**GAO-08-736R**                      Published: Jun 23, 2008. Publicly Released: Jun 23, 2008.                  

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## Highlights

Since fiscal year 2003, Congress has appropriated more than $46 billion dollars for relief and reconstruction efforts in Iraq. The Department of Defense (DOD) is one of several U.S. agencies that administer U.S.-funded relief and reconstruction programs in Iraq. In particular, DOD manages the Commander's Emergency Response Program (CERP), which is designed to enable local commanders in Iraq and Afghanistan to respond to urgent humanitarian relief and reconstruction requirements within their areas of responsibility by carrying out programs that will immediately assist the indigenous population. Thus far, Congress has appropriated more than $3 billion for CERP in Iraq and Afghanistan. Since the program's inception, DOD has steadily increased its funding requests in response to theater conditions, and reported obligations have also grown substantially. DOD's funding requests have increased by more than a billion dollars from fiscal years 2004 through 2008. For fiscal year 2008, DOD requested $1.2 billion to fund CERP projects in Iraq and Afghanistan and plans to request an additional $507 million, primarily for CERP in Iraq. Furthermore, DOD's reported obligations for Iraq and Afghanistan have grown from about $179 million in fiscal year 2004 to more than $1.1 billion in fiscal year 2007. In addition, over the same period of time, the number of projects in both countries has grown from about 6,450 to about 8,700. According to DOD regulations, CERP is intended for small-scale, urgent humanitarian relief and reconstruction projects for the benefit of Iraqi people. The guidance issued by the Undersecretary of Defense (Comptroller) establishes 19 authorized uses for CERP funds, including transportation, electricity, and condolence payments. CERP funds can be used for both construction and non-construction projects. In Iraq, commanders follow Multinational Corps-Iraq (MNC-I) standard operating procedures for CERP, which expand upon DOD regulations. MNC-I guidance states that the keys to project selection are to (1) execute quickly, (2) employ many Iraqis, (3) benefit the Iraqi people, and (4) be highly visible. DOD regulations identify the roles and responsibilities that different offices play in managing CERP. The Secretary of the Army serves as the executive agent and is responsible for ensuring that commanders carry out CERP in a manner that is consistent with applicable laws, regulations and guidance. The Commander of U.S. Central Command (CENTCOM) is responsible for allocating CERP resources. Public Law No. 108-106 and subsequent laws require DOD to provide Congress with quarterly reports on the source, allocation, and use of CERP funds. The reports are compiled based on information about the projects that was entered by unit officials into the Iraq Reconstruction Management System, a database that tracks projects' status and maintains a historical record of all reconstruction activity in Iraq, including those projects funded by CERP. Because of significant congressional interest, we conducted this work under the authority of the Comptroller General to undertake work at his own initiative and examined the following questions regarding the CERP program in Iraq: (1) To what extent does DOD guidance establish selection criteria for CERP projects? (2) To what extent do commanders in Iraq coordinate CERP with other U. S. government agencies and with the government of Iraq? and (3) To what extent do DOD and MNC-I exercise oversight of CERP projects in Iraq?

DOD has established broad selection criteria for CERP projects, which gives significant discretion to commanders in determining the types of projects to undertake. CERP is intended to provide commanders a source of funds that allow them to respond to urgent, small-scale humanitarian relief and reconstruction needs that will immediately assist the local Iraqi population. However, DOD guidance provides no definition for small-scale or urgent, which leaves commanders with the responsibility of developing their own definitions. Commanders we interviewed had varying definitions for small-scale. Our review of the quarterly reports to Congress demonstrated the wide spectrum in size and costs of projects. For instance, projects ranged from a waterline repair costing slightly more than $100 to an electrical distribution system costing more than $11 million. In addition, during our visit to Iraq, we observed three projects: a multimillion-dollar sewage lift station, a several hundred thousand dollar sports center and community complex, and a fruit and vegetable stand that had been renovated with a $2,500 grant. Commanders typically defined urgent as restoring a basic human need, such as water and electricity, or projects identified by the local Iraqi government as its most pressing requirement for the area. As a result, the scale, complexity, and duration of projects selected vary across commands. While the majority of CERP projects have cost less than $500,000, the number of projects costing more than $500,000 has increased significantly. According to DOD officials, factors contributing to the increasing number of CERP projects costing more than $500,000 include the lack of other available reconstruction money, improved security in the region and the fact that many of the immediate needs of the Iraq people were addressed during the initial phases of CERP. Commanders reported that they generally coordinated projects with the appropriate U.S. and Iraqi officials, as required by guidance. The officials include Iraqi government personnel as well as military and nonmilitary U.S. officials. MNC-I guidance further states that coordination with local officials is critical to ensure that a project meets a need and will be maintained and that numerous projects have been built that did not meet their intended purpose because of lack of coordination. MNC-I guidance notes that coordination efforts may include synchronizing CERP projects with complementary programs funded by United States Agency for International Development or other nongovernmental organizations within the commander's area of responsibility. While the MNC-I project approval process provides some oversight, the Offices of the Under Secretary of Defense (Comptroller), the Army and MNC-I have limited oversight of CERP in Iraq because they (1) do not require units executing projects to monitor them, (2) have not established performance metrics, and (3) have limited knowledge of projects under $500,000. Neither DOD nor MNC-I guidance establishes a requirement for units executing projects to monitor them. MNC-I guidance has a broad requirement for the MNC-I engineer to monitor reconstruction projects, but does not include a requirement for units executing projects to monitor them. No performance metrics exist for CERP. As we have previously reported, federal agencies should develop plans that establish objective, quantifiable, and measurable performance goals that should be achieved by a program. Although MNC-I officials have some visibility over projects costing more than $500,000 because they approve these projects, they have limited visibility and oversight for projects costing less than $500,000. The quarterly reports do not provide information about the number of projects completed during a quarter, the number of projects that have been started but not completed, or the number of projects that have not been sustained or maintained by the Iraqi government or the local population.

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## Topics

National Defense

Budget obligationsBudgetingConstruction costsCost analysisDefense cost controlEligibility determinationsEmergency managementEmergency responseEmergency response fundsEvaluation criteriaFederal aid to foreign countriesForeign governmentsFunds managementInteragency relationsInternal controlsInternational cooperationInternational relationsIraq War and reconstructionMilitary forcesMilitary officersMilitary operationsMilitary personnelProgram evaluationRegulationReporting requirementsProgram costs