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Last Updated: Friday, 3 November 2006, 16:15 GMT
US stops audit of Iraq rebuilding
Enlarging the fresh water treatment plant near Baghdad
The vast bill for rebuilding Iraq has created a need for rigorous auditing
A US government agency that has exposed corruption in Iraqi reconstruction projects will close in 2007.

Washington lawmakers have reacted with shock at the discovery that an obscure clause in a military spending bill will terminate the work of the auditor.

The Office of the Special Inspector General for Iraq Reconstruction has embarrassed the US administration with its reports on corrupt practices.

Critics of the government claim this is what lies behind its sudden closure.

Dogged investigator

Under the direction of Special Inspector General Stuart Bowen, the Office employs 55 auditors and inspectors.

His office has detailed successes among the many reconstruction projects, such as in the rebuilding of infrastructure essential for transport and education.

However, critics of President George W Bush's Iraq policy seized on the auditor's conclusion that the overall $20bn (11.5bn) reconstruction effort was being hampered by inefficiency as well as attacks by insurgents.

The auditor recently reported that a subsidiary of Halliburton, the largest US civilian contractor in Iraq, had withheld information from US officials.

Halliburton HQ, Houston
Halliburton subsidiary KBR came under scrutiny by the Iraq auditor

It said that KBR, formerly Kellogg Brown & Root, had systematically engaged in practices aimed at veiling the facts around its contracts.

The audit office began operations in March 2004 and has referred 25 criminal cases to the US Department of Justice, of which four have resulted in convictions.

Among its more notable findings was a report on the loss of 14,000 weapons destined for Iraqi government use. Many of these are believed to have found their way into the hands of insurgent groups after the Pentagon lost track of them.

Perplexed lawmakers

In 2005, it issued a damning report citing "severe inefficiencies and poor management" at the body that ran Iraq before the recent elections, the Coalition Provisional Authority.

Republican Senator Susan Collins told the New York Times she was mystified about how the termination clause had found its way into the bill. Senator John Warner, the Republican chairman of the Senate Armed Services Committee, told the newspaper he would push for an extension of Mr Bowen's charter.

Inspectors from other US government departments, such as the Pentagon, could take over some of the Iraq auditor's responsibilities. But the strength of Mr Bowen's operation lies in its strong presence on the ground in Iraq.

The Pentagon and other US bodies have been criticised by legislators for lacking an extensive network of auditors in Iraq itself.

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