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IMF adapts tougher auditing standards for loans |
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April 6, 2000
WASHINGTON, APR 5 (AP) - The International Monetary Fund, seeking to respond to growing calls for reform, adopted tougher auditing standards for countries seeking to borrow money.
The agency's 24-member executive board approved a requirement Tuesday that countries seeking loans will have to agree to publish annual financial statements of their central banks that have been reviewed by outside auditors using internationally accepted auditing standards.
The requirement, to take effect in July, was a response to allegations that the central banks of both Russia and the Ukraine lied to the IMF about the status of their financial reserves during recent fiscal crises.
That the IMF did not immediately uncover the true state of finances in Russia and the Ukraine has triggered renewed criticism of the lending agency on the part of many in Congress.
U.S. Treasury Secretary Lawrence Summers, testifying last month to a congressional committee examining IMF operations, said the Clinton administration also was deeply bothered by the incidents. Also worrisome, Summers said, was that IMF staff members did not disclose the Ukraine situation to its executive board until this year even though the staff knew about the developments in 1999.
Acting IMF Managing Director Stanley Fischer told reporters the new auditing requirements were intended to make sure that IMF loans in the future are used properly.
When the IMF extends a loan to a country in financial distress, the money usually is placed in that nation's central bank.
The IMF has never before required all countries to agree to independent audits of its central bank as a condition for getting loans, although it has required occasional spot audits in cases where improper use of the funds was alleged, as in the case of Russia and the Ukraine.
In a wide-ranging news conference late Tuesday, Fischer told reporters that the IMF has a full agenda of reform proposals to address at its annual spring meetings with the World Bank on April 16-17.
Many of the groups that disrupted the meetings of the World Trade Organization in Seattle in December are making plans to have thousands of demonstrators on the streets of Washington to vent unhappiness with the IMF and World Bank, two organizations they have accused of being more responsive to multinational corporations than the needs of poor people.
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