The program detailed the installation of grates in roadside drainage culverts, the Special Inspector General for Afghanistan Reconstruction said in the report.
The grates were intended to prevent insurgents from planting bombs in the culverts and thousands were supposed to be installed by 2009, the report states.
But hundreds or more were never installed and the SIGAR's investigation is looking into whether that failure was a factor in the death or injury of U.S. soldiers.
Investigators have found at least one case in which missing or faulty grates were involved in casualties, The New York Times said.
The Afghan attorney general has charged the Afghan contractor and his subcontractor who failed to do the installation with homicide and fraud.
One of the men is in custody and if the charges stand, the case will be the first dealing with a contracting failure that led to U.S. deaths, the Times said.
In the report, SIGAR said overlapping commanders could not properly monitor the contractors to ensure the work was done.
The problem is symptomatic of mismanagement issues that plagued the war and rebuilding effort in Afghanistan, the Times said.