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 hospitalâs 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 âwas reporting the hospital project cost as $50 million,â the inspector general wrote in his report.
The rest was reclassified as overhead, or âindirect costs.â According to a contracting officer at the agency who was cited in the report, the agency âdid not report these costs so it could stay within the $50 million authorization.â
$48 million here, millions more there, and pretty soon you’re talking real money.