About four million are lacking food and in need of different types of help.
In his report, Bowen said the handing over of completed US-funded rebuilding projects to the Iraqi government “has been off the rails” for about a year.
“The failure of the asset-transfer programme raises concerns about the continuing operation and maintenance of US-constructed projects”
The special inspector-general’s report
“That raises grave questions about the sustainability of what the US has constructed,” he said.
Previously criticism has been directed at large US companies awarded contracts for reconstruction.
Media reports said last year that government estimates indicated as much as half the budget of some reconstruction projects had been spent on overhead costs.
The highest proportion of those overheads were incurred by the Halliburton subsidiary KBR in its oil-services projects.
KBR was one of several large US contractors awarded reconstruction projects in 2003 after the war.
Bowen’s report showed serious problems including insufficient oversight, cost overruns and significant delays in the billion-dollar reconstruction programme of Bechtel national, another of the contractors.
Auditors said a contractual provision that required all Bechtel invoices to be paid within 10 days of receipt was “troubling” because it raised concerns “about the reliability of receipt review process”.
Bechtel ended the majority of its projects late last year after three years in the country which saw 52 of its employees killed.
So far, more than $99.5bn has been pumped into rebuilding Iraq, of which $44.5bn was spent by the US on relief and reconstruction work since 2003.