US Army Can’t Show Delivery of $1bn Fuel to Iraq

By John Lee.

The Special Inspector General for Iraq Reconstruction (SIGIR) has reported that U.S. Army Corps of Engineers (USACE) did not establish effective internal controls to document that goods and services paid for using DFI funds were received in Iraq.

SIGIR sampled 12 DFI-funded payments, totaling about $1.1 billion, made to USACE and found that two key financial documents—public vouchers and vendor invoices—were in the payment files. However, a third key document—the receiving report—was missing from more than 95% of the files.

Receiving reports document the government’s inspection and acceptance of products delivered or services performed. Missing receiving reports involved commodities vulnerable to fraud and theft, such as fuel, televisions, and vehicles. SIGIR has not concluded that fraud or theft occurred, but the absence of receiving reports raises questions.

Fuel deliveries alone accounted for $1.3 billion of the $2.4 billion in DFI funds (54.2 %) that USACE received for reconstruction activities in Iraq. Instead of using the required receiving reports to document fuel deliveries in Iraq, USACE officials told us that they maintained a fuel delivery log book.

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