International Advisory and Monitoring Board of the Development Fund for Iraq
Press Release
July 31, 2009
Statement by the International Advisory and Monitoring Board of the Development Fund for Iraq
The International Advisory and Monitoring Board (IAMB) of the Development Fund for Iraq (DFI) met in Vienna, Austria on July 22-23, 2009 and issued the following statement:
“The IAMB met to continue its oversight role over the use of resources of the DFI, which is the principal repository for Iraq's oil-export receipts, and oversee audits of the DFI in line with its mandate under UN Security Council Resolution 1859.
“The IAMB continues to take active steps to transition full responsibility for DFI oversight to the successor body, the Iraqi Committee of Financial Experts (COFE) by the end of 2009, as envisaged under UNSCR 1859. The IAMB recognizes the competence and capabilities of the COFE, aided by the Board of Supreme Audit. The IAMB wrote to the Iraqi Prime Minister in April 2009 and reiterated its belief that COFE is ready and capable to take over the tasks currently entrusted to the IAMB.
“The IAMB considered the results of the 2008 audit of the DFI. The audit continues to highlight key issues of concern regarding weaknesses in controls over oil extraction and use of the resources. Access to some ministries and regions had earlier been delayed, but this issue was resolved through the intervention of COFE and the fieldwork is now complete. The IAMB requested some clarifications from the auditor, KPMG. The IAMB noted that the audit opinion on the DFI financial statements continues to be heavily qualified and expressed concern that certain issues, including the continued non-deposit in the DFI of cash sales of fuel oil by SOMO, had not been resolved.
The IAMB will formally request COFE to ascertain the rationale behind excluding cash sales of fuel oil by SOMO from the DFI so that this issue can be resolved in 2009. Also, the IAMB noted that the audited financial statement of the Oil Proceeds Receipts Account has not yet been completed; this audit is expected to be finalized in the coming weeks.
Detailed audit reports and the KPMG presentation are available on the IAMB website (www.iamb.info) and the COFE website (www.cofe-iq.net).
“The IAMB has now entrusted much of the detailed follow-up and resolution of audit findings to COFE. The representatives of the Government of Iraq, the COFE and the Iraqi Board of Supreme Audit (BSA) reported on actions taken to follow-up on outstanding audit recommendations. The IAMB welcomed steps taken by COFE, in particular COFE’s proactive engagement with the Council of Ministers, which has led to Council directives that all ministries form working committees to address organizational and information systems issues that were raised by the DFI audits. COFE will monitor progress by the ministries in implementing these directives and the BSA will be reporting to the Council of Ministers on the follow-up of a survey by the BSA that identified weaknesses in internal controls at the ministries.
The IAMB also welcomed detailed follow-up reports from both COFE and the BSA, which are published on the IAMB and COFE websites. These reports noted that progress is being made, but it is apparent that much remains to fully implement the audit recommendations and strengthen the system of internal controls.
The IAMB reiterated its earlier recommendation that the Government of Iraq intensify efforts to follow up on frozen Iraqi assets held abroad, including through considering the need for a separate entity to handle these efforts. The IAMB noted that COFE has approached the Iraqi Ministry of Finance on this matter.
“The IAMB discussed options to enhance the transparency and accountability of the DFI, taking into account the audit findings of KPMG. The IAMB called for the timely monthly publication of the DFI financial statements on the COFE website. The IAMB also called on COFE to develop a realistic action plan and time-frame to resolve the seven audit qualifications from KPMG in their audit opinion. The IAMB requested COFE to report every other month to the IAMB on progress on these points; it is expected that such reports will be published on the IAMB and COFE websites. The IAMB also urged COFE to continue working expeditiously in supporting the necessary steps for the early passing through parliament of laws and regulations concerning organization structures, job descriptions and internal control systems and development of a time-bound action plan, endorsed by the Council of Ministers, to implement a comprehensive oil measuring system.
“The IAMB welcomed the finding by KPMG that no barter or in-kind transactions took place during 2008. The IAMB noted that the DFI audit opinion continues to refer to barter transactions contracted during earlier periods and urged resolution of this point for the 2009 audit.
“In accordance with the IAMB Terms of Reference, the nomination and appointment by the Government of Iraq of the DFI external auditor is subject to approval by the IAMB. COFE has initiated the appointment process for the 2009 auditor, as part of its action plan for 2009. COFE briefed the IAMB on the evaluation process to select an external audit firm to conduct the audit of the resources and disbursements of the DFI. The IAMB agreed that the 2009 audit should cover the period January 1, 2009 to December 31, 2009 with an interim audit for the period January 1, 2009 to June 30, 2009. The interim audit will be undertaken under the high-level oversight of the IAMB and the final audit is expected to be undertaken under the full oversight of COFE as the IAMB mandate is scheduled to have expired by that time. The IAMB approved the process and concurred with the recommendation of COFE to proceed with the audits.
“The UN Representative of the UN Secretary General briefed the Board on the results of his April 16, 2009 briefing to the UN Security Council, in line with paragraph 3 of UNSCR 1859. The Representative of the UN Secretary General informed the IAMB that the Secretary General’s draft written semi-annual report will be considered in the near future by the UN Security Council.
“The next meeting of the IAMB, together with COFE, is tentatively scheduled for December 2009. COFE will also be meeting separately on a regular basis in the interim.”
Press Release
July 31, 2009
Statement by the International Advisory and Monitoring Board of the Development Fund for Iraq
The International Advisory and Monitoring Board (IAMB) of the Development Fund for Iraq (DFI) met in Vienna, Austria on July 22-23, 2009 and issued the following statement:
“The IAMB met to continue its oversight role over the use of resources of the DFI, which is the principal repository for Iraq's oil-export receipts, and oversee audits of the DFI in line with its mandate under UN Security Council Resolution 1859.
“The IAMB continues to take active steps to transition full responsibility for DFI oversight to the successor body, the Iraqi Committee of Financial Experts (COFE) by the end of 2009, as envisaged under UNSCR 1859. The IAMB recognizes the competence and capabilities of the COFE, aided by the Board of Supreme Audit. The IAMB wrote to the Iraqi Prime Minister in April 2009 and reiterated its belief that COFE is ready and capable to take over the tasks currently entrusted to the IAMB.
“The IAMB considered the results of the 2008 audit of the DFI. The audit continues to highlight key issues of concern regarding weaknesses in controls over oil extraction and use of the resources. Access to some ministries and regions had earlier been delayed, but this issue was resolved through the intervention of COFE and the fieldwork is now complete. The IAMB requested some clarifications from the auditor, KPMG. The IAMB noted that the audit opinion on the DFI financial statements continues to be heavily qualified and expressed concern that certain issues, including the continued non-deposit in the DFI of cash sales of fuel oil by SOMO, had not been resolved.
The IAMB will formally request COFE to ascertain the rationale behind excluding cash sales of fuel oil by SOMO from the DFI so that this issue can be resolved in 2009. Also, the IAMB noted that the audited financial statement of the Oil Proceeds Receipts Account has not yet been completed; this audit is expected to be finalized in the coming weeks.
Detailed audit reports and the KPMG presentation are available on the IAMB website (www.iamb.info) and the COFE website (www.cofe-iq.net).
“The IAMB has now entrusted much of the detailed follow-up and resolution of audit findings to COFE. The representatives of the Government of Iraq, the COFE and the Iraqi Board of Supreme Audit (BSA) reported on actions taken to follow-up on outstanding audit recommendations. The IAMB welcomed steps taken by COFE, in particular COFE’s proactive engagement with the Council of Ministers, which has led to Council directives that all ministries form working committees to address organizational and information systems issues that were raised by the DFI audits. COFE will monitor progress by the ministries in implementing these directives and the BSA will be reporting to the Council of Ministers on the follow-up of a survey by the BSA that identified weaknesses in internal controls at the ministries.
The IAMB also welcomed detailed follow-up reports from both COFE and the BSA, which are published on the IAMB and COFE websites. These reports noted that progress is being made, but it is apparent that much remains to fully implement the audit recommendations and strengthen the system of internal controls.
The IAMB reiterated its earlier recommendation that the Government of Iraq intensify efforts to follow up on frozen Iraqi assets held abroad, including through considering the need for a separate entity to handle these efforts. The IAMB noted that COFE has approached the Iraqi Ministry of Finance on this matter.
“The IAMB discussed options to enhance the transparency and accountability of the DFI, taking into account the audit findings of KPMG. The IAMB called for the timely monthly publication of the DFI financial statements on the COFE website. The IAMB also called on COFE to develop a realistic action plan and time-frame to resolve the seven audit qualifications from KPMG in their audit opinion. The IAMB requested COFE to report every other month to the IAMB on progress on these points; it is expected that such reports will be published on the IAMB and COFE websites. The IAMB also urged COFE to continue working expeditiously in supporting the necessary steps for the early passing through parliament of laws and regulations concerning organization structures, job descriptions and internal control systems and development of a time-bound action plan, endorsed by the Council of Ministers, to implement a comprehensive oil measuring system.
“The IAMB welcomed the finding by KPMG that no barter or in-kind transactions took place during 2008. The IAMB noted that the DFI audit opinion continues to refer to barter transactions contracted during earlier periods and urged resolution of this point for the 2009 audit.
“In accordance with the IAMB Terms of Reference, the nomination and appointment by the Government of Iraq of the DFI external auditor is subject to approval by the IAMB. COFE has initiated the appointment process for the 2009 auditor, as part of its action plan for 2009. COFE briefed the IAMB on the evaluation process to select an external audit firm to conduct the audit of the resources and disbursements of the DFI. The IAMB agreed that the 2009 audit should cover the period January 1, 2009 to December 31, 2009 with an interim audit for the period January 1, 2009 to June 30, 2009. The interim audit will be undertaken under the high-level oversight of the IAMB and the final audit is expected to be undertaken under the full oversight of COFE as the IAMB mandate is scheduled to have expired by that time. The IAMB approved the process and concurred with the recommendation of COFE to proceed with the audits.
“The UN Representative of the UN Secretary General briefed the Board on the results of his April 16, 2009 briefing to the UN Security Council, in line with paragraph 3 of UNSCR 1859. The Representative of the UN Secretary General informed the IAMB that the Secretary General’s draft written semi-annual report will be considered in the near future by the UN Security Council.
“The next meeting of the IAMB, together with COFE, is tentatively scheduled for December 2009. COFE will also be meeting separately on a regular basis in the interim.”