OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

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SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

April 26, 2007 

MEMORANDUM FOR COMMANDING GENERAL, MULTI-NATIONAL FORCE-IRAQ 

COMMANDING GENERAL, MULTI-NATIONAL CORPS-IRAQ 

U.S. AMBASSADOR TO IRAQ 

DIRECTOR, IRAQ RECONSTRUCTION MANAGEMENT OFFICE 

 

SUBJECT: Management of the Commander’s Emergency Response Program in Iraq for 

Fiscal Year 2006 (SIGIR-07-006) 

 

This audit report is provided for your information and use. This review specifically 

sought to determine whether the Multi-National Corps-Iraq had established and 

implemented adequate management controls over the Commander’s Emergency Response 

Program for fiscal year 2006. 

We considered comments received on the draft of this report from the Multi-National 

Corps-Iraq when preparing the final report. 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 / 703-428-

1100); or Mr. Clifton Spruill at (clifton.spruill@iraq.centcom.mil / 703-343-9275). For 

the report distribution, see Appendix G. 

Stuart W. Bowen, Jr. 

 Special Inspector General for Iraq Reconstruction 

cc: See Distribution 

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

 Executive Summary i 

 Introduction 

 Background 1 

 Objectives 3 

 Findings 

 Management Controls for Accountability 4 

 Use of CERP Funds 8 

Coordination of CERP Projects 9 

Program Effectiveness 11 

Transfer and Sustainment of CERP Projects 12 

Prior SIGIR Recommendations 13 

Conclusion and Recommendations 15 

 Appendices 

A. Scope and Methodology 18 

B. Review of Completed CERP Project Files 20 

C. Availability of CERP Project Folders 22 

D. CERP Fund Uses & Restrictions 23 

E. Acronyms 25 

F. Report Distribution 26 

G. Audit Team Members 28 

 Management Comments 

 Multi-National Corps-Iraq 29 
Management of the Commander’s Emergency 

Response Program in Iraq for Fiscal Year 2006

SIGIR-07-006 April 26, 2007

Executive Summary 

Introduction 

In fiscal year 2006, the Congress appropriated $923 million for the Commander’s 

Emergency Response Program (CERP), of which $510 million was allocated to the 

Multi-National Corps-Iraq (MNC-I), a subordinate command of the Multi-National 

Force-Iraq (MNF-I). CERP enables U.S. military commanders in Iraq and Afghanistan to 

undertake a variety of non-construction and construction activities to respond to urgent 

humanitarian relief and reconstruction requirements in their areas of responsibility. This 

may include making condolence payments after combat operations, providing funds for 

repairs, purchasing critical infrastructure equipment, or conducting large-scale civic 

cleanups that employ as many Iraqis as possible. As of September 30, 2006, MNC-I 

reported it had obligated $510 million for over 3,800 CERP projects. 

Over the last two years, the Special Inspector General for Iraq Reconstruction (SIGIR) 

has issued three reports1

 on the management controls and accountability of the CERP 

family of funds.2 All three reports stated that, generally, CERP funds were used in 

accordance with published guidance.3

 However, we consistently found that Coalition 

forces did not fully comply with the published guidance for maintaining the 

documentation required to ensure accountability and oversight of CERP projects. 

 

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

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

(SIGIR-05-025, January 23, 2006); Management of the Iraqi Interim Government Fund (SIGIR-06-031, 

October 27, 2006). 

2

 The CERP family of funds consists of the Commander’s Emergency Response Program, the Commanders 

Humanitarian Relief and Reconstruction Program, and the Interim Iraqi Government Fund. 

3

 Management guidance is set forth in MNC-I’s “Commander’s Emergency Response Program (CERP) 

Family of Funds Standard Operating Procedures,” revised April 24, 2006. 

i 
Objectives 

The objectives of this audit were to determine: 

• What controls are in place to ensure the accountability of CERP funds and project 

records? 

• Were CERP funds used for intended and authorized purposes? 

• What is the status of coordination of CERP with other reconstruction funds and 

programs, particularly for larger CERP reconstruction projects with strategic 

value? 

• What performance measures are in place to evaluate the effectiveness of the 

individual CERP projects in relationship to the overall goals of the CERP 

program? 

• How are commanders ensuring sustainment of completed CERP projects by the 

Government of Iraq? 

• How are CERP projects transferred to the Government of Iraq? 

This review further assessed actions taken by U.S. government officials on the 

recommendations made in our prior reports on CERP. 

Results 

MNC-I has improved controls over fund accountability, but weaknesses remain in project 

documentation. To strengthen fund accountability, MNC-I now uses two management 

information systems to track and reconcile CERP financial and project data: the Iraq 

Reconstruction Management System (IRMS) and the Army accounting system.4 

However, not all CERP project documentation was complete or on file with MNC-I in 

accordance with applicable guidance. CERP documentation is required to be submitted 

quarterly by major subordinate commands (MSC). Of the files we requested for sample 

review, MNC-I could only provide 122 of 173 project folders—105 random sample and 

17 judgmental sample—or 71%; and many key project documents were missing from the 

folders we reviewed. The absences of these key documents, which help to certify the 

proper accountability for, and disbursements of funds, represent an internal control 

vulnerability. Furthermore, MNC-I does not maintain monthly status of funds reports 

from MSCs to the MNC-I Comptroller’s Office, which would support the reconciliation 

of financial and project data. These reports document whether commanders are 

monitoring CERP fiscal controls and program procedures. However, there was no 

documented requirement for MNC-I to keep copies of these reports on file for any 

specific period of time. 

 

4

 The Army accounting system is the Standard Financial System (STANFINS). 

ii 
Using applicable guidance and our sample review of available documentation for 122 

projects, we determined that fiscal year 2006 CERP funds were used for intended and 

authorized purposes. The MSC commanders have the authority to approve projects less 

than $500,000 without MNC-I approval, as long as the projects meet the standards 

outlined in CERP directives and guidance. Projects over $500,000 must be approved by 

the MNC-I Commanding General. 

MNC-I has continued to make improvements in coordinating its CERP projects with the 

Iraq Reconstruction Management Office (IRMO)5 and the U.S. Agency for International 

Development (USAID), as well as with Iraqi provincial and national government entities. 

For example, in fiscal year 2006, MNF-I established the Joint Reconstruction Operations 

Center (JROC) under the Gulf Region Division of the U.S. Army Corps of Engineers. 

Through the weekly meeting of the Joint Planning Commission—comprising MNF-I, 

MNC-I, IRMO, USAID, Iraqi representatives and Baghdad Amanat engineers,6—the 

JROC coordinates and synchronizes reconstruction projects from all the reconstruction 

players with the Government of Iraq in support of the Baghdad Security Plan. In addition, 

JROC maintains a list of prioritized projects for the Baghdad Amanat. MNC-I needs to 

continue to reinforce this coordination effort with its MSC commanders to ensure that 

CERP projects are successfully integrated with USAID and IRMO reconstruction 

operations. 

However, according to IRMO staff, the level of coordination for CERP activity outside of 

Baghdad was dependent on the province where the project was occurring and varies on 

the strength of the provincial reconstruction and development committee (PRDC) and the 

operational abilities of the provincial reconstruction team (PRT). 

Measuring the effect of a CERP project is often complex and difficult. MNC-I 

coordinates the efforts of several staff offices (project management, financial 

management, etc.) to determine the intended effects of CERP projects in a city or region. 

The assessment process considers polling results, operational reports, and subject-matter 

expert reports in a holistic methodology so that all the effects and impacts of a project are 

captured and measured. For example a CERP-funded security project did not directly 

cause economic growth in an area. However, because of the increased security the project 

provided, the second-order impact of free trade was enabled, which increased economic 

activity in the area. Polling of Iraqis, for example, would show that CERP projects 

provided jobs to Iraqis; and/or Iraqis indicated that they noticed the Coalition’s 

reconstruction efforts (i.e. the reconstruction was visible to them). 

Although we made a recommendation to address transfer and sustainment in our previous 

report,7 this condition remains since we determined that there is no specific MNC-I 

guidance for the transfer or sustainment of CERP projects to the Government of Iraq. 

Approximately 97% (3,716) of the CERP projects in fiscal year 2006 cost under 

 

5

IRMO coordinates Iraq reconstruction activities for the Department of State. 

6

 Baghdad Amanat (City Hall) is responsible for municipal services (water, sewerage, solid waste disposal, 

urban planning, roads, municipal buildings, and parks) to the metropolitan region of Baghdad. 

7

 SIGIR-05-025, January 23, 2006. 

iii 
$500,000 and probably required little transfer or sustainment planning. We believe that 

the larger projects—those over $500,000 in the essential services sectors (water and 

electricity)—will likely require some level of transfer or sustainment planning. Only 3% 

(138) of the CERP projects are valued over $500,000, and encompass 47% 

($235 million) of the $510 million obligated for fiscal year 2006. Some transfer and 

sustainment coordination occurs through such venues as the MSC commanders meetings 

with the PRDCs and PRTs in the provinces, and the JROC and the Interagency 

Stabilization Task Force. Both meet in Baghdad and bring together Coalition forces, 

interagency, and Government of Iraq agencies to coordinate and synchronize efforts. 

Nevertheless, it is uncertain how much these meetings contribute to the readiness of the 

Government of Iraq to take over completed projects. 

Our previous report made five recommendations for improving the CERP program. Our 

review found that MNC-I has fully addressed three of our recommendations, but still 

needs to take action to address two recommendations. 

Recommendations 

We recommend that the Commanding General, Multi-National Corps-Iraq, take these 

actions: 

1. Enforce the CERP requirement that major subordinate commands submit 

completed CERP project files on a quarterly basis. 

2. Require the major subordinate commands and the MNC-I Comptroller to keep on 

file monthly reports of the status of CERP funds to validate that reviews are being 

done and that the two management reporting systems are reconcilable. 

3. Continue to reinforce coordination effort with major subordinate commands to 

ensure that CERP projects are successfully integrated with IRMO reconstruction 

operations. 

Management Comments and Audit Response 

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

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

have been initiated or planned. According to the comments, the CERP standard operating 

procedure will be updated to add or enforce requirements in response to our 

recommendations on submitting project files and retaining monthly reports; and 

coordination efforts will be reinforced with the major subordinate commands and all 

involved parties regarding CERP project integration. The comments received were fully 

responsive and are included in the Management Comments section of this report. 

iv 
Introduction 

Background 

The Commander’s Emergency Response Program (CERP) was established in fiscal year 

2003 to give commanders the ability to respond to urgent humanitarian relief and 

reconstruction needs in their areas of responsibility by executing a variety of 

nonconstruction and construction activities that will immediately assist the local 

population. CERP is intended for small-scale, urgent, humanitarian relief and 

reconstruction projects for the benefit of the Iraqi and Afghan people. In fiscal year 2006, 

the Congress appropriated $923 million for the CERP.8

 The Department of the Army 

allocated $724.5 million for use in fiscal year 2006 and carried forward the remaining 

balance of $198.5 million to fiscal year 2007. The U.S. Central Command then allocated 

$510 million to the Multi-National Corps-Iraq (MNC-I), with the remaining 

$214.5 million going to fund CERP projects executed by U.S. forces in Afghanistan. As 

of September 30, 2006, MNC-I reported it had obligated $510 million for over 3,800 

CERP projects. For a summary of CERP projects organized by project category and 

obligation, see Appendix D. 

Roles and Responsibilities 

The Office of the Under Secretary of Defense (Comptroller) is responsible for the 

establishment and supervision of the execution of principles, policies, and procedures for 

CERP and to ensure that congressional oversight committees are informed of CERP 

activities on a quarterly basis. 

The U.S. Army is the executive agent for CERP, and the Army Budget Office, under the 

Office of the Assistant Secretary of the Army for Financial Management and 

Comptroller, is responsible for producing the quarterly report to the Congress on the 

source, allocation, and use of CERP funds pursuant to P.L. 109-148. 

The U.S. Central Command oversees military operations, programs, and funds in both 

Iraq and Afghanistan. It is responsible for allocating CERP funds between Iraq and 

Afghanistan, and through its component command, the Army Central Command, is 

required to reconcile CERP funds every three months and report these results to the Army 

Budget Office. 

 

8

 Congress appropriated funds twice in fiscal year 2006 for the CERP: $500 million in Emergency 

Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 

2006, Public Law 109-148 (December 30, 2005); $423 million in Emergency Supplemental Appropriations 

Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006, Public Law 109-234 (June 15, 

2006). 

1 
The Multi-National Force-Iraq (MNF-I) provides guidance, establishes priorities, and 

identifies focus areas for subordinate units to leverage CERP in support of the strategic 

objectives of its Campaign Plan.9

 Specifically, in support of the Campaign Plan, CERP is 

to assist in achieving the following strategic effects: 

• Build Iraqi provincial government capacity by partnering with provincial 

reconstruction and development committees in the identification, development, 

and execution of local projects. 

• Complete “last mile” projects that connect essential services or major 

infrastructure projects to the local end user, especially in strategic area cities. 

• Coordinate with the U.S. Agency for International Development (USAID) and the 

U.S. Army Corps of Engineers Gulf Region Division (GRD) to ensure unity of 

effort for maximum efficiency. 

• Create the conditions for economic development momentum. 

To implement the CERP guidance and priorities, MNF-I issues orders that clarify or 

change the major subordinate command’s (MSC’s) responsibilities and procedural 

requirements. The following subordinate units managed and executed CERP for MNF-I 

during fiscal year 2006: 

• MNC-I, a subordinate MNF-I command headquartered in Baghdad, Iraq, is the 

primary executing agency for CERP through the day-to-day management of the 

projects, funds, and records. During fiscal year 2006, MNC-I published an 

operation order (classified) to further the use of CERP in accordance with MNFI’s Campaign Plan; issued orders to update subordinate units on changes in 

CERP; and published the revised “Commander’s Emergency Response Program 

(CERP) Family of Funds Standard Operating Procedures. Also during fiscal year 

2006, MNC-I was staffed by two different Army Corps Commands—the XVIII 

Airborne Corps based at Fort Bragg, North Carolina; and the V Corps based at 

Heidelberg, Germany. 

MNC-I has six MSCs that are headquartered throughout Iraq. The MSCs propose, 

initiate, and execute both nonconstruction and construction projects in their areas 

of responsibility. In fiscal year 2006, the individual MSC designation/composition 

was as follows: 

• Multi-National Division-Baghdad – U.S. Army forces 

• Multi-National Division-Center South – Coalition forces (Poland) 

• Multi-National Division-North – U.S. Army forces 

• Multi-National Division-Northeast – Coalition forces (Republic of Korea) 

• Multi-National Division-Southeast – Coalition forces (United Kingdom) 

• Multi-National Force-West – U.S. Marine Corps forces 

 

9

 The Campaign Plan is a classified Operations Order that is updated periodically and details MNF-I’s 

military, political, and economic objectives for Iraq. 

2 
• GRD executes larger construction projects for MNC-I and/or the MSCs. GRD is 

headquartered in Baghdad, Iraq, and provides planning, engineering, contracting, 

and project management expertise and services to MNF-I and other U.S. agencies. 

In fiscal year 2006, GRD managed 290 CERP projects for MNC-I and the MSCs, 

totaling $105 million in obligations. 

• The Joint Contracting Command-Iraq/Afghanistan (JCC-I/A) supports a small 

number of CERP projects for MNC-I and/or the MSCs in Iraq. JCC-I/A is 

headquartered in Baghdad, Iraq, and provides operational contracting support to 

MNF-I to efficiently acquire vital supplies, services, and construction. During 

fiscal year 2006, JCC-I/A contracting offices executed contracts for nine CERP 

projects totaling approximately $12 million in obligations. 

• The Multi-National Security Transition Command-Iraq (MNSTC-I), a subordinate 

MNF-I command headquartered in Baghdad, Iraq; organizes, equips, and mentors 

the Iraqi Security Forces. MNSTC-I adheres to MNC-I’s standard operating 

procedures and guidance regarding CERP funds and projects. MNSTC-I obligated 

approximately $5 million for 21 CERP projects in fiscal year 2006. 

Objectives 

The objectives of this audit were to determine: 

• What controls are in place to ensure the accountability of CERP funds and project 

records? 

• Were CERP funds used for intended and authorized purposes? 

• What is the status of coordination of the CERP with other reconstruction funds 

and programs, particularly for larger CERP reconstruction projects with strategic 

value? 

• What performance measures are in place to evaluate the effectiveness of the 

individual CERP projects in relationship to the overall goals of the CERP 

program? 

• How are commanders ensuring sustainment of completed CERP projects by the 

Government of Iraq? 

• How are CERP projects transferred to the Government of Iraq? 

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

completed CERP project files, see Appendix B. For a summary on the availability of 

CERP project folders, see Appendix C. For a listing of CERP fund uses and restrictions, 

see Appendix D. For definitions of acronyms used, see Appendix E. For a list of the 

report distribution, see Appendix F. For a list of the audit team members, see 

Appendix G. 

3 
Management Controls for Accountability 

The Special Inspector General for Iraq Reconstruction (SIGIR) has issued three reports10

over the last two years on the CERP family of funds.11 All three reports identified 

problems with CERP records documentation, and two reports made recommendations for 

improvements. Since then, MNC-I has improved controls over fund accountability, but 

weaknesses remain in project documentation. To strengthen fund accountability, MNC-I 

now uses two management information systems to track and reconcile CERP financial 

and project data. However, not all CERP project documentation was complete or on file 

with MNC-I in accordance with applicable guidance. CERP documentation is required to 

be submitted quarterly by major subordinate commands (MSC). Furthermore, MNC-I 

does not maintain monthly status of funds reports from MSCs to the MNC-I 

Comptroller’s Office, which would support the reconciliation of financial and project 

data. These reports, which are not required in current guidance, document whether 

commanders are monitoring CERP fiscal controls and program procedures. 

Management Information Systems and Status of Funds 

MNC-I uses two management information systems to track CERP funds and projects: the 

Iraq Reconstruction Management System (IRMS) and the Army accounting system. 

IRMS is the central database for reporting all projects initiated under the CERP family of 

funds, while the Army accounting system tracks and reports on all commitments, 

obligations and disbursements against CERP projects. MNC-I began using IRMS as its 

central data base and tracking tool in fiscal year 2006, which significantly improved its 

ability to reconcile financial data with project data and its coordination procedures and 

management of CERP projects. 

According to the CERP standard operating procedures, each MSC must submit a monthly 

status of funds report to the MNC-I Comptroller’s Office showing CERP obligations and 

disbursements along with a statement from the MSC commander certifying that all fiscal 

controls and program procedures are being followed. The report, which provides MNC-I 

with an audit trail of data in both IRMS and the Army accounting system, is essential for 

management control. Data is entered and maintained in the two systems through a 

coordinated effort of the commanders at all levels, the MSCs’ CERP program managers, 

the civil affairs personnel, the engineers, and the organization comptrollers. MNC-I uses 

data from these two systems to prepare its monthly reports to higher commands. These 

 

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

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

(SIGIR-05-025, January 23, 2006); Management of the Iraqi Interim Government Fund (SIGIR-06-031, 

October 27, 2006). 

11 The CERP Family of Funds consists of the Commander’s Emergency Response Program, the 

Commander’s Humanitarian Relief and Reconstruction Program, and the Interim Iraqi Government Fund. 

Management guidance is set forth in MNC-I’s “Commander’s Emergency Response Program (CERP) 

Family of Funds Standard Operating Procedures, rev. April 24, 2006. 

4 
reports are ultimately reviewed by the Office of the Under Secretary of Defense 

(Comptroller) and are the basis for reports to the Congress on the status of CERP funds. 

We performed a reconciliation of the two reporting systems, as of September 30, 2006, of 

the $510 million obligated in fiscal year 2006 for CERP in Iraq. Except for minor 

discrepancies, we were able to reconcile the financial data in these two systems.12

Additionally, we compared the Secretary of Defense’s quarterly report to the Congress on 

the source, allocation, and use of the CERP for the period ending September 30, 2006, to 

data in IRMS to determine the accuracy of this reporting. Our analysis found that the data 

in the congressional report was supported by the data in IRMS. 

One area needing improvement that we identified is that copies of the MSCs’ monthly 

status of funds reports are not being maintained by MNC-I. There was no requirement for 

MNC-I to keep copies of the reports on file for any specific period of time. However, we 

believe that maintaining copies of the reports is a necessary management control to 

ensure that the monthly status of funds reports are being submitted to MNC-I and the two 

management information systems are being reconciled. The monthly report must also 

contain a statement of assurance by the MSC commander that all fiscal controls and 

program procedures were followed. These reports were not being kept on file by MNC-I 

to show commanders were monitoring CERP activities. 

Project Documentation 

During fiscal year 2006, MNC-I issued a variety of official policies and procedures to 

guide units in using the CERP. However, completed project folders are not being 

submitted by the MSCs to MNC-I on a quarterly basis, and many of the folders we 

reviewed did not contain the required documentation. 

Management and maintenance of CERP records are centralized at MNC-I, which has 

published a standard operating procedures document that discusses the requirements for 

the management of CERP records.13 The procedures require that the MSCs submit 

supporting project file documentation for each completed project to the MNC-I 

Comptroller’s Office for review and storage on a quarterly basis. The procedures also 

require that MNC–I, depending on the scope and/or dollar value of the project, maintain 

16 different documents (see Appendix B) in support of the completed project. Finally, 

MNC-I issued fragmentary orders to the major subordinate commands that support its 

management of CERP projects. 

 

12 The minor discrepancies accounted for less than 1% of the total obligation and consisted of timing 

differences (lag times) between IRMS and the Army accounting system. 13 See “Commander’s Emergency Response Program (CERP) Family of Funds Standard Operating 

Procedures,” rev. April 24, 2006. 

5 
MNC-I guidance requires that these steps be taken once a project is completed: 

• Project is annotated as complete (cleared) in the Iraq Reconstruction Management 

System (IRMS). 

• Project Purchasing Officer reconciles the project folder documentation. 

• MSC Commander reviews the project folder and signs a clearance memorandum 

concurring that the project folder is complete. 

• MSC Comptroller reviews the project file and, if applicable; documents in the 

project folder that it is cleared, contractually sufficient, and within the scope of 

the appointed authority. 

To assess whether the MSCs and MNSTC-I have complied with MNF-I’s guidance for 

project records, we conducted a review of a selection of project folders. We obtained a 

copy of fiscal year 2006 IRMS data from MNC-I on February 9, 2007. Of 3,854 projects, 

3,051 were indicated as either physically complete or terminated. We requested 173 of 

the 3,051 project folders for review. This included a random sample of 153 projects—

stratified proportionally by each MSC—and a judgmental sample of the top 20 most 

expensive (by obligation) completed projects at that time. MNC-I could only provide 122 

of the 173 project folders—105 of the requested random sample and 17 of the judgmental 

sample—or 71%. Therefore, our review was limited to these 122 project folders. As a 

result of the 48 missing random sample project folders, we did not project any statistical 

results into the entire population of 3,051 project folders. 

We compiled the supporting documentation for the 122 project folders and grouped 10 of 

the required documents into five primary categories to better assess specific process areas 

(see Table). Specifically: 

1. documents certifying the commitment of funds 

2. documents certifying the obligation of funds 

3. documents certifying the disbursement of funds 

4. documents that certified the officials that were responsible for handling project 

funds 

5. documents that certified the completion of a project 

Since about 30% of the records we requested were not provided, we are only reporting on 

the results of the 122 of 173 project folders we received, as reflected in the table below. 

For a summary of our results for the records for all 122 projects, see Appendix B. 

6 
Table—Analysis of CERP Project Documentation that Is Required, 

 but Missing 

Documentation Category Number Requireda Measure Missingb

1. Certification of the Commitment of Funds 

• Department of the Army (DA) Form 3953, or 

• Department of Defense (DD) Form 1149 

115 Number 

Rate 

12 

10.4% 

2. Certification of Obligation of Funds 

• Standard Form (SF) 44, or 

• SF 1449 

101 Number 

Rate 

19 

18.8% 

3. Certification of Disbursement of Funds 

• DD Form 1081 marked on advance 

• DD Form 1081 marked on return 

87 Number 

Rate 

43 

49.4% 

4. Certification of Officials Responsible for Project 

 Funds 

• Purchasing Officer (PO) Appointment Letter 

• Pay Agent (PA) Appointment Letter 

• PO DD Form 577 purchasing card 

• PA DD Form 577 purchasing card 

113 

Number 

Rate 

33 

27.0% 

5. Certification of Completion of Project 

• Commander’s Clearance Letter 

• DD Form 250 

118 Number 

Rate 

26 

22.0% 

Source: SIGIR 

a. Requirements for documentation varied per project based on MNC-I guidance. 

b. A missing document was recorded when it was determined a document was required but was not observed 

in the project folder. 

The rate of missing documents within each category varied. For example, in reviewing 

documents for the Certification of Officials Responsible for Project Funds (category 4), 

we found that approximately 73% of both the required DD Form 577s and Appointment 

Letters for Purchasing Officers were included in the project files. These records identify 

and certify the MNF-I officials authorized to spend appropriated funds on CERP projects, 

and provide a reasonable assurance to Department of Defense (DoD) officials that 

procedures to disburse funds are followed. Of the projects reviewed, we found that the 

Multi-National Division-Baghdad submitted 96% of their required DD Form 1081s 

“marked on return,” while neither the Multi-National Division-Center South or the MultiNational Force-West submitted any of these records. In addition, our judgmental sample 

of the top 20 most expensive completed projects showed the MSC project folders 

contained a higher percentage of the required documentation than was in the project 

folders we identified for our random sample selection. 

7 
Use of CERP Funds 

Using applicable guidance and our sample review of available documentation for 122 

projects, we determined that fiscal year 2006 CERP funds were used for intended and 

authorized purposes. The MSC commanders have the authority to approve projects less 

than $500,000 without MNC-I approval, as long as the projects meet the standards 

outlined in CERP directives and guidance. Projects over $500,000 must be approved by 

the MNC-I Commanding General. 

There are several documents that provide guidance on approved uses for CERP funds, 

including an Office of the Under Secretary of Defense (Comptroller) memorandum,14

MNC-I’s “Commander’s Emergency Response Program (CERP) Family of Funds 

Standard Operating Procedures,” MNC-I Operations Order, and MNC-I fragmentary 

orders. The memorandum states that the purpose of CERP is to enable commanders “to 

respond to urgent humanitarian relief and reconstruction requirements within their area of 

responsibility by carrying out programs that will immediately assist the indigenous 

population.” The MNC-I standard operating procedures expands on the memorandum, 

stating that the MNC-I commander’s intent is to achieve focused effects. Commands are 

to prioritize those CERP projects that focus on providing urgent humanitarian relief while 

providing significant employment opportunities for the Iraqi people. The guidance also 

reemphasizes the projects that CERP may support, such as water and sanitation, 

electricity, education, rule of law and governance, and condolence payments; and 

identifies restrictions on the use of CERP funds (see Appendix D). The MNC-I 

Operations Order provides overall guidance in selecting CERP projects while taking into 

account the strategic objectives identified in the MNF-I Campaign Plan.15 MNC-I 

fragmentary orders directs major subordinate commanders to focus their CERP projects 

on essential services—sewer, water, electricity, trash, and fuel.16 

Our review of 122 project folders found that the selected projects fully complied with 

DoD guidance and MNC-I procedures and orders for intended use and authorized 

purposes of CERP funds. For example, the MNC-I Operations Order directed the MSCs 

to focus reconstruction efforts on rebuilding and improving the water and electricity 

infrastructure in Iraq. Fragmentary Order 559 further directed the MSCs to focus their 

CERP efforts on sewer, water, electricity, trash, and fuel type projects. In fiscal year 

2006, almost one-half of the CERP obligations were for these types of projects. 

 

14 Under Secretary of Defense (Comptroller) Memorandum, July 27, 2005; Subject: Commander’s 

Emergency Response Program Guidance. 

15 MNC-I Operations Order 06-01, April 21, 2006. 

16 MNC-I Fragmentary Order 009, April 24, 2006, and Fragmentary Order 559, October 25, 2006. 

8 
Coordination of CERP Projects 

MNC-I has made improvements in coordinating its CERP projects, but IRMO officials 

report weaknesses in coordinating projects in some provinces. In our fiscal year 2005 

report on CERP management,17 we identified a lack of formal coordination of CERP 

projects with IRMO reconstruction programs that limited the effectiveness of the CERP 

projects. The lack of coordination was again reiterated by provincial reconstruction team 

officials during our review on the status of the Provincial Reconstruction Team 

program18 in October 2006. 

We reviewed MNC-I’s process for coordinating CERP projects with IRMO and USAID, 

as well as with Iraqi provincial and national government entities, and found that MNC-I 

has strengthened its coordination requirements at most levels. For example: 

• MNC-I guidance, revised in April 2006, now requires commanders to coordinate 

and determine CERP project needs with local Government of Iraq agencies, civil 

affairs elements, engineers, and the provincial reconstruction and development 

committees (PRDC) and/or provincial reconstruction teams (PRT) to gain the 

greatest effect and ensure synchronization. The guidance also directs commanders 

to coordinate CERP projects with complementary programs provided by USAID 

or non-governmental agencies operating in their areas of responsibility.19 

• In November 2005, MNF-I issued a fragmentary order designating at least 

$5 million in CERP funding to each province. The PRDC in each province was 

requested to prepare and approve a prioritized project list for the MSC controlling 

that applicable battlespace. The MSCs would then use the lists to identify and 

prioritize CERP projects in their battlespace.20

• In May 2006, MNC-I initiated the Interagency Stabilization Task Force, which 

coordinates program reconstruction efforts with Coalition Forces and the 

Government of Iraq. The task force is comprised of MNF-I, MNC-I, IRMO, and 

USAID representatives. 

• In fiscal year 2006, MNF-I established the Joint Reconstruction Operations 

Center (JROC) under GRD. Through the weekly meeting of the Joint Planning 

Commission, consisting of MNF-I, MNC-I, IRMO, USAID, Iraqi representatives 

and Baghdad Amanat engineers,21 the JROC coordinates and synchronizes 

reconstruction projects from all the reconstruction players with the Government of 

Iraq in support of the Baghdad Security Plan. In addition, it maintains a list of 

prioritized projects for the Baghdad Amanat along with its priorities.

 

17Management of the Commander’s Emergency Response Program for Fiscal Year 2005, SIGIR-05-025, 

January 23, 2006. 

18Status of the Provincial Reconstruction Team Program in Iraq, SIGIR 06-034, October 29, 2006. 

19 MNC-I Smart Book “Money as a Weapon System” and MNC-I’s “Commander’s Emergency Response 

Program (CERP) Family of Funds Standard Operating Procedures,” revised April 24, 2006. 

20 MNF-I Fragmentary Order 05-374, dated November 2005. 

21 Baghdad Amanat (City Hall) is responsible for municipal services (water, sewerage, solid waste disposal, 

urban planning, roads, municipal buildings, and parks) to the metropolitan region of Baghdad. 

9 
We discussed CERP project coordination with USAID officials, and they stated that 

MNC-I is working closely with them to ensure that projects are coordinated and meet the 

real needs of Iraqi communities. USAID officials said that they have regular face-to-face 

meetings with the MSC CERP program managers to share information on projects and 

community needs at the working level. Examples of cooperation on projects between 

MNC-I and USAID during FY 2006 are: 

• The Izdihar Private Sector Development Project. MNC-I and USAID collaborated 

on the expansion of microfinance institutions in Iraq through the strategic use of 

CERP funds over the past two years. USAID has provided significant guidance in 

terms of the structure and targeting of CERP small business grants. CERP funding 

was used to pay for operational expenses for several microfinance offices in cities 

across Iraq including Baghdad, Fallujah, and Kirkuk. USAID also contributed 

loan capital to these microfinance institutions, and has supported these 

organizations with essential technical assistance and staff training. The 

partnership between USAID and MNC-I is likely to continue since the expansion 

of microfinance services in Iraq has been identified as a strategic priority of the 

U.S. government to promote economic development in Iraq. 

• USAID’s Agricultural Reconstruction and Development Program for Iraq 

(ARDI). ARDI’s biweekly Joint Agricultural Task Force meetings provide a 

forum for disseminating best practices and lessons learned to MNC-I’s civil 

affairs officers in the area of agriculture. ARDI hosted numerous site visits, the 

objective being to identify potential projects and initiatives that could easily be 

replicated by using CERP funds. These visits enhanced the civil affairs officers 

understanding of best practices in agriculture and enabled MNC-I to form 

partnerships with several newly formed indigenous non-governmental 

organizations working with the ARDI project. CERP funding to these 

organizations strengthened their operational capacity, thus contributing to their 

financial sustainability and assisting the military to achieve significant results in 

agriculture countrywide. 

Discussions with IRMO officials supported the premise that coordination related to 

CERP projects improved in fiscal year 2006. IRMO staff added that the level of 

coordination was dependent on the province where the project was occurring and varies 

on the strength of the PRDC and the operational abilities of the PRT. For example, IRMO 

officials stated they are not always fully aware of ongoing CERP projects in some 

western provinces due to issues such as security concerns which precluded having 

consistent ongoing meetings on CERP projects. On the other hand, an example of 

successful coordination cited by IRMO was in the city of Kirkuk, located in the Al 

Tameen province, where PRT, PRDC, and MNC-I coordination is working successfully 

to develop and implement CERP projects. 

10 
Program Effectiveness 

Measuring the effect of a CERP project is often complex and difficult. MNC-I 

coordinates the efforts of several staff offices (project management, financial 

management, etc.) to determine the intended effects of CERP projects in a city or region. 

An Effects Assessment Working Group meets every week, and reviews the impacts of 

CERP projects across the lines of operations. The Effects Assessment Working Group 

culminates in a classified effects assessment briefing to the MNC-I Commanding General 

once a month. The effects of completed CERP projects are combined with other ongoing 

MNC-I efforts to gauge their impact on the MNC-I Operations Order. The majority of the 

effects a CERP project has on an area are second- and third-order impacts that go beyond 

the simple completion of the project. 

The assessment process considers polling results,22 operational reports, and subject 

matter expert reports in a holistic methodology so that effects and impacts of a project are 

captured and measured. Indirect impacts include economic, essential service, and security 

activities in an area where the CERP project is completed. For example, the purpose of a 

CERP-funded security project was not to directly cause economic growth in an area. 

However, because the project provided increased security, the second-order impact of 

free trade was enabled; which increased the third-order impact of economic activity in the 

area, such as adding to job growth, wage increases, etc. In another example, polling of 

Iraqis would show that CERP projects provided jobs to Iraqis, and/or Iraqis indicated that 

they noticed the Coalition’s reconstruction efforts (i.e. the reconstruction was visible to 

them). 

 

22 Multiple monthly polls are conducted by contractors for MNF-I and MNC-I to gauge the impact of the 

Coalition efforts in Iraq. The results of these polls are classified. 

11 
Transfer and Sustainment of CERP Projects 

There is no specific MNC-I guidance for the transfer or sustainment of CERP projects to 

the Government of Iraq. Approximately 97% (3,716) of the CERP projects in fiscal year 

2006 cost under $500,000 and probably required little transfer or sustainment planning. 

We believe that the larger projects—those over $500,000 in the essential services sectors 

(water and electricity)—will likely require some level of transfer and sustainment 

planning. Only 3% (138) of the CERP projects are valued over $500,000, and encompass 

47% ($235 million) of the $510 million obligated for fiscal year 2006. 

There has been a growing recognition that the Government of Iraq is not yet prepared to 

take over the near- and long-term management and funding of infrastructure projects. 

Consequently, an integral part of all reconstruction planning is working with the Iraqis to 

ensure not only that they can support completed projects, but also that the Government of 

Iraq is prepared to sustain them with the requisite financing. 

In our fiscal year 2005 CERP report, we recommended that MNC-I coordinate plans and 

funding for the sustainment of large CERP construction projects, and projects that have 

strategic value, with the Department of State (DoS). MNC-I broadly non-concurred that it 

should coordinate sustainment plans and funding of large CERP projects with DoS. 

Rather, MNC-I states that the appropriate coordination takes place only between the 

commander executing the project and representatives of the Government of Iraq. MNC-I 

also responded that this type of coordination takes place regularly through the PRDCs, 

Provincial Support Teams, and PRTs. We agree some transfer and sustainment 

coordination occurs through such venues as the MSC commanders meetings with the 

PRDCs and PRTs in the provinces and the JROC and the Interagency Stabilization Task 

Force. Both meet in Baghdad and bring together Coalition forces, interagency, and 

Government of Iraq agencies to coordinate and synchronize efforts. Nevertheless, it is 

uncertain how much these meetings contribute to the readiness of the Government of Iraq 

to take over and sustain completed projects. 

Therefore, while we commend the efforts of MNC-I and DoS to coordinate with the 

Government of Iraq on the provincial level, it is the position of SIGIR that the DoS is the 

U.S. government organization responsible for coordinating the overall asset recognition, 

transfer and sustainment of major reconstruction projects with the Government of Iraq. 

Some CERP projects, particularly capital construction projects, and those of strategic 

value, rise to that threshold, thus requiring more concerted efforts between all 

government entities charged with responsibilities for reconstruction activities in Iraq. 

12 
Prior SIGIR Recommendations 

During the course of our audit we reviewed actions taken by MNC-I to implement five 

recommendations from our fiscal year 2005 report on CERP management. Our review 

found that MNC-I has fully addressed three of our recommendations but still needs to 

take action to address two recommendations. 

In fiscal year 2005, we recommended that MNF-I should conduct a thorough examination 

of all fiscal year 2005 CERP funds and projects to account for project status reporting 

errors and to assure that fiscal year 2005 CERP funds were properly obligated. In 

addition, we recommended that MNF-I conduct a quarterly review of the CERP to ensure 

the data contained within its project tracking tool is valid and is as consistent as possible 

with the data for project obligations in the Army accounting system. MNC-I made an 

effort to reconcile fiscal year 2005 CERP project funds, indicated as open in IRMS, with 

information that was available in the Iraq theater. For fiscal year 2006, our analysis 

showed that MNC-I improved data coordination with commanders at all levels, the 

MSCs’ CERP program managers, the civil affairs personnel, the engineers, and the 

organization comptrollers to resolve this problem. As a result of MNC-I’s actions taken 

and the reconciliation we performed regarding the fiscal year 2006 financial data in the 

two reporting systems, we consider these two recommendations to be closed. 

Our fiscal year 2005 report also recommended that MNC-I clarify and enforce existing 

guidance on the collection of required project records, conduct quarterly reviews of 

project records to improve the management of project files, and provide training for all 

current and future MNF-I units on project documentation requirements and how to 

maintain and store these records. MNC-I did conduct training at several venues regarding 

CERP procedures; however, the continuing problems we identified again in fiscal year 

2006 suggest that additional attention is still needed. Consequently, we consider this 

recommendation to be still open. 

We recommended MNF-I formalize the process for coordinating CERP projects with 

IRMO and USAID, especially those used in conjunction with other reconstruction 

programs that are of strategic importance. In fiscal year 2006, MNC-I made 

improvements in coordinating its CERP projects IRMO and USAID, as well as with Iraqi 

provincial and national government entities. For example, MNF-I established the JROC 

under GRD. Through the weekly meeting of the Joint Planning Commission—

comprising MNF-I, MNC-I, IRMO, USAID, Iraqi representatives and Baghdad Amanat 

engineers,—the JROC coordinates and synchronizes reconstruction projects from all the 

reconstruction players with the Government of Iraq in support of the Baghdad Security 

Plan. In addition, it maintains a list of prioritized projects for the Baghdad Amanat along 

with its priorities. 

Discussions with IRMO supported CERP project coordination had improved but added 

that the level of coordination was dependent on the province where the project was 

occurring, and varied as to the strength of the PRDC and the operational abilities of the 

13 
PRT. Based on our review, we feel MNC-I met the intent of this recommendation 

regarding CERP project coordination with IRMO and USAID, and as such consider it 

closed. However, MNC-I needs to continue to reinforce its coordination effort to ensure 

that CERP projects are successfully integrated with USAID and IRMO reconstruction 

operations. 

Finally, we recommended MNF-I coordinate plans and funding for the sustainment of 

large CERP construction projects; and projects that have strategic value with the DoS. 

MNC-I non-concurred and stated that appropriate coordination takes place only between 

the commander executing the project and representatives of the Government of Iraq. In 

addition, MNC-I responded that coordination takes place regularly through the PRDCs, 

Provincial Support Teams, and PRTs. MNC-I asserts that sustainment of CERP projects 

is solely the responsibility of the Government of Iraq. While we commend the efforts of 

MNC-I to coordinate with the Government of Iraq on the provincial level, we still 

maintain that the DoS is the U.S. government organization responsible for coordinating 

the overall sustainment of reconstruction projects in Iraq, particularly capital construction 

projects costing more than $500,000, and those of strategic value. Consequently, we 

consider this recommendation to remain open. 

14 
Conclusion and Recommendations 

Conclusion 

MNC-I took significant steps in fiscal year 2006 to improve and strengthen management 

of the CERP. The introduction of IRMS as the project tracking tool significantly 

improved MNC-I’s ability to reconcile financial data with project data. In addition, MNFI and MNC-I have improved the coordination efforts in both procedural requirements and 

ongoing coordination meetings regarding CERP projects. However, as reported in 

SIGIR’s audit report on CERP management for fiscal year 2005, MNC-I was not 

enforcing its own management controls over the CERP projects. Further, the MSCs’ 

monthly CERP status of funds reports that reconcile the two CERP management 

reporting systems were, for the most part, not kept on file by MNC-I as an audit trail 

validating data in the systems. These deficiencies could result in the lack of a historical 

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

Our review of 122 projects found, in all cases, that the CERP funds were used for 

intended and authorized purposes. The MSC commanders have the authority to approve 

projects less than $500,000 without MNC-I approval, as long as the projects meet the 

standards outlined in CERP directives and guidance. Projects over $500,000 must be 

approved by the MNC-I Commanding General. 

Largely because the MSCs generally are not following the MNC-I guidance on the 

disposition of the folders for completed projects, MNC-I could only provide SIGIR with 

122 of the 173 folders requested as our sample.23 The 51 missing project folders included 

48 of the requested 153 proportionally stratified (across the MSCs) random sample and 3 

of the “top 20” projects sample. We are concerned that MNC-I could not provide about 

30% of the requested completed project folders. 

Potentially of much more significance, in our review and analysis of the contents of the 

122 available project folders, we found numerous cases in which key required documents 

were missing. For example, 49.4% of the DD Form 1081, Statement of Agent Officer’s 

Account, were missing. This document represents the transfer of cash to Coalition force 

personnel for payments and disbursements of funds to contractors or to other entities. The 

absence of any of the required documents, which are essential in certifying proper 

accountability for cash disbursements, could indicate an internal control vulnerability. 

We are again concerned that critical control documents are missing from the project 

folders. 

Improvements have been made by MNC-I in coordinating its CERP projects with IRMO 

and USAID, as well as with Iraqi provincial and national government entities. For 

example, in fiscal year 2006, MNF-I established the JROC under GRD. Through the 

weekly meeting of the Joint Planning Commission—consisting of MNF-I, MNC-I, 

 

23 Appendix C identifies the number project folders were requested and provided by MNC and MNSTC-I. 

15 
IRMO, USAID, Iraqi representatives and Baghdad Amanat engineers—the JROC 

coordinates and synchronizes reconstruction projects from all the reconstruction players 

with the Government of Iraq in support of the Baghdad Security Plan. In addition, it 

maintains a list of prioritized projects for the Baghdad Amanat along with its priorities. 

MNC-I needs to continue to reinforce this coordination effort with its MSC commanders 

to ensure CERP projects are successfully integrated with USAID and IRMO 

reconstruction operations. 

Measuring the effect of a CERP project is often complex and difficult. MNC-I 

coordinates the efforts of several staff offices (project management, financial 

management, etc.) to determine the intended effects of CERP projects in a city or region. 

An Effects Assessment Working Group meets every week, and reviews the impacts of 

CERP projects across the lines of operations. The Effects Assessment Working Group 

culminates in a classified effects assessment briefing to the MNC-I Commanding General 

once a month.24 It is important to note, however, that the CERP projects are often 

second- and third-order impacts, such as security improvements that lead to economic 

stability, and thus are difficult to measure. 

While most CERP projects are small and probably require little transfer or sustainment 

planning, we believe that the larger projects—those over $500,000 in the essential 

services sectors (i.e., water and electricity)—will likely require some level of planning. 

Although we made a recommendation to address transfer and sustainment in our previous 

report,25 this condition remains since we determined that there is no specific MNC-I 

guidance for the transfer or sustainment of CERP projects to the Government of Iraq. 

However, some transfer and sustainment coordination occurs through such venues as the 

JROC’s weekly meeting of the Joint Planning Commission consisting of MNF-I, MNC-I, 

IRMO, USAID, Iraqi representatives and Baghdad Amanat engineers.26 However, it is 

uncertain how much these meetings contribute to the readiness of the Government of Iraq 

to take over and sustain completed projects. 

Our fiscal year 2005 report made five recommendations for improving the CERP 

program. Our review found that MNC-I has fully addressed three of our 

recommendations but still needs to take action to address two recommendations. 

 

24 As stated, this report is classified and SIGIR did not have access to it. 25 SIGIR-05-025, January 23, 2006. 

26Baghdad Amanat (City Hall) is responsible for municipal services (water, sewerage, solid waste disposal, 

urban planning, roads, municipal buildings, and parks) to the metropolitan region of Baghdad. 

16 
Recommendations 

We recommend that the Commanding General, Multi-National Corps-Iraq, take these 

actions: 

1. Enforce the CERP requirement that major subordinate commands submit 

completed CERP project files on a quarterly basis. 

2. Require the major subordinate commands and the MNC-I Comptroller to keep on 

file monthly reports of the status of CERP funds to validate that reviews are being 

done and that the two management reporting systems are reconcilable. 

3. Continue to reinforce coordination effort with major subordinate commands to 

ensure that CERP projects are successfully integrated with IRMO reconstruction 

operations. 

Management Comments and Audit Response 

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

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

have been initiated or planned. According to the comments, the CERP standard operating 

procedure will be updated to add or enforce requirements in response to our 

recommendations on submitting project files and retaining monthly reports; and 

coordination efforts will be reinforced with the major subordinate commands and all 

involved parties regarding CERP project integration. The comments received were fully 

responsive and are included in the Management Comments section of this report. 

17 
Appendix A—Scope and Methodology 

In January 2007, we initiated this audit (Project No. 7007) to determine whether CERP 

projects and funds were effectively managed by MNC-I in fiscal year 2006. This report 

discusses management controls over CERP projects, funds, and records; performance 

measures for CERP projects vis-à-vis the goals of the program; transfer and sustainment 

of CERP projects to the Government of Iraq; and coordination of CERP projects with 

IRMO and USAID reconstruction programs. 

To determine if MNC-I implemented controls to effectively manage fiscal year 2006 

CERP projects, funds, and records, we interviewed officials from MNF-I and MNC-I to 

understand how the program was managed over the course of the year. This included 

collecting and analyzing guidance and fragmentary orders governing the program from 

the Office of the Under Secretary of Defense (Comptroller), MNF-I, and MNC-I. In 

addition, we tested the controls MNF-I had in place to manage the CERP. 

First, to determine whether MNF-I used CERP funds for the purposes intended and 

authorized in DoD guidance, and adequately controlled the records for CERP projects at 

the control point (i.e., MNC-I), we obtained a copy of the IRMS data from MNC-I. This 

data was provided on February 9, 2007, and was for fiscal year 2006. Of 3,854 projects, 

3,051 were indicated as either physically complete or terminated. We requested 173 of 

the 3,051 project folders for review. This included a random sample of 153 projects—

stratified proportionally by the major subordinate command, and a judgmental sample of 

the top 20 most expensive (by obligation) completed projects at that time. MNC-I could 

only provide 105 of the requested random sample and 17 of the judgmental sample 

project folders. Therefore, our review was limited to these 122 project folders. As a result 

of the 48 missing stratified random sample project folders, we did not project our results 

to the entire population of 3,051 project folders. 

We selected 16 required documents to review based on MNF-I and MNC-I guidance on 

CERP procedures and administrative requirements included in Fragmentary Orders and 

MNC-I’s “Commander’s Emergency Response Program (CERP) Family of Funds 

Standard Operating Procedures issued over the course of fiscal year 2006. We then 

grouped ten of these documents into five primary categories to better assess specific 

process areas. These primary categories are: (a) documents certifying the commitment of 

funds, (b) documents certifying the obligation of funds, (c) documents certifying the 

disbursement of funds, (d) documents that certified the officials that were responsible for 

handling project funds, and (e) documents that certified the completion of a project. 

To determine the errors for these primary categories, we recorded an occurrence of an 

error only when the document was not present in the project file at MNC-I. All other 

occurrences resulted in an “Accepted” mark; including project folders with missing 

signatures on documents and substituted documents as authorized by MNC-I. The results 

for all 122 project folders reviewed are tabulated in Appendix B. 

18 
19 

To determine if MNF-I effectively coordinated CERP projects, where appropriate; we 

interviewed officials and obtained relevant documentation from MNF-I and its 

subordinate units, from IRMO, and from USAID to understand how reconstruction 

programs, including the CERP, were coordinated across U.S. government agencies in 

Iraq. We also attended several strategic interagency coordination meetings, held in the 

U.S. Embassy-Iraq, to further observe how reconstruction activities are coordinated. 

Furthermore, we reviewed MNF-I, IRMO, and USAID plans to coordinate reconstruction 

programs in FY 2006 and queried officials on how the CERP will be integrated into these 

plans. 

To determine MNC-I guidance on transfer and sustainment of projects to the Government 

of Iraq, we interviewed MNC-I staff and reviewed existing MNC-I documented 

procedures and guidance. 

We conducted this audit from January 2007 through April 2007, in accordance with 

generally accepted government auditing standards. 

Use of Computer-Processed Data 

We utilized data from the Army accounting system, the Standard Financial System 

(STANFINS); and IRMS to reconcile project data with financial data for all the funds 

provided by CERP. However, we did not perform a review of the controls of STANFINS 

or IRMS, but did compare the data to the original records provided to us by MNC-I. 

Prior Coverage 

Office of the Special Inspector General for Iraq Reconstruction 

• Management of the Commander’s Emergency Response Program for Fiscal Year 

2004 (SIGIR-05-014, October 13, 2005)

• Management of the Commander’s Emergency Response Program for Fiscal Year 

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

• Management of the Iraqi Interim Government Fund (SIGIR-06-31, October 27, 

2006) 

U.S. Army Audit Agency 

The U.S. Army Audit Agency conducted a series of audits on the funds allocated to 

MNSTC-I for CERP projects in fiscal year 2005, which include: 

• Commander’s Emergency Response Program and Quick Response Fund (Report 

A-2005-0173-ALE, May 2, 2005) 

• Follow-Up of Commander’s Emergency Response Fund and Quick Response 

Fund (Report A-2005-0332-ALE, September 30, 2005) 

• Follow-Up II of Commander’s Emergency Response Program and Quick 

Response Fund (Report A-2006-0090 ALE, March 31, 2006) 
Appendix B—Review of Completed CERP Project Files 

This table summarizes the results of our review of the 122 completed CERP project folders available, from the 173 requestassess whether the executing commands complied with guidance for submitting the 16 required project documents and otheas required by MNC-I guidance. For our analysis, the first 10 types of records were grouped into five categories. We chose 

of 153 projects—stratified proportionally by the major subordinate command—and a judgmental sample of the top 20 mos

obligation) completed projects as of February 9, 2007. MNC-I could only provide 105 of the requested random sample and 

judgmental sample project folders. We were unable to project the errors for the population due to the number of missing pr

Executing 

Command Occurrence 

1. DA3953 or DD1149 

2. SF44(s) and/or 

SF1449(s) 

3. DD Form 1081 [On 

Advance] 

4. DD Form 1081 [On 

Return] 

5. Appointment Letter 

for Purchasing Officer 

6. Appointment Letter 

for Paying Agent 

7. DD Form 577 

Purchasing Officer 

8. DD Form 577 Paying 

Agent 

9. MSC Commander's 

Clearance Memo 

10. DD Form 250 

11. Project Proposal or 

SOW 

12. Copy of Contract 

13. 3+ Vendors or Sole 

Source Justification 

Documented 

On-file 4 4 2 2 2 2 2 2 4 1 3 0 1 Not On-file 0 0 2 2 1 1 1 1 0 0 1 0 0 Total Required 4 4 4 4 3 3 3 3 4 1 4 0 1 

MultiNational 

CorpsIraq % Missing 0% 0% 50% 50% 33% 33% 33% 33% 0% 0% 25% N/A 0% 

On-file 35 22 24 24 38 36 38 36 36 23 36 2 13 Not On-file 1 1 1 1 0 1 0 1 2 2 0 0 0 Total Required 36 23 25 25 38 37 38 37 38 25 36 2 13 

MultiNational 

DivisionBaghdad % Missing 3% 4% 4% 4% 0% 3% 0% 3% 5% 8% 0% 0% 0% 

On-file 4 5 1 0 0 0 0 0 5 3 5 2 1 Not On-file 1 0 4 5 5 5 5 5 0 1 0 0 0 Total Required 5 5 5 5 5 5 5 5 5 4 5 2 1 

MultiNational 

DivisionCenter 

South % Missing 20% 0% 80% 100% 100% 100% 100% 100% 0% 25% 0% 0% 0% 

On-file 33 25 9 11 23 24 21 23 25 6 23 9 7 Not On-file 1 7 15 12 6 4 6 4 7 5 5 2 0 Total Required 34 32 24 23 29 28 27 27 32 11 28 11 7 

MultiNational 

DivisionNorth % Missing 3% 22% 63% 52% 21% 14% 22% 15% 22% 45% 18% 18% 0% 

On-file 0 0 0 0 0 0 0 0 0 0 0 0 0 Not On-file 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Required 0 0 0 0 0 0 0 0 0 0 0 0 0 

MultiNational 

DivisionNortheast % Missing N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 

20 
21 

Executing 

Command Occurrence

1. DA3953 or DD1149

2. SF44(s) and/or 

SF1449(s)

3. DD Form 1081 [On 

Advance]

4. DD Form 1081 [On 

Return]

5. Appointment Letter for 

Purchasing Officer

6. Appointment Letter for 

Paying Agent

7. DD Form 577 

Purchasing Officer

8. DD Form 577 Paying 

Agent

9. MSC Commander's 

Clearance Memo

10. DD Form 250

11. Project Proposal or 

SOW

12. Copy of Contract

13. 3+ Vendors or Sole 

Source Justification 

Documented

On-file 7 10 6 6 10 9 10 10 9 7 11 4 2 Not On-file 1 0 0 0 0 1 0 0 1 1 0 0 0 Total Required 8 10 6 6 10 10 10 10 10 8 11 4 2 

MultiNational 

DivisionSoutheast % Missing 13% 0% 0% 0% 0% 10% 0% 0% 10% 13% 0% 0% 0% 

On-file 5 6 0 0 0 0 0 0 10 0 2 1 3 Not On-file 8 7 12 12 12 12 11 12 3 2 2 0 0 Total Required 13 13 12 12 12 12 11 12 13 2 4 1 3 

MultiNational 

ForceWest % Missing 62% 54% 100% 100% 100% 100% 100% 100% 23% 100% 50% 0% 0% 

On-file 0 0 0 0 0 0 0 0 0 0 0 0 0 Not On-file 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Required 0 0 0 0 0 0 0 0 0 0 0 0 0 

MultiNational 

Security 

Transition 

Cmd-Iraq % Missing N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 

On-file 88 72 42 43 73 71 71 71 89 40 80 18 27 Not On-file 12 15 34 32 24 24 23 23 13 11 8 2 0 Total Required 100 87 76 75 97 95 94 94 102 51 88 20 27 

Total for 

Random 

Sample % Missing 12% 17% 45% 43% 25% 25% 24% 24% 13% 22% 9% 10% 0% 

On-file 15 10 5 4 10 8 8 8 11 9 15 10 10 Not On-file 0 4 6 7 5 6 7 6 4 5 0 3 2 Total Required 15 14 11 11 15 14 15 14 15 14 15 13 12 

Total for 

Top 20 

% Missing 0% 29% 55% 64% 33% 43% 47% 43% 27% 36% 0% 23% 17% On-file 103 82 47 47 83 79 79 79 100 49 95 28 37 Not On-file 12 19 40 39 29 30 30 29 17 16 8 5 2 Total Required 115 101 87 86 112 109 109 108 117 65 103 33 39 

Total for 

All 

Projects % Missing 10% 19% 46% 45% 26% 28% 28% 27% 15% 25% 8% 15% 5% 

Source: SIGIR
Appendix C—Availability of CERP Project 

Folders 

This table identifies by executing command the availability of project folders requested 

for review. To assess whether the major subordinate commands and MNSTC-I complied 

with MNC-I’s guidance for project records, we requested 173 project folders for review. 

As indicated below, MNC-I could only provide 122 of the requested folders. 

Executing Command Number 

Requested 

Number 

Provided 

Number Not 

Provided 

Percent Not 

Provided 

Multi-National Corps-Iraq 4 4 0 0% 

Multi-National DivisionBaghdad 46 38 8 17.4% 

Multi-National DivisionCenter South 11 5 6 54.5% 

Multi-National DivisionNorth 41 34 7 17.1% 

Multi-National DivisionNortheast 3 0 3 100% 

Multi-National DivisionSoutheast 18 11 7 38.9% 

Multi-National Force-West 29 13 16 55.2% 

Multi-National Security 

Transition Command-Iraq 

1 0 1 100% 

Total Project Folders for 

Random Sample

153 105 48 31.4% 

Total Project Folders for 

Top 20 Most Expensive 

Projects

20 17 3 15% 

Total for All Projects 

Requested

173 122 51 29.5% 

Source: SIGIR

22 
Appendix D–CERP Fund Uses & Restrictions 

On July 27, 2005, the Office of the Under Secretary of Defense (Comptroller) published a 

list of uses and restrictions for CERP. The table below identifies the total number of 

authorized projects and obligations using fiscal year 2006 CERP Iraq appropriated funds 

for projects in Iraq as of September 30, 2006. 

 Authorized Uses - Fiscal Year 2006 Project Category Number Obligations

1. Water and sanitation - projects to repair or reconstruct water 

or sewer infrastructure, including water wells 659 $ 138,250,913

2. Food production and distribution - projects to increase 

food production or distribution processes 17 $1,302,366

3. Agriculture - projects to increase agricultural production or 

cooperative agricultural programs 58 $28,614,675 

4. Electricity - projects to repair or reconstruct electrical power 

or distribution infrastructure, including generators 421 $81,755,958 

5. Healthcare - projects to repair or reconstruct hospitals or 

clinics or to provide urgent healthcare services, 

immunizations, medicine, medical supplies, or equipment 232 $25,838,505

6. Education - projects to repair or reconstruct schools, 

purchase school supplies or equipment 557 $41,986,775 

7. Telecommunications - projects to repair or reconstruct 

telecommunications systems or infrastructure 81 $8,690,,536 

8. Economic, financial, and management improvements - 

projects to improve economic or financial security 95 $29,281,329

9. Transportation - projects to repair or reconstruct 

transportation systems, roads, bridges, or transportation 

infrastructure 480 $66,970,347 

10. Rule of law and governance - projects to repair or 

reconstruct such government buildings as administration 

offices, courthouses, or prisons 150 $12,131,377 

11. Irrigation - projects to repair or reconstruct irrigation systems 49 $13,823,564 

12. Civic cleanup activities - projects to remove trash, cleanup 

the community, or beautify the surroundings 234 $17,143,268 

13. Civic support vehicle - projects to purchase or lease 

vehicles to support civic and community activities 9 $2,194,300 

14. Repair of civic and cultural facilities - projects to repair or 

restore civic or cultural buildings or facilities 73 $4,923,332 

15. Repair of damage that results from U.S., Coalition, or 

supporting military operations and is not compensable under 

the Foreign Claims Act 59 $1,490,369

16. Condolence payments to individual civilians for death, 

injury, or property damage resulting from U.S. Coalition, or 

supporting military operations 438 $7,356,542

23 
 Authorized Uses - Fiscal Year 2006 Project Category Number Obligations

17. Payment to individuals upon release from detention 0 0

18. Protective measures – projects to enhance the durability 

and survivability of critical infrastructure sites (e.g., oil 

pipelines and electrical lines) 53 $4,347,217

19. Other urgent humanitarian or reconstruction - projects to 

repair collateral battle damage not otherwise payable 

because of combat exclusions or condolence payments 146 $23,595,065

 Subtotal by Type of Project 3,811* $509,696,437

 Funds Issued to Units / Project Details Pending** $ 352,888

 Total $510,049,325

Source: Army Budget Office as reported to the Congress in its September 30, 2006, quarterly report. Number of 

projects by category and total number computed by SIGIR from information provided by Army Budget 

Office. 

* On February 9, 2007, there were 3,854 CERP projects as compared to the 3,811 (shown above). This happens 

because commanders are sometimes provided bulk funds for CERP projects and the actual number of 

completed projects is not known until the MSC reports to MNC-I. 

** Funds are obligated by Multi National Corps-Iraq (MNC-I) headquarters when issued to military units.

Restrictions 

CERP appropriated funds shall not be used for the following 11 purposes: 

1. Direct or indirect benefit to U.S., Coalition, or other supporting personnel 

2. Providing goods, services, or funds to national armies, national guard forces, 

border security forces, civil defense forces, infrastructure protection forces, 

highway patrol units, police, special police or intelligence or other security forces 

3. Except as authorized by law and separate implementing guidance, weapons 

buyback programs, or other purchases of firearms or ammunition 

4. Entertainment 

5. Reward programs 

6. Removal of unexploded ordnance 

7. Duplication of services available through municipal governments 

8. Salaries, bonuses, or pensions of Iraqi military or civilian government personnel 

9. Training, equipping, or operating costs of Iraqi Security Forces 

10. Support to individuals or private businesses (exception: condolence and battle 

damage payments) 

11. Conducting psychological operations, information operations, or other U.S., 

Coalition, or Iraqi Security Forces operations 

24 
Appendix E—Acronyms 

ARDI Agricultural Reconstruction and Development Program for Iraq 

CERP Commander’s Emergency Response Program 

DoD Department of Defense 

DoS Department of State 

IRMO Iraq Reconstruction Management Office 

IRMS Iraq Reconstruction Management System 

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

JCC-I/A Joint Contracting Command-Iraq/Afghanistan 

JROC Joint Reconstruction Operations Center 

MNC-I Multi-National Corps-Iraq 

MNF-I Multi-National Force-Iraq 

MNSTC-I Multi-National Security Transition Command-Iraq 

MSC Major Subordinate Command 

PRDC Provincial Reconstruction and Development Committee 

PRT Provincial Reconstruction Team 

SIGIR Special Inspector General for Iraq Reconstruction 

STANFINS Standard Financial System 

USAID U.S. Agency for International Development 

25 
Appendix F—Report Distribution 

Department of State 

Secretary of State 

Senior Advisor to the Secretary and Coordinator for Iraq 

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

International Development 

 Director, Office of Iraq Reconstruction 

 Assistant Secretary for Resource Management/Chief Financial Officer, 

 Bureau of Resource Management 

U.S. Ambassador to Iraq 

Director, Iraq Reconstruction Management Office 

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

Inspector General, Department of State 

Department of Defense 

Secretary of Defense 

Deputy Secretary of Defense 

Under Secretary of Defense (Comptroller)/Chief Financial Officer 

 Deputy Chief Financial Officer 

 Deputy Comptroller (Program/Budget) 

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

Security Affairs 

Inspector General, Department of Defense 

Director, Defense Contract Audit Agency 

Director, Defense Finance and Accounting Service 

Director, Defense Contract Management Agency 

Department of the Army 

Assistant Secretary of the Army for Acquisition, Logistics, and Technology 

Principal Deputy to the Assistant Secretary of the Army for Acquisition, 

Logistics, and Technology 

Deputy Assistant Secretary of the Army (Policy and Procurement) 

Director, Project and Contracting Office 

Commanding General, Joint Contracting Command-Iraq/Afghanistan 

Assistant Secretary of the Army for Financial Management and Comptroller 

Chief of Engineers and Commander, U.S. Army Corps of Engineers 

 Commanding General, Gulf Region Division 

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

Auditor General of the Army 

U.S. Central Command

Commanding General, Multi-National Force-Iraq* 

Commanding General, Multi-National Corps-Iraq* 

Commanding General, Multi-National Security Transition Command-Iraq 

Commander, Joint Area Support Group-Central 

*Recipient of the draft audit report 

26 
Other Federal Government Organizations 

Director, Office of Management and Budget 

Comptroller General of the United States 

Inspector General, Department of the Treasury 

Inspector General, Department of Commerce 

Inspector General, Department of Health and Human Services 

Inspector General, U.S. Agency for International Development 

President, Overseas Private Investment Corporation 

President, U.S. Institute for Peace 

Congressional Committees and Subcommittees, Chairman and 

Ranking Minority Member 

U.S. Senate 

Senate Committee on Appropriations 

Subcommittee on Defense 

Subcommittee on State, Foreign Operations and Related Programs 

Senate Committee on Armed Services 

Senate Committee on Foreign Relations 

Subcommittee on International Operations and Organizations, Democracy and 

Human Rights 

Subcommittee on International Development and Foreign Assistance, Economic 

Affairs and International Environmental Protection 

Subcommittee on Near East and South and Central Asian Affairs 

Senate Committee on Homeland Security and Governmental Affairs 

Subcommittee on Federal Financial Management, Government Information, 

Federal Services and International Security 

Permanent Subcommittee on Investigations 

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 State, Foreign Operations, and Related Programs 

House Committee on Armed Services 

House Committee on Oversight and Government Reform 

Subcommittee on Government Management, Organization, and Procurement 

Subcommittee on National Security and Foreign Affairs 

House Committee on Foreign Affairs 

Subcommittee on Middle East and South Asia 

Subcommittee on International Organizations, Human Rights, and Oversight 

27 
Appendix G—Audit Team Members 

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

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

General for Iraq Reconstruction. 

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

Karen Bell 

Michael A. Bianco 

Glenn D. Furbish 

W. Dan Haigler 

Walt A. Keays 

James B. Pollard 

Clifton Spruill 

28 
Management Comments 

Multi-National Corps-Iraq

29 
30 
SIGIR’s Mission Regarding the U.S. reconstruction plans, programs, 

and operations in Iraq, the Special Inspector General 

for Iraq Reconstruction provides independent and 

objective: 

• oversight and review through comprehensive 

audits, inspections, and investigations 

• advice and recommendations on policies to 

promote economy, efficiency, and effectiveness 

• deterrence of malfeasance through the prevention 

and detection of fraud, waste, and abuse 

• information and analysis to the Secretary of 

State, the Secretary of Defense, the Congress, 

and the American people through Quarterly 

Reports 

Obtaining Copies of SIGIR 

Reports and Testimonies 

To obtain copies of SIGIR documents at no cost, go 

to SIGIR’s Web site (www.sigir.mil). 

To Report Fraud, Waste, 

and Abuse in Iraq Relief 

and Reconstruction 

Programs 

Help prevent fraud, waste, and abuse by reporting 

suspicious or illegal activities to the SIGIR Hotline: 

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

• Phone: 703-602-4063 

• Toll Free: 866-301-2003 

Congressional Affairs Marthena Cowart 

Assistant Inspector General for Congressional 

 Affairs 

Mail: Office of the Special Inspector General 

 for Iraq Reconstruction 

 400 Army Navy Drive 

 Arlington, VA 22202-4704 

Phone: 703-604-0368 

Email: marthena.cowart@sigir.mil 

Public Affairs Denise Burgess 

Assistant Inspector General for Public Affairs 

Mail: Office of the Special Inspector General 

 for Iraq Reconstruction 

 400 Army Navy Drive 

 Arlington, VA 22202-4704 

Phone: 703-428-1217 

Fax: 703-428-0818 

Email: PublicAffairs@sigir.mil 

31