Census figures were inflated "at least a thousand, maybe many times that" by the diocese and it's thought the survey could have even included non Catholics.
Officials were counting immigrants from Catholic countries even though it was unaware if they were practicing or even believers.
Bishop Bernt Eidsvig said the practice was "not satisfactory".
According to Norwegian newspaper The Local he said: "A practice, revealed to have lasted for a few years, has resulted in foreigners moving to Norway from Catholic countries, and thereby assumed to be Catholics. They were then registered as OKB [Diocese of Oslo] members without agreeing to it themselves."
The Catholic Church in Norway is given a grant by the government every year based on the number of people who go to church.
Next year it's due to get around £13 million.