Editing Development Fund for Iraq (section)

==Audits==
There have been several audits of the disbursement from the DFI during the CPA's stewardship.  The first was performed by international accounting firm KPMG. [[United States Congress]]man [[Henry Waxman]] had the staff of the [[Committee on Government Reform]] to perform another audit of DFI's expenditures.

===KPMG audit===
International [[auditor]]s KPMG were chosen by the Coalition Provisional Authority and the [[International Advisory and Monitoring Board]] to perform external audits of the Coalition's expenditures from the [[humanitarian]] '''Development Fund for Iraq'''. The IAMB started negotiating with the CPA to appoint an external auditor in December 2003. KPMG was appointed in April 2004, to audit the CPA's expenditures from Iraq's oil revenue in 2003. On July 15, 2004 KPMG released [http://www.iamb.info/dfiaudit.htm audit documents] that highlighted several dozen serious accounting discrepancies.  Note particularly [http://www.iamb.info/auditrep/r052203a.pdf the appendix devoted to ''Matters noted involving internal controls and other operational issues during the audit period of the Fund For the period to 31 December, 2003'']

[[UN Security Council Resolution 1483|United Nations Resolution 1483]] transferred the authority to authorize expenditures from [[Iraq]]'s oil revenue from the [[United Nations]] to the Coalition Provisional Authority.

It also created an international body to monitor the Coalition's expenditures from Iraq's oil revenue, the IAMB. The Coalition's authority to expend Iraq's oil revenue was conditional. The Coalition was only authorized to expend those funds for the benefit of the Iraqi people. Those expenditures were only authorized if they were made in an open and transparent manner. The Coalition was only authorized to expend funds so long as they cooperated in the IAMB's oversight of those expenditures. The Coalition was charged with the obligation to make those expenditures with meaningful Iraqi input.

Paragraphs 12 and 20 of UN resolution 1483 specified that an external auditor would be appointed to audit the expenditure made from Iraq's oil revenue.

The auditors identified dozens of serious ways in which the CPA failed to meet its obligations:

* ''Lack of cooperation with the auditors''. CPA administrator [[Paul Bremer]] has complained that the independent Inspector General [[Stuart Bowen]], whom the Congress appointed, never met with him. In contrast the KPMG auditors say Mr Bremer never scheduled a meeting with them, prior to the official hand-over, and surprised everyone by leaving Iraq early immediately after his early handover of authority to the Interim government. [[George Wolfe (CPA)|George Wolfe]], the chairman of the [[Coalition Provisional Authority Program Review Board|Program Review Board]], Iraq's de facto Treasurer "was unable to acknowledge the fair presentation of the statement of cash receipts and payments, the completeness of significant contracts entered into by the DFI and responsibilities for the implementation and operations of accounting and internal control systems, designed to prevent and detect fraud and error."
* ''Internal auditor''. In the {{usurped|1=[https://web.archive.org/web/20040701201942/http://iraqcoalition.org/regulations/20030615_CPAREG_2_Development_Fund_for_Iraq.pdf CPA Administrator's second regulation]}}, of 10 June 2003, Bremer committed the CPA to "obtain the services of an independent certified public accounting firm to support the objective of ensuring that the Fund is administered and used in a transparent manner for the benefit of the people of Iraq, and is operated consistent with Resolution 1483. The accountants performing this function shall be separate from those public accountants (auditors) approved by the International Advisory and Monitoring Board." But Bremer never obtained the services of an internal auditor. Instead the CPA hired a consulting firm, to set up a bookkeeping system – incomplete at the time of the handover.
* ''Double entry bookkeeping''. The CPA did not use a [[double-entry bookkeeping system]]. Instead, it used what that auditors called a single entry, cash-based, transaction list—$20&nbsp;billion of [[petty cash]]. The CPA did not do a cash-reconciliation until April 2004, eleven months into its administration. At that point, the CPA had disbursed $6&nbsp;billion in $100 bills.
* ''Metering Iraq's oil''. Iraq's oil infrastructure was damaged when the CPA took over. The CPA effected selected repairs. But the IAMB found that the CPA had chosen not to repair the meters on the pipelines. The IAMB told the CPA that they were concerned that the lack of metering made auditing Iraq's oil exports unreliable – making it impossible to detect fraud, deception or smuggling. The minutes of the IAMB meeting make clear that the CPA had assured the IAMB that they were in the process of repairing the meters – in bad faith. The CPA's authority came to an end with the meters unrepaired. Estimates of how much oil revenue was siphoned off during the year of the CPA's administration go as high as $4&nbsp;billion – comparable to the amount Saddam Hussein is suspected of stealing during the entire duration of the oil-for-food program.
* ''Record-keeping''. The auditors found that the Program Review Board failed to keep proper minutes:
**The PRB minutes did not always keep minutes of its meetings.
**The PRB minutes almost never recorded the wording of minutes, or the vote tallies.
**The auditors felt that the minutes did not record enough details for later readers to understand the reasons why the Board made their decisions.
**The PRB minutes sometimes did not even record the who attended the meetings.
**The auditors found that CPA staff responsible for overseeing programs were often unable to find their program files. They could not be counted on to be familiar with the programs they were responsible for.

===Waxman audit===
On June 20, 2005 the staff on Congressman Waxman's Committee on Government Reform released [https://web.archive.org/web/20061227183442/http://www.democrats.reform.house.gov/story.asp?ID=873&Issue=Iraq+Reconstruction a highly critical report].

In their [[International Advisory and Monitoring Board]]'s [http://www.iamb.info/pr/pr062204.htm press release of June 22, 2004] states:
:''"The IAMB was also informed by the CPA that '''contrary to earlier representations''' the award of metering contracts have been delayed and continues to urge the expeditious resolution of this critical issue."''
The CPA was shipping Iraqi oil through a pipeline system with non-functioning meters. The actual amount of oil being shipped would have had to be estimated. The Iraqi people were left in the position where they had to trust that the CPA's estimates were honest.