Audit: U.S. Can't Account For Billions In Iraqi Funds

A U.S. audit has found that the Defense Department can't properly account for how it spent about 95 percent of $9.1 billion in Iraqi oil money earmarked for rebuilding the war-ravaged country.

The U.S. Special Investigator for Iraq Reconstruction report released Tuesday said there was shoddy record keeping and a lack of oversight of the $8.7 billion. The Pentagon cannot account at all for $2.6 billion spent between 2004 and 2007.

The money comes from the Development Fund for Iraq, set up in 2004 by the U.N. Security Council and made up of oil revenues, Iraqi assets frozen before the 2003 U.S.-led invasion and surplus funds from the Saddam Hussein-era, oil-for-food program.

The audit highlights the continued problems over how the U.S. is handling Iraqi funds.