Audit finds millions wasted in Iraq reconstruction contract

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Millions of dollars were likely wasted on a 900 million dollar army contract to build courthouses, prisons, police and other security facilities in Iraq, an audit released Monday has found.

The audit by the congressionally appointed Special Inspector General for Iraq, Stuart Bowen, found that the contractor, Parsons Delaware Inc., completed only about a third of 53 planned construction projects.

"Although the failure to complete some of the work is understandable because of its complex nature and the unstable security environment in Iraq, millions of dollars in waste are likely associated with incomplete, terminated and abandoned projects under this contract," the audit report said.

The contract was one of a dozen design-build construction contracts awarded by the army in 2004 to restore Iraq's infrastructure in broad areas such as security and justice, water, oil, electricity and transportation.

Parsons was supposed to build police and civil defense training areas, two prisons, two courthouses, fire stations, and border control facilities.

The report said more than 142 million dollars, or nearly 43 percent of the funds disbursed so far, "were spent on projects that were either terminated or cancelled, although a number of the projects were subsequently completed."

Repeated construction delays prompted the government to cancel the construction of two partially built prisons, one at Nasiriyah and the other at Khan Bani Saad, the audit said.

The Nasiriyah prison was later completed by another contractor, but the facility at Khan Bani Saad was turned over half finished to the Iraqi government which has no plans to use it, the audit said.

It said about 40 million dollars has been spent on the Khan Bani Saad prison.

"At this point the entire amount disbursed for this project may ultimately be wasted because the government of Iraq currently has no plans for completing or using this facility," the audit said.

The audit said there were "significant weaknesses" in the government's oversight of the contract, which created "an environment that was conducive to waste and inefficiency."