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US paid millions for Afghan payroll system that doesn't work as intended, DOD audit says

By AARON GREGG | The Washington Post | Published: August 23, 2019

In 2016 the Defense Department began paying a Kabul-based tech company millions of dollars to create a new payroll system for the Afghan government, part of an ambitious effort to prevent fraud by tracking the flow of funds down to individual soldiers and police officers.

But in visits to Afghanistan last year, Defense Department auditors found problems: The system didn't connect to other Afghan government computer systems. It relied too much on the same manual data entry process it was supposed to get rid of and it hadn't implemented a required biometric tracking system, according to the newly released audit from the Defense Department Inspector General.

In a mark of how efforts to build a sustainable bureaucracy in Afghanistan are still floundering 17 years into the U.S. military's presence there, officials admitted that a planned transfer of oversight to the Afghan government would not be completed on time. The government of Afghanistan is now scheduled to take over full oversight of the program in 2020, reflecting a delay from the earlier timeline.

Netlinks, the Kabul-based tech company the Defense Department paid to build the system, did not immediately respond to a request for comment from The Washington Post. The Afghan embassy in Washington also did not comment.

Until the system is handed off to the Afghan government it will be overseen by a NATO-funded, Kabul-based office called the Combined Security Transition Command-Afghanistan, or CSTC-A for short. A spokesman for Resolute Support, the NATO organization that trains and advises Afghan security forces, said CSTC-A has already implemented the inspector general's recommendations.

"Since the [inspector general] concluded the audit in July 2018, CSTC-A has implemented the recommendations and we continue to work to improve the Afghan Personnel and Pay System," Lt. Col. Josh Jacques said in an email. "While the APPS does have its challenges, it is a useful tool in our efforts towards accountability, stewardship and counter corruption."

After the audit, CSTC-A took numerous efforts to remedy the problems raised by the inspector general, including creating a new human resources branch; standardizing data entry processes, and retiring its older human resources system. Those recommendations included developing and implementing a specific plan to fully transfer the system to Afghan control. The inspector general noted in the audit that all of its recommendations had been resolved.

The system was created after four audit reports between 2014 and 2017 concluded that a disorganized payroll system for Afghan security forces was failing to adequately protect hundreds of millions of U.S.-funded payments from fraud and abuse. There were concerns that U.S.-funded paychecks were going to "ghost soldiers" ― fake identities set up so that money could be fraudulently diverted elsewhere. As a result, the Afghan government had a limited ability to keep track of its own personnel.

In 2015 the Army started drawing up plans for what became the Afghan Personnel and Pay System, or APPS for short. It awarded a three-year contract with an estimated value of $22.2 million in March 2016.

The contract later ballooned to an estimated value of $38 million as the time frame was extended and additional support services were added. The inspector general concluded that as of December 2015, about $15.2 million had billed to the government for tasks that did not meet the government's requirements. And Afghan government agencies weren't using the system to generate payroll data even though U.S. officials said they would fund salaries that used that system only, auditors found.

"The [Defense Department] does not have definitive assurance that APPS personnel records are bio-metrically linked and is still at risk of funding payroll for fraudulent personnel records," the inspector general concluded.

National security analysts said the episode highlights how Afghan institutions are still closely dependent on U.S. funding and support, at a time when U.S. presence there is being drawn down.

"This is just another example of the U.S. trying to graft American solutions onto Afghanistan problems," said Dan Grazier, a former Marine Corps captain who now works at the Project on Government Oversight, a watchdog group. "That really doesn't work. I virtually guarantee you that as soon as [the U.S. military] leaves, this system is going to be abandoned anyway."

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