Audit: U.S. Defense Department can't account for billions for Iraq
January 29th, 2012
10:52 AM ET

Audit: U.S. Defense Department can't account for billions for Iraq

By CNN's Josh Levs

The U.S. Defense Department cannot account for about $2 billion it was given to cover Iraq-related expenses and is not providing Iraq with a complete list of U.S.-funded reconstruction projects, according to two new government audits.

The reports come from the office of the Special Inspector General for Iraq Reconstruction.

The Iraqi government in 2004 gave the Department of Defense access to about $3 billion to pay bills for certain contracts, and the department can only show what happened to about a third of that, the inspector general says in an audit published Friday.

Although the Department of Defense (DoD) had "internal processes and controls" to track payments, the "bulk of the records are missing," the report says, adding that the department is searching for them.

Other documents are missing as well, including monthly reports documenting expenses, the audit says.

"From July 2004 through December 2007, DoD should have provided 42 monthly reports. However, it can locate only the first four reports."

A letter accompanying the report is signed by Stuart Bowen, the inspector general. The audit was overseen by Glenn Furbish, assistant inspector general for audits.

In a response letter also contained in the report, Defense Under Secretary Mark Easton acknowledges "a records management issue."

The audit says it believes records management is to blame, and "has been an ongoing problem for DoD in Iraq. By all accounts, DoD established good internal processes and controls to account for and report on" the funds it was given after the Coalition Provisional Authority dissolved.

Where the records did exist, they matched other records and contained "good financial documentation supporting individual payments." Also, there is "sufficient evidence" that required monthly reports were sent to the government of Iraq, even though they can't be found, the audit said.

The audit deals with a time when Iraq's government was undergoing a transition. The Coalition Provisional Authority ran the country for 14 months from 2003 to 2004. During that time, the authority awarded numerous contracts. When it dissolved in 2004, the Iraqi government gave the U.S. Defense Department access to the $3 billion to pay bills for contracts the provisional authority had awarded.

The Defense Department letter from Easton - the department's deputy chief financial officer - thanks the inspector general's office for "the collaborative effort and professional courtesy" in a series of audits.

Separately, the inspector general's office sent a letter Sunday to the U.S. ambassador to Iraq complaining that the U.S. government is not providing Iraq with a complete list of reconstruction projects.

The U.S. criteria for selecting which projects to report to Iraq - which include only those valued at $250,000 or more - is a central part of the problem, the letter says.

The U.S. Embassy says the system is designed to help Iraq "focus its limited resources on sustainment of infrastructure and other large capital projects done through U.S. reconstruction efforts," the report notes.

The inspector general's office argues that the limited list - which is also "hampered by unreliable data and other data entry problems" - does not allow Iraq to decide where to focus its resources, and notes that the country might consider some smaller projects more important than those that are reported.

"Without more comprehensive knowledge about reconstruction projects the (Iraqi government) will not be in a position to maximize the use of its resources," the report says.

Billions of dollars in spending are not reported to Iraq under the current system, the report says.

In a response letter, Peter Bodde, assistant chief of mission for the U.S. Embassy in Iraq, says that while the current system is incomplete, "it does capture the vast majority of reconstruction projects and there is no other alternative that captures more."

He also notes that the Iraq reconstruction effort "is now in its very last stages, and all remaining capital projects will be reported through the asset transfer process."

The Office of the Special Inspector General for Iraq Reconstruction was created in 2004 to continue oversight of Iraq reconstruction programs.

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Filed under: Iraq • Military
soundoff (30 Responses)
  1. vaughn nebeker

    It was a us dod contract,to reset the reactor led at bataar nuclear reacter. there for it us dod place to ome up with the money. it a $2.0 billion for goods & service's. so now odit the oditer for pulling fraud.
    that's the incopadince of the vetrean case ecxsamiter. for assuming the case not asking wat is.

    January 31, 2013 at 4:32 pm | Reply
  2. vaughn nebeker

    the $2.0 billion doller account a fail salf account. Gorge bush never got the device. there for he could not sell in to iran.
    it's became a over flow account. $200.000,000.00 in intreast.

    August 21, 2012 at 12:47 pm | Reply
    • vaughnnebeker2@gmail.com

      The $220.0 BILLION was in silver Thaþ Vaughn Nebeker put up to the us securtary òf defance Casper Wineburger
      as colatrel so Charnobyl to gò out. The bet was $220.0 Billion down at a trillion to one odds at a Dubble or nothing
      that Charnobyl to go out. Charanobyl did go out. Vaughn Nebeker had won the bet. running at 20% set buy the
      secutary of uus defance casper winebuger.

      September 28, 2017 at 9:56 pm | Reply
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    June 15, 2012 at 4:28 am | Reply
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    March 30, 2012 at 8:27 pm | Reply
  6. Cicero

    Deliberately orchestrated by the Marxist run government. We need to have treason trials and use those built FEMA detention centers to hold the thousands of traitors running this country

    February 8, 2012 at 6:47 pm | Reply
  7. rebiii

    The only reason this is even a story is that the Iraq government gave us the money, and wanted it accounted for.

    Where is the accounting for the several trillion dollars that we spent on this war?

    How about the hundreds of millions of dollars that we throw at the N.S.A., F.B.I., and other spies in our country?

    Anybody have a look at the books? Didn't think so.

    Meanwhile, the above agencies have teams of dupes that follow around private citizens who exercise their right to free speech against the war. I don't fault them. I honestly don't. They are brainwashed, and I don't use that term in a perjorative sense. They honestly don't have the slightest idea what they are doing. They have constructed a sort of parallel universe that exists only in their minds, where it makes sense to them that it is healthy and patriotic to harass dissidents, no matter how harmless, and overlook this kind of corruption.

    February 1, 2012 at 5:07 pm | Reply
  8. Lili

    Billions spent in tax dollars and nothing accomplished but American rights being stripped for our "safety".

    I want my tax dollars spent on this charade refunded immediately. The government oversees the IRS-it needs to reimburse the citizens.

    If I pay money to have something fixed and it isn't-I should get a refund.

    January 31, 2012 at 3:50 pm | Reply
  9. Iranacockuptheirass

    Well DUH!...how else do you think we can afford Heroin...May the back packs of 7000 loaded camels of heroin slip and fall in your anals

    January 31, 2012 at 12:29 am | Reply
  10. TessaC

    That's nothing! What about Donald Rumsfeld announcement on Sept 10, 2001, "We seem to be missing $2.4 TRILLION of the Pentagon Budget." ALSO, a WTC Tower 4 & 5, custodial workers witnessed gold bars being loaded onto Brinks trucks just hours before the plane hit the North Tower. Most of the gold was suppose to be paid back to China – a 60 years old contract made to secure Chinese gold/wealth from Japanese mauraders/invaders was sent to the US(on ships) in exchange for treasury bonds. The Chinese could not cash in those notes until Sept 12, 2001. (Use 'Startpage' search engine for further reseach)

    January 30, 2012 at 4:55 pm | Reply
  11. viper51

    they can't keep track of the money they have here so you think this is news

    January 30, 2012 at 1:00 pm | Reply
  12. jjj

    I'm not suprised anymore, the gov has been disappointing the people for far too long and it's hard to earn back the trust and respect that was lost especially when these kind of situations continue!

    January 30, 2012 at 12:51 pm | Reply
  13. m

    http://ercim-news.ercim.eu/en78/special/sniper-a-data-mining-methodology-for-fiscal-fraud-detection

    find your $2 billion

    January 30, 2012 at 11:11 am | Reply
  14. Van the man

    And this is suprising? At one point they were just giving away duffle bags full of cash to compensate victims families, appease local mullah/ war lords and to buy off loyalties among various groups! I am suprised it is only 3 billion to be honest! They actually found a missing container once stuffed with cah, no one had a clue about! Ask Mr. Paul Bremer about the rest if you can find him these days?

    January 30, 2012 at 9:10 am | Reply
  15. xxxevilgrinxxx

    Reblogged this on Question Everything.

    January 30, 2012 at 7:29 am | Reply
  16. kenneth tillbrook

    remeber this is the war american was lied into,when does the trails for TREASON start?

    January 29, 2012 at 3:39 pm | Reply
    • The Right Guy

      First off, who even cares about our government anyway, they would rather give a teen family with 2 kids a house that they will never have to pay back compared to a 50 year old woman with terminal cancer has to work their ass off just for medical benefits because our countries SSI program is a freakin joke, thats real freaking news. We shouldnt be over there in the first place, just because Bush's daddy cant win a fight in his time, so we send our boys to suffer. Thie country is in need of a massive reconstruction, vote for me to be prez and ill show you all real change.

      January 29, 2012 at 4:19 pm | Reply
      • jwill

        You are insane.

        February 1, 2012 at 10:32 pm |
    • chizzlin sam

      bush, cheney, runsfeld, powell, rice should be detained and sent to guantanamo until the trial starts....

      January 30, 2012 at 1:18 pm | Reply
      • mm

        Amen!

        January 30, 2012 at 4:10 pm |
  17. michaelfury

    http://michaelfury.wordpress.com/2011/11/11/pulverized-to-near-power/

    January 29, 2012 at 3:34 pm | Reply
  18. ram

    ..and this country wants to control the world, when they cannot do Accounting 101.

    January 29, 2012 at 3:08 pm | Reply
  19. WW Thurber

    Just one more reason to reign in the DOD budget!

    January 29, 2012 at 2:08 pm | Reply
  20. Chickenhawks are Scum

    Well, well, well........looks as if Iraq wasn't the only country to be plundered by criminal ineptitude and greed. What a surprise.

    January 29, 2012 at 1:25 pm | Reply

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