Minutes of the meeting held at the IMF Headquarters in Washington DC on 6 December 2004

Minutes of the meeting held at the IMF Headquarters in Washington DC on 6 December 2004. Interim Government of Iraq: Advisor, Ministry of Finance World Bank: Mr. Fayezul Choudhury, Vice-President and Controller Mr. Chris Hemus, Deputy Division Chief, Finance Department Ms. Mary Hoare, Accountant, Finance Department Mr. Charles McDonough, Director, Accounting Department Interim Government of Iraq: Alternate Member, Chartered Accountant/Auditor President, Board of Supreme Audit Invitees from the US Department of Defense Mr. Joseph Benkert Col. Sidney Heetland Ms. Simone Ledeen Invitees from the US Department of State Mr. Mathew Goshko Mr. Joshua Voltz The Chair welcomed the presence of the President of the Board of Supreme Audit of Iraq (BSA). The IAMB re-elected the representative of the Secretary-General of the United Nations as Chair of the Board. The alternate representative from the Interim Government of Iraq briefed the IAMB on the evaluation and selection process of the DFI external auditor for the period June 29, 2004 to December 31, 2004 and transmitted the recommendation of the Interim Government of Iraq for the appointment of the DFI external auditor. To enhance the functions of the BSA and prepare for a smooth transition when the IAMB is dissolved, the IAMB was informed that the scope of the external audit was expanded to include a requirement for the successful Auditor to utilize the services of 15 qualified staff members of the BSA. The IAMB was satisfied with the evaluation process used for the external auditor selection, and approved the Interim Government of Iraq recommendation that KPMG be selected to undertake the audit for the period June 29, 2004 to December 31, 2004. The audit is expected to take three months from the date of the award of the contract. The IAMB requested to be provided with details on the DFI activities since June 29, 2004. Defense Contract Audit Agency (DCAA) Reports . The Board received the sixth and last DCAA audit report on sole-sourced contracts which it had previously sought. The report covered the audit of one Task Order and was also redacted like the earlier ones. The IAMB was informed that all reports relevant to the IAMB had now been provided. Update on the Status of the Special Audit of sole-sourced contracts The IAMB agreed to the terms of reference for a special audit of sole-sourced contracts using DFI funds proposed by the U.S. Government, to be completed by an independent auditor. The audit, which will cover the period up to the dissolution of the Coalition Provisional Authority (CPA), is expected to be completed by April 2005 and is to be made public. The audit will (i) identify non-competitively awarded contracts that used DFI funds, (ii) summarize the findings of audits of such contracts that have already been conducted by various US government audit agencies, and (iii) if any non-competitively awarded contracts have not been the subject of audit, perform audit procedures of such contracts. Update on SOMO Audits The IAMB received the audit report on the review of controls in the Iraqi State Oil Marketing Organization (SOMO) commissioned by the CPA in February 2004, as had been requested in earlier meetings. The IAMB will take into consideration the findings of this audit report when determining the scope of future audits. IAMB Report The IAMB prepared a report on its activities covering the period from inception to June 28, 2004 when the CPA was dissolved. This report was discussed and agreed. It was agreed to post this report on the IAMB website at www.iamb.info . Follow up on the Recommendations from Previous Audit The IAMB was informed by the representative of the Interim Government of Iraq that steps were being taken to address the concerns raised by the IAMB and the findings of the auditors. The IAMB will work with the BSA and the Interim Government of Iraq on measures to continue strengthening the overall framework for public financial management in Iraq. The IAMB agreed to issue a press release and to post it on the IAMB website. The next meeting of the IAMB has been tentatively scheduled for April 18-19, 2005. The meeting was adjourned on December 6 2004.