Agency analysis of the Swedish Agency for Youth and Civil Society (2017:13)

The Swedish Agency for Youth and Civil Society (MUCF) shall promote and convey knowledge about the living conditions of Swedish young people and the conditions of civil society. On behalf of the Government, the Agency also allocated various grants. In 2016, MUCF allocated more than SEK 600 million to municipalities and around 400 organisations in the civil sector.

The Swedish Agency of Public Management (Statskontoret) has done an agency analysis of MUCF. We have particularly analysed the control and quality assurance of the grant allocation and the reporting of results and administrative expenses for managing the state subsidies for the civil sector. We have also analysed the Government’s management of MUCF and how the Agency’s operations relate to agencies with related tasks.

MUCF must manage several challenges

Statskontoret deems that MUCF fulfils its mission in all essential respects. At the same time, our agency analysis shows that there are certain challenges with both the Agency’s grant allocation and knowledge mission.

Credibility in the grant allocation is called into question

The Agency’s control of the grant allocation has long received attention in the media. In the period February-August 2017, MUCF’s grants to some 15 organisations were called into question in editorial columns and debate and news articles. The criticism in most cases is about the recipients not being seen as an organisation with democratic values or being seen as not conducting their activities in earnest. In the past year, some 10 organisations have also appealed MUCF’s grant decisions to the Administrative Court even though the grant ordinances prohibit this.

In addition to this, MUCF has also demanded back grants from a few organisations. Some of these grants have been paid back while some 15 organisations are subject to debt collection.

The improper use of grants is serious but only accounts for a small portion

The grant allocation called into question, the appeals and MUCF’s return demands are not extensive seen in relation to the number of organisations that receive grants. Statskontoret deems that it is nonetheless large enough to affect the citizens’ confidence in the payments of government grants. MUCF’s controls must be able to guarantee that tax money is not paid out to organisations that in various ways violate the terms of the ordinances. Statskontoret’s conclusion is that MUCF’s controls are not adequate to prevent grant fraud.

The administrators’ possibilities for qualified control are limited MUCF shall not only check for improprieties, but also make difficult considerations in terms of organisations’ democratic values and the decisions shall hold in legal terms. At the same time, supported organisations as well as the number of approved grants have increased over time, which entails more work for the administrators through the control and

follow-up of the organisations. Today, 13 people (10 full-time equivalents) are responsible for allocating SEK 350 million to around 400 organisations. The grant controls are largely automated and streamlined and the administrators’ room to make qualified judgements and controls is limited.

The organisations are dependent on grants for survival

Our investigation shows that the organisations that are supported by MUCF receive on average 60-70 per cent of their revenues from the grants. In one out of ten cases, the organisations say that they only have revenues from MUCF. In addition, several of the organisations that have organisation grants also have project grants from MUCF. The grant dependence has increased since 2014.

Statskontoret sees a risk that non-profit organisations that shall fundamentally build on the members’ commitment are becoming increasingly dependent on grants. A principle is that the non-profit sector shall be independent in relation to public actors. With little or no self-financing, the members’ commitment can be undermined in the long term. Statskontoret assesses that the increased financial dependence hardly increases civil society’s independence.

The Government’s management of the knowledge mission is straggly

MUCF is a cross-sectional authority that has many special assignments form several ministries within various areas and with various emphases. The assignments are most often time-limited and sometimes come at short notice. They are largely financed through various special appropriations that can vary widely between the years, which makes MUCF’s planning and staffing difficult.

The assignments in MUCF’s instructions have also been expanded over time. The special priorities that the Government sets in the appropriation directions also largely cover the Agency’s entire area of operations.

Statskontoret’s proposals

In the report, Statskontoret presents a number of proposals that mainly aim to improve the efficiency of the operations, strengthen the grant controls and clarify MUCF's mission.

Increase the control in grant allocation

To strengthen and streamline MUCF’s grant allocation, Statskontoret proposes that MUCF try to assign a few people who are to work especially with the control of the grants. The Agency should also devote more resources to horizon monitoring and use a risk-based approach in the control work to a greater extent.

Statskontoret proposes that the Government consider increasing MUCF’s administrative appropriation to strengthen the grant control. An increase in the administrative appropriation can be financed by the funds given to the organisations today being reduced by an equivalent amount. Statskontoret also believes that MUCF should be given better possibilities to require the organisations to self-finance their activities to a greater extent.

Simplify and coordinate the ordinances

There are many differences in the terms in the ordinances that govern the grants to the civil sector that could be common. This is true, for example, of the application, reporting and audit. The differences entail difficulties and additional work for MUCF since the Agency needs separate control procedures for each grant. Statskontoret proposes that the Government begin work to simplify and coordinate the grant ordinances.

Stronger support for MUCF for difficult grant decisions

MUCF has made difficult decisions to deny organisations grants based on an assessment of their values, i.e. that they do not fulfil conditions of being a democratic organisation. Both the Agency’s management and the grant administrators seek better support for assessing such cases. Statskontoret therefore proposes that the Government consider establishing a council tied to MUCF’s Agency management that can serve as a support in difficult considerations in the grant review or a committee for grant review.

Our analysis shows that several agencies pay grants to the same organisation. Statskontoret therefore proposes that the Government take the initiative to create a common database for grant-awarding agencies. The purpose of the database is to create a better overview of the state’s grant allocation to the civil sector.

The Government should review the instructions and improve the allocation of the knowledge assignments

Statskontoret believes that the Government’s overall governance of MUCF can be developed in several ways. The Government should, among other things, clarify MUCF’s cross-sectional mission in the Agency’s instructions.

To facilitate MUCF’s planning and staffing of the operations, the Government should also more clearly state in the appropriation directions what the Agency should prioritise in the coming year and review how the various ministries’ assignments to MUCF can be better coordinated.

MUCF can improve the effect reporting of its efforts

MUCF has the objective that the knowledge that the Agency prepared shall be useful for their target groups. But MUCF does not report the effects of the knowledge production in relation to this. Statskontoret proposes that MUCF shall develop the reporting so that it better corresponds to the Agency’s objectives, such as what the target groups think about the Agency’s publications.

The effect reporting of the grants can also be developed. For example, it is not effective to follow up results and effects for all grants every year. Statskontoret therefore proposes that MUCF shall follow up results and effects of a few government grants at a time.

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