OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

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SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION 

July 26, 2008 

MEMORANDUM FOR U.S. AMBASSADOR TO IRAQ 

SECRETARY OF DEFENSE 

JOINT SECRETARIAT 

OSD POLICY EXECUTIVE SECRETARY 

COMMANDER, U.S. CENTRAL COMMAND 

COMMANDING GENERAL, MULTI-NATIONAL FORCE – IRAQ 

COMMANDING GENERAL, MULTI-NATIONAL SECURITY 

TRANSITION COMMAND – IRAQ 

DIRECTOR, IRAQ TRANSITION ASSISTANCE OFFICE 

SUBJECT: Government of Iraq Increasingly Funding Iraqi Security Forces Infrastructure 

Development, but Substantial U.S. Support Remains (SIGIR 08-022) 

We are providing this report for your information and use. It discusses the extent to which the 

Department of Defense is using the U.S.-appropriated Iraq Security Forces Fund for 

infrastructure development and the degree to which the Government of Iraq is assuming 

increased responsibility for funding development of the Iraqi Security Forces. This audit was 

conducted as Special Inspector General for Iraq Reconstruction (SIGIR) project 8026. It was 

performed under the authority of Public Law 108-106, as amended, which also incorporates the 

duties and responsibilities of inspectors general under the Inspector General Act of 1978. 

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

report, please contact Mr. Glenn Furbish at (703-428-1058/glenn.furbish@sigir.mil). 

Stuart W. Bowen, Jr. 

Inspector General 
Table of Contents 

Executive Summary i 

Introduction 1 

Status of U.S. Iraq Security Forces Fund Programmed 

for Infrastructure Development 6 

Shift Toward Greater Emphasis on Iraq Funding of Iraqi 

Security Forces Infrastructure Needs 12 

Conclusion and Matter for Congressional 

Consideration 15 

Appendices 

A. Scope and Methodology 16 

B. Iraq Security Forces Fund Sub-Activity Group Definitions 19 

C. Program Budget Advisory Committee Submission Template 20 

D. Acronyms 21 

E. Audit Team Members 22
Government of Iraq Increasingly Funding Iraqi 

Security Forces Infrastructure Development but 

Substantial U.S. Support Remains 

SIGIR-08-022 July 26, 2008

Executive Summary 

Introduction 

Recently, a congressional committee raised concerns that a significant amount of U.S.-

appropriated money from the Iraq Security Forces Fund (ISFF) continues to be spent on 

infrastructure projects1

 related to developing the Iraqi Security Forces and that the Government 

of Iraq (GOI) should shoulder more of the financial burden for infrastructure development. This 

issue gained particular attention when the Department of Defense (DoD) proposed to realign 

$590 million of FY 2007 ISFF to infrastructure development from other ISFF accounts. 

Because of the congressional interest, the Special Inspector General for Iraq Reconstruction 

(SIGIR) evaluated: 

• the status of U.S.-appropriated ISFF used for infrastructure projects in Iraq, including 

(1) factors affecting program execution and use of these funds, and (2) spending plans 

for unobligated funds and unliquidated obligations and 

• factors indicating and affecting a shift toward greater use of Iraqi funding to support 

Iraqi Security Forces infrastructure projects. 

Results 

Approximately $4.7 billion, or 30%, of all U.S. funds appropriated for the ISFF have been 

programmed for infrastructure projects.2

 As of June 30, 2008, $944.6 million remains 

unobligated in the infrastructure sub-activity group, of which $791.1 million is available for new 

obligations. The remaining unobligated funds have expired and cannot be used for new 

obligations. In addition, obligations have been incurred on some ISFF infrastructure projects, 

but substantial payments have not been made. Some of these projects, such as construction of 

police stations, were approved in 2006. Difficulties in executing land deeds have resulted in 

delays in executing some projects. The amount of unobligated balances, as well as funds 

obligated but not yet expended, suggests that ISFF-supported construction projects will continue 

at least into 2010. 

 

1 Infrastructure projects include facilities for military and police units, training academies and areas, detainee 

operations, and headquarters expenses. 

2

 Excludes $2.5 billion appropriated in June 2008. 

i
On June 30, 2008, the President signed H.R. 2642 (Public Law 110-252), which provided an 

additional $1.5 billion in fiscal year (FY) 2008 supplemental ISFF and $1.0 billion in FY 2009 

ISFF. Both the FY 2008 supplemental appropriation and the FY 2009 appropriation expire on 

September 30, 2009. 

The Government of Iraq’s inability to quickly execute its budgets and the need for speedy project 

execution to take advantage of security gains on the ground have been the key factors creating 

reliance on the United States to fund and execute infrastructure projects using ISFF. However, 

available budget information shows a clear trend toward greater reliance on the GOI to fund such 

projects, with the United States reducing its ISFF support for infrastructure projects.

Matter for Congressional Consideration 

The Congress may wish to examine the Multi-National Security Transition Command-Iraq’s 

infrastructure spending plans for the remaining ISFF that have not yet been obligated or 

expended to identify further opportunities to transfer funding responsibility to the GOI—either 

on a full-funding or cost-sharing basis. These spending plans are included in this report as 

Tables 3, 4, and 5. 

Management Comments and Audit Response

The Multi-National Security Transition Command-Iraq stated that it will continue to emphasize 

Government of Iraq full funding or cost sharing across all ISFF categories, including 

infrastructure. It also updated information on the Government of Iraq having obtained necessary 

land deeds so that planned construction of police stations using ISFF can resume. We have 

revised our report to reflect this information. 

The Office of the Secretary of Defense-Comptroller provided clarifying comments which were 

incorporated in this report. 

The Joint Contracting Command-Iraq/Afghanistan responded that it had no comments on the 

draft report.

ii
Introduction

The Iraqi Security Forces comprise the following elements: the Police Service, the National 

Police, and the Directorate of Border Enforcement, under the Ministry of Interior; the Ground 

Forces (Army), the Navy, and the Air Force; and Support Forces, under the Ministry of Defense; 

and the Special Operations Forces under the Counter-Terrorism Bureau. 

Recently, a congressional committee raised questions on issues about the amount of U.S.-

appropriated Iraq Security Forces Fund (ISFF) spent on infrastructure projects related to 

developing Iraq’s security forces. One issue focuses on having the Government of Iraq (GOI) 

shoulder more of the financial burden for infrastructure development. This issue gained 

particular attention when the Department of Defense proposed to realign $590 million of FY 

2007 ISFF to infrastructure development from other ISFF accounts. 

Background 

U.S. appropriations supporting the reconstruction needs of the Iraqi Security Forces began in 

2005. On May 11, 2005, the Emergency Supplemental Appropriations for FY 2005, Public Law 

109-13, became effective. This law provided emergency supplemental appropriations to be 

available for obligation through September 30, 2006, for defense, the global war on terror, and 

tsunami relief. Included in the legislation was about $5.5 billion for the ISFF provided to the 

Department of Defense to be used for the security forces of Iraq, including providing equipment, 

supplies, services, training, facility and infrastructure repair, renovation, construction, and 

funding. Additional funds were appropriated for this fund in 2006 and 2007. In addition, on 

June 30, 2008, the President signed H.R. 2642 (Public Law 110-252) providing an additional 

$1.5 billion in FY 2008 supplemental ISFF and $1.0 billion in FY 2009 ISFF. Table 1 shows the 

funds appropriated to ISFF and the amounts obligated as of June 30, 2008, and the date of fund 

expiration unless already expired. 

1
Table 1—Funds Appropriated to the Iraq Security Forces Fund ($ billions) 

Public Law Date of Enactment Amount Obligated Available Until 

109-13 May 11, 2005 $5.49 a $5.40 Already expired b

109-234 June 15, 2006 3.01 2.91 Already expired b

109-289 September 29, 2006 1.70 c September 30, 2008 

110-28 May 25, 2007 3.84 4.15 September 30, 2008 

110-161 December 26, 2007 1.50 0.26 September 30, 2009 

Subtotal $15.54 $12.71 d

110-252 (FY 08) June 30, 2008 1.50 0 September 30, 2009 

110-252 (FY 09) June 30, 2008 1.00 0 September 30, 2009 

Total $18.04 $12.71 d

Source: SIGIR analysis of Department of the Army Financial Management System Data – 1002 Report. 

Notes: 

a Excludes $210 million transferred to Operations and Maintenance, Army, to reimburse the Army for costs incurred relating to the Iraqi Security 

Forces, but includes $99 million for a regional training center in Jordan. 

b In accordance with Title 31, United States Code, section 1553, expired funds remain available to the agency to cover appropriate adjustments to 

obligations. These are considered “in scope” adjustments. In accordance with Title 31, United States Code, section 1552, at the end of the fifth 

fiscal year after the period of availability ends, the account is closed and any remaining unobligated balance in the account is cancelled. 

c Obligated funds appropriated under P.L. 109-289 and P.L. 110-28 are accounted together because they expire at the same time. 

d Totals do not add due to rounding. 

Infrastructure is one of four sub-activity groups used to categorize ISFF spending. The other 

three are (1) sustainment, (2) equipment and transportation, and (3) training (see Appendix B for 

definitions of projects included in each sub-activity group). The greatest percentage of ISFF has 

gone to the equipment and transportation category followed by infrastructure, which account for 

30%. Under its legislative authority, ISFF has been used to fund construction and improvements 

of police stations, an Army regional training center, national depot maintenance facilities, an air 

base at Taji, and border enforcement facilities among other infrastructure projects. Table 2 

summarizes the ISFF programmed by sub-activity group for FY 2005-2008. 

2
Table 2—ISFF Programmed by Sub-Activity Group, as of June 30, 2008 

($ billions) 

Fiscal Years 2005-2008 

Sub-Activity Group Programmed Percent of Total ISFF 

Sustainment $2.24 14.4% 

Infrastructure 4.70 a 30.2% 

Equipment and Transportation 5.39 34.7% 

Training and Operations 2.18 14.0% 

Other 1.03 6.6% 

Total $15.54 b 100.0% c

Source: SIGIR analysis of Department of the Army Financial Management System Data – 1002 Report as of June 30, 2008. 

Notes: 

a Includes a May 2008 reprogramming of $419 million in ISFF to infrastructure from other ISFF sub-activity groups 

b Excludes $1.5 billion in FY 2008 supplemental ISFF appropriation and $1.0 billion in FY 2009 ISFF appropriation signed by the President on 

June 30, 2008 (Public Law 110-252). 

c Total does not add due to rounding. 

Roles and Responsibilities 

In May 2004, National Security Presidential Directive No. 36, “United States Government 

Operations in Iraq,” assigned responsibility for organizing, equipping, and training Iraqi security 

forces to the Commander, U.S. Central Command (CENTCOM). CENTCOM’s subordinate 

command, the Multi-National Force-Iraq (MNF-I), leads this effort. The MNF-I’s major 

subordinate commands–the Multi-National Security Transition Command-Iraq (MNSTC-I) and 

the Multi-National Corps-Iraq (MNC-I)–play integral roles in developing and training the Iraqi 

security forces. MNSTC-I assists the Iraq government in developing, organizing, training, 

equipping, and sustaining Iraq’s security forces. MNC-I is responsible for the tactical command 

and control of MNF-I operations in Iraq and works with Iraq’s military at the division, brigade, 

and battalion levels and with police forces at the provincial, district, and station levels. 

Appropriation acts3

 providing the ISFF state that these funds “shall be available to the Secretary 

of Defense . . . for the purpose of allowing the Commander, MNSTC-I . . . to provide assistance . 

. . to the security forces of Iraq including the provision of equipment, supplies, services, training, 

facility and infrastructure repair, renovation, and construction . . .” In executing this 

responsibility, MNSTC-I determines, validates, and executes requirements supporting the 

security forces in Iraq’s Ministry of Defense (MoD) and Ministry of Interior (MoI), as shown in 

Figure 1. 

 

3

 See Table 1 for a list of public laws authorizing the ISFF to be used to provide assistance to the Iraqi Security 

Forces and dates of enactment. 

3
Figure 1: MNSTC-I Process for Determining and Validating ISFF Requirements 

No 

Commands and Staff 

sections submit and 

justify requirements 

Program Budget 

Advisory 

Committee 

Recommendation 

and Priority on 

Execution List 

Executive 

PBAC 

ISFF 

Execution List 

Approved 

Staff Execution: 

• purchase request & 

commitment 

• staff review 

• legal review 

• validate funds 

• documentation 

Contract 

Award 

Require MoD 

or MoI to fund 

No 

Source: MNSTC-I J8 Comptroller 

Requirements for using ISFF are submitted and justified by MNSTC-I’s command and staff 

sections. They include various coalition advisory and training teams that work with 

representatives from the MoD and MoI. Once requirements are identified, they are further 

validated during MNSTC-I’s Program Budget Advisory Committee process, where requirements 

are defended and recommendations made. During the requirement validation process, the 

Committee may ask the requesting organization to seek full or shared funding from the GOI to 

support the requirements. According to MNSTC-I’s Comptroller, the requesting organization 

must have already considered other sources of funding (e.g., through the U.S. Foreign Military 

Sales program or GOI direct contracting) before presenting its requirements to the Program 

Budget Advisory Committee. One of the questions that the requesting organization must 

consider is why it is important that MNSTC-I fund this requirement (see Appendix C). At the 

executive Program Budget Advisory Committee meeting, chaired by the Commander, MNSTCI, general and flag officers and other senior officials discuss the recommended requirements and 

make a final decision on the use of ISFF. The approved requirements are then sent to various 

contracting entities for award.4

 

4

 Contracting entities include the U.S. Army Corp of Engineers Gulf Region Division, the Joint Contracting 

Command-Iraq/Afghanistan, the Air Force Center for Engineering and the Environment, the U.S. Army TankAutomotive and Armaments Command, and the Defense Security Cooperation Agency. 

4
Objectives 

Because of the congressional interest, the Special Inspector General for Iraq Reconstruction 

(SIGIR) evaluated 

• the status of U.S.-appropriated ISFF used for infrastructure projects in Iraq, including (1) 

factors affecting program execution and use of these funds, and (2) spending plans for 

unobligated funds and unliquidated obligations and 

• factors indicating and affecting a shift toward greater use of Iraqi funding to support Iraqi 

Security Forces infrastructure projects. 

To achieve our objectives, we reviewed and analyzed budget and financial data from the 

Department of the Army, which oversees the budgeting and accounting for ISFF, and from 

MNSTC-I, which develops the implementation plans for ISFF. We also held discussions with 

officials from the Office of the Secretary of Defense, the Joint Staff, the Department of the 

Army, and the U.S. CENTCOM; the Defense Security Cooperation Agency; and MNSTC-I. We 

obtained obligation and expenditures data from the Corps of Engineers Financial Management 

System; quarterly reports provided by the Office of Management and Budget, as required by 

Section 3303(b) of the U.S. Troop Readiness, Veteran’s Care, Katrina Recovery, and Iraq 

Accountability Appropriations Act of 2007 (Public Law 110-28); and the Department of Army 

Financial Management System and its “1002” reports. We also attended a MNSTC-I Working 

Program Budget Advisory Committee meeting where ISFF requirements were discussed and 

approved. 

Appendix A provides more information on our scope and methodology. Appendix B contains 

the definition of the Iraq Security Forces Fund sub-activity groups. Appendix C shows the 

MNSTC-I Program Budget Advisory Committee submission template. Appendix D lists the 

acronyms used in the report. Appendix E lists the audit team members. 

5
Status of U.S. Iraq Security Forces Fund Programmed 

for Infrastructure Development 

Approximately $4.7 billion, or 30%, of U.S. funds appropriated for the ISFF have been 

programmed for infrastructure projects.5

 As of June 30, 2008, $944.6 million remains 

unobligated in the infrastructure sub-activity group, of which $791.1 million is available for new 

obligations. The remaining unobligated funds have expired and cannot be use for new 

obligations. In addition, obligations have been incurred on some ISFF infrastructure projects, 

but substantial payments have not been made. Some of these projects, such as the construction 

of police stations, were approved in 2006. 

On June 30, 2008, the President signed H.R. 2642 (Public Law 110-252), which provided an 

additional $1.5 billion in FY 2008 supplemental ISFF and $1.0 billion in FY 2009 ISFF. Both 

the FY 2008 supplemental appropriation and the FY 2009 appropriation expire on September 30, 

2009. However, the amount of unobligated balances, as well as funds obligated but not yet 

expended, suggests that ISFF-supported construction projects will continue at least into 2010. 

As of June 30, 2008, $3.8 billion, or 80%, of the $4.7 billion programmed for infrastructure 

development has been obligated for projects supporting the Iraqi Security Forces at the 

Ministries of Defense and Interior. This leaves $791.1 million still available for obligation from 

funds appropriated in FY 2007 and 2008. Fiscal years 2005 and 2006 ISFF appropriations have 

expired, and unobligated balances in those accounts cannot be used for new obligations.6 Figure 

2 shows the status of ISFF by fiscal year. 

 

5

 Excludes $2.5 billion appropriated in June 2008. 

6

 Expired funds may be used for in-scope adjustments to existing obligations for another five years. For example, if 

a project using FY 2006 ISFF is still in progress and it makes sense due to changes on the ground to expand that 

project beyond its originally contracted amount, the Department of Defense may in some cases be able to use 

expired FY 2006 funds to do so, according to an official in the Office of the Secretary of Defense. 

6
Figure 2: ISFF Infrastructure Fund Status by Year of Appropriation, as of June 30, 

2008 ($ billions)

Source: SIGIR analysis of Department of the Army Financial Management System Data – 1002 Report as of June 30, 2008 

Note: 

FY 2008 ISFF appropriation includes the recently enacted $1.5 billion supplemental. 

Spending Plans for Unobligated ISFF Infrastructure Funding 

MNSTC-I still has $791.1 million of the fiscal years 2007 and 2008 ISFF programmed for 

infrastructure available for obligation until September 30, 2008 and 2009, respectively. This 

means that U.S.-funded infrastructure projects will likely be under construction at least into 

2010. The amount of FY 2007 funds still available for obligation is partly due to a recent 

reprogramming action reallocating $419 million from other ISFF sub-activity groups to the 

infrastructure sub-activity group—although the amount is less than initially proposed. 

Spending Plan for Unobligated FY 2007 ISFF Infrastructure 

As of June 30, 2008, almost $1.07 billion of FY 2007 ISFF programmed for infrastructure 

projects had been obligated, leaving approximately $440 million unobligated from the $1.51 

billion programming objective. These funds are available for obligation until September 30, 

2008, after which time they expire. 

The majority of the $440 million remaining is the result of a recent realignment of the ISFF in 

which $419 million was added to infrastructure development from other sub-activity groups. 

MNSTC-I requested the realignment to meet the operational needs of the Iraqi Security Forces. 

Under the DoD Appropriations Act, 2007 (Public Law 109-289), the Secretary of Defense must 

notify congressional defense committees when appropriated funds within the ISFF are realigned. 

On April 3, 2008, the Secretary of Defense notified the Congress of his intent to realign $610 

million. The proposal would shift $590 million from other ISFF sub-activity groups 

(predominantly from the sustainment and equipment categories) to infrastructure development 

and $20 million for training Iraqi Security Forces. Of the funds proposed to be transferred to 

7
infrastructure development, MNSTC-I planned to use $171 million to build 55 police stations on 

a cost-sharing basis with the Iraq Ministry of Interior. 

On May 8, 2008, the Secretary of Defense revised his proposal and informed the Congress that 

he would realign $439 million ($419 million for infrastructure development and $20 million for 

training). This revision came after an April 10, 2008, hearing in which the Secretary of Defense 

testified about the ISFF. In a post-hearing letter, the Chairman of the Senate Committee on 

Armed Services asked that the Secretary of Defense not proceed with the reallocation. In 

response, the Secretary of Defense stated that he reviewed “...the entire reallocation request, 

item by item” and removed $171 million that was previously identified for police station 

construction. Officials from DoD stated that because the MoI had agreed to pay 26% of 

construction costs in an earlier cost-sharing arrangement, it could be asked to pay for all 

associated costs of the additional police stations. 

For the FY 2007 ISFF programmed for infrastructure development that remains unobligated, 

MNSTC-I plans to use the funds for projects listed in Table 3. 

Table 3—Spending Plan for Unobligated 2007 ISFF for Infrastructure 

Development as of June 30, 2008 (Funds Expire on September 30, 2008) 

($ Millions) 

Project Estimated Cost

Ministry of Defense 

Basing for Support Units At Tikrit, Al Amarah, Al Asad, Rustimiyah, Tallil, Al 

Kasik, Al Habbaniyah, Kirkush, Numaniyah and Taji 

$82

Air Force Center for Engineering and the Environment Cost to Complete 44

Besmaya Maneuver Center 30

Kirkuk Regional Air Base Infrastructure Improvements 23

Al Muthana Air Base Infrastructure Improvements 21

Taji National Depot Maintenance Area 20

Ammunition Supply Point 20

10th Division Headquarters Cost to Complete 17

Division Training Center Infrastructure 15

Taji Air Base Infrastructure Improvements 10

Ministry of Interior 

Construct National Police Sustainment Brigade Headquarters 60

Ministry of Interior Training Base Expansion 42

Provincial Police Station (12) 33

National Police Site One Restoration 11

Construction of Department of Border Enforcement Infrastructure 9

Expedient Police Stations (3) 3

National Forensic Laboratory Upgrades 2

Total $442 a

Source: MNSTC-I J8 (Comptroller) 

Notes: 

a Spending plan information provided in Table 3 by MNSTC-I does not reconcile with the $439 million 

contained in the Department of Army Financial Management System. 

8
Spending Plan for Unobligated FY 2008 ISFF Infrastructure 

In December 2007, the Congress appropriated $1.5 billion in ISFF, which is available for 

obligation until September 30, 2009. Of this amount, $408.5 million is planned for infrastructure 

development for both the Ministries of Defense and Interior. As of June 30, 2008, MNSTC-I 

had obligated $56.1 million for infrastructure projects, including the Al Shab Location Command 

and Air Traffic Control Towers at Taji and Kirkuk Regional Air Bases. The remaining $352.4 

million has not been obligated. Table 4 shows how MNSTC-I plans to use the unobligated 

funds. 

Table 4—Spending Plan for Unobligated 2008 ISFF for Infrastructure 

Development as of June 30, 2008 (Funds Expire on September 30, 2009) 

($ Millions) 

Project Estimated Cost

Ministry of Defense 

Air Force Center for Engineering and the Environment Cost to Complete 

Infrastructure Projects 

$102.0

Besmaya Maneuver Center 30.0

Air Force Center for Engineering and the Environment Civilian Pay and 

Contracting Support 

20.0

Iraqi Special Operations Forces Support Battalions 18.8

Ammunition Supply Points 18.6

Armor School Annex at Besmaya 15.0

Air Traffic Control Tower at Kirkuk Regional Air Base 10.0

Iraqi Naval Barracks Infrastructure 8.0

Site Surveys for Iraqi Air Force Bases 6.9

Training School and Maintenance Facility (Kirkuk or Taji) 2.5

Ministry of Interior 

National Police Forward Operating Bases in Baghdad Perimeter (4) 72.0

Provincial Police Stations (11) 33.0

National Police Site 11 Force Protection 2.0

Baghdad Criminal Investigation Department 2 1.8

Baghdad Police College Restroom Restoration 1.2

Total $341.8 a

Source: MNSTC-I J8 (Comptroller) 

Notes: 

a Spending plan information provided in Table 4 by MNSTC-I does not reconcile with the $352.4 million contained in the Department of Army 

Financial Management System. 

On June 30, 2008, the President signed H.R. 2642 (Public Law 110-252) providing an additional 

$1.5 billion in FY 2008 supplemental ISFF. However, no funding was provided in this 

supplemental for infrastructure development. These funds also expire on September 30, 2009. 

9
ISFF Obligations Where Substantial Payments Remain 

In addition to unobligated ISFF, obligations have been incurred for infrastructure projects, but 

payments have not been made. Some of these projects, such as the construction of police 

stations, were approved in 2006. Table 5 shows infrastructure projects for which obligations 

have been created and which carry outstanding balances of greater than $10 million. 

Table 5—Infrastructure Projects for Which Obligations Have Been Created, but $10 

Million or More Remains Unpaid as of May 20, 2008 

Approval 

Date 

Fiscal 

Year of 

Funding Project Description Obligation Disbursement Balance

05-Apr-06 2006 

Assessment and Renovation/Construction of 

Police Stations in Baghdad $17,943,685 $6,070,743 $11,872,942 

04-Sep-06 2006 

Construction of 100 Iraqi Police Stations and 

Construction Estimates for 10 Police Stations 32,949,123 4,783,193 28,165,930 

04-Sep-06 2006 

Construction of 100 Iraqi Police Stations and 

Construction Estimates for 10 Police Stations 28,293,754 16,440,165 11,853,589 

17-Feb-07 2007 Warehouse Upgrades at Taji National Depot 22,167,299 4,174,318 17,992,981 

17-Feb-07 2007 

Construction of CRSP Yard at Taji National 

Depot 14,551,287 3,241,630 11,309,657 

08-Apr-07 2006 

Construction of Facilities for 4th Brigade, 9th 

Division, Iraqi Army at Taji 31,804,561 19,716,713 12,087,848 

30-Jun-07 2007 

Construction of Facilities for Special 

Operations Forces, West Baghdad 

International Airport, Iraq 24,768,010 14,598,123 10,169,887 

07-Sep-07 2007 DGIS National Headquarters Building 33,560,000 0 33,560,000 

08-Sep-07 2007 Construction-Cost Plus Fixed Fee 13,740,070 1,282,839 12,457,231 

25-Sep-07 2006 

Construct/Renovate Ministry of Interior 

Investigations & Regional Bureau, Central 

Headquarters 17,030,616 6,755,875 10,274,741 

26-Sep-07 2007 

Construction of 5th Division Forward 

Operating Base Lion/Gabe, Iraq 14,996,896 4,367,554 10,629,342 

01-Feb-08 2007 Renovation of Multiple Police Stations 12,990,883 86,508 12,904,375 

28-Feb-08 2007 

Plan, Develop, and Install Recruit Training 

Center, Baghdad Police College 23,932,695 1,443,728 22,488,967 

13-Mar-08 2007 

Construction Efforts, Iraqi Air Force Flight 

School 23,504,735 0 23,504,735 

15-Mar-08 2007 Construction Efforts Cost Plus Fixed Fee 14,642,120 0 14,642,120 

01-May-08 2007 Baghdad Police College Phase III Expansion 19,170,000 0 19,170,000 

01-May-08 2008 

Iraqi Special Operations Forces RCB at 

Diyala 14,600,000 0 14,600,000 

01-May-08 2008 

Namab (Al Muthana) Regional Infrastructure 

RPR/CNS Ramp Phases I and II 10,300,000 0 10,300,000 

02-May-08 2008 

Iraqi Special Operations Forces RCB at 

Basara 13,700,000 0 13,700,000 

11-May-08 2008 

Design and Construction of Command at Al 

Shaiba, Iraq 42,668,300 0 42,668,300 

19-May-08 2007 Taji Air Traffic Control Tower 10,650,000 0 10,650,000 

19-May-08 2007 Kirkuk Air Traffic Control Tower 10,650,000 0 10,650,000 

Total $448,614,035 $82,961,388 $365,652,647 

Source: Corps of Engineers Financial Management System 

10
Obtaining Land Deeds Is a Challenge 

One of the challenges for the MoI infrastructure program that has caused delays in executing 

construction projects, according to MNSTC-I officials, has been the difficulty in obtaining land 

deeds for the construction of police stations. Until the land deeds are obtained, contracts for 

construction of these police stations cannot be executed and funds cannot be obligated. For 

example, in February 2008, the MNSTC-I Directorate of Interior Affairs received a request from 

MNC-I for construction of 130 police stations deemed critical to the security mission of the Iraqi 

Security Forces. The Directorate of Interior Affairs (DoIA) obtained approval for $125 million 

of the ISFF for construction of the first 49 stations, which were prioritized with input and 

participation by the Provincial Directors of Police. However, before these projects can be 

submitted for contracting, DoIA requires land deeds. MNSTC-I stated that effective July 2, 

2008, the GOI obtained the land deeds and that action to contract for construction of the 

remaining police stations using ISFF has resumed. 

In another case, the Directorate of Interior Affairs stated that as part of the Baghdad Expansion 

Plan that began in August 2007, the Directorate of Interior Affairs committed to building 

permanent police stations for the Baghdad police chiefs at 31 locations, including Kassrah and 

Hy Al Lam. However, to build permanent police stations, the Directorate of Interior Affairs 

must have land deeds, which were not provided for 15 of the 31 stations. As a result, in May 

2008, the Directorate of Interior Affairs notified MNC-I that it would not be able to build the 

Kassrah and Hy Al Lam Stations. 

11
Shift Toward Greater Emphasis on Iraq Funding of 

Iraqi Security Forces Infrastructure Needs 

Capacity and speed of execution have been the principal factors we identified as having created 

reliance on the United States to fund and execute the Iraqi Security Forces infrastructure projects 

in the past. More recently, available information indicates a shift toward greater reliance on the 

Iraq government to fund such projects, with the United States providing support in executing the 

projects. 

Project Execution Has Been the Key Driver in Decisions to Use ISFF 

OSD officials stated that speed of execution and the need to take advantage of security gains on 

the ground have driven the decision to use ISFF rather than requesting the GOI to fund 

infrastructure-related projects. According to the officials, contracting for construction projects 

under the MoD can take from 70 to 314 days, while under the MoI the process can take 71 to 90 

days. Iraqi law also requires that MoD and MoI projects be identified and approved for inclusion 

in the following year’s capital budget by March prior to the year of execution. Thus, ISFF more 

quickly meets emerging security requirements. Also, the GOI is using the U.S. Foreign Military 

Sales (FMS) system to acquire material and services. 

Government of Iraq Expenditures for Iraqi Security Forces 

Recently, the Commander, MNF-I, stated that the GOI has an increasing responsibility and an 

increasing ability to fund reconstruction and security operations in Iraq, and it is making progress 

toward assuming a greater share of the cost. On April 8-9, 2008, he testified that the Iraqi 

security ministries were steadily improving their ability to execute their budgets and in both 2006 

and 2007 these ministries had spent more on Iraqi Security Forces than the United States. He 

added that it was anticipated that Iraq would spend over $8 billion on security in 2008 and $11 

billion in 2009, which would allow the United States to reduce its ISFF budget request for FY 

2009 from $5.1 billion to $2.8 billion. 

He acknowledged that an important limiting factor is the Iraq government’s capability, but said 

that this is gradually improving as evidenced by an increase in budget execution last year. 

Figure 3 compares the expenditure rates of the United States and the GOI for the Iraqi Security 

Forces. 

12
Figure 3—U.S. and GOI Expenditures for Iraqi Security Forces ($ billions) 

Source: MNSTC-I Comptroller (J8) 

The administration’s expectation that the Iraqi government would take on a larger funding role is 

also reflected in the DoD’s budget request for FY 2009, which did not contain a request for 

funding of the ISFF infrastructure sub-activity group. MNSTC-I has made several cost-sharing 

arrangements with the GOI to partially fund some infrastructure requirements. In such 

arrangements, the MoD and MoI use a combination of direct contracting and Foreign Military 

Sales to facilitate cost sharing. For services and materials acquired through the Foreign Military 

Sales program, the Defense Security and Cooperation Agency and the U.S. Treasury pay vendors 

with Iraqi funds. Current infrastructure cost-sharing projects include border enforcement 

facilities, with the GoI contributing $25.4 million and the United States contributing $191.5 

million, and a headquarters complex for the Iraqi National Police, with the GOI contributing 

$52.5 million and the United States $18 million. In addition, the GOI provided $349.6 million in 

2007 for fifteen infrastructure projects. 

In the June 16, 2008 Program Budget Advisory Committee meeting, several of the new 

requirements presented to committee members were also cost-sharing arrangements, including 

requests for infrastructure projects. However, some MNSTC-I organizations requested that ISFF 

funds, rather than GOI funds, be used to support these requirements. These organizations stated 

that Foreign Military Sales or other Iraqi-funded avenues were not possible because the GOI did 

not have the processes, procedures, or technical capability in place to facilitate timely execution 

of the projects and that the Foreign Military Sales program was not a timely solution. However, 

DoD officials stated that as ministry capacity increases and matures, it will continue to work with 

the GOI to transfer additional ISFF responsibilities to the GOI. 

In addition, the Defense Security and Cooperation Agency announced in May 2008 that the GOI 

had initiated efforts to obtain technical assistance from the Corps of Engineers for engineering, 

planning, design, acquisition, contract administration, construction management, and other 

13
technical services for Iraqi Security Forces facilities and infrastructure construction. The 

facilities and infrastructure planned include new barracks and facilities, maintenance and supply 

buildings, brigade headquarters, and utility systems. The estimated cost is $450 million. 

14
Conclusions and Matter for Congressional 

Consideration

Conclusions 

U.S.-funded ISFF infrastructure spending has gradually and steadily shifted to funding by the 

Government of Iraq. The key driver in the speed of this shift is the ability of the Government of 

Iraq to quickly budget, contract for, begin, and complete needed projects. Further contributing to 

the shift is the encouragement exerted by the Congress as it makes its preferences known to the 

Department of Defense. 

In spite of the positive trend, the inability of the GOI to effectively execute its budget continues 

to inhibit a more speedy transfer of funding responsibility from U.S.-funded ISFF to the GOI. 

As a result, substantial U.S.-appropriated funds remain available for infrastructure projects. 

These funds will be available for obligation through September 2009 with expenditures likely 

extending into 2010. Some projects, such as the construction of police stations for the Ministry 

of Interior, may be more quickly transitioned to funding by the GOI, as was done with the recent 

DoD request for realignment of FY 2007 ISFF. 

Matter for Congressional Consideration 

The Congress may wish to examine DoD’s spending plans for the remaining ISFF that have not 

yet been obligated or expended to identify further opportunities for transferring funding 

responsibility to the GOI—either on a full-funding or cost-sharing basis. These spending plans 

are included in this report in Tables 3, 4, and 5. 

Management Comments and Audit Response

The Multi-National Security Transition Command-Iraq stated that it will continue to emphasize 

Government of Iraq full funding or cost sharing across all ISFF categories, including 

infrastructure. It also updated information on the Government of Iraq having obtained necessary 

land deeds so that planned construction of police stations using ISFF can resume. We have 

revised our report to reflect this information. 

The Office of the Secretary of Defense-Comptroller provided clarifying comments which were 

incorporated in this report. 

The Joint Contracting Command-Iraq/Afghanistan responded that it had no comments on the 

draft report. 

15
Appendix A—Scope and Methodology 

Because of congressional interest, the Special Inspector General for Iraq Reconstruction (SIGIR) 

evaluated 

• the status of U.S.-appropriated ISFF used for infrastructure projects in Iraq, including (1) 

factors affecting program execution and use of these funds and (2) spending plans for 

unobligated funds and unliquidated obligations and 

• factors indicating and affecting a shift toward greater use of Iraqi funding to support Iraqi 

Security Forces infrastructure projects. 

This audit was performed under the authority of Public Law 108-106, as amended, which also 

incorporates the duties and responsibilities of inspectors general under the Inspector General Act 

of 1978, as amended. 

To achieve our objectives, we reviewed and analyzed budget and financial data from the 

Department of the Army, which oversees the budgeting and accounting for ISFF, and from the 

Multi-National Security Transition Command-Iraq, which develops the implementation plans for 

use of ISFF. We also held discussions with officials from the Office of the Secretary of Defense, 

the Joint Staff, the Department of the Army, the U.S. Central Command, the Defense Security 

Cooperation Agency, the Multi-National Security Transition Command-Iraq, and Multi-National 

Force-Iraq. We obtained obligation and expenditures data from the Corps of Engineers Financial 

Management System; quarterly reports provided by the Office of Management and Budget, as 

required by Section 3303(b) of the U.S. Troop Readiness, Veteran’s Care, Katrina Recovery, and 

Iraq Accountability Appropriations Act of 2007 (P.L. 110-28); and from the Department of 

Army Financial Management System and its “1002” reports. We also attended an MNSTC-I 

Working Program, Budget, and Advisory meeting where ISFF requirements were discussed and 

approved. 

We performed our work in Arlington, Virginia, and Baghdad, Iraq. We conducted this 

performance audit from May through July 2008 in accordance with generally accepted 

government auditing standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for our results based on our 

audit objectives. Based on those objectives, we believe that the evidence obtained provides a 

reasonable basis for our results. 

Use of Computer-Processed Data 

SIGIR did not use any computer process data during this audit except for the financial 

information discussed below. 

SIGIR extensively used financial information from various DoD Financial Management 

Systems. We did not independently verify the overall integrity of the financial information. We 

reviewed other audit reports that included evaluations of aspects of the output from these 

financial systems and found no material deficiencies. For example, in an earlier review, we 

16
tested DoD controls over $9.2 billion in disbursements and in all instances found that DoD 

disbursements could be matched with obligations in accounting records. Thus, we believe that 

the financial obligation and expenditure information used in this report reasonably supports our 

overall results. 

Internal Controls 

We reviewed the controls in place to identify and approve projects for use of the ISFF and 

compared the projects identified with subsequent obligation and expenditure amounts. While we 

used financial information from the DoD financial management system, we did not perform an 

overall evaluation of the system. 

Related Reports by SIGIR and Others 

Interim Analysis of Iraqi Security Forces Information Provided By The Department of Defense 

Report, Measuring Stability and Security in Iraq, SIGIR-080015, April 25, 2008. 

Operation Iraqi Freedom: DoD Assessment of Iraqi Security Forces’ Units as Independent Not 

Clear Because ISF Support Capabilities Are Not Fully Developed, GAO-08-143R, November 

30, 2007. 

Management of the Iraq Security Forces Fund in Southwest Asia - Phase III, D-2008-026, 

Inspector General, United States Department of Defense, November 30, 2007. 

The Report of the Independent Commission on the Security Forces of Iraq, September 6, 2007. 

Securing, Stabilizing, and Rebuilding Iraq: Iraqi Government Has Not Met Most Legislative, 

Security, and Economic Benchmarks, GAO-07-1195, September 4, 2007. 

Stand Up and Be Counted: The Continuing Challenge of Building the Iraqi Security Forces. 

House Armed Services Committee, Subcommittee on Oversight & Investigations, June 27, 2007. 

Stabilizing Iraq: Factors Impeding the Development of Capable Iraqi Security Forces, GAO-07-

612T, March 13, 2007. 

Management of the Iraq Security Forces Fund in Southwest Asia - Phase II, D-2007-064, 

Inspector General, United States Department of Defense, February 12, 2007. 

Review of Iraq Relief and Reconstruction Fund Unmatched Disbursements, SIGIR-06-043, 

January 30, 2007. 

Management of the Iraq Security Forces Fund in Southwest Asia - Phase I, D-2007-030, 

Inspector General, United States Department of Defense, December 8, 2006. 

Iraqi Security Forces: Weapons Provided by the U.S. Department of Defense Using the Iraq 

Relief and Reconstruction Fund, SIGIR-06-033, October 28, 2006. 

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Iraqi Security Forces: Review of Plans to Implement Logistics Capabilities, SIGIR-06-032, 

October 28, 2006. 

Stabilizing Iraq: An Assessment of the Security Situation, GAO-06-1094T, September 11, 2006. 

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Appendix B—Iraq Security Forces Fund Sub-Activity 

Group Definitions 

Sustainment: Weapons, ammunition, and contracted activities, such as logistics support, 

maintenance, and other services. 

Infrastructure: Facilities for military and police units, training academies and areas, detainee 

operations, and headquarters expenses. 

Equipment and Transportation: Equipment and transportation for security forces and police, 

contracted security, force protection (including vehicle modifications), vehicles, organizational 

clothing, office furniture, and communications equipment. 

Training: Military and police training, institutional development, instructor support, medical and 

office equipment, training aids, aircraft support, and information technology equipment and 

services. 

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Appendix C—Program Budget Advisory Committee 

Submission Template 

20
Appendix D—Acronyms 

Acronym Description 

CENTCOM U.S. Central Command 

DoD Department of Defense 

DoIA Directorate of Interior Affairs 

GOI Government of Iraq 

FMS Foreign Military Sales 

ISFF Iraq Security Forces Fund 

MNC-I Multi-National Corps-Iraq 

MNF-I Multi-National Force-Iraq 

MNSTC-I Multi-National Security Transition Command-Iraq 

MoD Ministry of Defense 

MoI Ministry of Interior 

SIGIR Special Inspector General for Iraq Reconstruction 

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Appendix E—Audit Team Members

This report was prepared, and the audit work conducted, under the direction of David R. Warren, 

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

Reconstruction. Staff members who contributed to the report include: 

Tinh Nguyen 

Charles Thompson 

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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 Hillel Weinberg 

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: 703-428-1059 

Email: hillel.weinberg@sigir.mil 

Public Affairs Kristine R. Belisle 

Director 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 

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