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I Meeting of the EUROSAI WGEA Special Subgroup on the Audit of Natural, Man-Caused Disasters Consequences and Radioactive Wastes Elimination was held on March 16, 2007 in Kyiv, Ukraine.
The representatives of the Supreme Audit Institutions from 9 countries, in particular Azerbaijan, Germany, European Court of Audit, Netherlands, Poland, Russian Federation, Slovak Republic, France and Switzerland came to Kyiv.
In addition officials of Ministry of Environmental Protection of Ukraine, Ministry of Emergencies and Affairs of Population Protection from Consequences of Chernobyl Catastrophe of Ukraine and Parliamentary Committee on the Issues of Ecological Policy, Natural Management and Elimination of Consequences of Chernobyl Catastrophe took part in I Meeting as well.
Objectives of I Meeting were specified as follows:
1. approval of the Work Plan of the Special Subgroup for 2007−2008;
2. approval of the List of common issues for the International Co-ordinated Audit of the Chernobyl Shelter Fund;
3. discussion of the date and place of II Meeting of the Special Subgroup.
The Chairman of the Accounting Chamber of Ukraine Dr. Valentyn Symonenko in his opening statement welcomed all Meeting participants and outlined key milestones of establishment of the Special Subgroup, its overall goal and primary tasks.
Representatives of Ukrainian authorities expressed their support of the initiative of the Accounting Chamber and stressed upon the extraordinary nature of the issues related to the consequences of the Chernobyl catastrophe and radioactive wastes elimination for European community.
Mr. Mykhailo Borysyuk, Head of Secretariat of Parliamentary Committee on the Issues of Ecological Policy, Natural Management and Elimination of Consequences of Chernobyl Catastrophe emphasized that Ukraine remained in the heart of the most global catastrophe of the 20th century − Chernobyl catastrophe.
Mr. M. Borysyuk also covered legal fundamentals of the state policy on the Chernobyl issues, amounts of the State Budget funds allocated to these tasks, projects realized on the Chernobyl site, progress of negotiations concerning construction of the new confinement.
The representative of Parliamentary Committee mentioned that there were several reasons for improper realization of the international projects, which had both objective nature due to originality of such works and subjective nature due to project management's shortcomings.
Mr. M. Borysyuk also underscored that Parliamentary Committee welcomed conducting independent internal and international co-ordinated audits in accordance with regulations followed by respective funds and accounts of the international assistance with the aim of legal collisions' avoidance.
In conclusion, the representative of Parliamentary Committee noted that during last year some positive changes occurred concerning preparatory works on decommissioning the Chernobyl NPP and transforming the Shelter Object into an environmentally safe system. In Committee's opinion, under such circumstances it will be possible to begin decommissioning works till 2010.
After approval of I Meeting Agenda the participants considered its Theme I − Work Plan of the EUROSAI WGEA Special Subgroup on the Audit of Natural, Man-Caused Disasters Consequences and Radioactive Wastes Elimination for 2007−2008.
Presenting the Work Plan the Chairman of the Accounting Chamber of Ukraine Dr. V. Symonenko outlined basic issues incorporated into the Plan for current and following years. Chairman also suggested Meeting participants should exchange their views and submit motions to the Plan's contents.
Within the framework of cooperation with the Netherlands Court of Audit − Chairman of the Task Force on the Accountability and Audit of Disaster-Related Aid − Mr. Egbert Jongsma, Project Manager Tsunami took part in I Meeting of the Special Subgroup.
Mr. E. Jongsma gave a short overview of INTOSAI Tsunami Task Force, specifying its objectives, primary tasks and initial achievements, specific activities. The representative of the Netherlands also introduced web site of the Tsunami Task Force and expressed keen interest in placing Special Subgroup's relevant materials and information on this site.
The presentation included some issues regarding specificity of auditing aid provided to elimination of natural disasters. In particular Mr. E. Jongsma mentioned on the one hand about complex web of given aid and on the other hand about existing mandate restrictions of concerned SAIs.
Netherlands auditor gave special attention to conducting pilot studies of the possibility of using Geographic Information System for auditing disaster-related aid.
Mr. E. Jongsma finished his presentation with the statement that Tsunami Task Force was planning to provide illustrative examples of the added value of using geographical information for auditing at INCOSAI 2007 in Mexico. They also aim to convince INCOSAI to make auditing disaster-related aid a Sub-theme for the next INCOSAI 2010.
Mr. E. Jongsma suggested a possibility of combining efforts of both INTOSAI Tsunami Task Force and the Special Subgroup and incorporation of latter materials to the agenda of INCOSAI 2010.
After presentation of the Netherlands representative the Chairman of the Accounting Chamber Dr. Valentyn Symonenko suggested the Meeting participants should return to discussion of Agenda Theme I − Work Plan of the EUROSAI WGEA Special Subgroup for 2007−2008.
Chief Inspector of the Inspection for control over Federal Budget expenditures on conversion of the Accounts Chamber of the Russian Federation Mr. Nikolay Laskin introduced a motion to consider the time frames of conducting national audits after receiving additional information about mandates of SAIs while auditing the Chernobyl Shelter Fund.
In addition, Ms. Ewa Borkowska-Domańska, main expert from the Supreme Chamber of Control of Poland specified the dates of the EUROSAI WGEA Meeting in Bratislava that would take place in October 2007 and procedure of informing INTOSAI and EUROSAI community about the progress of the Special Subgroup in relevant publications.
After break the meting was renewed under the chair of the First Deputy Chairman of the Accounting Chamber of Ukraine Mr. Volodymyr Pershyn who gave the floor to the Deputy Minister of Emergencies and Affairs of Population Protection from Consequences of Chernobyl Catastrophe of Ukraine Mr. Volodymyr Kholosha.
Mr. V. Kholosha gave an overview of the projects financed from the Chernobyl Shelter Fund, Nuclear Safety Account and by the European Commission. These projects are realized to transform the Shelter Object into an environmentally safe system.
In addition, Deputy Minister mentioned that due to delay in construction of the new confinement it was decided to carry out stabilization measures aimed at strengthening existing Shelter Object. These measures were financed from the Chernobyl Shelter Fund. Mr. V. Kholosha also informed about placing into operation Liquid Radioactive Wastes Treatment Plant.
In conclusion, Mr. V. Kholosha emphasized that the Ministry of Emergencies and Affairs of Population Protection from Consequences of Chernobyl Catastrophe considered increasing the efficiency of utilization of international aid funds aimed at transformation of the Shelter Object into an environmentally safe system as the objective of the International Co-ordinated Audit of the Chernobyl Shelter Fund. The Ministry laid hope that this audit would be conducted in compliance with guiding regulations of the Chernobyl Shelter Fund.
Then the floor was given to Mr. Stepan Lizun, Deputy Minister of Environmental Protection of Ukraine.
Reporter focused his attention to Basel Convention Audit that is one of the issues of the Work Plan of the EUROSAI WGEA Special Subgroup for 2007−2008.
Mr. S. Lizun gave some examples about transportation of hazardous chemical wastes to Ukraine from Hungary and other European countries. Deputy Minister emphasized that storage of such wastes on the territory of Ukraine affected current ecological situation.
In conclusion of his presentation Mr. S. Lizun suggested that Meeting participants should cooperate with the Ministry of Environmental Protection while conducting Basel Convention Audit.
The next question, which was discussed within the Meeting Agenda, was the approval of the List of common audit issues for the International Co-ordinated Audit of the Chernobyl Shelter Fund.
First Deputy Chairman of the Accounting Chamber Mr. V. Pershyn expressed his gratitude to all SAIs participated in elaboration of the Co-ordinated Audit Program Assumptions, provided their suggestions and confirmed their involvement in this audit.
Mr. V. Pershyn informed about the results of previous audits of the Accounting Chamber of Ukraine on the issues of utilization of Chernobyl Shelter Fund's resources. Reporter outlined that international measures regarding elaboration of the ecologically acceptable solutions to the problem of Shelter Object in the beginning of 2007 were financed only at 25 % of their readiness; delay in realization of different projects amounted from 3 to 7 years; at that time none facility had been completed in fact and design solution of the new confinement was absent.
First Deputy Chairman noted that due to repeated threat of a new catastrophe the Accounting Chamber of Ukraine raised an initiative regarding conducting the International Co-ordinated Audit of the Chernobyl Shelter Fund.
Chairman of the Donor Assembly of the Chernobyl Shelter Fund, Chairman of the Parliament of Ukraine, Prime-Minister of Ukraine and Secretary of the National Security and Defence Council of Ukraine were informed about this audit.
After overview presentation of the First Deputy Chairman Mr. Volodymyr Pershyn the floor was given to the Director of the EBRD Nuclear Safety Department Mr. Vince Novak.
Mr. Vince Novak covered basic institutional practices of the Bank, including operations of the Chernobyl Shelter Fund in his presentation.
Invited guest reported that so far 3 so called management audits had been conducted in Chernobyl and the third final audit report was expected in the end of April.
EBRD representative finished his presentation with the procedure of money disbursement from the Fund, which is allocated solely to contractors under Grant Agreements and only after the recipient - Chernobyl NPP − and the Western management consultants have confirmed actual performance of the works. Currently more than 80 projects within SIP framework have been completed.
Following Mr. Novak's statements, the Chernobyl Shelter Fund is rather controlled and very transparent entity. Thus, in the opinion of the EBRD Department Director, the participants of the International Co-ordinated Audit of the Chernobyl Shelter Fund should decide themselves what indeed is the audit purpose and anticipated results. Informing the Donor Assembly about the planned audit, its objectives and tasks is seen as the first step in this regard.
The information on conducting the International Co-ordinated Audit of the Chernobyl Shelter Fund was further detailed in the presentation of the Chief Controller − Director of the Department for Agro-Industrial Complex, Nature Conservation and Emergencies Issues of the Accounting Chamber of Ukraine Ms. Mariya Shulezhko.
Ukrainian Chief Controller informed the Meeting participants about peculiarities while preparing the Audit, its objectives, tasks and criteria. The reporter called attention to the Common Audit Issues for participating SAIs, agreed upon the results of the meeting in November 2006 in Luxembourg, and existing audit mandates.
Director of the Department shared the matter of the Audit problem, need for elaboration of comprehensive approach towards solution of the problem of transforming the Shelter Object into an environmentally safe system by the international community and possible reasons for non-execution of scheduled measures at the Chernobyl NPP.
Ms. Shulezhko emphasized two stages of the International Audit conducting by the Accounting Chamber of Ukraine and other participating SAIs in I half of 2007, as well as drawing the Joint Report by SAI of Ukraine as the Audit Co-ordinator in 2008.
Mr. Jacek Kolasinski, Head of the Cabinet, from the European Court of Auditors was the next presenter who gave an overview on the audit on the use of the EU funds in making the Chernobyl site environmentally safe which was commenced in autumn 2006 by the Court.
European auditor specified the issues of audit justification, audit scope, risk assessment, approach and last developments in his presentation.
One of the biggest TACIS projects on construction of the Solid Wastes Facility, having been financed by the Commission since 2001, as well as the Nuclear Safety Account and the Chernobyl Shelter Fund, having been administered by the EBRD since 1994, are going to be checked in the course of the audit.
It will be a combined audit encompassing performance audit, regularity and legality audits.
Mr. Jacek Kolasinski concluded his presentation with some information about audit suspension by the European Court of Auditors due to investigation officially launched by OLAF (European Anti-Fraud Office) in January 2007 on the case of bribing one of TACIS contractor's employee. The Court will not resume commenced audit until the investigation is closed.
In European auditor's opinion, only audit of real projects performed on the Chernobyl site will bring some added value of the results.
According to Agenda Theme II on the Common Audit Issues of the International Co-ordinated Audit, auditor of the German Federal Court of Audit Mr. Thomas Weidmann made a presentation on preliminary results of national audit initiated in January 2007.
Mr. Thomas Weidmann informed his colleagues about German Work Plan, audit scope, performed activities and arisen problems, as well as possible ways of their solution.
Thus, German auditors plan to check efficiency of utilizing German contribution to the Chernobyl Shelter Fund, procedure of awarding the contracts with companies-winners and final payments hereunder. SAI of Germany will also look at the activities of the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety at the Donor Assembly, in particular level of representation of national interests.
Federal Ministry is active in this regard and in February 2007 forwarded its requirements to the EBRD concerning improving cost and risk management and providing solid and transparent procurement procedures.
Mr. Thomas Weidmann drew attention to existing conflict of interest between Project Management Unit (PMU, Western consultants) and Chernobyl NPP management, when the latter refused to accept tender decision and award the contract to the French Company Novarka.
The reporter also mentioned about current mandate restrictions of the German SAI in part of auditing executed contracts under Grant Agreements and Management audit of the PMU/ChNPP.
National audit report is going to be finalized by the Federal Court of Audit in the end of May.
The presentation of the Chief Inspector of the Inspection for control over Federal Budget expenditures on conversion of the Accounts Chamber of the Russian Federation Mr. Nikolay Laskin was also incorporated into I Meeting Agenda. Mr. Nikolay Laskin made a presentation on the vision of the Russian auditors regarding conducting the Chernobyl audit.
The problem of eliminating consequences of the Chernobyl accident is given special consideration both on governmental and public organizations' level in the Russian Federation.
In the Russian auditor's opinion, it is necessary first to receive appropriate authority from the EBRD and Donor Assembly to conduct such audit activities.
Mr. Nikolay Laskin believes that participants of the International Audit, possessing approved authorities, should audit the entities where financial resources are located, decisions on disbursements and their volumes are made and selection of SIP executors is performed.
Accounts Chamber of the Russian Federation could review, in particular, works performed by the Russian Atomic Energy Agency, as the representative of the Russian Federation in the Donor Assembly, in situ Atomstroyexport Company, forming the Stabilization Consortium. SAI of the Russian Federation could also assess activities carried out by Kurchatov Institute participating in this project as well.
Mr. Werner Tschopp, auditor from the Swiss Federal Audit Office was the last to make presentation within Theme II of the Meeting Agenda. The auditor elaborated two practical documents to be used while conducting the Chernobyl Shelter Fund Audit.
The first document is the Inventory List of the Projects realized on the Chernobyl site within the SIP, which account for more than 80 projects. This List contains some basic information on projects names, their period of realization, estimated costs and achieved per cent of performed activities. In addition, while completing this List key persons and organizations, involved into decision-making, financing, realizing and auditing, including Supreme Audit Institutions, will be specified.
After this Inventory List being completed by the audit participants, it will be possible to define the projects, which have the highest risks and are critical to attain strategic goal − transforming the Shelter Object into an environmentally safe system.
Such work will be logically extended by filling in another document − Checklist for Public Procurement Projects, in which on one hand we have the mentioned Inventory List of Projects and on the other hand the author asks various questions usually emerging in the course of the audit.
In Mr. Werner Tschopp's opinion, the outcome of planned Audit is to realize what is necessary to make secure environment for suffered population living in Ukraine, Russian Federation and Belarus.
After the presentation of the Swiss SAI's representative the Chair of Theme II Mr. Volodymyr Pershyn suggested including above said Inventory List of Projects into the List of common audit issues of the International Audit. The participants approved this suggestion.
Following discussions of I Meeting of the Special Subgroup on the Audit of Natural, Man-Caused Disasters Consequences and Radioactive Wastes Elimination, the Meeting participants agreed on the following:
1. Taking into account tabled suggestions, Special Subgroup Secretariat should update the Work Plan of the Special Subgroup for 2007-2008 and the List of common audit issues for the SAIs participating in the International Co-ordinated Audit of the Chernobyl Shelter Fund and submit revised documents to Meeting participants for consideration.
2. To prepare relevant information on the Special Subgroup activities and progress of the International Co-ordinated Audit of the Chernobyl Shelter Fund to be presented during XI INTOSAI WGEA Meeting in Tanzania in June 2007.
3. To hold a separate working meeting on the International Co-ordinated Audit of the Chernobyl Shelter Fund within V EUROSAI WGEA Seminar in the Slovak Republic in October 2007.
4. To conduct II Meeting of the Special Subgroup in IV Quarter of the year 2007 in Kyiv.
Participants of I Meeting of the Special Subgroup
March 16, 2007 Kyiv, Ukraine
SAIs - participants of the Special Subgroup:
Azerbaijan:
1. Mr. Jafar Hasanov − Auditor;
2. Ms. Fargana Aliyeva − Consultant
European Court of Auditors:
1. Mr. Jacek Kolasinski − Head of the Member Cabinet
Poland:
1. Mr. Andrzej Kubiak − Legal advisor;
2. Ms. Ewa Borkowska-Domańska − Main expert
Russian Federation:
1. Mr. Nikolay Laskin − Inspector;
2. Mr. Vladimir Kuleshov − Consultant
Slovak Republic:
1. Ms. Annamбria Vizikovб - Auditor
Ukraine:
1. Dr. Valentyn Symonenko − Chairman;
2. Mr. Volodymyr Pershyn − First Deputy Chairman;
3. Ms. Mariya Shulezhko − Chief Controller - Director of the Department
Switzerland:
1. Mr.Werner Tschopp − Auditor
Invited SAIs:
Netherlands:
1. Mr. Egbert Jongsma − Project Manager Tsunami
Germany:
1. Mr. Bernd Rose − Auditor;
2. Mr. Thomas Weidmann − Auditor
France:
1. Mr. Michel Babeau − Conseiller rйfйrendaire
Invited Ministries and Organizations:
Ministry of Environmental Protection of Ukraine:
1. Mr. Stepan Lizun − Deputy Minister
Ministry of Emergencies and Affairs of Population Protection from Consequences of Chernobyl Catastrophe of Ukraine:
1. Mr. Volodymyr Kholosha − Deputy Minister
Parliamentary Committee on the Issues of Ecological Policy, Natural Management and Elimination of Consequences of Chernobyl Catastrophe:
1. Mr. Mykhailo Borysyuk − Head of Secretariat
European Bank for Reconstruction and Development:
1. Mr. Vince Novak − Director of the Nuclear Safety Department
Chernobyl Shelter Fund:
1. Mr. Alexander Slavis − Representative of the Chernobyl Shelter Fund in Ukraine