Report: No Afghan ministry capable of managing aid
By HEATH DRUZIN | STARS AND STRIPES Published: January 30, 2014
KABUL — With an increasing amount of U.S. aid flowing directly to the Afghan government, two audits have shown that none of the country’s ministries are set up to manage and account for the billions of American taxpayer dollars being sent their way.
In 2010, the U.S. Agency for International Development contracted with accounting firms Ernst & Young and KPMG to assess the 16 Afghan ministries’ ability to manage U.S. funds, according to a quarterly report to Congress released Thursday by the top U.S. government watchdog in Afghanistan, the Special Inspector General for Afghanistan Reconstruction.
The firms made nearly 700 recommendations for changes in the way the ministries should account for aid money. A subsequent internal review of seven of the ministries by USAID found more than 100 “major risks” there, including “misappropriation of cash arising from payments of salaries in cash,” SIGAR said in a separate audit of direct assistance to Afghanistan, which also was published Thursday.
“A SIGAR audit report published this quarter concluded that USAID has not fully implemented measures designed to fix significant problems within Afghan ministries that will receive over $1 billion in direct, government-to-government assistance,” John Sopko, Special Inspector General for Afghanistan Reconstruction, wrote in the quarterly report to Congress.
The quarterly report said that USAID ignored its own requirements by continuing to provide direct assistance to the ministries and that it ignored recommendations to suspend direct assistance until the ministries implemented improved systems to ensure the money was used as intended.
Corruption remains rife in the Afghan government. Last year, Afghanistan was ranked at the bottom of Transparency International’s Corruption Perception Index for the second year in a row, a major concern for international donors.
In a letter responding to the report, Donald Sampler, assistant to the USAID administrator for Afghanistan and Pakistan, questioned the release of what he termed “sensitive” information.
His letter concurred with SIGAR’s recommendations — which include developing a plan for risk assessment and mitigation and informing Congress of the results of ministry assessments — but said they are already being implemented.
“SIGAR’s audit did not identify waste, fraud or abuse in USAID’s direct assistance program,” Sampler wrote. “While the audit report examines and calls attention to the risks USAID identified in the Ministries that could potentially impact direct assistance programming in Afghanistan, it fails to acknowledge the full range of risk mitigation measures USAID subsequently employed.”
Sampler wrote that the Afghan government provided “unprecedented access” to auditors with the understanding that the reports would not be made public. USAID asked that SIGAR “not make public sensitive information that could damage our bilateral relationships with the Government of the Islamic Republic of Afghanistan,” SAMPLER SAID.
“Unfortunately, public release of these materials will likely result in reduced cooperation from the Afghan Government and could undermine our ability to conduct proper oversight of direct assistance programs in the future,” he wrote.
A spokesman for Afghan President Hamid Karzai did not respond to requests for comment on the report.
Though the United States is rapidly withdrawing its military contingent from Afghanistan ahead of the Dec. 31 deadline for the departure of all foreign combat troops, it plans to continue spending billions of dollars to fund reconstruction efforts for years to come, and there are grave concerns about the proper spending of that money. The Afghan government is almost entirely dependent on foreign aid to fund its budget.
The U.S. has spent roughly $100 billion on reconstruction efforts in Afghanistan. There have been tangible improvements in education, health care, and infrastructure, but the massive program has been heavily criticized for lack of oversight and poor planning.