The report said the Iraqi government had failed to take control of or maintain many U.S.-funded infrastructure projects.
It also said U.S. money for Iraq reconstruction is almost used up, and that the Iraqi government now has the responsibility for financing the country's recovery.
In other news, Britain's Oxfam charity says hunger and disease are spreading in Iraq.
The charity said in a report released today that 28 percent of Iraqi children are malnourished, 15 percent of Iraqis regularly cannot afford enough to eat and 70 percent lack clean drinking water.
The report said 2 million Iraqis have been forced to flee the country since 2003, and at least as many have been displaced within Iraq.
Oxfam pulled out of Iraq along with most other aid agencies because of deteriorating security in 2003.
Copyright (c) 2006. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036. www.rferl.org