Evan Vucci, Associated Press
Secretary of State Condoleezza Rice says she has replaced officials, hired more contract managers and ordered other changes to improve operations in Iraq.

WASHINGTON — Secretary of State Condoleezza Rice acknowledged at a congressional hearing Thursday that her department had serious problems overseeing its largest contracts in Iraq.

One of the problems: The State Department official managing a $1.2 billion contract to train Iraqi police didn't keep a complete file for the contract, Rice told the House Oversight and Government Reform Committee.

Special Inspector General for Iraq Reconstruction Stuart Bowen said this week that the records were so incomplete his office had to suspend its audit of the contract.

Rice also said the killings last month of more than a dozen Iraqis by the private security firm Blackwater USA exposed management weaknesses. Blackwater President Erik Prince has maintained that his guards fired in self-defense.

"I certainly regret we did not have the kind of oversight I would have insisted upon," Rice said.

Rice said she had replaced officials, hired more contract managers and ordered other changes to improve the department's operations in Iraq. She said she will discuss oversight of security contractors in Iraq with Defense Secretary Robert Gates and may make more recommendations after that.

She also said the department had billed DynCorp for $29 million in improper payments and was trying to get an additional $19 million from the company, which provided police training. DynCorp spokesman Gregory Lagana said the company has not been asked to repay that amount, but the government often asks for more information to support its invoices.

"If there are any errors, we will absolutely reimburse the government," Lagana said.<

Rice's testimony came after the committee held several hearings to investigate the State Department's work in Iraq, including its security contracts with Blackwater and efforts to fight corruption in Iraq.

Committee Chairman Henry Waxman said the State Department has refused to turn over some documents, delayed release of others and blocked officials from publicly discussing the extent of corruption in the Iraqi government.

"We need to know whether the mistakes of the State Department have jeopardized any chance for political success in Iraq," said Waxman, D-Calif.

Rice defended her department, saying U.S. diplomats in Iraq face a difficult job in a war zone.

Rice acknowledged that "corruption is a pervasive problem in Iraq" but refused to criticize Prime Minister Nouri al-Maliki or any other Iraqi by name. "I don't see anything to be gained by discussing allegations that are not yet investigated and substantiated," Rice said.

Rice said some Iraqi government money had been siphoned off to fund sectarian militias, which attack U.S. troops, particularly in Iraq's south. She said Iran's support for Shiite Muslim militias is a more serious problem.

Republicans on the panel said Democrats used the hearing to attack Iraq policy.

"The Democratic strategy seems to be to drill enough small holes in the bottom of the boat to sink the entire Iraqi enterprise," said Rep. Tom Davis, R-Va.