CPA disbursed about $8.8bn of Iraqi DFI funds to ministries without adequate controls (SIGIR 05-004)
The Special Inspector General for Iraq Reconstruction (SIGIR) reported on 30 January 2005 that the Coalition Provisional Authority provided less-than-adequate controls over approximately $8.8 billion of Development Fund for Iraq (DFI) money, Iraqi oil revenue and other Iraqi assets, that it passed to interim Iraqi ministries through the national budget. Testifying on 21 June 2005, the Inspector General stressed that the audit did not say the money was lost or stolen; it said there was no assurance it was used transparently for the Iraqi people. Members of Congress cited payroll examples from the audit suggesting payments to unverifiable ("ghost") guards.
- Period
- From October 2003 to June 2004
- Sector
- Reconstruction and donor fundsDevelopment Fund for Iraq (Iraqi oil revenue), budget transfers
- Kind of case
- Audit finding
- Jurisdiction
- More than one jurisdiction
How the money moved, according to the sources
Iraqi money held in the DFI was released to ministries as budget allocations and cash, without spending plans, payroll verification or follow-up accounting, so there is no documentary trail showing where much of it went. Weak payroll controls allowed salaries to be paid for staff whose existence could not be verified.
What happened
Administrative or audit finding only. No prosecution arose from this audit as such; SIGIR stated the audit did not allege theft or fraud. The audit fed later congressional hearings (June 2005, February 2007).
Open questions
- How much of the $8.8bn reached intended purposes (salaries, operating costs) and how much was lost to payroll padding?
People and companies
| Name | Role in the case | Legal status | Detail | As of |
|---|---|---|---|---|
| L. Paul Bremer III بول بريمر | CPA Administrator (from May 2003 to June 2004) | Not charged as of the date of writing | Head of the authority whose controls were audited; SIGIR findings concern controls, not personal wrongdoing; Bremer defended CPA decisions before Congress (February 2007). | 25 September 2026 |
| Stuart W. Bowen Jr. ستيوارت بوين | Special Inspector General for Iraq Reconstruction | Not charged as of the date of writing | Auditor; testified 21 June 2005 that the audit did not find theft. | 25 September 2026 |
Sources
- US House Committee on Government Reform (GPO), testimony of DCAA Director William Reed21 June 2005Parliamentary documentTier A
The Development Fund for Iraq hearing (Serial No. 109-72)
Our copy (downloads as a file)OriginalSHA-256 8d1e27961a33DCAA questioned $139 million due to KBR's failure to support the reasonableness of prices paid for fuel and transportation from a Kuwaiti supplier.
It did not say that the money was lost. It did not say that the money was stolen.
The CPA paid cash to 8,026 Iraqi protective guards on the payroll at one ministry, but the Special IG could only verify that 602 actually existed
- US House Committee on Oversight and Government Reform (GPO)6 February 2007Parliamentary documentTier A
The Impact of CPA Decisionmaking on Iraq Reconstruction, opening statement of Chairman Henry Waxman (Serial No. 110-10)
Our copy (downloads as a file)OriginalSHA-256 fe2abf4099d0the Federal Reserve Bank in New York had to pack 281 million individual bills including more than 107 hundred dollar bills onto wooden pallets
The first step was to get money into the hands of the Iraqi people as quickly as possible.
- Federal Register (SIGIR final listing of reports)24 September 2013Law or official gazetteTier A
Final Listing of Audit and Other Reports Issued by SIGIR on Reconstruction Spending in Iraq
Our copy (downloads as a file)OriginalSHA-256 2fc8a1fc4dc605-004 Oversight of Funds Provided to Iraqi Ministries through the National Budget Process 1/30/2005