A $1.2bn (£590m) contract for training Iraqi police was so badly managed that auditors do not know how the money was spent, the US state department says.
The programme was run by a private US company, DynCorp. It insists there has been no intentional fraud.
Auditors have stopped trying to audit the programme because all the documents are in disarray and the government is trying to retrieve some of the money.
Training Iraqis to take over security is a key part of US strategy.
Stuart Bowen Jr, the Special Inspector General for Iraq Reconstruction (SIGIR), blamed the problems on long-standing contract administration problems within the state department office that awarded the contract.
He said “lack of controls” and “serious contract management issues” within the Bureau for International Narcotics and Law Enforcement Affairs (INL) made it “vulnerable to waste and fraud”.
Another BBC article states:
An independent panel has strongly criticised the way the US army manages contracts to supply its troops in Iraq and Afghanistan.
The panel said there were high levels of fraud and waste in relation to contracts worth $4bn (£1.9bn) a year.
It blamed a lack of oversight and said only about half the army’s contracting staff were properly qualified.
Defence Secretary Robert Gates said he was “dismayed” by the report and the Pentagon would pursue its suggestions.
The army says it is pursuing 83 criminal inquiries related to contract fraud and more than $15m in bribes have been exposed.
The panel did not address specific allegations against individuals, but made clear that a lack of oversight and too few army contracting personnel had exacerbated systemic problems.
The number of army personnel responsible for managing contracts in Kuwait, Iraq and Afghanistan dropped as the number of contracts and their value soared over 12 years, the panel found.
Only about half of all contracting personnel are certified to do their jobs, it added.
The panel said some 2,000 extra staff were needed to deal with a 600% increase in the workload.
“This is a systemic issue within the army and within the DoD [Department of Defense],” said Jacques Gansler, chairman of the commission.
Senator Joe Lieberman, chairman of the Senate Committee on Homeland Security and Governmental Affairs, said it could take the state department up to five years to review invoices and demand repayment from DynCorp for unjustified expenses.
“This scenario is far too frequent across the federal government,” he said.
DynCorp had been asked to improve its management of government-owned equipment in Iraq twice before.
There are many sides to the issue. One is a government that can account for expenditures in a sane way with a reasonable margin of error, which at present is not in place. This is being simply responsible and efficient in my mind. The other is prosecution for fraud, which is another matter and ex post facto, and harder than even being more efficient.
Since it appears to be bi-partisan issue overall in Congress to simply continue the process, why is it framed as partisan? It would seem to me either you are for gross wastefulness or not. And to reduce oversight while increasing spending seems counter-intuitive.
So do we just live with it? Is the margin of error in wastefullness the political issue here? Or is the concern marginal as only a concern for Ron Paul ? Is it unpatriotic to waste tax money and fail to deliver a service so grotesquely but vital to national security? Maybe not criminal, but severely undermining our security is unpatriotic.
What did Cheney mean by “deficits don’t matter”? Can a market believe in patriotism? Or a CEO within the confines of his/her company policies?