OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

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SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

 

January 30, 2007 

MEMORANDUM FOR U.S. AMBASSADOR TO IRAQ 

 DIRECTOR, IRAQ RECONSTRUCTION MANAGEMENT OFFICE 

MISSION DIRECTOR-IRAQ, U.S. AGENCY FOR INTERNATIONAL 

DEVELOPMENT 

COMMANDING GENERAL, MULTI-NATIONAL FORCE-IRAQ 

COMMANDING GENERAL, MULTI-NATIONAL SECURITY 

TRANSITION COMMAND-IRAQ 

COMMANDING GENERAL, U.S. ARMY CORPS OF ENGINEERS, 

GULF REGION DIVISION 

 

SUBJECT: Status of Ministerial Capacity Development in Iraq (SIGIR 06-045) 

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

in accordance with our statutory duties contained in Public Law 108-106, as amended, 

which requires that we provide for the independent and objective conduct of audits, as 

well as leadership and coordination of and recommendations on policies designed to 

promote economy, efficiency, and effectiveness in the administration of programs and 

operations and to prevent and detect waste, fraud, and abuse. We initiated subject review 

to determine whether U.S. government organizations had plans and programs in place for 

capacity development in the Iraqi government ministries. 

We considered comments received on the draft of this report from the Iraq 

Reconstruction Management Office, the U.S. Agency for International Development, and 

the Multi-National Security Transition Command-Iraq when preparing the final report. 

Their comments were addressed in the report, where applicable, and copies of formal 

agency responses are included in the Management Comments section of this report. 

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

report, please contact Mr. Joseph T. McDermott, Assistant Inspector General for Audit, 

(703-604-0982 / joseph.mcdermott@sigir.mil); or Mr. Glenn Furbish (914-360-3573/ 

glenn.furbish@iraq.centcom.mil). For the report distribution, see Appendix D. 

Stuart W. Bowen, Jr. 

 Inspector General 

cc: See Distribution 

400 Army Navy Drive • Arlington, Virginia 22202
Table of Contents 

Executive Summary i

Introduction 

 Background 1 

 Objectives 4 

Assessing Ministerial Competency 6 

Capacity-development Programs 8

Measuring Progress 13 

Funding Requirements 14 

Donor Nations/Institutions 16

Conclusion and Recommendations 18

Appendices 

A. Scope and Methodology 21 

B. Iraqi National Unity Government 23 

C. Acronyms 24 

D. Report Distribution 25 

E. Audit Team Members 27 

Management Comments 

Iraq Reconstruction Management Office (IRMO) 28

Mission-Iraq, U.S. Agency for 

 International Development (USAID) 30 

 Multi-National Force-Iraq (MNF-I) 33
Status of Ministerial Capacity 

Development in Iraq 

SIGIR-06-045 January 30, 2007

Executive Summary 

Introduction 

Iraq’s governing capacity has suffered from years of centralized control that led to the 

decay of core functions in many key institutions and ministries. Government systems and 

processes weakened in such areas as strategic and policy planning, finance, information 

technology, and human resources management. For almost 30 years, the central 

government neglected to develop a professional civil service, which fostered poor 

management practices. After the fall of Saddam Hussein’s regime in 2003, governing 

capacity continued to deteriorate during the formation of multiple governments: 

• provisional Iraqi Governing Council, established by the U.S.-led Coalition 

Provisional Authority in 2003 

• Iraqi Interim Government in 2004 

• Iraqi Transitional Government in 2005 

• elected Government of Iraq which took office in May 2006 

The current government, in office for about seven months, must deal with the ongoing 

sectarian strife and increased violence that continues to impede Coalition nation-building 

and related capacity-development efforts. 

The implications of Iraq’s poor governing capacity became fully apparent when some 

infrastructure facilities constructed or rehabilitated under the U.S. government’s 

reconstruction effort failed or operated in suboptimal conditions after their handover in 

2004 and 2005. Public Law 108-106, Emergency Supplemental Appropriations Act for 

Defense and the Reconstruction of Iraq and Afghanistan (2004), had encouraged U.S. 

organizations receiving reconstruction funds to provide significant financial resources, 

technical assistance, and capacity building to counterpart organizations. We found that 

those programs addressing Iraq’s ministerial capacity-development needs were just 

beginning at the time of our evaluation. 

i
The November 2005 U.S. National Strategy for Victory in Iraq; and the April 2006 Joint 

Campaign Plan—issued by the Chief of Mission, U.S. Embassy-Iraq, and the 

Commanding General of the Multi-National Force-Iraq (MNF-I)—together provided the 

broad policy and program guidance. These documents identified Iraqi national capacity 

development as a key component of U.S. strategic, political, security, and economic 

objectives in Iraq. 

Capacity development is defined as an activity or multiple activities that lead to the 

transfer of knowledge, skills, and abilities across a range of functions over a period of 

time. It is also an essential prerequisite for sustainment, thus enabling individuals, units, 

organizations, and systems to perform functions efficiently to establish sustainable 

operations. The U.S. Embassy’s Iraq Reconstruction Management Office (IRMO), the 

U.S. Agency for International Development (USAID), the U.S. Army Corps of Engineers 

Gulf Region Division (GRD), and the Multi-National Security Transition Command-Iraq 

(MNSTC-I) have designed internal programs to strengthen the management capability of 

Iraq’s executive institutions and key ministries, using recently released FY 2006 

supplemental funding. Other participants in ministerial capacity building include IRMO’s 

senior consultants and U.S. Embassy’s officers (Justice, Treasury, and Economic 

Affairs). These organizations and individuals receive strategic and policy guidance from 

the Executive Steering Committee, which comprise U.S. Mission, USAID, and U.S. 

military officials. In September 2006, the Joint Task Force on Capacity Development was 

created to coordinate the capacity-development initiatives of all U.S. government 

organizations, and makes recommendations to the Executive Steering Committee. We 

were also told by IRMO officials that the Joint Task Force ensures that capacitydevelopment activities meet the objectives of the Joint Campaign Plan. 

This audit examined the status of the ministerial capacity-development initiatives in Iraq 

as of December 2006. 

Objectives

The objectives of this audit were to determine whether U.S. government organizations 

had plans and programs in place for capacity development in the Iraqi government 

ministries. Specifically, we addressed the following questions: 

• Have U.S. government organizations, such as the Department of State and USAID, 

assessed the competency of the responsible Iraqi ministries for the long-term 

management of essential government functions and services? 

• What are their programs for addressing the identified shortcomings? 

• What performance indicators or metrics will be used to measure progress, and who 

has overall responsibility for measuring progress? 

• Have U.S. government organizations identified adequate funding? 

ii
• Is the U.S. government working with other donor nations and institutions to 

coordinate, fund, and develop solutions for a comprehensive capacity-development 

program in future years? 

Results 

The first step in capacity-development planning is a clear assessment of the competencies 

and needs of the Government of Iraq. Yet, as told to us by IRMO staff, the crucial task of 

assessing Iraqi ministerial competency has been hampered by multiple temporary 

governments in which senior officials not only purged the remaining skilled ministerial 

staff, but also replaced them with persons hired more for their ethnic loyalty and/or 

family relationship than for their qualifications. Nonetheless, since the Coalition 

Provisional Authority established the Iraqi Governing Council in mid-2003, many U.S. 

government officials have been working within the key Iraqi ministries. Through their 

ongoing interaction with Iraqi ministers and subordinates, U.S. government officials have 

developed first-hand knowledge of the abilities and needs of the respective institutions. 

However, this information is not always available, shared, or utilized across all U.S. 

agencies, hampering overall coherence and possibly program effectiveness. Without a 

clear understanding as to what needs are to be achieved, individual U.S. government 

organizations have initiated individual projects to support the defined National Strategy 

for Victory in Iraq. 

The majority of U.S. government capacity-development activities conducted to date have 

been internally driven and responsive to individual agency direction rather than a part of 

an overarching U.S. government capacity-building plan or program that defines roles and 

responsibilities, goals, objectives, and milestones. In April 2006, the Chief of Mission, 

U.S. Embassy-Iraq, and the Commanding General of MNF-I issued a Joint Campaign 

Plan that provides broad capacity-development policy and program guidance, but the 

Plan lacks the specific guidance to direct agency activities. Without a more detailed plan, 

we could not determine how these ongoing activities contribute to overall U.S. 

government objectives. A contributing problem seems to be that no one office or person 

is clearly in charge of the overall U.S. government capacity-development effort. Rather, 

functional responsibility for ministerial capacity development was intentionally divided: 

IRMO’s Ministerial Coordination Team (MCT) addresses immediate short-term process 

and system problems at the ministries, and USAID focuses on the medium- to long-term 

institution building. Additionally, other U.S. organizations and offices conduct capacitydevelopment activities at the ministries, including IRMO’s senior consultants, U.S. 

Embassy’s officers (Justice, Treasury, and Economic Affairs), MNSTC-I’s embedded 

advisors at the security ministries (Defense and Interior), and GRD’s functional experts at 

the essential services ministries (Oil, Electricity, Water Resources, Municipalities and 

Public Works, and Health). Without a detailed plan identifying common expectations that 

relate to both short- and long-term initiatives, resources may be wasted because ongoing 

initiatives may not be compatible with overall program goals. 

iii
In concept, these organizations’ discrete efforts should be coordinated by the recently 

formed Joint Task Force on Capacity Development. Although created to identify issues, 

critical paths, gaps, and redundancies in capacity-development initiatives for all U.S. 

government organizations and, subsequently, to make recommendations to the Executive 

Steering Committee for respective ministerial action, we found that the Joint Task Force 

had limited authority to coordinate the various activities and to establish an overall 

capacity-development agenda. At the time of our review, the Task Force members were 

still at the stage of cataloguing their various activities and had yet to identify critical 

programming paths or how to leverage their resources and activities with each other or 

with their Iraqi counterparts. 

As reported, multiple organizations and offices, have engaged the Iraqi ministries in 

numerous capacity-development activities. However, during the course of this review, we 

determined that U.S. government organizations introduced many of their activities 

without articulating clear achievable goals, especially the basis for measuring progress. 

Although some organizations had developed, or were in the process of developing, their 

own individual program objectives and performance measures, we noted the lack of a 

system to measure overall progress. And, most important, no single U.S. government 

office or official is responsible or accountable for measuring and reporting on overall 

U.S. ministerial capacity-development progress. 

In the absence of action plans, U.S. government organizations could not estimate how 

much funding would be necessary to achieve the goal of a self-sufficient Iraqi 

government. Agency officials explained that their capacity-development budgets were 

structured around their respective programs and that their programs were based on the 

level of funding that was allocated to them, not on an assessment of requirements to 

achieve the overall U.S. government goal. For fiscal year 2006, IRMO and USAID 

received approximately $125 million. USAID has requested an additional $310 million 

for activities in fiscal year 2007 ($190 million) and fiscal year 2008 ($120 million), and 

IRMO has requested an additional $70 million for activities in fiscal year 2007. 

Congress has not yet approved the fiscal year 2007 budgets for the Department of State 

and USAID; the agencies are operating under a continuing resolution based on their fiscal 

year 2006 funding. 

More than 40 nations and international institutions have pledged more than $15 billion 

for the reconstruction of Iraq, as of December 30, 2006. These bilateral and multilateral 

donors have played a limited role in Iraqi ministerial capacity-development 

programming. However, we were able to identify some capacity-development 

programs—two by the United Kingdom and several implemented through the United 

Nations Development Group Iraq Trust Fund and the World Bank Iraq Trust Fund. 

Though the United States works in close consultation with the United Kingdom on 

capacity-development activities at several Iraqi government offices, including the 

Ministry of Interior, we were unable to determine whether U.S. government managers 

took any steps to jointly develop and fund capacity-development programs with other 

bilateral or multilateral donors. The international community continues to negotiate the 

iv
details of the International Compact for Iraq,1

 projected to be completed in early 2007. 

We believe that the Compact presents the U.S. government with an excellent opportunity 

to actively work with participating bilateral and multilateral donors to assist in the 

planning, execution, and funding of a unified comprehensive capacity-development 

program in Iraq.

Recommendations 

We recommend that the U.S. Ambassador to Iraq and the Commanding General, MNF- I, 

take these actions: 

1. Develop a capacity assessment baseline for each ministry based on an agreed-on 

criterion that uses (a) the input from the individual U.S. organizations that have had 

an ongoing presence within the Iraqi ministries and (b) the assessment conducted by 

IRMO/MCT. 

2. Develop a mechanism to share this information among the U.S. organizations 

involved in the ministry capacity-development program. 

3. Develop a detailed plan, in concert with the Government of Iraq, including clearly 

defined objectives and outcome-related performance measures, milestones for 

achieving stated objectives, and future funding requirements, for implementing a 

unified comprehensive capacity-development program to enable the Iraqi government 

to provide sustainable security and services to the Iraqi public. 

4. Actively work with other bilateral and multilateral donors through the International 

Compact for Iraq process to assist in the planning, execution, and funding of a unified 

comprehensive capacity-development program in Iraq. 

5. Assign clear responsibility for the overall U.S. capacity-development effort to one 

U.S. government official or organization. 

Management Comments and Audit Response 

We received written comments on a draft of this report from IRMO, USAID, and MNF-I. 

Overall, the organizations generally concurred with our five recommendations. USAID 

disagreed on some of the methods of implementation. We are pleased to report that 

IRMO and MNF-I indicated in their comments that they had or were in the process of 

implementing all of the report’s recommendations. IRMO, USAID, MNF-I, and 

MNSTC-I also provided technical comments, which have been incorporated in the report 

 

1

 The International Compact for Iraq is a joint Government of Iraq and United Nations effort launched in 

July 2006 to bring together the international community and multilateral organizations to spur political, 

economic, and social development in Iraq. 

v
where appropriate. We consider that all comments received are responsive to the intent 

of the recommendations. 

However, for recommendation 5, “assign clear responsibility for the overall U.S. 

capacity-development effort to one U.S. government official or organization,” we believe 

that IRMO’s response of assigning this responsibility to the Joint Task Force for Capacity 

Development may not resolve the organizational and program management challenges 

confronting the U.S. capacity development initiative. As we observed during our 

assessment, the Joint Task Force is a useful mechanism for information sharing but lacks 

the authority to direct organizations in a coordinated manner. However, the Joint Task 

Force is an organization that coordinates rather than has an accountable management 

responsibility or authority. 

We believe this accountability with the appropriate authority is particularly important in 

addressing cross-ministerial management problems with multiple implementing agencies 

and organizations. IRMO, stated in its comments that the magnitude and complexity of 

the challenges faced in Iraq, combined with the many U.S. government entities involved, 

presents an organizational challenge of some magnitude. We agree. As such, we continue 

to believe—and USAID’s response to the draft report supported—that assigning overall 

responsibility to a single official or office with directive authority is the best way forward 

to address these organizational challenges. USAID responded that “the best scenario 

would be for a single organization to receive all funding for capacity development with 

the head of that organization named as the one U.S. government official responsible for 

U.S. capacity development efforts.” 

MNF-I, in its response to the draft of this report, stated that recommendation 5 is already 

completed because the “Secretary of State has appointed the Coordinator for 

Reconstruction (Ambassador Carney). Further, in accordance with Appendix 4 

(Effective Government and Essential Services) to Annex V (Campaign Objectives) of the 

Joint Campaign Plan, National Capacity Development is managed by the Joint Executive 

Steering Committee, which decides on issues related to the multi-level capacitydevelopment initiatives and ensures efforts are synchronized.” 

Based on the various responses to our recommendation 5, we believe that this 

recommendation remains valid. Further, as demonstrated by the responses and our 

discussions with other ministerial capacity-development participants, the overall 

responsibility for capacity-development has not been clearly assigned. 

vi
Introduction

Background 

Iraq’s governing capacity has suffered from years of centralized control that led to the 

decay of core functions in many key institutions and ministries. Government systems and 

processes weakened in such areas as strategic and policy planning, finance, information 

technology, and human resources management. According to U.S. Mission officials, for 

almost 30 years, the central government neglected to develop a professional civil service, 

which fostered poor management practices. Two collateral events—the Coalition 

Provisional Authority’s debaathification policies initiated after the fall of Saddam 

Hussein’s regime and the subsequent “brain drain” of professional staff that fled Iraq’s 

ongoing violence—decimated the government’s managerial class. 

Governing capacity continued to deterioration during the formation of multiple temporary 

governments, when senior officials not only purged the remaining skilled ministerial staff 

but also replaced them with persons hired more for their ethnic loyalty and/or family 

relationship than for their qualifications. Following Operation IRAQI FREEDOM in 2003, 

the Iraqis underwent the planned evolution of four governments: 

• provisional Iraqi Governing Council, established by the U.S.-led Coalition 

Provisional Authority in 2003 

• Iraqi Interim Government in 2004 

• Iraqi Transitional Government in 2005 

• elected Government of Iraq which took office in May 2006 

The current government, in office for about seven months, must deal with the ongoing 

sectarian strife and increased violence that continues to impede Coalition nation-building 

and related capacity-development efforts. 

The U.S. government faces significant challenges as it works to build governing capacity 

at key Iraqi institutions and ministries. Several Iraqi ministries are under the control of 

political parties that appear more concerned with furthering sectarian interests than the 

governance and capacity-development objectives of the representative government. 

According to U.S. Mission-Iraq officials, staffing at some ministries is frequently based 

upon religious and clan loyalty as opposed to merit or qualifications, thus undermining 

the capacity-development goal of training a competent workforce. 

The continued threat of violence by anti-Iraqi forces against Coalition members and Iraqi 

officials viewed as cooperating with the Coalition limits the ability of capacitydevelopment experts to interact with their Iraqi counterparts. While meetings are possible 

within the International Zone, the risk of violence affects the delivery of capacitydevelopment support to ministries and institutions, such as the Iraqi Ministries of 

Finance, Interior, and Electricity. For example, U.S. Agency for International 

1
Development (USAID) officials told us that their main Iraqi counterpart, the National 

Center for Consultations and Management Development, located in the Baghdad suburbs, 

asked the USAID officials not to visit the center’s compound because of the risk their 

presence would present. USAID officials also told us that they have been unable to assess 

the operations of potential implementing partners at regional training centers in Mosul 

and Basrah because of the security situation. In addition, the Multi-National Security 

Transition Command-Iraq (MNSTC-I) advisors working in Iraq’s security ministries 

(Defense and Interior) reported to us that it is very difficult to conduct capacitydevelopment activities while simultaneously engaged in ongoing security operations. 

Capacity-development Participants 

As reported by various agencies, the implications of Iraq’s poor governing capacity 

became fully apparent when some of the critical infrastructure facilities constructed or 

rehabilitated under the U.S. government’s reconstruction effort failed or operated in 

suboptimal conditions after their handover in 2004 and 2005.2

 Public Law 108-106, 

Emergency Supplemental Appropriations Act for Defense and the Reconstruction of Iraq 

and Afghanistan (2004), had encouraged U.S. organizations receiving reconstruction 

funds to provide significant financial resources, technical assistance, and capacity 

building to counterpart organizations. We found that those programs addressing Iraq’s 

ministerial capacity-development needs were just beginning at the time of our evaluation. 

The November 2005 U.S. National Strategy for Victory in Iraq; and the April 2006 Joint 

Campaign Plan—issued by the Chief of Mission, U.S. Embassy-Iraq and the 

Commanding General of the Multi-National Force-Iraq (MNF-I)—together provided the 

broad policy and program guidance. These documents identified Iraqi national capacity 

development as a key component of U.S. strategic, political, security, and economic 

objectives in Iraq. 

The Embassy’s Iraq Reconstruction Management Office (IRMO), USAID, U.S. 

Embassy-Iraq, the U.S. Army Corps of Engineers Gulf Region Division (GRD), and 

MNSTC-I have undertaken activities to strengthen the management capability of Iraq’s 

executive institutions (Prime Minister’s Office, Council of Ministers’ Secretariat, and 

Government Communications Directorate), its key enabling ministries (Finance, 

Planning, Interior, and Defense), and its key essential services ministries (Oil, Electricity, 

Water Resources, Municipalities and Public Works, and Health) using recently released 

FY2006 supplemental funding. The mutual goal is building the capacity of the 

Government of Iraq to provide sustainable security and services to the Iraqi public. 

 

2

 See Managing Sustainment for Iraq Relief and Reconstruction Fund Programs (SIGIR-05-022, October 

24, 2005); Challenges Faced in Carrying Out Iraq Relief and Reconstruction Fund Activities (SIGIR-05-

029, January 26, 2006); Audit of USAID/Iraq’s Electrical Power Activities (USAID/Inspector General-E267-05-003-P, June 29, 2005); and Rebuilding Iraq: Status of Funding and Reconstruction Efforts (GAO05-876, July 28, 2005). 

2
Capacity-development Initiatives 

Capacity development, defined as an activity or multiple activities that lead to the transfer 

of knowledge, skills, and abilities across a range of functions over a period of time, is a 

prerequisite for sustainment. An effective program, with appropriate level of budgetary 

resources, would enable individuals, units, organizations, and systems to perform 

functions efficiently to establish sustainable operations. According to a body of 

development literature, development investments without capacity development are not 

sustainable and lead to dependence or failure. IRMO has adopted a United Nations 

Development Program model that defines five levels of sustainable capacity development 

for organizations and offices engaged in Iraq’s reconstruction effort.3

 Collectively, the 

five levels serve as the overarching framework for capacity-development initiatives by 

IRMO, USAID, U.S. Embassy-Iraq, GRD, and MNSTC-I, as well as donor nations. Each 

level targets broad governmental functions and usually includes one or more of these 

participants, as follows: 

• Level 1 (Enabling Environment) covers the formulation of the strategic policy, 

vision, and commitment at the highest levels of the Iraqi government structure to 

enable, facilitate, and promote sustainable capacity-development frameworks and 

activities at the implementation level. Participants include the Iraqi government 

(political), the Department of State, IRMO, and donor nations. 

• Level 2 (Legal, Regulatory, and Policy Frameworks) entails the driving 

mechanisms and requirements that support a sustainable infrastructure. 

Organizations can function effectively only if the appropriate laws, regulations, 

and polices are in place at the appropriate level of government. Participants 

include the Iraqi government (Legislative and Cabinet), State Department, IRMO, 

USAID, and donor nations. 

• Level 3 (Interorganizational Systems and Processes) encompasses the systems 

and processes by which all public and private sector Iraqi stakeholders work 

toward the common goal of creating a sustainable infrastructure and delivery of 

services. Participants include Iraqi ministries, IRMO, USAID, and donor nations. 

• Level 4 (Iraqi Ministries) focuses on establishing functional business and 

organizational systems (budgeting, planning, human resources, and information 

management) within each ministry/sector necessary to support sustainable 

infrastructure and services. Participants include Iraqi ministries, IRMO, USAID, 

GRD, MNSTC-I, and donor nations. 

• Level 5 (Infrastructure) provides targeted labor force training and development to 

Iraqis at the plant or facility level to enable them to operate and maintain new 

and/or renovated equipment and other mechanical systems. Participants include 

Iraqi ministries, USAID, GRD, MNSTC-I, and donor nations. 

 

3

 Iraq Reconstruction Management Office, Iraq Reconstruction Program: Framework for Iraq 

Infrastructure Sustainability, June 11, 2006. 

3
The formulation of this capacity-development framework had evolved through the efforts 

of disparate organizations in 2005. Several organizations have reported capacitydevelopment problems related to U.S.-funded reconstruction projects. For example, an 

informal U.S. Mission/MNF-I working group raised their concerns that it was not 

receiving the attention it deserved. Beginning in mid-2005, a series of reports by the 

Special Inspector General for Iraq Reconstruction, the USAID Inspector General, and the 

U.S. Government Accountability Office reported that capacity-development problems 

jeopardized billions of dollars of investments in Iraq’s infrastructure and recommended 

that activities to develop the capacity of the Iraqi government to support and budget for 

sustaining projects be included in U.S. reconstruction programs. 

In the fall of 2005, IRMO and USAID began discussions to outline a national capacitydevelopment program to provide Iraqi ministries and executive institutions capacitydevelopment support structured along two tracks, short-term and medium- to long-term. 

In April 2006, it was determined that the short-term program (6-12 months) would be 

managed by IRMO and focus on such immediate, high-priority activities as budget 

execution, skills development, and legislative/regulatory backlogs; the medium- to longterm program (12-36 months) would be managed by USAID and center on institution 

building and civil service reform, reinforced with Iraqi-led training programs. The roles 

and responsibilities of the other ministerial capacity-development participants have not 

been clarified in written plans. 

Responsibility for coordinating and supporting U.S. government capacity-building efforts 

at key Iraqi ministries and institutions rests with IRMO’s Ministerial Coordination Team, 

formed in February 2006 and staffed by U.S. Mission, MNF-I, USAID, and other 

Coalition partners. The Ministerial Coordination Team, which receives strategic and 

policy guidance from the Executive Steering Committee, also chairs the Joint Task Force 

on Capacity Development. The Executive Steering Committee which comprise U.S. 

Mission officials, U.S. military and other Coalition representatives. The Joint Task 

Force, created in September 2006, has the mission of coordinating the capacitydevelopment initiatives of all U.S. government organizations and, subsequently, making 

recommendations to the Executive Steering Committee for respective ministerial action. 

The Joint Task Force members include, but are not limited to, the U.S. Embassy-Iraq, 

IRMO, USAID, GRD, MNSTC-I, and the Multi-National Corps-Iraq. 

Objectives

The objectives of this audit were to determine whether U.S. government organizations 

had plans and programs in place for capacity development in the Iraqi government 

ministries. Specifically, we addressed the following questions: 

• Have U.S. government organizations, such as the Department of State and 

USAID, assessed the competency of the responsible Iraqi ministries for the longterm management of essential government functions and services? 

• What are their programs for addressing the identified shortcomings? 

4
• What performance indicators or metrics will be used to measure progress, and 

who has overall responsibility for measuring progress? 

• Have U.S. government organizations identified adequate funding? 

• Is the U.S. government working with other donor nations and institutions to 

coordinate, fund, and develop solutions for a comprehensive capacitydevelopment program in future years? 

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

organization of the Iraqi National Unity Government, see Appendix B. For the acronyms 

used in this report, see Appendix C. For the report distribution, see Appendix D. For the 

audit team members, see Appendix E. 

5
Assessing Ministerial Competency

Assessing the competency and needs of the Iraqi ministries is a critical step in planning 

for capacity development. Yet, as told to us by IRMO staff, the crucial task of assessing 

Iraqi ministerial competency has been hampered by multiple temporary governments in 

which senior officials not only purged the remaining skilled ministerial staff, but also 

replaced them with persons hired more for their ethnic loyalty and/or family relationship 

than for their qualifications. Nonetheless, since the Coalition Provisional Authority 

established the Iraqi Governing Council in mid-2003, many U.S. government officials, 

including IRMO’s senior consultants, have been working with the key Iraqi ministries. 

Through their ongoing interaction with Iraqi ministers (see Appendix B) and their 

subordinates, U.S. government officials have developed first-hand knowledge of the 

abilities and needs of the respective institutions. Based on our interviews and review of 

reports and documents, we believe these officials have acquired a general understanding 

of Iraqi ministerial capabilities and shortcomings. However, this information is not 

always available, shared, or utilized across all U.S. agencies, hampering overall 

coherence and possibly program effectiveness. Without a clear understanding as to what 

needs are to be achieved, individual U.S. government organizations have initiated 

individual projects to support the defined National Strategy for Victory in Iraq. 

In August 2006, IRMO conducted an assessment of two enabling ministries (Finance and 

Planning), the five essential services ministries (Oil, Electricity, Water Resources, 

Municipalities and Public Works, and Health), and three others (Justice, Agriculture, and 

Education) based on general goals articulated in the Joint Campaign Plan—security, 

governance, and economic development. The assessment measured each ministry’s 

ability to carry out and sustain nine major functions and fifty-four subfunctions, including 

sustaining outputs, transparent financial systems, adequate technology resources, and 

effective information management systems. IRMO developed a color-coded bar graph, 

with four scoring levels to evaluate performance capacity: 

• Red (0-25%) 

• Amber (25-50%) 

• Yellow (50-75%) 

• Green (75-100%) 

Our review of the assessment tool indicated that it provided general information on each 

ministry’s ability to conduct business and lacked specific information to assist capacitydevelopment experts in devising corrective actions. However, IRMO officials told us that 

the results of this assessment serve as the basis for planning short-term capacity 

development activities. However, because the final assessment was classified, it had 

limited distribution or visibility outside of IRMO. 

6
USAID, as part of its capacity-development program, plans to work together with its 

Iraqi counterpart, the National Center for Consultations and Management Development4

, 

to identify and mentor a cadre of up-and-coming staff members within the Iraqi 

ministries, the objective being to begin a collaborative self-assessment process that will 

lead to specific capacity-development plans. Thereafter, USAID will assist the ministries 

with the implementation of their own capacity-development plans. USAID’s draft work 

plan envisions starting work in the first two ministries in winter/spring 2007. 

Another organization, MNSTC-I, has been monitoring the performance of the Defense 

and Interior ministries since in June 2004. 

We found that the information collected about the capacity-development shortfalls of a 

particular ministry is not effectively shared or understood across organizations. For many 

of the Government of Iraq’s capacity problems affect multiple ministries and cannot be 

solved on an ad hoc basis. For example, obtaining fuel for the Iraqi Security Forces is a 

critical problem that must be addressed at multiple ministries. However, at the time of 

our review, we found no U.S. government program that addressed a solution by utilizing 

management capacity building across the ministries involved. 

Mission officials told us that assisting ministries to convert budget resources into such 

essential services as reliable electricity, potable water, sewage disposal, and security is 

their top capacity-development priority, for the present system is underperforming. U.S. 

Mission officials view the Iraqi government’s inability to spend its own budget resources 

(estimated at more than $13 billion as of December 2006) as a significant problem that, if 

not corrected, may lead to the failure of the government. 

In meetings with IRMO officials, they stressed the difficulty of assessing ministerial 

capabilities given the large-scale turnover of senior ministerial personnel. They stated 

that the current strategy is to work with the Iraqi government to support its needs without 

imposing capacity-development activities that may not be supported within the 

government. This strategy is particularly vulnerable to staff turnover because it requires 

a buy-in by the Iraqi’s on each ministry’s needs, and these perceived needs may change 

dramatically when key Iraqi staff depart. 

 

 

4

 The National Center for Consultations and Management Development is part of the Iraqi Ministry of 

Planning. 

7
Capacity-development Programs

A number of U.S. government organizations have implemented capacity-development 

initiatives within Iraq’s executive institutions and key ministries, but most on-going 

activities are internally driven and responsive to agency direction rather than part of an 

overarching plan for a unified comprehensive U.S. capacity-development effort. Thus, 

we could not determine the relevance and impact of these individual activities. This 

problem occurs because no one office or person is clearly in charge of the overall U.S. 

capacity-development effort. Without clear lines of authority and responsibility and a 

plan that details U.S. goals, objectives, and responsibilities, it will be difficult for the 

myriad of organizations involved to coordinate and prioritize activities. 

In written comments on a draft of this report, MNF-I and IRMO disagreed with our 

assertion that capacity-development activities are being conducted without clear overall 

objectives. According to their comments, all U.S. government organizations conducting 

capacity-development activities operate in accordance with the Joint Campaign Plan. 

They stated that the Effective Government and Essential Services Appendices to the Joint 

Campaign Plan provide clear Ambassador and Commander intent, end states, objectives 

and priorities. However, we disagree. For example, the plan identifies one objective: “an 

Iraqi government based on the principals of national unity capable of effective 

administration, diminishing corruption, improving the provision of services, and securing 

its infrastructure; and with an accountable civil society invested in establishing a stable 

democratic, and economically viable Iraq.” The priorities identified are 

• national capacity development to facilitate effective governance and delivery of 

essential services 

• provincial capacity development linked to National Development Strategy 

• improve infrastructure integrity 

• deliver other essential services 

As stated earlier in this report, we consider these to be broad statements that lack 

specificity. At this level of detail it is not possible to determine what the specific planned 

activities are, who is responsible, or how progress will be measured. We believe 

objectives should be specific, measurable, accountable, relevant, and contain a timeline 

for execution in order to take the corrective actions to achieve the objectives. For 

example, a common problem in many ministries is the inability to prepare and submit 

budgets. Thus, we believe an appropriate plan would detail the specific activities planned 

to address budget problems at each ministry, identify who is responsible, relate all 

planned activities to the appropriate goal, and identify a timeline for accomplishing each 

activity. A timeline is particularly important for determining the resources necessary for 

carrying out each activity. 

 

IRMO also stated in its written comments that the conditions and challenges facing 

capacity-development efforts within the Iraq environment are more unique than this 

report acknowledges. According to IRMO, it is not so much in a post-conflict 

8
environment as an ongoing and active conflict environment. This has a dramatic impact 

on the political will and focus on governance by the Iraqi government. According to 

IRMO, it must be emphasized that the foundation of successful and sustainable capacity 

development is an enabling environment (political will) within the Iraqi government to 

improve the quality of security and services being provided to the people of Iraq. We 

agree with IRMO’s assessment. However, we continue to believe that greater specificity 

in capacity-development planning would focus activities on the goals and objectives 

established for each ministry and provide a more objective basis for activity planning and 

budgeting. 

Individual Programs 

Starting in the fall of 2006, IRMO and USAID initiated separate capacity-development 

programs to provide leadership and managerial training and support to Iraqi executive 

institutions and ministries. However, without a detailed plan, we were unable to 

determine how these ongoing and future activities will contribute to the U.S. government 

goal of building the capacity of the Government of Iraq to provide sustainable security 

and service to the Iraqi public. Also, because these capacity-development programs were 

just beginning at the time of our audit, we were unable to evaluate their effectiveness 

and/or their impact. 

Functional responsibility for ministerial capacity development is divided: IRMO’s 

Ministerial Coordination Team (MCT) addresses immediate short-term process and 

system problems at the ministries, and USAID focuses on the medium- to long-term 

institution building. As stated earlier, other U.S. government organizations and offices 

are engaged in capacity-development activities at the ministries, however, in the absence 

of a plan we are uncertain about their exact roles and responsibilities or how their current 

activities support or contribute to the overall capacity-development effort. Taken 

together, these organizations have targeted 12 of the current 34 Iraqi ministries where 

governing capacity must be improved for enabling the Government of Iraq to provide 

sustainable security and services to the Iraqi public (Table 1). For an organizational chart 

of the ministerial composition of the Iraqi National Unity Government, see Appendix B. 

Table 1—Iraqi Ministries Targeted for Capacity Development 

Enabling Essential Services Other 

Finance Oil Justice 

Planning Electricity Agriculture 

Interior Water Resources Education 

Defense Municipalities and Public Works 

 Health 

9
IRMO/MCT

Based on strategic and policy guidance from the Executive Steering Committee, IRMO’s 

MCT directed its efforts towards immediate problems and bottlenecks preventing Iraqi 

ministries from carrying out their core functions. These core functions have not been 

specifically identified but are listed in various documents that reference such functions as 

strategic planning, budgeting, financial management, human resources, information 

management, and constituent services. Starting in June and September 2006, training 

programs in the English language, procurement reform, financial management, and 

budget preparation were implemented with $15 million from the Iraq Reconstruction and 

Relief Fund. In addition, subject-matter experts were assigned to the Prime Minister’s 

Office and key ministries. Because of a delay in the release of $45 million from the 

Economic Support Fund until November 30, 2006, the MCT reported that the start of 

more than 40 other capacity-development projects was delayed. 

USAID 

USAID’s program focuses on medium- to long-term fundamentals in its efforts to 

develop Iraq’s governing institutions and civil service by improving and standardizing 

public administration and revitalizing government training centers. In late July 2006 

USAID awarded a two-year plus one option year contract to Management Systems 

International, a Washington D.C.-based consulting firm, valued up to $165 million, to 

design and implement its national capacity-development program. USAID’s main Iraqi 

counterpart in this program is the National Center for Consultations and Management 

Development, located in the Baghdad suburbs, working with three potential 

implementing partners at the regional training centers in Erbil, Mosul, and Basrah. A 

USAID official estimated that 80 % of the program would be geared toward training, 

with the goal of training up to 58,000 civil servants. In addition, although USAID focuses 

on medium-to long-term efforts, they told us that they also provide short-term immediate 

support to the Government of Iraq for key priorities as they materialize. For example, in 

November 2006, USAID began two training sessions addressing budgeting and 

procurement problems with officials from the Ministries of Finance, Planning, Oil, 

Electricity, and Water Resources. The participants identified the Ministry of Finance as a 

major bottleneck for executing budgets, saying its bureaucratic and centralized 

procedures were too strict for spending funds.

MNSTC-I 

MNSTC-I is primarily responsible for organizing, training, equipping, and mentoring 

Iraqi Security Forces under the Iraqi Ministries of Defense and Interior. To build capacity 

within these ministries, MNSTC-I has formed transition teams at each ministry, 

consisting of 38 advisors embedded within the Ministry of Defense, and at any point in 

time, between 40 and 50 advisors within the Ministry of Interior. These advisors work 

across all functional areas within the ministries and provide assistance and mentorship to 

their Iraqi counterparts. According to MNSTC-I officials, the Ministries of Defense and 

10
Interior rely on the support of the other enabling ministries (Finance, Planning), though 

much work remains in improving inter-ministerial cooperation. 

GRD 

The U.S. Army Corps of Engineers GRD, which is charged with planning and executing 

construction projects throughout Iraq, provides construction management support to the 

essential services ministries—Oil, Electricity, Water Resources, Municipalities and 

Public Works, and Health, in addition to the Ministries of Transportation and 

Communications. Starting in early 2005, GRD has conducted capacity-development 

training associated with individual projects, however, the bulk of GRD’s activities are 

focused at the plant and facility level. GRD also provides capacity-development training 

to ministry directors general as part of its Level 5 sustainment efforts to enhance their 

quality control management skills. 

IRMO Senior Consultants 

IRMO has senior consultants assigned to key Iraqi ministries to provide advice on 

strategic policy and organizational development. The consultants advise on all policies 

related to the management and daily operations of the respective ministries and are 

suppose to serve as the single U.S. Embassy point of contact for all ministerial matters 

and for coordination with Department of Defense components, other U.S. government 

agencies, Coalition governments, the United Nations, nongovernmental organizations, 

and the Government of Iraq. However, in spite of being well versed in the capacity needs 

of the respective ministries, several senior consultants told us that they were unaware of a 

wider U.S. government national capacity-development program. They thus declined to 

substantively address the efforts of IRMO/MCT and/or the mission of the Joint Task 

Force for Capacity Development. 

U.S. Embassy-Iraq 

The U.S. Embassy’s Economic Affairs and the Justice and Treasury Attaché offices 

engage in a wide variety of ministerial capacity-development activities. For example, 

Economic Affairs has between 10 and 12 officials providing technical assistance and 

advice to ministries on such issues as finance and banking, economics policymaking and 

reform, bilateral and multilateral trade, and regulatory frameworks. The Justice Attaché 

office has 8 legal advisors that assist Iraq’s High Judicial Council and provide 

prosecutorial development assistance and training. The Treasury Attaché office has 

approximately 10 officials that provide technical assistance and advice to the Ministry of 

Finance on budget execution matters, including instruction on financial management, 

budget, and central bank operations. In addition, U.S. Embassy offices also work with 

U.S. executive branch agencies to sponsor delegations of Iraqi ministry officials for 

senior management programs in Washington, D.C. 

11
Program Management 

The U.S. Mission has not designated a lead office to direct a coordinated U.S. 

government capacity-development effort. IRMO officials made clear in their written 

comments that it lacks the authority to direct MNSTC-I, GRD, and USAID activities. 

Thus, organizations such as the Joint Executive Steering Committee are deemed the best 

method of coordinating agency capacity development activities. They also stated that 

they believe the Steering Committee has been effective in coordinating activities. 

However, some capacity-development officials told us that the U.S. government has 

difficulty coordinating and managing its capacity-development activities, which results in 

overlapping program mandates and fragmented activities. 

In September 2006, the Joint Task Force on Capacity Development was created to 

address coordination issues within U.S. government organizations. Chaired by IRMO’s 

MCT, its members, including the U.S. Embassy-Iraq, IRMO, USAID, GRD, MNSTC-I, 

and the Multi-National Corps-Iraq, seek to identify issues, critical paths, gaps, and 

redundancies in capacity-development programming and, subsequently, to make 

recommendations to the Executive Steering Committee for respective ministerial action. 

At weekly meetings in October and December 2006, we observed that the Joint Task 

Force was making some progress in coordinating the various activities and developing a 

capacity-development agenda. By mid-December, task force members were still at the 

stage of cataloguing their various activities and had yet to identify critical programming 

paths or how to leverage their resources and activities. For example, we learned that 

obtaining fuel for the Iraqis Security Forces is a critical problem and resolving the 

problem requires addressing issues at the Ministries of Oil, Finance, and Planning. An 

MNF-I’s Iraq Strategic Logistics Study team also identified the lack of a process to 

resolve cross-ministerial issues as a significant problem. However, at the time of our 

review U.S. government organizations were still in the organizing stage of addressing 

cross-ministerial management problems. 

Finally, any effort of the scope and size of the Iraqi national capacity-development 

program typically requires the U.S. government to enter into a formal agreement with the 

host government to clearly articulate roles, responsibilities, and commitments. The 

United States has not yet entered into an overall bilateral agreement with the Government 

of Iraq. We found that capacity-development activities are being conducted within 

ministries based upon individual understandings reached between the Iraqi ministers and 

U.S. agency officials. A consensus among these officials was that they have not yet 

experienced a downside because of the lack of an overall agreement, but they stressed it 

would be preferable to have the full backing and support of the Iraq government behind a 

coordinated effort to ensure success. For an organizational chart of the ministerial 

composition of the Iraqi National Unity Government, see Appendix B. 

12
Measuring Progress

Committed to support sustainable infrastructure and services in Iraq, the U.S. 

government, through multiple organizations and offices, has engaged the Iraqi ministries 

in numerous capacity-development activities. During the course of our review, we 

determined that U.S. government organizations introduced many of their activities 

without articulating clear achievable goals, especially the basis for measuring progress. 

Although some organizations had developed, or were in the process of developing, their 

own individual program objectives and performance measures, we noted the lack of a 

system to measure overall progress. And, most important, no single U.S. government 

office or official is responsible or accountable for measuring and reporting on overall 

U.S. ministerial capacity-development progress. 

We were told that IRMO derived its capacity-development objectives and indicators to 

measure progress from the Joint Campaign Plan and the U.S. Embassy’s Mission 

Performance Plan. In our conversations with IRMO officials we noted that the Joint 

Campaign Plan and the Mission Performance Plan provide broad statements as to goals 

but lacked the specificity necessary to measure progress. IRMO officials acknowledged 

the need to follow a more systematic approach for developing indicators and measuring 

progress. They also told us, however, that Iraq’s unique challenges makes it difficult to 

adopt many of the traditional strategic planning and performance monitoring approaches 

used in nonconflict countries. 

USAID, which has a history of working in conflict and post-conflict environments, 

developed a strategic plan in January 2006 that emphasized the importance of reforms 

with Iraqi ministries and institutions to improve core public administration functions, 

such as strategic and policy planning, finance, information technology, and human 

resources management. In November 2006, USAID developed a preliminary set of 

performance indicators, including output measurements for major functions, and a 

performance monitoring plan. Set up to provide information at the intermediate and subintermediate results level in its capacity-development program, the plan appears 

sufficient to measure whether progress is or is not being made. 

Finally, MNSTC-I assesses the Defense and Interior ministries on a monthly basis, based 

upon fourteen categories of performance. The categories measure movement toward selfreliance in such areas as budgeting, logistics, contracting, and operations. 

 

13
Funding Requirements

The U.S. government organizations involved in Iraq reconstruction understand the 

overarching goal of building ministerial governing capacity to ensure sustainable security 

and services for the Iraqi public, but we determined that they lack the specifics of the 

actual funding requirements to realize this vision. Officials from these U.S. government 

organizations reported to us that they could not estimate how much funding would be 

necessary to achieve the goal of a self-sufficient Iraqi government. They explained that 

their capacity-development budgets were structured around their respective programs and 

that their programs were based upon the level of funding that was allocated to them, not 

upon an assessment of requirements to achieve the larger goal. 

Presently, U.S. ministerial capacity-development activities are spread among numerous 

organizations, yet no reliable method exists for relating the respective programs and 

budgets to the larger goal. For fiscal year (FY) 2006, IRMO and USAID received 

approximately $125 million. USAID has requested an additional $310 million for FYs 

2007 and 2008, and IRMO has requested an additional $70 million for FY 2007 (Table 

2). However, Congress has not yet approved the FY 2007 budgets for the Department of 

State and USAID; the agencies are operating on continuing resolutions based on their FY 

2006 funding. In addition, embedded MNSTC-I advisors, IRMO senior consultants, and 

U.S. Embassy officers (Justice, Treasury, and Economic Affairs) play an active role in 

ministerial capacity-development activities, but their support costs (chiefly salaries) are 

included within their organizations overall operating budget. Similarly, the activities of 

GRD’s functional experts at the essential services ministries (Oil, Electricity, and Water 

Resources) are reported under a sustainment budget line item, and we were unable to 

attribute a level of funding support. 

Table 2—U.S. Support for Ministerial Capacity Development in Iraq 

Dollars in millions 

Agency Obligated Requested Total 

FY 2006 FY 2007 FY 2007 FY 2008

USAID 65a 190 120 375

IRMO 60b 70 130

Total 125 260 120 505

Source: SIGIR analysis of IRMO and USAID data, as of December 15, 2006. 

Notes: 

a

 $5 million from the Iraq Reconstruction and Relief Fund (IRRF) and $60 million from the Economic Support 

Fund (ESF) 

b $15 million from IRRF and $45 million from ESF 

14
The ability to relate performance and achievement to budget outlays entails not only 

establishing a verifiable relationship between program objectives, with performance 

indicators, and expenditures but also being able to report this information in an integrated 

manner. We recognize that identifying how allocated and requested funding levels 

contribute to achieving the ministerial capacity-development goal is complex, requiring a 

significant level of effort in Iraq’s difficult operating environment. We also recognize 

that both IRMO and USAID are in the beginning stages of their capacity-development 

activities. However, it is necessary to develop budgeting processes that give meaningful 

indication of how dollars are expected to achieve results. We believe steps need to be 

taken to start down the path of developing such processes. 

15
Donor Nations/Institutions

More than 40 nations and international institutions have pledged over $15 billion for the 

reconstruction of Iraq, as of December 30, 2006. These bilateral and multilateral donors 

have played a limited role in Iraqi ministerial capacity-development programming. 

However, we were able to identify only a few capacity-development programs—two by 

the United Kingdom, valued at $31.5 million; those financed through the International 

Reconstruction Fund Facility for Iraq,5

 valued at approximately $25 million; and those 

channeled through the United Nations Development Group Iraq Trust Fund and the 

World Bank Iraq Trust Fund. Though the U.S. government organizations work in close 

consultation with the United Kingdom on capacity-development activities at several 

government offices, including the Ministry of Interior, we were unable to determine 

whether U.S. managers took any steps to jointly develop and fund capacity-development 

programs with other bilateral or multilateral donors. 

The following is a summary of the bilateral and multilateral Iraqi ministerial capacitydevelopment programs we identified:

• The United Kingdom’s Department for International Development manages two 

capacity-building programs: one for $25.7 million to improve Iraqi government 

operations at the Prime Minister’s Office, the Council of Ministers’ Secretariat, 

and the Government Communications Directorate, having three full-time advisors 

and a number of short-term subject-matter experts; and one for $5.8 million to 

strengthen human resources/financial management and operations within the 

Ministry of Interior, with the assistance of six international advisors fully 

embedded in the wider MNSTC-I effort. 

• The United Nations Development Group oversees not only its own capacitybuilding programs but also those financed with donor funds. Two of its projects 

involve a $3 million institutional strengthening effort with the Ministry of 

Municipality and Public Works and a $2.6 million endeavor to help the Iraqi 

government coordinate international donor assistance. In addition, through its Iraq 

Trust Fund, it also manages monies from the European Commission for 

reconstruction assistance in Iraq.6

 

 

5

 The International Reconstruction Fund Facility for Iraq, created at the request of donors attending the Iraq 

Donors Meeting held in New York on June 24, 2003, to meet the funding requirements for two trust funds 

run by the United Nations Development Group and the World Bank, aims to help donors channel their 

resources and coordinate their support for reconstruction and development assistance to Iraq. 6

 During the period 2003 to 2006, the European Commission channeled $20.5 million through the United 

Nations Development Group and the World Bank for capacity development in Iraq; however, we were 

unable to obtain any information on the specific in-country activities. 

16
• The World Bank, which has its own Iraq Trust Fund, is primarily involved in 

capacity development through policy dialogue and advisory assistance at Levels 1 

and 2. The World Bank does not have a permanent presence in Baghdad; 

however, according to a Bank representative, plans are under way to increase 

staffing and program activities by the spring of 2007. 

An important initiative to bring together the international community and multilateral 

organizations to spur political, economic, and social development is the five-year 

International Compact for Iraq, formally launched by the Government of Iraq and the 

United Nations on July 27, 2006. The Compact, jointly chaired by the Government of 

Iraq and the United Nations, with the support of the World Bank, the International 

Monetary Fund, and other regional financial institutions, seeks to help Iraq achieve its 

national vision of a united, federal, democratic country having sustainable selfsufficiency by developing a solid budgetary framework, by improving governance, and 

by building effective institutions. 

The international community continues to negotiate the details of the International 

Compact, projected to be completed in early 2007. We believe that the Compact presents 

the U.S. government with an excellent opportunity to actively participate with other 

bilateral and multilateral donors to assist in the planning, execution, and funding of a 

unified comprehensive capacity-development program in Iraq. According to a World 

Bank official, its programming strategy will be to support the International Compact, 

with the Government of Iraq in the lead, and that the European Commission also intends 

to be a strong supporter of the Compact. 

17
Conclusion and Recommendations

Conclusion 

A national capacity-development program in Iraq is a critical component of the U.S. 

government’s goal of building the capacity of the Government of Iraq to provide 

sustainable security and services to the Iraqi public. U.S. government organizations have 

signaled their commitment to developing Iraqi governing capacity by budgeting 

approximately $125 million for current programming and requesting an additional 

$380 million for FY 2007/2008. Undermining the U.S.-led effort to build Iraqi capacity is 

an operating structure where capacity-development activities are spread among multiple 

organizations and offices that are working without clear overall objectives, without a 

synchronized plan for conducting assignments, and without a system to measure if 

progress is or is not being made. The majority of U.S. government capacity-development 

activities conducted to date have been internally driven and responsive to individual 

agency direction rather than part of an overarching U.S. government capacity-building 

plan or program. Further complicating the U.S. effort is the lack of a single entity with 

the mandate to implement a unified comprehensive U.S. ministerial capacitydevelopment program in Iraq, having full authority not only to direct proactive solutions, 

but also to measure desired end-state results. 

Establishing viable Iraqi governing capacity will almost certainly require an investment 

of additional years and resources. This effort will not go unchallenged at the outset, given 

the difficult security situation and the increasing sectarianism within Iraqi society and its 

governing institutions. Both international and regional support are critical factors in the 

formula for success. The Iraqi government and the United Nations have much hope in the 

success of the International Compact for Iraq. However, this vehicle to unify the country 

is dependent upon each Iraqi minister demonstrating supportive leadership and strong 

commitment to the Compact and governing capacity to provide and sustain security and 

services to the Iraqi public. 

Recommendations

We recommend that the U.S. Ambassador to Iraq and the Commanding General, MNF-I, 

take these actions: 

1. Develop a capacity assessment baseline for each ministry based on an agreed-on 

criterion that uses (a) the input from the individual U.S. organizations that have 

had an ongoing presence within the Iraqi ministries and (b) the assessment 

conducted by IRMO/MCT. 

2. Develop a mechanism to share this information among the U.S. organizations 

involved in the ministry capacity-development program. 

3. Develop a detailed plan, in concert with the Government of Iraq, including clearly 

defined objectives and performance measures, milestones for achieving stated 

18
objectives, and future funding requirements, for implementing a unified 

comprehensive capacity-development program to enable the Iraqi government to 

provide sustainable security and services to the Iraqi public. 

4. Actively engage other bilateral and multilateral donors through the International 

Compact for Iraq process to assist in the planning, execution, and funding of a 

unified comprehensive capacity-development program in Iraq. 

5. Assign clear responsibility for the overall U.S. capacity-development effort to one 

U.S. government official or organization. 

Management Comments and Audit Response 

We received written comments on a draft of this report from IRMO, USAID, and MNF-I. 

Overall, the organizations generally concurred with our five recommendations. USAID 

disagreed on some of the methods of implementation. We are pleased to report that 

IRMO and MNF-I indicated in their comments that they had or were in the process of 

implementing all of the report’s recommendations. IRMO, USAID, MNF-I, and 

MNSTC-I also provided technical comments, which have been incorporated in the report 

where appropriate. We consider that all comments received are responsive to the intent 

of the recommendations. 

However, for recommendation 5, “assign clear responsibility for the overall U.S. 

capacity-development effort to one U.S. government official or organization,” we believe 

that IRMO’s response of assigning this responsibility to the Joint Task Force for Capacity 

Development may not resolve the organizational and program management challenges 

confronting the U.S. capacity development initiative. As we observed during our 

assessment, the Joint Task Force is a useful mechanism for information sharing but lacks 

the authority to direct organizations in a coordinated manner. However, the Joint Task 

Force is an organization that coordinates rather than has an accountable management 

responsibility or authority. 

We believe this accountability with the appropriate authority is particularly important in 

addressing cross-ministerial management problems with multiple implementing agencies 

and organizations. IRMO stated in its comments that the magnitude and complexity of 

the challenges faced in Iraq, combined with the many U.S. government entities involved, 

presents an organizational challenge of some magnitude. We agree. As such, we 

continue to believe—and USAID’s response to the draft report supported—that assigning 

overall responsibility to a single official or office with directive authority is the best way 

forward to address these organizational challenges. USAID responded that “the best 

scenario would be for a single organization to receive all funding for capacity 

development with the head of that organization named as the one U.S. government 

official responsible for U.S. capacity development efforts.” 

19
MNF-I, in its response to the draft of this report, stated that recommendation 5 is already 

completed because the “Secretary of State has appointed the Coordinator for 

Reconstruction (Ambassador Carney). Further, in accordance with Appendix 4 

(Effective Government and Essential Services) to Annex V (Campaign Objectives) of the 

Joint Campaign Plan, National Capacity Development is managed by the Joint Executive 

Steering Committee, which decides on issues related to the multi-level capacitydevelopment initiatives and ensures efforts are synchronized.” 

Based on the various responses to our recommendation 5, we believe that this 

recommendation remains valid. Further, as demonstrated by the responses and our 

discussions with other ministerial capacity-development participants, the overall 

responsibility for capacity-development has not been clearly assigned. 

20
Appendix A—Scope and Methodology

The Special Inspector General for Iraq Reconstruction (SIGIR) initiated this study on 

September 24, 2006 (Project No. 6035), specifically to answer five questions: (1) have 

U.S. government organizations, such as the Department of State and USAID, assessed the 

competency of the responsible Iraqi ministries for the long-term management of essential 

government functions/services, (2) what are their programs for addressing the identified 

shortcomings, (3) what performance indicators or metrics will be used to measure 

progress and who has overall responsibility for measuring progress, (4) have U.S. 

government organizations identified adequate funding, and (5) is the U.S. government 

working with other donor nations and institutions to coordinate, fund, and develop 

solutions for a comprehensive capacity-development program in future years. 

To determine whether U.S. government organizations assessed the competencies of the 

responsible Iraqi ministries, we interviewed both major and minor participants in the 

national capacity-development program, including the U.S. Embassy’s Iraq 

Reconstruction Management Office (IRMO), the U.S. Agency for International 

Development (USAID), the Multi-National Security Transition Command-Iraq (MNSTCI), the U.S. Army Corps of Engineers Gulf Region Division (GRD), and IRMO’s senior 

consultants and U.S. Embassy’s offices (Justice, Treasury, and Economic Affairs), and 

obtained information on capacity-development problems within their respective 

ministries of responsibility. We analyzed IRMO’s ministerial competency assessment 

methodology and results, as well as examined USAID’s plans for conducting an 

assessment as part of its involvement in the national capacity-development program. 

To determine if there were programs for addressing identified shortcomings, we obtained 

and reviewed capacity-development program documents from IRMO, USAID, MNSTCI, and GRD and held discussions with not only these officials but also the U.S. Embassy’s 

officers and IRMO’s senior consultants. We reviewed the U.S. National Strategy for 

Victory in Iraq, the Joint Campaign Plan, and the U.S. Embassy’s Mission Performance 

Plan to determine if existing and proposed programs were in line with U.S. government 

policy guidance and outlined strategic, political, security, and economic objectives for 

Iraq. We also attended the weekly meeting of the Joint Task Force for Capacity 

Development. 

To identify whether there were performance indicators to measure progress, we held 

interviews with each U.S. government organization conducting capacity-development 

activities to determine if and how they planned to measure the impact of their activities. 

We also obtained and examined the indicators developed by IRMO’s Ministerial 

Coordination Team (Ministerial Capacity Metrics Assessment), USAID (Performance 

Monitoring Plan), and MNSTC-I (Transitional Readiness Assessment). 

To determine whether there was adequate funding identified for capacity development, 

we examined funding documents from IRMO and USAID for fiscal years 2006-08. We 

held interviews with officials from U.S. government organizations conducting ministerial 

capacity-development activities and obtained both their funding requirements and 

21
funding methodology for meeting the U.S. government’s end-state objective for the 

Government of Iraq, namely, to provide sustainable security and services to the Iraqi 

public. 

Finally, to determine whether the U.S. government is working with other donor nations 

and institutions to coordinate, fund, and develop solutions for a comprehensive capacitydevelopment program in future years, we interviewed officials from the U.S. Embassy, 

IRMO, the United Kingdom’s Department for International Development, the World 

Bank, and the United Nations Assistance Mission in Iraq. We also reviewed capacitydevelopment program documents found on the websites of the International 

Reconstruction Fund Facility for Iraq, the United Nations Development Group Iraq Trust 

Fund, and the World Bank Iraq Trust Fund. We also examined documents and reports 

pertaining to the goals, plans, and formation of the International Compact for Iraq. 

We conducted this audit from September through January 2007 in accordance with 

generally accepted government auditing standards. 

Use of Computer-Processed Data

We did not utilize any computer-processed data during the performance of this audit. 

Prior Coverage 

We reviewed applicable reports issued by SIGIR, USAID Office of the Inspector 

General, and the Government Accountability Office: 

• Managing Sustainment for Iraq Relief and Reconstruction Fund Programs 

(SIGIR-05-022, October 24, 2005) 

• Challenges Faced in Carrying Out Iraq Relief and Reconstruction Fund 

Activities (SIGIR-05-029, January 26, 2006) 

• Audit of USAID/Iraq’s Electrical Power Activities (USAID/Inspector General-E267-05-003-P, June 29, 2005) 

• Rebuilding Iraq: Status of Funding and Reconstruction Efforts (GAO-05-876, 

July 28, 2005) 

22
Appendix B—Iraqi National Unity Government 

Source: Chart developed by IRMO/MCT, as of January 4, 2007

23
Appendix C—Acronyms

ESF Economic Support Fund 

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

IRMO Iraq Reconstruction Management Office 

IRRF Iraq Reconstruction and Relief Fund 

MCT Ministerial Coordination Team 

MNF-I Multi-National Force-Iraq 

MNSTC-I Multi-National Security Transition Command-Iraq 

SIGIR Special Inspector General for Iraq Reconstruction 

USAID U.S. Agency for International Development 

24
Appendix D—Report Distribution

Department of State 

Secretary of State 

Senior Advisor to the Secretary and Coordinator for Iraq 

Director of U.S. Foreign Assistance/Administrator, U.S. Agency for 

International Development 

 Director, Office of Iraq Reconstruction 

 Assistant Secretary for Resource Management/Chief Financial Officer, 

 Bureau of Resource Management 

U.S. Ambassador to Iraq* 

Director, Iraq Reconstruction Management Office* 

Mission Director-Iraq, U.S. Agency for International Development* 

Inspector General, Department of State 

Department of Defense 

Secretary of Defense 

Deputy Secretary of Defense 

Under Secretary of Defense (Comptroller)/Chief Financial Officer 

 Deputy Chief Financial Officer 

 Deputy Comptroller (Program/Budget) 

Deputy Assistant Secretary of Defense-Middle East, Office of Policy/International 

Security Affairs 

Inspector General, Department of Defense 

Director, Defense Contract Audit Agency 

Director, Defense Finance and Accounting Service 

Director, Defense Contract Management Agency 

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* 

Chief Financial Officer, U.S. Army Corps of Engineers 

Auditor General of the Army 

U.S. Central Command

Commanding General, Multi-National Force-Iraq* 

Commanding General, Multi-National Corps-Iraq 

Commanding General, Multi-National Security Transition Command-Iraq* 

Commander, Joint Area Support Group-Central 

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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 

President, Overseas Private Investment Corporation 

President, U.S. Institute for Peace 

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 

*Recipient of draft audit report.

26
Appendix E—Audit Team Members

This report was prepared and the review was conducted under the direction of Joseph T. 

McDermott, Assistant Inspector General for Audit, Office of the Special Inspector 

General for Iraq Reconstruction. 

The staff members who conducted the audit and contributed to the report include: 

Karen Bell 

Joanne M. Brignolo 

Patrick A. Dickriede 

Glenn Furbish 

Waheed Nasser 

Clifton Spruill 

27
Management Comments 

Iraq Reconstruction Management Office (IRMO)

28
29
Management Comments 

Mission-Iraq, U.S. Agency for International 

Development (USAID) 

30
31
32
Management Comments 

Multi-National Force-Iraq (MNF-I) 

33
SIGIR’s Mission Regarding the U.S. reconstruction plans, programs, 

and operations in Iraq, the Special Inspector General 

for Iraq Reconstruction provides independent and 

objective: 

• oversight and review through comprehensive 

audits, inspections, and investigations 

• advice and recommendations on policies to 

promote economy, efficiency, and effectiveness 

• deterrence of malfeasance through the prevention 

and detection of fraud, waste, and abuse 

• information and analysis to the Secretary of 

State, the Secretary of Defense, the Congress, 

and the American people through Quarterly 

Reports 

Obtaining Copies of SIGIR 

Reports and Testimonies 

To obtain copies of SIGIR documents at no cost, go 

to SIGIR’s Web site (www.sigir.mil). 

To Report Fraud, Waste, 

and Abuse in Iraq Relief 

and Reconstruction 

Programs 

Help prevent fraud, waste, and abuse by reporting 

suspicious or illegal activities to the SIGIR Hotline: 

• Web: www.sigir.mil/submit_fraud.html 

• Phone: 703-602-4063 

• Toll Free: 866-301-2003 

Congressional Affairs Marthena Cowart 

Assistant Inspector General for Congressional 

 Affairs 

Mail: Office of the Special Inspector General 

 for Iraq Reconstruction 

 400 Army Navy Drive 

 Arlington, VA 22202-4704 

Phone: 703-604-0368 

Email: marthena.cowart@sigir.mil 

Public Affairs Denise Burgess 

Assistant Inspector General for Public Affairs 

Mail: Office of the Special Inspector General 

 for Iraq Reconstruction 

 400 Army Navy Drive 

 Arlington, VA 22202-4704 

Phone: 703-428-1217 

Fax: 703-428-0818 

Email: PublicAffairs@sigir.mil 

34