WASHINGTON — The U.S.-led provisional government in charge of Iraq until last summer was unable to properly account for nearly $9 billion in Iraqi funds it was charged with safeguarding, according to a scathing audit report.
The Coalition Provisional Authority may have paid salaries for thousands of nonexistent employees in Iraqi ministries, issued unauthorized multimillion-dollar contracts and provided little oversight of spending in possibly corrupt ministries, according to the report by Stuart W. Bowen Jr., the special inspector general for Iraq reconstruction.
"While acknowledging the extraordinarily challenging threat environment that confronted the CPA throughout its existence and the number of actions taken by CPA to improve the [interim Iraqi government's] budgeting and financial management, we believe the CPA management of Iraq's national budget process and oversight of Iraqi funds was burdened by severe inefficiencies and poor management," the report says in its conclusion. An advance copy of the report, scheduled for release today, was obtained by The Times.
In a letter to Bowen, former agency administrator L. Paul Bremer III blasted the findings of a draft copy, saying that the report was filled with misconceptions and inaccuracies.
Bremer acknowledged that financial systems in Iraq were weak but said that Bowen failed to consider the U.S. mandate to quickly turn over control to an Iraqi government. The agency disbanded after transferring power to the interim Iraqi government in late June.
Bremer could not be reached for comment Sunday.
The "auditors presume that the coalition could achieve a standard of budgetary transparency and execution which even peaceful Western nations would have trouble meeting within a year, especially in the midst of war," Bremer wrote. "Given the situation the CPA found in Iraq at liberation, this is an unrealistic standard."
A Pentagon spokesman also disagreed with the report's conclusions, saying Sunday that the agency had implemented reforms to improve accountability.
"The CPA was operating under extraordinary conditions from its inception until mission completion," spokesman Bryan Whitman said in a statement. "Throughout, the CPA strived earnestly for sound management, transparency and oversight."
The audit adds to a growing body of evidence that the U.S.-led occupation government created a two-tier system of oversight that continues to severely hamper the rebuilding of Iraq.
