The State Department's poor oversight of police training contracts in Iraq has made $2.5 billion of U.S. funding vulnerable to waste, fraud and abuse, according to a new report from the special inspector general for Iraq reconstruction.

State has only three contracting officers representatives in Iraq overseeing the DynCorp training contract. That staffing is not enough to check the company's invoices, track the government-owned property DynCorp's uses and confirm that training meets contract standards, IG Stuart Bowen wrote in the report released Jan. 25.

Although State plans to increase the number of oversight officials to 11, Bowen said the officials need better guidance to strengthen oversight. State must also review its workload to ensure 11 officials will be enough because these officials also must review past invoices to confirm the government was billed properly for services DynCorp provided since 2004, Bowen wrote. So far, reviews of old invoices have been hampered by incomplete or missing paperwork, he said.

State agreed with Bowen's conclusion that more staff and better guidance are needed, but disagreed that these shortcomings have put the $2.5 billion at risk.