Is there an effective internal audit process for defence ministry expenditure (that is, for example, transparent, conducted by appropriately skilled individuals, and subject to parliamentary oversight)?
Iraq score: 0/100
There is little to no internal audit of defence ministry expenditure.
The internal audit unit engages in irregular and superficial reviews of defence ministry expenditure. There may be regular deviation from formalised processes.
The internal audit unit engages in ongoing reviews of defence ministry expenditures but there are questions over effectiveness. Staff expertise may not be appropriate or its findings may not be valued by the defence minister.
The internal audit unit engages in ongoing reviews of defence ministry expenditures but may not have flexibility to build its own work programme for the year. Staff expertise is generally appropriate and findings are valued by the defence minister.
The internal audit unit engages in ongoing reviews of defence ministry expenditures and has the flexibility to build its own work programme for the year. Staff expertise is appropriate (e.g. there is low staff turnover rate). Its findings are valued by the defence minister.
As stipulated within the republic of Iraq’s Internal Audit Guide (FBSA) the objective of reducing administrative and financial corruption is contingent on the processes of the internal audit and their effectiveness (1). This is a question widely debated among universities and Iraqi PhD candidates but rarely in the context of Iraq’s security and defence institutions, possibly due to the impossibility of obtaining audit files on defence expenditure. Spending has increased over the years in response to expanding security threats (2), few activities covered online offer evidence of effective internal audits. Political push-back from powerful parliamentary blocs and militias many of whom have come-up in local investigations covered by press outlets as beneficiaries of the climate of corruption that harms defence performance hamper internal audits. IG offices have now been assigned to the Popular Mobilization Forces Commission while little evidence of collaboration between the PMF and FBSA makes it unlikely to be effective (3). One source raises concerns over potential foul play behind the appointment of a former militia commander as the PMF IG stating that the figure in question “has no previous administrative or military experience in the Ministry of Defence”.
FBSA Audit findings must be approved before they can be distributed among associated agencies and the COI (4). This erodes the IG’s audit capabilities regardless of their undertaking and strips their independence. While Iraq’s international partners have assisted Iraq in the formation of risk management systems, no evidence exists to enable a comment of their effectiveness. The MoD’s Directorate of Central Audit plays a major role in auditing and monitoring military contracts (5), (6). In addition to the IG, the MoD’s Central Audit Branch is said to compile annual inventories and spot-checks on army units and departments. The effectiveness of this agency is undermined by non-transparent arrangements and the diversion of government funds earmarked for defence expenditures. Internal audit agencies, while they exist, have a limited capacity to trace expenditures and collect reliable data.
1. “Internal Audit Guide across Iraqi Ministries,” Federal Bureau of Supreme Audit, https://www.fbsa.gov.iq/uploads/files/attachments/istirshad_guid.pdf.
2. “Iraq Defence and Security Report: Country Industry Report,” BMI, 2019.
3. “Inspector General or shadow minister: new PMF IG,” Bas News, September 8, 2019, http://www.basnews.com/index.php/ar/reports/544769.
4. “Internal Audit Guide across Iraqi Ministries,” Federal Bureau of Supreme Audit, https://www.fbsa.gov.iq/uploads/files/attachments/istirshad_guid.pdf.
5. “The Directorate of Central Audit [MoD] works diligently to complete auditing [of Iraqi army units],” Ministry of Defence, August 29, 2018, https://www.mod.mil.iq/index.php?name=News&file=article&sid=8603.
6. “Central Audit Directorate undertakes major tasks auditing and inspecting all MoD departments and units,” Ministry of Defence, August 5, 2017, https://mod.mil.iq/index.php?name=News&file=article&sid=6038.
16b. Enabling oversight
Iraq score: 25/100
There is no enabling oversight of the internal audit function of defence ministry expenditure.
There is no oversight for sensitive or critical issues and enabling oversight bodies (e.g. parliamentary committees) are provided with reports in summary form only.
There may be no oversight for sensitive or critical issues or enabling oversight bodies (e.g. parliamentary committees) are provided with reports that contain gaps/ redactions, or they are in summary form only.
Oversight occurs for sensitive or critical issues. Enabling oversight bodies (e.g. parliamentary committees) are provided with reports that may contain some gaps/redactions, or they are in summary form only.
Oversight occurs for sensitive or critical issues. Enabling oversight bodies (e.g. parliamentary committees) are provided with non-redacted reports, which allow them to be effective in their oversight role.
Iraq’s Central auditing body, The Federal Board of Supreme Audit, is responsible for reporting on expenditure budgets and also deliberates on emergency expenditure (1), (2). The MoF disburses funds allocated for defence expenditures as specified in the federal budget, but spending more than the amount specified is prohibited. According to the Iraqi Parliament’s Rules of Procedure (3), the Committee on Security and Defence is not tasked with oversight of the internal audit function.
1. “Law of the Board of Supreme Audit No. 42 of the year 1968,” The Iraqi Chronicle Official Gazette, April 27, 1968, https://pdfs.semanticscholar.org/bc3a/9541a0f00fda9d999a9298eb8bd676da8892.pdf.
2. Talal Al Kassar et al, “The Innovative Approach for Accounting and Accountability of Government Revenues in Iraq,” Research Journal of Finance and Accounting 5(9) 2014, https://pdfs.semanticscholar.org/bc3a/9541a0f00fda9d999a9298eb8bd676da8892.pdf.
3. “House of Representatives Rules of Procedure,” Council of Representatives, http://ar.parliament.iq/النظام-الداخلي/?fbclid=IwAR04CVIMWAUQFRUlYSwZ00R0w-reBJeNNZtNO8iQZ2VJSp9tAzMwremf3zM.
16c. External scrutiny
Iraq score: 0/100
There is no external scrutiny of the internal audit function of defence ministry expenditure.
Internal audit reports are rarely released to legitimate external audit bodies. When they are it is in summary form only, and the internal audit process is rarely subject to reviews by external auditors.
Internal audit reports are sometimes released to legitimate external audit bodies and the internal audit process is subject to sporadic or superficial reviews by external auditors.
Internal audit reports are proactively released to legitimate external audit bodies (e.g. anti-corruption organisation). The internal audit process is subject to in depth but not necessarily regular reviews by external auditors.
Internal audit reports are proactively released to legitimate external audit bodies (e.g. anti-corruption organisations). The internal audit process is subject to regular and in depth reviews by external audit bodies.
External scrutiny is exercised by Iraq’s oldest auditory body — the FBSA — and while some performance reports are delayed or unavailable, those which are accessible on the watchdog’s official website, underscore economic malfeasance in the form of inflated costs versus real operational costs, lack of transparent use of money earmarked for major, yet anonymised defence projects (1). Speeches delivered during parliamentary hearings (2) by the PM and Commander-in-Chief of Iraq’s armed security forces, which includes quasi-state actors backed by Iran, acknowledge that bigger threats of corruption or malfeasance arise from large budgets and contracts but has fallen short, as far as accessible parliamentary minutes indicate, of the aim of fighting corruption for private/personal gain. As far as parliamentary scrutiny is concerned, legislative debates have not debated specific findings raised within FBSA’s auditory findings. Attempts to challenge, scrutinise or raise wider objections to findings that expose rampant violations, whether in the form of price-fixing or contractual fraud, are non-existent within parliamentary settings. AAM proposed in a recent parliamentary session the formation of a centralised contracts committee inside ministries at great risk of corruption including the ministries of defence and interior among others. “Elected members”, the PM emphasised, must be ‘qualified and competent’, listing oversight and scrutiny as the twin objectives of this committee, but this does not address the fact that the proposal itself overlaps with the jurisdictions of other intergovernmental and external auditory bodies (1). This raises doubts over the extent to which parliament, and by extension, the commander-in-chief, are able and committed to support the FBSA in its mandate and place security and military forces under scrutiny and issue customary penalties. The evasion of scrutiny and resistance to it also points to a culture of impunity which protects security actors especially those that made enormous strides in recent elections, namely Iran-backed groups (3). As one analyst writes (4) AAM “need[s] to appease Iraq’s different centres of power to avoid renewed violence could come at the expense of real policy change”.
1. “Third Quarterly Report for the period: July 1 2018 – September 30 2018,” The Federal Bureau of Supreme Audit, fbsa.gov.iq/uploads/files/reports/_الفصل_2018الثالث.pdf?fbclid=IwAR0dFunqT3KJnCmqMgSbl0A3nwq_9FW0mAznMcHBYasDYW2gNGs1wH1N1Rk.
2. “Minutes of Iraqi Parliamentary Session – Fourth Electoral Cycle,” Council of Representatives, March 9, 2019.
3. “Iran-backed militias step up in the battle in Iraq,” The Wall Street Journal, March 19, 2019.
4. “Will Iraq’s old divisions undermine its prime minister,” Foreign Policy Magazine, February 5, 2019.
16d. Institutional outcomes
Iraq score: 0/100
The ministry fails to address audit findings in its practices, or only incorporates minor changes.
The ministry sometimes addresses audit findings in its practices, but not regularly.
The ministry regularly addresses audit findings in its practices.
Audit findings, as available MoD content online shows, are managed by the ministry’s ‘Meera’ division — that is attached to the Central Audit Directorate; the body overseeing defence spending. Coverage is void of critical findings (1). Fraud detected by Iraq’s Parliamentary Integrity Committee has resulted in little more than admonishments (2). No evidence exists suggests that the findings of internal auditory bodies embedded within the MoD lead directly to prosecution or other institutional outcomes. Some arrest warrants have been issued, but the officials in question have walked away free. Coverage further underscores, the absence of audit reforms (3), and professionally trained auditors; which makes any positive correlation between audit findings and institutional outcomes the less likely. Annual reports could not be referenced in support of the above assertion, but widely circulated reports (4), (5), the evidence they present depicts a security ministry plagued by corruption and financial irregularities punished by institutional outcomes that reflect a broader mission or vision to incorporate these findings.
1. “The Directorate of Military Accounts is a major effort in following up the accounts, inventory and auditing of all military commanders and formations,” Ministry of Defence: Official YouTube Account, July 27, 2018.
2. “Parliament Integrity Commission reveals corrupt contracts issued inside Iraq’s Defence Ministry,” Al Ghad Press, January 21, 2016.
3. “The negative impact of administrative and financial corruption on Iraqi state institutions and ways to address it,” The Iraqi Ministry of Finance General Tax Commission, September 3, 2013, http://www.tax.mof.gov.iq/ArticleShow.aspx?ID=21.
4. “Iraq’s clampdown on corruption extends to senior officers,” Sharq Aswaat, December 27, 2017.
5. “Warning issued over corrupt deals in the Iraqi Ministry of Defence,” Al Hayat, September 9, 2017.
Compare scores by country
Please view this page on a larger screen for the full stats.
|Country||16a. Activity||16b. Enabling oversight||16c. External scrutiny||16d. Institutional outcomes|
|Albania||50 / 100||0 / 100||50 / 100||50 / 100|
|Algeria||0 / 100||NA||NA||NA|
|Angola||0 / 100||NA||NA||NA|
|Argentina||75 / 100||100 / 100||50 / 100||25 / 100|
|Armenia||75 / 100||25 / 100||50 / 100||50 / 100|
|Australia||50 / 100||50 / 100||50 / 100||50 / 100|
|Azerbaijan||0 / 100||NA||NA||NA|
|Bahrain||25 / 100||0 / 100||0 / 100||NEI|
|Bangladesh||50 / 100||50 / 100||0 / 100||0 / 100|
|Belgium||100 / 100||75 / 100||75 / 100||100 / 100|
|Bosnia and Herzegovina||75 / 100||0 / 100||50 / 100||50 / 100|
|Botswana||25 / 100||50 / 100||25 / 100||50 / 100|
|Brazil||100 / 100||100 / 100||100 / 100||100 / 100|
|Burkina Faso||0 / 100||NA||NA||NA|
|Cameroon||0 / 100||NA||NA||NA|
|Canada||75 / 100||75 / 100||100 / 100||75 / 100|
|Chile||75 / 100||50 / 100||50 / 100||50 / 100|
|China||75 / 100||NA||0 / 100||50 / 100|
|Colombia||100 / 100||75 / 100||100 / 100||50 / 100|
|Cote d'Ivoire||25 / 100||0 / 100||0 / 100||0 / 100|
|Denmark||50 / 100||50 / 100||25 / 100||50 / 100|
|Egypt||25 / 100||0 / 100||0 / 100||0 / 100|
|Estonia||50 / 100||50 / 100||25 / 100||75 / 100|
|Finland||75 / 100||75 / 100||75 / 100||75 / 100|
|France||100 / 100||75 / 100||25 / 100||50 / 100|
|Germany||100 / 100||50 / 100||25 / 100||50 / 100|
|Ghana||50 / 100||50 / 100||50 / 100||0 / 100|
|Greece||75 / 100||75 / 100||50 / 100||50 / 100|
|Hungary||50 / 100||50 / 100||0 / 100||NA|
|India||50 / 100||50 / 100||50 / 100||50 / 100|
|Indonesia||50 / 100||75 / 100||50 / 100||50 / 100|
|Iran||0 / 100||NA||0 / 100||NA|
|Iraq||0 / 100||25 / 100||0 / 100||0 / 100|
|Israel||50 / 100||50 / 100||50 / 100||50 / 100|
|Italy||75 / 100||75 / 100||50 / 100||NEI|
|Japan||NEI||0 / 100||NEI||NEI|
|Jordan||50 / 100||0 / 100||0 / 100||NA|
|Kenya||25 / 100||25 / 100||50 / 100||25 / 100|
|Kosovo||75 / 100||0 / 100||50 / 100||50 / 100|
|Kuwait||50 / 100||25 / 100||50 / 100||0 / 100|
|Latvia||75 / 100||75 / 100||75 / 100||100 / 100|
|Lebanon||75 / 100||0 / 100||75 / 100||NEI|
|Lithuania||75 / 100||50 / 100||75 / 100||NEI|
|Malaysia||100 / 100||0 / 100||100 / 100||50 / 100|
|Mali||25 / 100||0 / 100||0 / 100||0 / 100|
|Mexico||50 / 100||50 / 100||50 / 100||0 / 100|
|Montenegro||25 / 100||25 / 100||25 / 100||NEI|
|Myanmar||25 / 100||0 / 100||0 / 100||0 / 100|
|Netherlands||75 / 100||100 / 100||100 / 100||100 / 100|
|New Zealand||75 / 100||100 / 100||100 / 100||75 / 100|
|Niger||0 / 100||NA||NA||NA|
|Nigeria||25 / 100||25 / 100||25 / 100||0 / 100|
|North Macedonia||75 / 100||50 / 100||50 / 100||75 / 100|
|Norway||100 / 100||100 / 100||100 / 100||100 / 100|
|Oman||25 / 100||0 / 100||0 / 100||NA|
|Palestine||25 / 100||0 / 100||0 / 100||0 / 100|
|Philippines||0 / 100||NA||NA||NA|
|Poland||50 / 100||25 / 100||75 / 100||50 / 100|
|Portugal||75 / 100||50 / 100||0 / 100||50 / 100|
|Qatar||25 / 100||0 / 100||0 / 100||NA|
|Russia||25 / 100||25 / 100||25 / 100||50 / 100|
|Saudi Arabia||25 / 100||0 / 100||0 / 100||0 / 100|
|Serbia||75 / 100||25 / 100||0 / 100||0 / 100|
|Singapore||100 / 100||75 / 100||75 / 100||100 / 100|
|South Africa||50 / 100||0 / 100||0 / 100||75 / 100|
|South Korea||25 / 100||100 / 100||25 / 100||NEI|
|South Sudan||0 / 100||NEI||25 / 100||NEI|
|Spain||100 / 100||50 / 100||50 / 100||50 / 100|
|Sudan||0 / 100||NA||NA||NA|
|Sweden||100 / 100||50 / 100||50 / 100||100 / 100|
|Switzerland||100 / 100||100 / 100||100 / 100||100 / 100|
|Taiwan||100 / 100||75 / 100||100 / 100||100 / 100|
|Tanzania||100 / 100||25 / 100||50 / 100||50 / 100|
|Thailand||50 / 100||0 / 100||50 / 100||0 / 100|
|Tunisia||75 / 100||0 / 100||NEI||25 / 100|
|Turkey||25 / 100||0 / 100||0 / 100||25 / 100|
|Uganda||50 / 100||25 / 100||75 / 100||50 / 100|
|Ukraine||50 / 100||75 / 100||75 / 100||75 / 100|
|United Arab Emirates||25 / 100||0 / 100||0 / 100||NA|
|United Kingdom||75 / 100||0 / 100||25 / 100||50 / 100|
|United States||25 / 100||NA||NA||NA|
|Venezuela||0 / 100||0 / 100||0 / 100||0 / 100|
|Zimbabwe||25 / 100||0 / 100||50 / 100||25 / 100|