The US government cannot account for large amounts of weapons and armour given to Iraqi security forces in 2004 and 2005, a report by the Government Accountability Office (GAO), the investigative arm of the US congress, says.
At least 110,000 AK-47 rifles, 80,000 pistols, 135,000 items of body armour and 115,000 helmets are missing.
According to the GAO, the Pentagon has agreed with the findings and begun a review to ensure full accountability for the programme that aims to train and equip Iraqi forces.
"Our review of the 2007 property books found continuing problems with missing and incomplete records," the report said.
Approximately 54 per cent of the total weapons distributed to the Iraqi forces are said to be unaccounted for.
The report comes ahead of a review of US military operations that may pave the way for a reassessment of the US role in Iraq.
A senior Pentagon official has told The Washington Post newspaper that some weapons were probably being used against US troops.
He said that an Iraqi brigade, created in Fallujah, had disintegrated in 2004 and had begun fighting American soldiers.
Since 2003, the US has spent about $19.2bn to develop Iraqi security forces.
The US defence department has recently asked for another $2bn to continue the train-and-equip programme.
According to the GAO, the government had funded the programme for Iraqi security forces outside traditional security assistance programmes, providing the Pentagon with a degree of flexibility in managing the effort.
The report has further stated that "since the funding did not go through traditional security assistance programmes, the DoD [Department of Defence] accountability requirements normally applicable to these programmes did not apply".