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April 29, 2005
The International Advisory and Monitoring Board (IAMB) on the Development Fund for Iraq (DFI) met in Paris, France on April 17-18, 2005 and issued the following statement:
"The IAMB received an interim briefing by KPMG covering the period after the dissolution of the Coalition Provisional Authority (CPA) from June 29, 2004 to December 31, 2004. The IAMB at its meeting reviewed findings to date, received draft reports and expects that these will be completed shortly. These reports, which supplement earlier reports covering the periods from May 23, 2003 to June 28, 2004, will be made available on the IAMB website when received.
"The IAMB welcomed a briefing by the Iraqi representative on steps taken by the Interim Government of Iraq to address a number of issues identified in earlier audits.
"The IAMB took note of the report of the Special Inspector General for Iraq Reconstruction regarding oversight of funds provided to Iraqi ministries through the national budget process. This report contained findings similar to those identified by KPMG.
"In accordance with UNSCR 1483, all member states of the United Nations are obligated to freeze funds and other financial assets of the former Iraqi regime and transfer such assets to the DFI. The IAMB is concerned that not all frozen assets of the former Iraqi regime have been transferred to the DFI and recommends a systematic follow-up.
"The IAMB noted that the unredacted Defense Contract Audit Agency (DCAA) audit reports covering the sole sourced contracts have been made public. These reports indicate overcharges and questionable amounts billed under the sole sourced contracts of an amount in excess of $200 million. The IAMB notes with regret that these findings had been redacted in earlier DCAA reports submitted by the US Government to the IAMB. Use of DFI resources that is not for the benefit of the Iraqi people is in conflict with UN Security Council Resolution 1483.
"The IAMB requested a special audit to review the use of DFI resources for sole sourced contracts during the period up to the dissolution of the CPA in June 2004. On April 15, 2005, the U.S. Government informed the IAMB that negotiations with an internationally recognized auditing firm had been completed and the contract has been awarded to KPMG LLP. The U.S. Government informed the IAMB that the audit report is scheduled to be provided to the IAMB by end August 2005. The special audit of sole sourced contracts calls for: (i) identifying all non-competitively CPA awarded contracts valued at over $5 million that used DFI funds; (ii) providing a summary of the findings of audits of such contracts that have already been conducted by various U.S. Government audit agencies; and (iii) conducting additional audit procedures on non-competitively awarded contracts that have not been the subject of audit, including whether such contracts were in accordance with the purposes outlined in UN Security Council Resolution 1483.
"According to UN Security Council Resolution 1546, the IAMB will cease operation no later than December 31, 2005 or such earlier time as decided by the Government of Iraq. In view of this, arrangements to plan for a smooth transition to an Iraqi oversight authority were discussed.
"The date of the next meeting will be announced on the IAMB website (www.iamb.info)."