United States Government Accountability Office

GAO Testimony 

Before the Committee on Armed Services, 

House of Representatives 

SECURING, STABILIZING, 

AND REBUILDING IRAQ 

GAO Audit Approach and 

Findings 

Statement of David M. Walker 

Comptroller General of the United States 

For Release on Delivery

Expected at 10:00 a.m. EST 

Thursday, January 18, 2007 

 

GAO-07-385T 
Audit Approaches in Iraq

Mr. Chairman and Members of the Committee: 

I am pleased to be here today to provide a strategic overview of GAO’s 

work related to securing, stabilizing, and rebuilding Iraq. In my statement 

today, as requested, I will highlight (1) GAO’s scope, authority, and 

coordination; (2) some of the insights stemming from our work in Iraq; 

and (3) the rigorous quality assurance framework that GAO uses to ensure 

relevant, reliable, and consistent results in all of our work. 

My statement today is based upon extensive work spanning several years.

Since 2003, we have issued 67 Iraq-related reports and testimonies. For 

example, I sent a report to the Congress last week on a range of key issues

for congressional oversight of efforts to secure, stabilize, and rebuild Iraq.1

Although many of our sources are classified, we strive to report 

information to the Congress in a public format to promote greater 

transparency and accountability of U.S. government policies, programs,

and activities. As provided for in our congressional protocols, most of our 

work in Iraq has been performed under my authority to conduct 

evaluations on my own initiative since it is a matter of broad interest to the 

entire Congress and numerous committees in both chambers. Our work 

also helped inform the deliberations of the Iraq Study Group; I personally 

briefed this group on the results of our Iraq work in June 2006. We also 

provided significant additional information to the Iraq Study Group for its 

use. 

The work supporting this statement is based on our analysis of agency 

plans and documents and discussions with relevant senior officials from 

the Departments of Defense (DOD), Energy, State, and the Treasury; the 

U.S. Agency for International Development (USAID); the Army Corps of 

Engineers; the multinational force; the Defense Intelligence Agency; and

the Central Intelligence Agency. We conducted our reviews in accordance 

with generally accepted government auditing standards. 

GAO and the Inspectors General (IG) of individual departments and 

agencies have different roles and responsibilities. GAO’s broad audit 

authority allows us to support Congress through strategic analyses of 

issues that cut across multiple federal agencies and sources of funding. 

Summary 

 1

GAO, Securing, Stabilizing, and Rebuilding Iraq: Key Issues for Congressional

Oversight, GAO-07-308SP (Washington, D.C.: Jan. 9, 2007). 

Page 1 GAO-07-385T 
Audit Approaches in Iraq

Our work spans the security, political, and economic prongs of the U.S. 

national strategy in Iraq. The broad, cross-cutting nature of this work helps 

minimize the possibility of overlap and duplication by any individual 

Inspector General. 

Based on our work, we have made some unique contributions to Congress. 

Our past and ongoing work has focused on the U.S. strategy and costs of 

operating in Iraq, training and equipping the Iraqi security forces, 

governance issues, the readiness of U.S. military forces, and acquisition 

outcomes. Some highlights from our work follow: 

• Our analysis of the National Strategy for Victory in Iraq recommended that

the National Security Council improve the strategy by articulating clearer 

roles and responsibilities, specifying future contributions, and identifying 

current costs and future resources. 

• In our examination of the cost of U.S. military operations abroad, we 

recommended that the Secretary of Defense improve the transparency and 

reliability of DOD’s Global War on Terror (GWOT) obligation data. We also

recommended that DOD build more funding into the baseline budget once 

an operation reaches a known level of effort and costs are more 

predictable.

• In assessing the capabilities of Iraqi security forces, we found that overall 

security conditions in Iraq have deteriorated despite increases in the 

numbers of trained and equipped security forces. A complete assessment 

of Iraqi security forces’ capabilities is dependent on DOD providing GAO 

with the readiness levels of each Iraqi unit. 

• We found that DOD faces significant challenges in maintaining U.S. 

military readiness for overseas and homeland missions and in sustaining 

rotational deployments of duty, especially if the duration and intensity of

current operations continue at the present pace.

• In assessing the impact of ongoing military operations in Iraq on military 

equipment, we found that the Army and the Marine Corps have initiated 

programs to reset (repair or replace) equipment and are likely to incur 

large expenditures in the future. 

• In reviewing efforts to secure munitions sites and provide force 

protection, we recommended that DOD conduct a theaterwide survey and 

risk assessment of unsecured conventional munitions in Iraq and 

incorporate storage site security into strategic planning efforts. 

Page 2 GAO-07-385T 
Audit Approaches in Iraq

• In assessing acquisition outcomes, we found that DOD often entered into 

contract arrangements with unclear requirements, which posed additional 

risks to the government. DOD also lacked the capacity to provide 

sufficient numbers of contracting, logistics, and other personnel, thereby 

hindering oversight efforts. 

In April 2005, an international peer review team gave our quality assurance 

system a clean opinion—only the second time a national audit institution 

has received such a rating from a multinational team. Thus, the Congress 

and the American people can have confidence that GAO’s work is 

independent, objective, and reliable. 

While the IGs are designed to focus primarily on exposing fraud, waste, 

and abuse in individual federal agency programs, GAO’s broad audit 

authority allows us to support Congress through strategic analyses of 

issues that cut across multiple federal agencies and sources of funding. 

Although the IGs report to the heads of their respective departments and 

make periodic reports to Congress, GAO reports directly to Congress on a 

continuous basis. GAO consults regularly with its oversight committees 

and relevant committees of jurisdiction regarding key issues of national 

importance, such as U.S. fiscal solvency, emergency preparedness, DOD 

transformation, global competitiveness, and emerging health care and

other challenges for the 21st century. 

The Congress established the GAO in 1921 to investigate all matters 

relating to the receipt, disbursement, and application of public funds. 

Since then, Congress has expanded GAO’s statutory authorities and 

frequently calls upon it to examine federal programs and their 

performance, conduct financial and management audits, perform policy 

analysis, provide legal opinions, adjudicate bid protests, and conduct 

investigations. In 2006, the GAO issued more than 1,000 audit products and 

produced a $105 return for each dollar invested in the agency.

2

GAO has developed substantial expertise on security and reconstruction 

issues, as well as having long-term relationships with State, Defense, and 

USAID. Our work spans several decades and includes evaluations of U.S. 

military and diplomatic programs and activities, including those during 

GAO’s Work in Iraq Is 

Broad and 

Coordinated with 

Other Audit 

Authorities 

 2

GAO, Performance and Accountability Report: Fiscal Year 2006, GAO-07-2SP 

(Washington, D.C.: Nov. 15, 2006). 

Page 3 GAO-07-385T 
Audit Approaches in Iraq

and following contingency operations in Vietnam, the Persian Gulf 

(Operations Desert Shield and Storm), Bosnia, and Afghanistan. 

We also have many years of expertise in evaluating U.S. efforts to help 

stabilize regions or countries; we have, for example, monitored U.S. 

assistance programs in Asia, Central America, and Africa. The depth and 

breadth of our work and the expertise we have built has helped facilitate 

our ability to quickly gather facts and provide insights to the Congress as 

events unfold, such as the conflict in Iraq. Our current work draws on our 

past work and regular site visits to Iraq and the surrounding region, such 

as Jordan and Kuwait. Furthermore, we plan to establish a presence in 

Iraq beginning in March 2007 to provide additional oversight of issues 

deemed important to Congress. Our plans, however, are subject to 

adequate fiscal 2007 funding of GAO by the Congress. 

Our work in Iraq spans the three prongs of the U.S. national strategy in 

Iraq—security, political, and economic. The broad, cross-cutting nature of

our work helps minimize the possibility of overlap and duplication by 

individual IGs. We and other accountability organizations take steps to 

coordinate our oversight with others to avoid duplication and leverage our 

resources. In that regard, the ability of the Special Inspector General for 

Iraq Reconstruction (SIGIR) to provide in-country oversight of specific 

projects and reconstruction challenges has enabled us to focus our work 

on more strategic and cross-cutting national, sector, and interagency

issues. 

The expansion of SIGIR’s authority underscores the need for close 

coordination. We coordinate our work in Iraq through various forums, 

including the Iraq Inspectors General Council (IIGC) and regular 

discussions with the IG community. Established by what is now SIGIR, 

IIGC provides a forum for discussion and collaboration among the IG and 

staff at the many agencies involved in Iraq reconstruction activities. Our 

work is coordinated through regular one-on-one meetings with SIGIR, 

DOD, State, and USAID. We also coordinate our work with other 

accountability organizations, such as the Federal Bureau of Investigation’s

(FBI) public corruption unit. 

Page 4 GAO-07-385T 
Audit Approaches in Iraq

Let me highlight some of the key findings and recommendations we have 

made as a result of our continuing work in Iraq. 

In November 2005, the National Security Council issued the National 

Strategy for Victory in Iraq (NSVI) to clarify the President’s strategy for 

achieving U.S. political, security, and economic goals in Iraq. The U.S. 

goals included establishing a peaceful, stable, and secure Iraq. Our July 

2006 report assessed the extent to which the NSVI and its supporting 

documents addressed the six characteristics of an effective national 

strategy.3

 While we reported that the NSVI was an improvement over 

previous U.S. planning efforts for stabilizing and rebuilding Iraq, we 

concluded that the strategy fell short in at least three key areas. First, it 

only partially identified the agencies responsible for implementing key 

aspects of the strategy. Second, it did not fully address how the United 

States will integrate its goals with those of the Iraqis and the international 

community, and it did not detail Iraq’s anticipated contribution to its 

future needs. Third, it only partially identified the current and future costs 

of U.S. involvement in Iraq, including maintaining U.S. military operations, 

building Iraqi government capacity, and rebuilding critical infrastructure. 

We recommended that the NSC improve the current strategy by 

articulating clear roles and responsibilities, specifying future 

contributions, and identifying current costs and future resources. In 

addition, our report urged the United States, Iraq, and the international 

community to (1) enhance support capabilities of the Iraqi security forces, 

(2) improve the capabilities of the national and provincial governments, 

and (3) develop a comprehensive anti-corruption strategy. In our view, 

congressional review of the President’s 2007 plan for Iraq should consider

Key Findings and 

Recommendations 

from GAO’s Work in 

Iraq 

Assessment of the 

November 2005 National 

Strategy for Victory in Iraq 

and the U.S. Military 

Campaign Plan 

 3

The six characteristics are (1) a clear purpose, scope, methodology; (2) a detailed 

discussion of the problems, risks, and threats the strategy intends to address; (3) the 

desired goals and objectives, and outcome-related performance measures; (4) a description 

of the U.S. resources needed to implement the strategy; (5) a clear delineation of the U.S. 

government roles, responsibilities, and mechanisms for coordination; and (6) a description 

of how the strategy is integrated internally among U.S. agencies and externally with the 

Iraqi government and international organizations. See Rebuilding Iraq: More

Comprehensive National Strategy Needed to Help Achieve U.S. Goals, GAO-06-788 

(Washington, D.C.: July 11, 2006). 

Page 5 GAO-07-385T 
Audit Approaches in Iraq

whether it addresses the key elements of a sound national strategy 

identified in our July 2006 report. 

In October 2005, we issued a classified report on the military’s campaign 

plan for Iraq.4

 In that report, we discussed the military’s counterinsurgency 

plan for Iraq and the conditions and phases in the plan. The report 

contained a recommendation to link economic, governance, and security 

indicators to conditions for stabilizing Iraq. Congress acted on our 

recommendation in the 2006 National Defense Authorization Act and 

required DOD to report on progress toward meeting the conditions 

referred to in GAO’s report. We have supplemented this work with a series 

of classified briefings to the Congress on changes to the campaign plan

and U.S. efforts to train and equip Iraqi security forces and protect 

weapons caches throughout Iraq. We will continue to provide Congress 

these classified briefings.

Since 2001, Congress has appropriated about $495 billion to U.S. agencies 

for military and diplomatic efforts in support of the global war on 

terrorism; the majority of this amount has gone to stabilize and rebuild 

Iraq. Efforts in Iraq involve various activities such as combating 

insurgents, conducting civil affairs, building capacity, reconstructing 

infrastructure, and training Iraqi military forces. To date, the United States 

has reported substantial costs for Iraq and can expect to incur significant 

costs in the foreseeable future, requiring decision-makers to consider 

difficult trade-offs as the nation faces an increasing number of long-range 

fiscal challenges. Funding for these efforts has been provided through 

annual appropriations, as well as supplemental appropriations that are 

outside the annual budget process. In our view, moving more funding into

baseline budgets, particularly for DOD, would enable decision-makers to 

better weigh priorities and assess trade-offs. 

As of September 30, 2006, DOD had reported costs of about $257.5 billion 

for military operations in Iraq.5

 In addition, as of October 2006, about $29 

billion had been obligated for Iraqi reconstruction and stabilization efforts. 

However, problems with the processes for recording and reporting GWOT 

Limited Transparency on 

the Costs of the Global 

War on Terror 

 4

GAO, Rebuilding Iraq: DOD Reports Should Link Economic, Governance, and Security 

Indicators to Conditions for Stabilizing Iraq. GAO-06-217C (title is unclassified,

Washington D.C.: Oct. 31, 2005). 

5

DOD’s reported costs in Iraq do not include the costs of classified activities. 

Page 6 GAO-07-385T 
Audit Approaches in Iraq

costs raise concerns that these data may not accurately reflect the true 

dollar value of war-related costs. 

U.S. military and diplomatic commitments in Iraq will continue for the 

foreseeable future and are likely to involve hundreds of billions of 

additional dollars. The magnitude of future costs will depend on several 

direct and indirect variables and, in some cases, decisions that have not 

been made. DOD’s future costs will likely be affected by the pace and 

duration of operations, the types of facilities needed to support troops 

overseas, redeployment plans, and the amount of military equipment to be 

repaired or replaced. Although reducing the number of troops would 

appear to lower costs, we have seen from previous operations in the 

Balkans and Kosovo that costs could rise—if, for example, increased 

numbers of contractors replace military personnel. With activities likely to 

continue into the foreseeable future, decision-makers will have to 

carefully weigh priorities and make difficult decisions when budgeting for 

future costs. 

Over the years, we have made a series of recommendations to the 

Secretary of Defense intended to improve the transparency and reliability 

of DOD’s GWOT obligation data, including recommendations that DOD (1) 

revise the cost-reporting guidance so that large amounts of reported 

obligations are not shown in “miscellaneous” categories, and (2) take steps 

to ensure that reported GWOT obligations are reliable. We also have 

recommended that DOD build more funding into the baseline budget once 

an operation reaches a known level of effort and costs are more 

predictable. In response, the department has implemented many of our 

previous recommendations. 

Overall security conditions in Iraq continued to deteriorate in 2006 and 

have grown more complex despite recent progress in transferring security 

responsibilities to Iraqi security forces and the Iraqi government. The 

number of trained and equipped Iraqi security forces has increased from 

about 174,000 in July 2005 to about 323,000 in December 2006, at the same 

time as more Iraqi army units have taken the lead for counterinsurgency 

operations in specific geographic areas. Despite this progress, attacks on 

coalition forces, Iraqi security forces, and civilians have all increased, 

reaching record highs in October 2006. Because of the poor security in 

Iraq, the United States could not draw down U.S. force levels in Iraq as 

planned in 2004 and 2006, and U.S. forces have continued to conduct 

combat operations in urban areas, especially Baghdad. 

Progress in Transferring 

Security Responsibilities 

to Iraq Has Not Led to 

Improved Security 

Conditions 

Page 7 GAO-07-385T 
Audit Approaches in Iraq

Transferring security responsibilities to the Iraqi security forces and 

provincial governments is a critical part of the U.S. government’s strategy 

in Iraq and key to allowing a drawdown of U.S. forces. Since 2003, the 

United States has provided about $15.4 billion to train, equip, and sustain 

Iraqi security forces and law enforcement. However, it is unclear whether 

U.S. expenditures and efforts are having their intended effect in

developing capable forces and whether additional resources are needed. A 

key measure of the capabilities of Iraqi forces is the Transition Readiness 

Assessment (TRA) reports prepared by coalition advisors embedded in 

Iraqi units. These reports serve as the basis for the Multinational ForceIraq (MNF-I) determination of when a unit is capable of leading 

counterinsurgency operations and can assume security responsibilities for 

a specific area. 

The TRA reports provide the coalition commander’s professional 

judgment on an Iraqi unit’s capabilities and are based on ratings in 

personnel, command and control, equipment, sustainment and logistics, 

training, and leadership. To conduct future work on this issue, GAO has 

made multiple requests for full access to the unit-level TRA reports over 

the last year. However, DOD has not yet complied with our requests. This

serves to seriously and inappropriately limit congressional oversight over 

the progress achieved toward a critical U.S. objective. 

Since 2003, the United States has provided about $15.4 billion for Iraqi 

security forces and law enforcement. According to Multinational Security

Transition Command-Iraq (MNSTC-I) records, MNF-I has issued about 

480,000 weapons, 30,000 vehicles, and 1.65 million pieces of gear 

(uniforms, body armor, helmets, and footwear), among other items, to the 

Iraqi security forces as of October 2006. 

Congress funded the train-and-equip program for Iraq outside traditional 

security assistance programs, which, according to DOD officials, provided 

DOD with a large degree of flexibility in managing the program. Since the 

funding did not go through traditional security assistance programs,6

 the 

accountability requirements normally applicable to these programs did not 

necessarily apply, according to DOD officials. It is currently unclear what 

DOD May be Unable to 

Ensure that U.S.-Funded 

Equipment Has Reached 

Iraqi Security Forces 

 6

Traditional security assistance programs operate under State authority and are managed in

country by DOD through security assistance organizations under the direction and

supervision of the Chief of the U.S. Diplomatic Mission. 

Page 8 GAO-07-385T 
Audit Approaches in Iraq

accountability measures, if any, DOD has chosen to apply to the train-andequip program for Iraq, as DOD officials have expressed differing opinions

on this matter. As part of our ongoing work, we have asked DOD to clarify 

what accountability measures it has chosen to apply to the program. 

While it is unclear which regulations DOD has chosen to apply, beginning 

in early 2004, MNF-I established requirements to control and account for 

equipment provided to the Iraqi security forces by issuing orders that 

outlined procedures for its subordinate commands. These included 

obtaining signed records for equipment received by Iraqi units or 

individuals and recording weapons serial numbers. Although MNF-I took 

initial steps to establish property accountability procedures, limitations 

such as the initial lack of a fully operational equipment distribution 

network, staffing weaknesses, and the operational demands of equipping 

the Iraqi forces during war hindered its ability to fully execute critical 

tasks outlined in the property accountability orders. Since late 2005, 

MNSTC-I has taken additional steps to improve its property accountability 

procedures, including establishing property books7

 for equipment issued 

to Iraqi Ministry of Defense and Ministry of Interior forces. According to 

MNSTC-I officials, MNSTC-I also recovered existing documentation for 

equipment previously issued to Iraqi forces. However, according to our 

preliminary analysis, DOD and MNF-I may not be able to account for Iraqi 

security forces’ receipt of about 90,000 rifles and about 80,000 pistols that 

were reported as issued before early October 2005. Thus, DOD and MNF-I 

may be unable to ensure that Iraqi military forces and police received all of

the equipment that the coalition procured or obtained for them. 

In our ongoing review, we will continue to assess MNF-I records for Iraqi 

equipment distributed to Iraqi forces. We plan on issuing a final report on 

these and related intelligence matters by March 2007. Our work focuses on 

the accountability requirements8

 for the transportation and distribution of 

U.S.-funded equipment and did not review any requirements relevant to 

the procurement of this equipment. 

 7

A property book is a formal set of property accounting records and files.

8

DOD defines accountability as the obligation imposed by law, lawful order, or regulation, 

accepted by an organization or person for keeping accurate records, to ensure control of 

property, documents or funds, with or without physical possession (DODI 5000.64, 

Accountability and Management of DoD-Owned Equipment and Other Accountable

Property, E2.2).

Page 9 GAO-07-385T 
The U.S. government faces significant challenges in improving the 

capabilities of Iraq’s central and provincial governments so that they can 

provide security and deliver services to the Iraqi people. According to 

State, the Iraqi capacity for self-governance was decimated after nearly 30 

years of autocratic rule. In addition, Iraq lacked competent existing Iraqi 

governmental organizations. Since 2003, the United States has provided 

the Iraqis with a variety of training and technical assistance to improve 

their capacity to govern. As of December 2006, we identified more than 50

capacity development efforts led by at least six U.S. agencies. However, it 

is unclear how these efforts are addressing core needs and Iraqi priorities 

in the absence of an integrated U.S. plan. 

Iraq also faces difficulties in spending budgeted funds for capital goods 

and projects in the security, oil, and electricity sectors. When the Iraqi 

government assumed control over its finances in 2004, it became 

responsible for determining how more than $25 billion annually in 

government revenues would be collected and spent to rebuild the country 

and operate the government. However, unclear budgeting and 

procurement rules have affected Iraq’s efforts to spend capital budgets 

effectively and efficiently. Since most of the U.S. reconstruction funds 

provided between fiscal years 2003 and 2006 have been obligated, 

unexpended Iraqi funds represent an important source of additional 

financing. Iraq had more than $6 billion in unspent capital project funds as 

of August 2006. For example, Iraq’s Oil Ministry spent only $4 million of 

$3.6 billion in budgeted funds to repair Iraq’s dilapidated oil infrastructure. 

The inability to spend this money raises serious questions for the 

government, which has to demonstrate to citizens who are skeptical that it

can improve basic services and make a difference in their daily lives. The 

U.S. government has launched a series of initiatives in conjunction with 

other donors to address this issue and improve ministry budget execution.

Since September 11, 2001, U.S. military forces have experienced a high 

pace of operations to support homeland security missions, Operation 

Enduring Freedom in Afghanistan, and various combat and 

counterinsurgency operations in Iraq. These operations have required 

many units and personnel to deploy for multiple tours of duty and, in some 

cases, to remain for extended tours. DOD faces significant challenges in 

maintaining readiness for overseas and homeland missions and sustaining 

rotational deployments of duty, especially if the duration and intensity of

current operations continue at the present pace. 

Challenges in Improving 

Governance and Spending 

Budgeted Capital Project 

Funds 

Impact of the War on U.S. 

Military Readiness 

Page 10 GAO-07-385T Audit Approaches in Iraq
Audit Approaches in Iraq

Ongoing military operations in Iraq are inflicting heavy wear and tear on 

military equipment. Some equipment items used by U.S. forces are more 

than 20 years old, and harsh combat and environmental conditions over 

time have further exacerbated equipment condition problems. The Army 

and the Marine Corps have initiated programs to reset (repair or replace) 

equipment and are likely to incur large expenditures in the future. We are 

currently assessing these programs, including the extent to which the 

military services are tracking reset costs and the extent to which their 

reset plans maintain unit equipment readiness while meeting ongoing 

operational requirements. 

U.S. ground forces in Iraq have come under frequent and deadly attacks 

from insurgents using weapons such as improvised explosive devices 

(IED), mortars, and rocket launchers. IEDs, in particular, have emerged as 

the number one threat against U.S. forces. Because of the overwhelming 

size and number of conventional munitions storage sites in Iraq, combined 

with prewar planning assumptions that proved to be invalid, there were an

insufficient number of U.S. and coalition troops on the ground to prevent 

the widespread looting of those sites. The human, strategic, and financial 

costs of the failure to provide sufficient troops on the ground have been 

high, since IEDs made from looted explosives have caused about half of all 

U.S. combat fatalities and casualties in Iraq and have killed hundreds of 

Iraqis. In addition, unsecured conventional munitions sites have helped 

sustain insurgent groups and threatened the achievement of the Operation 

Iraqi Freedom’s (OIF) strategic goal of creating a stable Iraqi nation.9

DOD’s actions to date have primarily focused on countering IEDs and not 

on the security of conventional munitions storage sites as a strategic 

planning and priority-setting consideration for future operations. Although 

good first steps, these actions do not address what we believe is a critical 

OIF lesson learned: If not secured during initial combat operations, an 

adversary’s conventional munitions storage sites can represent an 

asymmetric threat to U.S. forces that remain in country. 

In December 2006, we recommended that the Chairman of the Joint Staff 

conduct a theaterwide survey and risk assessment regarding unsecured 

Problems in Securing 

Munitions Sites and 

Providing Force Protection 

 9

These issues are discussed in a classified GAO report, Operation Iraqi Freedom: DOD 

Should Apply Lessons Learned Concerning the Need for Security over Conventional 

Munitions Storage Sites to Future Operations Planning, GAO-07-71C (Washington, D.C.: 

Dec. 20, 2006). We plan to issue an unclassified version of this report. 

Page 11 GAO-07-385T
Audit Approaches in Iraq

conventional munitions in Iraq and incorporate conventional munitions 

storage site security as a strategic planning factor into all levels of 

planning policy and guidance. DOD partially concurred with our 

recommendations. 

Efforts to protect U.S. ground forces with increased body and truck armor 

have been characterized by shortages and delays, which have reduced 

operational capabilities and forced combat commanders to accept

additional risk in completing their missions.10 We are currently reviewing 

force protection measures, including body armor, for current operations, 

as well as the organization and management of the Joint IED Defeat to 

counter the IED threat. 

In prior reports, we recommended that the process for identifying and

funding urgent wartime requirements be improved and that funding 

decisions be based on risk and an assessment of the highest priority 

requirements. More recently, we have recommended actions to ensure that 

the services make informed and coordinated decisions about materiel 

solutions developed and procured to address common urgent wartime 

requirements. DOD generally agreed with these recommendations. 

DOD has relied extensively on contractors to undertake major 

reconstruction projects and provide logistical support to its troops in Iraq. 

Despite making significant investments through reconstruction and 

logistics support contracts, this investment has not always resulted in the 

desired outcomes. Many reconstruction projects have fallen short of 

expectations, and DOD has yet to resolve long-standing challenges in its 

management and oversight of contractors in deployed locations. These 

challenges often reflect shortcomings in DOD’s capacity to manage 

contractor efforts, including having sufficiently focused leadership, 

guidance, a match between requirements and resources, sound acquisition 

approaches, and an adequate number of trained contracting and oversight

personnel. 

Improving DOD 

Acquisition Outcomes 

 10For further information on these issues, see GAO, Defense Logistics: Actions Needed to 

Improve the Availability of Critical Items during Current and Future Operations, 

GAO-05-275 (Washington, D.C.: Apr. 8, 2005); Defense Logistics: Several Factors Limited

the Production and Installation of Army Truck Armor during Current Wartime 

Operations, GAO-06-160 (Washington, D.C.: Mar. 22, 2006); and Defense Logistics: Lack of

a Synchronized Approach between the Marine Corps and Army Affected the Timely

Production and Installation of Marine Corps Truck Armor, GAO-06-274 (Washington, 

D.C.: June 22, 2006). 

Page 12 GAO-07-385T
Audit Approaches in Iraq

The challenges encountered in Iraq are emblematic of the systemic issues

that DOD faces. In fact, GAO designated DOD’s contract management 

activities as a high-risk area more than a decade ago and have reported on 

DOD’s long-standing problems with its management and oversight of 

support contractors since 1997.11 For example, because information on the 

number of contractor employees and the services they provide is not 

aggregated within DOD or its components, DOD cannot develop a 

complete picture of the extent to which it relies on contractors to support 

its operations. DOD recently established an office to address contractor 

support issues, but the office’s specific roles and responsibilities are still 

being defined. 

In assessing acquisition outcomes government-wide over many years, we 

have applied a framework of sound acquisition practices that recognizes 

that a prerequisite to having good outcomes is to match well-defined 

requirements and available resources. Shifts in priorities and funding 

invariably have a cascading effect on individual contracts. Further, to 

produce desired outcomes with available funding and within required time 

frames, DOD and its contractors need to clearly understand DOD’s 

objectives and needs and how they translate into the contract’s terms and 

conditions; they need to know the goods or services required, the level of

performance or quality desired, the schedule, and the cost. When such 

requirements were not clear, DOD often entered into contract

arrangements that posed additional risks. Managing risks when 

requirements are in flux requires effective oversight, but DOD lacked the 

capacity to provide sufficient numbers of contracting, logistics, and other 

personnel, thereby hindering oversight efforts. With a considerable 

amount of DOD’s planned construction work remaining and the need for 

continued logistical support for deployed forces, it is essential to improve 

DOD’s capacity to manage its contractors if the department is to increase 

its return on its investment. 

GAO’s value to the Congress and the American people rests on its ability 

to demonstrate professional, independent, objective, relevant, and reliable 

work. To achieve this outcome, we set high standards for ourselves in the 

conduct of our work. Our core values of accountability, integrity, and 

GAO’s Quality 

Assurance 

Framework 

 11GAO, Military Operations: High-Level DOD Action Needed to Address Long-standing 

Problems with Management and Oversight of Contractors Supporting Deployed Forces,

GAO-07-145 (Washington, D.C.: Dec. 18, 2006). 

Page 13 GAO-07-385T
Audit Approaches in Iraq

reliability describe the nature of our work and, most importantly, the 

character of our people. In all matters, GAO takes a professional, 

objective, and nonpartisan approach to its work. GAO’s quality assurance 

framework is designed to ensure adherence to these principles. 

The framework is designed around people, processes, and technology and

applies to all GAO work conducted under generally accepted government 

auditing standards. GAO has a multidisciplinary staff of approximately 

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staffing engagements with teams proficient in a number of areas. For 

example, engagement teams comprise a mix of staff supported by experts 

in technical disciplines, such as data collection and survey methods, 

statistics, econometric modeling, information technology, and the law. To

add additional value and mitigate risk, GAO has a forensic audits and 

special investigations team to expose government fraud, waste, and abuse. 

A key process in our quality assurance framework is providing responsible 

officials of audited agencies with the opportunity to review and comment 

on our draft reports. This policy is one of the most effective ways to 

ensure that a report is fair, complete, and constructive. 

In April 2005, an international peer review team gave our quality assurance 

system a clean opinion—only the second time a national audit institution 

has received such a rating from a multinational team. Thus, the Congress 

and the American people can have confidence that GAO’s work is 

independent, objective, and reliable. The team, under the auspices of the 

Global Working Group of national audit institutions, examined all aspects 

of GAO’s quality assurance framework. The team found several global

“better practices” at GAO that go beyond what is required by government 

auditing standards. These practices included its strategic planning process, 

which ensures that GAO focus on the most significant issues facing the 

country, serious management challenges, and the programs most at risk. 

The team identified other noteworthy practices: 

• GAO’s audit risk assessment process, which determines the level of 

product review and executive involvement throughout the audit 

engagement.

Page 14 GAO-07-385T
Audit Approaches in Iraq

• GAO’s agency protocols, which provide clearly defined and transparent 

policies and practices on how GAO will interact with audited agencies. 

• GAO’s use of experts and specialists to provide multidisciplinary audit 

teams with advice and assistance on methodological and technical 

issues—vastly expanding GAO’s capacity to apply innovative approaches 

to the analysis of complex situations. 

As an organization in constant pursuit of improvement, we benefited from

the peer reviewers’ recognition of our quality control procedures as global 

“better practices” as well as their suggestions on how to strengthen 

guidance and streamline procedures.

Our work highlights the critical challenges that the United States and its 

allies face in the ongoing struggle to help the Iraqis stabilize, secure, and 

rebuild their country. Forthright answers to the oversight questions we 

posed in our report of January 9, 2007, are needed from the U.S. agencies 

responsible for executing the President’s strategy. Congress and the 

American people need complete and transparent information on the 

progress made toward achieving U.S. security, economic, and diplomatic 

goals in Iraq to reasonably judge our past efforts and determine future 

directions. For future work, GAO will continue to provide this committee 

and Congress with independent analysis and evaluations and coordinate 

our efforts with the accountability community to ensure appropriate 

oversight of federal programs and spending. 

Mr. Chairman, this concludes my statement. I would be pleased to answer 

any questions that you or other members may have at this time. 

For questions regarding this testimony, please call Joseph A. Christoff at 

(202) 512-8979. Other key contributors to this statement were Nanette 

Barton, Donna Byers, David Bruno, Dan Cain, Lynn Cothern, Tim 

DiNapoli, Mike Ferren, Rich Geiger, Tom Gosling, Whitney Havens, Lisa

Helmer, Patrick Hickey, Henry L. Hinton Jr., John Hutton, Steve Lord, Judy

McCloskey, Tet Miyabara, Mary Moutsos, Ken Patton, Sharon Pickup, 

Jason Pogacnik, Jim Reynolds, Donna Rogers, and William Solis. 

Concluding 

Observations 

GAO Contacts and 

Acknowledgments 

Page 15 GAO-07-385T (320477) 
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