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US Cannot Account for $8.7 Billion in Iraqi Funds

A U.S. investigation has found the U.S. Department of Defense cannot account for most of a $9.1 billion Iraqi oil fund meant for reconstruction.

An audit of the fund found the Pentagon is unable to show how $8.7 billion was spent. It says the Pentagon failed to properly create bank accounts for a bulk of the money, which it controlled from 2004 to 2007.

Without those accounts, the audit says the money became "vulnerable to inappropriate uses and undetected losses."

The report does not allege any fraudulent activity.

Of the $8.7 billion that was not handled properly, the audit says the military failed to provide any records for $2.7 billion.

The Pentagon has promised to change its accounting practices in response to the audit.

The U.S. still holds more than $34 million in the fund, which it was supposed to return to Iraqi control in 2007.

Some information for this report was provided by AP.