NATO finances present worrying picture

The Netherlands Court of Audit informed the House of Representatives of developments in financial management at NATO by letter of 20 September 2012.

NATO's annual report for 2011 and the 33 underlying reports issued by IBAN, the International Board of Auditors for NATO, present a worrying picture.

IBAN expressed a negative opinion on a quarter of the financial statements prepared by NATO units. There are difficulties closing the accounts for large investment projects for, for example, military bases, pipelines and warning and communication systems. Hundreds of completed projects, costing more than €3 billion in aggregate, are still waiting to be technically and financially audited. With the financial statements and audit being so late, it is virtually impossible for NATO to form a complete and reliable picture of its financial management and make necessary changes on a timely basis. At a time when many countries are having to cut their defence spending, adequate insight into NATO's financial management is necessary to increase the efficiency and effectiveness of NATO's operations.

The Court of Audit makes suggestions in the letter as to how the House of Representatives can improve insight into the military alliance's financial management. The House will meet the Minister of Defence in early October in preparation for the ministerial meeting of the NATO allies on 9 and 10 October 2012.