Stabilizing and Rebuilding Iraq: Serious Challenges Confront U.S.
Efforts to Build the Capacity of Iraqi Ministries (04-OCT-07,	 
GAO-08-124T).							 
                                                                 
The development of competent and loyal government ministries is  
critical to stabilizing and rebuilding Iraq. The ministries are  
Iraq's largest employer, with an estimated 2.2 million government
workers. U.S. efforts to build the capacity of Iraqi ministries  
include programs to advise and help Iraqi government employees	 
develop the skills to plan programs, execute budgets, and	 
effectively deliver services. The administration received $140	 
million in fiscal year 2007 to fund U.S. capacity-building	 
efforts and requested an additional $255 million for fiscal year 
2008. This testimony discusses (1) U.S. efforts to develop	 
ministry capacity, (2) the key challenges to these efforts, and  
(3) the extent to which the U.S. government has an overall	 
integrated strategy. This statement is based on GAO-08-117. To	 
accomplish our report objectives, we reviewed reports from and	 
interviewed officials of U.S. agencies, the Iraqi government, the
United Nations, and the World Bank. We conducted fieldwork in	 
Washington, D.C.; New York City; Baghdad, Iraq; and Amman,	 
Jordan. 							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-124T					        
    ACCNO:   A77054						        
  TITLE:     Stabilizing and Rebuilding Iraq: Serious Challenges      
Confront U.S. Efforts to Build the Capacity of Iraqi Ministries  
     DATE:   10/04/2007 
  SUBJECT:   Agency missions					 
	     Cost analysis					 
	     Federal aid to foreign countries			 
	     Foreign governments				 
	     International organizations			 
	     International relations				 
	     Iraq War and reconstruction			 
	     Performance measures				 
	     Procurement planning				 
	     Program evaluation 				 
	     Risk assessment					 
	     Strategic planning 				 
	     Program coordination				 
	     Program implementation				 
	     Iraq						 

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GAO-08-124T

   

     * [1]Summary
     * [2]Background
     * [3]U.S. Efforts to Build Iraqi Government Capacity Lack Unified
     * [4]Low Capacity of the Iraqi Ministries and Other Challenges Po
     * [5]The United States Is Beginning to Develop a Strategy for Cap
     * [6]Conclusion
     * [7]Recommendation for Executive Action
     * [8]Matter for Congressional Consideration
     * [9]Agency Comments and Our Evaluation
     * [10]GAO Contacts and Staff Acknowledgments

          * [11]Order by Mail or Phone

     * [12]PDF6-Ordering Information.pdf

          * [13]Order by Mail or Phone

Testimony

Before the Committee on Oversight and Government Reform, House of
Representatives

United States Government Accountability Office

GAO

For Release on Delivery Expected at 10:00 a.m. EDT

October 4, 2007

STABILIZING AND REBUILDING IRAQ

Serious Challenges Confront U.S. Efforts to Build the Capacity of Iraqi
Ministries

Statement of David M. Walker Comptroller General of the United States

GAO-08-124T

Mr. Chairman and Members of the Committee:

I am pleased to be here today to discuss our report issued today on U.S.
efforts to build the capacity of Iraqi ministries. The development of
competent and loyal government ministries is critical to stabilizing and
rebuilding Iraq. Iraq's 34 ministries are responsible for ensuring
security through the armed forces and police and providing essential
government services, such as electricity, water, and health care. The
ministries are Iraq's largest employer, with an estimated 2.2 million
government workers.

U.S. efforts to build the capacity of Iraqi ministries include programs to
advise and help Iraqi government employees develop the skills to plan
programs, execute budgets, and effectively deliver services. In 2005 and
2006, the United States provided $169 million for programs to help build
the capacity of key civilian and security ministries. The administration
received an additional $140 million in fiscal year 2007 and requested $255
million for fiscal year 2008.

My testimony today discusses (1) the nature and extent of U.S. efforts to
develop the capacity of Iraqi ministries, (2) the key challenges to these
efforts, and (3) the extent to which the U.S. government has an overall
integrated strategy.

This statement is based on the report we issued today.^1 To accomplish our
report objectives, we reviewed and analyzed U.S., Iraqi, donor government,
United Nations (UN), and World Bank reports and data. We conducted
fieldwork in Washington, D.C.; New York City; Baghdad, Iraq; and Amman,
Jordan. At these locations, we met with officials and contractors working
for the Departments of State (State), Defense (DOD), Treasury, Justice,
the U.S. Agency for International Development (USAID), the United Nations
(UN), the World Bank, European Union, and the Iraqi government. We
conducted our review in accordance with generally accepted government
auditing standards.

^1 [14]GAO-08- 117, Stabilizing and Rebuilding Iraq: U.S. Ministry
Capacity Development Efforts Need an Overall Integrated Strategy to Guide
Efforts and Manage Risk (Washington, D.C.: Oct. 2007).

Summary

In summary, we found the following:

           o U.S. efforts to help build the capacity of the Iraqi national
           government have been characterized by (1) multiple U.S. agencies
           leading efforts, without overarching direction from a lead agency
           or a strategic plan that integrates their efforts; and (2)
           shifting timeframes and priorities in response to deteriorating
           conditions in Iraq.

           o U.S. efforts to develop Iraqi ministerial capacity face four key
           challenges that pose risks to their success and long-term
           sustainability. These include significant shortages of Iraqi
           ministry employees with the necessary skills to conduct key tasks,
           partisan influence over and militia infiltration of some
           ministries, corruption within the ministries, and poor security
           conditions that endanger employees and cause skilled workers to
           leave the country.

           o The U.S. government is beginning to develop an overall strategy
           for ministerial capacity development, although agencies have been
           implementing separate programs since 2003. GAO's work in this area
           shows that an overall strategy for capacity development should
           include (1) a clear purpose, scope, and methodology; (2) a
           delineation of U.S. roles and responsibilities and coordination
           with other donors, including the United Nations; (3) goals and
           objectives linked to Iraqi priorities; (4) performance measures
           and milestones; and (5) the costs, resources needed, and
           assessment of program risks. Individual U.S. capacity development
           efforts have included some but not all of these components.

We recommend that State, in consultation with the Iraqi government,
complete an overall integrated strategy for U.S. capacity development
efforts. Congress also should consider conditioning future appropriations
on the completion of such a strategy.

Background

As of September 2007, the Iraqi government included 34 ministries
responsible for providing security and essential government services. U.S.
capacity development programs target 12 key ministries: State and USAID
focus on 10 civilian ministries while DOD is responsible for the
Ministries of Defense and Interior. These 12 ministries employ 67 percent
of the Iraqi government workforce and are responsible for 74 percent of
the 2007 budget (see table 1).

Table 1: Estimated Staff Numbers and 2007 Annual Budget for Key Iraqi
Ministries

                                                                     Ministry 
                                     Staff as 2007 budget (U.S.     budget as 
                                percentage of        dollars in percentage of 
Key Ministries       Staff^a         total         millions)         total 
Finance               10,000           <1%         $14,436^b            3% 
Interior             408,000            18             3,183             8 
Defense              200,000             9             4,141            10 
Health               151,000             7             1,818             4 
Education          515,000^c            23             1,821             4 
Agriculture           10,000                             108               
Water Resources       17,000             1               353             1 
Planning               2,000                             210             1 
Oil                 75,000^d                           2,451             6 
Electricity           84,000                           1,474             4 
Justice               16,000             1               125               
Municipalities and     3,000                             370             1 
Public Works                                                               
Subtotal - Key     1,491,000            67            30,490            74 
ministries                                                                 
Other ministries   727,000^e            33            10,564            26 
and entities                                                               
Total              2,218,000          100%           $41,054          100% 

Source: Government of Iraq and State Department .

Note: Iraqi data are from the Iraq National Budget 2007. The number of
employees is rounded to the nearest thousand.

aStaff numbers include ministry estimates of funded staff positions. A
census of ministry employees, required by the IMF Standby Agreement, has
yet to be completed.

bMinistry operations account for about 1 percent of this figure. The
remainder is for general activities of the state, including food basket
distribution, welfare, and pensions.

cThis figure includes schoolteachers employed by the national government.

dThis figure includes the employees of 15 publicly funded but
independently operated oil companies.

eThis figure includes staff at all other ministries and employees at the
National Assembly, the Ministry Council, the President's Office, the
Supreme Justice Council, and the national ministry staff located at the
provincial level.

U.S. Efforts to Build Iraqi Government Capacity Lack Unified Direction

U.S. efforts to help build the capacity of the Iraqi national government
are characterized by (1) multiple U.S. agencies leading individual efforts
without overarching direction from a lead entity or a strategic approach
that integrates their efforts with Iraqi government priorities and (2)
shifting time frames and priorities in response to deteriorating
conditions in Iraq.

As of May 2007, six U.S. agencies were implementing about 53 projects at
individual ministries and other national Iraqi agencies. State, USAID, and
DOD lead the largest number of programs and provide about 384 U.S.
military, government, and contractor personnel to work with the
ministries. DOD provides over half (215) of the personnel to the
Ministries of Defense and Interior to advise Iraqi staff in developing
plans and policies, building ministry budgets, and managing personnel and
logistics. State and USAID together provide an additional 169 advisors to
the 10 key civilian ministries.

Although State, USAID, and DOD have improved the coordination of their
capacity-building efforts since early 2007, there is no lead agency or
strategic plan to provide overarching guidance. Two factors explain the
lack of a lead agency. First, from their inception in 2003, U.S. ministry
capacity-building efforts evolved without an overall plan or the
designation of a lead entity. U.S. agencies provided distinct assistance
to four successive governments in response to Iraq's immediate needs,
according to U.S. officials.^2 This approach first began under the
Coalition Provisional Authority whereby U.S. advisors ran the ministries
using U.S. and Iraqi funds and made personnel and budget decisions.
Attempts to create an overall capacity development plan were dropped in
late 2003 after the United States decided to transfer control of the
ministries to an interim government.

A second factor has been the delay in implementing recommendations from a
2005 State assessment that characterized U.S. capacity development
programs as uncoordinated, fragmented, duplicative and disorganized. State
recommended a unified effort among State, DOD, and USAID, with the latter
providing overall coordination and leadership. The recommendations were
not implemented. However, in July 2007, State named an ambassador to
direct civilian capacity-building programs, including USAID efforts.

Shifting priorities also have affected U.S. capacity development efforts,
particularly in response to continued security problems. In early 2007,
the U.S. mission refocused its capacity development program as part of the
surge strategy associated with the administration's New Way Forward.
Rather than focusing on 12 civilian and security ministries, State and DOD
targeted 6 key ministries (Interior, Defense, Planning, Finance, Oil, and
Electricity) and focused on short-term improvements to address immediate
problems with budget execution, procurement, and contracting. Accordingly,
U.S. capacity development efforts shifted from long-term institution
building to immediate efforts to help Iraqi ministries spend their capital
budgets and deliver better services to the Iraqi people. Improvements were
expected by September 2007.

^2The four governments are the Coalition Provisional Authority (April 2003
to June 2004); the interim government (June 2004 to May 2005); the
transitional government (May 2005 to May 2006); and the permanent
government (May 2006 to the present).

Low Capacity of the Iraqi Ministries and Other Challenges Pose Risks to U.S.
Efforts

U.S. efforts to develop Iraqi ministerial capacity face four key
challenges that pose a risk to their success and long-term sustainability.

First, Iraqi government institutions have significant shortages of
personnel with the skills to perform the vital tasks necessary to provide
security and deliver essential services to the Iraqi people. When the
Coalition Provisional Authority (CPA) removed Ba'athist party leaders and
members from upper-level management in government, universities, and
hospitals in 2003, most of Iraq's technocratic class was forced out of
government.^3 A September 2006 U.S. embassy assessment^4 noted that the
government had significant human resource shortfalls in most key civilian
ministries. The majority of staff at all but 1 of the 12 ministries
surveyed was inadequately trained for their positions, and a quarter of
them relied heavily on foreign support to compensate for their human and
capital resource shortfalls. The lack of trained staff has particularly
hindered the ability of ministries to develop and execute budgets. For
example, in 2006, the Iraqi government spent only 22 percent of its
capital budget. For January through July 2007, spending levels have
improved with about 24 percent of capital budgets spent. However, as we
reported in early September 2007, it is unlikely that Iraq will spend the
$10 billion it allocated for 2007 for capital budgets by the end of this
year.^5

^3GAO, Securing, Stabilizing, and Rebuilding Iraq: Iraqi Government Has Not
Met Most Legislative, Security, and Economic Benchmarks, [15]GAO-07-1195
(Washington, D.C.: Sept. 4, 2007).

^4Iraq Reconstruction Management Office, Baseline Assessment of Core
Functions at Key Civilian Ministries, Sept. 2006. The number of ministries
assessed on a core function varied.

^5GAO, Securing, Stabilizing, and Rebuilding Iraq: Iraq Government Has Not
Met Most Legislative, Security, and Economic Benchmarks, [16]GAO-07-1195
(Washington, D.C.: Sept. 4, 2007).

Second, Iraq's government confronts significant challenges in staffing a
nonpartisan civil service and addressing militia infiltration of key
ministries. In June 2007, DOD reported that militias influenced every
component of the Ministry of Interior. In particular, the Ministry has
been infiltrated by members of the Supreme Islamic Council of Iraq^6 and
its Badr Organization, as well as Muqtada al-Sadr's Mahdi Army.^7
Furthermore, the Iraqi civil service remained hampered by staff whose
political and sectarian loyalties jeopardized the civilian ministries'
abilities to provide basic services and build credibility among Iraqi
citizens, according to U.S. government reports and international
assessments.^8 DOD further found that government ministries and budgets
were sources of power for political parties, and staff ministry positions
were rewarded to party cronies. The use of patronage hindered capacity
development because it led to instability in the civil service as many
staff were replaced whenever the government changed or a new minister was
named, according to U.S. officials.

Third, according to State, widespread corruption undermines efforts to
develop the government's capacity by robbing it of needed resources, some
of which are used to fund the insurgency; by eroding popular faith in
democratic institutions seen to be run by corrupt political elites; and by
spurring capital flight and reducing economic growth. According to a State
assessment, one-third of the 12 civilian ministries surveyed had problems
with "ghost employees" (that is, nonexistent staff listed on the payroll).
In addition, the procedures to counter corruption adopted at all but one
of the civilian ministries surveyed were partly effective or ineffective.
Similar problems existed in the security ministries, according to DOD.^9

Finally, the security situation remains a major obstacle to developing
capacity in areas vital to the government's success. The high level of
violence hinders U.S. advisors' access to their counterparts in the
ministries, increases absenteeism among ministry employees, and
contributes to "brain drain" as ministry employees join the growing number
of Iraqis leaving the country. According to a UN report, between March
2003 and June 2007, about 2.2 million Iraqis left the country and 2
million were internally displaced. According to U.S. and international
officials, the flow of refugees exacerbates Iraqi ministry capacity
shortfalls because those fleeing tend to be disproportionately from the
educated and professional classes. A November 2006 UN report stated that
an estimated 40 percent of Iraq's professional class had left since 2003.

^6This organization changed its name from Supreme Council for Islamic
Revolution in Iraq in May 2007.

^7DOD, Measuring Stability and Security in Iraq: Report to Congress in
Accordance with The Department of Defense Appropriations Act 2007, Section
9010, Public Law 109-289 (Washington, D.C.: June 2007).

^8GAO, Securing, Stabilizing, and Rebuilding Iraq: Key Issues for
Congressional Oversight, [17]GAO-07-308SP (Washington, D.C.: Jan. 9,
2007).

^9DOD, Measuring Stability and Security in Iraq: Report to Congress in
Accordance with the Department of Defense Appropriations Act 2007, Section
9010, Public Law 109-289 (Washington, D.C.: Mar. 2007).

The United States Is Beginning to Develop a Strategy for Capacity Development
Efforts

In February 2007, State officials provided GAO with a three-page,
high-level outline proposing a U.S. strategy for strengthening Iraqi
ministerial capacity. This document was a summary with few details and no
timeline. A senior USAID official indicated that it is uncertain whether
the high-level summary will be developed into a strategy, although the
administration received $140 million in funding for its capacity
development efforts in fiscal year 2007 and requested $255 million for
fiscal year 2008.

GAO has previously identified the desirable elements of a strategy: a
clear purpose, scope, and methodology; a delineation of U.S. roles,
responsibilities, and coordination; desired goals, objectives, and
activities tied to Iraqi priorities; performance measures; and a
description of costs, resources needed, and risks. Table 2 summarizes the
key elements of a strategy and provides examples of the status of the U.S.
approach as of September 2007.

Table 2: Status of U.S. Capacity Development Strategy

Key component         Description              Status of efforts           
Clear purpose, scope, Addresses why the           o Limited discussion of  
and methodology       strategy was produced,      purpose and methodology  
                         the scope of its            for overall strategy.    
                         coverage, and the           o Scope of capacity      
                         process by which it was     development efforts has  
                         developed.                  shifted.                 
Delineation of U.S.   Addresses who will be       o Roles not clearly      
roles,                implementing the            delineated between       
responsibilities, and strategy, what their        USAID, MNSTC-I, and the  
coordination          roles will be compared      embassy.                 
                         with others, and the        o Limited documentation  
                         mechanisms for              on how efforts are to be 
                         coordinating their          integrated, such as a    
                         efforts.                    security cooperation     
                                                     office and a lead        
                                                     agency.                  
                                                     o Interagency task force 
                                                     helping to clarify roles 
                                                     and responsibilities,    
                                                     and coordination.        
Desired goals,        Addresses what the          o U.S. Embassy-Baghdad   
objectives, and       strategy is trying to       defined overall          
activities            achieve, priorities, and    end-state: assist Iraq's 
                         steps to achieve those      transition to            
                         results, consistent with    self-sufficiency.        
                         Iraqi priorities.           o MNSTC-I priorities and 
                                                     objectives for the       
                                                     Ministry of Defense,     
                                                     consistent with Iraqi    
                                                     priorities.              
                                                     o Overall, Iraqi         
                                                     government priorities    
                                                     not clearly identified.  
Performance measures  Performance measures to     o Status of efforts to   
                         gauge results.              develop performance      
                                                     measures is unclear.     
                                                     o U.S. embassy is using  
                                                     process or output        
                                                     measures at civilian     
                                                     ministries; uncertain    
                                                     about future             
                                                     assessments.             
                                                     o MNSTC-I is in process  
                                                     of developing outcome    
                                                     and results measures at  
                                                     the security ministries. 
Description of costs, Addresses what the          o No assessments of risk 
resources needed, and strategy will cost; what    provided with agency     
risk                  sources and types of        funding requests for     
                         resources are needed;       fiscal years 2007-2008.  
                         and where resources and     o No estimates of        
                         investments should be       long-term costs and      
                         targeted, balancing         resources needed to      
                         benefits, costs, and        achieve program results. 
                         risks.                                               

Source: GAO analysis of U.S. ministry capacity-building efforts.

As table 2 shows, U.S. agencies have developed some of these elements in
their programs for capacity building at individual ministries, but not as
part of an overall U.S. strategy. For example:

           o We found little evidence that the U.S. government has clearly
           defined the purpose, scope, and methodology for developing an
           overall strategy. Agencies have provided some limited information
           on why an overall strategy is needed, what it will cover, and how
           it will be developed.

           o A Joint Task Force on Capacity Development, established in
           October 2006, has helped U.S. agencies better delineate roles and
           responsibilities and coordinate their efforts. However, we found
           no plans on how the capacity development programs of State, USAID,
           and DOD will be unified and integrated.

           o While U.S. agencies have clearly identified the overall goals of
           capacity development at the Iraqi ministries, most U.S. efforts
           lack clear ties to Iraqi priorities for all ministries.

           o While DOD is developing measures to assess progress at the
           security ministries, such measures have not been developed for
           Iraqi civilian ministries.

           o U.S. agencies have not identified the costs and resources needed
           to complete capacity development programs beyond the budget for
           fiscal year 2007 and the 2008 budget request. Agencies have not
           provided information on how future resources will be targeted to
           achieve the desired end-state or how the risks we identified will
           be addressed.

In addition, efforts to improve cooperation with the UN and other
international donor nations and organizations have encountered
difficulties. For example, U.S. efforts are to be coordinated with the
Iraqi government and the international donor community through the
Capacity Development Working Group. However, the group did not meet for
about a year after forming in late 2005 and did not meet from February
through May 2007.

Conclusion

Current U.S. efforts to build the capacity of the Iraqi government involve
multiple U.S. agencies working with Iraqi counterparts on many issues.
GAO, for example, is working with the Iraqi Board of Supreme Audit to
enhance its auditing skills and capacity. However, U.S. efforts to improve
the capacity of Iraq's ministries must address significant challenges if
they are to achieve their desired outcomes. U.S. efforts lack an overall
strategy, no lead agency provides overall direction, and U.S. priorities
have been subject to numerous changes. Finally, U.S. efforts confront
shortages of competent personnel at Iraqi ministries, and sectarian
ministries contend with pervasive corruption. The risks are further
compounded by the ongoing violence in Iraq as U.S. civilian advisors have
difficulties meeting with their Iraqi counterparts and skilled Iraqi
professionals leave the country.

Congress appropriated $140 million in May 2007 for capacity building and
the administration requested up to $255 million for fiscal year 2008. We
believe that future U.S. investments must be conditioned on the
development of an overall integrated U.S. strategy that clearly
articulates agency roles and responsibilities, establishes clear goals,
delineates the total costs needed, and assesses the risk to U.S. efforts.
The strategy would also need to consider any expanded role of multilateral
organizations, including the United Nations and World Bank.

Recommendation for Executive Action

GAO recommends that State, in consultation with the Iraqi government,
complete an overall integrated strategy for U.S. capacity development
efforts.

Key components of an overall capacity development strategy should include
a clear purpose, scope, and methodology; a clear delineation of U.S.
roles, responsibilities, and coordination, including the designation of a
lead agency; goals and objectives based on Iraqi-identified priorities;
performance measures based on outcome metrics and milestones; and a
description of how resources will be targeted to achieve the desired
end-state.

Matter for Congressional Consideration

Given the absence of an integrated capacity development strategy, it is
unclear how further appropriations of funding for ministry capacity
development programs will contribute to the success of overall U.S.
efforts in Iraq. Congress should consider conditioning future
appropriations on the completion of an overall integrated strategy.

Agency Comments and Our Evaluation

In commenting on a draft of the report accompanying this testimony, State
and USAID noted (1) their concern over our recommendation to condition
future appropriations for capacity development on the completion of a
strategy; (2) the recent appointment of an ambassador to supervise all
short- and medium-term capacity development programs; and (3) the need to
tailor capacity development needs to each Iraqi ministry. In response to
the agencies' first comment, we do not recommend stopping U.S. investment
in capacity development; the $140 million in supplemental funding
appropriated in fiscal year 2007 remains available for the agencies to
continue their efforts. Rather, we recommend that Congress condition
future funding on the development of an overall integrated strategy.

We acknowledge that State named an ambassador to coordinate the embassy's
economic and assistance operations. However, this action occurred in July
2007, underscoring our point that U.S. capacity development efforts have
lacked overall leadership and highlighting the need for an overall
integrated strategy. Finally, our recommendation does not preclude U.S.
agencies from tailoring capacity development efforts to meet each
ministry's unique needs. A strategy ensures that a U.S.-funded program has
consistent overall goals, clear leadership and roles, and assessed risks
and vulnerabilities.

Mr. Chairman, this concludes my statement. I would be pleased to answer
any questions that you or other Members have at this time.

GAO Contacts and Staff Acknowledgments

For questions regarding this testimony please me on (202) 512-5500, or Mr.
Joseph A. Christoff, Director, International Affairs and Trade, on (202)
512-8979 or [18][email protected] . Other key contributors to this
statement were Tetsuo Miyabara, Patrick Hickey, Lynn Cothern, Lisa Helmer,
Stephen Lord, and Judith McCloskey.

(320548)

To view the full product, including the scope
and methodology, click on [19]GAO-08-124T .

For more information, contact Joseph A. Christoff at (202) 512-8979 or
[email protected].

Highlights of [20]GAO-08-124T , a testimony before the Committee on
Oversight and Government Reform, House of Representatives

October 2007

STABILIZING AND REBUILDING IRAQ

Serious Challenges Confront U.S. Efforts to Build the Capacity of Iraqi
Ministries

The development of competent and loyal government ministries is critical
to stabilizing and rebuilding Iraq. The ministries are Iraq's largest
employer, with an estimated 2.2 million government workers. U.S. efforts
to build the capacity of Iraqi ministries include programs to advise and
help Iraqi government employees develop the skills to plan programs,
execute budgets, and effectively deliver services. The administration
received $140 million in fiscal year 2007 to fund U.S. capacity-building
efforts and requested an additional $255 million for fiscal year 2008.

This testimony discusses (1) U.S. efforts to develop ministry capacity,
(2) the key challenges to these efforts, and (3) the extent to which the
U.S. government has an overall integrated strategy.

This statement is based on the report issued at this hearing. To
accomplish our report objectives, we reviewed reports from and interviewed
officials of U.S. agencies, the Iraqi government, the United Nations, and
the World Bank. We conducted fieldwork in Washington, D.C.; New York City;
Baghdad, Iraq; and Amman, Jordan.

[21]What GAO Recommends

GAO recommends that State, in consultation with the Iraqi government,
complete an overall integrated strategy for U.S. capacity development
efforts. Congress also should consider conditioning future appropriations
on the completion of such a strategy.

Over the past 4 years, U.S. efforts to help build the capacity of the
Iraqi national government have been characterized by (1) multiple U.S.
agencies leading efforts without overarching direction from a lead agency
or a strategic plan that integrates their efforts; and (2) shifting
timeframes and priorities in response to deteriorating conditions in Iraq.
As of May 2007, six U.S. agencies were implementing about 53 projects at
individual ministries and other national Iraqi agencies. Although the
Departments of State and Defense and the U.S. Agency for International
Development (USAID) have improved the coordination of their
capacity-building efforts, there is no lead agency or strategic plan to
provide overarching guidance.

U.S. efforts to develop Iraqi ministerial capacity face four key
challenges that pose risks to their success and long-term sustainability.
First, Iraqi government institutions have significant shortages of
personnel with the skills to perform the vital tasks necessary to provide
security and deliver essential services to the Iraqi people. Second,
Iraq's government confronts significant challenges in staffing a
nonpartisan civil service and addressing militia infiltration of key
ministries. Third, widespread corruption undermines efforts to develop the
government's capacity by robbing it of needed resources, some of which are
used to fund the insurgency. Finally, violence in Iraq hinders U.S.
advisors' access to Iraqi minstries, increases absenteeism among minstry
employees, and contributes to the growing number of professional Iraqis
leaving the country.

The U.S. government is beginning to develop an overall strategy for
ministerial capacity development, although agencies have been implementing
separate programs since 2003. GAO's work in this area shows that an
overall strategy for capacity development should include (1) a clear
purpose, scope, and methodology; (2) a delineation of U.S. roles and
responsibilities and coordination with other donors including the United
Nations; (3) goals and objectives linked to Iraqi priorities; (4)
performance measures and milestones; and (5) costs, resources needed, and
assessment of program risks. U.S. ministry capacity efforts have included
some but not all of these components. For example, agencies are working to
clarify roles and responsibilities. However, U.S. efforts lack clear ties
to Iraqi-identified priorities at all ministries, clear performance
measures, and information on how resources will be targeted to achieve the
desired end-state.

State and USAID noted concerns over our recommendation to condition
further appropriations and cited the appointment of an ambassador to
supervise civilian capacity development programs. GAO does not recommend
stopping U.S. investment in capacity development. The $140 million in
fiscal year 2007 funds remains available to continue efforts while
developing an integrated strategy. In addition, the U.S. ambassador
arrived in Iraq in July 2007 underscoring our point that U.S. efforts
lacked overall leadership and highlighting the need for an overall
integrated strategy.

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  14. http://www.gao.gov/cgi-bin/getrpt?GAO-08-117
  15. http://www.gao.gov/cgi-bin/getrpt?GAO-07-1195
  16. http://www.gao.gov/cgi-bin/getrpt?GAO-07-1195
  17. http://www.gao.gov/cgi-bin/getrpt?GAO-07-308SP
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