Audit Suspended

The State Department has had to publicly humiliate itself, by admitting that it does not know what it received for a billion dollar contract with security firm DynCorp International to provide training services for Iraqi police.

The Office of the Special Inspector General for Iraq Reconstruction (SIGIR) has had to suspend its audit of the DynCorp contract, after administration officials admitted that they had no confidence in their own accounting records.

The list of problems are very familiar to auditors who have worked with companies in total disarray. Duplicate invoices, payments for equipment (eg a $1.8M scanner) that was never used and expense payments ($387K for hotels) that were unnecessary.

Needless to say, all of the above issues are red lights to professional accountants and auditors as they indicate the very real possibility of fraud.

The agency responsible for the contract was the Bureau of International Narcotics and Law Enforcement Affairs (INL). SIGIR castigates them, and is quoted by Reuters:

"INL does not know specifically what it received for most of the $1.2 billion in expenditures under its DynCorp contract for the Iraqi Police Training Program. INL's prior lack of controls created an environment vulnerable to waste and fraud."

Although the audit may well resume in January 2008, it is expected that it will take up to five years to complete it. Needless to say by that time the people responsible for this mess, ie the Bush administration, will have long since left office.

Mission accomplished!