NYT: State Dept. Agency Hid Iraq Costs from Congress

From today’s New York Times:

The State Department agency in charge of $1.4 billion in reconstruction money in Iraq used an accounting shell game to hide ballooning cost overruns on its projects there and knowingly withheld information on schedule delays from Congress, a federal audit released late Friday has found….

An example:

The hospital’s construction budget was $50 million. By April of this year, Bechtel had told the aid agency [the United States Agency for International Development] that because of escalating costs for security and other problems, the project would actually cost $98 million to complete. But in an official report to Congress that month, the agency “was reporting the hospital project cost as $50 million,” the inspector general wrote in his report.

The rest was reclassified as overhead, or “indirect costs.” According to a contracting officer at the agency who was cited in the report, the agency “did not report these costs so it could stay within the $50 million authorization.”

$48 million here, millions more there, and pretty soon you’re talking real money.