Report of the Board of Auditors on the audit of Iraq accounts

This is a 38 page report that was just posted on the UN website. I am still working my way thru it, but wanted to get the link posted if anyone else wants to take a look at it.

United Nations S/2009/314
Security Council
Distr.: General
18 June 2009
Original: English

Note by the Secretary-General
The Secretary-General has the honour to transmit herewith to the Security Council the report of the Board of Auditors on the United Nations escrow (Iraq)accounts for the year ended 31 December 2008.

Report of the Board of Auditors on the audit of the
United Nations escrow (Iraq) accounts established under
the provisions of Security Council resolutions 687 (1991),
706 (1991), 778 (1992), 986 (1995), 1284 (1999), 1483 (2003)
and 1762 (2007) for the 12-month period ended
31 December 2008 of the biennium 2008-2009


http://daccessdds.un.org/doc/UNDOC/GEN/N09/373/48/PDF/N0937348.pdf?OpenElement

This is the summary and recommendation section of the report.


Summary

The United Nations Board of Auditors has audited the financial statements of the United Nations escrow (Iraq) accounts established under the provisions of Security Council resolutions relating to Iraq for the 12-month period ended 31 December 2008 of the biennium 2008-2009. These financial statements have been prepared on the liquidation basis of accounting which is described in note 3 (a) to the financial statements. The audit was carried out through a review of financial transactions and liquidation activities covering the period mentioned above.
The Board issued an unmodified audit report (audit opinion) on the financial statements for the period under review, as reflected in section II.

Follow-up of previous recommendations of the Board
In response to the request of the Advisory Committee on Administrative and Budgetary Questions, the Board evaluated the results and impact of the Administration’s efforts to implement the Board’s previous recommendations. There was only one audit recommendation contained in the Board’s report for the biennium ended 31 December 2007, which was under implementation, as indicated in the annex to the present section.

Liquidation activities
In 2008, the liquidation of the oil-for-food programme was in its fifth year of operation following the adoption by the Security Council of resolution 1483 (2003). Owing to the continuous work of the Working Group, which comprises representatives from the Government of Iraq, the Central Bank of Iraq and the Secretariat, the number of letters of credit was reduced from 210 as at 31 December 2007 to 95 as at 31 December 2008. However, the liquidation continued to be hampered by the delay in the issuance of authentication documents by the Government of Iraq despite the repeated calls of the Security Council and the Secretary-General. This has delayed the complete closure of the programme.

Reserves and fund balances
As at 31 December 2008, the total reserves and fund balances of the “Humanitarian activities in Iraq” account and the “Administrative and operational costs” account amounted to $609 million, including $2.5 million of reserves for endof-service and post-retirement benefits, $206.2 million of reserves for any unanticipated claims from suppliers and expected administrative costs during liquidation, and $400.3 million of cumulative surplus. The Board noted that the processing of the authentication documents remained slow during the period under review. In addition, there was no timetable to resolve all outstanding issues and to complete the closure of the oil-for-food programme.


Recommendations

The Board has made two recommendations based on its audit. They are that the Administration:

(a) Settle the outstanding accounts payable and receivable of the United Nations Monitoring, Verification and Inspection Commission and transfer all remaining unencumbered funds to the Development Fund for Iraq in
accordance with Security Council resolution 1762 (2007);

(b) Keep under review the matter of transferring the unencumbered funds to the Development Fund for Iraq.

Great stuff Wind.....THANKS!

This is an analysis of the report on the liquidation of escrow accounts held by the UN for Iraq. The total amount held in escrow appears to be $609 million.

Prior to the 2003 invasion of Iraq by the UN coalition authorities, Iraq’s export revenue was placed in an Oil for Food Program escrow account. The UN managed the account and paid creditors, sent money back to Iraq for humanitarian purposes etc. This program was terminated in 2003 and was replaced by the Development Fund for Iraq. There was, however, money still in the Oil for Food Program accounts. The UN has been attempting to settle up outstanding claims from creditors for the last five years.

This document is a financial audit of those accounts and provides two recommendations. The first is a transfer of unencumbered funds to the DFI from the account that paid for the commission that conducted the on site inspections for biological, chemical and missile capabilities. This closes out this phase of the UN involvement in the funds.

The second, however, deals with the outstanding letters of credit from suppliers who have not yet been paid. There are a total of 95 representing approximately $344.69 million. To date, Iraq has not provided confirming documentation stating that the products or services were received so that these bills can be paid. The report recommends that the review be continued regarding the claims and funds.

“The board is concerned that the liquidation continues to be hampered by the delay in the issuance of authentication documents by the Government of Iraq despite the repeated calls of the Security Council and the Secretary-General”

I did find one interesting figure in the financial tables and apparently Kuwait was paid $225, 000 for the “repatriation or return of all Kuwaiti and third-country nationals or their remains and the return of all Kuwaiti property, as authorized by the Security Council.”

Thank you wind for the hard work...we appreciate it

apparently Kuwait was paid $225, 000 for the “repatriation or return of all Kuwaiti and third-country nationals or their remains and the return of all Kuwaiti property, as authorized by the Security Council.”

$225,000 seems awful low. Am I missing something?

THanks wind for trying to decifer this for us. You are awesome!

MrsCK wrote:since this report was for 18 June 2009....but we have a DFI/IAMB meeting coming up in August some time..no date has been set for this meeting yet...but does it give iraq time to fix what they haven't gotten done before this august meeting??

Good info mom!!!

The liquidation of the escrow accounts is under a different committee and does not have anything to do with the administraion of the DFI. Any action by Iraq would not affect the DFI/IAMB meeting other than the surplus funds don't get transferred to the DFI. What it does affect is the Security Council decision on Chapter VII as this is one of the outstanding 73 items.

This is the entire recommendation "Taking into consideration the large amount of reserves and fund balances as at 31 December 2008 as well as the absence of a timetable to resolve all outstanding issues and to complete the closure of the oil-for-food program, the Board is of the veiw that the ongoing review of the matter of transferring the unencombered funds to the Development Fund for Iraq at the earliest possible time would be favourable to the implementation of Security Council Resolution 1483 (2003)." It sounds like they want to get this over and done. The Security Council could say, transfer and close out the accounts.


You brought up another good point regarding the date of this report. It is dated June 18, 2009 but it was not distributed until July 9, 2009 and did not get posted for public review until July 15, 2009. That is almost one month to get access to the report. The lag time on some of this stuff is really bad.

Thank You both Windreader1 and MrsCK....you two really do some great research!