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$8.8b in Iraq unaccounted for

US audit cites lax 'stewardship'

WASHINGTON -- At least $8.8 billion in Iraqi funds given to Iraqi ministries by the former US-led authority there cannot be accounted for, according to a draft US audit set for release soon.

The audit by the Coalition Provisional Authority's inspector general blasts the authority for "not providing adequate stewardship" of at least $8.8 billion from the Development Fund for Iraq given to Iraqi ministries.

The audit was first reported earlier this month on a website run by retired Army Colonel David Hackworth, a journalist. A US official confirmed that the contents of the leaked audit cited by Hackworth were accurate.

The development fund is made up of proceeds from Iraqi oil sales, frozen assets from foreign governments, and surplus from the United Nations Oil for Food Program. Its handling came under fire in a UN-mandated audit released last month.

Among the draft audit's findings were that payrolls in Iraqi ministries under Coalition Provisional Authority control were padded with thousands of ghost employees.

In one example, the audit said the authority paid for 74,000 guards although 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.

Three Democratic senators -- Ron Wyden of Oregon, Tom Harkin of Iowa, and Byron Dorgan of North Dakota -- demanded an explanation from Defense Secretary Donald H. Rumsfeld over the use of the funds by the authority.

"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," the letter from the senators said.

The Pentagon did not respond to questions late yesterday.

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