Members of the US private security company Blackwater secure the way of a US convoy in Baghdad, July 8, 2006. Patrick Baz/AFP/Getty Images.

The controversial private security firm formerly known as Blackwater received $1 billion in funds that the State Department did not properly keep track of, a department inspector general report found.

While Blackwater was providing personal protection for State Department officials in Iraq in 2006 and 2007, the firm spent more than $100,000 of taxpayer money on nicer-than-coach-class airline tickets, skimping on the number of required security team members and purchasing (and then losing track of) at least one deep fat fryer.

The Blackwater money is part of $6 billion in contractor payments that department Inspector General Steve Linick revealed last week were inadequately recorded and tracked over the past six years, which Linick called a national security vulnerability.

"It creates conditions conducive to fraud. … It impairs the ability of the Department to take effective and timely action to protect its interests, and, in turn, those of taxpayers. Finally, it limits the ability of the Government to punish and deter criminal behavior," Linick said in his "management alert" made public Thursday.

The Inspector General alert cites a 2009 audit of Blackwater's security services in Iraq beginning in 2005, when the State Department needed to fill vacancies among its diplomatic security corps. During that period, 17 Iraqi civilians were killed during a Baghdad massacre, for which four Blackwater guards currently face manslaughter charges (not necessarily those involved in the State Department assignment).

The Blackwater employees who were in Iraq to protect high-profile diplomats also seemed to travel like them. Between May 2006 and December 2007, the firm spent $127,364 on "airfare in excess of coach fare" and only reimbursed about 45 percent of the money to the State Department.

Department rules stipulate that employees must fly coach unless it's too burdensome to book such airfare, including when it would mean circuitous routing, "excessively prolonged travel" or would end up exceeding any costs saved by sitting in coach.

The audit also found that the State Department did not deduct payments when Blackwater security teams went consistently undermanned between 2006 and 2007.

For example, a team tasked to provide protection in Baghdad and Ramadi that was supposed to have 10 personal protective security specialists was understaffed for 16 out of 19 months. And a separate assignment in Al-Hillah, Najaf and Karbala did not have an emergency medical technician as part of its detail for 17 out of 19 months.

"If manning falls below a minimum or the correct number of personnel are not deployed on time, a large reduction in the award price will be made in addition to not being able to invoice the hours/days not worked," the audit cites the State Department contract as saying - stipulations that were never put into effect.

And while the 2009 audit did find that the State Department did a "commendable job" in overseeing Blackwater's weapons and vehicles, it added that Blackwater could not account for many personal items that had been previously inventoried. Among them: four handheld radios, four body armor vests, two pairs of binoculars, one satellite phone, one body armor plate, one GPS, and one … deep fat fryer.

Still, given the war zone conditions under which Blackwater personnel were operating, the audit found that their inventory of personal items was "reasonable."