The U.S. occupation authority in Iraq tasked with overseeing the use of money appropriated by Congress for relief and reconstruction there didn't have proper accounting controls for $8.8 billion in funds, a report released this week alleged.
The Coalition Provisional Authority "provided less than adequate controls for approximately $8.8 billion of Development Fund for Iraq funds provided to Iraqi ministries through the national budget process," according to a report issued Sunday by the Office of the Special Inspector General for Iraq Reconstruction.
"The CPA did not establish or implement sufficient managerial, financial and contractual controls to ensure that DFI funds were used in a transparent manner," special inspector general for Iraq reconstruction Stuart Bowen Jr. wrote.
"Authorities and responsibilities over DFI funds were not clearly assigned, and CPA regulations, orders, and memoranda did not contain clear guidance regarding the procedures and controls for disbursing the funds for the national budget," the report said.
"The CPA did not exercise adequate responsibility over DFI funds provided to Iraqi ministries through the national budget process," the report continued, leaving no way to verify that the funds were used for their intended purpose.
The report also said that the CPA didn't maintain adequate documentation to support budget spending plans, disbursements or cash allocations made by coalition forces.
"We believe the CPA management of Iraq's national budget process and oversight of Iraqi funds was burdened by severe inefficiencies and poor management," the report said.
In written comments responding to the report, L. Paul Bremer III, who led the CPA, said that the report's authors failed to "understand and acknowledge the context in which the CPA was operating" and failed to address "the admitted weaknesses of the Iraqi budgeting system."
Bremer also said that the report assumed "that Western-style budgeting and accounting procedures could be immediately and fully implemented in the midst of a war."
"It is remarkable that the Inspector General's office could have produced even a draft report with so many misconceptions and inaccuracies," Bremer wrote.
