Rebuilding Iraq
Resource, Security, Governance, Essential Services, and Oversight Issues Gao ID: GAO-04-902R June 28, 2004Rebuilding Iraq is a U.S. national security and foreign policy priority. According to the President, the United States intends to help Iraq achieve democracy and freedom and has a vital national interest in the success of free institutions in Iraq. As of April 30, 2004, billions of dollars in grants, loans, assets, and revenues from various sources have been made available or pledged to the reconstruction of Iraq. The United States, along with its coalition partners and various international organizations and donors, has embarked on a significant effort to rebuild Iraq following multiple wars and decades of neglect by the former regime. The Coalition Provisional Authority (CPA), established in May 2003, was the U.N.-recognized coalition authority led by the United States and the United Kingdom that was responsible for the temporary governance of Iraq. Specifically, the CPA wasresponsible for overseeing, directing, and coordinating the reconstruction effort. On June 28, 2004, the CPA transferred power to a sovereign Iraqi interim government, and the CPA officially dissolved. To pave the way for this transfer, the CPA helped the Iraq Governing Council develop the Law of Administration for the State of Iraq for the Transitional Period in March 2004. The transitional law provides a framework for governance of Iraq while a permanent government is formed. In June 2004, U.N. Security Council Resolution 1546 provided international support to advance this process, stating that, by June 30, CPA will cease to exist and Iraq will reassert full sovereignty. Resolution 1546 also endorsed the formation of a fully sovereign Iraqi interim government; endorsed a timetable for elections and the drafting of an Iraqi constitution; and decided that the United Nations, at the Iraq government's request, would play a leading role in establishing a permanent government. Resolution 1546 further noted the presence of the multinational force in Iraq and authorized it to take all necessary measures to contribute to security and stability in Iraq, in accordance with letters annexed to the resolution. Such letters provide, in part, that the multinational force and the Iraqi government will work in partnership to reach agreement on security and olicy issues, including policy on sensitive offensive operations. Resolution 1546 stated that the Security Council will review the mandate of the multinational force in 12 months or earlier if requested by the government of Iraq and that it will terminate the mandate if requested by the government of Iraq. As part of our broad effort to monitor Iraq reconstruction, which we undertook at the request of Congress, this report provides information on the status of the issues we have been monitoring, as well as key questions that will assist Congres in its oversight responsibilities. Specifically, this report focuses on issues associated with (1) resources, (2) security, (3) governance, and (4) essential services. For the essential services issue, we focused on the Army Corps of Engineers' Restore Iraqi Electricity project, a major component of the U.S. assistance effort to rebuild the power sector.
As of the end of April 2004, about $58 billion in grants, loans, assets, and revenues from various sources had been made available or pledged to the relief and reconstruction of Iraq. Resource needs are expected to continue after the transfer of power to a sovereign Iraqi interim government. Of the funds available, the United States obligated about $8 billion of the available $24 billion in U.S. funds. The CPA obligated about $15.5 billion of the nearly $21 billion in available Iraqi funds. The international community pledged nearly $14 billion. In December 2003, the CPA put into effect an Iraqi-led process to coordinate reconstruction efforts. An October 2003 U.N./World Bank assessment noted that Iraq's ability to absorb resources as the country gains sovereignty and decision-making authority will be one of the most significant challenges to reconstruction. The security situation in Iraq has deteriorated since June 2003, with significant increases in attacks against the coalition and coalition partners. The increase in attacks has had a negative impact on military operations and the work of international civilian organizations in Iraq. As part of the effort to provide stability, the coalition plans to transfer security responsibilities from the multinational force to Iraqi security forces and to dissolve Iraqi militias operating outside the central government's control. During the escalation of violence that occurred during April 2004, these security forces collapsed in several locations. However, key elements of the CPA's transition and reintegration process remain to be finalized. With U.S. and others' assistance, Iraqis have taken control of government institutions at the national and subnational levels. National ministries are providing some services to citizens as their facilities are being rebuilt, reforms are being introduced, and their staffs trained. According to the head of the now-dissolved CPA, all ministries were under Iraqi authority as of the transfer of power on June 28, 2004. However, the security situation hinders the ability of the ministries to provide needed services and maintain daily operations. To reform the rule of law, ongoing efforts have begun to establish a functioning independent judiciary, although courts are not at their pre-war capacity. However, efforts to rebuild Iraq's judicial system and restore the rule of law face multiple challenges. U.S. officials said that rehabilitating and reforming Iraq's judicial system will likely take years. The Coalition considers reconstruction of the power sector critical to reviving Iraq's economy, supporting essential infrastructure, improving daily well-being, and gaining local support for the coalition presence in Iraq. The CPA set a goal of 6,000 megawatts of generating capacity by June 30, 2004, in anticipation of the higher demand for power during the summer months. As part of the overall effort to achieve this goal, the U.S. Army Corps of Engineers (Corps) has undertaken $1.4 billion in work under the Restore Iraqi Electricity (RIE) program. As of late May, the Corps anticipated that 59 of the 66 RIE projects expected to help meet the goal would be completed by June 30. However, electrical service in the country as a whole has not shown a marked improvement over the immediate postwar levels of May 2003 and has worsened in some governorates. RIE contractors report numerous instances of project delays due to difficulties in getting employees and materials safely to project sites. Further, the security environment continues to affect the cost of rebuilding the power sector.
GAO-04-902R, Rebuilding Iraq: Resource, Security, Governance, Essential Services, and Oversight Issues
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Report to Congressional Committees:
June 2004:
REBUILDING IRAQ:
Resource, Security, Governance, Essential Services, and Oversight
Issues:
GAO-04-902R:
United States General Accounting Office:
Washington, DC 20548:
June 28, 2004:
The Honorable Richard G. Lugar:
Chairman:
The Honorable Joseph R. Biden:
Ranking Minority Member:
Committee on Foreign Relations:
United States Senate:
The Honorable Henry J. Hyde:
Chairman:
The Honorable Tom Lantos:
Ranking Minority Member:
Committee on International Relations:
House of Representatives:
Subject: Rebuilding Iraq: Resource, Security, Governance, Essential
Services, and Oversight Issues:
Rebuilding Iraq is a U.S. national security and foreign policy
priority. According to the President, the United States intends to help
Iraq achieve democracy and freedom and has a vital national interest in
the success of free institutions in Iraq. As of April 30, 2004,
billions of dollars in grants, loans, assets, and revenues from various
sources have been made available or pledged to the reconstruction of
Iraq. The United States, along with its coalition partners and various
international organizations and donors, has embarked on a significant
effort to rebuild Iraq following multiple wars and decades of neglect
by the former regime. The Coalition Provisional Authority (CPA),
established in May 2003, was the U.N.-recognized coalition authority
led by the United States and the United Kingdom that was responsible
for the temporary governance of Iraq. Specifically, the CPA was
responsible for overseeing, directing, and coordinating the
reconstruction effort.
On June 28, 2004, the CPA transferred power to a sovereign Iraqi
interim government, and the CPA officially dissolved. To pave the way
for this transfer, the CPA helped the Iraq Governing Council develop
the Law of Administration for the State of Iraq for the Transitional
Period in March 2004.[U.S. General Accounting Office, Iraq's
Transitional Law, GAO-04-746R (Washington, D.C.: May 25, 2004).] The
transitional law provides a framework for governance of Iraq while a
permanent government is formed. In June 2004, U.N. Security Council
Resolution 1546 provided international support to advance this process,
stating that, by June 30, CPA will cease to exist and Iraq will
reassert full sovereignty. Resolution 1546 also endorsed the formation
of a fully sovereign Iraqi interim government; endorsed a timetable
for elections and the drafting of an Iraqi constitution; and decided
that the United Nations, at the Iraq government's request, would play
a leading role in establishing a permanent government. Resolution 1546
further noted the presence of the multinational force in Iraq and
authorized it to take all necessary measures to contribute to security
and stability in Iraq, in accordance with letters annexed to the
resolution. Such letters provide, in part, that the multinational
force and the Iraqi government will work in partnership to reach
agreement on security and policy issues, including policy on sensitive
offensive operations. Resolution 1546 stated that the Security Council
will review the mandate of the multinational force in 12 months or
earlier if requested by the government of Iraq and that it will
terminate the mandate if requested by the government of Iraq.
As part of our broad effort to monitor Iraq reconstruction, which we
undertook at your request, this report provides information on the
status of the issues we have been monitoring, as well as key questions
that will assist you in your oversight responsibilities. Specifically,
this report focuses on issues associated with (1) resources, (2)
security, (3) governance, and (4) essential services. For the essential
services issue, we focused on the Army Corps of Engineers' Restore
Iraqi Electricity project, a major component of the U.S. assistance
effort to rebuild the power sector. We updated the information in this
report on June 17, 2004, with the most currently available data, as
noted in each enclosure. We conducted our review from March 2004
through June 2004 in accordance with generally accepted government
auditing standards.
Summary:
Resources:
As of the end of April 2004, about $58 billion in grants, loans,
assets, and revenues from various sources had been made available or
pledged to the relief and reconstruction of Iraq. Resource needs are
expected to continue after the transfer of power to a sovereign Iraqi
interim government. Of the funds available, the United States obligated
about $8 billion of the available $24 billion in U.S. funds. The CPA
obligated about $15.5 billion of the nearly $21 billion in available
Iraqi funds. These funds were used to support ministry operations and
expenses; the restoration of essential services, such as power, oil,
and water; and humanitarian and other human services, including the
importation of liquid petroleum gas and food. The international
community pledged nearly $14 billion. In December 2003, the CPA put
into effect an Iraqi-led process to coordinate reconstruction efforts.
However, the capability to track the total amount of bilateral
assistance flowing into Iraq and to identify sectors that do not
receive assistance is still under development. An October 2003 U.N./
World Bank assessment noted that Iraq's ability to absorb resources as
the country gains sovereignty and decision-making authority will be one
of the most significant challenges to reconstruction. The CPA faced a
number of challenges in identifying, obtaining, and organizing the
human resources required to help stabilize and reconstruct Iraq. The
CPA's staffing requirements also changed over time as the mission
evolved from a reconstruction and humanitarian effort to the temporary
administration of the Iraq government. The CPA was dependent on
personnel from multiple sources and generally operated with about one-
third fewer staff than it required. After the transition, the U.S.
Mission in Baghdad and its temporarily established Iraq Reconstruction
Management Office are likely to continue to draw upon staff from
multiple sources.
Security: Trends and Issues:
The security situation in Iraq has deteriorated since June 2003, with
significant increases in attacks against the coalition and coalition
partners. Anti-coalition attacks have generally become more
sophisticated, widespread, and effective. In May 2004, the Secretary
of Defense and the Commander of the U.S. Central Command projected that
the level of violence could continue to increase as Iraq moves to elect
a transitional government. The increase in attacks has had a negative
impact on military operations and the work of international civilian
organizations in Iraq. The United States decided to maintain a force
level of about 138,000 troops at least until the end of 2005, rather
than drawing down to 105,000 troops by May 2004, as DOD had announced
in late 2003. The United Nations, numerous nongovernmental
organizations, and a range of civilian contractors have reduced their
presence or completely shut down operations. As part of the effort to
provide stability, the coalition plans to transfer security
responsibilities from the multinational force to Iraqi security forces
and to dissolve Iraqi militias operating outside the central
government's control. As of June 2004, Iraq had security forces
numbering about 220,000, including the Iraqi Police, Iraqi Civil
Defense Corps, and Iraqi Armed Forces. During the escalation of
violence that occurred during April 2004, these security forces
collapsed in several locations. As of June 2004, efforts to disband
Iraq's militias have produced formal agreements between the CPA and
nine major political parties that possess militias. However, key
elements of the CPA's transition and reintegration process remain to
be finalized.
Governance: Reforming and Rebuilding Iraq's Government:
With U.S. and others' assistance, Iraqis have taken control of
government institutions at the national and subnational levels.
National ministries are providing some services to citizens as their
facilities are being rebuilt, reforms are being introduced, and their
staffs trained. According to the head of the now-dissolved CPA, all
ministries were under Iraqi authority as of the transfer of power on
June 28, 2004. However, the security situation hinders the ability of
the ministries to provide needed services and maintain daily
operations. To reform the rule of law, ongoing efforts have begun to
establish a functioning independent judiciary, although courts are not
at their pre-war capacity. As of June 2004, the CPA had completed a
review of all Iraqi judges, took steps to reform Iraq's legal code, and
issued orders to restore judicial independence. However, efforts to
rebuild Iraq's judicial system and restore the rule of law face
multiple challenges, including providing adequate security for judges
and other court personnel, some of whom have been assassinated;
ensuring the independence of the court system so that it operates
without influence from the executive branch of the government; and
providing adequate training for judges and attorneys. U.S. officials
said that rehabilitating and reforming Iraq's judicial system will
likely take years.
Essential Services: Restore Iraqi Electricity:
The Coalition considers reconstruction of the power sector critical to
reviving Iraq's economy, supporting essential infrastructure,
improving daily well-being, and gaining local support for the coalition
presence in Iraq. The CPA set a goal of 6,000 megawatts of generating
capacity by June 30, 2004, in anticipation of the higher demand for
power during the summer months. As part of the overall effort to
achieve this goal, the U.S. Army Corps of Engineers (Corps) has
undertaken $1.4 billion in work under the Restore Iraqi Electricity
(RIE) program. As of late May, the Corps anticipated that 59 of the 66
RIE projects expected to help meet the goal would be completed by June
30. However, even if the 6,000-megawatt goal is met, generating
capacity will fall short of the estimated summer peak demand of 7,000
to 8,000 megawatts. Some improvements have been made in restoring
electricity; for example, Iraq's daily peak generation capacity
increased from about 3,400 megawatts on September 25, 2003, to about
4,200 megawatts on June 1, 2004. However, electrical service in the
country as a whole has not shown a marked improvement over the
immediate postwar levels of May 2003 and has worsened in some
governorates. For example, in May 2003, 7 of Iraq's 18 governorates had
16 or more hours of electricity a day, but as of late May 2004, only
one governorate in northern Iraq was at that level. RIE contractors
report numerous instances of project delays due to difficulties in
getting employees and materials safely to project sites. Further, the
security environment continues to affect the cost of rebuilding the
power sector. Preliminary estimates of security-related costs for one
RIE contractor are almost 18 percent of total costs. The possibility
that electrical capacity will not meet the peak summer demand raises
concerns about the ability of the coalition to support power-dependent
infrastructure, improve Iraq's economy, and promote stability in Iraq.
Concluding Observations:
The United States, along with its coalition partners and various
international organizations and donors, has undertaken a challenging
and costly effort to stabilize and rebuild Iraq. Several key challenges
will affect the political transition, the pace and cost of
reconstruction, and the type of assistance provided by the
international community. These include the unstable security
environment, the evolving capacity of the Iraqi institutions to govern
and secure the country, the availability and coordination of
international assistance, and the need for adequate oversight. Given
the instability and uncertainty in Iraq, there are also questions about
what options and contingency plans are being developed to address these
ongoing and future challenges. The following enclosures elaborate on
the progress made as of June 2004 in key aspects of the stabilization
and rebuilding effort. We also provide key questions for Congress to
consider as it assesses progress and provides oversight of
reconstruction efforts.
Agency Comments and Our Evaluation:
We provided drafts of this report to the Coalition Provisional
Authority; the Departments of Defense, State, Justice, and Treasury;
and the U.S. Agency for International Development. These agencies were
unable to provide us written comments in the limited time given.
However, we worked with the agencies to obtain oral comments on
individual enclosures. Agencies provided technical comments on many of
the enclosures, which we incorporated where appropriate.
CPA commented that the general tone of the report was accurate, but
stated that the report was not sufficiently critical of the judicial
reconstruction effort (enclosure IX). In particular, CPA said the
capacity of the courts is less than pre-war levels. We modified the
report to increase the emphasis on the challenges that Iraq faces in
reforming its judicial system and added additional information CPA
provided. CPA also commented on enclosure VI (Iraqi security forces),
stating that delays in providing equipment to Iraqi security forces
were caused by a range of factors, and not just contracting problems.
In commenting on our description of the Iraqi police force's response
to insurgent activity in April, CPA noted that the Iraqi police were
not intended to combat insurgents, but did stand up to them in some
locations. We modified enclosure VI by including the range of factors
that delayed equipping Iraqi security forces and incorporated CPA's
comments as appropriate.
Individual units of the Department of Defense, including the Army Corps
of Engineers, provided technical comments on resource issues
(enclosures I, II, IV); security (enclosures V, VI, and VII); and
essential services (enclosure X), which we incorporated as appropriate.
State provided technical comments on international funding (enclosure
II), which we incorporated as appropriate. Justice provided technical
comments on judicial reform (enclosure IX), which we incorporated as
appropriate. Treasury had no comment on the report. USAID provided
technical comments on governance issues (enclosure VIII), which we
incorporated as appropriate.
Scope and Methodology:
As part of our overall monitoring effort, we focused on issues
involving resources, security, governance, and essential services. For
each area, we obtained documents and interviewed relevant officials
from the various agencies involved in rebuilding Iraq, including the
Coalition Provisional Authority, the Departments of Defense, Justice,
State, and the Treasury, the U.S. Agency for International Development,
the Army Corps of Engineers, the multinational force, and
nongovernmental organizations. We reviewed key documentation, orders,
memoranda, reports, budget documents, and plans. In reviewing agency
data on the issues included in this report, we determined that the data
are sufficiently reliable for the purposes used. We did not audit the
funding data and are not expressing our opinion on them. However, we
took several steps to ensure that the funding data were sufficiently
reliable for the purposes of this report as discussed in enclosure XI.
Complete details on our scope and methodology are presented in
enclosure XI.
We are sending copies of this letter to interested congressional
committees. This letter is also available on GAO's Web site at http://
www.gao.gov. If you or your staff have questions, please contact Joseph
Christoff at (202) 512-8979 or christoffj@gao.gov. For press inquiries,
please contact Jeff Nelligan at (202) 512-4800 or nelliganj@gao.gov.
Key contributors to this report are included in enclosure XII.
Sincerely,
Signed by:
David M. Walker:
Comptroller General of the United States:
Enclosures (12):
Enclosures:
Resources:
I: Funding the Reconstruction:
II: International Assistance to Rebuild Iraq:
III: Development Fund for Iraq:
IV: Staffing for the Iraq Reconstruction Effort:
Security:
V: Iraq Security Trends:
VI: Transitioning Security Missions to Iraqi Forces:
VII: Transitioning and Reintegrating Iraq's Militias:
Governance:
VIII: Iraq's Federal Government:
IX: Reforming Iraq's Judicial System:
Essential Services:
X: Army Corps of Engineers' Restore Iraqi Electricity Project:
XI: Objectives, Scope, and Methodology:
XII: Acknowledgments:
[End of section]
I. Resources:
Funding the Reconstruction:
Issue:
The United States, along with its coalition partners and various
international organizations and donors, have committed billions of
dollars to the reconstruction of Iraq in the face of an unstable
security situation and other challenges. These funds have come from
multiple and diverse sources, the effective use of which requires
significant oversight and cooperation. The Coalition Provisional
Authority (CPA) has been responsible for the allocation of U.S. and
Iraqi funds. The Departments of Defense and State, and the U.S. Agency
for International Development, among others, have played play a primary
role in U.S. efforts to fund and execute the reconstruction effort. To
a large extent, these agencies have used contracts and personal
services contractors to implement their programs. Agency inspectors
general, the CPA inspector general, and other auditing authorities are
responsible for auditing aspects of the reconstruction effort. This
enclosure describes (1) the sources and amounts of funds that have been
made available for the reconstruction of Iraq, and (2) the amounts of
U.S. and Iraqi funds that have been obligated and disbursed as of April
30, 2004,[Footnote 1] and the uses to which those funds have been
applied. Funds for U.S. military operations are not described in this
enclosure.
Results in Brief:
As of April 30, 2004, about $58 billion in grants, loans, assets, and
revenues from various sources had been made available or pledged to the
reconstruction of Iraq (see fig. I.1). The United States appropriated
about $24 billion and the international community has pledged about
$13.6 billion in grants and loans. The remaining funds made available
for reconstruction purposes include about $18 billion from the
Development Fund for Iraq [Footnote 2] (DFI) and a total of about $2.65
billion in vested assets and seized assets from the deposed regime.
[Footnote 3] Of the funding available for the reconstruction effort,
about $24 billion had been obligated as of the end of April 2004.
[Footnote 4] Of this amount, about $13 billion came from the
Development Fund for Iraq and about $8 billion from U.S. appropriated
funds. About $4 billion of the $4.5 billion in U.S. funds appropriated
in 2003 and about $4.2 billion of the $19.6 billion in U.S. funds
appropriated in 2004 have been obligated. The remaining $2.5 billion
in obligated funds came from vested and seized assets. Obligations to
date have primarily been applied to the operating expenses of the Iraqi
ministries; restoration of essential services such as oil, water, and
power; and humanitarian and human services, including the procurement
of food and liquid petroleum gas for domestic consumption.
Figure I.1: Total Funds Available, Obligated, and Disbursed for Iraq
Reconstruction by Source, as of April 2004:
[See PDF for image]
[A] Of the $13.6 billion pledged, donors have committed about $1
billion to the International Reconstruction Fund Facility for Iraq.
[End of figure]
Funding Pledged or Made Available for Iraq:
The reconstruction of Iraq has been supported from multiple sources of
funds. The largest share of these funds has come from U.S.
appropriations. The other sources, in descending order of amounts, are
the DFI, vested assets, and seized assets (see fig. I.2). In addition,
international donors have pledged about $14 billion to the
reconstruction effort.
Figure I.2: Sources of Funding for Iraq Reconstruction as of April 30,
2004:
Billions of U.S. dollars:
[See PDF for image]
Sources: GAO (analysis); Departments of Defense, State, and the
Treasury, USAID, CPA, and the World Bank Group (data).
[End of figure]
U.S. Appropriations:
Congress has appropriated about $24 billion of the approximately $58
billion provided to date for the relief and reconstruction of Iraq. The
funds appropriated in fiscal year 2003 were made available until
September 30, 2004; those appropriated in fiscal year 2004 were made
available until September 30, 2006.
In April 2003, Congress enacted the Emergency Wartime Supplemental
Appropriations Act, which, when combined with previously appropriated
funds, provided about $4.5 billion for the reconstruction of Iraq. Of
this $4.5 billion, the act provided $2.475 billion for an Iraq Relief
and Reconstruction Fund (IRRF). The act also included a provision for
the Iraq Freedom Fund (IFF) to support ongoing military operations in
Iraq, among other things, and for a Natural Resources Risk Remediation
Fund to finance emergency firefighting, repair damaged oil facilities,
and preserve oil distribution capability. In addition, some funds were
transferred from the IFF to support the new Iraqi Army (about $50
million) and for CPA operating expenses (about $600 million). The
Natural Resources fund provided about $800 million to the
reconstruction effort. In addition, agencies have also been reimbursed
about $575 million for expenses incurred before the passage of the
supplemental appropriations act.
In November 2003, Congress enacted another emergency wartime
supplemental appropriation, of which $18.4 billion was provided for
Iraq relief and reconstruction. In addition, under the same act, the
CPA received its own funding authority of $983 million for operating
expenses. Further, $140 million was transferred from the IFF to support
regional emergency response programs.
Development Fund for Iraq:
As of May 6, 2004, the DFI had received deposits of about $18 billion.
This fund, established by the CPA in May 2003 and noted by U.N.
Security Council Resolution 1483, was created to benefit the Iraqi
people and facilitate the reconstruction of their country. The U.N.
resolution provided for an initial deposit of $1 billion from
unencumbered Oil for Food program funds. [Footnote 5] The resolution
further authorized the subsequent deposits of (1) proceeds from the
sale of Iraqi oil, natural gas, and petroleum products; (2) U.N. funds
such as unused Oil for Food program funds; and (3) transferred assets
from the former Iraqi regime that U.N. member states had frozen in the
1990. The DFI does not include U.S. appropriated funds. See enclosure
III for more detailed information on the DFI.
Vested Assets and Assets Seized in Iraq:
Approximately $2.7 billion in assets the United States confiscated and
seized from the former regime have been made available for use in
Iraq's reconstruction. In March 2003, the U.S. government confiscated
more than $1.7 billion in Iraqi assets located in U.S. financial
institutions and vested them in the U.S. Treasury. These funds were
Iraqi government funds originally frozen in 1990 consistent with a U.N.
Security Council Resolution and held in U.S financial institutions from
1990 to 2003. From May to September 2003, the United States transferred
these funds to Iraq. As of May 2004, coalition forces seized more than
$900 million of regime assets in Iraq.
International Donors:
The international donors described in this enclosure include individual
nations, the European Commission, and international financial
institutions. International donors, exclusive of the United States,
have pledged or committed nearly $14 billion to the reconstruction of
Iraq through 2007. [Footnote 6] These contributions will be made
either bilaterally or through a newly established multilateral
mechanism known as the International Reconstruction Fund Facility for
Iraq. For detailed information on international donors, see enclosure
II.
U.S. and Iraqi Funds Obligated and Disbursed:
Overall, about $24 billion in U.S. and Iraqi funds has been obligated
for the reconstruction effort in Iraq as of April 30, 2004. About $13
billion in obligations has come from the DFI, and about $8 billion from
U.S. appropriated funds. [Footnote 7] The remaining $2.5 billion in
obligations has come from vested assets and seized assets. Reliable
information on the international donors' obligations and expenditures
is not available. Table 1.1 provides a detailed breakdown of
obligations by sources of funding for the broad range of activities
associated with the reconstruction of Iraq, not solely for
infrastructure.
Table I.1: U.S., DFI, Vested and Seized Funds Obligated by Activity, as
of April 2004:
Millions of U.S. dollars:
Activity: Ministry operations/operating expenses;
U.S. appropriated: $1,191;
DFI: $7,541;
Vested: $1,507;
Seized: $284;
Total: $10523.
Activity: Essential services;
U.S. appropriated: $3,906;
DFI: $1,439;
Vested: $37;
Seized: $64;
Total: $5447.
Activity: Humanitarian and human services;
U.S. appropriated: $1,370;
DFI: $2,202;
Vested: $13;
Seized: $93;
Total: $3678.
Activity: Security;
U.S. appropriated: $1,164;
DFI: $895;
Vested: $76;
Seized: $12;
Total: $2147.
Activity: Regional programs;
U.S. appropriated: $21;
DFI: $618;
Vested: $1;
Seized: $341;
Total: $981.
Activity: Governance;
U.S. appropriated: $447;
DFI: $34;
Vested: $7;
Seized: $1;
Total: $490.
Activity: Economic reconstruction;
U.S. appropriated: $88;
DFI: $224;
Vested: $41;
Seized: $10;
Total: $362.
Activity: Public buildings and other reconstruction;
U.S. appropriated: $18;
DFI: $27;
Vested: $7;
Seized: $3;
Total: $55.
Total;
U.S. appropriated: $8,206;
DFI: $12,981;
Vested: $1,688;
Seized: $809;
Total: $23,683.
Sources: Departments of State, Defense, and the Treasury, USAID, and
CPA.
Note: Numbers may not add due to rounding.
[End of table]
About $20 billion of the approximately $24 billion in obligations has
been applied primarily to three categories: ministry operations and
expenses, the restoration of essential services, and humanitarian
relief and other human services. Ministry operations include the
salaries and costs of running the Iraqi ministries; the operating
expenses include U.S. funding for the CPA administration and other U.S.
agency operating costs. Obligations made for the restoration of
essential services include the rehabilitation of the country's power,
water, and oil infrastructure. For the humanitarian and human services
category, obligations have been made to support, among other things,
the importation of liquid petroleum gas for domestic cooking and
heating. Table I.2 provides a description of significant activities and
obligations within each category.
Table I.2: Projects and Significant U.S. Appropriated, DFI, Vested,
Seized Obligations by Activity, as of April 2004:
Activity: Ministry operations/operating expenses;
Projects: CPA and other U.S. agency operating costs, and budget
support, ministry salaries, pensions, and other operations;
Significant Obligations: From about $400 million in October 2003 to
about $1.25 billion per month in May 2004 for budget operations; About
$1.2 billion in CPA and other U.S. administrative expenses.
Activity: Essential services;
Projects: Oil, power, water and sanitation, transportation,
telecommunications;
Significant Obligations: About $1.7 billion for repair of power
infrastructure; About $1.5 for repair of and security for oil
infrastructure.
Activity: Humanitarian and human services;
Projects: Food, liquid petroleum gas, public safety, health care,
education, human rights, refugees;
Significant Obligations: Almost $2.5 billion for the importation of
liquid petroleum gases for domestic heating, cooking, and transport
purposes;About $580 million for food procurement.
Activity: Security;
Projects: Police, military, and other security forces, including
training, equipment, facilities, judicial security;
Significant Obligations: About $370 million for police training and
technical assistance; About $800 million for the Iraqi Armed Forces.
Activity: Regional programs;
Projects: The Commander's Emergency Response Program provides funding
for small, high-impact, emergency, local projects. The Rapid Regional
Response Program provides funding for local and regional projects;
Significant Obligations: About $550 million provided to the
multinational force for the Commander's Emergency Response Program;
About $430 million provided to local and regional governorates for the
Rapid Regional Response Program.
Activity: Governance;
Projects: Democracy building, rule of law, local governance activities;
Significant Obligations: About $375 million for democracy building,
including transitional, electoral, and rule of law support; About $110
million for the construction of detention, penal, and judicial
facilities.
Activity: Economic reconstruction;
Projects: Currency exchange, banking system modernization, private
sector development;
Significant Obligations: About $200 million for the currency exchange
for new Iraqi dinars; About $75 million for micro lending and jobs
programs.
Activity: Public buildings and other reconstruction;
Projects: Ministry and other government building construction and
renovation, miscellaneous projects and services;
Significant Obligations: About $42 million for building construction
and repair; About $12 million for legal and settlement fees.
Sources: GAO (analysis); CPA and U.S. agencies (information).
[End of table]
Once funds are obligated, disbursements occur when funds are paid and
the obligations are liquidated. Almost all available funds from the
vested and seized assets have been disbursed. Greater amounts of
funding remain available from U.S. appropriations and the Development
Fund for Iraq. Overall, as of April 30, 2004, about $8.2 billion, or
about one third, of the $24 billion in U.S. funds appropriated for
rebuilding Iraq have been obligated. About $3 billion of those
obligations have been disbursed. Although the amount of DFI funding
available for rebuilding Iraq changes as deposits are made from the
sale of Iraqi petroleum products, about $8.3 billion of the $13 billion
obligated had been disbursed as of May 6, 2004.
Conclusion:
The United States, its coalition partners, and international
organizations and donors have provided or pledged substantial amounts
of funds to help rebuild Iraq. Ensuring the accountability and
oversight of these resources is a fundamental responsibility of both
the U.S. agencies involved in the reconstruction and relevant audit
authorities. Critical to the agencies' ability to allocate and account
for these resources is the availability of complete and accurate
financial data. Further, close coordination among those providing
assistance is important to help ensure effective use of available funds
and avoid duplication of effort. Together, sound financial data and
close coordination provide a basis for effective use of resources and
oversight.
Oversight Questions:
1. What accounting and monitoring controls are in place to ensure
effective oversight of the U.S., Iraqi, and international funds used to
rebuild Iraq?
2. To what extent are existing accounting and management information
systems adequate to provide complete and reliable reporting on the
implementation of the reconstruction effort?
3. What are the roles and responsibilities of the CPA Inspector General
with the transfer of power to the Iraqis? What is the relationship
between the CPA Inspector General, the State Department Inspector
General, and U.S. ambassador to Iraq?
4. To what extent has the unstable security environment affected the
U.S. government's ability to provide adequate oversight of the
reconstruction effort, including the auditing of contracts and funding
expended?
5. What effect does the transfer of authority to the Iraqis have on the
U.S. agencies' ability to monitor and audit the reconstruction
investment made with these funds?
[End of section]
II. Resources:
International Assistance to Rebuild Iraq:
Issue:
Results in Brief:
The size and scope of Iraq's reconstruction needs through 2007 have
been estimated to total about $56 billion.[Footnote 8] Many nations and
various international organizations are supporting the effort to
rebuild Iraq through multilateral or bilateral assistance. U.N.
Security Council Resolution 1511 of October 16, 2003, urged member
states and international and regional organizations to support the Iraq
reconstruction effort. On October 23-24, 2003, an international donors
conference was held in Madrid, with 76 countries, 20 international
organizations, and 13 nongovernmental organizations participating.
This enclosure provides information on (1) the amount of funds
pledged[Footnote 9] by the international community for Iraq's
reconstruction, (2) the extent to which funds have been provided to the
International Reconstruction Fund Facility, and (3) mechanisms for
coordinating reconstruction assistance in Iraq.
Results in Brief:
As a result of the October 2003 donors conference, international donors
pledged nearly $14 billion, some in grants but largely in the form of
loans for the country's reconstruction over the next 4 years. This is
in addition to the $18.4 billion that Congress provided for Iraq relief
and reconstruction in November 2003. The International Reconstruction
Fund Facility for Iraq was established as a mechanism to channel
international funding to Iraq. As of April 22, 2004, international
donors had committed about $1 billion in multilateral aid, of the
pledged $14 billion, to the IRFFI to fund reconstruction projects in
2004. An Iraqi-led process, endorsed by the Iraqi Governing Council and
put into effect by the Administrator of the Coalition Provisional
Authority, is responsible for coordinating all international assistance
for rebuilding and reforming institutions in Iraq. However, this
process has not had the capability to track the total amounts of
bilateral assistance flowing into Iraq. The ability to track all
international contributions made to support Iraq's reconstruction,
including bilateral assistance, is an important element for identifying
the sectors receiving assistance, identifying any gaps in assistance,
and ensuring that assistance is coordinated.
International Donors Pledged about $14 Billion for Iraq Reconstruction:
International donors have pledged nearly $14 billion in grants and
loans for Iraq's reconstruction until the end of 2007. This is in
addition to the $18.4 billion that the U.S. Congress provided for
security, relief, rehabilitation, and reconstruction needs in Iraq in
November 2003.[Footnote 10] Other countries also offered technical and
other types of support in lieu of financial assistance.[Footnote 11]
Figure II.1 shows the major international non-U.S. pledges for Iraq
reconstruction made at the Madrid conference.
Figure II.1: International Non-U.S. Pledges for Iraq Reconstruction
Made at the 2003 Madrid Donors Conference, by Source:
Millions of U.S. dollars:
[See PDF for image]
Sources: GAO (analysis); World Bank (data).
Numbers may not add due to rounding.
Note: The European Union amount includes the collective pledge of the
European Commission as well as individual pledges from current and
acceding member countries of the European Union as of the October 2003
Madrid conference.
[End of figure]
Countries pledging $500 million or more included Japan at $4.9 billion,
the European Union at $1.3 billion, Saudi Arabia at $500 million, and
Kuwait at $500 million. The World Bank pledged assistance ranging from
$3 billion to $5 billion and the International Monetary Fund pledged
$2.6 billion to $4.3 billion.[Footnote 12] According to State Department
documentation, the International Monetary Fund plans to make $450
million of its pledge available in emergency aid to Iraq as part of a
postconflict program during the second half of 2004, if the interim
government that assumes power after June 30, 2004, meets certain
economic policy conditions. Table II.1 summarizes the amount of pledges
made at the Madrid conference by non-U.S. donors for Iraq
reconstruction.
Table II.1: International Non-U.S. Pledges for Iraq Reconstruction Made
at the 2003 Madrid Donors Conference by Type:
Millions of U.S. dollars[A]:
Contributions: Grants: IRFFI;
2004: $322.12;
2005-2007: $0.00;
Unspecified by year[C]: $83.17;
Total: $405.29.
Contributions: Grants: Bilateral grants;
2004: $110.22;
2005-2007: $78.19;
Unspecified by year[C]: $853.71;
Total: $1,042.13.
Contributions: Grants: Unspecified grants[B];
2004: $252.87;
2005-2007: $225.42;
Unspecified by year[C]: $1,697.00;
Total: $2,175.29.
Contributions: Total grants;
2004: $685.21;
2005-2007: $303.61;
Unspecified by year[C]: $2,633.88;
Total: $3,622.71.
Contributions: Loans;
2004: $1,470;
2005-2007: $4,655-8,355;
Unspecified by year[C]: $3,500;
Total: $9,625-13,325.
Contributions: Unspecified as grant or loan[D];
2004: $0;
2005-2007: $0;
Unspecified by year[C]: $335.62;
Total: $335.62.
Total;
2004: $2,155.21;
2005-2007: $4,958.61-8,658.61;
Unspecified by year[C]: $6,469.50;
Total: $13,583.33-17,283.33.
Sources: Department of State and World Bank Group.
[A] Amounts do not include identified humanitarian assistance or export
credits and guarantees.
[B] At the time of the donors' conference, most donors did not specify
whether they would provide their assistance bilaterally or through the
IRFFI.
[C] Many donors did not provide a breakdown of their assistance by
year.
[D] Italy and Qatar did not specify whether their pledges were grants
or loans.
[End of table]
International donors, excluding the United States, pledged at the
Madrid Conference to provide about $405 million in grants
multilaterally through the IRFFI and about $1.04 billion in grants
bilaterally. Another $2.2 billon in grants was pledged at the donors
conference, but donors did not specify how the grant assistance would
be provided or allocated by year. While data are available for the
actual contributions that have been made through the IRFFI, detailed
information on the actual amounts of the IRFFI and bilateral assistance
going into Iraq for reconstruction activities is not readily available.
According to officials from the State Department and the Coalition
Provisional Authority, the United States is working with the Iraqis to
identify this information and to develop a database for tracking all
bilateral commitments made to reconstruction activities in Iraq. As of
June 2, 2004, according to a State Department official, this work was
still ongoing and the database was not yet available.
Donor Commitments to the International Reconstruction Fund Facility for
Iraq:
As of May 26, 2004, the European Commission and 18 donor countries had
committed[Footnote 13] a total of about $1 billion to the International
Reconstruction Fund Facility for Iraq (IRFFI) for 2004. This commitment
tripled the $322 million in grants pledged to the IRFFI for 2004 at the
Madrid Conference. The IRFFI was established in response to the June
24, 2003, U.N. technical meeting and the 2003 Madrid conference's calls
for a mechanism to channel donor resources and coordinate support for
Iraqi reconstruction and development activities. The IRFFI comprises
two trust funds into which donors can make contributions--the World
Bank Iraq Trust Fund and the U.N. Development Group Iraq Trust
Fund.[Footnote 14] The World Bank and the U.N. Development Program
administer the IRFFI in coordination with international donors and
Iraqi authorities. The Donor Committee,[Footnote 15] with members from
14 countries and the European Commission, is to oversee the activities
of the IRFFI and endorse its priorities. At a February 2004
international donors meeting held in Abu Dhabi, participants focused on
IRFFI's operation and funding. Specifically, information was shared
with donors on Iraq's reconstruction plans and project priorities, U.S.
assistance spending plans, and the IRFFI's preferred spending and
project plans. Table II.2 presents a summary of the donors' commitments
and deposits made to the IRFFI as of May 26, 2004.
Table II.2: Donor Commitments to the International Reconstruction Fund
Facility, as of May 26, 2004:
Millions of U.S. dollars:
Country: Australia;
Committed contribution to IRFFI for 2004: $15.2;
Deposits made to the IRFFI: $14.6.
Country: Canada;
Committed contribution to IRFFI for 2004: $67.2;
Deposits made to the IRFFI: $44.7.
Country: European Commission[A];
Committed contribution to IRFFI for 2004: $209.6;
Deposits made to the IRFFI: $9.3.
Country: Finland;
Committed contribution to IRFFI for 2004: $6.2;
Deposits made to the IRFFI: $0.0.
Country: Greece;
Committed contribution to IRFFI for 2004: $3.6;
Deposits made to the IRFFI: $0.0.
Country: Iceland;
Committed contribution to IRFFI for 2004: $1.0;
Deposits made to the IRFFI: $1.0.
Country: India;
Committed contribution to IRFFI for 2004: $10.0;
Deposits made to the IRFFI: $5.0.
Country: Ireland;
Committed contribution to IRFFI for 2004: $1.2;
Deposits made to the IRFFI: $0.0.
Country: Italy;
Committed contribution to IRFFI for 2004: $12.2;
Deposits made to the IRFFI: $0.0.
Country: Japan;
Committed contribution to IRFFI for 2004: $490.0;
Deposits made to the IRFFI: $351.8[ B].
Country: Korea;
Committed contribution to IRFFI for 2004: $10.0;
Deposits made to the IRFFI: $0.0.
Country: Kuwait;
Committed contribution to IRFFI for 2004: $10.0;
Deposits made to the IRFFI: $0.0.
Country: Netherlands;
Committed contribution to IRFFI for 2004: $6.0;
Deposits made to the IRFFI: $0.0.
Country: Norway;
Committed contribution to IRFFI for 2004: $4.3;
Deposits made to the IRFFI: $0.0.
Country: Qatar;
Committed contribution to IRFFI for 2004: $10.0;
Deposits made to the IRFFI: $2.5.
Country: Spain;
Committed contribution to IRFFI for 2004: $20.0;
Deposits made to the IRFFI: $0.0.
Country: Sweden;
Committed contribution to IRFFI for 2004: $10.0;
Deposits made to the IRFFI: $0.0.
Country: United Kingdom;
Committed contribution to IRFFI for 2004: $127.4;
Deposits made to the IRFFI: $127.4.
Country: United States;
Committed contribution to IRFFI for 2004: $10.0;
Deposits made to the IRFFI: $10.0.
Total;
Committed contribution to IRFFI for 2004: $1,023.9;
Deposits made to the IRFFI: $566.3.
Source: State Department.
[A] The European Commission manages the European Union's budget and
represents the Union internationally. The data for the Commission
include commitments from both the Commission itself and the
Commission's Rapid Reaction Mechanism, a vehicle for the quick
mobilization of resources to provide the necessary political, social,
and economic stability in crisis situations.
[B] The Japanese government disbursed an additional $98.2 million of
its allocation which, as of May 26, 2004, has not been shown under 2004
deposits.
[End of table]
Iraqi Coordination of International Reconstruction Assistance in Iraq:
In December 2003, the Iraqi Governing Council endorsed and the
Coalition Provisional Authority administrator established an Iraqi-led
process to coordinate international reconstruction assistance,
including U.S. assistance. The Iraqi Strategic Review Board, the
Ministry of Planning and Development Cooperation, and the Council for
International Coordination are to coordinate all donor activities in
the country.[Footnote 16] In addition, these three bodies are to work
with and coordinate IRFFI-provided reconstruction assistance.
* The Iraqi Strategic Review Board is responsible for approving
reconstruction activities and for ensuring that international
assistance for Iraq is properly allocated against Iraq's prioritized
needs, effectively monitored, and integrated into the Iraqi national
budget. The Review Board is chaired by the Minister of Planning and
Development Cooperation and includes the Finance Minister, a CPA
representative, and two appointees of the Iraqi Governing
Council.[Footnote 17]
* The Ministry of Planning and Development Cooperation is responsible
for managing the coordination of reconstruction activities by (1)
providing guidance for development activities to the Iraqi ministers,
(2) recommending reconstruction activities for approval to the Iraqi
Strategic Review Board, and (3) monitoring the implementation of
international reconstruction assistance to Iraq. The Ministry of
Planning and Development Cooperation is to work closely with the
Ministry of Finance and the Central Bank of Iraq to ensure that the
recommendations it presents to the Iraqi Strategic Review Board conform
to the Iraqi budgetary framework. The Ministry of Planning and
Development Cooperation is also to work with the CPA's Program
Management Office[Footnote 18] to ensure that pre-existing bilateral
commitments and the U.S. government's apportionment and obligation of
funds appropriated for Iraq relief and reconstruction are taken into
account in recommendations made to the Iraqi Strategic Review Board. A
June 25, 2004, CPA Inspector General report noted that a process has
not been developed to track or coordinate internationally funded
projects with other CPA reconstruction efforts. Therefore, it made two
recommendations to the CPA's senior advisors to improve the
transparency and coordination of reconstruction efforts in Iraq funded
by international donors.
* The Council for International Coordination is responsible for
supporting and facilitating the participation of the international
community in Iraq's recovery and reconstruction. The Council is chaired
by the Minister of Planning and Development Cooperation and is composed
of members from more than 23 countries involved in the reconstruction
of Iraq. Although the Council is not a decision-making body, it serves
as the main point of contact between donors and the CPA.
According to State Department documentation, these three bodies worked
together after the Madrid donors' conference to set priorities and plan
for Iraq's reconstruction. Iraq's Minister of Planning and Development
Cooperation presented Iraq's project proposals, which had been approved
by the Iraqi Strategic Review Board for international donor
consideration, at the donors' meeting in Abu Dhabi. These proposals
totaled about $4 billion and included about 700 projects. Table II.3
presents the estimated total costs of the project proposals by priority
category as recommended by the Iraqi Strategic Review Board for donors'
consideration.
Table II.3: Iraqi Estimated Costs of Project Proposals for 2004, by
Priority Category:
Millions of U.S. dollars:
Priority category: Education, health, labor, and social affairs;
Total cost by category: $737.9.
Priority category: Education;
Total cost by sector: $607.0.
Priority category: Health;
Total cost by sector: $99.0.
Priority category: Labor and social affairs;
Total cost by sector: $31.9.
Priority category: Infrastructure;
Total cost by category: $1,957.7.
Priority category: Water and sanitation;
Total cost by sector: $347.5.
Priority category: Transport;
Total cost by sector: $323.3.
Priority category: Telecommunication;
Total cost by sector: $136.0.
Priority category: Electricity;
Total cost by sector: $1,057.9.
Priority category: Housing and land management;
Total cost by sector: $93.0.
Priority category: Urban management;
Total cost by sector: $0.0.
Priority category: Agriculture, water resources, and food security;
Total cost by category: $602.4.
Priority category: Agriculture;
Total cost by sector: $331.8.
Priority category: Water resources;
Total cost by sector: $270.6.
Priority category: Food security;
Total cost by sector: $0.0.
Priority category: Finance and private sector development;
Total cost by category: $486.3.
Priority category: Finance;
Total cost by sector: $53.0.
Priority category: State-owned enterprises;
Total cost by sector: $433.3.
Priority category: Investment climate and trade;
Total cost by sector: $0.0.
Priority category: Mine action;
Total cost by category: $54.5.
Priority category: Government institution, rule of law, civil society,
and media;
Total cost by category: $277.4.
Priority category: Cross-cutting themes, human rights, gender, the
environment;
Total cost by category: $73.4.
Total;
$4,189.6.
Source: State Department.
[End of table]
Of the seven categories shown above, about $1.96 billion (47 percent of
the total cost) has been requested for infrastructure projects; $737
million (18 percent of the total cost) for education, health, and labor
and social affairs; and $602 million (14 percent of the total cost) for
agriculture, water resources, and food security. According to
documentation presented by Iraq's Minister of Planning and Development
Cooperation at the Abu Dhabi conference, the priorities presented for
donor consideration were vetted to fit the country's economic plan, to
be reconciled with Iraq's own capital spending plans, and to account
for initiatives funded through the U.S. Iraq Relief and Reconstruction
Fund.
The October 2003 U.N./World Bank assessment noted that Iraq's ability
to absorb resources, particularly as it gains sovereignty and decision-
making authority, will be one of the most significant challenges to
reconstruction. The assessment also noted that the actual disbursement
of committed donor funds is linked and likely to be limited by the
current security situation, the current capacity in Iraqi institutions
to plan and implement projects, and the state of infrastructure and
energy services to support importation and distribution of physical
assets. Our recent work on the Oil for Food program highlighted the
history of inadequate oversight and alleged corruption in the program
and raised questions about the Iraqi government's ability to manage the
import and distribution of Oil for Food commodities as well as the
billions in international reconstruction assistance expected to flow
into the country.[Footnote 19]
Conclusion:
The United States, along with its coalition partners and various
international organizations and donors, have provided or pledged
substantial amounts of funds to help rebuild Iraq. The International
Reconstruction Fund Facility and several Iraqi-led mechanisms have been
set up to coordinate this assistance. The donor committee, of which the
United States is a member, is to oversee the activities of the IRFFI.
An important element for coordinating the reconstruction effort is the
ability to track all donor contributions, including bilateral
assistance, to identify the sectors receiving assistance and any gaps
in assistance. However, these Iraqi-led mechanisms have not had the
capability to track the total amounts of bilateral assistance flowing
into Iraq. Building internal control and accountability measures into
the operations of the Iraqi ministries will be critical to safeguarding
the billions of dollars in U.S. and international funds that will be
provided for reconstruction.
Oversight Questions:
1. How is the United States ensuring that the billions of dollars in
reconstruction assistance it is providing will not duplicate
multilateral and bilateral assistance?
2. What mechanisms and criteria have the Iraqi Strategic Review Board
and the Ministry of Planning and Development Cooperation implemented to
ensure transparent and accountable decision making?
3. To what extent is U.S. assistance being applied to help develop the
capacity of the Iraqi-led coordination process to ensure that multiple
sources of funding are sufficiently tracked and coordinated?
4. What entity will replace CPA representation on the Iraqi Strategic
Review Board? What entity will replace the CPA as the liaison with the
Iraqi Ministry of Planning and Development Cooperation and the Council
for International Coordination?
5. If the international community is unable to meet its pledged
commitments, what impact will this have on U.S. reconstruction funding?
III. Resources:
The Development Fund for Iraq:
Issue:
On May 22, 2003, United Nations Security Council Resolution 1483
recognized the establishment of the Development Fund for Iraq (DFI) to
provide a repository for Iraqi funds to support the reconstruction of
Iraq. DFI funds consist of oil proceeds, U.N. Oil for Food program
surplus funds, and returned Iraqi government and regime financial
assets. According to the resolution, DFI funds are to be used to meet
the costs of Iraqi civilian administration, humanitarian needs,
infrastructure repairs, economic reconstruction, and other purposes
benefiting the people of Iraq. The resolution also noted that an
independent external auditor approved by the International Advisory and
Monitoring Board (IAMB) is to audit the DFI to ensure the transparent
use of these DFI funds. The CPA, in consultation with the Iraqi
administration, directed the disbursement of DFI funds. In June 2003,
the CPA Administrator created the Program Review Board (PRB) to
evaluate the proposed uses of U.S. appropriated and Iraqi funds,
including DFI funds.[Footnote 20] This enclosure describes (1) the
sources of DFI funds, (2) the uses of DFI funds, and (3) the
International Advisory and Monitoring Board's efforts to monitor DFI
funds.
Results in Brief:
As of May 6, 2004, the DFI had received about $18 billion in deposits
largely from U.N. Oil for Food surplus funds and proceeds from the sale
of Iraqi oil. The majority of funds disbursed from the DFI have
supported the Iraqi budget to cover Iraqi ministry operating expenses.
The remaining DFI funds have been used for PRB-approved relief and
reconstruction projects and programs. The IAMB has only recently begun
to exercise oversight. The IAMB reached agreement with the CPA on the
IAMB's terms of reference in late October 2003 and on the selection of
an external auditor in March 2004 to review the operations of the DFI.
According to U.N. Security Council Resolution 1546, the IAMB will
continue its activities monitoring the DFI after CPA transfers power to
Iraq.
Sources of DFI Funds:
As of May 6, 2004, the DFI has received about $18 billion in deposits,
largely from the U.N. Oil for Food program and oil proceeds.[Footnote
21] The United Nations deposited $8.1 billion in surplus funds from
renegotiated Oil for Food contracts in a series of transfers from May
2003 to April 2004. Net oil revenues of $8.8 billion from the sale of
oil for export have been deposited since July 2003. Other sources of
DFI funding have come from transferred Iraqi government financial
assets. More than 10 countries and the Bank for International
Settlements transferred several hundred to several hundred million
dollars to the DFI.[Footnote 22] In addition to these sources, other
deposits to the DFI have been made since late June 2003, including $146
million from the World Food Program (see fig. III.1).
Figure III.1: DFI Deposits as of May 6, 2004:
Billions of U.S. dollars:
[See PDF for image]
Source: GAO analysis of CPA data.
[End of figure]
DFI Supports Iraqi Ministry Operations and Reconstruction Projects:
The DFI is the major source of funds used to support the Iraqi
budget.[Footnote 23] As of May 6, 2004, the CPA had allocated about $13
billion of the $18 billion in DFI funds, of which about $8.3 billion
has been disbursed.[Footnote 24] The CPA allocated and disbursed DFI
funds[Footnote 25] under three broad categories: Iraqi ministry
operations and expenses, Program Review Board-approved projects, and
regional programs. See table III.1 for details on DFI allocations and
disbursements.
Table III.1: Project Allocations and Disbursements by Category, as of
May 6, 2004:
Millions of U.S. dollars:
Purpose: Ministry operations and expenses;
Allocations: $7,541;
Disbursements: $6,106.
Purpose: PRB relief and reconstruction projects: Humanitarian and
human services;
Allocations: $2,202;
Disbursements: $1,292.
Purpose: PRB relief and reconstruction projects: Essential services;
Allocations: $1,439;
Disbursements: $316.
Purpose: PRB relief and reconstruction projects: Security;
Allocations: $895;
Disbursements: $21.
Purpose: PRB relief and reconstruction projects: Economic
reconstruction;
Allocations: $224;
Disbursements: $182.
Purpose: PRB relief and reconstruction projects: Governance;
Allocations: $34;
Disbursements: $21.
Purpose: PRB relief and reconstruction projects: Public buildings and
other reconstruction;
Allocations: $27;
Disbursements: $8.
Purpose: Regional programs;
Allocations: $618;
Disbursements: $333.
Total;
Allocations: $12,981;
Disbursements: $8,281.
Source: GAO (analysis) and CPA (data).
Note: Numbers may not total due to rounding.
[End of table]
Iraqi Ministry Operations and Expenses:
From September 2003 to May 6, 2004, $7.5 billion was allocated from the
DFI to support Iraqi ministry operations and expenses; of this amount,
$6.1 billion has been disbursed. The amount of the monthly budget
disbursements varied from a low of $433 million in October 2003 to
nearly $1.5 billion in March 2004. These monthly disbursements covered
salaries, pensions, operating costs, some capital project requirements,
and transferred expenditures, such as the provision of food and other
goods through the public distribution system.
Program Review Board Projects:
From July 2003 to early May 2004, the CPA allocated about $4.8 billion
for relief and reconstruction projects and services, of which $1.8
billion was disbursed. The process for obtaining DFI funds for these
projects began with a written project request to the PRB from the CPA
or the Iraqi ministries. Per CPA regulation 3, a Program Review
Committee initially categorized, prioritized, and reviewed these
project proposals in advance of the PRB. The PRB then reviewed the
requests and recommended projects to the CPA Administrator for
approval. Voting members of the PRB included five representatives from
the CPA; the Director of the U.S. Agency for International Development,
Iraq mission; and one representative each from the Commander of the
Coalition Forces, the Iraqi Ministry of Finance, the Iraqi Ministry of
Planning and Development Cooperation, the United Kingdom, Australia,
and the Chairman of the Council for International
Coordination.[Footnote 26]
DFI funding for approved relief and reconstruction projects has
generally fallen into six major categories: (1) humanitarian and human
services, (2) essential services, (3) security, (4) economic
reconstruction, (5) governance, and (6) public buildings and other
reconstruction. Some of the larger DFI allocations and disbursements
made between July 2003 and May 6, 2004, include the following:
Humanitarian and human services:
* $1.86 billion was allocated for imports of liquid petroleum gas for
domestic heating and cooking; about $1.07 billion was disbursed.
* $272 million was allocated for food procurement, transport, security,
and production; about $204 million was disbursed.
* $22 million was allocated for agriculture; nearly $12 million was
disbursed.
Essential services:
* $972 million was allocated for power infrastructure; about $157
million was disbursed.
* $437 million was allocated for oil infrastructure; about $150 million
was disbursed.
* $30 million was allocated for transportation and telecommunications;
about $10 million was disbursed.
Security:
* $842 million was allocated in late April and early May 2004 to
address increased security needs, including resources for the Iraq
security forces; about $2 million was disbursed.
* $52 million was previously allocated for police and security
equipment; $20 million was disbursed.
Economic reconstruction:
* $197 million was allocated for the currency exchange; about $180
million was disbursed.
* $27 million was allocated for microloans and employment programs;
about $2 million was disbursed.
Governance:
* $21 million was allocated and disbursed for regional governance.
Public buildings, miscellaneous ministry projects, and other
reconstruction:
* $18 million was allocated for a Program Management Office/Iraqi
Ministry of Planning and Development Cooperation business complex;
about $6 million was disbursed.
* $9 million was allocated for legal fees and settlements; about $3
million was disbursed.
According to the CPA, since May 6, 2004, the CPA Administrator approved
additional PRB-recommended allocations totaling about $1.5 billion for
the essential services, humanitarian and human services, and economic
reconstruction projects, and for other purposes. Essential services
projects include $460 million for the oil infrastructure and $315
million for the electricity sector. Humanitarian and human services
projects include $200 million to maintain current levels of food
procurement through 2004 and $65 million for agriculture development.
Economic reconstruction projects include $65 million for vocational
training and $65 million to provide capital to critical state-owned
enterprises. Examples of other allocations include $180 million for the
Iraq Property Claims Commission, $125 million to protect the Iraqi
budget from oil revenue volatility, and $25 million for the Victims'
Compensation Fund.
Regional Programs:
The Commanders' Emergency Response Program and the Rapid Regional
Response Program have been allocated DFI funds for local humanitarian,
essential services, economic, general construction, security, and
governance projects, as discussed below.
* Under the Commanders' Emergency Response Program, the CPA allocated
$353 million through the multinational force[Footnote 27] to military
division and brigade commanders; about $214 million was
disbursed.[Footnote 28] According to multinational force officials,
commanders have completed more than 21,000 small high-impact projects
at an average cost of about $11,000. For example, as of May 8, 2004,
multinational force officials reported that about $45 million had been
disbursed for more than 4,100 education projects.
* The activities of the Rapid Regional Response Program incorporate and
expand upon previous authorities of the Construction Initiative and the
Directors' Emergency Response Program. Under the program, about $265
million in DFI funds[Footnote 29] was allocated to regions and
governorates; about $120 million was disbursed. According to CPA, more
than 2,100 regional projects designed to create jobs, support local
industry, and respond to community needs have been initiated across the
northern, Baghdad central, southern central, and southern regions.
International Advisory and Monitoring Board Oversight:
Nearly 1 year after the DFI was established, the IAMB approved an
independent external auditor to support its oversight of the DFI. An
important initial step to ensure the transparent use of DFI funds came
5 months after the May 2003 U.N. resolution recognized the
establishment of the DFI.[Footnote 30] During this period, the IAMB
members and the CPA discussed terms of reference for guiding the IAMB's
operations. The terms of reference were eventually approved in late
October 2003. U.N. Resolution 1483 also noted that the IAMB was to rely
on independent, external auditors to ensure the transparent use of DFI
funds. The external auditor began its work after the contract was
signed on April 5, 2004.[Footnote 31]
The auditor is to perform at least two audits, the first covering DFI
transactions from its inception through December 31, 2003, and the
second for the period January 1, 2004, through June 30, 2004. According
to the contract's statement of work, the audit is to assess, among
other things, whether (1) export sales of oil, petroleum products, and
natural gas from Iraq were consistent with international best
practices, and (2) DFI disbursements were used for the purposes for
which they were intended. The contractor is required to produce the
first report within 90 days of the contract award. Consistent with its
terms of reference, the IAMB is to perform duties similar to those of
an outside audit committee.
Under its terms of reference, the IAMB is also to monitor the financial
reporting and internal control systems established by the CPA for areas
covered by the external audit. The IAMB, in consultation with the CPA,
can also determine whether special audits are warranted. Since March
2004, the IAMB has raised issues with the CPA, including concerns about
controls over Iraq oil extraction and the CPA's internal control and
financial reporting systems.
* Crude oil extraction: After reviewing information from the CPA on
crude oil extraction controls, the IAMB recommended in March 2004 that
metering equipment be expeditiously installed. According to the
Ministry of Oil and the IAMB, an absence of functioning meters
precludes control over the distribution and sales of crude and refined
products. In May 2004, the CPA approved an allocation of $5 million in
DFI funds to (1) determine where meters are currently installed,
evaluate their condition, and recommend locations for additional
meters; (2) make necessary repairs, install new meters, and calibrate
all meters; and (3) establish a central control facility to collect all
metering data. A CPA senior advisor estimated the project's duration at
1 year or less, but said that each phase of the project would
potentially be affected by Iraq's poor security environment. He also
said that the project would require visiting many different offshore
and onshore sites, and the protection of those conducting the
assessment would be difficult. In June 2004, the IAMB noted that the
award of metering contracts has been delayed and urged quick resolution
of this issue.
* CPA internal control and financial reporting systems: The IAMB also
sought clarification from the CPA on its internal controls and
financial reporting systems. The CPA briefed the IAMB on the Program
Review Board and contracting processes, and on the status of the DFI
account, financial operations, and the budget process. The CPA revised
the financial reporting on the status of the DFI that appeared on its
Web site. The IAMB expressed concern about the use of noncompetitive
bidding practices to award DFI funds and advised the CPA to take steps
to limit future noncompetitive awards to exceptional circumstances. In
April, May, and June 2004, the IAMB reported that it had requested
access to audits of sole-source contracts let from DFI funds, including
those by the Defense Contract Audit Agency, but had not received them
as of June 22, 2004.[Footnote 32] The IAMB also reported in June 2004
that it had decided to commission a special audit to determine the
extent sole-source contracts had been used.
On June 8, 2004, the U.N. Security Council adopted Resolution 1546,
which noted that Iraqi oil proceeds would continue to be deposited in
the DFI. The resolution also noted that the IAMB shall continue
monitoring DFI activities after CPA transfers power to Iraq. In
addition, the resolution noted the inclusion of a full voting member
designated by the government of Iraq to the board.
Conclusion:
The Development Fund for Iraq has been the primary funding source to
fully support the interim Iraqi civil administration and projects of
varying magnitude in many reconstruction sectors. Given that the CPA
oversaw and controlled the use of the DFI, transparency and
accountability over the use of the funds has been essential to assuring
Iraqis and the international community that the funds have been used to
benefit the Iraqi people. However, almost 1 year passed before the
external auditor contract was awarded to review the DFI's operations.
Thus, transactions worth billions of dollars in Iraqi funds have not
been independently reviewed or the results reported. The contractor is
not required to report on the results from the first audit until after
the scheduled transition of the CPA's authority to Iraq.
Oversight Questions:
1. What were the reasons for the delay in IAMB's oversight of the DFI?
To what extent will these delays affect IAMB's ability to conduct its
oversight responsibilities in an expeditious and thorough manner?
2. What measures will be in place to ensure the transparent use of
funds after the transition?
3. Will any further U.N. Oil for Food surplus funds or former regime
assets be available for deposit into the DFI after the transition?
4. What plans were made to address how the CPA was to transfer the
management of the DFI to the transitional Iraqi administration?
5. What interim plans have been made to respond to IAMB concerns about
ensuring oil sales are consistent with prevailing international market
best practices?
6. How would significant reductions in oil exportation due to pipeline
sabotage or other factors impact the sustainability of the Iraqi budget
and U.S. reconstruction plans?
Who will assume responsibility for overseeing and managing DFI-funded
CPA contracts let prior to the June 28 transition?
[End of section]
IV. Resources:
CPA Staffing for the Iraq Reconstruction Effort:
Issue:
The United States has made an enormous commitment of financial
resources toward the reconstruction of Iraq, which was managed by the
Coalition Provisional Authority (CPA) and supported by personnel from
the United States and coalition partners. The CPA's personnel needs
increased as it acquired new missions, elements, and
responsibilities.[Footnote 33] This increase presented additional
demands on U.S. and coalition resources to provide adequate numbers of
personnel to support the reconstruction effort. This enclosure provides
information on (1) the composition of the CPA, and (2) the means by
which the United States provided personnel to support the CPA and some
of the challenges associated with that effort.
Results in Brief:
Staffing of the CPA was dependent on personnel from multiple sources--
including U.S. and international military staff and civilians, a large
number of which were temporary hires or contractors. The U.S. effort to
provide staff to the CPA changed as the mission evolved from a
reconstruction and humanitarian coordination effort to the temporary
administration of the government of Iraq, and as staffing requirements
changed. In addition, the CPA generally operated with about one-third
fewer staff than it required. The CPA and U.S. agencies faced multiple
challenges--bureaucratic, logistical, and budgetary--in meeting CPA
staffing requirements and employed special hiring authorities and
incentives to overcome them.
Coalition Provisional Authority Staff from Multiple Sources:
Personnel directly supporting the CPA included U.S. and coalition
military personnel, U.S. and coalition civilian employees, contractors,
civilians hired under special authorities, and Iraqi expatriates from
the Iraq Reconstruction and Development Council (IRDC). Coalition
detailees to the CPA included personnel from Australia, the Czech
Republic, Denmark, Italy, Japan, Poland, Romania, Spain, United
Kingdom, Ukraine, and other coalition member countries. Additional
indirect support--such as security, transportation, and translation
services--was provided to the CPA by personnel from various entities,
including the United Kingdom, the Combined Joint Task Force-Seven
(CJTF-7),[Footnote 34] the U.S. Army Corp of Engineers, interpreters,
and the company Kellogg, Brown and Root.
In the early stages of the rebuilding effort, the Office for
Reconstruction and Humanitarian Assistance (ORHA), the organization
responsible for managing postwar activities, was composed of about 350
direct and indirect support personnel. This group grew to about 600
while deployed to Kuwait. By May 2004, the group had advanced to
Baghdad and grew to about 1,100 personnel. With the establishment of
the CPA and the mission's growth, these numbers increased in total to
more than 6,000 direct and indirect positions as of April 2004. Of this
number, about 1,200 directly supported the CPA mission.
Although the total number of CPA personnel fluctuated as staff
requirements changed and personnel rotated through Iraq, the
composition of personnel remained consistent. The military services
provided the largest portion of CPA personnel--an average of about 28
percent. Approximately 26 percent were civilian detailees from numerous
U.S. federal agencies, including the Defense Department (DOD), and an
average of 13 percent were detailees from other coalition
countries.[Footnote 35] About 25 percent were contractors and temporary
U.S. government employees hired under a special authority.[Footnote 36]
The agency officials we talked to from the Department of State, U.S.
Agency for International Development (USAID), and Army Corps of
Engineers stated that they had relied on volunteers--exclusive of U.S.
military personnel--to meet the demand for CPA staff and had not
resorted to forced placement.[Footnote 37] Table IV.1 shows the
composition of CPA direct support personnel from March until June
2004.[Footnote 38]
Table IV.1: Personnel Composition of Direct CPA Support in Baghdad from
March until June 2004:
Type of personnel: Special Hiring Authority 3161;
March 8, 2004: 226;
April 6, 2004: 237;
May 4, 2004: 240;
June 2, 2004: 203.
Type of personnel: Coalition detailees;
March 8, 2004: 172;
April 6, 2004: 160;
May 4, 2004: 141;
June 2, 2004: 120.
Type of personnel: U.S. detailees (not including DOD);
March 8, 2004: 149;
April 6, 2004: 208;
May 4, 2004: 207;
June 2, 2004: 209.
Type of personnel: DOD military;
March 8, 2004: 293;
April 6, 2004: 377;
May 4, 2004: 326;
June 2, 2004: 292.
Type of personnel: DOD civilian;
March 8, 2004: 168;
April 6, 2004: 81;
May 4, 2004: 88;
June 2, 2004: 92.
Type of personnel: Contractor;
March 8, 2004: 62;
April 6, 2004: 73;
May 4, 2004: 72;
June 2, 2004: 66.
Type of personnel: IRDC;
March 8, 2004: 28;
April 6, 2004: 27;
May 4, 2004: 30;
June 2, 2004: 27.
Type of personnel: Personnel in process;
March 8, 2004: 98;
April 6, 2004: 76;
May 4, 2004: 57;
June 2, 2004: 41.
Total;
March 8, 2004: 1,196;
April 6, 2004: 1,239;
May 4, 2004: 1,161;
June 2, 2004: 1050.
Source: Coalition Provisional Authority.
Note: According to CPA officials, the data presented above are about 90
percent accurate due to the difficulties of tracking personnel entering
and exiting Iraq.
[End of table]
In May 2004, the CPA began to decrease personnel in anticipation of the
transition of authority to the Iraqis and the dissolution of the CPA at
the end of June 2004. As of June 2, the CPA had a total of 1,050
personnel in Iraq who directly supported the mission. Several elements
of the CPA were identified to continue the U.S. effort in Iraq after
the transition. According to CPA officials, preliminary plans called
for a continued ministry advisory team, a headquarters support group,
military and police training teams, and governance teams. A May 11,
2004, National Security Presidential Directive stated that the U.S.
Mission in Baghdad and its temporarily established Iraq Reconstruction
Management Office will assume those authorities and responsibilities
that will continue after the termination of the CPA. The directive also
states that the United States Central Command shall continue to be
responsible for U.S. security and military operation efforts.
Challenges to U.S. Staffing of Coalition Provisional Authority:
The process for meeting the CPA requirements for U.S. personnel evolved
as the CPA's mission changed. The original mission of CPA's
predecessor, the Office for Reconstruction and Humanitarian Assistance,
was to coordinate the efforts addressing the humanitarian,
reconstruction, and administration challenges facing Iraq--not to
govern the country. In May 2003, CPA replaced ORHA when it became the
temporary authority governing Iraq during the period of transitional
administration.
The initial staffing process for the reconstruction effort was not
always well coordinated between Washington and Baghdad. CPA officials
stated that, prior to the CPA's establishment, the requirements for
staff were identified and personnel were recruited in an ad hoc manner.
For example, U.S. officials from the CPA and the State Department
stated that, due to the independent recruiting of staff by some
detailees in Baghdad, agency personnel authorities were unaware of
personnel who went to Iraq after the initial deployment in March 2003.
Further, officials from the State Department responsible for staffing
personnel to Iraq stated that they ultimately sent a representative to
Baghdad to physically account for all State Department personnel
present in the country. According to a CPA official, by July 2003, the
process for identifying personnel requirements was centralized in
Baghdad under the guidance of the CPA administrator.
In addition, the CPA had generally operated with about one-third of its
direct positions vacant. U.S. and CPA officials most frequently cited
the hardship of the posting and the budgetary implications as the
reasons for this situation. The hardship of the posting has affected
some civilian agencies' abilities to meet their staffing requirements.
The security situation in Iraq has also made it difficult to attract
and retain personnel. For example, USAID officials cited the security
situation as a reason for the early return of some staff and the
difficulty in filling direct-hire positions in Iraq. Further, State
Department officials stated that some qualified agency personnel who
had volunteered to go to Iraq were unable to meet the required medical
standards. Another dimension of the hardship of the posting is the
limitations of family accompaniment. Beginning in November 2003, the
CPA requested that all personnel serve a minimum of 6 months. According
to USAID officials, in some cases this required Foreign Service
personnel to relocate family members from their previous posts to the
United States.[Footnote 39] State Department officials also cited
family relocation issues and travel plans as reasons for delays in
providing personnel to Iraq.
State Department officials stated that they had no difficulty in
recruiting volunteers for positions in Iraq, attributing this largely
to Secretary Powell's support for the mission, incentive packages, and
the department's efforts to ensure that those who served in Iraq were
not disadvantaged. Other agencies, such as USAID and the U.S. Army
Corps of Engineers, while also relying on volunteers, stated that they
were constrained in their ability to meet staffing requirements. USAID
and Army Corps of Engineers officials said that prior downsizing had
left their agencies with a smaller pool of personnel from which to
draw. Additionally, some requirements that the CPA attempted to meet
were beyond the capability of the agency tasked. For example, according
to Department of Justice officials, the department was requested to
provide three international law litigators to the CPA but had only
three such personnel. To meet the requirement, Justice provided one
litigator to the CPA.
In addition, providing personnel on a nonreimbursable basis to the CPA
creates an unbudgeted expense to the supplying agency. Replacing
detailees creates additional costs for the agencies that their budgets
may not be able to sustain. Further, detailing of staff not only
creates gaps in the supplying agency but increases the workload of
those remaining. According to State Department officials, this burden
could not be sustained beyond 6 to 12 months.
To counter these challenges, the CPA and executive branch agencies have
relied on a number of mechanisms to support the staffing effort,
including the use of special hiring authorities, temporary tours of
duty (60 to 180 days), and incentive packages. The CPA had relied on a
special hiring authority under 5 USC 3161 to obtain temporary civilian
employees. Personnel obtained under this authority constituted about 20
percent of CPA staff. The passage of the emergency supplemental in
November 2003 provided a specific budget to the CPA. According to a CPA
official, this budget imposed a funding limit on CPA's ability to hire
personnel under the 3161 authority. In addition, agencies used
temporary tours of duty to supply personnel to the CPA due to the
hardship of the posting. Agencies also used incentive packages to
compensate civilian personnel, which included danger-pay allowances and
hardship differential payments.
Conclusion:
The United States and the coalition have faced many challenges in
identifying, obtaining, and organizing the human resources required to
help stabilize and reconstruct Iraq. The U.S. Mission in Baghdad and
its temporarily established Iraq Reconstruction Management Office are
likely to continue to draw upon staff from multiple sources with the
transition of power to the Iraqi interim government. The mission will
also continue to face challenges, such as the hardship of the posting,
in meeting its requirements.
Oversight Questions:
1. What lessons have been learned about the staffing challenges CPA
faced in fulfilling its administrative mission and managing the
reconstruction effort?
2. How can the U.S. process for staffing a temporary emergency
organization, such as the CPA, be improved if the need arises?
3. What steps have been taken to ensure sufficient personnel are
available to staff the new U.S. Mission in Iraq?
[End of section]
V. Security:
Iraq Security Trends:
Issue:
Since the President declared an end to major combat operations on May
1, 2003, the United States had obligated almost $53.3 billion through
March 2004 to stabilize the security situation in Iraq. This figure
includes about $52.1 billion for U.S. military participation in the
multinational force[Footnote 40] and almost $1.2 billion for Iraqi
security forces.[Footnote 41] This enclosure provides information on
(1) current and projected trends in the security situation, and (2) the
impact of the security situation on military and civilian operations.
Results in Brief:
Our analysis of information from the United Nations, nongovernmental
organizations, the Department of Defense (DOD), and the U.S. Agency for
International Development (USAID) indicates that the security situation
in Iraq began to deteriorate during June 2003, with significant
increases in attacks against the coalition and its partners--
international and Iraqi--in October-November 2003 and again in April-
May 2004. Moreover, since June 2003, the attacks have become more
sophisticated, widespread, and effective. In May 2004, the Secretary of
Defense and the Commander of U.S. Central Command projected that the
level of violence could continue to increase as Iraq moves toward
elections for a transitional government, currently scheduled to be held
by the end of January 2005.
The increase in attacks has had a negative impact on the presence and
operations of international military and civilian personnel in Iraq. In
late April 2004, the Deputy Secretary of Defense stated that the
multinational force was engaged in combat in Iraq, rather than in
peacekeeping as had been expected. About that time, the United States
decided to maintain a force level of about 138,000 troops until at
least the end of 2005, rather than drawing down to 105,000 troops by
May 2004 as DOD had announced in November 2003. On the other hand,
other countries participating in the multinational force, the United
Nations, numerous nongovernmental organizations, and some civilian
contractors have reduced their presence or completely shut down
operations, while the CPA and U.S. government agencies have severely
restricted staff movement around the country. No overall data exist on
the effects of these restrictions on political transition and
reconstruction efforts in Iraq. However, available evidence suggests
that, in general, international civilian staff have had increasingly
reduced contact with the Iraqi people. Iraqi staff working for the
coalition, including interpreters, have come under increasing threats
for cooperating with foreign organizations. Many important
reconstruction efforts had to be delayed or cease, and the civilian
organizations that remained have faced increased security requirements
for their personnel and compounds in the country. U.N. officials and
documents have expressed concern that the dangerous security
environment could hinder the implementation of Iraq's upcoming
elections process.
Current and Projected Trends in the Security Situation:
Security Situation Began to Deteriorate in June 2003:
According to U.N. reports, the security situation in Iraq began to
deteriorate in June 2003. Reports from the U.N. Office of the
Humanitarian Coordinator for Iraq show that attacks against
international organizations and the multinational force began to
increase during June and July 2003.[Footnote 42] The U.N. Secretary
General reported[Footnote 43] that the overall security situation had
deteriorated dramatically by the end of August 2003, a month marked by
the bombing of the Jordanian embassy on August 7, the bombing of the
U.N. headquarters in Baghdad on August 19, and the killing of an
important Shi'a leader on August 29. By September 2003, according to
the U.N. Secretary General's report, Iraq had entered a new phase. All
international organizations and contractors, as well as Iraqis
cooperating with the CPA, were potential targets of deliberate, direct,
and hostile attacks. The assessments of contractors and nongovernmental
organizations with whom we met generally agreed with the U.N.
assessment of these security trends.
Various U.S. and U.N. reports and data indicate that violence escalated
sharply against the coalition, Iraqis cooperating with the coalition,
international organizations, and international civilian aid groups and
contractors in October-November 2003 and again in April-May 2004. CPA
data show an extended increase in certain significant insurgent
activities[Footnote 44] during those two periods, with the level of the
attacks in April-May 2004 exceeding the level of attacks during
October-November 2003 (see fig. V.1). In April 2004, Sunni insurgents
fought the multinational force in Fallujah, Ramadi, Samarra, and
Tikrit, while a radical Shi'a militia attacked the force in the
southern cities of Karbala, Kut, Nassiriyah, Kufa, Najaf, and Basra, as
well as in part of Baghdad.
Figure V.1: Trends in Certain Significant Insurgent Acts, October 18,
2003, through May 28, 2004:
[See PDF for image]
Sources: CPA Office of Policy Planning and Analysis; Regional Security
Coordination Center.
[End of figure]
According to CPA data, the number of significant insurgent acts against
the coalition declined soon after the early April escalation but then
rose again in May, with the number of attacks in May exceeding the
number of attacks in April (see fig. V.2).
Figure V.2: Number of Certain Significant Insurgent Acts, by Month,
November 2003 through May 2004:
[See PDF for image]
Sources: CPA Office of Policy Planning and Analysis; Regional Security
Coordination Center.
[End of figure]
DOD data on the number of U.S. military personnel killed or wounded due
to hostile action in Iraq generally support U.N. and CPA assessments of
the security situation since the declared end of major combat
operations. As shown in figure V.3, initial increases in U.S. military
casualties in June-July 2003 were followed by much more significant
increases in October-November 2003 and April-May 2004. While the number
of significant insurgent acts against the coalition increased from
April to May, the number of U.S. military casualties declined.
Figure V.3: Number of U.S. Military Personnel Killed or Wounded Due to
Hostile Action in Iraq, March 2003 through May 2004:
[See PDF for image]
Source: Department of Defense.
[End of figure]
Overall, according to U.N. and U.S. reports, the nature of the attacks
against the coalition and its partners changed significantly from the
summer of 2003 through the late spring of 2004 in terms of their
targets, source, location, sophistication, and effectiveness. In
general, the insurgents' targets expanded to cover almost all foreign
groups operating in Iraq, whether military or civilian personnel, as
well as Iraqi security forces and Iraqi political leaders viewed as
collaborating with the occupation. Further, the group of insurgents
grew from former regime loyalists to include foreign terrorists, Sunni
Islamic extremists, and, most recently, Shi'a radicals. The areas of
instability expanded from Baghdad, the Sunni Triangle, and to a lesser
extent the Kirkuk and Mosul areas that were already very unstable due
to ethnic and political tensions, to include majority Shi'a areas in
the south.
Iraqis View Security as Most Pressing Issue:
According to State Department public opinion polls, the majority of
Iraqis remain extremely concerned about the security situation in their
country. The State Department reported in early January 2004 that about
62 percent of residents in five Iraqi cities named safety and security
as their greatest worry. According to a late January 2004 State
Department report, Iraqis tended to fear general street crime and low-
grade explosions as the greatest threats to self and family. This poll
also showed that most Iraqis see the greatest threat to their country's
security to be sectarian or ethnic conflict and large-scale attacks. In
a later polling report published in mid-June 2004, the State Department
reported that security remained the most urgent issue for residents of
five Iraqi cities.
Attacks May Continue to Escalate through Early 2005:
In late May 2004, the President said there is likely to be more
violence in Iraq after the transfer of power. He noted that there are
difficult days ahead, and the way forward may sometimes appear to be
chaotic. One week earlier, the Commander of the U.S. Central Command
had predicted that the situation in Iraq will become more violent after
the transfer of power as the country moves toward elections for a new
government, which are currently scheduled to be held by January 2005.
Further, the Secretary of Defense said in early May 2004 that there
will be uncertainty in Iraq and increased attacks against the
coalition, Iraqis, and the United States during the period leading up
to the elections.
Military and Civilian Responses to the Deteriorating Security
Situation:
In April and May 2004, the Deputy Secretary of Defense said that the
multinational force was engaged in combat and a continuing war in Iraq,
rather than peacekeeping as had been expected. The increase in attacks
has had a negative impact on the presence and operations of
international military and civilian personnel in Iraq. It has led to an
increase in U.S. force levels and to a decrease in freedom of movement
for international civilians working to rebuild Iraq and assist in its
political transition.
United States and United Kingdom Increased Troop Levels as Other
Coalition Members Reduced Them:
As a result of the increase in violence during April 2004, the United
States and the United Kingdom decided to increase their overall force
levels in the country. The United States decided to maintain a force
level of about 138,000 troops until at least the end of 2005, keeping
about 33,000 more troops in Iraq as of May 2004 than the 105,000 troops
originally planned. On May 24, 2004, the President said that if
military commanders determine that they need more troops to fulfill the
mission, he would send them. The following week, the United Kingdom
announced that it would send an additional 370 troops to southern Iraq
in response to the increased violence, bringing its total troop
contribution to the multinational force to about 8,900 military
personnel. This figure includes 170 engineering personnel who would
deploy for 3 months to help fortify U.K. military bases and facilities
in Iraq against the increased threat of mortar and rocket attacks.
In mid-April 2004, the new government of Spain announced that it would
withdraw its 1,300 troops from Iraq. The government withdrew the troops
much earlier than the United States expected, after violence escalated
in the Spanish area of operations in Iraq. Shortly thereafter, Honduras
and the Dominican Republic announced they would also withdraw their
national contingents from the multinational force.
During April 2004, the United States redeployed forces from Baghdad and
northern areas of Iraq to cities in the south that had come under the
control of a radical Shiía militia. The United States did so because
Iraqi security forces and at least one contingent of the multinational
force would not or could not fight the insurgents. For example,
according to a CPA official, Iraqi police in the cities of Karbala,
Najaf, and Kut collapsed in April when a radical Shi'a militia overran
the cities and took control of police stations. Moreover, according to
a USAID report, after heavy fighting in the city of Kut, a non-U.S.
contingent of the multinational force withdrew from the city as the
militia overran it.
International Civilian Organizations Have Reduced Operations in Iraq
and Have Faced Increased Security Requirements:
The deteriorating security situation has also adversely affected the
operations of civilian organizations in Iraq. The dangerous environment
has led many to halt operations completely or to reduce activity by
severely restricting staff movement around the country. No systematic
data exist on the effect of these restrictions on efforts to assist in
Iraq's political transition and reconstruction. Anecdotal evidence
suggests, however, that the efforts overall have been scaled back.
In general, international civilian staff have had increasingly little
contact with the Iraqi people, and Iraqi staff working for the
coalition, including interpreters, have been increasingly threatened
for cooperating with foreign organizations. Many important
reconstruction efforts had to at least temporarily cease operation.
Civilian organizations that continue to operate in the country face
increased security measures for their personnel and compounds in the
country. The following examples show the effect of the security
situation on the operations of the CPA and supporting U.S. agencies,
reconstruction contractors, international organizations, and
nongovernmental aid organizations.
* Due to the unsafe security environment, the CPA and its supporting
U.S. agencies have had difficulty staffing their operations, opening
offices throughout the country, and providing protection for U.S.
civilian personnel as they travel around the country. U.S. agencies,
particularly USAID, had difficulty in attracting and retaining
personnel because of security concerns.[Footnote 45] In addition,
according to a CPA official, as the security situation worsened during
2003, the CPA abandoned plans to fully staff offices throughout Iraq to
assist in Iraq's political transition and reconstruction and instead
established a much smaller field presence. Further, the CPA established
stringent security measures that U.S. government staff had to follow in
traveling outside the Green Zone, the coalition's "safe area" in
Baghdad, thereby making it difficult for them to move around the
country. In late February 2004, the Department of Homeland Security
decided to stop sending teams of customs investigators to assist CPA.
They could no longer do their jobs because it had become too dangerous
for them to move around the country. CPA officials also stated that
they were concerned about the safety of their Iraqi employees,
particularly their interpreters, as insurgents had increasingly
targeted them for cooperating with the coalition.
* In an April 17, 2004, document, the CPA administrator stated that
lack of security is the key obstacle to reaching reconstruction
objectives. Referring to the entire reconstruction program, the
administrator stated that a worsened security situation would mean that
projects would take longer to complete and that the kinds of projects
undertaken and their costs would change to an unknown extent. Our
review of selected electricity projects showed that the security
situation delayed the implementation of key projects, thereby
contributing to the CPA not meeting its objective of providing 6,000
megawatts of electrical generating capacity to the Iraqi people by its
original goal of June 1, 2004.[Footnote 46] In late March 2004, the CPA
Inspector General reported that that rising security concerns were a
significant cost driver for CPA activities and contractor projects,
representing at least 10 percent to 15 percent of total costs.
* The United Nations and its programs have faced significant setbacks
as a result of the deteriorating security situation. Most importantly,
after the attacks on the U.N. headquarters in Baghdad in August and
September 2003, the U.N. Secretary General redeployed all U.N.
international personnel from Baghdad, Basra, and other area offices to
neighboring countries, particularly Jordan and Kuwait, where they have
continued to support assistance operations inside Iraq.[Footnote 47] As
of late May 2004, the United Nations had not allowed most of its
international personnel to return to Iraq.[Footnote 48] Although Iraqi
staff continued some U.N. programs, the United Nations had to scale
down or delay both ongoing activities and new initiatives. The United
Nations sent three separate assessment teams to Iraq during the first
half of 2004 to assist Iraqis in assessing options for forming an
interim government and in preparing for national elections. The
dangerous security situation forced these teams to restrict their
travel around Iraq during the first half of 2004, thereby limiting
their interaction with Iraqis during important political discussions
about the country's future.
* In discussions during the fall of 2003 and the spring of 2004,
nongovernmental organization representatives stated that the
deteriorating security situation has forced numerous nongovernmental
aid organizations to reduce or shut down operations in Iraq. In
response to the dangerous security environment, many nongovernmental
organizations and contractors that we interviewed have hired private
security to provide protection for their staff and compounds. In
addition, one representative emphasized his view that as more
international workers leave Iraq, insurgents will increasingly focus
their efforts on killing Iraqi nationals who are seen as collaborators.
U.N. officials and documents have expressed concern that the lack of
security could threaten Iraq's transition toward a democratic
government. According to a U.N. assessment, the lack of security may
lead to major disturbances that could undermine the administration of
the elections, alter the established timetable, and compromise the
overall credibility of the process. By mid-April 2004, the
multinational force had begun to consider how it could provide
security, logistical, and other support for the elections, but the
United Nations and others had not yet developed a specific plan for
important tasks such as the registration of political parties, voters,
and candidates or the number and locations of polling sites.
Conclusion:
Since June 2003, the security situation has become more dangerous for
international military and civilian personnel operating in Iraq and for
Iraqis who work with them. Instead of engaging in post-conflict nation
building, the United States and its partners have been rebuilding the
country in a wartime environment. They have attempted to combat a
growing insurgency through military, economic, and political measures.
The deteriorating security situation, however, has generally hindered
the implementation of economic reconstruction and political transition
efforts. The United States has had to rely more heavily on the military
than it initially planned. U.S. officials have stated that the violence
in Iraq may get worse as the country moves toward national elections by
early January 2005.
Oversight Questions:
1. In light of the dangerous security situation, how can the United
States better protect international civilian personnel so that they can
more actively assist Iraqis in the country's political transition and
reconstruction?
2. What contingency plans exist to address increased attacks against
the coalition? How many more U.S. or other multinational force troops
would be needed if the security situation were to deteriorate further?
[End of section]
VI. Security:
Transitioning Security Missions to Iraqi Forces:
Issue:
Under U.N. Security Council Resolution 1546, the U.S.-led multinational
force has the authority to take all necessary measures to contribute to
the maintenance of security and stability in Iraq in accordance with
letters annexed to the resolution. Toward that end, the force conducts
offensive operations to defeat forces opposed to the coalition, as well
as stability operations to provide security needed for the country's
political transition and reconstruction. The multinational force is
also organizing, training, equipping, mentoring, and certifying Iraqi
security forces so that it can transfer security responsibilities to
them and eventually draw down the multinational force. This enclosure
describes the (1) multinational force's plan for transitioning security
responsibilities to Iraqi security forces, and (2) progress in
developing Iraqi security forces as of May 2004.
Results in Brief:
The multinational force's security transition plan calls for a four-
phased transfer of security responsibilities from the multinational
force to effective Iraqi security forces. As of March 26, 2004, Iraq
had about 203,000 security personnel of greatly varying capabilities.
Of these forces, only the Iraqi Armed Forces are specifically mandated
for the military defense of Iraq, while the others are intended
exclusively for civil law enforcement and protection duties. However,
according to senior DOD officials and multinational force documents,
these security forces, especially the Iraqi Police Service and Iraqi
Civil Defense Corps, were insufficiently trained and equipped for these
duties. During the escalation of violence that occurred during April
2004, some of these security forces collapsed. The multinational force
has taken action to address training and equipping problems, but it is
unclear how this will affect the long-term plan to shift security
responsibilities to Iraqi forces.
Security Transition Will Transfer Control to Iraqis in Four Phases:
Since the fall of 2003, the multinational force has developed and
refined a plan to transfer security responsibilities to Iraqi security
forces in four phases. In October 2003, a multinational force document
outlined the security transition concept, including (1) an initial
phase, called mutual support, where the multinational force establishes
conditions for transferring security responsibilities to Iraqi forces;
(2) transition to local control, where Iraqi forces in a local area
assume responsibility for security; (3) transition to regional control,
where Iraqis are responsible for larger regions; and (4) transition to
strategic over watch, where Iraqi forces on a national level are
capable of maintaining a secure environment against internal and
external threats, with broad monitoring from the multinational force.
Transition through these phases is contingent on decreasing threat
capability, increasing Iraqi security capability, and the ability of
civil administration to exercise control of Iraqi forces.
According to the multinational force document, transferring control for
local security to Iraqis should allow the multinational force to reduce
the number of troops devoted to stability operations and reduce the
number of forward operating bases. This would allow the multinational
force to focus on offensive operations against coalition opponents.
The multinational force began to shift responsibilities to Iraqi
security forces in February 2004, earlier than planned, citing the
growing capability of these forces. In Baghdad, for example, the
coalition forces withdrew to bases outside of the city, giving Iraqi
forces greater responsibility for security within the city. According
to State Department public-opinion polls published around that
time,[Footnote 49] about 20 percent of Iraqis said that the
multinational force was very effective at keeping law and order on the
streets ,and one-third believed the force was very effective in
protecting Iraqis from major threats and civil war. Furthermore, Iraqis
preferred that more security responsibilities be transferred to their
own police and army. In a later polling report published in mid-June
2004,[Footnote 50] the State Department said that Iraqis viewed the
multinational force as part of the security problem, not the solution.
According to the report, Iraqis were confident that Iraqi security
forces would be able to maintain security without the multinational
force.
Iraqi Security Forces Were Unprepared to Assume Security
Responsibilities:
Iraqi security forces include more than 200,000 members of the armed
forces, police, and other agencies of the Ministry of Interior. These
forces have varying missions and capabilities, but most are not trained
or equipped to engage well-armed insurgents. The CPA and multinational
force reported problems in training and equipping these forces in 2004.
According to senior DOD officials, these forces performed poorly in the
crises in Fallujah and southern Iraq in early April 2004.
Structure of the Iraqi Security Forces:
As of May 2004, the multinational force was responsible for training,
equipping, mentoring, and certifying all Iraqi security forces, such as
the Iraqi Armed Forces and the Iraqi police. These Iraqi security
forces have different missions and controlling authority, as detailed
in table VI.1.
Table VI.1: Controlling Authority and Mission of Iraqi Security
Forces:
Ministry: Defense;
Security force: Iraqi Armed Forces; regular army, other services[A];
Mission: Will provide the military defense of Iraq when fully
operational, including defense of the national territory and protection
and security of critical installations, facilities, infrastructure,
lines of communication and supply, and population.
Ministry: Defense; Security force: Iraqi Civil Defense Corps;
Mission: Perform security and emergency service that directly supports
coalition operations to provide security and stability. Complements the
police force but designed to perform operations that exceed the
capacity of the police.
Ministry: Interior;
Security force: Iraqi Police Service;
Mission: Provide primary civil law enforcement for public safety,
security, and order.
Ministry: Interior; Security force: Department of Border Enforcement;
Mission: Monitor and control the movement of persons and goods to,
from, and across the borders of Iraq. Includes Iraqi Border Police
charged with border and customs enforcement and immigration.
Ministry: Interior; Security force: Facilities Protection Service;
Mission: Guard and secure individual ministry and municipal facilities
against vandalism and theft. These guards are hired and equipped by
individual ministries and can vary greatly in capability.
Sources: DOD status reports; CPA Orders 22, 26, 27, 28, 67, 73.
[A] According to a CPA official, these forces include units of the
Iraqi Army, Iraqi Naval Infantry, Iraqi Army Aviation, Iraqi Coastal
Defense Force, an Iraqi counterterrorism force, and associated
headquarters.
[End of table]
U.N. Security Council Resolution 1546 states that after the transfer of
power, Iraqi security forces would fall under the command of
appropriate Iraqi ministers, and welcomed the continued development of
a security partnership between the sovereign government of Iraq and the
multinational force. According to an annex to the resolution, the Iraqi
Armed Forces will be responsible to the Chief of Staff and Minister of
Defense, while the other security forces will report to the Ministry of
the Interior or other government ministers. The resolution states that
the government of Iraq has the authority to commit Iraqi security
forces to engage in operations with the multinational force. According
to the resolution, the multinational force and Iraqi government are
developing various coordination mechanisms to achieve unity of command
of military operations when Iraqi security forces operate with the
multinational force.
The total number of Iraqi security forces as of March 26, 2004, just
prior to the insurgent activities of early April, was 203,000--
approximately 86 percent of the goal set by the multinational
force.[Footnote 51] Of these forces, the Iraqi Armed Forces is the only
force specifically trained and equipped for the defense of Iraqi
territory and population. However, in March 2004 this force experienced
the greatest shortfall in personnel, with only 8 percent of the troops
needed. (See figure VI.1 for a breakdown of the numbers for each
component and its goals.):
Figure VI.1: Iraqi Security Force Levels, as of March 2004:
[See PDF for image]
Source: DOD updates.
[End of figure]
Although the other Iraqi security forces existed in greater numbers,
they were not intended to fight a pitched battle against well-armed
insurgents. Iraqi police officers are tasked solely to uphold general
law and order through such activities as performing criminal
investigations, arresting suspects, and questioning witnesses. Iraqi
Civil Defense Corps soldiers are trained for constabulary duties, such
as setting up traffic control checkpoints, patrolling and cordoning off
streets, performing crowd control, providing convoy security, and other
civil functions. Members of the Facilities Protection Service are
trained to guard Iraqi ministry buildings and other fixed sites.
According to CPA officials, they are effective exclusively in locations
already controlled by local military and law enforcement personnel. For
example, according to a CPA official, Facilities Protection Service
guards at a fixed site would be overrun by an enemy force that
contained more than 10 to 20 insurgents, or one that had numerous heavy
weapons, without prompt help from the multinational force.
Training and Equipping[Footnote 52] Iraqi Security Forces Had Gaps:
The multinational force and CPA had problems training and equipping the
Iraqi Police Service and the Iraqi Civil Defense Corps in late March
2004. While some police training occurred at academies in Jordan and
Baghdad, according to an official from the State Department Bureau of
International Narcotics and Law Enforcement (State/INL), the prevailing
security situation has prevented CPA and State/INL police trainers from
moving freely across the country and establishing additional training
facilities. As a result, multinational force commanders assumed
responsibility for temporary police training in their areas of
responsibility. State/INL provided the commanders with a temporary
curriculum, the Transition Integration Program. The full curriculum is
108 hours long and provides basic police training in such subjects as
basic human rights, firearms familiarization, patrol procedures, and
search methods. According to a State Department official, the various
major subordinate commanders had wide latitude in terms of training
police and did not uniformly adopt the Transition Integration Program.
They were free to establish their own curriculum and requirements for
police, which varied in depth and scope. Training could last between 3
days and 3 weeks. According to a State/INL official, some commanders
required trainees to undergo class and field training, while other
commanders only required officers to wear a uniform.
According to a multinational force interim assessment from May 2004,
the Iraq Civil Defense Corps also lacked proper training. It stated
that investment into training the Iraqi Civil Defense Corps units
varied among the multinational divisions and that the units in the
western and center-south major subordinate commands in particular were
the least prepared for combat. Furthermore, the training was not
sufficient for high-intensity tasks. One CPA official agreed with this,
stating that the training for the Iraqi Civil Defense Corps did not
prepare it to fight against well-armed insurgents with mortars and
rocket-propelled grenades, for example. The assessment also noted that
the Iraqi Civil Defense Corps units contained too many inexperienced
officers and soldiers.
Providing equipment for Iraqi forces also posed problems. According to
DOD officials, both the Iraqi Police Service and the Iraqi Civil
Defense Corps were poorly equipped in late March 2004 due to
significant delays for provisioning all Iraqi security forces.
According to CPA, these delays were related to several factors,
including delays in contractor delivery and performance, delays in
allocating and releasing the funding, and a shortage of experienced
contracting officials in Baghdad.
The Iraqi Police Service was beset by continued delays in equipment
provisioning and a lack of awareness of equipment, funding, and
contracting status. According to data from the CPA's Provost Marshal's
Office, as of March 28, 2004, the Iraqi Police Service was operating
with 41 percent of its required patrol vehicles, 63 percent of its
required uniforms, 43 percent of its required pistols, 21 percent of
its required hand radios, 7 percent of its required vehicle radios, and
9 percent of its required protective vests.
In March 2004, equipment provisioning for Iraqi Civil Defense Corps was
months behind schedule. According to a CPA official, no Iraqi Civil
Defense Corps units possessed body armor, and many were using Saddam-
era helmets for protection. According to a multinational force planning
document, as of April 23, 2004, units were still awaiting the delivery
of uniforms, helmets, body armor, vehicles, radios, AK-47 rifles, RPK
machine guns, ammunition, and night vision equipment. A CPA official
stated that most, if not all, of this equipment is currently flowing
into the region. A multinational force assessment noted that Iraqis
within the Iraqi Civil Defense Corps felt the multinational force never
took them seriously, as exhibited by what they perceived as the broken
promises and the lack of trust of the multinational force.
Iraqi Security Forces Performed Poorly in April 2004:
According to the President, senior DOD officials, and multinational
force commanders, Iraqi security forces responded poorly to a series of
anti-coalition attacks in April 2004. In western and central Iraq,
insurgents attacked the multinational force in Fallujah, Baghdad, Ar
Ramadi, Samarra, and Tikrit, while a radical Shi'a militia launched
operations to dislodge multinational forces and occupy cities from
Baghdad to Basra in the south. In particular, units of the Iraqi Army,
Iraqi Police Service, and the Iraqi Civil Defense Corps refused to
engage the enemy.
According to DOD officials, the 2nd Battalion of the Iraqi Armed Forces
refused to engage insurgents and support the 1st Marine Expeditionary
Force in Fallujah. One problem cited included the belief of the
soldiers, reinforced by briefings during their training, that they
would never be used as an internal security force. Weak battalion
leadership and insufficient or poor equipment were also mentioned as
contributing factors.
According to a CPA official, Iraqi police forces in Fallujah, Najaf,
Karbala, and Kut collapsed. The number of police officers dropped by
2,892 during the week of April 17 to 23, according to the CPA weekly
assessment. These declines resulted from officers being killed in the
line of duty; sent for retraining and reintegration; or removed from
the Iraqi Police Service for actions supporting the insurgency.
According to a CPA official and an assessment by the multinational
force, the Iraqi Police Service was overwhelmed due to disorganization,
insufficient training and equipment, and weak mentoring. However, CPA
also said the police forces are civil law enforcement units and are not
intended to withstand guerilla attacks. Nonetheless, in other locations
they stood up to the attacks.
Iraqi Civil Defense Corps units also collapsed during April, with
soldiers staying home, declaring a neutral stance, or resigning
throughout central and western Iraq. According to the multinational
force interim assessment, desertion was most prevalent between April 2
and April 16. During this time, up to 12,000 Iraqi Civil Defense Corps
soldiers did not show up for duty. Table VI.2 shows the decrease in the
corps during this time.
Table VI.2: Iraqi Civil Defense Corps Desertion from April 2 to April
16:
Location: Northeastern Iraq, including the cities of Baqubah and
Tikrit;
Staffing decrease: About 9,100 to about 6,100, or 30 percent;
Responsible major subordinate command: 1st Infantry Division.
Location: Baghdad and surrounding area;
Staffing decrease: About 6,200 to about 3,200, or 49 percent;
Responsible major subordinate command: 1st Cavalry Division.
Location: Central-southern Iraq, including Karbala, An Najaf, and Al
Kut;
Staffing decrease: About 3,500 to about 2,500, or 30 percent;
Responsible major subordinate command: Multinational Division-Center
South.
Location: Western Iraq, including Fallujah;
Staffing decrease: About 5,600 to about 1,000, or 82 percent;
Responsible major subordinate command: 1st Marine Expeditionary Force.
Source: DOD.
Note: Derived from a DOD briefing and GAO analysis of a multinational
force assessment.
[End of table]
The assessment also found that Iraqi Civil Defense Corps units were not
sufficiently equipped or trained for high-intensity tasks, such as
engaging large numbers of insurgents. Furthermore, lack of equipment
and poor training resulted in general fear and disillusionment among
personnel. Additionally, better-equipped and better-trained battalions
in northern and southern Iraq held together during the crises of mid-
April, although they did not face the same level of threat. Iraqi Civil
Defense Corps soldiers were also susceptible to intimidation or
sympathy for anti-coalition fighters. Finally, soldiers were less
likely to carry out their duty when their home township was under
insurgent pressure, leading to the collective desertion of units from
the troubled townships.
Multinational Force's Response:
The multinational force is taking steps to assess and respond to the
various problems of the Iraqi security forces and is considering how
these forces can provide security during Iraq's upcoming election
process. As of late May 2004, a new team of senior military officers
was assessing every unit in the Iraqi security forces. This team will
oversee the accelerated training of Iraqi soldiers, police, and other
security personnel.
In April 2004, the multinational force began a new reconstitution
program for police officers who had deserted in Najaf and Karbala and
scheduled senior leadership and additional specialized courses for the
end of May. In addition, it planned to begin implementing its equipment
distribution plan, define the equipment requirements for the entire
Iraqi Police Service and the Department of Border Enforcement, and
better inform major subordinate commands about which equipment they
would receive and when. Further, the multinational force planned to
start institutionalizing a monthly report and certification plan for
police stations.
According to a Department of Justice (DOJ) official, in an effort to
support the multinational force training program for the Iraqi Police
Service, DOJ and its components have developed a number of specialty
courses designed to transition the fundamentals of basic training into
operational and investigative capacity. The specialty courses are
designed to build investigative directorates in the areas of
intelligence analysis, counterterrorism, organized crime, basic
criminal investigation, post-blast investigations, and fingerprinting.
Teams of personnel and experienced contractors from many DOJ components
are currently deployed or are preparing to deploy to provide training
in support of this initiative.
According to an implementation order published in April 2004,[Footnote
53] the multinational force is pursuing multiple courses of action to
rebuild the Iraqi Civil Defense Corps. It will also develop and rebuild
battalions with new equipment scheduled to arrive throughout May 2004.
However, a CPA official with access to CPA contracting information
stated that Iraqi Civil Defense Corps equipment would probably not make
it to Iraq until June or possibly July 2004. The multinational force
will also review the criteria for recruitment and possibly change
recruiting practices to stop commissioning entire battalions from the
same area. The multinational force also plans to ease de-Baathification
standards and invite experienced and capable former soldiers and
officers to join the Iraqi Civil Defense Corps. The multinational force
expects some 4,000 to 5,000 Sunni to be incorporated into the Iraqi
Civil Defense Corps in this way. The training program will begin
concentrating on developing and mentoring leaders at all levels of the
Iraqi Civil Defense Corps. Furthermore, all major subordinate commands
will permanently embed training teams within Iraqi Civil Defense Corps
battalions. These teams will perform refresher training and mentoring,
and provide direction until battalion leadership is fully developed and
capable of assuming command.
Given the poor performance of the Iraqi security forces during April
2004, it is unclear what level of security they will be able to provide
during the period leading up to Iraq's national elections, which are
currently scheduled to be held by the end of January 2005. As of mid-
April 2004, the multinational force was considering what sort of
security and other support it would provide during the election
process. According to a planning document, the extent of this support
will depend on the ability of the Iraqis, international organizations,
and contractors to provide for security and other support tasks. The
document stated that the multinational force expected some areas to be
under the local control of the Iraqi security forces by the time
elections take place. The document did not acknowledge, however, the
poor performance of Iraqi security forces during early April 2004.
Conclusion:
Effective Iraqi security forces are critical for transitioning security
responsibilities to Iraq. However, Iraqi security forces proved unready
to take over security responsibilities from the multinational force, as
demonstrated by their collapse during April 2004. Of these forces, only
the Iraqi Armed Forces are specifically mandated for the military
defense of Iraq, while the others are intended exclusively for civil
law enforcement and protection duties. The multinational force
identified problems in the training and equipping of the Iraqi forces
as reasons for poor performance. Although the multinational force is
beginning to address these problems, it is unclear what impact April's
security collapse will have on the plans for transitioning Iraq's
security to Iraqi security forces or the extent to which these forces
will be capable of providing security during the Iraqi election
process. What is clear, however, is that the development of effective
Iraqi security forces will continue after the transfer of power to an
interim Iraqi government.
Oversight Questions:
1. How will the Iraqi security forces coordinate with the multinational
force after the transfer of power, and how will they resolve
potentially differing views on security issues? What arrangements have
been made to facilitate coordination between the multinational force
and the interim Iraqi government?
2. What kind of provisioning process will be used to equip the Iraqi
security forces after the transfer of power? Will this be administered
by the Ministries of Defense and Interior, the multinational force, or
another body?
3. What level of support does the multinational force expect Iraqi
security forces to provide during Iraq's upcoming election process, and
what options and contingency plans are being explored?
[End of section]
VII. Security:
Transitioning and Reintegrating Iraq's Militias:
Issue:
A large but unknown number of militias[Footnote 54] are operating
outside the control of the central government in Iraq. Some of these
militias have taken hostile action against the coalition and Iraqi
security forces, while others have remained neutral or are
participating in Iraq's political transition. In a February 2004
report, the United Nations warned that the existence of militias--
especially those connected with political movements--could be a source
of coercion and intimidation that would undermine the political
credibility of Iraq's upcoming elections, which are currently scheduled
to be held by the end of January 2005.
In late May 2004, the Coalition Provisional Authority (CPA) developed a
transition and reintegration strategy for disbanding or controlling
these militias. CPA Order 91, issued in early June 2004, is intended to
provide legal authority for implementing the transition and
reintegration process and declares militias outside of central
government control, declaring them illegal except as provided by the
order and law. This enclosure provides information on (1) the CPA's
transition and reintegration strategy for militias and (2) the status
of implementing the transition and reintegration process.
Results in Brief:
The CPA's transition and reintegration strategy contains three
components or tracks for disbanding or controlling militias operating
outside the control of Iraq's central government. As outlined in CPA
documents and Order 91, the strategy calls for (1) recruiting militia
members into officially recognized Iraqi security forces, (2) retiring
some militia members with veterans' benefits, and (3) reintegrating
others into Iraq's civil society and economy through education,
training, and job placement. On June 5, 2004, the CPA announced that
nine parties that maintain militias had agreed to develop and implement
transition and reintegration plans. However, key elements of the CPA's
transition and reintegration process remain to be finalized.
Transition and Reintegration Strategy Has Three Components:
The first track of the transition and reintegration strategy focuses on
recruiting militia leadership and members to transition to the Iraqi
Armed Forces or other government security forces. To aid in recruiting
militia leadership, the strategy calls for providing major groups with
a sufficient number of slots in the security forces to reduce the
perceived threat from the central government and provide local leaders
with some control over local security. The strategy anticipates that
economic incentives will aid in recruiting individual militia members,
noting that the security services provide one of the few current
opportunities for paying jobs in Iraq. However, the strategy cautions
against legitimizing militia units by moving them into security forces.
In this regard, the strategy calls for ensuring that former militia
members (1) are paid by the central government, (2) rely on central
government systems for advancement and retirement, and (3) develop as
members of a professional force. Moreover, the strategy says it is
critical to ensure that the chain of command for these security forces
is not the same as the chain of command for the former resistance
forces. According to the strategy, the transfer of loyalty to a central
government that these arrangements are intended to support may take
quite some time.
The second track of the transition and reintegration strategy addresses
retirement of militia members that were former members of resistance
forces. The strategy bases eligibility for veterans' status on
individuals' service in these resistance groups and proposes that
qualified individuals would receive the opportunity to retire with the
same pensions and benefits they would have received had they served in
the Iraqi Armed Forces. According to the strategy, the leadership of
the former resistance forces will provide service records for these
individuals and the Iraqi Veterans Agency[Footnote 55] will verify
them. However, the strategy acknowledges that it is unlikely that most
militias kept good records and that militia leaders would willingly
share them.
The third track of the strategy is to offer a reintegration program to
militia members who do not transition to the Iraqi Armed Forces or
other government security services or do not qualify for retirement.
This reintegration program would be designed to help these members
assimilate into Iraq's civil society and economy. According to CPA
Order 91, the program could include skills screening, education
benefits, job training, job placement, and a limited stipend program.
The strategy states that the Iraqi Veterans Agency, in collaboration
with the Ministry of Labor and Social Affairs, other ministries, and
the public health system, will establish a program to accomplish the
following:
* screen and register all eligible militia members to determine their
skills and match them with job training and placement opportunities;
* provide medical screening and determination of needs;
* identify skills and aptitude for training and job placement;
* provide education, job training, and placement if needed;
* provide a limited stipend program to get militia members through
retraining; and:
* develop a tracking mechanism tied to the provision of benefits.
The strategy states that a regional approach to program implementation
will be necessary because of the great differences in cultures,
outlook, and expectations in Iraq. The strategy also recommends
planning and executing reintegration efforts in conjunction with local
militia leaders to defuse their suspicions and ensure that programs run
smoothly.
According to a CPA official, the multinational force is developing a
program similar to the transition and reintegration strategy for
illegal militias currently fighting the coalition and the new Iraqi
government that decide to lay down their arms. Under CPA Order 91,
participation in the transition and reintegration strategy is limited
to militias identified by the CPA or the Transition and Reintegration
Implementation Committee as participating in the political process.
Status of Implementing the Transition and Reintegration Process:
As of June 2004, the CPA has been successful in reaching an agreement
with nine political parties on the transition and reintegration
strategy. The CPA estimates that about 90 percent of the 100,000
militia members will participate in the transition by the end of
January 2005. However, while the militias have agreed to transition,
they may still operate under the provisions set forth in CPA Order 91
as "Residual Elements," which exempts militia members from an illegal
status while following the transition and reintegration plan. Militias
that continue to conduct hostile operations against coalition forces
rather than taking part in the transition and reintegration process are
deemed illegal and will be subject to penalties.
Some Militias Have Accepted Transition Plans:
In early June 2004, the CPA announced the successful completion of
negotiations with nine major political parties[Footnote 56] to bring
the militias under their authority under the transition and
reintegration process. The CPA reported that these parties had accepted
detailed plans, timetables, and terms for the complete transition and
reintegration of the armed groups under their authority. However, the
CPA transition and reintegration strategy noted that Iraq's security
situation must be stable and the political situation must have
progressed in such a way that political and militia leaders willingly
follow through on their commitments to disband as scheduled. The
Transition and Reintegration Implementation Committee established by
CPA Order 91 may revise individual transition and reintegration plans,
although such revisions are limited to changes in transition and
reintegration schedules.
The CPA reported that the June 2004 agreement with the nine major
political parities covered about 100,000 former resistance
fighters[Footnote 57] and estimated that about 90 percent of these
individuals would complete the transition and reintegration process by
January 2005, and that all would complete the process by October
2005.[Footnote 58] The CPA also estimated that about 60 percent of
these militia members would transition into Iraqi security services--
such as the Iraqi Armed Forces, Iraqi Police Service, or the Internal
Security Forces of the Kurdistan Regional Government[Footnote 59]--and
that the remainder would retire or find civilian employment. The CPA
stated that the militia members would transition into Iraqi security
forces individually because no militia had been permitted to transfer
units into any branch of the Iraqi security forces.
Under CPA Order 91, the militias of the nine parties that have agreed
to transition and reintegration plans can continue limited operations.
The order designates militias operating under approved transition and
integration plans as "residual elements" and grants them and their
members a limited exception to the prohibition against militias while
drawing down during the transition and reintegration process. CPA Order
91 permits these residual elements to perform security functions only
with the advanced authorization of the Ministry of Interior and the
multinational force and prohibits them from recruiting new members or
adding weapons. According to a CPA document, to prevent the perception
or occurrence of coercion, the order bans these militias from
endorsing, financing, or campaigning for candidates for political
office. Residual elements that fail to comply with their transition and
integration plans and conditions outlined in CPA Order 91 will lose
their status as residual elements and be considered illegal militias.
In announcing the June 2004 agreement, the Prime Minister of Iraq's
interim government warned that those that chose violence and
lawlessness over transition and reintegration would be dealt with
harshly. According to a CPA document, political parties that support
illegal militias and their leaders will be subject to penalties as
defined in the forthcoming CPA order on electoral law. Moreover, under
CPA Order 91, former members of illegal militias are barred from
holding political office for 3 years after ceasing to be a member of an
illegal militia.
Not all militias operating in Iraq had agreed to participate in the
transition and reintegration process. On June 5, 2004, the CPA reported
that it had not negotiated agreement with several smaller militias due
to the security situation and limited resources. In late May 2004, a
CPA official told us that some militias had not been contacted because
they were small, difficult to contact, or politically less important.
Some militias have decided to continue hostile operations against the
coalition rather than take part in the transition and reintegration
process.
Oversight and Enforcement Mechanisms:
CPA Order 91 established the Transition and Reintegration
Implementation Committee to exercise oversight of the transition and
reintegration process and to take such disciplinary or other action as
may be necessary upon a determination that a residual element militia
is illegal. According to the order, the committee is to be chaired by
the Minister of Interior and will report to the Ministerial Committee
for National Security. In addition to the Minister of Interior, the
committee is to include permanent representatives from the Ministries
of Defense, Justice, Foreign Affairs, Finance, Labor and Social
Affairs, and Education, as well as the Iraqi Veterans Agency. According
to the order, the committee chair may invite the commander or other
representatives of the multinational force to attend and participate in
committee meetings.
In May 2004, the CPA estimated that implementing the transition and
reintegration strategy would require little separate funding--a total
of about $14.3 million--because it was designed to leverage existing
programs to the greatest extent possible. This estimate is based on the
following three assumptions:
* Existing programs would pay the cost of screening militia members
entering Iraqi security and the transition and reintegration program
would only need an additional $1.5 million to screen those accepting
pensions or entering job training and placement programs.
* An additional $3.75 million would be needed to fund former militia
seeking jobs under an existing $180 million job training program run by
the Ministry of Labor and Social Affairs that contained a veterans'
preference.
* An additional $9 million would be needed to fund retirement pensions
for the number of currently active militia members expected to retire.
The transition and reintegration strategy stated that successfully
leveraging these and other programs to assist former militia members
would depend on the active development of opportunities and
coordination on the part of the office that directs the reintegration
efforts to be managed by the Veterans Agency. The strategy noted that
the schedules for drawing down militias would depend on the ability of
numerous programs to absorb militia members. However, on June 10, 2004,
a CPA official told us that some of these programs existed, while
others were planned but not yet fully operational. For example,
according to this official, many of the sites for the job-training
program run by the Ministry of Labor and Social Affairs were shut down
when the security situation deteriorated in April and May 2004.
Under CPA Order 91, an illegal militia is subject to immediate
confiscation of all weapons and property through measures determined by
the Transition and Reintegration Implementation Committee in
coordination with the Ministry of the Interior and the commander of the
multinational force. The order also states that (1) an illegal militia
will be subject to any actions the committee decides are necessary for
the safety and security of the Iraqi people and (2) its members will be
subject to criminal prosecution in accordance with the laws of Iraq.
CPA Order 91 states that one of the committee's functions is to
coordinate with the commander of the multinational force on Iraqi
policy, decisions, and determinations that have security implications;
however, it does not specify which entity--the Iraqi security forces or
the multinational force--is responsible for taking action against
illegal militias if the committee deems military action to be
necessary. According to U.N. Security Council resolution 1546, dated
June 8, 2004, the multinational force and the Iraqi interim government
were putting in place arrangements to establish a security partnership
to ensure coordination between the two. The resolution states that the
multinational force will have the authority to take all necessary
measures to contribute to the maintenance of security and stability in
Iraq in accordance with the letters annexed to the resolution. In those
letters, the Secretary of State and Iraq's Prime Minister stated that
the multinational force will coordinate with Iraqi security forces
commanders and civilian leadership at all levels--national, regional,
and local--to achieve unity of command in joint military operations.
Conclusion:
The CPA in early June 2004 had reached agreement with nine parties to
disband their militias, but certain elements of the broader transition
and reintegration process remain to be finalized. Although the order
calls for the Transition and Reintegration Implementation Committee to
coordinate with the commander of the multinational force on Iraqi
policy, decisions, and determinations that have security implications,
it does not specify which entity--whether Iraqi security forces or the
multinational force--is responsible for taking action against illegal
militias if the committee deems military action to be necessary.
Moreover, the transition and reintegration program is relying on
numerous other programs to provide services for militia members who are
participating in the program. As of late May 2004, some of these
programs were not fully operational.
Oversight Questions:
1. What progress has been made in disbanding militias that have agreed
to a transition and reintegration plan, and what options and
contingency plans are being explored if progress is unsatisfactory?
2. What is the status of efforts to develop a more comprehensive
strategy for disbanding Iraq's militias?
3. What progress is being made in encouraging other Iraqi militias to
agree to a transition and reintegration plan? If a hostile militia
agrees to disband, how would the timetable, monitoring, and enforcement
of that militia's transition and reintegration process differ from
those for a non-hostile militia?
4. What will be the roles and responsibilities of the multinational
force and the Iraq interim government in enforcing provisions of CPA
Order 91 that guide the operations of militias as they disband?
[End of section]
VIII. Governance:
Iraq's Federal Government:
Issue:
The CPA transferred power to a sovereign Iraqi interim government on
June 28, 2004. Crucial to the success of the transfer of power is the
continued functioning and reform of Iraq's national ministries and
local government. According to CPA, under the former regime, national
ministries were responsible for providing basic services to all Iraqis
but were inefficient and corrupt. Enforcement of anti-corruption
regulations was arbitrary and intermittent. Moreover, governing
authority was centralized at the national level and subnational
governing institutions did not exist. The U.S.-led coalition is helping
to rebuild and reform the national ministries and establish and train
subnational governing bodies. As of June 2004, about $490 million had
been obligated for governance activities, such as support for the
transition.[Footnote 60] In this enclosure, we describe (1) the
operation of Iraq's national ministries and U.S. assistance to them and
(2) Iraq's subnational government bodies and U.S. efforts to establish
them.
Results in Brief:
Iraqis have taken control of government institutions at the national
and subnational levels with U.S. and CPA assistance, according to U.S.
officials. National ministries are providing services to citizens even
as reforms are introduced, facilities rebuilt, and staffs trained.
However, the security situation hampers the ability of the ministries
to provide needed services to Iraqis and maintain daily operations. For
example, Iraqi hospitals and infrastructure installations continue to
be attacked by insurgents. With U.S. assistance, governorate,
municipal, and local government bodies are appearing for the first time
and are representing citizens and responding to their needs. However,
security impedes public participation at the local level. In addition,
the former regime was highly centralized and left Iraq with few
government institutions at the local level and none that represented
citizens, according to U.S. officials. These are in the process of
being developed.
Iraq's National Ministries Are Managing Government Operations with
Coalition Support:
Iraq's national ministries provide many fundamental services to Iraqi
citizens, including health care and education, and are operating under
Iraqi control with limited input from U.S. advisors. Progress has been
made in rehabilitating ministry facilities and management capabilities,
but the security situation is impacting the ability of the ministries
to carry out their daily functions. U.S. assistance to the national
ministries has focused on reconstructing ministry buildings; providing
leadership, training, and advice in management; and establishing a
framework of regulations and commissions in which ministries may
continue to operate after the transfer of power.
Iraq's National Ministries Provide Services, but the Security
Situation Hinders Efforts:
According to CPA, Iraq's 26 national ministries operate under Iraqi
authority and provide services to Iraqi citizens such as health care,
water and electricity, education, and security. For example, Iraq's
Ministry of Health manages all public health services throughout the
country, as well as pharmaceutical purchases and distribution. Ministry
staff currently operate the country's 240 hospitals and more than 1,200
primary health care centers. Similarly, the Ministry of Education has
more than 300,000 employees throughout Iraq, including teachers.
According to a CPA official, the Ministry of Education is responsible
for educating about 5.5 million primary and secondary school children.
Iraq's Ministry of Finance is responsible for paying Iraq's 1.8 million
pensioners and about 670,000 state employees. It also developed the
2005 national budget and is responsible for managing Iraq's debt,
establishing economic policy, and collecting taxes and customs
revenues. Table VIII.1 lists Iraq's ministries, their estimated
budgets, estimated number of staff, and projected number of U.S. and
coalition senior advisors after the transfer of power.
Table VIII.1: Estimated Budget and Staffing of Iraq's National
Ministries (2004):
Ministry: Agriculture;
2004 budget estimates (millions of dollars): $35.5;
2004 estimated staff[A]: 8,000;
Projected coalition advisors after June 28, 2004: 4.
Ministry: Communications;
2004 budget estimates (millions of dollars): $6.2;
2004 estimated staff[A]: 200;
Projected coalition advisors after June 28, 2004: 18.
Ministry: Construction and Housing;
2004 budget estimates (millions of dollars): $170.2;
2004 estimated staff[A]: 16,000;
Projected coalition advisors after June 28, 2004: 6.
Ministry: Culture;
2004 budget estimates (millions of dollars): $9.2;
2004 estimated staff[A]: 3,000;
Projected coalition advisors after June 28, 2004: 4.
Ministry: Defense;
2004 budget estimates (millions of dollars): [B];
2004 estimated staff[A]: [B];
Projected coalition advisors after June 28, 2004: [B].
Ministry: Displacement and Migration;
2004 budget estimates (millions of dollars): $1.6;
2004 estimated staff[A]: Less than 100;
Projected coalition advisors after June 28, 2004: 10.
Ministry: Education;
2004 budget estimates (millions of dollars): $543.9;
2004 estimated staff[A]: 325,000;
Projected coalition advisors after June 28, 2004: 0.
Ministry: Electricity;
2004 budget estimates (millions of dollars): $1.5;
2004 estimated staff[A]: 1,000;
Projected coalition advisors after June 28, 2004: 9.
Ministry: Environment;
2004 budget estimates (millions of dollars): $1.6;
2004 estimated staff[A]: Less than 100;
Projected coalition advisors after June 28, 2004: 3.
Ministry: Finance;
2004 budget estimates (millions of dollars): $10544.5;
2004 estimated staff[A]: 7,000;
Projected coalition advisors after June 28, 2004: 11.
Ministry: Foreign Affairs;
2004 budget estimates (millions of dollars): $44.4;
2004 estimated staff[A]: 1,000;
Projected coalition advisors after June 28, 2004: 0.
Ministry: Health;
2004 budget estimates (millions of dollars): $947.0;
2004 estimated staff[A]: 105,000;
Projected coalition advisors after June 28, 2004: 0.
Ministry: Higher Education;
2004 budget estimates (millions of dollars): $122.1;
2004 estimated staff[A]: 50,000;
Projected coalition advisors after June 28, 2004: 2.
Ministry: Human rights;
2004 budget estimates (millions of dollars): $1.6;
2004 estimated staff[A]: Less than 100;
Projected coalition advisors after June 28, 2004: 2.
Ministry: Industry and Minerals;
2004 budget estimates (millions of dollars): $8.0;
2004 estimated staff[A]: 1,000;
Projected coalition advisors after June 28, 2004: 5.
Ministry: Interior;
2004 budget estimates (millions of dollars): $124.9;
2004 estimated staff[A]: 65,000;
Projected coalition advisors after June 28, 2004: 27.
Ministry: Justice;
2004 budget estimates (millions of dollars): $138.6;
2004 estimated staff[A]: 21,000;
Projected coalition advisors after June 28, 2004: 5.
Ministry: Labor and Social Affairs;
2004 budget estimates (millions of dollars): $34.9;
2004 estimated staff[A]: 5,000;
Projected coalition advisors after June 28, 2004: 4.
Ministry: Municipalities and Public Works;
2004 budget estimates (millions of dollars): $206.0;
2004 estimated staff[A]: 23,000;
Projected coalition advisors after June 28, 2004: 4.
Ministry: Oil;
2004 budget estimates (millions of dollars): $1.8;
2004 estimated staff[A]: 1,000;
Projected coalition advisors after June 28, 2004: 13.
Ministry: Planning;
2004 budget estimates (millions of dollars): $45.0;
2004 estimated staff[A]: 1,000;
Projected coalition advisors after June 28, 2004: 8.
Ministry: Science and Technology;
2004 budget estimates (millions of dollars): $24.3;
2004 estimated staff[A]: 10,000;
Projected coalition advisors after June 28, 2004: 3.
Ministry: Trade;
2004 budget estimates (millions of dollars): $10.2;
2004 estimated staff[A]: 1,000;
Projected coalition advisors after June 28, 2004: 6.
Ministry: Transport;
2004 budget estimates (millions of dollars): $84.8;
2004 estimated staff[A]: 2,000;
Projected coalition advisors after June 28, 2004: 14.
Ministry: Water Resources;
2004 budget estimates (millions of dollars): $145.0;
2004 estimated staff[A]: 7,000;
Projected coalition advisors after June 28, 2004: 3.
Ministry: Youth and Sport;
2004 budget estimates (millions of dollars): $14.9;
2004 estimated staff[A]: 2,000;
Projected coalition advisors after June 28, 2004: 5.
Source: GAO analysis of 2004 Iraq Budget and CPA documents.
[A] The number of staff is an estimate for 2004 and does not include
staff who work for state-owned enterprises.
[B] The Ministry of Defense was established by CPA Order 67 in March
2004 and, according to CPA officials, is in the process of staffing and
developing a budget.
[End of table]
The security situation in Iraq has presented a challenge to the
ministries in their efforts to deliver services and manage internal
operations. Attacks and threats have been made on government officials,
ministry facilities, and infrastructure installations such as power
lines and oil pipelines. For example, in May 2004, the rotating
president of the Iraq Governing Council was killed by a car bomb in
Baghdad. In June 2004, a deputy minister of foreign affairs and a
senior official from the Ministry of Education were killed in separate
attacks. Other government officials continue to receive threats on
their lives. The Ministry of Oil building in Baghdad has been attacked
several times, including in March 2004 when a rocket was fired on the
area just outside the ministry. U.S. Agency for International
Development reports state that high-profile entities, including
ministry facilities, are expected to be targets of terrorist attacks.
Attacks on infrastructure also continue to impact government
operations. CPA stated that operations at the Ministry of Oil are
constantly being changed due to attacks on pipelines and
infrastructure. In other incidences, hospitals and railroad
infrastructure have been attacked. According to a CPA report, security
problems have hampered the distribution of wheat from delivery ports to
facilities throughout Iraq.
To transition full control of ministries back to Iraqis before the
transfer of power, CPA introduced a "graduation" program. After
graduation, Iraqi officials have full authority for making decisions.
According to CPA officials, CPA established four criteria for ministry
graduation. To graduate, each ministry must have an interim minister, a
budget, an inspector general's office, and its own facilities. As of
early June 2004, 12 ministries had graduated, beginning with the
Ministry of Health in March 2004. According to U.S. officials, all
remaining ministries would be under Iraqi control by the time power is
transferred to the interim government, regardless of whether they have
met the graduation criteria.
U.S. Assistance to National Ministries:
U.S. assistance has focused on restoring facilities, enhancing
ministries' capacity to function as government agencies, and providing
a legal framework of CPA orders for continuing reforms. According to
U.S. officials, when the coalition took over the national ministries,
most offices were in poor condition, having been looted or burned by
outgoing government officials and members of the Ba'ath Party.
Ministries also suffered from a culture of corruption fostered under
the previous regime, according to CPA. For example, from 1997 through
2002, the previous regime used illicit contracting and kickback schemes
to acquire an estimated $4.4 billion in illegal revenues through the
U.N. Oil for Food Program.[Footnote 61]
To quickly restore essential government functions, USAID implemented
its "Ministry in a Box" program. Through this program, USAID provided a
standard package to the ministries, including the furniture, equipment,
and materials necessary for 100 ministry employees to resume work.
Substantial facilities reconstruction is still necessary, however. The
coalition began reconstructing public buildings in fiscal year 2003;
the United States expects to obligate almost $80 million to public
building reconstruction for 2004 and more than $50 million for further
rehabilitation efforts in 2005.
To help reform the ministries, the CPA removed all Ba'ath party members
in the top 4 of 10 party levels, which effectively removed most
ministry leadership. Because most ministries had few, if any, middle
managers to fill the vacant leadership positions, CPA assigned U.S.
advisors from various agencies, including the Department of State and
the Department of Defense, to work directly with the Iraqi interim
minister appointed by the Governing Council. According to a former
senior advisor, the advisors had broad managerial authority, including
the authority to hire and fire ministry employees, determine ministry
budgets, change ministry structures and functions, and make major
policy decisions.
U.S. advisors will continue to work in most of the 26 ministries after
the transfer of power, but it is unclear how much influence they will
have. According to a CPA official working with the Ministry of the
Interior, coalition advisors will have no authority after the transfer
of power to make decisions for the ministries. Nonetheless, certain key
ministries will have many U.S. advisors. For example, the Ministry of
the Interior, responsible for the Iraqi Police, customs, immigration,
and fire services, will have 27 U.S. advisors. The Ministry of Finance,
responsible for the national budget and other financial management
duties, will have 11 advisors.
CPA also promulgated orders and regulations to guide Iraq's ministries
and continue reforms after the transfer of power. Since May 2003, CPA
introduced orders to foster a free market economy in Iraq, provide
security and stability, and combat corruption. The orders remain as
laws of Iraq, but the transitional government to be elected by January
2005 has the right to amend or rescind any of them once it takes
power.[Footnote 62] The following paragraphs describe some of these
orders.
* To foster a free market economy, some CPA orders lay out Iraq's rules
for banking, trade liberalization, tax policy, and foreign investment.
For example, to attract foreign investment in Iraq, CPA Order 39 on
foreign investment specifies the terms and procedures that foreign
investors must follow.
* CPA Order 68 establishes the Ministerial Committee for National
Security to coordinate national security policy. According to the
order, after the transfer of power, the committee will be led by the
head of Iraq's interim government and will consist of key Iraqi
ministers. The order states that the Commander of the multinational
force in Iraq may be invited to attend and participate in the
committee's meetings.
* Several orders address corruption in Iraq. CPA Order 55 authorized
the Governing Council to establish the Iraq Commission on Public
Integrity and gives it responsibility for enforcing anti-corruption
laws and public service standards. Order 57 establishes inspectors
general offices in each of the ministries to conduct investigations and
audits of ministry operations and expenditures. Order 87 sets Iraqi
rules for public contracting and states that public contracting should
meet international standards of transparency and fairness.
Iraq Is Developing Subnational Government Bodies with Coalition
Assistance:
With U.S. financial and technical support, Iraqis are establishing
representative councils at the subnational level. In most of Iraq's 18
governorates, some councils and subnational government units monitor
the delivery of public services and represent their constituents'
concerns to higher levels of government. U.S. support through USAID's
Local Governance Program is working to establish these subnational
institutions and build governing capacity at the governorate,
municipal, and local levels. Despite progress, Iraq's security
situation and lack of governing capacity at the local level present
challenges to continued reform.
According to U.S. officials, democratically elected councils at the
governorate, municipal, and local levels of government have been
established in many areas throughout Iraq and are acting as
representative bodies under authorities that CPA established. According
to contractors working for USAID, council members in these areas have
been elected by their communities at public meetings to fulfill local
needs and represent their constituents at each higher level of
government. For example, the 88 elected neighborhood councils in the
city of Baghdad send delegates to sit on district councils.
Representatives from the 9 Baghdad district councils then meet on the
Baghdad city council to preside over city business, such as the
selection of the city mayor. Iraq's councils derive their legal
authority from CPA Order 71, issued in April 2004. Order 71 gives
governorate councils the authority to set priorities for the provinces,
monitor delivery of public services, represent the concerns of their
constituents, generate and collect revenues by imposing taxes or fees,
and initiate and implement projects.[Footnote 63]
According to Order 71, each governorate may, by majority vote, form
subprovincial regional councils, municipal councils, and other relevant
local councils. U.S. officials stated that in most areas such councils
exist. However, the capacity and authority of the councils vary
throughout the country. In some areas, they are soliciting input from
citizens, prioritizing community needs, and requesting grants from the
government and the international community to fulfill those needs,
according to U.S. officials. For example, the city of Kirkuk is
purchasing additional garbage removal equipment to dispose of excess
waste with a grant funded by USAID's local governance program. However,
in other areas, such as the mostly rural Maysan governorate in eastern
Iraq, local councils serve only as advisory bodies that present local
community needs to government institutions. According to USAID, they
have no political authority or explicit role in government. Local
government officials throughout Iraq were training to independently
manage government affairs once the transfer of power takes place.
USAID's local governance program is intended to establish and provide
technical assistance to councils at the governorate, municipal, and
local levels. The objectives of the program are to build the capacity
of local administrators to deliver essential services, develop
transparent and participatory policy processes at the local level, and
develop civil society institutions that foster participation in
political processes. U.S. officials have trained council members in
democratic processes, as well as administrative officials in running
local government offices. Training has included teaching council
members how to run democratic council meetings, organize into
committees, solicit input from citizens, and resolve conflicts.
Assistance in developing anti-corruption procedures and in auditing has
also been part of the local governance program. In addition, U.S.
officials have trained governorate and local officials in developing
budgets at the subnational level. U.S. officials stated that, in the
past, capacity for budget preparation at the subnational level did not
exist because national ministries developed budgets for their entire
operation, including local departments.
Despite efforts that have been made in building government and
implementing democracy programs at the subnational level, the security
situation has hampered some of these efforts. For example, U.S. and
Iraqi officials implementing the local governance program have had to
pull staff out of certain areas and limit field visits and public
appearances in other areas to ensure staff safety and avoid putting
their audiences at risk. In some governorates, nongovernmental
organizations implementing democracy-building programs have had all of
their facilities destroyed and looted. Members of representative
councils and other local government officials have also been
threatened, attacked, and in some cases killed. These security threats
hinder assistance efforts and require those providing assistance to
adjust their operations and sometimes suspend their work.
In addition to the security situation, Iraq faces the challenge of
building a decentralized democratic government structure in a country
with a history of highly centralized nondemocratic government
operations. Under the previous regime, localities were not involved in
government activities or decision making. This has left the country
with little or no capacity at the municipal and local levels for such
essential tasks as budget development and responding to community
needs, according to U.S. officials.
Conclusion:
According to U.S. officials, Iraq's 26 ministries are carrying out the
daily responsibilities of the national government, and some are
providing basic services under full Iraqi authority. However, their
operations are hindered by the security situation and the country's
history of corruption. CPA promulgated orders to address some of these
issues. At the subnational level, representative councils are operating
at the governorate, municipal, and local levels, and in some areas they
operate as governing bodies. These bodies are new to the country's
formerly centralized government structure, and challenges remain to
building democratic government institutions, including providing a
secure environment and building effective local participation in a
country that was highly centralized.
Oversight Questions:
1. What role will U.S. advisors play now that power has been
transferred to a sovereign Iraqi government, and what is the exit
strategy?
2. How fully are the Iraqi ministries implementing the anti-corruption
provisions, such as those dealing with oversight and public
accountability? What impact are the orders having?
3. What are the indications of the effectiveness and sustainability of
U.S. and other efforts to promote democratic governance at the local
level? What long-term assistance programs are the United States and
others planning to follow up on the initial efforts?
4. What oversight are the United States and other donors conducting
over grants and other funding going to development of local government?
5. How is the security situation affecting the capacity of the Iraqi
ministries to provide services to Iraq? What specific government
services are at risk, and what strategies are being put in place to
mitigate the risks?
[End of section]
IX. Governance:
Reforming Iraq's Judicial System:
Issue:
The rule of law in Iraq is a prerequisite for political stability,
economic development, and public confidence in public institutions. Key
to establishing the rule of law is reforming Iraq's judicial system so
that it is fair and transparent. The legal and physical foundations of
Iraq's judicial system were in disarray at the end of major hostilities
in May 2003, with the majority of its courthouses damaged or destroyed,
according to the U.S. Department of Justice (DOJ). Since then, the CPA
undertook efforts to assess, rehabilitate, and reform the judicial
system. This enclosure describes (1) the status of Iraq's judicial
system, (2) coalition efforts to reform the system, and (3) challenges
to establishing a fair and transparent judicial system in Iraq.
Results in Brief:
The CPA began the process of establishing a functioning independent
judiciary in Iraq. However, challenges such as security and training
have hindered these efforts. As of June 2004, the CPA reported that
courts were open but not functioning at pre-war levels, and that Iraqi
judges were trying cases. CPA completed a review of all Iraqi judges
and approved or rejected them, took steps to reform Iraq's legal code,
and issued orders to restore judicial independence. Nonetheless,
efforts to rebuild Iraq's judicial system and restore the rule of law
face multiple challenges, including providing adequate security for
judges and other court personnel, some of whom have been assassinated;
ensuring the independence of the court system so that it operates
without influence from the executive branch of the government;
providing adequate training for judges and attorneys; and developing an
accurate system for data collection so that court performance can be
measured. U.S. officials state that rehabilitating Iraq's judicial
system will take years.
Status of the Iraqi Judicial System:
Various reforms have begun to improve Iraq's judiciary, including
restructuring its courts, training and protecting judges, and modifying
the roles and responsibilities of the Ministry of Justice.[Footnote 64]
Iraqi judges are currently trying cases and courts are operating,
according to CPA officials and documents. The CPA reported that the
Court of Cassation adjudicated approximately 4,200 appellate cases in
May 2004, up from 3,000 in April 2004.[Footnote 65] However, CPA
officials also stated that courts were not functioning at pre-war
levels. For example, by some rough measures, courts in Baghdad were
functioning at about one-third of their pre-war capacity. Further,
according to the former senior advisor to the Ministry of Justice, some
courts hear few, if any, cases in any given month, and some judges have
refused to move cases forward due to concerns for their safety.
Protection for judges remains inadequate, according to this advisor,
and several judges have been assassinated.
Iraq has a multitiered court system. The CPA and DOJ estimate that
there are approximately 130 courthouses, 570 courts, and 710 judges in
Iraq. A DOJ assessment from July 2003 identified 12 types of courts,
including appellate courts, criminal courts, civil courts, and juvenile
courts, among others. In addition to these courts, the former regime
established Revolutionary Courts and Special Courts to handle matters
related to the security of the state and official corruption. These
courts, which were independent of the regular judicial system and
staffed by Ba'ath party officials with no legal training, undermined
the integrity of the Iraqi judicial system under the former regime. In
May 2003, CPA dissolved these courts.
Since April 2003, two new courts have been established in Iraq. In June
2003, CPA established the Central Criminal Court of Iraq (CCCI) to try
the most serious criminal cases. The CCCI convicted the captain of a
Ukrainian ship for oil smuggling in October 2003 and the former mayor
of Najaf for corruption in November 2003. Although the CPA
Administrator identified the CCCI as one of his top priorities in the
justice sector, difficulties with transporting the accused to court and
a lack of support from the United States have limited the CCCI's
caseload. The Law of Administration for the State of Iraq for the
Transitional Period, or the transitional law, signed on March 8, 2004,
established an additional high court in Iraq--the Federal Supreme
Court. This court will have jurisdiction over cases between the
transitional government and the subnational governments, and over
claims that a law conflicts with the transitional law.
The Ministry of Justice operates independently from the judiciary and
has assumed new responsibilities since May 2003. The ministry publishes
the Legal Gazette and manages land deeds and records.[Footnote 66] Its
State Consultative Council provides legal advice to the executive
branch and drafts and proposes revisions to legislation. In addition,
CPA Order 10 vested authority over all prison facilities in the
Ministry of Justice in June 2003.
Efforts to Reform the Judicial System:
When the United States and its coalition partners took control of Iraq
in April 2003, the Iraqi judicial system was in a state of chaos,
according to a DOJ assessment. Coalition officials have undertaken
several efforts to rehabilitate the Iraqi judiciary since April 2003.
These efforts include:
* working to re-establish judicial independence,
* removing corrupt judges and prosecutors,
* reforming the legal code,
* reconstructing and fortifying courthouses to provide adequate
security for judges and prosecutors, and:
* rehabilitating prisons.
However, experience at USAID suggests that such reforms will take many
years to complete.
CPA and the Iraqi Governing Council took several steps to restore the
judiciary's independence. During the previous regime, the judiciary was
under the control of the Minister of Justice, and the regime's
Revolutionary Command Council frequently interfered with the ministry,
according to DOJ. CPA Order 35, issued in September 2003 and intended
to re-establish judicial independence, reinstated a Council of Judges
to supervise the judicial and prosecutorial systems of Iraq. The
transitional law also states that the judiciary will be independent and
separate from the legislative and executive authorities, including the
Ministry of Justice. CPA Memorandum 12, issued in May 2004, provided
that the Council of Judges and Court of Cassation will have their own
budgets and staff independent of the Ministry of Justice.
In June 2003, CPA Order 15 established a Judicial Review Committee to
review the suitability of Iraqi judges and prosecutors. The committee,
composed of three Iraqi members and three international members, has
the authority to remove such officials from office, confirm their
continued holding of office, and appoint replacements for vacated
offices. The committee completed its review of all of Iraq's judges and
prosecutors in early 2004. According to the committee, it reviewed
approximately 870 judges and prosecutors and removed approximately one
fifth of these officials. It also appointed approximately 110 new
judges and prosecutors and reinstated 80 who had been removed under the
former regime. According to a former member of the committee, decisions
to remove judges and prosecutors were based primarily on the criteria
of Ba'ath party membership, allegations of corruption, and the
individual's competence and reputation.
CPA issued several other orders and memoranda to reform Iraq's legal
code. For example, CPA Order 7 generally re-established the 1969 Iraqi
Penal Code as the penal code of Iraq. Order 7 also prohibits torture
and suspends capital punishment. CPA also worked with the Iraqi
Governing Council to develop the transitional law to govern Iraq until
a permanent constitution is adopted. The transitional law guarantees
Iraqis several basic rights, including protecting certain rights of the
accused. Specifically, it states that the accused is presumed innocent
until proven guilty and has the right to remain silent. The
transitional law bans the use of torture in all circumstances and
protects against unlawful arrest and detention.
CPA also initiated projects to reconstruct Iraq's courthouses, the
majority of which had been either destroyed or severely damaged.
According to CPA, funding from the Commander's Emergency Response
Program played the most significant role in refurbishing courthouses.
In addition, an April 2004 report from the Office of Management and
Budget indicated that $135 million had been allocated to add security
and repair Iraqi courthouses in fiscal years 2004 and 2005. Some of the
construction includes structural repairs such as electrical, sanitary,
and civil works. However, as of February 2004, CPA staff in Baghdad
stated that construction had been delayed due to difficulties with the
budgeting process.
To provide security to government infrastructure, including
courthouses, CPA created the Iraqi Facilities Protection Service (FPS).
Since courthouse security was nonexistent before May 2003, according to
a former CPA official, CPA had to provide new FPS officers with basic
equipment. CPA also gave FPS advice and training on courthouse security
operations through the U.S. Marshals Service. However, as recently as
June 2004, courthouses were not adequately fortified to ensure the
security of court personnel, according to a former CPA official.
Challenges to Establishing the Rule of Law in Iraq:
Despite CPA efforts to rehabilitate and reform Iraq's judicial system,
significant challenges remain. Security for court officials, while
improving, continues to affect the functioning of the courts. CPA has
issued orders re-establishing an independent judiciary, but questions
remain about how to implement this.
The security situation in Iraq has hindered the operation of the courts
due to the lack of security for judges, prosecutors, and witnesses.
According to a memorandum from a former CPA senior advisor to the
Ministry of Justice, security is essential to renovating court
facilities. Although personal protection for judges is improving,
several judges have been assassinated. In March 2004, approximately 250
judges had personal security details, but no additional judges were to
receive details until June 2004. One Iraqi judge stated that he had 18
bodyguards and had survived three attempts on his life since being
appointed to the CCCI. Furthermore, while a team of U.S. Marshals began
establishing a witness protection program in March 2004, witness
intimidation continues to be a problem, according to DOJ officials.
Because judicial independence had been completely eroded under the
former regime, ensuring the independence of the judiciary is also a
challenge. In addition, while CPA orders and the transitional law have
established a separate and independent judiciary, some implementing
issues remain. For example, it is still unclear whether prosecutorial
and judicial departments will be separated. Although the July 2003 DOJ
assessment recommended separating prosecutorial functions from the
judiciary, DOJ officials state that the basic judicial structure will
be maintained and prosecutorial functions will not be separated from
the judiciary. According to CPA, Iraqi judges and prosecutors opposed
the separation. Therefore, CPA officials concluded that the Iraqi
people should consider such a fundamental change when drafting the
constitution.
Ensuring adequate and appropriate training of judges, prosecutors, and
attorneys is also a challenge. DOJ identified training at all levels as
one of the strategic priorities for Iraq to pursue after the transfer
of power on June 28, 2004. Attorneys from DOJ's Office of Overseas
Prosecutorial Development, Assistance, and Training have trained
hundreds of Iraqi judges on basic tenets of human rights, due process,
and rule of law, according to DOJ officials. In addition, CPA held
weekly training sessions for court-appointed defense counsel. However,
a former CPA official said that CCCI officials continue to need
training regarding these tenets. Another official said that, in some
trials, CCCI defense attorneys asked no questions and therefore needed
more training. Although USAID helped reopen the Iraqi Judicial College
and is reviewing the college's curriculum to include due process, rule
of law, and human rights, as of June 2004, only a quarter of Iraq's
judges had received this training. In addition, a former member of the
Judicial Review Committee concluded that rehabilitating Iraq's judicial
system would take years as a competent body of legal professionals is
developed.
The lack of a system of data collection and measurement makes it
difficult to accurately assess the functioning of the judicial system.
While CPA's strategic plan included the development of quantifiable
measures of effectiveness, such as the time from arrest to trial and
the number of felony trials, by February 2004 no progress had been made
on developing these measures. One example of a systemic approach is in
DOJ's framework for overseas prosecutorial training and development. As
part of the framework, an overall objective of strengthening judicial
independence is identified, several subobjectives and specific tasks
toward this objective are listed, and several measures of progress
identified. While CPA's strategic plan included the establishment of an
independent judiciary as an objective, it lists only one task related
to this objective and includes no measures of progress.
Conclusion:
CPA began the process of building a functioning judiciary in Iraq.
However, establishing a fair and independent judicial system in Iraq
will extend beyond the transfer of power and take many years. To
accomplish this, Iraqis will confront significant challenges and
require U.S. and international assistance. These include delineating
the prosecutorial and judicial functions clearly; ensuring the
independence of the court system so that it operates without influence
from the executive branch of the government; providing adequate
security for court personnel so that all cases can be handled fairly;
providing adequate training for judges, attorneys, and others so they
fully implement due process; and developing an accurate system of data
collection so the courts know how they are performing.
Oversight Questions:
1. What steps did CPA take to help ensure judicial independence after
the transfer of power? What functions will the Ministry of Justice
retain and acquire? What functions will the judiciary assume?
2. What are the results of U.S. efforts to help ensure adequate
training for Iraqi justice personnel?
3. What are the results of U.S. efforts to help develop a data
collection and analysis system for Iraqi courts? Are these efforts
resulting in reliable data to reform Iraq's justice system?
[End of section]
X. Essential Services:
Restore Iraqi Electricity Program:
Issue:
According to a United Nations/World Bank needs assessment[Footnote 67]
and discussions with several U.S. government officials, Iraq's power
infrastructure had deteriorated due to years of neglect during the
previous regime, destruction caused by the 1991 and 2003 conflicts, and
looting during the summer of 2003. Inadequate electricity levels
present public health challenges and affect Iraq's oil sector, which
plays a dominant role in its economy. The Coalition Provisional
Authority (CPA) and Iraqi authorities recognized that reconstructing
the power sector is critical to reviving Iraq's economy, supporting
essential infrastructure, and improving daily well-being. Visible
improvements in the delivery of essential services, including
electricity, were also considered critical in establishing a secure,
peaceful, and democratic Iraq. Accordingly, the CPA and U.S. government
departments and agencies have made available about $7.7 billion to
repair Iraq's power infrastructure.
This enclosure focuses on progress to date in implementing the U.S.
Army Corps of Engineers' (Corps) Restore Iraqi Electricity (RIE)
program, a major component of the U.S. assistance effort for the power
sector funded at almost $1.4 billion. We chose this program because the
first phase has been under way since September 2003, and the CPA had
set project goals for the June 2004 time frame. In this enclosure, we
discuss (1) the progress made under the RIE program, as well as overall
progress in providing Iraq's electrical needs; (2) the effect of the
security environment on the cost and pace of RIE projects; and (3)
oversight of the RIE program.
Results in Brief:
The CPA set a goal for Iraq of 6,000 megawatts of generating capacity
by June 30, 2004, in anticipation of the higher demand for power during
the summer months. As of late May 2004, the Corps expected that 59 of
the 66 RIE projects expected to help meet this goal would be complete
by June 30. On June 1, the daily peak generation capacity in Iraq stood
at about 4,200 megawatts, an improvement over the capacity at the start
of the RIE program, but still short of the CPA's goal. However, even if
the 6,000-megawatt goal is reached, it will fall short of the estimated
peak summer demand of 7,000 to 8,000 megawatts. Due to several factors,
including the worsening security situation and increased demand,
average daily hours of electrical service in some governorates was
worse at the end of May 2004 than it was prior to the war. Hours of
electrical service in the country as a whole, while more equitably
distributed, also did not show a marked improvement over the immediate
postwar levels of May 2003 and worsened in some governorates. U.S.
government reports and discussions with Corps officials indicate that a
deteriorated security environment has affected the pace and cost of RIE
projects. RIE contractors report numerous instances of project delays
due to the difficulties in safely getting employees and materials to
project sites. In addition, estimates of security-related costs reach
as high as almost 18 percent of total costs for one contractor. The
Corps' Transatlantic Program Center and Gulf Region Division share
oversight responsibility for the RIE program. Corps staff based in the
United States and Iraq and RIE contractors coordinate through weekly
videoconferences to facilitate oversight. The Defense Contract Audit
Agency (DCAA) also performs reviews of contractor costs and procedures.
Ongoing DCAA audits have resulted in disallowing $16.5 million in costs
for one subcontractor. As of May 21, 2004, documentation for $113
million in subcontractor costs was still under review or had not yet
been submitted.
Background:
In January 2004, the CPA approved a reconstruction plan for Iraq that
set a June 1, 2004, target of 6,000 megawatts[Footnote 68] of daily
"peak deliverable" generating capacity.[Footnote 69] In October 2003,
the Iraqi Ministry of Electricity and the CPA Electricity Advisory Team
published a detailed plan to increase power in 2004. These plans also
included restoring hundreds of kilometers of electric transmission and
distribution lines, electric power control systems, and other electric
facilities. The RIE program is a major component of the strategy to
reach this goal. As of late May 2004, the CPA changed the goal date for
achieving the 6,000-megawatt target to June 30 instead of June 1.
About $1.38 billion has been made available for RIE projects to date.
Of this amount, $756 million was allocated from the Development Fund
for Iraq,[Footnote 70] and the remaining $626 million was made
available from funds Congress appropriated for the Iraq Relief and
Reconstruction Fund.[Footnote 71] The Corps' Transatlantic Program
Center used $1.06 billion of this money to issue task orders to
contractors for the first phase of RIE projects, known as "RIE 1,"
beginning in September 2003. The three largest contract obligations for
this phase went to Perini Corporation ($356.5 million), Fluor
Intercontinental ($335 million), and Washington Group International
($310 million).[Footnote 72] According to Corps officials, as of May
5, 2004, the CPA's Program Management Office had allocated to the Corps
almost $323 million for two additional RIE phases, known as "RIE 2"
and "RIE 3." RIE 2 continues the efforts of RIE 1 to help achieve 6,000
megawatts of generating capacity by June 30, 2004. RIE 3 projects are
not of an emergency nature but are necessary to add additional capacity
to the electrical grid. Of the $1.38 billion made available for RIE
projects, about $1.32 billion has been committed to contracts and task
orders.
In addition to the Corps' RIE program, two other contracting efforts
are currently contributing to Iraq electrical reconstruction. USAID
contractor Bechtel National is undertaking electricity work as part of
its two infrastructure contracts totaling $2.8 billion.[Footnote 73]
Also, in March 2004, the Corps, on behalf of the CPA's Program
Management Office, awarded three electrical capacity contracts for a
total of up to $1.5 billion, or $500 million each. The Program
Management Office awarded these contracts to the same three prime
contractors that received RIE 1 contracts, but these efforts are not
part of the Corps' RIE program. We do not discuss the status of these
efforts in this enclosure.
Despite Progress in Power Sector, CPA Did Not Meet the June 1 Goal:
Power generation capacity in Iraq has generally improved since the RIE
projects began in September 2003, but the progress of overall
electrical reconstruction was not sufficient to meet CPA's 6,000-
megawatt goal, and electrical service in some areas is worse than it
was before the war. According to the Corps, RIE had added 1,295
megawatts in additional capacity of its planned 1,348-megawatt
contribution to the goal by the end of May 2004.[Footnote 74] As of
June 1, 2004, although peak capacity fluctuated during this period,
Iraq's daily peak generation capacity had increased to about 4,200
megawatts, an improvement from about 3,400 on September 25, 2003--the
date on which the Corps issued the first RIE task orders. However,
improvements to the electrical system have had limited effect in terms
of daily electrical service for the Iraqi people. The level of service
in Iraq's 18 governorates, as measured in the average hours per day of
electricity, has not shown substantial improvement from conditions
present at the end of major combat in May 2003. The late completion of
some RIE projects contributed to the CPA not meeting its goals. As of
May 29, 2004, Corps reporting indicated that just over half of the RIE
1 and 2 projects would be complete by the initial CPA goal date of June
1. According to Corps data, additional projects should be complete in
time to help meet the revised goal date of June 30, but 7 power
generation projects were not expected to be complete by June 30.
Hours of Electrical Service Generally Are Not Improved from Prewar
Conditions:
As of June 1, 2004, Iraqi peak distributable generation capacity had
not yet been restored to the goal of 6,000 megawatts but had reached
about 4,200 megawatts, a level near where it has been since January
2004 (see fig. X.1). This level was short of the 4,400-megawatt interim
goal set by the CPA for October 2003 and the June goal of 6,000
megawatts. Even if met, however, the 6,000-megawatt goal will not be
sufficient to meet Iraq's needs this summer. Current estimated demand
for electricity in Iraq is about 6,500 to 7,000 megawatts, according to
the World Bank.[Footnote 75] CPA and USAID officials also stated that
Iraq needs about 7,000 to 8,000 megawatts of generation capacity to
meet increased peak summer demands.
Figure X.1. Iraqi Peak Electric Power Generating Capacity, September
2003 through June 1, 2004:
[See PDF for image]
Note: The low point in November was due to a problem with the
transmission line from Baiji to West Baghdad that triggered a series of
failures causing plants to shut down in both the central and southern
regions of Iraq.
[End of section]
The CPA had made some progress in restoring electricity throughout Iraq
since the end of the war. As shown in figure X.2, Baghdad and large
areas of southern Iraq averaged 8 or fewer hours of electricity a day
following the war. As of May 2004, some of these areas were averaging
between 9 and 15 hours daily. However, as of May 26, 2004, the level of
service in the country as a whole was not near 24 hours a day except in
the extreme north of the country.
As of May 2004, the available electrical service in Iraq's
governorates, while more equitably distributed, had not improved
substantially from the situation before the war. Although some
improvement in service was made earlier in 2004, the situation
deteriorated due to the worsening security situation and increasing
demand as of May 26, 2004. At that time, 8 of Iraq's 18 governorates
had electricity for an average of 8 or fewer hours a day, and 9 had
electricity for between 9 and 15 hours daily (see fig. X.2). According
to Corps officials, this change is partly a result of the CPA's more
equitable power distribution policy. The former regime provided certain
areas of the country, such as Baghdad, with greater electricity and
limited power in other areas, notably the Shi'ite regions in southern
Iraq.
Figure X.2. Average Daily Electrical Power Distribution by Governorate:
[See PDF for image]
Note: Data for 2003 are based on a survey of Iraqis countrywide in fall
2003; 2004 data are from the CPA.
[End of table]
Late Completion of RIE Generation Projects Contributed to the CPA Not
Meeting Its June 1 Goal of 6,000 Megawatts:
The CPA expected RIE 1 and 2 projects to contribute to the initial CPA
goal of 6,000 megawatts of generating capacity by June 1, 2004. The
overall progress of RIE 1 and 2 projects toward this goal was mixed.
The majority of RIE generation projects were not completed by June 1,
but all management, transmission, distribution, and control projects
were completed in advance of this date. Although, according to the
Corps, RIE had added 1,295 megawatts of its planned 1,348 megawatts in
additional capacity by the end of May 2004, many projects are not yet
complete. As of May 29, Corps data showed that only 22 of 53 RIE 1 and
2 generation projects were expected to be complete by June 1 (see table
X.1). This late completion of some RIE generation projects contributed
to the CPA not meeting its 6,000-megawatt goal. In all, 35 of the total
66 RIE 1 and 2 projects were expected to be complete on June 1, and 59
were expected to be complete before June 30.
Table X.1: Estimated Completion Date of RIE Projects, by Project Type:
Generation;
RIE 1: By June 1: 16;
RIE 1: June 2-June 30: 7;
RIE 1: After June 30: 4;
RIE 2: By June 1: 6;
RIE 2: June 2-June 30: 17;
RIE 2: After June 30: 3;
TOTAL: 53.
Transmission, distribution, and controls;
RIE 1: By June 1: 9;
RIE 1: June 2-June 30: 0;
RIE 1: After June 30: 0;
RIE 2: By June 1: 1;
RIE 2: June 2-June 30: 0;
RIE 2: After June 30: 0;
TOTAL: 10.
Management;
RIE 1: By June 1: 3;
RIE 1: June 2-June 30: 0;
RIE 1: After June 30: 0;
RIE 2: By June 1: 0;
RIE 2: June 2-June 30: 0;
RIE 2: After June 30: 0;
TOTAL: 3.
Total;
RIE 1: By June 1: 28;
RIE 1: June 2-June 30: 7;
RIE 1: After June 30: 4;
RIE 2: By June 1: 7;
RIE 2: June 2-June 30: 17;
RIE 2: After June 30: 3;
TOTAL: 66.
RIE 1: 28 of 39 RIE 1 projects complete by June 1;
35 of 39 RIE 1 projects complete by June 30.
RIE 2: 7 of 27 RIE 2 projects complete by June 1;
24 of 27 RIE 2 projects complete by June 30.
Source: GAO analysis of U.S. Army Corps of Engineers' report.
[End of table]
Security Environment Affects the Cost and Pace of RIE Projects:
Several factors, particularly the deteriorating security environment,
pose particular challenges to the Corps in managing and implementing
RIE projects. According to a Corps request to the CPA for an additional
$55 million from the Development Fund for Iraq, nearly all projects
have exceeded targeted budget projections due to unanticipated security
expenses, underestimated level of effort, and contracting challenges.
Based on our review of Corps documents and contractor reports, it is
clear that security costs add to the overall cost of reconstruction and
that security incidents have slowed its pace. From our review of
contractor reporting in April and May 2004, we have identified numerous
examples of security concerns leading to problems such as project
shutdowns, refusal of subcontractors to work at project sites, delays
in the shipment of key materials, and the inability or unwillingness of
Iraqi labor to work on projects.
Security Concerns Add to Cost and Slow Reconstruction Pace:
To varying extents, RIE 1 contractors are reporting or are expected to
report substantial security costs. For example, Perini estimated the
total cost of security at $63.4 million through August 2004, or almost
18 percent of its $356.5 million contract, and Washington Group
International's security costs were nearly $44.5 million, or 14.3
percent of its $310 million contract.[Footnote 76] According to Corps
officials, the variation in security costs is in part explained by
differences in the nature and location of the projects performed by the
three contractors. Fluor, for example, used the protection of the
coalition's "Green Zone" in Baghdad for some functions. Security for
RIE projects under these contracts extends through the construction
period. At the end of construction, the Iraqi Ministry of Electricity
will assume responsibility for security.
According to interviews with Corps personnel and reviews of recent
contractor reports, the security situation has affected the
implementation of RIE projects, particularly as violence increased
during April 2004, as shown by the following examples:
* Washington International locked down its power plant construction
site at Mosul for 3 days in April and at Mullah Abdullah for 5 days due
to security concerns. Incidents at Mosul included ambushes, small arms
and mortar fire, and snipers. On May 13, 2004, the contractor also
stated it was incurring substantial costs to satisfy the security
concerns of a subcontractor. Despite additional precautions, the
subcontractor refused to come to the project site, and the subcontract
was terminated. A Texas subcontractor will continue the work.
* At the Qudas power plant near Baghdad, Fluor reported that insurgent
activities on supply routes prevented truck convoys with materials from
reaching the project site. During the week of April 15, 2004, Fluor
reported that its Qudas workers needed to leave at 4 p.m., instead of 6
p.m., to make it through checkpoints and arrive home before dark. This
resulted in a daily loss of 2 hours of labor. During the week ending
May 6, Fluor reported that attendance appeared to have returned to
normal, but attendance problems reappeared during the week of May 21.
* Fluor is developing a change order request[Footnote 77] for delays at
the Taiji and Zaferina power plants in Baghdad and at the Nasiriyah
water intake project due to the impact of civil unrest on schedule and
cost. For example, Fluor evacuated its personnel from the Nasiriyah
project in central Iraq during the week of April 22 but resumed work
the following week. Fluor also evacuated its field personnel from the
Najaf power generation project during the week of May 21 due to civil
unrest and the entry of the military into Najaf.
* RIE 2 contractor CH2M Hill/Dragados/Soluziona reported during the
week of April 16, 2004, that a subcontractor would not send personnel
to the Haditha Dam project site, about 140 miles northwest of Baghdad,
due to changing conditions and concerns with security. The Corps
deferred the subcontractor's project to a later date. The same report
stated that death threats had been issued against another
subcontractor's Iraqi personnel, who have declined to come to the site.
Access from Baghdad to the site was also constrained because the road
to Haditha passes through Fallujah and was under fire and inaccessible.
On May 13, this contractor submitted a written request for a schedule
extension due to work restrictions resulting from significant site
access and security issues.
Concerns about the effect of security on the pace of reconstruction
also rose to the level of the former CPA administrator. In a cable to
the Departments of Defense and State and the White House on April 17,
2004, the CPA administrator observed that security is the key obstacle
to reaching reconstruction objectives. Referring to the entire
reconstruction program, the administrator stated that a worsened
security situation would mean that projects would take longer to
complete and that the kinds of projects undertaken and their costs
would change to an unknown extent.
Corps and DCAA Provide Oversight:
Two organizations within the Corps--the Transatlantic Program Center
and the Gulf Region Division--manage and oversee the RIE program. These
two organizations coordinate their efforts through joint participation
in weekly teleconferences and other reporting. DCAA has also provided
oversight through its audits of RIE contracts, and it has identified
concerns with contractor cost estimating and purchasing systems and
unsupported subcontractor costs. DCAA's efforts are ongoing but to date
have resulted in disallowing $16.5 million of unsupported subcontractor
costs.
Corps Gulf Region Division and Transatlantic Program Center Oversee RIE
Program:
The contracting, management, and oversight responsibilities for RIE are
split between the Transatlantic Program Center in Winchester, Virginia,
and the Gulf Region Division in Iraq. The Transatlantic Program Center
managed RIE before the creation of the Gulf Region Division and
continues its oversight responsibilities for RIE 1 projects, with
support from Gulf Region staff. For RIE 2 and 3, the Gulf Region
Division has assumed more contract administration functions that had
been handled by the Transatlantic Program Center for RIE 1,
particularly program and project management support. The Transatlantic
Program Center, however, continues to provide support to the Gulf
Region Division during solicitation and award of RIE 2 and 3 task
orders.
The Gulf Region Division manages and supports RIE 2 and 3 projects from
its Baghdad office and at project locations. As of May 2004, 72
civilian personnel, including one contracting officer in Baghdad,
provided oversight for RIE projects within the Gulf Region Division.
The division's field offices, which are located at all project sites,
are responsible for monitoring and verifying contractor performance.
These offices include a quality assurance representative or
construction inspector and a project engineer. The staff in these
offices verify contractor reporting on project status.
Required reporting includes daily quality control reports and weekly
progress reports from the prime contractors. The weekly reports include
a schedule for completion of subtasks, cost reporting, an
identification of construction and security issues, and completion
percentages for projects. To summarize the status of RIE projects, the
Gulf Region Division compiles a weekly list and provides it to the CPA,
the Ministry of Electricity, and others. The division also conducts
weekly contractor video teleconferences with its contractors in Iraq
and their headquarters offices in the United States. In addition,
Transatlantic Program Center management staff participate in weekly
video teleconferences with the regional division to coordinate and
maintain visibility on the projects. We participated in several of
these videoconferences between the Corps and contractor staff.
DCAA Questioned Some RIE Contractor Procedures and Costs:
DCAA has conducted several price proposal audits and evaluations of the
three RIE 1 contractors. Initially, it found weaknesses in cost
estimating and purchasing systems and unsupported subcontractor costs
totaling $220 million, or almost 22 percent of the total cost of the
contracts. As of May 21, 2004, $90.5 million of this amount had been
supported and approved for payment by DCAA, $16.5 million had been
disallowed for one subcontractor, and DCAA was reviewing revised plans
for purchasing and estimating. At that time, documentation for $113
million in subcontractor costs was still under review or had not yet
been submitted.
The three largest RIE 1 contracts are cost-reimbursement contracts
under which the government has agreed, subject to cost ceilings, to
reimburse the contractor for all reasonable and allowable costs
incurred in performing the work. An award fee (profit) is also provided
to the contractor. To meet urgent operational needs, as is the case in
Iraq's reconstruction, agencies are permitted to authorize contractors
to begin work before the key terms and conditions, including price, of
the contracts or task orders have been defined and agreed upon. While
this approach allows agencies to initiate needed work quickly, it also
can result in potentially significant additional costs and risks for
the government.[Footnote 78]
Conclusion:
Iraq's electricity sector deteriorated due to neglect by the prior
regime, destruction caused by the 1991 and 2003 wars, and looting in
the summer of 2003 following Operation Iraqi Freedom. Sufficient power
is needed to help ensure economic growth, support essential
infrastructure, and improve the well-being of the Iraqi people. As of
late May 2004, average daily electrical service since the immediate
postwar period had not significantly improved in the country as a whole
and was worse in some areas. To meet anticipated summer demand, the CPA
set a goal of restoring generating capacity to 6,000 megawatts by June
30. Most RIE projects designed to meet this goal are expected to be
completed by at that time, but not all will be finished, and the
worsening security environment has affected the pace and cost of these
projects. Moreover, the anticipated peak summer demand is estimated at
7,000 to 8,000 megawatts. The possibility that electrical capacity will
not meet the peak summer demand raises concerns about the ability of
the coalition to support power dependent infrastructure, improve Iraq's
economy, and promote stability in Iraq.
Oversight Questions:
1. How are delays in electricity projects affecting the reconstruction
goals of other key sectors, such as oil and water and sanitation?
2. What are the plans for meeting Iraq's future electrical needs beyond
the 6,000-megawatt capacity goal following the transition to
sovereignty on June 28, 2004?
3. What is the full range of factors contributing to the length of time
required to meet Iraq's electrical needs?
4. What management and oversight framework has been planned for the
$1.5 billion in electricity contracts let by the CPA's Program
Management Office in March 2004?
5. What measures are being taken to monitor and ensure adequate
maintenance and security of improved facilities?
6. How will ongoing electricity reconstruction efforts be coordinated
among the U.S. government and relevant Iraqi ministries, including the
Ministries of Electricity and Irrigation?[Footnote 79]
7. What are the lessons learned from the management and implementation
of RIE projects that can be applied to other reconstruction projects?
[End of section]
Enclosure XI:
Objectives, Scope, and Methodology:
As part of our broad effort to monitor Iraq reconstruction, we focused
on issues associated with (1) resources, (2) security, (3) governance,
and (4) essential services. We conducted our review from March through
June 2004 in accordance with generally accepted government auditing
standards. We did not travel to Iraq during this period due to security
concerns.
Resources: Funding and Staffing:
To monitor the use of resources in the reconstruction of Iraq, we
focused on the sources and uses of U.S., Iraqi, and international
funding. In addition, we reviewed U.S. efforts to provide staff to
support the Coalition Provisional Authority (CPA) in rebuilding Iraq
and the challenges faced.
U.S. agencies and the CPA provided us with electronic data files for
appropriated funds, the Development Fund for Iraq (DFI), vested assets,
and seized assets. These files generally included objective or project
descriptions with allocated, obligated, and disbursed amounts. We
assigned each of the funding line items to eight broad categories based
on the descriptive information available in the data files. To assign
the data to a category, we relied on project descriptions from agency
and CPA data files.
In addressing the amount of U.S. funds that have been appropriated,
obligated, and disbursed for the Iraq reconstruction effort, we
collected funding information from the Departments of Defense, State,
and the Treasury; U.S. Agency for International Development (USAID);
and the CPA. Data for U.S.-appropriated funds are as of April 30, 2004,
with the exception of CPA's Program Management Office data on
obligations and disbursements in fiscal year 2004, which are as of May
25 and June 16, respectively. We also reviewed the public funding
documents of the Office of Management and Budget and the CPA Inspector
General. Although we have not audited the funding data and are not
expressing our opinion on them, we discussed the sources and
limitations of the data with the appropriate officials and corroborated
them, when possible, with other information sources. We determined that
the data were sufficiently reliable for the broad comparisons in the
aggregate and the category descriptions we have made.
To identify sources and uses of Development Fund for Iraq funds, vested
assets, and seized assets, we relied on funding data from the CPA.
These data included DFI funds committed from July 2003 and vested
assets and seized assets committed from May and June 2003 through May
6, 2004, respectively. To determine the reliability of these data, we
examined the financial files and interviewed CPA officials responsible
for the data. Based on these evaluations, we determined the data are
sufficiently reliable for the purposes of describing the major deposits
to the DFI and the allocations and disbursements by major categories.
To address international assistance for rebuilding Iraq, we collected
and analyzed information provide by the State Department's Office of
Iraq Economic Reconstruction. We also collected and reviewed documents
from the CPA, United Nations Development Group, and World Bank Group.
To describe the activities of international donors, we relied on
interviews with U.S. and CPA officials and reviewed documents
pertaining to the international donor conferences. To assess the
reliability of the data on the pledges and commitments made by
international donors, we (1) interviewed the officials at State and the
Council for International Coordination who are responsible for
compiling these data based on information provided by the World Bank
and U.N. Development Group, the governments of the international
donors, and the Iraqi Ministry of Planning and Development Coordination
and (2) performed reasonableness checks of the data against other
sources of information. We determined that the data on major
international pledges were sufficiently reliable for the purpose of
comparing the amounts pledged by international donors. We also
determined that the data on pledges made by non-US international donors
at the 2003 Madrid Conference were sufficiently reliable for the
purpose of describing grants and loans at the aggregate level. Further,
we determined that the data on donor commitments made to the
International Reconstruction Fund Facility were sufficiently reliable
for the purposes of comparing committed contributions and deposits by
country. Finally, we determined that the Iraqi government's estimated
costs for project proposals were sufficiently reliable for the purpose
of showing what the Iraqi government had requested in 2004. However, we
did not examine the estimating methodology used by the Iraqi government
and cannot attest to its accuracy.
To address the staffing effort for the CPA, we collected and analyzed
information provided by the CPA, USAID, the Department of State, and
the Army Corps of Engineers. We interviewed officials from these
departments as well as from the Departments of Justice and the
Treasury. We relied primarily on staffing data from the CPA personnel
office, as its data was the most comprehensive and it was responsible
for processing and managing CPA personnel requirements. To assess the
reliability of these data, we (1) interviewed the officials at the CPA
who are responsible for compiling these data and (2) performed some
basic reasonableness checks of the data against other sources of
information. According to CPA officials, the staffing data are only
about 90 percent accurate due to the difficulties of tracking personnel
entering and exiting Iraq. We determined that the data from March 2004
onward were sufficiently reliable for the purposes of making
comparisons of the type of personnel directly supporting the CPA.
Security:
With respect to security issues, we focused on (1) the current and
projected security trends and the impact of the security situation on
military and civilian operations, (2) the multinational force's plan
for transitioning security responsibilities to Iraqi security forces
and the progress made, and (3) the CPA's transition and integration
strategy for militias and the status of implementing the transition and
reintegration process.
To analyze the security trends in Iraq and the impact on military and
civilian operations, we obtained information from DOD on casualty data
of U.S. military personnel due to hostile action in Iraq from March
2003 through April 2004 and from the CPA on the number of certain
significant insurgent activities affecting coalition operations from
October 2003 to May 15, 2004. We also obtained documents and
interviewed officials from the CPA, the Department of State, the
multinational force, the United Nations, and nongovernmental
organizations on the security situation in Iraq and its impact on
operations. We also obtained information from State about opinion polls
in Iraq on the security situation. We corroborated the data on
insurgent activities with classified sources. We determined that the
data were sufficiently reliable for establishing general trends in the
security situation.
To describe the plan for transitioning security responsibilities to
Iraqi forces and the progress made, we obtained and reviewed the
transition plan and related documents, orders, and status reports on
progress in building Iraqi forces and their performance from the CPA
and DOD. We interviewed officials from the CPA, Defense, and State on
the plans and progress being made. We obtained data on the number of
Iraqi security forces from DOD. We corroborated the information with
classified sources and public testimony and statements from U.S.
officials about the situation. We determined that the data were
sufficiently reliable for the purpose of describing the plan and
progress on transitioning security responsibilities to Iraqi forces.
To describe the plan for and status of reintegrating Iraq's militias
into civilian life, we obtained and reviewed the CPA's Transition and
Reintegration plan and supporting documentation, such as CPA Order 91.
We also discussed the status, progress, and challenges to this effort
with CPA officials implementing the plan. The number of militia members
participating in the plan is a CPA estimate. We discussed the estimate
with CPA officials to determine their approach for deriving the
estimate. We determined that the information was sufficiently reliable
for the purpose of indicating the general size of the militias.
Governance:
For the governance issue, we examined (1) the status of the Iraqi
national ministries and U.S. efforts to strengthen the ministries and
establish subnational governing institutions and (2) the status of the
Iraqi judicial system and U.S. efforts to reform it. To examine the
status of Iraqi ministries, we reviewed CPA orders, documents, budgets,
and periodic reports describing Iraq's national ministries; we also
reviewed CPA and USAID reports and documents on developments in
subnational government institutions and U.S. assistance to these
bodies. We also interviewed officials from the CPA, USAID, and
nongovernmental organizations implementing U.S. programs at the
subnational level in Iraq to determine how the national ministries and
subnational governing bodies are operating and how the United States
has assisted them. The budget information on the number of Iraqi civil
servants in each ministry is an estimate published by the Ministries of
Finance and Planning and is subject to revision. We interviewed CPA
officials about the budget preparation and the process of compiling the
data, and we examined both the original 2004 budget and the revised
budget. We reviewed the guidance for preparing the budget. We
determined that the data were sufficiently reliable for the purpose of
describing the general number of staff in Iraqi ministries.
To examine the status of the Iraqi judicial system, we reviewed related
CPA orders, weekly reports, correspondence and memoranda, CPA's
strategic plan, and an assessment of the judicial system prepared by
the Department of Justice. We also spoke with officials from the CPA,
Justice, and USAID about the status of Iraq's judiciary, U.S. efforts
to rehabilitate it, and the results of these efforts. We found the
information on the number of judges in Iraq to be generally consistent
with several CPA documents.
Essential Services: Restoring Iraqi Electricity:
For the essential services issue, we focused our initial effort on the
Army Corps of Engineers' Restore Iraqi Electricity (RIE)
program[Footnote 80] because it is a major component of the U.S.
assistance effort to rebuild the power sector. Specifically, we
reviewed the status of the effort, the effect of the security
environment on progress, and oversight of the program. To determine the
progress made in restoring electricity, we reviewed weekly and daily
status reports prepared by the Corps and the CPA and weekly status
reports from Corps contractors from April and May 2004. We compiled
these data and analyzed the result to provide summary data. For
additional context on the status of electrical service under the
previous regime and in May 2003, we used survey data prepared under
contract to USAID. To assess the reliability of the survey data, we
reviewed the survey methodology and questionnaire and compared the
results with testimonial evidence on electricity distribution. We noted
that more than 7,000 individuals were surveyed but that it may be
difficult to make precise comparisons among governorates. However, we
determined that the survey data were sufficiently reliable to provide a
broad indication of electrical distribution by governorate. To document
the effect of Iraq's security environment on RIE progress, we
interviewed Corps and CPA officials in the United States and Iraq,
participated in videoconferences between the Corps and its contractors,
and reviewed a selection of RIE contractor reports from April and May
2004. We also obtained documents from the Corps for data on security
and contract costs and funding. To document the oversight framework for
RIE projects, we interviewed Corps officials in the U.S. and Iraq and
reviewed a number of examples of their reporting. We also participated
in teleconferences between U.S. and Iraq-based Corps officials and
between Corps officials and RIE contractors to observe and document the
nature of oversight coordination. We obtained a summary of DCAA
reporting from the Corps and used this summary to document the status
of DCAA review.
We reviewed the data for anomalies and documented the Corps' processes
for assuring data reliability from contractor reports, and we
interviewed officials familiar with the data collection. We determined
that the data were sufficiently reliable to meet our reporting
objectives.
[End of section]
Staff Acknowledgements:
Key contributors to this report include J. Robert Ball, Monica Brym,
Julie Chao, Lyric Clark, Lynn Cothern, Muriel Forster Dave Hancock,
Laura Helm, John Hutton, Sarah Lynch, Judith McCloskey, Tetsuo
Miyabara, Valérie Leman Nowak, Stephanie Robinson, Jonathan Rose,
Michael Simon, Audrey Solis, George Taylor, and Phillip Thomas. Martin
de Alteriis, Beverly Bendekgey, Sam Bernet, Joseph Brown, David Bruno,
Patrick Dickriede, Philip Farah, Etana Finkler, A. Rahman Ford, Beth
Hoffman, Hynek Kalkus, Mary Moutsos, José M. Peña, III, Michael
Rohrback, Nanette Ryen, and Juan Tapia-Videla provided technical
assistance.
[End of section]
Related GAO Products:
United Nations: Observations on the Oil for Food Program and Iraq's
Food Security. GAO-04-880T. Washington, D.C.: June 16, 2004.
Contract Management: Contracting for Iraqi Reconstruction and for
Global Logistics Support. GAO-04-869T. Washington, D.C.: June 15, 2004.
Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures and
Management Challenges. GAO-04-605. Washington, D.C.: June 1, 2004.
Iraq's Transitional Law. GAO-04-746R. Washington, D.C.: May 25, 2004.
Military Operations: DOD's Fiscal Year 2003 Funding Reported
Obligations in Support of the Global War on Terrorism. GAO-04-668.
Washington, D.C.: May 13, 2004.
State Department: Issues Affecting Funding of Iraqi National Congress
Support Foundation. GAO-04-559. Washington, D.C.: April 30, 2004.
United Nations: Observations on the Management and Oversight of the Oil
for Food Program. GAO-04-730T. Washington, D.C.: April 28, 2004.
Operation Iraqi Freedom: Long-standing Problems Hampering Mail Delivery
Need to Be Resolved. GAO-04-484. Washington, D.C.: April 14, 2004.
United Nations: Observations on the Oil for Food Program. GAO-04-651T.
Washington, D.C.: April 7, 2004.
Military Prepositioning: Observations on Army and Marine Corps Programs
during Operations Iraqi Freedom and Beyond. GAO-04-562T. Washington,
D.C.: March 24, 2004.
Recovering Iraq's Assets: Preliminary Observations on U.S. Efforts and
Challenges. GAO-04-579T. Washington, D.C.: March 18, 2004.
Defense Logistics: Preliminary Observations on the Effectiveness of
Logistics Activities during Operation Iraqi Freedom. GAO-04-305R.
Washington, D.C.: December 18, 2003.
Military Operations: Fiscal Year 2003 Obligations Are Substantial, but
May Result in Less Obligations than Expected. GAO-03-1088. Washington,
D.C.: September 17, 2003.
Rebuilding Iraq. GAO-03-792R. Washington, D.C.: May 15, 2003.
Weapons of Mass Destruction: U.N. Confronts Significant Challenges in
Implementing Sanctions against Iraq. GAO-02-625. Washington, D.C.: May
23, 2002.
(320277):
FOOTNOTES
[1] Data for U.S. appropriated funds are as of April 30, 2004, with the
exception of some CPA Program Management Office obligations and
disbursements, which are as of May 25 and June 16, respectively. Iraqi
funds data are as of May 6, 2004.
[2] CPA established the Development Fund for Iraq to accommodate Iraqi
funds that would be used to benefit the Iraqi people and facilitate the
reconstruction of their country.
[3] "Vested assets" refers to former Iraqi regime assets held in U.S.
financial institutions that the President confiscated in March 2003 and
vested in the U.S. Treasury. The United States froze these assets
shortly before the first Gulf War. The U.S.A. PATRIOT Act of 2001
amended the International Emergency Economic Powers Act to empower the
President to confiscate, or take ownership of, certain property of
designated entities, including these assets, and vest ownership in an
agency or individual. The President has the authority to use the assets
in the interests of the United States. In this case, the President
vested the assets in March 2003 and made these funds available for the
reconstruction of Iraq in May 2003. Seized assets refer to former
regime assets seized within Iraq.
[4] An obligation is a binding agreement that will result in immediate
or future outlays of funds.
[5] The Oil for Food program was established by the United Nations and
Iraq in 1996 to address concerns about the humanitarian situation in
Iraq after the imposition of international sanctions in 1990. The
program allowed the Iraqi government to use the proceeds of its oil
sales to pay for food, medicine, and humanitarian goods for the benefit
of the Iraqi people. U.N. Security Council Resolution 1483 provides for
the deposit of oil revenues and some Oil for Food program funds in the
DFI until an internationally recognized, representative government of
Iraq has been constituted. See U.S. General Accounting Office, United
Nations: Observations on the Management and Oversight of the Oil for
Food Program, GAO-04-730T (Washington D.C.: Apr. 28, 2004).
[6] The World Bank Group defines a pledge as an indication of intent to
mobilize funds for which an approximate sum of contribution is
specified. International donor pledges range from $13.6 billion to
$17.3 billion, reflecting the range of loans pledged by the World Bank
and International Monetary Fund (IMF). Given the uncertainty of the
ultimate amount of loans provided by the World Bank and IMF, we have
used the lower pledge amount in this report.
[7] The CPA used the term allocation to reflect DFI obligations. In
this enclosure, we have considered these allocations as obligations for
consistency of reporting.
[8] The United Nations Development Group and the World Bank Group
prepared a needs assessment from June 2003 through August 2003 to
define Iraq reconstruction requirements. According to the October 2003
assessment, Iraq needs an estimated $36 billion from 2004 through 2007.
Sectors covered by this assessment include education, health,
electricity, transportation, agriculture, and cross-cutting areas such
as human rights and the environment. The assessment also notes that the
Coalition Provisional Authority (CPA) estimates that an additional $20
billion will be needed from 2004 through 2007 to rebuild other critical
sectors (e.g., security and oil) outside the scope of the U.N./World
Bank assessment.
[9] The World Bank Group defines a pledge as an indication of intent to
mobilize funds for which an approximate sum of contribution is
specified.
[10] See PL 108-106, "Emergency Supplemental Appropriations Act for
Defense and for the Reconstruction of Iraq and Afghanistan, 2004." In
this act, Congress appropriated $18.6 billion for Iraq's security,
relief, rehabilitation, and reconstruction needs, but directed that of
these funds, $100 million be transferred for assistance to Jordan, $100
million be transferred for assistance to Liberia, and $10 million be
transferred for assistance to Sudan.
[11] The following countries offered in-kind assistance: Bahrain,
Chile, Egypt, Germany, Jordan, Latvia, Mexico, Poland, Philippines,
Portugal, Slovakia, Sri Lanka, Switzerland, Thailand, Tunisia, and
Vietnam.
[12] In figure II.1, we have used the lower pledge amount, given the
uncertainty of the ultimate amount of loans to be provided by the World
Bank and IMF.
[13] According to State Department officials, commitments refer to a
firmer declaration of the amount that a country has pledged to provide.
[14] The Donors Committee determined on May 26, 2004, that the IRFFI
will focus its activities on the re-establishment of essential
services, infrastructure rehabilitation, job creation, poverty
reduction, governance, and capacity building, including support for the
transitional authorities. The World Bank Iraq Trust Fund will focus its
funding on projects for economic transition, governance and public
sector reform, and poverty and safety net issues. The U.N. Development
Group Iraq Trust Fund will focus its funding on projects such as basic
services, infrastructure, capacity building, employment generation,
and community-level rehabilitation.
[15] As of May 26, 2004, the Donor Committee membership is composed of
Australia, Canada, the European Commission, Finland, India, Italy,
Japan (chair), Korea, Kuwait, Norway, Qatar, Spain, Sweden, United
Kingdom, and the United States. Membership comprises donors whose paid-
in contributions or commitments to either or both trust funds amount to
a minimum of US$10 million per donor, plus two additional seats for
contributing donors that do not meet the minimum.
[16] CPA Regulation number 5 established the Council for International
Coordination in June 2003. Regulation number 7 established the Iraqi
Strategic Review Board and renamed the Ministry of Planning the
Ministry of Planning and Development Cooperation on December 5, 2003.
[17] On June 1, 2004, the Iraqi Governing Council dissolved and the
Iraqi Interim Government was announced.
[18] The Program Management Office manages the awards and provides
project management support for the contracts funded from the $18.4
billion provided by Congress for Iraq reconstruction. A May 11, 2004,
National Security Presidential Directive established a temporary
organization--the Project and Contracting Office--within the
Department of Defense to provide acquisition and project management
support after the transition of authority to the Iraqis.
[19] See U.S. General Accounting Office, United Nations: Observations
on the Management and Oversight of the Oil for Food Program, GAO-04-
730T (Washington, D.C.: Apr. 28, 2004).
[20] According to CPA officials, since at least March 2004, the PRB has
recommended allocations almost exclusively from DFI funds.
[21] As directed under U.N. Security Council Resolution 1483, 95
percent of oil proceeds are to be deposited in the DFI. The remaining 5
percent of oil proceeds are deposited into a U.N. Compensation Fund
account to process and pay claims for losses resulting from Iraq's
invasion and occupation of Kuwait.
[22] For more information, see U.S. General Accounting Office,
Recovering Iraq's Assets: Preliminary Observations on U.S. Efforts and
Challenges, GAO-04-579T (Washington, D.C.: Mar. 18, 2004).
[23] The CPA, the Ministry of Finance, and the Ministry of Planning and
Development issued a 2004 budget in October 2003. It was revised in
March 2004.
[24] The DFI operates as a series of bank accounts; disbursements are
thus actually withdrawals or debits.
[25] Additional deposits and disbursements (accounting for a net
balance of $46 million) were made for which we could not obtain
detailed information. These transactions are not included in our
totals.
[26] In addition, the PRB Chairman was to cast the deciding vote on
matters when PRB member votes were tied.
[27] The multinational force, formerly Combined Joint Task Force-Seven,
became known as the Multi-National Force-Iraq on May 15, 2004.
[28] In addition to DFI allocations, the Commanders' Emergency Response
Program has received nearly $179 million in seized assets and $140
million in U.S. appropriated funds from Army Operations and
Maintenance, for which transfer authority was provided in the fiscal
year 2004 supplemental.
[29] In addition to DFI allocations, the Rapid Regional Response
Program received at least $46 million in seized funds.
[30] The IAMB chair is currently a U.N. Secretary General
representative; representatives of the Arab Fund for Economic and
Social Development, the International Monetary Fund, and the World Bank
are the other executive head members. The IAMB also has five observers.
[31] The PRB approved a commitment of almost $6 million in DFI funds to
pay for the external audit.
[32] As of May 2004, DCAA had audits under way on contracts awarded for
projects with both U.S. appropriated and DFI funds.
[33] In January 2004, the CPA's Inspector General office was staffed.
More recently, the transition of power expected in June 2004 affected
CPA requirements.
[34] As of May 15, 2004, this entity became known as Multi-National
Force-Iraq.
[35] U.S. civilian personnel were detailed to the CPA from various U.S.
agencies, including the Departments of Agriculture, Commerce, Energy,
Defense, Homeland Security, the Interior, Labor, State, Transportation,
the Treasury, Veteran Affairs, the Office of Management and Budget, the
National Aeronautics and Space Administration, U.S. Agency for
International Development, U.S. Postal Service, U.S. Public Health
Service, and the Federal Aviation Administration.
[36] Under 5 USC 3161, the head of a temporary organization may appoint
persons to positions of employment in such numbers and with such skills
as are necessary to perform the functions required.
[37] The Secretary of State solicited staff outside of the standard
placement process through cables requesting civil and foreign service
volunteers for 3-month and, later, 6-month tours.
[38] Reliable data on the composition of staff were not available for
the period prior to March 1, 2004.
[39] USAID officials stated that family members are currently not
permitted to relocate to countries in the Middle East during a spouse's
assignment in Iraq.
[40] DOD obligation data as of March 31, 2004. In addition, DOD
obligated about $12.2 billion for U.S. military operations in Iraq
before April 30, 2003, for a total obligation of $64.3 billion for U.S.
military operations during Operation Iraqi Freedom.
[41] U.S. obligations for Iraqi security forces as of April 2004.
[42] Iraqis have also faced outbreaks of inter-ethnic violence and a
large amount of common crime, but we could not identify sources of
systematic data on either issue.
[43] Report of the Secretary-General pursuant to paragraph 24 of
resolution 1483 (2003) and paragraph 12 of resolution 1511 (2003); U.N.
Security Council S/2003/1149; December 5, 2003.
[44] CPA data of certain significant insurgent activities include
selected reported attacks affecting coalition operations reported and
documented through the multinational force. In assessing security
trends, the CPA counts attacks using improvised explosive devices,
vehicle-borne improvised explosive devices, mortars, rocket-propelled
grenades, and improvised rockets. CPA does not count small-arms fire,
hand grenade attacks, and other hostile activities, including most
assassinations, kidnappings, and hijackings. According to a CPA
official, the number of all hostile acts against the coalition would be
higher than the number included here.
[45] See enclosure IV of this report for more information on staffing.
[46] See enclosure X for more information on these electricity
projects.
[47] The Secretary General left a small core presence of international
staff in Erbil, Iraq. These staff were to help phase down and terminate
the Oil for Food program by November 21, 2003.
[48] According to a U.N. official, the United Nations has maintained a
small office in Baghdad for the past several months.
[49] U.S. Department of State, Opinion Analysis, Office of Research, M-
03-04, Washington, D.C. (Jan. 6, 2004); U.S. Department of State,
Opinion Analysis, Office of Research, M-13-04, Washington, D.C. (Jan.
29, 2004).
[50] U.S. Department of State, Opinion Analysis, Office of Research, M-
71-04, Washington, D.C. (June 17, 2004).
[51] According to DOD updates, as of June 18, 2004, Iraqi Security
Forces totaled about 219,000 personnel, including approximately 84,000
police officers, 18,000 Department of Border Enforcement staff, 7,000
Iraqi Armed Forces, 36,000 Iraqi Civil Defense Corps, and 74,000
Facilities Protection Service personnel.
[52] The performance of Iraqi security forces during April 2004
indicated problems with the vetting of security force personnel.
However, we were unable to assess the nature and extent of the problems
in the vetting process prior to this report.
[53] FRAGO 689 to CJTF-7 OPORD 04-01.
[54] This enclosure uses the term militias to include military or
paramilitary forces that are not part of the Iraqi Armed Forces or
other Iraqi security forces established pursuant to CPA Orders,
Regulations and Memoranda, or pursuant to Iraqi federal law and the Law
of Administration for the State of Iraq for the Transitional Period.
CPA Order 91 refers to the military forces of the Kurdistan Democratic
Party and the Patriotic Union of Kurdistan as armed forces rather than
militias.
[55] The Iraqi Veterans Agency functions as a bureau under the
administration and direction of the Ministry of Defense. It is
responsible for managing all aspects of veterans' issues, coordinating
provision of support from other agencies to veterans, and directing the
veterans' stipend program.
[56] The parties are the Kurdistan Democratic Party, Patriotic Union of
Kurdistan, Iraqi Islamic Party, Supreme Counsel of the Islamic
Revolution in Iraq/Badr Organization, Iraqi National Accord, Iraqi
National Congress, Iraqi Hezbollah, Iraqi Communist Party, and Da'wa.
[57] As of May 2004, the 3 largest militias accounted for about 88,000
active fighters, according to CPA--about 41,000 in the Kurdistan
Democratic Party militia; 31,000 in the Patriotic Union of Kurdistan
militia; and 16,500 for the Badr Corps.
[58] Iraq's transitional administrative law states that (1) elections
for a transitional government shall take place by January 31, 2005; (2)
the National Assembly shall write a draft permanent constitution by
August 15, 2005; and (3) the draft permanent constitution shall be
presented to the Iraqi people for approval in a general referendum to
be held by October 15, 2005.
[59] The transitional law states that the Kurdistan Regional Government
will retain regional control over the police forces and internal
security in the Kurdistan region.
[60] These funds were from U.S. 2003 and 2004 appropriations, the
Development Fund for Iraq, and other sources.
[61] U.S. General Accounting Office, United Nations: Observations on
the Management and Oversight of the Oil for Food Program, GAO-04-730T
(Washington, D.C.: Apr. 28, 2004).
[62] Iraq's Transitional Administrative Law states that CPA orders
remain in place until amended or rescinded by duly enacted legislation.
See U.S. General Accounting Office, Iraq's Transitional Law, GAO-04-
746R (Washington, D.C.: May 25, 2004).
[63] According to U.S. officials, most national ministries have
offices, known as departments, in each of Iraq's 18 governorates. These
departments are led by directors general and are responsible for
implementing the ministry's programs at the governorate level.
[64] Iraq's judiciary is based on a civil law system similar to
France's. Under this system, there are no juries. Judges hear cases,
determine guilt and innocence, and sentence the convicted.
[65] The Court of Cassation is Iraq's highest appellate court.
[66] The Legal Gazette is the official publication for Iraqi laws,
including all CPA orders and regulations. Publication of the Gazette
resumed in June 2003.
[67] United Nations/World Bank, Joint Iraq Needs Assessment:
Electricity (New York: October 2003).
[68] A megawatt is a measure of the rate at which electric energy can
be transferred and is used as a measure of electric generation
capacity.
[69] "Peak deliverable" generation capacity is the generation capacity
that can be delivered to users given the capabilities and constraints
of installed generation equipment and electric transmission and
distribution facilities.
[70] The Fund is held on the books of the Central Bank of Iraq and
financed from multiple sources, including oil revenues and assets of
the former Iraqi regime. It is to be used for the economic
reconstruction and repair of Iraq's infrastructure, among other things.
Until the transfer of authority to Iraqi sovereignty, the CPA
administrator managed the Fund on behalf of the Iraqi people.
[71] Congress appropriated funds to the Iraq Relief and Reconstruction
Fund in the Emergency Wartime Supplemental Appropriations Act, 2003,
P.L. 108-11, and the Emergency Supplemental Appropriations Act for
Defense and for the Reconstruction of Iraq and Afghanistan, 2004, P.L.
108-106.
[72] In addition, about $54 million has been allocated for Corps
headquarters costs and for miscellaneous projects, including police for
the electricity ministry and emergency generators.
[73] This amount is the total amount of the two contracts for all
Bechtel reconstruction activities in Iraq, including rehabilitating the
power, water, and sanitation sectors and repairing and reconstructing
ports, roads and bridges, schools, and health facilities.
[74] Not all of this additional capacity is reflected in Iraq's actual
peak generation, the measure used for the CPA goal of 6,000 megawatts.
[75] Joint Needs Assessment: Electricity.
[76] These figures may change based on ongoing DCAA audit work. All
costs stated here are from Corps documentation; GAO has not verified
these figures.
[77] A change order is a written order from a contracting officer
making a unilateral contract modification within the general scope of
the contract.
[78] See U.S. General Accounting Office, Rebuilding Iraq: Fiscal Year
2003 Contract Award Procedures and Management Challenges, GAO-04-605
(Washington, D.C.: June 1, 2004), for additional discussion of
contracting for Iraq reconstruction.
[79] The Ministry of Irrigation controls the quantity and timing of
water moving through Iraq's dams to power plants.
[80] Although other efforts directed at improving Iraq's electricity
are under way, our review addresses only the RIE portion of the overall
program and its relationship to the CPA's goal of 6,000 megawatt of
peak deliverable capacity.
