KOSOVO'S NEW AUDITOR GENERAL OFF TO A GOOD START

UNCLAS SECTION 01 OF 02 PRISTINA 000538

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SUBJECT: KOSOVO'S NEW AUDITOR GENERAL OFF TO A GOOD START


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1. (U) Sensitive but unclassified; protect accordingly.


2. (SBU) Summary. Since arriving in February 2006, Kosovo
Auditor General Linda Casella has produced six complete
audits on Kosovo municipalities and other institutions. She
was assaulted and severely beaten in downtown Pristina
shortly after her scathing audit of Pristina municipality
was issued and has since moved to a secure residence and
accepted 24-hour security. Undeterred, she has focused on
completing overdue audits from previous fiscal years and
launching new reviews of political parties and the Kosovo
Assembly. Unlike her predecessor, Casella has good
relationships with SRSG Soren Jessen-Petersen and Prime
Minister Agim Ceku; the latter has asked her to audit,
resources permitting, six Kosovo ministries to assist him in
evaluating the performance of his ministers as part of his
effort to clean up the Kosovo government. End Summary.

NEW AUDITOR GENERAL OFF TO PRODUCTIVE START
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3. (SBU) On June 7 Kosovo's new Auditor General (AG) Linda
Casella, a dual Italian/Australian national, told E/P Chief
and Econoff that she takes seriously her responsibility to
review the financial management and accountability of all
Kosovo Government and UNMIK agencies that receive funding
from the Kosovo Consolidated Budget (KCB). Kosovo's Auditor
General noted that her predecessor, Inga Britt Ahlenius,
focused on building the professional capacity and skills of
the AG's Kosovar staff, whereas Casella believes the best
way to build capacity is to guide staff through hands-on
training by doing actual auditing work.


4. (SBU) Since Casella's arrival in Kosovo in February 2006,
the AG has produced six audits including reports on the
Office of the President of Kosovo's procurement procedures
and asset management from January-September 2005, the
Ministries of Trade and Industry's procurement procedures
and asset management in 2004, Kacanik municipality's
procurement procedures and asset management in 2004, and the
Central Inter-Ministerial Commission Reconstruction Fund in
2004-05 for housing and commercial property damaged during
the March 2004 riots. Casella said that her staff, which is
a mix of Kosovars and internationals, can do most of the
work but the more difficult audits are outsourced to more
experienced private sector auditing companies which are paid
for by the European Agency for Reconstruction (EAR).

PHYSICALLY ASSUALTED BUT UNDETERRED IN HER WORK
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5. (SBU) Casella told Econoffs that she was physically
assaulted and robbed of her handbag in February as she
attempted to enter her apartment complex in downtown
Pristina. Police reports at the time concluded that the
physical assault was taken out of proportion and noted that
the crime appeared to be a simple purse snatching, and the
Kosovo press suggested a link to the AG's very critical
report, then just-released, of the Pristina municipality's
procurement practices. Casella said UNMIK moved her to a
secure apartment complex after the incident and is providing
24/7 security. Despite the incident, Casella said that she
is focused on completing audits from 2003-05 and is planning
to review the activities of the political parties that
receive KCB funding. She said that her office is currently
auditing the Kosovo Assembly's procurement procedures and
asset management, noting that the first report should come
out in late June or July.

PM CEKU SEES AUDITOR GENERAL AS ALLY IN CLEANING UP PISG
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6. (SBU) Casella said that she has good relationships with

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the outgoing UNMIK SRSG Soren Jessen-Petersen and Kosovo
Prime Minister Agim Ceku. (NOTE: AG Alhenius was constantly
at loggerheads with UNMIK over her focus on institutional
capacity building to the virtual exclusion over actual
auditing. END NOTE.) Casella said the prime minister has
requested comprehensive audits of all Provisional
Institutions of Self-Government (PISG) ministries to help
him evaluate the performance of current ministers, adding
that Ceku even offered to set up a desk for her to work in
his office. Casella said she told the PM she could only do
audits if he found the money to pay for them, but she is
clearly impressed with the PM's seriousness of purpose,
opining that this spirit of cooperation would allow her
office to get a lot done in thoroughly auditing PISG
institutions.


7. (SBU) Comment: During her short time in Kosovo, the new
Auditor General Casella has produced auditing reports on
sensitive, politically charged issues, notwithstanding
evident risks to her personal safety. Her steadfast
devotion to concluding state-of-the-art audits of Kosovo
institutions is intended to improve efficiency in
government. Along the way, her work product should prove
useful to other international and Kosovar officials charged
with ferreting out corruption and bias. End Comment.

GOLDBERG