IG: DOD not detailing where billions go in aid to Afghan forces
By CID STANDIFER | STARS AND STRIPES Published: December 5, 2013
KABUL — The U.S. Defense Department lacks the resources and rigorous procedures it needs to properly keep tabs on the billions of dollars in direct aid it gives to Afghan security forces through the Kabul government, according to a report issued today by the U.S. government’s Afghanistan watchdog office.
Combined Security Transition Command-Afghanistan hasn’t taken a systematic look at the way the Finance Ministry, through which all direct aid flows, keeps its books, the Special Inspector General for Afghan Reconstruction (SIGAR) said. Afghanistan’s Finance Ministry doesn’t keep track of its money in enough detail to ensure direct aid is being spent as intended, and CSTC-A doesn’t have enough people to do more than catch glaring errors, SIGAR said.
In its comments on the report, CSTC-A said it agrees it needs to examine direct-aid risks more comprehensively. It said it is changing the way it advises the government, shifting to one that focuses on “systems within ministries” instead of individual offices.
CSTC-A has done risk assessments for some of the offices in the Interior Ministry and Defense Ministry that get funding, but SIGAR said even those assessments are inconsistent, subjective and based on changing definitions.
CSTC-A said it knows there’s a staffing shortage and is getting approval to hire more civilian auditors.
The Finance Ministry’s practices make tracking cash difficult because different accounting codes are used than those of its budgeting office, SIGAR said. The ministry has resisted CSTC-A requests that it use more detailed coding system, which would enable CSTC-A to determine whether money it sends through the Finance Ministry is being spent on items eligible for direct aid.
Note from the report
Under the Finance Ministry’s three-digit coding system, certain items ineligible for direct aid may be hidden within a larger category that is eligible for such aid. For example, the category “repairs and maintenance” includes both construction equipment, which is eligible for direct aid, and broadcasting equipment, which is not. The recommended five-code system would clearly highlight these differences.
And because CSTC-A doesn’t have enough trained auditors, it lacks the wherewithal to track down deliberately fraudulent spending. The report quotes one official for CSTC-A’s comptroller directorate, CJ8, as saying, “You have to assume the data is sound, so it’s simply a matter of looking for mistakes.”
“As a result,” the report asserts, “if fraudulent expenditures are properly coded within the accounting system, it is unlikely that CJ8 will identify the fraudulent activity.”
In Afghanistan, fraud is widespread and sometimes reaches an alarming scale. On Tuesday, Transparency International’s annual corruption rankings once again pegged Afghanistan as the most corrupt country in the world, tied with Somalia and North Korea.
Kate Clark, a senior analyst with the Afghanistan Analysts Network, said the Interior Ministry, has always had a reputation for corruption.
“Generally, having such huge sums of foreign money funding the government — rather than it coming from a nation’s taxpayers — makes it more likely for money to go astray,” Clark said. There’s an inherent likelihood of corruption, and if you then have lax oversight … then I’m not surprised if money goes missing.”
Note from the report
Despite the risk assessments CSTC-A sometimes requires when it gives the Afghan government money, SIGAR says those assessments have never made CSTC-A cancel a direct-aid payment. About half of the money given to the Defense Ministry in 2013 was paid without any risk assessment at all, as was at least $453 million of the nearly $1 billion given to the Interior Ministry.
Once money leaves Kabul in the form of payrolls, accountability becomes even more difficult, the report said. Literacy is a major hurdle. One CJ8 payroll adviser told SIGAR that a senior police officer who was required to sign off on payroll documents couldn’t read them.