Inspector General's report -- 30 July, 2004

Coalition Provisional Authority Control Over Seized and Vested Assets Report Number 04-008 July 30, 2004

Examined 20 Program Review Board requests for 60 disbursements totalling $120.1 million. They found:

• 25 disbursements had only the signature of the recipient, totalling $17.2 million
• 5 disbursements had no documentation, totalling $99.1 million
• 1 disbursement request did not have approval documents from the PRB or CPA on file

So $116.3 million had not been properly accounted for. ``However, during final discussions with the CPA Comptroller's office at the conclusion of the audit, comptroller personnel produced the disbursement documentation and the approval documentation that we had identified as missing.

Non-cash assets:

Described as ``ranged from carpets and furniture to vases and wine glasses'', the FMO allowed personnel to sign-out non-cash assets for use in offices and villas. The audit states that ``FMO personnel did not adequately manage, secure, and safeguard non-cash assets in complieance with CPA established policied and procedures''.

• Only the inventory of Uday Hussein's personal items was investigated.
• Of 24 available sign-out sheets, 7 were incorrectly filled out.
• A chain of custody was not established for the jewelry, which was not listed by item (e.g. ``box of jewels''),
• tours were given for groups of personnel, who were encouraged to take souvenir photographs with the items.

Is this related to the theft of 12 Iraqi paintings and 40 bonds by Fox News Channel employee Benjamin James Johnson? According to CNN,

The charges against Johnson say he had accompanied the U.S. Army troops to the "New Presidential Palace," which Johnson told authorities was the former residence of Uday Hussein, son of the now deposed Iraqi president.

The document says Johnson first claimed he was given the items by Iraqi citizens on the street, but later admitted to federal agents that he had removed the paintings from a palace.

The audit report section concludes by noting that the Iraq Ministry of Culture has taken posession of these items, which will be sold and the proceeds put ``into an education fund for Iraqi schools''.

Seized and vested cash assets:

As summarised above, ``the validity and the purpose of disbursements for $116.3 million could not be determined''.

The response to the report is as follows:

• Similar to the KPMG audit, FMO responded that asset management was accorded lower priority due to limited resources being taken up by combat operations.
• FMO has turned over all seized assets to the Ministry of Culture, which should be finalised by 29 October, 2004