Survey of the Status of Funding for Iraq

Programs Allocated to the Department

of State’s Bureau of International

Narcotics and Law Enforcement

Affairs as of December 31, 2005

Report Numbers AUD/IQO-06-30

SIGIR-06-018

July 2006

UNCLASSIFIED

UNCLASSIFIED

United States Department of State

and the Broadcasting Board of Governors

Special Inspector General

for Iraq Reconstruction

Offices of Inspector General Offices of Inspector General Offices of Inspector General
UNCLASSIFIED

UNCLASSIFIED

 OIG Report No. AUD/IQO-06-30/SIGIR-06-018, Survey of the Status of Funding for Iraq Programs - July 2006 1 .

SUMMARY

This report presents the results of the joint survey by the Department of State

(Department), Office of Inspector General (OIG), and the Special Inspector

General for Iraq Reconstruction (SIGIR) of funding for Iraqi-related activities by

the Department’s Bureau of International Narcotics and Law Enforcement Affairs

(INL). This survey was performed in support of the Office of Inspector General’s

continuing responsibility to assist management through independent reviews of

Department operations. The primary objectives were to: (1) identify funding

received and expended by INL that was earmarked for Iraq, and (2) evaluate INL

accounting procedures for those funds. The survey scope covered funding received,

obligated, and expended from October 1, 2002, through December 31, 2005.

According to the Department’s Bureau of Resource Management (RM), as of

December 31, 2005, the Department received over $1.3 billion from two Iraq

Relief and Reconstruction Fund (IRRF) emergency supplemental appropriations

that provided program funding specifically supporting Iraqi-related activities.1

 Of

that amount, INL received about $957.5 million, or 74 percent of the total amount

received by the Department for foreign assistance projects under IRRF. In addition,

the Department of Defense (DOD) provided about $532.2 million to assist programs managed by INL,2

 for a total of about $1,489.7 million available to INL for

Iraq.

As of December 31, 2005, INL had obligated about $1,312.2 million, or about

88 percent of the funding received. As a result, INL had about $177.5 million left

to obligate for programs in Iraq, if the funds remain available, before their statutory

expiration at the end of FY 2006. In addition, INL had expended about $1 billion

of its current obligations through December 31, 2005, and about $300 million

remained unliquidated for various program activities in Iraq. These latter funds can

be spent or liquidated for up to five years after expiration of their period of availability for obligation.

1

 Pub. L. No. 108-11, Emergency Wartime Supplemental Appropriations Act, 2003; and Pub. L. No. 108-

106, Emergency Supplemental Appropriations Act for Defense and for the Reconstruction of Iraq and

Afghanistan, 2004.

2

 This included about $300 million from Pub. L. No. 109-13, Emergency Supplemental Appropriations

Act for Defense, the Global War on Terror, and Tsunami Relief, 2005.
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2 . OIG Report No. AUD/IQO-06-30/SIGIR-06-018, Survey of the Status of Funding for Iraq Programs - July 2006

INL was able to track Iraqi-related funds received and allotted to major programs and procurement actions. Overall, INL accounted for funds obligated and

monitored expenses and liquidations. Although extracting information from INL’s

accounting system on funds for Iraq by program, contract, or other governmental or

private recipient was cumbersome, the financial information forwarded to RM was

generally accurate.

Nevertheless, some funding recipients, primarily the Department of Justice

(DOJ) and its independent agencies, did not adequately provide financial information on the status of the expenditure of funds received from INL through memoranda of agreement. According to an INL official, this situation has continued

despite INL’s efforts to work with DOJ to correct these deficiencies. The survey

team recommended that INL modify existing and future memoranda of agreement

so that recipients’ financial reports would better inform INL of the actual financial

status of a program. In addition, the survey team recommended that INL better

document accruals, or other temporary accounting adjustments, and at least quarterly, make electronic backups of its supplementary accounting records.

INL reviewed a draft of this report and agreed with the findings and recommendations. To comply with report recommendations, INL has initiated or proposed

solutions that will strengthen financial accountability and internal controls. Of

particular note is the enhanced liaison between INL and DOJ to foster better and

more timely financial reporting by DOJ for activities in Iraq that are funded through

INL.
UNCLASSIFIED

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 OIG Report No. AUD/IQO-06-30/SIGIR-06-018, Survey of the Status of Funding for Iraq Programs - July 2006 3 .

BACKGROUND

On March 20, 2003, coalition forces began military operations in Iraq. Approximately one month after the United States and coalition forces took control of

Baghdad, the Coalition Provisional Authority (CPA) began to provide for the

temporary governance of a free Iraq until it assumed sovereignty. Since April 2003,

Congress has appropriated about $26.5 billion to support rebuilding efforts in Iraq.

This represents the largest aid initiative since the Marshall Plan. Congress has

passed three emergency supplemental appropriations that provided the majority of

the Iraq assistance funds to the Department, either as direct appropriations or

through transfers from DOD.

On May 11, 2004, President Bush issued a directive that upon the termination

of the CPA, “. . . the Secretary of State shall be responsible for the continuous

supervision and general direction of all assistance for Iraq . . ..” Thus, with the

transfer of power from CPA to the Iraqi interim government on June 28, 2004,

authority over the U.S. efforts in Iraq transferred to the Department. On June 29,

2004, President Bush issued a memorandum directing that all unobligated funds

appropriated for the operating expenses of the former CPA be transferred to the

Secretary of State.

The Department’s responsibilities in the U.S. government’s overall global

reconstruction policy for all countries were established by National Security Presidential Directive #44 on December 7, 2005. The directive stated that the United

States has a significant stake in enhancing the capacity to assist in stabilizing and

reconstructing countries or regions, especially those at risk of, in, or in transition

from conflict or civil strife, and to help them establish a sustainable path toward

peaceful societies, democracies, and market economies. The directive designated

the Secretary of State to coordinate and lead integrated U.S. government efforts,

involving all U.S. agencies with relevant capabilities, to prepare, plan for, and

conduct stabilization and reconstruction activities.

INL is a major participant in U.S. government programs to support the relief

and reconstruction of the justice sector throughout Iraq. Most programs in this

effort are carried out by U.S. agencies, government contractors, and nongovernmental organizations or international bodies receiving grants. According to the INL FY

2006 Bureau Performance Plan, INL’s postconflict program for Iraq focuses on
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4 . OIG Report No. AUD/IQO-06-30/SIGIR-06-018, Survey of the Status of Funding for Iraq Programs - July 2006

reestablishing, reforming, and modernizing the criminal justice sector - police,

judicial system, and prisons - as well as strengthening good governance in general,

including anticorruption. During FY 2006, INL anticipates completing delivery of

training programs of various lengths in basic police skills, field training, transitionintegration, and specialized and correctional skills for 75,600 police and 2,000

corrections personnel.

Further, INL projects establishing a program to supplement police equipment

and other support provided by coalition military forces in prior years. The police

training program and facilities in Jordan will scale back operations and reduce the

number of trainers in Iraq as the number of trainees declines and Iraqi trainers

increases. A new initiative for FY 2006 includes funding for the startup of a

counternarcotics unit. INL strategies for achieving the long-term goals for police

training and judicial programs are as follows.

• Work with the Iraqi government to stand up police, judicial, and prison

systems by providing trainers and advisers along with possible technical

and equipment support.

• Provide security and field support to U.S. government-supported trainers

and advisers so they can continue to operate when the environment is less

than stable.

• Implement an anticorruption action plan at both national and subnational

levels of government, strengthening key institutions, and developing

effective preventive measures and internal controls. Engage with civil

society groups to develop and encourage anticorruption support within

the Iraqi political culture.

• Enlist the support of other international donors to share financial and

political burdens of reconstruction.

• Adjust the assistance package based on results of initial and follow-on

assessments by U.S. government and other international groups, such as

the World Bank and the United Nations.
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 OIG Report No. AUD/IQO-06-30/SIGIR-06-018, Survey of the Status of Funding for Iraq Programs - July 2006 5 .

OBJECTIVES, SCOPE, AND METHODOLOGY

OIG and SIGIR prepared this report pursuant to a memorandum of agreement

dated December 18, 2005, to conduct a survey of INL funding for Iraq. This

report is the first product of that agreement. The purpose of this report was to aid

OIG and SIGIR in planning future survey work. The objectives were to identify

and compile earmarked funding received by INL for Iraq and to review INL accounting procedures for the receipt, transfer, and reporting of funds. The scope

covered $1,489.7 million INL received from three emergency supplemental appropriations specifically for Iraqi-related activities. The joint OIG and SIGIR team

obtained and analyzed budget, allotment, and interagency transfer information for

FY 2003 through December 31, 2005, to identify and compile funds earmarked for

Iraq. The team reviewed apportionments, allotments, and funds transfers and

identified the financial authorities, including the expiration of funds.

The team also examined selected financial data entered in INL supplementary

accounting records and the obligations and expenditures recorded into the

Department’s Central Financial Management System (CFMS), the official accounting records. In addition, the survey team reviewed INL’s annual Bureau Performance Plans for FYs 2006 and 2007 that covered program activities for Iraq. The

team reviewed financial information provided by RM, pursuant to Section 2207 of

Pub. L. No. 108-106, which requires the submission of a report to Congress every

three months that updates the estimates and assumptions for IRRF funds.

In reviewing INL allotments, the team met with RM and INL representatives to

gather information on how the Department and INL are recording and tracking

emergency supplemental appropriations for INL activities in Iraq. The Department

and INL may have also received, under other authorities or programs, other funds

that could be used to support Iraqi-related activities; however, this survey report

did not attempt to quantify the amount of such funds other than through the three

supplemental appropriations. This survey used information from prior OIG reports. (See Appendix A.)

OIG and SIGIR staff conducted this survey in accordance with Government

Auditing Standards. The team obtained and compiled the financial data, which are

presented in Tables 1-5, from INL supplementary accounting records. These
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6 . OIG Report No. AUD/IQO-06-30/SIGIR-06-018, Survey of the Status of Funding for Iraq Programs - July 2006

records are the responsibility of INL, and the team did not audit, review, or otherwise verify or evaluate the data. Therefore, this report cannot and does not make

any representations as to their validity, reliability, or completeness.

OIG and SIGIR performed fieldwork between November 2005 and January

2006 in Washington, DC. The team held an exit conference with INL on January

26, 2006. On April 21, 2006, INL and RM were given a copy of the draft report

for comment. On June 9, 2006, INL provided written comments on the draft

report that have been incorporated into the final report where appropriate. INL’s

comments are included in their entirety as Appendix B.
UNCLASSIFIED

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 OIG Report No. AUD/IQO-06-30/SIGIR-06-018, Survey of the Status of Funding for Iraq Programs - July 2006 7 .

SURVEY RESULTS

As of December 31, 2005, over $1.3 billion in supplemental appropriations

funding has supported a variety of Department projects and initiatives in Iraq,

including improving the security capabilities of the Iraqi police force and other

judicial initiatives, promoting democratization efforts, peacekeeping operations,

demining removal and training, and security operations. INL received about

$1,489.7 million for its programs in Iraq, about $957.5 million directly through

IRRF and $532.2 million from DOD. Currently, INL can track Iraqi-related funds

received and allotted to major programs and procurements.

AMOUNT AND SOURCE OF FUNDS

RM allotted about $1,489.7 million to INL for FY 2003 through December 31,

2005, as shown in Table 1. The funds came from three supplemental appropriations to the Department for its programs in Iraq. Of these funds, INL was directly

apportioned a total of about $957.5 million. In addition, DOD provided about

$532.2 million to assist programs managed by INL. Table 1 shows RM allotments

to INL by source of funding from FY 2003 through December 31, 2005.

Table 1: Total Funds Provided to INL for Iraq FY 2003 - Qtr. 1 FY 2006

(Dollars in Millions)

Funding Source FY 2003 FY 2004 FY 2005 Qtr. 1FY 2006 Total

Pub. L. No. 108-11 IRRF

 transfers to INCLE $10.6 $14.0 $24.6

Pub. L. No. 108-11 IRRF

direct apportionment 61.5 61.5

Pub. L. No. 108-106 IRRF

direct apportionment 838.4 $33.0 871.4

Subtotal Department funds 957.5

Pub. L. No. 108-106 IRRF

from DOD 222.2 222.2

Pub. L. No. 109-13 ISSF

from DOD 150.0 $160.0 310.0

Subtotal Funds from DOD $532.2

Total $10.6 $913.9 $405.2 $160.0 $1,489.7

Legend

INCLE = International Narcotics Control and Law Enforcement

IRRF = Iraq Relief and Reconstruction Fund

ISSF = Iraq Security Forces Fund
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8 . OIG Report No. AUD/IQO-06-30/SIGIR-06-018, Survey of the Status of Funding for Iraq Programs - July 2006

Note 1: Both Pub. L. Nos. 108-11 and 108-106 provide IRRF funds and share the same Treasury account

symbol (1096). The difference is funds from Pub. L. No. 108-11 were available for FYs 2003 and 2004 and

Pub. L. No. 108-106 for FYs 2004-06.

Note 2: Totals may not add because of rounding; however, the Total column agrees with the actual numbers.

Source: RM apportionment and allotment records.

INL PROGRAMS AND OBLIGATIONS

INL obligated a total of $1,312.2 million of the $1,489.7 million (88 percent)

during FY 2003 through December 31, 2005, for programs in Iraq. (See Table 2.)

The Civilian Police programs received about $1,176.8 million or about 90 percent

of INL total program obligations. (See Table 3.)

Table 2: INL Iraq Program Obligations by Program Sector FY 2003 - Qtr. 1 FY 2006

(Dollars in Millions)

 Qtr. 1

Sector Programs FY 2003 FY 2004 FY 2005 FY 2006 Total Obligations

Civilian Police $24.6 $559.9 $566.2 $26.2 $1,176.8

Corrections 26.7 6.0 32.7

Rule of Law 15.8 9.2 25.0

Judicial Security and 4.0 1.0 5.0

 Facilities

Anti-corruption/Rule of 11.6 1.7 13.3

 Law

Witness Protection 25.0 10.0 35.0

Crimes Against Humanity 1 4.4 10.0 24.4

Total $24.6 $641.6 $610.7 $35.3 $1,312.2

Note: Totals may not add because of rounding; however, the Total Obligations column agrees with the

actual numbers.

Source: INL supplementary records that accounted for obligations and expenditures for Iraq.

Table 3: Civilian Police Obligations FY 2003 - Qtr. 1 FY 2006

(Dollars in Millions)

Civilian Police Programs FY 2003 FY 2004 FY 2005 First Qtr. Program Summary

 FY 2006 Obligations

Police training in Jordana $54.2 $81.0 $3.6 $138.8

DynCorp contractsb $19.6 363.5 455.4 838.6

Justice agreements

 ICITAPc 2.9 124.9 12.0 139.8

Other Justice agreements 2.0 11.2 6.9 9.7 29.8

Other contracts and 0.1 1.8 17.7 0.4 19.9

 agreements

INL Administration 0.1 4.3 5.2 0.4 9.9

Total $24.6 $559.9 $566.2 $26.2 $1,176.8

Note: Totals may not add because of rounding; however, the Program Summary - Obligations column

agrees with the actual numbers.
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 OIG Report No. AUD/IQO-06-30/SIGIR-06-018, Survey of the Status of Funding for Iraq Programs - July 2006 9 .

a Payments incurred under letters of agreement with the government of Jordan for construction and

maintenance of an Iraqi police training facility in Jordan and other local costs incurred in Jordan.

b DynCorp International, LLC, contracts also supported the corrections and judicial security and

facilities programs as well as civilian police.

c International Criminal Investigative Training Assistance Program.

Source: INL supplementary records that accounted for obligations and expenditures for Iraq.

ACCOUNTING FOR AND MONITORING OF FUNDS FOR IRAQ

INL keeps supplementary accounting records in Excel spreadsheets to enable it

to track accounting activity in its programs. One weakness with the Excel system is

the spreadsheets are continuously updated for expenditures and cannot produce “as

of ” reports for previous periods. In the course of compiling financial information

on INL funding for Iraq, the survey team found the following.

• INL’s supplementary accounting records did not support total expenditures

for the Witness Protection Program reported in the Section 2207 report to

Congress for the FY quarter ending September 30, 2005. In its September 30,

2005, report to RM on obligations and expenditures of IRRF for the Witness

Protection Program, INL reported reimbursing $10 million to DOJ when

these funds had, in fact, not yet been disbursed. According to an INL official,

the $10 million was considered an accrual of program costs based on informal information provided by DOJ. DOJ, however, had not reported actual

expenditures to INL, and INL had not posted the accrual in its supplementary

accounting records or otherwise recorded an explanation for the accrual. An

INL official agreed that INL needed to do a better job documenting the

information reported from its accounting records to RM. INL’s response to

the draft report commented that the $10 million had in fact been liquidated

but had not been properly recorded by DOJ. Subsequently, the $10 million

was corrected by DOJ and reported to INL, who properly recorded the $10

million in the Department’s financial management system.

• During the Section 2207 reporting period of October to December 2005, INL

obligated $9.2 million of IRRF funds that had been allocated to the Rule of

Law Program to cover Civilian Police Program costs. According to an INL

official, a funding shortfall occurred owing to delays in the receipt of transferred reimbursable authority from DOD for Civilian Police programs. Therefore, Rule of Law Program funds were used to avoid “stop work” situations

for the food and maintenance services at the Jordan International Police

Training Center. By providing interim funding, INL believes it avoided a

potential riot scenario, which had already occurred at this facility during the
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10 . OIG Report No. AUD/IQO-06-30/SIGIR-06-018, Survey of the Status of Funding for Iraq Programs - July 2006

past year. The $9.2 million in funds will be corrected in the INL supplementary accounting records for Iraq funding. INL’s response to the draft report

commented that the $9.2 million has been properly corrected in INL accounting records and recorded in the Department’s financial management system.

Further, INL has coordinated more closely with DOD to ensure that reimbursable transfers are more expeditiously processed. Therefore, interim

funding measures have not been necessary nor are they anticipated to be

needed again.

The team also identified that INL’s supplementary accounting records did not

readily identify the status of all prior-year obligations. As indicated in Table 4,

$177.5 million remained unobligated as of December 31, 2005, and will be available for obligation until the end of FY 2006.

Table 4: Funds Obligated and Remaining Unobligated Balances as of

December 31, 2005

 (Dollars in Millions)

Fiscal Year Total Funds TotalFunds Funds

Funding Source Availability Provided Obligated Available

Pub. L. No. 108-11 IRRF 2003-04 $24.6 $24.6 0

 transfers to INCLE

Pub. L. No. 108-11 IRRF 2003-04 61.5 61.5 0

 direct apportionment

Pub. L. No. 108-106 IRRF 2004-06 871.4 848.1 $23.2

 direct apportionment

Pub. L. No. 108-106 IRRF 2004-06 222.2 217.0 5.2

 from DOD

Pub. L. No. 109-13 ISSF 2005-06 310.0 160.9 149.1

 from DOD

Total $1,489.7 $1,312.2 $177.5

Legend

INCLE = International Narcotics Control and Law Enforcement

IRRF = Iraq Relief and Reconstruction Fund

ISSF = Iraq Security Forces Fund

Note 1: Both Pub. L. Nos. 108-11 and 108-106 provide IRRF and share the same Treasury account symbol (1096). The difference is IRRF funds from Pub. L. No. 108-11 were available for FYs 2003 and 2004

and Pub. L. No. 108-106 for FYs 2004-06.

Note 2: Totals may not add because of rounding; however, the Funds Available column agrees with the

actual numbers.

Source: RM apportionment and allotment records and INL supplementary records that accounted

for obligations and expenditures for Iraq.
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 OIG Report No. AUD/IQO-06-30/SIGIR-06-018, Survey of the Status of Funding for Iraq Programs - July 2006 11 .

Table 5: Funds Obligated and Remaining Unliquidated Balances by Program

Sector, FY 2003 - Qtr. 1 FY 2006

 Total Total Total Unliquidated

Sector Program Obligations Expenditures Obligations

Civilian Police $1,176.8 $968.3 $208.5

Corrections 32.7 18.8 13.9

Rule of Law 25.0 5.9 19.2

Judicial Security and Facilities 5.0 0.8 4.2

Anticorruption/Rule of Law 13.3 12.0 1.3

Witness Protection 35.0 0.3 34.7

Crimes Against Humanity 24.4 24.4 0

Total $1,312.2 $1,030.4 $281.8

Note: Totals may not add because of rounding; however, the Total Unliquidated Obligations column

agrees with the actual numbers.

Source: INL supplementary records that accounted for obligations and expenditures for Iraq for FY

2003 through Qtr. 1 FY 2006.

Table 5 shows that fund recipients had not spent about $281.8 million of the

$1,312.2 million in program obligations (21 percent) as of December 31, 2005.

The team reviewed INL memoranda of agreement with DOJ that required quarterly

financial reporting. As indicated below, the team found unliquidated obligations in

INL’s supplementary accounting records that were not accurate because, according

to an INL official, recipients of INL funding did not report to INL on program

expenditures in a timely and accurate manner. As a result, INL’s accounting

records do not allow INL officials to monitor the status of program funds that may

have expired or required more immediate action by INL for reprogramming.

• In FY 2004, INL obligated $29.8 million to the International Criminal

Investigative Training Assistance Program for Civilian Police programs,

and according to INL records, $8.4 million remained unliquidated as of

December 31, 2005. These were two-year funds that are available for

expenditure until the end of FY 2009.

• Beginning in FY 2004, INL obligated $35 million to DOJ for the Witness

Protection Program. As of December 31, 2005, only $282,000 of the $35

million had been reimbursed to DOJ, although as previously discussed,

INL accrued an additional $10 million of the $35 million in estimated

program expenditures. These are three-year funds for the purposes of

obligation and are to expire at the end of FY 2006; however, the funds

are available for expenditure through the end of FY 2011. The INL

agreement with DOJ requires that DOJ notify INL by June 1, 2006, of all

unobligated funds so that INL can begin reprogramming the funds.
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12 . OIG Report No. AUD/IQO-06-30/SIGIR-06-018, Survey of the Status of Funding for Iraq Programs - July 2006

• In FY 2004, INL obligated $2,670,645 for Corrections programs in Iraq

and $1,166,071 for Justice programs. As of December 31, 2005, INL had

not recorded any expenditures for these obligations. According to an INL

official, the contractor inaccurately charged some expenditures for these

programs against the Civilian Police Program rather than the Justice and

Correction programs. These corrections, totaling about $3.8 million

should be completed and recorded in the supplementary accounting

records by March 30, 2006.

At the conclusion of the survey, a senior INL official agreed that greater

compliance was needed by recipients concerning reporting the status of funds and

the recipients’ plans for obligating and expending those funds.

In response to a discussion draft of this report, in April 2006, a senior INL

budget officer stated he had been working with DOJ officials to incorporate accrual

reporting into their required quarterly reports. The INL official also reported that

RM counterparts were fully informed with respect to the above cases and that the

Department’s official and INL supplementary accounting records and Section 2207

reports had all been corrected. OIG and SIGIR agree that these are appropriate

corrective measures, but suggest that INL adopt more formal policies and procedures to ensure that INL’s summary accounting records better document such

activities in the future. In this manner, other Department recipients of Iraq funding

may wish to follow suit.

Overall, OIG concluded that INL can track Iraqi-related funds received and

allotted to major programs and procurements. However, OIG found that INL’s

supplementary accounting records in Excel spreadsheets were continuously updated for expenditures and could not produce “as of ” reports for previous periods.

That inability to produce prior-period reports is a serious accounting weakness, as

INL would find it difficult to respond to requests for financial information or to

recover from a computing mishap if all it had for a historical record was paper

copies of reports supporting its section 2207 reports to RM.

Recommendation 1: OIG and SIGIR recommend that the Bureau of International Narcotics and Law Enforcement Affairs establish policies and procedures to document management decisions regarding accounting or reporting

of Iraq funding, including coordination with other Department entities, such

as the Bureau of Resource Management.
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In response to the draft report, INL agreed with this recommendation, saying

that it has used an existing process to document management decisions regarding

accounting and reporting of Iraq funding, in conjunction with the Department’s

Budget Office. All formal requests and communications are provided in writing for

apportionment requests, allotments, and reporting requirements, consistent with

the Department Budget Office formats. In addition, INL’s new Local Financial

Management System, currently in the process of being implemented in all INL

overseas narcotics affairs sections, including the Iraq Narcotics Affairs SectionBaghdad in the near future, will document all decisions and reports.

On the basis of INL’s response, the recommendation is resolved. This recommendation can be closed when INL provides a copy of the policies and procedures

that INL is now using as part of the process to document management decisions

regarding accounting or reporting of Iraq funding. In addition, OIG and SIGIR

asked INL to provide information, when finalized, on INL’s new Local Financial

Management System.

Recommendation 2: OIG and SIGIR recommend that the Bureau of International Narcotics and Law Enforcement Affairs modify existing and future

memoranda of agreement with non-Departmental funding recipients to provide quarterly reports that contain sufficient information so, if necessary, INL

can add accruals to its supplementary accounting records so that reports prepared by INL can more accurately reflect the actual financial status of a program sector.

In response to the draft report, INL agreed with this recommendation and said

that it is already in partial compliance. Specifically, the largest DOJ program

ICITAP is providing reports that more accurately reflect the financial status of all

active memoranda of agreement and comply with the requirement that DOJ notify

INL by June 1, 2006 of all unobligated funds so that INL can begin reprogramming

the funds.

On the basis of INL’s response, the recommendation is resolved. It can be

closed when INL provides an update on actions taken with other non-Departmental funding recipients to provide quarterly reports that contain sufficient information so INL can add accruals to its supplementary accounting records and prepare

more accurate reports. In addition, OIG affirms the benefit of modifying memoranda of agreement with non-Department funding recipients to make certain the

Department receives accurate financial information. OIG requests that INL

provide documentation concerning actions taken with IRRF funding recipients to

correct INL and Department accounting records.
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Recommendation 3: OIG and SIGIR recommend that the Bureau of International Narcotics and Law Enforcement Affairs, at a minimum, electronically save a copy of its supplementary accounting records for funds for Iraq at

the close of each Section 2207 reporting period.

In response to the draft report, INL agreed with this recommendation and said

that all supplementary accounting records for Iraqi program funds are already in

electronic files and are consistent with 2207 quarterly reporting periods. On the

basis of INL’s response and the documentation provided, the recommendation is

closed. OIG requests examples of INL monthly records to support a future section

2207 report.
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 OIG Report No. AUD/IQO-06-30/SIGIR-06-018, Survey of the Status of Funding for Iraq Programs - July 2006 15 .

Selective Listing of Department of State 

Iraq-Related Reports, 2004-05 

Inspection of Rule-of-Law Programs, Embassy Baghdad (ISP-IQO-06-01, Oct. 2005) 

Review of Security Programs at U.S. Embassy Baghdad (ISP-IQO-05-60, July 2005) 

Interagency Assessment of Iraq Police Training (ISP-IQO-05-72, July 15, 2005; joint State/DOD 

report) 

Bureau of International Narcotics and Law Enforcement Affairs (ISP-I-05-14, July 2005) 

Review of Staffing Process for Embassy Baghdad's New Embassy Compound (ISP-IQO-05-61, July 

2005) 

Survey of Department of State Funding for Iraq (AUD/CG-05-18, Feb. 2005) 

Review of Agreed-Upon Procedures for the Verification of Excessive Fuel Charges in Support of the 

Jordan International Police Training Center (AUD/IQO-05-16, Mar. 2005) 

Review of Staffing at U.S. Embassy Baghdad (ISP/IQO-05-57, Mar. 2005) 

Review of the Department of State Procurement Competitions To Support the Iraqi Police Training 

Program (AUD/IQO-04-47, Sept. 2004) 

APPENDIX A (Iraq-Related Reports)
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16 . OIG Report No. AUD/IQO-06-30/SIGIR-06-018, Survey of the Status of Funding for Iraq Programs - July 2006
APPENDIX B (INL Comments)

INL COMMENTS

Attachment #1












Attachment #2
Attachment #3

 UNCLASSIFIED

 UNCLASSIFIED