IRAQ: Who Keeps Tabs on Contractors

There is no centralized procedure for monitoring scores of contracting firms rebuilding Iraq with U.S. funds, according to the military. The controls that do exist have been criticized for failing to keep track of millions.

Instead, most contracts are monitored by the individual agencies that award them. The Army Corps of Engineers, for example, which issues the bulk of reconstruction work, has its own inspectors and quality assurance monitors. The U.S. Defense Contract Management Agency provides oversight on behalf of the Army for troop support contracts -- private firms that do everything from serving meals to washing combat fatigues.

Congress has set aside $18.4 million to help Iraq rebuild its roads, water systems, airports, rail lines, seaports, housing and other needed projects. The total cost of reconstruction has been estimated at $150 billion.

The International Advisory and Monitoring Board, established by the United Nations after Iraq's interim government took power last year summer, audits cash and oil revenues held by the Development Fund for Iraq, which funds additional rebuilding contracts with Iraqi money.

The Coalition Provisional Authority ran the country for 13 months following its invasion, and rushed to issue rebuilding projects using a combination of seized Iraqi money and international funds.

Last month, investigators said incompetence and "indications of fraud" was responsible for nearly $100 million in cash not being accounted for by the CPA. That amount included more than $7 million that simply vanished, according to the Special Inspector General for Iraq Reconstruction, appointed in January 2004 to serve as a U.S. government watchdog for Iraqi reconstruction.

The CPA, predominantly run by Americans, has provided a poor example for reconstruction, critics say. Millions handed out to contractors including Custer Battles has not been accounted for, auditors said.

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