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

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The program was not fully achieving all of its core objectives, however. One area in which program effortsfell short was teacher training, the primary means of ensuring that program-supported students receive aquality education.An examination of the records for four tested provinces also disclosed that data reported under severalperformance measures relating to teacher training and other activities were not adequately supported,partly because of record-keeping deficiencies.Review of Security Costs Charged to USAID Projects in Afghanistan (Report No. 5-306-10-002-S,September 29, 2010)USAID/Afghanistan relies on private security contractors (PSCs) to supply an array of security services forcontractors and grantees that implement USAID-funded projects in Afghanistan. PSCs free up military forcesfor their core missions and provide protection to USAID’s implementing partners in hostile environments.USAID/Afghanistan’s practice has been to delegate responsibility and oversight for security to itsimplementing partners and factor the cost of security into their program budgets. These implementingpartners typically subcontract their security services to PSCs. USAID indirectly pays for PSCs when theimplementing partners submit their invoices, which include the cost of security services, for payment.In the past year, news reports have said that U.S. Government funds paid to contractors for reconstructionprojects were being siphoned off to Taliban insurgents in exchange for “protection” to prevent attacks. Forexample, one news article reported that USAID funds were ending up in the hands of the Taliban through aprotection racket for contractors. Another article said that in southern Afghanistan, no contract could beimplemented without the Taliban taking a cut, sometimes at various steps along the way. Other newsreports said that PSCs were involved in the negotiations with insurgents. OIG staff met with one of thereporters involved to obtain additional details.OIG conducted a review of Edinburgh International’s security costs charged to the following three USAIDfundedprojects in Afghanistan implemented by Development Alternatives Inc.:Afghanistan Small and Medium Enterprise DevelopmentIncentives Driving Economic Alternatives for the North, East, and WestLocal Governance and Community Development (LGCD)The review found no indication that Edinburgh International had misused USAID funds to pay the Taliban orothers in exchange for protection. However, there were indications that Afghan subcontractors working onthe LGCD project had paid insurgents for protection in remote and insecure areas of Afghanistan. Thepayments allegedly were made as part of a security arrangement with local communities that very likelyincluded the Taliban or groups that support them.OIG also found indications of pervasive fraud in DAI’s LGCD office in Jalalabad and indications of endemiccorruption in Nangarhar Province, where Jalalabad is located. It is conducting an investigation withmembers of the International Contract Corruption Task Force, including the Special Inspector General forAfghanistan Reconstruction and the Federal Bureau of Investigation, as well as with the local Afghanistanprosecutor’s office and the Afghanistan Major Crimes Task Force. In June 2010, DAI terminated ten LGCDemployees who were involved in the fraud scheme.USAID OIG Afghanistan and Pakistan Oversight Report 79
Audit of USAID/Afghanistan's Alternative Development Program Expansion, South West (ReportNo. 5-306-10-011-P, July 29, 2010)The production and trafficking of illicit narcotics in Afghanistan breed corruption and provide resources tothe Taliban, drug lords, and other terrorist groups. The U.S. Government has supported the AfghanGovernment’s counternarcotics strategy of providing incentives to stop growing opium poppy throughalternative development projects; supporting strong disincentives in the form of provincial governor-lederadication, interdiction, and law enforcement; and spreading the antinarcotics message.USAID awarded a contract to Associates in Rural Development to implement a 3-year, $75 million programto counter illicit poppy cultivation by providing alternative development programs, improved economicopportunities, and diverse regional economic growth.The program made progress. A 32 percent decrease in poppy production between 2008 and 2009 wasattributed to strong antipoppy messages from provincial governors, increased interdiction activities, anoverproduction of poppy in prior years that suppressed market prices, and provision of alternativeeconomic opportunities in targeted districts in each province. The implementer established 45 cash-forworkprojects that included road, canal, and market rehabilitations. One project provided employment to220 workers, while another project targeted 30 disadvantaged women, mainly widows. The program alsoassisted local farmers with sales of produce totaling nearly $3.8 million. Further, it helped the FarahFarmer’s Union, a cooperative of 8,700 growers, identify business opportunities and develop the FarahAgricultural Center, which will provide an all-inclusive hub for market expansion and business development.Despite the program’s progress, the audit disclosed problems. First, continued reductions in poppycultivation may not be sustainable because a critical southern province was not included in the program,and no follow-on alternative development program had been approved beyond March 2011. Second, theprogram experienced delays in implementation, partly because of security issues. Also, a new embassy-ledannual program review process, the restructuring of the regional commands, and the mission’s plan toimplement regional platforms presented challenges that could hamper program implementation if notproperly managed.Review of School and Health Clinic Buildings Completed Under the Schools and Clinics Constructionand Refurbishment Program (Report No. 5-306-10-009-P, June 24, 2010)In September 2002, USAID/Afghanistan began to build and reconstruct schools and health clinicsthroughout Afghanistan under the Schools and Clinics Construction and Refurbishment Program. During thefollowing 4 years, the mission increased the number of structures the program would work on from fewerthan 100 to 776. Similarly, the number of implementing partners grew to more than a half dozen, anddisbursements under the program amounted to more than $105 million.In October 2004, OIG audited school and health clinic reconstruction activities. 7 The audit found that theprogram was behind schedule, and it recommended that the mission develop a new implementation plan.7 “Audit of USAID/Afghanistan’s School and Clinic Reconstruction Program,” Report No. 5-306-05-003-P,March 14, 2005.80 USAID OIG Afghanistan and Pakistan Oversight Report
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Audit ProgramOIG auditors, certifie
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site visits. In the past, building
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Financial Audit of Costs Incurred b
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investigation. While the employee h
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This field was cultivated under USA
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eceived payments. OIG’s review of
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program is improving the capacity o
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Under Cooperative Agreement No. 391
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Financial Audit of USAID Funds Mana
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OIG Investigation Results in Employ
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Page 61 and 62: 10/10/11 F-306-12-002-N Financial A
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Page 69 and 70: 06/23/11 G-391-11-003-Q Quality Con
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Page 93 and 94: Audit of USAID/Pakistan’s Energy
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Page 106: USAID Office of Inspector General13
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