WASHINGTON -- The Defense Department is preparing its seventh supplemental budget request for the wars in Iraq and Afghanistan, but congressional overseers and government watchdog groups are warning that gaps in the Pentagon's accounting methods make it difficult to monitor how the armed services have spent more than $300 billion since the war on terror began.

The nonpartisan Congressional Research Service has said that confusing Pentagon accounting procedures, as well as bookkeeping lapses, have complicated the legislative branch's ability to track billions of dollars that have been spent on military contracts and operations.

The CRS, a branch of the Library of Congress, said those lapses have increased the likelihood that funds could be misused.

"They should and could do a better job on providing at least basic estimates about where the money is going," said Steve Kosiak, of the Center for Strategic and Budgetary Assessments.

"It is a wartime environment, and it may not be your first priority, but this has been going on since 9/11," a budget analyst.

The CRS report, which was prepared for lawmakers but was not released publicly, cautioned that "gaps and inconsistencies" in the Pentagon's accounting efforts "sometimes make it problematic to reconstruct costs."

The Defense Department, the report said, "has not provided an overall reckoning of these funds by mission or military operation," adding that Congress has yet to receive a "transparent accounting" of money it has already allocated to the war effort. It said lawmakers need to "to ensure accurate accounting in the future."

Asked about the congressional report's findings, Pentagon officials said in a statement that the department "disagrees with the implication that funding is not accounted for or justified."

"The Department of Defense has a comprehensive cost reporting system that reports obligations by military operation, by military service, by month, and by fiscal year," the statement said. "This system has captured the costs of the global war on terror since September 11, 2001."

The new request, a package administration and congressional officials said could total as much as $35 billion, including $5 billion for the new Iraqi security forces, would be on top of nearly $50 billion already set aside for next year by lawmakers. The officials said the new money for training and outfitting the Iraqi security forces reflects President Bush's priority of replacing American forces with Iraqi units as quickly as possible.

Pentagon officials said they are currently meeting with commanders in the field to assess their budget needs for the coming year, but will definitely need more than the nearly $50 billion already designated for 2006.

"The Department has not made any decisions," said a spokeswoman, Lieutenant Colonel Rose-Ann Lynch. "The Department is constantly working with the [military] services, as well as the combatant commands, to assess the requirements in the global war on terror. These requirements are based on the conditions in the field."

The funds for Iraqi forces would be on top of the $10.6 billion already budgeted for 2005 and 2006, according to Lieutenant General Martin Dempsey, commander of the Multinational Security Transition Command.

Dempsey told reporters via telephone from Iraq Friday that most of those funds will have been spent by early next year and said that US and Iraqi officials will soon "have a better idea of what a potential supplemental will be."

The growing cost of training and equipping the Iraqis comes on top of the ballooning price tag of maintaining the US military's day-to-day operations in the region. The United States spends on average almost $6 billion a month in Iraq and about $1 billion a month in Afghanistan, according to CRS estimates. Compared to last year, costs have increased by nearly 20 percent in Iraq, while they have gone down by nearly 10 percent in Afghanistan, where the United States has decreased its forces.

In total, the US has allocated an estimated $357 billion for military operations since the September 11, 2001, terrorist attacks, according to the congressional analysis. More than $250 billion has gone to the Iraq mission, $82 billion to Afghanistan, and about $24 billion to beefing up security at American military bases around the globe.

That is far more than predicted before the US invaded Iraq in 2003. And back when the war was expected to be over more quickly, there was little attention to oversight of the war budget.

But as the war has become an annual expense, and reports of misused funds have filtered out, budgetary watchdogs have taken notice.

Many give the Pentagon high marks for recent efforts to track the $18 billion that had been set aside for rebuilding projects. Investigations have led to several indictments, including the first charges of graft against a US military officer last week.

Dozens more criminal cases may be brought, according to Pentagon officials.

But the vast sums of money being spent to maintain the American military presence in Iraq -- plus an estimated 30,000 private security agents working under Pentagon contracts -- are also drawing new attention.

Keith Ashdown, of the conservative Taxpayers for Common Sense, said that the Defense Department Inspector General's office no longer has any auditors in Iraq and that only a fraction of the war funds has been audited.

"The lion's share of the money really hasn't been audited that effectively," Ashdown said. "The money going to keep our troops and the infrastructure there is not being looked at. We don't know how many pairs of boots or helicopters we are replacing."

A recent investigation by the Government Accountability Office found that the Defense Department could not account for more than $7 billion provided for the war on terrorism. All together, government audits have concluded that at least $20 billion in war-related spending has been unaccounted for.

Such questions are not expected to hold up passage of the supplemental spending package to continue funding operations in Iraq and Afghanistan. In anticipation of the mounting costs, House and Senate committees tacked $45 billion onto the annual defense appropriations bill, awaiting passage next month.

But in light of recent Iraq contracting scandals, some lawmakers are pushing for much greater oversight of overall war spending. Representative Stephen F. Lynch, a South Boston Democrat, sponsored a bill this month requiring extra review of reconstruction and troop support contracts.

"This is a matter of common sense," Lynch said in a statement. "A comprehensive contractual review does not appear to be a priority . . . It's about time we adopt a real system of accountability."
© Copyright 2005 Globe Newspaper Company.

Commentary:
$20 billion is missing out of $300 billion. That's 15% - and congress is doing nothing about it. When Katrina hit, republicans were outraged that we'd have to pay for it - they demanded spending cuts. Why didn't they demand spending cuts (and tax increases) to fight their silly wars and tax cuts? (Because they're intellectually inconsistent.)