OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

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Special Inspector General for IRAQ Reconstruction

SIGIR

Special Inspector General for Iraq Reconstruction

For more information, contact SIGIR Public Affairs at 

(703) 428-1100 or PublicAffairs@sigir.mil

Summary of Report: SIGIR 10-019 

Why SIGIR Is Issuing This Report

Public Law 108-106 requires the Special 

Inspector General for Iraq Reconstruction 

(SIGIR) to prepare a final forensic audit report 

on all funding appropriated for the reconstruction 

of Iraq, which to date totals more than $53 

billion. This interim report presents the results of 

our ongoing forensic auditing program, including 

an update on our efforts to identify questionable 

financial activity and an update on our review of 

agency expenditures. The report also presents 

information on our data mining methodology. 

We are reporting our results periodically, and a 

final cumulative report will eventually address 

all available reconstruction funds.

In our first report, we summarized the results of a 

series of audits of major reconstruction contracts 

that were intended, in part, to identify internal 

control weaknesses. Because such weaknesses 

provide opportunities for fraud, waste, and 

abuse, we have used the results from these audits 

to develop targeted forensic auditing approaches 

to identify instances of possible wrongdoing.

SIGIR continues its forensic review of 

Department of Defense (DoD), Department of 

State (DoS), and U.S. Agency for International 

Development (USAID) expenditures. These 

reviews systematically examine Iraq 

reconstruction program expenditures to identify 

anomalies in transactional data that may indicate 

fraud, waste, or abuse. SIGIR’s approach 

combines automated data mining with standard 

audit and investigative techniques to detect 

questionable transactions and develop relevant 

evidence for use in administrative actions or civil 

or criminal fraud prosecutions. 

SIGIR continues its review of Iraq reconstruction 

program areas known to have weaknesses in 

internal controls. Identified as the SIGIR Audits/ 

Investigations Initiative, this effort focuses on 

programs that afford easy access to cash with 

weak controls over expenditures.

Management Comments

We received technical comments from U.S. 

Forces-I that we addressed in the report where 

appropriate.

 

July 26, 2010 

IRAQ RECONSTRUCTION FUNDS: FORENSIC AUDITS IDENTIFYING 

FRAUD, WASTE, AND ABUSE – INTERIM REPORT #4

SIGIR’s Results to Date

A major aspect of SIGIR’s forensic audit effort involves a joint audit and 

investigative initiative that was established in January 2009. This effort, staffed

by SIGIR Audit and Investigative personnel, focuses on programs that afford 

easy access to cash with weak controls over expenditures. This initiative 

continues to identify instances of questionable activity. Since our last report in 

April 2010 , an additional four criminal investigations were opened bringing the 

total number of investigations resulting from the initiative to 49. 

Another major aspect of SIGIR’s forensic audit effort is the congressionally 

mandated forensic audit of DoD, DoS, and USAID expenditures. Since our last 

report, SIGIR reviewed nearly 25,000 additional transactions valued at almost 

$3.9 billion, bringing the total transactions reviewed to nearly 108,000 valued at 

approximately $35.8 billion. 

SIGIR has completed its review of possible duplicate payments involving 

DoD-related Iraq Relief and Reconstruction Fund (IRRF) and Iraq Security 

Forces Fund (ISFF) program transactions that occurred during the FY03-FY08 

time period. As indicated in SIGIR Forensic Audit Interim Report #3 (SIGIR 

10-017), we anticipated that many of the questionable transactions selected for 

review would prove to be valid once supporting documentation was reviewed. 

This proved to be the case. In SIGIR 10-017 we reported that, of the 

approximately 1,000 transactions selected for review, about 20 transactions, 

with a value of approximately $300,000, remained under investigation as 

possible duplicate payments. Our investigation of these transactions found that 

12 transactions, with a value of about $142,000, were duplicate payments. As a 

result of this work, DoD requested reimbursement from the contractors and has 

recovered all of the overpaid amounts.

SIGIR also completed its review of possible duplicate payments involving 

USAID transactions related to the IRRF and Economic Support Fund (ESF). 

We reviewed 54 possible duplicate payments, totaling approximately $64 

million, and found that duplicate or overpayments, and payment and accounting 

adjustments, were made in 36 of these transactions. Our review found that 

USAID had already identified these erroneous transactions and had either 

recovered the funds or made ledger adjustments for all of the amounts.

SIGIR continues its forensic audit of possible duplicate payments involving 

DoS transactions related to IRRF- and ESF-funded programs. We have selected 

77 transactions, totaling approximately $53.5 million, for review and have 

requested pertinent information from DoS.

We are continuing our review of possible fictitious contractors associated with 

DoD’s IRRF- and ISFF-funded programs as well as DoS and USAID IRRF- and 

ESF-funded programs. At this time we are focusing on 124 possible fictitious 

contractors. As with our duplicate payment work, we are performing detailed 

research to determine whether these contractors were legitimate or were 

engaged in a scheme to defraud the U.S. government. We anticipate that many 

of these contractors will prove to be legitimate following our review. An 

examination of key documentation, such as state business licenses, web sites, 

invoices, receiving documents, and payment records will be used to support 

conclusions concerning the validity of the vendors.
SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

400 Army Navy Drive • Arlington, Virginia 22202

MEMORANDUM FOR U.S. SECRETARY OF STATE

July 26, 2010 

U.S. SECRETARY OF DEFENSE

COMMANDING GENERAL, U.S. ARMY CORPS OF ENGINEERS

DIRECTOR, DEFENSE FINANCE AND ACCOUNTING SERVICE

ADMINISTRATOR, U.S. AGENCY FOR INTERNATIONAL 

DEVELOPMENT

SUBJECT: Iraq Reconstruction Funds: Forensic Audits Identifying Fraud, Waste, and Abuse – 

Interim Report #4 (SIGIR 10-019) 

We are providing this report for your information and use. The report discusses the results to date 

of the Special Inspector General for Iraq Reconstruction’s (SIGIR) forensic audits of Department 

of Defense, Department of State, and U.S. Agency for International Development expenditures 

involving Iraq relief and reconstruction. 

We performed this review in accordance with our statutory responsibilities contained in Public 

Law 108-106, as amended, which also incorporates the duties and responsibilities of inspectors 

general under the Inspector General Act of 1978. This law provides for independent and objective 

audits of programs and operations funded with amounts appropriated or otherwise made available 

for the reconstruction of Iraq, and for recommendations on related policies designed to promote 

economy, efficiency, and effectiveness and to prevent and detect fraud, waste, and abuse. These

audits are being conducted as SIGIR Projects 9005, 9012, and 9013. 

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

contact David Warren, Assistant Inspector General for Audits, (703) 

604-0982/ david.warren@sigir.mil or Glenn Furbish, Principal Deputy Assistant Inspector 

General for Audits, (703) 604-1388/ glenn.furbish@sigir.mil. 

Stuart W. Bowen, Jr.

Inspector General

cc: U.S. Ambassador to Iraq 

Commander, U.S. Central Command 

Commanding General, U.S. Forces-Iraq
Table of Contents

Introduction 1

Objectives 2

SIGIR Effort Identifies Questionable Activity 3

Forensic Audits of Agency Expenditures Identify Anomalous and Possibly 

Fraudulent Transactions 4

Automated Data Mining To Identify Transactions That Require Additional Analysis 5

Detailed Examinations of Contract Files To Validate Fraud 6

Review of Possible Duplicate Payments 7

USACE’s Improper Payment Reviews and Data Mining Efforts 8

Review of Possible Fictitious Contractors 8

Forensic Support for Other Audits and Investigations 9

Management Comments and Audit Response 10

Appendix A—Scope and Methodology 11

Appendix B—Acronyms 14

Appendix C—Forensic Audit Team Members 15

Appendix D—SIGIR Mission and Contact Information 16
1 

Iraq Reconstruction Funds: Forensic Audits Identifying 

Fraud, Waste, and Abuse – Interim Report #4 

SIGIR 10-019 July 26, 2010 

Introduction

Public Law 108-106, as amended, requires that the Special Inspector General for Iraq 

Reconstruction (SIGIR) prepare a final forensic audit report on all funding appropriated for the 

reconstruction of Iraq, which to date totals more than $53 billion. To keep Congress apprised, this 

report, the fourth in a planned series of interim reports, describes the methodology and updates the 

results of our forensic audit efforts to date. Our first interim report discussed our analysis of 

Department of Defense (DoD) expenditures. Our second interim report included results of our 

analysis of expenditure data from the U.S. Agency for International Development (USAID). Our 

third interim report included information on our analysis of expenditure data from the Department 

of State (DoS). The information is being reported cumulatively, and a final report will encompass 

total reconstruction funds. Table 1 identifies total appropriations by fund. 

Table 1—Total Appropriations by Fund as of June 30, 2010 ($ in billions)

Iraq Relief and Reconstruction Appropriations

Iraq Relief and Reconstruction Fund (IRRF 1 and 2) $20.86 

Iraq Security Forces Fund (ISFF) 18.04

Economic Support Fund (ESF) 4.56

Commander’s Emergency Response Program (CERP) 3.82

Other Reconstruction Assistance Programs 4.00

TOTAL $51.27 

Notes: 

Numbers affected by rounding.

The table excludes appropriations totaling $2.3 billion related to various federal agency operating and oversight expenses, which are outside the 

scope of the forensic audits. 

Source: SIGIR Quarterly Report to the Congress, July 2010.
2 

Objectives 

SIGIR’s objectives for this report were to present the results to date of our forensic auditing efforts 

to include identifying questionable activity and updating the results of our review of agency 

expenditures. The report also presents information on our data mining methodology. As 

discussed, SIGIR is required to prepare a final forensic audit report on all funding appropriated for 

the reconstruction of Iraq. To keep Congress apprised, SIGIR plans to periodically issue updated 

cumulative reports until all DoD, Department of State (DoS), and USAID Iraq reconstruction 

expenditures are reviewed. At that time, we will provide the final congressionally mandated 

forensic audit report on all funding for the reconstruction of Iraq. 

For a discussion of our audit scope and methodology, see Appendix A. For acronyms used, see 

Appendix B. For forensic audit team members, see Appendix C. For the SIGIR mission and 

contact information, see Appendix D. 
3 

SIGIR Effort Identifies Questionable Activity

A major aspect of SIGIR’s forensic audit effort involves a joint audit and investigative initiative 

that was established in January 2009. This effort, identified as the SIGIR Audits/Investigations 

Initiative, focuses on programs that afford easy access to cash with weak controls over 

expenditures. At this time the SIGIR Audits/Investigations Initiative is reviewing several 

programs with identified instances of questionable activity. One of the projects involves the 

handling of funds associated with the Development Fund for Iraq. At one time the Coalition 

Provisional Authority managed the Development Fund for Iraq, and SIGIR has reported that the 

Coalition Provisional Authority provided less than adequate control over its funds. A second 

program with identified control weaknesses is the Commander’s Emergency Response Program 

(CERP). SIGIR has issued seven reports on CERP that collectively identify weaknesses in 

program documentation. 

The SIGIR Audits/Investigations Initiative has obtained information related to these and other 

programs and is analyzing it in an effort to identify questionable activity. One source of 

information for this initiative is the congressionally mandated forensic audit of DoD, DoS, and 

USAID expenditures. Pertinent information is reviewed by SIGIR auditors, analysts, and 

investigators to determine whether further action is warranted. Since our last report in April 2010, 

SIGIR has opened an additional four criminal investigations. This brings the total number of 

criminal investigations opened as a result of this initiative to 49. 

Detailed information regarding SIGIR’s ongoing audit and investigative initiative will not be 

presented in these reports. Rather, our results will generally be reported in the aggregate and 

specific findings will be included where appropriate and useful. 
4 

Forensic Audits of Agency Expenditures Identify 

Anomalous and Possibly Fraudulent Transactions

Another major aspect of SIGIR’s forensic audit effort is the congressionally mandated forensic 

audit of DoD, DoS, and USAID expenditures. Since our last report SIGIR reviewed nearly 25,000 

additional transactions valued at almost $3.9 billion; bringing the total number reviewed to nearly 

108,000 transactions valued at approximately $35.8 billion. These transactions include DoD, 

DoS, and USAID expenditures and represent the cumulative results of our data collection for fiscal 

years 2003-2008 as well as a significant portion of Fiscal Year (FY) 2009 data. It includes DoD 

expenditures from the Iraq Security Forces Fund (ISFF), Iraq Relief and Reconstruction Fund 

(IRRF), and CERP; USAID IRRF and Economic Support Fund (ESF) expenditures; and DoS 

IRRF expenditures.

1

Of the $53 billion appropriated to date, approximately $43.5 billion has been expended through 

FY 2009, and the 108,000 transactions valued at $35.8 billion represent about 82% of the 

expenditures for fiscal years 2003 through 2009. 

These new totals represent a portion of FY09 transaction data.

Figure 1 identifies, by appropriation, the status of SIGIR’s work in collecting and testing 

transaction data for fiscal years 2003 through 2008 for each of the agencies and their respective 

financial systems. 

 

1 ISFF was established in 2005; therefore, there were no expenditures in fiscal years 2003 or 2004.
5 

Figure 1 —Status of Anomaly Testing for FY 03-08 as of July 2010 ($ billions) 

Notes: 1 Total expended amounts and collected amounts are in billions. The percentage listed is the total dollar amount analyzed out of the total expended. 

2 Estimated amount. 

3 Computerized Accounts Payable System (CAPS). 

4 Global Financial Management System (GFMS). 

5 

Source: SIGIR analysis of agency data. 

Deployable Disbursing System (DDS). 

Automated Data Mining To Identify Transactions That Require 

Additional Analysis

SIGIR’s forensic audit of nearly 108,000 transactions has identified anomalous activity that 

requires additional analysis. This includes payments that may be duplicates, payments to possibly 

fictitious or generic vendors such as “Vendor” and “Cash,” notable variances in payment activity, 

and payments that occurred before or on the date of the invoice. 

SIGIR primarily conducts performance audits that assess the economy, efficiency, and 

effectiveness of reconstruction programs, often with a focus on the adequacy of internal controls 

and the potential for fraud, waste, and abuse. These include the series of audits of major 

reconstruction contracts that identified common internal control weaknesses. Certain controls, 

such as the segregation of duties, are key to minimizing the risk of fraud, waste, and abuse. We 

relied on SIGIR’s extensive body of work related to inadequate controls in Iraq reconstruction 
6 

programs to develop transaction anomalies likely to be observed as a result of the failure or 

circumvention of these controls. We have incorporated 10 of these anomaly tests into our 

automated data mining effort. Table 2 lists the anomaly tests and their intended results.

Table 2—Anomaly Tests and Intended Results

Anomaly Test Intent of Test

Duplicate payments Identify instances where it appears a contractor may have been paid two or 

more times for the same invoice, work performed, and/or product delivered

Questionable vendors Identify vendor names that are generic (e.g., Cash, Vendor) and vendor 

names that do not appear to align with the program goals

Notable variances in payment 

activity

Identify payments outside of the “norm” for a vendor

Invoice date analysis Identify payments occurring prior to or on the date of invoice and 

sequentially-numbered contractor invoices

Payments to debarred/

suspended contractors

Identify payments to debarred/suspended contractors identified in the 

Excluded Parties List System 

Segregation of duties Identify breakdowns in segregation of duties whereby the same 

government contracting official originates the request for payment, 

approves the request, is the payor and/or payee

Fictitious addresses/high risk 

locations

Identify payments to possibly fictitious addresses and/or high risk locations 

or known high-risk banking centers such as Cyprus and Beirut 

Payee Validation Identify payments to debarred/suspended contractors who are also an 

Approver or Originator

Fictitious contractors Identify payments to contractors with no associated D-U-N-S1/CAGE2 

number

Application of Benford’s Law Identify nonrandom transaction amounts to identify instances a contractor 

submitted false invoices using false invoice totals

3

Notes:

1 The Data Universal Numbering System or D-U-N-S® Number is Dunn and Bradstreet's (D&B) copyrighted, proprietary means of 

identifying business entities on a location-specific basis. Assigned and maintained solely by D&B, this unique nine-digit 

identification number has been assigned to over 100 million businesses worldwide. The D-U-N-S® Number is widely used by 

both commercial and federal entities and was adopted as the standard business identifier for federal electronic commerce in 

October 1994. The D-U-N-S Number® was also incorporated into the Federal Acquisition Regulation in April 1998 as the 

Federal Government's contractor identification code for all procurement-related activities. 2 A Commercial and Government Entity (CAGE) Code is a five-character code that identifies companies doing or wishing to do 

business with the Federal Government.

3

Source: SIGIR analysis. 

Benford's law states that the leading digit in lists of numbers from many real-life sources of data is distributed in a non-uniform 

way. Accordingly, the first digit is 1 almost one third of the time, and subsequent digits occur as the first digit in descending 

frequency, where 9 is the leading digit less than one time in twenty.

Detailed Examinations of Contract Files To Validate Fraud 

When a transaction anomaly is identified, SIGIR examines the details to determine whether it is 

fraudulent or improper. To accomplish this, teams of SIGIR personnel perform additional 

electronic testing; conduct detailed examinations of relevant contract documentation such as 

solicitation actions, award selection materials, invoices, and payment files; interview contracting 
7 

officials as well as vendor management and other staff; and coordinate with other audit and law 

enforcement agencies. These validation efforts are designed to support determinations about the 

legitimacy of a transaction and to determine whether improper expenditures are attributable to 

administrative error or fraud. Transactions are prioritized for review by their risk of fraud and 

dollar value with high-risk/high-dollar transactions receiving priority. To date, these examinations 

have provided information related to seven SIGIR audits and fifteen SIGIR investigations. As 

discussed in detail in the following section, SIGIR is currently focusing on DoD, DoS and USAID 

expenditures that may be duplicate payments as well as possible fictitious contractors associated 

with DoD, DoS, and USAID expenditures. 

Review of Possible Duplicate Payments 

We reviewed DoD, DoS, and USAID-related transactions that were identified by data mining as 

possible duplicate payments (e.g., situations where a contractor may have been paid two or more 

times on the same date, for the same item, work performed, and/or product delivered). The 

purpose of this particular review was to determine the validity and status of these payments. If we 

determine that a payment was made in error, SIGIR will: (1) seek reimbursement to the U.S. 

Treasury, (2) determine how the error occurred, and (3) make recommendations to strengthen 

internal controls and financial management practices to reduce the risk of similar errors in the 

future. If a payment appears to be the result of fraudulent or other improper activity, pertinent 

information will be provided to our Investigations Directorate for review and appropriate action. 

Since issuing SIGIR Forensic Audit Interim Report #3 (SIGIR 10-017) we have completed a 

review of possible duplicate payments involving DoD-related IRRF and ISFF program 

transactions that occurred during the FY03-FY08 time period. As noted in SIGIR 10-017, we 

anticipated that many of the questionable transactions selected for analysis would be valid once 

supporting documentation was reviewed. This proved to be the case. In our last report we 

indicated that, of the approximately 1,000 transactions selected for review, about 20 transactions, 

with a value of approximately $300,000, remained under investigation as possible duplicate 

payments. Since issuing SIGIR 10-017, we completed our investigation of these transactions and 

determined that 12 of the transactions, with a value of approximately $142,000, were duplicate 

payments. As a result of this work, DoD requested reimbursement from the contractors and has 

recovered all of the overpaid amounts. 

Since issuing SIGIR 10-017 we have also completed our review of possible duplicate payments 

involving USAID transactions related to the IRRF and ESF funds. In this forensic audit we 

selected transactions that involved both USAID contracts and grants and included large companies 

and organizations as well as smaller vendors and individuals. We reviewed 54 possible duplicate 

payments totaling approximately $64 million. Our analysis of the data and associated 

documentation revealed that duplicate or overpayments, and payment and accounting adjustments, 

totaling about $48.6 million, were made in 36 of these transactions. Our review determined that 

USAID had identified the erroneous transactions and had either recovered the funds or made 

ledger adjustments for all of the amounts. 

SIGIR continues its forensic audit of possible duplicate payments involving DoS transactions 

related to IRRF- and ESF-funded programs. We selected 77 transactions, totaling approximately 
8 

$53.5 million, for review and have requested pertinent information from DoS regarding these 

questionable transactions. 

USACE’s Improper Payment Reviews and Data Mining Efforts

Congress has enacted several provisions of law aimed at improving the integrity of the government 

payment process and the efficiency of its programs and activities, including the Improper 

Payments Information Act of 2002 (Pub. L. No. 107-300), and Section 831 of the Defense 

Authorization Act for Fiscal Year 2002, also known as the Recovery Auditing Act (Pub. L. No. 

107-107, codified at 31 U.S.C. §§ 3561-3567). SIGIR will use this information as a guide during 

our improper payment audit work, as well as Office of Management and Budget (OMB) Circular 

A-123, Appendix C, which implements them. 

The Improper Payments Information Act requires federal agencies to review and report improper 

payment information, which would include duplicate payments. Specifically, the Act requires that 

all executive branch agencies on an annual basis: (1) identify programs and activities that are 

susceptible to significant improper payments, (2) estimate the amounts improperly paid under 

those programs and activities, and (3) report on the amounts improperly paid and their actions to 

reduce improper payments. In addition, executive branch agencies are required to report on their 

efforts to recover overpayments made to contractors under the Recovery Auditing Act. Since 

fiscal year 2004, executive branch agencies have been required by OMB to report on the Improper 

Payments Information Act and recovery auditing efforts in their Performance and Accountability 

Report. 

In May 2009, the USACE Finance Center implemented a new data-mining tool designed to 

identify possible erroneous or improper payments. The Finance Center is testing transactions from 

May 2009 forward. Similar to our results, the Army Corps of Engineers’ efforts have revealed few 

duplicate payments. SIGIR will continue to coordinate with Finance Center officials to avoid 

duplication of effort as we analyze fiscal year 2009 transaction data. 

Review of Possible Fictitious Contractors

We are continuing our review of possible fictitious contractors associated with DoD’s IRRF- and 

ISFF-funded programs as well as DoS and USAID’s IRRF- and ESF-funded programs and, at this 

time, we are focusing on 124 possible fictitious contractors. We tested for three anomalies in 

DoD, DoS, and USAID transaction data that could be indicative of a fictitious contractor:

• payments to contractors with no associated D-U-N-S/CAGE number 

• payments to possibly fictitious addresses and/or high-risk locations or known high-risk 

banking centers such as Cyprus and Beirut 

• payments to vendor names that are generic (e.g., cash, vendor) and vendor names that do 

not appear to align with program goals 

While these anomalies were revealed during the course of our testing procedures, as with our 

possible duplicate payment review, we expect that many of the vendors will prove to be legitimate. 

An examination of key documentation, such as state business licenses, web sites, invoices, 
9 

receiving documents, and payment records will be used to support conclusions concerning the 

validity of the vendors. 

Forensic Support for Other Audits and Investigations

Upon request, the SIGIR Forensics Group also provides information collected during the course of 

our forensic data mining effort to SIGIR audit and investigative staff in support of ongoing audit 

and investigations. This information is obtained from the primary forensic databases via ad hoc 

queries and Case Management Tool reports. To date, we have provided information related to 

seven audits and fifteen investigations. In addition, we are providing lessons learned that can be 

applied to other contingency operations, such as in Afghanistan. 
10 

Management Comments and Audit Response

We received technical comments from USF-I that we addressed in the report where appropriate.
11 

Appendix A—Scope and Methodology

In December 2008, the Special Inspector General for Iraq Reconstruction (SIGIR) initiated its 

forensic effort as Projects 9005, 9012, and 9013 to examine Iraq relief and reconstruction 

expenditures by Department of Defense (DoD), Department of State (DoS), and the U.S. Agency 

for International Development (USAID). SIGIR’s objectives for this report were to present the 

results to date of our forensic auditing efforts to include identifying questionable activity and

updating the results of our review of agency expenditures. The report also presents information on 

our data mining methodology. 

This interim report represents our review of expenditure data collected from DoD, DoS, and 

USAID pursuant to our congressional mandate for a forensic audit of all Iraq relief and 

reconstruction transactions. The results of these reports will generally be discussed in the 

aggregate, with specific findings included where appropriate and useful. Cumulative questioned 

costs will be reported as defined and required by the Inspector General Act of 1978, as amended. 

This audit was performed 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. The audit work for this report covers the period December 2008 through June 2010 and 

was conducted in Arlington, VA; Indianapolis, IN; Millington, TN; Rome, NY; and Washington, 

DC.

To obtain the expenditure data from the DoD, we interviewed officials from the Army Budget 

Office, the Defense Finance and Accounting Service, and the U.S. Army Corps of Engineers. To 

obtain expenditure data from USAID, we interviewed officials from the Middle East Bureau and 

Chief Financial Officer’s office. To obtain expenditure data from DoS, we interviewed officials 

from the Deputy Chief Financial Officer’s Office. From these offices, we obtained pertinent 

appropriation and transactional data, as well as supporting documentation, to include contract 

details and vendor data. 

To develop our list of anomalies, we used information from discussions with SIGIR auditors and 

investigators; key agency stakeholders and systems owners; live financial system demonstrations; 

SIGIR and other agency audit reports; and industry-established tests for fraudulent activities. 

We conducted this review 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. However, this is an information report, which has no findings or conclusions. 

Use of Computer-processed Data

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

the Defense Finance and Accounting Service, the U.S. Army Corps of Engineers’ accounting 

systems, the USAID Phoenix System, and the DoS Global Financial Management System. We 

performed reconciliations of disbursement data received from the various accounting systems to 

determine that it was complete and reliable. The reconciliation process included a comparison of 

the detailed disbursement totals to other sources of information, including summary-level data. 
12 

This reconciliation process yielded a variance of tolerable amounts. Therefore, we found the data 

to be adequate and sufficiently reliable to be used in meeting our forensic audit objectives. 

Internal Controls

As discussed in the body of the report, SIGIR has conducted audits of major reconstruction 

contracts that were intended in part to identify internal control weaknesses. We reported on those 

weaknesses in each report, which also contained relevant conclusions and recommendations. 

Because such weaknesses provide opportunities for fraud, waste, and abuse, we used the results of 

those audits to develop targeted forensic auditing approaches to identify instances of wrongdoing. 

However, this is an information report and, as such, we draw no conclusions and make no 

recommendations. 

Prior Coverage

We reviewed the following reports for this audit: 

SIGIR

Developing a Depot Maintenance Capability at Taji Hampered by Numerous Problems, SIGIR 

09-027, 7/30/2009. 

Tikrit Location Command Project Achieving Contract Goals by Using Sound Management 

Practices, SIGIR 09-024, 7/30/2009. 

Commander’s Emergency Response Program: Muhalla 312 Electrical Distribution Project 

Largely Successful, SIGIR 09-025, 7/26/2009. 

Commander’s Emergency Response Program: Hotel Construction Completed, but Project 

Management Issues Remain, SIGIR 09-026, 7/26/2009.

Joint Audit of Blackwater Contract and Task Orders for Worldwide Personal Protective Services 

in Iraq, AUD/IQO-09-16 and SIGIR 09-021, June 2009. 

Security Forces Logistics Contract Experienced Certain Cost, Outcome, and Oversight Problems, 

SIGIR 09-014, 4/26/2009. 

Need To Enhance Oversight of Theater-Wide Internal Security Services Contracts, SIGIR 09-017, 

4/24/2009. 

Oversight of Aegis’s Performance on Security Services Contracts in Iraq with the Department of 

Defense, SIGIR 09-010, 1/14/2009.

Cost, Outcome, and Oversight of Iraq Oil Reconstruction Contract with Kellogg Brown & Root 

Services, Inc., SIGIR 09-008, 1/13/2009.

Review of Cost, Outcome, and Oversight of Local Governance Program Contracts with Research 

Triangle Institute, SIGIR 09-003, 10/21/2008. 
13 

Outcome, Cost, and Oversight of the Security and Justice Contract with Parsons Delaware, Inc., 

SIGIR 08-019, 7/28/2008. 

Review of Outcome, Cost, and Oversight of Water Sector Reconstruction Contract with Fluor 

AMEC, LLC, SIGIR 08-018, 7/15/2008. 

Review of Outcome, Cost, and Oversight of Electricity-Sector Reconstruction Contract with Perini 

Corporation, SIGIR 08-011, 4/29/2008. 

Report on Review of Outcome, Cost, and Oversight of Iraq Reconstruction Contract 

W914NS-04-D-0006, SIGIR 08-010, 1/28/2008. 

Outcome, Cost, and Oversight of Reconstruction of Taji Military Base and Baghdad Recruiting 

Center, SIGIR 08-004, 1/15/2008. 

Interim Review of DynCorp International, LLC, Spending Under Its Contract for the Iraqi Police 

Training Program, SIGIR 07-016, 10/23/2007. 

Review of Bechtel’s Spending under Its Phase II Iraq Reconstruction Contract, SIGIR 07-009, 

7/25/2007. 

Iraq Reconstruction: Lessons in Program and Project Management, March 2007.

Coalition Provisional Authority Comptroller Cash Management Controls Over the Development 

Fund for Iraq, SIGIR 04-009, 7/28/2004. 

Department of Defense, Office of the Inspector General

Internal Controls Over Payments Made in Iraq, Kuwait and Egypt – (Report No. D-2008-098), 

May 22, 2008. 

Internal Controls Over United States Marine Corps Commercial and Miscellaneous Payments 

Processed Through the Deployable Disbursing System – (Report No. D-2010-037), January 25, 

2010. 

Government Accountability Office

Excluded Parties List System: Suspended and Debarred Businesses and Individuals Improperly 

Receive Federal Funds, GAO-09-174, 2/25/2009. 

Improper Payments: Significant Improvements Needed in DoD’s Efforts to Address Improper 

Payment and Recovery Auditing Requirements, GAO-09-442, 7/29/2009. 

Defense Contracting Integrity: Opportunities Exist to Improve DOD’s Oversight of Contractor 

Ethics Programs, GAO-09-591, 9/22/2009. 
14 

Appendix B—Acronyms

Acronym Description

CAGE Commercial and Government Entity Code

CAPS Computerized Accounts Payable System

CERP Commander’s Emergency Response Program

DDS Deployable Disbursing System

DoD Department of Defense

DoS Department of State

D-U-N-S Data Universal Numbering System

ESF Economic Support Fund

FY Fiscal Year

GFMS Global Financial Management System

IRRF Iraq Relief and Reconstruction Fund

ISFF Iraq Security Forces Fund

OMB Office of Management and Budget

SIGIR Special Inspector General for Iraq Reconstruction

USACE U.S. Army Corps of Engineers

USAID U.S. Agency for International Development
15 

Appendix C—Forensic Audit Team Members

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

Assistant Inspector General for Audits, Office of the Special Inspector General for Iraq 

Reconstruction. 

The following SIGIR staff members are participating in the forensic audit effort, which includes 

the audit and investigative initiative, and contributed to this report:

Richard C. Newbold 

Adam T. Hatton 

William F. Bedwell

Dennis W. Rader 

James J. Crowley

Robin L. Rowan 

David Childress 

George S. Salvatierra

Robert A. Whiteley 

Benjamin H. Comfort 

Donald V. McNamara
16 

Appendix D—SIGIR Mission and Contact Information

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 703-428-1059 

Email hillel.weinberg@sigir.mil

Public Affairs Deborah Horan

Director of 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: 703-428-0817 

Email: PublicAffairs@sigir.mil