The official who led the authority, L. Paul Bremer III, submitted a blistering written reply to the findings, saying the report had "many misconceptions and inaccuracies" and lacked professional judgment.
Bremer said the report "assumes that Western-style budgeting and accounting procedures could be immediately and fully implemented in the midst of a war."
The inspector general said the occupying agency disbursed $8.8 billion to Iraqi ministries "without assurance the moneys were properly accounted for."
US officials "did not establish or implement sufficient managerial, financial, and contractual controls," the report said. There was no way to verify that the money was used for its intended purposes of financing humanitarian needs, economic reconstruction, the repair of facilities, disarmament, and civil administration.
Bryan Whitman, a Pentagon spokesman, said yesterday that the authority was hamstrung by the "extraordinary conditions" under which it worked throughout its mission.
"We simply disagree with the audit's conclusion that the [authority] provided less than adequate controls," Whitman said.
Turning over the money "was in keeping with the [authority's] responsibility to transfer these funds and administrative responsibilities to the Iraqi ministries as an essential part of restoring Iraqi governance."
The inspector general cited an International Monetary Fund assessment in October 2003 on the poor state of Iraqi government offices. The assessment indicated ministries suffered from staff shortages, poor security, disruptions in communications, damage and looting of government buildings, and lack of financial policies.
