The State Department hasn't properly tracked the use of nearly $250 million in grants awarded between 2004 and 2009 for "democracy building activities" in Iraq, according to the special inspector general for Iraq reconstruction.

The two nonprofit organizations receiving grant funding from State's Bureau of Democracy, Human Rights and Labor — the International Republican Institute (IRI) and the National Democratic Institute (NDI) — have not provided to State assessments of the programs the money supported, although they tell the IG the assessments were done. State doesn't require the grantees to submit the reports, meaning the department is without the insights it needs to ensure the funding is being spent properly, special IG Stuart Bowen wrote in a report released Tuesday.

The IG staff audited seven grants worth $114 million and found that only $47 million, or 41 percent of the funds, were spent on program activities. The rest of the money went to security and overhead costs, Bowen said.

Almost one-third of NDI's costs and more than one-half IRI's costs went to security. Without documentation showing the cost-benefit analyses of those decisions, neither the IG nor State can determine if the costs were appropriate, Bowen said. Further, State doesn't give grantees a formula to determine appropriate spending on administrative and security costs, Bowen said.

The report recommends State in the future require quarterly reports on all grantees' budgets to determine whether administrative costs are reasonable and programs are effective. State concurred with the recommendations.