To: Kenneth E. Phillipps who wrote (670401 ) 1/31/2005 12:19:03 PM From: DuckTapeSunroof Respond to of 769670 Audit: $9 Billion Unaccounted for in Iraq By LARRY MARGASAK, Associated Press Writer WASHINGTON - The U.S. occupation authority in Iraq was unable to keep track of nearly $9 billion it transferred to government ministries, which lacked financial controls, security, communications and adequate staff, an inspector general has found. The findings were released Sunday by Stuart Bowen Jr., special inspector general for Iraq reconstruction. Bowen issued several reports on the Coalition Provisional Authority (CPA), the U.S. occupation government that ruled Iraq from June 2003 to June 2004. The inspector general said the occupying agency disbursed $8.8 billion to Iraqi ministries "without assurance the moneys were properly accounted for." U.S. officials, the report said, "did not establish or implement sufficient managerial, financial and contractural controls." There was no way to verify that the money was used for its intended purposes of financing humanitarian needs, economic reconstruction, repair of facilities, disarmament and civil administration. ...The inspector general cited an International Monetary Fund assessment in October, 2003 on the poor state of Iraqi government offices. The assessment found ministries suffered from staff shortages, poor security, disruptions in communications, damage and looting of government buildings, and lack of financial policies. Some of the transferred funds may have paid "ghost" employees, the inspector general found. CPA staff learned that 8,206 guards were on the payroll at one ministry, but only 602 could be accounted for, the report said. At another ministry, U.S. officials found 1,417 guards on the payroll but could only confirm 642. news.yahoo.com Special Inspector General for Iraq Reconstruction:iraqreconstructionig.org Occupation Authority Did Not Properly Monitor Spending of Iraqi Money, U.S. Audit Says January 31, 2005 By ERIK ECKHOLM ...The new report covers money given to Iraqi ministries between the American invasion of early 2003 and the transfer of sovereignty to an interim Iraqi government in mid-2004. During that time, according to a United Nations resolution, the occupation authority was responsible for disbursing Iraqi oil money, leftover receipts from Iraq's oil-for-food relief program, and seized assets, which were combined into the Development Fund for Iraq. A large share of the money was transferred to Iraqi ministries, while several billions more were spent directly by the Americans for fuel imports and construction projects. An international auditing agency has questioned the occupation authority's management of the Iraqi money it spent directly, charging a lack of oversight and overuse of non-competitive contracts. ...Other American and international auditors have warned that weak financial controls are a continuing problem in Iraqi ministries, opening the door to possible fraud, kickbacks and misuse of funds. nytimes.com