KPMG Audit of the DFI

The press release from the IAMB is available here:

First, according to the press release

KPMG has concluded that all known oil proceeds, reported frozen assets, and transfers from the Oil for Food Program have been properly and transparently accounted for in the DFI.

Unfortunately, the word "known" in that sentence appears to be an important qualifier

At the same time, based on a review of the KPMG reports, the IAMB believes that controls were insufficient to provide reasonable assurance (i) for the completeness of export sales of petroleum and petroleum products for the period from May 22, 2003 to December 31, 2003, and (ii) whether all DFI disbursements were made for the purposes intended.

Number (ii) is concerning.

You can get the report and the appendices here. The appendices are the better read. They detail issues with the DFI that KPMG identified, and the response from the CPA to those issues raised.

• 1.2.2 and 1.2.3 was foreshadowed in the interim report, which basically says that they had difficulty getting their hands on the info that they needed.
• 2.2, 2.4 and 3 are about the awarding of contracts without a transparent competitive bidding process.

You'll note that 3.4 doesn't get much of a response from the CPA. The IAMB press release notes

DFI funds were used to award contracts on a non-competitive basis. To ascertain the conditions and circumstances, the IAMB has requested copies of reports on audits of sole-sourced contracts that have already been undertaken by various US agencies, before determining whether additional audits are necessary. Despite repeated requests, these reports have still to be made available to the IAMB.

Now, I could have this completely wrong, but I think those are the same contracts reported by the Washington Post and The Guardian. Quoting from The Guardian

But the report's concerns also lead back to the US company that has become inextricably linked with the occupation: Halliburton. Given that the US vice president Dick Cheney was previously chief executive of Halliburton, the potential conflict of interest over its business dealings in Iraq were always going to be a focus of concern. Yet when the monitoring board's auditors asked for details of contracts involving Halliburton being paid for out of the oil funds, the Pentagon repeatedly refused. At issue are three contracts, worth a total of $1.4bn, awarded in noncompetitive tenders - meaning Halliburton was the sole bidder. The monitoring board rightly concluded that further investigation is required.

The IAMB press release above says

In the meantime, the IAMB will follow-up on its earlier decision for a special audit of the sole-sourced contracts that utilized DFI funds.

In other news:

• I think KPMG have lost the contract and Ernst & Young will be taking over.
• There's a Democrat congressman by the name of Henry Waxman who's interested in this. His website his info is a little out of date.