Reports Fault Oversight of Iraq Police Program

James F. McNulty, chief executive of Parsons, said in a statement that the company's work had been hampered by security concerns. "Extremely difficult security conditions factored significantly into problems that occurred, and we worked to fix the problems as soon as we learned about them,'' he said.

Parsons, a $3 billion-a-year construction and engineering firm, had been one of the United States' largest contractors in Iraq. The company's work first came under scrutiny last spring, when the special inspector general's office reported that the company would complete only a small fraction of the 150 health clinics it was tasked to build. The focus on Parsons intensified in the fall, when the special inspector general's office blamed the company and the corps for problems at the police college.

At a congressional hearing in September, a Parsons executive, Earnest Robbins II, testified that the problems at the college would be fixed. "We are repairing it at no cost to the government," he said.

The company left the repairs to an Iraqi subcontractor, which it blamed for botching the job in the first place. In yesterday's report, however, auditors also found fault with Parsons's designs, which they said did not include enough detail to allow subcontractors to do the work properly.

In its review of work under DynCorp's $1.8 billion State Department contract, the special inspector general found that the department's lax oversight led it to pay $43.8 million for a residential camp for DynCorp trainers that has never been used.

Some of the work on the camp, including the pool and VIP trailers, was requested by the Iraqi Interior Ministry but was never authorized by U.S. officials.

The State Department ordered work on the project stopped in September 2004, shortly after issuing the contract, because of concerns that the location was too dangerous for DynCorp's trainers. DynCorp initially told the department that the camp had already been completed, but more than a year later said it wasn't.

In 2005, a State Department official became concerned about "potential fraud" regarding DynCorp's billing for 500 trailers that may have never been built. Yesterday's report said the investigation is ongoing.

The department also can't account for $36.4 million of weapons and equipment, including armored vehicles and body armor, because DynCorp's invoices were vague, the report said. "DynCorp invoices were frequently ambiguous and lacked the level of detail necessary to identify what was procured," the report said.

A State Department official said the agency initially became concerned about the contract in 2005 and has revamped its contracting practices for work in Iraq, Afghanistan and Jordan. According to the report, the department is reviewing all of DynCorp's contracts and identified a $1.1 million billing error earlier this month.

"We haven't been contacted about the information in this report," said Greg Lagana, a DynCorp spokesman, "but we believe that any investigation or audit will show that the company acted responsibly and with concern for the expenditure of public funds. Of course, should there be any audit or investigation, we will cooperate fully and openly."