Defense IG to ramp up Iraq spending audits

The Defense inspector general will continue to pursue a series of audits related to spending and financial management for activities in Iraq and Afghanistan over the next year, and plans to launch several new studies on whether funds were used as Congress intended.

The IG office detailed its Iraq-related audits and investigations and described a sampling of related activities under way throughout the services in a semiannual report to Congress covering the second half of fiscal 2006.

In a two-phase ongoing audit slated for completion by March 2007, investigators will review how $5.7 billion was spent through the Iraqi Security Forces Fund in fiscal 2005 on equipment, facilities, construction and training of Iraq security forces, among other things. The second phase will look at spending through the Multi-National Security Transition Command-Iraq.

Other audits the office plans include an evaluation of the department's controls over out-of-country payments, a look at procurement policy for armored vehicles and an investigation into possible spending violations related to an internment facility at Camp Bucca, Iraq.

Investigators will conduct preliminary research into contracts with the construction giant Parsons Corp. for potential further review. The study was launched the day after a congressional hearing into problems with a policy academy campus and plans for 150 health clinics to be built throughout Iraq. The Special Inspector General for Iraq Reconstruction found the new police buildings were so plagued with sewage leaks that their strength could be compromised; only six of the health clinics were completed.

The IG report pointed to the central role of congressional oversight in directing investigations. "Many of the DOD OIG audits were initiated at Congress' request after issues were brought to their attention," it stated.

Oversight is expected to increase dramatically next year with Democrats taking control of Congress, and several key lawmakers have announced their intention to ramp up hearings. Special attention is expected to focus on problems related to operations in Iraq and the government's response to Hurricane Katrina. The Army Corps of Engineers is responsible for important parts of New Orleans' levee system, ensuring that the Defense Department will figure prominently in both those issues.

The inspector general's office calculated that the value of its activities reached nearly $23 billion in the six months covered by the report, including $21 billion in audit benefits and more than $1.9 billion in investigative recoveries.

The report also highlighted the office's significant training efforts to prepare for introduction of the National Security Personnel System. The 1,400 civilian employees of the office who are not Senior Executive Service members are scheduled to join the pay-for-performance system on Jan. 21.