OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION

COST, OUTCOME, AND OVERSIGHT OF

LOCAL GOVERNANCE PROGRAM

CONTRACTS WITH RESEARCH

TRIANGLE INSTITUTE

SIGIR--09--003

OOCCTTOOBBEERR 2211,,22000088
 

 

October 21, 2008

COST, OUTCOME, AND OVERSIGHT OF LOCAL 

GOVERNANCE PROGRAM CONTRACTS WITH 

RESEARCH TRIANGLE INSTITUTE

Costs Are Not Easily Linked to Outcomes

As of June 30, 2008, USAID has spent more than $513 million on two 

contracts with RTI for local governance programs in Iraq. However, the value 

of the dollars spent is not easily linked to outcome because until April 2007 

the costs of individual activities were not reported. Instead, costs were 

reported at the aggregate level. Consequently, we could not assess the 

outcomes associated with the cost of individual activities for the first four 

contract years.

Contract Achievements Were Initially Unclear

Our work provides indications that the current outcomes of this program are 

positive. However, we could not determine whether the government received 

appropriate value for the amount invested over the life of these contracts for 

two reasons. First, a process was not put in place for identifying project 

objectives and assessing outcome for the first four years of the contract. 

Second, as discussed, costs for this program were reported at an aggregate 

level for the first four years rather than an activity level precluding an 

assessment of the efficiency, effectiveness, or value of individual activities.

SIGIR also noted that RTI’s activity reporting is sometimes not linked 

to specific program goals and objectives, in particular training activities. 

SIGIR acknowledges the difficulties in measuring the effect of training, 

but believes that improvements can be made in this area.

Contract Management and Oversight Has Improved Over Time

Recent changes have improved USAID’s oversight of LGP activities. In 

December 2006 USAID shifted greater program oversight responsibility to 

USAID representatives assigned to Provincial Reconstruction Teams (PRTs).1 

These representatives, called activity managers, assist in overseeing contract 

activity. We also identified several other contract management and oversight 

problems including (1) USAID did not initially assign sufficient personnel to 

manage the contract; (2) USAID was late in evaluating the contractor’s 

performance in accordance with the Federal Acquisition Regulation and its 

own Acquisition and Assistance Policy Directive; and (3) USAID’s review 

and approval process for RTI invoices and vouchers is inadequate. We also 

identified an incident in which we believe USAID inappropriately paid 

General and Administrative costs and fees for lost funds.

Lesson Learned: The overall success of a contract is determined by the 

success of its individual activities or tasks. Consequently, management needs 

information at the activity level on expected outcomes, progress toward 

achieving outcomes, and costs to determine how discrete activities contribute 

to overall program goals and objectives. This is particularly the case for large 

dollar-value contracts.

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-09-003

Why SIGIR Did This Study

SIGIR has a legislative requirement to prepare 

a final forensic audit on funds made available 

for Iraq relief and reconstruction prior to its 

termination. Based on this requirement, 

SIGIR has undertaken a series of focused 

contract reviews examining major Iraq 

reconstruction contracts. This report, the 

eighth in the series of such reviews, examines 

two contracts for Local Governance Program 

(LGP) activities awarded by the U.S. Agency 

for International Development (USAID) to the 

Research Triangle Institute (RTI) to assist the 

Iraqis in creating a more favorable 

environment for local governance and to build 

the capacity of representative councils and sub 

national offices of central government 

ministries. The contracts were awarded in 

2003 and 2005 and had a total value of 

$598,218,622, as of June 30, 2008.

SIGIR’s objectives were to examine contract 

costs, outcomes, and management oversight, 

emphasizing issues related to vulnerabilities to 

fraud, waste, and abuse.

What SIGIR Recommends

SIGIR recommends that USAID’s Mission 

Director-Iraq take actions to improve 

operational guidance to facilitate contract 

oversight; ensure the review of payment 

vouchers and invoices before payments are 

made; and take action to recover general and 

administrative and fixed fees that may have 

been improperly paid to the contractor as 

allowable expenses against $185,000 in 

government funds lost by the contractor.

In commenting on a draft of this report, 

USAID concurred with the report’s findings 

and recommendations, and outlined steps it is 

taking to address each recommendation. 

USAID also provided technical comments that 

we have included in the report where 

appropriate.

Special Inspector General for IRAQ Reconstruction

SIGIR
October 21, 2008

MEMORANDUM FOR: U.S. AMBASSADOR TO IRAQ

 MISSION DIRECTOR-IRAQ, U.S. AGENCY FOR INTERNATIONAL 

DEVELOPMENT

SUBJECT: Review of Cost, Outcome, and Oversight of Local Governance Program Contracts

with Research Triangle Institute (SIGIR 09-003) 

We are providing this report for your information and use. We performed this audit under the 

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

responsibilities of inspectors general under the Inspectors General Act of 1978, as amended. 

This report discusses the results of our review of two USAID contracts with Research Triangle 

Institute, for local governance program activities. This audit was conducted as project number 

7023.

We considered written comments on a draft of this report from the U.S. Agency for International 

Development when finalizing this report. The comments are addressed in the Management 

Comments section of this report and are included in their entirety in appendix E.

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

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

Needham at (nancee.needham@iraq.centcom.mil) / 703-343-9275).

Stuart W. Bowen, Jr.

Inspector General
Table of Contents

Executive Summary i

Introduction 1

Costs Are Not Easily Linked to Outcomes 3

Contract Outcomes Were Initially Unclear 6

Contract Management and Oversight Has Improved Over Time 17

Conclusions and Recommendations 22

Lesson Learned 23

Management Comments 23

Appendices

A. Scope and Methodology 24

B. Contract Solicitation and Award 27

C. Examples of Program Monitoring Plan Indicators 29

D. Subcontractors 34

E. Management Comments, USAID 37

F. Acronyms 39

G . Audit Team Members 40
i

Cost, Outcome, and Oversight of Local Governance 

Program Contracts with Research Triangle Institute

SIGIR-09-003 October 21, 2008

Executive Summary

Introduction

A December 2006 amendment to SIGIR’s enabling legislation requires that SIGIR prepare a 

forensic audit report on funds made available to the Iraq Relief and Reconstruction Fund.1 The 

2008 Defense Authorization Act2extended this same requirement to other funds, including the 

Economic Support Fund.3 Under this requirement, SIGIR has undertaken a series of focused 

contract reviews examining major Iraq reconstruction contracts. The objective of these audits is 

to examine contract cost, outcome, and management oversight, emphasizing issues related to 

vulnerabilities to fraud, waste, and abuse.

This report, the eighth in the series of focused contract reviews, examines two contracts for local 

governance program (LGP) activities to help the Iraqis in creating a more favorable environment 

for local governance and to build the capacity of representative councils and subnational offices 

of central government ministries to manage more effective, efficient, and responsive customer 

services. In 2003 and 2005, the U.S. Agency for International Development (USAID) awarded 

two contracts to Research Triangle Institute (RTI). The total contract value of the two contracts

(LGP-1 and LGP-2) was $598,218,622, as of June 30, 2008.

SIGIR’s objectives were to determine the costs and outcomes of RTI’s work under its contracts

and to evaluate USAID’s oversight of the contracts.

Results in Brief

Costs Are Not Easily Linked to Outcomes

As of June 30, 2008, the total value of the LGP-1 and LGP-2 contracts is $598,218,622 ─ 

$239,317,322 for the LGP-1 contract and $358,901,300 for the LGP-2 contract. Of this amount, 

$513,027,336 has reportedly been disbursed ─ $239,317,322 from the LGP-1 contract, and 

$273,710,014 from the LGP-2 contract. Before April 2007, RTI reports did not identify costs for 

individual activities; costs were identified at an aggregate level. Consequently, SIGIR could not 

 

1

Public Law 108-106, Emergency Supplemental Appropriations Act for Defense for the Reconstruction of Iraq and 

Afghanistan, 2004.

2

Public Law 110-181, National Defense Authorization Act for Fiscal Year 2008, January 28, 2008.

3 The Economic Support Fund provides funds to promote economic and political stability in regions where the 

United States has strategic or regional interests.
ii

assess the outcomes associated with the cost of individual activities for the first four years of the 

contract. Table 1 provides details on the value of each contract and its disbursements.

Table 1—LGP Contract Value and Disbursements as of June 30, 2008

Contract

Period of 

Performance Obligations Disbursements

Local Governance 

Program (LGP 1) EDGC-00-03-00010-00

March 26, 2003 –

May 9, 2005 $239,317,322 $239,317,322

Local Governance 

Program (LGP 2) 267-

C-00-05-00505-00

May 9, 2005 –

December 31, 2008 $358,901,300 $273,710,014

Total $598,218,622 $513,027,336

Source: SIGIR review of RTI contracts, RTI financial reports, and RTI invoices.

Note: SIGIR did not audit the data or verify RTI computer system controls.

The LGP-1 contract was funded by multiple appropriations including

the first Iraq Relief and Reconstruction Fund (IRRF 1) (Public Law 108-11)

the second Iraq Relief and Reconstruction Fund (IRRF 2) (Public Law 108-106

USAID’s Economic Support Fund (ESF)4

the Development Fund for Iraq

IRRF 1 provided approximately $104.7 million, IRRF 2 provided approximately $125.7 million; 

ESF provided approximately $6 million and the Development Fund for Iraq provided about $2.9

million. The LGP-2 contract is funded by IRRF 2 and the ESF. IRRF 2 provided about $107 

million and ESF provided about $251 million.

Contract Outcomes Were Initially Unclear

Since USAID approved RTI’s first performance monitoring plan in April 2007, program results 

have begun to be better documented. However, although SIGIR’s current work suggests that the 

current outcomes of this program are positive, SIGIR could not determine whether the 

government received appropriate value for the amount invested over the life of these contracts 

for two reasons. First, for the first four years of the project, no process was in place to identify

project objectives and assess outcomes. Second, the program costs were reported at the 

aggregate level for the first four years, rather than an activity level, which precludes an 

assessment of the efficiency, effectiveness, or value of individual activities.

 

4 The Economic Support Fund provides funds to promote economic and political stability in regions where the 

United States has strategic or regional interests.
iii

Two reports issued by the USAID Regional Inspector General (USAID/RIG) found that for the 

first four years USAID did not enforce its requirement that the contractor submit plans and 

progress reports needed to identify outcomes including.

5

a Performance Monitoring Plan to identify benchmarks and targets6

Quarterly Work Plans (later called Quarterly Implementation Plans) to identify activities 

that RTI planned to carry out

semiannual Performance Monitoring Reports that would report progress toward the 

benchmarks and targets.

As a result, the USAID/RIG concluded that it could not determine if the contracts were 

improving the Iraqi’s local governance capabilities.

SIGIR’s review looked at the program since the last USAID/RIG report (July 2007), which 

stated that in April 2007 USAID approved RTI’s Performance Monitoring Plan and RTI 

submitted its first Quarterly Implementation Plan. SIGIR reviewed these and subsequent plans 

and progress reports and found that they contain the needed information on current contractor 

activities along with benchmarks for assessing progress. Together, the documents show that for 

the last 18 months progress has been made in improving local governance. SIGIR chose two 

activities for assessment─the development of Provincial Development Strategies and a 

Geographical Information System to help the Iraqis’ map government infrastructure─and found 

that outcomes are better documented. SIGIR also interviewed personnel knowledgeable about 

LGP activities including DoS officials responsible for provincial affairs and military and civilian 

personnel located in the provinces. All of the personnel endorsed the program.

SIGIR also noted that RTI’s activity reporting─in particular, training activity reporting─is 

sometimes not linked to specific program goals and objectives. Although measuring the effect of 

training is unquestionably difficult, SIGIR believes that improvements can be made in this area.

Contract Management and Oversight Has Improved Over Time

Although USAID did not establish a process for identifying project objectives and assessing 

outcome for these contracts during their first four years of activity, recent changes have 

improved oversight. For example, in December 2006 USAID shifted greater program oversight 

responsibility to USAID representatives assigned to Provincial Reconstruction Teams (PRTs).7 

 

5 Audit of USAID/Iraq’s Local Governance Activities; USAID Office of the Inspector General Report E-267-06-003-

P, July 10, 2006; Audit of USAID Iraq’s Local Governance Activities, USAID Office of the Inspector General 

Report E-267-07-007-P, July 31, 2007;.

6 The RIG reported that RTI did not submit a Performance Monitoring Plan that met USAID’s requirement until 

April 2007.

7 The Provincial Reconstruction Team (PRT) program for Iraq is a U.S.-led, civil military effort to assist Iraq’s 

provincial and local governments to govern effectively and deliver essential services. PRT staffing depends on the 

needs and circumstances of each province and its districts, but a PRT generally comprises personnel from the 

Departments of State (DoS), Defense (DoD), Justice, Agriculture, and Commerce; USAID and it LGP contractor, 

RTI; the Multi-National Force-Iraq (MNF-I) and its subordinate command, the Multi-National Corp-Iraq (MNC-I); 

and the Gulf Region Division of the U.S. Army Corps of Engineers; as well as Iraqi-born expatriates (often U.S. 

citizens.)
iv

These representatives, called activity managers, assist in overseeing contract activity. USAID 

was developing an operations manual that formalizes the role of the PRT representative but this

effort still needs to be finalized.

SIGIR identified a number of other contract management and oversight problems, including:

Initially, USAID did not assign sufficient personnel to manage the contract. During most 

of the contracts’ period of performance one Cognizant Technical Officer (CTO) was 

assigned.8 The number of CTOs assigned is an agency decision; nevertheless, SIGIR 

believes that one CTO could not manage these contracts effectively because of the size 

and scope of the LGP contracts ($598 million with activities in 18 provinces) and the 

associated responsibilities conferred on the CTO. The appointment of USAID 

representatives at the PRTs to assist in oversight should improve this situation.

USAID is required to evaluate the contractor’s performance annually, but for the last 

three years these evaluations have been completed late. USAID’s evaluation of RTI for 

the year ending in May 2006 was not finalized until May 23, 2007; the evaluation for the 

year ending in May 2007 was not finalized until August 29, 2007. Nonetheless, USAID 

exercised two option periods for LGP-2 ─ in July and December 2006 ─ without 

essential performance information on which to base the decision. USAID/RIG reported 

this in its July 2007 report. SIGIR found that the evaluation report for the period ending 

May 2008 has also not been finalized. However, on September 23, 2008, USAID 

provided SIGIR with documents showing that the 2008 evaluation is in process.

USAID’s review and approval process for RTI invoices and vouchers is inadequate. 

Section G.1 of the LGP-2 contract states that the CTO is the authorized representative of 

the government to approve vouchers under this contract. The CTO’s signed designation 

letter also requires the CTO to provide administrative approval of contractor vouchers or 

invoices. However, because the contract states that payment is to be made by means of a 

letter of credit, RTI draws funds in advance. Consequently, the CTO is not approving the 

vouchers. The CTO is in the best position to determine whether RTI expenditures listed 

on monthly invoices are appropriate. SIGIR found no evidence of written CTO approval 

of RTI invoices.

During the course of its work on the LGP contract, RTI physically lost $185,000. With 

the concurrence of the contracting officer, RTI claimed the loss as an allowable expense. 

RTI submitted an invoice for the lost money that included its General and Administrative 

fee and fixed fee. USAID approved the invoice and RTI was paid $56,906 for both the 

fees. SIGIR questions the decision to pay fees on the lost money.

 

8 The CTO assists the contracting officer in ensuring compliance with the terms of the contract. The CTO monitors 

how well the contractor is progressing towards achieving the contract’s purpose, and is responsible for providing 

technical liaison between the contractor and the contracting officer.
v

Recommendations

SIGIR recommends that USAID’s Mission Director-Iraq take these actions:

Direct USAID officials to establish a timeframe for completing the operations manual 

that provides guidance to activity managers for overseeing contractor performance.

Direct the CTO to review and approve RTI vouchers and invoices as required by the 

contract. Also, require the CTO to maintain documentation of the approvals in the 

contract file.

Direct that action be taken to recover the General and Administrative fee and the fixed 

fee paid to RTI on the $185,000 in lost funds.

Lesson Learned

The overall success of a contract is determined by the success of its individual activities or tasks. 

Consequently, management needs information at the activity level on expected outcomes, 

progress toward achieving outcomes, and costs to determine how discrete activities contribute to 

overall program goals and objectives. This is particularly true for large dollar-value contracts.

Management Comments

USAID concurred with the report findings and recommendations and identified steps it is taking 

to address each recommendation. According to USAID, it has already issued guidelines for its 

PRT representatives that clarify their role, and has improved its voucher and invoice review 

processes. It also agreed that the amounts paid to RTI for the lost funds were inappropriate and 

stated that it would include this matter as part of the closeout process.
1

Introduction

A December 2006 amendment to the Special Inspector General for Iraq Reconstruction’s (SIGIR) 

enabling legislation requires that, prior to its termination, SIGIR prepare a final forensic audit report 

on funds made available to the Iraq Relief and Reconstruction Fund.9 The 2008 Defense 

Authorization Act10 extended this same requirement to other funds, including the Economic Support 

Fund.11 Pursuant to this requirement, SIGIR has undertaken a series of focused contract reviews 

examining major Iraq reconstruction contracts. The objective of these audits is to examine contract 

outcome, cost, and management oversight, emphasizing issues related to vulnerabilities to fraud, 

waste, and abuse.

This report, the eighth in the series of focused contract reviews, examines the local governance 

program managed by the U.S. Agency for International Development (USAID) and performed by 

Research Triangle Institute (RTI) of Research Triangle Park, North Carolina.

Background

USAID is the principal agency to extend assistance to countries recovering from disaster, trying to 

escape poverty, and engaging in government reform. The USAID Mission–Iraq was established on 

July 27, 2003, to carry out relief and reconstruction programs in infrastructure reconstruction, 

education, health care, airport and seaport management, economic growth, and local governance.

Iraq’s government was centralized at the national level during the Saddam Hussein era. According 

to USAID, essential public services such as water, sanitation, health services, and basic educational 

services, which were not robust during Hussein’s rule, were nominal after his removal from power. 

The Iraqi citizenry needed to develop a governance structure and framework to govern and provide 

needed public services if they were to live in a functioning society. In addition, the Iraqi people 

needed to establish the role of local governance and civic institutions in a free society. 

To assist Iraq in building a framework for a democratic and civil society, USAID awarded two costplus-fixed-fee contracts to RTI. The first of the two contracts, known as the Local Governance 

Program-1 contract (LGP-1) (EDG-C-00-03-00010-00), was awarded with an effective date of 

March 26, 2003, to procure and provide technical and other assistance to strengthen local 

administrations, civic institutions, and processes in Iraq. According to the USAID Regional 

Inspector General (USAID/RIG) during its first year of the contract ―the local governance program 

focused on (1) restoring basic services through the use of rapid response grants, (2) developing 

transparent and accountable local and provincial governments by providing technical assistance, and 

(3) strengthening civil society organizations by providing training. The second year of the program 

focused on facilitating Iraq’s transition to a sovereign state, with an emphasis on institutional 

 

9

Public Law 108-106, Emergency Supplemental Appropriations Act for Defense for the Reconstruction of Iraq and 

Afghanistan, 2004, Nov. 2004.

10 Public Law 110-181, National Defense Authorization Act for Fiscal Year 2008, January 28, 2008

11 The Economic Support Fund provides funds to promote economic and political stability in regions where the United 

States has strategic or regional interests.
2

capacity building to enable local governments to take responsibility for providing services to citizens 

effectively and efficiently.‖

12

 This contract ended in May 2005.

The LGP-1 contract statement-of-work identified four functional areas with corresponding activities 

to be performed by RTI. The contract also required RTI to submit quarterly work plans seven days 

before the beginning of each quarter. In addition, the contract required RTI to submit a performance 

monitoring plan within 30 days of the signing of the award. The performance monitoring plan was 

to include baseline data for the measurement of progress throughout the program. Furthermore, RTI 

was to submit semiannual performance monitoring reports that detailed progress toward 

achievement of performance indicators.

The second of the two contracts, known as Local Governance Program-2 (LGP-2) (267-C-00-05-

00505-00), was intended to build the capacity of representative councils and sub-national offices of 

the central government ministries to manage more effective, efficient, and responsive customer 

services. The contract was awarded with an effective date of May 9, 2005 for a base period of two 

years with three option years. The contract was subsequently modified to provide for one base year 

with three option years. The contract statement-of-work identifies five activities, each with 

supporting tasks to be accomplished. The five activities are:

Promote policy reform in support of local governance

Support clarification of the roles and responsibilities of different levels of government

Promote increased efficiency of local service delivery

Assist in the development of regularized mechanisms of citizen participation in governmental 

decision-making processes

Capture learning through systematic study and reflection

As with LGP-1, the LGP-2 required the contractor to develop (1) a performance monitoring plan that 

would provide baseline data for measuring program progress, (2) semi-annual performance 

monitoring reports that would detail progress toward the achievement of performance indicators, and 

(3) quarterly work plans (now called quarterly implementation plans) that would identify the 

activities to be conducted each quarter.

Objectives

Our objectives were to examine the cost and outcome of RTI’s work under its contract to help build 

the Iraq provinces’ local governance capabilities, and USAID’s management oversight of the 

contracts.

For a discussion of the audit scope and methodology, see Appendix A. For information on the 

solicitation and award of the LGP-1 and LGP-2 contracts, see Appendix B. For a listing of RTI’s 

program monitoring indicators, see Appendix C. For a listing of subcontractors who worked on 

these contracts, see Appendix D. For a listing of the acronyms, see Appendix E. For a listing of the 

audit team members, see Appendix F.

 

12 Audit of USAID/Iraq’s Local Governance Activities; USAID Office of the Inspector General, Audit Report E-267-06-

003-P, Jul. 10, 2006.
3

Costs Are Not Easily Linked to Outcomes

As of June 30, 2008, the total value of the LGP-1 and LGP-2 contracts was $598,218,622

comprising $239,317,322 from the LGP-1 contract and $358,901,300 from the LGP-2 contract. Of 

this amount, $513,027,336 has reportedly been disbursed; $239,317,322 from the LGP-1 contract, 

and $273,710,014 from the LGP-2 contract. For the first four years of these contracts, costs for 

individual activities were not identified in RTI reports. Instead, costs were identified at an aggregate 

level. Consequently, for the first four years we could not assess the outcomes associated with cost of 

individual activities.

Table 1—LGP Contract Value and Disbursements as of June 30, 2008

Contract Period of Performance Value Disbursements

Local Governance 

Program (LGP 1)

March 26, 2003 – May

9, 2005 $239,317,322 $239,317,322

Local Governance 

Program (LGP 2)

May 9, 2005 –

December 31, 2008 $358,901,300 $273,710,014

Total $598,218,622 $513,027,336

Source: SIGIR review of RTI Contracts, RTI Financial Reports, and RTI Invoices. 

Note: We did not audit the data or verify RTI computer system controls. 

The LGP-1 contract was funded by multiple appropriations including (1) the first Iraq Relief and 

Reconstruction Fund (IRRF-1) (Public Law 108-11); the second Iraq Relief and Reconstruction 

Fund (IRRF-2) (Public Law 108-106), USAID’s Economic Support Fund (ESF),13 and the 

Development Fund for Iraq. IRRF-1 provided approximately $104.7 million, IRRF-2 provided 

approximately $125.7 million; the ESF provided approximately $6 million and the Development 

Fund for Iraq provided about $2.9 million. The LGP-2 contract is funded by IRRF-2 and the ESF. 

IRRF-2 provided about $107 million and the ESF provided about $251 million.

Both the LGP-1 and LGP-2 contracts are cost-plus-fixed fee contracts that require the contractor to 

provide a specified level of effort, over a stated period of time, on work that can be stated in general 

terms only. The Federal Acquisition Regulation Part 16.306(a) states in part that ―This contract type 

permits contracting for efforts that might otherwise present too great a risk to contractors, but it 

provides the contractor only a minimum incentive to control costs.

Activity Costs Are Unknown

Although our current work provides indications that the present outcomes of this program are 

positive, for the first four years we could not determine whether the government received 

appropriate value for the amount invested because RTI reports did not identify the cost of individual 

 

13 The Economic Support Fund provides funds to promote economic and political stability in regions where the United 

States has strategic or regional interests.
4

activities. Instead, RTI only collected costs at the aggregate level. This prevents us from assessing 

the efficiency, cost effectiveness, or value of the activities. Currently, program costs are being 

reported in five broadly defined activities, not at the task level supporting each of the activities. This 

approach may provide sufficient information for programs with relatively low funding levels such as 

grant or cooperative agreement activities; however, in a program with costs over $500 million, more 

specific reporting on services performed and outcomes in relation to costs are necessary to 

effectively manage the contract.

Security Costs for LGP Activities Are Higher Than Security 

Costs for Construction Projects

RTI’s costs for subcontracted security services totaled approximately $116.3 million, or about 22.7% 

of the $513 million disbursed as of June 2008. Approximately $44 million was spent on security 

under LGP-1 (about 18.4%), and approximately $72.3 million was spent on security on LGP-2 

(about 26.4%).

SIGIR previously assessed security costs for nine construction contractors and found that the costs, 

as identified at that time, ranged from a low of 7.6% to a high of 16.7%. The average for all 

construction contractors when identifying percentage of security costs to total costs was 12.5%.14 

While SIGIR recognizes that these data are limited, they would seem to indicate non-construction 

activities (e.g., democracy building activities, local governance activities) incur higher security costs. 

SIGIR plans to continue gathering data on non-construction security costs in future audits. Private 

security contractor officials told us during a separate review of private security contractors that 

security costs for these types of activities are likely to increase with reductions in U.S. troop levels.15

Subcontractors Were Used Extensively

Approximately $174.3 million, or about 34% of disbursements as of June 30, 2008, were for 

subcontractors. Nine subcontractors were selected by RTI to support LGP 2. Seven of the nine 

subcontractors also supported LGP-1. All subcontractors were approved by USAID as part of the 

award process. Subcontractors who provide technical assistance are integrated directly with RTI 

employees on implementation teams and are supervised daily by RTI staff. RTI then submits a 

performance evaluation to the employing subcontractor. RTI engages with subcontractors by to 

ensure the services provided are meeting project requirements.

Some RTI payments to subcontractors have been questioned. As reported by the auditing firm 

PricewaterhouseCoopers in its audit of RTI financial statements for fiscal year 2006,16 RTI 

determined that certain expenditures under subcontracts for services for the LGP-1 contract were 

improper due to a lack of proper documentation of appropriate approvals, evidence of vendor 

delivery, and inappropriate disbursements. RTI stated that it engaged a third party to perform a 

 

14 Fact Sheet on Major U.S. Contractors’ Security Costs Related to Iraq Relief and Reconstruction Fund Contracting 

Activities; SIGIR-06-044, Jan. 30, 2007.

15 Agencies Need Improved Financial Data Reporting for Private Security Contractors; SIGIR 09-005, Oct. 2008.

16 PricewaterhouseCoopers LLP, Research Triangle Institute, Financial Statements, Schedules and Other Information 

Related to Federal Awards for the Year Ended September 30, 2006 and Reports Under OMB Circular 133-A Thereo
5

review of expenditures relating to the LGP. Based on the review, RTI identified certain payments 

that should not have been charged to the LGP. RTI stated that it reimbursed the U.S. government for 

the amounts.
6

Contract Outcomes Were Initially Unclear

With USAID’s approval of RTI’s first performance monitoring plan in April 2007, program results 

have begun to be better documented. However, although our current work provides indications that 

the current outcomes of this program are positive, we could not determine whether the government 

received appropriate value for the amount invested over the life of these contracts for two reasons. 

First, a process was not put in place for identifying project objectives and assessing outcome for the 

first four years of the contract. Second, costs for this program were reported at an aggregate level 

rather than an activity level precluding an assessment of the efficiency, cost effectiveness, or value 

of individual activities.

SIGIR also noted that RTI’s activity reporting is sometimes not linked to specific program goals and 

objectives─in particular, training activity reporting. SIGIR acknowledges the difficulties in 

measuring the effect of training, but believes that improvements can be made in this area.

USAID Inspector General Reviews of the Local Governance 

Program

Local Governance Program activities have been the subject of two separate reviews conducted by 

the USAID/RIG. Both of these reviews found that USAID did not require the contractor to submit 

or fully complete all contractually required documents detailing program benchmarks and targets (a 

Performance Monitoring Plan), activities planned that would address each benchmark and target 

(Quarterly Work Plans - later called Quarterly Implementation Plans), and reports that would 

identify RTI’s progress in achieving the baselines and targets (semi-annual Performance Monitoring 

Reports). 17 As a result, the RIG concluded that it could not determine if the contracts were 

improving the Iraqi’s local governance capabilities.

First RIG Review - The first RIG review, published in July 2006, focused on the LGP-1 program, 

which ran from March 2003 to May 2005. The objective of this review was to determine if local 

governance activities being conducted in Iraq by USAID achieved their intended outputs. The audit 

reviewed pertinent laws and regulations, program requirements defined in the contract, and 

associated implementation and work plans. Overall, the RIG concluded that it could not determine if 

USAID/Iraq’s local governance program activities achieved their intended outputs because USAID

did not require RTI to submit all reporting and monitoring documents specified in the contract. It 

also found that USAID did not properly approve all grants, prepare contractor evaluations, or review 

payment vouchers submitted by RTI.

According to the report, the contract required RTI to submit quarterly work plans. However, instead 

of submitting the required plans, RTI submitted an implementation plan, dated August 2003, which 

listed selected core activities to be accomplished within the contract period. For the second program 

year, RTI submitted a work plan, dated July 2004, which included a set of intended activities and 

indicators. According to the USAID/RIG report, however, the RTI work plans did not provide 

 

17 Audit of USAID/Iraq’s Local Governance Activities, USAID Inspector General Report E-267-06-003-P, July 10, 

2006; Audit of USAID’s Local Governance Activities, USAID Inspector General Report E-267-07-007-P, July 31, 2007.
7

information on program implementation in a format that allowed the USAID Mission-Iraq to 

measure the progress made against pre-defined goals. Rather the reports merely described what was 

accomplished during the period, without considering progress toward goals and objectives. As a 

result, the audit team could conclude only that activities had taken place but not whether progress 

was made.

According to the USAID/RIG report, the reason for this problem was that the USAID-Mission-Iraq

was in transition and daily operational requirements were emphasized in lieu of administrative 

requirements. The Mission also suffered from high staff turnover and this contributed to 

inefficiencies and lapses in program management. Additionally, during the first two years of the 

contract, three contracting officers and five cognizant technical officers (CTOs) worked on the 

contract.

The first USAID/RIG report also critiqued the monitoring plan and RTI’s lack of monitoring reports. 

USAID’s contract with RTI required the contractor to submit both a performance monitoring plan 

and a semiannual performance monitoring report. The monitoring report was to include the 

methodology on how data would be collected, interim and final targets, and a timeline for collecting 

data. The semiannual performance reports were to detail progress toward the targets identified in the 

monitoring plan. According to the report, in 2003 RTI developed a monitoring plan but did not 

submit the required semiannual reports. In 2004, RTI submitted a monitoring plan, but changed the 

targets from those identified in its 2003 plan. Again in 2004, the semiannual performance reports 

were not submitted.

In the absence of monitoring reports, the RIG reviewed RTI’s monthly progress reports to determine 

if progress had been made. However, differences in detail and format between the monthly reports 

and the performance and work plans precluded the RIG from making a determination regarding 

progress made. As a result, USAID had no assurance that the local governance program activities 

achieved their intended goals.

Second RIG Review - The RIG’s second review of local governance activities was issued in July 

2007. The objective of this review was again to determine if local governance program activities 

were achieving their goals and objectives. The report focused on the LGP-2 contract, but also 

followed up on recommendations made in its first report. In this report, the RIG focused on the 

Mission’s controls related to monitoring local governance activities, including weekly progress 

reports from the Provincial Reconstruction Teams (PRTs); CTO visits to the PRT’s and RTI offices; 

RTI’s activity reports, and emails between the CTO and RTI.

The RIG found that actions taken by the USAID Mission-Iraq to address recommendations in the 

first report were ineffective and that problems identified in the first report (a year earlier) were 

continuing. Specifically, USAID/Iraq still had not required RTI to submit Quarterly Implementation 

Plans and had not required RTI to submit a Performance Monitoring Plan that met the USAID

Mission-Iraq’s requirements and would have set forth baselines and targets until April 2007. As a 

result, the RIG still could not determine whether USAID/Iraq’s local governance program activities 

were effective or making progress.

As an example of the problems in RTI’s reports, the RIG cited activities identified in RTI’s annual 

and quarterly activity reports in which RTI reported conducting 2,214 activities during the audit
8

period. These activities consisted of training and technical assistance in five regions throughout 

Iraq. Table 2 shows the activities reported by the RIG.

Table 2—Number of Activities Conducted by Region

Activities:

North

Region

North 

Central 

Region

Central

Region

South 

Central

Region

South 

Region Total

Core Training 58 146 87 459 47 797

Supplemental Training Modules 78 34 37 265 33 447

Conferences and Workshops 5 0 23 2 4 34

Technical Assistance Events 121 49 193 509 64 936

Total Activities 2,214

Source: RIG Audit Report E-267-07-007-P, July 2007.

A brief description of each activity follows:

Core Training – Competency-based training modules on transparency, accountability and 

responsiveness for local government officials emphasizing gradual skill and competency 

building. Examples of training topics include Introduction to Service on Council and 

Council Procedures.

Supplemental Training – Training modules on responsibility and corruption to address the 

varying needs of local government officials to extend their skills and competence beyond 

core areas. Examples include Budgeting for Local Government and Negotiation and 

Problem Solving.

Conferences and Workshops – Forums for sharing and updating information and 

knowledge or looking at problems within a specified subject area with the objective of 

arriving at solutions by the end of the conference. One example is the South Regional 

Agribusiness Conference.

Technical Assistance – Technical consultations provided that build on existing training 

modules and assist in developing systems and processes in targeted organizations.

The RIG’s criticism of RTI’s activity reporting was that it was output oriented rather than outcome 

oriented. Activity reporting that is not linked to an overall program goal or objective cannot be 

assessed for effectiveness. According to the RIG ―In summary, without approved quarterly 

implementation plans that identify planned activities, and without a (Performance Monitoring Plan) 

that defines baselines and targets, USAID/Iraq could not assess whether the (funds) obligated for the 

local governance program activities program-and implemented by RTI-improved local government’s 

ability to provide services. Moreover, by reporting only on achievements, it is difficult to determine 

what essential aspects of the local governance program are not being addressed by RTI’s activities.‖
9

Required Plans and Reports Are Now Being Submitted

SIGIR’s review looked at the program since the last USAID/RIG report (July 2007.) In that report 

the RIG found that in April 2007, more than 4 years after the initial contract award, USAID 

approved RTI’s Performance Monitoring Plan and RTI submitted its first Quarterly Implementation 

Plan. However, by this time $329 million had already been spent on the program. SIGIR reviewed 

these and subsequent plans and progress reports and found that they contain needed information on 

current contractor activities along with benchmarks for assessing progress. Together these 

documents show that for the last 18 months progress has been made in improving local governance.

Performance Monitoring Plan – As stated earlier, a Performance Monitoring Plan is intended to 

identify the overarching strategic objectives of the local governance program, and to provide

indicators and targets that RTI can use as a basis for its reporting. To illustrate, one of the LGP 

strategic objectives is ―Responsive and Effective Local Government Strengthened.‖ To measure 

progress in this area, the plan identifies three strategic objective indicators along with several 

intermediate result indicators. Each strategic objective indicator and intermediate result indicator is 

then backed up by targets. For example, one indicator is ―Number of Provincial and District 

Councils that met project criteria for functioning during the last six months.‖ LGP objective 

measurements (e.g., targets) for defining a functioning Provincial Councils are:

1. Provincial Council has records of meeting minutes held during the reporting period.

2. A quorum of Provincial Council members was [sic] ―present for at least 70 percent of meetings.‖

3. Progress on developing a Provincial Development Strategy, an annual work plan and /or budget 

development, and/or capital investment project approval and execution during the reporting 

period are documented in meeting records.

4. The provincial Governor was appointed by the Provincial Council and has separate offices and 

staff.

5. Any Provincial Council seats that became vacant during the period were filled.

Figure 1 shows the structure of the results framework in the approved Performance Monitoring Plan. 

Additional program indicators with results, as of June 10, 2008, are in appendix C.
10

Figure 1—Results Framework with Indicators

Source: Performance Monitoring Plan, November 2, 2007

Performance Reports - On June 10, 2008, RTI issued its most recent semiannual performance 

report, which provides tables listing targets and results for eight monitoring and evaluation 

indicators. As of June 10, three targets for 2008 had already been met.

Seventeen Provincial Councils met project criteria for ―functioning‖ during the last six 

months;

Contracts for more than $2.5 billion in capital budget projects were awarded by the 

provincial governments in the last 12 months.
11

All Provincial Councils used mechanisms to solicit citizen input related to public policy 

decisions or issues in the last 6 months.

A fourth target was achieved following the issuance of the report; all eighteen provincial councils 

had completed and obtained approval for their Provincial Development Strategy. Four other 

monitoring and evaluation indicators showed progress towards the 2008 target. For more 

information on the indicators with targets and results reported for the performance period ending 

June 10, 2008, see Appendix C.

Outcome of LGP Activities Better Documented Now

SIGIR’s review of semi-annual performance reports and other documents submitted by the 

contractor, along with interviews of relevant program officials, identified a number of program 

accomplishments over the past 18 months. For example, a senior USAID official said that the LGP 

program played an important role in the development of the Iraqi Provincial Councils. According to 

the CTO, LGP activities engaged the local populations and helped Provincial Councils become 

responsive to the citizens’ needs. The USAID official also said that LGP activities played a role in 

communicating the elements of the Provincial Powers Law to the Iraqi public.

Of the many other activities, SIGIR chose two for additional assessment. These are the development 

of Provincial Development Strategies (PDS) and the implementation of a Geographical Information 

System (GIS). Our review also noted continuing challenges in assessing the outcome of many 

activities.

Provincial Development Strategies – According to the Government of Iraq’s Provincial 

Development Strategy Executive Summary:

―During the period of Baath Party rule, ending with the end of Saddam Hussein’s rule in 2003, 

development planning in Iraq was heavily centralized. As part of the reconstruction effort, the 

LGP promoted the development of a participatory planning approach throughout the 18 

provinces to formulate prioritized objectives and strategies to address the social, economic, and 

environmental priorities of the challenges faced by each province. This effort was designed to 

help strengthen democracy, reduce corruption, limit differences among various political and 

ethnic groups, and empower citizens by promoting greater interaction among stakeholders 

within communities. The planning process put in place was intended to produce an individual 

provincial development strategy (PDS) for each province. During the PDS process, the 

provincial stakeholders, including the community, nongovernmental organizations, the private 

sector, the service departments, the governor, and the provincial and local councils,

collectively determine the vision and goals for the province. A target identified in the 

Performance Monitoring Plan is for each province to develop a provincial development 

strategy.‖

18

According to RTI officials, governing officials had no historical exposure to the types of approaches 

needed in the creation of a PDS. To this end, between January 2006 and November 2007, RTI 

initiated a number of different PDS conferences, modules for training of trainers and mentoring 

 

18 Republic of Iraq Provincial Development Strategies: Executive Summaries Version 1, March 2008.
12

workshops, and roundtable and consultative forums throughout the 18 provinces in Iraq. These 

activities guided participants through the process of PDS formulation. During the same period, RTI 

held other conferences and training activities in support of PDS formulation and implementation, 

including the Al Anbar PDS conference in Amman that had more than 120 participants.

The PDS document produced by each province is the first of the three-phase planning process:

Phase I – Defining an Overarching Strategy

Phase II – Implementation, in which a five-year action plan of projects is determined, and

Phase III – Resource Allocation, in which funds are allocated to implement the first year of 

the plan.

An indicator of success in this three phase process is identified in the Performance Monitoring Plan 

as ―Number of Provincial Councils that finalized their PDS for use as the province’s public 

investment plan.‖ According to a senior RTI official, as of July 2008, each of the 18 Provincial 

Councils had approved and issued a PDS, completing the first phase of the planning process. Each 

PDS presents the overall strategic direction of the province, but our review found that most did not 

show the Phase III resource allocation. However, a few, such as the Al Anbar, Salah Al-Din, and 

Baghdad PDS, identify specific construction projects and expected costs. The PDS is intended to be 

a living document that is regularly reviewed and modified by governorate administration to reflect 

changing circumstances.

Our review found that the detail and quality varies from one PDS to another. Generally, the PDS 

includes an introduction describing the unique characteristics of the province. Some PDS identify a 

vision or mission statement. Most PDS break down the report by self-determined sectors, such as 

commerce, education and health, and agriculture. Then the PDS provides objectives within the 

sector and lists obstacles or weaknesses that must be overcome. We noted that the English 

translations of many of the PDS contained some misspellings and awkward word usage, but the 

intent is usually clear. For example, the Sulaymaniyah PDS identifies multiple objectives under the 

agriculture sector. One objective is ―tending to natural pastures proving [sic] fodder for animals.‖ 

The PDS identifies four problems within the objective:

―reduction in pasture spaces due to changing it to agricultural lands;

harmful usage of the pasture by the shepherds;

mined fields in the pastures;

shortage in seed and natural pastures‖

The PDS then identifies strategies for solving each problem:

―enforcing laws to prevent changing pastures to agricultural lands;

importing good quality seeds;

demining;

instructing shepherds for good usage of pastures‖

According to a senior RTI official, the PDS documents vary in quality from province to province, 

but he stated some were quite good for a first effort. Baghdad and Anbar senior PRT officials stated 
13

that the PDS effort was a success because of the process more than the outcome. The process of 

developing the PDS involved convening individuals, often adversaries who were sometimes divided 

by sectarianism, and compelling them to work together for a common purpose. A senior USAID 

official further stated that all 18 PDS were voted on and approved by a majority of the council 

members. However, two senior PRT officials in Kirkuk expressed dissatisfaction and stated that the 

PRT did not have sufficient input in the development of the Kirkuk province PDS.

According to a PRT team leader, in the next phase of the program, each Provincial Council will 

develop a Provincial Development Plan, which identifies specific projects to be accomplished under 

the PDS. 

Another indicator of success identified in the Performance Monitoring Report is ―Number of 

Provincial Councils that invested in projects according to public investment priorities identified in 

the PDS during the last six months.‖ According to RTI’s June 2008 report, 16 Provincial Councils 

had invested in projects related to public investment priorities identified in their PDS during the last 

six months. The Dahuk Provincial Council could not be evaluated because it did not have a PDS at 

the time of the report, and the Erbil Provincial Council could not be evaluated because its PDS did 

not meet project criteria.

Geographical Information System – The Geographical Information System (GIS) emerged from a 

base mapping project designed to scan deteriorating maps electronically. This would allow the 

Iraqi’s to use the digital images to develop maps of property boundaries. The project has since 

evolved into a GIS project to provide the provinces with a tool that can be used to integrate, analyze, 

and provide information visually to assist in prioritizing reconstruction projects and essential service 

delivery in local communities. RTI is assisting the provinces in repairing and digitally archiving 

paper maps. Steps have been taken to preserve the maps by flattening, repairing, and encapsulating 

them. The maps are then scanned to achieve a digital visual equivalent of the paper map, and the 

digital image files can then be archived. This will provide the provinces with maps that, among 

other uses, can detail their water, sewer, traffic, land use, communication and electricity networks, 

government and commercial building locations, and agricultural lands.

RTI reported that it had established urban planning/GIS centers in 17 of Iraq’s 18 provinces. Diyala 

was identified as the only province without its own center, and a center will open there as soon a 

security conditions permit. A 2008 target is for 15 provinces to use GIS capacity to produce the city 

maps with utility overlays. In its June 2008 report, RTI reported that only Basrah province has used 

GIS capacity, but other provinces are making progress toward the target. However, a senior USAID 

official stated that the GIS program is still developing and long-term success remains uncertain.
14

Figure 2 shows the delivery of GIS equipment in November 2007 in preparation for distribution to 

GIS centers nationwide.

Source: RTI

Measuring Outcome for Many Activities Remains a Challenge

RTI’s reporting of activities without linking the activities to specific program goals and objectives 

was cited as a problem in the USAID/RIG’s July 2007 report, and to some degree this practice 
15

continues. SIGIR acknowledges the difficulties in measuring the effect of training, but believes that 

improvements can be made in this area.

To illustrate, training is a major activity conducted by RTI under the LGP-2 contract to support local 

governance in Iraq. The Performance Monitoring Plan has four Operational Plan indicators relating 

to training. For example, one indicator is ―Number of people who received project-supported 

training to strengthen local government in the last six months.‖ However, while the Operational 

Plan indicators quantify outputs (e.g., the number of people trained) the Performance Monitoring 

Plan does not identify targets or milestones for the training, which makes it difficult to fully evaluate

the result of the activity. An RTI training official stated that RTI takes several actions to assess its 

training including (1) recording requests and comments from training beneficiaries to identify their 

expectations and sources of satisfaction; (2) monitoring participation rates to identify the ―most 

wanted‖ or ―lowest interest‖ training courses, and (3) obtaining feedback from the PRTs to 

determine whether beneficiaries are putting into practice what is learned. However, there is no 

discussion in the performance monitoring report that provides the results of these assessments.

Despite the absence of discussion on training outcomes, PRT officials interviewed generally believe 

the training is effective. RTI stated that it conducts much of the training at its five regional hub 

facilities around Iraq, in Baghdad, Basrah, Hillah, Erbil, and Tikrit. The training is conducted by 

Iraqi hires that speak Arabic, although training manuals are in Arabic and English. Senior Baghdad 

PRT personnel praised RTI personnel and the training conducted at the Karrada training facility in 

Baghdad. A Baghdad PRT official stated that Iraqi officials like training at the facility and consider 

it safe. The Baghdad PRT team leader stated that relationships are key to the success of the 

program, and the Baghdad PRT USAID representative stated that he had a good relationship with 

RTI personnel at the Karrada facility. However, the CTO stated that the training needs to progress 

to more complex subjects.

Table 3 shows the total number of provincial government officials strengthened through training and 

technical assistance by province from October 1, 2006 through December 31, 2007, as reported by 

RTI.
16

Table 3—Provincial Government Officials Strengthened Through Training 

and Technical Assistance by Province and Gender

Region Province Male Female Total

North Dahuk 1,262 673 1,935

Erbil 1,721 547 2,268

Ninewa 752 50 802

Sulaymaniyah 1,027 565 1,592

Kirkuk (Tamim) 1,360 522 1,882

North Central Anbar 41 2 43

Diyala 20 8 28

Salah ad Din 614 18 632

Central Baghdad 1,202 226 1,428

South Central Babil 1,458 219 1,677

Karbala 992 327 1,319

Najaf 1,147 336 1,483

Qadissiyah 326 97 423

Wasit 1,095 199 1,294

South Basrah 1,536 228 1,764

Maysan 447 42 489

Muthanna 299 30 329

Dhi Qar 436 47 483

Iraq Nationwide 15,735 4,136 19,871

Source: RTI’s LGP 2007 Annual Report, October 1, 2006 through December 31, 2007.

Note: We did not audit the data or verify RTI computer system controls.
17

Contract Management and Oversight Has 

Improved Over Time

As discussed in the contract outcome section, USAID did not put a process in place for identifying 

project objectives and assessing outcome during the first four years of activity under these contracts. 

Recent changes, however, have improved USAID’s oversight.

Additionally, we identified the following contract management and oversight problems:

USAID did not initially assign sufficient personnel to manage the contract

USAID did not evaluate the contractor’s performance annually in accordance with the 

Federal Acquisition Regulation and its own Acquisition and Assistance Policy Directive

USAID’s review and approval process for RTI invoices and vouchers is inadequate

We also identified an incident in which we believe the contractor was inappropriately paid General 

and Administrative costs and fees for lost funds.

Moving Oversight of LGP Activities to PRTs Has Improved 

Accountability

On December 5, 2006, the USAID/Iraq Mission Director issued a memorandum to USAID’s 

implementing partners, including RTI, identifying changes to USAID’s role at the PRTs. This 

change has improved oversight of LGP activities. A planned manual that would formalize the role 

of each PRT representative, however, still needs to be finalized.

According to the USAID Mission Director’s memorandum, it was designed to ensure that USAID 

activities are responsive to the needs of the PRT, and that the PRT’s resources contribute to the 

success of the implementing partners. To achieve this goal, it shifted greater program management 

responsibility to the USAID representatives within each PRT. These representatives, called activity 

managers, assist in overseeing contract activity. The memorandum stated that ―Direct interaction 

between the USAID PRT representatives and the implementing partners in the field is the only way 

to ensure critical coordination with, and oversight of USAID programs in their provinces.‖ PRT 

representative are assigned to assist the implementing partners in carrying out the programs, such as 

LGP. This has resulted in greater oversight of RTI activities.

An area still needing attention is the development of an operations manual that formalizes the role of 

each USAID PRT representative. According to the USAID Mission Director’s memorandum, ―An 

operations manual that formalizes the role of each USAID PRT Representative is currently in its 

final stages. The manual is designed to ensure that USAID activities are responsive to the needs of 

the PRT, and that PRT’s resources contribute to the success of all your activities.‖ However, we 

found no evidence that the operations manual or other written guidance was issued to the USAID 

PRT representatives. Written guidance is particularly important given the high rates of turnover 
18

among U.S. government personnel in Iraq. Without effective oversight of RTI, there is increased 

risk that LGP objectives will not be met and that funds could have been put to better use.

USAID Contract Oversight

USAID is responsible for LGP contract and program management; however, initially it did not 

assign sufficient personnel to effectively carry out this responsibility.

The USAID contracting officer appointed the LGP program manager as the CTO, with responsibility 

for oversight of the contractor. The LGP contracts confer broad responsibility on the CTO including

approving key RTI personnel and changes in personnel;

approving RTI vouchers;

ensuring that RTI meets the technical requirements of the contract in accordance with the 

contract terms, conditions, and specifications;

performing necessary inspections and ensuring RTI corrects deficiencies;

performing acceptance for the government; and

monitoring RTI’s production or performance progress, notifying RTI in writing of 

deficiencies observed during surveillance, and directing appropriate action to effect 

correction.

At present, one CTO is assigned to this contract and our review has found no evidence that more 

than one CTO was ever assigned at one time. SIGIR found no criteria that identify the number of 

CTOs that should be assigned, and it appears to be an agency decision as to the number required. 

However, although the current CTO is trained, experienced, and was properly designated by 

appointment letter, SIGIR believes that the size and scope of the LGP contracts (approximately $239 

million and $359 million with activities in all 18 provinces) and the associated responsibilities 

conferred on the CTO are too great for one individual to manage effectively.

USAID’s recent augmentation of LGP management by the PRT representatives has largely resolved

this problem. USAID representatives at the PRTs, called activity managers, now provide assistance 

to the CTO in overseeing RTI. These representatives do not stand in for the CTO, but provide 

feedback to the CTO in the form of e-mails and face-to-face meetings. For example, the current 

CTO stated that he receives about 100 e-mails a day from 28 USAID representatives in all 18 

provinces. The CTO also stated that he receives informal feedback on RTI performance from other 

sources, such as the U.S. military.

Contractor Performance

USAID was late in evaluating the contractor’s performance during three of the contract years. 

Annual contractor reviews are required by Federal Acquisition Regulation and USAID’s own 

Acquisition and Assistance Policy Directive. According to the RIG, the 2006 evaluation was done a

year late, and the 2007 evaluation was two months late. SIGIR also found that the 2008 evaluation, 
19

due in May 2008, has not been completed. However, on September 23, 2008, USAID provided us 

with documents showing that the 2008 evaluation is in process.

Federal Acquisition Regulation 42.15 and USAID Acquisition and Assistance Policy Directive 06-

05 require CTOs to evaluate contractor performance at least annually. One reason is to provide 

information for future source selection and other acquisition decisions. In its July 2007 report, the 

RIG found that USAID did not complete the annual contractor performance evaluation for the year 

ending May 2006 until May 23, 2007, and the evaluation for the year ending in May 2007 was not 

finalized until August 29, 2007. Consequently, when USAID exercised two option periods for LGP2 in July and December 2006, which increased the estimated cost of the contract by $90 million, 

USAID officials did not have essential performance information available on which to base the 

decision. The RIG stated that it believed that this occurred because USAID/Iraq did not make 

contractor performance evaluation a priority.

SIGIR’s current review additionally found that the required contractor evaluation for the year ending 

May 2008 has similarly not been completed. The CTO stated that he had completed the evaluation, 

but technical problems had prevented the evaluation from being posted for comment by RTI. A 

senior USAID/Iraq official stated that action was being taken to push the process to completion. 

Without the required evaluation, the U.S. government will not have complete information to evaluate 

RTI properly on future acquisition actions. Additionally, the USAID policy directive states, ―GAO 

(Government Accountability Office) has ruled that failure to properly document contractor 

performance information and make it available for use in source selections for the same or similar 

items was sufficient basis to sustain a protest of a contract award in a subsequent source selection.‖ 

On September 23, USAID provided us with documents showing that the May 2008 evaluation report 

was in process.

Although the contractor performance reports were not submitted in a timely manner, the report for 

the period May 9, 2006, to May 8, 2007 generally shows that USAID was pleased with RTI’s 

performance. On a scale of 0 to 5, where 0 is ―unsatisfactory‖ and 5 is ―outstanding,‖ USAID rated 

RTI a 3, or ―good,‖ in all four categories evaluated, including quality of product or service, cost 

control, timeliness of performance, and business relations. Informal appraisals of RTI’s

performance by senior USAID and U.S. State Department leaders were generally positive. Senior 

State Department officials from the Office of Provincial Affairs expressed high satisfaction with the 

LGP program and RTI performance. Baghdad PRT leaders praised RTI and stated that RTI was a 

valuable asset.

Voucher Review

USAID’s review and approval process for contractor invoices is inadequate. There are several 

criteria requiring that an individual with knowledge of the contractor’s activity review vouchers. 

However, according to USAID, the CTO is in the best position to know enough about the program to 

determine whether RTI expenditures listed on monthly invoices are appropriate. Yet, SIGIR’s 

review found no evidence that this review is being conducted.

SIGIR identified three criteria requiring a CTO review of vouchers. First, Section G.1 of the LGP-2 

contract states that the CTO is the authorized representative of the government to approve vouchers 

under this contract. Second, Section E of the CTO designation order states that the CTO must 
20

administer financial management responsibilities by, among other things, ―reviewing the 

contractor’s request for payments (usually the contractor’s vouchers or invoices) and providing or 

denying your administrative approval in accordance with the stipulations of the contract 

administration plan and the procedures in Automated Directives System Chapter 630, Payables 

Management. This chapter states that your administrative approval constitutes the written evidence 

that the goods and/or services specified on the invoice were received and conform to the 

requirements or performance milestones in the contract—effectively the acceptance of these goods 

and/or services.‖ The letter also requires the CTO to recommend the disallowance of costs to the 

Contracting Officer, in accordance with the Automate Directives System Chapter 630. Third, 

USAID’s Guide for Managers and Cognizant Technical Officers, emphasizes that the CTO should 

review, analyze, and evaluate the contractor’s progress, performance and compliance with technical, 

price, and schedule provisions of the contract.

During our review, we found no documentary evidence of CTO review of vouchers and invoices and 

the CTO is not approving the vouchers. When we requested copies of vouchers and RTI invoices 

from USAID, the agency directed us to obtain them from RTI. USAID officials told us that the CTO 

is not required to document his review and approval of vouchers since the contract states that 

payment will be by means of a letter of credit. RTI draws these funds in advance. However, 

according to USAID officials, the CTO reviews the monthly invoice and, based on the quarterly 

implementation plan and his knowledge of the program, determines if any expenditure appears to be 

outside the scope of the program. If there are any such items, then the CTO e-mails an RTI 

accountant in North Carolina to determine if, in fact, the expenditure is appropriate. However, 

without a signed document there is no evidence that this review actually takes place.

Possible Overpayment

During the course of its work on the LGP contract, RTI physically lost $185,481 in cash. With the 

concurrence of the contracting officer, RTI claimed the loss as an expense and the government 

subsequently paid RTI both its General and Administrative expense on the lost money along with its 

fixed fee. The amount paid totaled $56,906. SIGIR questions this decision.

On August 19, 2004, RTI physically lost $185,481 in LGP cash. It reported the loss to USAID, and 

on October 3, 2004, the USAID/Iraq Contracting Officer issued a letter to RTI stating that she had 

considered the facts and circumstances described in RTI’s notice of cash loss and had reviewed 

RTI’s Cash Management Policies and Procedures. The letter stated, ―Based on the facts surrounding 

the incident giving rise to the loss and RTI’s statement of compliance with the policies and 

procedures identified in Attachment B, I determine that the loss of cash and cash equivalents totally 

[sic] $185,481 was unforeseen [sic] and without the fault or negligence of RTI. Consequently, the 

loss is considered an allowable expense under the subject contract.‖

On October 25, 2004, RTI prepared, signed, and submitted a Standard Form 1034 for $242,386.57. 

RTI also submitted an accompanying invoice with a miscellaneous business expense of $185,481, 

General and Administrative expense (based on 21 percent of the cost) of $38,951.01 and fixed fee of 

$17,954.56. The invoice total was the same as the voucher, $242,386.57.

While the Contracting Officer made the determination to reimburse RTI for the lost cash, we believe 

that the loss was incorrectly identified as an allowable expense. While the loss of cash may b e 
21

classified as an expense (extraordinary loss) on the income statement, the later replenishment of the 

cash, by whatever means, reverses the expense. Had RTI’s insurance carrier reimbursed them for 

the loss, the recorded expense would have been credited upon receipt of the cash reimbursement. In 

this instance, USAID replaced the cash. Therefore, RTI incurred no expense and should not have 

been entitled to charge the U.S. government for its General and Administrative expense on the loss. 

Furthermore, it is unclear how the fixed fee charged on the invoice was calculated. The LGP 1 

contract did not specify a base or rate for calculating how the fee would be paid on the level-of-effort 

contract. Based on the negotiation memorandum for the contract, it appears that the fee is based on a 

percentage of total costs, including subcontracts and consultants. The fee charged on the invoice is 

approximately 8 percent of the lost cash plus General and Administrative expense. Because the cash 

was reimbursed, it is no longer an expense, therefore RTI should not have been allowed any 

associated fee. Therefore, the General and Administrative expense of $38,951.01 and the fixed fee 

of $17,954.56, or a total of $56,905.57, would not have been allowed if the Contracting Officer had 

not identified the loss as an allowable expense.
22

Conclusions and Recommendations

As of June 30, 2008, obligations under these contracts are approximately $598,218,622, and 

disbursements are $513,027,336. SIGIR’s primary cost concern is that data on the costs of 

individual activities was not available for the first four years of the contracts because RTI reports did 

not identify costs at an activity level. Instead, RTI only collected costs at an aggregate level. 

Currently, program costs are being reported in five broadly defined activities, not at the task level 

supporting each of the activities. This approach may provide sufficient information for programs 

with relatively low funding levels. However, in a program with over $500 million in costs, more 

specific reporting on services performed, outcome, and costs is necessary for effective oversight.

USAID has spent or obligated over $500 million on the two RTI contracts over five years to promote 

and strengthen local governance in Iraq. However, for the first four years of these contracts the 

outcome is unclear because basic contract requirements were not met, particularly the contract 

requirements for development of a performance plan and baseline data against which contractor 

performance and progress could be assessed. In April 2007, the necessary plans and reports were 

put in place, but not before $329 million had already been spent. SIGIR reviewed the plans and 

reports submitted along with subsequent plans and found that they contain the needed information on 

contractor activities along with benchmarks for measuring progress. Together, these documents 

show that for the last 18 months progress has been made in improving local governance. SIGIR 

interviews with personnel with direct knowledge of program activities indicate that the current 

outcomes of this program are positive. SIGIR also reviewed two activities conducted under this 

contract, the development of Provincial Development Strategies and the implementation of the 

Geographical Information System, and in both cases found indications of progress toward goals.

Recent changes have begun to address this problem and improved USAID’s contract management 

ability. These changes include assigning USAID representatives at the PRTs responsibility for 

monitoring and reporting on program activities. Other problems SIGIR identified include delays in 

conducting contractor performance assessments, and an absence of invoice reviews. 

Recommendations

We recommend that USAID’s Mission Director-Iraq take the following actions:

Direct USAID officials to establish a timeframe for completing the operations manual that 

provides guidance to activity managers overseeing contractor performance.

Direct the CTO to review and approve RTI vouchers and invoices as required by the contract. 

Also, require the CTO to maintain documentation of the approvals in the contract file.

Direct that action be taken to recover the General and Administrative fee and the fixed fee 

paid to RTI on the $185 thousand in lost funds.
23

Lesson Learned

The overall success of a contract is determined by the success of its individual activities or tasks. 

Consequently, management needs information at the activity level on expected outcomes, progress 

toward achieving outcomes, and costs to determine how discrete activities contribute to overall 

program goals and objectives. This is particularly the case for large dollar-value contracts.

Management Comments

USAID concurred with the report findings and recommendations and identified steps it is taking to 

address each recommendation. According to USAID, it has already taken the following steps:

USAID has issued guidelines for its PRT representatives that clarify their role. It has 

also implemented a comprehensive orientation program for new PRT representatives, 

and stated that it would hold PRT coordination meetings with all representatives several 

times a year. USAID also recognized that it would be useful to establish Mission-wide 

guidelines to clarify the roles and responsibilities of program management staff and 

would do so at its next gathering of PRT representatives.

USAID stated that the CTO, Controller, and Contracting Officer have discussed the 

contract requirement for administrative review of expenditures, and established 

procedures to improve its voucher and invoice review processes.

USAID agreed that the amounts billed for General and Administrative and fixed fee 

associated with the allowed cash loss should not have been paid and stated that it would 

include this matter as part of its contract closeout process.
24

Appendix A – Scope and Methodology

This audit addresses the U.S. government’s two contracts with Research Triangle Institute to execute 

the local governance program. This audit specifically examined contract cost, outcome, and 

management oversight, including any vulnerability to fraud, waste, and abuse.

To determine the outcome and management oversight of these contracts during the first four years, 

SIGIR relied primarily on audit work performed by USAID’s Regional Inspector General, in 

Baghdad, Iraq. The RIG issued two audit reports on local governance program activities, in July 

2006 and again in 2007. These reports identified numerous problems with the program in its first 

four years of activity and the information presented in this report on local governance program 

activities is taken directly from those reports. SIGIR used these reports to avoid duplication of effort 

between SIGIR and the RIG, and to minimize the impact of the audit on USAID’s Iraq operations.

To determine the costs, outcome, and management oversight of local governance activities from 

April 2007 to the present, we did the following:

reviewed the basic contracts and all associated modifications

reviewed financial reports

reviewed quarterly, semiannual, and annual activity reports, LGP reports and PRT weekly 

summary reports

reviewed Provincial Development Strategy documents;

interviewed knowledgeable officials at USAID, the Office of Provincial Affairs, several 

PRTs, military officials at one PRT, senior officials at RTI; and the USAID/RIG;

obtained an understanding of USAID’s process for validating RTI’s quantitative data relating 

to LGP program outcomes.

To determine the adequacy of internal controls used for contract and program management we did 

the following:

reviewed the request for proposals, negotiation memorandums, and other documents relating 

to the solicitation and award of the contracts;

reviewed supporting documentation for all nine LGP 2 subcontractors and Subcontractor 

Selection and Price Justification Memorandums to identify the reasons for selection and areas 

of expertise;

reviewed copies of the contractor performance reports;

reviewed copies of invoices, pay vouchers, and financial reports;

reviewed a USAID/Iraq Mission Director memorandums identifying the roles of USAID 

PRT representatives;
25

developed an understanding of USAID’s process for reviewing RTI expenses under the 

contract through interviews and analysis of the financial documents;

developed an understanding of the Letter of Credit Advanced Payment authorization;

reviewed relevant Defense Contract Audit Agency and USAID/Iraq Inspector General 

reports;

reviewed a copy of the most recent annual report of government property in contractor’s 

custody;

reviewed the hard copy contract files at USAID; and

interviewed knowledgeable officials at USAID, the PRTs, RTI, and the USAID/Iraq 

Regional Inspector General.

This audit was performed by the Special Inspector General for Iraq Reconstruction 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 July 2007 through August 2008.

We conducted this performance audit from July 2007 to August 2008 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.

Use of Computer-Processed Data

We reviewed financial data relating to contract costs compiled and maintained in RTI accounting 

systems, Costpoint and AccPac. We relied on these systems as the official source because it is the 

most complete source for such data. Because the financial data was not critical to our findings, we 

determined that performing substantive testing of the reliability of the accounting system or the 

financial data was not necessary.

We also reviewed performance data produced by RTI systems relating to program outcomes. RTI 

uses four internally designed databases to document and report on LGP training, conferences, and

technical assistance activities. The software application comprises licensed versions of Microsoft

Access 2003 at RTI headquarters and in the five regional hubs. We relied on the RTI systems as the 

official source because it is the most complete source for such data. The performance data was not 

critical to our findings. Although we obtained evidence that supported some of the data, we 

determined that performing substantive testing of the reliability of RTI systems or the performance 

data was not necessary.

Internal Controls

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

respect to RTI contracts. Specifically, we identified and assessed internal or management controls 

including
26

contract award

overseeing contract performance

financial management

management of government property in the custody of the contractor

Prior Coverage

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

Audit Agency, USAID/Iraq – Inspector General, and PricewaterhouseCoopers LLP.

SIGIR Audit Reports

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

Program in Iraq, October 18, 2007

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

Iraq, July 25, 2007

Defense Contract Audit Agency Reports

Report No. 1281-2007A17900065, Audit of Direct Costs Incurred January 1, 2006 through 

December 31, 2006 on USAID Contract No. 267-C-00-05-00505-00, September 11, 2007

USAID/Iraq – Inspector General Reports

Report No. E-267-07-008-P, Audit of USAID/Iraq’s Participation in Provincial Reconstruction 

Teams in Iraq, September 27, 2007

Report No. E-267-07-007-P, Audit of USAID/Iraq’s Local Governance Activities, 

July 31, 2007

Report No. E-267-06-003-P, Audit of USAID/Iraq’s Local Governance Activities, 

July 10, 2006

Memorandum No. 03-004, USAID’s Compliance with Federal Regulations in Awarding the Iraq 

Sub-National Governance and Civic Institution Support Contract, September 9, 2003

PricewaterhouseCoopers LLP Financial Audit Reports

Research Triangle Institute, Financial Statements, Schedules and Other Information Related to 

Federal Awards for the Year Ended September 30, 2006 and Reports Under OMB Circular 133-A 

Thereon
27

Appendix B—Contract Solicitation and Award

The LGP-1 Contract - On January 13, 2003, the USAID Acting Administrator granted a waiver for 

the solicitation of the LGP 1 contract that allowed the agency to use expedited acquisition and 

assistance procedures to support urgent needs of the Iraq program. USAID Acquisition Regulation 

706.302-70 grants the authority to provide the waiver and states, ―Full and open competition or 

otherwise have an adverse effect on programs conducted for the purposes of foreign aid, relief, and 

rehabilitation.‖ USAID selected limited competition because in January 2003, the Office of 

Procurement was informed that award had to be made by the end of February 2003. USAID issued 

the request for proposal March 4, 2003. Proposals were due on March 17, 2003.

The request for proposal was provided to three prospective offerors; it was not advertised on the 

federal website because the procurement was being conducted using other than full and open 

competition procedures. According to the Memorandum of Negotiation, the three prospective 

offerors were experienced and knowledgeable in the field of local governance. By the closing date 

of March 17, two of the offerors had declined to submit an offer, citing other commitments or 

concerns that they could not meet expectations. As a result, RTI became the sole offeror for the 

solicitation.

In Washington, D.C., a technical evaluation committee and a cost evaluation committee analyzed 

RTI’s offer. The technical evaluation committee found RTI to be technically acceptable and gave 

RTI a good rating. RTI’s revised cost proposal, covering one base year and two option years, was 

for $434,335,643, excluding fees. USAID’s Contract Audit Management office assisted the 

Contracting Officer in evaluating RTI’s cost proposal. Also, a representative of the Contract Audit 

Management office made a site visit to RTI’s North Carolina office and obtained documentation 

supporting the RTI cost proposal. Based on the analysis conducted under limited competition, the 

on-site audit, and supporting documentation for final revised costs proposed, RTI’s proposed costs 

were deemed fair and reasonable. The final negotiated fee for a base year and two option years was 

$31,734,866. USAID also evaluated RTI’s past performance.

USAID expected the contract to include one base year plus two option years but only one option 

year plus forty-five days was exercised. According to an RTI official, the government determined 

that the contract was not correctly bid, and had to be re-bid.

On September 9, 2003, the RIG issued memorandum 03-004 on USAID’s compliance with federal 

regulations in awarding the LGP 1 contract. The RIG determined that USAID had complied with 

the applicable federal regulations for authorizing other than full and open competition, assessing the 

contractor’s ability to perform, and conducting the pre-solicitation, selection and negotiation process. 

The memorandum further stated, ―However in making its award to RTI, USAID did not prepare and 

use adequate needs-based support for determining the level of effort or technical assistance procured 

under the contract.‖ The Inspector General determined that the level of effort called for in the 

request for proposal and subsequent contract award was not based on an analysis of the requirements 

for possible local government assistance in Iraq. Therefore, the contract may have been awarded in 

an amount in excess of need. The review determined that the contract budget was developed to 

justify spending the available funding of approximately $150 million within one year rather than 

being based on an assessment of estimated needs. 
28

The LGP-2 Contract - USAID issued the request for proposal for the LGP 2 contract on November 

24, 2004. Proposals were due on January 11, 2005. Three offerors submitted proposals and 

provided past performance references. The Contracting Officer determined that one of the proposals 

had not addressed the requirements of the solicitation. Two USAID committees analyzed the other 

two proposals in Amman, Jordan. A technical evaluation panel and a cost review committee 

reviewed the proposals.

The Technical Evaluation Panel ranked RTI’s proposal as the highest technically qualified offer. 

The two remaining offerors were included in the competitive range, and disparity in the quality of 

the proposals was considered to be insubstantial. However, the Contracting Officer requested 

revised proposals from the two offerors to address discussion points in the technical evaluation 

panel’s evaluation. The offerors responded on March 3, 2005, with revised proposals.

The technical evaluation team submitted final rankings on March 8, 2005. RTI’s score was 

substantially higher than the other offeror’s score. The other offeror had the lowest total price, 

which was almost $50 million less than RTI’s lowest total price; however, the offeror was notified 

that its proposal was no longer considered technically viable and was eliminated from the 

competitive range. Therefore, no best value decision was made. USAID performed a cost realism 

analysis to determine the most probable cost on the contract, and accepted RTI’s proposed budget 

and total cost of $218,761,081. The contract was signed on April 26, 2005, and became effective 

May 9, 2005.
29

Appendix C—Examples of Program Monitoring 

Plan Indicators

LGP M&E Indicator Values

9. A: Number of Provincial and District Councils that met project criteria for functioning during the 

last six months

Year Target Actual Notes

2005 Baseline - 0 0 Provincial council was elected in October 

2004.Three of Iraq’s 18 provinces are part 

of the Kurdish region. 2006 15 PCs

2007 15 PCs,

10 districts 

16 PCs; unable to collect data on Diyala PC. 

Erbil PC failed to pass project criteria.

12 districts.

The district councils to be measured are 

those where embedded PRTs are located.

2008 15 PCs,

16 districts

17 PCs. Erbil PC failed to pass project criteria.

27 district councils.

The district councils measured are for 

ePRT locations in Anbar, Baghdad, North 

Babil and Wasit.

9. B: Number of Provincial Councils that invested in projects according to public investment 

priorities identified in their PDS during the last six months

Year Target Actual Notes

2005 Baseline 0 Provincial development strategies were 

to be developed by 16 provinces in 

2006-2007 and then coupled with 

assignment of national budget 

resources. 

2006 0 0

2007 16 PCs 16 PCs; unable to evaluate Erbil. Dahuk 

has not completed its PDS.

2008 18 PCs

9.1. A: Milestones of legislative progress related to local government interaction through the legal 

framework with national government impact existing and newly proposed legislation and 

the legislative process

Year Target Actual Notes

2005 [no milestone targeted]

2006

Milestone 1: Provincial Councils conduct regional & national 

conferences on enabling legislation.

Milestone 2: PCs draft, adopt, and submit Provincial Powers Law to 

COR.

Milestone 3: PCs form local government association & set a legislative 

agenda for 2007.

Completed

Completed

Completed

2007 Milestone 4: LGA lobbying campaign for Provincial Powers Law. Completed Law passed 

by COR in 

March 2008. 

2008 Milestone 5: PCs draft Provincial Fiscal Decentralization Law.

Milestone 6: LGA attains legislative agenda for 2008. In progress

2008 agenda 

to be 

formalized in 

December 

2007

Note: RTI’s first program monitoring plan was approved by USAID in April 2007.
30

9.1. B: Number of Provincial Councils that finalized their PDS for use as the province's public 

investment plan

Year Target Actual Notes

2005 Baseline 0

Conferences on PDS began in 2006 and continued in 2007. PC 

finalization of the provinces’ PDS should happen in late 2007. 2006 0 0

2007 16 PCs 14 PCs

2008 18 PCs 17 PCs

Anbar, Salah Ad Din and Diyala completed the development of their PDS.

Dahuk governor approved the development of a PDS in March 2008 and 

not started till now.

9.2. A: Number of provincial councils with more than 50% of current council members who have 

demonstrated performance of key competencies

Year Target Actual Notes

2005 0 0 A methodology for evaluating competence 

was attempted in 2006 and revised in 

2007. 2006 0 0

2007 5 cumulative

Babil PC: certified in March 2007.

Kirkuk PC: certified in May 2007.

Baghdad PC: certified in July 2007.

LGP expatriate assigned to address 

competency issues resigned in July 2007. 

Replacement expected to be in place in 

November 2007.

2008 15 cumulative

Karbala PC: certified in December 

2007.

Najaf PC: certified in December 

2007.

Basrah PC: certified in January 

2008.

LGP expatriate assigned to address 

competency issues resigned in February 

2008. 

9.2. B: Number of provinces that have used GIS capacity to produce city maps with utility 

overlays that inform planning for delivery of essential services

Year Target Actual Notes

2005 Baseline 0

2006 0 0 GIS implementation in Basra city as a pilot project.

2007 2 1, Basrah Project expanded to 18 provinces in April 2007. 

2008 15 1, Basrah Detailed progress can be seen in the index table for GIS.
31

9.2. C: Capital budget funds assigned to provincial governments in FY 2006-2008 that were 

contracted for projects

Year Target ($ billions) Actual Notes

2005 Baseline 0

No capital budget funds 

were assigned to provinces 

in 2005

2006

$2.0 assigned for 

commitment thru 18 

months

18 provinces committed 92% of 2006 

provincial capital budget allocation in 12 

months (as of Sept. 2007).

Project funds were 

committed in 2006 and 

2007.

2007

$2.3 assigned for 

commitment thru 15 

months

18 provinces committed 84% of 2007 

provincial capital budget allocation in 11

months (as of Feb. 2008).

2008

Est. $2.5 billion assigned 

for committing thru 12 

months

15 provinces (excluding the KRG) were 

allocated $3.34 billion assigned for 

committing thru 12 months.

In February, the COR 

passed the 2008 Budget 

Law.

9.3. A: Number of subnational councils or other government offices that used mechanisms to 

solicit citizen input related to public policy decisions or issues in the last six months.

Year Target Actual Notes

2006 Baseline 6 Targets may be adjusted. 

2007 12 PCs 10 PCs

2008 15 PCs (cumulative) 18 PCs

Operational Plan Indicator Values

9.2.1.A

Number of councils that received project-supported technical assistance 

for performance improvement in the last six months

Region Province PC LC Total

Central Baghdad 1 18 19

North

Erbil 1 0 1

Ninawa 1 29 30

Sulaymanyah 1 0 1

Tamim 1 12 13

South

Basrah 1 15 16

Maysan 1 0 1

Muthanna 1 0 1

Thi Qar 1 6 7

South 

Central

Babil 1 10 11

Karbala 1 8 9

Najaf 1 4 5

Diwaniya (Qadisiyah) 1 9 10

Wasit 1 16 17

North 

Central

Anbar 1 11 12

Salah ad Din 1 11 12

Total 16 149 165
32

9.2.1.B Number of people who received project-supported training to strengthen 

local government in the last six months.

Region Province

PC LC Total

Male Female Male Female Male Female Total

Central Baghdad 91 29 459 80 550 109 659

North

Duhuk 2 0 310 155 312 155 467

Erbil 5 9 739 326 744 335 1079

Ninawa 16 5 239 9 255 14 269

Sulaymanyah 4 0 244 120 248 120 368

Tamim 1 6 279 233 280 239 519

South

Basrah 54 20 368 56 422 76 498

Maysan 20 5 93 14 113 19 132

Muthanna 33 5 79 25 112 30 142

Thi Qar 55 8 148 29 203 37 240

South 

Central

Babil 19 10 381 64 400 74 474

Karbala 153 23 299 83 452 106 558

Najaf 65 27 405 111 470 138 608

Diwaniya (Qadisiyah) 29 16 50 16 79 32 111

Wasit 16 17 353 63 369 80 449

North 

Central

Anbar 30 3 323 2 353 5 358

Salah ad Din 22 4 367 8 389 12 401

Total 615 187 5136 1394 5751 1581 7332

9.2.1.C Number of people in government who received project-supported training to 

strengthen transparency in the last six months

Region

Province PC LC Total

Male Female Male Female Male Female Total

Central Baghdad 1 0 101 12 102 12 114

North

Duhuk 0 0 47 34 47 34 81

Erbil 0 0 91 22 91 22 113

Ninawa 0 0 1 0 1 0 1

Sulaymanyah 1 0 40 25 41 25 66

Tamim 1 0 76 21 77 21 98

South

Basrah 0 0 32 0 32 0 32

Thi Qar 18 5 11 0 29 5 34

South 

Central

Babil 2 1 90 2 92 3 95

Karbala 1 2 9 0 10 2 12

Najaf 13 6 44 1 57 7 64

Diwaniya (Qadisiyah) 14 15 0 0 14 15 29

North 

Central

Anbar 1 0 167 2 168 2 170

Salah ad Din 12 3 154 0 166 3 169

Total 64 32 863 119 927 151 1078
33

9.3.1. A: Number of mechanisms for local citizen engagement used at least twice in projecttargeted areas in the last six months

Province # of mechanisms Description of Mechanisms

Anbar 2 Provincial website

Weekly PC newspaper called Sot Al-Anbar.

Babil 4 Weekly PC meeting with citizens

PC website

2 PC phonelines for citizen input.

Monthly Babil environment newspaper called (BIATONA) 

Baghdad 5 Weekly PC meeting with citizens

PC website.

Weekly PC Newspaper

Al-Mansour Municipality Council Bio-monthly newspaper

Karrada district council website

Basrah 3 PC website.

Weekly PC Newspaper called Albasrah

Almaydan periodical newspaper issued from the PC 

Development & Reconstruction Committee. 

Dhi Qar 1 PC website

Dohuk 1 Quarterly PC newspaper

Diyala 1 PC website

Diwaniya 

(Qadisiyah)

2 Weekly PC Newspaper called “Sada Al-Diwaniya”

Periodical TV/Radio interviews with PC members where citizens 

participate in discussions

Erbil 1 Provincial website

Karbala 5 PC website

Weekly PC newspaper

Monthly newsletter from Education DirectorateQuarterly 

magazine issued from the Agriculture DG called Karbala 

Agriculture

Quarterly magazine issued from the Environment DG called the 

environment & society

Kirkuk 1 PC Website.

Maysan 2 Provincial website

Bio-monthly PC newspaper called “Sada Maysan”

Muthanna 1 PC website

Najaf 2 Monthly PC newspaper

Provincial website.

Ninawa 1 TV interviews with the Governor.

Salah Ad Din 2 Weekly PC newspaper called “Al-Muntasf”

Periodical TV/Radio interviews with PC members where citizens 

participate in discussions

Sulaymaniyah 2 PC website

Governorate website

Wasit 3 Monthly PC newspaper called ―Wasit Provincial Council 

Newspaper”

PC website

1 PC phone lines for citizen input

18 Provinces 39 Total

Source: RTI Semi-Annual Performance Monitoring Report, June 10, 2008. We did not audit the data or verify RTI computer system 

controls.
34

Appendix D—Subcontractors

Nine subcontractors were selected by RTI to support LGP 2. Seven of the nine subcontractors also 

supported LGP 1. All subcontractors were approved by USAID as part of the award process.

LGP-1 Subcontractors

Subcontractor Type

Subcontract 

Amount

Period of 

Performance

American Manufacturers Export Group CPFF $ 1,479,004 06/02/03 - 05/09/05

BearingPoint CPFF 3,142,509 04/11/03 - 05/09/05

BSH FP 10,451,626 06/01/03 - 05/09/05

Chemonics Int'l, Inc. CPFF 16,973,329 04/11/03 - 03/25/05

Creative Associates Int'l, Inc. CPFF 4,307,106 04/02/03 - 02/28/05

Custer Battles FM 7,978,477 10/01/03 - 03/25/04

Environmental Quality Int'l CPFF 87,541 10/15/03 - 09/30/04

Int'l City/County Mgmt Assoc CPFF 2,579,227 05/01/03 - 05/09/05

Int'l Foundation for Election Systems CPFF 861,936 04/11/03 - 09/30/04

MPRI, Inc. CPFF 1,257,629 06/09/03 - 03/25/05

MPRI, Inc. TM 1,885,000 09/03/03 - 03/25/05

Near East Foundation CPFF 398,586 04/11/03 - 06/30/04

RTI Polska TM 1,410,894 07/28/03 - 01/31/05

Solace Enterprises TM 1,290,840 07/.23/03 - 01/31/05

Unity Resources Group TM 38,822,599 03/26/04 - 05/09/05

VNG Int'l TM $ 1,456,149 08/01/03 - 05/09/05
35

Local Governance Program-2 Subcontractors

Subcontractor Type

Subcontract 

Amount

Period of 

Performance

BearingPoint CPFF $ 9,653,591 05/09/05 - 08/08/07

BSH FP 912,795 05/10/05 - 05/10/06

Creative Associates Int'l, Inc. CPFF 624,394 05/09/05 - 12/31/08

Greenfire Int'l FP 99,500 03/01/06 - 05/31/06

Int'l City/County Mgmt Assoc CPFF 1,521,178 05/09/05 - 12/31/08

NYBI FP N/A 07/26/06 - 05/08/09

RTI Polska T&M 128,016 11/01/05 - 03/01/06

Unity Resources Group T&M 92,900,000 05/09/05 – 12/31/08

VNG Int'l T&M 2,527,439 05/09/05 - 12/31/08
36

Appendix E─Management Comments USAID
37
38
39

Appendix F—Acronyms

CTO Cognizant Technical Officer

GIS Geographical Information System

LGP Local Governance Program

PDS Provincial Development Strategy

PRT Provincial Reconstruction Team

RIG United States Agency for International Development Regional Inspector General

RTI Research Triangle Institute

SIGIR Special Inspector General for Iraq Reconstruction

USAID United States Agency for International Development
40

Appendix G—Audit Team Members

This report was prepared and the review was 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:

Kenneth Bowen

Ed Brooks

Walter Franzen

Frank Gulla

Walt Keays

William Shimp
41
42

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 Kristine Belisle

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: 703-428-0818

Email: PublicAffairs@sigir.mil