OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

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SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION 

October 27, 2006 

MEMORANDUM FOR U.S. AMBASSADOR TO IRAQ 

 COMMANDING GENERAL, MULTI-NATIONAL FORCE-IRAQ 

 

SUBJECT: Management of the Iraqi Interim Government Fund (SIGIR-06-031) 

We are providing this 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 considered comments from the Multi-National Force-Iraq. The comments are addressed 

in the report, where applicable, and a copy of the response letter is 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 (joseph.mcdermott@sigir.mil / 703-604-0982) or 

Mr. Clifton Spruill at (clifton.spruill@iraq.centcom.mil / 703) 343-9275). For the report 

distribution, see Appendix E. 

Stuart W. Bowen, Jr. 

 Inspector General 

cc: See Distribution 

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

Executive Summary i 

Introduction 1 

Management Controls 4 

Conclusion and Recommendations 8 

Appendices 

A. Scope and Methodology 10 

B. Letter Establishing the IIGF, July 15, 2004 13 

 C. Analysis of Documents Contained in 26 Judgmentally 

 Sampled Completed IIGF Project Files 14 

D. Acronyms 15 

E. Report Distribution 16 

F. Audit Team Members 18 

Management Comments 

Multi-National Force-Iraq 19 
Management of the 

Iraqi Interim Government Fund 

SIGIR-06-031 October 27, 2006 

Executive Summary 

Introduction 

In 2004, the Iraqi Interim Government established the Iraqi Interim Government Fund 

(IIGF), providing $136 million from the Development Fund for Iraq1

 for U.S. military 

commanders to respond to the urgent humanitarian relief and reconstruction requirements 

in their areas of responsibility. The Multi-National Force-Iraq (MNF-I) is responsible for 

overseeing and reporting monthly to the Iraqi government on the status of IIGF projects 

and financial information; MNF-I’s subordinate command, the Multi-National Corps-Iraq 

(MNC-I), is responsible for management of the IIGF projects. IIGF projects involve the 

repair or reconstruction of hospitals and clinics, the provision of electrical equipment 

(such as generators), and civic cleanup. One of its purposes is to employ as many Iraqis 

as possible. As of July 31, 2006, MNC-I reported that it had disbursed $114.9 million for 

683 IIGF projects, of which 628 were complete. 

Objectives 

The objectives of this audit are to determine if MNF-I can properly account for the funds 

provided by the Iraqi Interim Government and has used the funds for their intended 

purposes. 

Results 

MNF-I can account for the $136 million of IIGF monies in its overall financial records. 

For the 26 projects we randomly reviewed, MNF-I used the funds for the intended 

purposes and in accordance with appropriate rules and regulations. However, we also 

found that project files were incomplete and that data could not be reconciled to the 

financial records or to the project files. Further, although monthly reports to the Iraqi 

government on the status and uses of the IIGF are required, we found that MNF-I had not 

reported to the Iraqi government since December 2005. 

 

1

 The Development Fund for Iraq is the primary repository for Iraqi oil revenues and formerly seized Iraqi 

assets from abroad. 

i
Our review of 26 completed project files found that only 2 contained all required 

documents. We also found that MNC-I could not account for the whereabouts of all 

completed IIGF project files. These deficiencies could result in the lack of a historical 

accounting and transparency of the U.S. relief and reconstruction efforts in Iraq. 

Regarding the inability to reconcile data, we found variances between the Iraq 

Reconstruction Management System (IRMS) and both the Army’s Standard Financial 

System (STANFINS), and IIGF project file data. Both STANFINS and IRMS are used 

by MNC-I, and are the basis for a required report to be submitted monthly by MNF-I to 

the Iraqi government on the status of IIGF projects. MNF-I and MNC-I have actions 

underway to improve data quality. 

Recommendations 

Because MNF-I has not been submitting to the Iraqi government the required monthly 

IIGF accounting reports on the use of the Development Fund for Iraq since December 

2005, we recommend that the Commanding General, MNF-I: 

1. Provide the Iraqi government the required accounting of the use of these funds. 

This accounting should be in compliance with MNF-I Fragmentary Order 603 

“Accountability of Funds from the Iraqi Interim Government,” and be henceforth 

submitted monthly, as required. 

Further, we recommend that the Commanding General, MNF-I, direct his program 

managers and subordinate commands to take these actions: 

2. Enforce existing guidance on maintaining project records, including conducting 

quarterly reviews to ensure the accuracy of IIGF project files.

3. Develop a tracking system for controlling and processing IIGF project files 

through the entire management process. 

4. Continue efforts to improve IRMS accuracy for IIGF projects.

Management Comments and Audit Response 

We received written comments on a draft of this report from MNF-I. The MNF-I Chief 

of Staff concurred with all recommendations and has identified corrective actions that 

have been initiated or planned. According to their comments, MNF-I resumed its 

monthly reporting to the Iraqi government in July 2006. However, upon obtaining the 

July report, we found that it was not signed by MNF-I until September 13, 2006. The 

comments received were fully responsive. MNF-I’s comments are included in the 

Management Comments section of this report. 

ii
Introduction 

Background 

In 2004, the Iraqi Interim Government established the Iraqi Interim Government Fund 

(IIGF), by providing $136 million from the Development Fund for Iraq, for U.S. military 

commanders to respond to the urgent humanitarian relief and reconstruction requirements 

in their areas of responsibility. The Multi-National Force-Iraq (MNF-I) is responsible for 

overseeing and reporting monthly to the Iraqi government on the status of IIGF projects 

and financial information; MNF-I’s subordinate command, the Multi-National Corps-Iraq 

(MNC-I), is responsible for management of the IIGF projects. IIGF projects involve the 

repair or reconstruction of hospitals and clinics, the provision of electrical equipment 

(such as generators), and civic cleanup. One of its purposes is to employ as many Iraqis 

as possible. As of July 31, 2006, MNC-I reported that it had disbursed $114.9 million for 

683 IIGF projects, of which 628 projects were complete. 

On June 28, 2004, the Commanding General of the Combined Joint Task Force-7, 

Operation IRAQI FREEDOM, who was the senior commander in Iraq at the time, sent a 

letter to the Iraqi Prime Minister requesting that the Iraqi government partner with the 

MNF-I to provide Development Fund for Iraq funds in support of Commander’s 

Emergency Response Program2 (CERP) projects. The Deputy Prime Minister responded 

in a letter dated July 15, 2004, agreeing to provide $86 million immediately and 

promising additional funds for the future (see Appendix B).3 On August 11, 2004, the 

Iraqi Interim Government transferred $86 million to MNF-I under the custody of the 

Joint Area Support Group-Central Comptroller. 

Based on instructions from the MNF-I Deputy Chief of Staff for Resources Management, 

the Joint Area Support Group-Central Comptroller disbursed the $86 million in funds to 

three of the major subordinate commands of the MNC-I4 as follows: 

• $38,600,000 to Multi-National Division-Baghdad (Task Force Baghdad) 

• $26,000,000 to Multi-National Division-North 

• $21,400,000 to Multi-National Force-West 

 

2

 The Commander’s Emergency Response Program (CERP) allows U.S. military commanders in both Iraq 

and Afghanistan to undertake a variety of nonconstruction and construction activities in response to the 

urgent humanitarian relief and reconstruction requirements of the local population in their areas of 

responsibility. For more information regarding the program, see SIGIR audit report, Management of the 

Commander’s Emergency Response Program for Fiscal Year 2005, (SIGIR-05-025, January 23, 2006). 3

 The U.S. Ambassador to Iraq provided MNF-I an additional $86 million (matching funds) from the Iraq 

Relief and Reconstruction Fund, which became known as the Commanders Humanitarian Relief and 

Reconstruction Program and was separate from the IIGF. 

4

 The major subordinate commands, which are deployed throughout Iraq, propose, initiate, and execute 

nonconstruction projects and some construction projects in their areas of responsibility. 

1
MNF-I issued guidance for executing IIGF projects and accountability as fragmentary 

orders.5

 MNC-I, as the primary implementing agency for the IIGF, also issued its own 

fragmentary orders to its major subordinate commands and published its own standard 

operating procedures6

 to codify all current procedures and requirements. MNC-I was 

responsible for identifying new projects and submitting a list to MNF-I for approval. 

In December 2004, the Iraqi Deputy Minister of Finance provided an additional $50 

million in funding, increasing the IIGF total to $136 million. During the intervening 

period, the MNF-I Commanding General had approved 122 new projects identified by 

MNC-I to be paid for with the $50 million. 

Also in December 2004, MNF-I initiated a process to bring the IIGF into the U.S. 

Treasury Financial System, using the Defense Finance and Accounting Service via the 

Department of the Army’s Standard Financial System (STANFINS). A memorandum of 

agreement between the 336th Finance Command, Kuwait, and MNF-I, addressed the 

receiving, disbursing, accounting for, and reporting of IIGF assets. It also identified a 

four-step process for placing IIGF monies under the formal custodial account control of 

authorized financial management personnel: 

• Cash transfer from MNC-I division-level agents to the 336th Finance Command 

• Transfer of custodial control from the Joint Area Support Group-Central 

Comptroller to the 336th Finance Command 

• Electronic funds transfer of IIGF monies from the Iraqi Minister of Finance 

• Monthly status reports on IIGF projects and disbursements from MNF-I to the 

Iraqi Minister of Finance 

The memorandum of agreement did not alter the guidance for executing IIGF projects. 

Objectives 

The objectives of this audit are to determine if MNF-I can properly account for the funds 

provided by the Iraqi Interim Government and has used the funds for their intended 

purposes. 

When we announced the audit, we anticipated that a cash count would be necessary; 

however, we learned that the IIGF was now based on an electronic funds transfer process, 

and cash associated directly to IIGF was no longer utilized in the transfer of funds or for 

the payment of expenses/vouchers. Thus, we modified our audit objectives accordingly. 

 

5

 A Department of Defense abbreviated form of an operation order usually issued on a day-to-day basis that 

eliminates the need for restating information in a basic operation order. It may be issued in sections. 6

 MNC-I issued “CERP Family of Funds: Fiscal Policies, Processes, and Standard Operating Procedures” 

on June 29, 2005, and a revised version on April 24, 2006. 

2
For a discussion of the audit scope, methodology, and prior coverage, see Appendix A. 

For the letter establishing the Iraqi Interim Government Fund, see Appendix B. For the 

summary of our analysis of 26 completed IIGF project files, see Appendix C. For the 

acronyms, see Appendix D. For the report distribution, see Appendix E. For a list of the 

audit team members, see Appendix F. 

3
Management Controls 

Our review found that MNF-I can account for the $136 million of IIGF monies in its 

overall financial records. For the 26 projects we randomly reviewed, MNF-I used the 

funds for the intended purposes and in accordance with applicable rules and regulations. 

However, we did find shortfalls in records management and project data reliability. The 

26 project files selected for review are below. 

Table—Completed IIGF Projects 

Project Title Project Number Completion Date Disbursement 

Funding Camp Bucca 

Projects (Bulk Payment) 27742 07/16/06 $1,092,377

Baghdad Sewage Office 

Retrofit 27755 04/17/06 $2,644,000

Travel Reimbursement 

for Voting VI 002 11/11/05 $2,650

Fuel for Election Support 27658 11/03/05 $9,600

Amar Clinics 33276 10/31/05 $2,200,000

Sewer Line Repair 33121 07/30/05 $1,140,687

Sewer Network Renovation 33112 07/05/05 $2,237,860

Construction Apprentice 

Program 33553 07/01/05 $60,000

Route Pluto Renovations 32249 06/01/05 $400,000

Renovation of Fresh 

Water System 

32019 06/01/05 $2,133,888

Roadway Project 32238 05/21/05 $144,650

Pump Station Renovation 31733 05/14/05 $1,902,000

Renovation Rasheed 

Water Treatment Plant 31994 05/01/05 $499,920

Sewer Lift Station 

Rehabilitation 33099 04/30/05 $134,000

Rear Generators 

Inoperative 33011 04/27/05 $1,398,800

Install New Sewer Pumps 33108 04/22/05 $3,015,046

Rehab P6 Sewage 

Pump Station 33126 03/30/05 $191,600 

Road Refurbishment 30186 02/24/05 $50,000

Road Construction 30596 02/13/05 $42,000

Two Armored SUVs 33255 02/04/05 $343,000

Primary School Repair 30222 02/02/05 $28,509

Primary School Repair 30221 02/02/05 $23,370

Secondary School for Boys 30194 02/02/05 $43,382

Graffiti Removal 05MD85304 01/10/05 $1,300

School Construction 35968 01/05/05 $84,436

Hospital Work 1AD2BCT-130/MDIA607 09/14/04 $94,035

TOTAL $19,917,110

Source: SIGIR analysis of selected IIGF project files, as of August 2006. 

4
MNF-I utilized several processes to oversee and manage the IIGF. Specifically, MNF-I 

required: 

• MNC-I to centralize the collection and management of project records, and 

required the major subordinate commands to provide their records for completed 

projects to MNC-I on a quarterly basis, 

• IIGF financial information to be controlled through the Defense Finance and 

Accounting Service via STANFINS, 

• all major subordinate commands to report the status of projects to MNC-I via the 

Iraq Reconstruction Management System (IRMS) that is operated by the Gulf 

Region Division of the U.S. Army Corps of Engineers. 

Records Management 

MNF-I centralized the management and maintenance of completed IIGF project files at 

MNC-I, requiring the major subordinate commands to submit completed project files 

with all required source documentation for review and storage on a quarterly basis. 

MNC-I’s Standard Operating Procedures contain a requirement that the major 

subordinate commands submit, at a minimum, 13 types of supporting records or 

documents for each completed project to MNC-I. We reviewed the completed IIGF 

project files to ascertain if the 13 supporting records or documents were in the files. 

Initially, the sample we selected for review of the IIGF files was a random sample of all 

completed projects. However, MNC-I was not able to provide us all the required 

records/project files nor were the files kept in a manner whereby we had access to all 

records. MNC-I officials acknowledged this, and even went so far as to disclose that the 

major subordinate commands might have mistakenly sent some project files directly to 

the Coalition Forces Land Component Command in Atlanta, Georgia, thereby 

circumventing MNC-I’s oversight process. Further, the records were not maintained in a 

manner where it was easy to identify which projects were funded by IIGF. 

Because of MNC-I’s inability to provide a complete set of complete project files, we 

determined that a judgmental sample would be the best approach to conduct our selection 

of project files to be reviewed. Our judgmental sample consisted of 26 completed project 

files totaling $19.9 million in MNC-I’s control at Camp Liberty in Baghdad, Iraq. Our 

review disclosed that: 

• 2 of the 26 files contained all of the required supporting documentation 

• 24 were missing two or more required documents 

• the majority of the missing documents were signature cards and appointment 

letters for the paying agent and the project purchasing officer 

5
In interviews with budget personnel, we were told that due to the large number of 

transactions handled by the paying agents and project payment officers, copies of the 

signature cards or appointment letters were not included in all project files as required. 

For a summary of our analysis of the documents contained in the 26 sampled project 

files, see Appendix C. 

The Special Inspector General for Iraq Reconstruction (SIGIR) has reported on a lack of 

documentation in project files held by MNC-I in two previous audit reports7 on CERP. 

As identified in those previous reports, these deficiencies could result in the loss by the 

U.S. government of a historical accounting and transparency of the efforts conducted to 

provide relief and reconstruction to the people of Iraq. 

Data Reliability 

MNC-I uses two separate automated management information systems: STANFINS for 

tracking and reporting IIGF disbursements; and IRMS for tracking project data. These 

two systems collectively provide the basis for MNC-I to report the status of IIGF projects 

to MNF-I. 

 

To reconcile the IIGF data between MNC-I financial records and STANFINS, we 

compared obligations and disbursements for each of the major subordinate commands as 

of August 18, 2006, and found that the MNC-I maintained financial spreadsheet was in 

agreement with STANFINS. We then tried to reconcile IRMS aggregate financial data 

with STANFINS and found an insignificant variance of approximately .3% between the 

two systems for both obligations and disbursements. According to an MNF-I official, 

between December 2005 and July 2006, the variances had been much higher and MNF-I 

had successfully worked to reduce them. 

In addition, during our review of the IIGF project files, we noted inaccuracies between 

data in the project files and the data in IRMS. Several examples are as follows: 

• A project file showed the project completed in November 2005, but IRMS 

showed the project as in progress. 

• A project file contained documents identifying funds transferred to a major 

subordinate command via Military Interdepartmental Purchase Request 

(referred to as bulk payments) to be used for various ongoing projects. IRMS 

listed the project as being completed and the money disbursed. The effect of this 

skews the number of projects completed and the amount of IIGF monies actual 

disbursed on projects since there is no way of assuring all of the bulk payment 

money will be disbursed. 

 

7 Management of the Commander’s Emergency Response Program for Fiscal Year 2004 (SIGIR-05-014, 

October 13, 2005) and Management of the Commander’s Emergency Response Program for Fiscal Year 

2005 (SIGIR-05-025, January 23, 2006). 

6
• Documentation identifying total project costs contained in the project file did 

not agree with the actual disbursed cost in IRMS. 

• The unique requirements identifier listed on a project file did not agree with the 

unique requirements identifier for that project in IRMS. 

As a result of the data inaccuracies in IRMS, we did not use IRMS data for validation 

purposes during the course of this audit. In a previous report, Review of Data Entry and 

General Controls in the Collecting and Reporting of the Iraq Relief and Reconstruction 

Fund (SIGIR-06-003, April 28, 2006), we identified that the reliability of the reports 

generated by IRMS is diminished without assurances that the initial data entering the 

system are complete, accurate, and valid. Until improvements are made, there is 

diminished assurance that there is adequate integrity of the data in IRMS that supports 

program management oversight and decision making. The results of this review are 

another example of the need for improving the data quality in IRMS. 

We discussed this issue with both MNF-I and MNC-I and were told that they have been 

working on this for some time, and that MNC-I is cleaning up the data in IRMS to ensure 

accuracy and has made good progress. As this data reconciliation was being conducted, 

MNC-I continued to provide monthly reports to MNF-I on the status of IIGF projects. 

However, as of January 2006, MNF-I decided to cease submitting the IIGF monthly 

status report required by MNF-I Fragmentary Order 603 “Accountability of Funds from 

the Iraqi Interim Government” until the IIGF financial and project data could be 

reconciled. By not reporting this data, MNF-I has not provided transparency and 

accountability for the funds transferred by the Iraqi government to MNF-I for its 

administration and management.

7
Conclusion and Recommendations 

Conclusion

MNF-I can account for the $136 million of IIGF monies in its overall financial records. 

For the 26 projects we randomly reviewed, MNF-I used the funds for the intended 

purposes and in accordance with appropriate rules and regulations. However, MNF-I had 

not provided the monthly status report prepared by MNC-I to the Iraqi government since 

December 2005 because financial data in STANFINS could not be reconciled with 

project data in IRMS. We also found data reliability issues in IRMS. We previously 

addressed the reliability of IRMS in prior audit reports. 

On a positive note, an initiative is underway to improve data quality in IRMS for the 

IIGF projects. However, based on our review, we do not agree that MNF-I is unable to 

provide to the Iraqi government a status of its money and of the ongoing and completed 

projects since our analysis found only an insignificant .3% variance in financial data 

between the STANFINS financial system and the IRMS project management system. 

Even with a larger variance, reports should have been provided monthly, explaining the 

accounting difficulties and the actions being taken to resolve them. 

Recommendations 

Because MNF-I has not been submitting to the Iraqi government the required monthly 

IIGF accounting reports on the use of the Development Fund for Iraq since December 

2005, we recommend that the Commanding General, MNF-I: 

1. Provide the Iraqi government the required accounting of the use of these funds. 

This accounting should be in compliance with MNF-I Fragmentary Order 603 

“Accountability of Funds from the Iraqi Interim Government,” and be henceforth 

submitted monthly, as required. 

Further, we recommend that the Commanding General, MNF-I direct his program 

managers and subordinate commands to take these actions: 

2. Enforce existing guidance on maintaining project records, including conducting 

quarterly reviews to ensure the accuracy of IIGF project files.

3. Develop a tracking system for controlling and processing IIGF project files 

through the entire management process. 

4. Continue efforts to improve IRMS accuracy for IIGF projects. 

Management Comments and Audit Response 

We received written comments on a draft of this report from MNF-I. The MNF-I Chief 

of Staff concurred with all recommendations and has identified corrective actions that 

8
have been initiated or planned. According to their comments, MNF-I resumed its 

monthly reporting to the Iraqi government in July 2006. However, upon obtaining the 

July report, we found that it was not signed by MNF-I until September 13, 2006. The 

comments received were fully responsive. MNF-I’s comments are included in the 

Management Comments section of this report. 

9
Appendix A─Scope and Methodology 

In May 2006, we initiated this audit (Project no. 6019) to conduct a cash accountability 

audit of the Iraqi Interim Government Fund (IIGF) and to determine if the IIGF was 

administered according to applicable policies and procedures. At the time of our review 

no cash count was needed because the IIGF had been reestablished as a deposit fund in 

the U.S. Treasury Financial System and accounted for by the Defense Finance and 

Accounting Service via the Department of the Army’s Standard Financial System 

(STANFINS). The Defense Finance and Accounting Service reimburses the major 

subordinate commands by electronic transfer on monies drawn from their funds. As a 

result, we modified the audit objectives stated in the announcement letter dated May 9, 

2006. 

This report discusses our limited review of management controls over IIGF funds and, 

specifically, 26 completed project files, totaling $19.9 million. We performed a 

judgmental sample of completed projects files to determine if those files had all the 

required documentation (see Appendix C). We performed a judgmental sample because 

Multi-National Corps-Iraq (MNC-I) had an inadequate records management system for 

the IIGF project folders. Because it was a judgmental sample, we did not project the 

results of this sample to the universe. 

 

To determine if Multi-National Force-Iraq (MNF-I) can properly account for the IIGF 

funds and whether the funds were used for their intended purposes, we interviewed the 

MNF-I and the MNC-I program managers. In addition we interviewed officials from 

MNF-I, MNC-I, major subordinate command staff, and the Joint Area Support GroupCentral Comptroller to understand how the IIGF projects and disbursements are 

controlled. 

We reviewed the 26 selected project packets based on MNF-I and MNC-I guidance on 

IIGF procedures and administrative requirements included in fragmentary orders and 

standard operating procedures. MNC-I implemented limited document controls to 

manage IIGF projects records. 

For the 26 selected projects, we determined the effectiveness of the management controls 

by: 

• reviewing the records of completed project files under MNC-I control, 

• comparing IIGF financial information in MNC-I records with STANFINS data, 

• comparing IIGF data contained in IRMS with MNC-I project and financial files, 

• reviewing the required IIGF status reports. 

We conducted this audit from May through August 2006, in accordance with generally 

accepted government auditing standards. 

10
Use of Computer-Processed Data. We utilized data from STANFINS to determine that 

MNF-I could account for all the funds provided by the Iraqi government from its 

Development Fund for Iraq to the IIGF. However, we did not perform a review of the 

controls of STANFINS, but did compare the data to the original records provided to us by 

MNF-I. 

Further, because of data reliability issues that we and MNF-I identified, we did not rely 

on the data from the Iraq Reconstruction Management System (IRMS) to draw our 

conclusion that the MNF-I can account for all the IIGF. 

Prior Coverage. The Office of the Special Inspector General for Iraq Reconstruction 

(SIGIR) issued several related audit reports, which can be accessed on its website 

http://www.sigir.mil: 

• SIGIR-06-003, dated April 28, 2006, Review of Data Entry and General Controls 

in the Collecting and Reporting of the Iraq Relief and Reconstruction Fund, 

concluded that the reliability of the reports generated by IRMS is diminished 

without assurance that the initial data entering the system are complete, accurate, 

and valid. Further, until improvements are made in general and security controls; 

there is diminished assurance that there is adequate security and integrity of the 

data in IRMS that supports program management oversight and decision making. 

• SIGIR-06-001, dated April 24, 2006, Management of Iraq Relief and 

Reconstruction Fund Program: The Evolution of the Iraq Reconstruction 

Management System, concluded that development of the new unified Iraq 

Reconstruction Management System showed progress toward meeting the 

automated support requirements, but there were still problems to resolve relating 

to data verification before the system would become fully functional. 

• SIGIR-05-025, dated January 23, 2006, Management of the Commander’s 

Emergency Response Program for Fiscal Year 2005, concluded that project data 

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

higher headquarter units contain several errors, and that MNF-I units still have not 

fully complied with requirements for project records. 

• SIGIR-05-014, dated October 13, 2005, Management of Commander’s 

Emergency Response Program for Fiscal Year 2004, concluded that appropriated 

funds were properly used for their intended purposes but overall controls over the 

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

required project documentation for Commander’s Emergency Response Program 

projects was not consistently used to ensure accountability of projects. 

11
In addition, the Army Audit Agency conducted a series of audits on the funds allocated to 

Commander’s Emergency Response Program and Quick Response Fund, which includes 

the following reports: 

• A-2006-0090-ALE, dated March 31, 2006, Follow-Up II of Commanders 

Emergency Response Program and Quick-Response Fund 

• A-2005-0332-ALE, dated September 30, 2005, Follow-Up of Commanders 

Emergency Response Fund and Quick-Response Fund 

• A-2005-0173-ALE, dated May 2, 2005, Commanders Emergency Response 

Program and Quick-Response Fund

12
Appendix B─Letter Establishing the IIGF, July 15, 2004 

Note: This is a reproduction of the original letter, dated July 15, 2004, in MNC-I’s files. 

As shown below, the reproduction had the year 2004 and some words on the right-hand 

side truncated. 

13
Appendix C─Analysis of Documents Contained in 

26 Judgmentally Sampled Completed IIGF 

Project Files 

MSC Project Title

MSC Comptroller Clearance

Letter

Commanders

Clearance

Letter

Money In (DD 1081)

Money

Out (DD 1081)

PA Appointment Letter

PPO Appointment LetterSignature

Card for PA (DD 577)

Signature

Card for PPO (DD 577)

Project Proposal / Statement of

Work

Invoice

Receiving

Report (DD 250)

Purchase

Request &

Commitment (DA 3953)

Actual Contract (SF 1449)

Purchase

Order / Invoice (SF-44)

MNC-I Travel Reimbursement for Voting X X X X X X X X N/A X N/A X

MNC-I

Funding Camp Bucca Projects (Bulk 

Payment)

MND-B Roadway Project X X X X X X X X X X X X X X

MND-B Two Armored SUV's XXXX XXXXXX

MND-B Rear Generators Inoperative X X X X X X X X X X X X

MND-B Install New Sewer Pumps X X X X XXXXXX

MND-B Renovation of Fresh Water System X X X X X X X X X X

MND-B Sewer Line Repair X X X X X X X X X X

MND-B Pump Station Renovation X X X X X X X X X X

MND-B Sewer Network Renovation X X X X X X X X X X

MND-B Baghdad Sewage Office Retrofit X X X X X X X X X X X X X X

MND-B Sewer Lift Station Rehabitation X X X X X X X X X X

MND-B Rehab P6 Sewage Pump Station X X X X X X X X X

MND-B

Renovation Rasheed Water 

Treatment Plant X X X X X X X X X

MND-B Route Pluto Renovations X X X X X X X X X

MND-B Amar Clinics X X X

MND-CS Fuel for Election Support X X X X X X X N/A X N/A X

MNF-W Road Construction X X X X X X X X X

MNF-W Construction Apprectice Program X X X X X

MNF-W Primary School Repair N/A N/A X X X N/A X X X

MNF-W Primary School Repair X X X X X

MNF-W Road Refurbishment X X X X

MNF-W Secondary School for Boys X X X X X

MNF-W Grafitti Removal X X X X X

MNF-W School Construction X X X X

MNF-W Hospital Work XXX

Source: SIGIR Analysis of 26 IIGF Project Files, August 2006

LEGEND

DA Department of Army form

DD Department of Defense form

DD 1081 Statement of Agent Officer's Account

MNC-I Multi-National Corps-Iraq

MND-B Multi-National Division-Baghdad

MND-CS Multi-National Division-Central South

MNF-W Multi-National Force-West 

MSC Major Subordinate Command

N/A Document not applicable to the specific project

PA Paying Agent

PPO Project Purchasing Officer

SF Standard Form

X Document located in project file

NOTE: While there are 13 basic document types required for IIGF project files, in some instances "alternative" documents are accepted. 

Therefore, this table includes 14 types of documents identified in our analysis of IIGF project files.

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Appendix D─Acronyms 

CERP Commander’s Emergency Response Program 

IIGF Iraqi Interim Government Fund 

IRMS Iraq Reconstruction Management System 

MNC-I Multi-National Corps-Iraq 

MNF-I Multi-National Force-Iraq 

SIGIR Special Inspector General for Iraq Reconstruction 

STANFINS Standard Financial System (Department of the Army) 

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Appendix E─Report Distribution 

Department of State 

Secretary of State 

Senior Advisor to the Secretary and Coordinator for Iraq 

U.S. Ambassador to Iraq 

Director, Iraq Reconstruction Management Office 

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

Inspector General, Department of State 

Department of Defense 

Secretary of Defense 

Deputy Secretary of Defense 

Director, Defense Reconstruction Support Office 

Under Secretary of Defense (Comptroller)/Chief Financial Officer 

 Deputy Chief Financial Officer 

 Deputy Comptroller (Program/Budget) 

Inspector General, Department of Defense 

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 

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 

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 

*Recipient of the draft report

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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 

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Appendix F─Audit Team Members 

This report was prepared and the audit 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 contributed to 

the report include: 

Frank W. Gulla 

W. Dan Haigler 

Ronald L. Rembold 

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Management Comments 

Multi-National Force-Iraq 

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