Report on an investigation we conducted on the processes utilized by ILO senior managers in

performing their responsibility for corporate financial management, following a summary of the results
of our audit and analysis of the General Fund's adequacy.

The relevance of the financial information system, IRIS, was highlighted in the analysis of senior
management's role in financial control and project management. We followed up on our previous audits
of IRIS and re-evaluated the status of the system's implementation across the ILO.

Took the chance at the end of our stint as the ILO's external auditors to reflect on where the
organization stands presently in terms of overall financial governance. Recognizing current
transformation initiatives and the problems the ILO faces, have selected what they believe are the top
areas of financial governance for the ILO to address in the future.

Have audited the International Labour Organization's financial accounts in compliance with the
Financial Regulations and in accordance with International Auditing Standards. The audit found no flaws
or errors that were material to the financial statements' accuracy, completeness, or validity, and the
audit opinion confirmed that the financial statements present fairly, in all material respects, the financial
position as of December 31, 2007, as well as the results of operations and cash flows for the period then
ended, in accordance with United States GAAP.

The audited financial results reveal a US$ 0.7 million Regular Budget surplus for the 2006–2007
biennium, while the General Fund increased by US$ 113 million to US$ 285 million at the end of 2007.
Income and expenditure were highly volatile, owing to a variety of factors outside the ILO's control. For
example, in 2006–2007, a net US$ 73 million in assessed contribution arrears from prior biennia were
collected, as well as extraordinarily significant foreign exchange gains of US$ 21 million.