The United States has slashed a signature Iraqi police training programme as it downsizes its massive diplomatic mission amid high costs and negative Iraqi sentiment, a US watchdog said on Monday.

The Special Inspector General for Iraq Reconstruction said in a report on an audit it conducted that the United States had wasted some $206 million on building facilities for the Police Development Programme (PDP), which a top Iraqi interior ministry official has termed "useless."

The US State Department "is wisely reducing the PDP's scope and size in the face of weak... support" from Iraq's interior ministry, SIGIR said, noting that it was originally conceived as a five-year, multi-billion dollar programme, the State Department's largest worldwide.

As of this month, the number of in-country advisers was reduced to 36 -- 18 in Baghdad and 18 in Kurdish regional capital Arbil, down from 85 advisers in January, SIGIR said, and compared to an initial plan for 350 advisers.

But the reduction in the PDP's scope means that millions of dollars have been wasted.

The State Department constructed training and housing facilities at the Baghdad Police College Annex for an estimated $108 million, while another $98 million was used to construct the Basra consulate so it could be used for training, according to SIGIR.

But the State Department "decided to close the (Baghdad Police College Annex) facility, just months after the PDP (Police Development Programme) started, due to security costs and programme revisions," SIGIR said.

And the Basra consulate "will not be used because the (Iraqi interior ministry) decided to terminate training at that location," it added.

"This brings the total amount of de facto waste in the PDP -- that is, funds not meaningfully used for the purpose of their appropriation -- to about $206 million."

The report also said that in May 2012, Iraq's senior deputy interior minister, Adnan al-Assadi, told SIGIR the PDP was "useless" and that his department did not need the large numbers of PDP advisers present in the country.

"He also indicated that Iraqi police officers had expressed their opinion that the training received to date was not beneficial," SIGIR said.

"Along with Iraqi disinterest, security concerns also affected the programme. The embassy's Regional Security Office deemed it unsafe for advisers to travel to Iraqi-controlled facilities in Baghdad on a frequent basis."

SIGIR noted that 94 percent of PDP operational programme costs go to "security and life and mission support."

And it said the State Department "has found it difficult to sustain the planned US personnel levels in Iraq because of the costs (estimated to be $6 billion annually) and the increasingly negative Iraqi reaction to such a large US diplomatic presence."

The State Department is working to decrease the size of its diplomatic mission in Iraq, the largest in the world.

A SIGIR quarterly report to the US Congress released on Monday said that there were 1,235 US government civilian employees and at least 12,477 employees of US-funded contractors or grantees in Iraq as of late June and early July, respectively.

The number of US government civilian employees is down 10 percent compared with the previous quarter, while the contractors and grantees have been reduced by about 26 percent, from 16,973 on April 1, SIGIR said.

The watchdog also said the State Department has announced the closure of the US consulate in the northern Iraqi city of Kirkuk.

The US has other consulates outside of Baghdad, in the southern port city of Basra, and in Arbil, the capital of the autonomous Kurdistan region in northern Iraq.