OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

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SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION 

400 Army Navy Drive • Arlington, Virginia 22202

April 28, 2006 

MEMORANDUM FOR THE INTERNATIONAL ADVISORY AND 

 MONITORING BOARD FOR IRAQ 

SUBJECT: Briefing to the International Advisory and Monitoring Board for Iraq: 

Management Controls Over the Development Fund for Iraq 

(SIGIR 06-013) 

The Inspector General Act of 1978, as amended, requires the Special Inspector General for 

Iraq Reconstruction (SIGIR) to determine by follow-up and report semiannually on actions 

planned or taken to implement the recommendations made in SIGIR audit reports. This 

briefing, presented on April 5, 2006, provided the status of corrective actions taken in 

response to a series of audits conducted by SIGIR addressing the use of the Development 

Fund for Iraq (DFI) for Iraq relief and reconstruction activities. These recommendations 

were made to the U.S. Ambassador to Iraq, the Joint Area Support Group – Central (JASGC), and the Joint Contracting Command-Iraq/Afghanistan (JCC-I/A). Overall, these audit 

reports found a lack of control and accountability for contracts, grants, and cash transactions 

using the DFI and made recommendations for improvement. The slides from this briefing 

are presented in Appendix A. 

Background. From May 2004 to September 2005, SIGIR conducted eight audits of 

contracts, grants, and small purchases using the Development Fund for Iraq (DFI). These 

were the overall findings: 

• The Coalition Provisional Authority had developed adequate policies and procedures 

to provide adequate controls over DFI. 

• Compliance was the issue. 

• Oversight of adherence to policy and procedures was not performed. 

Of those audits: 

• 6 identified significant material control weaknesses in controlling and accounting for 

Iraqi cash assets 

• 40 recommendations were made for improving oversight and management of DFI 

funds 

Results. SIGIR found that all recommendations were being implemented satisfactorily or 

are in the process of being implemented. Specifically, of the 40 recommendations, 23 were 

closed, and 17 had corrective actions underway or planned. For the details of our follow-up 
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review on the status of each of the 40 recommendations, see SIGIR Audit Report, “Followup on Recommendations Made in SIGIR Audit Reports Related to Management and Control 

of the Development Fund for Iraq,” SIGIR-06-005, April 2006, which can be accessed on the 

SIGIR Web site: http://www.sigir.mil/. 

Recommendations. SIGIR made no recommendations in this follow-up report. SIGIR 

plans to review final implementation efforts in May 2006. 

We are distributing this report to other interested parties as listed in Appendix B. Questions 

should be directed to Mr. Joseph T. McDermott, Assistant Inspector General for Audit, at 

703-343-7926, or by email at joseph.mcdermott@iraq.centcom.mil. 

Stuart W. Bowen, Jr. 

Inspector General 

cc: Distribution 
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Appendix A. April 5, 2006 Briefing ________
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Appendix B. 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 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 
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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