VZCZCXRO3921
PP RUEHBC RUEHDA RUEHDE RUEHIHL RUEHKUK
DE RUEHGB #3783 3371550
ZNR UUUUU ZZH
P 021550Z DEC 08
FM AMEMBASSY BAGHDAD
TO RUEHC/SECSTATE WASHDC PRIORITY 0653
INFO RUCNRAQ/IRAQ COLLECTIVE

UNCLAS BAGHDAD 003783 
 
SIPDIS 
 
E.O.12958:N/A 
TAGS: EFIN ECON PGOV IZ
SUBJECT: IRAQ BUDGET EXECUTION TO IMPROVE WITH NEW ACCOUNTING 
MANUAL 
 
¶1. Summary: The GOI will soon release a new accounting manual that 
will establish uniform accounting practices at all levels of public 
administration.  The manual is the work of experienced Iraqi civil 
servants, supported by U.S. Treasury advisors and experts from the 
UK and World Bank.  Making official accounting practices become more 
uniform and transparent will reinforce other reforms undertaken by 
the GOI.  End summary. 
 
¶2.  A team of 13 senior GOI civil servants completed the accounting 
manual during a workshop held in Amman, Jordan, from November 4 
through 14.  Advisors from the U.S. Treasury Department's Office of 
Technical Assistance (OTA) facilitated the workshop, with additional 
support from the UK and the World Bank.  The 200-page manual will be 
published in both Arabic and English once it is formally approved by 
the Minister of Finance.  Ministry officials expect that to happen 
by the end of this year. 
 
¶3.  The results of the workshop are the culmination of nearly a year 
of preparatory work by GOI officials located across Iraq.  Those 
present at the workshop represented the Ministries of Finance and 
Education, the Council of Ministers, the Board of Supreme Audit, and 
the finance ministry of the Kurdish Regional Government.  The manual 
records largely undocumented accounting practices understood by only 
the most experienced Iraqi civil servants.  Just three of the 
Ministry of Finance officials attending the workshop had combined 
work experience of over 120 years. 
 
¶4.  Once the manual is widely available, it will be possible for the 
GOI to follow uniform accounting practices at all levels of 
government.  While it could take up to five years to achieve that 
goal, completion of the manual was an essential first step.  "You 
can't have budget execution without this," said one of the OTA 
advisors at the workshop. 
 
¶5.  In 2006, as one of the reforms required under Iraq's program 
with the International Monetary Fund, the Ministry of Finance 
established a new accounting classification to guide GOI 
record-keeping.  But the GOI was not able to apply the new chart of 
accounts consistently across all ministries or at all levels of 
government.  The resulting inconsistencies added unnecessary 
friction to the budget process, made it difficult to measure the 
results of GOI spending, and impeded budget execution. 
 
¶6. The spread of uniform government accounting standards should 
reinforce other reforms the GOI is undertaking.  In addition to more 
efficient execution of budgets, the process of preparing budgets 
will become simpler.  Consistent classification and coding of 
expenditure will also increase transparency, improve the quality of 
audits, and help to curb corruption. 
CROCKER