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The Government Accountability Office weighs in:

Iraqi Spending to Rebuild Has Slowed, Report Says: Highly promising figures that the administration cited to demonstrate economic progress in Iraq last fall, when Congress was considering whether to continue financing the war, cannot be substantiated by official Iraqi budget records, the Government Accountability Office reported Tuesday.... [L]ast September the administration said Iraq had greatly accelerated such spending. By July 2007, the administration said, Iraq had spent some 24 percent of $10 billion set aside for reconstruction that year. As Gen. David H. Petraeus, the top American commander in Iraq, and Ryan C. Crocker, the American ambassador to Iraq, prepared in September to report to Congress on the state of the war, the economic figures were a rare sign of progress within Iraq’s often dysfunctional government.

But in its report on Tuesday, the accountability office said official Iraqi Finance Ministry records showed that Iraq had spent only 4.4 percent of the reconstruction budget by August 2007. It also said that the rate of spending had substantially slowed from the previous year. The reason for the difference, said Joseph A. Christoff, the G.A.O.’s director of international affairs and trade, was that few official Iraqi figures for 2007 were available when General Petraeus and Mr. Crocker went to Congress. So the administration, with the help of the Finance Ministry in Baghdad, appears to have relied on a combination of indicators, including real expenditures, ministries’ suggestions of projects they intended to carry out, and contracts that were still under negotiation, Mr. Christoff said. But actual spending does not seem to have lived up to those estimates for spending on reconstruction, a budget item sometimes called capital or investment expenditures, he added. “So it looked like an improvement, but it wasn’t an improvement,” he said....

[A]fter Iraq’s failure to spend its own money on reconstruction was first disclosed in late 2006, Iraqi and American officials repeatedly asserted that the problems would be much less severe the next year, as the new government led by Prime Minister Nuri Kamal al-Maliki found its way.... But the accountability office figures, which Mr. Christoff said were taken directly from Finance Ministry records, show that through August 2007 the Iraqi government had spent less than half the percentage of its investment budget that it had spent in the same period in 2006...