ERBIL, Kurdistan Region of Iraq - As the Kurdistan Region's civil servants still await their salaries for June, new obstacles caused by a mix of technical issues and political disagreements threaten further delays in the already lengthy process of resolving Baghdad-Erbil budgetary and oil disputes.

Last month, Baghdad and the Kurdistan Regional Government (KRG) reached an agreement for the KRG to send 230,000 barrels of oil per day and 120 billion Iraqi dinars in non-oil revenues monthly to the federal government. In return, Baghdad agreed to pay salaries for May to public sector workers in the region, which had been previously suspended.

But the Kurdistan Region’s ability to meet the oil commitment was disrupted by 20 drone attacks in July targeting oil fields and strategic facilities, damaging infrastructure and reducing output.

In response, the federal government formed four committees to review oil production, non-oil revenues, budget matters, and the localization of salary payments. These committees were expected to submit their reports by Monday, August 4, but so far, only one of the four federal committees has submitted a report. The remaining three have not yet visited the Region. Without the full reports, the federal government says it cannot move forward with the June salary payments.

The New Region learned on Monday that the respective governments' divergent views regarding the handover of non-oil revenues from the KRG to Baghdad have delayed the work of one of the committees, who have requested an additonal two months to hold meetings, reconcile the two viewpoints, and reach an agreement, after which time they will submit a draft to the Iraqi Council of Ministers for approval.

Officials from both sides are now blaming each other for failing to follow the terms of the deal, raising fears that the salary payments will be delayed again.

“If there is no strong pressure and intervention, Baghdad will halt the salary payments once more,” a senior Iraqi government official told The New Region.

Faris Issa, the KRG’s representative in Baghdad, told The New Region the Kurdish government had “fully committed to the agreement and done everything required.”

Separately, Baghdad said it would send a new audit committee from the Federal Board of Supreme Audit to the KRG Ministry of Finance to examine all income and expenses. This visit was not part of the original agreement.

Sources told The New Region that KRG financial officials are not prepared to host the auditors or allow access to accounting units. The committee later reported a lack of cooperation from the Kurdish side.

A senior official in the Iraqi cabinet told The New Region that the KRG is willing to continue with the agreement and has committed to sending 120 billion dinars per month, along with about 150,000 barrels of oil daily, “maybe more,” the official said.

Meanwhile, both sides continue to disagree over what the sum of non-oil revenues should entail. The KRG says it already transfers 50% of its border crossing income to Baghdad, but the federal government insists it should receive half of all non-oil revenues from the region.

This disagreement is further complicating efforts to pay public sector workers and may result in continued delays.