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SIGIR 

Special Inspector General for IRAQ Reconstruction 

For more information, contact SIGIR Public Affairs 

at (703) 428-1100 or PublicAffairs@sigir.mil Special Inspector General for Iraq Reconstruction 

Summary of Report: SIGIR-09-020 

Why SIGIR Did This Study 

In October 2005, the U.S. government 

established the Provincial Reconstruction Team 

(PRT) program in Iraq. This program is a civilmilitary, interagency effort that acts as the 

primary government interface between the 

United States, Coalition partners, and provincial 

and local governments. However, to date 

agencies have not separately tracked PRT 

operating costs. 

SIGIR’s initial work focused on the cost of 

operating individual PRTs and the overall PRT 

program. We quickly found that the agencies 

involved are not required to capture these costs 

at the program or individual level. 

Consequently, SIGIR’s reporting objectives are 

to (1) identify the major PRT program cost 

categories (2) estimate program costs using 

available information (3) assess the feasibility 

and usefulness of tracking PRT costs. 

What SIGIR Recommends 

SIGIR provides recommendations to the 

Secretaries of State and Defense, the U.S. 

Ambassador to Iraq, and the Commanding 

General, Multi-National Forces – Iraq, on 

compiling and reporting PRT costs to support 

budgeting and management decision-making. 

Management Comments

We received written comments from the MultiNational Force–Iraq (MNF-I) and the 

Department of State (DoS). MNF-I concurred 

with the report’s findings and recommendations. 

The DoS comments included comments from 

both the Bureau of Near Eastern Affair–Iraq and 

the Resource Management Office. DoS did not 

agree with the report’s findings and 

recommendations and stated that it already has a 

process for capturing PRT costs at a level 

sufficient for reporting, budgeting, and policy 

decision. We disagree and respond in our 

report. 

April 28, 2009

PROVINCIAL RECONSTRUCTION TEAMS: DEVELOPING A COSTTRACKING PROCESS WILL ENHANCE DECISION-MAKING

What SIGIR Found 

Although not required to separately track PRT costs, DoS and the 

Department of Defense (DoD) provided some major costs by category 

associated with PRTs. Using that information, we estimated that Fiscal Year 

2008 PRT costs in Iraq were at least $373 million. Our estimate 

substantially understates the total cost because costs for military-provided 

movements and personnel are not included. The major cost categories 

identified include security, salaries, life-support, and operations. However, 

since DoS and DoD–the two largest contributors–are not required to 

segregate PRT costs from other costs, neither department has a process to 

capture PRT costs, according to DoS and DoD officials. DoS and DoD 

officials noted that with additional effort, existing financial systems could 

track most PRT costs. They further agreed that PRT cost data would be 

useful to managers for budgeting and other decision-making processes 

related to the PRT program, although the Department of Defense believes 

that gathering such costs would be expensive. 

Conclusions 

The PRT program is a large civil-military interagency effort that may grow 

and continue to be used in other contingency reconstruction operations. 

However, U.S. agencies have had no requirement to capture PRT costs, 

so these costs are not routinely tracked. As the U.S. embassy in Iraq 

normalizes operations, the application of U.S. government accounting 

standards to the PRT program is important to assist in budgeting and 

other decision-making processes. Furthermore, historical PRT cost 

data could be useful in planning and implementing other 

reconstruction operations using PRTs. Through its financial systems, 

DoS already appears to have the capability to track major costs by 

category. Other major costs such as Diplomatic Security personnel 

and security movements, and some DoD costs will be more difficult to 

track but could be estimated at an aggregate level
SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION 

April 28, 2009 

MEMORANDUM FOR U.S. SECRETARY OF STATE 

U.S. SECRETARY OF DEFENSE 

U.S. AMBASSADOR TO IRAQ 

COMMANDER, U.S. CENTRAL COMMAND 

COMMANDING GENERAL, MULTI-NATIONAL FORCE-IRAQ 

DIRECTOR, OFFICE OF PROVINCIAL AFFAIRS 

DIRECTOR, IRAQ TRANSITION ASSISTANCE OFFICE 

DIRECTOR, U.S. AGENCY FOR INTERNATIONAL 

DEVELOPMENT 

SUBJECT: Provincial Reconstruction Teams: Developing a Cost-Tracking Process Will 

Enhance Decision-Making (SIGIR-09-020) 

This report is provided for your information and use. It discusses the results of our review of the 

costs of staffing and operating a Provincial Reconstruction Team (PRT) in Iraq. The audit was 

conducted by the Special Inspector General for Iraq Reconstruction (SIGIR) as project 9009 

under the authority of Public Law 108-106, as amended, which also incorporates the duties and 

responsibilities of inspectors general under the Inspector General Act of 1978. 

We considered written comments on a draft of this report from the Department of State and the 

Multi-National Force–Iraq when finalizing the report. Both agencies and the Office of the 

Deputy Assistant Secretary of Defense (ME) also provided technical comments that we 

addressed in the report where appropriate. 

We appreciate the courtesies extended to our staff. For additional information on this report, 

please contact Mr. Glenn Furbish (glenn.furbish@sigir.mil, 703-428-1058) or Ms. Nancee 

Needham (nancee.needham@iraq.centcom.mil, 240-553-0851 ext 3793). 

Stuart W. Bowen, Jr. 

Inspector General
Table of Contents 

Introduction 1 

Background 1 

Objective 2 

Cost-Tracking Process Will Enhance Decision-Making 4

PRT Costs Are Not Routinely Tracked, but Fiscal Year (FY) 2008 Costs 

Are at Least $373 Million 4 

Estimated Costs for the Bureaur of Diplomatic Security 5 

Estimated Costs for the Bureau of Near Eastern Affairs-Iraq 5 

Estimated Costs for DoD 6 

Estimated Costs for Other Government Agencies 7 

U.S. Government Financial Management Standards 7 

DoD and DoS Can Track PRT Costs 8 

Some DoS Financial Systems Can Track PRT Costs 8 

Some DoS Costs Are More Difficult to Track 8 

DoD Could Track Some Costs 9 

Cost-Tracking Process Will Enhance Decision-Making 9 

Conclusion 10

Recommendations and Lesson Learned 11

Recommendations 11 

Lesson Learned 11 

Management Comments and Audit Response 12 

Appendices 

A. Scope and Methodology 13

B. SIGIR Analysis of PRT FY 2008 Cost Data 15

C. U.S. Government Financial Standards 18 

D. Acronyms 21

E. Audit Team Members 22 

F. Management Comments 23 
1

Introduction 

This is the fifth in a series of Special Inspector General for Iraq Reconstruction (SIGIR) audit 

reports on Provincial Reconstruction Teams (PRT). Since October 2006, we have issued four 

reports examining the status, expansion, effectiveness, and performance evaluation of PRTs in 

Iraq. 

Background 

In October 2005, the U.S. government established the PRT program in Iraq. The PRT initiative 

is a civil-military, interagency effort that acts as the primary U.S. government interface between 

the United States, Coalition partners, and provincial and local governments throughout Iraq’s 18 

provinces. The PRT program was established to assist Iraq’s provincial governments in 

developing a sustained capability to govern, to promote increased security and rule of law, to 

promote political and economic development, and to provide the provincial administration 

necessary to meet the population’s basic needs. 

To accomplish its goals, the PRT program provides integrated and multidisciplinary teams of 

U.S. and Coalition personnel to teach, coach, and mentor provincial and local Iraqi government 

officials in core competencies of governance and economic development. The PRTs comprise 

personnel from the Department of State (DoS), the U.S. Agency for International Development, 

other departments of the U.S. government, the Multi-National Corps-Iraq (MNC-I), Iraqi-born 

expatriates, contractors, and Iraqi local nationals. DoS and the Department of Defense (DoD) 

provide most of the PRT funding. As of March 2009, 14 regular PRTs were located throughout 

different provinces in Iraq. In addition, four Provincial Support Teams, with functions similar to 

those of PRTs, are located in neighboring provinces rather than the provinces to which they are 

providing assistance because of security or other concerns. Also, 10 smaller PRTs are embedded 

with U.S. brigades to coordinate with Iraqi city and local governments. In this report, all of the 

teams, regardless of type, are referred to collectively as PRTs. As of March 2009, 28 PRTs were 

in Iraq. 

For PRTs located at forward operating bases or camps, DoD provides security and life-support. 

For PRTs not collocated with a U.S. military element, DoS provides security and life-support. 

According to DoS officials, the National Security Council, in preliminary verbal guidance in 

March 2009, directed that the program be reduced to 16 PRTs by August 2010 and to 6 by 

December 2011. Figure 1 shows the location of the PRTs in Iraq as of March 2009. 
2

Figure 1—PRT Footprint in Iraq, March 2009 

Source: DoS, Office of Provincial Affairs 

Civilian and military personnel and contractors are assigned to each PRT. The number of staff 

assigned to each PRT varies, however, depending on the tasks assigned for an area and the skills 

required because they are task organized. Consequently, there is no standard model for a PRT’s 

organization skill set or staff size. DoS civilian team members typically include the Team 

Leader and 13 to 15 U.S. government contractors and civilians whose areas of knowledge 

include rule of law, governance, political reconciliation, political development, economic 

development, and agriculture. DoD team members typically include the Deputy Team Leader, a 

military liaison, bilingual/bicultural advisors, an engineer, military security teams, and 4 to 20 

civil affairs team personnel. Finally, the U.S. Agency for International Development usually 

provides one agency representative and multiple local governance contractors as integral 

members of each PRT. 

 

PRTs

Ninewa

Kirkuk

Babil

Baghdad

Anbar

Basrah (UK)

Dhi Qar (IT)

Salah ad Din

Diyala

Erbil

Wasit

Najaf

Karbala

Diwaniyah

ePRTs

Baghdad (6)

Anbar (3)

S. Diyala (1)

PSTs 

(Total PSTs: 4)

Muthanna

Maysan

Dohuk

Sulaymaniyah

US PRT

ePRT

PST

Coalition PRT

CURRENT PRT FOOTPRINT

Anbar

Ninewa

Najaf

Salah ad

Din

Muthanna

Basrah

Diyala

Kirkuk

Karbala

Wasit

Maysan

Dhi Qar

Diwaniyah

Babil

Baghdad

Sulaymaniyah

Erbil

?

US PRT 12

Coalition 2

ePRT 10

PST 4

_____________

Total PRT 28

PRT Updates

• Total BOG for DoS Managed personnel is currently at

467.

Dohuk
3

Objective 

SIGIR’s reporting objectives for the PRT program are to (1) identify the major PRT program 

cost categories, (2) estimate PRT program costs using available cost information, and (3) 

determine the feasibility and usefulness of tracking PRT costs. 
4

Cost-Tracking Process Will Enhance Decision-Making 

Although it is not required to track PRT costs, the Departments of State (DoS) and Defense 

(DoD) provided some estimated costs, by category, associated with PRTs. Using that 

information, we estimated that Fiscal Year (FY) 2008 PRT costs in Iraq were at least $373 

million. Our estimate is substantially understated because the costs for military-provided 

security teams and personnel are not included. The major categories of cost include security, 

salaries, life-support, and operations. However, since DoS and DoD–the two largest 

contributors–are not required to segregate PRT costs from other costs, neither department has a 

process to capture PRT costs according to DoS and DoD officials. DoS and DoD officials noted 

that with additional effort existing financial systems could track most PRT costs. They further 

agreed that PRT cost data would be useful to managers for budgeting and other decision-making 

processes related to the PRT program. 

PRT Costs Are Not Tracked, but FY 2008 Costs Are at Least $373 

Million 

DoS and DoD were able to provide some major PRT costs, which allowed us to make a general 

estimate of the program’s total cost. Our analysis shows that in FY 2008, PRT costs were at 

least $373 million, not including DoD’s costs for military security team movements and 

personnel. DoS estimates its FY 2008 PRT costs were $322 million, which includes $179 

million for security contracts, and $143 million for salaries, life-support, and other operational 

costs. The only PRT-specific cost identifiable for DoD is about $9 million for 82 contractor 

bilingual/bicultural advisors. DoD does not capture or separately report any of its other PRTrelated costs. DoD’s other costs would include compensation and life-support for military 

personnel assigned to the PRTs, base security, and ground and air movement security. Table 1 

shows our estimated PRT program costs for FY 2008, based on available cost data. 
5

Table 1—Minimum Estimated PRT Costs, FY 2008 

PRT Minimum Identifiable Cost Categories FY 2008 

Department of State 

Bureau of Diplomatic Security $179,000,000 

Bureau of Near Eastern Affairs-Iraq1 

Salaries 82,000,000 

Support 39,000,000 

Operations 21,600,000 

Department of State Subtotal $321,600,000 

Department of Defense 

Bilingual Bicultural Advisors Contract $9,000,000 

Department of Defense Subtotal $9,000,000 

United States Agency for International Development 

Contractors $30,500,000 

Salaries 11,700,000 

United States Agency for International Development Subtotal $42,200,000 

Fiscal Year 2008 PRT Minimum Identifiable Cost Total $372,800,000 

Note: The costs detailed in this section are estimates for FY 2008; costs related to FY 2009 have already changed in a variety of ways and, based 

on currently planning, will continue to change. 

Source: SIGIR analysis of DoS, DoD and U.S. Agency for International Development data. 

Estimated Costs for the Bureau of Diplomatic Security

The Bureau of Diplomatic Security (DS) represents DoS’ largest PRT cost category in FY 2008, 

totaling at least $179 million. Of this amount, $62 million is for Iraq-wide aviation support, 

most of which goes to PRTs. The remaining $117 million covers base and ground security for 

PRTs and Regional Embassy Offices,2

 although according to DoS officials, a significant portion 

of the security costs at at Regional Embassy Offices are in support of the collocated PRTs. 

Estimated Costs for the Bureau of Near Eastern Affairs-Iraq

The Bureau of Near Eastern Affairs─Iraq (NEA-I) provided estimates of its FY 2008 PRT costs 

for three major categories: salaries, $82 million; life-support, $39 million; and operations, $22 

million. The $82 million in salary costs includes: 

 

1

 A senior DoS Resource Management official stated the Bureau of Near Eastern Affairs–Iraq provided figures for 

FY08 obligations, not expenditures. 

2

 Most of DS’ security for FY 2008 was provided by three private security contractors: DynCorp International, 

Triple Canopy, and Xe (formally known as Blackwater Worldwide). 
6

• direct-hire Foreign Service Officers 

• temporary employees 

• U.S. citizen subject-matter experts 

• direct-hire employees detailed to DoS from the DoD, Justice Commerce, and Agriculture 

Salary data includes employees located at the PRTs; employees of the Office of Provincial 

Affairs, whose mission is managing and supporting the PRTs; and Embassy information 

technology officers who travel between the PRTs.3

 Salary costs include base pay, hardship pay, 

danger pay, and Sunday differentials; overtime pay; and benefits. Benefits include postassignment travel, post-assignment transfer costs, rest and recreation travel, training costs, and 

various other related costs. 

Support cost data includes $21 million in life-support reimbursements to DoD for PRTs 

collocated with the U.S. military and $19 million in life-support for the PRTs not collocated with 

the military. For those PRTs collocated with the military, DoS reimburses DoD based on the 

number of PRT personnel present at each PRT. Regardless of the provider, life-support costs 

comprise water, housing, food, electricity, ablution, sanitation, medical, non-tactical vehicles, 

office space, and other minor support costs. Operational costs of $22 million include rent, 

vehicles, information technology equipment, information technology at the domestic bureau 

level, total contract costs for linguists, local subject-matter experts, and PRT acquisitions. 

According to DoS officials, DoS’ costs for FY 2008 do not include administrative costs incurred 

by agencies and departments supporting PRT personnel at both the U.S. Embassy and in 

Washington, DC. These agencies include Embassy Management, NEA-I, Global Financial 

Services, Charleston, other DoS bureaus and offices, and the U.S. Departments of Justice, 

Agriculture, and Commerce. 

Estimated Costs for DoD 

DoD incurs a large portion of PRT costs, and while it tracks its Iraq costs in other areas, it tracks 

only a small portion of its costs associated with PRTs. That cost, for PRT bilingual/bicultural 

advisors, was approximately $9 million in FY 2008. However, the cost is likely higher. A 

Multi-National Corps–Iraq (MNC-I) Plans Office official stated that DoD paid about $30 million 

in FY 2008 for approximately 269 contracted bilingual/bicultural advisors throughout Iraq. 

Under the terms of a Memorandum of Agreement, DoD allots 82 of these advisors for DoS’ use 

at the PRTs. However, according the official, local commanders informally detail as many as 60 

additional advisors to the PRTs.4

 

 

3

 According to a senior NEA-I Budget Officer, PRT salary estimates are derived by multiplying the percentage of 

DoS personnel at PRTs by the total amount of DoS salaries in Iraq. No attempt is made to determine actual total 

salaries of PRT staff. The percentage of DoS personnel at PRTs is derived from a mid-year personnel count. This 

calculation does not adjust for fluctuations in the number of PRT staff throughout the year or for individuals not 

present for an entire year unless there are large deviations. 4

 The agreed allotment of 82 bilingual/bicultural advisors represents 31 percent of the total 269 bilingual/bicultural 

advisors. If calculated on a per person basis these contractors account for approximately $9 million of the $30 
7

While DoD captures costs in other areas, it does not separately report them by individual PRTs. 

The most significant of these costs is for security teams. According to a Memorandum of 

Agreement, signed February 2007, DoD is obligated to provide each PRT under its security 

umbrella with three daily ground movements outside of the secured base, if needed. U.S. 

military security teams meet this requirement with about 32 personnel, 3 or 4 tactical vehicles, 

and various other movement-specific resources. According to knowledgeable DoD officials, 

while some PRTs use these services as needed, other PRTs have a dedicated military security 

team. According to DoD officials, local military units log the actual number of PRT-specific 

movements, but the costs of these movements or the costs of a dedicated security team are not 

tracked. The same is the case for PRT-related military air movements. DoD also provides base 

security to the majority of PRTs and their subordinate ePRTs. These costs also are not tracked. 

However, DoD officials stated the actual portion of PRT costs for base security are marginal, 

since the military would have to protect these bases regardless of whether a PRT is present. 

In addition to security, DoD also pays for U.S. military-civil affairs personnel permanently 

assigned to PRTs. These costs include salaries and benefits for at least 117 military personnel 

currently working at the PRTs and life-support for 99 of those personnel. However, according to 

DoD officials, local commanders provide an unknown numbers of additional military personnel 

and translators to PRTs on a temporary basis5

. 

Estimated Costs for Other Government Agencies 

The U.S. Agency for International Development provided the largest contribution to Iraq PRTs 

after DoS and DoD with reported FY 2008 costs of approximately $42 million. While the 

agency does not track its costs for specific PRTs or the whole PRT program, it was able to 

estimate costs for U.S. Agency for International Development personnel and contractors 

supporting the program for FY 2008. These costs include $11.5 million for direct hire and 

personal service contractor salaries and $30.5 million for local governance development 

contractors. The agency also estimated it incurred administrative costs of $375 thousand for 

PRTs for FY 2008. 

U.S. Government Financial Management Standards 

Multiple U.S. government financial management standards and policies promote the reporting of 

program costs as an effective management tool. U.S. government managers require reliable, 

relevant cost information to improve operational economy and efficiency. This information 

assists the Congress and executives in making decisions about allocating federal resources, 

authorizing and modifying programs, and evaluating program performance. 

 

million bilingual/bicultural advisors contract. The additional 60 personnel represent 22 percent of the total 269 

advisors. While we did not add this to our total cost estimate, these personnel would represent an additional $6.6 

million in PRT-related DoD costs. 

5

 DoS pays life-support costs for 18 military personnel permanently staffed as Deputy PRT team leaders. Military 

personnel numbers are accurate as of March 2009. 
8

The DoS Foreign Affairs Manual6 provides financial management policy and accounting 

standards. The manual states that DoS policy is to conduct a continuous program to improve 

financial operations regarding budgeting, accounting, financial reporting, and auditing. 

Furthermore, DoS policy is to be responsive to the financial reporting and other requirements of 

both the executive and the legislative branches. Similarly, DoD regulation 7000.14-R7, which 

provides policy for contingency operations, states that “components must make every effort 

possible to capture and accurately report the cost of the contingency operation.” 

DoD and DoS Can Track PRT Costs 

Although U.S. government accounting standards require agencies to track program costs, 

according to officials, DoS and DoD are not required to track PRT costs separately; 

consequently, there is no process for doing so. DoS officials stated NEA-I has systems capable 

of tracking individual PRT costs; however, because they are not required to do so, this capability 

has not been used. DS’s PRT costs result mostly from private security contracts; however, 

according to DS officials, contractors are not required to report costs by PRT, making it difficult 

to track individual PRT costs. According to DoD officials, MNC-I tracks its largest PRT costs at 

the unit level; however, without a requirement to track these costs and report them up the chain 

of command, no tracking and reporting process has been developed. 

Some DoS Financial Systems Can Track PRT Costs 

DoS’ global accounting and payroll systems have the capability to track total or individual PRT 

costs, according to DoS officials. In April 2008, the U.S. Embassy in Baghdad began tracking 

costs by individual PRT in its regional accounting system. The regional accounting system 

operates separately from, but interfaces with the global accounting system. However, the global 

accounting system has not yet integrated the PRT cost-tracking capability. Instead, the NEA 

bureau currently transcribes information from the global system into a manual spreadsheet to 

generate an estimated yearly total for PRT costs. 

The DoS’ payroll system manages salary information for all Foreign Service Officers and 

temporary DoS hires in Iraq. Currently the most detailed location code the system uses is for the 

whole of Iraq; however, a DoS official knowledgeable about Iraq payroll stated that the payroll 

system could be configured in approximately 60 days to track salaries for the PRT program as a 

whole, as well as individual PRTs. 

Some DoS Costs Are Difficult to Track 

DS’s PRT costs are derived mostly from private security contracts; however, according to DS 

officials, contractors are not required to report costs per PRT, which prevents the Bureau from 

collecting costs in that manner. Rather, the DS’s security contractors issue bills indicating the 

number of their personnel in Iraq, multiplied by the agreed-upon daily rate. While it is possible 

 

6

 DOS, U.S. Department of State Foreign Policy Manual, Volume 4, Section 04 FAM 011, “Statement of Financial 

Management Policy,” updated 10/4/2004. 

7

 DOD, DOD 7000.14-R, Volume 12, Chapter 23, “Contingency Operations,” Paragraph 230904, sections B and C, 

updated 9/2007. 
9

to estimate the DS’s total PRT costs, this invoice process makes separation by individual PRT 

indeterminable. 

DoD Could Track Some Costs 

According to DoD officials, MNC-I records its largest contributions to PRTs at the unit level; 

however, because it is not required to calculate the cost of these contributions and report them up 

the chain of command, it has not established a process to do so. One of MNC-I’s contributions 

to PRTs is movement security. According to DoD officials, while local military units log the 

actual number of PRT-specific ground movements, DoD is not required to collect and report this 

data or to calculate the cost of these movements and thus has no cost data for PRT-specific 

military movements. Yet according to DoD officials, MNC-I could count the number of ground 

movements at a PRT and calculate a reasonable cost estimate using the average costs of 

equipment and crew operations. The same holds true for air movements of PRT personnel. 

Another DoD PRT cost is the 117 military personnel directly assigned to the PRT mission. 

Since these personnel are assigned to designated jobs requiring specific ranks, the cost of salaries 

and benefits for them is calculable. In addition, the life-support DoD provides for 99 of those 

personnel could be derived from life-support contracts. However, since DoD is not required to 

calculate the cost of these personnel and report it up the chain of command, it has not developed 

a process to do so. In addition, according to DoD officials, local commanders task unknown 

numbers of additional military personnel and translators to PRTs on a temporary basis. DoD 

officials could not provide an estimate of how many personnel this includes, so while DoD pays 

for the salaries, benefits, and life-support for these personnel, these costs are unknown. DoD 

officials stated that the cost for base security for PRTs would be difficult to calculate because 

this is a sunk cost of securing U.S. military bases and any increases from assisting the PRTs 

would be marginal. 

Cost-Tracking Process Will Enhance Decision-Making 

A cost-tracking process for PRTs, would enable the U.S. government to effectively capture 

relevant data for use in decision-making and planning in Iraq, Afghanistan and other future 

reconstruction efforts. To illustrate how cost information could be used, in November 2008, the 

U.S. Ambassador to Iraq faced a decision about creating a committee to determine whether to 

close the Regional Embassy Office in Hillah and move the collocated Babil PRT. A 

memorandum submitted for the Ambassador’s approval considered the effect of decision on 

costs and argued that the estimated $75 million DoS spent to operate the Hillah Regional 

Embassy Office was a costly way to support a PRT. Similarly, DoS and DoD are considering 

which, if any, PRTs will remain or be converted into consulates by the time the U.S. military 

drawdown is complete. Accurate cost data would enhance DoS and DoD decision-making 

related to PRT operations. 

 
10

Conclusion 

The PRT program in Iraq costs hundreds of millions of dollars and PRTs may be used in other 

contingency reconstruction operations. The full cost of PRTs, however, is not known. As the 

U.S. Embassy in Iraq normalizes operations, application of U.S. government accounting 

standards to the PRT program is important to assist in budgeting and other decision-making 

processes. Furthermore, historical PRT cost data could be useful in planning and implementing 

other reconstruction operations using PRTs. DoS’ financial systems already appear to have the 

capability to track major cost categories. Other major cost categories, for example, for DS 

personnel and security movements, and some DoD costs will be more difficult to track but could 

be estimated at an aggregate level. Developing systems to routinely track costs will require some 

level of investment. For example, in responding to our report, the Deputy Assistant Secretary of 

Defense (ME) stated the implementation of U.S. government accounting standards to track PRT 

costs could require the presence of full-time resident auditors at each PRT and that this would be 

costly. Nonetheless, we believe that DoD and DoS should assess the costs and benefits of having 

this management information routinely available. 
11

Recommendations and Lesson Learned 

Recommendations 

We recommend that: 

1. The U.S. Ambassador to Iraq establish a policy requiring all participating agencies to 

compile PRT cost data and report the data to the Chief of Mission in Iraq on a quarterly 

basis. 

2. The Commanding General, Multi-National Forces – Iraq, establish processes to track the 

costs of U.S. military support to the PRTs and report those costs to the Chief of Mission 

on a quarterly basis. 

3. The Secretaries of Defense and State form a joint study group to assess the cost and 

benefit of modifying their respective financial systems to capture, on a routine basis, the 

major cost categories associated with PRT operations to support their respective 

budgeting and other management decision-making processes. 

Lesson Learned 

Without tracking Iraq PRT costs, the U.S. government will lose the opportunity to capture 

relevant historical data for use in decision-making and planning in Afghanistan or other future 

reconstruction efforts. 

 
12

Management Comments and Audit Response 

We received written comments on a draft of this report from DoS and the Multi-National 

Force─Iraq. The DoS comments included comments from both NEA-I and the Resource 

Management Office. All comments are included in Appendix F. 

DoS did not agree with our finding and stated it already has a process for tracking PRT-related 

costs at a level sufficient for reporting, budgeting, and policy decision-making purposes. DoS 

cited the cost data used in the strategic decision to close the Regional Embassy Office in Hillah 

as evidence of the effectiveness of the current system. We disagree. In interviews with NEA-I 

and Embassy Financial Management Officers, we were told DoS accounting systems cannot 

track PRT costs. For example, the cost information provided to SIGIR for this report did not 

come from a DoS accounting system. Rather, the information was derived through the use of 

percentage based estimates in an external spreadsheet using total Iraq cost information as a base. 

A senior NEA-I budget official stated NEA-I did not compile or provide the cost data relating to 

the decision regarding the Hillah office. Furthermore, the NEA-I budget official and a senior 

Embassy financial management official agreed it would be valuable to track costs for individual 

PRTs and for the entire PRT program since PRTs in Afghanistan are beginning to expand in 

number and size. 

The Multi-National Force─Iraq fully concurred with our finding and recommendations. It stated 

that it would establish processes to track the costs of U.S. military support to the PRTs and report 

those costs to the Chief of Mission on a quarterly basis starting in the fourth quarter of FY 2009, 

or sooner, provided that proper cost estimates analysis and aggregations are reviewed by the 

Multi-National Forces - Iraq Chief of Staff prior to utilization. 

The Multi-National Force─Iraq, DoS, and the Deputy Assistant Secretary of Defense (ME) also 

provided technical comments that we included in the report where appropriate. 
13

Appendix A—Scope and Methodology 

This audit was performed by the Special Inspector General for Iraq Reconstruction (SIGIR) 

under the authority of Public Law 108-106, as amended, which also incorporates the duties and 

responsibilities of inspectors general under the Inspector General Act of 1978. It was completed 

during the period of February 12, 2009, through April 3, 2009. The audit addresses U.S. 

government agencies’ tracking and reporting of PRT program costs and costs of individual 

PRTs. We focused on the extent to which U.S. government departments and agencies track the 

costs of staffing and operating individual PRTs and the Iraq PRT program as a whole. We did 

not look at programmatic funding. 

To determine the costs of PRTs and agency processes for identifying and reporting the costs, we 

interviewed officials at U.S. Embassy Management, Office of Provincial Affairs; NEA-I; DS; 

Regional Security Office; Iraq Transition Assistance Office; International Narcotics and Law 

Enforcement Office; General Services Office; Multi-National Force─Iraq; MNC-I; and U.S. 

Agency for International Development. We observed meetings of the Joint PRT Working 

Group, the Joint PRT Steering Group, and the PRT Core Group. We obtained and reviewed 

relevant documentation, including: 

• copies of contracts for goods and services at PRTs 

• DoD reimbursement requests for fiscal year 2008 

• Military Interdepartmental Purchase Requests for fiscal year 2008 

We also obtained and reviewed applicable guidelines, including: 

• the U.S and Iraq Security Agreement 

• MNC-I CJ8 “Money as a Weapon System” Standard Operating Procedure 

• DoS-DoD Memorandums of Agreement 

• DoS Foreign Affairs Manual, Volume 4 

• DoD Financial Management Regulation 7000.14-R 

• Federal Accounting Standards Advisory Board “Statements of Federal Financial 

Accounting Concepts and Standards” 

• Government Accountability Office “Standards for the Internal Control in the Federal 

Government” 

We gathered available PRT cost data from the relevant agencies and identified a minimum total 

cost of the PRT program for FY 2008. For details of this analysis, see Appendix B. 

Use of Computer-Processed Data 

To achieve the assignment’s objectives we extensively relied on computer-processed data 

contained in the Consolidated American Payroll Processing System, the Global Financial 
14

Management System, and the Regional Financial Management System. We assessed the 

reliability of this data through reliance on both a DoS system accreditation report and a Fiscal 

Year 2008 Privacy Impact Statement and found them to be adequate. Based on these 

assessments and tests, we concluded that the data are sufficiently reliable to be used in meeting 

the assignment’s objectives. 

We obtained DoS payroll and other cost data, which is reported for informational purposes only. 

The Consolidated American Payroll Processing System a custom-written, third-generation 

mainframe, business-processing application, processes DoS payroll data. We did not audit the 

system; however, we obtained and reviewed the DoS system accreditation report, dated August 

2007. The Global Financial Management System is the official DoS financial management 

system to account for and control appropriated resources and to maintain accounting and 

financial information associated with the normal operation of U.S. government organizations. 

The Global Financial Management System processes DOS non-payroll cost data. We did not 

audit the system; however, we obtained and reviewed a Fiscal Year 2008 Privacy Impact 

Statement, a survey discussing system controls, conducted by the Bureau of Administration 

Information Sharing Services. 

We obtained from MNC-I copies of Excel spreadsheets showing calculations of the requested 

reimbursements from DoS to DoD. This data is reported for informational purposes only. We 

analyzed the spreadsheets and verified the computations. 

Internal Controls 

In conducting the audit, we assessed certain internal controls pertinent to the audit objectives 

with respect to control of costs. Specifically, we identified and assessed internal controls 

covering DoS’ validation of one-time costs for PRTs. In addition, we identified and assessed 

DoS internal controls over staffing of U.S. government employees and contractors at the PRTs. 

We conducted this performance audit in accordance with generally accepted government 

auditing standards. Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. We believe that the evidence obtained provides a reasonable basis 

for our findings and conclusions based on our audit objectives. 

Prior Coverage 

In conducting this audit, we reviewed applicable reports issued by SIGIR, the Government 

Accountability Office, and the U.S. House of Representatives Committee on Armed Services – 

Subcommittee on Oversight and Investigations. 

SIGIR Audit Reports 

Report No. SIGIR-09-013, Provincial Reconstruction Teams’ Performance Measurement 

Process Has Improved, 1/28/2009 

Report No. SIGIR-07-015, Review of the Effectiveness of the Provincial Reconstruction Team 

Program in Iraq, 10/18/2007 
15

Report No. SIGIR-07-014, Status of the Provincial Reconstruction Team Program Expansion In 

Iraq, 7/25/2007 

Report No. SIGIR-06-034, Status of the Provincial Reconstruction Team Program in Iraq, 

10/29/2006 

Government Accountability Office Reports 

Report GAO-09-086R, Provincial Reconstruction Teams in Afghanistan and Iraq, 10/1/2008 

U.S. House of Representatives Committee on Armed Services – Subcommittee on Oversight 

and Investigations Reports 

Report 41-409, Agency Stovepipes vs. Strategic Agility: Lessons We Need to Learn from 

Provincial Reconstruction Teams in Iraq and Afghanistan, 4/2008
16

Appendix B—SIGIR Analysis of PRT FY 2008 Cost 

Data 

Analysis of DoS Data 

The DoS analysis includes costs from two major Bureaus: DS and NEA-I. 

DS provided a FY 2008 cost estimate of $432 million for all Iraq operations. Of this amount, $2 

million represents Washington, D.C.-based administrative costs for Iraq and several other 

theatres of operation. U.S.Embassy─Iraq ground and air security costs are $250 million. The 

remaining $179 million includes $62 million for Iraq-wide aviation support, most of which goes 

to PRTs, and $117 million for base and ground security for PRTs and Regional Embassy Offices. 

NEA-I provided a total FY 2008 cost estimate for PRTs of $82,000,000 in salaries, $36,000,000 

in support, and 21,600,000 in operations. NEA-I’s accounting system tracks Iraq costs in total. 

Consequently, NEA-I Financial Management Officers enter those system-reported totals into a 

manual spreadsheet for further manipulation to calculate estimated PRT costs. 

NEA-I estimates salary costs based on mid-fiscal year personnel counts. As of March 2008, a 

total of 374 Foreign Service officers were in Iraq; 112 personnel worked at the PRTs; and 262 

personnel worked at the Embassy. NEA-I determined that PRTs represent approximately 30 

percent of total salary costs (112/374=.30) and that embassies represent 70 percent of total salary 

(262/374=.70). Thus, NEA-I multiplies these derived percentages by total salaries (as reported 

in the payroll system) to determine the PRT salary estimate. Salaries for temporary DoS 

personnel are determined using the same calculations with the applicable personnel counts. 

NEA-I tracks support costs in the accounting systems by reimbursements/payments made 

directly to DoD and the DoS life-support contractor on a quarterly basis. WE calculated the total 

DoD reimbursements for FY 2008 by adding the four quarterly DoS to DoD electronic payment 

receipts. These reimbursements deal exclusively with the PRTs. NEA –I estimates that only 20 

percent of total DoS life-support contracts relate to PRTs. 

NEA-I’s regional accounting system at the U.S. Embassy─Iraq identifies operational costs 

relating to PRTs, and therefore the costs do not require estimation. These costs include rent, 

vehicles, information technology equipment, IT costs at the domestic bureau level, total contract 

costs for linguists and local subject-matter experts, and various PRT acquisitions. 

Analysis of DoD Data 

DoD’s contract for bi-lingual/bi-cultural advisors includes 269 advisors in Iraq, which includes 

the 82 DoS PRT advisors. The total contract costs for FY 2008 were $30 million. Based on 

these facts, we estimated total costs for PRT advisors FY 2008 at $9 million. We calculated this 

total using the percentage of PRT DoS advisors divided by total advisors (82/269 = 30.5 

percent.) We then multiplied this percentage of DoS advisors by the total contract costs of $30 

million ($30,000,000 x .305 = $9,000,000.) 
17

Analysis of U.S. Agency for International Development Data 

The U.S. Agency for International Development has a contract with the Research Triangle 

Institute for local governance advisor support at the PRTs. This contract is for an annual 

payment totaling $30.5 million. The agency confirmed that actual payments for FY 2008 totaled 

approximately $30.5 million. Since all of these contractors support the PRTs, no additional cost 

estimates are necessary. 

The U.S. Agency for International Development also paid salaries of approximately $11.7 

million in FY 2008. A list of full-time equivalent salaries is the basis for this cost estimate. Six 

of these personnel are U.S. Agency for International Development PRT support staff living at the 

compound in Baghdad for which the agency pays all applicable life-support costs. The U.S. 

Agency for International Development considers these costs insignificant and as such did not 

capture them in the FY 2008 estimate. DoS pays for all life-support of U.S. Agency for 

International Development personnel at the PRTs through its quarterly reimbursements to DoD 

and the DoS life-support contractor. 
18

Appendix C—U.S. Government Financial Standards 

Multiple U.S. government financial management and internal control guidelines require agencies 

to capture program costs and communicate data to management in a timely manner. However, 

the PRT program is a large civil-military interagency effort, and as such, U.S. agencies have had 

no requirement to capture PRT costs. Yet, as the PRT program in Iraq transitions to normal 

embassy operations, the application of U.S. government accounting standards to the program 

could prove beneficial. 

Federal Accounting Standards 

The Federal Accounting Standards Advisory Board, established by the U.S. Department of the 

Treasury, the Office of Management and Budget, and the Government Accountability Office, has 

issued statements of federal financial concepts and standards. The Board’s managerial cost 

accounting standard8

 states: “Each reporting entity should accumulate and report the costs of its 

activities on a regular basis for management information purposes. Costs may be accumulated 

either through the use of cost accounting systems or through the use of cost funding techniques.” 

Paragraph 19 of the Standard further states: “Government managers are the primary users of cost 

information. They are responsible for carrying out program objectives with resources entrusted 

to them. Reliable and timely cost information helps them ensure that resources are spent to 

achieve expected results and outputs, and alerts them to waste and inefficiency.” Paragraph 22 

identifies objectives for managerial cost accounting concepts and standards, including to: 

• Provide program managers with relevant and reliable information relating costs to 

outputs and activities. Based on this information, program managers can respond to 

inquiries about the costs of the activities they manage. This cost information will assist 

them in improving operational economy and efficiency; 

• Provide relevant and reliable cost information to assist the Congress and executives in 

making decisions about allocating federal resources, authorizing and modifying 

programs, and evaluating program performance. 

Paragraph 71 of the Standard further provides guidelines on the cost accounting process: 

“Regardless whether a reporting entity uses a cost accounting system or cost finding techniques, 

the methods and procedures followed should be designed to perform at least a certain minimum 

level of cost accounting and provide a basic amount of cost information necessary to accomplish 

the many objectives associated with planning, decision-making, control, and reporting.” 

 

8

 Federal Accounting Standards Advisory Board, “Statement of Federal Accounting Standards Number 4 – 

Managerial Cost Accounting Standards”, July 31, 1995. 
19

DoS Policy Guidelines 

The DoS Foreign Policy Manual describes the organizational responsibilities and authorities 

assigned to each major component of DoS. These authorities and responsibilities are the basic 

organizational directive of DoS. Volume 4 of the manual covers financial management policy, 

organization, and accounting principles and standards. According to the manual9, DoS policy is 

to: 

• maintain effective financial management programs and systems 

• conduct a continuous program to improve financial operations and systems and to 

identify more efficient methods of operations regarding budgeting, accounting, financial 

report, and auditing 

• be responsive to management needs at the various levels of DoS 

• be responsive to the financial reporting and other requirements of both the executive and 

the legislative branches 

DoD Financial Management Standards 

Financial management standards apply to DoD as well. A DoD financial management 

regulation10 issues policies and procedures for contingency operations related to DoD. As the 

U.S. military plays a large and critical support role for PRTs, this regulation is applicable to 

DoD’s part of the PRT program. The regulation states, “Components must make every effort 

possible to capture and accurately report the cost of the contingency operation”. 

The regulation provides further guidance on the capture of costs, stating, “Each organization 

supporting a contingency operation is required to capture and report all related obligations and 

disbursements at the lowest possible level of the organization. Actual costs, as reflected in the 

accounting systems or subsidiary accounting records, should be reported.” The regulation 

further states, “It is up to the DoD Component to develop adequate measures to allow for 

capturing actual costs from the official accounting records. Procedures could include 

establishing unique coding or establishing subsidiary accounting records for use during the 

contingency operations that will allow it to provide accurate reports to the Department’s CBS 

[contingency cost breakdown structure]. When actual costs are not available, an auditable 

methodology should be established and documented for capturing costs.” 

 

9

 DoS, U.S. Department of State Foreign Affairs Manual, Volume 4, Section 04 FAM 011, “Statement of Financial 

Management Policy”, updated 10/4/2004. 

10 DoD, DOD 7000.14-R, Volume 12, Chapter 23, “Contingency Operations”, Paragraph 230904, sections B and C, 

updated 9/2007. 
20

Government Accountability Office Standards 

Last, the Government Accountability Office has issued a set of internal control standards for 

government,11 as required by the Federal Manager’s Financial Integrity Act of 1982. A section 

of the standards regarding information and communications states, “Information should be 

recorded and communicated to management and others within the entity who need it and in a 

form and within a time frame that enables them to carry out their internal control and other 

responsibilities.” The section further states, “Program managers need both operational and 

financial data to determine whether they are meeting their agencies’ strategic and annual 

performance plans and meeting their goals for accountability for effective and efficient use of 

resources.” 

 

11 Government Accountability Office, GAO/AIMD-00-21.3.1, “Standards for Internal Control in the Federal 

Government”, 11/1999. 
21

Appendix D—Acronyms 

Acronym Description 

DoD Department of Defense 

DoS Department of State 

DS Bureau of Diplomatic Security 

FY Fiscal Year 

MNC-I Multi-National Corps-Iraq 

MNF-I Multi-National Force-Iraq 

NEA-I Bureau of Near Eastern Affairs - Iraq 

PRT Provincial Reconstruction Team 

SIGIR Special Inspector General for Iraq Reconstruction 
22

Appendix E—Audit Team Members 

This report was prepared and the audit conducted under the direction of David R. Warren, 

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: 

Meredith P. Baumeister 

J. J. Marzullo 

Nancee K. Needham 

William E. Shimp 

 
23

Management Comments—Multi-National Force-Iraq 
24
25

Management Comments—NEA-I/Resource 

Management 
26

 
27

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 Hillel Weinberg 

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: hillel.weinberg@sigir.mil 

Public Affairs Daniel Kopp 

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