Special Inspector General for 

Iraq Reconstruction

Iraq Reconstruction: 

Lessons from Auditing U.S.-funded Stabilization 

and Reconstruction Activities

October 2012

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*The official version of this report, including any corrections, is available on the 

SIGIR website: www.sigir.mil. 

Contents

Part I: 

Background.......................................................................................1

Part II:

 Principal Lessons Learned from Auditing Stabilization and 

Reconstruction Activities in an SRO.................................................. 3

Part III: 

Agency Perspectives on SIGIR’s Lessons Learned........................... 34

Part IV: 

Studies in Reconstruction Management......................................... 39

Appendix A: 

Focus of SIGIR Recommendations....................................................43

Appendix B: 

SIGIR Potential and Actual 

Financial Accomplishments ........................................................... 44

Appendix C: 

SIGIR Audit Products ...................................................................... 46

Appendix D: 

Acronyms ....................................................................................... 60

Endnotes.........................................................................................61

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 1

Part I: Background

In April 2003, the United States completed initial combat operations 

in Iraq, defeating Iraqi forces and overthrowing Saddam Hussein. That 

month also marked the beginning of U.S. efforts to provide relief and 

reconstruction assistance to the war-torn country. 

As of the end of June 2012, the U.S. government had appropriated 

or otherwise made available $60.45 billion to support assistance efforts 

in Iraq. Nearly $51.46 billion, or more than 85% of the funding, was 

provided through five major funds—the Iraq Relief and Reconstruction Fund (IRRF), Iraq Security Forces Fund (ISFF), Economic Support 

Fund (ESF), Commander’s Emergency Response Program (CERP), and 

International Narcotics Control and Law Enforcement (INCLE) account. 

These major funds sought to meet a variety of Iraqi needs, including the 

reconstruction of infrastructure, the development of security forces, the 

promotion of economic and political stability, the institution of the rule 

of law, and the provision of humanitarian relief.

The Coalition Provisional Authority (CPA), created in May 2003, 

served for 14 months as the interim entity for the governance of Iraq. It 

developed, implemented, and oversaw initial reconstruction activities, 

including the expenditure of U.S. and Iraqi funds. 

Six months after the CPA started the reconstruction mission, the Congress created an Office of Inspector General within the CPA. The Inspector General eventually was appointed in late January 2004, and he made 

two trips to Iraq within the following 30 days. The urgent oversight needs 

identified during those trips led him to deploy two tiger teams of auditors 

to Baghdad, who were on the ground and working by mid-March 2004. 

After termination of the CPA in June 2004 and the concurrent establishment of the new U.S. Mission to Iraq, the Congress reauthorized the CPA 

Inspector General as the Special Inspector General for Iraq Reconstruction (SIGIR) through the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005. 

SIGIR quickly began providing substantial in-country oversight of 

the use of taxpayer funds in the reconstruction program. The Inspector General’s growing accountability team was buttressed by the development of innovative oversight practices, including an integrative approach to inspections, a focus on timely performance auditing rather 

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2 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

than ex post facto financial reviews, and an ever-increasing coordination 

among executive branch audit and investigative agencies serving in Iraq.

At its peak in 2008, SIGIR had a staff of 150 with 35 auditors and 

8 investigators permanently stationed in Iraq conducting audits and 

investigations to root out fraud, waste, and abuse. The in-country audit 

teams were supported by visits from audit managers based in Arlington, 

Virginia, who regularly traveled to Iraq to strengthen specific reviews 

or support particular oversight missions. The Inspector General and 

the Deputy Inspector General visited Iraq every quarter to consult with 

staff and meet with senior U.S., Iraqi, and other officials. The Inspector 

General made his 33rd visit to Iraq in September 2012.

SIGIR’s audit plan sought to determine whether programs and operations funded by the United States were managed efficiently and effectively. Further, it aimed at promoting on-the-ground change through 

near-real-time reporting. Between 2004 and October 2012, SIGIR 

published 217 audit reports that covered a range of reconstruction issues, including oversight of contracting, the promotion of democracy, 

the transfer of completed projects to the Government of Iraq (GOI), and 

the development of the Iraqi Security Forces. 

SIGIR’s audits have had positive financial effects, resulting in about 

$645 million in actual savings from the identification of more than 

$1.6 billion in potential financial benefits. In addition, the Inspector 

General testified before the Congress on 34 occasions on the work 

of SIGIR’s audit, investigation, and inspection teams. Notably, a key 

aspect of SIGIR’s work has been to capture lessons learned from the 

Iraq experience that could be applied to other contingencies, including Afghanistan. 

In July 2008, SIGIR issued an audit report that identified key recurring systemic management issues. This Lessons Learned study builds 

on that report, documenting many lessons learned by SIGIR auditors 

from 2004 through 2012. The numerous problems uncovered in SIGIR’s 

audits reduced program effectiveness and increased potential for fraud, 

waste, and abuse. If the causes and effects of these problems are not fully 

understood—and if actions are not taken to forestall their recurrence—

then future stability and reconstruction operations (SROs) could 

experience similar negative outcomes.

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 3

Part II: Principal Lessons Learned from Auditing Stabilization and Reconstruction Activities in an SRO

During the course of conducting 217 audits of stabilization and reconstruction programs, projects, contracts, grants, and other activities 

in Iraq, SIGIR identified an array of deficiencies that elicit important 

lessons. These lessons point to remedies that could help improve outcomes in future SROs.

1. A Successful Reconstruction Program Requires a Balancing 

of Security, Political, and Economic Interests

The United States assumed that reconstruction in Iraq would take 

place in a relatively stable environment. This assumption proved 

wrong. But the U.S. government nevertheless pursued a high-risk 

strategy of pushing forward with a very large and ambitious relief and 

reconstruction strategy in a war zone. 

SIGIR audits revealed that reconstruction during the insurgency 

resulted in the waste of money, the unacceptable loss of life, and the 

large-scale diversion of funds from projects and programs to ad hoc 

efforts supporting security needs. Reconstruction program managers 

apparently decided to proceed with projects despite the risks associated with building in a very unstable environment.

Security threats in Iraq increased project duration, raised material 

costs, and limited funding available for training and other democracybuilding activities. SIGIR found that poor security conditions resulted 

in a high human toll within the reconstruction program. All of these 

findings underscore the need to plan more carefully for the costs and 

consequences of reconstruction in unstable settings. Future planning should anticipate the financial and human costs associated with 

rebuilding in insecure environments. This lesson was explicated in 

SIGIR’s Lessons in Inspections of U.S.-funded Stabilization and Reconstruction Projects.

1

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4 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

a. Risks of Violence Must Be Assessed at the Outset 

of Reconstruction Activities

U.S. officials did not sufficiently anticipate the levels of violence that 

would occur in Iraq after Saddam Hussein’s fall. The consequences of 

the oversight were reflected in SIGIR audits, which highlighted the 

effects of the insurgency on U.S. reconstruction efforts. 

In January 2006, SIGIR reported that strategy changes caused by the 

deteriorating security environment contributed to the U.S. decision 

to shift reconstruction funds from infrastructure and reconstruction 

projects to security and law-enforcement efforts. Approximately $1.78 

billion in planned projects, predominantly in the water and electricity 

sectors, were dropped and the funds moved to the security sector.2

Hundreds of projects intended to benefit the Iraqi people were canceled.

Other SIGIR reports identified adverse effects caused by the 

dangerous security situation:

•	 About $560 million was wasted because construction efforts were 

sabotaged and had to be rebuilt (or were delayed).3

•	 Provincial Reconstruction Teams working in the provinces were 

often unable to have face-to-face contacts with local officials, a critical objective of their program.4

•	 SIGIR’s 2012 audit of the Police Development Program found that 

U.S. advisors could not safely travel to Iraqi-controlled facilities and 

that security concerns had significantly hampered training operations.5 

Security issues were the major factor causing the cost increases and 

delays in the $345 million U.S. effort to build more than 130 primary 

healthcare centers (PHCs) in Iraq. SIGIR reviews of this program 

found:6

•	 The U.S. government did not complete six PHCs after spending 

nearly $3 million because explosives destroyed portions or all of the 

buildings during construction. 

•	 The United States spent $126,000 on al-Tahrir PHC, which insurgents bombed in July 2006. In August 2006, U.S. officials identified 

substantial damage but reported that the site was salvageable. However, the next day, three improvised explosive devices detonated in 

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 5

the center, causing additional damage. The area was so volatile that 

no one was able to assess damages. 

•	 The United States spent $756,000 on the Hai al-Intisar PHC, which 

had to be abandoned when insurgents used explosives to seriously 

damage the structure. 

Dangerous conditions prevailed in Falluja in June 2004 when 

the CPA awarded FluorAMEC a task order to design, procure, and 

construct a major wastewater treatment system. Initially envisioned as 

a $28.6 million project that was to be completed in one year, the plant 

ultimately cost $107 million, took seven years to finish, and ultimately 

serviced approximately 38,400 residents—well short of the 100,000 

originally intended to benefit from the system. Many people, including 

U.S. government personnel, were killed while working on this project.7

Additionally, the U.S. government, citing security concerns, abandoned 

the Khan Bani Sa’ad Correctional Facility after spending about $40 

million and completing only about half of the construction project.8

b. Risks to Human Life Must Be Weighed against Potential Outcomes

SIGIR reports identified the need to better assess risks when 

initiating projects or programs in an SRO. The report on the Falluja 

Wastewater Treatment System questioned the wisdom of pursuing 

the project given the persistent danger, the loss of life, and the 

fact that descoping of the facility meant it would serve far fewer 

individuals than originally planned.9

SIGIR issued a special report in July 2012 that reviewed the loss 

of life during the Iraq reconstruction effort, finding that 719 people 

were killed while engaged in reconstruction and stabilization 

activities between May 1, 2003, and August 31, 2010 (the end of 

Operation Iraqi Freedom). This number includes 318 Americans 

(U.S. military, federal civilian employees, and U.S. civilian 

contractors), 111 third-country nationals, and 271 Iraqis working 

in support of the U.S. reconstruction and stabilization mission.10

The report recognized that the actual number of deaths related to 

reconstruction and stabilization activities was certainly higher. The 

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6 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

absence of a central database of reconstruction and stabilization 

casualties made an exact calculation impossible. 

Individual SIGIR audits reported on some of the U.S., Iraqi, and 

third-country-national personnel who were killed while performing 

official duties:

•	 A National Democratic Institute (NDI) staffer was killed when 

her convoy was ambushed in Baghdad.11

•	 An ambush on three Baghdad-based contractor engineers 

planning for the construction of the Falluja Wastewater Treatment 

System resulted in two killed and one seriously wounded. In 

May 2009, three U.S. reconstruction officials were killed by an 

improvised explosive device while returning from the treatment 

plant.12

Additionally, a SIGIR auditor stationed in Iraq was killed when a 

rocket hit his trailer in the International Zone, and other SIGIR auditors have been injured.

Bombed Hai al-Intisar Primary Healthcare Center. (GRD photo)

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c. Costs and Benefits of Initiating Projects Requiring High Security 

Costs Must Be Carefully Weighed

During an SRO, the costs of providing security for project protection 

may sometimes be so high as to render the cost of the project 

greater than the benefit. Early into the Iraq rebuilding effort, U.S. 

agencies faced very high reconstruction costs, which was chiefly the 

consequence of running the program in a war zone. 

In 2006, SIGIR reported that, of $9 billion allocated for construction 

activities as of June 2005, approximately $2 billion was attributable 

to security-$1.46 billion for direct security costs and an additional 

$560 million to rework damaged facilities, replace damaged materials, 

and pay for additional security due to construction delays.13 In 2007, 

SIGIR reported that nine major contractors estimated their security 

costs ranged from 7.6% to 16.7%.14

While there is no universal gauge for appropriate security 

costs, when protective measures consume the vast share of total 

expenditures, it is incumbent upon the U.S. government and 

implementing organizations to determine whether the endeavor is 

worth the costs. In January 2010, SIGIR reported on security costs 

for seven democracy grants awarded to the International Republican 

Khan Bani Sa’ad Correctional Facility abandoned after approximately $40 million had been spent. 

(GRD photo)

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8 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

Institute (IRI) and NDI. The review found that only 41% of the grant 

funds were actually spent on direct program activities. NDI spent 

almost one-third of its funds on security, and IRI spent more than 

half of its funds on security. SIGIR noted that an acceptable level of 

security expenditures for a grant is a case-by-case decision and should 

be based on a cost-benefit analysis. However, the audit found that no 

analysis had been conducted, so there was no basis for assessing the 

appropriateness of the security costs incurred.15

In a subsequent audit, SIGIR examined the security costs of six 

nonprofit organizations that received grants in Iraq. Taken together, 

these organizations paid about $40.16 million for their privatesecurity contract costs out of nearly $185.82 million in grant funds 

expended in FY 2010. One organization paid $8.01 million in 

private-security contract costs in FY 2010, or almost 53% of its total 

grant expenditures. Another organization’s private-security contract 

costs totaled about $13.71 million, or about 44% of its total grant 

expenditures for the year.16

2. An Integrated Management Structure That Provides 

Clear Lines of Authority on Program Coordination 

and Delivery of Projects Is Critical for SRO Success

The reconstruction experience in Iraq demonstrated that the U.S. 

government must reform its approach to managing reconstruction 

programs in an SRO. Fragmented organizational structures 

resulted in poor interagency coordination, weak management 

oversight, and inefficient program implementation. Ultimately, the 

entire reconstruction program suffered, chiefly because no single 

organization was in charge of the effort. 

SIGIR documented the extent of the fragmentation in a 2006 

audit report, identifying at least 62 agencies or major agency suborganizations involved in the reconstruction program in Iraq.17

 To 

address this problem, the audit identified the need to clarify agency 

roles and missions and ensure that managers were accountable and 

programs coordinated.

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 9

a. Defining Roles and Missions of All Involved U.S. Agencies 

Is a Necessary Prerequisite for Effective Reconstruction Planning

SIGIR audits highlighted that constant leadership and organizational 

changes contributed to waste, identifying a number of U.S. efforts 

that were weakened by the adverse effects of diluted accountability. 

For example:

•	 In 2006, a SIGIR audit found that no single office had the authority or responsibility to oversee and ensure that U.S. anticorruption 

efforts were focused on a common goal or that efforts were being 

performed in an efficient manner.18

•	 Another 2006 report on the U.S. management of programs to 

train and equip the Iraqi Oil Protection Force and the Electrical 

Power Security Service found that the lack of a clear management 

structure severely degraded the effective management of the programs. Further, there were limited records documenting program 

cost, the use of funds, and the location of millions of dollars of 

government equipment. These problems raised concerns that 

fraud may have occurred and that the $147 million expended on 

the programs may not have been used for its intended purposes.19

b. Programs Require Management Accountability 

and Effective Coordination To Avoid Waste

When multiple agencies implement related programs in an SRO, 

they must closely coordinate their work to avoid duplication of effort 

and consequent waste. SIGIR found that capacity-development programs, anticorruption efforts, and asset-transfer initiatives were not 

adequately coordinated. In each area, auditors found that agencies 

implemented their programs with little interagency engagement.

The U.S. Embassy, U.S. Agency for International Development 

(USAID), U.S. Army Corps of Engineers (USACE), and MultiNational Security Transition Command-Iraq (MNSTC-I) each 

managed its own ministerial capacity-development program rather 

than coordinating an overarching, integrated U.S. government 

capacity-building program with defined roles, responsibilities, goals, 

objectives, and milestones.20

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The same predicament afflicted anticorruption programs. Many 

agencies conducted efforts without sufficient coordination with or 

oversight by the U.S. Embassy. In 2006, SIGIR recommended that the 

U.S. Ambassador establish a policy that would require all agencies 

conducting anticorruption programs to vet their programs through 

a joint executive steering group and direct a joint executive steering 

group to conduct a complete review of each U.S.-funded anticorruption program, assessing how that program helped achieve the U.S. 

government’s anticorruption strategic goals.21

3. An Integrated U.S. Reconstruction Management 

Information System Is Critical To Promote Accountability

The U.S. government must be able to account for its reconstruction 

funding during an SRO. In Iraq, multiple civilian and military 

agencies used their own unique information systems to document 

their activities. When coupled with the lack of agency coordination, 

the U.S. government frequently was not able to provide the most basic 

information on projects it had undertaken, including their location 

and cost. This created significant internal control weaknesses. The Iraq 

experience demonstrated the need for all agencies to use one uniform 

system that can provide the level of program and project specificity 

necessary for oversight and visibility.

The consequences of this project-tracking problem included 

the U.S. government’s inability to report completely on how U.S. 

reconstruction funds were spent or what was achieved. A SIGIR 

audit found in 2006 that the United States lacked an integrated 

management information system for reporting contracting, financial, 

and construction management data for reconstruction projects and 

programs managed by multiple U.S. government agencies. Such 

a system could have facilitated program and project management 

coordination and decision making.22

U.S. agencies were not able to easily comply with reporting and 

monitoring requirements that the Congress called for. In 2008, SIGIR 

reported on a U.S. government project to develop an integrated 

reporting system to address the problem. Development of the Iraq 

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 11

Reconstruction Management System (IRMS) began in 2004, but by 

June 2007, the system had achieved only limited functionality. SIGIR’s 

audit concluded that the IRMS could not provide a complete or 

consistent picture of reconstruction activities in Iraq.23 Recognizing 

the difficulty of developing a management information system under 

the best of circumstances, SIGIR noted the additional challenges of 

doing so where not even the most basic off-the-shelf solutions were 

available and where skilled information-technology managers were 

reluctant to serve because of the growing danger.

Unavailable or imprecise data adversely affected the implementation 

of reconstruction programs. A July 2008 SIGIR report pointed out 

that information on billions of dollars in projects was missing from 

the system, and information on project completions was inaccurate. 

SIGIR found that approximately $35.3 billion in IRRF, ISFF, ESF, and 

CERP funds had been obligated, but the IRMS contained data on 

projects amounting to just $25.08 billion or 71% of total obligations.24

In April 2009, SIGIR reported that unreliable and incomplete IRMS 

data continued to burden managers trying to track the status of 

reconstruction projects.24

Ultimately, incomplete data prevented a complete accounting of what 

has been accomplished in Iraq. Further, the lack of reliable information 

limited U.S. efforts to monitor projects and make assessments about the 

type and extent of further assistance that might be necessary.

4. Managing Staffing Needs and Reducing Staff Turnover Is 

Vital for Effective Program Implementation and Oversight

Anticipating and planning for the requisite number of skilled 

personnel is an important component in managing an SRO. Reconstruction in Iraq suffered because the participating U.S. agencies 

did not anticipate the large and long-term staffing needs required to 

effectively manage a massive and prolonged rebuilding effort. Program, project management, and contracting offices were significantly understaffed, even after major reconstruction projects were well 

under way, and existing staff often lacked the right skills to manage 

the contracting and program-management workload. As highlighted 

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12 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

in a number of SIGIR reports, this problem was exacerbated by high 

turnover in understaffed offices that were continuously trying to 

bring new employees up to speed on programs and projects.

a. Obtaining the Required Number of Skilled Personnel 

Is Essential in Managing Reconstruction During an SRO

SIGIR found that the number of skilled personnel—particularly those 

overseeing and managing contracts and grants—was insufficient to 

provide adequate safeguards against fraud, waste, or abuse. This deficiency caused poor contract and program administration and resulted 

in major oversight problems. The lesson learned is that planning for 

any large reconstruction efforts to be undertaken during an SRO must 

include planning for the number and type of staff necessary to provide 

requisite program oversight and project management.

SIGIR’s audits are replete with examples of insufficient oversight 

staffing and the resulting problems.

•	 Neither USAID nor USACE had a sufficient number of 

personnel to manage and oversee a $1.33 billion contract with 

Bechtel National, Inc., for the construction of multiple facilities 

in Iraq. Under this contract, 24 job orders were issued, including 

14 in water and sanitation, 8 in power, 1 in telecommunications, 

and 1 to build the Basrah Children’s Hospital. USAID was 

responsible for the overall implementation of reconstruction 

activities and for providing technical and management oversight 

of the contractor. USACE signed a memorandum of agreement 

with USAID to oversee Bechtel’s construction, monitor its 

quality control, and provide other construction-management 

services. SIGIR assessed USAID’s and USACE’s personnel 

strength at about the midpoint of contract execution and, in July 

2007, reported that just under half (18 of 37) of the required 

USACE positions were filled. At the same time, USAID had 

filled only 170 of 251 of its authorized positions.26

•	 A SIGIR review of the construction of healthcare facilities in 

Iraq found that, while USACE’s Gulf Region Division (GRD) 

was responsible for managing 400 projects in the southern 

region of Iraq, it had fewer than 40 military and civilian field 

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 13

engineers and construction inspectors to do so. Further, GRD 

reported that 5%–8% of these positions were vacant due to 

individuals who were on rest and recuperation leave. Indicative 

of the severe shortage of inspectors, GRD informed SIGIR that 

it sought to hire and train 115 Iraqi engineers to compensate for 

GRD personnel shortages.27 

•	 During a 2006 audit of the Basrah Children’s Hospital project, 

SIGIR could not identify a government program manager or 

government program management team for the project. Instead, 

SIGIR was told that Bechtel, the overall construction contractor, 

fully managed the contract for USAID. SIGIR concluded that 

the lack of an independent government management team was a 

critical internal control weakness.28

Personnel problems were not sufficiently abated over the course of 

the rebuilding program. For example, in July 2011, SIGIR found that 

40% of surveyed contracting officer representatives for security services contracts stated that the training they received did not prepare 

them for their duties in overseeing private security companies.29

b. Reducing Turnover of Contract and Program Management 

Personnel Is Necessary for Effective Management

Ensuring continuity of personnel with the applicable experience 

and knowledge is crucial to effective contract management in SROs. 

In Iraq, problems stemming from shortages in contracting and 

program management personnel were compounded by the high 

turnover of government personnel in these areas. As SIGIR reported 

in 2006, this caused weaknesses in continuity and contributed to a 

perception that government officials were inexperienced.30

A SIGIR report found that high turnover of government officials 

adversely affected the management of a major contract with the 

Perini Corporation to build electrical transmission and distribution 

facilities in southern Iraq. Between March 2004, when the contract 

was issued, and September 2006, 14 contracting officers were assigned—an average of 1 new contracting officer every 65 days. A 

former electricity sector official told SIGIR that the turnover rate 

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14 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

negatively affected the Perini contract because it undercut the effectiveness and efficiency of contract administration.31

Personnel shortages and high turnover rates contributed to 

frequent contracting problems. Contractors commonly had poorly 

defined statements of work, and the high turnover rate meant 

that the government failed to take timely action to remedy these 

problems. For example: 

•	 SIGIR found that DoS’s Bureau of International Narcotics and Law 

Enforcement Affairs (INL) and Office of Acquisition Management poorly administered a contract to build facilities for a police 

training program, which resulted in millions of dollars being put at 

risk of waste. DoS paid about $43.8 million for manufacturing and 

temporary storage of a residential camp that was not being used. 

This amount included $4.2 million for unauthorized work.32

•	 SIGIR’s 2008 audit of a contract with Parsons Delaware, Inc. found 

high turnover of contracting and program management personnel 

throughout the contract’s two-year duration. SIGIR identified 18 

different contracting officers assigned to this contract from March 

2004 through termination of the last task order in July 2006. While 

the audit concluded that the effect of this turnover on the project 

was difficult to quantify, a 2005 draft GRD memorandum on the 

Incomplete building at Khan Bani Sa’ad Correctional Facility, 2006.

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 15

contractor’s performance stated that the significant turnover of personnel contributed significantly to a perception of inexperience and 

unresponsiveness. Ultimately, because of these and other security 

and management problems, only about one-third of the planned 

projects contemplated under the contract were completed.33

•	 A 2010 SIGIR report highlighted the personnel challenges U.S. 

Army civil-affairs brigades faced in managing 46 CERP projects 

at Baghdad International Airport. Because of rotations, multiple 

brigades with varying levels of experience handed off management 

of many incomplete projects. Army personnel overseeing the program in 2007 acknowledged to SIGIR that they were not subject 

matter experts in engineering or airport development. Moreover, 

they said that the civil-affairs training did not prepare them for 

large-scale reconstruction efforts.34

•	 CERP officials cited several factors affecting good file maintenance: the turnover of military personnel (especially of contracting 

officers) as unit rotations occurred, the relatively short time for 

transitioning from one unit to the next, and the lack of knowledge 

of CERP program requirements among transition teams and 

incoming units. Officials noted that when new units arrived, they 

were expected to pick up where others left off, including managing 

numerous project files, conducting on-site surveys, writing status 

reports, and processing project file documentation, with little or no 

prior knowledge or experience.35

5. Enhanced Oversight of Contracts, Grants, and Other 

Procurements in SROs Is Necessary To Avoid Fraud and Waste 

and To Promote Efficiency

Aggressive and wisely targeted oversight is the best means of ensuring 

that projects are not vulnerable to fraud, waste, and abuse. Assessing 

and mitigating vulnerabilities at the front end of a contract or grant is 

the most effective oversight approach. 

Since 2004, SIGIR conducted numerous audits that identified weak 

controls over the expenditure of reconstruction funds. Although not 

all projects and programs displayed severe weaknesses, SIGIR found 

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16 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

enough instances to conclude that billions of dollars of reconstruction funds were vulnerable to fraud, waste, and abuse. Reflective of 

the insufficient number and experience of oversight and management 

personnel discussed previously, SIGIR determined that there were inadequate reviews of contractors’ business systems, invoices and costs, 

delivery of required goods and services, and cash disbursements. 

Grants awarded for work in unstable security and political conditions 

in contingency environments clearly require greater oversight than 

grants awarded in more permissive environments. 

a. Advance Planning Reduces Opportunities for Fraud, Waste, and Abuse 

to Occur

In a July 2012 report, SIGIR noted that reviews of contractors’ business systems and associated internal controls are the first line of 

defense in the fight to reduce the risk of fraud, waste, and abuse. These 

reviews address the adequacy of a company’s accounting and purchasing systems and the company’s financial and management relationships with its subcontractors and the subcontractors’ pricing of goods. 

Further, the revelation of such relationships through a business-system 

review raises red flags regarding possible inappropriate or excessive 

charges to the government. 

SIGIR found significant gaps in such reviews for the 35 Department 

of Defense (DoD) contractors sampled. Of the 21 contractors that had 

at least one business system reviewed, most had their accounting and 

billing systems reviewed, but less than a third had their estimating and 

purchasing systems reviewed.36

The lack of purchasing system reviews or weaknesses in those 

reviews is noteworthy because SIGIR had identified the consequences 

of this type of oversight gap in a previous audit of another major 

contract. Specifically, SIGIR’s July 2011 report on a $119.1 million 

contract with Anham, LLC (Anham) found significant weaknesses in 

the government’s oversight of contractor business systems and other 

contract administration functions. These weaknesses left the government at risk of paying excessive costs:37

•	 The Defense Contract Audit Agency (DCAA) was responsible for 

reviewing three Anham business systems, but it had audited the 

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 17

accounting system. 

DCAA had not reviewed the estimating system, and had 

reviewed the billing 

system very late into 

the contract, finding 

significant weaknesses with that system. 

•	 The Defense Contract Management 

Agency (DCMA) 

reviewed and recommended approving 

Anham’s purchasing 

system but did so without asking important questions about close 

and/or affiliated relationships that Anham may have had with 

its subcontractors. SIGIR believes that identifying these types of 

relationships is critical to determining the level of risk of overbillings to the government. 

•	 DCMA reviewed and recommended approving Anham’s purchasing system even though Anham did not justify sole-source 

purchases in 32 of 34 cases, and in all 34 cases there was no documentation showing Anham determined that the U.S. government 

was getting a fair and reasonable price.

SIGIR performed a limited incurred cost review of the contract, 

questioning 39%, or $4.4 million, of the costs reviewed. As a result 

of the multiple problems identified with the Anham contract, SIGIR 

subsequently questioned all reported costs. 

b. Reviews of Contractor Invoices and Audits of Final Incurred Costs 

Are Necessary To Ensure Payments Are Correct

SIGIR found numerous instances where U.S. government employees or their designated representatives had not thoroughly reviewed 

contractor invoices before payment to ensure the bills were correct or 

Anham billed the government $80 for a 1.5” x 4.0” 90-degree 

PVC elbow.

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18 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

appropriate. In some instances, invoices were reviewed months after 

they were paid. Poor or delayed invoice reviews increase the risk that the 

government may overpay or pay unallowable and unreasonable costs. 

To illustrate, in 2004, INL had only one staff member in Iraq 

responsible for validating invoices for a DynCorp task order to 

support the Iraqi Police Training Program. The task order had 

$800 million in obligations.38

 Because oversight of the DynCorp 

contract was weak, INL decided to reconcile all historical invoices. As 

of July 2009, INL reported to SIGIR that its voucher review process 

had saved or collected over $60 million and that other questioned 

vouchers were still in process. 

In addition, SIGIR’s audit of the U.S. Army Contracting Command’s 

Global Maintenance and Supply Services contract with AECOM 

Government Services to provide maintenance activities for the U.S. 

Army, Iraqi Army, and Afghan Army also found inadequate invoice 

reviews. SIGIR’s review of selected contract invoices showed AECOM 

potentially overbilled or could not support more than 

$4.2 million in costs, or 14% of the $30.6 million SIGIR examined. 

Given the billing issues, the weaknesses in invoice review procedures, 

and the size of the contract, SIGIR concluded that the U.S. 

government was highly vulnerable to having paid questionable costs.39

Anham, through the contractor Knowlogy, billed $20,000 for installation of a “Plug and Play” Voice System. 

Audit Lessons Learned_v10.indd 18 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 19

Finally, SIGIR’s audit of Anham’s contract for warehouse and 

distribution services showed that U.S. government personnel either 

did not review or only conducted limited reviews of Anham’s 

vouchers. The administrative contracting office reviewed only $32.74 

million in vouchers, and the contracting officer representatives 

reviewed another $32.20 million in vouchers for trucking services 

out of $113.4 million in expenses. Additionally, SIGIR found that 

the reviews were not comprehensive. For example, vouchers were 

not compared to receiving documents, and officials signed for 

delivery of goods without verifying that the goods were delivered. 

Moreover, Anham’s employees were allowed to sign for receipt of 

$10 million in goods.40

c. Close Oversight of Deliverables and Inventory Is Required 

To Oversee Compliance to Contract and To Deter Loss and Theft 

Poor inventory controls over U.S. government-financed property left 

the property vulnerable to undetected loss or theft. SIGIR examined 

Kellogg Brown & Root Services, Inc., inventory controls for a logistics 

task order to support U.S. Embassy operations. Examination of fuel receiving, distribution, and accounting processes uncovered weaknesses 

of such magnitude that SIGIR could not determine how much fuel 

was provided under the task order. These were material weaknesses 

that resulted in the improper use of fuel.41

Similarly, SIGIR reported that Parsons Infrastructure & Technology 

Group, Inc., a prime contractor involved in reconstruction of the Taji 

Military Base and Baghdad Recruiting Center, provided an incomplete 

accounting of government property. As SIGIR completed the report 

in 2008, the task order for these projects remained open because 

of questions surrounding the accuracy of government property 

inventory records.42

d. Close Oversight of Cash Transactions Is Necessary 

To Deter Fraud and Abuse

Cash transactions must have strong controls, especially in a war zone 

where they may be highly vulnerable to theft or misappropriation. In 

Iraq, cash transactions were especially prevalent due to the absence of a 

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20 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

modern banking system. SIGIR audits found that programs designed to use cash payments failed to include the requisite internal 

controls to ensure that the funds were used as intended or reached 

their intended recipient.

The CERP-funded Sons of Iraq (SOI) program had weak financial 

controls over its cash payments. In June 2007, the Multi-National CorpsIraq (MNC-I) began using CERP funds to hire former insurgents and 

their passive supporters to guard checkpoints, buildings, and key parts 

of neighborhoods. The SOI program, in combination with other events 

(most notably the 2007 surge of U.S. forces into Iraq) has been credited 

with helping reduce the overall levels of violence. 

While this may be true, SIGIR found weak controls in the program—that is, payments were often made directly to an SOI leader to 

distribute instead of to individual members and without any means of 

verifying that each member received his salary. Moreover, considerable 

documentary evidence was missing that would have helped account for 

cash disbursements. Among the most significant missing documents 

were receipts and statements of pay agent officer’s accounts—important 

internal control documents that ensure funds are used appropriately. In 

December 2009, a U.S. Army captain pled guilty to stealing approximately $690,000 in SOI funds.43

SIGIR found weak controls in its review of the DoS Quick Response 

Fund (QRF) program, which used cash to fund local projects to promote economic and social development in Iraq. The QRF funded grants, 

microgrants, or direct purchases of materials (such as seed, fertilizer, or 

books) for local neighborhood and government officials and members 

of community-based groups (such as nonprofit organizations, business 

and professional associations, charities, and educational institutions). In 

a 2011 report, SIGIR concluded that DoS had made some improvements 

in keeping records of its cash payments since an earlier review in 2009, 

but problems with QRF recordkeeping from 2007–2008 had not been 

addressed, and 35% of the records that could document the uses of funds 

and program outcomes were missing. SIGIR concluded that DoS could 

not be assured that these projects were completed or that the funds were 

used as intended.44

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 21

e. Grants Awarded in SROs Require Stronger Oversight 

Than Those Awarded in Peaceful Areas

Grants and cooperative agreements differ from contracts but still require oversight to ensure that funds are being properly and efficiently 

used. These assistance instruments may be used when it is anticipated 

that the agency and the recipient will have no substantial involvement during performance of the grant and the principal purpose is 

the transfer of money, property, or services to accomplish a public 

purpose of support or stimulation authorized by federal statute. DoS’s 

standard operating procedure for grant management states that the 

Department has a fiduciary responsibility to monitor the funds it allocates and administers. This would include not only financial oversight 

but also oversight of what the grant is accomplishing.

SIGIR recognizes that managing grants and related cooperative 

agreements in an SRO is difficult. The limited number of oversight 

personnel assigned in country, the fluid security conditions, and the 

challenging cultural considerations made direct U.S. contact with 

grant recipients difficult. However, as addressed in several of SIGIR’s 

reports, these conditions did not relieve U.S. officials from their management responsibilities. In fact, the challenges dictate the need for 

even more oversight because of the inherent vulnerabilities to fraud, 

waste, and abuse. 

A prime example of this problem was USAID’s management of 

the Community Action Program (CAP). SIGIR reported in 2011 

that, since 2003, USAID had obligated about $675 million to nongovernment organizations to implement the CAP, which worked in 

rural and urban communities to promote grass-roots democracy 

and local governance. SIGIR’s audit found that USAID’s oversight of 

one of the principal implementing partners, Cooperative Housing 

Foundation International (CHF), failed to detect questionable charges, 

allocations of costs against the agreement, or accounting practices. 

Based on the examination of selected FY 2010 costs CHF claimed, 

SIGIR questioned the reasonableness, allocability, and allowability 

of about $1.08 million. SIGIR’s audit showed that USAID officials 

may have relied too heavily on CHF, contractors, and external audit 

agencies for information on activities in the field. SIGIR noted that 

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22 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

travel restrictions and the lack of personnel made it difficult for 

USAID officials to adequately monitor projects in the field.45

f. Maintaining Comprehensive Contract and Project Records 

Is Crucial To Effective Oversight 

The rapid turnover of contract and project management personnel 

and the extensive use of cash payments require comprehensive records 

to ensure some level of management continuity. SIGIR’s audits found, 

however, that contract, program, and project files were often not comprehensive and did not contain sufficient information to document, for 

example, why critical decisions were made. 

SIGIR’s review of a CERP contract to construct a hotel found that 

critical documents were missing. The auditors could not determine how 

and why significant actions occurred, such as why costs increased from 

$2.7 million to $4.2 million, and there was no documentation showing 

that the U.S. government conducted quality assurance activities.46

6. Reconstruction Programs Need Clear and Measurable Goals

 and Objectives 

Sufficient planning is the critical prerequisite for any SRO. Identifying 

the needs to be addressed, setting goals and objectives, and establishing 

a path to measure progress are critical first steps before any expenditure 

Bathroom with no running water in a school built in Anbar province with CAP funds, February 2011.

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 23

of funds should occur. However, in Iraq, SIGIR found that agencies 

implemented expensive programs without this analysis. As a result, program objectives were sometimes not clear and outcomes were difficult 

to measure. Overall, the absence of a clear definition of what was to be 

achieved left programs vulnerable to inefficiencies and waste. 

Departments of Defense and State Police Training 

and Development Programs. SIGIR issued a number of reports 

detailing the difficulties in assessing the outcomes of DoD and 

subsequent DoS efforts to train the Iraqi police forces. A 2010 report 

found that after spending more than $7.3 billion to train the Iraqi 

police forces, DoD reported in June 2009 that the forces were more 

capable than when the coalition members began training in 2003, but 

the extent of those capabilities was unknown. The inability to assess 

the success of this training resulted from the lack of a comprehensive 

plan that laid out goals, objectives, and measures for progress. Absent 

usable metrics to assess outcomes, DoD used quantitative measures, 

such as the number of personnel trained, to determine progress.47

This lack of clearly defined objectives and metrics to evaluate 

success was also endemic in the follow-on DoS Police Development 

Program. On October 1, 2011, DoD transferred to the DoS 

responsibility for managing police training. SIGIR’s October 2011 

report noted that DoS, with assistance from DoD, had been planning 

Entrance to the Baghdad International Airport Caravan Hotel, May 2009.

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24 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

for more than two years for the transfer of the program. However, 

SIGIR concluded that DoS had not assessed Iraqi police capabilities 

to the extent necessary to provide a sufficient basis for developing 

detailed program tasks and an effective system for measuring program 

results. That is, it had not developed specific goals on what was to 

be accomplished, intermediate and longer-term milestones, metrics 

to assess progress and accomplishments, or the means to ensure 

transparency and accountability for program costs 

and performance.48

Commander’s Emergency Response Program. SIGIR’s reports on 

the $3.96 billion CERP program, established to enable military commanders to respond to urgent humanitarian relief and reconstruction 

requirements, highlight the problems that can occur when goals and 

performance measures are not adhered to. SIGIR found that, as the 

program progressed, commanders did not always use the funds for 

the purposes directed in DoD guidance. The Congress was sufficiently 

concerned about this discrepancy that, in July 2009, the Chairman of 

the House Appropriations Defense Subcommittee wrote a letter to the 

Secretary of Defense, stating:49

Counterinsurgency training for Iraqi police forces, April 2010.

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 25

Today, a majority of CERP funds are spent on ... projects that, while 

important, far exceed the intended scale and scope of urgent projects 

CERP was intended to support. Over the last five years, CERP has 

grown from an incisive [counterinsurgency] tool to an alternative 

U.S. development program with few limits and little management.

A 2011 audit determined that DoD used FY 2011 CERP funds primarily for civil capacity-development projects. However, USAID and 

DoS funds already provided for such efforts, and SIGIR did not find 

any guidance or directive that explained DoD’s role in civil capacity 

development that is not part of a larger counterinsurgency effort. DoD 

guidance continued to state that the CERP was intended for “urgent 

humanitarian needs” on the battlefield to help meet military objectives 

in a counterinsurgent environment. Given that focus, DoD capacitydevelopment projects should have shown some link to specific 

military objectives, but SIGIR’s examination of FY 2011 projects did 

not find this to be the case, raising questions about the need for such a 

large incremental focus on capacity development.50

Sons of Iraq Program. SIGIR’s 2011 audit of the $370 million SOI 

program noted that the effort has been credited with helping reduce 

Riot-control training for Iraqi police forces, April 2010.

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26 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

the overall levels of violence in Iraq. However, SIGIR’s audit found that 

the ability to evaluate the effects of the program was made much more 

difficult because there was no comprehensive plan with specific goals, 

metrics, or milestones from which to measure the individual or collective impact of the effort. Moreover, there was no requirement for local 

commanders to document what their SOI contingents achieved. Given 

the absence of such information coupled with the difficulty in segregating the effect of the SOI from other factors, such as the influx of 

large numbers of additional U.S. forces, SIGIR’s auditors were unable 

to measure effects against the specified program goals and metrics.51

U.S. Development Assistance Programs. SIGIR’s reviews of worldwide U.S. development assistance programs used in Iraq indicate that 

they too were constrained because of a lack of defined benchmarks 

and other criteria to assess outcomes. As a result, assessments were often made on what the agency did or bought—outputs—as opposed to 

the long-term result of the effort, or outcomes. This occurred despite 

the existence of U.S. and international expertise in designing effective 

performance measures. 

For example, USAID developed a 1998 handbook to enhance the 

ability of democracy and governance project managers to monitor 

progress in achieving planned results. The guidance offers a general process for developing a performance-monitoring system and 

provides specific measurable metrics to evaluate impact. Nevertheless, 

SIGIR concluded that NDI and IRI were not providing DoS assessments of the impact of their grants to promote democracy in Iraq.52

7. Working Closely with Host Governments Is Essential to the 

Long-term Success of U.S. Investments in Reconstruction Projects

SIGIR’s audits of U.S. reconstruction efforts in Iraq demonstrated 

that, when U.S. agencies make decisions about investments in reconstruction projects without obtaining the views and buy-in of hostcountry officials, the result can be, at best, inefficient and, at worst, 

entirely wasteful. 

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 27

Foreign assistance practitioners have long identified the need for 

host governments and citizens to actively participate in identifying needs and to financially and otherwise support activities to best 

ensure that foreign aid is used effectively and not wasted. Such buy-in 

may take a number of forms, such as cost-sharing or other in-kind 

support and agreements to sustain and maintain facilities or programs 

once finished. This is essential not only to ensure that donor funds are 

used effectively but also to promote the nation-building skills of the 

recipient country. 

SIGIR’s work identified two important steps in ensuring that the 

activity will be used and sustained after U.S. participation has ended: 

host-government involvement in identifying reconstruction needs 

and priorities, and a requirement for the host country to share project 

costs. These efforts are both critical and difficult in situations where 

the stability of the host government is fragile.

a. Host Governments Must Be Involved in Identifying 

Sustainable Reconstruction Priorities and Needs

SIGIR audits identified numerous instances where U.S. agencies initiated reconstruction projects without GOI input and support and the 

wasteful expenditure of funds that ensued. In 2008, SIGIR reported 

that U.S. agencies often made many decisions about investments without ascertaining Iraqi needs or obtaining the views and buy-in of Iraqi 

officials. SIGIR concluded that the failure to obtain host-government 

agreement on construction projects and efforts to foster a functioning 

democracy can lead to the waste of U.S. investments.53

Early in the reconstruction process, the CPA recognized the need 

for the Iraqi government to have a financial management information 

system. According to USAID officials, however, the CPA made a policy 

decision to not identify Iraqi ministry user requirements. This decision 

was made despite International Monetary Fund and the World Bank 

studies concluding that a sound information technology project design is 

predicated on identifying such requirements. 

SIGIR found that U.S. reconstruction policy decisions and guidance 

drove development of the Iraqi Financial Management Information 

System and that the project was suspended for reasons related 

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28 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

principally to the lack of GOI commitment. In November 2007, USAID 

attempted to garner GOI support for reviving the project, and in 

mid-January 2008 the Iraqi Minister of Finance and Acting Mission 

Director of USAID signed a memorandum of understanding 

to restart the effort. However, the entire system was ultimately 

abandoned as unworkable.54

Host-government support at the outset is critical for politically 

sensitive programs aimed at building democracy and improving security. SIGIR’s audits of anticorruption efforts noted that a long-term 

and sustained commitment was needed by both the U.S. government 

and GOI to achieve any measurable improvement in the pervasive 

corruption the country faced. In 2008, SIGIR recommended that the 

U.S. efforts be based on assurances that the GOI supported the U.S. 

approach and that there were measurable indicators of progress. The 

audit concluded that, absent such assurances, the U.S. programs were 

vulnerable to waste.55

SIGIR also found that GOI political decisions could adversely affect 

program success. For example, although SIGIR’s auditors found that 

U.S. Special Operations Forces successfully trained and equipped the 

Iraqi Special Operations Force (ISOF), U.S. officials were concerned 

that the ISOF would not remain an impartial and fully functioning 

military force. The ISOF’s extra-constitutional move from the Ministry of Defense to the Office of the Prime Minister raised concerns 

about how the force would be used in the future. This, in turn, left its 

status as a Ministry of Defense agency or a Prime Minister agency 

unclear, which created budget problems, poor logistical and recruiting 

support, and irregular payments.56

DoS’s recent experience in planning its Police Development 

Program is indicative of what can happen when the scope and 

objectives of a program are not mutually agreed upon by the host 

country. SIGIR reported in July 2012 that DoS designed a billiondollar program, to include some construction, without securing an 

agreement from the GOI. In the face of GOI rejection, DoS was forced 

to change and downsize the program, and about $200 million was 

wasted because funds were not meaningfully used for the purpose of 

their appropriation.57

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 29

While it is not feasible to anticipate every host-government action, 

the greater the involvement, the greater the probability that U.S. assistance efforts will be supported and sustained. In Iraq, unfortunately, 

SIGIR found that the lack of GOI knowledge and support of projects 

led to difficulties in transferring them to the Iraqi government because 

they had not agreed to or were unaware of their existence.58

b. Obtaining Host-government Cost Sharing Is the Best Way 

To Ensure Long-term Sustainment

SIGIR’s experience in auditing assistance programs in Iraq supports 

an important conclusion of U.S. and international foreign-aid 

institutions: the most effective means of ensuring host-country 

support is to require it to share in the costs. 

USAID’s Global Development Alliance encourages partnering with 

entities such as host-country governments and indigenous nongovernmental organizations to mobilize the strengths and participation 

of the host country and enhance the developmental impact of the 

assistance. When such relationships are forged, USAID expects the 

partner to make financial or in-kind contributions to increase the 

impact and sustainability of development efforts. However, in 2009, 

SIGIR examined the status and direction governing GOI cost sharing 

and found that none of the U.S. agencies involved in reconstruction 

had developed specific guidance for obtaining GOI support for U.S. 

assistance programs. Rather, there appeared to be more of an effort to 

explain why they were not required to solicit matching funds.59

USAID officials informed SIGIR that its agency-wide cost-sharing 

requirement was not applicable to Iraq. The guidance requires 

cost sharing for those programs funded from USAID’s universal 

Development Assistance and Child Survival foreign assistance 

accounts, which were not used in Iraq. As such, USAID said it was 

seeking Iraqi support “to the extent that it makes sense.” 

Agencies responded that GOI support took many forms, providing 

the following examples:60

•	 According to DoS, the matching requirement of Public Law 110-

252 applied to only six of its foreign assistance programs, and the 

GOI capital budget for 2008 contained $12 billion for these six 

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30 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

programs, which more than matched U.S. assistance as required 

by the legislation.

•	 DoD noted that the GOI had spent more than $8 billion to support its security and police forces from 2004 through 2008 and 

more than $4 billion to purchase U.S. military equipment and 

supplies. The GOI also provided financial or in-kind support for 

individual U.S.-funded projects, such as the Sons of Iraq.

•	 USAID asserted that it managed programs incorporating costsharing elements at the project level.

A January 2011 SIGIR report highlighted SIGIR’s concerns regarding GOI support for a U.S. project to develop an executive-level educational facility for the Iraqi Security Forces and other branches of the 

government. When completed, the facility was to serve as a regional 

center of excellence for officials from other countries. Iraqi Ministry 

of Defense officials informed SIGIR that the GOI had no plan to fund 

the operation of the facility after it opened and had assumed that U.S. 

financial support would continue.61

Recognizing these deficiencies, the Congress, in a number of appropriations, authorizations, and accompanying conference reports, 

placed explicit demands for GOI cost sharing.62

 However, such direct 

congressional intervention should not be necessary if agencies providing reconstruction assistance utilize the same cost-sharing guidelines as 

those embedded in traditional foreign-assistance programs.

8. Accountability and Oversight of Private Security 

Contractors Is Vital in Politically Sensitive Contingency 

Operations 

The U.S. government relied extensively on private security contractors 

(PSCs) in Iraq to perform critical security missions, including protecting personnel movements, supply convoys, and facilities. However, 

issues surfaced on PSC oversight, control, and costs. 

The 2007 Blackwater incident in which 17 Iraqi citizens were killed 

brought to the forefront the need for better U.S. oversight of these 

companies to ensure that their actions do not place mission objecAudit Lessons Learned_v10.indd 30 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 31

tives at risk. It took time before U.S. government agencies and partners began to consider PSC costs when deciding whether to proceed 

with reconstruction projects in Iraq, and most still do not. Given that 

any future reconstruction efforts would likely take place in a hostile 

environment, it is critical that the issues surrounding the use of PSCs 

be considered up front as reconstruction plans are being designed and 

before any monies are obligated or expended. 

a. Establishing Core Standards and Immediately Investigating 

Possible Breaches Are Essential Steps in Ensuring that Use of 

Private Security Contractors Does Not Adversely Affect the Mission

It was not until after a serious incident involving PSCs and the 

death of Iraqi civilians that DoS and DoD agreed to jointly develop, 

implement, and follow core standards, policies, and procedures for 

the accountability, oversight, and discipline of PSCs in Iraq. Primary 

among several goals was reducing the number and strategic impact 

of serious incidents involving PSCs. A central part of this oversight 

was the reporting of incidents. SIGIR noted that the agencies learned 

lessons over time and applied them incrementally, but there were 

still gaps in oversight. For example, SIGIR found that DoD was not 

following its own regulations to investigate reports of serious incidents involving PSCs.

SIGIR concluded that, in SROs requiring the extensive use of PSCs, 

DoD and DoS must establish common standards, policies, and procedures early in the contingency operation. This guidance should address standards of conduct, use of deadly force, a common definition 

and reporting requirements for serious incidents, and a method for 

DoD units and the U.S. Embassy to share information on incidents.63

b. Obtaining an Accurate Accounting of Private Security Contractor 

Costs Is Essential for Planning and Budgeting Operations

PSC costs can consume a large portion of a contract, project, or program’s overall budget. In 2008, because agencies were not required to 

systematically identify PSC costs, SIGIR could not readily and reliably 

calculate costs of these services. As a result, SIGIR recommended that 

agencies develop processes for routinely capturing this information 

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32 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

and that program managers weigh these costs relative to the expected benefits for all new projects.64

This became increasingly important as the reconstruction effort 

evolved from large-scale infrastructure projects to capacity building, 

and physical security became a larger portion of total contract cost. 

Additionally, with the withdrawal of U.S. forces, the need for private 

security services increased to compensate for support previously 

provided by the U.S. military. 

SIGIR’s 2012 audit of the DoS Police Development Program indicates that the cost of security appears to have increased relative to 

the total cost of the assistance effort, but DoS had still not fully calculated that amount to assess program feasibility. In a 2011 report, 

SIGIR noted that security and life and mission support costs comprised 88% of the program’s budget, while this latest audit reported 

that support costs would increase to 94% of the proposed 2013 

budget. DoS did not, however, provide SIGIR an explicit breakdown 

for security costs alone.65

9. Linking an Inspector General’s Authority to the Mission, 

Rather Than Funding, Is Critical To Ensure Complete Coverage

In 2004, the Congress created SIGIR as the successor to the CPA 

Office of Inspector General and identified its duties “to conduct, 

supervise, and coordinate audits and investigations of the treatment, 

handling, and expenditure of amounts appropriated or otherwise 

made available for the reconstruction of Iraq, and of the programs, operations, and contracts carried out utilizing such funds.”66 The words 

“appropriated or otherwise made available for reconstruction” generally limited SIGIR to reviews of projects funded by the IRRF, and later, 

those funded by the ISFF, CERP, and ESF. However, a large amount of 

the Iraq relief and reconstruction program management and operation was carried out by DoS and DoD personnel and contractors who 

were generally paid out of their agency operating accounts. Neither 

DoS nor DoD believed these accounts were subject to SIGIR’s oversight authority, and therefore they did not allow SIGIR to review their 

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 33

internal organization and structure, such as office staffing, contracting 

workload, and security costs. 

In 2008, SIGIR’s authority was broadened to include “the efficacy 

of Department of Defense management and oversight, including 

the adequacy of staffing and training of officials responsible for such 

management and oversight.”67 SIGIR’s authority to review DoS’s management and oversight was not included in this new law. As a result, 

DoS objected to SIGIR conducting an audit of its contract to provide 

personal protective services because most of the funding came out of 

its Diplomatic and Consular Programs account, over which DoS asserted SIGIR did not have oversight authority. While SIGIR ultimately 

teamed with the DoS Inspector General to conduct the audit, DoS 

resistance caused delays and inefficiencies.

The lesson for future SROs is that limiting an Inspector General’s 

authority to an appropriation rather than the mission limits oversight. 

SIGIR was unique in that it had authority to cross agency boundaries 

to arrive at systemic planning and other deficiencies, but at the same 

time, it was inhibited from doing so by restrictions on what funds it 

could audit. In response, SIGIR was forced to audit multiple projects 

and contracts to identify individual agency operational weaknesses, 

and from there, to extrapolate systemic reconstruction problems. In 

contrast, when authority is linked to the mission, auditors can review 

overall agency funding streams and operations, which would facilitate 

identification of systemic weaknesses.

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34 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

Part III: Agency Perspectives on SIGIR’s Lessons Learned

SIGIR offered agencies the opportunity to provide their perspectives 

on these lessons, to include the extent to which they have taken actions to address them. Agency responses vary in their assessment of 

the validity of the lessons as presented, as well as in agency actions to 

deal with them. The opinions provided represent the positions of the 

individual organizations and may not represent official positions of 

the Departments of Defense and State.

Office of the Secretary of Defense (OSD)

The responding OSD official did not disagree with the lessons learned 

presented. On the issue of balancing security, political, and economic 

interests in decision making, he noted that such analyses are part of 

DoD doctrine. Nevertheless, he cautioned that such examinations 

are hampered by the fact that one cannot see the future. He further 

explained that the lack of defined agency roles and mission overlap 

can be traced to the authorities given each agency by its congressional 

authorizing committee. Problems in the field occur if the Congress 

authorizes similar authorities and programs for more than one agency. 

As such, the lack of coordination is first at the legislative and highest 

executive branch level. 

In addressing the need for a comprehensive management information system to provide information on how money was spent, the 

official noted that addressing this need would require purchasing a 

new system because none of the ones currently in service meet the requirements of all the major agencies. Finally, OSD agreed on the need 

to increase contract and grant oversight in contingency environments. 

The official noted that DoD’s efforts to provide contract oversight in 

Iraq were ad hoc, and an institutional effort to provide an expeditionary force is needed. 

U.S. Central Command (CENTCOM)

CENTCOM responded that staff reviewed the report and discussed 

it with senior leadership, concluding that, while the lessons learned 

provides interesting observations, they are already part of DoD’s 

Audit Lessons Learned_v10.indd 34 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 35

overarching engagement charter and therefore embedded into daily 

operations they conduct in their theater. As such, CENTCOM stated 

that it had no further comments to provide. 

U.S. Army Corps of Engineers (USACE)

In a written response, USACE generally agreed with the lessons 

provided and noted how USACE had implemented those applicable 

to the agency. For example, regarding the need to assess the risks of 

violence, USACE noted that the Commander of the International 

Security Assistance Force in Afghanistan issued contracting guidelines 

on October 9, 2010, that include specific go/no go criteria that need to 

be factored into a risk assessment for all proposed construction projects. USACE also stated that it had taken steps to better manage staff 

needs and turnover by using rehired annuitants and extending tour 

lengths to 9 and 12 months, among other actions. To improve contract 

oversight through more comprehensive records, USACE noted that 

its own lessons learned conferences identified the need for all contingency districts and field offices to adhere to standard USACE business 

practices when operating in a contingency environment. Finally, in response to the lesson that host governments must be involved in identifying sustainable reconstruction priorities and needs, USACE stated 

that it executes the requirements of supported force commanders and 

other agencies. However, in Afghanistan the contracting guidelines 

require confirmation that local leaders and stakeholders have been 

consulted on the development of requirements for any project that 

Afghans will own, operate, and maintain.

Defense Contract Audit Agency (DCAA)

DCAA officials generally agreed with the lessons as presented and 

stated that they have taken steps to address them. For example, to provide better personnel continuity and reduce turnover, they are deploying contracting officers to Afghanistan for a one-year tour. DoD is also 

working to address issues by establishing an expeditionary workforce 

and has allocated more staff for the agency. 

DCAA noted that it still does not have sufficient staff to conduct 

the level of oversight needed and has taken mitigating measures, such 

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36 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

as conducting risk analysis before selecting contracts to audit. DCAA 

expressed concern that SIGIR’s lessons suggested that DCAA should 

conduct in-depth voucher reviews when that is not their organization’s 

responsibility. DCAA emphasized the importance of government 

oversight from the start of a contract.

Defense Contract Management Agency (DCMA)

DCMA officials stated that the lessons learned presented in the report 

are valid and that the agency director is committed to responding to 

these, and others DCMA has learned, to improve performance as a 

combat support agency. They detailed actions DCMA has taken to address personnel and oversight issues. Specifically, to address problems 

associated with rotations of staff with differing skill levels, DCMA has 

placed a contract director in both Iraq and Afghanistan and identified 

personnel who will receive special training as part of a contingency 

corps should another such operation arise. 

To improve oversight, DCMA identified gaps and inconsistencies 

in policies and procedures that were designed for working in benign 

environments but did not meet demands of contingency operations. 

DCMA also is reevaluating current criteria used to determine when 

to conduct purchasing system reviews to include more lower-cost, 

but high-risk, contracts that SIGIR noted were particularly vulnerable 

to fraud and waste. They also noted that the U.S. government must 

recognize that the country cannot go to war without contractors and 

that it needs to have visibility and accountability over them. Additionally, they agreed on the need to consider the human costs of activities 

as they too lost a staff member in Afghanistan.

Department of State Bureau of International Narcotics 

and Law Enforcement Affairs 

DoS officials stated that, in general, they agreed with SIGIR’s lessons learned. The extent to which these lessons now appear obvious, 

such as requiring metrics, is a reflection of what has been learned 

and applied since the early days of Iraq reconstruction. For example, 

they responded that they have embraced SIGIR recommendations on 

contract oversight by pushing oversight to the field, and have imAudit Lessons Learned_v10.indd 36 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 37

proved their working relationships with major contractors. Moreover, 

monitoring and oversight have become part of DoS culture. Nevertheless, they noted some issues with the presentation. For example, they 

posited that in a non-permissive, dangerous environment, even the 

most thorough cost-benefit analyses cannot necessarily predict the future security climate because unforeseen things happen. Furthermore, 

construction projects require a long lead time, and there is no way to 

determine with certainty what security conditions will prevail when 

the project reaches its final stages or concludes. 

DoS disagreed with SIGIR’s conclusion that it did not consider 

security costs because no specific written cost-benefit analyses existed. 

They noted that the internal (DoS and the Office of Management and 

Budget) and external (congressional) budget processes were rigorous 

and involved multiple layers of analysis and justification at all stages 

of the budget development and implementation process. Regarding 

staffing issues, they noted that, while staff rotations are a given, and 

staff members and their families already make tremendous sacrifices 

to take unaccompanied assignments in conflict zones, managers can 

mitigate the effects of frequent rotations by requiring documentation 

and using technology (such as Sharepoint) to ensure that knowledge 

transfers from one staff to another, and by targeting staff members 

with specific needed skills. 

DoS agreed that coordination within or across organizations can 

be difficult, including in situations when DoD’s assistance efforts do 

not fall under Chief of Mission authority. Appropriate organizational 

structures (such as Assistant Chief of Mission positions) and deployment of personnel with constructive, collaborative, and missionfocused perspectives can improve coordination. 

U.S. Agency for International Development 

Bureau for the Middle East

The USAID official representing the Bureau stated that, overall, he 

had little to disagree with, although he said that some overarching 

issues—such as the relationship between counterinsurgency and 

stabilization efforts—were not addressed, and some of the nuances 

in the specific issues SIGIR raised were not recognized. To illustrate, 

Audit Lessons Learned_v10.indd 37 10/17/2012 6:27:0
38 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

he disagreed with the need for assessing whether high security costs 

render an activity not worth the effort. He noted that USAID did not 

have experience in providing developmental assistance in such an 

insecure environment, and so had no basis to determine what was, or 

was not, a reasonable security cost. As such, a cost-benefit analysis was 

not practical. Additionally, some programs required more travel, so 

there were higher security costs, but overall, their security costs averaged about 25% to 30% of total program costs. From a developmental 

perspective, the official said it was worth the costs. 

USAID further noted that reducing the number of agencies involved, rather than improving coordination among them, would be 

the principal factor needed to improve delivery of reconstruction 

assistance. On the other hand, he described USAID efforts to address 

the lessons delineated by SIGIR. Regarding personnel management, 

he noted that rotations will always be a problem but that USAID 

provided continuity by detailing third-country nationals from USAID 

missions in other countries to Iraq to manage programs and contracts. 

Also, he noted that cost sharing has always been a part of USAID culture and has increased significantly in Iraq, in part, to be responsive to 

congressional direction. He stated that USAID now has memoranda 

of understanding with ministries to provide financial support and that 

the Ministry of Finance provided funding to select ministries specifically to support USAID projects.

Audit Lessons Learned_v10.indd 38 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 39

Part IV: Studies in Reconstruction Management

SIGIR’s work identified numerous examples of both good and bad 

reconstruction management. In many cases, performance was mixed, 

demonstrating both positive and negative management decisions and 

project or program execution. Two of SIGIR’s audits, however, provide 

the extremes: in one case, decisions were uniformly poor and resulted 

in failure; and in the other, decisions were uniformly good, which 

resulted in success. 

Falluja Waste Water Treatment System: A Case Study 

in Wartime Contracting 

(SIGIR 12-007, October 30, 2011)

The Falluja Waste Water Treatment System was one of the largest and 

most expensive construction projects in Iraq. It was part of a broad strategy to improve Iraq’s infrastructure so as to win the hearts and minds of 

the Iraqi people. The project was initiated in June 2004 after U.S. officials 

approached the GOI and asked what could be done in Falluja to help 

Raw sewage in the streets of Falluja, 2004.

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40 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

rebuild the city. The U.S. military had completed a major operation there 

earlier that year, and the city had sustained heavy damage. The GOI offered 

a list of projects for the city, including a request for a sewer network system. 

GOI officials wanted this system to service the residents of the city of Falluja. At the time, Falluja did not have a comprehensive sewage system. 

SIGIR’s report noted that, as of September 2011, the treatment facility 

had an estimated cost of $107.9 million and was servicing 6,000 homes (or 

approximately 38,400 residents).68 To complete the system the GOI will 

need to spend at least $87 million more, and the entire network collection 

system is not estimated to be completed until at least 2014.

SIGIR Findings 

SIGIR’s report concluded that heavy fighting in Falluja, poor planning, 

unrealistic cost estimates, and inadequate funding led to significant cost 

overruns and delays in constructing the city’s new wastewater treatment system. After seven years and the expenditure of more than $100 

million, the backbone of a wastewater treatment system was in place 

in 2011 and servicing approximately 38,400 residents. But this was far 

short of the 100,000 residents originally intended to benefit from the 

system. Despite this shortfall, SIGIR noted that the facility was expandable and, with additional investment by the Iraqi government, tens of 

thousands of additional residents could be connected to it. At the time 

of SIGIR’s audit, the GOI was supporting the system’s operation and its 

future expansion. But completion of the existing backbone system was 

years late and millions of dollars over budget, leaving Falluja’s streets 

torn up and in disrepair for years. Many people, including DoS personnel, died while working in support of this project. 

After evaluating all the issues surrounding the project, SIGIR concluded that assessing the Falluja Waste Water Treatment System solely 

on its excessive costs and limited results would likely not fully realize the 

nature of its secondary goals and objectives. Wartime projects generally 

have secondary goals that shape management decisions made along the 

way. This project had the secondary goals of enhancing local citizens’ 

faith in their government’s ability to deliver essential services, building 

a service capacity within the local government, winning the hearts and 

minds of a critical segment of the Iraqi populace, and stimulating the 

Audit Lessons Learned_v10.indd 40 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 41

economy by boosting employment (particularly for young men who 

were potentially recruitable by the insurgency). 

This project was taken on in 2004 in a city wracked by violence. Little 

planning went into the project, and there was minimal understanding 

of site conditions, no skilled workforce available, and no clear idea about 

how much the new system would cost. Very early in the project, security 

conditions rapidly deteriorated such that the trenches and pipes laid 

by the U.S. contractor were regularly being blown up, and construction 

workers were subject to continual attacks. On several occasions, U.S. 

combatant commanders had to direct the contractor to stop construction until security improved. So many adverse conditions faced this 

project from the outset; thus, it is hard to understand why it was initiated and continued. 

The absence of information or analysis on whether progress was 

made toward achieving any of the secondary goals makes an assessment 

of this project’s worth or wisdom quite difficult. In the end, it would be 

dubious to conclude that this project helped stabilize the city, enhanced 

the local citizenry’s faith in government, built local service capacity, won 

hearts or minds, or stimulated the economy. Coupled with the fact that 

the outcome achieved was a wastewater treatment system operating at 

levels far below what was anticipated, it is difficult to conclude that the 

project was worth the $100 million investment and the many lives lost.

Tikrit Location Command Project Achieving Contract Goals 

by Using Sound Management Practices

(SIGIR 09-024, July 30, 2009)

This review examined the Tikrit Location Command, a $37.8 million 

ISFF-funded project to construct a new area support base for the Iraqi 

Army. The project was a joint effort between the Multi-National Security Transition Command-Iraq (MNSTC-I) and Iraq Training and 

Advisory Mission (ITAM). The Joint Contracting Command-Iraq/

Afghanistan awarded the contract and was responsible for contract oversight. The Gulf Region-North (GRN) District of the U.S. Army Corps of 

Engineers provided program management and engineering oversight. 

Audit Lessons Learned_v10.indd 41 10/17/2012 6:27:0
42 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

SIGIR Findings

SIGIR found that, although completing the Tikrit Location Command 

project had taken longer than originally planned, the project’s costs did 

not increase, the facilities were nearing completion at that time, project 

management oversight controls were working well, and plans for transferring and sustaining the project were being developed.

As of May 2009, the contractor was meeting the requirements of the 

contract, and cost disbursements were commensurate with management’s estimate of the construction status. The building exteriors were 

mostly complete, and the contractor was completing the interiors and 

other infrastructure and was adding the utilities. The GRN Program 

Manager estimated that overall construction was 78% complete, and 

both the GRN manager and the contractor believed that construction 

would be completed by the end of the current period of performance, which 

is September 26, 2009. About $25.2 million of the $37.8 million—nearly 

67% of the modified contract price—had been disbursed to the contractor.

Strong program, project, and contract management controls were in 

place from the beginning of this contract and improved over time. When 

construction deficiencies were identified, action was taken to resolve the 

issues. Additionally, lessons learned from prior construction projects were 

implemented. MNSTC-I officials indicated that a good security situation 

at Tikrit, among other factors, contributed to the positive outcome.

At the time the report was issued, the project was approximately 

three months from its scheduled completion date, and had not yet been 

transferred to the GOI. Nonetheless, SIGIR found that MNSTC-I had 

an asset-transfer plan in place and was working with the GOI to address 

several training and sustainment issues, including securing an adequate 

power supply for the facility and training Iraqi operators to run the 

reverse-osmosis water treatment facility. To monitor the project after its 

transfer, a logistics military advisory team would be located at the site to 

advise the location command’s commander, and a logistics training assistance team would provide focused training. SIGIR also found that ITAM 

officials conducted capability assessments to track the GOI’s progress in 

base services, water treatment, and other areas.

Audit Lessons Learned_v10.indd 42 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 43

Appendix A: Focus of SIGIR Recommendations

SIGIR made 487 recommendations to deal with management problems discussed throughout the lessons learned presented in this 

report. In a number of cases, a single recommendation addressed 

more than one of the issues outlined above. To illustrate, SIGIR has 

provided:

•	 more than 190 recommendations to improve program management, including the need to adequately staff offices and reduce 

staff turnover

•	 nearly 80 recommendations to improve interagency coordination 

and cooperation and to better share information

•	 more than 205 recommendations to improve oversight of contracts and contractors to encourage economy and efficiency and 

minimize the potential for fraud, waste, and abuse

•	 more than 200 recommendations to improve accountability and 

internal control weaknesses (These involve deficiencies such as 

inadequate review of contractor invoices, inadequate contractor 

oversight, missing or incomplete documentation of contract actions, and inadequate staffing.)

•	 more than 40 recommendations to work more closely with the 

GOI in areas such as designing and transferring projects to improve the prospects that the GOI will sustain U.S.-funded facilities 

and programs so that these efforts will not be wasted

Audit Lessons Learned_v10.indd 43 10/17/2012 6:27:0
44 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

Potential Savings from SIGIR Findings and 

Recommendations ($ Millions)

Actual 

Savings 

($ Millions) 

Questioned Costs

Report 

Number Report Title

Funds That 

Could Be 

Better Used

Unallowable 

Unallocable 

Unreasonable

Unsupported 

Costs

Dollars 

Saved & 

Recoveredc

04-003 Federal Deployment Center Forward 

Operations at the Kuwait Hilton 18.20 18.20

04-011

Audit of the Accountability and 

Control of Materiel Assets of the 

Coalition Provisional Authority in 

Baghdad

19.70 19.70

04-013

Coalition Provisional Authority’s 

Contracting Processes Leading Up To 

and Including Contract Award

5.19 0.00a

05-008 Administration of Contracts Funded 

by the Development Fund of Iraq 0.04 0.00a

05-015

Management of Rapid Regional 

Response Program Grants in SouthCentral Iraq 2.70 0.00a

05-016

Management of the Contracts and 

Grants Used To Construct and Operate 

the Babylon Police Academy 

1.30 0.00a

05-017 Award Fee Process for Contractors 

Involved in Iraq Reconstruction 7.80 7.80

05-020

Management of the Contracts, 

Grant, and Micro-Purchases Used To 

Rehabilitate the Kerbala Library 

0.15 0.00a

05-023

Management of Rapid Regional 

Response Program Contracts in SouthCentral Iraq 0.57 0.00a

06-009 Review of Task Force Shield Programs 12.80 12.80

06-010

Review of the Multi-National 

Security Transition Command-Iraq 

Reconciliation of the Iraqi Armed 

Forces Seized Assets Fund

1.51 3.46 4.97

06-016

Interim Audit Report on the Review 

of the Equipment Purchased for 

Primary Healthcare Centers Associated 

with Parsons Global Services, Contract 

Number W914NS-04-D-0006

23.30 23.30

06-029

Review of DynCorp International, 

LLC, Contract Number S-LMAQM04-C-0030, Task Order 0338, for the 

Iraqi Police Training Program Support 

5.46 5.46

07-007 Status of U.S. Government 

Anticorruption Efforts in Iraq 3.80 3.80

08-018

Outcome, Cost, and Oversight of 

Water Sector Reconstruction Contract 

with FluorAMEC, LLC

0.57 0.57

Appendix B: SIGIR Potential and Actual Financial Accomplishments 

Audit Lessons Learned_v10.indd 44 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 45

Potential Savings from SIGIR Findings and 

Recommendations ($ Millions)

Actual 

Savings 

($ Millions) 

Questioned Costs

Report 

Number Report Title

Funds That 

Could Be 

Better Used

Unallowable 

Unallocable 

Unreasonable

Unsupported 

Costs

Dollars 

Saved & 

Recoveredc

09-003

Cost, Outcome, and Oversight of 

Local Governance Program Contracts 

with Research Triangle Institute

0.19 0.06a

09-004

Iraq Reconstruction Project 

Terminations Represent a Range of 

Actions

16.62 16.62

10-008

Long-standing Weaknesses in 

Department of State’s Oversight of 

DynCorp Contract for Support of the 

Iraqi Police Training Program

448.49 502.25 508.66

10-010

Department of State Contract 

To Study the Iraq Reconstruction 

Management System

5.00 5.00

10-013

Commander’s Emergency Response 

Program: Projects at Baghdad Airport 

Provided Some Benefits, but Waste 

and Management Problems Occurred

16.10 16.10

10-022

Improved Oversight Needed for 

State Department Grants to the 

International Republican Institute

5.54 0.69

11-001

National Democratic Institute Grant’s 

Security Costs and Impact Generally 

Supported, but Department of State 

Oversight Limited

0.08 0.08

11-009 Iraqi Government Support for the 

Iraq International Academy 12.00 –

11-014

The Iraq Community Action Program: 

USAID’s Agreement with CHF Met 

Goals, but Greater Oversight Is Needed

1.08 1.08

11-022

Poor Government Oversight of 

Anham and Its Subcontracting 

Procedures Allowed Questionable 

Costs To Go Undetected

113.40 –

12-006

Iraqi Police Development Program: 

Opportunities for Improved 

Program Accountability and Budget 

Transparency

387.00 –

629.33 11.35

Totals 973.62 640.68b 644.89

a SIGIR previously reported that agencies saved some, or more money, but collection efforts were stopped for reasons such as the company 

went out of business or the cost of collection would have exceeded the funds recovered.

b The total dollar amount of questioned costs comprises two subcategories, which are delineated in this table in order to clarify the nature 

of the questioned cost as defined by the Inspector General Act.

c Actual savings are funds that were actually saved because the agency under review accepted SIGIR’s recommendation to put funds to 

better use or to recover monies that were inappropriately spent by a contractor, grant recipient, or other organization receiving U.S. 

funding, or funds that were saved because the Congress elects to reduce appropriations based on SIGIR’s work. No recovered funds or 

collection efforts to date related to Reports 11-009, 11-022, or 12-006.

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46 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

Appendix C: SIGIR Audit Products

SIGIR 

Report Number Date Report Title

13-003 10/4/2012 Development Fund for Iraq: U.S. Army Corps of 

Engineers Has Missing Receiving Reports and Open 

Task Orders

13-002 10/3/2012 Final Review of State Department’s Management of 

Quick Response Funds in 2007 and 2008

13-001 10/4/2012 Sustaining the Progress Achieved by U.S. Rule of Law 

Programs in Iraq Remains Questionable

12-020 7/30/2012 Iraq Police Development Program: Lack of Iraqi 

Support and Security Problems Raise Questions about 

the Continued Viability of the Program

12-019 7/30/2012 Gaps in Business System Reviews of Contractors 

with Generally Less Than $100 Million Annually 

in Contracts in Iraq Increase U.S. Government 

Vulnerabilities to Fraud, Waste, and Abuse

12-018 7/27/2012 Status of Fiscal Years 2011–2012 Iraq Security Forces 

Fund

12-017 7/13/2012 Final Forensic Audit Report of Iraq Reconstruction 

Funds

12-016 4/30/2012 Interim Review of State Department’s Progress in 

Implementing SIGIR Recommendations Addressing 

Quick Response Fund Management Controls

12-015 4/26/2012 Interim Report on Spend Plans for Fiscal Years 

2011–2012 Iraq Security Forces Funds 

12-014 4/18/2012 USACE Used or Deobligated Residual Funds on 

Terminated Contracts

12-013 4/30/2012 Development Fund for Iraq: The Coalition Provisional 

Authority’s Financial Controls for Electronic Fund 

Transfer Payments Diminished over Time

12-012 1/13/2012 Development Funds for Iraq Returned to the Central 

Bank of Iraq

12-011 1/29/2012 Few Contracts Terminated by the U.S. Army Corps of 

Engineers Resulted in Wasted Funds in Iraq

12-010 1/27/2012 Status of Recommendations Made by the Special 

Inspector General for Iraq Reconstruction to the 

Department of Defense

Continued on next page

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 47

SIGIR 

Report Number Date Report Title

12-009 1/29/2012 The Department of State's Process To Provide 

Information on Reconstruction Projects to the 

Government of Iraq

12-008 1/27/2012 Development Fund for Iraq: Department of Defense 

Cannot Fully Account for the Funds It Used after the 

Coalition Provisional Authority Dissolved

12-007 10/30/2011 Falluja Waste Water Treatment System: A Case Study 

in Wartime Contracting

12-006 10/24/2011 Iraqi Police Development Program: Opportunities 

for Improved Program Accountability and Budget 

Transparency

12-005 10/28/2011 U.S. Central Command Contracting Command Had 

Few Contract Terminations That Resulted in Wasted 

Funds in Iraq

12-004 10/27/2011 Department of Defense Agencies Have Taken Action 

on Most Open Audit Recommendations

12-003 10/27/2011 Status of International Narcotics Control and Law 

Enforcement Funds Allocated for Iraq Reconstruction

12-002 10/28/2011 Indirect Costs of Managing Private Security Contracts 

in Iraq

12-001 10/26/2011 Development Fund for Iraq: The Coalition Provisional 

Authority Transferred Control over Most of the 

Remaining DFI Funds to the Central Bank of Iraq

11-023 7/29/2011 Department of State Reports It Has Taken Action 

on Most Open Audit Recommendations, but 

Documentation Is Needed

11-022 7/30/2011 Poor Government Oversight of Anham and Its 

Subcontracting Procedures Allowed Questionable 

Costs To Go Undetected

11-021 7/29/2011 Management of the Iraq Commander’s Emergency 

Response Program Needs To Be Improved (Interim 

Report)

11-020 7/29/2011 Commander’s Emergency Response Program for 2011 

Shows Increased Focus on Capacity Development

11-019 7/29/2011 Monitoring Responsibilities for Serious Incidents 

Involving Private Security Contractors Once U.S. 

Military Forces Leave Iraq Have Not Been Determined

11-018 7/28/2011 Control Weaknesses Remain in Oversight of Theaterwide Internal Security Services Contracts

Continued on next page

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48 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

SIGIR 

Report Number Date Report Title

11-017 4/22/2011 USAID Is Responsive to SIGIR Recommendations

11-016 4/27/2011 USACE Is Meeting Customer Needs, but 

Documentation of Project Decisions Could Improve

11-015 4/27/2011 Gulf Region District Is Adjusting Its Aegis Security 

Contract Requirements for Changes in Reconstruction 

Activities in Iraq

11-014 4/28/2011 The Iraq Community Action Program: USAID's 

Agreement with CHF Met Goals, but Greater 

Oversight Is Needed

11-013 4/22/2011 Iraq Relief and Reconstruction Fund 2: Report on 

Apportionments, Expenditures, and Status at End of 

Fiscal Year 2010

11-012 1/31/2011 Commander's Emergency Response Program 

Obligations Are Uncertain

11-011 4/27/2011 Quick Response Fund: Management Controls Have 

Improved, but Earlier Projects Need Attention

11-010 1/28/2011 Sons of Iraq Program: Results Are Uncertain, and 

Financial Controls Were Weak

11-009 1/26/2011 Iraqi Government Support for the Iraq International 

Academy

11-008 1/28/2011 Interim Report: Action Needed To Address Missing 

Iraq Transaction Data

11-007 1/25/2011 Iraq Relief and Reconstruction Fund 1: Report on 

Apportionments, Expenditures, and Canceled Funds

11-006 10/28/2010 Forensic Audit Methodologies Used To Collect 

and Analyze Electronic Disbursement of Iraq 

Reconstruction Funds

11-005 10/28/2010 Iraq Reconstruction Funds: Forensic Audits 

Identifying Fraud, Waste, and Abuse—Interim Report 

#5

11-004 10/25/2010 Iraqi Security Forces: Special Operations Force 

Program Is Achieving Goals, but Iraqi Support 

Remains Critical to Success

11-003 10/25/2010 Iraqi Security Forces: Police Training Program 

Developed Sizeable Force, but Capabilities Are 

Unknown

11-002 10/15/2010 Guidance Needed for Use of Residual Iraqi Vested 

and Seized Asset Funds

Continued on next page

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OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 49

SIGIR 

Report Number Date Report Title

11-001 10/13/2010 National Democratic Institute Grant's Security Costs 

and Impact Generally Supported, but Department of 

State Oversight Limited

10-022 7/29/2010 Improved Oversight Needed for State Department 

Grant to the International Republican Institute

10-021 7/30/2010 Plans To Preserve Iraq Reconstruction Program and 

Contract Records Need To Be Improved

10-020 7/27/2010 Development Fund for Iraq: Department of Defense 

Needs To Improve Financial and Management 

Controls

10-019 7/26/2010 Iraq Reconstruction Funds: Forensic Audits 

Identifying Fraud, Waste, and Abuse—Interim 

Report #4

10-018 7/21/2010 Most Iraq Economic Support Fund Appropriations 

Have Been Obligated and Liquidated

10-017 4/28/2010 Iraq Reconstruction Funds: Forensic Audits 

Identifying Fraud, Waste, and Abuse—Interim 

Report #3 

10-016 4/23/2010 Most Iraq Security Forces Fund Appropriations Have 

Been Obligated

10-015 4/29/2010 Health Center Sustainment Contract Resulted in 

Some Repairs, but Iraqi Maintenance Capability Was 

Not Achieved

10-014 4/27/2010 Process for Continuing Invoice Payment for the 

Development Fund for Iraq Needs Attention 

10-013 4/26/2010 Commander’s Emergency Response Program: Projects 

at Baghdad Airport Provided Some Benefits, but 

Waste and Management Problems Occurred 

10-012 1/26/2010 Department of State Grant Management: Limited 

Oversight of Costs and Impact of International 

Republican Institute and National Democratic 

Institute Democracy Grants

10-011 1/28/2010 Iraq Reconstruction Funds: Forensic Audits 

Identifying Fraud, Waste, and Abuse—Interim 

Report #2

10-010 1/26/2010 Department of State Contract To Study the Iraq 

Reconstruction Management System

10-009 3/25/2010 Interim Report on Projects to Develop the Iraqi 

Special Operations Forces

Continued on next page

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50 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

SIGIR 

Report Number Date Report Title

10-008 1/25/2010 Long-standing Weaknesses in Department of State's 

Oversight of DynCorp Contract for Support of the 

Iraqi Police Training Program

10-007 1/28/2010 Wamar International Successfully Completed 

Contracts, but Unanticipated Problems Affected 

Costs and Schedules

10-006 10/29/2009 Development Fund for Iraq: Policy Guidance Needed 

To Enhance Accountability of USACE-managed Funds

10-005 10/30/2009 Iraq Security Forces Fund: Weak Contract Oversight 

Allowed Potential Overcharges by AECOM To Go 

Undetected

10-004 10/28/2009 Iraq Reconstruction Funds: Forensic Audits 

Identifying Fraud, Waste, and Abuse—Interim 

Report #1

10-003 10/27/2009 Iraq Commander's Emergency Response Program 

Generally Managed Well, but Project Documentation 

and Oversight Can Be Improved

10-002 10/26/2009 Data Provided to the Government of Iraq on U.S. 

Reconstruction Projects Lacked Clarity

10-001 10/22/2009 Iraqi Security Forces Facilities: Environmental 

Chemical Corporation Projects Achieved Results but 

with Significant Cost and Schedule Delays

09-027 7/30/2009 Developing a Depot Maintenance Capability at Taji 

Hampered by Numerous Problems

09-026 7/26/2009 Commander's Emergency Response Program: Hotel 

Construction Successfully Completed, but Project 

Management Issues Remain

09-025 7/26/2009 Commander's Emergency Response Program: 

Muhalla 312 Electrical Distribution Project Largely 

Successful

09-024 7/30/2009 Tikrit Location Command Project Achieving Contract 

Goals by Using Sound Management Practices

09-023 7/28/2009 Investigation and Remediation Records Concerning 

Incidents of Weapons Discharges by Private Security 

Contractors Can Be Improved

09-022 7/28/2009 Field Commanders See Improvements in Controlling 

and Coordinating Private Security Contractor 

Missions in Iraq

Continued on next page

Audit Lessons Learned_v10.indd 50 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 51

SIGIR 

Report Number Date Report Title

09-021 and 

AUD/IQO09-16

6/1/2009 Joint Audit of Blackwater Contract and Task Orders 

for Worldwide Personal Protective Services in Iraq 

(with DoS OIG)

09-020 4/28/2009 Provincial Reconstruction Teams: Developing a Costtracking Process Will Enhance Decision Making

09-019 4/30/2009 Opportunities To Improve Processes for Reporting, 

Investigating, and Remediating Serious Incidents 

Involving Private Security Contractors in Iraq

09-018 4/29/2009 Information on Government of Iraq Contributions to 

Reconstruction Costs

09-017 4/24/2009 Need To Enhance Oversight of Theater-wide Internal 

Security Services Contracts

09-016 4/26/2009 Asset-transfer Process for Iraq Reconstruction Projects 

Lacks Unity and Accountability

09-015 4/29/2009 Construction of Primary Healthcare Centers Reported 

Essentially Complete, but Operational Issues Remain

09-014 4/26/2009 Security Forces Logistics Contract Experienced Certain 

Cost, Outcome, and Oversight Problems

09-013 1/28/2009 Provincial Reconstruction Teams’ Performance 

Measurement Process Has Improved

09-012 1/26/2009 The U.S. Has Reduced Its Funding for the Iraqi 

Security Forces, but Continued Support Will Likely Be 

Necessary

09-011 1/29/2009 Opportunities To Improve Management of the Quick 

Response Fund

09-010 1/14/2009 Oversight of Aegis’s Performance on Security Services 

Contracts in Iraq with the Department of Defense

09-009 1/30/2009 Full Impact of Department of Defense Program To 

Restart State-owned Enterprises Difficult To Estimate

09-008 1/13/2009 Cost, Outcome, and Oversight of Iraq Oil 

Reconstruction Contract with Kellogg Brown & Root 

Services, Inc.

09-007 10/29/2008 Improvements Needed in Reporting Status of 

Reconstruction Projects to Chief of Mission

09-006 10/28/2008 Status of Department of State Economic Support 

Fund Interagency Agreements with the U.S. Army 

Corps of Engineers in Iraq

09-005 10/30/2008 Agencies Need Improved Financial Data Reporting 

for Private Security Contractors

Continued on next page

Audit Lessons Learned_v10.indd 51 10/17/2012 6:27:0
52 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

SIGIR 

Report Number Date Report Title

09-004 10/27/2008 Iraq Reconstruction Project Terminations Represent a 

Range of Actions

09-003 10/21/2008 Cost, Outcome, and Oversight of Local Governance 

Program Contracts with Research Triangle Institute

09-002 10/21/2008 Challenges in Obtaining Reliable and Useful Data on 

Iraqi Security Forces Continue

09-001 10/22/2008 Opportunities To Enhance U.S. Democracy-building 

Strategy for Iraq

08-024 7/29/2008 Information on a Special Department of Defense 

Program To Foster Economic Recovery in Iraq

08-023 7/29/2008 Anticorruption Efforts in Iraq: U.S. and Iraq Take 

Actions, but Much Remains To Be Done

08-022 7/26/2008 Government of Iraq Increasingly Funding Iraq Security 

Forces Infrastructure Development, but Substantial 

U.S. Support Remains

08-021 7/26/2008 Comprehensive Plan Needed To Guide the Future of 

the Iraq Reconstruction Management System

08-020 7/27/2008 Key Recurring Management Issues Identified in 

Audits of Iraq Reconstruction Efforts

08-019 7/28/2008 Outcome, Cost, and Oversight of the Security and 

Justice Contract with Parsons Delaware, Inc.

08-018 7/15/2008 Outcome, Cost, and Oversight of Water Sector 

Reconstruction Contract with FluorAMEC, LLC

08-017 4/28/2008 Transferring Reconstruction Projects to the 

Government of Iraq: Some Progress Made but Further 

Improvements Needed To Avoid Waste

08-016 4/24/2008 U.S. Anticorruption Efforts in Iraq: Progress Made in 

Implementing Revised Management Plan

08-015 4/25/2008 Interim Analysis of Iraqi Security Force Information 

Provided by the Department of Defense Report, 

Measuring Stability and Security in Iraq

08-014 4/22/2008 Progress on Recommended Improvements to 

Contract Administration for the Iraqi Police Training 

Program

08-013 4/28/2008 Interim Report on Iraq Reconstruction Contract 

Terminations

08-012 3/13/2008 Attestation to Development Fund for Iraq Cash in the 

Possession of the Joint Area Support Group-Central

Continued on next page

Audit Lessons Learned_v10.indd 52 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 53

SIGIR 

Report Number Date Report Title

08-011 4/29/2008 Outcome, Cost, and Oversight of Electricity-sector 

Reconstruction Contract with Perini Corporation

08-010 1/28/2008 Outcome, Cost, and Oversight of Iraq Reconstruction 

Contract W914NS-04-D-0006

08-009 1/24/2008 Appropriate Award-fee Conversion Scales Can 

Enhance Incentive for Contractor Performance

08-008 1/24/2008 U.S. Anticorruption Efforts in Iraq: Sustained 

Management Commitment Is Key to Success

08-007 1/25/2008 Efforts To Implement a Financial-management 

Information System in Iraq

08-006 1/25/2008 Commander’s Emergency Response Program in Iraq 

Funds Many Large-scale Projects

08-005 1/29/2008 Differences in Services and Fees for Management and 

Administration of Iraq Reconstruction Contracts

08-004 1/15/2008 Outcome, Cost, and Oversight of Reconstruction of 

Taji Military Base and Baghdad Recruiting Center

08-003 10/29/2007 Review of the Use of Contractors in Managing Iraq 

Relief and Reconstruction Projects

08-002 10/30/2007 Logistics Civil Augmentation Program Task Orders 130 

and 151: Program Management, Reimbursement, and 

Transition

08-001 10/24/2007 Interim Report on Efforts and Further Actions 

Needed To Implement a Financial Management 

Information System in Iraq

07-016 10/23/2007 Interim Review of DynCorp International, LLC, 

Spending under Its Contract for the Iraqi Police 

Training Program

07-015 10/18/2007 Review of the Effectiveness of the Provincial 

Reconstruction Team Program in Iraq

07-014 7/25/2007 Status of the Provincial Reconstruction Team Program 

Expansion in Iraq

07-013 4/27/2007 Sustainment of the Advanced First Responder 

Network (Restricted)

07-012 4/26/2007 Review of Iraq Relief and Reconstruction Fund 

Unmatched Disbursements at the Department of 

State

07-011 10/23/2007 Controls over Unliquidated Obligations in the Iraq 

Relief and Reconstruction Fund

Continued on next page

Audit Lessons Learned_v10.indd 53 10/17/2012 6:27:0
54 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

SIGIR 

Report Number Date Report Title

07-010 10/24/2007 Agency Management of the Closeout Process for Iraq 

Relief and Reconstruction Fund Contracts

07-009 7/24/2007 Review of Bechtel’s Spending under Its Phase II Iraq 

Reconstruction Contract

07-008 7/26/2007 Fact Sheet on the Roles and Responsibilities of U.S. 

Government Organizations Conducting IRRF-funded 

Reconstruction Activities

07-007 7/24/2007 Status of U.S. Government Anticorruption Efforts in 

Iraq

07-006 4/26/2007 Management of the Commander’s Emergency 

Response Program in Iraq for Fiscal Year 2006

07-005 7/27/2007 Fact Sheet on Sources and Uses of U.S. Funding 

Provided in Fiscal Year 2006 for Iraq Relief and 

Reconstruction

07-004 7/25/2004 Transferring Iraq Relief and Reconstruction Fund 

Capital Projects to the Government of Iraq

07-003 7/26/2007 Cost-to-complete Reporting for Iraq Reconstruction 

Projects

07-002 4/25/2007 Status of the Advanced First Responder Network

07-001 6/22/2007 Logistics Civil Augmentation Program Task Order 130: 

Requirements Validation, Government Oversight, 

and Contractor Performance

06-045 1/30/2007 Status of Ministerial Capacity Development in Iraq

06-044 1/30/2007 Fact Sheet on Major U.S. Contractors’ Security Costs 

Related to Iraq Relief and Reconstruction Fund 

Contracting Activities

06-043 1/30/2007 Review of Iraq Relief and Reconstruction Fund 

Unmatched Disbursements

06-042 1/30/2007 Fact Sheet on Major U.S. Contractors‘ Security 

Costs Related to Iraq Relief and Reconstruction 

Fund Contracting Activities (Restricted-Limited 

Distribution)

06-040 1/30/2007 Improper Obligations Using the Iraq Relief and 

Reconstruction Fund (IRRF 2)

06-039 1/29/2007 Review of USAID/Bechtel National, Inc., 

Property Management Controls for Contract 

SPU-C-00-04-00001-00

Continued on next page

Audit Lessons Learned_v10.indd 54 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 55

SIGIR 

Report Number Date Report Title

06-038 9/27/2006 Unclassified Summary of SIGIR’s Review of Efforts 

To Increase Iraq’s Capability To Protect Its Energy 

Infrastructure

06-037 9/22/2006 Interim Audit Report on Improper Obligations Using 

the Iraq Relief and Reconstruction Fund (IRRF 2)

06-036 1/29/2007 Follow-up on SIGIR Recommendations Concerning 

the Development Fund for Iraq (DFI)

06-035 10/26/2006 Interim Audit Report on Inappropriate Use of 

Proprietary Data Markings by the Logistics Civil 

Augmentation Program (LOGCAP) Contractor

06-034 10/29/2006 Status of the Provincial Reconstruction Team Program 

in Iraq

06-033 10/28/2006 Iraqi Security Forces: Weapons Provided by the U.S. 

Department of Defense Using the Iraq Relief and 

Reconstruction Fund

06-032 10/28/2006 Iraqi Security Forces: Review of Plans To Implement 

Logistics Capabilities

06-031 10/27/2006 Management of the Iraqi Interim Government Fund

06-030 1/30/2007 Status of Medical Equipment and Other Nonconstruction Items Purchased for Primary Healthcare 

Centers

06-029 1/30/2007 Review of DynCorp International, LLC, Contract 

Number S-LMAQM-04-C-0030, Task Order 0338, for 

the Iraqi Police Training Program Support

06-028 10/23/2006 Review of Administrative Task Orders for Iraq 

Reconstruction Contracts

06-026 7/31/2006 Review of the U.S. Agency for International 

Development’s Management of the Basrah Children’s 

Hospital Project

06-025 7/28/2006 Review of the Medical Equipment Purchased for the 

Primary Healthcare Centers Associated with Parsons 

Global Services, Inc., Contract Number W914NS04-D-0006

06-024 7/26/2006 Joint Cash Count—Iraq National Weapons Card 

Program

06-023 7/28/2006 Changes in Iraq Relief and Reconstruction Fund 

Program Activities, January through March 2006

Continued on next page

Audit Lessons Learned_v10.indd 55 10/17/2012 6:27:0
56 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

SIGIR 

Report Number Date Report Title

06-021 7/28/2006 Joint Survey of the U.S. Embassy-Iraq’s Anticorruption 

Program

06-020 7/28/2006 Review of the Advanced First Responder Network

06-019 7/28/2006 Review of the Use of Definitization Requirements for 

Contracts Supporting Reconstruction in Iraq

06-018 7/1/2006 Survey of the Status of Funding for Iraq Programs 

Allocated to the Department of State’s Bureau of 

International Narcotics and Law Enforcement Affairs 

as of December 31, 2005

06-017 7/28/2006 Transition of Iraq Relief and Reconstruction Fund 

Projects to the Iraqi Government

06-016 4/4/2006 Interim Audit Report on the Review of the Equipment 

Purchased for Primary Healthcare Centers Associated 

with Parsons Global Services, Contract Number 

W914NS-04-D-0006

06-015 4/28/2006 Iraqi Armed Forces Seized Assets Fund: Review of 

Contracts and Financial Documents

06-014 7/27/2006 Review of Efforts To Increase Iraq’s Capability To 

Protect Its Energy Infrastructure (Classified)

06-013 4/28/2006 Briefing to the International Advisory and 

Monitoring Board for Iraq: Management Controls 

over the Development Fund for Iraq

06-012 4/28/2006 Development Fund for Iraq Cash Accountability 

Review: Joint Area Support Group-Central/Falluja

06-011 4/29/2006 Management of the Primary Healthcare Centers 

Construction Projects

06-010 4/28/2006 Review of the Multi-National Security Transition 

Command-Iraq Reconciliation of the Iraqi Armed 

Forces Seized Assets Fund

06-009 4/28/2006 Review of Task Force Shield Programs

06-008 4/28/2006 Development Fund for Iraq Cash Accountability 

Review: Joint Area Support Group-Central

06-007 4/29/2006 U.S. Agency for International Development: 

Management of the Transfer of Iraq Relief and 

Reconstruction Fund Projects to the Iraqi Government

06-006 4/29/2006 Multi-National Security Transition Command-Iraq 

Management of the Transfer of Iraq Relief and 

Reconstruction Fund Projects to the Iraqi Government

Continued on next page

Audit Lessons Learned_v10.indd 56 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 57

SIGIR 

Report Number Date Report Title

06-005 4/28/2006 Follow-up on Recommendations Made in SIGIR Audit 

Reports Related to Management and Control of the 

Development Fund for Iraq

06-004 4/28/2006 Changes in Iraq Relief and Reconstruction Fund 

Program Activities, October through December 2005

06-003 4/28/2006 Review of Data Entry and General Controls in the 

Collecting and Reporting of the Iraq Relief and 

Reconstruction Fund

06-002 2/3/2006 Prompt Payment Act: Analysis of Expenditures Made 

from the Iraq Relief and Reconstruction Fund

06-001 4/24/2006 Management of Iraq Relief and Reconstruction Fund 

Program: The Evolution of the Iraq Reconstruction 

Management System

05-029 1/26/2006 Challenges Faced in Carrying Out Iraq Relief and 

Reconstruction Fund Activities

05-028 1/24/2006 GRD-PCO Management of the Transfer of IRRFfunded Assets to the Iraqi Government

05-027 1/27/2006 Methodologies for Reporting Cost-to-complete 

Estimates

05-026 1/27/2006 Fact Sheet on the Use of the $50 Million 

Appropriation To Support the Management and 

Reporting of the Iraq Relief and Reconstruction Fund

05-025 1/23/2006 Management of the Commander’s Emergency 

Response Program for Fiscal Year 2005

05-024 1/23/2006 Management of the Mansuria Electrical 

Reconstruction Project

05-023 1/23/2006 Management of Rapid Regional Response Program 

Contracts in South-Central Iraq

05-022 10/24/2005 Managing Sustainment for Iraq Relief and 

Reconstruction Fund Programs

05-021 10/24/2005 Management of Iraq Relief and Reconstruction Fund 

Programs: Cost-to-Complete Estimate Reporting

05-020 10/26/2005 Management of the Contracts, Grant, and Micropurchases Used To Rehabilitate the Kerbala Library

05-019 9/30/2005 Attestation Engagement Concerning the Award of 

Non-Competitive Contract DACA63-03-D-0005 to 

Kellogg Brown and Root Services, Inc.

Continued on next page

Audit Lessons Learned_v10.indd 57 10/17/2012 6:27:0
58 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

SIGIR 

Report Number Date Report Title

05-018 10/21/2005 Management of Iraq Relief and Reconstruction Fund 

Program: Acquisition of Armored Vehicles Purchased 

through Contract W914NS-05-M-1189

05-017 10/25/2005 Award Fee Process for Contractors Involved in Iraq 

Reconstruction

05-016 10/26/2005 Management of the Contracts and Grants Used To 

Construct and Operate the Babylon Police Academy

05-015 10/25/2005 Management of Rapid Regional Response Program 

Grants in South-Central Iraq

05-014 10/13/2005 Management of Commander’s Emergency Response 

Program for Fiscal Year 2004

05-013 9/9/2005 Controls over Equipment Acquired by Security 

Contractors

05-012 7/22/2005 Policies and Procedures Used for Iraq Relief and 

Reconstruction Fund Project Management—

Construction Quality Assurance

05-011 7/26/2005 Cost-to-complete Estimates and Financial Reporting 

for the Management of the Iraq Relief and 

Reconstruction Fund

05-010 7/26/2005 Interim Briefing to the Project and Contracting 

Office-Iraq and the Joint Contracting Command-Iraq 

on the Audit of the Award Fee Process

05-009 7/8/2005 Reconciliation of Reporting Differences of the Source 

of Funds Used on Contracts after June 28, 2004

05-008 4/30/2005 Administration of Contracts Funded by the 

Development Fund for Iraq

05-007 4/30/2005 Administration of Iraq Relief and Reconstruction 

Fund Contract Files

05-006 4/30/2005 Control of Cash Provided to South-Central Iraq

05-005 4/20/2005 Compliance with Contract No. W911S0-04-C-0003 

Awarded to Aegis Defence Services Limited

05-004 1/30/2005 Oversight of Funds Provided to Iraqi Ministries 

through the National Budget Process

05-003 11/23/2004 Task Order 0044 of the Logistics Civilian 

Augmentation Program III Contract

05-002 10/25/2004 Accountability and Control of Materiel Assets of the 

Coalition Provisional Authority in Kuwait

Continued on next page

Audit Lessons Learned_v10.indd 58 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 59

SIGIR 

Report Number Date Report Title

05-001 10/22/2004 Coalition Provisional Authority Control of 

Appropriated Funds

04-013 7/27/2004 Coalition Provisional Authority’s Contracting 

Processes Leading Up to and Including Contract 

Award

04-011 7/26/2004 Audit of the Accountability and Control of Materiel 

Assets of the Coalition Provisional Authority in 

Baghdad

04-009 7/28/2004 Coalition Provisional Authority Comptroller Cash 

Management Controls over the Development Fund 

for Iraq

04-008 7/28/2004 Coalition Provisional Authority Control over Seized 

and Vested Assets

04-007 7/26/2004 Oil for Food Cash Controls for the Office of Project 

Coordination in Erbil, Iraq

04-006 7/21/2004 Corporate Governance for Contractors Performing 

Iraq Reconstruction Efforts

04-005 7/23/2004 Award of Sector Design-Build Construction Contracts

04-004 7/28/2004 Task Orders Awarded by the Air Force Center for 

Environmental Excellence in Support of the Coalition 

Provisional Authority

04-003 6/25/2004 Federal Deployment Center Forward Operations at 

the Kuwait Hilton

04-002 6/25/2004 Management of Personnel Assigned to the Coalition 

Provisional Authority in Baghdad, Iraq

04-001 6/25/2004 Coalition Provisional Authority Coordination of 

Donated Funds

Audit Lessons Learned_v10.indd 59 10/17/2012 6:27:0
60 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

Appendix D: Acronyms

Acronym Definition

AMC Army Materiel Command

CAP Community Action Program

CENTCOM U.S. Central Command

CERP Commander's Emergency Response Program

CHF Cooperative Housing Foundation International

CPA Coalition Provisional Authority

DCAA U.S. Defense Contract Audit Agency

DCMA Defense Contract Management Agency

DoD Department of Defense

DoS Department of State

ESF Economic Support Fund

GOI Government of Iraq

GRD Gulf Region Division

GRN Gulf Region-North

INCLE International Narcotics Control and Law Enforcement account

INL Bureau of International Narcotics and Law Enforcement Affairs

IRI International Republican Institute 

IRMS Iraq Reconstruction Management System

IRRF Iraq Relief and Reconstruction Fund

ISFF Iraq Security Forces Fund

ISOF Iraqi Special Operations Force

ITAM Iraq Training and Advisory Mission

MNC-I Multi-National Corps-Iraq

MNSTC-I Multi-National Security Transition Command-Iraq

NDI National Democratic Institute

OSD Office of the Secretary of Defense

PHC primary healthcare center

PSC private security contractor

QRF Quick Response Fund

SIGIR Special Inspector General for Iraq Reconstruction

SOI Sons of Iraq

USACE U.S. Army Corps of Engineers

USAID U.S. Agency for International Development

USF-I U.S. Forces-Iraq

Audit Lessons Learned_v10.indd 60 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 61

Endnotes

1. SIGIR, Iraq Reconstruction: Lessons in Inspections of U.S.-funded Stabi- lization and Reconstruction Projects, 12/2011.

2. SIGIR Audit 05-029, “Challenges Faced in Carrying Out Iraq Relief 

and Reconstruction Fund Activities,” 1/26/2006.

3. SIGIR Audit 05-029, “Challenges Faced in Carrying Out Iraq Relief 

and Reconstruction Activities,” 1/26/2006.

4. SIGIR Audit 06-034, “Status of the Provincial Reconstruction Team 

Program in Iraq,” 10/29/2006.

5. SIGIR Audit 12-020, “Iraq Police Development Program: Lack of 

Iraqi Support and Security Problems Raise Questions about the Contin- ued Viability of the Program,” 7/30/2012.

6. SIGIR Audit 09-015, “Construction of Primary Healthcare Cen- ters Reported Essentially Complete, but Operational Issues Remain,” 

4/29/2009.

7. SIGIR Audit 12-007, “Falluja Waste Water Treatment System: A Case 

Study in Wartime Contracting,” 10/30/2011.

8. SIGIR Audit 08-019, “Outcome, Cost, and Oversight of the Security 

and Justice Contract with Parsons Delaware, Inc.,” 7/28/2008.

9. SIGIR Audit 12-007, “Falluja Waste Water Treatment System: A Case 

Study in Wartime Contracting,” 10/30/2011.

10. SIGIR Special Report No. 2, The Human Toll of Reconstruction or Stabilization during Operation Iraqi Freedom, 7/30/2012.

11. SIGIR Audit 10-012, “Department of State Grant Management: 

Limited Oversight of Costs and Impact of International Republican 

Institute and National Democratic Institute Democracy Grants,” 

1/26/2010.

12. SIGIR Audit 12-007, “Falluja Waste Water Treatment System: A 

Case Study in Wartime Contracting,” 10/30/2011.

13. SIGIR Audit 05-029, “Challenges Faced in Carrying Out Iraq Relief 

and Reconstruction Fund Activities,” 1/26/2006.

14. SIGIR Audit-06-044, “Fact Sheet on Major U.S. Contractors’ Secu- rity Costs Related to Iraq Relief and Reconstruction Fund Contracting 

Activities,” 1/30/2007.

15. SIGIR Audit 10-012, “Department of State Grant Management: 

Limited Oversight of Costs and Impact of International Republican 

Institute and National Democratic Institute Democracy Grants,” 

1/26/2010.

Audit Lessons Learned_v10.indd 61 10/17/2012 6:27:0
62 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

16. SIGIR Audit 12-002, “Indirect Costs of Managing Private Security 

Contracts in Iraq,” 10/28/2011.

17. SIGIR Audit 07-008, “Fact Sheet on the Roles and Responsibilities of 

U.S. Government Organizations Conducting IRRF-funded Reconstruc- tion Activities,” 7/26/2007.

18. SIGIR Audit 06-021, “Joint Survey of the U.S. Embassy-Iraq’s Anti- corruption Program,” 7/28/2006.

19. SIGIR Audit 06-009, “Review of Task Force Shield Programs,” 

4/28/2006.

20. SIGIR Audit 08-020, “Key Recurring Management Issues Identified 

in Audits of Iraq Reconstruction Efforts,” 7/27/2008.

21. SIGIR Audit 06-021, “Joint Survey of the U.S. Embassy-Iraq’s Anti- corruption Program,” 7/28/2006.

22. SIGIR Audit 06-001, “Management of Iraq Relief and Reconstruc- tion Fund Program: The Evolution of the Iraq Reconstruction Manage- ment System,” 4/24/2006.

23. SIGIR Audit 08-021, “Comprehensive Plan Needed To Guide the 

Future of the Iraq Reconstruction Management System,” 7/26/2008.

24. SIGIR Audit 08-013, “Interim Report on Iraq Reconstruction Con- tract Terminations,” 4/28/2008.

25. SIGIR Audit 09-016, “Asset-transfer Process for Iraq Reconstruction 

Projects Lacks Unity and Accountability,” 4/26/2009.

26. SIGIR Audit 07-009, “Review of Bechtel’s Spending under Its 

Phase II Iraq Reconstruction Contract,” 7/24/2007.

27. SIGIR Audit 06-011, “Management of the Primary Healthcare Cen- ters Construction Projects,” 4/29/2006.

28. SIGIR Audit 06-026, “Review of the U.S. Agency for International 

Development’s Management of the Basrah Children’s Hospital Project,” 

7/31/2006.

29. SIGIR Audit 11-018, “Control Weaknesses Remain in Oversight of 

Theater-wide Internal Security Services Contracts,” 7/28/2011.

30. SIGIR Audit 06-011, “Management of the Primary Healthcare Cen- ters Construction Projects,” 4/29/2006.

31. SIGIR Audit 08-011, “Outcome, Cost, and Oversight of Electricitysector Reconstruction Contract with Perini Corporation,” 4/29/2008.

32. SIGIR Audit 06-029, “Review of DynCorp International, LLC, 

Contract Number S-LMAQM-04C-0030, Task Order 0338, for the Iraqi 

Police Training Program Support,” 1/30/2007.

Audit Lessons Learned_v10.indd 62 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 63

33. SIGIR Audit 08-019, “Outcome, Cost, and Oversight of the Security 

and Justice Contract with Parsons Delaware, Inc.,” 7/28/2008.

34. SIGIR Audit 10-013, “Commander’s Emergency Response Program: 

Projects at Baghdad Airport Provided Some Benefits, but Waste and 

Management Problems Occurred,” 4/26/2010.

35. SIGIR Audit 08-006, “Commander’s Emergency Response Program 

in Iraq Funds Many Large-scale Projects,” 1/25/2008.

36. SIGIR Audit 12-019, “Gaps in Business System Reviews of Contrac- tors with Generally Less Than $100 Million Annually in Contracts in 

Iraq Increase U.S. Government Vulnerabilities to Fraud, Waste, and 

Abuse,” 7/30/2012.

37. SIGIR Audit 11-022, “Poor Government Oversight of Anham and 

Its Subcontracting Procedures Allowed Questionable Costs To Go 

Undetected,” 7/30/2011.

38. SIGIR Audit 10-008, “Long-standing Weaknesses in Department of 

State’s Oversight of DynCorp Contract for Support of the Iraqi Police 

Training Program,” 1/25/2010.

39. SIGIR Audit 10-005, “Iraq Security Forces Fund: Weak Contract 

Oversight Allowed Potential Overcharges by AECOM To Go Unde- tected,” 10/30/2009. 

40. SIGIR Audit 11-022, “Poor Government Oversight of Anham and 

Its Subcontracting Procedures Allowed Questionable Costs To Go 

Undetected,” 7/30/2011.

41. SIGIR 07-001, “Logistics Civil Augmentation Program Task 

Order 130: Requirements Validation, Government Oversight, and Con- tractor Performance,” 6/22/2007.

42. SIGIR Audit 08-004, “Outcome, Cost, and Oversight of Reconstruc- tion of Taji Military Base and Baghdad Recruiting Center,” 1/15/2008.

43. SIGIR Audit 11-010, “Sons of Iraq Program: Results Are Uncertain 

and Financial Controls Were Weak,” 1/28/2011.

44. SIGIR Audit 11-011, “Quick Response Fund: Management Controls 

Have Improved, but Earlier Projects Need Attention,” 4/27/2011.

45. SIGIR 11-014, “The Iraq Community Action Program: USAID’s 

Agreement with CHF Met Goals, but Greater Oversight Is Needed,” 

4/28/2011.

46. SIGIR Audit 09-026, “Commander’s Emergency Response Pro- gram: Hotel Construction Completed, but Project Management Issues 

Remain,” 7/26/2009.

47. SIGIR Audit 11-003, “Iraqi Security Forces: Police Training Program 

Developed Sizeable Force, but Capabilities Are Unknown,” 10/25/2010.

Audit Lessons Learned_v10.indd 63 10/17/2012 6:27:0
64 Iraq Reconstruction: Lessons From Auditing U.S.-funded Stabilizationand Reconstruction Activities

48. SIGIR Audit 12-006, “Iraqi Police Development Program: Opportu- nities for Improved Program Accountability and Budget Transparency,” 

10/24/2011.

49. SIGIR Audit 11-020, “Commander’s Emergency Response Program 

for 2011 Shows Increased Focus on Capacity Development,” 7/29/2011.

50. SIGIR Audit 11-020, “Commander’s Emergency Response Program 

for 2011 Shows Increased Focus on Capacity Development,” 7/29/2011.

51. SIGIR Audit 11-010, “Sons of Iraq Program: Results Are Uncertain 

and Financial Controls Were Weak,” 1/28/2011.

52. SIGIR Audit 10-012, “Department of State Grant Management: 

Limited Oversight of Costs and Impact of International Republican 

Institute and National Democratic Institute Democracy Grants,” 

1/26/2010.

53. SIGIR Audit 08-020, “Key Recurring Management Issues Identified 

in Audits of Iraq Reconstruction Efforts,” 7/27/2008.

54. SIGIR Audit 08-007, “Efforts To Implement A Financial-manage- ment Information System in Iraq,” 1/25/2008.

55. SIGIR Audit 08-023, “Anticorruption Efforts in Iraq: U.S. and Iraq 

Take Actions, but Much Remains To Be Done,” 7/29/2008.

56. SIGIR Audit 11-004, “Iraqi Security Forces: Special Operations 

Force Program Is Achieving Goals, but Iraqi Support Remains Critical 

to Success,” 10/25/2010.

57. SIGIR Audit 12-020, “Iraq Police Development Program: Lack of 

Iraqi Support and Security Problems Raise Questions about the Contin- ued Viability of the Program,” 7/30/2012.

58. SIGIR Audit 08-017, “Transferring Reconstruction Projects to the 

Government of Iraq: Some Progress Made, but Further Improvements 

Needed To Avoid Waste,” 4/28/2008.

59. SIGIR Audit 09-018, “Information on Government of Iraq Contri- butions to Reconstruction Costs,” 4/29/2009.

60. SIGIR Audit 09-018, “Information on Government of Iraq Contri- butions to Reconstruction Costs,” 4/29/2009.

61. SIGIR Audit 11-009, “Iraqi Government Support for the Iraq Inter- national Academy,” 1/26/2011.

62. SIGIR Audit 09-018, “Information on Government of Iraq Contri- butions to Reconstruction Costs,” 4/29/2009.

Audit Lessons Learned_v10.indd 64 10/17/2012 6:27:0
OCTOBER 2012 I SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION I 65

63. SIGIR Audit 09-019, “Opportunities To Improve Processes for 

Reporting, Investigating, and Remediating Serious Incidents Involving 

Private Security Contractors in Iraq,” 4/30/2009.

64. SIGIR Audit 09-005, “Agencies Need Improved Financial Data 

Reporting for Private Security Contractors,” 10/30/2008.

65. SIGIR Audit 12-006, “Iraqi Police Development Program: Opportu- nities for Improved Program Accountability and Budget Transparency,” 

10/24/2011, and Audit 12-020, “Iraq Police Development Program: 

Lack of Iraqi Support and Security Problems Raise Questions about the 

Continued Viability of the Program,” 7/30/2012.

66. Emergency Supplemental Appropriations Act for Defense and for 

the Reconstruction of Iraq and Afghanistan, 2004, P.L. 108-106, 108th 

Cong. § 3001 (2004).

67. National Defense Authorization Act for Fiscal Year 2008, P.L. 110-

181 § Section 842 (2008).

68. SIGIR Audit 12-007, “Falluja Waste Water Treatment System: A 

Case Study in Wartime Contracting,” 10/30/2011. The total estimated 

cost of $107.9 million provided for 9,116 home connections to the 

wastewater treatment plant, of which 6,000 were connected as of Sep- tember 2011. In order to determine the number of residents currently 

served by this project, SIGIR used the 2007 World Health Organiza- tion/Republic of Iraq “Iraq Family Health Survey Report” average of 

6.4 people per Iraqi household. Consequently, 6,000 homes equals 

approximately 38,400 residents.

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