Iraq report: $2.6B missing in action

BAGHDAD, July 27 (UPI) -- The inspector general for U.S. Defense Department spending in Iraq said $2.6 billion of Iraqi reconstruction funds is missing in action.

Describing a report set for release Tuesday, special inspector general Stuart Bowen Jr. said, "Weak oversight is directly correlated to increased numbers of cases of theft and abuse, with the majority of convictions to date being traceable to the 2003-04 time-frame where accounting practices were weakest," The Washington Post reported.

The report says officials skipped the basic step of setting up bank accounts that would have made it possible to keep track of about $8.7 billion worth of reconstruction funds. In addition, the Defense Department should have returned $34.3 million to Iraq in 2007, but failed to do so, the report said.

The report says, "Breakdowns in controls left the funds vulnerable to inappropriate uses and undetected losses."

The Pentagon has already pledged it will make changes and return the $34.3 million. In response, Bowen said, "We look forward to seeing real results."