Jul 16 2012
Serious weakness in the US government’s control over the reconstruction funds put USD billions of the sums at risk of wastage and misappropriation, the office of the Special Inspector General for Iraq Reconstruction (SIGIR) said in a final audit report.
The report, titled Final Forensic Audit Report of Iraq Reconstruction Funds, said about USD 20 billion of the sum total of 51 billion, that Congress had approved for Iraq reconstruction, was allocated for rebuilding Iraq and another USD 20 billion for rebuilding the violence-scarred country’s basic infrastructure.
“The precise amount, lost to fraud and waste, can never be known,” the report added.
The reconstruction projects were run mainly by the Defense Department, the State Department, and the US Agency for International Development.
Internal control weaknesses, including inadequate reviews of contractors’ invoices, insufficient numbers or inadequate training of oversight staff, poor inventory controls, high staff turnover, poor recordkeeping, insufficient price competition by subcontractors, and weak oversight of cash disbursements are among the main problems.
A major source of shortcoming was inadequate reviewing of contractors’ invoices. Some invoices were checked months after they had been paid for due to the lack of contracting officers. “As a result, invoices were not properly reviewed, and the USD 2.5 billion in US funds were vulnerable to fraud and waste,” the report said.
“Why did you take this job? It’s an impossible task,” the Inspector General, Stuart Bowen recalled in the report, citing the then-Defense Secretary Donald Rumsfeld’s comments shortly after he took up the position in 2004.
Bowen’s office produced numerous reports and investigated criminal fraud which led to 87 indictments, 71 convictions, and USD 176 million in fines and other penalties.
As a result of investigations, both civilian and military personnel were accused of bribery, fraud, embezzlement, and outright theft of government property and funds.
The office has spent more than USD 200 million for tracking the reconstruction funds.
Given their proportions, plans for the reconstruction of Iraq marked the largest nation-building program in the US history. Analysts say, even after the US ends its presence in Iraq, Washington will be paying excessive amounts to shape Iraq in accordance with the geopolitical advantage, it wishes that the country serve.