U.S. and Iraqi officials doled out hundreds of millions of dollars in oil proceeds and other moneys for Iraqi projects earlier this year, but there was little effort to monitor or justify the expenditures, according to an audit released Thursday.
Files that could explain many of the payments are missing or nonexistent, and contracting rules were ignored, according to auditors working for an agency created by the United Nations.
"We found one case where a payment ($2.6 million) was authorized by the CPA (Coalition Provisional Authority) senior adviser to the Ministry of Oil," the report said. "We were unable to obtain an underlying contract" or even "evidence of services being rendered."
In a program to allow U.S. military commanders to pay for small reconstruction projects, auditors questioned 128 projects totaling $31.6 million. They could find no evidence of bidding for the projects or, alternatively, explanations of why they were awarded without competition.
The report was released by Rep. Henry Waxman of California, ranking Democrat on the House Government Reform Committee and a leading critic of reconstruction spending to rebuild Iraq.
"The Bush Administration cannot account for how billions of dollars of Iraqi oil proceeds were spent," Waxman said. "The mismanagement, lack of transparency, and potential corruption will seriously undermine our efforts in Iraq. A thorough congressional investigation is urgently needed."
Iraq's Ministry of Finance maintained two sets of accounting records, one manual and one computerized.
"A reconciliation between these two sets of accounting records was not prepared and the difference was significant," the report said.
Auditors questioned why checks were made payable to a U.S. official - a senior adviser to the Iraqi ministry of health - rather than to suppliers.
Other questions were raised about funds provided by the U.S.-run governing authority to Kurdish officials in northern Iraq. In one instance, auditors were given a deposit slip that showed the transfer of $1.4 billion to a Kurdish bank. Auditors said they were denied access to accounting records and were unable to verify how - or if - the money was spent.
The administration commits vast accounting frauds as part of their so-called war on terror. It will take years to figure out exactly who is profiting and what deals were cut by whom.
Yet another piece of evidence why the Bush administration is just Enron writ large.