Former minister Doug Henderson spoke out following a report last week that claimed billions of dollars earmarked for rebuilding the countryhad vanished after being given to the US-controlled governing body in Baghdad.
‘Accounting for aid money is very difficult, as I know from my time as Europe minister in the Foreign Office. You must have a proper and clear audit trail. It is vital that we have an absolutely transparent accounting system for this Iraqi aid money,’ Henderson said.
Christian Aid has calculated that at least $4bn (£2.3bn) has been passed to the ruling Coalition Provisional Authority (CPA). The leading UK charity claims that only a fifth of those development funds have been accounted for. It believes that this multibillion-dollar ‘black hole’ will double by the end of the year unless the CPA’s accounts are made public.
The charity has challenged the British government to account for the missing money. However, a spokesman for the CPA has denied that the money had been lost or misused and promised that all the cash will be fully accounted for.
In addition, Christian Aid has claimed that one senior European diplomat told the charity he had ‘absolutely no idea how the money has been spent’.
Christian Aid’s international director, Roger Riddell, called the situation ‘little short of scandalous’. He said: ‘The British government must use its position of second in command of the CPA to demand full disclosure of this money and its proper allocation in the future. This is Iraqi money. The people of Iraq must know where it is going and it should be used for the benefit of all the country’s peopleð particularly the poorest.’
The UN transferred $1bn from its old Oil for Food Programme to the new Development Fund For Iraq earlier this year. The same UN resolution was supposed to set up an International Advisory and Monitoring Board to oversee the accounts.
According to Christian Aid, the CPA has received $2.5bn in assets seized from Saddam Hussein’s regime in Iraq and abroad and an additional $1.5bn in oil revenue since the war.
In June Accountancy Age reported that oil exports had resumed from Iraq with uncertainty hanging over whether the CPA had appointed auditors.
When the UN lifted sanctions against the Iraq oil export ban in May it had done so on the proviso that auditors be appointed.
But it became clear that confusion existed within the governing authorities within the war shattered country. Exports had resumed without audit supervision and the CPA centre in Baghdad seemed unaware that it had an obligation to appoint a monitoring board.
A spokesman said the CPA believed the UN had responsibility for financial supervision.
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