http://www.wa****ngtonpost.com/wp-dyn/content/article/2008/05/22/AR2008052203751.html
Spending On Iraq Poorly Tracked
Audit Faults Accounting for $15 Billion in Work
Rep. Waxman says Iraqi assets were spent with "absolutely no
accountability."
(Manuel Balce Ceneta - AP)
By Dana Hedgpeth
Wa****ngton Post Staff Writer
Friday, May 23, 2008; Page D01
The inspector general for the Defense Department said yesterday that the
Pentagon cannot account for almost $15 billion worth of goods and services
ranging from trucks, bottled water and mattresses to rocket-propelled
grenades
and machine guns that were bought from contractors in the Iraq
reconstruction
effort.
The Pentagon did not have the proper do***entation, including receipts,
vouchers, signatures, invoices or other paperwork, for $7.8 billion that
American and Iraqi contractors were paid for phones, folders, paint,
blankets,
Nissan trucks, laundry services and other items, according to a 69-page
audit
released to the House Committee on Oversight and Government Reform.
An earlier audit by the inspector general found deficiencies in accounting
for
$5.2 billion of U.S. payments to buy weapons, trucks, generators and other
equipment for Iraq's security forces. In addition, the Defense Department
spent $1.8 billion of seized Iraqi assets with "absolutely no
accountability,"
according to Rep. Henry A. Waxman (D-Calif.), who chairs the oversight
committee. The Pentagon also kept poor records on $135 million that it
paid to
its partners in the multinational military force in Iraq, auditors said.
The Army disagreed with some of the auditors' findings, saying that it is
difficult to maintain an adequate paper trail in a war zone and that it
has
improved its record-keeping and accountability efforts. Robert L. Wilkie,
assistant secretary of defense for legislative affairs, declined an
invitation
to testify before from Waxman's committee.
Of the $7.8 billion in payments detailed in the audit released yesterday,
about $1.4 billion did not meet the most minimal requirements for
do***entation, making it highly possible that waste, fraud or abuse had
occurred, according to auditors. In one case, there is a copy of a $5.6
million check from the U.S. Treasury paid to an Iraqi contractor but no
do***ents saying what was purchased. In another, a South Carolina
contractor
was paid $11 million, according to a voucher, but auditors said they could
not
tell what goods or services were received.
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"Without a receiving re****t and invoice, we don't know what we paid for,"
said
Mary Ugone, the Defense Department's deputy inspector general for
auditing.
She said internal controls and paper trails were inadequate and that the
Army's "finance personnel were not adequately trained" in overseeing the
billions of dollars paid.
Auditors referred more than two dozen vouchers, totaling $35 million, to
criminal investigators at the Pentagon.
Waxman said the poorly do***ented expenditures of seized Iraqi assets
included
a $320 million cash payment for employing 1,000 people that was handed
over to
the Iraqi Finance Ministry with "little more than a signature in
exchange."
"Investigators looked at 53 payment vouchers and couldn't find even one
that
adequately explained where the money went," Waxman said.
The money paid to military coalition partners, including Britain, Poland
and
South Korea, was intended to help local reconstruction and humanitarian
projects. Auditors said that none of the files reviewed "contained
sufficient
sup****ting do***entation to provide reasonable assurance that these funds
were
used for their intended purpose." In one case, the Defense Department made
an
$8 million payment to Polish forces with minimal do***entation, according
to
the audit.
An audit re****t issued in November found that $5.2 billion of U.S.
payments to
buy weapons, trucks, generators and other equipment to sup****t Iraqi
security
forces had major deficiencies in how items were accounted for, saying that
the
Defense Department did not know "what equipment is due in, due out, issued
and
on hand." The inspector general found that the Defense Department could
not
account for 12,712 of 13,508 weapons, including assault rifles, machine
guns
and grenade launchers for Iraqi forces.
"When we turned them over to the Iraqis, they weren't properly accounted
for,"
said Gary Comerford, a spokesman for the Defense Department's inspector
general, saying serial numbers were not consistently recorded. "The paper
trail is not complete."
The November audit also described how the Pentagon paid $32 million for
the
construction of an Iraqi military facility in Anbar province that was
never
built. Defense Department officials told staff members of the oversight
committee that "this is embarrassing" because "not a spade of dirt was
turned."
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