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SPECIAL INSPE CTOR GENE RAL FOR IRAQ RECONSTRUCTION
October 25, 2005
MEMORANDUM FOR UNITED STATES AMBASSADOR TO IRAQ
DIRECTOR, IRAQ RECONSTRUCTION MANAGEMENT OFFICE
COMMANDING GENERAL, JOINT CONTRACTING COMMAND
– IRAQ/AFGHANISTAN
COMMANDER, JOINT AREA SUPPORT GROUP - CENTRAL
SUBJECT: Management of Rapid Regional Response Program Grants in South-Central Iraq
(Report No. SIGIR 05-015)
We are providing this audit report for your information and use. We performed the audit in
accordance with our statutory duties contained in Public Law 108-106, as amended, which
mandates the independent and objective conduct of audits relating to the programs and
operations funded with amounts appropriated or otherwise made available to the Iraq Relief and
Reconstruction Fund. Public Law 108-106, as amended, requires that we provide for the
independent and objective leadership and coordination of and recommendations of polices
designed to promote economy, efficiency, and effectiveness in the administration of such
programs and operations and to prevent and detect waste, fraud, and abuse.
We considered management comments from the Iraq Reconstruction Management Office, the
Joint Contracting Command – Iraq/Afghanistan, and the Joint Area Support Group - Central on a
draft of this report when preparing the final report. There was one recommendation to the Joint
Area Support Group – Central that they did not believe they had the authority to take action on
the recovery of overpayments made to grantees. Therefore, we added a recommendation to the
final report to resolve that issue.
Because we added a recommendation to the final report, we request that the
United States Ambassador to Iraq provide comments to the final report by November 14, 2005.
Comments should describe actions taken or planned in response to recommendation and provide
completion dates for the actions.
We appreciate the courtesies extended to the staff. For additional information on this report,
please contact Mr. Joseph T. McDermott at (703) 428-1100, or at joseph.mcdermott@sigir.mil or
Mr. Clifton Spruill at (703) 343-8817, or at clifton.spruill@iraq.centcom.com. For the report
distribution, see Appendix G.
Stuart W. Bowen, Jr.
Inspector General
400 Army Navy Drive • Arlington, Virginia 22202

Special Inspector General for Iraq Reconstruction
Report No. SIGIR 05-015 (Project No. D2004-DCPAAF-0034.2)
October 25, 2005
Management of Rapid Regional Response Program Grants
in South-Central Iraq
Executive Summary
Introduction. This audit report is one of a series of reports addressing controls over
cash, contract management, and grant management for the Coalition Provisional
Authority South-Central Region. This audit report discusses the processes used for the
authorization, award, execution, and oversight of grants within the Coalition Provisional
Authority South-Central Region.
During 2003-2004, the Coalition Provisional Authority used grants in Iraq to transfer
Development Fund for Iraq funds from the Coalition Provisional Authority or coalition
forces to grant recipients. The grants were intended to help carry out a program or
project that directly benefited the Iraqi people or assisted in the reconstruction and
recovery of Iraq. Between February and June 2004, the Coalition Provisional Authority
South-Central Region used funds provided from the Development Fund for Iraq through
the Rapid Regional Response Program to award 74 grants worth approximately
$20.8 million.
Objective. The overall audit objective was to determine whether disbursing officers in
selected locations in southern Iraq complied with applicable guidance and properly
controlled and accounted for Development Fund for Iraq cash assets and expenditures.
During our audit, we observed deficiencies in grant award documentation and expanded
our scope to determine whether grants were properly managed by coalition
representatives in the South-Central Region.
Results. South-Central Region personnel, under the direction of the Coalition
Provisional Authority, did not effectively manage 74 grants awarded through the
Rapid Regional Response Program in the amount of $20.8 million.
South-Central Region personnel cannot account for more than $20.5 million in
Development Fund for Iraq funds provided for Rapid Regional Response Program
grants, and they made payments in the amount of more than $2.6 million that
exceeded the total value grants awarded. Our audit shows that Coalition
Provisional Authority South-Central Region personnel disbursed a total of almost
$23.5 million through 74 grants, although the award value of these grants was only
$20.8 million.
We could not determine how grant recipients actually used the cash distributed by
the South-Central Region through the Rapid Regional Response Program. Because
we could not find documentation to support grant performance, we could not
determine: whether the grants met their intended goals; whether the work for which
the grants were intended was started or satisfactorily completed; to whom the cash
was actually disbursed in some grants; and what benefit, if any, the Iraqi people
received as a result of the grants.
i

We concluded, based on the documentation examined during our review, that the
South-Central Region failed to adequately manage its Rapid Regional Response
Program grant program.
Material Internal Control Weaknesses. Our audit identified material internal control
weaknesses. For example, United States government agents and Coalition partners did
not comply with applicable guidance regarding cash management and did not properly
control and account for Iraqi cash assets. In addition, based on our review of the grant
award process and of actual grant management, there was no assurance that fraud, waste,
and abuse did not occur in the management and administration of grant funds.
Indications of Potential Fraud. During this audit, we found indications of potential
fraud and referred these matters to the Assistant Inspector General for Investigations,
Office of the Special Inspector General for Iraq Reconstruction, for action. Related
investigations are continuing.
Recommendations. Since the Coalition Provisional Authority was dissolved on
June 28, 2004, we are addressing the recommendations to three of the
four successor organizations: the Iraq Reconstruction Management Office, the Joint
Contracting Command – Iraq/Afghanistan, and the Joint Area Support Group -
Central.
We added a recommendation to the United States Ambassador to Iraq, because the
Commander, Joint Area Support Group - Central stated that the responsibility for seeking
reimbursement of any overpayments is up to the office that managed the grant and not the
disbursing office.
1. We recommend that the United States Ambassador to Iraq determine the party
responsible for collecting the overpaid grant amounts and direct the responsible
individual to take action to seek reimbursement for the overpaid grant amounts.
2. We recommend that the Director, Iraq Reconstruction Management Office,
ensure proper authorization and oversight of the grant approval and
administrative processes for all existing and future grants.
3. 4. We recommend that the Commanding General, Joint Contracting Command –
Iraq/Afghanistan require contracting officers, for all existing and future grants:
a. Follow the Department of Defense 3210.6-R, Grants and Agreements, for
the award and administration of grants
b. c. Require grant recipients to provide receipts for all expenditures
Require monthly reports from the grant recipients detailing expenditures and
achievements
d. e. Ensure regular site-visits to the grant recipient location
Require reports at the end of the grant to assess the performance of the
grantee and to document the outcome of the grant in relation to the grant
goals
We recommend that the Commander, Joint Area Support Group - Central:
a. Require paying agents to obtain proper grant approval documentation prior
to making disbursements
b. Require the appropriate separation of duties
ii

c. Establish a special team to review disbursements made in other regions of
Iraq to determine if the same conditions exist as determined by the Special
Inspector General for Iraq Reconstruction in the South-Central Region
Management Comments and Audit Response. The Director, Iraq Reconstruction
Management Office; the Commanding General, Joint Contracting Command –
Iraq/Afghanistan; and the Commander, Joint Area Support Group - Central
generally concurred with the finding and recommendations. The comments that
concurred with recommendations are responsive. However, for one
recommendation, the Joint Area Support Group - Central stated it did not have the
responsibility for seeking recovery of overpayments to grantees. Therefore, we
added a recommendation to the United States Ambassador to Iraq in the final report
to establish who is responsible to recover these funds and deleted the
recommendation directed to the Joint Area Support Group - Central to seek
recovery of overpayments.
iii

Table of Contents
Executive Summary i
Introduction
Background 1
Objective 3
Finding
Management of Grants in the South-Central Region 4
Appendixes
A. Scope and Methodology 15
B. Coalition Provisional Authority Guidance Applicable to Grants 17
C. Coalition Provisional Authority Organizational Responsibilities
for Grants 18
D. Present U.S. Government Organizational Responsibilities
for Grants 19
E. Grants Awarded by the South-Central Region 20
F Overpayments on Grants 24
G. Acronyms 25
H. Report Distribution 26
I. Audit Team Members 28
Management Comments
Director, Iraq Reconstruction Management Office Commanding General, Joint Contracting Command – Iraq/Afghanistan Commander, Joint Area Support Group – Central 29
31
33

Background
Introduction
This audit report is one of a series of reports addressing controls over cash, contract
management, and grant management for the Coalition Provisional Authority (CPA)
South-Central Region. This audit report discusses the processes used for the
authorization, award, execution, and oversight of grants within the CPA South-Central
Region.
Coalition Provisional Authority. CPA Regulation Number 1 was issued on
May 16, 2003, by the CPA Administrator, “Pursuant to my authority as Administrator of
the Coalition Provisional Authority, relevant United Nations Security Council
resolutions, including Resolution 1483 (2003), and the laws and usages of war,. . . .”
CPA Regulation Number 1 stated:
The CPA shall exercise powers of government temporarily in order to
provide for the effective administration of Iraq during the period of
transitional administration, to restore conditions of security and
stability, to create conditions in which the Iraqi people can freely
determine their own political future, including by advancing efforts to
restore and establish national and local institutions for representative
governance and facilitating economic recovery and sustainable
reconstruction and development.
The Development Fund for Iraq. United Nations Security Council Resolution 1483,
which was adopted on May 22, 2003, noted the establishment of the Development Fund
for Iraq (DFI) and assigned responsibility for managing the fund to the CPA. The
resolution noted that the CPA should direct disbursement of DFI funds, in consultation
with the Iraqi interim administration. It also required that the DFI funds be used in a
transparent manner to meet the humanitarian needs of the Iraqi people, for the economic
reconstruction and repair of Iraq’s infrastructure, for the continued disarmament of Iraq,
for the costs of Iraqi civilian administration, and for other purposes benefiting the people
of Iraq. The DFI was the primary financial vehicle to channel revenue from ongoing
Iraqi oil sales, unencumbered Oil for Food deposits, and repatriated Iraqi assets into the
relief and reconstruction of Iraq.
During the CPA’s administration of Iraq, the CPA Comptroller managed the DFI, and the
Program Review Board (PRB) was responsible for recommending expenditures of
resources from the DFI. For a description of CPA Regulation Number 2, which applied
to the DFI, and CPA Regulation Number 3, which applied to the PRB, see Appendix B.
Program Review Board Guidance. The Director of the PRB provided directives that
applied to grants’ management within CPA regions. Two of these directives addressed
the management of the Rapid Regional Response Program (R3P):
• PRB Guidance 06, “Rapid Regional Response Program Overview,”
September 27, 2003
• PRB Guidance 06.2, “Rapid Regional Response Program Overview
(amended),” December 14, 2003, and January 25, 2004
1

Rapid Regional Response Program. The R3P funds were derived from the DFI, and
the CPA provided those funds to the Iraqi people for needed infrastructural repairs and
upgrades. The objectives of the R3P were to create local jobs, support local industries,
and stimulate the economy. The R3P was initially conceived as a civilian equivalent of
the Commanders’ Emergency Response Program fund.1 Further, it was designed to
provide maximum flexibility to regional and governorate coordinators in implementing
projects responsive to the needs in their areas of responsibility. The program
incorporated and expanded upon authorities of previously funded programs:
• the Directors’ Emergency Response Program, which provided an emergency
response capacity
• the Construction Initiative, which provided greater funding authority for
construction activities
The discretionary authority under which regions could execute programs without prior
Regional Program Coordinator approval was increased to $500,000 from $200,000
through PRB Guidance 06.2, as amended on December 14, 2003, and January 25, 2004.
South-Central Region. The CPA established the South-Central Regional office in the
spring of 2003, and it was comprised of the provinces of Anbar, Babil, Karbala, Najaf,
Qadisiyah, and Wasit; which cover approximately half of the land mass of Iraq. South-
Central Region personnel worked with the Iraqi people and coalition forces to establish
the conditions for a free, sovereign, and democratically-elected representative
government in Iraq. The top priorities of the South-Central Region were electricity,
human rights, security, strategic communications, tribal democracy, and women’s rights.
Organizations Responsible Grants Management. The CPA was the authority
responsible for the temporary governance of Iraq through June 28, 2004. Thereafter, the
Iraqi Interim Government was the authority responsible for the governance of Iraq. The
responsibility for the DFI transferred from the CPA to the Iraqi Interim Government on
June 28, 2004. For information on the CPA organizational responsibilities concerning
grants management, until it ceased to exist on June 28, 2004, see Appendix C.
Due to the dissolution of the CPA, four U.S. government organizations assumed
responsibilities for the management of grants in Iraq. For information on the current
organizational responsibilities for grants management in Iraq, see Appendix D.
Project and Contracting Office. The Project and Contracting Office (PCO) now
has the responsibility to assess requirements for grants. National Security Presidential
Directive 36, “United States Government Operations in Iraq,” May 11, 2004, established
the PCO and directed that the PCO provide acquisition and project management support
with respect to activities in Iraq, to include grant related activities. The PCO reports
through the Deputy Assistant Secretary of the Army (Policy and Procurement) to the
Assistant Secretary of the Army for Acquisition, Logistics, and Technology. The PCO
also administratively reports to the Iraq Reconstruction Management Office.
Iraq Reconstruction Management Office. The Iraq Reconstruction Management
Office now has the responsibility to approve grants. National Security Presidential
Directive 36, “United States Government Operations in Iraq,” May 11, 2004, established
1 According to Combined Joint Task Force-7, Fragmentary Order 89, June 19, 2003, DFI funds were to be
used to help fund the Commanders’ Emergency Response Program, which provides reconstruction
assistance to the Iraqi people.
2

the Iraq Reconstruction Management Office within the Department of State and directed
that organization to facilitate the transition in Iraq. The Iraq Reconstruction Management
Office reports to the Chief of Mission in Iraq.
Joint Contracting Command – Iraq/Afghanistan. The Head of Contracting
Activity, Joint Contracting Command – Iraq/Afghanistan now has the responsibility to
administer grants.2 The Joint Contracting Command – Iraq/Afghanistan was established
in 2004 to consolidate contracting activities and reports through the Deputy Assistant
Secretary of the Army (Policy and Procurement) to the Assistant Secretary of the Army
for Acquisition, Logistics, and Technology.
Joint Area Support Group - Central Comptroller. The Joint Area Support Group
- Central now has the financial responsibility3 for grants. The CPA Comptroller, as part
of the CPA, ceased to exist on June 28, 2004. When the CPA was dissolved, the CPA
Comptroller was realigned as the Joint Area Support Group - Central Comptroller. The
Joint Area Support Group - Central Comptroller continued to perform the same duties for
that portion of the DFI still administered by the U.S. Government. The Joint Area
Support Group - Central reports to the Commander, Multi-National Force – Iraq.
Objectives
The overall audit objective was to determine whether disbursing officers in selected
locations in southern Iraq complied with applicable guidance and properly controlled and
accounted for DFI cash assets and expenditures. During our audit, we observed
deficiencies in grant award documentation and expanded our scope to determine whether
CPA South Central Region personnel properly managed grants.
For a discussion of the audit scope, methodology, and a summary of prior coverage, see
Appendix A. For definitions of the acronyms used in this report, see Appendix F. For a
list of the audit team members, see Appendix H.
2 The Joint Contracting Command – Iraq/Afghanistan used Department of Defense 3210.6-R, “DoD Grant
and Agreement Regulations,” April 13, 1998, as guidance.
3 The Joint Area Support Group - Central Comptroller provided funds to the CPA regions to disburse for
the grants. Afterward, the disbursement documentation was returned to the Joint Area Support Group -
Central Comptroller’s office for review and to be cleared.
3

Management of Grants in the South-Central
Region
South-Central Region personnel, under the direction of the CPA, did not effectively
manage 74 grants awarded through the R3P in the amount of $20.8 million.
This condition occurred because South-Central Region personnel did not always:
• follow established policies and procedures for authorizing, competing, and
properly documenting grant awards
• properly monitor grant performance
• disburse funds in accordance with proper authorization or specific grant
agreement disbursing criteria
• identify disbursements made to grant recipients
• account for the funds disbursed for the grants
• prevent payments that exceed the award value of grants
As a result, South-Central Region personnel cannot account for more than
$20.5 million in DFI funds provided for R3P grants, and they made payments in the
amount of more than $2.6 million that exceeded the total value grants awarded.
Our audit shows that CPA South-Central Region personnel disbursed a total of
almost $23.5 million through 74 grants, although the award value of these grants
was only $20.8 million.
We could not determine how grant recipients actually used the cash distributed by
the South-Central Region through the R3P. Because we could not find
documentation to support grant performance, we could not determine: whether the
grants met their intended goals; whether the work for which the grants were
intended was started or satisfactorily completed; to whom the cash was actually
disbursed in some grants; and what benefit, if any, the Iraqi people received as a
result of the grants.
We concluded, based on the documentation examined during our review, that the
South-Central Region failed to adequately manage its R3P grant program.
Guidance for Grants
In Iraq, the CPA used grants to transfer DFI funds from the CPA or coalition forces to a
grant recipient. The grants were intended to help carry out a program or project that
directly benefited the Iraqi people or assisted in the reconstruction and recovery of Iraq.
The South-Central Region used funds provided from the DFI through the R3P to award
74 grants worth approximately $20.8 million between February and June 2004. A
Department of Defense regulation and a CPA memorandum provided guidance for the
management of grants.
Department of Defense 3210.6-R. According to Department of Defense 3210.6-R,
“DoD [Department of Defense] Grant and Agreement Regulations,” April 13, 1998, a
grant is:
4

A legal instrument which, consistent with 31 U.S.C. 6304, is
used to enter into a relationship:
(a) The principal purpose of which is to transfer a thing of
value to the recipient to carry out a public purpose of support or
stimulation authorized by a law of the United States, rather than to
acquired property or services for the Department of Defense’s direct
benefit or use.
(b) In which substantial involvement is not expected between
the Department of Defense and the recipient when carrying out the
activity contemplated by the grant.
Coalition Provisional Authority Memorandum 4. CPA Memorandum
Number 4, “Contract and Grant Procedures Applicable to Vested and Seized Iraqi
Property and the Developmental Fund for Iraq, Implementation of Regulation
Number 3, Program Review Board,” August 19, 2003, (CPA Memorandum
Number 4) “establishes procedures applicable to the execution of contracts and
grants for the benefit of the Iraqi people using Iraqi Funds. . . .” The memorandum
directs that “the CPA will manage and spend Iraqi Funds, which belong to the Iraqi
people, for their benefit. . . . in a transparent manner that fully comports with the
CPA's obligations under international law, including Resolution 1483.” The memo
also states:
Consistent with their programmatic responsibility to ensure that
contractors and grantees properly perform their duties, Contracting
Officers shall be responsible for regularly monitoring the post-award
execution of all Contracts they approve. This monitoring process
includes ensuring that the contractor provides the agreed upon goods,
services or construction in accordance with the provisions, and that
payments are made in a timely manner. Contracting Officers shall
include in the Contract file a written report describing post-award
performance by contractors or grantees, including a final assessment
upon completion of the Contract. Contracting officers shall rely upon
locally available military engineering resources in assessing all repair
and construction projects. All documents related to the establishment
and execution of Contracts will be maintained in a Contract file that
includes the materials described in Appendix A to this Memorandum.
Further, the memorandum states “the Head of Contracting Activity, CPA, shall
provide administrative oversight as well as technical supervision” of contracting
officers. The appendices to this memorandum provided supplemental instructions
on preparing and executing contracts and grants pursuant to the memorandum.
Specifically, Appendices A, B, and C of the memorandum identified the contract
file requirements, standard terms and conditions for solicitations and contracts in
excess of $5,000, and contract and grant procedures applicable to vested and seized
Iraqi property and the DFI.
Authorization, Award, and Documentation for Grants
South-Central Region personnel did not follow established policies and procedures
for authorizing, competing, and properly documenting the awarding of grants issued
through the R3P.
5

Grants Awarded for Projects Exceeding $500,000. Ten of the 74 grants we
reviewed during our audit were awarded in amounts greater than $500,000. The
value of those ten grants was $13.4 million. We identified discrepancies in the
compliance with the procedures concerning the discretionary authority for the
approval of grants, the competition for awards, and the amounts of the awards.
Discretionary Authority. We determined that South-Central Region
personnel improperly approved 9 of the 10 grants. The value of those nine grants
was about $7.4 million. South-Central Region personnel did not fully comply with
PRB Guidance 06.2 (amended). The guidance stated that the “discretionary
authority under which Regional Coordinators can execute projects without Regional
Program Coordinator approval is increased to $500,000, and projects up to
$100,000 can be executed at the Governorate Coordinators’ discretion.” Projects
over $500,000 required Regional Program Coordinator approval via form PRB-01,
“Funding Request Form.” The Regional Program Coordinator had to review and
approve the funding request for completeness of the information concerning budget
and justification, appropriate clearances, identification of funding sources, and other
pertinent factors. South-Central Region personnel did not submit form PRB-01 for
nine grants to the Regional Program Coordinator for approval; instead, South-
Central Region personnel approved the grants. For a description of CPA
Regulation Number 3, which applied to the PRB review process, see Appendix B.
Competition in Awarding Grants. We determined that none of the
10 grants, totaling $13.4 million, was competitively awarded, and that there was no
evidence of any necessary competitive process documented in the files. South-
Central Region personnel did not comply with the required competition actions for
awarding grants over $500,000. CPA Memorandum 4 states that “reasonable
efforts will be made to identify all organizations capable of performing the Grant.
Grants in excess of $500,000 will be tendered for proposals by capable
organizations, except as authorized for good cause, in writing, by the official that
appointed the Contracting Officer involved.”
Split Awards. We determined that five grants, totaling $2.1 million, were
awarded to two recipients. South-Central Region personnel did not fully comply
with PRB Guidance 06.2 (amended). They split the grant amounts in an attempt to
keep the grant awards under the $500,000 threshold and thus circumvent Regional
Program Coordinator review. Projects over $500,000 required Regional Program
Coordinator approval. Although each of the five grants amounted to less than the
$500,000 threshold, when combined, both recipients received grant awards
exceeding the $500,000 threshold.
Separation of Duties. We identified three examples in which the South-Central Region
disbursing agent approved the Funding Request Forms, instead of the Regional Program
Coordinator, who was the appropriate approval authority. The disbursing agent
personally authorized and disbursed $950,000 worth of grants; but, given the lack of
documentation in the grant files, we could not determine whether this agent approved any
additional grant funding. PRB Guidance 06.2 (amended) specifically stated that "the
disbursing authority may not be involved in the approval process." Therefore, the
disbursing agent did not have the discretionary authority to approve these funding
requests.
Signatures for Grant Agreements. We determined that 4 of the 74 grants were
not signed by the contracting officer and that 9 were not signed by the grant
recipient, as required.
6

Documentation in Grant Files. We determined that 73 of the 74 grants did not
have the required documentation and approval authority. South-Central Region
personnel did not fully comply with PRB Guidance 06.2 (amended), which required
that all project proposals must be justified based upon the criteria in the Funding
Request Form. For example, 53 of 74 grants did not have the Funding Request
Form in the files. Of the 21 grant files that contained a Funding Request Form,
1 form was signed by an appropriate approving authority, 8 forms were signed by
South-Central Region personnel that did not possess the appropriate discretionary
authority, and 12 forms were unsigned.
Monitoring Grant Performance
South-Central Region personnel did not properly monitor grant performance as
required by the guidance provided by CPA Memorandum Number 4 and
PRB Guidance 05, “Project Monitoring and Evaluation,” September 30, 2003
(PRB Guidance 05). Although CPA Memorandum Number 4 stated that
performance monitoring was important to ensure that grantees are properly
performing their duties, this guidance and PRB Guidance 05 generally were not
followed.
Management Actions to Monitor Grant Performance. We determined that, for
most of the grants we reviewed, the responsible officials did not perform the
following required duties:
• Reviewing project timelines and project implementation plans with grant
recipients
• Visiting projects sites regularly
• Ensuring monthly reporting from grant recipients that documented the
expenditures incurred and achievements accomplished
• Documenting the results of the monitoring and evaluation, which should
have been included in grant files
• Confirming delivery of goods or products to recipients to verify receipt
• Documenting satisfactory work performance by recipients, including a
completed Certificate of Completion
• Discussing with the Iraqi beneficiary of the project whether the project
achieved the desired outcome
• Reporting on grantee performance by the contracting officer post-award
Progress Reports in the Grant Files. We determined that 69 of the 74 grants did
not have any progress reports in the grant files, and that none of the 74 grants
awarded by the South-Central Region had any final reports in the files. South-
Central Region grant files contained no documentation of site-visits or final reports
written after the completion of the grant. When we asked about the status of the
grants, current and former South-Central Region personnel stated they were not
certain what the status or the outcome was of the grants. Without any progress
reports, site-visit reports, or final reports from the grant recipients, we could not
determine whether the work on projects was satisfactorily completed or even begun.
7

Coalition Provisional Authority Oversight. We determined that no one from
outside the South-Central Region provided any oversight of the South-Central
Region personnel actions in managing or monitoring these grants.
Disbursing Grant Funds
South-Central Region personnel disbursed funds in advance of authorization,
violated specific grant agreement disbursing criteria, and could not identify
disbursements made to grant recipients. CPA Memorandum 4 and the
R3P guidance required each contract or grant file to contain disbursement
documentation that recorded the date, amount, and payee for each disbursement
made.
Disbursement Authorization in Grant Agreements. We determined that
five disbursements totaling more than $2.5 million were made to grant recipients
prior to the signing of the grant agreement. In four instances, the funds for an entire
grant or a modification to a grant were paid to the grant recipient at least 10 days
before the grant agreement was signed. All grant agreements required the grant
recipient and the contracting officer to sign the agreement prior to the disbursement
of funds. The grant was not considered binding until both the authorized South-
Central Region personnel and grant recipient signed the agreement. Therefore,
South-Central Region personnel made these disbursements without proper
authorization. Table 1 shows disbursements made prior to the signing of the grant
agreement.
Table 1. Disbursements Made Prior to Signing of Grant Agreement
Grant Number Date of
Disbursement
Date of
Signed
Grant
Agreement
Amount
DABV01-04-G-8007
5/15/2004 5/26/2004 $450,000
P0001 (a modification to
a grant)
DABV01-04-G-8008 3/15/2004 3/25/2004 $500,000
DABV01-04-G-8016 4/14/2004 4/15/2004 $500,000
DABV01-04-G-8022 5/15/2004 5/26/2004 $600,000
DABV01-04-G-8027 5/15/2004 5/26/2004 $500,000
Total Amount
$2,550,000
Disbursed
Disbursement Criteria in Grant Agreements. Six of the 74 grants awarded by
the South-Central Region, valued at a total of $1,975,000, had specific language
that provided procedures for disbursements to the grant recipient. In all six cases,
the disbursements did not adhere to the procedures established in the grant
agreements. The grant agreement identified conditions as to the amount and time-
8

frames for disbursements.4 In four instances, instead of 10 percent of the funds
being disbursed upon signing the grant as the procedures provided, 100 percent was
disbursed at signing. In the other two grants, South Central Region personnel
disbursed the balance of remaining grant funds without the required submission of a
budget or initial reports documenting results from the initial disbursement.
Disbursement Documentation in Grant Files. We determined that the South-
Central Region personnel did not properly document the disbursements of more
than $1.1 million. CPA Memorandum 4 and PRB Guidance 04, “Maintaining
Project Files,” September 30, 2003 (PRB Guidance 04), required grant files to
contain a signed grant agreement, receipts and invoices, disbursement
documentation, and a certificate of completion.
We identified a disbursement document in the amount of $950,000, and South-
Central Region personnel stated they had never heard of the particular grant for
which the disbursement was made. South-Central Region personnel were unable to
match the disbursement document to either a signed grant agreement or a grant file.
A review of records at the Joint Area Support Group - Central Comptroller’s office
confirmed that the $950,000 was disbursed, and we were able to identify the
organization receiving the grant. However, South-Central Region personnel were
unable to identify the signature of the recipient. They believed the signature was
one of the organization’s board members, but they were not certain. South-Central
Region personnel were completely unaware that the disbursement had been made,
the organization to which it was provided, or for what purpose the $950,000 was
used.
We reviewed another grant file that contained no documentation on a grant project
that intended payment to the grant recipient in the amount of $200,000. We found
that the grant agreement was not signed by the grant recipient; but the file did
contain a certificate of completion statement stating the grant project was
completed on May 16, 2004. However, no documentation was available to show
payment to the grant recipient. Former South-Central Region personnel were asked
whether the grant was paid, and they stated they “believed” the money was
disbursed.
Accountability for Grant Funds
South-Central Region personnel could not account for the funds disbursed for the
grants we reviewed, and they made payments that exceeded the award value of
certain grants. CPA Memorandum 4 and PRB Guidance 04 required each contract
or grant file to contain disbursement documentation to record the date, amount, and
payee for each disbursement made.
Accountability for Grant Funds. We determined that South-Central Region
personnel could not account for about $20.5 million of grant funds. We reviewed
the South-Central Region’s receipt files for the 74 grants and determined that valid
receipts were available for only $297,000 of the $20,838,000 disbursed, leaving
approximately $20.5 million in cash unaccounted for. According to CPA
4 Some grant agreements stated that the grantee was to receive 10 percent of the funds at the signing of the
grant agreement, and the remaining funds were to be disbursed after a specific action occurred (e.g., the
election of a board, the approval of the grant recipient’s budget, or an initial report from the grant recipient
documenting achievements or results obtained as a result of the initial disbursement).
9

Memorandum 4, grant recipients were required to document the use of funds with
receipts. The grant agreements also called for the grant recipients to maintain
records of all expenditures incurred and to provide the receipts to the South-Central
Region along with a report documenting the rationale for each of the expenditures.
Without receipts, the South-Central Region could not account for the funds spent on
the grants, thus we could not determine how recipients used the grant funds.
Table 2 shows the amount of grant awards made for which no receipts existed.
Table 2. Amount of Cash Unaccounted For
Total Amount of Grants Awarded Less: Grant Files with Receipts Available Grant Files with Receipts Missing Number of
Grants
74 67 Amount
$20,838,000
7 $297,000
$20,541,000
Disbursement Amounts. South-Central Region personnel overpaid eight grants in
the amount of approximately $2.6 million. The grant files contained no evidence
indicating that the overpayments were ever returned or that the South-Central
Region personnel ever asked for return of this money. For a detailed list of the
overpayments, see Appendix F.
Examples of South-Central Region Grants Management
The CPA South-Central Region used R3P funds to award 74 grants worth
approximately $20.8 million between February and June 2004. The following are
two examples, from those 74 grants, of the mismanagement of grants used in the
South-Central Region. The examples show the results of our evaluations of the
management of these two particular grants.
A Grant to Establish or Restore Public Structures and Facilities. A grant in the
amount of $6 million was awarded to the Provincial Government of Najaf5 to:
. . . establish or restore to appropriate condition public structures and
facilities in the Province of Najaf, including but not limited to,
government, educational, historical, and religious structures and
facilities and the surrounding areas which were damaged by war and
conflicts to facilitate the economic recovery of the Province of Najaf.
The grant required the Provincial Government of Najaf to maintain records and
promptly furnish quarterly reports to the CPA. The quarterly reports were to
contain all such information as the CPA would reasonably require for
documentation of the use of the proceeds of this grant.
5 Najaf is one of the six Iraqi provinces that comprised the CPA South-Central Region
10

Documentation in Grant Files. We found that the grant file contained only
the signed grant agreement and the disbursement document in the amount of
$6 million. The grant file did not contain any requests for information from the
CPA representatives, any receipts or written reports from the Provincial
Government of Najaf, or any record of site-visits from South-Central Region
personnel.
Expenditure of Grant Funds. According to the grant agreement, the
completion date of the grant was December 31, 2006, and any sums provided under
this grant which were not expended on or before that date were to be ”remitted back
to the CPA.” At the time of our review, South-Central Region personnel did not
know the amount expended and whether any funds potentially were available for
return.
Completion of Grant Work. At the time of our review, no South Central
Region personnel knew whether this grant was still underway or completed. If the
grant had been completed, then South-Central Region personnel should have
executed a post-award assessment to evaluate the affect the grant had upon the
community and the performance of the Provincial Government of Najaf in
achieving the objectives of the grant.
Oversight of the Grant. We found a complete lack of any requests for
information, no receipts or written reports, no record of site-visits, and no funds
accountability, and thus the South-Central Region apparently exercised no oversight
of the $6 million grant.
Grants for Programs to Promote Employment, Equal Rights for Women, and
Democratic Ideals. A grant recipient received six grants between April and May
2004 totaling $3,550,000. The grants were intended to establish a program for
immediate employment for Iraqis and to promote programs for equal rights for
women and democratic ideals. The grants contained language requiring the
recipient to:
. . . track all expenditures and the purpose of each expenditure and
provide a report to the South-Central Regional Coordinator on a
monthly basis until such time as the funds are fully expended.
CPA Memorandum Number 4 “establishes procedures applicable to the execution
of contracts and grants for the benefit of the Iraqi people using Iraqi Funds. . . .”
CPA Memorandum 4 also stated that obtaining receipts for significant payments
and documenting the use of funds was necessary to exercise fiscal responsibility
when executing grants.
Expenditure of Grant Funds. Instead of following the requirements of
CPA Memorandum Number 4, South-Central Region personnel disbursed the
money for each grant in one lump sum at the start of the grant. The grant recipient
did not provide any receipts to document the expenditure of funds and did not
provide the required monthly project reports.
Site-visits to Grant Projects. The South-Central Region was responsible for
visiting project sites to “ascertain proper usage of the funds.” No documentation
existed in the six grant files to indicate any site-visits, any contact with the
recipient, or any attempt to determine how the funds were spent.
11

Completion of Grant Work. Current and former South-Central Region
personnel were not familiar with any project or program completed by the grant
recipient with the funding provided by the six grants.
Oversight of the Grant. The lack of any receipts or written reports, any
record of site-visits, and any funds accountability resulted in the South-Central
Region apparently losing oversight of the $3,550,000 grants.
Conclusion
The South-Central Region awarded 74 R3P grants using funds from the DFI to
support programs and projects that were to directly benefit the Iraqi people or assist
in the recovery of Iraq.
Our review of these grants determined that CPA South-Central Region personnel
did not properly manage approximately $20.8 million in funds provided by the DFI
to support the South-Central Region R3P. South-Central Region personnel could
not account for more than $20.5 million in funds provided by the DFI for grants
they managed during the period February through June 2004. Further,
overpayments were made that exceeded the total value of grants awarded by more
than $2.6 million. Our audit revealed that South Central Region personnel
disbursed a total of almost $23.5 million for the 74 grants even though the award
value of these grants was only $20.8 million.
Because almost 98 percent of the awarded amounts for the 74 grants could not be
accounted for, we could not determine for what purposes the cash expended by the
South-Central Region for the grants were actually used by the grant recipients.
Finally, because we could not find documentation to support grant performance, we
could not determine whether the grants met their intended goals; whether the work
for which the grants were intended was started or satisfactorily completed; to whom
the cash was actually disbursed in some grants; and what benefit, if any, the Iraqi
people received as a result of the grants.
We concluded, based on the documentation examined during our review, that the
South-Central Region failed to adequately manage its R3P grant program.
Material Internal Control Weaknesses. Our audit identified material internal control
weaknesses. U.S. government agents and Coalition partners did not comply with
applicable guidance and did not properly control and account for Iraqi cash assets. In
addition, based on the award process for grants and the management of grants we
evaluated, there was no assurance that fraud, waste, and abuse did not occur in the
management and administration of assets.
Indications of Potential Fraud. During this audit, we found indications of potential
fraud and referred these matters to the Assistant Inspector General for Investigations,
Office of the Special Inspector General for Iraq Reconstruction, for action. Related
investigations are continuing.
12

Recommendations, Management Comments, and Audit
Response
Redirected and Added Recommendations. Since the Coalition Provisional
Authority was dissolved on June 28, 2004, we are addressing the recommendations
to three of the four successor organizations: the Iraq Reconstruction Management
Office; the Joint Contracting Command – Iraq/Afghanistan; and the Joint Area
Support Group - Central.
We added a recommendation to the United States Ambassador to Iraq because the
Commander, Joint Area Support Group - Central, stated that the responsibility for
seeking reimbursement of any overpayments is up to the office that managed the grant,
not the disbursing office.
1. We recommend that the U.S. Ambassador to Iraq determine the party
responsible for collecting the overpaid grant amounts and direct the responsible
individual to take action to seek reimbursement for the overpaid grant amounts.
2. We recommend that the Director, Iraq Reconstruction Management Office,
ensure proper authorization and oversight of the grant approval and
administrative process for all existing and future grants.
Management Comments. concurred.
The Director, Iraq Reconstruction Management Office
3. We recommend that the Commanding General, Joint Contracting Command –
Iraq/Afghanistan require that contracting officers, for all existing and future
grants:
a. b. c. d. e. Follow the Department of Defense 3210.6-R, Grants and Agreements,
for the award and administration of grants.
Require grant recipients to provide receipts for all expenditures.
Require monthly reports from the grant recipients detailing expenditures
and achievements.
Ensure regular site-visits to the grant recipient location.
Require reports at the end of the grant to assess the performance of the
grantee and to document the outcome of the grant in relation to the grant
goals.
Management Comments. The Commanding General, Joint Contracting
Command – Iraq/Afghanistan concurred and noted that Joint Contracting
Command – Iraq/Afghanistan currently has no grants officers and the normal
requirement for grants reporting is quarterly.
4. We recommend that the Commander, Joint Area Support Group - Central:
a. Require paying agents to obtain proper grant approval documentation
prior to making disbursements.
b. Require the appropriate separation of duties.
13

c. Establish a special team to review disbursements made in other regions
of Iraq to determine if the same conditions exist as determined by the
Special Inspector General for Iraq Reconstruction in the South-Central
Region.
Management Comments. The Commander, Joint Area Support Group - Central
generally concurred with all recommendations and took corrective actions. The
Commander, Joint Area Support Group - Central partially concurred with the
recommendation to seek reimbursement for overpayments, stating that the
responsibility for seeking reimbursement of any overpayments is up to the office
that managed the grant, not the disbursing office. However, it will support
whatever guidance it is provided by the office that is responsible. As a result, we
deleted the recommendation to the Commander, Joint Area Support Group - Central
to seek reimbursement for the overpayments.
14

Appendix A. Scope and Methodology
In September 2004, we initiated an audit of cash controls over disbursing officers in
southern Iraq as a result of concerns brought to our attention by staff of the
Coalition Provisional Authority (CPA) Comptroller.
We reviewed the following documents issued by the CPA:
• CPA Regulation Number 2, “Developmental Fund for Iraq,” June 10, 2003
• CPA Regulation Number 3, “Program Review Board,” June 18, 2003
• CPA Memorandum Number 4, “Contract and Grant Procedures Applicable
to Vested and Seized Iraqi Property and the Developmental Fund for Iraq,
Implementation of Regulation Number 3, Program Review Board,”
August 19, 2003
• Combined Joint Task Force-7, Fragmentary Order 89, June 19, 2003
• Combined Joint Task Force-7, Fragmentary Order 1268, December 22, 2003
• Director, Program Review Board, Program Review Board Guidance 01,
“Coalition Provisional Authority Allocation Process,” June 9, 2003, updated
October 4, 2003
• Director, Program Review Board, Program Review Board Guidance 02,
“Program Management Model for the Regions,” July 30, 2003
• Director, Program Review Board, Program Review Board Guidance 03,
“Program Management Assessment,” July 9, 2003
• Director, Program Review Board, Program Review Board Guidance 04,
“Maintaining Project Files,” September 30, 2003
• Director, Program Review Board, Program Review Board Guidance 05,
“Project Monitoring and Evaluation,” September 30, 2003
• Director, Program Review Board, Program Review Board Guidance 06,
“Rapid Regional Response Program Overview,” September 27, 2003
• Director, Program Review Board, Program Review Board Guidance 06.2,
“Rapid Regional Response Program Overview (amended),” December 14,
2003 and January 25, 2004
The CPA South-Central Region used Rapid Regional Response Program funds to
award 74 grants worth approximately $20.8 million between February and June
2004. We reviewed all 74 grants. We initially reviewed the Program Review
Board minutes to determine whether those grants were approved by the Program
Review Board.
During our audit, we observed deficiencies in grant award documentation and
expanded our scope to determine whether grants were properly managed by
coalition representatives in the South-Central Region to include the authorization,
award, execution, and oversight of the grants. We spoke with the contracting
officials available at the time of our audit regarding the status of the grant projects
and examined documentation maintained in the grant files. Those contracting
officers primarily were located at the South-Central Region, now known as the
U.S. Regional Embassy Office, located in Al Hillah, Iraq; but one contracting
15

officer who had previously worked for the South-Central Region was working for
the Joint Contracting Command – Iraq/Afghanistan.
We performed audit work at two locations to review applicable documentation and
grants management procedures. At the Joint Area Support Group - Central
Comptroller’s Office, located in the U.S. Embassy, Baghdad, Iraq; we reviewed
receipts submitted by South-Central Region pay agents to confirm disbursements
made for the grants. At the U.S. Regional Embassy Office, we reviewed all other
aspects of the grants.
We conducted this performance audit from September 2004 through August 2005,
in accordance with generally accepted government auditing standards.
Use of Computer-Processed Data. We did not use computer-processed data to
perform this audit.
Prior Coverage. The Special Inspector General for Iraq Reconstruction (SIGIR),
which was formerly the Office of the Inspector General, Coalition Provisional
Authority (CPA-IG), issued five reports related to controls over cash and the
management of contracts. The U.S. Army Audit Agency also issued a report
related to controls over cash. The reports are listed below and are available at the
indicated website addresses.
Special Inspector General for Iraq Reconstruction Reports. Reports can be accessed
on its website at http://www.sigir.mil.
SIGIR Report No. 05-019, “Attestation Engagement Concerning the Award of Non-
Competitive Contract DACA63-03-D-0005 to Kellogg, Brown and Root Services,
Inc.,” September 30, 2005
SIGIR Report No. 05-006, “Control of Cash Provided to South-Central Iraq,”
April 30, 2005
SIGIR Report No. 05-008, “Administration of Contracts Funded by the
Development Fund of Iraq,” April 30, 2005
CPA-IG Report No. 04-007, “Oil for Food Cash Controls for the Office of Project
Coordination in Erbil, Iraq,” July 26, 2004
CPA-IG Report No. 04-009, “Coalition Provisional Authority Comptroller Cash
Management Controls Over the Development Fund for Iraq,” July 28, 2004
CPA-IG Report No. 04-013, “Coalition Provisional Authority’s Contracting
Processes Leading Up to and Including Contract Award,” July 27, 2004
U.S. Army Audit Agency. Reports can be accessed on its website at
https://www.aaa.army.mil/reports.htm.
U.S. Army Audit Agency Audit Report: A-2005-0095-FFG, “Vested and Seized
Assets, Operation Iraqi Freedom,” February 16, 2005
16

Appendix B. Coalition Provisional Authority
Guidance Applicable to Grants
Coalition Provisional Authority (CPA) guidance for the Development Fund of Iraq
(DFI) and for the Program Review Board’s (PRB) operations that are relevant to
grants is:
Coalition Provisional Authority Regulation Number 2. CPA Regulation
Number 2, “Development Fund for Iraq,” June 10, 2003, described the
responsibilities for the administration, use, accounting, and auditing of the DFI.
This regulation was intended to ensure that the DFI was managed in a transparent
manner for and on behalf of the Iraqi people, consistent with United Nations
Security Council Resolution 1483, and that all DFI disbursements would be for
purposes benefiting the people of Iraq.
Coalition Provisional Authority Regulation Number 3. CPA Regulation
Number 3, “Program Review Board,” June 18, 2003, established the procedures
applicable to the PRB operations. The PRB was responsible for recommending
expenditures of resources from the DFI in a manner that meets the interests of the
people of Iraq, furthers CPA policy objectives, and comports fully with CPA
stewardship and financial management duties under the applicable laws and
regulations, including United Nations Security Council Resolution 1483. The PRB
was not responsible for overseeing the manner in which approved spending
requirements were executed.
17

Appendix C. Coalition Provisional Authority
Organizational Responsibilities for Grants
The diagram shown below identifies organizational entities within the Coalition
Provisional Authority (this is not a complete organizational diagram of the
Coalition Provisional Authority) that had oversight and administrative
responsibilities for grants until it ceased to exist on June 28, 2004.
Administrator
Comptroller
Rapid Regional
Response Program
Coordinator
Head Activity
Contracting
Program
Management
Office
Field
Disbursing Agents
Field
Contracting Agents
18

Appendix D. Present U.S. Government
Organizational Responsibilities for Grants
The diagram shown below identifies the present U.S. government organizational
entities that had oversight and administrative responsibilities for grants.
Director,
Iraq Reconstruction and
Management Office
Approval
Project and
Contracting Office
Requirements
Joint Contracting
Command -
Iraq/Afghanistan
Award/Monitor
Joint Area Support
Group - Central
Disburse
19

Appendix E. Grants Awarded by the South-
Central Region
The South Central Region awarded 74 grants. The total amount awarded was
$20,838,000.
Grant Number Grant
Amount Grant Description
DABV01-04-G-8001 $50,000 Media advancement through training, marketing.
DABV01-04-G-8002 $100,000 Assistance to the Karbala Provincial Council to
deal with the Ashoura bombing
DABV01-04-G-8003 $135,000 Delegation of key Iraqi personnel to Washington
DC for meetings with US Government officials.
DABV01-04-G-8004 $25,000 Funding for the grand opening of regional
democracy centre
DABV01-04-G-8005 $10,000 To aid the Karbala Police Department during the
religious holiday of Arbaaeen
DABV01-04-G-8006 $150,000
Iraq Media Professionals Association South East
Region (IMPASER) to provide support of the
media
DABV01-04-G-8007 $600,000 Provide operating support for the Babylon police
academy
DABV01-04-G-8008 $500,000 Provide operating support for the Babylon
advanced police training facility
DABV01-04-G-8009 $10,000
Provide operating support for the Diwaniyah
Archeology Office to assist in the disinterring of
the historical city of Nippur (Nafar) & the
protection of a group of historical graves
DABV01-04-G-8010 $200,000 Provide initial start-up and operating expenses
for the South Central Freedom Soccer League
DABV01-04-G-8011 $200,000
Exportable medical training; training & public
education subscription to medical journals,
books, and computer equipment
DABV01-04-G-8012 $15,000 Cleanup of the Barnoon village & instill civic
pride
DABV01-04-G-8013 $450,000 Provide support for Babylon Security Training
Facility
DABV01-04-G-8014 $500,000 Funding for the security tracking system
DABV01-04-G-8015 $150,000
Aid the Iraqi Democratic Gathering Regional
Centre to assist in activities against the Mahdi
Army & Moqtada Sadr
DABV01-04-G-8016 $500,000
Aid the Iraqi Democratic Gathering Regional
Centre to assist in activities against the Mahdi
Army & Moqtada Sadr
DABV01-04-G-8017 $100,000 Support for the people in the Kawliyah Gypsy
Tribe
DABV01-04-G-8018 $250,000
Assist w/ City of Najaf's populace needs &
counteract the ruinous deeds of Moqtada Al
Sadr & Madhi Militia
DABV01-04-G-8019 $950,000 No Grant paperwork
DABV01-04-G-8020 $210,000 Provide operating support for the Karbala
Library librarians
20

Grant Number DABV01-04-G-8021 DABV01-04-G-8022 DABV01-04-G-8023 DABV01-04-G-8024 DABV01-04-G-8025 DABV01-04-G-8026 DABV01-04-G-8027 DABV01-04-G-D9001 DABV01-04-G-D9002 DABV01-04-G-D9003 DABV01-04-G-D9004 DABV01-04-G-D9005 DABV01-04-G-D9006 DABV01-04-G-D9007 DABV01-04-G-D9008 Grant
Amount $600,000
$600,000
$750,000
$403,500 $250,000
$950,000
$500,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000
$40,000
$50,000
Grant Description
Sustain democratic initiatives through funding
of programs, projects, conferences, & promote
women's rights
Sustain democratic initiatives through funding
of programs, projects, conferences, & promote
women's rights
Sustain democratic initiatives through funding
of programs, projects, conferences, & promote
women's rights
Start up funding for the establishment of a Small
Business Development Center
To provide news, democracy broadcasts,
information, & entertainment to the Diwaniyah
area
Sustain the physical center & cover operational
expenses for the Hilla University for
Humanitarian, Scientific, and Religious Studies
Provide a base monthly operating budget over
the next 12 months, while translating books &
periodicals that define "Western Civilization"
with democratic thoughts and practices from
English, French, & German into Arabic
Provide funds to assist in strengthening the
Governor's ability to promote the Diwaniyah
people's welfare
Provide funds to assist in strengthening the
Governor's ability to promote the Diwaniyah
people's welfare
Provide funds to assist in strengthening the
Governor's ability to promote the Diwaniyah
people's welfare
Support operations & improvements to the
facilities & equipment of the Diwaniyah's Al
Amel & Al Rijaa Institute
Provide the Provincial Council of Diwaniyah
representatives funds to assist in strengthening
the Council's ability to promote the Diwaniyah
people's welfare
Provide the Provincial Council of Diwaniyah
representatives funds to assist in strengthening
the Council's ability to promote the Diwaniyah
people's welfare
Provide the DCCVMV funds to assist in
compensating Diwaniyah people with legitimate
claims against the Sadr JAS Mehdi Militia for
damages and losses incurred during April/May
2004
Support the Governor’s unexpected
humanitarian & representation needs including
those of non-governmental provincial
organizations
21

Grant Number Grant
Amount DABV01-04-G-D9009 $50,000
DABV01-04-G-D9010 $10,000
1 $25,000 2 $50,000 3 $50,000 4 $50,000 5 $50,000 6 $50,000 7 $50,000 8 $50,000 9 $50,000 10 $50,000 11 $50,000 12 $50,000 13 $10,000 14 $25,000 W911SO-04-A-0002 $6,000,000 DABV01-04-1-0015 $375,000 DABV01-04-1-0016 $150,000 DABV01-04-1-0017 $225,000 DABV01-04-1-0018 $350,000 DABV01-04-1-0019 $1,400,000 DABV01-04-1-0020 $1,000,000 DABV01-04-1-0021 $525,000 LGF II - 001 $50,000 LGF II - 004 $50,000 LGF II - 012 $29,500 LGF II 014 $50,000 LGF II - 015 $10,000 LGF II - 016 $50,000 LGF 004 Wassit 052 $47,000 LGF 004 Wassit 053 $27,000 K-1000-1 $250,000 Grant Description
Support library's continued development &
usage by the Diwaniyah people through building
repair, book binding, essay writing contests, &
purchase of additional books
Support Law and Medical College students by
providing funds for the purchase of additional
books that reflect today's legal & medical
environment
Install street lighting
Develop educational programs
Develop community programs
Develop a sport's club
Develop community programs
Develop education programs
Develop community programs
Develop community programs
Develop literacy programs
Develop women's programs
Develop water recreation programs
Construct a home as residence for a medical
doctor
Renovate a home for the medical doctor's
residence
Construct a home for the teacher's residence
Establish & restore public structures & facilities
in Najaf
Road repair in Najaf Province
Road repair in Kufa Municipality
Road repair in Najaf Municipality
Cleanup of Kufa Municipality
Installation of a water system in Najaf
Municipality
Installation of a water system in Kufa
Municipality
Cleanup of Najaf Municipality
Provide support for Shiek Saad's people
(Irrigation system)
Provide support for Engineer's Association
Provide support or Wassit newspaper
Provide support for Province Council
Provide support for Province Council
Provide support for Province Council
Provide support for an independent media
Produce better quality programs
damaged properties in the city of Kerbala
22

Grant Number Grant
Amount Grant Description
K-685-01 $14,000 Conduct a 1 month cleanup in 6 sectors of the
Yarmouk Quarter of Karbala
K-685-02 $5,000 Provide support for women's rights
K-685-03 $3,000 Promote and facilitate women's rights and
welfare in Karbala
K-685-04 $1,000 Promote and facilitate women's rights and
welfare in Karbala
K-685-10 $3,000 Provide project support to conduct human rights
and democracy educational programming
K-685-11 $5,000 Provide support for the Human Right Center to
conduct voter's rights educational program
Total Grant Amount $20,838,000
23

Appendix F. Overpayments on Grants
South-Central Region personnel overpaid eight grants in the amount of $2,663,500.
For a detailed list of the duplicate payments, see the table.
Overpayments on Grants
Grant
Grant
Grant Agreement
Number
Agreement
Award
Disbursement
Disbursement
Amount of
Date
Amount
Date
Amount
Overpayment
DABV01-04-G-8002 3/2/2004 $100,000 3/2/2004 3/3/2004 DABV01-04-G-8015 4/10/2004 $150,000 4/10/2004 4/10/2004 $100,000
$100,000 $150,000
$150,000 $100,000
$150,000
DABV01-04-G-8016 4/16/2004 $500,000 4/15/2004 4/15/2004 DABV01-04-G-8017 4/19/2004 $100,000 4/20/2004 4/28/2004 DABV01-04-G-8020 5/24/2004 $210,000 5/26/2004 6/8/2004 DABV01-04-G-8024 5/26/2004 $403,500 5/27/2004 5/27/2004 DABV01-04-G-8025 5/25/2004 $250,000 5/27/2004 5/27/2004 DABV01-04-G-8026 5/26/2004 $950,000 5/27/2004 6/1/2004 $500,000
$500,000 $100,000
$100,000 $210,000
$210,000 $403,500
$403,500 $250,000
$250,000 $950,000
$950,000 $500,000
$100,000
$210,000
$403,500
$250,000
$950,000
Total Overpayments $2,663,500
24

Appendix G. Acronyms
CPA Coalition Provisional Authority
CPA-IG Coalition Provisional Authority Office of the Inspector General
DFI Development Fund for Iraq
DoD Department of Defense
PCO Project and Contracting Office
PRB Program Review Board
R3P Rapid Regional Response Program
SIGIR Special Inspector General for Iraq Reconstruction
25

Appendix H. Report Distribution
Department of State
Secretary of State
Senior Advisor to the Secretary and Coordinator for Iraq
U.S. Ambassador to Iraq
Director, Iraq Reconstruction Management Office
Inspector General, Department of State
Department of Defense
Secretary of Defense
Deputy Secretary of Defense
Director, Defense Reconstruction Support Office
Under Secretary of Defense (Comptroller)/Chief Financial Officer
Deputy Chief Financial Officer
Deputy Comptroller (Program/Budget)
Inspector General, Department of Defense
Department of the Army
Assistant Secretary of the Army for Acquisition, Logistics, and Technology
Principal Deputy to the Assistant Secretary of the Army for Acquisition,
Logistics, and Technology
Deputy Assistant Secretary of the Army (Policy and Procurement)
Director, Project and Contracting Office
Commanding General, Joint Contracting Command – Iraq/Afghanistan
Assistant Secretary of the Army for Financial Management and Comptroller
Chief of Engineers and Commander, U.S. Army Corps of Engineers
Commander, Gulf Region Division
Auditor General of the Army
U.S. Central Command
Commanding General, Multi-National Force – Iraq
Commanding General, Multi-National Security Transition Command – Iraq
Commander, Joint Area Support Group – Central
Other Defense Organizations
Director, Defense Contract Audit Agency
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Other Federal Government Organizations
Director, Office of Management and Budget
Comptroller General of the United States
Inspector General, Department of the Treasury
Inspector General, Department of Commerce
Inspector General, Department of Health and Human Services
Inspector General, U.S. Agency for International Development
Mission Director – Iraq, U.S. Agency for International Development
Congressional Committees and Subcommittees, Chairman and
Ranking Minority Member
U.S. Senate
Senate Committee on Appropriations
Subcommittee on Defense
Subcommittee on State, Foreign Operations and Related Programs
Senate Committee on Armed Services
Senate Committee on Foreign Relations
Subcommittee on International Operations and Terrorism
Subcommittee on Near Eastern and South Asian Affairs
Senate Committee on Homeland Security and Governmental Affairs
Subcommittee on Federal Financial Management, Government Information and
International Security
Subcommittee on Oversight of Government Management, the Federal
Workforce, and the District of Columbia
U.S. House of Representatives
House Committee on Appropriations
Subcommittee on Defense
Subcommittee on Foreign Operations, Export Financing and Related Programs
Subcommittee on Science, State, Justice and Commerce and Related Agencies
House Committee on Armed Services
House Committee on Government Reform
Subcommittee on Management, Finance and Accountability
Subcommittee on National Security, Emerging Threats and International
Relations
House Committee on International Relations
Subcommittee on Middle East and Central Asia
27

Appendix I. Audit Team Members
The Office of the Assistant Inspector General for Auditing, Office of the Special
Inspector General for Iraq Reconstruction, prepared this audit report. The Office of
the Special Inspector General for Iraq Reconstruction staff members who
contributed to the report include:
James Carrera
Angelina Johnston
Robert Murrell
Kevin O’Connor
William Shimp
William Whitehead
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Management Comments
Director, Iraq Reconstruction Management Office
Embassy of the United States of America
Baghdad, Iraq
September 22, 2005
RESPONSE TO REPORT STATEMENTS
UNCLASSIFIED
TO: FROM: SUBJECT: Senior Audit Manager, SIGIR - James Carrera
IRMO Director – Daniel Speckhard
Report on Management of Rapid Response Program Grant
in South-Central Iraq
The following comments are provided as requested for the draft statements and
recommendations shown:
Statements and Findings: Concur with statements as written. Between February and
June 2004, the Coalition Provisional Authority (CPA) South-Central Region used funds
provided from the Development Fund of Iraq (DFI) through the Rapid Regional
Response Program (R3P) to award 74 grants worth about $20.8M. The overall audit
objective was to determine whether disbursing officers in selected locations in southern
Iraq complied with applicable guidance and properly controlled and accounted for DFI
cash assets and expenditures. While the Iraq Reconstruction Management Office
(IRMO) began operations subsequent to these matters, the recommendations from SIGIR
are noted below.
Recommendations: The SIGIR recommended that the Director of IRMO ensure proper
authorization and oversight of the grant and administrative process for all existing and
future grants. IRMO concurs.
Attachment
Report on Management of Rapid Response Program Grant in South-Central Iraq
Dated September 1, 2005
29

DRAFTED: IRMO Operations RDiehl 19 September 2005
CLEARED: IRMO ExecOfc DHarris (ok)
30

Management Comments
Commanding General, Joint Contracting Command – Iraq/Afghanistan
31

32

Management Comments
Commander, Joint Area Support Group – Central
33

34