Christian Aid has produced a report, Iraq: The Missing Billions, to coincide with a US-led international conference in Madrid aimed at securing money to rebuild the country.
The report's co-authors, Dominic Nutt and John Davison spent two months working on their findings.
The report reveals that billions of dollars of Iraqi oil money, transferred to the US-controlled Coalition Provisional Authority (CPA), has effectively disappeared.
Christian Aid has been able to account for only $1 billion of the total $5 billion raised from Iraqi oil sales.
John Davison told Aljazeera.net that serious questions need to be asked about the accountability of the CPA.
''This is money that belongs to the Iraqi people''
''This is money that belongs to the Iraqi people, and it's money that should be used to improve the lives of the Iraqi people. Who is deciding where this money is spent? There has to be a system in place that makes people accountable and above suspicion of wrong doing,'' said Davison.
The charity states that the lack of accountability on behalf of the CPA is in direct violation of the UN resolution that has given the green light for Iraqi assets to be transferred to the CPA.
Before money was transferred to the CPA an International Monitory Advisory Board should have been set up to monitor the flow of money.
Christian Aid says UN sources have told the charity that the board's formation has been delayed by internal arguments over the limited power that the board would have.
''If this lack of transparency is perpetuated it could well hold the seeds for future disaster in Iraq. The very oil revenues that are potentially the country's greatest asset could, on all available evidence, prove to be a curse,'' said Davison.
Christian Aid is asking for action to be taken to find out where the missing money is. The charity estimates that by the end of the year the revenue from Iraqi oil will top $9 billion.
The charity is demanding that the CPA should reveal where the money has gone.
''Oil revenues should benefit those who need help most - the country's poor, not just those with power and influence,'' says Davison.