OSCE: EU Statement on the External Auditor

Finnish Presidency of the Council of the European Union

Permanent Council No. 618
6 July 2006

The EU warmly welcomes Mr Miller to the PC. We would like to thank the External Auditor for the audit of the 2005 financial statements and for his comprehensive report. We would also like to express our appreciation of the high quality work done by the UK National Audit Office for the OSCE over the past three years.

The EU would also like to thank the Secretariat for their work in providing the 2005 Financial Report and Financial Statements within the timeframe laid down in the Financial Regulations.

We are pleased that the External Auditor has again placed an unqualified opinion on the financial statements.

The EU has already provided detailed comments on the Auditor’s report in the ACMF. We would like to highlight the following issues today.

We welcome the Auditor's focus this year on the management of procurement, since this has been an area of concern for the EU in the past. We support the recommendations on standardisation of processes and documentation, and on dissemination of good practice by the Procurement and Contracting Unit.

We note the Auditor's recommendations on introducing open competition for the recruitment of the OSCE External Auditor, on full provision for external audit costs in the Unified Budget, and on the length of the audit appointment. We look forward to addressing these issues in due course.

We support the recommendation to establish a mechanism requiring staff to make annual declarations of interest and to establish a central register to record the receipt of gifts or hospitality they receive from suppliers or in the course of carrying out their official duties.

On prior year recommendations, we welcome the improvements identified by the Auditor. We endorse the proposal that the Audit Committee consider ways of helping management plan and prioritise the implementation of internal audit recommendations.

We strongly support the recommendation that the Secretariat undertake a comprehensive assessment of risk across the Organisation. Finally, we agree that it is important that the risks identified by the Auditor last year are addressed when the new contract for the Provident Fund is negotiated.

The Acceding Countries Bulgaria and Romania, the Candidate Countries Turkey, Croatia [1] and the former Yugoslav Republic of Macedonia, the Countries of the Stabilisation and Association Process and potential candidates Albania, Bosnia and Herzegovina, Serbia, as well as Ukraine and the Republic of Moldova align themselves with this statement.

[1] Croatia and the Former Yugoslav Republic of Macedonia continue to be part of the Stabilisation and Association Process