Audit Finds 'Accounting Shell Game' in Iraq Reconstruction Projects

According to a recent federal audit of some of the reconstruction projects underway in Iraq, the agency charged with overseeing the projects knowingly withheld schedule delays and cost overruns in what The New York Times reported as "an accounting shell game."

The findings appear in an audit of the United States Agency for International Development’s (U.S.A.I.D.) oversight of the construction of a children’s hospital in Basra, but the report refers to wider reconstruction efforts throughout Iraq.

The government’s auditors report that U.S.A.I.D. made a practice of hiding escalating costs for security and other problems by reporting them as overhead or indirect costs. Further, the agency was found to have regularly withheld project delays in its reports to Congress.

The U.S. government has sent a new director to its embassy in Baghdad to oversee reconstruction efforts.