OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

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000 SIGIR 

Special Inspector General for IRAQ Reconstruction 

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 11-005 

Why SIGIR Is Issuing This Report 

Public Law 108-106, as amended, 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 totaled 

about $53.8 billion as of July 2010. We are 

reporting our results periodically, and a final 

cumulative report will eventually address all 

findings identified through this effort. 

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. 

Our last report was issued in July 2010. 

SIGIR’s objectives for this report are to present 

the results to date of our forensic auditing efforts 

to include (1) identifying questionable activity 

and (2) updating the results of our review of 

agency expenditures. 

Recommendations 

This report contains no recommendations 

Management Comments 

Because this report does not contain 

recommendations, the responsible agencies were 

not required to, and did not, submit comments. 

October 28, 2010 

IRAQ RECONSTRUCTION FUNDS: FORENSIC AUDITS IDENTIFYING 

FRAUD, WASTE, AND ABUSE – INTERIM REPORT #5

SIGIR’s Results to Date 

SIGIR continues to identify instances of questionable activity involving 

programs that afford easy access to cash with weak controls over expenditures. 

In the last quarter, we have opened four new criminal investigations bringing the 

total number of investigations resulting from this effort to 53. 

This quarter, SIGIR completed its initial review of nearly 180,000 transactions 

involving the expenditure of funds appropriated for the reconstruction of Iraq by 

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

Agency for International Development (USAID) from fiscal years 2003-2009. 

These transactions are valued at approximately $40 billion. 

We analyzed this data in a number of ways, looking for anomalies that are then 

given additional review. SIGIR’s anomaly testing focuses on vouchers that 

have been paid. Additional testing is required to determine whether the 

vouchers were allowable, allocable, and reasonable. This quarter, the anomalies 

identified include: 

 Duplicate Payments—54 potential duplicative payments made by DoS, 

totaling approximately $18 million 

 Separation of Duties—recurring generic names in Commander’s 

Emergency Response Program (CERP) payment data in DoD’s 

Deployable Disbursing System (DDS) 

Our initial review of the DoS data identified 77 transactions, totaling 

approximately $53.5 million that might be duplicate payments. To date, we 

have completed our review of 23 transactions, totaling approximately $35.5 

million, and determined that they were not duplicate payments. Our work in 

this area continues. 

Our initial assessment of 27 of the CERP transactions valued at approximately 

$4 million found that the use of generic names such as “cashier” did not indicate 

that internal controls had been compromised nor did it indicate that duties were 

not adequately separated. Nonetheless, we are continuing to examine the use of 

generic names associated with the remaining transactions. 

We are also continuing our review of possible fictitious contractors that we 

identified last quarter. To date, we have reviewed 58 of 124 potential fictitious 

contractors that appear to be foreign entities, and we are currently in the process 

of confirming the identity of those firms. Our work in this area continues. 

Since issuing our last report, SIGIR has also provided forensic support to 

several other efforts. These include providing information from our forensic 

database in support of two audits and three investigations. We also queried the 

forensic database in an effort to determine whether 266 firms that were 

suspended from contracting activities by Iraq’s Ministry of Planning had 

received U.S. contracts. We are currently analyzing the results of those queries. 

Additionally, SIGIR continues to provide support on conducting forensic audits 

to the Special Inspector General for Afghanistan Reconstruction. 
SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

400 Army Navy Drive • Arlington, Virginia 22202 

October 28, 2010 

MEMORANDUM FOR U.S. SECRETARY OF STATE 

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 #5 (SIGIR 11-005) 

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. This report does not contain 

recommendations; accordingly, the addressees were not required to provide comments and elected 

not to do so. 

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

please contact Glenn Furbish, Assistant Inspector General for Audits, (703) 604-1388/ 

glenn.furbish@sigir.mil or Jason Venner, Principal Deputy Assistant Inspector General for 

Audits, (703) 607-1346/ jason.venner@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

Background 2

Objectives 3

SIGIR Effort Identifies Questionable Activity 4

Forensic Audits of Agency Expenditures Identify Anomalous and Possibly 

Fraudulent Transactions 5

Initial Transaction Testing Is Complete 5

Automated Data Mining Identifies Transactions That Require Additional Analysis 7

Forensic Support to Audits, Investigations, and Other Activities 8

Concluding Observation 10

Management Comments and Audit Response 11

Appendix A—Scope and Methodology 12

Appendix B—Acronyms 16

Appendix C—Forensic Audit Team Members 17

Appendix D—SIGIR Mission and Contact Information 18
1 

Iraq Reconstruction Funds: Forensic Audits Identifying 

Fraud, Waste, and Abuse – Interim Report #5 

SIGIR 11-005 October 28, 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 about $53.8 billion. We are reporting our results 

periodically to keep Congress apprised, and a final cumulative report will eventually address all 

findings identified through this effort. This report, the fifth in a 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 discussed our analysis of U.S. Agency for International Development (USAID) 

expenditure. Our third interim report discussed our analysis of Department of State (DoS) 

expenditure data. Our fourth interim report discussed our analysis of possible duplicative 

payments at DoD and USAID.1 This report provides the results of our analysis of possible 

duplicate payments at DoS and our analysis of separation of duties in Commander’s Emergency 

Response Program (CERP) transactions entered into DoD’s Deployable Disbursing System 

(DDS). It also updates information on our review of anomalies identified in earlier reports. 

The information is being reported cumulatively, and a final report will encompass total 

reconstruction funds. Table 1 identifies total appropriations by fund as reported in the July 30, 

2010, SIGIR Quarterly Report to the Congress. 

Table 1—Total Appropriations by Fund as of July 2010 ($ billions) 

Iraq Relief and Reconstruction Appropriations 

Iraq Relief and Reconstruction Fund 1 and 2 $20.86

Iraq Security Forces Fund 18.04

Economic Support Fund 4.56

Commander's Emergency Response Program 3.82

Other Reconstruction Assistance Programsa 4.00

Agency Operating and Oversight Expensesa 2.51

Total $53.79

Notes: 

Data not audited. Numbers affected by rounding. 

a

 These appropriations are outside the scope of the forensic audit. 

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

 

1

 See Appendix A for a list of SIGIR’s prior interim forensic reports. 
2 

Background 

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 an ongoing series of audits of major 

reconstruction contracts that identified common internal control weaknesses (see Appendix A for 

a list of these reports). Certain controls, such as the separation of duties, are key to minimizing the 

risk of fraud, waste, and abuse; particularly for programs that use cash for expenditures instead of 

transferring funds electronically. We relied on SIGIR’s extensive body of work related to 

inadequate controls in Iraq reconstruction programs to develop both our joint initiative with SIGIR 

Investigations and our audit initiative to identify transaction anomalies likely resulting from the 

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

methodologies to collect and analyze electronic disbursements of reconstruction funds.2 These 

tests focus on controls over electronic disbursements after vouchers have been approved for 

payment. Table 2 lists the anomaly tests and their intended results. 

 

 

2

 The methodology used for conducting our automated data mining effort is described in Forensic Audit 

Methodologies Used To Collect and Analyze Electronic Disbursements of Iraq Reconstruction Funds, SIGIR 11-006, 

10/28/2010.
3 

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 

Separation of duties Identify breakdowns in separation of duties whereby the same government

contracting official originates the request for payment, approves the 

request, is the payer 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-Sa

/CAGEb

number 

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

submitted false invoices using false invoice totals 

Notes:

a

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

identifying business entities on a location-specific basis. This unique nine-digit identification number has been assigned to over 

100 million businesses worldwide. The D-U-N-S® Number was incorporated into the Federal Acquisition Regulation in April 

1998 as the Federal Government's contractor identification code for all procurement-related activities. b

 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. 

c

 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.

Source: SIGIR analysis as of 09/30/2010. 

Objectives 

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

include (1) identifying questionable activity and (2) updating the results of our review of agency 

expenditures. 

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. 

 
4 

SIGIR Effort Identifies Questionable Activity 

This quarter SIGIR has opened four more criminal investigations involving programs that afford 

easy access to cash with weak controls over expenditures. A major aspect of SIGIR’s forensic 

audit involves a multi-disciplinary initiative involving auditors, analysts, and investigators 

working jointly since January 2009. This effort, known as the SIGIR Audits/Investigations 

Initiative, is currently engaged in several projects looking at areas where prior SIGIR audits have 

identified weak controls over funds, particularly instances where U.S. military and civilian 

personnel involved in the reconstruction of Iraq had easy access to cash. One of the projects 

involves the handling of funds associated with the Development Fund for Iraq managed by the 

Coalition Provisional Authority. Another project involves the handling of funds managed by DoD 

as part of the Commander’s Emergency Response Program (CERP). The four new investigations 

bring the total number of criminal investigations opened as a result of this initiative to 53. 

Detailed information regarding SIGIR’s Audits/Investigations Initiative will not be presented in 

these reports due to the sensitive nature of ongoing and pending criminal investigations. Rather, 

our results will generally be reported in the aggregate and specific findings will be included where 

appropriate and useful. 

 
5 

Forensic Audits of Agency Expenditures Identify 

Anomalous and Possibly Fraudulent Transactions 

This quarter, SIGIR completed its initial review of nearly 180,000 transactions involving the 

expenditure of funds appropriated for the reconstruction of Iraq by the Department of Defense 

(DoD), Department of State (DoS), and the U.S. Agency for International Development (USAID) 

from fiscal years 2003-2009. These transactions are valued at approximately $40 billion. Several 

anomalies have been identified, including potential duplicative payments, possible payments to 

fictitious contractors, poor separation of duties, and possible weaknesses in DoD systems for 

disbursing funds. Each anomaly requires further analysis. It is noted that SIGIR’s anomaly testing 

focuses on vouchers that have been paid. Additional testing is required to determine whether the 

vouchers were allowable, allocable, and reasonable. Additionally, the transaction data SIGIR 

collected has been used to support audits, investigations, and other oversight activities on an as 

needed basis. 

Initial Transaction Testing Is Complete 

SIGIR has completed its collection of DoD, DoS, and USAID expenditure data. Since our last 

report, SIGIR has reviewed an additional 71,295 transactions valued at $4.0 billion, bringing the 

total number reviewed to 179,207 transactions valued at $39.8 billion. These transactions include 

DoD, DoS, and USAID expenditures for fiscal years 2003-2008 as well as a significant portion of 

fiscal year 2009 data. It includes DoD expenditures from the Iraq Security Forces Fund (ISFF),3

Iraq Relief and Reconstruction Fund (IRRF), and CERP; USAID expenditures from the IRRF and 

Economic Support Fund (ESF); and DoS expenditures from the IRRF and ESF. These 

transactions represent about 75% of the $53.8 billion appropriated as of July 2010 or 

approximately 84% of the funds within the scope of the forensic audit.4

 Given the amount of 

expenditure data tested thus far, SIGIR believes that the current results are representative of the 

universe. Figures 1 identifies, by appropriation, the status of SIGIR’s work in collecting and 

testing transaction data for Fiscal Years 2003 through 2009 for each agency and its respective 

financial system.5

 

 

3

 ISFF was established in 2005; therefore, there were no expenditures in FY 2003 or FY 2004. 

4

 As noted in Table 1, the forensic audit did not include $4 billion appropriated for Other Reconstruction Assistance 

Programs and $2.5 billion appropriated for Agency Operating and Oversight Expenses. 

5

 The CERP transactions analyzed may include other funds due to discrepancies with how some transactions were 

coded in DoD financial systems; however, these transactions were included in our analysis to ensure complete 

coverage of CERP. Therefore, the total amount of CERP that was analyzed as shown in Figure 1 appears greater than 

the amount appropriated that is shown in Table 1. SIGIR is working to reconcile these potential discrepancies and will 

include more information on this issue in future reports. 
6 

Figure 1—Status of Anomaly Testing for FY 03-09 as of September 30 2010 

($ billions) 

Notes: a

 Data analyzed from FY2003 through end of FY2009 (except for USAID Phoenix where the received transactions were up to July 1, 2009). b

 United States Army Corps of Engineers.

c

 Defense Finance and Accounting Service. 

Source: SIGIR analysis of agency data. 
7 

Automated Data Mining Identifies Transactions That Require 

Additional Analysis 

SIGIR’s forensic audit of nearly 180,000 transactions has identified anomalous activity that 

requires additional analysis. When an anomaly is identified, SIGIR examines the details of the 

transaction 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; 

and interview contracting officials as well as vendor management and other staff. These validation 

efforts are designed to enable us to determine the legitimacy of a transaction and 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. This includes payments that may be duplicative, payments to possibly fictitious 

contractors (e.g., contractors with generic vendors such as “Vendor” and “Cash,”) and potential 

weaknesses in separation of duties. 

Review of Possible Duplicate Payments 

This quarter, SIGIR looked for possible duplicative payments involving DoS transactions.6

 Our 

initial review identified 77 transactions, totaling approximately $53.5 million, that appeared to be 

duplicative, and we initiated a more detailed review of these transactions. To date, we have 

completed our review of 23 transactions totaling approximately $35.5 million and found that they 

were not duplicate payments. We are currently awaiting documentation from DoS on the 

remaining 54 transactions, which total approximately $18 million. 

The purpose of the duplicate payment review is to determine the validity and status of 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. 

Analysis of Separation of Duties in CERP Transactions 

This quarter SIGIR reviewed CERP transaction data recorded in DoD’s Deployable Disbursing 

System (DDS) for appropriate separation of duties. Separation of duties is an internal control 

requiring that more than one person complete a task such as requesting a payment, approving the 

payment, and making the payment. 

During our forensic audit, we noted numerous CERP transactions recorded in DDS where the 

individual requesting, approving, or making the payment involved generic names, such as 

“Cashier C. Cashier” and “Input T. Input,” or involved one individual in multiple key roles. This 

was indicative of a possible breakdown in controls. To assess whether internal controls were 

compromised, we selected one individual whose name was associated with approximately 

$45 million of these transaction. We selected a sample of 27 transactions totaling approximately 

 

6

 We identified about $48 million worth of duplicate payments in our prior interim report. In most instances, the 

responsible agency had discovered the erroneous payments and had taken corrective action. See Iraq Reconstruction 

Funds: Forensic Audits Identifying Fraud, Waste, and Abuse – Interim Report #4, SIGIR 10-019, 7/26/2010. 
8 

$4 million and reviewed the vouchers and related paperwork. Our examination of the 

documentation revealed that, in most instances, separation of duties did exist in that different 

individuals signed as originator, approver, and payer. However, the DDS system did not include 

all of these different names making it appear that there was poor separation of duty. 

We contacted DDS management to determine why the data fields used to record the requestor, 

approver, and payer associated with these CERP transactions did not correspond with the voucher 

and associated documents. According to the DDS Program Manager, paying agents often work in 

remote combat zone operations and do not have direct access to DDS. They conduct business in 

the field and obtain certified vouchers for payments and then send a record of the transactions to 

another location, such as Baghdad, to be entered into DDS. DoD personnel entering this 

information into DDS created the generic names to record the transactions on behalf of the remote 

paying agents. The DDS Program Manager noted that effective January 2011, DDS will no longer 

accept the use of generic names and will require that the actual name of the pay agent be entered 

into the system. 

Based upon our review of the sample transactions we determined that internal controls were not 

compromised in this particular case. The payments were made in the field and internal controls, 

including separation of duties, were observed in most instances. Nonetheless, our work in this area 

will continue until we can determine that the use of generic user names has not resulted in erroneous 

payments or other fraudulent activity. 

Review of Possible Fictitious Contractors 

We are continuing to review DoD, DoS, and USAID transactions for possible fictitious 

contractors. We are testing for three anomalies that could be indicative of a fictitious contractor: 

 payments to contractors with no associated Dun and Bradstreet number or government 

code identifier 

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

banking centers such as Cyprus and Beirut 

 payments to vendors with names that are generic (e.g., cash, vendor) and vendor names 

that do not appear to align with program goals 

To date, we have identified 124 names that warrant further review, and this quarter we completed 

a review of approximately half of the names. We examined key documentation, such as state 

business licenses, web sites, invoices, receiving documents, and payment records to support 

conclusions on the validity of the contractors. Our initial reviews generally show the contractors 

thought to be potentially fictitious are likely foreign entities and we are currently in the process of 

confirming the identity of those firms. 

Forensic Support to Audits, Investigations, and Other Activities 

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

forensic data mining effort to SIGIR auditors and investigators in support of ongoing audit, 

investigations, and other oversight activities on an as needed basis. To date, we have provided 
9 

information to SIGIR auditors and investigators in support of 9 audits and 18 investigations, 

including 2 audits and 3 investigations this last quarter. 

The forensic data serves other purposes as well. Since issuing our last report, we received 

information on 266 firms that were suspended from contracting activities with the Government of 

Iraq by the Iraqi Ministry of Planning. We queried our forensic databases in an effort to determine 

if any of the subject firms were associated with US contracts. We are currently analyzing the 

results of those queries. In addition, SIGIR continues to provide support on conducting forensic 

audits to the Special Inspector General for Afghanistan Reconstruction.

 
10 

Concluding Observation 

SIGIR continues to review anomalies in DoD, DoS, and USAID expenditures for the 

reconstruction of Iraq. It is noted that SIGIR’s anomaly testing focused on vouchers that were 

paid. Additional testing is required to determine whether the vouchers were allowable, allocable, 

and reasonable. Our forensic audit work will continue to examine reconstruction data for 

occurrences of potential fraud, waste, and abuse. 
11 

Management Comments and Audit Response 

Because this report is for information only, it does not contain findings or recommendations and 

the responsible agencies were not required to, and did not, submit comments 
12 

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 (1) include identifying questionable activity and 

(2) updating the results of our review of agency expenditures. 

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 September 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’ Financial 

Management System, 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. This reconciliation process yielded a variance of tolerable amounts. 
13 

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 

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

Report #4, SIGIR 10-019, 7/26/2010. 

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

Report #3, SIGIR 10-017, 4/28/2010. 

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

Report #2, SIGIR 10-011, 1/28/2010. 

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

Report #1, SIGIR 10-004, 10/28/2009.

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. 
14 

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. 

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 

FluorAMEC, 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. 
15 

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. 

 
16 

Appendix B—Acronyms 

Acronym Description 

CERP Commander’s Emergency Response Program 

DDS Deployable Disbursing System 

DoD Department of Defense 

DoS Department of State 

ESF Economic Support Fund 

FY Fiscal Year 

IRRF Iraq Relief and Reconstruction Fund 

ISFF Iraq Security Forces Fund 

SIGIR Special Inspector General for Iraq Reconstruction 

USAID U.S. Agency for International Development 
17 

Appendix C—Forensic Audit Team Members 

This report was prepared and the forensic audit conducted under the direction of Glenn D. Furbish, 

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 

Robin L. Rowan 

Dennis W. Rader 

James J. Crowley 

David Childress 

George S. Salvatierra 

Robert A. Whiteley 

 
18 

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