Army Corps Faked Budget Entries

The Army Corps of Engineers improperly created fake entries in government ledgers to maintain control over hundreds of millions of dollars in spending for the reconstruction of Iraq, according to a federal audit released Friday.

Corps officials listed $362 million in potential contracts for a nonexistent contractor labeled "Dummy Vendor" in a government database, an accounting trick to preserve funds due to expire at the end of this fiscal year, the audit said.

"They took this money and parked it to use later," said one senior U.S. official who requested anonymity because he was not authorized to elaborate on the audit.

"It's improper. It's wrong. This is not the way you do government business."

Corps officials acknowledged Friday that the technique was improper but said that there was no intent to deceive. They said that the entries were designed to ensure that the government had enough money on hand to pay contractors already at work in Iraq.