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Pentagon Can't Account For Nearly $9 Bln In Iraq Funds

An Iraqi worker operates valves at the Nahran Omar oil refinery near the city of Basra, southeast of Baghdad, Iraq.  NABIL AL-JURANI/AP hide caption

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NABIL AL-JURANI/AP

The Pentagon can't properly account for most of the $9.1 billion meant to rebuild Iraq that the department was given responsibility for, according to a new report from the special inspector general who polices the spending of these funds.

The report doesn't suggest that all $8.7 billion in the Development Fund for Iraq wasn't spent the way that it was intended, though it strains credulity to believe it all was.

But the report is pretty clear that the Pentagon never put in place the sort of management controls it should have to properly account for the funds in its care. As the report suggests, money could have been stolen or misused without the Pentagon's knowledge because of its weak controls.

The money in the account comes from Iraqi oil revenues and confiscated financial accounts like those once belonging to Saddam Hussein or his sons.

An excerpt from the report's executive summary:

Weaknesses in DoD’s financial and management controls left it unable to properly account for $8.7 billion of the $9.1 billion in DFI funds it received for reconstruction activities in Iraq. This situation occurred because most DoD organizations receiving DFI funds did not establish the required Department of the Treasury accounts and no DoD organization was designated as the executive agent for managing the use of DFI funds. The breakdown in controls left the funds vulnerable to inappropriate uses and undetected loss.

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