Iraq Reconstruction: Better Data Needed to Assess Iraq's Budget Execution
Highlights
The President's New Way Forward in Iraq identified Iraq's inability to spend its resources to rebuild infrastructure and deliver essential services as a critical economic challenge to Iraq's self-reliance. Further, Iraq's ability to spend its $10.1 billion capital projects budget in 2007 was one of the 18 benchmarks used to assess U.S. progress in stabilizing and rebuilding Iraq. This report (1) examines data the U.S. embassy used to determine the extent to which the government of Iraq spent its 2007 capital projects budget, (2) identifies factors affecting the Iraqi government's ability to spend these funds, and (3) describes U.S. government efforts to assist the Iraqi government in spending its capital projects funds. For this effort, GAO reviewed Iraqi government budget data and information on provincial spending collected by the U.S. Provincial Reconstruction Teams. GAO also interviewed officials from the departments of the Treasury, Defense, State, and other agencies and organizations.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of the Treasury | To help ensure more accurate reporting of the government of Iraq's spending of its capital projects budget, the Secretary of Treasury should work with the government of Iraq and relevant U.S. agencies to enhance the Treasury department's ability to report accurate and reliable expenditure data from the ministries and provinces. This reporting should be based on the International Monetary Fund-compliant standards rather than unofficial data sources that are of questionable accuracy and reliability. |
Closed – Implemented
In January 2008, GAO reported (GAO-08-153) significant discrepancies between U.S. and Iraqi reports on the rates of Iraqi government spending on capital projects. GAO concluded that we could not determine the extent to which the Iraqi government was spending its 2007 capital projects budget, among other government spending, because of the discrepancies between the unofficial data that the U.S. government was reporting to Congress and the official data that the Iraqi government was using. We further noted that discrepancies between the official and unofficial data highlight uncertainties about the sources and use of Iraq's expenditure data. GAO recommended that the Secretary of Treasury work with the government of Iraq and relevant U.S. agencies to enhance the department's ability to report accurate and reliable expenditure data from the ministries and provinces. In the course of working on a subsequent report that reviewed the Iraqi government's revenue and expenditures (GAO-08-1031), GAO officials worked with Department of the Treasury officials to explore the different data sources and determine which was more authoritative and reliable. As a result, Treasury and GAO determined that expenditure data collected monthly by the Ministry of Finance and sent directly to the Treasury Attache at U.S. Embassy - Baghdad was sufficiently reliable for Treasury's purposes and for GAO to analyze and report. Treasury officials stated in an interview with GAO that, as a result of GAO's intervention, they better understand the data they are using to help guide U.S. policy and report to Congress.
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