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