Audit 

 Report 

Coalition Provisional Authority 

Coordination of Donated Funds 

Report Number 04-001 June 25, 2004 

Office of the Inspector General 

Coalition Provisional Authority 
Acronyms 

CIC Council for International Coordination 

CPA Coalition Provisional Authority 

IRFF International Reconstruction Fund Facility 

The Ministry Ministry of Planning and Development Coordination 

PMO CPA Program Management Office 

UN United Nations 
COALITION PROVISIONAL AUTHORITY 

OFFICE OF THE INSPECTOR GENERAL

400 Army Navy Drive • Arlington, Virginia 22202

June 25, 2004 

MEMORANDUM FOR ADMINISTRATOR, COALITION PROVISIONAL AUTHORITY 

SUBJECT: Report on Controls Over Donated Funds (Report No.04-001) 

We are providing this report for review and comment. We performed the audit in 

accordance with our statutory duties contained in Public Law 108-106 which mandates the 

conduct of audits relating to the treatment, handling, and expenditure of funds by the CPA or its 

successor entities on Iraq reconstruction, and of the programs, operations, and contracts, carried 

out in utilizing such funds. We considered management comments on a draft of this report in 

preparing the final report. 

Management comments on the draft of this report were either non-responsive or did not 

fully concur with our recommendations. In order to obtain resolution on any outstanding issues 

related to our reports, we request management provide additional comments to address 

recommendations in this report. Management may also provide alternative suggestions to 

resolve recommendations in this report for our review and evaluation. Comments should be 

received by July 16, 2004. 

 We appreciate the assistance extended to the staff. Questions should be directed to 

Mr. Brian Flynn, (703) 343-8953 or Mr. William Whitehead, (703) 343-8954. Management may 

request a formal briefing on the results of this audit. 

Stuart W. Bowen, Jr. 

Inspector General 

Coalition Provisional Authority 
i 

Office of the Inspector General 

Coalition Provisional Authority 

Report Number 04-001 June 25, 2004 

 (Project No. D2004-DCPAAF-0006) 

Coalition Provisional Authority Coordination of Donated Funds 

Executive Summary

Introduction: The Ministry of Planning and Development Cooperation (The Ministry) 

is responsible for promoting international assistance to Iraq and serves as the primary 

liaison to existing and potential international donors. According to the World Bank, over 

$9 billion has been pledged by countries other than the United States to reconstruct Iraq. 

To ensure confidence by foreign entities and the Iraqi people, the Ministry must have a 

transparent process for allocating and monitoring international assistance to 

reconstruction projects throughout the country. With input from the Ministry of Finance, 

the Ministry makes recommendations to the Iraqi Strategic Review Board that reflect a 

single comprehensive integrated plan for matching all available revenues, including 

donations, against all known requirements. The Ministry monitors the provision of 

international assistance to ensure that donated funds are applied to important priorities. 

Objective: The original objective of the audit was to determine whether the Coalition 

Provisional Authority (CPA) had adequate controls in place to ensure that donated funds 

are properly accounted for, handled, monitored, and controlled. During the audit, we 

found that donated funds are maintained by donating countries and international entities 

such as the World Bank and the United Nations. The primary role of the CPA was to 

develop the processes by which reconstruction priorities are established and approved. 

We modified the audit objectives to determine whether these processes provide adequate 

transparency and coordination in the allocation of donated funds to the reconstruction of 

Iraq. 

Conclusion: The Ministry of Planning and Development Cooperation, working closely 

with the CPA Senior Advisor, assembled a comprehensive list of projects to be funded 

with international donations. Although, the process by which these projects were 

assembled and approved for consideration was transparent, no process was developed for 

tracking or coordinating internationally funded projects with other CPA reconstruction 

efforts. In a addition, there was little guidance provided to the Iraq Ministries on 

maintaining adequate supporting documentation that describe the reconstruction efforts to 

be funded from donated funds. As a result, the international community and the Iraqi 

people may have less confidence in the appropriate assignment of donated funds to high 

priority reconstruction projects. The lack of visibility into the use of donated funds could 

reduce the confidence of foreign entities to donate further. In addition, important 

information on internationally funded projects may be lost or unavailable because of 

inadequate supporting documentation. 

Recommendations: We are making two recommendations to improve the transparency 

and coordination of reconstruction efforts in Iraq funded by international donations. We 

recommend the CPA’s Senior Advisor coordinate with the Ministry of Planning and 
ii 

Development Cooperation to document procedures to identify and track projects to be 

funded from donated funds, account for donated equipment and material, and submit 

quarterly updates on the progress of projects financed with donated funds. We also 

recommend the CPA Senior Advisor coordinate with the CPA Program Management 

Office to develop and document a Memorandum of Understanding that describes how the 

offices will share information on reconstruction projects. 

Management Comments and Audit Response. The Senior Advisor’s Office did not 

concur or was non-responsive to the recommendations. The Iraq Program Management 

Office concurred and was responsive to the recommendation. See page 8 of the report for 

a discussion of management comments and page 13 of the report for the complete text of 

the comments. 
Table of Contents 

Executive Summary i 

Background 1 

Objective 3 

Finding 

Coordination and Transparency of Donated Funds 4 

Recommendations, Management Comments, And Audit Response 8 

Appendixes 

A. Scope and Methodology 10 

B. International Reconstruction Fund Facility for Iraq 12 

C. Report Distribution 12 

D. Audit Team Members 13 

Management Comments 

 Senior Advisor for the Ministry of Planning and Development 

Cooperation 13 

 Iraq Program Management Office 15 
1

Background 

Ministry of Planning and Development Cooperation. The Ministry of Planning and 

Development Cooperation (The Ministry) is responsible for promoting international 

assistance to Iraq and is the primary liaison with existing and potential international 

donors. To ensure confidence by foreign entities and the Iraqi people in the use of these 

funds, the Ministry must have a transparent process for allocating international 

assistance. With input from the Ministry of Finance, the Ministry makes 

recommendations to the Iraqi Strategic Review Board that reflect a single comprehensive 

integrated plan for matching all available revenues against all known requirements. The 

Ministry also monitors the use of international assistance to ensure that the donated funds 

are applied to the most appropriate priorities. The Ministry consists of two components: 

• The Senior Advisor’s Office staffed by Coalition Provisional Authority (CPA) 

personnel. This office is responsible for CPA interface with the Ministry, and 

• The Iraqi Ministry of Planning and Development Cooperation staffed by Iraqi 

nationals. On May 13, 2004, the CPA Administrator turned over control of the 

Ministry to the Iraqi Minister. 

In January 2004 the Council for International Coordination (CIC) was assigned to assist 

the Ministry. 

Iraqi Strategic Review Board. CPA Regulation 7 “International Donor Assistance,” 

December 5, 2003, established the Iraqi Strategic Review Board to work on behalf of the 

Iraqi people to forge a strong partnership between Iraq and foreign governments, 

international organizations, and other entities that provide support to Iraq’s recovery and 

development. The Iraqi Strategic Review Board sets priorities for the financial and 

economic development of Iraq in a transparent manner that does not unfairly discriminate 

among Iraq’s geographic regions, cultures, and religious groups. The Iraqi Ministries 

submit programs and plans for the expenditure of donated funds to officials in the 

Ministry, who forward the requirements to the Iraqi Strategic Review Board for approval. 

Council for International Coordination. CPA Regulation 5 “Council for International 

Coordination,” June 17, 2003, established the CIC to work on the behalf of the CPA, to 

support, encourage, and facilitate participation of the international community in 

humanitarian relief, recovery, and development efforts with respect to Iraq. According to 

CPA Regulation 5, the CIC does not involve itself in issues relating to the establishment 

of an Iraqi police capability, Army, or other security matters. The CIC consists of two 

components, the CIC Assembly and the CIC Secretariat. 

• Council for International Coordination Assembly. The CIC Assembly 

consists of donor countries that meet to discuss general reconstruction and 

rehabilitation issues. According to CIC personnel, the Chairman of the CIC is an 

Iraqi government representative. The CIC Assembly receives briefings from Iraqi 

Ministries and CPA staff including sector updates and other topics in order to 

assist the Assembly in funding decisions. 

• Council for International Coordination Secretariat. The CIC Secretariat 

coordinates information between the Iraqi ministries and the CIC Assembly. 

According to the CIC Director, in January 2004, the CIC Secretariat was charged 
2

with acting as the support team for the Ministry. The CIC Secretariat consists of 

dedicated officials from a number of different countries and agencies. 

Future of the Council for International Coordination. Senior personnel from the CIC

Secretariat stated that after the June 30, 2004, transition to the interim government for 

Iraq, the CIC Secretariat would be integrated into the Iraqi Ministry of Planning and 

Development Cooperation. The CIC Secretariat works with the World Bank, United 

Nations (UN), and other donors to guarantee the efficient and effective allocation of 

donated funds to selected reconstruction projects. The CIC Secretariat was tasked with 

building the Ministry’s capacity to lead donor coordination efforts, build the capital 

budget, and operate the Donor Assistance Database. The CIC Secretariat will integrate 

Iraqi personnel into the staff and eventually be staffed with Iraqi citizens, and the CIC 

Assembly will continue to operate outside the Ministry. 

Program Management Office. The CPA Program Management Office (PMO) manages 

the $18.4 billion appropriated by the United States Congress to support the relief and 

reconstruction of Iraq. The PMO is responsible for all activities associated with program, 

project, asset, construction and financial management of that portion of the reconstruction 

effort undertaken by the United States. The PMO is tasked to work with the government 

of Iraq and disenfranchised groups in a fashion that fosters mutual collaboration. The 

PMO is developing a web-based asset management information system that will facilitate 

the transparent procurement and life-cycle management of assets in Iraq, which 

eventually will be given to the Ministry of Planning and Development Coordination once 

the mission of the PMO is complete. 

International Assistance. According to personnel from the Senior Advisor’s Office and 

the CIC, the CPA does not administer or oversee any donated funds from international 

donors. All the donated funds are administered by either international organizations such 

as, the International Reconstruction Fund Facility for Iraq (IRFF), or bilaterally between 

the country donating the funds and the Iraqi Ministry receiving the service or equipment. 

The World Bank has reported that over $8 billion has been pledged by countries other 

than the United States to reconstruct Iraq; this figure may include the estimated value of 

equipment, training, and services provided. The $8 billion in pledges also includes over 

$1 billion that has been pledged to the IRFF for Iraq. The IRFF for Iraq is made up of 

two trust funds, which are administered by the World Bank and the UN. Of funds 

pledged, $566 million has been deposited in either the World Bank or the UN Trust Fund 

for Iraq. According to CIC personnel, funds have not been expended from the IRFF for 

Iraq. See Appendix B for details concerning funds donated to the IRFF for Iraq. 

The United States has appropriated $18.4 billion to assist in the reconstruction of Iraq. 

According to the PMO, as of May 14, 2004, of the $18.4 billion appropriated, 

approximately $12.4 billion will go to reconstruction projects, $5.5 billion to equipment 

and services, and $45 million will go to democracy building activities in Iraq. 
3

Objective 

The original objective of the audit was to determine whether the CPA had adequate 

controls in place to ensure that donated funds are properly accounted for, handled, 

monitored, and controlled. During the audit, we found that donated funds are maintained 

in two trust funds administered by the IRFF for Iraq. The CPA’s primary responsibility 

was to develop the processes by which reconstruction priorities are established and 

approved. We modified the audit objectives to determine whether these processes 

provide adequate coordination and transparency in the allocation of donated funds to the 

reconstruction of Iraq. 
4

Finding: Coordination and Transparency of 

Donated Funds 

The Ministry of Planning and Development Cooperation (The Ministry), working closely 

with the CPA Senior Advisor, assembled a comprehensive list of projects to be funded 

with international donations. Although the process by which these projects were 

assembled and approved for consideration was transparent, no process had been 

developed for tracking or coordinating internationally funded projects with other CPA 

reconstruction efforts. In addition, there was little guidance provided to the Iraq 

Ministries on maintaining adequate supporting documentation that describe the 

reconstruction efforts to be funded from donated funds. As a result, the international 

community and the Iraqi people may have less confidence in the appropriate assignment 

of donated funds to high priority reconstruction projects. In addition, important 

information on internationally funded projects may be lost or unavailable because of 

inadequate supporting documentation. 

Transparent Process 

CPA Regulation 7. According to CPA Regulation 7 “International Donor Assistance,” 

December 5, 2003, (CPA Regulation 7) the Ministry should perform the following duties: 

• Develop transparent procedures for allocating international assistance to 

geographic and functional sectors in Iraq. 

• Monitor the use of donated funds to ensure that Iraq’s prioritized needs are 

addressed and that the funds are equitably distributed among Iraq’s geographic 

regions and cultural and religious groups. 

• Work closely with PMO to ensure pre-existing bilateral commitments and the 

United States government’s apportionment and obligation funds for Iraq 

reconstruction have been taken into account. 

Identifying Programs for International Assistance. To support the Ministry, the CIC 

assembled projects that could be funded through international assistance and donations. 

In February 2004, the CIC documented 727 projects in Iraq valued at approximately 

$4.2 billion that were not funded. The list included a general description and estimated 

cost of each project. The Iraqi Ministries originally identified unfunded projects as high 

priority projects that were not being funded. The Iraqi Ministries submitted projects to 

the Ministry for consideration and ultimate approval by the Iraqi Strategic Review Board. 

However, the supporting documentation for the approved projects lack specific 

information such as a detailed statement of need, a description of the project, a detailed 

cost breakdown, time frames, or life-cycle costs. The Senior Advisor’s Office organized 

three international assemblies.1 At two of the international assemblies the 727 projects 

were presented. During the audit, the Senior Advisor’s Office developed a list of selected 

country’s donations that resulted from these international assemblies. 

Visibility of International Programs. Most reconstruction projects funded by donated 

funds will not be visible by the PMO because the donating country or international 

 

1

 The three international assemblies were Madrid on October 23-24, 2003, Abu Dhabi on February 28-29, 

2004, and Doha on May 25-26, 2004. 
5

organizations such as the World Bank and The UN Trust Funds retains control over the 

project. As a result, the Ministry has little visibility into the totality of reconstruction 

projects that will be accomplished with donated funds. Additionally, the Ministry has not 

implemented a mechanism that makes internationally funded projects easily accessible to 

the international community of donor nations and the Iraqi people. The Senior Advisor’s 

Office, or the successor organization, should develop and document, in both, English and 

Arabic, procedures for Iraqi Ministries to submit detailed international assistance project 

information, to include significant equipment, and provide quarterly updates on project 

information. 

Monitoring U.S. and internationally-funded projects. The Ministry and the CPA 

Senior Advisor have not developed a process for monitoring internationally-funded 

projects. The Senior Advisor’s Office did not effectively coordinate with the PMO to 

ensure that reconstruction projects approved for funding with donated funds were not 

duplicative or overlapping with reconstruction projects to be funded with United States 

appropriated funds. Senior PMO personnel stated that if PMO identifies a duplicated 

project, PMO will cease activity and let the international entity continue the 

reconstruction effort. However, this action may occur after the PMO has already 

expended resources in planning and possibly contracting for commencement of the 

project. In order for the Ministry of Planning and Development Cooperation and the 

PMO to exchange critical information on reconstruction projects, the Senior Advisor’s 

Office and the PMO should document an understanding on how project information will 

be exchanged. 

Security Concerns. According to senior personnel at the Senior Advisor’s Office, 

security concerns have limited movement within Iraq. Specifically, senior personnel 

from the Senior Advisor’s Office stated travel to the Iraqi Ministry of Planning and 

Development Cooperation in the Baghdad has been difficult. Additionally, the same 

senior personnel stated the Senior Advisor’s Office has been trying to develop an online 

database and security has delayed installation of the equipment because a suitable 

location was not available. 

According to the current Senior Advisor for the Ministry, the prior senior advisor was not 

actively involved in the organization of the Ministry, and personnel at the CIC did not 

start assisting the Ministry until January 2004. The current Senior Advisor was not 

assigned until March 2004. The current Senior Advisor stated his office has set 

priorities; however, because of the short time frame that he has been in office, the office 

has not accomplished all the goals. 

Confidence in Reconstruction 

As a result of the lack of transparency of reconstruction projects and equipment to be 

provided by donated funds, the CPA risks diminishing the confidence of foreign entities 

and the Iraqi people. Additionally, vital information on reconstruction projects could be 

lost because Iraq Ministries were not aware of what information they should be collecting 

on bilateral donations and reconstruction projects. 

Confidence in the Appropriate Use of Donated Funds. The lack of visibility into the 

use of donated funds could reduce the confidence of foreign entities to donate further. 

Without detailed information regarding planned reconstruction projects in Iraq, 

international entities may be less likely to donate or release promised funds because of 

uncertainty about whether the donated funds will be used in an effective manner. 

Additionally, without visibility of planned reconstruction projects, the CPA cannot 
6

demonstrate to the international community that donated funds are being used for the 

benefit of Iraq’s geographic regions, and cultural and religious groups. The result could 

be distrust in the reconstruction process within Iraq. 

Lost Information. Lastly, information on reconstruction projects and donated 

equipment could be lost because ministries were not aware that they should be 

developing and keeping detailed information about reconstruction projects supported by 

donated funds. Officials in four out of the five Iraqi ministries visited were not aware of 

the importance of having detailed information on current projects and donations. Thus, 

important information about expected donations and planned reconstruction projects and 

donations is not being captured and reported to the international community and the Iraqi 

people. 

Actions Are Ongoing to Develop Processes to Oversee Donated 

Funds 

Processes are being developed by the Ministry of Planning and Development 

Cooperation for the Iraqi Ministries to follow in identifying, documenting, monitoring, 

and coordinating reconstruction projects supported by donated funds. Through the 

introduction of a web database to provide needed visibility and a formal coordination 

process with PMO, the CPA hopes to achieve transparency in the application of donated 

funds to reconstruction efforts in Iraq and ensure the most efficient use of those funds by 

avoiding duplication with other reconstruction efforts being overseen by PMO. 

Donor Assistance Database. CPA began work on developing the Donor Assistance 

Database in October 2003. The total estimated cost of the database is approximately 

$300,000; of which $195,000 has been expended. Officials in the CPA Information 

Management Unit believe the database would be operational in May 2004. Senior 

officials from the CIC stated: 

“The Donor Assistance Database is based on a successful model used for 

Afghanistan. The database would include all unfunded projects that have been 

approved by the Iraqi government, as well as track projects that are currently being 

implemented, including projects administered in the PMO. The database will be 

accessible by the public and will be a transparent mechanism for governments, 

organizations, and private citizens throughout the world to track the reconstruction 

efforts in Iraq. Once completed, the database will be the primary resource for 

tracking donor funding and an essential tool for donor coordination efforts. The Iraqi 

Ministry of Planning and Development Cooperation will own and maintain the 

database. Training for Iraqi personnel is being arranged to guarantee the effective 

operation of the database, as well as its long-term sustainability.” 

Personnel from the CPA Information Management Unit2 are managing the Donor 

Assistance Database server which is located in CPA Headquarters in Baghdad. The 

room that houses the Donor Assistance Database server does not have climate control or 

raised floors. Additionally, during the inspection of the server room,3 the server 

protective case was removed to improve the cooling and the door to the room was left 

 

2

 The CPA Information Management Unit assists the Administrator’s office with the collection, 

organization, analysis, and dissemination of information relevant to CPA’s for mission goals. 

3

 The server room also contains servers for Groove and CPA Infonet applications. 
7

open and unattended. The server room should be climate controlled to ensure that 

servers operate within the proper temperature range and the room should have raised 

floors to avoid any possible water damage due to spills or flooding. The server room 

should be locked to ensure the server is not tampered with or improperly removed. The 

door is currently left open during the day because the room does not have adequate 

circulation and the servers in the room would most likely overheat. 

According to the State Department Senior Facilities Manager adding more new loads to 

most areas of the Palace’s electrical distribution system is inviting a possible 

catastrophic failure. After reviewing the electrical distribution system that provides 

power to the server room, the State Department Senior Facilities Manager recommended 

not to supply an additional heating/cooling system. However, as a temporary fix, on 

April 23, 2004, Kellogg, Brown, and Root was tasked to install a grate or louver door 

and an outflow fan to secure the room and reduce the temperature within. The State 

Department Senior Facilities Manager also stated that prior to any future equipment 

installation; a site survey should be completed to determine if adequate electrical power, 

climate controls, and space are available. 

Officials from the Senior Advisor’s Office, the Iraqi Minister of Planning and 

Development Cooperation have determined that the Donor Assistance Database should 

be housed outside of the CPA. Consequently, housing the Donor Assistance Database in 

the CPA Palace is not a permanent solution. As a result of the audit, management is in 

the process of developing a transition plan to move the Donor Assistance Database to the 

Ministry. However, according to the Senior Advisor, the transition plan has stalled 

because the Ministry does not have appropriate infrastructure such as, internet access to 

support the Donor Assistance Database. 

Formal Coordination Procedures. Senior personnel from the Office of the Senior 

Advisor to the Ministry stated they plan to establish a formal process for the Iraq 

Ministries to report and track internationally funded projects that are not captured in a 

PMO database. Officials in the Office of the Senior Advisor in coordination with the 

Ministry of Finance are developing a Capital Request Form that the Iraqi Ministries will 

be required to complete to request funding for reconstruction projects. The Capital 

Request Form will capture a detailed description of the proposed project, project status, 

location, construction schedule, construction costs, administrative costs, training costs, 

and life-cycle cost for projects that require donor or budgetary funding. The Capital 

Request Form will be the basis for capturing bilateral donation information for 

reconstruction projects within Iraqi Ministries. However, there are no plans to develop 

procedures to capture the value of donated equipment 

The Ministry envisions that the Iraqi Ministries would update the status of the projects 

reported on the Capital Request Form annually. However, we believe that annual 

reporting will not provide sufficient actionable information, especially if projects 

encounter cost increases and delays in completion. 

Coordination with Program Management Office. Senior personnel from the Senior 

Advisor’s Office stated that they will develop a Memorandum of Understanding with the 

PMO that describes how the Donor Assistance Database and the PMO database will 

share information on reconstruction projects in Iraq. 

 

Personnel at the Naval Air Systems Command are in the process of creating a crosswalk 

that will automatically transfer reconstruction information between the PMO database 
8

and the Donor Assistance Database4. However, according to the PMO Information 

Manager, work on the crosswalk has been delayed because the PMO database requires 

immediate attention in other areas. The PMO information manager expects the crosswalk 

to be completed by July 2004. 

Once the Donor Assistance Database is operational, the crosswalk is completed, and the 

Iraqi Ministries provide internationally-funded project information to the Ministry of 

Planning and Development Cooperation, this should create a visible process for tracking 

United States and internationally-funded projects in Iraq. 

Recommendations, Management Comments, and Audit 

Response 

1. The Senior Advisor for the Ministry should coordinate with the Iraqi Ministry of 

Planning and Development Cooperation to: 

a. Develop and document, in both, English and Arabic, procedures for Iraqi 

Ministries to: 

• Submit international assistance projects information; 

• Submit donations of significant equipment to be included in the Donor 

Assistance Database; and 

• Submit quarterly updates in order to revise the Donor Assistance 

Database. 

b. Develop a plan to move the Donor Assistance Database server to a location 

acceptable to the Iraqi Minister of Planning and Development Cooperation 

where the likelihood of tampering, overheating, or water damage is greatly 

reduced. 

Senior Advisor for the Ministry Comments. The Senior Advisor’s Office stated the 

Ministry was encouraged to take a decision-making role, which they willingly did. The 

Senior Advisor’s Office can advise, but not dictate. The final decision lies with the Iraqi 

Ministry. The Iraqi Ministry should decide the frequency and nature of reporting on 

donor assistance. 

 

The Senior Advisor’s Office stated Iraqi Ministries have been provided with a format to 

report projects that require international funding and were asked to prioritize their top 

five projects. The Minister of Planning and Development Cooperation presented them to 

donors in Doha on May 23 and 26, 2004. The process was transparent and well 

understood by donors and Ministries. 

The Senior Advisor’s Office stated the audit recommendation assumes the Donor 

Assistance Database is operating and is supported by the Iraqi Ministry of Planning and 

Development Cooperation. However, there is no agreement yet in the Ministry to adopt 

the Donor Assistance Database. Establishing a database is rightly identified in the report 

as a key priority. The Ministry and our office are disappointed there has not been 

 

4

 The Donor Assistance Database is an independent system. The crosswalk is only for the transfer of 

information between databases. 
9

sufficient support to establish a database. The Ministry has approached the UN for 

support in this matter. The Senior Advisor’s Office recommended that the CPA’s 

Program Management Office or the United States Agency for International Development 

offer support to the Ministry to develop a database that meets its needs. 

Audit Response. We do not feel that the response of the Senior Advisor’s Office fully 

addressed the recommendation. Consequently, we continue to recommend that the 

Senior Advisor’s Office should coordinate with the Iraqi Ministry of Planning and 

Development Cooperation to implement the recommendations. We agree that the Senior 

Advisor’s Office can only advise, and the final decision lies with the Iraqi Ministry. 

Additionally, we agree the procedure used to develop unfunded projects was transparent. 

We also agree that establishing a database to track reconstruction projects that are funded 

and unfunded should be a priority. 

However, no procedures had been developed for tracking internationally funded projects. 

According to personnel in the Information Management Unit, the Donor Assistance 

Database would be operational by May 2004. Additionally, the Donor Assistance 

Database is fully funded and available to transition to the Iraqi Ministry of Planning and 

Development Cooperation. The only funding that is required is for the infrastructure to 

support the Donor Assistance Database at the Iraqi Ministry of Planning and 

Development Cooperation. If the Iraqi Ministry of Planning and Development 

Cooperation chooses not to accept the Donor Assistance Database, United States 

appropriated funds should not be used to develop an additional database. 

2. The Senior Advisor for the Ministry and the Director of the Iraqi Program 

Management Office should coordinate in order to develop and document a 

Memorandum of Understanding that describes how the offices will share information 

on reconstruction project information. 

Senior Advisor for the Ministry Comments. The Senior Advisor’s Office stated it 

would be more appropriate for the Ministry (rather than the Senior Advisor) to describe 

its needs to the Program Management Office and the United States Agency for 

International Development and for them to agree on what information should be collected 

and how the information should be shared. It should be noted that the United States 

Embassy will not have a mandate to take possession of any other countries’ assistance in 

kind or in cash. 

Audit Response. The Senior Advisor’s Office did not concur with the recommendation. 

However, the Senior Advisor is the primary liaison with the Iraqi Ministry of Planning 

and Development Cooperation. As a result, we continue to recommend that the Senior 

Advisor for the Ministry and the Director of the Iraqi PMO should coordinate in order to 

develop and document a Memorandum of Understanding that describes how the offices 

will share information on reconstruction project information. 

CPA Program Management Office Comments. The PMO stated that they agreed with 

the recommendation that the process used to share information should be documented. 

The successor office to the PMO will work with the Senior Advisor’s Office and other 

appropriate Ministry Staff to cooperatively develop a Memorandum of Understanding 

describing the process the offices will use to share reconstruction project information. 

Audit Response. The PMO concurred and was responsive with the recommendation. 
10

Appendix A: Scope and Methodology 

We reviewed the CPA Regulation 7 “International Donor Assistance,” December 5, 

2003, and CPA Regulation 5 “Council for International Coordination,” June 17, 2003. 

We performed this audit from March 2004 through May 2004 in accordance with 

generally accepted government auditing standards. Our scope was limited to reviewing 

procedures and processes related to the transparency of processes and procedures related 

to proposed reconstruction projects to be funded by donated funds. We did not meet with 

personnel from the IRFF for Iraq or confirm the amounts in the trust funds. We did not 

confirm any figure related to the Madrid Conference held on October 24, 2003. We did 

not perform a detailed review of the task order or the associated contract for the Donor 

Assistance Database. 

To determine whether effective coordination and transparent procedures are in place for 

allocating international assistance, we visited the CIC Secretariat for International 

Cooperation, the Office of the Senior Advisor for the Ministry, the CPA Program 

Management Office, the CPA Information Management Unit, and the State Department 

Senior Facilities Manager. We judgmentally selected five Senior Advisor’s offices for 

Iraqi Ministries to visit (Education, Electricity, Higher Education, Labor and Social 

Affairs, and Youth and Sports). At each entity, we interviewed personnel connected with 

the coordination of donated funds or the Senior Advisor. Additionally, we corresponded 

with personnel from Naval Air Systems Command regarding database establishment and 

maintenance. 

We reviewed 727 projects that were originally identified by the Iraq Ministries as high 

priority projects that were not being funded. We also reviewed a draft copy of the 

Capital Request Form and the work request for the Donor Assistance Database server 

room. 
11

Appendix B: International Reconstruction Fund 

Facility for Iraq 

The table below provides financial information on the two trust funds, the World Bank 

and UN, which comprise the IRFF for Iraq. As of May 25, 2004, over $1,041 million has 

been pledged to the IRRF for Iraq. Of funds pledged, a total of $5665

 million has 

actually been deposited. The World Bank Trust Fund has $205 million balance and the 

UN Trust Fund has a balance of $360 million. According to CIC personnel, funds have 

not yet been expended from the IRFF for Iraq. 

 

5

 Some countries have donated funds in currency other then U.S. Dollars. Some amounts may fluctuate due 

to currency exchange rates. 

International Reconstruction Fund Facility for Iraq

May 25, 2004

Amounts in Millions of U.S. Dollars 

Country Pledged 

Donations 

Deposited 

Donations

World Bank 

Trust Fund

United Nations 

Trust Fund

 

Australia $15.20 $14.60 $10.20 $4.40 

Canada 74.69 44.73 22.26 22.47 

European Community 209.63 9.19 3.57 5.62 

Finland 6.20 

Greece 7.20 

Iceland 1.00 1.00 1.00

India 10.00 5.00 2.50 2.50 

Ireland 1.22 

Italy 12.20 

Japan 490.00 351.80 90.00 261.80 

Korea 10.00 

Kuwait 10.00 

Netherlands 6.00 

Norway 10.32 

 Qatar 10.00 2.50 2.50 

Spain 20.00 

Sweden 10.00 

United Kingdom 127.35 127.35 71.38 55.97 

United States 10.00 10.00 5.00 5.00 

 

Total $1,041.01 $566.17 $205.91 $360.26 

 

 
12

Appendix C: Report Distribution 

Office of the Secretary of Defense 

Under Secretary of Defense (Comptroller)/Chief Financial Officer 

Director, Defense Procurement and Acquisition 

Department of the Army 

Assistant Secretary of the Army, Acquisition, Logistics & Technology 

Auditor General, Department of the Army 

Other Defense Organizations

Administrator, Coalition Provisional Authority 

Director, Coalition Provisional Authority Program Management Office 

Department of Defense Inspector General 

Director, Defense Contract Audit Agency 

Non-Defense Federal Organization 

Office of Management and Budget 

General Accounting Office 

Department of State 

U.S. Agency for International Development 

Department of Health and Human Services Inspector General 

Department of Commerce Inspector General 

Congressional Committees and Subcommittees, Chairman and 

Ranking Minority Member 

Senate Committee on Appropriations 

Senate Subcommittee on Defense, Committee on Appropriations 

Senate Committee on Armed Services 

Senate Committee on Governmental Affairs 

Senate Committee on Foreign Relations 

House Committee on Appropriations 

House Subcommittee on Defense, Committee on Appropriations 

House Committee on Armed Services 

House Committee on Government Reform 

House Subcommittee on Government Efficiency and Financial Management, Committee 

on Government Reform 

House Subcommittee on National Security, Emerging Threats, and International 

Relations, Committee on Government Reform 

House Subcommittee on Technology, Information Policy, Intergovernmental Relations, 

and the Census, Committee on Government Reform 

House International Relations Committee 
13

Appendix D: Audit Team Members 

This report was prepared by the Financial Management Division, Office of the Assistant 

Inspector General for Auditing, Coalition Provisional Authority. 

John Betar 

Brian Flynn 

David Griffin 

William Whitehead 

Troy Zigler 
14

Management Comments 

Management Comments from the Senior Advisor for the 

Ministry of Planning and Development Cooperation 
15
16

Management Comments 

Management Comments from the CPA Program 

Management Office