- WASHINGTON (Reuters) -- At
least $8.8 billion in Iraqi funds that was given to Iraqi ministries by
the former U.S.-led authority there cannot be accounted for, according
to a draft U.S. audit set for release soon.
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- The audit by the Coalition Provisional Authority's own
Inspector General blasts the CPA for "not providing adequate stewardship"
of at least $8.8 billion from the Development Fund for Iraq that was given
to Iraqi ministries.
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- The audit was first reported on a Web site earlier this
month by journalist and retired Col. David Hackworth. A U.S. official confirmed
the contents of the leaked audit cited by Hackworth (www.hackworth.com)
were accurate.
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- The development fund is made up of proceeds from Iraqi
oil sales, frozen assets from foreign governments and surplus from the
U.N. Oil for Food Program. Its handling has already come under fire in
a U.N.-mandated audit released last month.
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- Among the draft audit's findings were that payrolls in
Iraqi ministries under Coalition Provisional Authority control were padded
with thousands of ghost employees.
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- In one example, the audit said the CPA paid for 74,000
guards even though the actual number could not be validated. In another,
8,206 guards were listed on a payroll but only 603 people doing the work
could be counted.
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- Three Democratic senators -- Ron Wyden of Oregon, Tom
Harkin from Iowa and Byron Dorgan of North Dakota -- demanded an explanation
from Defense Secretary Donald Rumsfeld over the use of the funds by the
CPA, which handed over authority to the Iraqis in June.
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- "The CPA apparently transferred this staggering
sum of money with no written rules or guidelines for ensuring adequate
managerial, financial or contractual controls over the funds," said
the letter sent by the senators on Thursday.
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- "Such enormous discrepancies raise very serious
questions about potential fraud, waste and abuse," said the senators.
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- A spokesman for the CPA Inspector General's office confirmed
"field work" had been completed on the audit but declined to
give specifics. He said auditors were awaiting comment from the Pentagon
before releasing the final report, probably later this month.
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- The Pentagon did not immediately respond to questions.
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- An international audit report released last month that
was requested by a U.N.-mandated monitoring body chided the CPA for oversight
of spending of Iraq's oil revenue.
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- While the International Advisory and Monitoring Board
said the audit found no evidence of fraud in spending by the CPA after
the U.S. invasion in March 2003, it said oversight was insufficient to
ensure money was used for its intended purposes.
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- One of the main benefactors of the Iraq funds was Texas-based
firm Halliburton, which was paid more than a billion dollars out of those
funds to bring in fuel for Iraqi civilians.
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- The monitoring board said despite repeated requests it
had not been given access to U.S. audits of contracts held by Halliburton,
which was once run by Vice President Dick Cheney, and other firms that
used the development funds.
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