Minutes of the meeting held at the United Nations Headquarters, New York on 11 and 12 October 2004

Minutes of the meeting held at the United Nations Headquarters, New York on 11 and 12 October 2004. Interim Government of Iraq: Advisor, Ministry of Finance World Bank: Mr. Charles McDonough, Director Accounting Department Observer: Mr. David Norquist, Deputy Under Secretary, US Department of Defense Mr. Chris Hemus, Deputy Division Chief, Finance Department Ms. Mary Hoare, Accountant, Finance Department Mr. Jayantilal Karia, Director, Accounting Division Interim Government of Iraq: Alternate Member, Chartered Accountant/Auditor The adoption of the revised rules of procedure and the amended Terms of Reference of the IAMB were confirmed. These documents have been posted on the IAMB website. KPMG presented the final audit reports of the Development Fund for Iraq (DFI) for the period 1 January to 28 June 2004. The reports are available on the IAMB website at http://www.iamb.info/dfiaudit.htm KPMG informed the IAMB that the Arabic version of the audit report would be provided in due course. The Arabic version of the earlier KPMG audit reports (i.e., through December 31, 2003) has been posted on the IAMB website. The IAMB decided to prepare a report on its oversight responsibilities under United Nations Security Council Resolution 1483, i.e., through June 28, 2004, which will include a summary of KPMG's findings and conclusions. The Board completed the review of the Statement of Work (SOW) for the audit of the DFI covering the period 1 July - 31 December 2004. The Statement of Work will be submitted to tender by the Government of Iraq. The deadline for receipt, from the Government of Iraq, of recommendations for award of this audit was set for 29 November 2004. Prior to providing the recommendations, the member from the Interim Government of Iraq also indicated that the Government would provide the IAMB with the evaluation criteria that would be applied to the proposals received. Defense Contracts Audit Agency (DCAA) Reports . The Board received DCAA audit reports on sole sourced contracts which it had previously sought. The reports covered the audit of 5 Task Orders and were redacted. The Observer informed the Board that the edits had been undertaken by the DCAA to safeguard proprietary information of the concerned parties. Special Audit of sole-sourced contracts The IAMB discussed the special audit of the sole source contracts. Due to the fact that the audit would cover the period when the CPA was in charge of the DFI, the Observer informed the IAMB that it would be logistically difficult for the Iraqi Government to handle the audit and obtain access to all necessary documents, either because the documents were located outside Iraq or because the documents were proprietary. The IAMB therefore agreed in principle to a proposal conveyed by the Observer that the US Government would commission a special audit of sole-sourced contracts in accordance with terms of reference agreed with the IAMB. This special audit will (i) determine the extent of sole-sourced contracts using DFI resources; (ii) summarize the findings of audits that have already been conducted by various US government audit agencies; and (iii) determine whether any such contracts have not been the subject of audits. The results of the audit will also be made public. It was also agreed that the US Government would provide the IAMB with written confirmation of this understanding. Update on SOMO Audits The IAMB reiterated its request to receive access to audit reports on the review of controls in the State Oil Marketing Organization (SOMO) by KPMG, which was commissioned by the CPA in February 2004. The Board was informed that the SOMO audit reports would also be redacted to remove proprietary information. The US Observer promised to get back to the Board on this matter. The IAMB agreed to issue a press release and to post it on the IAMB website. The next meeting of the IAMB has been scheduled for 6-7 December 2004. The meeting was adjourned on Tuesday 12 October 2004.