Use the free
to view the PDF files
The following members of the IAMB were present:
Arab Fund for Economic and Social Development: Mr. Khalifa Ali Dau, Senior
International Monetary Fund: Mr. Bert E. Keuppens, Senior Advisor
United Nations: Mr. Jean-Pierre Halbwachs, Assistant Secretary-General, Controller
World Bank: Mr. Fayezul Choudhury, Vice-President and Controller
Observer: Prof. Mahdi Hadi Al-Kafaji (Governing Council of Iraq)
Observer's Representative: Mr. Cameron Leuthy (Coalition Provisional Authority)
Also in attendance were the following:
International Monetary Fund:
Mr. Chris Hemus, Deputy Chief, Finance Department
Mr. Ramanand Mundkur, Counsel, Legal Department
Ms. Mary Hoare, Accountant, Finance Department
Mr. Jayantilal Karia, Director, Accounts Division
Mr. Moses Bamuwamye, Finance Officer
Mr. Charles McDonough, Director, Accounting Department
Mr. Said Al Habsy, Chief Counsel, Middle East, North Africa and South Asia
Iraq Board of Supreme Audit:
Mr. Ihsan Ghanim
- The meeting was opened by the Chair.
- The agenda for the meeting was unanimously adopted.
External Audit of the DFI
- Representatives from KPMG briefed the IAMB on its plans for the audits
of the DFI specifically: (i) export sales of oil, petroleum products and
natural gas from Iraq; (ii) the "Oil Proceeds Receipts Account";
(iii) the DFI financial statements; and (iv) the disbursements of resources
from the DFI and the assessment of internal controls of the recipients
of DFI resources. KPMG undertook to provide its engagement letter to the
- The IAMB noted and welcomed KPMG's commitment to utilize an Advisory
Team for the audit, comprising: (i) international experts in energy and
natural resources, International Financial Reporting Standards, Government
and NGO audits, and forensic accounting; and (ii) the Iraq Board of Supreme
Audit and the Inspectors General.
- The IAMB had an exchange of views with KPMG on various aspects of the
audits, and in particular, on the issues related to the extraction of crude
oil, in light of the lack of metering.
- In keeping with its terms of reference, the IAMB sought and obtained assurances from KPMG that the timeline as stated in the Statement of Work would be achieved. To that end, KPMG undertook to submit an interim audit report to the IAMB and the CPA in June 2004. In the intervening period, the IAMB will continue to have on going discussions with KPMG representatives.
Briefing by the CPA
- As a follow up to the March 17-18 briefing provided to the IAMB, the
CPA provided an update on the latest DFI activities.
- The CPA advised that a statement of work with regards to metering of
oil extraction was underway.
- Responding to the earlier concern that barter transactions were not reflected in the DFI as required by UNSCR 1483 (2003), the CPA indicated that processes were now in place to account for some barter transactions in the DFI. The IAMB sought clarification on the treatment of the 5 percent of oil export sales that would normally be transferred to the Compensation Fund, and the CPA confirmed its intention to transfer the equivalent amount to the Compensation Fund in the near future.
- The IAMB followed up with the CPA on its earlier request to access audits of sole-sourced contracts funded by the DFI, including those by the Defense Contract Audit Agency. A response from the CPA Administrator dated April 22, 2004 reported that the CPA was liaising with US government agencies to obtain copies of the audit reports. The IAMB requested the CPA to provide the audit reports expeditiously. Based on the outcome of this enquiry, the IAMB will decide whether a special audit of sole-sourced contracts is warranted. To this end the members agreed to prepare a draft Terms of Reference for a special audit of sole-sourced contracts.
- The CPA provided the IAMB with draft DFI financial statements as of December 31, 2003 which were prepared on a cash accounting basis. The IAMB reiterated its view that the financial statements of the DFI need to be prepared in line with International Financial Reporting Standards (IFRS), including on an accruals basis so as to ensure a complete reflection of all transactions as of December 31, 2003. The CPA undertook to prepare such financial statements, with possible assistance from KPMG .
Post June 30 2004
- Noting the expected changes to governing arrangements in Iraq after June 30, 2004, the IAMB reviewed ways in which the functions of the IAMB could be transferred to an Iraqi entity at a suitable time. In this context, the IAMB welcomed the Iraq Supreme Audit Board's ongoing attendance at IAMB meetings and a statement from the Governing Council observer, Prof. Al-Kafaji. The IAMB confirmed its mandate to oversee audits of oil export sales and the operations of the DFI . Such audits will be completed by KPMG during the second half of 2004 and the IAMB will monitor this work.
Update of the UN Secretary General
- With the recent appointment of the external auditor, the IAMB decided it was opportune to update the Secretary-General on its activities to facilitate his report to the Security Council on the work of the IAMB under UNSCR 1483 (2003) (para. 24) and the IAMB Terms of Reference (para. 50).
- The members agreed to issue a press release highlighting the results of this meeting and to post this press release on the IAMB website.
- The next meetings of the IAMB have been tentatively scheduled for 24–25
May at IMF headquarters in Washington DC and 21-22 June at a venue to be
- The meeting was adjourned on Friday 23 April 2004.
* * * * * *