WASHINGTON, Jan 31: A US audit report, released on Monday, said the US-led authority that governed Iraq after the 2003 invasion failed to keep track of nearly nine billion dollars it transferred to Iraqi ministries.
The audit report, compiled by the Special Inspector General for Iraqâ's reconstruction programme, said the Coalition Provisional Authority (CPA) failed to establish control systems to verify how the money was spent, which opened it to corruption.
In some instances, money was used to pay "ghost" employees, explaining that out of 8,206 guards on the payroll at one ministry, only 602 could be accounted for. Paul Bremer, who ruled Iraq until June 2004, rejected the findings, saying the report assumes Western-style accounting procedures could have been quickly set up during wartime.
Mr Bremer said delaying payment to Iraqi public servants could have created more security threats. "The CPA did not establish or implement sufficient managerial, financial and contractual controls to ensure that funds were used in a transparent manner," said Stuart Bowen Jr, director of the Office of the Special Inspector General.
The 8.8 billion dollars was reported to have been spent on salaries, operating and capital expenditures, and reconstruction projects between Oct 2003 and June 2004, Mr Bowen's report concluded.
The money came from revenues from the United Nations' former oil-for-food program, oil sales and seized assets - all Iraqi money. Under a UN Security Council resolution, the Development Fund for Iraq was to be used for humanitarian assistance, economic reconstruction and repair of infrastructure, continued disarmament, costs of civilian administration and other programs for the benefit of Iraqis.
The audit report, which was prepared for Congress, acknowledged that the resistance to occupation forces posed "the most difficult challenge" to reconstruction.
"Even under the most favourable of conditions, rebuilding Iraq would be a job of daunting proportions," the report observed. But the CPA did not clearly assign managerial responsibility, and its rules lacked clear guidance on procedures and controls for dispersing funds, the report said.
