US faulted for poorly managing private security in Iraq

"The department's security operation in Iraq has been highly effective in ensuring the safety of chief of mission personnel," according to the report by the department Office of Inspector General (OIG).

"However, the rapid rise in use and scale of private security contractors has strained the department's ability to effectively manage them," the OIG added.

"The department's management of the security program in Iraq has been undermined by frequent staff turnover, understaffing, increased workload, and the lack of standardized operating policies and procedures," it added.

It said that under the security contract, the embassy in Baghdad's regional security office overseeing logistics is responsible for managing and controlling government-furnished vehicles, arms, communications and other equipment.

The office is directed by a personnel services contractor (PSC) which oversees six Blackwater administrative logistics security specialists, it added.

And OIG said it believes the use of "a PSC to direct -- and Blackwater administrative specialists to carry out" -- the mission of the logistics office to control "government-furnished equipment is a poor management practice."

Such a practice may also violate Federal Acquisition Regulation policy stipulating that contractors not be used to carry out "inherently government functions," it added.

"This arrangement is particularly troubling because Blackwater personnel have inspected their own company," it added.

The report comes as five former Blackwater guards stand trial on charges of killing 14 Iraqi civilians and wounding 18 others by gunfire and grenades in Baghdad in 2007.