CPA Inspector General Interim Report: July 2004

Exerpts from the Audit Report #04-011, Dated July 26, 2004 prepared by the Office of the Inspector General Coalition Provisional Authority:

"This report is the first in a series resulting from our review of the management of the Logistics Civil Augmentation Program III contract and the associated Task Order 0044. This report discusses accountability and control of material assets used to support the Coalition Provisional Authority (CPA) in Bagdad, Iraq"

"Task Order 0044 was issued by the Department of the Army to KBR...to provide logistics and life support for the CPA Regional Offices. As of April 2004, KBR, (Kellogg Brown and Root, a subsidiary of Halliburton), had performed a reported $308,529,772 of work on Task Order 0044. The cost of actual completed work and an additional forecast for work in progress was reported by KBR to be $633 million as of March 27, 2004. As part of Task Order 0044, KBR property records show they managed 20,531 items valued at over $61.1 million in Bagdad, Iraq."

"We projected that KBR could not account for 6,975 (34%) property items from an inventory of 20,531 records. Further we projected that 1,425 (6.9%) property items were on-hand but were not recorded on hand receipts. In addition, we projected that 5,920 (28.8%) hand receipts were not on file or had not been prepared. As a result, we projected that property valued at more than $18.6 million was not accurately accounted for or was missing."

Note: KBR reported they did $308 million of work on Task Order 0044, had another $325 million of work in progress, and only used $61 million, (19.8%), worth of property items for this work. Of that amount, 34% of the items could not be accounted for directly, and that 30.4% of the money spent on these assets were not accurately accounted for or were missing.

In other words, KBR spent 80% of their funding for things other than property items that could be inventoried, and of the other 20% spent on property items, at least 30% were missing in action.

Gee, I wonder how much of the $246 million in non-property items was unaccounted for? And since the CPA probably did not pay any significant rent, utilities, insurance, etc did the 80% go toward human resources?