Today's Article
The American Spark
provides the entire
shocking report
exposing the loss of
more than $ 1 billion
of military equipment
and support on its
website.
provides the entire
shocking report
exposing the loss of
more than $ 1 billion
of military equipment
and support on its
website.
The American Spark
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Iraq Security Forces Fund Mismanagement: Full Report
By Cliff Montgomery - Dec. 9th, 2007
The American Spark here provides the entire text of the most recent Pentagon Inspector General report on
the (mis)management of the Iraq Security Forces Fund in Southwest Asia, which was released on Thursday.
The study revealed that more than $1 billion of American military assistance allocated for Iraqi security forces
is now missing--and that the Pentagon cannot account for the whereabouts of any of the lost military hardware,
money, and services. See Friday's American Spark article for more background on this shocking story.
We quote from the study's somewhat dry, but very informative, executive summary below:
Background
"Public Law 109-13, 'Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and
Tsunami Relief, 2005,' May 11, 2005, provided $5.7 billion for the Iraq Security Forces Fund, of which the
Commander, Multi-National Security Transition Command-Iraq received $5.2 billion. The funds were to be used
to provide equipment; supplies; services; training; and facility and infrastructure repair, renovation, and
construction for the Iraq Security Forces.
"We performed the audit as required by Public Law 109-234, 'Emergency Supplemental Appropriations Act for
Defense, the Global War on Terror, and Hurricane Recovery, 2006,' June 15, 2006. [...] We determined
whether the Multi-National Security Transition Command-Iraq properly accounted for the services, equipment,
and construction purchased for the Iraq Security Forces using the Iraq Security Forces Fund, and whether the
delivery of services, equipment, and construction was properly made.
Results
"The Multi-National Security Transition Command-Iraq was not able to demonstrate proper accountability for
and management of the Iraq Security Forces Fund, and could not always demonstrate that the delivery of
services, equipment, and construction was properly made to the Iraq Security Forces.
"As a result, the Multi-National Security Transition Command-Iraq was unable to provide reasonable
assurance that Iraq Security Forces Fund achieved the intended results, that resources were used in a
manner consistent with the mission, and that the resources were protected from waste and mismanagement.
"In addition, several transactions resulted in $1.8 million of funds that could be put to better use. Those
transactions were not identified for de-obligation by the required Multi-National Security Transition Command-
Iraq tri-annual reviews.
"We recommend that the Commander, Multi-National Security Transition Command-Iraq establish internal
controls and specific procedures for forward-deployed personnel to follow in maintaining adequate oversight of
obligated funds and retaining accountable property records for expenditure of wartime funding.
"Also, the Commander, Multi-National Security Transition Command-Iraq should develop standard operating
procedures for processing, managing, and overseeing Military Interdepartmental Purchase Requests.
"In addition, the Commander, Multi-National Security Transition Command-Iraq should identify personnel
requirements for proper sourcing in the Joint Manning Document it submits through Multi-National Force-Iraq,
U.S. Central Command, to the Joint Staff and the Office of the Secretary of Defense.
"We recommend that the Commander, Multi-National Security Transition Command-Iraq establish procedures
that ensure compliance with the DoD Financial Management Regulation for performing and documenting tri-
annual validation reviews of un-liquidated obligations, and establish controls to de-obligate funds efficiently.
"We also recommend that the Commander, Multi-National Security Transition Command-Iraq, in conjunction
with the Defense Finance and Accounting Service, conduct an assessment of financial management
functions (such as financial reporting, accounts payable, and cost accounting) that could be transferred
outside of Iraq to ease the strain on the Command’s accounting personnel.
Management Comments and Audit Response
"The Commander, Multi-National Security Transition Command-Iraq concurred with four of the
recommendations, non-concurred with one of the recommendations, and partially concurred with one of the
recommendations. The Commander’s comments were fully responsive. [...]
"Although not required to comment, the Chief Audit Executive, Headquarters U.S. Army Corps of Engineers
Internal Review Office provided comments on the draft report regarding prompt-payment discounts.
"The Chief Audit Executive stated that, for all transactions entered in it, the Corps of Engineers Financial
Management System automatically records the discount taken, returns the discount to the obligation, de-
obligates the discount, and returns the discount amount to the funding account.
"We concur that the Corps of Engineers Financial Management System automatically calculates the discounts
for transactions, as the Chief Audit Executive stated; however, sufficient documentation has not been provided
that all discounts taken were de-obligated and returned to the funding account.
"We require no further comments from the U.S. Army Corps of Engineers."
Like what you're reading so far? Then why not order a full year (52 issues) of the The American Spark e-
newsletter for only $15? A major article covering an story not being told in the Corporate Press will be
delivered to your email every Monday morning for a full year, for less than 30 cents an issue. Order Now!
By Cliff Montgomery - Dec. 9th, 2007
The American Spark here provides the entire text of the most recent Pentagon Inspector General report on
the (mis)management of the Iraq Security Forces Fund in Southwest Asia, which was released on Thursday.
The study revealed that more than $1 billion of American military assistance allocated for Iraqi security forces
is now missing--and that the Pentagon cannot account for the whereabouts of any of the lost military hardware,
money, and services. See Friday's American Spark article for more background on this shocking story.
We quote from the study's somewhat dry, but very informative, executive summary below:
Background
"Public Law 109-13, 'Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and
Tsunami Relief, 2005,' May 11, 2005, provided $5.7 billion for the Iraq Security Forces Fund, of which the
Commander, Multi-National Security Transition Command-Iraq received $5.2 billion. The funds were to be used
to provide equipment; supplies; services; training; and facility and infrastructure repair, renovation, and
construction for the Iraq Security Forces.
"We performed the audit as required by Public Law 109-234, 'Emergency Supplemental Appropriations Act for
Defense, the Global War on Terror, and Hurricane Recovery, 2006,' June 15, 2006. [...] We determined
whether the Multi-National Security Transition Command-Iraq properly accounted for the services, equipment,
and construction purchased for the Iraq Security Forces using the Iraq Security Forces Fund, and whether the
delivery of services, equipment, and construction was properly made.
Results
"The Multi-National Security Transition Command-Iraq was not able to demonstrate proper accountability for
and management of the Iraq Security Forces Fund, and could not always demonstrate that the delivery of
services, equipment, and construction was properly made to the Iraq Security Forces.
"As a result, the Multi-National Security Transition Command-Iraq was unable to provide reasonable
assurance that Iraq Security Forces Fund achieved the intended results, that resources were used in a
manner consistent with the mission, and that the resources were protected from waste and mismanagement.
"In addition, several transactions resulted in $1.8 million of funds that could be put to better use. Those
transactions were not identified for de-obligation by the required Multi-National Security Transition Command-
Iraq tri-annual reviews.
"We recommend that the Commander, Multi-National Security Transition Command-Iraq establish internal
controls and specific procedures for forward-deployed personnel to follow in maintaining adequate oversight of
obligated funds and retaining accountable property records for expenditure of wartime funding.
"Also, the Commander, Multi-National Security Transition Command-Iraq should develop standard operating
procedures for processing, managing, and overseeing Military Interdepartmental Purchase Requests.
"In addition, the Commander, Multi-National Security Transition Command-Iraq should identify personnel
requirements for proper sourcing in the Joint Manning Document it submits through Multi-National Force-Iraq,
U.S. Central Command, to the Joint Staff and the Office of the Secretary of Defense.
"We recommend that the Commander, Multi-National Security Transition Command-Iraq establish procedures
that ensure compliance with the DoD Financial Management Regulation for performing and documenting tri-
annual validation reviews of un-liquidated obligations, and establish controls to de-obligate funds efficiently.
"We also recommend that the Commander, Multi-National Security Transition Command-Iraq, in conjunction
with the Defense Finance and Accounting Service, conduct an assessment of financial management
functions (such as financial reporting, accounts payable, and cost accounting) that could be transferred
outside of Iraq to ease the strain on the Command’s accounting personnel.
Management Comments and Audit Response
"The Commander, Multi-National Security Transition Command-Iraq concurred with four of the
recommendations, non-concurred with one of the recommendations, and partially concurred with one of the
recommendations. The Commander’s comments were fully responsive. [...]
"Although not required to comment, the Chief Audit Executive, Headquarters U.S. Army Corps of Engineers
Internal Review Office provided comments on the draft report regarding prompt-payment discounts.
"The Chief Audit Executive stated that, for all transactions entered in it, the Corps of Engineers Financial
Management System automatically records the discount taken, returns the discount to the obligation, de-
obligates the discount, and returns the discount amount to the funding account.
"We concur that the Corps of Engineers Financial Management System automatically calculates the discounts
for transactions, as the Chief Audit Executive stated; however, sufficient documentation has not been provided
that all discounts taken were de-obligated and returned to the funding account.
"We require no further comments from the U.S. Army Corps of Engineers."
Like what you're reading so far? Then why not order a full year (52 issues) of the The American Spark e-
newsletter for only $15? A major article covering an story not being told in the Corporate Press will be
delivered to your email every Monday morning for a full year, for less than 30 cents an issue. Order Now!