OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

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SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

400 Army Navy Drive • Arlington, Virginia 22202

January 23, 2006 

MEMORANDUM FOR U.S. AMBASSADOR TO IRAQ 

 COMMANDING GENERAL, MULTI-NATIONAL FORCE-IRAQ 

 MISSION DIRECTOR-IRAQ, U.S. AGENCY FOR 

INTERNATIONAL DEVELOPMENT 

SUBJECT: Management of the Commander’s Emergency Response Program 

for Fiscal Year 2005 (SIGIR-05-025) 

We are providing this report for your information and use. We performed the audit pursuant to 

a request in 2004 from the Deputy Secretary of Defense, through the Department of Defense 

Inspector General, that SIGIR review the Commander’s Emergency Response Program 

(CERP) to determine whether CERP funds were properly administered by Department of 

Defense officials and agencies. Our first report on the CERP was published in October 2005 

(SIGIR-05-014) and concluded that overall controls of CERP processes required improvement. 

This report expands on those findings by assessing the management of the CERP in Iraq in 

Fiscal Year 2005. We may conduct further audits of the CERP in our continuing effort to meet 

the intent of the Deputy Secretary’s request, or pursuant to other authority or guidance. 

We considered comments from the Multi-National Corps-Iraq and the U.S. Agency for 

International Development on the draft of this report when preparing the final report. 

We appreciate the courtesies extended to the staff. For additional information on this report, 

please contact Mr. Cliff Spruill at clifton.spruill@iraq.centcom.mil or at (703) 343-8816 or 

Mr. Jason Venner at jason.venner@iraq.centcom.mil or at (703) 343-9256. For the report 

distribution, see Appendix E. 

Stuart W. Bowen, Jr. 

Inspector General 
i 

Special Inspector General for Iraq Reconstruction 

SIGIR-05-025 January 23, 2006 

Management of the Commander’s Emergency Response Program 

for Fiscal Year 2005 

Executive Summary 

Introduction. During the course of Fiscal Year (FY) 2005, the Congress authorized the 

use of $854 million for the Commander’s Emergency Response Program (CERP), of 

which $718 million was allocated to the Multi-National Force-Iraq (MNF-I) to support 

Operation Iraqi Freedom. The CERP enables United States (U.S.) military commanders 

in Iraq to respond to the urgent humanitarian relief and reconstruction requirements of the 

local population by providing funds for repairs and condolence payments after combat 

operations, the provision of equipment such as electrical generators to support critical 

infrastructure, and large scale civic cleanup and construction activities to employ as many 

Iraqis as possible. For FY 2005, MNF-I reported that it obligated its $718 million 

allocation for 7,678 CERP projects, of which 4,805 of these projects were completed by 

September 30, 2005. We previously reported in October 2005 that U.S. forces did not 

fully comply with regulations and guidance for maintaining controls over appropriated 

funds or for maintaining the documentation required to account for projects in FY 2004. 

Our concerns over these conditions generated this audit, which addresses MNF-I’s 

management of the FY 2005 CERP. 

Objectives. The objectives of this audit were to determine whether MNF-I: 

• implemented controls to effectively manage FY 2005 CERP projects, funds, and 

records 

• effectively coordinated CERP projects, where appropriate, with the Department of 

State (DoS) and the U.S. Agency for International Development (USAID) to 

optimize available resources for the sustainment of projects and the reconstruction 

of Iraq 

Results. Considerable progress has been made to improve the management of the CERP 

by MNF-I. This included the improved alignment of projects with MNF-I strategic 

objectives, centralized tracking of project status and management of project records, and 

coordination of the CERP with other U.S. reconstruction programs. We found, however, 

that the project data MNF-I used to track the progress of projects and report the status of 

projects to higher headquarter units contained several errors, and MNF-I units still did not 

fully comply with requirements for project records. In addition, we found that MNF-I 

lacked a consistent process to coordinate CERP projects with the DoS and the USAID 

when the CERP was used in conjunction with other reconstruction programs in Iraq, and 

did not coordinate with DoS for the sustainment of large CERP construction projects. 

Management Actions. During the course of this audit, we notified MNF-I of our 

concerns about errors in its project tracking tool. As a result, MNF-I initiated its own 

review of its FY 2005 project data. Also, in November 2005, MNF-I began transitioning 

to the Iraq Reconstruction Management System as its project tracking tool, which should 
ii 

reduce the errors in their current project tracking system that we identified. In addition, 

MNF-I and the U.S. Embassy-Iraq published a Joint Mission Statement on December 6, 

2005, which stated that all political, military, and economic tools available to U.S. 

agencies in Iraq will be integrated in FY 2006 to maximize the effectiveness of U.S. 

efforts to rebuild Iraq. 

 

Recommendations. We recommend that the Commanding General, Multi-National 

Force-Iraq, direct his program managers and subordinate commands to take these actions: 

1. Conduct a thorough examination of all FY 2005 CERP funds and projects to 

account for project status reporting errors. In addition, if it is determined that 

funds were inappropriately obligated against the FY 2005 appropriation, MNF-I 

should initiate a de-obligation from FY 2005 funds and re-obligate projects with 

the appropriate funds. 

2. Conduct a quarterly review of the CERP to ensure the data contained within its 

project tracking tool is valid and is as consistent as possible with the data for 

project obligations in Army financial systems. 

3. Clarify and enforce existing guidance on the collection of required project 

records. MNF-I should conduct quarterly reviews of project records to improve 

the management of project files. MNF-I should also consider developing a plan 

to provide training for all current and future MNF-I units on project 

documentation requirements and how to maintain and store these records. 

Methods for storing records in electronic formats should also be considered. 

4. Formalize the process of coordinating CERP projects with the DoS and the 

USAID where the CERP is used in conjunction with other reconstruction 

programs, particularly those projects that are of strategic importance. 

5. Coordinate plans and funding for the sustainment of large CERP construction 

projects; and projects that have strategic value with the DoS. 

Management Comments and Audit Response. On behalf of MNF-I, the MultiNational Corps-Iraq (MNC-I) concurred or partially concurred with four of five 

recommendations of the report. We generally agreed with the comments provided by 

MNC-I and, in some cases, changed our report accordingly. However, we also note that 

MNC-I has apparently misunderstood parts of two of our recommendations and therefore 

we reaffirmed SIGIR’s position that coordination on sustainment of reconstruction 

projects is a key component of the overall success of the U.S. Government in Iraq. The 

U.S. Agency for International Development also provided technical comments for this 

report. We agreed with their comments and changed our report accordingly. The 

comments received are fully responsive. 

We plan to perform a follow-up audit later this year to determine whether the quality of 

the data for the CERP, contained within financial systems and in reports to the Congress; 

is accurate, timely, and consistent. 
Table of Contents 

Executive Summary i 

Introduction 

Background 1 

Objectives 4 

Findings 

 Management Controls 5 

 Coordination of Projects 11 

Conclusion and Recommendations 14 

Appendices 

A. Scope and Methodology 16 

B. Review of CERP Project Files 19 

C. CERP Fund Uses & Restrictions 20 

D. Acronyms 22 

E. Report Distribution 23 

F. Audit Team Members 25 

Management Comments 

Multi-National Corps-Iraq 26 
 1 

Introduction 

Background 

During the course of Fiscal Year (FY) 2005, the Congress authorized the use of $854 

million for the Commander’s Emergency Response Program (CERP) of which, the 

United States Central Command allocated $718 million to the Multi-National Force-Iraq 

(MNF-I) to support Operation Iraqi Freedom.1

 The purpose of the CERP is to provide 

United States military commanders in Iraq and Afghanistan the ability to respond to the 

urgent humanitarian relief and reconstruction requirements of the local population within 

their areas of responsibility with a variety of non-construction and construction activities. 

The tool MNF-I used to track projects in FY 2005 indicated funds were obligated for 

7,678 projects, of which 4,805 projects were completed by the end of the fiscal year 

(September 30, 2005) in support of Operation Iraqi Freedom. For a complete list of the 

numbers of projects and obligations by project type as reported MNF-I for FY 2005, see 

Appendix C. 

MNF-I reported to us that it had obligated approximately $284.2 million, or 

approximately 40 percent of its total allocation, for 4,101 non-construction projects in FY 

2005. Some examples of non-construction projects include condolence payments, the 

provision of foodstuffs, and purchases of equipment such as computers, electrical 

generators, or vehicles. 

In FY 2005, MNF-I also reported to us that it obligated approximately $450.8 million, or 

roughly 60 percent of its total allocation for 3,577 construction projects. Construction 

projects include the repair of homes and buildings damaged by combat operations, the 

building or reconstruction of community infrastructure such as hospitals and schools, 

fences and barriers to protect oil pipelines, and “last tactical mile” projects to bridge the 

gap between large Iraq Relief and Reconstruction Fund projects with the local population 

(i.e., building substations or sewerage systems that link Iraqi neighborhoods with power 

or water lines). Some of these construction projects require additional funds for 

continued sustainment costs (i.e. operation and maintenance costs) from either the U.S. or 

the Government of Iraq to maintain the structures over time. 

 

Guidance for the FY 2005 CERP for Operation Iraqi Freedom. MNF-I units must 

execute the CERP in order to support the strategic objectives of MNF-I’s Campaign Plan 

for FY 2005. The Campaign Plan is a classified operational order that is updated 

periodically and details MNF-I’s military, political, and economic objectives for Iraq. 

The Commanding General, MNF-I, intended the CERP to support these objectives by 

focusing CERP projects on labor intensive and urgent humanitarian relief and 

reconstruction efforts in FY 2005. MNF-I’s Command Policy and Standard Operating 

Procedure document, published on February 2, 2005, and in effect throughout the rest of 

FY 2005, clarified and expanded the Commanding General’s intent by focusing the 

 

1

 The Congress authorized funding for the CERP three times over the course of FY 2005 from funds 

already appropriated to the Department of Defense for operations and maintenance programs: on October 

28, 2004, for $300 million under the “Ronald W. Reagan National Defense Authorization Act for Fiscal 

Year 2005” (P.L. 108-375); on December 8, 2005, for $500 million under the Consolidated Appropriations 

Act, 2005” (P.L. 108-447); and again on May 11 2005, for a final authorization of $854 million for FY 

2005 under the “Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and 

Tsunami Relief, 2005'' (P. L. 109-13). 

 
 2 

CERP on “highly visible, quick starting, labor intensive & urgent humanitarian relief and 

reconstruction projects” to be used for: 

• reconstruction after combat operations to rapidly improve local conditions in 

areas affected by combat 

• emergency repairs of critical facilities 

• critical infrastructure shortfalls that can be rapidly resolved 

• reducing the risk of injury to the local populace 

• procurement of critical equipment to replace items or establish critical 

community services 

• employing as many Iraqis as possible 

MNF-I also issued fragmentary orders that clarified or changed the program management 

responsibilities and procedural requirements of subordinate units over the course of the 

fiscal year. As MNF-I’s primary implementing agency for the CERP, the Multi-National 

Corps-Iraq (MNC-I) published its own Campaign Plan to further the use of the CERP in 

accordance with MNF-I’s Campaign Plan; issued fragmentary orders to update 

subordinate units on changes in the CERP; and published its own Standard Operating 

Procedure document on June 29, 2005, codifying all current CERP procedures and 

requirements for subordinate units. In addition, MNC-I officials we interviewed defined 

projects that take 180 days or less as meeting the intent of the guidance for the CERP to 

respond to the urgent humanitarian relief and reconstruction requirements of the local 

Iraqi population. 

 

Department of Defense (DoD) Program Responsibilities. The Under Secretary of 

Defense-Comptroller, located in the Pentagon, Arlington, Virginia, is responsible for the 

establishment and supervision of the execution of principles, policies, and procedures for 

the CERP. 

The United States Army is the executive agent for the CERP, and the Army Budget 

Office, under the Assistant Secretary of the Army for Financial Management and 

Comptroller, is responsible for reporting to the Congress each quarter on the source, 

allocation, and use of CERP funds for both Iraq and Afghanistan. The Army Budget 

Office is also located in the Pentagon, Arlington, Virginia. 

The United States Central Command, headquartered in Tampa, Florida, oversees military 

operations, programs, and funds in both Iraq and Afghanistan. U.S. Central Command is 

responsible for allocating CERP funds between Iraq and Afghanistan, and through its 

Army component command, Army Forces Central Command (ARCENT) reconciles 

CERP funds every three months and reports these results to the Army Budget Office for 

the quarterly reports to the Congress. 

The Multi-National Force-Iraq (MNF-I), headquartered in Baghdad, Iraq, oversees 

military operations, programs, and reconstruction funds for Iraq. MNF-I is the program 

manager in Iraq for the CERP. The following subordinate units manage and execute the 

CERP for MNF-I: 

 

• The Multi-National Corps-Iraq (MNC-I), headquartered at Camp Victory, 

Baghdad, Iraq, is MNF-I’s primary operational warfighting and reconstruction 

command in Iraq. MNC-I manages CERP projects, funds, and records for 
 3 

MNF-I. For FY 2005, MNC-I and subordinate units were authorized to obligate 

$692 million, which resulted in 7,491 CERP projects, and represented 75 percent 

of MNC-I’s $918 million reconstruction budget for FY 2005.2 During FY 2005, 

MNC-I was staffed by two different Army Corps Commands – the III Corps 

based at Fort Hood, Texas; and the 18th Airborne Corps based at Fort Bragg, 

North Carolina. The processes to improve the management of the CERP 

discussed in this audit were implemented by the 18th Airborne Corps. In January 

2006, the V Corps, based in Heidelberg, Germany, will take command of MNC-I. 

However, lead elements of the V Corps have already taken over the management 

of MNC-I from the 18th Airborne Corps and were tasked by MNF-I with 

responding to the findings of this audit. 

• MNC-I’s seven Major Subordinate Commands (MSCs) are headquartered 

throughout Iraq and are comprised of U.S. Army and Marine Corps, and coalition 

forces. MSCs propose, initiate, and execute non-construction projects and some 

construction projects in their areas of responsibility. In FY 2005, the MSCs 

primarily consisted of the following coalition forces. 

o Multi-National Division-Baghdad: U.S. Army forces 

o Multi-National Division-Center-South: Coalition forces from the 

Republic of Poland 

o Multi-National Division-North-Center: U.S. Army forces 

o Multi-National Division-Northeast: Coalition forces from the Republic of 

Korea 

o Multi-National Division-Southeast: Coalition forces from the United 

Kingdom 

o Multi-National Force-Northwest: U.S. Army forces 

o Multi-National Force-West: U.S. Marine Corps forces 

• The U.S. Army Corps of Engineers, Gulf Region Division (GRD), executes larger 

construction projects for MNC-I and/or the MSCs. GRD is headquartered in 

Baghdad, Iraq and provides planning, engineering, contracting, and project 

management expertise and services to MNF-I and other U.S. agencies. In FY 

2005 GRD managed 393 CERP construction projects with $227 million in 

obligations for MNC-I and the MSCs. 

• The Joint Contracting Command-Iraq/Afghanistan (JCC-I/A) supports nonconstruction CERP projects for MNC-I and/or the MSCs in Iraq. JCC-I/A is 

headquartered in Baghdad, Iraq, and provides operational contracting support to 

MNF-I to efficiently acquire vital supplies, services, and construction for the 

relief and reconstruction of Iraq. JCC-I/A contracting offices executed contracts 

for CERP projects totaling approximately $22 million according to JCC-I/A 

officials. 

 

2

 The balance of MNC-I’s reconstruction budget (approximately $226 million) was funded with Iraqi 

Transitional Government funds and funds from the DoS’ Commander’s Humanitarian Relief and 

Reconstruction Program. 
 4 

• The Multi-National Security Transition Command-Iraq (MNSTC-I), 

headquartered in Baghdad, Iraq, is a subordinate command of MNF-I, whose 

mission is to organize, equip, and mentor Iraqi security forces. MNSTC-I 

obligated approximately $26 million for 187 CERP projects in FY 2005. 

MNSTC-I was required to report the status of its CERP projects and funds to 

MNC-I. 

Department of State (DoS) Program Responsibilities. The U.S. Ambassador to Iraq is 

the Department of State’s Chief of the U.S. Mission in Iraq and is responsible for the 

continuous supervision and general direction of all assistance for Iraq according to 

National Security Presidential Directive 36 United States Government Operations in Iraq. This includes the direction, coordination, and supervision of all United States government 

employees, policies, and activities in country, except those under the command of an area 

military commander. The DoS’s activities to rebuild Iraq are primarily funded through 

the Iraq Relief and Reconstruction Fund as codified in Public Law 108-11 and Public 

Law 108-106. 

U.S. Agency for International Development (USAID) Program Responsibilities. 

The United States Agency for International Development (USAID), under the direction 

of the State Department, undertakes projects to restore Iraq’s vital infrastructure in the 

areas of electricity, water/sewerage, health care, education, communications, and 

transportation. USAID uses a combination of the Iraq Relief and Reconstruction Fund 

and direct appropriations to fund their projects. 

 

Objectives 

The objectives of this audit were to determine whether MNF-I: 

• implemented controls to effectively manage FY 2005 CERP projects, funds, and 

records 

• effectively coordinated CERP projects, where appropriate, with the DoS and the 

USAID to optimize available resources for the sustainment of projects and the 

reconstruction of Iraq 

For a discussion of the audit scope and methodology, see Appendix A. For our review of 

records and documents for completed CERP project files, see Appendix B. For a list of 

the uses of and restrictions of CERP funds, see Appendix C. For definitions of the 

acronyms used in this report, see Appendix D. For a list of the report’s distribution, see 

Appendix E. For a list of the audit team members, see Appendix F. 
 5 

Management Controls 

CERP Management and Tracking 

MNF-I utilized several processes to improve the management of the CERP in FY 2005. 

Specifically, MNF-I: 

• implemented three processes within its chain of command to effectively align 

CERP projects with the strategic objectives of its Campaign Plan 

• required all subordinate units to report the status of projects and funds twice a 

month to MNC-I, and for MNC-I to consolidate these reports and provide them to 

MNF-I 

• centralized the collection and management of project records at MNC-I, and 

required the MSCs to turn in their records for completed projects at the end of 

each month 

As a result of these improvements, we found that coalition forces generally used CERP 

funds in accordance with the intent of published guidance from higher headquarter units 

and were better positioned to manage the large supplemental appropriation for the CERP 

that MNF-I received late in FY 2005 under P.L. 109-13. However, as previously 

reported by the Special Inspector General for Iraq Reconstruction (SIGIR)3

 coalition 

forces did not fully comply with DoD guidance for maintaining controls over 

appropriated funds and for maintaining the documentation required to ensure 

accountability and oversight of CERP projects. 

We tested the effectiveness of these controls in several ways. First, we reviewed the 

records of 207 projects completed by September 5, 2005. This included a stratified 

random sample of 187 projects and a judgmental sample of the top 20 most expensive 

completed projects at that time.4 These project files were used to assess whether projects 

met the intent of DoD and MNF-I guidance for the CERP, and whether required project 

records and documents were present at the designated control point (i.e. MNC-I). Then, 

we analyzed the tool used by MNF-I to track the status of projects to assess the validity 

of MNF-I’s data for the CERP for FY 2005. For a more detailed explanation of our 

methodology for this objective, see Appendix A. 

Aligning Projects with MNF-I’s Campaign Plan. MNF-I, through MNC-I, 

implemented processes to effectively prioritize and align CERP projects with its strategic 

objectives. As the focus of MNF-I’s Campaign Plan changed to emphasize using 

reconstruction programs, including the CERP, as an enabler of MNF-I’s military, 

political, and economic goals for FY 2005, guidance from the Commanding General, 

MNF-I, challenged the commanders of subordinate units to prioritize the projects that 

they thought best advanced these goals. As a result, MNC-I developed and implemented 

three processes which took effect in April 2005, to centralize the management of the 

CERP within MNC-I and to link projects to the strategic objectives of MNF-I’s 

Campaign Plan. These processes are: the annual Joint Civil-Military Engineering Board; 

 

3

 Management of the Commander’s Emergency Response Program for Fiscal Year 2004 (Report Number 

SIGIR 05-014, October 13, 2005). 

4

 To comply with generally accepted government auditing standards for statistical sampling methods, we 

consulted with the Department of Defense Office of the Inspector General Quantitative Methods Division. 

For more information on our sampling plan, see Appendix A. 
 6 

the monthly Targeting and Effects Process; and the weekly CERP Program Review 

Board. 

Joint Civil-Military Engineering Board (JCMEB)

The JCMEB codified the policies, procedures, and priorities for an annual MNC-I 

approval process for CERP projects proposed by the MSCs. The JCMEB was convened 

once in FY 2005 to approve projects that needed advance planning, including both 

construction projects and non-construction projects (such as the purchase of vehicles or 

equipment). Projects for condolence payments or battle damage repairs were still at the 

discretion of the MSC commander, and could be substituted for MNC-I approved 

projects if the estimated cost of the project was less than $500,000.5 

The measures MNC-I used in the JCMEB to prioritize projects was based on MNF-I 

operational priorities, available CERP funds, and overall guidance on the CERP from 

DoD. The JCMEB also takes “saturation criteria” into account, which is based on area 

security, capacity of local contractors, and other mitigating factors. Prior to the JCMEB, 

CERP projects and allocations of funds to MSCs were based primarily on the population 

density of Iraqi cities and provinces within the MSCs area of responsibility. MNC-I 

officials we interviewed said the JCMEB significantly improved MNC-I’s ability to 

ensure CERP projects met guidance from DoD for the appropriate use of CERP funds, 

and MNF-I guidance to align projects with strategic objectives. Accordingly, of the 207 

projects reviewed to assess whether FY 2005 CERP funds were used for the purposes 

intended by the DoD, we found only one project that violated the intended use of CERP 

funds.6

 

Targeting and Effect Process The Targeting and Effect Process integrates the projects approved through the JCMEB 

with MNC-I combat and reconstruction operations across Iraq through a monthly review 

process. This enabled MNC-I to measure the effectiveness of CERP projects in 

conjunction with overall operations and to synchronize the intended effects of new 

projects with MNF-I’s strategy. According to MNC-I officials and MNF-I documents, 

MNC-I was able to focus approximately $400 million for projects to provide essential 

services and economic improvements to key cities and provinces across Iraq pursuant to 

MNF-I’s Campaign Plan for FY 2005. However, MNC-I officials said they do not expect 

to see the full effects of these CERP projects until the second or third quarter of FY 2006 

after most of the projects are completed. 

 

CERP Program Review Board

The weekly MNC-I CERP Program Review Board enabled MNC-I to synchronize ongoing CERP projects with changing operational priorities. The Program Review Board 

included representation from operations and support officers, and officials from all MNFI units and offices involved with the CERP, including MNF-I, MNC-I, all of the MSC’s, 

and supporting commands such as GRD and JCC-I/A. As we observed, the Program 

Review Board was instrumental at the end of the year in providing a forum in which 

CERP funds could be reallocated between the MSCs and GRD in order to obligate funds 

by the end of the fiscal year, and support MNF-I strategic objectives. For example, 

 

5

 Projects with an estimated cost of $500,000 or more require written approval from the Commanding 

General, MNC-I. 

6

 Prior to the 18th Airborne Corps assuming command of MNC-I, Multi-National Force-Northwest paid 

$40,000 to security forces of the Iraqi Ministry of the Interior for operating expenses while deployed from 

Baghdad to Mosul on November 26, 2004. MNF-I Fragmentary Order 87 (June 29, 2004) states CERP 

funds will not be used for the direct or indirect benefit of U.S., coalition, or other supporting forces. 
 7 

MNC-I was able to redirect $1.9 million from other MSCs for MNC-Northwest to 

obligate against $3.9 million worth of unfunded humanitarian relief projects resulting 

from combat operations in Tal Afar. Reallocations were also made from other MSCs to 

assist GRD with administrative issues in order to obligate approximately $172 million for 

91 construction projects between September 26 and September 30, 2005. In addition, we 

observed that the Program Review Board was a useful way for MNF-I officials to 

communicate administrative or procedural issues, or share lessons learned with other 

MNF-I CERP officials. 

According to MNF-I officials we interviewed, these processes were instrumental in 

enabling MNF-I to obligate the $354 million supplemental funding authorization for the 

CERP that MNF-I received in May 2005 pursuant to P.L. 109-13. For example, due to 

the advance planning done in April through the JCMEB process in expectation of 

receiving the supplemental funds, MNF-I’s data indicates that it obligated roughly $392 

million for 2,541 projects in the fourth quarter of 2005, which was approximately $258 

million more in obligations than in any other quarter in FY 2005. In order to do so, 

however, MNC-I approved obligations of roughly $208 million for 121 large projects 

over $500,000, of which 25 of these projects were planned to last longer than 180 days. 

There was no consensus on the effect of having to obligate such a large allotment of 

money in such a short period of time. Some MNF-I officials we spoke with debated 

whether so many large projects taking more than 180 days to execute actually met the 

intent of urgent humanitarian relief, while other officials discussed whether the 

administrative effort required to obligate this amount of money in such a short period of 

time was justifiable given MNF-I’s other combat and reconstruction priorities in Iraq. 

However, virtually all of the officials indicated that the funds were executed for projects 

that supported the objectives of MNF-I’s Campaign Plan, and within the intent of the 

Congress that the funds authorized for the CERP in FY 2005 were to be obligated by the 

end of the fiscal year. 

Reporting the Status of Projects and Funds. MNF-I, through MNC-I, implemented a 

process to manage the program and track the status of CERP projects. To track the status 

of projects, MNF-I required all subordinate units to report project status to MNC-I twice 

a month using a common Excel spreadsheet format, and MNC-I consolidated this data 

into a single Excel spreadsheet and provided it to MNF-I. These reports included each 

project’s identifying data and purpose, progress towards completion; and data on 

committed, obligated, and expended funds for each project. The project tracking tool is 

the mechanism by which the MSCs communicate project status information to MNC-I 

and MNF-I for management of the overall program. 

This project tracking tool is provided to the Army Forces Central Command-Army 

(ARCENT) each month, but without project completion information. ARCENT used this 

tool to compare MNF-I data with the financial report for CERP funds from the Army’s 

financial systems, which is the official management system of record for the CERP. If 

the total obligations from the two reports do not match, ARCENT officials said they 

queried MNF-I to reconcile the data. ARCENT then sends its report of the status of 

funds and project information for the CERP to the Army Budget Office, which provides a 

report to the Congress on the source, allocation, and use of CERP funds for each quarter 

of the fiscal year pursuant to P.L. 108-375. 

We analyzed MNF-I’s project tracking tool and found several problems in the data which 

caused us to question the tool’s reliability. MNF-I’s total obligation authority for the 

CERP for FY 2005 was $718 million. MNF-I reported it had obligated 100 percent of 

this by the end of the fiscal year (September 30, 2005) and ARCENT confirmed this on 
 8 

October 16, 2005. During the course of our audit, however, MNF-I provided us with 

their year end project tracking tool—dated October 24, 2005—for FY 2005. Our analysis 

of the project tracking tool indicates that MNF-I was tracking 7,678 projects with total 

obligations of approximately $735 million.7 These totals included: 

• 114 projects representing $4.6 million in obligations that were listed as starting in 

FY 2004 

• 22 projects representing $700,000 in obligations with “planned” start dates in FY 

2004 

• 96 projects representing approximately $21 million in obligations with a 

“scheduled” start in FY 2006 

MNF-I officials provided us with documentation from the Army’s financial systems 

certifying that MNF-I did not exceed its total obligation authority for the CERP for FY 

2005. These officials also said the Army’s financial systems have built-in safeguards to 

help program managers’ avoid exceeding their total obligation authority in any fiscal 

year.8

 While we acknowledge some of the projects in error noted above may be attributed 

to clerical errors, the definition of terms, or addressed by financial safeguards; we could 

not determine, with any reasonable assurance, whether all these errors were reconciled. 

For example, the projects noted above were still in MNF-I’s project tracking tool after it 

submitted its year end report to ARCENT. MNF-I officials we interviewed indicated this 

occurred because MNF-I does not formally reconcile the obligations listed in the project 

tracking tool with total obligations recorded in the financial system. Part of the reasons 

for this are time and resource constraints, but primarily the Army’s financial systems do 

not provide enough detailed information to compare total obligations to individual CERP 

projects. As a result, MNF-I could not provide us with assurance that these projects were 

properly accounted for in their management process during the course of our audit. 

Additionally, if the projects noted above were actually contracted for or obligated in FY 

2004 or FY 2006, they must be de-obligated from FY 2005 and re-obligated against 

appropriate funds from the appropriate fiscal year. 

Based on the errors discussed above, we believe the potential for additional errors in the 

information reported to ARCENT remains high. MNF-I officials we interviewed also 

agreed that the quality of the data in the project tracking tool should be improved, and 

should be as consistent as possible with the records in the Army’s financial systems. At 

the conclusion of our audit, however, MNF-I did not yet have a plan in place to improve 

the accuracy of its project management data for FY 2005. 

 

Maintaining Project Records. MNF-I centralized the management and maintenance of 

records for CERP projects at MNC-I. Throughout FY 2005, MNF-I required the MSCs 

to submit completed files of source documentation for completed projects to MNC-I for 

review and storage at the end of each month. In addition, as the requirements for specific 

CERP records changed over the course of the fiscal year, MNC-I issued fragmentary 

orders codifying these requirements; provided training to some MSCs on which records 

were required for completed project’s file folders and to complete the records; and 

 

7

 For more information on our analysis, see Appendix A. For a complete list of obligations by project type 

as reported by MNF-I, see Appendix B. 

8

 We did not audit the Army’s financial systems during the course of this audit, but we plan to do so in a 

future audit. 
 9 

published its Standard Operating Procedure document on June 29, 2005, which discussed 

all of the requirements for the management of records for CERP projects. Although the 

official record for the funding and status of CERP projects is kept within the Army’s 

financial systems, DoD officials we spoke with in Baghdad and at the Pentagon said the 

project records maintained by MNC-I play an important part in preventing potential 

fraud, waste, and abuse of CERP funds by enabling DoD officials to verify that 

procedures to commit, obligate, and disburse funds are followed. 

The MSCs, however, did not comply with MNF-I’s guidance. MNF-I required the MSCs 

to submit 16 different types of records or other documentation to MNC-I for the project 

files for completed projects. To assess whether the MSCs complied with MNF-I’s 

guidance for project records, we analyzed a random sample of 187 projects—stratified by 

MSC—out of 4,160 projects completed by September 5, 2005. To allow for the 

maximum number of statistical projections, however, we grouped: (a) records certifying 

the commitment of funds; (b) records certifying the obligation of funds; (c) records 

certifying the disbursement of funds; (d) records that certified the officials that were 

responsible for handling project funds; and (e) records that certified the completion of a 

project into five categories for statistical analysis. This allowed us to project the point 

estimate, or mean error rate, for these five categories with a 90 percent confidence level 

as reflected in Table 1.9

 

Table 1: Point Estimate Projections for Errors of Selected Documents

Record Category with Required Forms Measure Errors

Certification of the Commitment of Funds: 

• Department of the Army (DA) Form 3953; or 

• Department of Defense (DD) Form 1149 

Number 

Rate 

907 

21.8%

Certification of Obligation of Funds: 

• Standard Form (SF) 44; or 

• SF 1449 

Number 

Rate 

385

9.3%

Certification of Disbursement of Funds: 

• DD Form 1081 marked on advance; and/or 

• DD Form 1081 marked on return 

Number 

Rate 

2,178 

52.4%

Certification of Officials Responsible for Project Funds: 

• Purchasing Officer (PO) Appointment Letter; and 

• Pay Agent (PA) Appointment Letter; and 

• PO DD Form 577 purchasing card; and 

• PA DD Form 577 purchasing card 

Number 

Rate 

2,901

69.7%

Certification of Completion of Project: 

• Commander’s Clearance Letter; and/or 

• DD Form 250 

Number 

Rate 

2,347

56.4%

Source: SIGIR 

The type of errors in each category varied, with differences for both the individual 

records and for each MSC. For example, in reviewing documents for the Certification of 

Officials Responsible for Project category, we found that 66 percent of the required DD 

 

9

 Point estimates represent the mean of the confidence interval between the lower and upper bounds of 

projected errors for each category. See Appendix A for more on our sampling methodology. For a 

summary of our results for the records for all 187 projects, see Appendix B. 
 10 

Form 577s for Purchasing Officers were included in the project files, whereas only 33 

percent of Appointment Letters for Purchasing Officers were present in the project files. 

These records identify and certify the MNF-I officials authorized to spend appropriated 

funds on CERP projects and provide a reasonable assurance to DoD officials that 

procedures to disburse funds are followed. We found that the Multi-National DivisionBaghdad submitted 97 percent of their required DD Form 1081’s “marked on return”, 

while the Multi-National Force-West only submitted 17 percent of these records. 

Conversely, the MSCs submitted more documentation for all project folders identified as 

being among the Top 20 most expensive projects as of September 5, 2005. For a 

complete list of the occurrences of project records and documents in CERP project files 

for all 207 completed projects we reviewed, see Appendix B. 

MNC-I officials acknowledged they were aware the MSC’s were generally not following 

all of the requirements for submitting records for completed projects. For example, 

MNC-I conducted their own audit of the Multi-National Division-Baghdad in April 2005, 

and found 95 percent of the 100 files they reviewed (which included 30 FY 2005 CERP 

projects) did not fully comply with guidance from MNF-I and MNC-I. MNC-I officials 

we interviewed cited several factors for this, but primarily faulted the austere, war-time 

environment in Iraq which prevented the MSCs from establishing fully functional finance 

and accounting offices to maintain project records. For example, the personnel turnover 

at the MSCs is high: U.S. Air Force and U.S. Navy project officers, finance personnel, 

and contracting personnel can be in their positions for as little as four months before 

rotating out of Iraq. 

Moreover, some MSC finance and accounting offices did not have the technological 

capability to electronically transfer records to MNC-I. In addition, MNC-I officials said 

foreign coalition forces could not necessarily be expected to use DoD forms to record 

project information given language barriers and differences in accounting systems. 

While we acknowledge these difficulties—and that the MSCs generally attempted to 

control funds and document project milestones using their own documents and 

management control processes—MNF-I required all MSCs to fully comply with 

published guidance for maintaining and submitting records to MNC-I, and did not permit 

waivers for meeting the requirements for these records for any reason. 

Management Actions

During the course of this audit, we recommended to MNF-I that it take action to improve 

the quality of its data in its project tracking tool. MNF-I agreed and initiated its own 

review of its data for FY 2005 projects; however, this review was not completed at the 

conclusion of our audit. Also, in November, 2005, MNF-I began transitioning to the Iraq 

Reconstruction Management System as its project tracking tool for FY 2006.10 This 

newly developed centralized database will be used to identify and track all U.S. 

reconstruction projects in Iraq, including the CERP. One of its commercial components 

called Maximo provides a formatted structure for capturing, updating, and reviewing 

project data. This will enable MNC-I and the MSCs to generate a Unique Requirements 

Identifier to track projects and avoid duplication of project data. MNF-I believes the 

errors in their current project tracking tool that we identified above will be reduced in FY 

2006 by transitioning to this automated system. 

 

10 The DoD requested an appropriation of $500 million for the CERP for FY 2006, of which MNF-I 

expects to receive $375 million for use in Iraq.
 11 

Coordination of Projects 

Interagency Processes 

MNF-I’s actions to effectively coordinate CERP projects with DoS and USAID varied in 

FY 2005. The primary methods of coordinating the CERP with DoS and USAID took 

place in the weekly Coordinated Embassy Reconstruction Team meeting in the U.S. 

Embassy in Baghdad. In addition, CERP projects were coordinated through interagency 

working groups, lower-level meetings, and personal contacts. According to MNF-I, DoS 

and USAID officials, all of these forums enabled U.S. officials to meet, discuss, and 

coordinate reconstruction projects to avoid duplication of efforts between MNF-I, DoS 

and USAID. These officials characterized this as ad hoc—but effective—coordination of 

CERP projects with other reconstruction programs, which improved over the course of 

FY 2005. However, the DoS’ October 5, 2005, Management Review of the U.S. Mission 

– Iraq report to the U.S. Ambassador to Iraq stated that the lack of focused leadership of 

the U.S. reconstruction effort in Iraq resulted in disjointed and less than optimal results in 

FY 2005. These concerns were reflected in the coordination of the CERP in FY 2005 by 

MNF-I, DoS, and USAID as discussed below. 

 

Coordination with the DoS. MNF-I effectively coordinated the CERP with the DoS in 

support of the Provincial Reconstruction and Development Committee (PRDC) program. 

The PRDC program is a DoS-led effort to promote the rule of law and governance 

capabilities of Iraqi provincial governments by providing $150 million from the Iraq 

Relief and Reconstruction Fund for capacity-building activities for 15 of 18 Iraqi 

provinces (i.e. $10 million for each province). However, DoS staff and funds were not 

available in May 2005 to start the program, so MNF-I agreed to staff and fund the 

program with $80 million from the CERP to support capacity building activities in nine 

strategic cities located in eight of the provinces in support of MNF-I’s Campaign Plan. 

The eight PRDCs were authorized to nominate up to $10 million worth of CERP projects 

per city with MSC approval, and were expected to learn how to manage these projects 

with the assistance of their local MSC and other U.S. government officials. MNF-I 

officials said the use of the CERP “kick started” the PRDC program, resulting in the 

PRDCs nominating 484 CERP projects in FY 2005. However, during the course of this 

audit, we did not verify whether the PRDC’s capability to manage CERP projects 

improved.

Conversely, MNF-I did not fully coordinate the sustainment of large CERP construction 

projects with the DoS. As previously reported by SIGIR, DoS is responsible for the 

continuous supervision and general direction of all assistance for Iraq, including the 

sustainment of all U.S. reconstruction programs such as the CERP.11 MNF-I reported that 

it had obligated more than $500,000 for each of 126 large CERP construction projects, 

for a total obligation of approximately $190.9 million, or roughly 27 percent of the total 

CERP funds appropriated for Iraq in FY 2005. Of these, MNF-I also reported it had 

obligated $1 million or more for each of 53 construction projects; $4 million or more for 

each of 8 construction projects; and $8 million or more for 3 capital construction projects, 

the largest of which was an $11 million project initiated in August 2005 to protect the 

Beiji to Kirkuk oil pipeline. Some of these projects are integrated into Iraq’s national 

infrastructure and therefore are strategically important to U.S. efforts to rebuild Iraq. 

 

11 When SIGIR issued SIGIR-05-022 Managing Sustainment for Iraq Relief and Reconstruction Fund 

Programs on October 24, 2005, the DoS did not yet have a plan to sustain reconstruction projects. 
 12 

According to MNC-I officials, the scope of work for CERP construction projects may 

include some funding for sustainment or training of Iraqi personnel, but these funds 

typically last for only six months, and therefore do not cover the continuing sustainment 

requirements for these projects. Therefore, MNF-I units commonly used additional 

CERP funds to sustain these projects, which according to MNC-I officials we 

interviewed, deviates from the intent of the guidance for the CERP and delays the longterm U.S. goals of transferring reconstruction projects to the Government of Iraq to 

operate and maintain. 

Coordination with the USAID. MNF-I did not formally coordinate the CERP with 

USAID’s reconstruction programs. MNF-I units, however, effectively coordinated with 

USAID’s Office of Transition Initiatives (OTI) to use CERP projects in conjunction with 

OTI Employment Grants on a case-by-case basis. In FY 2005, USAID OTI provided 

$175 million for 2,611 Employment Grants to provide short-term employment 

opportunities for unemployed Iraqis. In Baghdad, for example, OTI Employment Grants 

were used to provide essential services to the local population. This included the removal 

of trash and sewage; and the rehabilitation and renovation of community infrastructure 

such as clinics, markets, schools, and sports fields in conjunction with CERP projects 

executed by the Multi-National Division-Baghdad. According to USAID officials, the 

coordination of CERP and OTI projects resulted from an on-going agreement between 

the USAID Mission Director and the U.S. Commander of the Multi-National DivisionBaghdad in March 2004, for USAID officials to attend the Multi-National DivisionBaghdad’s reconstruction meetings, and for a liaison officer from the Multi-National 

Division-Baghdad to be placed on USAID’s staff, to ensure each organization stayed 

informed of the other’s reconstruction activities in Baghdad. 

OTI Employment Grants were also used in FY 2005 in conjunction with the CERP to 

repair and rebuild Najaf, Fallujah, Ramadi, and Tal Afar after combat operations 

concluded in those strategic cities. According to USAID officials, MNF-I units and 

USAID were able to coordinate post-combat reconstruction activities in Fallujah and Tal 

Afar early in the planning for these operations through the Combined Embassy 

Reconstruction Team meetings. Consequently, USAID OTI was able to broker 

agreements to be on the ground in these cities approximately two weeks after combat 

operations ended to assist MNF-I units with post-combat humanitarian assistance 

operations. As a result of this successful collaboration, MNF-I and Multi-National ForceWest placed liaison officers with the USAID office in Baghdad, and USAID placed 

liaison officers in Fallujah and Ramadi to better coordinate MNF-I and USAID programs. 

This ad-hoc coordination, however, contributed to the uneven use of CERP projects in 

conjunction with OTI Employment Grants across Iraq. In Baghdad, USAID disbursed 

$68.1 million, or roughly 39 percent of total FY 2005 OTI Employment Grant 

expenditures, to support CERP projects and other DoD reconstruction priorities. In 

contrast, USAID disbursed approximately $25 million worth of OTI Employment Grant 

expenditures, or roughly 14 percent of the total for FY 2005, were used in Najaf, 

Fallujah, Ramadi, Salah Ad Din, and Diyala. This Baghdad-centric approach to 

reconstruction, according to the October 2005 DoS management review report, is not 

adaptive enough to respond to the rapidly changing war-time conditions that exist in Iraq 

today. Accordingly, MNC-I officials stated that a formal process to coordinate with 

USAID would have resulted in a more even distribution of the use of USAID OTI 

Employment Grants with CERP projects to better support MNF-I and U.S. mission 

objectives across Iraq. 
 13 

Management Actions

MNF-I has taken actions that may address our concerns regarding the need for a more 

formal process to coordinate the CERP with other reconstruction programs. MNF-I and 

the U.S. Embassy – Iraq published a Joint Mission Statement on December 6, 2005, 

which stated that all political, military, and economic tools available to U.S. agencies in 

Iraq would be integrated in FY 2006 to maximize the effectiveness of U.S. efforts to 

rebuild Iraq. In addition, MNF-I implemented the Strategic Resource Council to better 

focus MNF-I, DoS, and USAID officials on specific reconstruction issues and to 

coordinate reconstruction costs in FY 2006.12

 

12 MNF-I Fragmentary Order 05-316 (October 15, 2005) establishes the Strategic Resource Council in 

order to maximize the effect of limited funds to rebuild Iraq by providing a forum for MNF-I, DoS, and 

USAID to coordinate the funding priorities of reconstruction activities. 
 14 

Conclusion and Recommendations 

Conclusion 

MNF-I made important progress in FY 2005 to improve the management of the CERP. 

We commend MNF-I and subordinate units for their efforts and look forward to seeing 

the results of their additional improvements scheduled to take place in FY 2006. We 

believe, however, that MNF-I cannot currently provide a reasonable assurance to DoD 

leadership and the Congress that FY 2005 project information was sufficiently controlled 

to provide an accurate year-end report on the use of funds for projects; or that project 

records were sufficiently accounted for to protect against potential fraud, waste, and 

abuse of the program. We also believe that the lack of formal coordination with DoS and 

USAID of the CERP with other U.S. reconstruction programs and funds potentially 

limited the effectiveness of some CERP projects, particularly large construction projects. 

While we realize that the CERP is only one of the programs MNF-I is managing while 

conducting combat operations in Iraq, SIGIR believes the effective management of the 

CERP—of which the DoD has requested $500 million for FY 2006, with $375 million of 

this total planned to go to Iraq—is essential to the success of the long-term U.S. goals for 

Iraq. 

Recommendations 

We recommend that the Commanding General, Multi-National Force-Iraq, direct his 

program managers and subordinate units to take these actions: 

1. Conduct a thorough examination of all FY 2005 CERP funds and projects to 

account for project status reporting errors. In addition, if it is determined that 

funds were inappropriately obligated against the FY 2005 appropriation, MNF-I 

should initiate a de-obligation from FY 2005 funds and re-obligate projects with 

the appropriate funds. 

2. Conduct a quarterly review of the CERP to ensure the data contained within its 

project tracking tool is valid and is as consistent as possible with the data for 

project obligations in Army financial systems. 

3. Clarify and enforce existing guidance on the collection of required project 

records. MNF-I should conduct quarterly reviews of project records to improve 

the management of project files. MNF-I should also consider developing a plan 

to provide training for all current and future MNF-I units on project 

documentation requirements and how to maintain and store these records. 

Methods for storing records in electronic formats should also be considered. 

4. Formalize the process of coordinating CERP projects with the DoS and the 

USAID where the CERP is used in conjunction with other reconstruction 

programs, particularly those projects that are of strategic importance. 

5. Coordinate plans and funding for the sustainment of large CERP construction 

projects; and projects that have strategic value with the DoS. 

Management Comments and Audit Response. On behalf of MNF-I, the MultiNational Corps-Iraq (MNC-I) concurred or partially concurred with four of five 
 15 

recommendations of the report. We generally agreed with the comments provided by 

MNC-I and, in some cases, changed our report accordingly. However, we also note that 

MNC-I has apparently misunderstood parts of two of our recommendations and therefore 

we reaffirm our position that coordination on sustainment of reconstruction projects is a 

key component of the overall success of the Iraqi government. The following responds to 

MNC-I’s comments. 

• In response to Recommendation 4, MNC-I concurs that CERP projects should be 

synchronized but non-concurs with “... the idea that this coordination can or 

should happen at the MNC-I or MNF-I level in all cases.” Nowhere in our report 

did we prescribe a level at which all coordination should take place. MNC-I 

further states that the most effective coordination of projects occurs when MNC-I, 

DoS, and USAID officials discuss projects with Iraqi officials, and that any 

coordination should not limit the MSC commanders flexibility to respond to 

emergencies. We agree. However, based upon examples we have cited in our 

report, we believe that formalized coordination processes could optimize the use 

of scarce funds and resources and better enable MNF-I, DoS, and USAID to 

contribute to rebuilding Iraq. 

• In response to Recommendation 5, MNC-I broadly non-concurs that it should 

coordinate sustainment plans and funding of large CERP projects with DoS. 

Rather, MNC-I states that the appropriate coordination takes place only between 

the commander executing the project and representatives of the Iraqi government. 

MNC-I also responds that this type of coordination takes place regularly through 

the PRDCs, Provincial Support Teams, and Provincial Reconstruction Teams. 

We note however, that these organizations are sponsored, supported, funded and, 

in some cases, chaired by DoS officials. MNC-I asserts that sustainment of CERP 

projects is solely the responsibility of the Government of Iraq. While it is true 

that the sustainment of existing infrastructure is the responsibility of the 

Government of Iraq, the failure of any project attributed to the lack of 

sustainment, regardless of which government is at fault, may weaken the 

Government of Iraq and ultimately be blamed on the U.S. Therefore, while we 

commend the efforts of MNC-I and DoS to coordinate with the Government of 

Iraq on the provincial level, it is the position of SIGIR that the DoS is the U.S. 

agency responsible for coordinating the overall sustainment of reconstruction 

projects in Iraq. Some CERP projects, particularly capital construction projects, 

and those of strategic value, rise to that threshold, thus requiring more concerted 

efforts between all government entities charged with responsibilities for 

reconstruction activities in Iraq. 

MNC-I also provided technical comments and documents certifying that it did not exceed 

its total obligations authority for the CERP for FY 2005 for the January 5, 2005 draft of 

the report. We agreed with these comments and changed our draft report accordingly. 

However, we plan to perform a follow-up audit later this year to determine whether the 

quality of the data for the CERP, contained within financial systems and in reports to the 

Congress; is accurate, timely, and consistent. 

The U.S. Agency for International Development also provided technical comments for 

this report. We agreed with their comments and changed our report accordingly. 
 16 

Appendix A. Scope and Methodology 

In August 2005, we initiated this audit (Project No. SIGIR-2005-15) to determine 

whether CERP projects and funds were effectively managed by MNF-I in FY 2005. This 

is the second in a series of audits of the CERP pursuant to a request in 2004 from the 

Deputy Secretary of Defense, through the Department of Defense Inspector General, that 

SIGIR review the CERP to determine whether CERP funds were properly administered 

by Department of Defense officials and agencies. This report discusses management 

controls over CERP projects, funds, and records, and the coordination of CERP projects 

with the reconstruction programs of the DoS and the USAID. 

To determine if MNF-I implemented controls to effectively manage FY 2005 CERP 

projects, funds, and records we interviewed officials from MNF-I, MNC-I, and the MultiNational Division-Baghdad to understand how the program was managed over the course 

of FY 2005. This included attending several CERP Program Review Board meetings to 

observe how MNC-I managed the CERP from week-to-week. We also collected and 

analyzed guidance and fragmentary orders governing the program from the Office of the 

Secretary of Defense, MNF-I, and MNC-I. In addition, we tested the controls MNF-I 

implemented in FY 2005 to improve the management of the CERP in several ways. 

First, to determine whether MNF-I used CERP funds for the purposes intended in DoD 

guidance, and adequately controlled the records for CERP projects at the control point 

(i.e. MNC-I), we reviewed the project records for 207 of 4,160 projects completed by 

September 5, 2005. This included a stratified random sample of 187 projects by MSC, 

which the Department of Defense Office of the Inspector General Quantitative Methods 

Division validated, and a judgmental sample of the top 20 most expensive completed 

projects at that time. The 16 records we selected for our review were based on MNF-I 

and MNC-I guidance on CERP procedures and administrative requirements included in 

fragmentary orders and Standard Operating Procedure documents issued over the course 

of FY 2005. We then grouped records into five categories to allow for the maximum 

number of statistical projections for our sample. As noted above, these categories are for 

the records that certify the commitment, obligation, and disbursement of funds; that 

certify the officials that were responsible for handling project funds; and certify the 

completion of a project. This allowed us to project the point estimate, or mean error rate, 

for all of these five categories of errors simultaneously with a 90 percent level of 

confidence, so that all intervals include their respective population error rate and number 

of errors across all 4,160 projects to state the error for the population total. For each 

individual category separately, there is a 98 percent level of confidence the projected 

error rate and number of errors is between the lower and upper bounds as illustrated in 

Table 2 below. 
 17 

Table 2: Projections Using 90 percent Simultaneous Confidence Bounds

Record Categories 

Error 

Measure

Lower

Bound

Point 

Estimate 

Upper

Bound

Certification of Commitment of Funds Number 579 907 1,234

 Rate 13.9% 21.8% 29.7%

Certification of Obligation of Funds Number 115 385 655

 Rate 2.8% 9.3% 15.7%

Certification of Disbursement of Funds Number 2,030 2,178 2,664

 Rate 48.8% 56.4% 64.0%

Certification of Officials Responsible for 

Project Funds 

Number 2,562 2,901 3,239

 Rate 61.6% 69.7% 77.9%

Certification of Completion of Project Number 1,840 2,347 2,516

 Rate 44.2% 52.4% 60.5%

Source: SIGIR

Then, to determine the errors for these categories, we only recorded an occurrence of an 

error when the record or document was not present in the project file at MNC-I. All other 

occurrences resulted in a “Present” mark. This included records with missing signatures, 

records and documents that were not applicable at the time of project completion, 

substituted documents as authorized, and records and documents for projects whose files 

were not present at MNC-I. The files for twenty projects were not present at MNC-I at 

the time we finished our review on October 27 2005: one project file from the MultiNational Division-Baghdad, one project file from the Multi-National Division-North 

Center, one project file from the Multi-National Division-Northeast, and 16 project files 

from the Multi-National Force-West. The results for the occurrences of all records for 

the 207 project folders we reviewed are tabulated in Appendix B below. 

Last, we analyzed the tool used by MNC-I to track the status of projects to assess the 

validity MNF-I’s data for the CERP. This included examining the following data sets: 

• distribution of projects by start dates 

• status of projects for planned, in-progress, complete, and cancelled projects 

• number of construction and non-construction projects 

• distribution of projects by MSC, project type, and obligations 

• total obligations for projects reported by project and program managers to MNC-I 

 

To determine if MNF-I effectively coordinated CERP projects, where appropriate, we 

interviewed officials and obtained relevant documentation from MNF-I and its 

subordinate units, the DoS, and the USAID to understand how reconstruction programs, 

including the CERP, were coordinated across U.S. government agencies in Iraq. We also 

attended several strategic interagency coordination meetings held in the U.S. Embassy – 

Iraq to further observe how reconstruction activities are coordinated. Furthermore, we 

reviewed MNF-I, DoS, and USAID plans to coordinate reconstruction programs in FY 

2006 and queried officials on how the CERP will be integrated into these plans. 

We conducted this audit from August 2005 through January 2006, in accordance with 

generally accepted government auditing standards. 
 18 

Use of Computer-Processed Data. We did not use computer-processed data to perform 

this audit. 

Prior Coverage. SIGIR reported on October 13, 2005 in “Management of Commander’s 

Emergency Response Program for Fiscal Year 2004” (SIGIR-2005-014) that CERPappropriated funds were properly used for their intended purposes, but overall controls 

over the distribution of appropriated funds were not consistently followed, and the 

required project documentation for CERP projects was not consistently used to ensure 

accountability of projects. This report did not contain recommendations, therefore, no 

management response was required; however, the findings of this report were the basis 

for our current review of the FY 2005 projects and funds. Other SIGIR reports covering 

the CERP include SIGIR Report No. SIGIR 05-022 “Managing Sustainment for Iraq 

Relief and Reconstruction Fund Programs” (October 24, 2005). 

In addition, the Army Audit Agency (AAA) is currently conducting a series of audits on 

the funds allocated to MNSTC-I for CERP projects in FY 2005. We met with the audit 

team from AAA and developed our audit methodology to ensure we did not duplicate 

their efforts. As a result, we did not review the project records of any MNSTC-I projects, 

however, the funding data for MNSTC-I projects was included in our analysis. Prior 

AAA reports on the CERP include: 

• Report A-2005-0173-ALE “Commanders’ Emergency Response Program and 

Quick Response Fund” (May 2, 2005) • Report A-2005-0332-ALE “Follow-Up of Commander’s Emergency Response 

Fund and Quick Response Fund” (September 30, 2005) • Project A-2006-ALE-0108.000 “Follow-Up II of Commander’s Emergency 

Response Program and Quick Response Fund” (Draft Report dated 2 December 

2005) 
 19 

Appendix B. Review of CERP Project Files 

Table 3 below summarizes the results of our review of the 207 completed projects of the 

207 CERP projects files we selected to assess whether the MSCs complied with guidance 

for submitting the 16 records and other project documents to MNC-I, as required by 

MNF-I guidance. As discussed above, the first ten types of records were grouped into 

five categories to project the errors for the population of 4,160 projects completed by 

September 5, 2005. 

 

Table 3: Occurrences of Project Records in CERP Project Files

MSC Occurrence

1. DA3953 or DD11492. SF 44(s) and/or SF 1449(s)3. DD Form 1081 [On Advance]4. DD Form 1081 [On Return]5. Appointment Letter for Purchasing Officer6. Appointment Letter for Pay Agent7. DD Form 577 for Purchasing Officer8. DD Form 577 for Paying Agent9. MSC Commander's Clearance Memo10. DD Form 25011. Project Proposal or Statement of Work12. Copy of Contract13. 3+ Vendors or Sole Source Justification Documented14. Invoice from Vendor(s)15. MSC Comptroller Clearance Memo16. MNC-I Approval for Projects With an Estimated Cost of $500,000 or More

Present 30 29 28 29 21 20 28 28 28 30 27 30 30 29 3 30

Error 0 1 2 1 9 10 2 2 2 0 3 0 0 1 27 0

Total 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30

Percent Present 100% 97% 93% 97% 70% 67% 93% 93% 93% 100% 90% 100% 100% 97% 10% 100%

Present 12 28 0 0 2 0 11 11 15 10 29 30 27 22 4 30

Error 18 2 30 30 28 30 19 19 15 20 1 0 3 8 26 0

Total 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30

Percent Present 40% 93% 0% 0% 7% 0% 37% 37% 50% 33% 97% 100% 90% 73% 13% 100%

Present 28 27 11 9 6 6 19 17 22 13 24 29 28 14 15 30

Error 2 3 19 21 24 24 11 13 8 17 6 1 2 16 15 0

Total 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30

Percent Present 93% 90% 37% 30% 20% 20% 63% 57% 73% 43% 80% 97% 93% 47% 50% 100%

Present 4 5 3 3 3 3 5 5 3 4 3 5 6 3 3 6

Error 2 1 3 3 3 3 1 1 3 2 3 1 0 3 3 0

Total 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6 6

Percent Present 67% 83% 50% 50% 50% 50% 83% 83% 50% 67% 50% 83% 100% 50% 50% 100%

Present 1 11 0 0 0 0 12 12 0 5 29 31 26 26 0 30

Error 30 20 31 31 31 31 19 19 31 26 2 0 5 5 31 1

Total 31 31 31 31 31 31 31 31 31 31 31 31 31 31 31 31

Percent Present 3% 35% 0% 0% 0% 0% 39% 39% 0% 16% 94% 100% 84% 84% 0% 97%

Present 30 28 28 30 23 27 26 28 19 24 17 29 26 21 24 30

Error 0 2 2 0 7 3 4 2 11 6 13 1 4 9 6 0

Total 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30

Percent Present 100% 93% 93% 100% 77% 90% 87% 93% 63% 80% 57% 97% 87% 70% 80% 100%

Present 20 28 5 5 7 0 22 20 2 13 18 30 28 14 0 30

Error 10 2 25 25 23 30 8 10 28 17 12 0 2 16 30 0

Total 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30 30

Percent Present 67% 93% 17% 17% 23% 0% 73% 67% 7% 43% 60% 100% 93% 47% 0% 100%

Present 125 156 75 76 62 56 123 121 89 99 147 184 171 129 49 186

Error 62 31 112 111 125 131 64 66 98 88 40 3 16 58 138 1

Total 187 187 187 187 187 187 187 187 187 187 187 187 187 187 187 187

Percent Present 67% 83% 40% 41% 33% 30% 66% 65% 48% 53% 79% 98% 91% 69% 26% 99%

Present 18 20 16 17 13 14 19 19 17 20 20 14 20 17 4 14

Error 2 0 4 3 7 6 1 1 3 0 0 6 0 3 16 6

Total 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20

Percent Present 90% 100% 80% 85% 65% 70% 95% 95% 85% 100% 100% 70% 100% 85% 20% 70%

Present 143 176 91 93 75 70 142 140 106 119 167 198 191 146 53 200

Error 64 31 116 114 132 137 65 67 101 88 40 9 16 61 154 7

Total 207 207 207 207 207 207 207 207 207 207 207 207 207 207 207 207

Percent Present 69% 85% 44% 45% 36% 34% 69% 68% 51% 57% 81% 96% 92% 71% 26% 97%

Total for All 

Projects 

MultiNational 

Force - North 

West

MultiNational 

Force - West

MultiNational 

Division - 

Baghdad 

MultiNational 

Division - 

Center South

MultiNational 

Division - 

North Center

MultiNational 

Division - 

North East

MultiNational 

Division - 

South East

Total for 

Random 

Sample

Total for Top 

20 
 20 

Appendix C. CERP Fund Uses & Restrictions 

Listed below are the uses and restrictions for the CERP for FY 2005, along with the total 

year-end obligations for each category as reported to us by MNF-I. The Office of the 

Under Secretary of Defense-Comptroller published a list of uses and restrictions for the 

CERP on November 25, 2003, and then augmented this list on February 18, 2005, and 

July 27, 2005. 

Uses. Appropriated funds for the CERP were used for projects to meet urgent 

humanitarian relief and reconstruction requirements to assist the Iraqi people in the 

following 19 areas in FY 2005 in table 4 below. 

 

Table 4: CERP Uses, and Reported Projects and Obligations for FY 2005

Uses 

Number of 

Projects 

Total

Obligations

1. Water and sanitation 1369 $234,363,373

2. Food production and distribution 44 $2,245,472

3. Agriculture 74 $12,442,237 

4. Electricity 522 $73,952,460 

5. Healthcare 414 $32,060,661

6. Education 1188 $68,776,477 

7. Telecommunications 155 $26,154,212 

8. Economic, financial, and management improvements 267 $14,237,727

9. Transportation 680 $105,475,157 

10. Rule of law and governance 531 $31,491,415 

11. Irrigation 63 $8,690,243 

12. Civic cleanup activities 343 $15,747,956 

13. Civic support vehicle 65 $5,486,643 

14. Repair of civic and cultural facilities 353 $13,873,578 

15. Repair of damage that results from U.S., coalition, or 

supporting military operations and is not 

compensable under the Foreign Claims Act** 

168 $6,791,468

16. Condolence payments to individual civilians for 

death, injury, or property damage resulting from U.S. 

coalition, or supporting military operations** 

631 $14,866,544

17. Payment to individuals upon release from 

detention** 

0 0

18. Protective measures to enhance the durability and 

survivability of critical infrastructure sites** 

52 $16,452,392 

19. Other urgent humanitarian or reconstruction projects 759 $51,869,018

Total 7,678 $734,977,033

Source: SIGIR and MNF-I as of October 24, 2005 
 21 

Restrictions. Appropriated funds made available for the CERP shall not be used for the 

following 10 purposes: 

1. Activities with a direct or indirect benefit to U.S., Coalition, or other supporting 

personnel 

2. Providing goods, services, or funds to national armies, national guard forces, border 

security forces, civil defense forces, infrastructure protection forces, highway patrol 

units, police, special police, or intelligence or other security forces** 

3. Except as authorized by law and separate implementing guidance, weapons buy-back 

programs, or other purchases of firearms or ammunition 

4. Entertainment 

5. Rewards program 

6. Removal of unexploded ordnance 

7. Duplication services available through municipal governments 

8. Salaries, bonuses, or pensions of Iraqi or Afghan military or civilian government 

personnel* 

9. Training, equipping, or operating costs of Iraqi security forces** 

10. Conducting psychological operations, information operations, or other U.S., coalition, 

or Iraqi/Afghan security force operations** 

* Added on February 18, 2005 

** Added on July 27, 2005 
 22 

Appendix D. Acronyms 

ARCENT U.S. Army Forces Central Command 

CERP Commanders Emergency Response Program 

DoD Department of Defense 

DoS Department of State 

GRD U.S. Army Corps of Engineers Gulf Region Division 

MNC-I Multi-National Corps-Iraq 

MNF-I Multi-National Force-Iraq 

MNSTC-I Multi-National Security Transition Command-Iraq 

MSC MNF-I Major Subordinate Command 

OTI USAID Office of Transition Initiatives 

SIGIR Special Inspector General for Iraq Reconstruction 

USAID U.S. Agency for International Development 
 23 

Appendix E. Report Distribution 

Department of State 

Secretary of State 

Senior Advisor to the Secretary and Coordinator for Iraq 

U.S. Ambassador to Iraq 

Director, Iraq Reconstruction Management Office 

Inspector General, Department of State 

Department of Defense 

Secretary of Defense 

Deputy Secretary of Defense 

Director, Defense Reconstruction Support Office 

Under Secretary of Defense (Comptroller)/Chief Financial Officer 

 Deputy Chief Financial Officer 

 Deputy Comptroller (Program/Budget) 

Inspector General, Department of Defense 

Department of the Army 

Assistant Secretary of the Army for Acquisition, Logistics, and Technology 

Principal Deputy to the Assistant Secretary of the Army for Acquisition, 

Logistics, and Technology 

Deputy Assistant Secretary of the Army (Policy and Procurement) 

Director, Project and Contracting Office 

Commanding General, Joint Contracting Command – Iraq/Afghanistan 

Assistant Secretary of the Army for Financial Management and Comptroller 

Chief of Engineers and Commander, U.S. Army Corps of Engineers 

 Commanding General, Gulf Region Division 

Auditor General of the Army 

U.S. Central Command

Commanding General, Multi-National Force – Iraq 

 Commanding General, Multi-National Security Transition Command – Iraq 

 Commander, Joint Area Support Group – Central 

Other Defense Organizations

Director, Defense Contract Audit Agency 
 24 

Other Federal Government Organizations 

Director, Office of Management and Budget 

Comptroller General of the United States 

Inspector General, Department of the Treasury 

Inspector General, Department of Commerce 

Inspector General, Department of Health and Human Services 

Inspector General, U.S. Agency for International Development 

Mission Director – Iraq, U.S. Agency for International Development 

Congressional Committees and Subcommittees, Chairman and 

Ranking Minority Member 

U.S. Senate 

Senate Committee on Appropriations 

Subcommittee on Defense 

Subcommittee on State, Foreign Operations and Related Programs 

Senate Committee on Armed Services 

Senate Committee on Foreign Relations 

Subcommittee on International Operations and Terrorism 

Subcommittee on Near Eastern and South Asian Affairs 

Senate Committee on Homeland Security and Governmental Affairs 

Subcommittee on Federal Financial Management, Government Information and 

International Security 

Subcommittee on Oversight of Government Management, the Federal 

Workforce, and the District of Columbia 

U.S. House of Representatives 

House Committee on Appropriations 

Subcommittee on Defense 

Subcommittee on Foreign Operations, Export Financing and Related Programs 

Subcommittee on Science, State, Justice and Commerce and Related Agencies 

House Committee on Armed Services 

House Committee on Government Reform 

Subcommittee on Management, Finance and Accountability 

Subcommittee on National Security, Emerging Threats and International 

Relations 

House Committee on International Relations 

Subcommittee on Middle East and Central Asia 
 25 

Appendix F. Audit Team Members 

This audit report was prepared and the audit work was conducted under the 

direction of Joseph T. McDermott, the Assistant Inspector General for Auditing, 

Office of the Special Inspector General for Iraq Reconstruction. The staff members 

who contributed to the report include: 

Walt Keays 

Ronald Rembold 

Clifton Spruill 

Jason Venner 

In addition, the following staff from the DoD Office of the Inspector General, 

Quantitative Methods Division contributed to the report: 

James Hartman 

Kandasamy Selvavel 
 26 

Management Comments 

Multi-National Corps-Iraq 
 27