updated 1/26/2006 8:37:25 PM ET 2006-01-27T01:37:25

Billions of dollars in projects to improve water, sewer and electrical systems in Iraq could not be completed because the money had to be used to increase security, according to a government audit released Thursday.

Nearly one-third — or a total of $5.6 billion — of the $18.4 billion that Congress appropriated for Iraq relief and reconstruction in 2003 was shifted to address the new priorities and heightened security as of last Sept. 30, the audit said.

Moving money to those projects ended many plans to repair dams, improve water quality and repair and build sewer systems needed to remove sewage that built up near schools, hospitals and public markets in cities across the country.

“Because of the increase in insurgency activities, contractors have had to include better site protection, hardened vehicles for personnel transportation and trained security teams with special communications capability,” the audit said.

Officials increased funding for police training by more than 90 percent, to $1.8 billion; border enforcement by nearly 200 percent, to $436 million; and Iraqi National Guard operations and personnel by close to 300 percent, to $224.6 million.

Funding for private sector development jumped from the planned $153 million to $443 million — an increase of 290 percent.

The audit, released Thursday by the Special Inspector General for Iraq Reconstruction, is the latest in a string of critical reports that detail how the former Coalition Provisional Authority badly handled rebuilding projects and failed to account for millions of dollars in spending.

Four people have been charged in connection with the fraud investigation, and up to a dozen cases have been referred to the Justice Department.

Overall, just 49 of the planned water and sewer projects will be completed, and 300 of the planned 425 electrical projects will be done, according to the audit.

Part of the problem, the auditors said, was that the CPA underestimated the decrepit condition of the country’s infrastructure. Some of the reconstruction plans were initially made without a clear understanding of how bad the conditions in Iraq were, the auditors said.

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