As the U.S. military draws down forces in Iraq, the State Department’s plans to take over the American role may falter because of lack of money, inadequate housing for increased personnel and unforeseen events, according to a new inspector general’s report.

“Establishing a viable diplomatic mission in Iraq without the considerable support and resources of [the Department of Defense] will almost certainly require years of effort and the investment of significant resources,” according to the report released this week by the State Department’s inspector general.

The administration requested $2.7 billion for Iraq in fiscal 2011, but when the final continuing resolution was passed by Congress, the State Department got $2.3 billion for the effort. The administration has requested $6.3 billion for fiscal 2012. The funding uncertainties have “hindered the ability to derive firm, detailed budget figures for completing the transition and sustaining operations,” according to the report.

The report says the State Department plans to eventually deploy 17,000 political, economic and security personnel among 15 sites throughout Iraq. In Baghdad, the influx is expected to reach 8,000 by the end of 2011, but there are beds for only about half that number now. The embassy is negotiating with the Iraqi government to obtain more residential space in a nearby facility that is a U.S. military base, but there are no contingency plans if a property lease is delayed or denied by the Iraqi government, according to the report.

State Department officials in Washington told the inspector general’s investigators that “creative ways would be found to accommodate and provide life support for more civilian personnel, including ‘hot bunking’ [creating shifts for use of sleeping rooms], adding more containerized housing units, or requiring private contractors to find accommodations off of the embassy compound in nearby neighborhoods. . . . None of these options is optimal or sustainable in the long run,” according to the report.

In other problems cited in the report, the State Department plans to open four provincial posts by the end of 2011, including permanent consulates in Basra and Erbil, and temporary embassy branch offices in Kirkuk and Mosul. But uncertain funding and problems getting land use and lease agreements with the new Iraq government “have delayed department decisions on the size and scope of each post,” according to the report.

In congressional testimony, State Department officials said that construction costs for future consulates and embassy branch offices could require spending $1 billion over several years, with operating costs of up to $200 million annually.

The new plan, according to the report, is that $481 million from the State Department’s “Diplomatic and Consular Program funds will be used to retrofit and improve existing structures for interim posts, designed to last 3-5 years, rather than on new construction for permanent posts.”

With the departure of the U.S. military, the State Department decided to set up its own air operations so it would have aircraft for “quick reaction force movement, search and rescue, medical and casualty evacuation, and route reconnaissance and convoy escort,” the report states. The so-called Embassy Air Iraq, which has 19 aircraft based in Baghdad, will be expanded to as many as 46 aircraft, including helicopters and fixed-wing planes.

Embassy officials also plan to establish their own network of contractor-supported medical facilities to provide care after the withdrawal of U.S. military. State Department officials have sought to retain excess military medical equipment from the Pentagon, but contracts are in the early stages, and embassy officials told the inspector general that “there is a risk they will not have a fully mission capable medical operation prior to the military’s departure.”