USAID OIG Afghanistan and Pakistan Oversight Report, April-June ...

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Closeout Financial Audit of the Fund Accountability Statement of USAID ResourcesManaged by the Government of the Islamic Republic of Afghanistan through the Ministryof Transport and Civil Aviation Under the Regional Airports Project, USAID AwardNo. 306-IL-11-05-17, for the Period January 9, 2011, to July 31, 2012.Thirty-five other financial audits of USAID funds in Afghanistan were in the planning stage at theend of the quarter. In addition to these audits, OIG plans to audit USAID/Afghanistan’s financialstatements as part of its overall USAID financial statement audit for FY 2012.InvestigationsAs of June 30, 2012, USAID OIG had 62 ongoing investigations pertaining to Afghanistan. Duringthe reporting period, OIG investigators opened 6 cases in Afghanistan and closed 11 others. SinceFY 2003, OIG has initiated 188 investigationsrelated to Afghanistan. These investigations havebeen associated with a range of different types ofallegations. In most cases, underlying allegationshave pertained to program fraud (37 percent) orbribery and kickbacks (24 percent).During the April 1 through June 30, 2012, reportingperiod, one OIG investigation led to thetermination of a local USAID employee, and anotherresulted in the debarment of an employeeof a USAID implementing partner in Afghanistan:Investigative OutcomesSince FY 2003, OIG investigations in Afghanistanhave resulted in:38 referrals for civil or criminal prosecution13 arrests13 indictments11 convictions and pleadings102 administrative actions (e.g., contract andemployee terminations)$163 million in savings and recoveriesAfghan National Employee Terminated forTheft. A local employee of USAID/Afghanistan was terminated after an OIG investigationrevealed that he had stolen cell phone cards valued at approximately $2,000. The terminatedemployee was responsible for purchasing and distributing cards to other Afghans working forUSAID for use with their government cell phones. The investigation also revealedUSAID/Afghanistan had weak internal controls related to phone card accountability. Afterreceiving a referral memorandum from OIG, USAID/Afghanistan improved its internal controlsin this area to prevent similar incidents from occurring in the future.Implementing Partner’s Employee Debarred for Theft of More Than $250,000. An Afghanemployee of a contractor implementing several USAID programs in Afghanistan was debarredby USAID after stealing more than $250,000. The employee was a member of the USAIDcontractor’s local staff and was part of a team responsible for providing logistical support toseveral USAID projects. The employee altered a check written for approximately $200 andredeemed it at a local bank for more than $250,000 in cash. The USAID contractor detected thetheft and did not pass the cost on to USAID, instead reporting the matter to OIG for furtherUSAID OIG Afghanistan and Pakistan Oversight Report 13
investigation. While the employee has not been located, USAID used information provided byOIG to debar him from participation in future U.S.-funded projects.Outreach and CoordinationOIG investigators conduct fraud awareness briefings to alert participants—employees, contractors,grantees, and subrecipients—to fraudulent practices and schemes and to provide guidance on howto report fraud. OIG has provided 124 fraud awareness briefings in Afghanistan to 2,460participants since FY 2003. During the reporting period, special agents in Afghanistan deliveredsix fraud awareness briefings attended by 167 participants.OIG conducts many of its investigations in association with other law enforcement agencies, oftenin association with the International Contract Corruption Task Force to detect, investigate, anddismantle corruption and contract fraud resulting from U.S. contingency operations. 3 When casesinvolving Afghan nationals are declined for prosecution by the U.S. Department of Justice, thematters are presented to the local public prosecutor, with whom OIG has developed a successfulworking relationship.OIG also has a close working relationship with USAID/Afghanistan, and investigators regularlybrief the mission’s contracting personnel on fraud detection and prevention. OIG provides anorientation to all incoming USAID staff members in Afghanistan on their role in helping promoteeffectiveness and accountability in USAID projects and programs, as well as on the operatingenvironment in Afghanistan, fraud indicators, and the OIG’s audit and investigative programs.OIG has also established working relationships with many implementing partners and regularlyprovides fraud awareness briefings for their staff. OIG also supports implementing partners intheir efforts to identify and address allegations of fraud by quickly referring cases to USAID’s Officeof Acquisitions and Assistance (OAA) and to local prosecutors when appropriate. OIG continues tocollaborate with OAA by referring entities for possible suspension or debarment and meetingregularly to review referrals. As this process becomes more robust, it will become increasinglydifficult for individuals to prey on multiple USAID projects. Since FY 2011, OAA has takensuspension or debarment actions against 40 individuals and firms based on OIG referrals related toAfghanistan.USAID OIG coordinates audit plans and ongoing activities with other oversight bodies through theInspector General Shura, a body made up of the OIGs for USAID and the Departments of State andDefense, the Special Inspector General for Afghanistan Reconstruction, and GAO.3 Overseas contingency operations are operations in which members of the armed forces have been or may becomeinvolved in military actions, operations, or hostilities against an enemy, or for which active duty members of theuniformed services have been called to order or retained (10 U.S.C. §101(a)(13)).14 USAID OIG Afghanistan and Pakistan Oversight Report
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Page 7 and 8: Audit ProgramOIG auditors, certifie
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Page 11 and 12: site visits. In the past, building
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Page 23 and 24: eceived payments. OIG’s review of
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Page 27 and 28: Under Cooperative Agreement No. 391
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Page 31 and 32: OIG Investigation Results in Employ
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Page 35 and 36: Other ExclusionsWalker, Scott Antho
Page 37 and 38: ReportDateReport Title*Recommendati
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Page 41 and 42: Date Report Recommendation TargetAc
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Page 45 and 46: DateReport Title and NumberAmountAu
Page 61 and 62: 10/10/11 F-306-12-002-N Financial A
Page 63 and 64: 02/25/10 5-306-10-002-NFinancial Au
Page 65 and 66: 08/10/06 5-306-06-004-D Financial A
Page 67 and 68: 03/26/04 5-306-04-003-N Financial A
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06/23/11 G-391-11-003-Q Quality Con
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04/30/09 5-391-09-008-R Financial A
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09/26/06 5-391-06-003-Q Quality Con
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The project had many successes, inc
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complicated process, and OIG could
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The objective of the audit was to d
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According to information provided b
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OIG’s audit found that the univer
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Audit of USAID/Afghanistan's Altern
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and DOD PSCs in Afghanistan because
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Afghanistan has one of the highest
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contractor estimated that cost over
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Audit of USAID/Pakistan’s Energy
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Audit of USAID/Pakistan’s Road Re
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establishing a distribution policy,
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planned results was hindered by a s
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Although USAID carried out numerous
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AbbreviationsAACCAEDATVIAUAfCERPDAB
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USAID Office of Inspector General13
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