US government agencies charged with the reconstruction of Iraq allocated $362m to non-existent "dummy vendors", according to a report by the watchdog overseeing the reconstruction effort.

Stuart Bowen, the special inspector-general, said his review of the government's allocation of the $18.2bn fund found 96 incidents of cash being earmarked for projects that did not identify a vendor or contractor. The findings come just one week before the expiration of the reconstruction fund, at which point whatever remains will be returned to the Treasury. Mr Bowen said the government had $826m in remaining funds. Stephanie Kirchgaessner, Washington