In a report made public on Tuesday, a review panel found that there were too few American officials in Iraq to enforce the rules that apply to Blackwater and other security contractors. It also found that the conduct of the contractors had undermined the broader mission of ending the insurgency and establishing a democratic government in Iraq.

Ms. Rice approved a number of the review panel’s recommendations intended to strengthen oversight of the security contractors, including a revision of the rules for the use of deadly force to bring them more in line with the military’s rules of engagement, and creation of review panels to investigate every incident involving the injury or killing of a civilian. The panels could refer possible instances of wrongdoing to the Justice Department. The contractors would also undergo more rigorous training in Iraqi culture and language.

The other report was an audit of the State Department’s oversight of DynCorp, released Tuesday, which found that records tracking hundreds of millions of dollars paid to the company were in “disarray.”

Interviews with administration officials, auditors and outside experts show that the use of contractors has grown far beyond what department officials imagined when they first outsourced critical security functions in 1994 and hired private security guards to protect American diplomats in Haiti, which was thrown into turmoil by civil strife.

Today, the Bureau of Diplomatic Security, the small State Department office that oversees the private security contractors in Iraq and elsewhere, is overwhelmed by its responsibilities to supervise the contractors, according to former employees, members of Congress and outside experts. They say the office has grown too reliant on, and too close to, the 1,200 private soldiers who now guard American officials overseas.