BAGHDAD  - The US Department of Defence cannot account for some $2 billion of Iraqi funds it held, a report from a US watchdog said on Monday, in the latest case of apparently lax US oversight of spending in Iraq. The defence department "cannot account for about two-thirds of the approximately $3 billion in Development Fund for Iraq funds," the report to the US Congress by the Special Inspector General for Iraq Reconstruction (SIGIR) said, citing the findings of an audit it performed. According to the audit, the money was made available by the Iraqi government to the defence department.