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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. David Norquist, Deputy Under-Secretary, Department of Defense (Coalition Provisional Authority)
Also in attendance were the following:
Arab Fund for Economic and Social Development:
Mr. Shehab Bayoumi, Financial Advisor
International Monetary Fund:
Mr. Chris Hemus, Deputy Chief, Finance Department
Mr. Ramanand Mundkur, Counsel, Legal 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
Ms. Caroline Harper,
The meeting was opened by the Chair.
- The agenda for the meeting was unanimously adopted.
External Audit of the DFI
- A representative from KPMG briefed the IAMB on the on-going audit of
the DFI. He indicated that the audit was progressing satisfactorily after
encountering some initial difficulties. The Observer from the Governing
Council and the representative from the CPA pledged their continued support
for the audit and their assistance to KPMG.
- KPMG reiterated its commitment to adhere to the time-line as stated
in the Statement of Work.
- The IAMB noted KPMG's and the CPA's concerns with the practical difficulties
in preparing the financial statements on an accrual basis, It was agreed
that the financial statements of the DFI would be presented on a cash basis
and that they would be based on the International Public Sector Accounting
Standards (IPSAS) and be accompanied by detailed supplementary notes.
- The observer from the Governing Council emphasized the need to present
the financial statements and audit reports in both English and Arabic.
- Noting the need to address any outstanding issues expeditiously, the IAMB requested KPMG to keep the Board informed on the progress of the audit and to present a full update report at the next IAMB meeting.
Briefing by the CPA
- As a follow up to the April 24 - 25 briefing provided to the IAMB, the
CPA provided an update on the latest DFI activities.
- The CPA is continuing to build up the functions of inspectors general
throughout the various ministries.
- Responding to earlier requests by the Board to obtain audit reports regarding
sole source contracts, including those by the Defense Contract Audit Agency,
the CPA advised that these reports will be provided as soon as clearance
from the concerned parties with regards to proprietary information is finalized.
- The CPA provided an update on controls over oil in Iraq including progress
being made on metering, the status and financial controls over the bartering
process, and the impact of the security situation on oil production. The
IAMB was informed that two contracts have been issued for the installation
of meters and that the metering project for the entire country will take
between 12 to 18 months. The IAMB noted its initial concern that the two
contracts had been awarded as "Task Orders" (add-ons to existing
contracts) and that some of the original contracts might have been awarded
under the sole source contracting procedure. The CPA representative promised
to send additional information on this matter.
- The CPA indicated that it had commissioned a review of controls in the
State Oil Marketing Organization. The IAMB looks forward to receiving a
report on the same.
- In his comment, the Observer from the Governing Council stressed the
need to establish proper internal control systems especially with regards
to the extraction and export of oil.
- In their response to the CPA briefing, the possibility of engaging some experts on oil from the IMF and the World Bank to give an assessment on the losses as a result of smuggling and the lack of metering is being considered by the IAMB.
Briefing by the Governing Council Observer
- In his briefing to the Board, the observer from the Governing Council noted that smuggling of oil and oil products is a concern of the Governing Council and stated that steps should be taken to control it.
Post June 30 2004
- The CPA briefed the Board on the preparations for the anticipated hand-over of the DFI ands its operations.
- 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 scheduled for 20–22 June
in Paris, and 14–15 July in Washington DC.
- The meeting was adjourned on Tuesday 22 May 2004.
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