UN BOARD OF AUDITORS SKIRTS SERIOUS REVIEW OF UNDP

UNCLAS USUN NEW YORK 000592 SIPDIS SIPDIS E.O. 12958: N/A TAGS: ACABQ AID AORC KUNR UNDP UNFPA UNICEF UNOPS SUBJECT: UN BOARD OF AUDITORS SKIRTS SERIOUS REVIEW OF UNDP OPERATIONS IN DPRK REF: USUN 00529 ¶1. At the insistence of one member of the ACABQ (rumored to be the French member),the ACABQ met with the Board of Auditors (BOA) to discuss the Board's response to ACABQ's request to complete the audit of the UN's voluntarily funded programs in the DPRK. The US member and others made clear during the discussion with the BOA that the audit remained incomplete in a number of respects, for example, on how UN funds were spent in the DPRK. The French auditor led the discussion, with support from the South African auditor, stating that the only way possible to complete the audit was for the Board to go the DPRK in order to gain access to documents and staff. They further stated that it had no intention of doing any further work on this audit if access to the DPRK is denied. Furthermore, the BOA sought the explicit confirmation from the ACABQ that the ACABQ would not expect the audit to continue unless the DPRK granted visas to enter the country to pursue the audit. The ACABQ, consistent with its earlier positions, reiterated the need for the BOA to complete the audit by recourse to existing electronic files, access to international staff, including UN Volunteers, and transfer of remaining documents from the DPRK to New York Headquarters. ¶2. The US ACABQ member, supported by a minority of other members, insisted that the BOA fully address ACABQ's request to complete the audit and submit its report in a timely manner, and not use the possible denial of access into the DPRK as an excuse for not completing what has been requested. The US member pointed out that access to required documents and personnel were either currently available in NY or could be retrieved from the DPRK for review in NY and that the BOA must bring this matter to closure. In response to the above comments from the ACABQ, the South African and French auditors reiterated their view that the only way to bring the matter to closure was for the BOA to travel to the DPRK. ¶3. Comment: USUN expects that it is extremely unlikely that the DPRK will admit the BOA onto the country. The BOA seems to be using the visa issue as an excuse to avoid beginning the second phase of the audit. The BOA preliminary audit sampled only a few UNDP documents. Importantly, the BOA stated that all payments were made using manual check. The BOA did not have access to the check book and accordingly could not determine what checks were made out to "cash". In addition, the BOA preliminary audit did not a constitute a "full-scope country office audit" and accordingly did not cover other areas of concern including, but not limited to, the occurrence of counterfeit currency in the UNDP country office and the control and rules over the activities of local staff. End Comment. KHALILZAD