ED Magedson – Founder
World Bank1818 H Street NW Washington, Dist of Columbia USA
World Bank gave inaccurate financial statements Washington DC
I submitted this statement 5/13/2013 to the UK Parliament Commons Select Public Administration Committee in response to their inquiry into complaints handling. http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-administration-select-committee/inquiries/parliament-2010/complaints-handling/
Written evidence submitted by Karen Hudes
Written evidence submitted by Karen Hudes on Complaints: do they make a difference?
· permitting corruption to remain unaddressed is not an option
1. When government departments and public organisations are not held to account, irreversible harm may occur that cannot be put right. The high cost of permitting financial weakness to be concealed by poor accounting and auditing practices has been amply demonstrated. My complaints to the World Bank's oversight agencies, including the UK's Executive Director, Governor, Ambassador in Washington, Serious Fraud Office (SFO), the International Organization of Supreme Audit Institutions, the International Organization of Securities Commissions, the United States National Advisory Council for International Monetary and Financial Policies, Fitch Ratings, Moodys, and Standard and Poors have fallen upon deaf ears. Failure to correct the internal control lapses and corruption that I have reported is about to result in a state of permanent backwardation in the gold markets, interrupt the financing of world trade except through barter, and plunge the world into a depression from which recovery is unlikely.
2. As a World Bank bondholder, on September 28, 2010, I informed the SFO of material omissions in the accuracy of the World Bank's financial reporting due to the World Bank's internal control lapses and KPMG's failure to follow Generally Accepted Auditing Standards. I provided the SFO a chronology of such lapses, which included a Letter from Jean-Louis Rioda, Acting Head of the European Community's Anti-Fraud Office: "I hereby acknowledge receipt of your correspondence received on 18/05/2010 in which you provide OLAF with information regarding 'the impaired ethics and legal functions in the World Bank'".
3. The World Bank's Audit Committee requested an audit of the World Bank's internal controls over financial reporting. The auditor may form an opinion on the effectiveness of internal control over financial reporting only when there have been no restrictions on the scope of the auditor's work. KPMG itself imposed such restrictions on its own audit team. A scope limitation requires the auditor to disclaim an opinion or withdraw from the engagement. KPMG's unqualified opinion prevented bondholders from requiring mitigating measures to correct corporate governance irregularities and improve the quality of the World Bank's financial reporting.
4. The SFO called the United States Security and Exchange Commission (SEC) on 10 October 2010, but the SEC only stonewalled. On 29th March, 2012 the Economic Affairs Committee of the UK House of Lords recommended that funding to the World Bank should be reduced "while a more detailed re-evaluation is carried out." http://www.publications.parliament.uk/pa/ld201012/ldselect/ldeconaf/278/27802.htm
5. On 24th July, 2012 I followed up with the FSA, under reference number PC159743/ISS10622211. I have repeatedly reminded the FSA and the UK Parliament that the World Bank receives funding from UK taxpayers and bondholders and is subject to oversight by Parliament and the FSA. Instead, both Parliament and the FSA have abdicated their responsibility to ensure that the World Bank's financial information to bondholders is correct.
6. The House of Commons International Development Committee and the House of Commons Public Administration Committee published my testimony that the World Bank was already in contempt of an 8th April, 2005 letter  from the Joint Economic Committee of the US Congress to the World Bank inquiring whether "the Bank's Board of Executive Directors always is in possession of accurate and timely data on the Bank's accounting and financial position."
Written Evidence for the inquiry into Public engagement in policy making, published November 2, 2012 available here:
7. In June, 2012 I recommended a simple admonishment: "The UK Parliament's Select International Development Committee [and the European Parliament's Committee on Budgetary Control] share[s] the Joint Economic Committee's goal "that the Board of Directors and the public are being presented with accurate and timely financial information and that any accounting irregularities are promptly discovered, disclosed and corrected....Under the World Bank's COSO framework, it is also necessary to determine whether the World Bank's internal control system has the necessary critical underpinnings."
8. Today's dire circumstances call for immediate and forceful intervention in the hope that time still remains.
 (Poor ) online copy : http://kahudes.net/wp-content/uploads/2012/05/exhibit2.pdf
This report was posted on Ripoff Report on 05/13/2013 05:13 AM and is a permanent record located here: http://www.ripoffreport.com/reports/r/world-bank/washington-dist-of-columbia-20433/world-bank-gave-inaccurate-financial-statements-washi-1050418. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.
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