2530 Crystal Drive Arlington, VA 22202 www.sigar.mil FRAUD, WASTE, OR ABUSE MAY BE REPORTED TO SIGAR’S HOTLINE By Phone: Afghanistan Cell: 0700107300 DSN: 318-237-3912 ext. 7303 All voicemail is in Dari, Pashto, and English. By Phone: United States Toll Free: 866-329-8893 DSN: 312-664-0378 All voicemail is in English and answered during business hours. By Fax: 703-601-4065 By E-mail: sigar.hotline@mail.mil By Web Submission: www.sigar.mil/investigations/hotline/ www.sigar.mil/investigations/hotline/report-fraud.aspx IGAR | Quarterly Report to the United States Congre ss | Special Inspector General for Afghanistan Reconstruction S SIGAR sigar Special Inspector General for Afghanistan Reconstruction Oct 30 2013 Quarterly Report to the United States Congress October 30, 2013 4 FINAL_Oct2013_Cover.indd 1 10/21/2013 2:14:47 PM The National Defense Authorization Act for FY 2008 (P.L. 110-181) established the Special Inspector General for Afghanistan Reconstruction (SIGAR). SIGAR’s oversight mission, as defined by the legislation, is to provide for the independent and objective • conduct and supervision of audits and investigations relating to the programs and operations funded with amounts appropriated or otherwise made available for the reconstruction of Afghanistan. • leadership and coordination of, and recommendations on, policies designed to promote economy, efficiency, and effectiveness in the administration of the programs and operations, and to prevent and detect waste, fraud, and abuse in such programs and operations. • means of keeping the Secretary of State and the Secretary of Defense fully and currently informed about problems and deficiencies relating to the administration of such programs and operation and the necessity for and progress on corrective action. Afghanistan reconstruction includes any major contract, grant, agreement, or other funding mechanism entered into by any department or agency of the U.S. government that involves the use of amounts appropriated or otherwise made available for the reconstruction of Afghanistan. Source: P.L. 110-181, “National Defense Authorization Act for FY 2008,” 1/28/2008. (For a list of the congressionally mandated contents of this report, see Section 3.) Cover photo: A typical, heavily loaded Afghan truck waits at the U.S.-funded Weesh crossing on the Afghanistan-Pakistan border. An alert letter issued this quarter pointed out SIGAR auditors’ observation that many Afghan trucks are too tall to pass through a new inspection device at the crossing. (SIGAR photo) FINAL_Oct2013_Cover.indd 2 Sheep and goats share Kabul’s main highway with cars and trucks. (SIGAR photo) 10/21/2013 2:14:50 PM SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN RECONSTRUCTION I am pleased to submit to Congress, and to the Secretaries of State and Defense, SIGAR’s latest quarterly report on the status of the U.S. reconstruction effort in Afghanistan. SIGAR has a unique mandate to provide oversight for what has become the largest U.S. effort to reconstruct a single country in our nation’s history. Unlike other Inspectors General, who are usually limited to conducting audits and investigations of the agencies to which they are attached, SIGAR holds a unique congressional mandate to oversee any and all U.S.-funded reconstruction programs in Afghanistan. As the only agency tasked exclusively to examine Afghanistan reconstruction programs, SIGAR conducts its audits and investigations in a country that is not only deemed critical to U.S. national security, but also is impoverished, isolated, war-torn, and corrupt. In this difficult environment, law enforcement plays a particularly crucial role in combating corruption and protecting the nearly $100 billion U.S. investment in building Afghan security forces, fostering Afghanistan’s democracy, and encouraging economic development. As the U.S. and Coalition troop drawdown proceeds, the U.S. Embassy Kabul is also trimming the civilian presence in the country. Other federal law-enforcement agencies are reducing or completely withdrawing their agents from Afghanistan as part of this “right sizing” process. SIGAR maintains a robust law enforcement presence in Afghanistan. The reduced presence of other agencies increases SIGAR’s responsibility to root out and deter criminal activity related to Afghan reconstruction appropriated monies spent in Afghanistan, and to protect future funding from waste, fraud, and abuse. The first section of this report discusses the law-enforcement challenges in Afghanistan. SIGAR’s multi-pronged strategy to perform this increasingly vital function focuses on five critical areas: detecting fraud, building criminal and civil cases for prosecution in the United States and Afghanistan, tracking the flow of stolen reconstruction funds, preventing poorly performing and corrupt individuals and companies from being awarded U.S.-funded contracts, and exposing lax management practices both inside U.S. programs and Afghan ministries that place U.S. taxpayer dollars at risk. SIGAR has built an experienced team of federal agents and analysts deployed to Afghanistan. They serve longer tours in country than most other U.S. oversight personnel and have successfully partnered with U.S. civilian and military law-enforcement and oversight agencies. Where possible, SIGAR works with and mentors Afghan law-enforcement authorities to arrest and prosecute Afghan citizens and companies engaged in criminal activity related to U.S.-funded contracts. This quarter alone, SIGAR investigations resulted in $63 million being frozen in bank accounts, two arrests, three sentencings, and more than $95,000 in fines and restitutions. To date, SIGAR investigations have led to 47 convictions and guilty pleas; more than $236 million in recoveries, savings, and contract monies protected*; and 61 suspensions and 94 debarments of individuals and companies from receiving U.S.-funded contracts. SIGAR has more than 300 ongoing criminal investigations in Afghanistan and the United States. * “Contract monies protected” is an investigative term that refers to money that is put to better use as the result of contract terminations. 2530 CRYSTAL DRIVE ARLINGTON, VIRGINIA 22202 SIGAR’s collaboration with Afghan authorities has yielded some noteworthy results, such as disrupting fuel theft to save the U.S. government an estimated $2 million. SIGAR is also the only foreign law-enforcement agency that has been called upon to testify against an Afghan accused of corruption in an Afghan court. Afghanistan’s endemic corruption constitutes one of the most serious obstacles to the effective and efficient use of U.S. reconstruction dollars. As the United States provides more of its development assistance on-budget—directly to the Afghan government, rather than through U.S.-managed contracts—theft and fraud will pose an even greater risk to U.S. taxpayer dollars. This is why SIGAR investigators and auditors are taking a hard look at whether Afghan government ministries have the capability to properly account for how U.S. funds are spent. More importantly, that is why SIGAR’s investigative work identifying individuals in various Afghan ministries who may be corrupt has become crucial even if those individuals cannot be prosecuted in U.S. courts because of lack of jurisdiction and in Afghan courts because of lack of will. This quarter, our audit of the Afghan Ministry of Public Health identified internal control weaknesses that we believe put U.S. funds at risk of waste, fraud, and abuse. The audit also directly led to SIGAR’s opening a criminal investigation of possible corruption at the ministry. In other cases, investigative results have triggered audits and special projects as SIGAR directorates share data. For example, work by our investigators resulted in two inspections that we report on this quarter. One identified construction failures at a courthouse; the other found design flaws at a major border crossing point. Such findings may be more difficult to spot and confirm if increasing delivery of reconstruction aid via direct assistance is not coupled with effective safeguards. Direct assistance can be a useful tool to help aid recipients build ministerial capacity and adapt funding to their particular and changing needs. However, maintaining appropriate levels of visibility and accountability is vital—and especially difficult in the Afghan setting. Recognizing this, Congress required the U.S. Agency for International Development (USAID), the principal U.S. agency providing direct assistance to Afghanistan’s civilian ministries, to contract with private audit firms to assess the degree to which these ministries can manage and transparently account for funds. SIGAR has an audit under way to examine the integrity, accuracy, and usefulness of USAID’s ministerialassessment process. We plan to issue the results of this audit early next quarter. In addition, SIGAR continues to be concerned about the capabilities of the Afghan National Security Forces (ANSF). The majority of U.S. reconstruction funding—more than $54 billion—has gone to build the ANSF. The success of the U.S. mission in Afghanistan depends to a great extent on the Afghan National Army (ANA) and the Afghan National Police’s (ANP) ability to protect Afghan civilians and prevent al-Qaeda and other terrorist groups from establishing strongholds from which to mount attacks against the United States and its allies. SIGAR published three audits this quarter that identified planning and logistics issues that must be addressed to not only safeguard funds used to construct ANSF facilities, purchase fuel for the ANP, and track spare parts for the ANA, but also to ensure a robust and effective ANSF. SIGAR is also currently examining ANSF personnel and payroll systems as well as the reliability of the system the U.S. military is using to measure the capabilities and capacity of the ANSF to ensure U.S. taxpayer dollars are properly used and accounted for during this important period of transition. The drawdown of U.S. combat troops will have an unintended but major impact on the oversight of reconstruction. Nearly 80% of Afghanistan may not be readily accessible to U.S. civilian auditors, investigators, and other federal employees by 2015. SIGAR’s maps illustrating diminishing oversight access appear in Section 2 of this report. This quarter 2530 CRYSTAL DRIVE ARLINGTON, VIRGINIA 22202 SIGAR wrote to the Secretaries of State and Defense and to the Administrator of USAID to inquire about how they plan to manage, monitor, and evaluate programs if it is not possible for U.S. contracting and oversight officials to visit sites. SIGAR looks forward to working with the Departments of Defense and State, USAID, and other government and non-government agencies to help clarify “best practices” to ensure effective oversight of reconstruction assistance. SIGAR will convene a panel of experts, drawn from government and non-government organizations, in the coming months to identify best practices for monitoring U.S.-funded projects and programs. This quarter, I reiterate my concerns—which I raised in our last two quarterly reports— about the policies of the U.S. Army’s suspension and debarment program. The Army’s refusal to suspend or debar supporters of the insurgency from receiving government contracts because the information supporting these recommendations is classified is not only legally wrong but also contrary to sound public policy and national security goals. I continue to urge Congress to change this faulty policy and enforce the rule of common sense in the Army’s suspension and debarment program. In his FY 2014 budget request, the President asked Congress to provide approximately $12 billion in additional reconstruction assistance for Afghanistan. As the security, political, and economic transitions progress, the implementing agencies, other oversight bodies, and SIGAR must work together to ensure that U.S. tax dollars are not subject to corruption and achieve their intended purposes. My staff and I look forward to working with the Congress and the Administration make programs more effective and free from waste, fraud, and abuse. Respectfully, John F. Sopko Special Inspector General for Afghanistan Reconstruction 2530 CRYSTAL DRIVE ARLINGTON, VIRGINIA 22202 EXECUTIVE SUMMARY In addition to providing a summary of SIGAR’s oversight work and an update on developments in the major development sectors, this report includes a discussion of the critical role that SIGAR investigators play in ensuring effective oversight of the nearly $100 billion that Congress has appropriated for the reconstruction of Afghanistan. During this reporting period, SIGAR published 12 audits, inspections, alert letters, and other reports assessing the U.S. efforts to build the Afghan security forces, improve governance, and facilitate economic development. These reports identified a number of problems, including poor planning, management deficiencies, and oversight failures as well as project delays, shoddy construction, and threats to health and safety. SIGAR investigations led to more than $63 million being frozen in bank accounts, two arrests, three sentencings, and more than $95,000 in fines and restitutions. SIGAR OVERVIEW Law enforcement is a critical component of effective oversight. SIGAR has built one of the largest and most experienced teams of federal agents and analysts working in both Afghanistan and the United States to protect the U.S. investment in the reconstruction of Afghanistan. The SIGAR overview section of this report describes what SIGAR’s investigators are doing to successfully overcome significant challenges in Afghanistan’s complex environment to prevent waste, fraud, abuse, and corruption. SIGAR is focusing on five critical areas: detecting fraud, building criminal and civil cases for prosecution in the United States and Afghanistan, tracking the flow of stolen reconstruction funds, preventing poorly performing and corrupt individuals and companies from receiving U.S.-funded contracts, and exposing lax management practices in U.S. programs and Afghan ministries that place U.S. taxpayer dollars at risk. AUDITS SIGAR produced four audits, four inspections, and one alert letter this quarter. Three of the audits assessed programs to build and evaluate the ANSF. They found: • DOD needs to take additional action to reduce waste in $4.7 billion worth of planned and ongoing construction projects for the ANSF. • DOD needs to strengthen oversight of U.S. funds provided to purchase fuel for the Afghan National Police (ANP). • The Afghan National Army (ANA) is not consistently using or updating its inventory to track spare parts. A fourth audit report identified financial management deficiencies at the Afghan Ministry of Public Health, putting $236 million that USAID provides in direct assistance funding to the ministry at risk of waste, fraud, or abuse. As a result of the audit, SIGAR is investigating potential corruption at the ministry. SIGAR issued four inspection reports of U.S.-funded facilities that identified the following problems: • A district police headquarters that is in a state of severe disrepair for lack of maintenance • A hospital that has not been finished due to poor contractor performance • A courthouse that has never been completed • A medical clinic that was not built according to design specifications and has never been used SIGAR also sent an alert letter to inform DOD about design flaws that inspectors had discovered during the course of an ongoing audit at the Weesh-Chaman Border Crossing point in Kandahar Province. NEW AUDITS This quarter, SIGAR initiated two new performance audits and 13 financial audits. The two performance audits are part of a planned series of sector-wide audits. These audits will cover U.S. government completed, EXECUTIVE SUMMARY ongoing, and planned projects related to a specific sector in Afghanistan. The two audits begun this quarter will assess: • the U.S. government’s efforts to assist and improve the Afghan education sector • Afghan women’s initiatives funded by the U.S. government The 13 new financial audits will be examining Stateand USAID-funded contracts, grants, and cooperative agreements with combined incurred costs of approximately $843.7 million, bringing the total number of ongoing financial audits to 25 with more than $2.2 billion in costs incurred. INVESTIGATIONS During this reporting period, SIGAR investigations led to $63 million in illegally obtained assets being frozen in bank accounts, more than $1.5 million being protected, $344,000 being recovered, and $10,000 saved. SIGAR investigations also led to two arrests, three sentences, more than $95,000 in fines and restitutions ordered, two indictments, one criminal information, a criminal complaint, and four guilty pleas. Afghan authorities arrested five Afghan citizens as a result of a SIGAR investigation. Investigation highlights include the following: • A U.S. Sergeant First Class and a former U.S. soldier pled guilty to charges of bribery related to fuel thefts. • A U.S. Army reservist pled guilty to conspiracy to commit wire fraud. • A SIGAR investigation led to the recovery of three generators valued at $302,510. • Afghan authorities arrested an Afghan contractor for failure to install systems to prevent insurgents from planting improvised devices in culverts. SPECIAL PROJECTS SIGAR’s Office of Special Projects published one report on the U.S. anticorruption strategy. This report found that the United States does not have a comprehensive anticorruption strategy. SIGAR also wrote to the Secretaries of State and Defense and the Administrator of USAID to inquire about their plans to ensure oversight for U.S. funded reconstruction efforts as U.S. combat troops withdraw. SIGAR produced a series of oversight access maps projecting that no more than 21% of Afghanistan will be accessible to U.S. civilian oversight personnel by the end of the transition. RECONSTRUCTION UPDATE As of September 30, 2013, the United States had appropriated approximately $96.6 billion for relief and reconstruction in Afghanistan since FY 2002. The President has requested approximately $12 billion, including oversight and operations budgets, for FY 2014. The U.S. reconstruction effort focuses on three broad areas: security, governance, and economic and social development. Key events shaping reconstruction efforts in these sectors this quarter include the following: • U.S. and Afghan concerns over ANSF casualties • The continuing negotiations for a new U.S.-Afghan bilateral security agreement • The ongoing transition to Afghan-led security • The release of the latest U.S. Civil-Military Strategic Framework • Continued preparations, including the registration of candidates for president, for the 2014 Afghan presidential and provincial council elections • Increased Afghan government spending and decreased revenues • Expected slowing of economic growth due to fading business and investor confidence TABLE OF CONTENTS SECTION 1 1 U.S. LAW ENFORCEMENT IN AFGHANISTAN 3 Afghanistan: Tough Setting For U.S. Law Enforcement 5 SIGAR’s Investigations Directorate 7 SIGAR’s Investigative Strategy 14 What Makes Afghanistan a Unique Challenge? 17 The Outlook SECTION 2 19 SIGAR OVERSIGHT ACTIVITIES 22 Comprehensive Oversight Plan Issued 22 Audits 36 Inspections 44 Special Projects 46 Quarterly Highlight: Oversight Access Challenges 48 Investigations 58 SIGAR Budget 58 SIGAR Staff SECTION 3 61 RECONSTRUCTION UPDATE 63 Overview 67 Status of Funds 81 Security 109 Governance 111 Quarterly Highlight: Elections Preparations and Challenges 145 Economic and Social Development TABLE OF CONTENTS SECTION 4 179 OTHER AGENCY OVERSIGHT 182 Completed Oversight Activities 185 Ongoing Oversight Activities APPENDICES & ENDNOTES 196 Appendix A: Cross-Reference of Report to Statutory Requirements 202 Appendix B: U.S. Funds for Afghanistan Reconstruction 204 Appendix C: SIGAR Written Products 208 Appendix D: SIGAR Investigations and Hotline 212 Appendix E: Abbreviations and Acronyms 216 Endnotes “We are determined to use all possible means to recover stolen taxpayer money. I’m proud of my agents, who worked closely with the Department of Justice on this groundbreaking achievement [of freezing more than $63 million in U.S. government funds, allegedly obtained through fraudulent means]. This hits the criminals where it hurts. SIGAR will stop at nothing to follow this money trail wherever it leads.” — Special Inspector General John F. Sopko Source: SIGAR press release, August 9, 2013. CONTENTS Afghanistan: Tough Setting For U.S. Law Enforcement 3 SIGAR’s Investigations Directorate 5 SIGAR’s Investigative Strategy 7 What Makes Afghanistan a Unique Challenge? 14 The Outlook 17 Photo on previous page A SIGAR special agent boards a helicopter after conducting an armed sweep of the U.S. consulate in Herat, which came under attack in September, to ensure all personnel were accounted for, and that no insurgents had entered the compound. (SIGAR photo) 2 U.S. LAW ENFORCEMENT IN AFGHANISTAN U.S. LAW ENFORCEMENT IN AFGHANISTAN AFGHANISTAN: TOUGH SETTING FOR U.S. LAW ENFORCEMENT Serving as a U.S. law-enforcement officer in Afghanistan can involve dealing with thieves, bribe takers, money launderers, and drug smugglers—but also suicide bombers and insurgent attack squads. Special Agent Jeff Millslagle of the Special Inspector General for Afghanistan Reconstruction (SIGAR) was at the U.S. consulate in Herat, Afghanistan, on the early morning of September 13, 2013. A truck packed with explosives rammed into the security gate and blew up. The blast killed several guards and heavily damaged the building. A group of armed insurgents then tried to storm the compound, but at least five were killed in the ensuing 20-minute firefight and others retreated. Assisting the Regional Security Officer1, Millslagle conducted an armed sweep to ensure that all U.S. Chief of Mission personnel were accounted for and that no insurgents had penetrated the consulate. Millslagle also helped move casualties and Deputy Secretary of Defense Ashton Carter inspects blast damage from the September 13, 2013, Afghan insurgent attack on the U.S. consulate in Herat. (DOD photo) REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 3 U.S. LAW ENFORCEMENT IN AFGHANISTAN held a weapons position covering the blown-open entrance to the consulate. He survived the assault unscathed. The Herat attack illustrates the key challenge for U.S. law-enforcement personnel in Afghanistan: 12 years into the U.S. involvement, the country is still a war zone. The consequences of the Herat attack further complicated law-enforcement. U.S. personnel relocated from the damaged consulate onto a nearby military base that ordinary Afghans cannot enter and that federal civilians cannot leave without military escort. There are now only two areas of the U.S. presence in Afghanistan where federal civilian employees are free to drive themselves around. Such restrictions greatly reduce SIGAR and other agents’ ability to work with Afghan informants, talk with contacts, and recruit helpful witnesses. Even without insurgent attacks, Afghanistan presents a daunting array of obstacles to American law enforcement. Travel is difficult. Customs and languages differ. Backup may be scant or nil. Useful evidence or even basic documentation is often hard to come by. The population can be suspicious and uncooperative. Officials may be corrupt or cowed by threats. U.S. officials have no authority to arrest Afghan nationals. The country has no extradition treaty with the United States. Suspects who are reported to Afghan authorities may never be prosecuted. Meanwhile, cash from Afghanistan’s opium trade and from bribes, theft, and extortion related to inflows of American aid fuels both corruption and the insurgency. Afghanistan is a challenge for U.S. law-enforcement officials, but what happens in Afghanistan doesn’t always stay in Afghanistan. People, money, drugs, and other contraband involved in crime in Afghanistan enter the United States. So investigating crime in the Afghan reconstruction program entails stateside as well as in-country work for investigators, analysts, and prosecutors. The United Nations Security Council recently highlighted the importance of crime as it extended the mandate of the NATO-led International Security Assistance Force. The Security Council’s October 10, 2013, unanimous resolution expressed “serious concern about the security situation in Afghanistan, in particular the ongoing violent and terrorist activities by the Taliban, al-Qaida and other violent and extremist groups, illegal armed groups and criminals, including those involved in the production, trafficking or trade of illicit drugs.”2 Crimes like theft, bribery, kickbacks, and money laundering deprive programs of intended resources and governments of needed revenues. They also foster public perceptions of corruption, undermine the legitimacy of both the Afghan government and the international reconstruction program, and enhance the popular appeal of the Taliban, who may be harsh and bloody-handed but are widely perceived as non-corrupt. As the U.S. Department of Defense has officially reported, 4 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION U.S. LAW ENFORCEMENT IN AFGHANISTAN The insurgency’s safe havens in Pakistan, the limited institutional capacity of the Afghan government, and endemic corruption remain the greatest risks to long-term stability and sustainable security in Afghanistan. … Widespread corruption continues to limit the effectiveness and legitimacy of the Afghan government.3 In other words, criminality is not an incidental sideshow in Afghanistan, but a fundamental and critical challenge to U.S. military, reconstruction, and development efforts. This essay offers a brief overview of SIGAR’s law-enforcement presence in Afghanistan, the obstacles its personnel face in carrying out their duties, and SIGAR’s strategy to overcome or mitigate those obstacles to detect, punish, and deter wrongdoing. SIGAR’S INVESTIGATIONS DIRECTORATE The SIGAR Investigations Directorate supports SIGAR’s mission to prevent waste, fraud, abuse, and corruption by focusing on five critical areas: detecting fraud, building criminal and civil cases for prosecution in the United States and Afghanistan, tracking the flow of stolen reconstruction funds, preventing poorly performing and corrupt individuals and companies from receiving U.S.-funded contracts, and exposing lax management practices in U.S. programs and Afghan ministries that place U.S. taxpayer dollars at risk.4 The Investigations Directorate collaborates closely with SIGAR’s Audits and Inspections Directorate and the Office of Special Projects. Each team may use others’ work as a springboard for further action. In carrying out its duties, the Investigations Directorate often uncovers information that triggers SIGAR audits or special projects, while SIGAR audits have in turn often led to criminal investigations. For example, this quarter SIGAR’s audit of the Afghan Ministry of Public Health revealed internal control weaknesses in the ministry that could put U.S. funds at risk. The audit also directly led to SIGAR’s opening a criminal investigation of possible corruption at the ministry. As of October 2013, the directorate has 306 open criminal investigations involving contract fraud, corruption, and theft in Afghanistan reconstruction. During this reporting period, a SIGAR investigation resulted in the court-ordered freezing of $63 million in bank deposits suspected of being fruits of crime. SIGAR investigations also led to two arrests, three sentences, two indictments, one criminal information, one criminal complaint, and four guilty pleas in the United States; in Afghanistan, five Afghan citizens were arrested following SIGAR investigations. SIGAR’s Investigations Directorate comprises 57 staff—nearly a third of SIGAR’s workforce—with 36 at its Virginia headquarters and 21 (plus two foreign-national employees) deployed in Afghanistan. Besides managers, the directorate employs special agents, investigative analysts, management specialists, forensic analysts, and Afghan support personnel. In addition, REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 5 SIGAR agent briefing customs agents at Kandahar Airfield. (SIGAR photo) U.S. LAW ENFORCEMENT IN AFGHANISTAN several attorneys with suspension-and-debarment expertise, prosecutors who serve as special assistant U.S. attorneys, and paralegals provide support to Investigations, but are not administratively part of its staff. SIGAR special agents are full-fledged federal law-enforcement officers: badged, authorized to carry weapons, and empowered to make arrests (although not of Afghans on their home soil). The agents average more than 20 years’ experience in law enforcement. Their duties take them not only to locations in Afghanistan, but to stateside military bases, ports of entry, court houses, prosecutors’ offices, and other domestic sites touched by the ripples of criminality in Afghanistan reconstruction. The directorate’s other professionals, such as investigative analysts, forensic auditors, and forensic examiners, bring an average of more than 10 years’ professional experience to SIGAR. SIGAR Investigations operates under the direction of Assistant IG Douglas J. Domin and Deputy Assistant IG Sharon E. Woods. Domin is a former FBI agent whose career includes a posting at the U.S. Embassy London, a management role at the FBI’s Dallas field office, and serving as special agent in charge of the FBI Minneapolis Division responsible for 200 personnel and operations in Minnesota and the Dakotas. While at the FBI, he also managed the massive information-technology project that produced IAFIS, the Integrated Automated Fingerprint Identification System that makes more than 100 million sets of criminal- and civil-case fingerprints, descriptions, criminal histories, and other data speedily available to law-enforcement officials 24 hours a day.5 Woods’s career includes service as a Naval Criminal Investigative Service special agent, director of the Defense Criminal Investigative Service (DCIS), and director of investigations at the IG office of the Defense Logistics Agency. Before joining SIGAR, she helped DCIS establish its presence in Kuwait, Iraq, and Afghanistan. The ongoing phased withdrawals of U.S. and Coalition military forces and the separate “right-sizing” reductions in other U.S. agencies’ in-country presence combine to increase the difficulty of conducting effective oversight and to magnify the challenge and importance of SIGAR’s investigative role in Afghanistan. Recent hires will help SIGAR deal with those challenges by adding to its cadre of high-level staff with direct experience in Afghanistan. The staff expansion reflects the Special Inspector General’s program of adding subject-matter experts in areas like money laundering and counternarcotics to bolster existing capabilities. The new hires include Frank P. Calestino, a Treasury Department professional who was one of the founders of the Afghanistan Threat Finance Cell and had served as deputy director of its Iraq counterpart. Joining SIGAR in the coming quarter will be David J. Schwendiman, a former federal prosecutor currently serving as Justice Attaché at U.S. Embassy Kabul. His prior experience includes international prosecution of war crimes in the Balkans. He will be SIGAR’s Director of Forward Operations in Afghanistan, acting 6 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION U.S. LAW ENFORCEMENT IN AFGHANISTAN as the Special IG’s official representative. Also coming to SIGAR is Timothy A. Jones, a long-serving Drug Enforcement Administration official who is currently director of the Afghanistan Threat Finance Cell targeting the narco-terror financial nexus. SIGAR’S INVESTIGATIVE STRATEGY The Investigations Directorate pursues its objectives through several means: • maintaining a robust presence in Afghanistan • forging alliances with other law-enforcement agencies • developing cases in Afghanistan and the United States • aggressively targeting candidates for suspension and debarment • combating money laundering • countering the narcotics trade • reaching out to observers of reconstruction misconduct Maintaining a Robust Presence in Afghanistan SIGAR has one of the largest, most experienced, and longest-deployed groups of U.S. law-enforcement professionals in Afghanistan. Most of SIGAR’s Afghanistan-based investigative personnel are special agents with full U.S. law-enforcement officer authority. SIGAR’s presence in Afghanistan is robust not only in comparative size, but in mandate. By statute, SIGAR is the only U.S. oversight agency tasked exclusively with Afghan reconstruction. It is also the only one that can examine any aspect of the reconstruction effort regardless of agency boundaries. SIGAR has established offices at Kabul, Kandahar Airfield, Camp Leatherneck, Herat, Mazar-e-Sharif, and Bagram Airfield. Forging Alliances with Other Law-Enforcement Agencies SIGAR is not alone as an American oversight and law-enforcement agency in Afghanistan. Other American law-enforcement agencies maintaining an Afghan presence include: • Defense Criminal Investigative Service (DCIS), Department of Defense • Department of Homeland Security (DHS) • Department of State Office of Inspector General (State OIG) • Drug Enforcement Administration (DEA), Department of Justice • Federal Bureau of Investigation (FBI), Department of Justice • Major Procurement Fraud Unit (MPFU), U.S. Army Criminal Investigation Division Command • Naval Criminal Investigative Service (NCIS), U.S. Navy • Office of Special Investigations (OSI), U.S. Air Force • Regional Security Office (RSO), Department of State • U.S. Agency for International Development Office of Inspector General (USAID OIG) REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 7 SIGAR agents visiting with Afghan villager. (SIGAR photo) U.S. LAW ENFORCEMENT IN AFGHANISTAN SIGAR collaborates with these agencies. In addition, the U.S. government has created a number of groups and task forces to address Afghanistanrelated issues. SIGAR works closely with the following: • The International Contract Corruption Task Force (ICCTF): The FBI spearheaded creation of this special interagency body in 2006 because of an immense crime problem of bribes, kickbacks, and theft among U.S. civilian and military contracting officials and contractors working on contingency operations.6 SIGAR joined the task force in 2009 and has a special agent assigned full-time to ICCTF headquarters. In addition to Afghanistan, ICCTF-affiliated agents operate in Iraq, Kuwait, Qatar, Pakistan, and Haiti. The ICCTF’s members now include the FBI, SIGAR, DCIS, MPFU, NCIS, and the IG offices of State and USAID. • Task Force 2010 (TF 2010): This team, set up by U.S. ForcesAfghanistan in 2010, works with commanders and acquisition personnel to combat contract extortion, theft, and prevent U.S. contract funds from ending up in enemy hands. TF 2010 operates audit, intelligence, law enforcement, and legal sub-units. SIGAR has had an agent embedded in the law-enforcement sub-unit, and has worked with TF 2010 staff at its former headquarters in Kabul and at Bagram and Kandahar Airfields. The task force has since moved its headquarters to an air base near Doha, Qatar, on the Persian Gulf. SIGAR has asked the U.S. Army for permission to station an agent there to continue the close working relationship. • Afghanistan Threat Finance Cell (ATFC): Modeled after the Iraq Threat Finance Cell created under Treasury and DOD leadership, the ATFC began operations in 2009 to attack illicit financial networks by providing financial expertise and actionable intelligence to U.S. agencies. The ATFC seeks to identify and disrupt threat finance networks related to terrorism and the Afghan insurgency. The Drug Enforcement Administration leads the ATFC, with DOD acting as deputy. SIGAR has an analyst embedded at the cell. This has helped it access vast amounts of data for searches and other investigative work on illicit finance. • Combined Joint Interagency Task Force–Afghanistan (CJIATF-A): This consortium coordinates and focuses efforts against corruption, narcotics, threat finance, and contracting with the enemy. It also conducts detainee operations and coordinates with units of the Afghan government. Members include TF 2010 and the CJIATF-Nexus counternarcotics analytical cell, with Interagency Operations Coordination Center and ATFC working in alignment with the CJIATF-A team. SIGAR prosecutors also cooperate whenever possible with the Afghan Attorney General’s Office (AGO) on investigations, interviews, and referrals for prosecutions involving Afghan nationals. No other U.S. agency has such a working relationship with the AGO. It gives the United States a voice in dealing with Afghan contractors against whom the United States has no 8 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION U.S. LAW ENFORCEMENT IN AFGHANISTAN legal remedy. Since 2010, the AGO has prosecuted 35 individuals reported by SIGAR investigators for reconstruction fraud, theft, and corruption. The AGO has acted against Afghans involved in some cases based on SIGAR work. These include contractors who failed to install culvert-denial systems needed to prevent insurgents from placing bombs under roads. As previous SIGAR reports have noted, however, the AGO typically prosecutes low-level suspects, not people with political connections or major assets that can be tapped to avoid justice. Finally, SIGAR agents share information with the Independent Joint AntiCorruption Monitoring and Evaluation Committee (MEC) on corruption and fraud in projects and contracts being executed in Afghanistan. Created in 2010 at the request of the Afghan government, this six-member international committee establishes benchmarks, identifies problems, and evaluates progress against corruption. The MEC is not a law-enforcement agency, but its reports form a point of reference for the international community and could affect Afghan government receptivity toward greater anticorruption efforts. Developing Cases in Afghanistan and the United States SIGAR agents use audit findings, informants’ tips, interagency contacts, and other resources to develop cases in both Afghanistan and the United States. As detailed in a SIGAR news release, the Investigations Directorate has scored major victories in cases involving fuel theft and in freezing $63 million of bank deposits that may be related to illegal activity in Afghanistan. Such investigations, conducted in Afghanistan and the United States, will be increasingly important as the United States transfers more aid money directly to the Afghan government, creating new opportunities for misconduct including theft and illicit money transfers. SIGAR Investigations is now in the preliminary stage—assessing jurisdiction—of a possible criminal investigation of the U.S.-funded acquisition of Russian-built Mi-17 transport helicopters for the Afghan security forces. Allegations involving the Mi-17 contracts came through SIGAR’s hotline. A vice president of a contractor at Kandahar Airfield in Afghanistan awarded work to an Afghan subcontractor from whom he then took $60,000. SIGAR’s investigation started in Afghanistan. The suspect, Elton M. McCabe III of Slidell, Louisiana, was arrested in December 2012 when he returned to the States. He pled guilty to accepting kickbacks and to conspiracy to commit offenses against the United States. He also agreed to forfeit $60,000. McCabe was sentenced on August 22, 2013, to serve 10 months in federal prison.7 Smaller cases like the McCabe prosecution can be helpful. Taxpayers and the reconstruction effort benefit every time a person or organization contemplating misconduct considers the risks of detection and abandons a plan for crime. So the directorate’s impact cannot be fully measured by simply totaling the dollar amounts recovered, restored, fined, or protected against further disbursement to bad vendors. Deterrence also counts. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 9 U.S. LAW ENFORCEMENT IN AFGHANISTAN Effective investigations and case development require access to information. SIGAR will benefit greatly from the access it has now gained to the voluminous Afghanistan files of the U.S. Senate’s Permanent Subcommittee on Investigations (PSI). The Special IG wrote to PSI Chairman Carl Levin and Ranking Member John McCain in April 2013 asking for access. Senate Majority Leader Harry Reid introduced a resolution on May 23, 2013, authorizing the PSI leaders to making committee records relating to U.S. efforts in Afghanistan available to federal investigators. The resolution was adopted by unanimous consent.8 This highly unusual move highlights SIGAR’s aggressive pursuit of every available investigative avenue. Aggressively Targeting Candidates for Suspension and Debarment SIGAR has found that suspension and debarment—the act of temporarily or permanently preventing a person or firm from contracting with the U.S. government—can be a powerful tool in Afghanistan. U.S. law enforcement has little legal leverage against Afghan citizens and Afghan-owned companies. But U.S. implementing agencies can suspend or debar any company or individual of any nationality from obtaining additional U.S.-funded contracts, grants, or loans if they have performed poorly, engaged in illicit activity, or have links to criminal and insurgent networks. Other U.S. agencies, military and civilian, have at times been reluctant for operational or other reasons to act on SIGAR recommendations to suspend or debar contractors. The U.S. Army, for example, has declined to accept SIGAR recommendations involving 43 companies with ties to the Taliban, al-Qaeda, or the Haqqani Network. The firms are on the Commerce Department’s Entity List of foreign persons or entities barred from receiving certain exports. SIGAR has repeatedly called on the Army to prevent these companies from ever receiving U.S. contracts, but the Army has cited legal reasons for not acting.9 SIGAR believes the Army’s refusal to suspend and debar these companies is contrary to good public policy and to national-security goals. Agency resistance to SIGAR recommendations does not preclude all action, however. SIGAR investigations have resulted in some 200 individual Afghans being banned from U.S. bases and barred from obtaining visas to enter the United States. SIGAR has requested but has not yet secured its own regulatory authority to suspend or debar dubious contractors. The request was submitted to the Office of Management and Budget (OMB) in late 2011; OMB has not acted on it. SIGAR is therefore confined to making recommendations to other agencies that suspensions and debarments be imposed. Since 2008, SIGAR has referred 358 cases to other agencies, resulting in 61 suspensions, 94 debarments, and one administrative settlement. 10 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION U.S. LAW ENFORCEMENT IN AFGHANISTAN Combating Money Laundering Theft and fraud related to U.S. contracts for reconstruction work in Afghanistan and the country’s large narcotics trade lead to many attempts to “launder” the monetary proceeds to avoid law-enforcement scrutiny and move funds to other jurisdictions. Money laundering involves Afghans, Americans, and people of other nationalities. The central figure in one case was an American contractor official who engaged in both corruption and cash smuggling. SIGAR investigators caught Donald G. Garst trying to smuggle $150,000 out of Afghanistan through a commercial package shipper. He later admitted to receiving about $210,000 from Afghan vendors after soliciting kickbacks in return for favorable contracting treatment. The U.S. Department of Justice said Garst had planned to receive another $400,000 in kickbacks, but was caught before he could collect the payment.10 Garst’s employer at the time, AC First, is a joint venture of the large contractors AECOM and CACI, and held a multi-million-dollar contract with the U.S. Army for vehicle and equipment maintenance, facilities and supply management, transportation, and other services in Afghanistan. On February 12, 2013, a federal court in Kansas sentenced Garst to 30 months in prison and fined him $52,117 for his guilty plea to a charge of bulk cash smuggling. The $150,000 cash shipment was forfeited. The Garst case is no isolated incident. Afghanistan stands at the top of a 149-country money-laundering risk index calculated by the Basel Institute on Governance.11 SIGAR has reported on evidence of bulk cash smuggling through Kabul Airport, and estimates of total illicit cash transfers run into the billions of dollars. Illegal transfers of funds out of Afghanistan, whether by smuggling bulk cash or by electronic means, deprive the Afghan government of tax revenues, support criminal enterprises and terrorism, and undermine public trust in the government. Several U.S. laws criminalize money laundering.12 But investigating moneylaundering cases in Afghanistan is extremely difficult. Attempts to obtain evidence-quality, certified records from Afghan banks typically fail. Afghan police and even court records often do not exist. Government offices may lack computerized records, computers, or even electric power. Investigators therefore turn to Western Union wire records, logs of informal Afghan “hawala” financial transfers, or Afghan prosecutors for information and evidence. SIGAR has taken special steps to reinforce its capability to detect and investigate money laundering. Besides hiring a former Treasury moneylaundering expert who had served with the Afghanistan Threat Finance Cell, SIGAR is making a significant new investment in information technology. New hardware and software will assist in following the tortuous trails of money leaving Afghanistan. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 11 U.S. LAW ENFORCEMENT IN AFGHANISTAN Countering the Narcotics Trade As described at greater length in the Security section of this report, counternarcotics efforts have absorbed large amounts of U.S. money and effort in Afghanistan. The country is the world’s leading producer of opium, and the drug trade provides a living for hundreds of thousands of Afghan farmers. It also produces a public-health scourge, a motivation for users to commit crimes to obtain drugs, a source of financing for insurgents and terrorists, and material for the money-laundering and cash-smuggling business. SIGAR agents worked on one criminal case that illustrates the intermingling of offenses. While assigned to the Kunar Provincial Reconstruction Team, Sidharth Handa, an Army Reserve captain, collaborated with an Afghan interpreter to solicit bribes from companies competing for construction contracts. The two had agreements to receive more than $1.3 million in bribes, of which they collected and split $315,000 before Handa left Afghanistan. A cooperating witness and an undercover agent later met him in a Virginia hotel under pretext of delivering another $500,000 of the promised amount. In the course of his conversation with the cooperating witness, Handa also discussed selling heroin. Officers arrested Handa as he left the hotel with the money, a loaded handgun, and a spreadsheet detailing bribe promises and payments. On September 23, 2011, a federal court in Virginia sentenced Handa to 120 months in prison for soliciting and accepting bribes, and for conspiring to distribute heroin. He was also ordered to pay $315,000 in restitution.13 SIGAR’s continuing engagement with the DEA-led Afghanistan Threat Finance Cell gives it access to documents, evidence, and informants that can assist in the counternarcotics effort. Reaching Out to Observers of Reconstruction Misconduct SIGAR’s Investigations Directorate reaches out to engage everyone in the fight against fraud and corruption. SIGAR runs an antifraud hotline that invites anyone with tips on possible illegal activity to call, fax, e-mail, or visit SIGAR with their information—anonymously if they wish. About 70 hotline complaints come in each quarter, with about 40% leading to a preliminary or full investigation. One hotline tip to SIGAR involved an Afghan construction company that wanted to overturn two terminations for default on its U.S.-funded contracts. The company offered $30,000 to influence an American contracting officer’s representative working at the U.S. Embassy Kabul in 2009–2010 for the State Department’s Bureau of International Narcotics and Law Enforcement Affairs. SIGAR investigators checked out the hotline information, collected evidence, and referred the case to prosecutors. On September 19, 2013, defendant Kenneth M. Brophy pled guilty in U.S. District Court in Wilmington, DE, to receipt of an illegal gratuity by a public official. His plea agreement proposes six months’ incarceration, six months’ 12 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION U.S. LAW ENFORCEMENT IN AFGHANISTAN RemembeR: FRaud Can Kill Report Fraud involving u.S. Reconstruction dollars to SiGaR www.sigar.mil sigar.hotline@mail.mil Afghanistan | 0700107300 (cell) | 318-237-3912 x7303 (DSN) United States | +1-866-329-8893 (int’l line) | 94-312-664-0378 (DSN) SIGAR publicizes its fraud hotline with posters and advertisements. supervised release, and forfeiture of $30,000, subject to court approval. On April 29, 2013, the Department of State suspended Brophy from further contracting with the government.14 A final debarment decision based on Brophy’s criminal conviction is pending. The telephone hotlines—866-329-8893 toll-free in the United States, 0700107300 for Afghan cell phones—are answered during business hours at SIGAR headquarters and in Kabul, and voicemail is available in three languages, 24 hours a day. Broadcast news reports featuring interviews or speeches by SIGAR officials boost the inflow of hotline contacts both stateside and in Afghanistan. SIGAR also advertises its antifraud mission and the hotline in venues like the Armed Forces Network, Stars and Stripes, and the in-flight magazine of Safi Airways, the Afghan national airline. Posters in English, Dari, and Pashtu are placed at U.S. bases, Afghan ministries, and many jobsites. SIGAR is also looking into airtime buys on Afghan radio and television—an option that could be particularly useful in a largely illiterate country. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 13 U.S. LAW ENFORCEMENT IN AFGHANISTAN WHAT MAKES AFGHANISTAN A UNIQUE CHALLENGE? For a variety of reasons, the Afghan setting complicates all of the duties of a law enforcement agent and may represent a worst-case scenario for conducting U.S. law enforcement in a foreign country. Work in a Combat Zone As noted earlier, the overriding challenge is that Afghanistan is an active combat zone. Oversight and investigative officials in Afghanistan depend heavily on the U.S. military for transportation and security. The continuing drawdown of U.S. and other Coalition forces from Afghanistan and related base closures are already having an impact on federal agencies’ ability to move at will in the country and to complete investigations expeditiously. Most stateside fraud investigations are worked for several years from receipt of initial allegation to criminal, civil, or administrative resolution. Afghanistan demands a faster pace for reasons including frequent personnel rotations that reduce the numbers of knowledgeable witnesses, erode institutional memory, and create lapses in record creation and retention. At one point, SIGAR investigative personnel were stationed at nine locations in Afghanistan and could book travel around the country on rotary- or fixedwing aircraft that flew several times a day. Recently in-country scheduled transport flights from the main U.S. base to forward operating bases have declined to three a week. These constraints make it all the more important for Investigations to collaborate with investigative partners and to use new techniques and technologies to carry out its mission. Shrinking Areas of Access for Oversight As the area in which the U.S. military is prepared to transport civilians shrinks with the drawdown of U.S. troops, about 80% of Afghanistan may no longer be readily accessible to U.S. oversight and investigative officials after 2014.15 Given that the U.S. Army Corps of Engineers, USAID, and Regional Contracting Commands may continue to award contracts for construction projects outside of the shrinking oversight-access zones, the trend implies growing barriers to SIGAR’s and other agencies’ ability to act aggressively on allegations or evidence of waste, fraud, and abuse. Meanwhile, the ongoing reductions in other law-enforcement agencies’ presence in Afghanistan will magnify both the challenge and the importance of SIGAR’s work in country in 2014 and beyond as reconstruction funds continue to be disbursed. Section 2 of this report includes a highlight on the oversight-access challenge, with maps illustrating changes since 2009 and expected in 2014. Heavy U.S. Reliance on Contracting Contracts present another challenge in Afghanistan. There, as in Iraq, U.S. military, reconstruction, and development activities rely on large numbers of contractors for tasks ranging from construction and equipment 14 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION U.S. LAW ENFORCEMENT IN AFGHANISTAN maintenance to facilities maintenance and training. As of fourth quarter FY 2013, U.S. Central Command reported 85,528 DOD contractors in Afghanistan, split roughly equally among U.S., Afghan, and third-country nationals.16 As has been the case for much of the time in Iraq and Afghanistan, contractors outnumber deployed military personnel. Many of the DOD contractors work on reconstruction activities including building projects, management and maintenance, and training Afghan forces. Additional thousands of contractors, cooperative-agreement partners, or grantees work for or on behalf of State, USAID, and other federal agencies with smaller roles in Afghanistan. The plethora of contracts, the billions of dollars involved, the tens of thousands of contractor employees, and differences—including in languages and record-keeping systems—all combine with shortages of competent and conscientious contracting officers and supervising/technical representatives to create special problems for oversight—and numerous, amplified opportunities for waste, theft, and corruption. Another obstacle for investigators arises out of the 2006 statutory creation of the “Afghan First Initiative.” This legislation gives preference to Afghan contractors for DOD-required goods and services. It may support the political objective of cultivating good will and helping to develop Afghanistan’s economy, but it has had the unintended consequence of making it more difficult to prosecute reconstruction fraud and theft. In Iraq, U.S. operations involved many Iraqi subcontractors, but the primary contractors legally responsible for employing and managing the subcontractors were generally U.S. companies subject to U.S. law. In Afghanistan, by contrast, U.S. law enforcement has no jurisdiction over Afghan primary contractors or their subcontractors. Agencies can only refer cases to Afghan prosecutors, recommend suspension and debarment to prevent further contract work by offenders, and bar specific personnel from U.S. bases. Legal Complications Afghan sovereignty and the status of international agreements also complicate life for U.S. law-enforcement officials in Afghanistan. The United States and Afghanistan are still negotiating a bilateral agreement that would define the legal status of U.S. military and law-enforcement personnel in Afghanistan. At present, U.S. agencies can and do refer cases to Afghan prosecutors, but they cannot arrest Afghan nationals or present cases in Afghan courts. By contrast, cases involving U.S. nationals in Afghanistan can be turned over to federal officials for criminal prosecution or, if DOJ does not opt to take a case involving a military member, to military commands for action under the Uniform Code of Military Justice. SIGAR works with Afghan law enforcement, but it is rare for a non-Afghan even to appear as a witness in the country’s criminal proceedings. When a SIGAR special agent testified in an Afghan appellate court in March 2013, it REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 15 SIGAR agent testifying in Afghan criminal trial. (SIGAR photo) U.S. LAW ENFORCEMENT IN AFGHANISTAN INVESTIGATIVE INNOVATIONS SIGAR investigators’ innovations to deal with the Afghan operating environment include: • aggressive use of suspension-anddebarment recommendations • obtaining an in rem warrant to seize assets implicated in criminal activity • testifying as a prosecution witness in an Afghan appellate court • barring certain Afghans from entering U.S. bases or obtaining U.S. visas may have marked the first testimony by a U.S. law-enforcement agent. The special agent’s testimony helped the court reinstate charges, extend the prison sentence, and double the fine imposed on an Afghan accused of bribery and theft totaling more than $1 million related to U.S. reconstruction contract work.17 The SIGAR testimony was based on agents’ use of law-enforcement tools including undercover work, recordings, aerial surveillance, informants, and cooperation with Afghan police and prosecutors. Although the United States has extradition treaties with at least 110 countries, Afghanistan is not one of them.18 Bringing an Afghan accused of violating U.S. law to the United States for trial would therefore require a special, long-odds diplomatic effort with an Afghan government already sensitive to perceptions of foreign influence. So far, DOJ has prosecuted no Afghans in U.S. courts on charges related to Afghan reconstruction. In a related complication, DOJ has not yet used Afghan citizens to testify as witnesses in U.S. court cases related to SIGAR investigations. Obtaining visas, paying travel and lodging expenses, dealing with language barriers, and taking heed of reprisal threats against witnesses and their families have proved insurmountable obstacles. SIGAR’s Investigations Directorate continues to adapt to the Afghan operating environment, and will refine and adjust its approaches further as conditions change and new obstacles or opportunities arise. Challenges of Giving More Money Directly to Afghan Ministries The United States and other international donors have committed to provide increasing portions of reconstruction and development assistance directly to the Afghan government, rather than through U.S. agencies’ and contractors’ work, or through nongovernmental organizations operating on behalf of the U.S. government. “Direct assistance” is a term with varying definitions, and is sometimes also known as “on-budget” or “government-to-government” assistance.19 Ideally, providing direct assistance may help a recipient government build its own capacity to plan and execute budgets, and to channel and adapt funding to its country’s changing needs and priorities. But realistically, direct assistance may also magnify the threat of corruption and theft. For example, Afghan government ministries may not have the appropriate expertise, financial systems, or internal controls to properly manage and oversee the increased flow of money, possibly multiplying opportunities to divert cash. U.S. government assessments of Afghan ministries’ capabilities have raised serious questions about the feasibility of providing additional money through direct assistance. Nevertheless, the U.S. government and other international donors have committed to channel at least 50% of funds through direct-assistance programs. The commitment partly reflects the reality that, within two years, it will be largely up to the Afghan government to sustain the reconstruction effort in which the U.S. and others have invested so much. 16 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION U.S. LAW ENFORCEMENT IN AFGHANISTAN Some SIGAR audits have indicated that certain Afghan ministries are not yet capable of adequately managing these large flows of money. SIGAR has repeatedly found weaknesses in the abilities of the Afghan Ministries of Defense and Interior to manage funds that pay for critical petroleum, oil, and lubricants. SIGAR audits have also found significant challenges to Afghan ministries’ ability to sustain U.S.-provided facilities and equipment using direct assistance. Audits described in this and prior SIGAR quarterly reports have uncovered conditions ripe for waste, fraud, and abuse. Such findings are then referred to SIGAR Investigations for additional review. Any resulting criminal investigations can be complicated by weaknesses in Afghan recordkeeping systems, limited access to personnel and documents, and other oversight challenges. Yet even if SIGAR cannot prosecute Afghan citizens or persuade Afghan officials to prosecute them, identifying individuals and agencies implicated in corruption or theft could help international donors and implementing agencies with the design and targeting of their direct-assistance programs. Most recently, SIGAR completed an audit this quarter of the $236 million Partnership Contracts for Health program, which supports the Afghan Ministry of Public Health (MOPH) in its delivery of health services to local Afghan clinics and hospitals. The audit found significant financial management deficiencies at the MOPH, including problems with the ministry’s internal audit, budget, accounting, and procurement functions. In SIGAR’s view, USAID’s decision to continue disbursing funds to the MOPH with little or no assurance that these funds are safeguarded from waste, fraud, and abuse raises serious concerns about the integrity of the program. Moreover, following issuance of this audit, SIGAR received allegations of fraud and corruption within the very unit of the MOPH set up to mitigate the ministry’s financial-management weaknesses. These allegations have prompted a new criminal investigation involving U.S. assistance to the MOPH that may result in SIGAR’s referring cases to U.S. or Afghan prosecutors. THE OUTLOOK Nearly $19 billion of U.S. funds appropriated for Afghanistan reconstruction have not yet been disbursed, and the administration has committed to request billions more in the years ahead. Plans call for much of this money to be provided through direct assistance. At the same time, other U.S. and international agencies will have reduced their in-country presence and oversight access will become more difficult. These facts will require SIGAR and other U.S. oversight and law-enforcement agencies to continue refining and adjusting their approaches for the changing Afghan operating environment. They also suggest that SIGAR and its Investigations Directorate will be busy for some time to come. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 17 “Significant portions of Afghanistan are already inaccessible to SIGAR, other inspectors general, the Government Accountability Office, and other U.S. civilians conducting oversight, such as contracting officers. SIGAR believes this constraint on oversight will only worsen as more U.S. and coalition bases close.” —Special Inspector General John F. Sopko Source: John F. Sopko, inquiry letter to State, DOD, and USAID, October 10, 2013. --. SIGAR OVERSIGHT CONTENTS CONTENTS Comprehensive Oversight Plan Issued 22 Audits 22 Inspections 36 Special Projects 43 Quarterly Highlight: Oversight Access Challenges 46 Investigations 48 SIGAR Budget 58 SIGAR Staff 58 Photo on previous page A view of the Hindu Kush mountain range from the Gardez hospital construction site. (SIGAR photo) 20 SIGAR OVERSIGHT ACTIVITIES SIGAR OVERSIGHT ACTIVITIES In this reporting period, SIGAR issued 12 audits, inspections, alert letters, and other reports. This work identified poor planning, management deficiencies, project delays, and failures of oversight in areas of Afghanistan’s reconstruction ranging from public health to national security. It also found design problems, shoddy construction, and threats to health and safety. An alert letter raised concerns about the design of a major border crossing point in Kandahar. An audit report warned that internal control deficiencies put U.S. funds provided to the Ministry of Public Health (MOPH) at risk of waste, fraud, and abuse. Another audit reported that the Combined Security Transition Command-Afghanistan (CSTC-A) was building facilities that the Afghan National Security Forces (ANSF) may not need. A third audit report revealed that poor oversight and documentation of fuel purchases for the Afghan National Police (ANP) had led to the use of higher-priced vendors and questionable costs to the U.S. government. Four inspection reports showed that the Archi District Police Headquarters was in a state of disrepair, that the Gardez hospital has not been completed after two years due to poor contractor performance, that poor oversight contributed to a failed construction project in Parwan, and that the Walayatti medical clinic was not built to specifications and was never used. SIGAR’s Office of Special Projects warned that the United States lacks a strategic plan and mechanisms to track progress in fighting corruption in Afghanistan. The Office of Special Projects also wrote to the Secretaries of State and Defense and to the Administrator of the United States Agency for International Development (USAID) to inquire about their plans to provide oversight for the reconstruction as the drawdown of U.S. and Coalition troops increasingly limits the access U.S. civilians have to projects outside a few major cities. SIGAR investigations this quarter resulted in $63 million in fraudulently obtained criminal proceeds being frozen. In the United States, SIGAR investigations led to two arrests, three sentences, more than $95,000 in fines and restitutions, two indictments, one criminal information, a criminal complaint, and four guilty pleas. In Afghanistan, five Afghan citizens were arrested following SIGAR investigations. Monetary savings brought by SIGAR this quarter include $1.5 million protected, $344,000 recovered, and REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 21 AUDIT ALERT LETTER • Alert 14-2: Design Flaws at the WeeshChaman Border Crossing Point COMPLETED AUDITS • Audit 13-17: USAID’s Assistance to the Ministry of Public Health • Audit 13-18: ANSF Construction Projects • Audit 14-1: ANP Fuel Program • Audit 14-3: ANA Vehicle Spare Parts COMPLETED FINANCIAL AUDIT • Financial Audit 14-9: Contracts Implemented by Checchi & Company Inc. COMPLETED INSPECTIONS • Inspection 14-5: Archi Police District Headquarters • Inspection 14-6: Gardez Hospital • Inspection 14-7: Justice Center in Parwan Courthouse • Inspection 14-10: Walayatti Medical Clinic COMPLETED SPECIAL PROJECT REPORTS • Special Project 13-9: Anti-Corruption Efforts • Special Project 14-4: Oversight Access Inquiry SIGAR OVERSIGHT ACTIVITIES $10,000 saved. SIGAR also referred 14 individuals and 17 companies for suspension and debarment. COMPREHENSIVE OVERSIGHT PLAN ISSUED Performance audits: provide assurance or conclusions based on an evaluation of sufficient, appropriate evidence measured against stated criteria. Performance audits provide objective analysis so that management and those charged with governance can use the information to improve the program performance and operations, reduce costs, and facilitate decisions making by parties with responsibility to oversee or initiate corrective action for public accountability. Performance audits are conducted in accordance with generally accepted government auditing standards (GAGAS) and the Council of the Inspectors General on Integrity and Efficiency (CIGIE) Quality Standards for Federal Offices of Inspector General. Inspections: are systematic and independent assessments of the design, implementation, and/or results of an agency’s operations, programs, or policies. SIGAR conducts inspections, in accordance with CIGIE Quality Standards for Inspection and Evaluation, to provide information to Congress and the public on the quality of construction of facilities and infrastructure throughout Afghanistan; and generally, provides an assessment of the extent to which the facilities were constructed in accordance with the contract requirements, used as intended, and are sustainable. AUDIT ALERT LETTERS • Alert 14-2: Design Flaws at the WeeshChaman Border Crossing Point SIGAR and the other members of the Southwest Asia Joint Planning Group this quarter issued the fiscal year (FY) 2014 Comprehensive Oversight Plan for Southwest Asia (COPSWA). This plan incorporates all of the planned and ongoing oversight for Afghanistan and the rest of Southwest Asia by the inspectors general of SIGAR, the Department of Defense, the Department of State, and the U.S. Agency for International Development, the Army Audit Agency, the Naval Audit Service, and the Air Force Audit Agency. It also includes ongoing oversight efforts by the U.S. Government Accountability Office related to Southwest Asia. The plan notes that the execution of the reconstruction mission will change dramatically with the U.S. military drawdown. As U.S. combat forces and most of their support network leave Afghanistan, operational responsibility will shift from the Department of Defense to the Department of State, which also coordinates with USAID. Meanwhile, the closing of U.S. bases and the steadily shrinking “bubbles” of U.S.-provided security and medical-evaluation services will complicate and constrain management and oversight of U.S.-funded reconstruction projects. SIGAR’s planned work includes an audit of the U.S. government reconstruction transition plan, an audit of the reliability of ANSF personnel data, an inspection of the Kajaki Dam and related construction projects, and an audit of Afghan women’s initiatives funded by the U.S. government. AUDITS SIGAR conducts performance audits, inspections, and financial audits of programs and projects connected to the reconstruction in Afghanistan. This quarter, SIGAR issued four audit reports. SIGAR also began two new performance audits, bringing the total number of ongoing audits to 12. The published reports, among other things, raised concerns about U.S. funds provided to the MOPH, planned and ongoing construction projects for the ANSF, and fuel provided to the ANP. The audits made a total of 16 recommendations to ensure that the MOPH uses U.S. funds as intended, that U.S. funds are not wasted on construction projects for the ANSF, that oversight is strengthened of U.S. spending on fuel for the ANP, and that CSTC-A is ordering vehicle spare parts based on accurate information. Alert Letters With Afghanistan in the midst of transition, U.S. military and civilian officials have asked SIGAR to provide them with real-time information to prevent waste and increase the effectiveness of U.S. reconstruction 22 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES programs. One of SIGAR’s main goals is to provide implementing agencies and Congress with actionable information while there is still time to make a difference. During this reporting period, SIGAR sent one alert letter to inform DOD about audit findings requiring urgent attention; the letter drew attention to design flaws at the Weesh-Chaman border crossing. Alert 14-2: Design Flaws at the Weesh-Chaman Border Crossing Point On October 10, 2013, SIGAR informed U.S. military officials in Afghanistan that it had found problems with the design of a major border crossing point under construction in Kandahar Province. SIGAR uncovered the problems at the Weesh-Chaman (Weesh) border crossing in the course of an ongoing audit of U.S. Agency for International Development (USAID) and Department of Homeland Security Customs and Border Protection efforts to develop and strengthen Afghanistan’s capacity to assess and collect customs revenue. SIGAR noted in its letter that customs revenue made up 44% of Afghanistan’s annual national budget in the most recent Afghan fiscal year. SIGAR identified two design concerns. First, the site has only one entrycontrol point, even though current guidance calls for two control points. Second, there are plans to install an inspection device at the site. The device will block one traffic lane and does not have sufficient clearance to allow for efficient inspection of many of the vehicles that travel through the border crossing. These design problems will likely increase congestion, which could lead to decreased inspection efficiency. Resolving these issues at Weesh may also help the NATO Training Mission-Afghanistan (NTM-A)/ Combined Security Transition Command-Afghanistan (CSTC-A) and USACE address any similar issues related to the design of six other border crossing point construction projects totaling approximately $38.4 million. Audit Reports Published This quarter, SIGAR completed four audit reports that reviewed health services in Afghanistan and ANSF construction projects, as well as the systems of supplying spare parts to the ANA and fuel to the ANP. SIGAR also has 12 audits under way assessing, among other things, Afghan ministerial capacity, the U.S. government reconstruction transition plan, and the reliability of ANSF personnel data. See Appendix C for a complete list of ongoing audits. Audit 13-17: Health Services in Afghanistan USAID Continues Providing Millions of Dollars to the Ministry of Public Health Despite the Risk of Misuse of Funds. In July 2008, USAID and the Afghan Ministry of Public Health (MOPH) signed an implementation letter establishing the $236 million Partnership Contracts for Health (PCH) program. The program, which began in REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 23 Financial audits: provide an independent assessment of and reasonable assurance about whether an entity’s reported condition, results, and use of resources are presented in accordance with recognized criteria. SIGAR performs financial audits in accordance with GAGAS, which includes both requirements contained in the American Institute of Certified Public Accountants Statements on Auditing Standards and additional requirements provided in GAGAS. SIGAR also reviews financial audits conducted by independent public accountants (IPA). When an IPA conducts a financial audit, SIGAR conducts reasonable procedures to ensure compliance with GAGAS, based on the intended use of the IPA's work and degree of responsibility accepted by SIGAR with respect to that work. COMPLETED AUDITS • Audit 13-17: USAID Continues Providing Millions of Dollars to the Ministry of Public Health Despite the Risk of Misuse of Funds • Audit 13-18: Afghan National Security Forces: Additional Action Needed to Reduce Waste in $4.7 Billion Worth of Planned and Ongoing Construction Projects • Audit 14-1: Afghan National Police Fuel Program: Concerted Efforts Needed to Strengthen Oversight of U.S. Funds • Audit 14-3: Afghan National Army: Combined Security Transition Command-Afghanistan Lacks Key Information on Inventory in Stock and Requirements for Vehicle Spare Parts SIGAR OVERSIGHT ACTIVITIES November 2009, supports the MOPH in its delivery of health services to local Afghan clinics and hospitals. The MOPH uses USAID-provided funds to contract with nongovernmental organizations to provide basic health care in 13 provinces and hospital services in five provinces. The objectives of this audit were to determine the extent to which (1) USAID assessed the financial management capability of the MOPH and (2) cost estimates for the PCH were developed appropriately. It was not an objective to expose or find corruption, but as a result of this audit, SIGAR has opened a criminal investigation into corruption at the MOPH. USAID direct assistance to the Ministry of Health bought incubators for Ghazni Provincial Hospital, but demand is high: the incubator at left is sheltering quadruplets, while triplets lie in the one at right. (SIGAR photo) FINDINGS Despite financial management deficiencies at the MOPH, USAID continues to provide millions of U.S. taxpayer dollars in direct assistance with little assurance that the MOPH is using these funds as intended. Specifically, USAID’s April 2012 assessment of the MOPH’s financial management capability identified significant internal-control deficiencies that put U.S. funds provided under the PCH program at risk of waste, fraud, and abuse. For example, the assessment found deficiencies in MOPH’s internal audit, budget, accounting, and procurement functions. USAID officials stated that they have not verified what, if any, actions the MOPH has taken to address these deficiencies. Rather, a USAID official told SIGAR that USAID has no obligation to address the deficiencies identified or to verify any of the corrective actions that the MOPH may have implemented for the ongoing PCH program. In SIGAR’s view, USAID’s decision to continue disbursing funds to the MOPH with little or no assurance that these funds are safeguarded from waste, fraud, and abuse raises serious concerns about the integrity of the PCH program. USAID provided $236 million for the PCH program based on a cost estimate that the MOPH developed, but which USAID did not independently validate. Specifically, USAID did not prepare a comprehensive analysis of the actual cost for the PCH program using key factors such as, among other things, patient workload, population statistics, existing infrastructure, and security. USAID officials stated that the estimate was based on historical data, but they could not provide documentation showing how the estimate was calculated. More than $190 million of the $236 million provided for the PCH program has been obligated. However, SIGAR’s review found that about $127 million has actually been spent, resulting in potential excess obligations of about $63 million. RECOMMENDATIONS SIGAR recommends that the USAID Mission Director (1) provide no further funding to the PCH program until the program cost estimates are validated as legitimate; (2) develop, in coordination with the MOPH, a comprehensive action plan to address deficiencies identified in the April 2012 ministry capability assessment, establish key milestones to monitor progress in 24 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES executing this action plan, and make additional funding for the PCH program contingent on the successful completion of established milestones; and (3) validate the funds obligated and expended under the PCH program since its inception and de-obligate any excess funds and return the funds to the U.S. Treasury or put these funds to better use. AGENCY COMMENTS USAID did not concur with the first recommendation, partially concurred with the second recommendation, and concurred with the third recommendation. USAID stated that the safeguards it has put in place within the MOPH protect taxpayer funds from misuse. However, strong evidence exists that funds provided to the MOPH are at risk of misuse. In particular, both USAID and third party assessments of the MOPH have concluded that MOPH’s systems, operations, and internal controls to manage donors’ funds cannot be relied upon without substantial corrective measures being taken. Audit 13-18: Afghan National Security Forces Afghan National Security Forces: Additional Action Needed to Reduce Waste in $4.7 Billion Worth of Planned and Ongoing Construction Projects Since 2005, Congress has appropriated nearly $52.8 billion to equip, train, base, and sustain the ANSF. As of April 2013, the ANSF facilities construction program had more than 400 ANSF facilities in progress or in the acquisition or planning stages. These facilities, worth $4.7 billion, are designed to support the currently approved ANSF strength of 352,000 personnel. CSTC-A is constructing new facilities for the ANSF at the same time that the United States and Coalition partners are reducing their presence in Afghanistan and, through the International Security Assistance Force Joint Command (IJC), closing or transferring their facilities to the Afghan government. SIGAR’s prior audit of ANSF facilities expressed concern that CSTC-A’s lack of planning increased the risk that CSTC-A was building facilities that did not meet ANSF needs. In addition, the United States, its NATO allies, and the Afghan government announced at the May 2012 Chicago Summit that the ANSF may shrink from its currently approved strength of 352,000 to 228,500 personnel, depending on security conditions. The objectives of this audit were to assess (1) the extent to which U.S. and Coalition basing plans for the ANSF reflect force-strength projections; (2) whether CSTC-A analyzed alternatives to minimize new construction, including using existing U.S. and Coalition bases to satisfy ANSF basing needs; and (3) the extent to which planned construction projects are likely to be completed by December 2014. FINDINGS The IJC has established a process to review and analyze existing Coalition facilities for transfer to the Afghan government. Specifically, in April 2012, REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 25 SIGAR OVERSIGHT ACTIVITIES IJC instituted an Operational Basing Board that meets weekly to nominate and review existing U.S. and Coalition facilities for closure or transfer to the Afghan government. The IJC board actively engages with CSTC-A and the Afghan Ministries of Defense and Interior to determine which facilities should be transferred to the ANSF. Consequently, CSTC-A has dropped plans for 318 new ANSF facilities, saving approximately $2 billion. CSTC-A, with IJC assistance, has responsibility for managing the construction of ANSF facilities around the country. However, CSTC-A lacks a comprehensive ANSF basing plan that considers future ANSF reductions and excess capacity in existing facilities. Current construction requirements reflect the currently approved 352,000 ANSF personnel level and do not take into account planned reductions in the number of ANSF personnel. As a result, if the ANSF decreases to 228,500 personnel, ANSF facilities will have excess personnel capacity. SIGAR has previously noted excess capacity and underutilization in existing ANSF facilities. SIGAR attempted to review the occupancy of existing ANSF facilities and requested on-site personnel numbers for 36 randomly-selected ANA and ANP facilities, but IJC and CSTC-A officials informed SIGAR that they do not track this information. As a result, CSTC-A is unable to determine whether either existing or planned facilities meet ANSF needs, and may be missing opportunities to identify additional planned facilities that are candidates for consolidation or termination. Using CSTC-A’s 2012 base construction schedule, SIGAR identified 52 projects that may not meet the ISAF’s December 2014 construction deadline, increasing cost of and oversight risks if these projects are continued. SIGAR’s assessment differed from that of CSTC-A, which estimated that only one facility worth $16 million would not meet the 2014 ISAF construction deadline. After SIGAR briefed CSTC-A on its analysis, CSTC-A began reassessing project timelines. As of June 2013, CSTC-A had revised this estimate upward to 47 projects valued at $1.1 billion that would still be under construction beyond ISAF’s December 2014 deadline. In comments on a draft of this report, CSTC-A stated that it has several initiatives under way to identify those areas where there is excess capacity and current projects can be de-scoped or cancelled. According to CSTC-A, from January to August 2013, these initiatives, combined with routine reviews, resulted in a reduction of over $432 million in U.S. and Coalition funding. In addition, the ISAF Commander has requested quarterly reviews to ensure that facility requirements remain valid and that construction is on track. The combination of locating ANSF construction projects in dangerous areas and the downsizing and planned withdrawal of U.S. forces will make it more challenging to complete projects by the December 2014 deadline unless CSTC-A ensures that the necessary resources are available to provide oversight. 26 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES RECOMMENDATIONS To help ensure that the U.S. government is providing the appropriate number of facilities for the current and future ANSF, SIGAR recommended that the Deputy Commander, CSTC-A, among other things, (1) develop a plan that considers potential ANSF reductions and defer building facilities, as appropriate, to reduce future excess capacity, and (2) identify the extent to which current facilities are underutilized in order to reduce construction of new facilities and save reconstruction funds. SIGAR also recommends that the Deputy Commander of CSTC-A, in coordination with the Commanding General, and the Chief of Engineers of USACE, prepare a plan detailing specifics for security and oversight for construction projects continuing past 2014. AGENCY COMMENTS SIGAR received formal comments on a draft of this report from CSTC-A and IJC. CSTC-A concurred with all the recommendations addressed to it and IJC concurred with the two recommendations addressed to it. Both CSTC-A and IJC, as well as U.S. Central Command, provided additional technical comments, which SIGAR incorporated, as appropriate. Audit 14-1: Afghan National Police Fuel Program Afghan National Police Fuel Program: Concerted Efforts Needed to Strengthen Oversight of U.S. Funds Since 2005, Congress has appropriated almost $52.8 billion to train, equip, and sustain the ANSF, which includes the Afghan National Police (ANP) and the Afghan National Army (ANA). CSTC-A, which is responsible for building the ANSF, uses the Afghanistan Security Forces Fund (ASFF) to provide the ANSF with equipment, training, and supplies, as well as to build, renovate, and repair facilities and infrastructure. A portion of the ASFF has been used to purchase fuel for the ANSF. CSTC-A uses blanket purchase agreements issued by the U.S. Central Command Joint Theater Support Contracting Command (C-JTSCC). C-JTSCC, as the contracting office, executes and oversees contracts and exercises control over all contingency contracting in Afghanistan. Under the blanket purchase agreements, CSTC-A provides the contracting officer representative and is responsible for ordering and accounting for fuel purchased for the ANSF. Since 2007, C-JTSCC has established 17 blanket purchase agreements with vendors to provide fuel to the ANSF. C-JTSCC approves the monthly fuel prices and, following that approval, CSTC-A uses the approved prices to select vendors and order fuel. These vendors then deliver fuel directly to approximately 145 authorized ANP locations throughout Afghanistan. Once vendors deliver the fuel to those locations, the ANP stores and distributes the fuel to ANP district and local level units. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 27 SIGAR OVERSIGHT ACTIVITIES In January 2013, SIGAR reported on CSTC-A’s accounting and oversight of fuel purchased for the ANA, and identified weaknesses in CSTC-A’s process used to order, receive, and pay for fuel. This audit evaluated U.S. oversight of fuel purchases for the ANP. Specifically, it assessed (1) the extent to which C-JTSCC and CSTC-A provided oversight of ANP fuel purchases, deliveries, and consumption; (2) CSTC-A’s efforts to provide direct contributions to the Afghan government to support the ANP’s logistics transition; and (3) the basis and support for CSTC-A’s funding request for fiscal year 2013 and its estimates for fiscal years 2014 through 2018. FINDINGS SIGAR found that C-JTSCC and CSTC-A had limited oversight of fuel purchases for the ANP. Poor oversight and documentation of blanket purchase agreements and fuel purchases resulted in the use of higher-priced vendors and questionable costs to the U.S. government. In several instances, vendors charged fees for fuel deliveries that were not allowed under the blanket purchase agreements. For example, from November through December 2012, C-JTSCC approved fuel prices for three of the four ground fuel vendors for Kabul Province that included transportation charges beyond what is allowed by the blanket purchase agreement. The total cost of these charges was approximately $520,000. In addition, C-JTSCC approved one aviation vendor’s fuel prices that included Afghan taxes and other fees totaling approximately $25,000 from November 2010 through February 2012. The blanket purchase agreement did not allow the vendor to charge these taxes and fees. CSTC-A did not adhere to the Federal Acquisition Regulation or C-JTSCC’s blanket purchase agreement guidance related to the use of two or more vendors for competition. For instance, from November 2012 through December 2012, CSTC-A did not select the lowest-priced vendors for ground fuel for a majority of 717 orders in Kabul province because, as C-JTSCC and CSTC-A officials told SIGAR, the lower-priced vendors did not have exemptions from taxes and duties. CSTC-A did not document its justification for using the higher-priced vendors as required. The use of the higher-priced vendors resulted in almost $1 million in additional costs over the two-month period. CSTC-A’s limited oversight of ANP fuel orders and vendor deliveries also resulted in Helmand Provincial Police Headquarters ordering and receiving more fuel than it could store at its location on 24 separate occasions during a 28-month period, as shown in Figure 2.1. After CSTC-A officials suspected the excessive fuel deliveries were instances of potential fraud, they decreased fuel deliveries in October 2012. However, by December 2012, CSTC-A increased Helmand PHQ’s fuel deliveries to 300,000 liters without investigating the suspected fraud. Until C-JTSSC and CSTC-A implement effective controls over 28 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES FIGURE 2.1 HELMAND PHQ MONTHLY FUEL ORDERS (THOUSANDS) 800 700 600 Mar 2013 MOI conducts audit 500 400 Sept 2012 CSTC-A suspends fraud 300 200 0 RC-SW reported fuel capacity Nov 2012 CSTC-A reclassifies possible fraud into “ordering and accounting errors” and refers to MOI 100 Apr 2010 Jun 2010 Aug 2010 Oct 2010 Dec 2010 Feb 2011 Apr 2011 Jun 2011 Aug 2011 Oct 2011 Dec 2011 Feb 2012 Apr 2012 ANP fuel purchases and investigate allegations of possible impropriety, there is limited assurance that U.S. funds and fuel are used as intended. CSTC-A provided $26.8 million in direct budgetary contributions to the Afghan government for ANP fuel between October 2011 and December 2012. However, it did not provide evidence that it had conducted the required risk assessments to determine the Ministry of Interior’s (MOI) capacity for managing U.S. funds to purchase fuel for the ANP. From October 2011 through August 2012, CSTC-A provided more than $10.6 million of the $26.8 million in direct budgetary contributions to the Afghan government, but could not confirm whether the funds had been used as intended. In December 2012, despite several DOD assessments that the MOI could not accomplish its logistics mission without significant coalition support until late 2014, CSTC-A provided the additional $16.2 million. By October 2012, CSTC-A developed new requirements to improve controls and accountability over how the MOI spends U.S. funds. However the effectiveness of those requirements could not be evaluated during SIGAR’s fieldwork because the MOI contract had not been awarded to begin the use of the $16.2 million in U.S. funds to purchase fuel for the ANP. A one-page briefing slide prepared by CSTC-A showed that its officials considered direct contributions for ANP fuel to be “highrisk” for waste, fraud, and abuse. Yet with the U.S. drawdown underway, REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 29 Jun 2012 Aug 2012 Oct 2012 Dec 2012 Feb 2013 Apr 2013 SIGAR OVERSIGHT ACTIVITIES CSTC-A approved providing $243 million to the MOI for ANP fuel for FY 2014 without a plan to mitigate risk. For FY 2013, CSTC-A has requested $134.6 million for ANP fuel. CSTC-A’s justification for its request and for future ANP fuel budget estimates is partly based on prior fuel orders. Although CSTC-A has purchased fuel for the ANP for six years, it does not have reliable information on the number of ANP vehicles and generators in use, nor has it received consumption data from the MOI. Further, CSTC-A officials could not support its FY 2013 request. CSTC-A relies on past ANP fuel orders and other undocumented assumptions to calculate ANP fuel requirements. SIGAR estimates that CSTC-A will have approximately $94 million in FY 2013 funds for ANP fuel available when FY 2014 begins, indicating that the FY 2013 ANP fuel budget was overestimated. Further, the overall budget estimates for FY 2014 through FY 2018 may be overstated because they are based on the ANP’s historical orders of fuel, including questioned deliveries. In addition to the ongoing risks SIGAR identified with the ANP fuel process, significant funds could be put at increased risk of waste, fraud, and abuse should CSTC-A proceed with its plans to directly contribute $1.4 billion to the Afghan government through FY 2018 for ANP fuel. RECOMMENDATIONS SIGAR made eight recommendations—two recommendations to the Deputy Commanding General, C-JTSCC, to ensure the reasonableness of prices for ANP fuel, and six to the Deputy Commanding General, CSTC-A, to improve the oversight of U.S. funds used to purchase ANP fuel—compliance with CSTC-A direct contribution standard operating procedures, and future estimates for ANP fuel purchases. AGENCY COMMENTS SIGAR received comments on a draft of this report from C-JTSCC and CSTC-A. C-JTSCC concurred with the two recommendations addressed to it. CSTC-A concurred with five of the six recommendations addressed to it, but did not agree that reviews are needed to determine if fuel is being delivered above storage capacity. Both commands provided technical comments, which SIGAR incorporated, as appropriate. Audit 14-3: Afghan National Army Spare Parts Afghan National Army: Combined Security Transition Command-Afghanistan Lacks Key Information on Inventory in Stock and Requirements for Vehicle Spare Parts From 2004 through 2013, CSTC-A purchased approximately $370 million in spare parts to maintain and repair vehicles for the ANA. A reliable and integrated logistics system is needed to provide spare parts to maintain vehicle and equipment readiness for security operations. However, questions have been raised about CSTC-A’s support of the ANA’s 30 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES logistics capabilities. For example, in October 2012, the ISAF Commander’s Advisory and Assistance Team reported that CSTC-A could not account for approximately $230 million worth of spare parts for the ANSF and noted that, due to the lack of accountability for these parts, CSTC-A ordered additional spare parts worth more than $138 million. The team referred this matter to SIGAR and asked that SIGAR examine the matter further. The objectives of this audit were to assess whether (1) CSTC-A’s estimates for ANA vehicle spare parts were based on accurate requirements; and (2) CSTC-A has sufficient internal controls to account for vehicle spare parts to prevent waste, fraud, and abuse. FINDINGS CSTC-A is placing orders for vehicle spare parts without accurate information on what parts are needed or are already in stock. CSTC-A relies on the ANA to maintain accurate inventory records of vehicle spare parts availability and future requirements to minimize spare parts shortages. However, the ANA is not consistently using or updating its inventory to track: • what parts are in stock, • what parts have been ordered by ANA units, and • when and where those parts are supposed to arrive. The ANA did not keep fully accurate records at any of the four locations—three Regional Logistic Supply Centers (RLSC) and the Central Supply Depot (CSD)—where SIGAR conducted parts inventories. SIGAR also found that the RLSCs and the CSD are not consistently updating Afghan Ministry of Defense (MOD) forms to maintain a record of parts due to be received by and distributed to ANA units in accordance with an MOD decree. Further, the ANA is not consistently inventorying parts as they are received. RLSC-South and the CSD contain ANA vehicle spare parts that have not been inventoried. Without accurate inventories, CSTC-A does not have data to justify the number of vehicle spare parts authorized or purchased for the RLSCs and the CSD. Moreover, the ANA continues to place orders for vehicle spare parts without demand or usage data. From 2011 through April 2013, CSTC-A modified the authorized stock quantities required at the RLSCs two times, reducing the authorized types of spare parts needed from 3,843 to 576. However, CSTC-A placed orders for $130 million worth of parts based on the initial 3,843-types authorization. Furthermore, according to CSTC-A officials, they do not have records to show how the 3,843 total was determined. In addition, CSTC-A ordered these parts without knowledge of what parts the ANA already had in stock because there is no recorded inventory of spare parts. CSTC-A is able to track vehicle spare parts into Afghanistan for orders placed during 2010 through 2012, but could not document that the parts were transferred to the ANA. SIGAR found that CSTC-A cannot provide REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 31 SIGAR OVERSIGHT ACTIVITIES Uninventoried vehicle spare parts at the southern Regional Logistic Supply Center. (SIGAR photo) documentation confirming delivery or title transfer to the ANA for vehicle spare parts delivered during 2010 through 2012. SIGAR randomly sampled 68 transportation control numbers from orders during this time period and requested that CSTC-A provide documentation showing their origin, shipping, and distribution. CSTC-A was able to account for the origin of all 68 control numbers (100%) and shipping destination for 58 control numbers (85%). However, it could account for the delivery to the ANA of only seven control numbers (10%). Moreover, CSTC-A was unable to provide documentation confirming transfer to the ANA for any of the 68 control numbers. According to a CSTC-A official, a June 2013 meeting with SIGAR helped raise the issue of the lack of information on the location of vehicle spare parts and provided the support needed to fix the accountability problem. In June 2013, CSTC-A began implementing new procedures for incoming containers of vehicle spare parts. To accelerate transferring property to the ANA and to ensure that all vehicle spare parts remain in U.S. custody until title transfer has taken place, CSTC-A now plans to redirect all incoming vehicle spare parts containers to a U.S. transfer point prior to officially transferring them to the ANA. In addition, CSTC-A is attempting to repossess vehicle spare parts until the ANA can conduct an official inventory and transfer. According to CSTC-A officials, a U.S. and Afghan official will be on-hand to conduct a joint inventory and officially transfer the vehicle spare parts to the ANA. RECOMMENDATIONS To ensure that CSTC-A is ordering vehicle spare parts based on accurate information and valid requirements, and to prevent the U.S. government from purchasing unnecessary spare parts, SIGAR recommends that the Commanding General, CSTC-A Ministerial Advisory Group, (1) defer noncritical vehicle spare parts purchases until the ANA has conducted and verified the required inventories in accordance with the requirements set forth under MOD Decree 4.0, and (2) require the ANA to submit inventory reports to CSTC-A that correctly identify spare part demand and usage rates. AGENCY COMMENTS SIGAR received formal comments on a draft of this report from CSTC-A. CSTC-A concurred with both recommendations and provided additional technical comments, which SIGAR incorporated, as appropriate. Correspondence Concerning Audit 13-6: Contracting with the Enemy On August 8, 2013, SIGAR replied to a May 14, 2013, memorandum from Richard T. Ginman, Director of Defense Procurement and Acquisition Policy (DPAP) at DOD. Ginman had written that DPAP concurred with five of SIGAR’s seven recommendations in an audit that found DOD had limited 32 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES assurance that contractors with links to enemy groups are identified and their contracts terminated. However, SIGAR was troubled by DPAP’s refusal to concur with its recommendation to require prime contractors to certify that they do not have subcontracts with the enemy. DPAP had stated that DOD could not comply on the grounds that the Clinger-Cohen Act prohibits new certification requirements unless those requirements are specifically imposed by statute or approved by the Administrator of the Office of Procurement Policy. SIGAR pointed out that the act permits agencies to issue new certification requirements when they are approved in writing by the agency head, in this case the Secretary of Defense. Moreover, it argued that requiring this certification would be consistent with DOD’s obligation under statute to award contracts only to “responsible” parties. Correspondence Concerning Alert 13-2: Southern Regional Agricultural Development Program Had Poor Coordination, Waste, Management On September 6, 2013, SIGAR wrote to Donald Sampler, Acting Assistant to the Administrator, Office of Afghanistan and Pakistan Affairs, USAID. SIGAR was responding to a memorandum USAID had sent concerning SIGAR’s alert letter on the Southern Regional Agricultural Development (S-RAD) program, which was funded and overseen by USAID and implemented by International Relief and Development Inc. (IRD). The memorandum had noted that USAID disagrees with SIGAR’s findings regarding oversight, work plans, and program-funded equipment and supplies. SIGAR wrote that it was very concerned about USAID’s views regarding its oversight obligations. SIGAR pointed out that the use of a cooperative agreement does not absolve USAID of its obligations to ensure that U.S. funds are properly spent and that the desired outcomes are actually achieved. USAID had argued that the flexibility it granted IRD was allowed under federal regulations. SIGAR agreed, but noted that such flexibility introduces additional risk that the implementing partner may engage in activities that deviate from USAID officials’ instructions—something IRD acknowledges occurred during the S-RAD program. SIGAR also disputed several of USAID’s claims concerning S-RAD’s provision of farm tractors, solar panels, agricultural supplies, and irrigation pumps. Correspondence Concerning Alert 13-1: Geospatial Database Has Incorrect Coordinates for Some Sites On September 10, 2013, SIGAR wrote to William Hammink, Afghanistan Mission Director at USAID, concerning its January 2013 alert letter noting problems with the accuracy of the data contained in the Afghanistan Infrastructure and Security Cartography System (AISCS). In response to the alert letter, USAID directed IRD, which developed AISCS, to conduct a review of the database. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 33 SIGAR OVERSIGHT ACTIVITIES In a March 9, 2013 letter, USAID provided SIGAR with the results. USAID’s letter stated that IRD was able to locate 41 of 42 missing schools using aerial imagery and site visit reports. However, SIGAR wrote that it continued to question the accuracy of AISCS for many of the structures its alert letter had identified as having inaccurate or inconclusive coordinates. The National Geospatial-Intelligence Agency (NGA), which conducted the original study along with SIGAR, disagreed with IRD’s assessment. NGA concurred with IRD’s review on the location of only 12 of the 41 schools IRD located. NGA continues to dispute the geospatial coordinates of the remaining 20 schools. New Audits Announced This Quarter NEW AUDITS • U.S. Efforts to Assist and Improve Afghanistan’s Education Sector • U.S. Government Efforts to Improve the Rights and Treatment of Women in Afghanistan This quarter SIGAR initiated more audits in a planned series of sectorwide audits. These audits cover U.S. government completed, ongoing, and planned projects related to a specific sector in Afghanistan. The two audits initiated this quarter will assess: • the U.S. government’s efforts to assist and improve the Afghan education sector • Afghan women’s initiatives funded by the U.S. government Education Sector SIGAR has initiated an audit of the U.S. government’s efforts to assist and improve the education sector in Afghanistan. This audit will focus on projects and programs undertaken by U.S. government agencies to expand access to and improve the quality of education in Afghanistan. The objectives of the audit will be to (1) identify completed and ongoing U.S. government-funded projects and programs to expand access to and improve the quality of education and assess the extent to which they have achieved or are achieving their stated objectives; (2) identify challenges, if any, that these projects have encountered and examine how the U.S. government has addressed them; and (3) assess the extent to which the progress and outcomes achieved under these completed, ongoing, and planned projects are sustainable. Women’s Initiatives SIGAR has initiated an audit of Afghan women’s initiatives funded by the U.S. government. The audit will focus on U.S. programs and initiatives to improve the rights and treatment of women in Afghanistan and on challenges U.S. government agencies face in addressing women’s issues in Afghanistan. From fiscal years 2003 through 2010, Congress provided $627 million in appropriated funds to the Department of State and USAID to support activities specifically for Afghan women and girls. In July 2010, SIGAR reported on State and USAID’s use of funds for activities for Afghan women and girls during fiscal years 2008 and 2009. Among other things, the agency found that while earmarks of appropriated funds for addressing 34 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES the needs of Afghan women increased over time, and Congress directed State and USAID to report on the use of these funds, the reporting was incomplete and did not provide a clear picture of how the funds would be used to benefit Afghan women. This audit will (1) identify U.S. government programs or initiatives to improve the rights and treatment of women in Afghanistan since FY 2011; (2) assess the extent to which these programs and initiatives have been coordinated across different U.S. government agencies; and (3) identify challenges in addressing women’s issues in Afghanistan and evaluate U.S. efforts to address these challenges. Financial Audits This quarter, SIGAR completed one financial audit of two U.S.-funded Afghanistan reconstruction contracts implemented by Checchi & Company Consulting Inc. SIGAR transmitted the audit to USAID, which is reviewing the findings. SIGAR will publish the audit findings early next quarter. To date, SIGAR’s financial audits have identified more than $50.2 million in questioned costs. SIGAR also announced 13 new financial audits of State- and USAIDfunded contracts, grants, and cooperative agreements with combined incurred costs of approximately $843.7 million, bringing the total number of ongoing financial audits to 25 with more than $2.2 billion in costs incurred, as shown in Table 2.1. TABLE 2.1 SIGAR’S FINANCIAL AUDIT COVERAGE ($ MILLIONS) 12 Completed Audits $815 25 Ongoing Audits $2,209 Total $3,024 Notes: Numbers have been rounded. Coverage includes auditable costs incurred by recipients of U.S.-funded Afghanistan reconstruction contracts, grants, and cooperative agreements Source: SIGAR Audits Directorate. SIGAR launched its financial audit program in 2012, after Congress and the oversight community expressed concerns about oversight gaps and the growing backlog of incurred cost audits for contracts and grants awarded in support of overseas contingency operations. SIGAR competitively selects independent accounting firms to conduct the financial audits and ensures that the audit work is performed in accordance with U.S. government auditing standards. Financial audits are coordinated with the federal inspector general community to maximize financial audit coverage and avoid duplication of effort. SIGAR’s financial audits have four specific objectives: • Express an opinion on whether the Fund Accountability Statement for the award presents fairly, in all material respects, revenues received, REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 35 COMPLETED FINANCIAL AUDIT • SIGAR Financial Audit 14-9: USAID’s Afghanistan Rule of Law-Informal Project and USAID’s Services Under Program and Project Offices for Results Tracking Project: Audit of Costs Incurred by Checchi & Company Consulting, Inc. Questioned Costs: Costs determined to be potentially unallowable. They include ineligible costs (violation of a law, regulation, contract, grant, cooperative agreement, etc., or an unnecessary or unreasonable expenditure of funds) and unsupported costs (those not supported by adequate documentation or proper approvals at the time of an audit). Fund Accountability Statement: a special purpose financial statement that includes all revenues received, costs incurred, and any remaining balance for a given award during a given period. Source: USAID, “ADS Chapter 591: Financial Audits of USAID Contractors, Recipients, and Host Government Entities,” 7/31/2012. SIGAR OVERSIGHT ACTIVITIES costs incurred, items directly procured by the U.S. government, and balance for the period audited in conformity with the terms of the award and generally accepted accounting principles or other comprehensive basis of accounting. • Evaluate and obtain a sufficient understanding of the audited entity’s internal control related to the award; assess control risk; and identify and report on significant deficiencies including material internal control weaknesses. • Perform tests to determine whether the audited entity complied, in all material respects, with the award requirements and applicable laws and regulations; and identify and report on instances of material noncompliance with terms of the award and applicable laws and regulations. • Determine and report on whether the audited entity has taken adequate corrective action to address findings and recommendations from previous engagements. A list of new and ongoing financial audits can be found in Appendix C of this quarterly report. INSPECTIONS COMPLETED INSPECTIONS • Inspection 14-5: Archi District Police Headquarters: Extensive Mold, Lack of Running Water, and Inoperable Electrical Systems Show Facilities Are Not Being Sustained • Inspection 14-6: Gardez Hospital: After Almost Two Years, Construction Not Yet Completed because of Poor Contractor Performance, and Overpayments to the Contractor Need to Be Addressed by USAID • Inspection 14-7: Justice Center in Parwan Courthouse: Poor Oversight Contributed to Failed Project and Action May Be Needed to Avoid Unnecessary Costs to the U.S. Government • Inspection 14-10: Walayatti Medical Clinic: Facility Was Not Constructed According to Design Specifications and Has Never Been Used This quarter, SIGAR completed four inspections. The completed inspections found an Archi police district headquarters in a state of disrepair, an uncompleted hospital in Gardez, a failed project to build a Parwan courthouse, and a clinic in Walayatti that has never been used. Inspections Reports Published Inspection 14-5: Archi District Police Headquarters: Extensive Mold, Lack of Running Water and Inoperable Electrical Systems Show Facilities Are Not Being Sustained On March 4, 2008, the U.S. Army Corps of Engineers, Afghanistan Engineer District-North (USACE-TAN) awarded a $4.2 million firm fixed-price contract to Swiz Hewadwal Joint Venture to construct nine district police headquarters for the ANP, including $708,331 for the Archi District Police Headquarters Project. On March 12, 2009, USACE-TAN modified the contract to limit the Archi project to construction of force-protection measures­ perimeter walls, guard towers, main and secondary entry— control points, a guard shack, and a guard house—which reduced the Archi project total from $703,331 to $289,185. For this inspection, we assessed whether (1) construction had been completed in accordance with the contract and (2) the facilities were being used as intended and maintained. 36 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES FINDINGS The force-protection measures—such as the perimeter walls and guard towers—built under the March 2008 contract between USACE-TAN and Swiz Hewadwal Joint Venture appeared well constructed. However, SIGAR was unable to determine whether they had been built in accordance with contract requirements and applicable construction standards, because USACE officials could not locate the project’s construction files, including important documents such as the contract’s technical specifications and requirements. In addition, USACE and CSTC-A had conflicting information about the project’s cost. Moreover, while additional buildings had been constructed on the site, including barracks, bathrooms, and water and septic systems, neither USACE nor Afghan officials knew who built these additional buildings, when they were built, or how much they cost. SIGAR found that the Archi District Police Headquarters facilities were in a state of disrepair, with an estimated 40 ANP personnel living and working in facilities with extensive mold—which can cause serious health problems—growing on the interior walls and ceilings of the barracks and bathrooms. In addition, the bathrooms were virtually unusable because of missing sink faucets, showers in disrepair, and no running water. Also, the main generator has needed repair for two years and, as a result, a small back-up generator was being used three hours per night to provide basic electricity needs. Although operation and maintenance of the Archi District Police Headquarter was to be achieved using some of the $800 million in maintenance contracts USACE awarded in July 2010 and using some of the $829.1 million in funds the NTM-A/CSTC-A contributed to the MOI, SIGAR was unable to determine whether funds had been allocated or expended for the operation and maintenance of the Archi facility. Archi District Police officials told SIGAR they made repeated requests through their chain of Archi District Police Headquarters has hazardous mold on walls and ceilings of living/ working facilities for about 40 ANP personnel. (SIGAR photo) REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 37 SIGAR OVERSIGHT ACTIVITIES command to the Provincial Chief of Police for maintenance and repairs, but none have been made. In early August 2013, Afghan police officials told SIGAR that the problems it found on its November 2012 site inspection had worsened. For example, the facility’s water well no longer worked, requiring water to be trucked to the site twice a week. RECOMMENDATIONS SIGAR is making one recommendation: the Deputy Commanding Generals of NTM-A and CSTC-A should determine why U.S. funds provided directly to the Afghan Ministry of Interior for O&M of the ADPH have not been used to maintain the facility. AGENCY COMMENTS In response to SIGAR's recommendation, CSTC-A outlined steps it is taking to work with the Afghan government to help it become self-sufficient through proper budgeting and prudent financial stewardship. SIGAR commended CSTC-A for these steps, but maintained that a determination should be made as to why the Archi Police District Headquarters facility had still not received O&M funding from the Afghan Ministry of Interior, as requested by officials at the site. Inspection 14-6: Gardez Hospital: After Almost Two Years, Construction Not Completed Because of Poor Contractor Performance, and Overpayments to the Contractor Need to be Addressed by USAID In January 2008, USAID entered into a $57 million cooperative agreement with the International Organization for Migration (IOM) to implement the Construction of Health and Education Facilities program. The program’s objective was to help increase access to healthcare for Afghan citizens through the design and construction of hospitals and midwife training centers throughout Afghanistan, including a 100-bed hospital in the town of Gardez, Paktiya province. In May 2010, IOM awarded a contract to Sayed Bilal Sadath Construction Company (SBSCC), an Afghan company, for $13.5 million to build the new Gardez hospital. The contract’s original November 24, 2011, completion date was extended to June 30, 2013, and its value increased to $14.6 million. In April 2011, USAID awarded a contract to IRD for nearly $97 million—a follow-on to an existing contract—to provide independent quality assurance services for ongoing and planned design, construction, and maintenance projects, including Gardez hospital. In an April 2013 audit report on health services in Afghanistan, SIGAR noted that the Afghan government may not be able to sustain the new Gardez hospital once it is completed and that the new hospital’s annual operation and maintenance costs could exceed five times the annual operating costs for the hospital it will replace. 38 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES SIGAR conducted its inspection on November 25, 2012, and assessed (1) the extent to which construction had been completed, and (2) whether adequate oversight was being provided to ensure that the terms of the cooperative agreement and contract were being met. FINDINGS Construction of the new 100-bed hospital in Gardez is currently about 23 months behind its original schedule. In March 2011, the USAID Office of Inspector General reported that facilities being constructed under the Construction of Health and Education Facilities program—including Gardez hospital—had fallen significantly behind schedule. During construction, the IOM granted the construction contractor five extensions through June 30, 2013, but when a sixth extension to October 31, 2013, was requested, IOM terminated the contract for failure to perform. According to USAID, the ability to complete construction of the Gardez hospital has been seriously hampered by the facility’s remote location and by an active insurgency. USAID has granted IOM an extension until December 31, 2013, to complete the project. Because the facility was largely incomplete at the time of inspection, SIGAR could not thoroughly assess the quality of construction. SIGAR also found that IOM did not have sufficient internal controls to detect overpayments of at least $507,000 to SBSCC, which need to be returned to the U.S. government. In one instance, SIGAR found that IOM paid the contractor $300,000 for 600 gallons of diesel fuel—a cost of $500 per gallon. According to IOM officials, the market price in Afghanistan for diesel fuel should not exceed $5.00 per gallon. As a result, with a proper invoice, the fuel charge should not have exceeded $3,000. In another instance, IOM paid $220,000 for an automatic temperature control device that should have cost between $2,000 and $10,000. IOM could not provide SIGAR with a vendor invoice for either of these payments. USAID did not discover the overpayments and reimbursed IOM for these unwarranted costs. RECOMMENDATIONS SIGAR recommends that the USAID Mission Director (1) seek reimbursement from IOM of the $507,000 in overpayments for diesel fuel and temperature control devices; and (2) conduct a detailed financial audit of the costs associated with construction of Gardez Hospital to determine whether there are additional overpayments that need to be returned to the U.S. government. AGENCY COMMENTS USAID concurred with the second recommendation, and stated that it intends to conduct a financial audit of the costs associated with this activity. USAID also stated that, pending the results of this audit, it would recover REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 39 SIGAR inspectors examine the construction still in progress at Gardez Hospital. (SIGAR photo) SIGAR OVERSIGHT ACTIVITIES any contractor payments, if appropriate, in accordance with SIGAR’s first recommendation. Inspection 14-7: Justice Center in Parwan Courthouse: Poor Oversight Contributed to Failed Project and Action May Be Needed to Avoid Unnecessary Costs to the U.S. Government Under a December 2010 agreement between the State Department’s Bureau of International Narcotics and Law Enforcement Affairs (INL) and DOD’s Combined Joint Interagency Task Force-435 (CJIATF-435), INL agreed to provide up to $10 million to construct the Justice Center in Parwan (JCIP) complex in Parwan province. On June 13, 2011, the Bagram Regional Contracting Center (BRCC) awarded CLC Construction Company (CLC) a $2.38 million firm-fixed price contract to build the JCIP courthouse, the centerpiece of 11 buildings in the complex. The contractor was given 155 days to complete the project after the notice to proceed was issued on July 16, 2011. On November 11, 2011, the contract was modified to increase the height of the courthouse ceilings, which increased the contract value to $2.67 million. This inspection assessed (1) whether construction of the courthouse was completed in accordance with contract requirements and applicable construction standards and (2) the U.S. government’s management of the JCIP courthouse construction contract. FINDINGS Construction of the JCIP courthouse has not been completed and the workmanship of the construction that has been done to date is poor. For example, in its May 2013 inspection, SIGAR observed numerous cracks in the concrete, incomplete pours of concrete and rebar bound with wire instead of being welded that could lead to structural failure. In January 2012, INL and the Department of Defense’s CJIATF-435, which both funded the project, conducted inspections and found construction flaws, including the use of inferior building materials. Based on the results of these inspections, in mid-January 2012, the Department of Defense’s BRCC issued CLC a Stop-Work Order. Subsequently, in March 2012, the U.S. Army Corps of Engineers conducted an inspection and recommended terminating and re-bidding the courthouse contract. CJIATF-435’s oversight of the construction project was not conducted as required. The project fell behind schedule quickly and SIGAR found no evidence that the project’s contracting officer representative (COR) conducted monthly reviews or submitted reports to the BRCC contracting officer as required. In fact, the COR, who had military experience as a construction engineering supervisor, told SIGAR that he felt unqualified to determine whether the contractor was performing according to the contract. 40 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES In June 2013, BRCC notified CLC that the JCIP courthouse contract was being terminated for convenience, which gives the U.S. government the right to terminate a contract without cause. At the time, CLC had been paid $396,000. Because the contract was terminated for convenience rather than default, CLC could have requested the amount remaining on the contract, or about $2.2 million. A draft of this report recommended reviewing the decision to terminate for convenience and taking action to address the contractor’s failure to complete the project according to the terms of the contract. On October 3, 2013, CENTCOM’s Joint Theater Support Contracting Command rescinded the contract’s termination for convenience and issued a termination for default. SIGAR considers this action as meeting the intent of its recommendation and, accordingly, deleted this recommendation from the final report. RECOMMENDATIONS SIGAR recommends that the Commander, U.S. Central Command, and the U.S. Secretary of State identify the reasons poor oversight occurred and establish processes to ensure this problem does not reoccur. AGENCY COMMENTS SIGAR received comments from INL and CENTCOM’s Joint Theater Support Contracting Command (C-JTSCC). INL and C-JTSCC concurred with the recommendation to strengthen oversight and noted the steps they are taking to implement this recommendation. Inspection 14-10: Walayatti Medical Clinic: Facility Was Not Constructed According to Design Specifications and Has Never Been Used On February 1, 2011, Joint Task Force Kabul, within U.S. ForcesAfghanistan, awarded a $194,572 Commander’s Emergency Response Program (CERP) contract to Bonyad Watan Limited Construction Company. The contract called for a 180-day period of performance to construct a new medical clinic consisting of three structures—a single-story, 11-room medical clinic; a guard tower; and a latrine—in the village of Walayatti in Kabul province. For this inspection, SIGAR assessed whether (1) construction was completed in accordance with contract requirements and applicable construction standards, and (2) the facilities were being used as intended and being sustained. FINDINGS SIGAR’s inspections found that none of the three structures built for the Walayatti clinic was constructed according to the design specifications. For example, the latrine was built as one room with four stalls, instead of two REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 41 Failure risk at Parwan Justice Center: rebar bound with wire instead of being welded. (SIGAR photo) SIGAR OVERSIGHT ACTIVITIES At Walayatti Medical Clinic, no structures were built to specifications, or are occupied. (SIGAR photo) separate rooms with two stalls each, which would have allowed for simultaneous use by both genders. In addition, a 120-kilowatt generator and two water heaters were missing, and critical documents were missing from the project’s construction files, including approvals of deviations from contract specifications and documentation of project oversight. SIGAR has previously reported on the problem of missing CERP project documentation and, while some improvements have been made in project accountability, missing documents for this project indicate that it is still a problem. SIGAR also found that the clinic was empty and had never been used. Joint Task Force Kabul and the Afghan MOPH signed an agreement for the MOPH to staff and equip the clinic upon official transfer of the facility to the Afghan government. However, an MOPH official told SIGAR that he was unaware of the existence of a signed agreement. Moreover, the official said the clinic was not included in the MOPH’s operation and maintenance plan because the U.S. government failed to coordinate with MOPH’s policy and planning directorate and had not officially transferred the facility to the Afghan government. The project’s files contain no documentation of the project’s transfer to the Afghan government after construction was completed. RECOMMENDATIONS SIGAR made a number of recommendations to address the problems identified in this inspection. AGENCY COMMENTS At the time this report went to press, the agencies were finalizing their comments on the draft of this audit report. The final audit report, including agency comments and SIGAR's response to them, can be found on SIGAR's website at www.sigar.mil. STATUS OF SIGAR RECOMMENDATIONS The Inspector General Act of 1978, as amended, requires SIGAR to report on the status of its recommendations. This quarter, SIGAR closed three recommendations contained in Inspection 13-1 of the Kunduz ANA garrison. From 2009 through September 2013, SIGAR published 101 audits, alert, and inspection reports and made 335 recommendations to recover funds, improve agency oversight, and increase program effectiveness. SIGAR has closed just over 62% of these recommendations. Closing a recommendation generally indicates SIGAR’s assessment that the audited agency has either implemented the recommendation or otherwise appropriately addressed the issue. In some cases, a closed recommendation will be the subject of follow-up audit work. The Inspector General Act of 1978, as amended, also requires SIGAR to report on any significant recommendations from prior reports on which corrective action has not been completed. In this quarter, SIGAR 42 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES continued to monitor agency actions on recommendations in 39 audit and inspection reports. There are two audit reports over 12 months old that are pending resolution. SIGAR is currently reviewing recent agency activity for both audit reports, which may allow SIGAR to consider closing a number of report recommendations. Audit 11-13, Limited Interagency Coordination and Insufficient Controls over U.S. Funds in Afghanistan Hamper U.S. Efforts to Develop the Afghan Financial Sector and Safeguard U.S. Cash, was published on July 20, 2011. The audit, discussed in a prior SIGAR quarterly report, contains four recommendations. One was directed to the U.S. Ambassador to improve interagency coordination on financial sector development programs; the other three were directed at the Secretaries of State and Defense to strengthen oversight over the flow of U.S. funds through the Afghan economy. Audit report 12-12, titled Fiscal Year 2011 Afghanistan Infrastructure Fund Projects Are Behind Schedule and Lack Adequate Sustainment Plans was published July 30, 2012. The audit contains nine recommendations to enhance joint decision making, coordination, and oversight among U.S. government agencies implementing Afghanistan Infrastructure Fund projects. The recommendations were also directed at the timely completion of congressional notifications and reports, and the receipt or transfer of appropriated funds. For five other audit and inspection reports that remain open over 12 months, the recommendations are considered resolved and SIGAR is waiting for the agreed upon resolution actions to be completed. The reports were discussed in prior SIGAR quarterly reports. SPECIAL PROJECTS During this reporting period, SIGAR’s Office of Special Projects issued a report on the U.S. government’s lack of a strategic plan and mechanisms to fight corruption in Afghanistan. The Office of Special Projects also inquired about State, DOD, and USAID’s plans to ensure adequate oversight for the U.S.-funded reconstruction in Afghanistan in the aftermath of the Coalition troop drawdown. SP-13-9: U.S. Anti-Corruption Efforts: A Strategic Plan and Mechanisms to Track Progress Are Needed In Fighting Corruption in Afghanistan In August 2010, SIGAR reported that the United States had provided more than $50 billion in reconstruction assistance to Afghanistan without the benefit of a comprehensive anticorruption strategy, and that U.S. anticorruption efforts had provided relatively little assistance to some key Afghan institutions. Since that time, an additional $46 billion has been appropriated for reconstruction in Afghanistan. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 43 COMPLETED SPECIAL PROJECT REPORTS • Special Project 13-9: Anti-Corruption Efforts: A Strategic Plan and Mechanisms to Track Progress Are Needed in Fighting Corruption in Afghanistan • Special Project 14-4: Oversight Access Inquiry SIGAR OVERSIGHT ACTIVITIES This review was initiated to follow up on the findings of the 2010 report, specifically on the Department of State’s establishment of a comprehensive anticorruption strategy and to evaluate progress the United States has made in meeting its anticorruption goals in Afghanistan. The objectives were to (1) identify the U.S. strategic goals and objectives for reducing corruption in Afghanistan, and (2) assess the overall progress that U.S. agencies have made against those goals and objectives. FINDINGS U.S. anticorruption activities in Afghanistan are not guided by a comprehensive U.S. strategy or related guidance that defines clear goals and objectives for U.S. efforts to strengthen the Afghan government’s capability to combat corruption and increase accountability. State never finalized the draft 2010 U.S. anticorruption strategy for Afghanistan and, according to agency officials, the draft strategy and its related implementation plan are no longer in effect. In the absence of a relevant and specific anticorruption strategy, agency officials informed us that two documents guide their current anticorruption efforts: the Tokyo Mutual Accountability Framework and the U.S. Civil-Military Strategic Framework for Afghanistan. However, SIGAR found that both documents lacked specific goals and objectives with measurable outcomes for anticorruption activities against which the U.S. government can measure its progress. As the U.S. military and civilian presence in Afghanistan is reduced, U.S. agencies plan to continue to implement programs and activities to increase the Afghan government’s accountability and ability to combat corruption. To oversee these programs and activities, senior leadership at the U.S. Embassy Kabul made an effort to coordinate the agencies’ various anticorruption programs and related efforts by establishing three anticorruption working groups in 2012. These working groups coordinate agencies’ activities under the broad goals of building Afghan government institutional capacity, improving financial regulation and public financial management, and enhancing revenue generation. However, these groups do not measure the medium- or long-term progress of their programs against comprehensive anticorruption goals. As a result, State and Embassy Kabul remain unable to assess the overall progress the U.S. government has made to improve the Afghan government’s capacity to combat corruption. RECOMMENDATIONS SIGAR recommended that the Secretary of State: (1) develop and approve a comprehensive, coordinated strategy for U.S. anticorruption efforts in Afghanistan, including goals, objectives, and measurable outcomes; and (2) develop an updated operational plan for the implementation of the anticorruption goals and objectives that identifies benchmarks and timelines 44 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES for the accomplishment of these goals and accounts for the needed funding and personnel resources. In response to this report, State agreed with the importance of establishing clear objectives and benchmarks in order to measure outcomes. In addition, as a result of our findings, State is developing a targeted set of anticorruption objectives, benchmarks, and plans against which U.S. efforts and resources will be directed and assessed. SP-14-4: Oversight Access Inquiry On October 10, 2013, SIGAR wrote to the Secretaries of State and Defense and to the Administrator of USAID to inquire about their plans to ensure adequate oversight for the U.S.-funded reconstruction in Afghanistan in the aftermath of the Coalition troop drawdown. U.S. military officials have informed SIGAR that they can provide civilian access only to areas within a one-hour round trip of an advanced medical facility and that requests to visit reconstruction sites outside of these oversightaccess areas will probably be denied. See the quarterly highlight on pages 46–47 for further information. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 45 QUARTERLY HIGHLIGHT OVERSIGHT ACCESS CHALLENGES SIGAR has been concerned about the implications of the Coalition troop drawdown for ensuring adequate oversight of the U.S.-funded reconstruction effort in Afghanistan ever since Special Inspector General John F. Sopko was appointed more than a year ago. SIGAR personnel have already experienced difficulty obtaining military escort to travel into contested areas. For example, earlier this year SIGAR was unable to visit infrastructure projects in northern Afghanistan valued at $72 million because they are located in areas that could not be reached by U.S. civilian employees. U.S. military officials have told SIGAR that in the future they can provide civilian access only to areas within a one-hour round trip of an advanced medical facility. Although exceptions can be made, most requests to visit reconstruction sites outside of these oversightaccess areas will probably be denied. Similarly, State Department officials have warned SIGAR that their ability to reach reconstruction sites will be extremely limited due to constraints on providing emergency medical support without assistance from the Department of Defense. SIGAR believes this constraint on oversight will only worsen as more U.S. and Coalition bases close. Although it is difficult to predict the future of the U.S. presence in Afghanistan, it is likely that no more than 21% of Afghanistan will be accessible to U.S. civilian oversight personnel by the end of the transition, a 47% decrease since 2009. U.S. military and civilian officials are working hard to develop alternative means to help protect the U.S. taxpayers’ investment. For example, the USAID mission in Afghanistan is exploring how to use third-party monitors to help oversee reconstruction sites. Additionally, State Department personnel are contemplating how to expand oversight access by periodically deploying emergency medical and security forces to the edge of the oversight access areas. To help the U.S. prepare for these challenges, SIGAR will conduct audits and begin other initiatives to examine the consequences of restricted oversight in Afghanistan. SIGAR has also written to the Secretaries of State and Defense and to the Administrator of USAID to inquire about their plans to ensure adequate oversight for the U.S.-funded reconstruction in Afghanistan. SIGAR also plans to convene a panel in the coming months of oversight and implementing agencies, non-governmental organizations, and others to discuss best practices for third-party monitoring, remote monitoring, and other alternatives to traditional oversight. 46 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION QUARTERLY HIGHLIGHT SHRINKING OVERSIGHT ACCESS TO AFGHANISTAN 2009–2014 Afghanistan Oversight Access 2009 Oversight Access 2009 U z b e k i s t a Afghanistan Oversight Access 2011 Oversight Access 2011 U ^Dushanbe n T a j i k i s t a z b e k i s t a n ^Dushanbe T n a j i k i s t a n China China T u r k m e n i s t a T n u r k m e n i s t a n Badak hs han Mazar-E Sharif ! B a l k h J o w z j a n K u n d u z Sa man gan F a r y a b Badak hs han Mazar-E Sharif ! B a l k h J o w z j a n Ta k h a r K u n d u z Ta k h a r Sa man gan F a r y a b B a g h l a n S a r - e B a d g h i S a r - e Panjshayr s B a m y a P a r w a n n r a t G h o W a r d a k r h a z n Ir a n A F f a r g a h h a n i s U r u z g a n t a h i Panjshayr s a m y a e r a t G h o n a k i s t a n A F f a r a g h h a n i h s U r u z g a n a z t n a b u Paktiya i a P a k t i k a Z K h o s t n P a Z UNCLASSIFIED a b u m a n d K a n d a h a r Provinces e l m a n d K a n d a h a I n d This graphic depicts approximate oversight access areas for reconstruction projects and activities in Afghanistan. These oversight access areas represent access under the most favorable conditions possible and do not include limitations due to terrain, weather and security conditions. i I a Sources: Esri, USGS, NOAA k i s t a n a j i k i s d U t a z b e k i s t a n u r k m e n i s t a T n a j i k i s t a n China T u r k m e n i d g h i m y a n a a d g h i Panjshayr Kapisa B Laghman K u n a r ^Kabul W a r d a k t G h o H N a n g a r h a r r G Ir a n f r y a P a r w a n n Herat e r a t G h o a g h h a n i h s U r u z g a n a t z n a i a b u n G Ir a n P a k i s t a n F A a f r a g h h a n i h s U r u z g a n a t Z Kandahar 2013 Oversight Access Coverage ! l m a n d K a n d a h a n a i Paktiya I n d i a Islamabad n K h o s t Provinces e l m d l P a k i s t a n UNCLASSIFIED a n d K a n d a h a r This graphic depicts approximate oversight access areas for reconstruction projects and activities in Afghanistan. These oversight access areas represent access under the most favorable conditions possible and do not include limitations due to terrain, weather and security conditions. This graphic depicts approximate oversight access areas for reconstruction projects and activities in Afghanistan. These oversight access areas represent access under the most favorable conditions possible and do not include limitations due to terrain, weather and security conditions. n u Provinces N i m r o z I b 21% of total area of Afghanistan H r N i m r o z a 2014 Possible Oversight Access Coverage ! 45% of total area of Afghanistan e z P a k t i k a UNCLASSIFIED l Kandahar H N a n g a r h a r ^ Paktiya P a k t i k a Z Nuristan Laghman K u n a r Logar D a y k u n d i K h o s t Kapisa ^Kabul W a r d a k r I n d i a Islamabad ^ a m ! Logar A a Kabul D a y k u n d i F P u l s Kabul Herat r Ta k h a r B a g h l a n B Nuristan a K u n d u z Sa man gan F a r y a b S a r - e P a r w a n Badak hs han Mazar-E Sharif ! B a l k h J o w z j a n Panjshayr ! e n P u l s B H a Ta k h a r B a g h l a n S a r - e a t K u n d u z Sa man gan F a r y a b B s Badak hs han Mazar-E Sharif ! B a l k h J o w z j a n a ^Dushanbe n China T i Sources: Esri, USGS, NOAA Afghanistan Possible Oversight Access 2014 Oversight Access 2014 ^Dushanbe T n Produced by the US Army Geospatial Center, Date: 9/25/2013 Afghanistan Oversight Access 2013 Oversight Access 2013 e n Provinces N i m r o z Produced by the US Army Geospatial Center, Date: 9/25/2013 b a r This graphic depicts approximate oversight access areas for reconstruction projects and activities in Afghanistan. These oversight access areas represent access under the most favorable conditions possible and do not include limitations due to terrain, weather and security conditions. z t 59% of total area of Afghanistan H N i m r o z U s 2011 Oversight Access Coverage ! 68% of total area of Afghanistan l i UNCLASSIFIED l Kandahar 2009 Oversight Access Coverage ! e k P a k t i k a l Kandahar H I n d i a Islamabad ^ G Ir a n P N a n g a r h a r Logar D a y k u n d i K h o s t Nuristan Laghman K u n a r ^Kabul W a r d a k r I n d i a Islamabad Kapisa P a r w a n n Kabul ! H N a n g a r h a r Paktiya i g B ^ G d Herat Logar D a y k u n d i a P u l Laghman K u n a r ^Kabul ! e Kapisa B Nuristan Kabul Herat H B a g h l a n P u l i a I Produced by the US Army Geospatial Center, Date: 9/25/2013 Produced by the US Army Geospatial Center, Date: 9/25/2013 n d i a Sources: Esri, USGS, NOAA Sources: Esri, USGS, NOAA Sources: U.S. Army Geospatial Center, 9/25/2013, based on open outposts and medical facilities for 2009, 2011, and 2013, and SIGAR projections for open outposts and medical facilities at the end of 2014. The approximate oversight access areas represent access under the most favorable conditions possible and do not include limitations due to terrain, weather, and security conditions. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 47 SIGAR OVERSIGHT ACTIVITIES INVESTIGATIONS In this quarter, SIGAR investigations resulted in $63 million in fraudulently obtained funds being frozen, more than $1.5 million being protected, $344,000 being recovered, and $10,000 saved. In the United States, SIGAR investigations led to two arrests, three sentences, more than $95,000 in fines and restitution ordered, two indictments, one criminal information, a crimiFIGURE 2.2 nal complaint, and four guilty pleas. In Afghanistan, five Afghan citizens were arrested following SIGAR investigations. SIGAR INVESTIGATIONS: NUMBER OF OPEN INVESTIGATIONS, AS OF SEPTEMBER 30, 2013 During this reporting period, SIGAR initiated 64 new cases and closed 47 bringing the current number of active investigations to 306, of which SIGAR is the lead agency on 249, as shown in Figure 2.2. SIGAR also referred Total: 306 14 individuals and 17 companies for suspension and debarment based on evidence developed as part of investigations the agency conducted in Afghanistan and the United States. Procurement and Contract Fraud 128 Public Corruption 84 Miscellaneous 71 Theft 23 Source: SIGAR Investigations Directorate, 10/10/2013. $63 Million in Fraudulently Obtained Criminal Proceeds Frozen A SIGAR investigation of corruption in Afghanistan led the U.S. government for the first time to attempt to seize funds held by an Afghan contractor in an Afghan bank. The Department of Justice (DOJ) in recent months froze more than $63 million in fraudulently obtained criminal proceeds located in bank accounts held in Afghanistan and in correspondent banks in the United States and abroad. The bank accounts are owned by Hikmatullah Shadman, an Afghan trucking contractor, who allegedly defrauded the U.S. government of more than $77 million by jacking up the price to deliver U.S. military supplies. SIGAR determined that beginning as early as November 2010 and continuing until at least March 2012, Hikmatullah conspired to obtain illegal payments for transporting U.S. military supplies. The contracts to resupply the U.S. military covered at least 5,421 transportation missions, valued at $77,920,605. Hikmatullah allegedly paid bribes and kickbacks and manipulated contract bids to obtain them. A U.S. judge issued seizure warrants for more than $77 million held in Hikmatullah’s accounts at Afghanistan International Bank (AIB). The seizure warrants were sent to the Afghan government in accordance with the United Nations Convention Against Corruption, as a mutual legal assistance request. In addition, the judge issued arrest warrants in rem—directed against an object or asset, as distinct from an in personam warrant against a person—and transmitted them to the Afghan government with a request to freeze the accounts. AIB froze two of the accounts at the direction of the Afghan Attorney General’s Office (AGO) in response to the U.S. request. However, in April 2013, the United States learned that the freeze on the AIB accounts had been lifted and that Hikmatullah had transferred the money out of the AIB accounts to accounts at Bank Alfalah and Emirates NBD Bank in the United Arab Emirates. In May 2013, DOJ filed an amended 48 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES verified complaint for forfeiture of the assets transferred out of AIB bank, and the U.S. District Court, District of Columbia, issued arrest warrants in rem against those funds in the interbank accounts. A U.S. Sergeant First Class and a Former U.S. Soldier Plead Guilty to Fuel Theft Scheme On August 29, 2013, Sergeant First Class Bilal Abdullah pled guilty in the U.S. District Court of the Western District of Kentucky to charges of bribery and conspiracy to commit bribery, while on September 5, 2013, Stephanie Charboneau pled guilty in the U.S. District Court of Denver to the same charges. The guilty pleas from Abdullah and Charboneau, a former Specialist in the U.S. Army, make a total of five convictions resulting from a SIGAR investigation of a fuel theft scheme at Forward Operating Base (FOB) Fenty in Afghanistan. The investigation revealed that Abdullah, Charboneau, Sergeant Christopher Weaver, and Jonathan Hightower, a former contractor, all conspired with Afghan nationals to help them steal fuel from the base in exchange for cash. Early on in the investigation, 13 search warrants were executed for the suspects’ email and social media accounts. After reviewing the contents, agents of SIGAR, the Federal Bureau of Investigation (FBI), U.S. Army Criminal Investigation Command (CID), and the Defense Criminal Investigative Service (DCIS) developed probable cause to obtain and execute search warrants at the homes of Weaver and Charboneau in Colorado and Hightower in Texas. During the course of these searches, Weaver, Charboneau, and Hightower all admitted to conspiring with an Afghan representative of the company Afghan American Army Services to facilitate the theft of fuel from FOB Fenty. Weaver and Hightower also implicated Staff Sergeant Bilah Abdullah in the same scheme. When SIGAR interviewed Abdullah in June 2012, he admitted receiving $50,000 in bribes from Afghan contractors. Weaver and Hightower have already been prosecuted. Abdullah’s sentencing is expected in January 2014. U.S. Military Member Sentenced for Wire Fraud and Theft On August 15, 2013, Christopher Chase Bradshaw was sentenced in the U.S. District Court for the Southern District of Mississippi to serve three months in prison and three years of supervised release. Bradshaw pled guilty in June to one count of conspiracy to commit wire fraud and one count of theft of government property. The first three months of his release will be on electronic monitoring, on each of the two counts, to be served concurrently. He was also ordered to pay $32,300 in restitution, $7,500 in fines, and $200 in special assessments. An army reservist who served as a finance-office cashier at FOB Salerno in Afghanistan from April 2010 to March 2011, Bradshaw used his position to add stored cash value to his military debit card and to those of two REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 49 SIGAR OVERSIGHT ACTIVITIES co-conspirators. Bradshaw added about $32,300 in stored value to the cards, but failed to report those transactions in the daily transaction report which was electronically submitted daily from Afghanistan to the Federal Reserve Bank in Boston. Bradshaw was ordered to surrender himself to the authorities by November 15, 2013. Investigation Results In Over $1.5 Million Protected In July 2013, SIGAR opened an investigation into allegations that an Afghan-owned transportation company, Quick Logistics Transportation, had submitted false transportation movement requests (TMRs) for dry- and heavy-cargo missions at Camp Phoenix. The initial allegations indicated that 120 fraudulent TMRs valued at approximately $450,000 were suspect, but further investigation identified as many as 421 fraudulent TMRs with a combined value of over $1.5 million. The General Support Contracting Center at Camp Phoenix denied payment for the TMRs and notified Quick Logistics Transportation that its contract may be terminated. Recovered Stolen Equipment Saves $300,000 SIGAR helped to recover three generators for the U.S. government valued at $302,510. SIGAR launched its investigation after receiving information that employees of an Afghan construction company were stealing building supplies, scrap metal, and shipping containers from military yards at Camp Leatherneck and selling the property to other contractors. Five generators were reported stolen from the Class Four lot at Camp Leatherneck in June 2012 and Zikrullah Shahim, a translator for 77 Construction Company, was identified as the prime suspect. A SIGAR Special Agent and the AGO interviewed Shahim. He admitted to stealing the generators and selling three of them to a local scrap metal dealer. The local scrap metal dealer subsequently sold the three generators to a local contractor, who then sold them to Blackwood Construction Company. The company then sold Camp Leatherneck a set of 19 generators in July 2012. A subsequent inventory revealed that the set included the three generators previously reported as stolen. The AGO arrested Shahim and placed him in jail without bond at Lashkar Gah. He is currently awaiting trial there. The AGO continues to search for the scrap metal dealer. On September 16, 2013, the Department of the Army debarred Shahim from contracting with the U.S. government until May 7, 2018. Afghan National Arrested and $42,000 in Stolen Lumber Recovered On July 9, 2013, SIGAR and Afghan law-enforcement agents investigating theft at Bagram Airfield (BAF) observed an Afghan truck driver loading wood valued at approximately $41,640 from the construction supply yard. 50 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES The truck driver then presented a fraudulent TMR for the wood at the BAF exit-control point. When agents stopped and questioned him, the driver claimed that an unknown Afghan outside the airfield had hired him to drive the truck onto BAF, load the materials, and return the truck to him. The driver said he had done this on several prior occasions and been paid 2,000 afghani (roughly $35) each time. The Afghan prosecutor and investigator working with SIGAR attempted to escort the driver to the holding place outside BAF where he said he had met the truck’s owner. However, SIGAR suspended the operation when BAF came under indirect fire, allowing the truck owner to leave the area before SIGAR agents could apprehend him. The AGO and the ANP later took the driver into custody. The truck containing the stolen lumber was seized and is currently being kept at the holding yard at BAF. SIGAR will continue to work this investigation with the Attorney General’s Office in Parwan Province. Tennessee Couple Indicted for Steering $6.9 Million in Proceeds from DOD Subcontracts A federal grand jury indicted Keith Johnson and Angela Johnson on charges of conspiracy to commit wire fraud and substantive wire fraud for their alleged role in a scheme to steer $6.9 million in military subcontracts through kickbacks and the use of assumed names. According to the indictment, the married couple, both of Maryville, TN, used part of the proceeds of the scheme to purchase, among other items, several luxury vehicles and more than $191,000 in jewelry. SIGAR, DCIS, FBI, and Army CID opened their investigation after an Army CID report alleged that Keith Johnson, a program manager for a U.S. contractor, and his family members were steering supply contracts and rigging bids to award contracts to a company owned and operated by Angela Johnson and another relative. Keith Johnson allegedly had his wife establish a separate company and then positioned her as the sales manager. The report also alleged that close associates of the Johnson couple had established other companies to allow Keith Johnson to steer contracts to them. The associates then reportedly paid kickbacks to Keith Johnson through a shell company operated in the name of Johnson’s relative. DOD Contractor Sentenced for Theft of U.S. Funds On August 7, 2013, a former DOD contractor, Lavette Domineck, appeared in U.S. District Court for the Eastern District of North Carolina and was sentenced to three years supervised probation, a $500 fine, and $3,239 in restitution. After a SIGAR investigation, Domineck pled guilty in November 2012 to a charge of theft of U.S. government funds. While working in Afghanistan, Domineck defrauded the U.S. government by having another person telephone the Fayetteville, NC, office of the American Red REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 51 SIGAR OVERSIGHT ACTIVITIES Cross to falsely claim that her brother had died in Milwaukee, WI. After the American Red Cross transmitted this false death notification to Afghanistan, Domineck used it to claim and obtain advance paid leave and travel benefits to attend the non-existent funeral. The claimed costs were fraudulently billed to the U.S. government. Former U.S. State Department Contractor Convicted On September 19, 2013, in the District of Delaware, Kenneth Michael Brophy, a former U.S. State Department contractor, pled guilty to count two of his indictment, receipt of an illegal gratuity by a public official. The court accepted the plea agreement as well as Brophy’s recommended sentence of six months incarceration, six months supervised release, and forfeiture of $30,000, an amount equal to the gratuity he accepted. Additionally, the $5,500 seized from Brophy and retained by SIGAR as evidence was forfeited to partially pay his court-ordered forfeiture. The U.S. Embassy Kabul employed Brophy from November 2009 to May 2010 to supervise contracts for a prison-renovation project, among other things. Brophy accepted a $30,000 payment from one of the Afghan companies he was supervising on the prison contracts. The Afghan contractor reportedly sought Brophy’s help in prosecuting a claim against USACE for the termination of its contracts. Brophy personally lobbied a USACE official, assisted in drafting documents to be submitted to USACE, and provided general advice regarding the Afghan company’s communications with USACE. Also, Brophy initially provided false statements to federal officials about the gratuity payment. On April 29, 2013, the State Department suspended Brophy from further contracting with the U.S. government. A final debarment decision based on Brophy’s criminal conviction is currently pending. Afghan Contractor Arrested For Failure to Install Culvert Denial Systems On July 22, 2013, Bismillah Ahmaszai, president of Muneeb Brothers Construction Company (MBCC), was arrested on fraud charges by the AGO prosecutor in Kabul. An investigation by SIGAR and the AGO determined that MBCC submitted fraudulent documents to U.S. government claiming to have installed culvert-denial systems along a critical stretch of highway in Ghazni province. The systems were meant to prevent insurgents from planting improvised explosive devices (IEDs) in the culverts. SIGAR confirmed that the denial systems MBCC invoiced for were never built and concluded that this led to the creation of a zone in which insurgents planted IEDs aimed at killing U.S. troops. 52 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES U.S. Contractor Employee Sentenced for Kickbacks and Wire Fraud On August 22, 2013, Elton Maurice McCabe III was sentenced to 10 months incarceration after being found guilty of conspiring to commit wire fraud and receive illegal kickbacks. Upon completion of his jail time, McCabe will be on supervised release for a period of two years. The judge in the Eastern District of Louisiana also imposed a civil forfeiture of $60,000 and a special assessment of $100 on him. From June through December 2009, McCabe worked in Afghanistan for an American company while maintaining a residence in Slidell, LA. During that time, McCabe was assigned to subcontract four construction projects at Kandahar Airfield, including one to build an apron between the runway and the hangars. McCabe awarded the apron subcontract at a value of $3.2 million. At the time of the award, he asked the subcontractor for what he called a $60,000 “loan.” Although McCabe called the payment a loan, he and the subcontractor established no repayment conditions or terms of interest. On July 18, 2009, the subcontractor gave McCabe $7,000 in cash. On July 22, 2009, the subcontractor wire-transferred an additional $53,000 from Beirut, Lebanon, to the Louisiana bank account of McCabe’s wife. The bank’s transfer form noted that the money was “to buy a vehicle from McCabe’s wife.” McCabe was arrested in December 2012 at his Louisiana residence by special agents from SIGAR, DCIS, FBI, Army CID, and the Air Force Office of Special Investigations. He pled guilty in May 2013 to one count of conspiracy to commit offenses against the United States. Three Afghan Nationals Arrested for Assault and Robbery On July 19, 2013, the AGO arrested three Afghans for assault and robbery as part of an investigation by SIGAR into bribery at BAF. The three Afghans, Zomir Shah, Kham Zarine, and Rohulla, allegedly robbed and beat an Afghan truck driver who refused to pay them a bribe to enter BAF on July 18. The men worked for Naseeb Qurishi Construction Company, a contractor hired to provide personnel to collect documentation from truck drivers waiting to enter the BAF gates. Known as “wranglers,” they collected documentation from drivers waiting to enter BAF at nine “cooldown” parking lots across from the base. The wranglers then gave the documentation to military personnel assigned to the BAF entry control point. The company’s contract specifically states that the wranglers are not to solicit bribes. However, SIGAR’s investigation determined that truck drivers could not enter BAF without paying the Naseeb Qurishi Construction Company a bribe. The wranglers reportedly told the drivers that the more money they paid, the sooner they would be allowed access to the airfield. Meanwhile, drivers who refused to pay bribes sat outside BAF for more than 30 days at a time. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 53 SIGAR agents approaching an AfghanistanUzbekistan border crossing. (SIGAR photo) SIGAR OVERSIGHT ACTIVITIES SIGAR and an AGO investigator interrogated the wranglers after the beating incident on July 18. Agents learned that Mohammand Nazir, the brother of the owner of Naseeb Qurishi Construction Company, was the on-site wrangler supervisor and the primary person behind the bribe solicitations. On July 27, the AGO investigator summoned Nazir for interview and arrest. The investigation is ongoing. Investigation Results in $10,000 Savings SIGAR agents at the firing range in Afghanistan. (SIGAR photo) SIGAR initiated an investigation following allegations that Khalil Rahimi Construction Company (KRCC) had submitted a false invoice for about $10,000 in March 2013 for the last payment for the 2011 construction of a training building at FOB Fenty. The construction management consultant at the Regional Contracting Office-Fenty, where the invoice had been submitted, visited the facility. He found that it had not been completed and the work that had been done was not acceptable. SIGAR interviewed the camp commandant at Camp Duffman at the time of the construction. She reported that she signed an invoice for KRCC in July 2011, covering work done in June 2011. However, she said she had never signed an invoice for the final payment to KRCC and that her signature on the document had been forged. In July 2013, an assistant command judge advocate advised that KRCC’s final request for payment had been denied based on SIGAR’s investigation. The judge advocate also reported that a claim against the contractor for $11,308 has been initiated. KRCC officials were not available for interview as they are currently in Pakistan. Suspensions and Debarments This quarter, SIGAR’s suspension and debarment program referred 14 individuals and 17 companies for suspension or debarment based on evidence developed as part of investigations conducted by SIGAR in Afghanistan and the United States. Of these 31 contractors, 13 individuals and seven companies were referred for debarment based on allegations that they engaged in fraud and non-performance in connection with five contracts valued at $174,687,292. An additional 10 individuals were referred for suspension based on allegations related to the payment of kickbacks and wire fraud related to transportation purchase orders valued at $77,920,605. Since 2008, SIGAR has made 358 referrals—196 individuals and 150 companies--for suspension or debarment, as shown in Figure 2.3. As of the end of September 2013, SIGAR’s efforts to utilize suspension and debarment to address fraud, corruption, and poor performance in Afghanistan have resulted in a total of 61 suspensions and 94 finalized debarments of individuals and companies engaged in U.S. funded reconstruction projects. Suspensions and debarments—actions taken by U.S. agencies to exclude companies or individuals from receiving federal contracts or assistance 54 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES FIGURE 2.3 SIGAR INVESTIGATIONS: CUMULATIVE REFERRALS FOR SUSPENSION AND DEBARMENT, Q2 FY 2011–Q4 FY 2013 400 350 300 250 200 150 100 50 0 Q2 FY 2011 Q3 Q4 Q1 FY 2012 Q2 Q3 Q4 Q1 FY 2013 Q2 Q3 Q4 Source: SIGAR Investigations Directorate, 10/3/2013. because of misconduct—are an important tool for ensuring that agencies award contracts only to responsible entities. SIGAR’s program addresses three challenges posed by U.S. policy and the contingency contracting environment in Afghanistan: the need to act quickly, the limited U.S. jurisdiction over Afghan nationals and Afghan companies, and the vetting challenges inherent in the use of multiple tiers of subcontractors. SIGAR continues to look for ways to enhance the U.S. government’s responses to these challenges through the innovative use of information resources and investigative assets both in Afghanistan and the United States. SIGAR makes referrals for suspensions and debarments based on completed investigations. In most cases, SIGAR’s referrals occur where there is no possibility of criminal prosecution or remedial action by a contracting office. Suspensions and debarments are therefore the primary remedy to address contractor misconduct. In making referrals to agencies, SIGAR provides the basis for a suspension or debarment decision by the agency as well as all of the documentation needed for an agency to support that decision should it be challenged by the contractor at issue. Based on the evolving nature of the contracting environment in Afghanistan and the available evidence of contractor misconduct and/or poor performance, on occasion SIGAR has found it necessary to refer individuals or companies on multiple occasions for consideration by agency suspension and debarment officials. SIGAR increased its emphasis on suspension and debarment in 2011 in response to the contracting climate in Afghanistan. Of the 358 SIGAR REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 55 SIGAR OVERSIGHT ACTIVITIES referrals for suspension and debarment, 322 have been made since the second quarter of 2011. In the 15-month period between June 2012 and September 2013, SIGAR accelerated its suspension and debarment program, referring 184 individuals and companies for exclusion from contracting to agency suspension and debarment officials. SIGAR’s referrals over this period represent allegations of theft, fraud, poor performance, financial support to insurgents and mismanagement as part of reconstruction contracts valued at $417,934,161. Army Proposes Debarment of State Corps Incorporated for Fraud On August 28, 2013, the Army proposed State Corps Incorporated, for debarment based on the submission of fraudulent misrepresentations to the government as part of its bid to obtain the award of two contracts to install electrical power systems, transmission lines and substations for the Northeast Electrical Power System (NEPS) and the Southeast Electrical Power System (SEPS) being developed in Afghanistan. These contracts, with a combined overall value of $172,904,500, required that qualified contractors have experience with high-voltage electrical work and a history of satisfactory performance on previously awarded government contracts. Investigations by SIGAR, the Army Procurement Fraud Branch and USACE, as well as a detailed complaint to the SIGAR Hotline, resulted in allegations that State Corps had made representations regarding its experience with highvoltage electrical work that were based on another company’s performance history. The investigations also found that State Corps had misrepresented its qualifications on seven other reconstruction contracts awarded by USACE in Afghanistan, calling into question its ability to complete the NEPS and SEPS contracts according to contract requirements. A final debarment decision on this matter is currently pending with the Army. Debarment of New Riders Construction Company, Maiwand Ansunullah Alyas and Three Affiliated Companies On September 6, 2013, as a result of a referral by the SIGAR’s suspension and debarment program, the Army debarred New Riders Construction Company, Maiwand Ansunullah Alyas, and three affiliated companies. The Army based this action on the failure of New Riders Construction Company to deliver 23,302.25 cubic meters of gravel to FOB Salerno between March and May of 2012, in accordance with its contract with the U.S. government. Subsequent investigation by SIGAR determined that, in addition to failing to perform the contract, the company had significantly underbid for the contract to obtain the award, improperly measured the amount of gravel that was delivered, attempted to have the contract price adjusted after award to a price above market cost that would allow it to realize a significant profit, and improperly charged the government for unsupported and unrelated truck rental costs. 56 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES Based on SIGAR’s investigation into these allegations, the Army debarred New Riders Construction Company, Alyas, and three affiliated companies for a period of 48 months. Debarment of Luqman Engineering Construction Company, Ghanzi Gul, and Khan Wazir On September 4, 2013, based on a referral from SIGAR, the Army debarred Luqman Engineering Construction Company and two of the company’s officers, Ghanzi Gul and Khan Wazir, from continued contracting with the government. The Army took this action because the company had failed to repay a $796,903.60 overpayment made in December 2009 on a Commander’s Emergency Response Program (CERP) project to build a 4.35 kilometer stretch of road to support the growing population of Jalalabad. Despite multiple attempts by the government to obtain repayment of these funds, Luqman Engineering Construction Company failed to return the money and made false statements in an attempt to conceal its receipt of this overpayment from investigators. Based on evidence presented by SIGAR, Luqman Engineering Construction Company, Ghanzi Gul, and Khan Wazir were debarred for a period of 60 months. Debarment of Navid Basir Construction Company, Navidullah Matun, and Wahidullah Matun and Two Affiliated Joint Venture Companies On September 4, 2013, as the result of a SIGAR referral, the Army debarred Navid Basir Construction Company, Navidullah Matun, Wahidullah Matun, and two affiliated joint-venture companies for attempting to bribe a USACE official for the award of future contracts. The USACE contracting officer subsequently reported the attempted bribe to law enforcement, resulting in a criminal investigation. On September 23, 2012, undercover agents from SIGAR and the ICCTF met with Navidullah Matun and Wahidullah Matun at Camp Eggers, where they were given a package containing $5,000 in hundred-dollar bills on behalf of Navid Basir Construction Company. Both men were subsequently arrested and charged with bribery. As a result of this evidence, all parties were debarred from contracting with the U.S. government for a period of 90 months. Suspension of Former Air Force Officer Based on Unlawful Representation of a Contractor As the result of an investigation conducted by SIGAR, the DCIS, and the FBI, the U.S. Air Force suspended former Air Force Reserve Captain Adam Jeff Julias Pudenz, and his company, Peace Thru Business LLC, on September 17, 2013. The suspension followed Pudenz’s August 21, 2013, arrest on charges of knowingly and willfully performing unlawful representational activities. Pudenz allegedly accepted employment and payments REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 57 SIGAR OVERSIGHT ACTIVITIES totaling $247,993 from an Afghan footwear contractor, despite being informed by Air Force officials that he had been permanently disqualified from representing the footwear contractor due to his participating in the award of reconstruction contracts to the company between December 2011 and December 2012. Pudenz also allegedly used his Air Force Reserve identification to escort representatives from this company onto Camp Eggers and other U.S. government locations. Consequently, U.S. Forces– Afghanistan issued a letter barring him from all installations in Afghanistan. Pudenz’s criminal case is currently pending in the U.S. District Court for the Northern District of Iowa. SIGAR BUDGET Congress appropriated $49.9 million for SIGAR’s operating expenses through FY 2013 in the Full Year Continuing Appropriations Act 2013 (Pub. L. No. 113-6). SIGAR’s FY 2013 annual funding was then reduced, in accordance with the Office of Management and Budget direction on the implementation of sequestration, to $48.0 million. The budget supports SIGAR’s oversight activities and products by funding SIGAR’s five directorates: (1) Audits and Inspections, (2) Special Projects, (3) Investigations, (4) Management and Support, and (5) Information Management. SIGAR STAFF Since its last report to Congress, SIGAR increased its staff by five positions, bringing the FY 2013 total staffing number to 193 federal employees. In FY 2013, SIGAR continued to be authorized to fill 57 billets in Afghanistan. This quarter, SIGAR had 37 authorized personnel at the U.S. Embassy Kabul and 13 authorized at locations outside the U.S. Embassy. SIGAR staff members were stationed at six locations across the country, including Kandahar and Bagram airfields, Mazar-e-Sharif, Camp Leatherneck, USFOR-A headquarters in Kabul, and the U.S. Consulate in Herat. SIGAR employed three local Afghans in its Kabul office to support investigations and audits. In addition, SIGAR supports its work with staff assigned to short-term temporary duty in Afghanistan. This quarter, SIGAR had 15 personnel on temporary duty in Afghanistan for a total of 282 days. 58 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SIGAR OVERSIGHT ACTIVITIES SIGAR investigators meet with Assistant Inspector General, Investigations, Douglas Domin, center, at U.S. Embassy Kabul. (SIGAR photo) REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 59 “The United States believes firmly that lasting security and prosperity in a unified Afghanistan and an independent Afghanistan, whose people and sovereignty are respected, will take root when the people’s voice is heard in the course of this election.” —Secretary of State John Kerry Source: State, Joint Press Availability With Afghan President Hamid Karzai After Their Meeting, October 12, 2013. RECONSTRUCTION UPDATE CONTENTS Overview 63 Status of Funds 66 Security 80 Governance 108 Economic and Social Development Photo on previous page U.S. Marines flying over southern Afghanistan in August 2013 drop information leaflets as part of efforts to reduce popular support for the insurgency. (DOD photo) 62 144 RECONSTRUCTION UPDATE OVERVIEW Section 3 presents updates on accomplishments, challenges, and initiatives in Afghanistan reconstruction to provide context for oversight. Sidebars identify SIGAR audits, completed and ongoing, relating to those efforts. SIGAR presents the data in this section in compliance with Public Law 110-181, which mandates that each of SIGAR’s quarterly reports to Congress on reconstruction activities in Afghanistan include, among other things: • obligations and expenditures of appropriated funds • discussions of U.S. government entities’ contracts, grants, agreements, or other mechanisms • funds provided by foreign nations or international organizations to programs and projects funded by U.S. government entities TOPICS This section has four subsections: Status of Funds, Security, Governance, and Economic and Social Development. The Status of Funds subsection describes monies appropriated, obligated, and disbursed for Afghanistan reconstruction, including U.S. funds and international contributions. The organization of the other three subsections mirrors the three pillars in the Prioritization and Implementation Plan developed in an international conference in July 2010 and announced by the Afghan government. The Security subsection describes U.S. efforts to bolster the Afghan National Security Forces (the Army and Police), the transition away from private security contracting, and the battle against the narcotics trade. The Governance subsection provides an overview of the Afghan government’s progress toward good governance through capacity-building efforts, rule of law initiatives, and human rights recognition. This subsection also describes the status of reconciliation and reintegration, Afghan government control in various provinces, and initiatives to combat corruption. The Economic and Social Development subsection looks at reconstruction activities by sectors like energy, mining, and health. It provides a snapshot of the state of the economy and updates on progress in regulating financial networks, achieving fiscal sustainability, and delivering essential services. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 63 63 RECONSTRUCTION UPDATE METHODOLOGY Section 3 was compiled from open-source and U.S. agency data. Attributions appear in endnotes or notes to tables and figures. Multiple organizations provide data, so numbers may conflict. SIGAR has not verified data other than that in its own audits or investigations. Information from other sources does not necessarily reflect SIGAR’s opinion. For details on SIGAR audits and investigations this quarter, see Section 2. Data Call The data call is a series of questions directed to U.S. agencies about their contributions and involvement in reconstruction programming, and the state of affairs in Afghanistan. U.S. agencies responding to the latest data call include the Departments of State, Defense, Transportation, and Treasury, and the U.S. Agency for International Development. Responding agencies received a preliminary draft of this section so they could verify and comment on specific data they provided for this quarterly report. Open-Source Research Open-source research draws on the most current, publicly available data from reputable sources. Sources used include the U.S. agencies represented in the data call, the International Security Assistance Force, the United Nations (and relevant branches), the International Monetary Fund, the World Bank, and Afghan ministries and other government organizations. 64 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION RECONSTRUCTION UPDATE GRAPHICS KEY UNDERSTANDING THE GRAPHICS AND DATA TERMS All figures and tables report data for this quarter, except where identified in titles or notes. ASFF CERP DoD CN BAR CHARTS DoD ESF INCLE USAID DoS UNITS IN BILLIONS AND MILLIONS This report discusses many funds and projects with dollar values ranging from millions to billions. To provide an accurate graphical representation of these numbers, some bar graphs appear with a break (a wavy line) to indicate a jump between zero and a ASFF larger number. $500 Because this report details funding in both billions and millions of dollars, it uses a visual cue to distinguish the two measurement units. Dollars reported in billions are represented in blue, and dollars reported in millions are depicted in green. $200 DoD $450 $150 $400 $100 $350 CERP $0 $50 Pie chart in billions Pie chart in millions $0 DoD Bar chart with a break in scale Bar chart without a break in scale FUNDING MARKERS DoD CN CALENDAR AND SOLAR YEARS Funding markers identify individual funds discussed in the text. The agency responsible for managing the DoD is listed in the tan box below fund the fund name. Afghanistan follows the solar Hejri calendar, which began in 622 A.D. in the Gregorian calendar. SIGAR converts Hejri solar years to Gregorian equivalents. The current Afghan solar year (SY) is 1392. It began on March 21, 2013, and ends on March 20, 2014. The Afghan government’s fiscal year runs from December 21, 2012, to December 20, 2013. ESF USAID INCLE DoS REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 65 STATUS OF FUNDS CONTENTS U.S. Reconstruction Funding for Afghanistan 68 Afghanistan Security Forces Fund 70 ASFF Budget Activities 71 Commander’s Emergency Response Program 72 Afghanistan Infrastructure Fund 73 Task Force for Business and Stability Operations 74 DOD Drug Interdiction and Counter-Drug Activities 75 Economic Support Fund 76 International Narcotics Control and Law Enforcement 77 International Reconstruction Funding for Afghanistan 78 66 STATUS OF FUNDS STATUS OF FUNDS To fulfill SIGAR’s legislative mandate, this section details the status of U.S. funds appropriated, obligated, and disbursed for reconstruction activities in Afghanistan. As of September 30, 2013, the United States had appropriated approximately $96.60 billion for relief and reconstruction in Afghanistan since FY 2002. This total has been allocated as follows: • $54.30 billion for security • $24.71 billion for governance and development • $6.93 billion for counternarcotics efforts • $2.67 billion for humanitarian aid • $7.99 billion for operations and oversight Figure 3.1 shows the major U.S. funds that contribute to these efforts. FIGURE 3.1 U.S. FUNDS SUPPORTING AFGHANISTAN RECONSTRUCTION EFFORTS ($ BILLIONS) FUNDING SOURCES (TOTAL: $96.60) ASFF CERP AIF TFBSO DOD CN ESF INCLE Other $52.78 $3.64 $1.02 $0.69 $2.62 $16.67 $4.18 $14.99 USAID $16.67 Department of State (State) $4.18 Distributed to Multiple Agenciesa $14.99 AGENCIES Department of Defense (DOD) $60.75 Notes: Numbers have been rounded. a Multiple agencies include DOJ, State, DOD, USAID, Treasury, USDA, DEA, BBG, and SIGAR. Sources: DOD, responses to SIGAR data call, 10/23/2013, 10/9/2013, 9/30/2013, 10/22/2012, 10/14/2009, and 10/1/2009; State, responses to SIGAR data call, 10/18/2013, 7/2/2013, 6/27/2013, 10/5/2012 and 6/27/2012; Treasury, response to SIGAR data call, 10/4/2013; OMB, responses to SIGAR data call, 7/19/2013 and 1/4/2013; USAID, responses to SIGAR data call, 10/10/2013, 10/15/2010, 1/15/2010, and 10/9/2009; DOJ, response to SIGAR data call, 7/7/2009; USDA, response to SIGAR data call, 4/2009; P.L. 113-6, 3/26/2013; P.L. 112-74, 12/23/2011; P.L. 112-10, 4/15/2011; P.L. 111-212, 10/29/2010; P.L. 111-118, 12/19/2009; FY 2010 Defense Explanatory Statement. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 67 ASFF: Afghanistan Security Forces Fund CERP: Commander’s Emergency Response Program AIF: Afghanistan Infrastructure Fund TFBSO: Task Force for Business and Stability Operations DOD CN: DOD Drug Interdiction and Counter-Drug Activities ESF: Economic Support Fund INCLE: International Narcotics Control and Law Enforcement Other: Other Funding STATUS OF FUNDS U.S. RECONSTRUCTION FUNDING FOR AFGHANISTAN ASFF CERP AIF TFBSO DODCN DOD ESF As of September 30, 2013, cumulative appropriations for relief and reconstruction in Afghanistan totaled approximately $96.60 billion, as shown in Figure 3.2. This total can be divided into five major categories of reconstruction funding: security, governance and development, counternarcotics, humanitarian, and oversight and operations. For complete information regarding U.S. appropriations, see Appendix B. President Obama submitted the FY 2014 budget proposal on April 10, 2013. The proposal called for an additional $12 billion for Afghanistan relief and reconstruction with oversight and operations requests included—a 23% increase over the amount appropriated for FY 2013.20 At the close of FY 2013, Congress had not yet approved an FY 2014 budget or passed appropriations legislation to fund the U.S. government through FY 2014.21 INCLE USAID State The amount provided to the seven major U.S. funds represents nearly 84.5% (more than $81.60 billion) of total reconstruction assistance in Afghanistan since FY 2002. OfASFF amount, over 85.1% (more than this $69.47 billion) has been obligated, and over 74.6% (nearly $60.89 billion) has been DOD disbursed. The following pages provide additional details on these funds. FIGURE 3.2 CUMULATIVE APPROPRIATIONS BY FUNDING CATEGORY, AS OF SEPTEMBER 30, 2013 ($ BILLIONS) $100 CERP $96.60 $95 $90 $85 $86.82 DOD $80 $75 $72.18 $70 $65 DOD CN $60 $56.34 $55 $50 DOD $45 $39.65 $40 $35 $29.26 $30 ESF $23.07 $25 $20 $15 $13.02 $10 USAID $5 $0 2002–2006 Security 2007 2008 2009 INCLE Governance/Development Counternarcotics 2010 Humanitarian 2011 2012 Oversight and Operations 2013 Total Notes: Numbers have been rounded. DOD reprogrammed $1 billion from FY 2011 ASFF. DOD reprogrammed $1 billion from FY 2012 ASFF. P.L. 113-6 rescinded $1 billion from FY 2012 ASFF. DOD transferred $101 million from FY 2011 AIF to FY 2011 ESF to fund an infrastructure project to be implemented by USAID. State Sources: DOD, responses to SIGAR data call, 10/23/2013, 10/9/2013, 9/30/2013, 10/22/2012, 10/14/2009, and 10/1/2009; State, responses to SIGAR data call, 10/18/2013, 7/2/2013, 6/27/2013, 10/5/2012 and 6/27/2012; Treasury, response to SIGAR data call, 10/4/2013; OMB, responses to SIGAR data call, 7/19/2013 and 1/4/2013; USAID, responses to SIGAR data call, 10/10/2013, 10/15/2010, 1/15/2010, and 10/9/2009; DOJ, response to SIGAR data call, 7/7/2009; USDA, response to SIGAR data call, 4/2009; P.L. 113-6, 3/26/2013; P.L. 112-74, 12/23/2011; P.L. 112-10, 4/15/2011; P.L. 111-212, 10/29/2010; P.L. 111-118, 12/19/2009; FY 2010 Defense Explanatory Statement. AIF 68 DOD SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION STATUS OF FUNDS Despite this fiscal uncertainty, five of the seven major reconstruction funds are appropriated for two fiscal years, and more than $7.27 billion of the $7.95 billion appropriated these funds for FY 2013/14 had not been obligated at the end of the fiscal year, as shown in Table 3.0. As of September 30, 2013, the total appropriated for Afghanistan reconstruction for FY 2013 amounted to nearly $9.78 billion, as shown in Figure 3.3. The majority of this amount—nearly $5.13 billion—was appropriated to equip, train, and sustain the Afghan National Security Forces (ANSF).22 With the support of the ANSF, Afghanistan is to assume full operational responsibility for its security by 2015; however, as long as the country makes progress toward its goals established in the Tokyo Mutual Accountability Framework, the support of the NATO train, advise, and assist mission will continue into the “transformation decade” as will the financial assistance of the United States and Afghanistan’s international partners.23 FIGURE 3.3 TABLE 3.0 FY 2013 APPROPRIATIONS AND OBLIGATIONS, AS OF SEPTEMBER 30, 2013 a ($ MILLIONS) Appropriated Obligated $5,124 $625 $325 $0 $307 $43 ASFF AIF ESF INCLE TOTAL $1,623 $0 $7,949 $675 To Be Obligated $7,274 Notes: Numbers have been rounded. a ASFF and AIF data as of 8/31/2013 because data through 9/30/2013 was unavailable when this report went to press. Sources: DOD, responses to SIGAR data call, 10/23/2013, 10/9/2013, and 9/30/2013; USAID, response to SIGAR data call, 10/10/2013; State, response to SIGAR data call, 10/18/2013; P.L. 113-6, 3/26/2013. APPROPRIATIONS BY FISCAL YEAR, AMOUNT, AND CATEGORY ($ BILLIONS) $16.69 $17 $15.84 $16 $14.64 $15 $14 $13.04 $13 $12 $11 $10.39 $10.04 $10 $9.78 $9 $8 $7 $6.19 $6 $5 $4 $3 $2 $1 $0 2002–2006 Security 2007 2008 Governance/Development 2009 Counternarcotics 2010 2011 Humanitarian 2012 Oversight and Operations 2013 Total Notes: Numbers have been rounded. DOD reprogrammed $1 billion from FY 2011 ASFF. DOD reprogrammed $1 billion from FY 2012 ASFF. P.L. 113-6 rescinded $1 billion from FY 2012 ASFF. DOD transferred $101 million from FY 2011 AIF to FY 2011 ESF to fund an infrastructure project to be implemented by USAID. Sources: DOD, responses to SIGAR data call, 10/23/2013, 10/9/2013, 9/30/2013, 10/22/2012, 10/14/2009, and 10/1/2009; State, responses to SIGAR data call, 10/18/2013, 7/2/2013, 6/27/2013, 10/5/2012 and 6/27/2012; Treasury, response to SIGAR data call, 10/4/2013; OMB, responses to SIGAR data call, 7/19/2013 and 1/4/2013; USAID, responses to SIGAR data call, 10/10/2013, 10/15/2010, 1/15/2010, and 10/9/2009; DOJ, response to SIGAR data call, 7/7/2009; USDA, response to SIGAR data call, 4/2009; P.L. 113-6, 3/26/2013; P.L. 112-74, 12/23/2011; P.L. 112-10, 4/15/2011; P.L. 111-212, 10/29/2010; P.L. 111-118, 12/19/2009; FY 2010 Defense Explanatory Statement. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 69 STATUS OF FUNDS ASFF CERP AIF TFBSO DODCN DOD ESF INCLE USAID State AFGHANISTAN SECURITY FORCES FUND ASFF DOD ASFF FUNDS TERMINOLOGY DOD reported ASFF funds as appropriated, obligated, or disbursed CERP Appropriations: Total monies available for commitments Obligations: Commitments to pay monies DOD Disbursements: Monies that have been expended Source: DOD, response to SIGAR data call, 4/13/2010. DOD CN The Congress created the Afghanistan Security Forces Fund (ASFF) to provide the ANSF with equipment, supplies, services, and training, as well as facility and infrastructure repair, renovation, and construction.24  The primary organization responsible for building the ANSF is the North Atlantic Treaty Organization (NATO) Training Mission-Afghanistan/Combined Security Transition Command-Afghanistan.25  The Consolidated and Further Continuing Appropriations Act, 2013, appropriated more than $5.12 billion for the ASFF for FY 2013, increasing total cumulative funding to nearly $52.78 billion.26 As of August 31, 2013, nearly $46.99 billion of total ASFF funding had been obligated, of which more than $43.54 billion had been disbursed.27  Figure 3.4 displays the amounts made available for the ASFF by fiscal year. DOD reported that cumulative obligations as of August 31, 2013, increased by more than $1.63 billion over cumulative obligations as of June 30, 2013. Cumulative disbursements as of August 31, 2013, increased by more than $1.80 billion over cumulative disbursements as of June 30, 2013.28 Figure 3.5 provides a cumulative comparison of amounts made available, obligated, and disbursed for the ASFF. DOD FIGURE 3.4 FIGURE 3.5 ASFF APPROPRIATED FUNDS BY FISCAL YEAR ASFF FUNDS, CUMULATIVE COMPARISON ($ BILLIONS) ($ BILLIONS) $12.0 $55.0 ESF Appropriated $52.78 Appropriated $52.78 USAID $10.0 $50.0 $8.0 INCLE $45.0 $6.0 State Obligated $46.99 Obligated $45.36 Disbursed $43.54 Disbursed $41.74 $40.0 $4.0 AIF DOD $0.0 $35.0 $2.0 05 06 07 08 09 10 11a 12b 13 $0 As of Jun 30, 2013 As of Aug 31, 2013 Notes: Numbers have been rounded. ASFF data through 9/30/2013 was unavailable when this report went to press. a DOD reprogrammed $1 billion of FY 2011 ASFF. TFBSO DOD b DOD reprogrammed $1 billion of FY 2012 ASFF; another $1 billion was rescinded in P.L. 113-6. Sources: DOD, responses to SIGAR data call, 10/09/2013 and 7/22/2013; P.L. 113-6, 3/26/2013. 70 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION STATUS OF FUNDS ASFF BUDGET ACTIVITIES DOD allocates funds to three budget activity groups within the ASFF: • Defense Forces (Afghan National Army, ANA) • Interior Forces (Afghan National Police, ANP) • Related Activities (primarily Detainee Operations) Funds for each budget activity group are further allocated to four subactivity groups: Infrastructure, Equipment and Transportation, Training and Operations, and Sustainment.29  As of August 31, 2013, DOD had disbursed more than $43.54 billion for ANSF initiatives. Of this amount, more than $29.11 billion was disbursed for the ANA, and nearly $14.10 billion was disbursed for the ANP; the remaining more than $0.33 billion was directed to related activities.30  As shown in Figure 3.6, the largest portion of the funds disbursed for the ANA—nearly $11.20 billion—supported Equipment and Transportation. Of the funds disbursed for the ANP, the largest portion—nearly $4.87 billion— supported Sustainment, as shown in Figure 3.7.31  FIGURE 3.6 FIGURE 3.7 ASFF DISBURSEMENTS FOR THE ANA BY SUB-ACTIVITY GROUP, FY 2005–AUG 31, 2013 ($ BILLIONS) ASFF DISBURSEMENTS FOR THE ANP BY SUB-ACTIVITY GROUP, FY 2005–AUG 31, 2013 ($ BILLIONS) Total: $14.10 Total: $29.11 Infrastructure $4.68 Equipment and Transportation $11.20 Training and Operations $2.85 Sustainment $10.39 Infrastructure $2.54 Equipment and Transportation $3.56 Training and Operations $3.13 Sustainment $4.87 Notes: Numbers have been rounded. ASFF data through 9/30/2013 was unavailable when this report went to press. Notes: Numbers have been rounded. ASFF data through 9/30/2013 was unavailable when this report went to press. Source: DOD, response to SIGAR data call, 10/09/2013. Source: DOD, response to SIGAR data call, 10/09/2013. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 71 Budget Activity Groups: categories within each appropriation or fund account that identify the purposes, projects, or types of activities financed by the appropriation or fund Sub-Activity Groups: accounting groups that break down the command’s disbursements into functional areas Sources: DOD, “Manual 7110.1-M Department of Defense Budget Guidance Manual,” accessed 9/28/2009; Department of the Navy, “Medical Facility Manager Handbook,” p. 5, accessed 10/2/2009. STATUS OF FUNDS ASFF DOD COMMANDER’S EMERGENCY RESPONSE PROGRAM CERP DOD CERP FUNDS TERMINOLOGY DOD reported CERP funds as appropriated, obligated, or disbursed DOD CN Appropriations: Total monies available for commitments Obligations:DOD Commitments to pay monies Disbursements: Monies that have been expended Source: DOD, response to SIGAR data call, 4/14/2010. ESF The Commander’s Emergency Response Program (CERP) enables U.S. commanders in Afghanistan to respond to urgent humanitarian relief and reconstruction requirements in their areas of responsibility by supporting programs that will immediately assist the local population. Funding under this program is intended for small projects that are estimated to cost less than $500,000 each.32 Projects with cost estimates exceeding $1 million are permitted, but they require approval from the Commander of U.S. Central Command; projects over $5 million require approval from the Deputy Secretary of Defense. CERP-funded projects may not exceed $20 million.33  The Consolidated and Further Continuing Appropriations Act, 2013, appropriated $200 million for CERP for FY 2013, increasing total cumulative funding to nearly $3.64 billion.34 Of this amount, DOD reported that nearly $2.29 billion had been obligated, of which nearly $2.22 billion had been disbursed as of August 31, 2013.35 Figure 3.8 shows CERP appropriations by fiscal year, and Figure 3.9 provides a cumulative comparison of amounts appropriated, obligated, and disbursed for CERP projects. FIGURE 3.8 FIGURE 3.9 CERP APPROPRIATIONS BY FISCAL YEAR USAID CERP FUNDS, CUMULATIVE COMPARISON $1,000 $4.0 ($ MILLIONS) INCLE ($ BILLIONS) Appropriated $3.64 State Appropriated $3.64 Obligated $2.27 Disbursed $2.21 $3.6 Obligated $2.29 Disbursed $2.22 $3.2 $800 $2.8 $2.4 $600 AIF $2.0 $1.6 $400 DOD $1.2 $0.8 $200 TFBSO $0.4 $0 DOD 04 05 06 07 08 09 10 11 12 13 $0.0 As of Jun 30, 2013 As of Aug 31, 2013 Notes: Numbers have been rounded. Data may include inter-agency transfers. CERP data through 9/30/2013 was unavailable when this report went to press. Sources: DoD, responses to SIGAR data call, 10/23/2013 and 7/22/2013; OMB, response to SIGAR data call, 1/4/2013; P.L. 113-6, 3/26/2013; P.L. 112-74, 12/23/2011; P.L. 112-10, 4/15/2011. 72 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION USAID STATUS OF FUNDS INCLE State AFGHANISTAN INFRASTRUCTURE FUND The Ike Skelton National Defense Authorization Act for FY 2011 established the Afghanistan Infrastructure Fund (AIF) to pay for high-priority, largescale infrastructure projects that support the U.S. civilian-military effort. Congress intended for projects funded by the AIF to be jointly selected and managed by DOD and State. Thirty days before obligating or expending funds on an AIF project, the Secretary of Defense and Secretary of State are required to notify the Congress with details of the proposed project, including a plan for its sustainment and a description of how it supports the counterinsurgency strategy in Afghanistan.36  The Consolidated and Further Continuing Appropriations Act, 2013, appropriated $325 million for the AIF for FY 2013, increasing total cumulative funding to more than $1.02 billion.37 This figure excludes $101 million of FY 2011 AIF funds transferred to the FY 2011 Economic Support Fund for USAID’s AIF-funded infrastructure project. As of August 31, 2013, more than $548.35 million of total AIF funding had been obligated, of which more than $163.34 million had been disbursed.38  Figure 3.10 shows AIF appropriations by fiscal year, and Figure 3.11 provides a cumulative comparison of amounts appropriated, obligated, and disbursed for AIF projects. FIGURE 3.10 FIGURE 3.11 AIF APPROPRIATIONS BY FISCAL YEAR AIF FUNDS, CUMULATIVE COMPARISON $800 $1,200 ($ MILLIONS) ($ MILLIONS) $1,000 Appropriated $1,024.00 Appropriated $1,024.00 $600 $800 $600 $400 Obligated $616.07 Obligated $548.35 $400 $200 $200 $0 2011a 2012 $0 2013 Disbursed $134.18 As of Jun 30, 2013 Disbursed $163.34 As of Aug 31, 2013 Notes: Numbers have been rounded. Updated data resulted in a lower obligation figure than that reported as of 6/30/2013. AIF data through 9/30/2013 was unavailable when this report went to press. a FY 2011 figure excludes $101 million transferred to USAID to execute an AIF project. Sources: DFAS, "AR(M) 1002 Appropriation Status by FY Program and Subaccounts," 9/17/2013; DOD, response to SIGAR data call, 7/22/2013; P.L. 113-6, 3/26/2013; P.L. 112-74, 12/23/2011; P.L. 112-10, 4/15/2011. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 73 AIF DOD AIF FUNDS TERMINOLOGY DOD reported AIF funds as appropriated, TFBSO obligated, or disbursed Appropriations: Total monies available for commitments DOD Obligations: Commitments to pay monies Disbursements: Monies that have been expended Source: DOD, response to SIGAR data call, 4/13/2012. State STATUS OF FUNDS AIF DOD TASK FORCE FOR BUSINESS AND STABILITY OPERATIONS TFBSO DOD TFBSO FUNDS TERMINOLOGY DOD reported TFBSO funds as appropriated, obligated, or disbursed Appropriations: Total monies available for commitments Obligations: Commitments to pay monies Disbursements: Monies that have been expended Source: DOD, response to SIGAR data call, 4/13/2010. In 2010, the Task Force for Business and Stability Operations (TFBSO) began operations in Afghanistan aimed at stabilizing the country and countering economically motivated violence by decreasing unemployment and creating economic opportunities for Afghans. TFBSO projects include activities that facilitate private investment, industrial development, banking and financial system development, agricultural diversification and revitalization, and energy development.39 TFBSO has two separate funding streams. The funds authorized for TFBSO in the National Defense Authorization Act are used to pay for activities directly related to reconstructing Afghanistan. The funds TFBSO receives from the Operations and Maintenance, Army, account are used to pay for sustainment of U.S. assets, civilian employees, travel, security, and other operational costs. As of September 30, 2013, TFBSO had been appropriated nearly $137.40 million for FY 2013, bringing cumulative appropriations for the task force to nearly $692.15 million.40 Of this amount, nearly $658.38 million had been obligated and nearly $480.17 million had been disbursed.41 Figure 3.12 displays the amounts appropriated for TFBSO projects by fiscal year, and Figure 3.13 provides a cumulative comparison of amounts made available, obligated, and disbursed for TFBSO projects. FIGURE 3.12 FIGURE 3.13 TFBSO APPROPRIATIONS BY FISCAL YEAR TFBSO FUNDS, CUMULATIVE COMPARISON $200 $700 Appropriated $684.59 $600 Obligated $590.76 ($ MILLIONS) NDAA ($ MILLIONS) OMA $160 $500 $120 Disbursed $421.62 $400 Appropriated $692.15 Obligated $658.38 Disbursed $480.17 $300 $80 $200 $40 $100 $0 2009 2010 2011 2012 2013 $0 As of Jun 30, 2013 As of Sep 30, 2013 Notes: Numbers have been rounded. NDAA = National Defense Authorization Act. NDAA funding is used to pay for activities directly related to reconstructing Afghanistan. OMA = Operations and Maintenance, Army. OMA funding is used to pay for sustainment of U.S. assets, civilian employees, travel, security, and other operational costs. Sources: DOD, responses to SIGAR data call, 10/1/2013, 7/3/2013 and 10/4/2011; P.L. 113-6, 3/26/2013; P.L. 112-74, 12/23/2011; P.L. 112-10, 4/15/2011. 74 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION DOD Status of Funds CERP DOD DOD Drug Interdiction and Counter-Drug Activities DOD’s Drug Interdiction and Counter-Drug Activities fund (DOD CN) supports efforts to stabilize Afghanistan by combating the drug trade and related activities. DOD uses the DOD CN to provide assistance to the counternarcotics effort by supporting military operations against drug traffickers; expanding Afghan interdiction operations; and building the capacity of Afghan law enforcement bodies—including the Afghan Border Police— with specialized training, equipment, and facilities.42 DOD CN funds are appropriated by Congress to a single budget line for all military services. DOD reprograms the funds from the Counter-narcotics Central Transfer Account (CTA) to the military services and defense agencies, which track obligations of the transferred funds. DOD reported DOD CN accounts for Afghanistan as a single figure for each fiscal year.43 As of September 30, 2013, DOD reported that DOD CN received $307.36 million for Afghanistan for FY 2013, bringing cumulative funding for DOD CN to nearly $2.62 billion since fiscal year 2004.44 Figure 3.14 shows DOD CN appropriations by fiscal year, and Figure 3.15 provides a cumulative comparison of amounts appropriated and transferred to the military services and defense agencies for DOD CN projects. During the quarter, unobligated FY 2013/14 DOD CN funds previously transferred to the military services and defense agencies were returned to the CTA to be redistributed for execution in FY 2014. Figure 3.14 Figure 3.15 DOD CN APPROPRIATIONS BY FISCAL YEAR $2.7 $400 $2.6 DOD DOD CN funds terminology DOD reported DOD CN funds as appropriated, obligated, or disbursed ESF Appropriations: Total monies available for commitments USAID Obligations: Commitments to pay monies Disbursements: Monies that have been expended Source: DOD, response to SIGAR data call, 4/13/2010. INCLE State DOD CN FUNDS, CUMULATIVE COMPARISON $450 DOD CN ($ MILLIONS) AIF ($ BILLIONS) $350 DOD Appropriated $2.64 Appropriated $2.62 TFBSO $2.5 $300 $2.4 Transferreda $2.44 Transferreda $2.35b $250 $2.3 DOD $200 $2.2 $150 $2.1 $100 $2.0 $50 $0 $0 2004 05 06 07 08 09 10 11 12 13 As of Jun 30, 2013 As of Sep 30, 2013 Notes: Numbers have been rounded. Updated data resulted in a lower appropriation figure for FY 2013 and a higher appropriation figure for FY 2012 than reported last quarter. a DOD reprograms all funds to the military services and defense agencies for obligation and disbursement. b During the quarter, funds previously transferred to the military services and defense agencies were returned to the DOD Central Transfer Account to be redistributed in FY 2014. This led to a lower level of reported appropriations as of 9/30/2013. Sources: DOD, responses to SIGAR data call, 9/30/2013 and 7/1/2013. Report to the united states congress 3.1_Funding_Oct13.indd 75 I October 30, 2013 75 10/27/2013 2:44:15 PM DOD STATUS OF FUNDS DOD CN DOD ECONOMIC SUPPORT FUND ESF USAID ESF FUNDS TERMINOLOGY USAID reported ESF funds as appropriated, obligated, or disbursed INCLE Appropriations: Total monies available for commitments State Obligations: Commitments to pay monies Disbursements: Monies that have been expended AIF Source: USAID, response to SIGAR data call, 4/15/2010. Economic Support Fund (ESF) programs advance U.S. interests by helping countries meet short- and long-term political, economic, and security needs. ESF programs support counterterrorism; bolster national economies; and assist in the development of effective, accessible, independent legal systems for a more transparent and accountable government.45 The ESF was appropriated more than $1.62 billion for FY 2013, bringing cumulative funding for the ESF to more than $16.67 billion. Of this amount, nearly $14.67 billion had been obligated, of which more than $11.17 billion had been disbursed.46 Figure 3.16 shows ESF appropriations by fiscal year. USAID reported that cumulative obligations as of September 30, 2013, increased by nearly $75.11 million over cumulative obligations as of June 30, 2013. Cumulative disbursements as of September 30, 2013, increased by more than $245.02 million over cumulative disbursements as of June 30, 2013.47 Figure 3.17 provides a cumulative comparison of the amounts appropriated, obligated, and disbursed for ESF programs. FIGURE 3.16 FIGURE 3.17 ESF APPROPRIATIONS BY FISCAL YEAR DOD ESF FUNDS, CUMULATIVE COMPARISON $3.5 $18 $3.0 $16 Appropriated $16.65 Appropriated $16.67 $14 Obligated $14.59 Obligated $14.67 ($ BILLIONS) TFBSO DOD $2.5 ($ BILLIONS) $2.0 $12 $1.5 Disbursed $10.93 $10 Disbursed $11.17 $1.0 $8 $0.5 $0.0 02 03 04 05 06 07 08 09 10 11 12 13 $0 As of Jun 30, 2013 As of Sep 30, 2013 Notes: Numbers have been rounded. FY 2011 figure includes $101 million that was transferred to the ESF from the Afghanistan Infrastructure Fund. Sources: USAID, response to SIGAR data call, 10/10/2013 and 7/17/2013; State, response to SIGAR data call, 6/27/2013. 76 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION DOD STATUS OF FUNDS ESF USAID INTERNATIONAL NARCOTICS CONTROL AND LAW ENFORCEMENT INCLE The U.S. Bureau of International Narcotics and Law Enforcement Affairs (INL) manages an account for advancing rule of law and combating narcotics production and trafficking—the International Narcotics Control and Law Enforcement (INCLE) account. INCLE supports several INL program groups, including police, counternarcotics, and rule of law and justice.48 State reported that the Consolidated and Further Continuing Appropriations Act, 2013, appropriated nearly $568.81 for INCLE, bringing cumulative funding to more than $4.18 billion. Of this amount, more than $3.53 billion had been obligated, of which nearly $2.79 billion had been disbursed.49 Figure 3.18 shows INCLE appropriations by fiscal year. State reported that cumulative obligations as of September 30, 2013, increased by more than $62.97 million compared to cumulative obligations as of June 30, 2013. Cumulative disbursements as of September 30, 2013, increased by more than $95.86 million over cumulative disbursements as of June 30, 2013.50 Figure 3.19 provides a cumulative comparison of amounts appropriated, obligated, and disbursed for INCLE. FIGURE 3.18 FIGURE 3.19 INCLE APPROPRIATIONS BY FISCAL YEAR INCLE FUNDS, CUMULATIVE COMPARISON $700 $4.5 ($ MILLIONS) ($ BILLIONS) $600 Appropriated $4.15 $4.0 $500 $3.5 Obligated $3.47 Appropriated $4.18 Obligated $3.53 $400 $3.0 $300 $2.5 $200 Disbursed $2.79 $2.0 $100 $0 Disbursed $2.69 $0 02 03 04 05 06 07 08 09 10 11 12 13 As of Jun 30, 2013 As of Sep 30, 2013 Notes: Numbers have been rounded. Data may include inter-agency transfers. Updated data resulted in a higher appropriation figure for FY 2012. Sources: State, responses to SIGAR data call, 10/18/2013 and 7/15/2013. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 77 State INL FUNDS TERMINOLOGY INL reported INCLE and other INL funds as AIF appropriated, obligated, or disbursed. Appropriations: Total monies available DOD for commitments Obligations: Commitments to pay monies Disbursements: Monies that have been expended TFBSO Source: State, response to SIGAR data call, 4/9/2010. DOD STATUS OF FUNDS INTERNATIONAL RECONSTRUCTION FUNDING FOR AFGHANISTAN In addition to assistance provided by the United States, the international community provides a significant amount of funding to support Afghanistan relief and reconstruction efforts. As noted in previous SIGAR quarterly reports, most of the international funding provided is administered through trust funds. Contributions provided through trust funds are pooled and then distributed for reconstruction activities. The two main trust funds are the Afghanistan Reconstruction Trust Fund (ARTF) and the Law and Order Trust Fund for Afghanistan (LOTFA).51 Contributions to the Afghanistan Reconstruction Trust Fund The largest share of international contributions to the Afghan operational and development budgets comes through the ARTF. From 2002 to September 22, 2013, the World Bank reported that 33 donors had pledged nearly $6.92 billion, of which more than $6.52 billion had been paid in.52 According to the World Bank, donors have pledged approximately $804.52 million to the ARTF for Afghan fiscal year 1392, which runs from December 21, 2012, to December 20, 2013.53 Figure 3.20 shows the 10 largest donors to the ARTF for FY 1392. FIGURE 3.20 ARTF CONTRIBUTIONS FOR FY 1392, BY DONOR, AS OF SEPTEMBER 22, 2013 ($ MILLIONS) Total Commitments: $805 Total Paid In: $407 219 United States 0 130 130 United Kingdom 110 110 Japan 81 Germany 0 EC/EU 77 40 62 62 Australia Sweden 22 37 34 Netherlands 0 15 12 13 13 Canada Finland Others 17 0 25 50 100 150 Commitments 200 250 Paid In Notes: Numbers have been rounded. FY 1392 = 12/21/2012–12/20/2013. Source: World Bank, "ARTF: Administrator's Report on Financial Status as of September 22, 2013 (end of 9th month of FY 1392)," p. 1. 78 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION STATUS OF FUNDS As of September 22, 2013, the United States had pledged more than $1.96 billion and paid in more than $1.74 billion since 2002.54 The United States and the United Kingdom are the two biggest donors to the ARTF, together contributing approximately 46% of its total funding, as shown in Figure 3.21. Contributions to the ARTF are divided into two funding channels— the Recurrent Cost (RC) Window and the Investment Window.55 As of September 22, 2013, according to the World Bank, more than $2.88 billion of ARTF funds had been disbursed to the Afghan government through the RC Window to assist with recurrent costs such as salaries of civil servants.56 The RC Window supports the operating costs of the Afghan government because the government’s domestic revenues continue to be insufficient to support its recurring costs. To ensure that the RC Window receives adequate funding, donors to the ARTF may not “preference” (earmark) more than half of their annual contributions for desired projects.57 The Investment Window supports the costs of development programs. As of September 22, 2013, according to the World Bank, more than $2.97 billion had been committed for projects funded through the Investment Window, of which nearly $2.14 billion had been disbursed. The World Bank reported 20 active projects with a combined commitment value of nearly $1.79 billion, of which approximately $962.70 million had been disbursed.58 Contributions to the Law and Order Trust Fund for Afghanistan The United Nations Development Programme (UNDP) administers the LOTFA to pay ANP salaries and build the capacity of the Ministry of Interior.59 Since 2002, donors have pledged nearly $3.38 billion to the LOTFA, of which more than $3.06 billion had been paid in, according to the most recent data available.60 The LOTFA’s sixth support phase started on January 1, 2011. On March 20, 2013, the UNDP-LOTFA Steering Committee approved an extension of Phase VI to continue the phase beyond the planned end date of March 31, 2013, to December 31, 2013. In the 30 months since Phase VI began, the UNDP had transferred more than $1.26 billion from the LOTFA to the Afghan government to cover ANP and Central Prisons Directorate staff remunerations and an additional $27.86 million for capacity development and other LOTFA initiatives.61 As of June 30, 2013, donors had committed nearly $1.85 billion to the LOTFA for Phase VI. Of that amount, the United States had committed nearly $859.37 million, and Japan had committed more than $614.76 million. Their combined commitments make up nearly 80% of LOTFA Phase VI commitments. The United States had contributed more than $1.12 billion to the LOTFA since the fund’s inception.62 Figure 3.22 shows the four largest donors to the LOTFA since 2002, based on the latest data available. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 79 FIGURE 3.21 ARTF CONTRIBUTIONS PAID IN BY DONORS SY 1381 (2002)–SEPTEMBER 22, 2013 (PERCENT) Total Paid In: $6.5 billion United States 27% United Kingdom 19% Others 31% Canada 9% EC/EU 7% Germany 7% Notes: Numbers have been rounded. EC/EU = European Commission/European Union. "Others" includes 28 donors. Source: World Bank, "ARTF: Administrator's Report on Financial Status as of September 22, 2013 (end of 9th month of FY 1392)," p. 5. FIGURE 3.22 DONORS' CONTRIBUTIONS TO THE LOTFA SINCE 2002, AS OF JUNE 30, 2013 (PERCENT) Total Paid In: $3.1 billion United States 37% Others 13% Japan 30% EU 14% Germany 6% Notes: Numbers have been rounded. EU = European Union. "Others" includes 18 donors. Sources: UNDP, "LOTFA Phase VI Quarterly Progress Report Q2/2013," 8/11/2013, p. 66; SIGAR analysis of UNDP's quarterly and annual LOTFA reports, 10/21/2013. SECURITY CONTENTS Key Issues and Events This Quarter 81 Security Environment 86 U.S. and Coalition Forces in Afghanistan 87 ANSF Strength 87 Afghan Local Police 88 Afghan Public Protection Force 89 ANSF Assessments 89 Ministry of Defense and Ministry of Interior Assessments 91 Afghan National Army 92 Afghan National Police 97 ANSF Medical/Health Care 101 Removing Unexploded Ordnance 101 Counternarcotics 102 80 SECURITY SECURITY As of August 31, 2013, the U.S. Congress had appropriated nearly $54.3 billion to support the Afghan National Security Forces (ANSF). Most of these funds ($52.8 billion) were appropriated through the Afghanistan Security Forces Fund (ASFF) and provided to the Combined Security Transition Command-Afghanistan (CSTC-A). Its purpose is to build, equip, train, and sustain the ANSF, which comprises the Afghan National Army (ANA) and the Afghan National Police (ANP). Of the $52.8 billion appropriated for the ASFF, approximately $47.0 billion had been obligated and $43.5 billion disbursed as of August 31, 2013.63 This section discusses assessments of the ANSF and the Ministries of Defense and Interior; gives an overview of U.S. funds used to build, equip, train, and sustain the ANSF; and provides an update on efforts to combat the cultivation of and commerce in illicit narcotics in Afghanistan. This section also discusses the challenges to transitioning to Afghan-led security by the end of 2014. KEY ISSUES AND EVENTS THIS QUARTER Key issues and events this quarter include continuing U.S. and Afghan concerns over ANSF casualties, a tentative new U.S.-Afghan bilateral security agreement, the appointment of a new Afghan Minister of Interior, the withdrawal of German forces from Kunduz, the ongoing process of transition to Afghan-led security, release of the latest U.S. Civil-Military Strategic framework, and the implementation of a new process to assess the readiness of the ANSF. ANSF Casualties and Attrition Senior U.S. and Afghan officials expressed continuing concern this quarter about the high number of ANSF casualties and their effect on the forces. In a September 2013 media interview, International Security Assistance Force (ISAF) commander, General Joseph Dunford, reportedly stated, “I’m not assuming that those casualties are sustainable.”64 According to the news article, General Dunford said the ANSF are losing too many people and may need up to five years of support before they can fight on their own.65 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 81 SECURITY In addition, according to media reports, Afghanistan’s new Interior Minister, Umar Daudzai, said in a September 2 speech, “In the last six months of this (Islamic calendar) year 1,792 Afghan policemen have lost their lives and over 2,700 were wounded.”66 During a press briefing last quarter, General Dunford said, “Afghan casualties are among my top concerns,” and noted that the ANSF was “suffering in some cases 100 or 120 killed in action in a week.”67 The Department of Defense’s (DOD) July 2013 Report on Progress Toward Security and Stability in Afghanistan, said the ANSF is near its endstrength goal of 352,000 personnel and “is conducting almost all operations independently” resulting in lower ISAF casualties.68 However, that report also showed a rise in the number of ANSF killed in action since 2010. In March 2013 (the latest date available in the DOD report), more than 300 ANSF were killed. DOD noted that ANSF casualties are based on ISAF operational reporting, which “is expected to under-represent the actual number of ANSF casualties.”69 This quarter, SIGAR requested an update on ANSF casualties; however, the response the U.S. Central Command (CENTCOM) provided was classified.70 DOD has reported Afghan casualty trends in past reports but does not report specific Afghan casualty numbers. In his September 2013 report on Afghanistan, the United Nations (UN) Secretary-General noted that “the number of casualties [the ANSF] endure has risen considerably.”71 According to the Secretary-General, more than 3,500 Afghan military personnel were reportedly wounded or killed in action, during the second quarter of this year. The MOI reported that 299 ANP personnel were killed between mid-May and mid-June—a 22% increase over the same period in 2012. The Secretary-General also said that insider attacks were still a problem. Between May 16 and August 15, there were two such attacks against Coalition forces in Kandahar and Paktika, for which the Taliban took responsibility, and five attacks involving Afghan forces in Herat, Helmand, and Kunar.72 The Secretary-General also cited ongoing problems with large-scale unauthorized absences—mainly in the ANA—with attrition, from all causes, as high as 2.4% per month.73 According to the latest numbers from CSTC-A, in August 2013, the ANA’s attrition was 2.4% and the ANP’s was 1.5%. From September 2011 through August 2013, the ANA’s monthly attrition rate has averaged 2.5%, but has reached as high as 4.1% in January 2013; the ANP’s has averaged 1.3% and has reached as high as 1.9% in October 2011 and again in July 2013.74 ANA personnel absent without leave (AWOL) were also a problem. According to CSTC-A, 8,797 personnel—or 5.3% of the ANA—were AWOL during its most recent tally in August 2013.75 Although SIGAR also requested the number of ANP personnel who were AWOL, CSTC-A did not provide that data. 82 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY Bilateral Security Agreement On October 11, Secretary of State John Kerry met with President Karzai in Kabul to negotiate a bilateral security agreement (BSA) to determine the status and role of U.S. forces who stay in Afghanistan after their combat mission ends in 2014. According to State, the two sides shared ideas and concerns regarding an agreement. At an October 12 joint press conference, President Karzai said that he and Secretary Kerry agreed that the United States will not conduct counterterrorism operations by itself but with Afghan forces, will provide a written guarantee for the safety of the Afghan people from home invasion, and clearly commit to respect and honor the nation’s sovereignty. However, President Karzai said the question of whether Afghanistan will accept the U.S. demand that the remaining U.S. troops be under the jurisdiction of U.S. military courts and not Afghan courts will be decided by a grand council of elders, or Loya Jirga, to be called at the end of November. If the Loya Jirga approves immunity for U.S. troops, then the agreement goes to Afghanistan’s parliament for approval.76 The United States and Afghanistan have been negotiating a BSA since November 15, 2012.77 In an October media interview, President Obama said he prefers that the ANSF handle Afghanistan’s security needs, but recognized that they are not yet ready to take on full responsibility. According to the media account, he would consider leaving behind some troops in a training and advisory capacity, but believes a BSA is required to ensure protection for U.S. troops who stay behind.78 In previous statements, President Karzai has indicated his wish to see U.S. forces remain in Afghanistan after the withdrawal of international forces at the end of 2014. He has stressed that any deal should “preserve the national interests of Afghanistan.”79 New Minister of Interior On September 1, 2013, President Karzai named Umar Daudzai as the new Minister of Interior; Daudzai was formally appointed on September 25, according to media reports.80 Daudzai, Afghanistan’s former ambassador to Pakistan, replaced Ghulam Majtaba Patang, who lost a vote of confidence in the Afghan parliament less than a year after his appointment for failing to improve security conditions.81 German Troops Leave Kunduz German forces handed over command of their base in Kunduz to Afghan forces in an October 6 ceremony attended by Germany’s defense and foreign ministers, according to a German media report. All 900 German troops in Kunduz are expected to withdraw by the end of October.82 Germany has been the lead nation for security in nine northern Afghan provinces. As of August 1, a total of 4,400 German troops were serving in Afghanistan.83 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 83 Secretary of State Kerry holds press conference with President Karzai on the BSA at the Presidential Palace in Kabul on October 12, 2013. (State photo) SECURITY According to German media, many Kunduz residents are worried about the security environment following the withdrawal of German forces.84 Transition Progress Since last quarter, all five geographic “tranches” of Afghanistan were transitioning to ANSF-led security. By December 2014, the transition process will be complete and the ANSF will be fully responsible for security in Afghanistan, according to DOD.85 During the transition process, ISAF will continue to engage in combat operations where necessary through 2014, and will remain committed to support the ANSF with key “enablers” like air, aviation, medical support, intelligence, counter-IED, signal, and logistics, according to DOD. However, the ANSF will be responsible for day-to-day execution of operations. The ANSF also will plan, prepare, and execute counterinsurgency operations with advice and enabler support provided by their Security Force Assistance Teams. The Afghan government, principally through its security ministries, will provide direction and policy for operations.86 DOD says ISAF will retain military assets in or near transitioning areas to ensure that security is properly maintained, and continue to provide the ANSF with training, advising, and assistance support. As ANSF capabilities improve, the level of ISAF support will be adjusted, allowing ANSF to take on greater responsibility.87 U.S. Civil-Military Strategic Framework In August, DOD and State released the latest revision of the U.S. CivilMilitary Strategic Framework for Afghanistan. The framework, which replaces an October 2012 version, provides strategic guidance for all American civilian and military personnel serving in Afghanistan and outlines U.S. priorities through what the framework calls the “transformation decade” of 2015–2024.88 The United States has two goals in Afghanistan: disrupt, dismantle, and defeat al-Qaeda and its affiliates and strengthen Afghanistan so it can never again be a haven for terrorists.89 Security is the foundation of the framework, necessary to enable progress in the governance, rule of law, and economic development sectors. According to the framework, the role of the United States is changing as ISAF transitions security responsibility to the Afghans. U.S. and Coalition forces will shift to supporting the ANSF, setting the conditions for the U.S. government to focus on governance and development in the transformation decade.90 In developing the revised framework, U.S. planners made several assumptions, including the following security-sector assumptions:91 • The Afghan government’s strategic goals remain generally congruent with U.S. goals in Afghanistan through the transformation decade. 84 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY • The U.S. and Afghan governments will negotiate and conclude a bilateral security agreement and NATO will conclude a status of forces agreement with the Afghan government to define long-term security partnerships beyond 2014. • There will be a NATO train, advise, and assist mission at the end of the ISAF mandate. • Afghan government revenue generation will not cover operating expenditures, including increased security spending, and development costs until sometime after 2025. That last point is significant because it indicates that Afghanistan will need to rely on international assistance if it is to fund its government and security forces for at least another 12 years. Implementation of New ANSF Assessment Process This quarter, the ISAF Joint Command (IJC) stated that, as of August 15, a new reporting mechanism would be used to assess the ANSF. The new Regional Command ANSF Assessment Report (RASR) is the third assessment tool used by ISAF to rate the ANSF since 2005.92 The first was the Capability Milestone (CM) rating system. SIGAR audited the CM rating system in 2010 and found that it had not provided reliable or consistent assessments of ANSF capabilities, had overstated ANSF operational capabilities, had inadvertently created disincentives for ANSF development, and had included outdated data. Moreover, ANSF units given a top rating using the rating system were not capable of sustaining independent operations. IJC concurred or partially concurred with all ten of SIGAR’s recommendations at the conclusion of the audit report.93 In April 2010, during the course of SIGAR’s audit, IJC replaced the CM rating system with the Commander’s Unit Assessment Tool (CUAT).94 Since the implementation of the CUAT, SIGAR has tracked assessments of the ANSF in the security section of its quarterly reports. Assessments of the ANA and ANP are indicators of the effectiveness of U.S. and Coalition efforts to build, train, equip, and sustain the ANSF. These assessments also provide both U.S. and Afghan stakeholders with updates on the status of these forces as transition continues and Afghanistan assumes responsibility for its own security. Last year, SIGAR initiated an audit of the CUAT in order to rate its effectiveness as an assessment tool. That audit will be released next quarter. Due to implementation of the new RASR assessment process, SIGAR could not use and compare CUAT reports for assessing the progress of the ANSF in this report. For more information on the RASR assessment tool, see “ANSF Assessments” later in this section of the report, page 89. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 85 SIGAR AUDIT An ongoing SIGAR audit is examining the methods and tools used to measure and evaluate the ANSF’s operational effectiveness, including the extent to which these methods and tools are consistently applied, reliable, and validated. SECURITY SECURITY ENVIRONMENT From May 16 to August 15, the UN recorded 5,922 security incidents—an 11% increase compared with the same period in 2012, but a 21% decrease from 2011. Armed clashes and improvised explosive devices constituted the majority of events (4,534 or 77% of the total). Insurgents also focused on attacking security checkpoints and bases that Coalition forces had handed over to Afghan forces. According to the UN Secretary-General, the ANSF was generally effective in protecting key urban and district administrative centers as well as strategic transport routes. As in previous quarters, the southern, southeastern, and eastern provinces accounted for the most security incidents (69% between May 16 and August 15).95 The Secretary-General also said that insurgents conducted a number of “spectacular” attacks in urban areas during the same reporting period. From May 16 to August 15, there were 33 suicide incidents—seven in Kabul— compared to seven for all of 2012 and 16 in 2011. On August 3, in Jalalabad, Nangarhar, the Indian Consulate was the target of a complex suicide attack; all casualties were Afghan security personnel and civilians.96 Attack on U.S. Consulate in Herat On September 13, Taliban militants attacked the U.S. Consulate in Herat. Killed in the attack were three Afghans guards and an interpreter; nearly 20 people were wounded, none were American.97 According to State, the attackers began by detonating a vehicle-borne improvised explosive device (VBIED) in front of the U.S. Consulate, damaging the outer gate. The attackers then fired a rocket-propelled grenade at the Consulate and detonated U.S. Army soldiers react to potential threat at the U.S. Consulate in Herat on September 19, 2013. (DOD photo) 86 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY another VBIED. Consulate security personnel “neutralized several suicide bombers attempting to breach the compound.” Although the front gate was damaged, the Consulate’s interior compound was not breached.98 Civilian Casualties In a July 2013 report, the UN Assistance Mission in Afghanistan (UNAMA) found that civilian deaths and injuries were 23% higher in the first six months of 2013 compared to the same period in 2012. UNAMA documented 3,852 civilian casualties—1,319 deaths and 2,533 injuries—from January to June 2013, a 14% increase in deaths and 28% increase in injuries. According to UNAMA, this rise in civilian casualties reverses the decline in 2012, and marks a return to the high numbers of civilian casualties documented in 2011. UNAMA attributed 74% of civilian casualties to “Anti-Government Elements,” 9% to “Pro-Government Forces”, and 12% to engagements between those combatants. The remaining 4% were unattributed, caused mainly by the explosion of abandoned or as-yet-unexploded ordnance.99 U.S. AND COALITION FORCES IN AFGHANISTAN According to CENTCOM, 64,000 U.S. forces were serving in Afghanistan as of September 30, 2013. Of those, approximately 1,600 were assigned to the NATO Training Mission-Afghanistan (NTM-A)/CSTC-A.100 In addition, approximately 27,000 non-U.S. international troops were serving in Afghanistan as of October 1, 2013.101 Since operations began in 2001, a total of 2,143 U.S. military personnel have died in Afghanistan—83% of whom were killed in action—and 19,334 were wounded as of October 1, 2013.102 ANSF STRENGTH This quarter, ANSF’s assigned force strength was 336,587 (183,434 assigned to the ANA and Afghan Air Force, and 153,153 assigned to the ANP), according to data provided by CSTC-A.103 The ANSF’s assigned strength includes personnel in training and cadets, as well as both personnel in the field (engaged in combat operations) and those who were “in barracks.” SIGAR requested the number of personnel who were sick or on leave, but CSTC-A did not identify those personnel separately in their response. The assigned strength is short of the goal to have an end strength of 352,000 ANSF personnel—195,000 in the ANA and Air Force and 157,000 in the ANP—by October 2012 that was given in DOD’s April 2012 report on Progress Toward Security and Stability in Afghanistan.104 DOD revised this goal to 352,000 ANSF by 2014 (187,000 ANA by December 2012, 157,000 ANP by February 2013, and 8,000 Air Force by December 2014) when that end-strength was not met.105 Neither the ANA nor the ANP met their end-strength goal by the revised deadline, as shown in Table 3.2 on the following page. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 87 SIGAR AUDIT An ongoing SIGAR audit is assessing the reliability and usefulness of data for the number of ANSF personnel authorized, assigned, and trained. SECURITY TABLE 3.2 ANSF ASSIGNED STRENGTH, AUGUST 20, 2013 ANSF Component Current Target Afghan National Army 187,000 personnel by December 2012 Status as of 5/2013 176,818 Difference Between Current Strength and Target End-Strength Goals Afghan National Police 157,000 personnel by February 2013 153,153 -3,847 Afghan Air Force 8,000 personnel by December 2014 6,616 -1,384 ANSF Total 352,000 336,587 -15,413 -10,182 Sources: DOD, Progress Toward Security and Stability in Afghanistan, 12/2012, p. 56; CSTC-A, response to SIGAR data call, 10/1/2013. AFGHAN LOCAL POLICE This quarter, 24,286 personnel were assigned to the Afghan Local Police (ALP), according to U.S. Forces-Afghanistan (USFOR-A). As of September 30, 2013, the United States has obligated $152.7 million and expended $150 million of ASFF funds to support the ALP. The ALP is scheduled to reach 30,000 members in December 2014. At that strength, the ALP is estimated to cost $117 million per year—including $68 million in salaries—to sustain in fiscal years (FY) 2015 to 2018, according to USFOR-A.106 DOD said a 30,000-strong ALP will cost $180 million a year.107 According to DOD, the ALP has demonstrated an ability to defend villages against insurgents and also coordinate with Afghan civil and military authorities. DOD reported the ALP battled enemy forces up to ten times more often than other Afghan security forces and successfully defended its positions over 80% of the time.108 In his September 2013 report, the UN Secretary-General said the ALP has “borne an increasingly disproportionate brunt of attacks by anti-government elements.”109 The Taliban have attempted on many occasions to infiltrate the ALP. However, DOD maintains the ALP has shown a unique resistance to this form of pressure due to the fact that its members are from the villages they protect and quickly recognize outside infiltrators. In addition, DOD said that during the first part of this current fighting season, the ALP has often been successful in coordinating with the Afghan government (at the district and provincial level) and with the Ministry of Defense (MOD) and Ministry of Interior (MOI) to defend their communities against Taliban aggression.110 The ALP program’s primary challenge is the MOI’s ability to properly support and manage the ALP as a pillar under the Afghan Uniform Police (AUP), according to DOD. The NATO Special Operations Component Command-Afghanistan (NSOCC-A) and the MOI have implemented an initiative to meet immediate ALP support requirements and to build an enduring logistics and support capacity for the ALP in the MOI.111 In an October 7 Afghan media report, members of the Meshrano Jirga, the upper house of the Afghan parliament, criticized the ALP over alleged unauthorized activities. The senators urged the ALP’s integration with the national police force.112 88 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY AFGHAN PUBLIC PROTECTION FORCE The Afghan Public Protection Force (APPF) is a state-owned enterprise under the authority of the MOI that provides security services in Afghanistan. Following President Karzai’s 2010 announcement to disband private security companies (PSCs) and transfer protection responsibilities to the APPF, the Afghan government implemented a bridging strategy for a phased transition to the public security company.113 As part of that strategy, security for development and humanitarian projects would transition from PSC responsibility to the APPF by March 20, 2012.114 Security for military installations was scheduled to be transferred to the APPF in March 2013. In October 2012, however, IJC told SIGAR that meeting the deadline was “extremely unlikely.”115 As of September 30, 2013, only three military forward operating bases (FOBs) were secured by APPF personnel; 47 FOBs were still secured by PSCs.116 The APPF recruits officers and non-commissioned officers (NCOs) from the ANP. New recruits attend courses on facility, convoy, and personal security at the APPF Regional Training Center. And in some cases, trained guards also transition directly from private security companies into the APPF. According to the most recent assessment of the APPF, they are “partially capable of conducting full spectrum security services with coalition support,” according to CSTC-A. The United States has provided more than $51 million to support the APPF.117 As of September 30, 2013, the APPF comprised 19,612 personnel, according to CSTC-A. APPF numbers are not counted as ANSF.118 SIGAR AUDIT A SIGAR audit report released at the end of last quarter found that the transition to APPF-provided security has had a minimal effect on projects, but only because implementing partners hired risk management companies to fill APPF capacity gaps and perform critical functions. ANSF ASSESSMENTS In prior quarterly reports, SIGAR has tracked the progress of the ANSF using the Commander’s Unit Assessment Tool (CUAT) provided by DOD or IJC. However, the IJC’s latest data is based on a new assessment mechanism, the Regional Command ANSF Assessment Report (RASR). According to IJC, the RASR is a “holistic intelligence, operational, and sustainment assessment and reporting mechanism” of the ANSF.119 The RASR will use new rating definition levels (RDLs), based upon ANSF capabilities, to assess ANSF units at the brigade level.120 The RDLs for the RASR are different than those used in the CUAT, as shown in Figure 3.23. According to IJC, the previously used RDLs “conflate the relationship/ reliance of ANSF on Coalition forces, rather than describing actual ANSF unit capabilities.” IJC also said the adjustment was needed as Coalition forces drawdown and ISAF loses the ability to advise and observe previously partnered ANSF units.121 The new RDLs use a simplified assessment matrix that is tailored to the specific unit type (e.g. infantry, intelligence, signals) and identify the capabilities a unit must possess in order to be assessed “fully capable.” REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 89 FIGURE 3.23 CHANGES IN RATING DEFINITION LEVELS CUAT RASR Independent with Advisors Fully Capable Effective with Advisors Capable Effective with Partners Partially Capable Developing with Partners Developing Established Established Notes: CUAT rating definition levels are as of August 2011; RASR rating definition levels are as of August 2013. Source: IJC, response to SIGAR data call, 9/30/2013. SECURITY According to IJC, “this simplified system is easily observable, not as labor intensive or complex, and could form the basis of Afghan ‘self reporting’ as ISAF continues to draw down.”122 Because the RASR assesses the ANSF mainly at the brigade level or higher, fewer units at the “kandak” or battalion level will be assessed. For example, in the CUAT report provided to SIGAR last quarter, 312 ANA and 515 ANP units—including both brigade-level and higher units and kandaks—were assessed using the CUAT.123 The most recent RASR assessed 64 ANA and 21 ANP units.124 And unlike CUAT reports, which were issued quarterly, the RASR is a monthly report.125 IJC said that this could result in fluctuations as a unit may be rated “fully capable” one month, regress to “capable” and then return to “fully capable” within the same quarter.126 According to the latest RASR report, 20 of 64 ANA units and 8 of 21 ANP units were rated “fully capable,” as shown in Figure 3.24.127 According to the UN Secretary-General, there remains a notable shortage of logistical, air support, medical evacuation, and counter improvised explosive device (IED) capabilities within the ANSF.128 FIGURE 3.24 RASR RATINGS OF THE ANSF, SEPTEMBER 2013 30 25 ANA Total: 65 ANP Total: 21 20 15 10 5 0 Fully Capable Capable Partially Capable Developing Established Not Assessed Note: The RASR Assessment provided by IJC showed 64 ANA units assessed by the RASR in September 2013. However, all ANA units in the RASR added up to 72 ANA units including those waiting to be fielded and 65 ANA units excluding those waiting to be fielded. Source: IJC, response to SIGAR data call, 9/30/2013. 90 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY MINISTRY OF DEFENSE AND MINISTRY OF INTERIOR ASSESSMENTS Assessments of the MOD and the MOI showed some progress and some regression this quarter. To rate the operational capability of these ministries, NTM-A uses the Capability Milestone (CM) rating system. This system assesses staff sections (such as the offices headed by assistant or deputy ministers) and cross-functional areas (such as general staff offices) using four primary and two secondary ratings:129 • CM-1A: capable of autonomous operations • CM-1B: capable of executing functions with coalition oversight only • CM-2A: capable of executing functions with minimal coalition assistance • CM-2B: can accomplish its mission but requires some coalition assistance • CM-3: cannot accomplish its mission without significant coalition assistance • CM-4: exists but cannot accomplish its mission At the MOD, all 46 staff sections and cross-functional areas were assessed this quarter. Of those, two progressed and four regressed. Last quarter, the Logistics Command became the first MOD office to achieve the highest rating of CM-1A (capable of autonomous operations).130 The other offices that received a higher rating this quarter were:131 • ANA Training Command (CM-1B) • Ministry of Defense Chief of Health Affairs (CM-2B) The four MOD offices that regressed were the Assistant Minister of Defense for Intel Policy (fell to CM-4), Vice Chief of General Staff for the Air Force (CM-3), General Staff Logistics (CM-3), and the First Deputy Minister of Defense (CM-2A).132 The MOD Office for Gender Integration is still rated CM-4, meaning that it cannot accomplish its mission.133 All 32 staff sections at the MOI were assessed; six progressed and none regressed since last quarter. No MOI sections were rated CM-4, as shown in Figure 3.25 on the following page. Those whose ratings increased this quarter were:134 • Deputy Minister for Security - Afghan National Civil Order Police (CM-1A) • Deputy Minister for Security - GDPSU (CM-1B) • Deputy Minister for Security - Plans and Operations (CM-1B) • Deputy Minister for Security - Force Readiness (CM-1B) • Deputy Minister for Support - Logistics (CM-2B) • Deputy Minister for Support - Facilities and Installations (CM-2B) As of this quarter, two MOI staff sections had achieved the highest rating of CM-1A (capable of autonomous operations): the Chief of Staff Public Affairs Office and the Deputy Minister for Security Office of the Afghan National Civil Order Police.135 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 91 SECURITY FIGURE 3.25 CAPABILITY MILESTONE RATINGS OF MOD AND MOI, QUARTERLY CHANGE MOD CM-1A: capable of autonomous operations CM-1B CM-2A: capable of executing functions with minimal coalition assistance CM-2A CM-2B: can accomplish its mission but requires some coalition assistance 1 CM-1A CM-1B: capable of executing functions with coalition oversight only MOl CM-2B CM-3: cannot accomplish its mission without significant coalition assistance CM-4: exists but cannot accomplish its mission 6 15 16 15 7 6 12 9 8 CM-2B 10 7 CM-3 7 1 5 0 CM-4 2 0 4 CM-2A 15 CM-3 2 CM-1B 6 CM-4 1 CM-1A 1 3 6 Q3 MOD Staff Sections 9 12 15 0 0 Q4 MOD Staff Sections 3 6 Q3 MOI Staff Sections 9 12 15 Q4 MOI Staff Sections Sources: CSTC-A, responses to SIGAR vetting, 7/15/2013; CSTC-A responses to SIGAR data call, 7/2/2013 and 10/1/2013. AFGHAN NATIONAL ARMY As of August 31, 2013, the United States had obligated $31 billion and disbursed $29.1 billion of ASFF funds to build, train, and sustain the ANA.136 ANA Strength As of August 21, 2013, the overall strength of the ANA was 183,434 personnel (176,818 Army and 6,616 Air Force), according to CSTC-A. This is a decrease of 1,853 since last quarter, as shown in Table 3.3. The total includes 13,717 trainees, students, and those awaiting assignment, as well as 4,736 cadets. According to CSTC-A, the ANA includes 8,698 civilians (both ANA and Air Force personnel) in determining its end strength.137 SIGAR’s reporting of ANA’s end strength does not include these civilians, but does count unassigned military personnel and cadets. ANA Sustainment As of August 31, 2013, the United States had obligated $10.8 billion and disbursed $10.4 billion of ASFF funds for ANA sustainment.138 As part of sustainment funding, the United States has provided the ANA with ammunition at a cost of approximately $1.15 billion, according to CSTC-A.139 92 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY TABLE 3.3 ANA STRENGTH, QUARTERLY CHANGE Authorized ANA Component Q2 2013 Assigned Quarterly Change Q3 2013 Q2 2013 Quarterly Change Q3 2013 201st Corps 17,638 18,130 +492 18,116 18,636 +520 203rd Corps 20,002 20,798 +796 20,288 20,220 -68 205th Corps 18,287 19,097 +810 19,351 19,331 -20 207th Corps 14,097 14,879 +782 14,279 13,753 -526 +1,310 209th Corps 14,236 15,004 +768 13,371 14,681 215th Corps 16,733 17,555 +822 17,447 17,640 +193 9,174 9,174 None 8,619 9,492 +873 Special Operations Force 12,238 11,013 -1,225 10,970 10,925 -45 Echelons Above Corpsa 38,773 36,275 -2,498 33,685 33,687 - - - 22,700 161,218 161,925 +707 178,826 111th Capital Division TTHS b ANA Total Afghan Air Force (AAF) ANA + AAF Total c +2 18,453 -4,247 176,818 -2,008 d 7,097 7,097 None 6,461 6,616 +155 168,315 169,022 +707 185,287 183,434 -1,853 Notes: Q2 data is as of 5/21/2013; Q3 data is as of 8/20/2013. a Includes MOD, General Staff, and Intermediate Commands b Trainee, Transient, Holdee, and Student; these are not included in counts of authorized personnel c Includes 4,667 cadets d Includes 4,736 cadets SIGAR AUDITS Source: CSTC-A, responses to SIGAR data calls, 7/2/2013 and 10/1/2013. ANA Salaries, Food, and Incentives As of September 30, 2013, CSTC-A reported that the United States had provided nearly $1.9 billion through the ASFF to pay for ANA salaries, food, and incentives since FY 2008. According to CSTC-A, $420 million was provided for these purposes between July and September 2013.140 However, this raised a question about the cumulative total of $1.9 billion, as CSTC-A last quarter reported a cumulative total of $1.8 billion.141 CSTC-A also estimated the annual amount of funding required for the base salaries, bonuses, and incentives of a 195,000-person ANA at $931 million.142 This is a 36% increase over the $686 million estimate reported last quarter.143 ANA Equipment and Transportation As of August 31, 2013, the United States had obligated and disbursed $11.2 billion of the ASFF for ANA equipment and transportation.144 Most of these funds were used to purchase weapons and related equipment, vehicles, communications equipment, and aircraft and aviation-related equipment. Nearly 79% of U.S. funding in this category was for vehicles and transportation-related equipment, as shown in Table 3.4 on the following page. The United States has also procured nearly $774 million in other equipment such as clothing and personal gear.145 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 93 In an audit report released this quarter, SIGAR found that CSTC-A was placing orders for vehicle spare parts without accurate information on what parts were needed or were already in stock. CSTC-A relies on the ANA to maintain records of vehicle spare parts availability and future requirements. However, the ANA has not been consistently updating its inventory. For more information, see Section 2, page 30. In an audit report released last quarter, SIGAR found that DOD was moving forward with a $771.8 million purchase of aircraft for the SMW despite the SMW having less than one-quarter of the personnel needed, facing steep recruitment and training challenges, and lacking the ability to maintain its current aircraft fleet. SECURITY TABLE 3.4 COST OF U.S.-FUNDED ANA EQUIPMENT Type of Equipment Weapons Vehicles Communications Equipment Total Procured $447,161,951 $3,955,027,637 $609,320,331 $5,011,509,919 Remaining to be Procured $26,819,942 $0 $0 $26,819,942 Source: CSTC-A, response to SIGAR data call, 10/1/2013. Determining the amount and cost of equipment provided to the ANA remains a challenge. In April 2013, CSTC-A stated that the United States had procured $878 million of weapons for the ANA.146 In July 2013, CSTC-A stated that the total cost for weapons was actually $623 million due to a $153 million correction in the total cost of some equipment and accounting for nearly $102 million in donated equipment that was not U.S.-funded.147 This quarter, CSTC-A stated that the actual total cost of weapons procured for the ANA was $447 million. According to CSTC-A, the “decrease in the number procured from last quarter is a result of an extensive internal audit that revealed some equipment had been double-counted.”148 CSTC-A also reduced its estimate of the total cost of vehicles procured for the ANA this quarter. In July 2013, CSTC-A stated the total cost of vehicles was $5.56 billion.149 This quarter, CSTC-A stated the actual cost of vehicles procured was $3.96 billion. According to CSTC-A, the “decrease in total cost from last quarter [was] due to actual, contracted equipment pricing being lower than estimated pricing.”150 The updated cost total is reflected in Table 3.4. CSTC-A also noted that the cost of weapons remaining to be procured has increased from $226,000 last quarter to nearly $27 million this quarter due to increased requirements for weaponry.151 Afghan Air Force Aircraft Inventory This quarter, the Afghan Air Force inventory consisted of 105 aircraft, according to CSTC-A:152 • 40 Mi-17s (transport helicopters) • 11 Mi-35s (attack helicopters) • 16 C-27As (cargo planes) • 26 C-208s (light transport planes) • 6 C-182s (four-person airplane trainers) • 6 MD-530Fs (light helicopters) However, this tally of aircraft may not accurately reflect operational capability. Last quarter, CSTC-A reported that only six Mi-35s were operational at that time.153 94 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY SIGAR has concerns about the Afghan Air Force’s reported inventory and has requested that CENTCOM confirm the status of the 16 C-27A aircraft. In March 2013, a DOD Office of Inspector General (DOD OIG) official told Congress that the U.S. Air Force had stopped flying those aircraft based on DOD OIG’s recommendation. At that time, a DOD initiative to replace those aircraft was underway.154 In addition, SIGAR received two photos that seem to show 16 C-27A aircraft sitting unused. SIGAR is concerned that the aircraft CSTC-A reported as part of the Afghan Air Force’s inventory may not be in service or may not be fit for service in the future. CSTC-A also noted that the number of Mi-17s was reduced from 48 last quarter to 40 this quarter due to a “change in definition and ‘double counting’ of 10 loaned aircraft to [the Special Mission Wing].”155 Still to be procured are 20 light support aircraft, nine Mi-17 helicopters, four C-130H cargo planes, and four C-27A cargo planes.156 Last February, the U.S. Air Force awarded a U.S. company a $427 million contract to deliver the 20 light support aircraft; the contract is capped at $950 million through February 2019.157 Separate from the Afghan Air Force’s inventory of aircraft is the inventory of the Special Mission Wing (SMW). The SMW provides air support for Afghan Special Forces executing counternarcotics and counterterrorism missions.158 This quarter, the SMW inventory consisted of 30 Mi-17 helicopters: 13 from DOD, 10 on loan from the Afghan Air Force, five from the United Kingdom, and two from Germany.159 Afghan Air Force personnel unload an Mi-17 out of a Russian cargo plane in Kabul on September 1, 2013. (DOD Photo) ANA Infrastructure As of August 31, 2013, the United States had obligated $6.1 billion and disbursed $4.7 billion of the ASFF for ANA infrastructure.160 At that time, the United States had completed 242 infrastructure projects (valued at $2.79 billion), with another 138 projects ongoing ($2.82 billion) and 10 planned ($106 million), according to CSTC-A. Of the ongoing projects, two new contracts (nearly $21 million) were awarded this quarter.161 This quarter, the largest ongoing ANA infrastructure projects were a brigade garrison for the 201st Corps in Kunar (at a cost of $115.8 million), phase one of the MOD’s headquarters in Kabul ($108 million), and a brigade garrison for the 205th Corps in Kandahar ($89.1 million).162 ANA and MOD Training and Operations As of August 31, 2013, the United States had obligated $2.9 billion and disbursed $2.8 billion of the ASFF for ANA and MOD operations and training.163 This quarter, 43,942 ANA personnel were enrolled in some type of training, with 31,850 enrolled in literacy training, according to CSTC-A. In addition, 4,400 enlisted personnel were enrolled in basic warrior-training courses, 2,495 were training to become commissioned officers, and 1,302 were training to become NCOs. Other training programs include combat REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 95 SIGAR AUDITS In an audit report released this quarter, SIGAR identified 52 construction projects that may not meet ISAF’s December 2014 construction deadline and would therefore be at risk due to lack of oversight and increasing costs. In addition, SIGAR learned that CSTC-A does not track the ANSF’s use of constructed facilities and cannot determine whether existing or planned facilities meet ANSF needs. For more information, see Section 2, page 25. SECURITY specialty courses such as infantry training; combat-support courses such as engineering, signals, and logistics; and courses to operate the high-mobility multipurpose wheeled vehicles known as “Humvees.”164 According to CSTC-A, the United States funds a variety of contracts to train the MOD and the ANA. The largest of these are a $256 million contract for advising, training, and supporting the MOD; a $203 million contract to build the intelligence-collection capacity of both the ANA and ANP; and a $76 million contract to train ANA specialized personnel to respond to IEDs and other explosive ordnance.165 ANA Literacy Since its start in 2009, NTM-A/CSTC-A’s literacy program has sought to achieve greater literacy rates within the ANA. The program is based on a 312-hour curriculum. According to CSTC-A, in order to progress from illiteracy to functional literacy, a student may take as many as seven tests. The student’s performance determines if he or she progresses to the next training level.166 Level 1 literacy is the ability to read and write single words, count up to 1,000, and add and subtract whole numbers. At Level 2, an individual can read and write sentences, carry out basic multiplication and division, and identify units of measurement. At Level 3, an individual has achieved functional literacy and can “identify, understand, interpret, create, communicate, compute and use printed and written materials.”167 As of September 30, 2013, ANA personnel who have completed a literacy program include:168 • 139,360 Level 1 graduates • 40,274 Level 2 graduates • 37,087 Level 3 graduates According to CSTC-A, NTM-A’s established goal to have 50,000 ANSF personnel achieve Level 3 or “functional literacy” before March 2014 was met in January 2013. However, in response to a SIGAR question that asked how many ANA personnel who had achieved Level 3 literacy were still in the ANA, CSTC-A responded: “Answers unattainable due to insufficient ANA personnel tracking and skill/education tracking systems.”169 Literacy affects mission success: widespread illiteracy undermines effective training, use of technical manuals, understanding of orders, inventorying equipment, documenting operations, and other vital military functions. SIGAR is therefore concerned that no one appears to know what the overall literacy rate of the ANSF is. That requires determining the numbers of serving personnel—net of departures, casualties, or desertions—who were already literate when they joined the force and those who were not, but who have completed the Level 3 training. Since 2010, the United States has funded three literacy contracts for the ANSF. Each has a base year and a five-year limit—one-year options may be 96 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY exercised in August of each year—and a maximum cost of $200 million.170 According to CSTC-A, these contractors were providing 690 literacy trainers to the ANA:171 • OT Training Solutions, a U.S. company, was providing 260 trainers. • Insight Group, an Afghan company, was providing 198 trainers. • The Higher Education Institute of Karwan, an Afghan company, was providing 232 trainers. CSTC-A said responsibility for literacy training for ANA personnel in the field was scheduled to transition to the ANA between October 1, 2013, and October 1, 2014.172 Although CSTC-A noted that transitioning the literacy program from NTM-A to the MOD is not a primary focus. A train-the-trainers program is needed first; a contract for such a program is expected to be awarded in October with classes starting in November. Transitioning literacy training to the MOD is expected to happen after the April 5, 2014, elections.173 Ongoing funding of the current literacy contracts through December 2014, at a cost of $31 million, will come from the NATO Trust Fund and not ASFF, according to CSTC-A.174 Women in the ANA and Afghan Air Force As in prior quarters, the number of women in the ANA is increasing, but the goal for women to make up 10% of the ANA and Afghan Air Force remains distant. Despite an increase this quarter, women make up only 0.3% of the force.175 This quarter, 502 women were serving in the ANA, according to CSTC-A. However, CSTC-A also provided SIGAR with a breakdown of the women serving—253 officers, 238 NCOs, 61 enlisted personnel, and 90 cadets—that would indicate a total of 642. CSTC-A noted that the “discrepancy between totals and ANA number may reflect civilians who are working in the supply chain (e.g., sewing).”176 SIGAR will seek further clarification for the next quarterly report. In the Afghan Air Force, 33 women were serving—20 officers and 13 NCOs.177 AFGHAN NATIONAL POLICE As of August 31, 2013, the United States had obligated $15.6 billion and disbursed $14.1 billion of ASFF funds to build, train, and sustain the ANP.178 ANP Strength As of August 20, 2013, the overall strength of the ANP was 153,153 personnel, including 109,574 Afghan Uniform Police (AUP), 21,399 Afghan Border Police (ABP), 14,516 Afghan National Civil Order Police (ANCOP), 2,759 in the Counter Narcotics Police of Afghanistan (CNPA), and 4,905 students in training, according to CSTC-A.179 The total is an increase of 1,329 since last quarter, as shown in Table 3.5 on the following page. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 97 SIGAR AUDIT In an ongoing audit, SIGAR is evaluating the implementation and oversight of the three ANSF literacy training program contracts. SIGAR will also assess whether the contractors provide qualified instructors and services; the extent to which CSTC-A monitored the contractors’ performance and training outcomes; and the extent to which the contracts are meeting the goal of providing basic, sustainable levels of literacy for the ANSF. SECURITY TABLE 3.5 ANP STRENGTH, QUARTERLY CHANGE Authorized Assigned ANP Component Q2 2013 Q3 2013 Quarterly Change Q2 2013 Q3 2013 Quarterly Change AUP 108,122 110,369 +2,247 108,128 109,574 +1,446 ABP 23,090 23,090 None 21,422 21,399 -23 ANCOP 14,541 14,541 None 14,515 14,516 +1 NISTAa 9,000 6,000 -3,000 3,779 4,905 +1,126 154,753 154,000 -753 147,844 150,394 +2,550 2,247 2,247 None 3,059 2,759 -300 157,000 156,247 -753 151,824b 153,153 +1,329 157,000 157,000 None 151,824b +905 Other ANP Total CNPA ANP + CNPA Total 150,919 Notes: Q2 data is as of 5/20/2013; Q3 data is as of 8/20/2013. a NISTA = personnel in training b CSTC-A provided total; actual sum of all ANP components and the personnel in the NISTA account was 150,903 Source: CSTC-A, responses to SIGAR data calls, 7/2/2013 and 10/1/2013. ANP Sustainment SIGAR AUDIT In an audit report released this quarter, SIGAR found that U.S. Central Command and CSTC-A had limited oversight of fuel purchases for the ANP , resulting in the use of higher-priced vendors and questionable costs to the U.S. government. For more information, see Section 2, page 27. As of August 31, 2013, the United States had obligated $5.3 billion, and disbursed $4.9 billion of ASFF funds for ANP sustainment.180 As part of sustainment funding, the United States has provided the ANP with ammunition at a cost of approximately $306 million, according to CSTC-A.181 ANP Salaries From 2008 through September 30, 2013, the U.S. government had provided $907 million through the ASFF to pay ANP salaries, food, and incentives (extra pay for personnel engaged in combat or employed in specialty fields), CSTC-A reported. According to CSTC-A, when the ANP reaches its final strength of 157,000 personnel, it will require an estimated $628.1 million per year to fund salaries ($265.7 million), incentives ($224.2 million), and food ($138.2 million).182 ANP Equipment and Transportation As of August 31, 2013, the United States had obligated and disbursed $3.6 billion of ASFF funds for ANP equipment and transportation.183 Most of these funds were used to purchase weapons and related equipment, vehicles, and communications equipment.184 More than 85% of U.S. funding in this category was for vehicles and vehicle-related equipment, as shown in Table 3.6. As with the ANA, determining the cost of equipment provided to the ANP remains a challenge. CSTC-A’s estimate of the total cost of U.S.-funded ANP weapons procured fell from $369 million last quarter to $137 million 98 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY TABLE 3.6 COST OF U.S.-FUNDED ANP EQUIPMENT Type of Equipment Procured Weapons $137,187,450 $3,882,811 $2,029,397,735 Vehicles $2,345,100 Communications Equipment Total Remaining to be Procured $210,184,400 $0 $2,376,769,585 $6,227,911 Source: CSTC-A, response to SIGAR data call, 10/1/2013. this quarter.185 According to CSTC-A, the “decrease in total cost from last quarter [was] due to actual, contracted equipment pricing being lower than estimated pricing.”186 CSTC-A’s estimate of the total cost of vehicles procured for the ANP also decreased since last quarter. In July 2013, CSTC-A stated the total cost of vehicles was $2.65 billion.187 This quarter, CSTC-A stated the actual cost of vehicles procured was $2.03 billion. According to CSTC-A, the “decrease in the number procured from last quarter is a result of an extensive internal audit that revealed some equipment had been double-counted.”188 The updated cost total is reflected in Table 3.6. ANP Infrastructure As of August 31, 2013, the United States had obligated $3.4 billion and disbursed $2.5 billion of ASFF funds for ANP infrastructure.189 At that time, the United States had completed 574 infrastructure projects (valued at $2.02 billion), with another 165 projects ongoing ($904 million) and 17 planned ($75 million), according to CSTC-A. Of the ongoing projects, 19 new contracts (nearly $5 million) were awarded this quarter.190 This quarter, a regional police-training center in Herat ($49.5 million) was completed. The largest ongoing ANP infrastructure projects were administrative facilities ($59.5 million) and building and utilities ($34.3 million) at the MOI Headquarters and an ANCOP patrol station in Helmand ($28.5 million).191 ANP Training and Operations As of August 31, 2013, the United States had obligated $3.4 billion and disbursed $3.1 billion of ASFF funds for ANP and MOI training and operations.192 This quarter, 8,273 ANP personnel were enrolled in some type of training, according to CSTC-A. Of those, 1,438 were training to become officers and 3,273 were training to become NCOs.193 This quarter, the number of ANP in training increased as the ANP became more independent and took a more pro‐active role in planning and executing their training, according to CSTC-A. The ANP has been reviewing overall training requirements and re‐aligning courses and student numbers REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 99 SIGAR AUDIT In an inspection report released this quarter, SIGAR found that mold, a lack of running water, and inoperable electrical systems at a district police headquarter in Kunduz Province showed that the facility is not being sustained. For more information, see Section 2, page 36. SECURITY to better meet their fielded force and professionalization needs and to deal with the problem of untrained ANP personnel assigned to the field without undergoing basic police training. CSTC-A noted that the ANP has developed a course planner and tracker, with minimal Coalition assistance, that meets ANP training needs for this year.194 NTM-A/CSTC-A contracts with DynCorp International to provide training, mentoring, and support services at multiple training sites around the country. The ASFF-funded contract provides 373 mentors and trainers as well as approximately 1,225 support personnel at regional training centers and in mobile support teams. The contract value is $1.21 billion.195 ANP Literacy NTM-A/CSTC-A’s literacy program for the ANP follows the same curriculum and uses the same standards as the ANA’s literacy program previously mentioned in this section. The program is based on moving students through three levels of literacy training.196 As of September 30, 2013, ANP personnel who have completed a literacy program include:197 • 81,170 Level 1 graduates • 51,500 Level 2 graduates • 33,263 Level 3 graduates According to CSTC-A, NTM-A’s goal to have 50,000 ANSF personnel achieve Level 3 or “functional literacy” before March 2014 was met in January 2013. However, in response to a SIGAR question that asked how many of ANP personnel that had achieved Level 3 literacy were still in the ANP, CSTC-A responded: “Answers unattainable due to insufficient ANP personnel tracking and skill/education tracking systems.”198 This fact, entailing an inability to determine the overall literacy rate of the ANP, raises the same concern discussed earlier for ANA literacy levels. Since 2010, the United States has funded three literacy contracts for the ANSF. Each has a base year and a five-year limit—one-year options may be exercised in August of each year—and a maximum cost of $200 million.199 According to CSTC-A, these contractors were providing 649 literacy trainers to the ANP:200 • OT Training Solutions, a U.S. company, was providing 231 trainers. • Insight Group, an Afghan company, was providing 135 trainers. • The Higher Education Institute of Karwan, an Afghan company, was providing 283 trainers. CSTC-A noted that transitioning the literacy program from NTM-A to the MOI is not a primary focus. A train-the-trainers program is needed first and a contract for such a program is expected to be awarded in October with 100 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY classes starting in November. Transitioning literacy training to the MOI is expected to happen after the 2014 elections.201 Ongoing funding of the current literacy contracts through December 2014 was scheduled to shift from ASFF to the NATO Trust Fund on October 1, 2013, according to CSTC-A.202 Women in the ANP As in prior quarters, the number of women in the ANP is increasing, but progress has been slow toward reaching the goal to have 5,000 women in the ANP by the end of 2014. CSTC-A said that “the ANP is currently focused more on finding secure areas (i.e., positions with appropriate facilities for females) for recruits than increasing recruiting to reach this target.”203 Despite an increase this quarter, women make up only 1% of the force. As of September 13, 2013, ANP personnel included 1,570 women—232 officers, 639 NCOs, and 699 enlisted personnel—according to CSTC-A.204 This in an increase of 366 women in two years (since August 22, 2011).205 ANSF MEDICAL/HEALTH CARE As of September 30, 2013, the United States has funded construction of 174 ANSF medical facilities valued at $134 million, and has funded $10 million in contracts to provide the ANSF with medical training, according to CSTC-A. Since 2006, Coalition forces have procured and fielded $36 million in ANSF medical equipment.206 This quarter, CSTC-A reported the ANSF health care system had 847 physicians out of 1,010 authorized. Of these, 566 were assigned to the ANA and 281 were assigned to the ANP. The ANSF had 7,360 other medical personnel (including nurses and medics) out of 10,162 needed.207 REMOVING UNEXPLODED ORDNANCE Since 2002, the U.S. Department of State has provided nearly $264 million in funding for weapons destruction and demining assistance to Afghanistan, according to its Bureau of Political-Military Affairs’ Office of Weapons Removal and Abatement (PM/WRA).208 Through its Conventional Weapons Destruction program, State funds five Afghan nongovernmental organizations (NGOs), five international NGOs, and a U.S. government contractor. These funds enable clearance of areas contaminated by explosive remnants of war and support removal and destruction of abandoned weapons that insurgents might use to construct improvised explosive devices.209 From July 1, 2012, through June 30, 2013, State-funded implementing partners cleared nearly 33 million square meters (about 13 square miles) of minefields, according to the most recent data from the PM/WRA.210 An estimated 537 million square meters (more than 200 square miles) of REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 101 SECURITY TABLE 3.7 CONVENTIONAL WEAPONS DESTRUCTION PROGRAM METRICS, JULY 1, 2012–JUNE 30, 2013 Date Range AT/AP Destroyed UXO Destroyed SAA Destroyed Fragments Cleared Minefields Cleared (m2) Estimated Contaminated Area Remaining (m2) 7/1–9/30/2012 5,542 165,100 121,520 2,569,701 11,830,335 550,000,000 10/1–12/31/2012 2,146 62,449 22,373 3,672,661 7,265,741 570,000,000 1/1–3/31/2013 1,984 100,648 105,553 3,722,289 7,978,836 552,000,000 4/1–6/30/2013 1,058 18,735 49,465 1,079,807 5,586,198 537,000,000 10,730 346,932 298,911 11,044,458 32,661,110 537,000,000 Total Notes: AT/AP = anti-tank/anti-personnel ordnance. UXO = unexploded ordnance. SAA = small-arms ammunition. Fragments are reported because their clearance requires the same care as for other objects until their nature is determined. Source: State, PM/WRA, response to SIGAR data call, 10/1/2013. contaminated areas remain to be cleared, as shown in Table 3.7. The PM/ WRA defines a “minefield” as an area contaminated by landmines, and a “contaminated area” as an area contaminated with both landmines and explosive remnants of war.211 COUNTERNARCOTICS Farm-gate price: the price of the product available at the farm, excluding any separately billed transport or delivery charge. Source: IMF, “Glossary,” 2004, p. 598. Although the U.S. has spent billions to reduce poppy cultivation and illicit drug trafficking, Afghanistan’s opium production continues to rise. The country is the world’s leading producer and cultivator of opium, accounting for 74% of global illicit opium production in 2012.212 The Afghan opium economy undermines U.S. reconstruction efforts by financing the insurgency and fueling corruption. According to the UN Office of Drugs and Crime (UNODC) opium survey, an estimated 154,000 hectares of land were under poppy cultivation in 2012, an 18% increase from the previous year.213 The impact of this cultivation is significant. Estimates of the magnitude of the opium economy’s size compared to Afghanistan’s licit GDP (nearly $19 billion in 2012) range from just over 3% to as high as 11% depending on the type of data considered.214 For example, the World Bank estimates that opium (by farm-gate price) is equivalent to 3.3% of Afghanistan’s gross domestic product (GDP), or as much as 7–8% if export earnings are included.215 UNODC estimates farm-gate value is equivalent to 4% of GDP and net opium exports at 10% of GDP (11% for gross opium exports).216 The U.S. counternarcotics (CN) strategy focuses primarily on combating the narco-insurgency nexus.217 The main components of the strategy include U.S.-sponsored eradication, promotion of alternative livelihoods, publicawareness initiatives, and interdiction operations. As of September 30, 2013, the United States has appropriated $6.9 billion for CN initiatives in Afghanistan since efforts began in 2002. Most of these funds were appropriated through two channels: the State Department’s International Narcotics Control and Law Enforcement (INCLE) account ($4.2 billion), 102 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY and the DOD Drug Interdiction and Counter-Drug Activities (DOD CN) fund ($2.6 billion).218 State’s Bureau of International Narcotics and Law Enforcement Affairs (INL) bears the primary responsibility for funding Afghan-led eradication, alternative livelihoods, and public awareness programs. DOD and INL coordinate to support the CN efforts of Afghanistan.219 Key Events This quarter, specialized Afghan law enforcement units arrested the provincial police chief of Nimruz, Major General Mohammad Kabir Andarabi, on drug corruption and obstruction of justice charges. He was tried and convicted of obstruction of justice and sentenced to 10 years in prison. Andarabi is the highest-ranking government official arrested on drug charges to date. According to DOD, this and other high-profile arrests demonstrate the competency of vetted Afghan units to compile and use evidence against a target. The U.S. military provided general logistics and intelligence support, while the U.S. intelligence community provided supplemental targeting and analytical support to Coalition mentors.220 Opium Cultivation Afghanistan accounted for 64% of the global acreage devoted to poppy cultivation in 2012, according to UNODC. Poppy was cultivated in 17 of Afghanistan’s 34 provinces, as shown in Figure 3.26. Although eradication of poppy (by hectare) increased by 154%, poppy cultivation increased by over 50% in seven provinces, including four of Afghanistan’s largest (by area) provinces in the west, as shown in Figure 3.27 on the following page. Overall, the number of hectares under cultivation increased by 18%.221 The price per kilogram of opium fell in 2012 compared to the previous year. The average farm-gate price was $180 per kilogram for fresh opium and $241 per kilogram for dry opium in 2011. In 2012, those prices fell to $163 and $196 respectively. Moreover, farmers’ gross income from opium per hectare fell by 57% and net income fell by 65%.222 Governor Led Eradication Program INL supports the Afghan government’s Governor Led Eradication (GLE) program.223 As of September 30, 2013, the United States has provided $85 million for the GLE program.224 According to a September 25, 2013, report, the GLE program was responsible for eradicating 7,323 hectares in Afghanistan—a 24% decrease from 2012 when 9,672 hectares were verified as eradicated. The Ministry of Counter Narcotics (MCN) attributes the decrease to the ANSF’s diminished support for eradication efforts, Taliban attacks against the CNPA, cultivation in insecure and remote areas, and the hot climate this year, which meant farmers could harvest their opium crop earlier than most years. Eradication levels are verified by UNODC and the REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 103 SECURITY FIGURE 3.26 OPIUM CULTIVATION IN AFGHANISTAN BY PROVINCE, 2012 JOWZJAN FARYAB KUNDUZ BALKH TAKHAR BADAKHSHAN SAMANGAN BAGHLAN PANJSHIR NURISTAN PARWAN KAPISA KUNAR BAMYAN LAGHMAN KABUL WARDAK NANGARHAR LOGAR DAYKUNDI PAKTIYA SAR-E PUL BADGHIS HERAT GHOR KHOWST GHAZNI Opium cultivation, hectares URUZGAN FARAH PAKTIKA ZABUL Poppy-free Less than 1,000 NIMROZ HELMAND 1,001-10,000 KANDAHAR 10,001-30,000 More than 30,000 Note: One hectare = about 2.5 acres. Source: UNODC, Afghanistan Opium Survey 2012, 5/2013, p. 14. FIGURE 3.27 CHANGES IN OPIUM CULTIVATION LEVELS BY PROVINCE, 2011–2012 JOWZJAN FARYAB BALKH KUNDUZ TAKHAR BADAKHSHAN SAMANGAN BAGHLAN PANJSHIR NURISTAN PARWAN KAPISA KUNAR BAMYAN LAGHMAN KABUL WARDAK NANGARHAR LOGAR DAYKUNDI PAKTIYA SAR-E PUL BADGHIS HERAT GHOR KHOWST GHAZNI Opium cultivation change (%) URUZGAN FARAH ZABUL PAKTIKA Poppy-free Decrease (-49% to -11%) NIMROZ HELMAND Stable (-10% to +10%) KANDAHAR Increase (+11% to +50%) Strong increase (over 50%) Source: UNODC, Afghanistan Opium Survey 2012, 5/2013, p. 15. 104 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY MCN. The MCN reported that the GLE program is being used in 842 villages in 17 provinces, according to INL.225 Good Performer’s Initiative INL funds the MCN’s Good Performer’s Initiative (GPI), which incentivizes governors to achieve and sustain reductions in poppy cultivation.226 As of September 30, 2013, the United States has provided $10 million for the GPI program.227 Provinces that achieve poppy-free status, reduce poppy cultivation by more than 10%, or demonstrate exemplary CN efforts receive development assistance to support local development priorities. Under the terms of the program, each year that a province achieves poppy-free status, it becomes eligible for $1 million in GPI development projects. A province is deemed poppy-free when UNODC, in cooperation with MCN, verifies that it has fewer than 100 hectares under poppy cultivation during the year. During 2012, 17 Afghan provinces qualified for GPI poppy-free awards, the same number as in 2011. One province lost and one province gained poppy-free status from 2011 to 2012. GPI awards for 2013 have yet to be announced.228 Since the start of the GPI program in 2007, more than 200 development projects are either complete or in process in all 34 provinces. These projects include school construction, road and bridge projects, irrigation structures, farm machinery projects, and hospitals and clinic construction. INL noted that while the backlog in implementing GPI projects has been reduced substantially, the program has faced some delays as the capacity of the MCN continues to increase and the process is refined. There are also delays in implementation of construction projects due to security challenges.229 According to INL, the GPI program provides support once good performance in a province has been verified. In contrast, the GLE program provides a 10% advance based on mutually agreed upon goals, and the remaining funds are provided following verification of qualifying eradication results.230 Effect of the Coalition Drawdown on Counternarcotics Operations DOD anticipates the ability of the CNPA and other Afghan government CN agencies to conduct CN operations in areas with decreased Coalition presence will diminish as U.S. and Coalition forces draw down. However, DOD said Afghan CN units including the Special Mission Wing, the National Interdiction Unit, and the Sensitive Investigative Unit are trained and capable units that have conducted CN operations independently or with limited U.S. and Coalition support. DOD expects these Afghan CN units to continue to operate with a reduced Coalition presence. However DOD also recognizes that certain enabler functions currently provided by U.S. and Coalition forces—such as air support, security, and intelligence—cannot be replicated.231 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 105 SECURITY Precursor chemical: substance that may be used in the production, manufacture and/or preparation of narcotic drugs and psychotropic substances. Source: UNODC, “Multilingual Dictionary of Precursors and Chemicals,” 2009, p. viii. DOD also noted that two of the highest poppy-cultivation areas, Kandahar and Helmand, will be highly impacted by the withdrawal. These areas also have more insurgents and more entrenched narcotics networks. Poor security, a small Afghan CN security force, minimal assets, and lack of intelligence to identify opium production networks are likely to allow drug traffickers to move and operate largely unimpeded in these important provinces.232 According to DOD, the U.S. Drug Enforcement Administration (DEA) has advised it is closing a number of forward operating locations and significantly reducing its footprint in others, especially in southern Afghanistan.233 CSTC-A noted that these forward operating locations—including bases in Kunduz, Herat, and Kandahar—are being transitioned to CNPA control and will be used to launch counternarcotics operations as has been done in the past.234 However, without military support for security, intelligence, medical evacuation, and tactical air control for high-risk operations, DEA operations will center on Kabul with little ability to extend beyond the Afghan capital. This will also affect the Afghan CN forces’ ability to conduct complex interdictions because DEA has directly augmented Afghan CN operational capabilities throughout the country. DOD noted that DEA’s diminishing ability to operate in Afghanistan is directly related to the Coalition military drawdown and subsequent reduction of security.235 DOD also correlated the sharp decline in the interdiction of illicit drugs and drug-related chemicals from FY 2011 to FY 2013 with the military drawdown and loss of operational enablers. The largest declines were the interdictions of precursor chemicals (chemicals used to manufacture narcotics) by 73% and hashish by 79%. The only area to show a modest gain was the interdiction of morphine between FY 2012 and FY 2013; although nearly twice as much morphine was seized in FY 2011 than in either of the following two years. Moreover, the total number of CN operations has declined 26% between FY 2012 and FY 2013.236 With the end of 2014 combat operations, the ISAF military mission in Afghanistan will transition to the NATO-led training, advisory, and assistance Mission that has been named the Resolute Support Mission (RSM). RSM will not have the resources and capacity to support law enforcement CN missions at current levels. However, DOD stated it is committed to continuing support to U.S. law enforcement agencies for Afghan and regional CN efforts within budget constraints. According to DOD, it is working closely with U.S. interagency partners to identify law enforcement CN requirements in a post-transition environment.237 Counternarcotics Police of Afghanistan This quarter, 2,759 personnel were assigned to the CNPA, according to CSTC-A. This 512 more personnel than the 2,247 personnel currently authorized for the CNPA.238 106 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION SECURITY Afghan Interdiction Operations From July 1 through September 30, 2013, the ANSF conducted 90 unilateral CN operations—routine patrols, cordon-and-search operations, vehicle interdictions, and deliberate detention operations—according to DOD. The MOI’s General Department of Police Special Units led the effort. The department participated in 17 operations that seized approximately 18,200 kg of various narcotics and precursor chemicals.239 U.S. Interdiction Operations All U.S.-only interdiction activities occurred in south and southwest Afghanistan, where the majority of opiates are grown, processed, and smuggled out. According to DOD, U.S. interdiction support remains focused on building Afghan capabilities and partnering with Afghan law enforcement. As Afghan forces have taken the lead in this area, there were only four unilateral U.S. operations. The Combined Joint Interagency Task Force-Nexus (CJIATF-N) and the Interagency Operations Coordination Center (IOCC) continued working with ISAF and law enforcement mentors in building the capacity of Afghan forces. All operations were coordinated with U.S. and Coalition military commanders on the ground.240 Interdiction Results Since 2008, a total of 2,474 Afghan and Coalition interdiction operations have resulted in 2,488 detentions and seizure of the following narcotics contraband:241 • 728,886 kg of hashish • 354,580 kg of opium • 46,961 kg of morphine • 25,923 kg of heroin • 407,203 kg of precursor chemicals REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 107 GOVERNANCE CONTENTS Key Events 109 Elections 110 Quarterly Highlight: Elections Preparations and Challenges 111 New U.S. Civil-Military Strategic Framework for Afghanistan 119 Reconciliation and Reintegration 121 National and Subnational Governance 124 Judicial Reform and Rule of Law 130 Anticorruption 134 Human Rights 108 139 GOVERNANCE GOVERNANCE As of September 30, 2013, the United States had provided nearly $24.7 billion to support governance and economic development in Afghanistan. Most of this funding, nearly $16.7 billion, was appropriated to the Economic Support Fund (ESF) administered by the State Department and the United States Agency for International Development (USAID).242 KEY EVENTS Preparation for the 2014 presidential and provincial council elections continued during this quarter. The Afghan Independent Election Commission (IEC) concluded registration of candidates for president and provincial councils on October 6, 2013.243 Twenty-six candidates for president, along with candidates for first and second vice president, officially registered for the election.244 On October 22, the IEC issued an initial list of presidential candidates with only 10 of the registered candidates approved.245 The IEC and Electoral Complaints Commission (ECC) began work with new commissioners during the quarter. President Karzai appointed nine IEC commissioners for six-year terms in July 2013 and later appointed five members to the ECC.246 The top United Nations (UN) official for human rights warned after a recent visit to Afghanistan that “The momentum of improvement in human rights may have not only peaked, but is in reality waning.” The UN High Commissioner for Human Rights cited issues related to women’s rights and the Afghanistan Independent Human Rights Commission as areas of particular concern.247 The United States Ambassador to Afghanistan and the Commander of United States Forces-Afghanistan (USFOR-A) issued a revision to the U.S. Civil-Military Strategic Framework for Afghanistan in August 2013. The framework provides strategic guidance for all American civilian and military personnel serving in Afghanistan.248 The governor of Logar Province, Arsala Jamal, was killed in a mosque in the provincial capital in October. Mr. Jamal is the second Logar provincial governor to have been assassinated with a predecessor having been killed in September 2008. One of Mr. Jamal’s top priorities was the Aynak REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 109 GOVERNANCE FIGURE 3.28 PRELIMINARY LIST OF PRESIDENTIAL CANDIDATES WITH THEIR ELECTION SYMBOL Qutbuddin Hilal Dr. Abdullah Abdullah Dr. Zalmai Rassoul Abdul Rab Rassoul Sayyaf Abdul Rahim Wardak Qayoum Karzai Dr. Ashraf Ghani Ahmadzai Gul Agha Shirzai Sardar Muhammad Nader Naeem Hedayat Amin Arsala Note: IEC approved candidates for president as of October 22, 2013. The candidate symbols have been used since the 2004 presidential election to help illiterate voters identifiy candidates. For example, former Nangahar governor Gul Agha Sherzai opted for the symbol of a bulldozer to match his nickname. Sources: Independent Election Commission, “Presidential Candidates,” 10/22/2013, accessed 10/22/2013; Radio Free Europe, “Afghanistan: Ballot Papers Feature Unique System of Candidate Symbols,” 9/14/2005, accessed 10/22/2013; AFP, “Afghan election body disqualifies 16 presidential candidates,” 10/22/2013, accessed 10/22/2013. cooper mine which is located in Logar Province.249 The quarter also saw the defection to the Taliban of a serving district governor and former senator from Sar-e-Pul Province. The district governor became the highest-ranking Afghan civilian official to have joined the insurgency. 250 ELECTIONS The IEC accepted nominations for president from September 16 to October 6.251 Twenty-six candidates were nominated with only ten presidential candidates initially approved by the IEC for inclusion on the preliminary list of candidates, as shown in Figure 3.28.252 Prominent candidates include former Foreign Ministers Abdullah Abdullah and Zalmai Rassoul, former Finance Ministers Ashraf Ghani and Anwarul Haq Ahadi, former Defense Minister Abdul Rahim Wardak, former parliamentarian and mujahedeen commander Abdul Rasoul Sayyaf, former Senior Minister Hedayat Amin Arsala, and former governor of Nangahar Gul Agha Sherzai.253 Several presidential and vice presidential candidates were required to resign their government posts before they nominated themselves for the presidential election, as shown in Figure 3.29 on page 121.254 According to Human Rights Watch, the slate of candidates include former military and militia commanders implicated in serious rights abuses, war crimes, and crimes against humanity.255 The IEC announced a preliminary list of approved candidates on October 22 and will issue a final list of candidates on November 16, 2013. The IEC announcement of the preliminary list of presidential candidates was delayed by three days partially due to verifying the nationality of the candidates. There were several reasons for candidates being disqualified including the lack of university degrees, holding dual nationality, and failing to provide 100,000 voter cards from at least 20 provinces. According to the IEC Chairman, disqualified candidates have 20 days to raise any objections.256 The official election campaigning will begin in February 2014.257 The IEC also announced that 3,056 candidates, including 323 women, filed nominations for the 420 provincial council seats. Of those who registered, IEC confirmed 2,704 candidates, including 308 females, as preliminary candidates for provincial council.258 Preparations for the April 5, 2014, elections are further advanced than at comparable points in any previous Afghan election, according to State. State said the promulgation last quarter of two key electoral laws, rapid appointments to election management bodies, and the roll-out of a voter registration update represent significant progress toward ensuring an orderly and timely process. Afghan authorities have registered over 1.5 million new voters.259 For a full discussion of the election planning and challenges see the quarterly highlight on pages 111–118. 110 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION QUARTERLY HIGHLIGHT ELECTIONS PREPARATIONS AND CHALLENGES Afghanistan’s presidential and provincial council elections are scheduled for April 5, 2014. Parliamentary elections are scheduled for spring 2015. The constitution prohibits two-term President Hamid Karzai from running again. A successful election to replace him would represent the first democratic transfer of power in the country’s history. The government of Afghanistan committed in the Tokyo Mutual Accountability Framework “to conduct credible, inclusive, and transparent Presidential and Parliamentary elections in 2014 and 2015 according to the Afghan Constitution, in which eligible Afghan citizens, men and women, have the opportunity to participate freely without internal or external interference and in accordance with the law.”260 This quarter, U.S. Special Representative for Afghanistan and Pakistan James F. Dobbins called Afghanistan’s electoral process the “single most important development which will affect Afghanistan’s future over the next year.”261 Craig Jenness, the director of the United Nations’ Electoral Assistance Division, told SIGAR that donors and Afghans agree on the overall strategic principles: (1) the ultimate goal is an outcome broadly accepted by Afghans; (2) participation and inclusivity must be a priority; (3) the technical process must be (and be seen to be) unbiased and sound enough to defend the outcome; and (4) antifraud measures should be both robust and strategic.262 U.S. ELECTIONS SUPPORT AND UNDP/ELECT II The United States is providing an estimated $99.4 million in assistance to support the 2014 elections through a variety of programs, as shown in Table 3.8.263 The most important is the United Nations Development Programme’s (UNDP) Enhancing Legal and Electoral Capacity for Tomorrow-Phase II (ELECT II).264 ELECT II evolved out of ELECT, a UNDP program set up in TABLE 3.8 U.S. PROGRAMS INTENDED TO SUPPORT THE 2014 AFGHAN PRESIDENTIAL AND PROVINCIAL ELECTIONS Mechanism Budget Estimate UNDP Enhancing Legal and Electoral Capacity for Tomorrow-Phase II (ELECT-II) $55 million January 2012–December 2015 Support for Increased Electoral Participation in Afghanistan (SIEP) $15 million September 2008–September 2013 Afghanistan Electoral Reform and Civic Advocacy (AERCA) $7.5 million July 2009–June 2014 Supporting Political Entities and Civil Society (SPECS) $6 million July 2013–June 2016 Promoting Afghan Civil Engagement (PACE) $4 million TBD 2013–TBD 2018 Initiative to Promote Afghan Civil Society, Phase II (IPACS II) $1 million October 2010–December 2013 Source: USAID, response to SIGAR data call, 9/30/2013. REPORT TO THE UNITED STATES CONGRESS I MONTH 30, 2013 111 Life of Project QUARTERLY HIGHLIGHT 2006 to help the Afghan government prepare for and manage the 2009 and 2010 elections. The country’s first elections in 2004–2005 were co-executed through the Joint Electoral Management Body, which included the UN and Afghanistan’s Independent Election Commission (IEC).265 ELECT II aims to support the IEC and the Elections Complaint Commission (ECC) to: • improve and consolidate its institutional capacity, • improve and consolidate the professional and electoral skills of its staff via a skills transfer from ELECT II personnel, • increase its capacity to implement elections so that technical assistance will not be required in the medium-to-long-term, • sustain and develop its facilities, management and information systems, and infrastructure, • encourage democratic participation, and • mainstream the importance of gender equality across all its activities.266 USAID will contribute $55 million of the total $129 million ELECT II estimates is necessary to support the 2014 elections. The United Kingdom, the European Union, Italy, Germany, France, the Netherlands, Sweden, Denmark, Norway, and Japan are contributing the remainder, as shown in Figure 3.30.267 This funding will also allow UNOPS, an arm of the United Nations, to provide operational assistance through the UNDP subcontracting process to the newly established permanent ECC, which will adjudicate complaints.268 The International Foundation for Electoral Systems (IFES) will also provide advisory support to the ECC under the same process.269 FIGURE 3.30 ELECT II DONOR COMMITMENTS FOR THE 2014 PRESIDENTIAL AND PROVINCIAL COUNCIL ELECTIONS (MILLIONS U.S. $) 55 USAID 16.3 Japan 15 Norway European Union 13.2 United Kingdom 12.8 10 Germany 10 Netherlands 6 Sweden 3.3 France Denmark 3 Italy 1.3 0 10 20 30 40 50 60 Source: UN Department of Political Affairs, Electoral Assistance Division. 112 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION QUARTERLY HIGHLIGHT FIGURE 3.31 AFGHANISTAN'S ELECTORAL HIGHLIGHTS 2003 2004 2005 2006 2007 2008 Sept 18: Provincial election 2009 Oct 6–Feb 2: Voter registration for 2009 presidential election Oct 9: Hamid Karzai elected president Dec–Aug: Voter registration for 2004 presidential election begins 2010 Nov 2: IEC announces Karzai is elected to a second term 2011 Oct 5-9: ECC conducts fraud audit Aug. 20: Election Day ELECT II’s total estimated budget of $248 million for the 2014–2015 elections is considerably less than the $331 million ELECT budgeted for the 2009–2010 elections.270 (See Figure 3.31 for a timeline showing the highlights of Afghanistan’s elections since 2004.) Jenness told SIGAR the UN has sought to reduce the international footprint in each successive Afghan election. In 2004, the international body that managed the election included about 500 international advisors. In 2009, ELECT had some 120 on hand. Only about 50 international advisors will play a role in the upcoming elections, he said.271 Jenness added that for the first time, in the spirit of Afghanization and the requirements of the Tokyo Mutual Accountability Framework, approximately 20–23% of the electoral budget will likely be on-budget through the Ministry of Finance. He said this should help to build sustainable mechanisms for future Afghan-led and owned elections.272 USAID is also spending $21 million to (1) strengthen political parties and coalitions; (2) develop domestic election and polling agent monitoring; (3) facilitate international election observation; and (4) encourage greater citizen participation in the elections and political process. Of this total, $15 million was spent on the Supporting Increased Electoral Participation (SIEP) project and $6 million will be spent on a follow-on project called Supporting Political Entities and Civil Society (SPECS) that will be implemented by the National Democratic Institute (NDI), IFES, and Internews, a non-governmental organization whose mission is to empower local media.273 USAID is spending $7.5 million to support the Afghanistan Electoral Reform and Civic Advocacy (AERCA) project implemented by Democracy International (DI). AERCA has been facilitating an Afghan-led electoral I OCTOBER 30, 2013 113 2013 2014 April 5: Scheduled date for presidential and provincial elections Sept 18: Election for lower house of the National Assembly Sources: SIGAR Quarterly Reports, 10/30/09, pp. 75, 83; 1/30/10, p. 78; 10/30/10, p. 77; and 7/30/2013, p. 123. REPORT TO THE UNITED STATES CONGRESS 2012 Sept 16–Oct 6: Nomination period for presidential candidates May 26: Voter registration for 2014 presidential and provincial elections begins QUARTERLY HIGHLIGHT U.S. soldiers deliver voter-registration books to Afghan officials in Zabul Province. (DOD photo) reform dialogue to strengthen Afghan democracy and foster innovations in governance.274 USAID will use an estimated $6.5 million to support the initial roll out of the e-tazkera.275 USAID/Office of Transition Initiatives will use $5 million for an information campaign encouraging peaceful citizen engagement in the electoral process in targeted areas of the south and east. The campaign is intended to counter insurgent messages aimed at preventing Afghans from participating in elections.276 The agency is also planning on spending $4.4 million for electionsrelated civic-education programs through its Initiative to Promote Afghan Civil Society (IPACS II) project and forthcoming Promoting Afghan Civic Engagement (PACE) project.277 The program aims to engage voters and raise their awareness of their civil rights through a wide variety of mediums.278 In addition to USAID, the Public Affairs section at U.S. Embassy Kabul is implementing 26 grants and cooperative agreements for approximately $7.67 million to support the 2014 Afghan elections. These programs will focus on raising awareness and encouraging voter participation nationwide, especially in the provinces where voting rights for Afghan women and youth are a challenge. Such programming includes town halls, radio and television broadcasts, as well as election polling.279 Independent Elections Commission This quarter, President Karzai appointed nine commissioners to the IEC, who elected Yusuf Nuristani as the IEC chairman.280 Nuristani previously served under Karzai as deputy defense minister and governor of Herat. He told The Wall Street Journal that insurgent violence remains his main preoccupation in preparing for the presidential election in April 2014.281 Under the new electoral law passed last quarter, the commissioners were chosen from a shortlist given to the president by a selection committee composed of the two speakers of Parliament, the head of the Afghanistan Independent Human Rights Commission, the head of the Supreme Court, and a representative of civil society organizations.282 According to the UN Secretary-General, civil society organizations failed to agree on a representative and had no official representative in the selection process as required by the law.283 VOTER REGISTRATION SIGAR recommended in an audit of the 2009 elections that Afghanistan improve its voter registration process.284 The IEC has no database of voter registration cards.285 Deceased voters have never been removed from the rolls.286 Voter registration cards in circulation outnumber eligible voters.287 Voters are not assigned to any particular polling station.288 The former head 114 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION QUARTERLY HIGHLIGHT of the IEC admitted that his organization was unable to identify counterfeit cards.289 The UN’s Jenness noted the prevailing view that the problem has not been multiple voting but rather ballot stuffing or “wholesale fraud.” Jenness said that last year the UN asked the international community to fund compilation of an entirely new Afghan voter registry. The new registry would have been the first real attempt to establish a voter registry linking voters to polling stations.290 However, the donors balked at the cost.291 USAID disagreed with Jenness’s account, saying the Afghan government made the decision not to go forward with a new voter registry.292 The IEC has instead embarked on a process of topping-up the existing registry. The commission is issuing new voter registration cards to potential voters who either have reached the age of 18 since the 2011 elections, have not previously registered, changed their electoral constituencies, repatriated to Afghanistan from abroad, or whose cards were lost or seriously damaged.293 As a result, Jenness said, “we will have the same criticism of the registry that we always have.”294 The IEC began registering voters on May 26, 2013.295 The Afghan government has extended voter registration at the district level by 45 days, or until November 16, 2013, to give remote communities and women more opportunities to participate fully in the elections.296 The IEC has said it plans to distribute between 2.5 million and 3.5 million new cards.297 Reuters reported that voter registration cards are being sold for less than $5 and that it is fairly easy for one to register to vote with false information.298 According to Reuters, voter cards have become a form of currency and are being Thumbs blue with ink show voter-registration officials that these Afghan women have used the fingerprint alternative to a photo ID. (DOD photo) REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 115 QUARTERLY HIGHLIGHT exchanged for bags of rice and potatoes in parts of Kunduz Province, with most of those buying the cards working for candidates as campaigners.299 An IEC commissioner told Tolo News that fraud through the purchase of voting cards and votes is presently more of a concern for the IEC than security.300 The Afghanistan Analysts Network reported previously that the manual, paper-based system of voter registration makes it possible for people to obtain multiple voter registration cards.301 SECURITY Jenness and his political officer on Afghanistan, Asma Nassery, said the UN sees the biggest challenge facing election officials in 2014 as a lack of security that may prevent a significant number of voters from casting their ballots.302 The Ministry of Interior has a comprehensive plan to secure polling places, according to UN officials.303 Under the plan, the Afghan National Security Forces will provide security, with the International Security Assistance Force (ISAF) offering assistance only upon request from the Afghan authorities for logistical, informational, and in urgent situations requiring in-extremis support.304 Afghan forces are already providing security for the IEC’s activities, including outreach, voter registration, and movements of material, largely without reliance on ISAF.305 Jenness said ISAF has offered to transport sensitive materials by air if requested, a role they have played in past elections.306 Meanwhile, according to the head of the IEC secretariat, the Afghan security forces have guaranteed security for only 3,435 of 6,845 total polling stations.307 The most recent assessment offered by security officials found that 3,410 polling centers are still under threat. Of those centers under threat, 945 are classified as low-threat; 1,074 are medium-threat; and 1,132 are high-threat.308 A total of 259 were classified as being in areas under militant control in the provinces of Nuristan, Helmand, Ghazni, Badakhshan, Faryab, Parwan, Sar-e-Pul, Kandahar, and Paktika.309 This September, the Taliban claimed responsibility for assassinating the provincial head of the IEC in Kunduz.310 According to the Associated Press¸ the Taliban leader Mullah Omar sent a message on the eve of the Muslim Eid al-Adha holiday calling on Afghans to boycott the election.311 SIGAR reported in 2009 that over 100 violent incidents took place on election day.312 FRAUD PREVENTION In 2009, insecurity, intimidation, a lack of observers, and, at times, a lack of adequate training of temporary poll staff led to widespread fraud.313 In its audit report on Afghanistan’s 2009 elections, SIGAR found that lessons learned included identifying polling stations well in advance to ensure sufficient logistics and security support, controlling printed ballots to prevent fraudulent voting, enabling and educating candidate representatives and 116 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION QUARTERLY HIGHLIGHT election observers, completing electoral activities before sundown due to security, tallying votes quickly to avoid manipulation, making results forms tamper resistant, tabulating votes in a transparent manner, and addressing and resolving complaints quickly.314 With the help of ELECT II, the IEC has published a detailed, 20-page fraud-mitigation plan for the 2014 elections. State said the plan has three objectives: fraud prevention, fraud identification, and fraud correction.315 The plan drew from an IFES report on the integrity of the Afghanistan elections that was prepared in February, State said. The report indicated that a large amount of fraud in 2009 was conducted by the temporary elections staff hired to administer polling stations.316 To prevent recruitment of these former IEC employees and contractors, the IEC has developed a database with information about persons who committed fraud and misused their positions in previous elections. All IEC provincial offices have access to this database and are expected to use the data to screen recruits. Currently the IEC has only hired a few hundred temporary workers for the voter registration process, but in the months to come, it will hire thousands of temporary employees to staff polling stations and administer the election. The Independent Joint Anti-Corruption Monitoring and Evaluation Committee (MEC) has volunteered to monitor this process, State said.317 USAID plans to fund domestic observers for the election through its SPECS project and its AERCA program. Through SPECS, USAID plans to set aside $1.4 million in sub-grants to fund domestic election-observation missions, advocacy groups, and watchdog organizations. Through AERCA, Democracy International will fund two domestic observation organizations. USAID has not yet decided whether to fund international election observers.318 The UN’s Jenness said the IEC will be walking a fine line in the elections between instituting strict antifraud measures and disenfranchising voters. He said that while improprieties in the 2009 elections led to nearly a quarter of the votes being thrown out, overly strict antifraud measures could lead to a result like the one in Ghazni’s 2010 parliamentary election. In that case, 117 out of 272 polling stations failed to open due to insecurity or had their ballots invalidated and the members of the majority Pashtun ethnic group failed to elect a single representative. “We think a major challenge is that in the south, in these insecure areas, there are people who have the right to vote,” he said. “Don’t you have to do the maximum to enfranchise these people? The key to the legitimacy of the upcoming elections will be the balance of maximal participation and strategic antifraud measures.”319 THE ELECTORAL COMPLAINTS COMMISSION On September 19, the five commissioners of the newly established ECC were sworn in. President Karzai had signed a law last quarter making the REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 117 QUARTERLY HIGHLIGHT ECC the country’s adjudicator of electoral complaints. Under the new law, the ECC no longer has international commissioners. The same selection committee that chose the IEC commissioners, with the addition of a civil society representative, presented the president with a short list of Afghan nominees, drawn from 300 applications, on September 12. On September 16, the presidency announced the final list of ECC commissioners. State said the members broadly reflect Afghanistan’s ethnic and geographic diversity. Four members are men and one is a woman. The new commissioners elected Abdul Satar Saadat as chairperson.320 The ECC faced the challenging task of establishing 34 offices in all 34 provinces before the end of the candidate-nomination process on October 6. State said the ECC had accepted a proposal from the IEC to share offices with the IEC in the provinces, but to have an independent headquarters in Kabul. The ECC’s next step was to propose nominees for the provincial ECC to the president, who would finalize their appointments.321 The ECC has not yet presented nominations for provincial commissioners and instead has asked those with complaints to submit the evidence to the IEC provincial office which will then forward the request to the ECC in Kabul for consideration.322 These provincial commissioners were to constitute the core of the ECC’s staff in the provinces. They will adjudicate electoral complaints at the provincial level, although their decisions can be appealed to the ECC in Kabul.323 WOMEN’S PARTICIPATION Another SIGAR audit found that the IEC and the UN lacked sufficient focus in 2009 on resolving the issues that limited Afghan women’s ability to fully exercise their political rights to register, campaign, and vote. For example, at least 80,000 female polling staff were needed, but only 43,341 were successfully recruited.324 UN officials said the IEC is working hard to make it easier for women to vote in the 2014 elections. They said ELECT II is supporting the IEC to incorporate a gender perspective in all public outreach initiatives, including the recent broadcast of radio and TV public service announcements encouraging women to register and participate in elections. UNWOMEN, a UN organization dedicated to gender equality and the empowerment of women, is considering a separate electoral support project aimed at the civil society sector.325 The IEC’s extension of district-level voter registration for an extra 45 days is likely to improve female registration, according to State. However, the IEC warned in August that a shortage of female police officers could keep women from voting. The IEC said it needs 12,000 female body searchers at polling stations, but by the end of August, there were only 2,000.326 118 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION GOVERNANCE FIGURE 3.29 Executive Branch Officials Running for President or Vice President Executive Branch Candidates for President Executive Branch Candidates for Vice President Mohammad Ismail Khan Dr. Ashraf Ghani Ahmadzai Abdul Rahim Wardak Minister of Energy and Water Chairman Transition Coordination Committee Senior Advisor to the President NO PHOTO Dr. Zalmai Rassoul Governor of Nangarhar Chief of Staff to the Commander in Chief Gul Agha Sherzai Minister of Foreign Affairs General Abdul Rashid Dostum Habiba Surabi Governor of Bamyan Hedayat Amin Arsala Wahidullah Shahrani Senior Minister Minister of Mines Note: Listed in chronological order of their registration. Two other executive branch candidates who had resigned to run for president, Azizullah Ludin (Head of the High Office of Oversight and Anti-Corruptions) and Anwar-ul-Haq Ahadi (Minister of Commerce & Industries), were disqualified by the IEC from running. As of late October 2013, there are five other tickets of candidates running for president. Sources: ToloNews, “Complete List of Registered Presidential Tickets,” 10/7/2013, accessed 10/7/2013; Tolo News, “IEC Announces Preliminary List of 2014 Presidential Candidates,” 10/22/2013, accessed 10/22/2013. E-tazkera The distribution of Afghanistan’s new biometric national identity card, the e-tazkera, has been tied to the National Assembly’s passing a law on registration of the population. The lower house passed a bill in July that included the controversial provision that an individual’s ethnicity would not be printed on the face of the card, although it would still be recorded in the biometric data contained within the card’s electronic memory. The law is currently under review in the upper house. Once the population registration law has been enacted, under the European Union leadership and with the support of USAID, the Afghan Ministry of Interior has agreed to fund a nine-month pilot project to distribute the cards in 12 to 14 districts of Kabul City.327 The cards will be accepted as a form of national ID for the April elections, as well as in other interactions with the Afghan government.328 NEW U.S. CIVIL-MILITARY STRATEGIC FRAMEWORK FOR AFGHANISTAN The U.S. Ambassador to Afghanistan, James B. Cunningham, and the Commander of USFOR-A, General Joseph F. Dunford, signed the U.S. Civil-Military Strategic Framework for Afghanistan which they say REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 119 GOVERNANCE “articulates the vision for pursuing U.S. national goals in Afghanistan, while reflecting policy updates and changes related to the passage of time.”329 It includes improving governance and the rule of law as part of the U.S. national goal of strengthening Afghanistan so that it can never again be a safe haven for international terrorism.330 The framework document names political reconciliation and reintegration and advancing women’s role in society as cross-cutting efforts that will remain an important focus for the U.S. government.331 According to the framework, a key U.S. goal is to empower the Afghan government and help its institutions become representative, accountable, responsive, constitutionally legitimate, and capable of performing key functions.332 Under the new strategic framework, the United States has four priorities in the governance sector:333 • supporting the 2014 Afghanistan presidential elections • strengthening checks and balances both within the Afghan government and independent institutions such as civil society • strengthening governance functionality to enable service delivery • stemming corruption The framework notes that U.S. government support will shift away from parallel systems of direct service provision and toward strengthening the Afghan government’s role in sub-national governance, revenue collections, and budgeting to improve service delivery.334 The United States also seeks to help Afghans develop a legal structure that enhances stability by encouraging good governance, a vibrant civil society, economic growth, and women’s rights.335 The framework outlines four rule-of-law priorities:336 • building the capacity of the Afghan government justice and legal systems • combating corruption within Afghan government agencies and institutions • increasing access and understanding of the formal justice systems to empower civil society and protect women’s rights • strengthening linkages between formal and customary justice sectors The framework assumes that the Afghan government will do the following:337 • make acceptable progress on indicators outlined in the Tokyo Mutual Accountability Framework leading to continued financial support from the international community • hold successful presidential elections resulting in a peaceful transfer of power in 2014 • provide continued support for political reconciliation The new U.S. strategic framework also assumes that there will be sufficient security for implementing partners to conduct assistance activities and enough U.S. civilian and military personnel to adequately monitor and evaluate 120 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION GOVERNANCE progress.338 The framework itself does not offer specific indicators or metrics of progress for governance and rule of law other than the reference to indicators found in the Tokyo Mutual Accountability Framework. The Tokyo Mutual Accountability Framework governance-related indicators include:339 • developing an election timeline through 2015 • ensuring that an electoral architecture is developed • ensuring respect for human rights of all citizens • implementing the Elimination of Violence Against Women Law (EVAW) and National Action Plan for Women (NAPWA) • enforcing the legal framework for fighting corruption • raising the ratio of revenue collection to gross domestic product (GDP) from 11% to 15% by 2016 • improving budget execution to 75% by 2017 • enacting a legal framework to clarify roles and responsibilities of government agencies at national, provincial and district levels in line with the 2010 Sub-National Governance Policy • developing a provincial budgeting process that includes provincial input into the relevant ministries formulation of budget requests, linked to a provincial planning process in which provincial councils have their consultative roles RECONCILIATION AND REINTEGRATION According to the Civil-Military Framework, the U.S. government views political reconciliation as “the solution to ending the war in Afghanistan.” The framework said the United States will pursue high-level diplomatic engagement for political reconciliation that includes leadership elements of the insurgency as well as support for the Afghan government reintegration program.340 The Special Representative for Afghanistan and Pakistan, Ambassador James F. Dobbins, indicated in September that the Taliban are currently unwilling to engage in dialogue with the United States or Afghan government, and that it is not clear when the situation will change. He also pointed out that the Taliban political office in Doha is currently closed following a “false start” at negotiations in June 2013.341 Neither the United States nor the Afghan government made any progress towards establishing a peace process with the Taliban. The Afghan government continued its efforts to revive peace talks with the Taliban this quarter, but its overtures failed to bear any fruit. President Karzai visited Pakistan to discuss opportunities for cooperation between the two countries in support of reconciliation efforts.342 Following the visit, Pakistan’s Foreign Ministry announced plans to release Mullah Abdul Ghani Baradar, the former Taliban second in command.343 According to news reports, however, Taliban commanders have refused to meet with Mullah Baradar because he is being escorted by Pakistani security agents and remains detained by Pakistani REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 121 An audience member addresses representatives from the Afghan High Peace Council during a panel discussion at the end of a women’s peace conference at the governor’s palace in Nangarhar Province. (DOD photo) GOVERNANCE authorities.344 The New York Times reported that a spokesman for President Karzai stated that there had been no contact between Mullah Baradar and the Afghan government while Radio Free Europe quoted President Karzai saying “We are trying to find a contact number or his address to talk to him.”345 Pakistan also released an additional seven Taliban figures this quarter to facilitate the peace process in Afghanistan.346 High Peace Council The U.S. and Afghan governments continued this quarter to stress that the High Peace Council is their preferred intermediary for any peace talks with the Taliban. In a September 16 press conference, Ambassador Dobbins said the U.S. supports an Afghan-led peace process which would involve talks between the Taliban, the Afghan government, and the High Peace Council.347 The Chairman of the High Peace Council travelled with President Karzai to Islamabad in August to ask Pakistan for the release of high-profile Taliban prisoners into Afghan government custody.348 Afghan Peace and Reintegration Program The National Solidarity Program (NSP): was conceived and launched by the Ministry of Finance and Ministry of Rural Rehabilitation and Development (MRRD) in 2003. The NSP is designed to strengthen community level governance and to improve the access of rural communities to social and productive infrastructure and services by channeling resources to democratically-elected Community Development Councils (CDCs). The NSP outsources project implementation to facilitating partners that mobilize communities to form CDCs and provide CDCs technical guidance for managing block grants and planning and implementing subprojects at the village level. NSP receives support from the World Bank’s International Development Association (IDA), the World Bankadministered Afghanistan Reconstruction Trust Fund (ARTF), and bilateral donors. Source: World Bank, Emergency Project Paper on a Proposed Grant in the Amount of SDR 27.2 million (U.S. $40 million Equivalent) to the Islamic Republic of Afghanistan for a Third Emergency National Solidarity Project, 6/10/2010, pp. 3, 14. According to the Department of Defense (DOD), the Afghan Peace and Reintegration Program (APRP) has made strong progress but is not a major influence on the conflict.349 According to the Department of State (State) and DOD, the Joint Secretariat completed reforms that improved the APRP’s financial-reconciliation process, largely addressing the financial-flow stoppages that had stalled the program every quarter.350 As of September, only four Provincial Joint Secretariat Teams (PJST) out of 33 were over 60 days delinquent in filing financial reports.351 According to State and DOD, the PJSTs’ inability to conduct financial reconciliation had essentially shut down the APRP until this quarter.352 State and DOD consider this change to be a significant improvement for the two and a half year-old program.353 According to State and DOD, the $50 million U.S. contribution in support of APRP via the Ministry of Rural Rehabilitation and Development’s (MRRD) National Solidarity Program (NSP) has not been linked to the APRP for fear of increasing the risk to NSP non-governmental facilitating partners. The U.S. funds have instead been subsumed into the broader Afghanistan Reconstruction Trust Fund (ARTF) budget rather than being used in support of specific reintegration initiatives. The World Bank recently completed a mid-term review of the NSP and assessed the overall progress as satisfactory; however, the review did not include the Community Recovery Intensification and Prioritization (CRIP) component of NSP that is in support of the APRP.354 The MRRD planned to use $10.4 million of the $58 million pledged to NSP for use in support of APRP in 1390 and a further $20 million in 1391.355 During the quarter, the number of small grants in support of APRP increased to 70. State and DOD state that 435 new reintegrees joined the 122 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION GOVERNANCE FIGURE 3.32 REINTEGREES BY REGIONAL COMMAND, MARCH 2012–SEPTEMBER 2013 8,000 7,000 6,000 RC-NORTH 5,000 RC-CAPITAL RC-WEST 4,000 RC-EAST 3,000 RC-SOUTH 2,000 RC-SOUTHWEST 1,000 0 Mar 2012 Jun 2012 Sep 2012 Jan 2013 March 2013 June 2013 Sep 2013 Source: State, responses to SIGAR data call, 4/2/2013, 1/2/2013, 10/2/2012, 7/5/2012, 3/30/2012, 7/1/2013, 10/4/2013. program increasing the total to 7,214 reintegrees, as shown in Figure 3.32.356 State and DOD also report there is an estimated backlog of approximately 600 applicants.357 Twelve donor countries have given the APRP a total of $182.3 million. Of this, $107.1 million had been expended as of July 31, 2013.358 Conflict Resolution The UN Secretary-General reported that the United Nations Assistance Mission in Afghanistan (UNAMA) continued to support the Afghan People’s Dialogue on Peace. Between April and June, UNAMA conducted 100 focus group discussions—of 200 planned in total—across the country involving 1,733 Afghans, including 429 women. The focus groups found that entrenched impunity, pervasive corruption and abuse of authority, unemployment, and, in some cases, lack of equitable development were reasons for discontent and the insurgency. Focus group participants also voiced concerns about the APRP and what was seen as a lack of vetting and accountability.359 USAID administers the Promoting Conflict Resolution, Peace Building, and Enhanced Governance program implemented by the United States Institute of Peace. The main objectives of the program are reducing violence by strengthening capacity to mitigate conflict; improving peace, security, and development; enhancing the rule of law; and increasing understanding of critical development, peace, and stability issues through REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 123 GOVERNANCE fellowships, research, and analysis. USAID has obligated $7 million for the program, of which $4.7 has been disbursed as of September 30, 2013.360 In a Foreign Policy article, the Afghanistan Country Director for the United States Institute of Peace reported on the results of a meeting the program hosted with 200 community elders. The elders reported that although only 50 Taliban may be operating in a given area where as many as 300 to 500 government security personnel also operate, the elders are reluctant to side with the government due to widespread corruption. The author argues that the elders are largely indifferent to both the government and insurgent forces, with the elders reporting that neither can be trusted to deliver on promises of security, justice, or services.361 NATIONAL AND SUBNATIONAL GOVERNANCE Alignment: as meaning external partners are aligned with National Priority Program (NPP) strategy and the underlying principles of all donor programs and projects are consistent with the NPPs stated approach. Alignment is fully achieved when donor funded projects and the NPPs have common, unified, and consistent objectives, plans, programs, projects, and deliverables. On-budget: all inflow of resources or spendings, program and project aid, is aligned with the plans of budgetary units, are captured in the budget documentation, are appropriated by the parliament and managed through the treasury system. National Priority Programs (NPPs): a set of 22 priority programs announced at the Kabul Conference (2010) representing a prioritized and focused approach to Afghanistan National Development Strategy (ANDS) implementation including specific deliverables and costing of programs. Source: Government of the Islamic Republic of Afghanistan, Aid Management Policy (AMP) For Transition and Beyond, 12/10/2012, pp. 5, 8. The UN Secretary-General reported that the Afghan government has continued to engage donor partners in the implementation of its Aid Management Policy, including on-budget financing, development framework agreements, financing agreements, and joint analysis, research, and assessments.362 The Aid Management Policy was endorsed at the February 12, 2013, Joint Coordination and Monitoring Board (JCMB) meeting which was attended by Afghan government officials and representatives of 37 countries.363 According to the Ministry of Finance, the policy forms the guiding principles for the delivery of aid in Afghanistan and for the implementation and monitoring of mutual commitments made by the Afghan government and international donors.364 According to the Secretary-General, the Afghan government and donors are seeking to develop a consensus on definitions of on-budget and alignment.365 The July 2010 Kabul Conference previously used the term “alignment” and the 2012 Tokyo Conference used the terms “alignment” and “on-budget” to describe international donor commitments.366 The endorsed Aid Management Policy provides definitions for both of these terms that appear to match those used in the Kabul and Tokyo conferences.367 The Secretary-General did not elaborate on the specifics of the disagreement but his observation raised questions about the value of policies endorsed by the JCMB if key definitions remain up for debate. The Secretary-General also reported that the Independent Directorate of Local Governance (IDLG) and the MRRD finalized policy for the establishment of District Coordination Councils (DCC). These councils are intended to be in place until constitutionally-mandated district council elections take place. Provincial committees would determine membership based on government criteria. The proposal has been submitted to the Council of Ministers for approval, with UNAMA facilitating consultations between the Government and the international community on funding modalities.368 DOD previously reported the Afghan government was expected to endorse and define the roles and responsibilities of the DCCs by the end of 2012 in order to begin operation by the end of 2013.369 124 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION GOVERNANCE National Assembly Both houses of parliament had a 45-day summer recess from July 23 to September 7, 2013.370 Upon return from recess, the lower house of parliament voted in favor of the Private Land Grabbing Prevention Law that aims to prevent the illegal acquisition of government and private lands. Parliamentarians supporting the law stated that over the past several years, millions of acres of land have been illegally acquired by influential government officials.371 The lower house also gave their vote of confidence for Omer Daudzai, the nominee for the post of Minister of Interior; Akram Khpalwak, the nominee for the post of Minister of Tribal and Border Affairs; Lotfurrahman Saeed, a nominee for membership to the Commission on Overseeing the Implementation of the Constitution (COIC); and Barat Ali Mateen, a nominee to the Supreme Court. Another nominee to the COIC, Nusrat Estanikzai, failed to gain a vote of confidence from the lower house.372 A female member of parliament was kidnapped by the Taliban in August while traveling along the Kabul-Kandahar highway near the city of Ghazni and released in September. It was the first instance a female member of parliament has been abducted by insurgents. According to a Taliban spokesman, six men and four women were freed in exchange for the parliamentarian. Another female member of the upper house of parliament was targeted in August while in Muqur district, Ghazni Province, in an attack that killed her daughter and driver.373 Mohammed Mohaqeq and Abdul Rasoul Sayyaf, both former Mujahedeen commanders and members of parliament, resigned their seats along with five other parliamentarians in order to run for office in the 2014 presidential elections.374 USAID provides support to the parliament through the $23 million Assistance to Legislative Bodies of Afghanistan (ALBA) project that will run through April of 2017 with a possible one-year extension depending upon funding and project success. According to USAID, in the first two years of the ALBA project, efforts will focus on building parliamentary capacity ahead of the 2015 parliamentary elections. Once the new parliament is in place, the project will shift focus to more individualized training for parliamentarians and parliamentary commissions.375 Civil Service Vacancies and Access The Independent Administrative Reform and Civil Service Commission (IARCSC) continued to prioritize filling Afghan government positions at the provincial level in line with the Insecure Provinces Recruitment Strategy and President Karzai’s Presidential Decree 45. The Commission has advertised for positions in insecure provinces in neighboring areas to increase the pool of qualified applicants for civil service positions.376 IARCSC had planned to implement a general entrance exam to recruit recent university REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 125 GOVERNANCE Kandahar Provincial Governor Tooyalai Wesa speaks to local village elders during a shura in Maiwand district, Kandahar Province. U.S. and Afghan dignitaries also attended the shura. (DOD photo) graduates for government positions in April; however, the initiative is delayed until the parliament approves relevant legislation.377 The Afghan government announced 50 district governor positions in 13 insecure provinces. The positions were advertised a second time due to the low number of applicants. Forty-eight candidates for district governor passed the examination and interview process jointly administered by the IDLG and the IARCSC. IDLG selected and referred 36 candidates to the IARCSC, which in turn sent 34 names to President Karzai’s office for appointment after it was found that one of the candidates was missing documents and the other did not have the necessary exam score. The 34 candidates have already received training and will be ready to begin duty upon their appointment.378 UNAMA reported in its July 2013 midyear report that there has been an increase in targeted killings of civilian government workers, peace council members, and tribal elders perceived to be supporting the Afghan government.379 These killings are meant to punish civilians for supporting the Afghan government and serve as a warning to others. UNAMA observed a 76% increase in attacks targeting civilian government employees, with 114 civilians killed in 103 attacks during the first six months of 2013 (as compared to 61 civilian deaths from 72 attacks for the whole of 2012).380 On May 2, 2012, the Taliban announced that their “Al-Farooq” spring offensive would specifically aim to kill civilian targets, including high-ranking government officials, members of parliament, High Peace Council members, contractors, and “all those people who work against the Mujahedeen.” As in 2012, the Taliban announcement of its 2013 spring offensive warned that civilians associated with the Afghan government or its international allies would be at risk of attack.381 A recent targeted attack killed an employee of the MRRD and five staff members of the International Rescue Committee working for the NSP while returning to their field office in Gulran district, Herat Province. The six were traveling in a taxi that was stopped by armed men.382 The MRRD has referred to the attackers as “enemy of the people of Afghanistan who oppose any development support” but did not offer additional details.383 This incident highlights the increasing difficulty civil servants and nongovernmental employees are having reaching Afghan government projects. These now include the NSP, which the Taliban formerly avoided attacking due to the popular support the program enjoyed.384 U.S. Stability Programs USAID’s Stability in Key Areas Program USAID said that its Stability in Key Areas Program (SIKA) made progress in grants execution, but that the program faced serious problems resulting from deteriorating security during this reporting period.385 USAID has 126 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION GOVERNANCE obligated $146.9 million for four SIKA programs to increase the confidence of Afghans in their district government leading to the expansion of Afghan provincial government authority and legitimacy through workshops, trainings, and small grants.386 USAID reported 75 grants awarded in SIKA-East, 15 grants applications approved in SIKA-South, 52 grants activities in SIKAWest, and 65 active grants in SIKA-North.387 Other SIKA activities include training and capacity building of Afghan government officials and communities, development of communications plans for the Afghan government, and outreach events such as service-provider fairs, which USAID sees as producing tangible benefits for communities.388 As of September 2013, the four SIKA programs have expended $92.93 million.389 USAID also stated that security has worsened in SIKA-East with cases of insurgents demanding that communities not affiliate with government projects. Meanwhile in SIKA-West, a recent threat led to a continuing work stoppage across an entire district.390 SIKA-North has also identified increased security challenges, but says activities have not been suspended.391 Winter is expected to affect implementation of community projects in SIKA-East.392 SIKA-South faced delays in Afghan-government certification of community representatives as legitimate—a required step that USAID says should have taken two weeks, but remains incomplete after three months.393 According to USAID, SIKA-West has found some district governors are not at their post and some district governors are reluctant to visit remote communities where project activities are under way.394 Village Stability Operations Village Stability Operations (VSO) and the Afghan Local Police (ALP) are complementary components of the Afghan government’s and the Afghan National Army (ANA) Special Operations Command’s counterinsurgency strategy.395 According to DOD, team assessments and survey data suggest that gains in governance remain steady once districts transition from coalition forces to Afghan government control.396 ALP are currently serving in 116 districts across 29 provinces. By this fall, all ALP districts will have transitioned to complete Afghan government control.397 U.S. Capacity-Building Programs for Public Administration Initiative to Promote Afghan Civil Society USAID’s Initiative to Promote Afghan Civil Society (I-PACS) encourages development of a politically active civil society in Afghanistan.398 The World Bank defines civil society as “the wide array of non-governmental and not-for-profit organizations that have a presence in public life, expressing the interests and values of their members or others, based on ethical, cultural, political, scientific, religious, or philanthropic considerations.”399 Through the program, USAID provides technical assistance, capacity REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 127 Nahr-e Saraj district Governor Mohammed Fahim speaking at a shura event urging the people to take ownership of their village and to ensure its peace and stability. (DOD photo) GOVERNANCE building, and grants to civil society organizations nationwide.400 According to USAID, I-PACS proposed 33 amendments to legislation and regulations for civil society organizations with parliament approving 29 amendments.401 USAID reports that I-PACS contributed to the recent signing of the Social Organization Law by President Karzai in September 2013 with 88% adoption of recommended amendments specific to that law.402 According to the International Center for Not-for-Profit Law, the Social Organization Law supersedes the 2002 Law on Social Organizations and expands the civic space in Afghanistan by allowing social organizations to access foreign funding and to conduct advocacy.403 According to USAID, I-PACS has awarded $10.9 million in grants to civil society organizations.404 I-PACS is now in its final quarter of operation and staff attrition is impacting implementation.405 USAID has obligated $45 million with an estimated $38 million expended as of September 30, 2013.406 USAID Performance Based Governance Fund USAID’s Performance Based Governance Fund (PBGF) was focused on building the financial-management capacity of provincial governors’ offices (PGOs).407 The program assessed the PGOs’ capacity on a quarterly basis. Improving PGOs received incentive funding.408 The award for the PBGF ended programmatic activities as of July 31, 2013, with close-out concluded on September 30, 2013. There is no broad programmatic followon for PBGF, although some training and capacity-building functions will be covered by a new program called the Initiative to Strengthen Local Administrations. The total obligated for PBGF to date is $48.89 million, of which $47.93 million has been expended.409 USAID did not provide program metrics or results in response to the SIGAR data request this quarter despite the fact that the PBGF is now being concluded. USAID’s Office of Inspector General (OIG) previously reported in October 2012 that the PBGF plan contained no baseline values and only one target value for its 103 performance indicators, had too many indicators to be useful, and that the intended results were not clear or universally understood.410 USAID OIG also noted that the program spent the majority of its funds (51%) on vehicles and equipment for the PGOs.411 USAID’s RAMP-UP and Kabul City Initiative USAID’s Regional Afghan Municipalities Program for Urban Populations (RAMP-UP) and the Kabul City Initiative (KCI) are intended to help municipal governments in Kabul and other urban centers increase capacity of municipal officials, improve delivery of municipal services, support economic growth initiatives, and raise revenues.412 As of September 30, 2013, USAID had obligated $271 million for RAMP-UP and $44.6 million for KCI, of which $185.9 million and $39.7 million had been expended, respectively.413 According to USAID, program uncertainty and funding cuts are no 128 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION GOVERNANCE longer an issue because new budgets, scopes of work, and periods of performance have been negotiated and finalized for all municipal programs.414 The RAMP-UP projects were extended to the end of March 2014 with USAID planning for a follow-on program, the Strengthening Hubs for Afghanistan Resilience (SHAHAR).415 USAID plans to concentrate its SHAHAR resources in up to 16 small-to-medium provincial capitals where it hopes to make the most difference.416 USAID reports that the RAMP-UP East program recently selected 19 small-scale projects to be built through the municipal incentive fund.417 Projects include six parks, five solar energy projects, and three trash bin projects.418 Although the municipalities are supposed to share the cost at 30.8% on average, USAID notes that many have delayed making their cost or in-kind contributions to municipal incentive projects. However, USAID and RAMP-UP discussions with mayors and the IDLG/General Directorate of Municipality have reportedly resolved these challenges and allowed the projects to go forward.419 USAID’s Support to Sub-National Governance Institutions USAID’s Support to the Sub-National Governance Structure (SNG) project aimed to develop the capacity of Afghanistan’s 32 provincial councils and provide technical assistance to the IDLG.420 A USAID-commissioned performance evaluation found that although the SNG project appeared relatively cost-effective as compared to similar projects implemented by other donors, the project had limited ability to report on project results.421 For example, the implementing partner registered 82 site visit reports by provincial council members (which would be less than one site visit per year for each of the provinces) even though provincial council members claimed to have conducted more frequent site visits that were funded by SNG.422 The evaluation found that SNG was unable to deliver performance indicator information because data were too general to ascertain results.423 The evaluation concluded that provincial councils appear firmly established across Afghanistan but that the limited authority of the councils undercuts their effectiveness.424 The project ended on September 30, 2013.425 USAID’s Afghanistan Media Development and Empowerment Project The Afghanistan Media Development and Empowerment Project (AMDEP) is designed to strengthen the capacity of independent media outlets by promoting greater professionalism within and among media institutions in Afghanistan.426 In addition to other partners, AMDEP supports Nai Supporting Open Media in Afghanistan (NAI), the leading media advocacy and training organization in Afghanistan.427 During the quarter, NAI voiced its opposition to long government delays in passing the draft Access to Information Law, and advocated for expediency.428 The Access REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 129 GOVERNANCE to Information Law outlines the rights of Afghan citizens and organizations to access information about the government as detailed in Article 50 of the Afghanistan Constitution.429 NAI also joined other media organizations in asking parliament to revise three articles of the Media Law that they argue would curtail the freedom of the press.430 USAID has obligated $31.8 million for AMDEP, of which $30.2 million has been spent.431 JUDICIAL REFORM AND RULE OF LAW Based on information received from the Supreme Court of Afghanistan and the Afghan Attorney General’s Office, all districts now have prosecutors assigned (down from five without a prosecutor in 2012). However, the prosecutors for the 51 most insecure districts work from their assigned provincial centers, which may be outside of those districts. All districts now have a judge assigned and functioning courts (down from 33 without a judge in 2012). As required by Presidential Decree 45, the Supreme Court stated that as of March 2013, it had functioning courts in each district of Afghanistan. As no new judges had been hired, the Court thinned staffing in previously served areas to provide functioning courts. According to DOD, the Attorney General’s Office will need to deploy prosecutors to underserved districts to allow for functioning criminal trials since many remain outside their assigned districts.432 Supreme Court Under the Afghan constitution, Supreme Court judges serve set terms. According to State, four Supreme Court justices with expired terms are still serving.433 During this quarter, one nominee was introduced to the lower house to replace a justice whose term expired in 2010.434 The nominee received a vote of confidence from legislators. Several members of parliament requested during the nomination that President Karzai introduce a nominee for chief justice; the sitting incumbent’s term has expired.435 State considers the final and binding conviction of Haji Lal Jan, an important drug-trafficker with ties to the insurgency, as a significant case before the Supreme Court this quarter.436 Criminal Procedure Code The lower house of the National Assembly passed the updated Criminal Procedure Code (CPC) in early June 2013, the State Department said. The upper house has yet to act on the draft CPC passed by the lower house.437 The Afghan government had pledged at the end of the Kabul Conference in July 2010 to enact its draft CPC.438 130 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION GOVERNANCE Taliban Justice UNAMA observed an increase in judicial punishments carried out by insurgent elements in the first six months of 2013. The majority involved insurgents executing civilians accused of spying for the Afghan government.439 Insurgent judicial structures were found to be imposed on some communities by force through physical removal of suspects, implementation of decisions, threats, intimidation, and harassment. In other instances, however, communities appeared to use these structures rather than official legal mechanisms and referred cases to the parallel “court.”440 Insurgent judicial punishments included beheading a civilian contractor supplying Afghan National Border Police in Kunar Province, killing an international non-governmental staff member, and abducting and killing a civilian accused of affiliation with the National Directorate for Security.441 U.S. Justice Sector Support In July 2013, SIGAR alerted the Secretary of State to deficiencies related to the award of the Afghanistan Justice Training Transition Program (JTTP) which is being administered by State’s Bureau of International Narcotics and Law Enforcement Affairs (INL).442 State responded to the SIGAR alert letter this quarter and the full SIGAR audit—with responses to agency comments— should be released in the next quarter.443 INL has agreed to fund the JTTP, at $47 million over 30 months with a program goal of transitioning from an external donor-led program to an in-house continuing legal education program administered by the Afghan government. JTTP builds upon capacity building and training programs under the Justice Sector Support Program, a program for which State has obligated $212.7 million as of December 30, 2012.444 JTTP provides regional training on a range of criminal-justice topics, including anticorruption, to justice sector officials, including judges, prosecutors, defense attorneys, and criminal investigators.445 INL has also provided $12.41 million since December 2010 to support the National Justice Sector Strategy (NJSS) and plans to provide an additional $5.64 million to continue funding of NJSS until April 2014. INL’s contribution to the International Development Law Organization, an international organization that implements both JTTP and NJSS, totals $65 million.446 INL has cited The Asia Foundation’s 2012 survey which found that, for the first time, more Afghans were using the formal justice system than the informal one as evidence that INL’s justice-sector programs were working.447 DOD’s rule of law efforts to date have included field support to civilian teams; training for judges, prosecutors, defense counsels, and corrections officials; providing infrastructure for courts and prisons; and training Ministry of Interior (MOI) police forces in aspects of law enforcement. However, the DOD mission is evolving as the international presence draws down. USFOR-A’s Rule of Law Field Force-Afghanistan (ROLFF-A) officially REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 131 GOVERNANCE SIGAR INSPECTION REPORT During this quarter, SIGAR published an inspection report on the construction of the courthouse as part of the Justice Center in Parwan (JCIP). SIGAR found that construction of the JCIP courthouse has not been completed and the workmanship of the construction done to date is poor. For more information, see Section 2, page 40. closed its field mission on August 31, 2013, and the NATO Rule of Law Field Support Mission-Afghanistan was scheduled to shut down on September 30, 2013. ROLFF-A’s current mission is focused on supporting the Justice Center in Parwan, where staff assist civilian agencies to build the capacity of Afghan authorities to prosecute insurgents and terrorists under Afghan law. ROLFF-A will cease operations on February 1, 2014.448 Rule of Law Stabilization (Formal and Informal) USAID administers two Rule of Law Stabilization programs: one focused on the informal sector, the other on the formal sector. As of September 30, 2013, USAID has obligated $18.9 million for the Rule of Law StabilizationFormal (RLS-F) and $15.7 million for the Rule of Law Stabilization-Informal (RLS-I), with $10.2 million and $9.6 million disbursed respectively.449 According to USAID, RLS‐F addresses the needs of the formal justice sector by developing the skills of four audiences: the judiciary, court administrators, Law and Sharia Faculties at universities, and the public-outreach departments at the Ministry of Justice and the Supreme Court. RLS‐F most recently sponsored a joint training program on anticorruption. RLS‐F continues to support a two‐year orientation and skills-development program for future judges. RLS‐F also works with the Law and Sharia Departments at universities across Afghanistan to promote a cadre of legal professionals for the next generation. USAID says progress has been made to establish a unified national curriculum for legal education and provide practical learning experiences for students, like moot court competitions and legal clinics. Finally, RLS‐F educates Afghans on laws and rights so that they know how to access the courts.450 According to USAID, RLS‐I addresses the needs of the informal justice sector by fostering linkages between the formal and traditional justice systems, and by aligning traditional justice with the Afghan constitution. RLS‐I has enhanced the dispute-resolution skills of community leaders in 48 districts in south, east, and north Afghanistan. RLS‐I has trained 20,000 persons (45% women) in key legal principles; established six community cultural centers and conducted outreach to increase citizens’ understanding of rights; facilitated registration of close to 700 traditional justice decisions with district officials and local district courts; and secured 2,000 pledges from elders to follow best practices in traditional dispute resolution and refrain from using customs that violate Afghan law and international human rights. The program has also established female elders groups, which according to USAID, have a unique capacity to address cases that affect women and have resolved 700 cases.451 Counternarcotics Justice Center INL has expended approximately $17.5 million to support operations and maintenance costs of the Counternarcotics Justice Center (CNJC) in Kabul 132 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION GOVERNANCE since FY 2008. Since 2005, INL has also transferred approximately $18.8 million to the U.S. Department of Justice (DOJ) for programs that include mentoring, training, and advisory services to the police, prosecutors, and judges of the Criminal Justice Task Force who work at the CNJC. DOJ advisors also work on anticorruption and major crimes programs. INL funded the original construction of the CNJC facility, as well as various infrastructure upgrades totaling about $16 million.452 According to INL, the investigators, prosecutors, and judges at the CNJC continue to pursue their cases aggressively and effectively. INL notes that CNJC prosecutors are able to build effective and compelling criminal cases through careful examination of the sufficiency of evidence for potential cases. According to INL, for the Afghan solar year 1391 (roughly March 2012–March 2013), the conviction rate at the CNJC was 99.7% in the Primary Court, with 21 Afghan government officials convicted of drug-related crimes.453 In August, the Nimroz Provincial Chief of Police, General Mohammad Kabir Andarabi, was arrested for large-scale heroin and opium trafficking, and transferred to the CNJC. Although there may have been some political pressure to release him, CNJC staff continued to detain Andarabi and pursue the case on its merits, State said.454 On September 29, the CNJC Primary Court issued a verdict of guilty on one count of drug-related corruption and sentenced General Andarabi to ten years in prison.455 The transition of the CNJC continues with INL reporting an emerging consensus among international and Afghan stakeholders that the MOI should be responsible for its operations and maintenance.456 Afghan Correctional System The inmate population of Afghanistan’s prisons has continued to increase at a rate of at least 17% annually over the past five years, leading to overcrowding, according to State. State attributed the growth in prison population to a system-wide improvement in the capacity of the Afghan justice sector coupled with a lack of understanding of and reluctance by the justice sector to utilize alternatives to incarceration.457 According to the United Nations Office on Drugs and Crime (UNODC), fines are often imposed in addition to—as opposed to in lieu of—incarceration sentences. Moreover, although Afghan law states that non-payment of fines is not a sufficient reason to incarcerate prisoners beyond their sentenced term, this still happens sometimes in Afghanistan.458 UNODC has conveyed to INL that prosecutors and judges are concerned that they will be perceived as corrupt if they permit fines to substitute for incarceration. INL will continue to train prosecutors on the legality of fines as an alternative to incarceration and to encourage the Afghan government to more significantly acknowledge their legitimacy.459 The INL Corrections System Support Program (CSSP) is working with the Afghan General REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 133 GOVERNANCE Directorate of Prisons and Detention Centers (GDPDC) to compile data on the extent of the overcrowding problem.460 Despite reports by UNAMA in 2011 and 2012 documenting widespread torture and abuse in Afghan police and National Directorate of Security detention facilities, State said it is not aware of any credible allegations of systemic torture or mistreatment within GDPDC facilities.461 Juveniles are incarcerated by the Juvenile Rehabilitation Directorate (JRD), which is a separate Afghan government entity under the Ministry of Justice. According to State, JRD lacks the resources and capacity of the GDPDC, with most juvenile facilities being rented properties that are unsuitable as rehabilitation centers.462 The GDPDC and JRD continue to implement rehabilitation programs. Since last quarter, GDPDC worked to increase participation in industries programs like carpet weaving and bunk-bed construction at Pol-i-Charkhi, Afghanistan’s central prison located outside Kabul. Prison leadership at Pol-i-Charkhi began housing prisoners working on industries programs in a separate cell block to expedite their movement to the industries building. The Pol-i-Charkhi prison commander has committed to establishing literacy classes specifically for prisoners enrolled in industries and vocational programs.463 At the Nangarhar, Balkh, and Kunduz provincial prisons, female inmates are enrolled in sewing programs, producing prisoner uniforms as well other garments for sale in the local economy. INL supports these efforts primarily through the CSSP, which provides advisors—including those with expertise particular to prison industries and gender and juvenile issues—at both GDPDC and JRD headquarters, as well as at correctional facilities in five provinces.464 According to State, INL possesses the financial and workforce resources to monitor contracts, grants, and construction projects throughout Afghanistan. State acknowledges that a lack of security periodically makes it difficult for INL to reach locations and because of this, State said INL is developing contingency plans and weighing site accessibility when making decisions on future efforts.465 For example, INL is investigating the viability of using third-party contractors to supplement direct oversight of infrastructure projects by INL’s American and Afghan engineering staff.466 ANTICORRUPTION This quarter, a SIGAR report on U.S. anticorruption efforts concluded that these activities are not guided by a comprehensive U.S. strategy that defines clear goals and objectives to strengthen the Afghan government’s capability to combat corruption and increase accountability. SIGAR found that a draft 2010 U.S. anticorruption strategy was never finalized, and that in the absence of an anticorruption strategy, agencies are depending on 134 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION GOVERNANCE the Tokyo Mutual Accountability Framework and the U.S. Civil-Military Strategic Framework for Afghanistan for guidance. These documents lack specific goals and objectives against which the U.S. government can measure its progress.467 Moreover, according to State, the Afghan government has made little progress in meeting the July 2012 Tokyo Conference anticorruption benchmarks.468 In July 2012, President Karzai issued Presidential Decree 45, which includes 38 anticorruption articles. State concurs with the Independent Joint Anti-Corruption Monitoring and Evaluation Committee’s (MEC) overall assessment that there has been mixed progress with some positive achievements and some dismal failures.469 The MEC is an independent, joint Afghan/ international entity established to monitor and evaluate national and international efforts to fight corruption in Afghanistan. It reports semi-annually to the Afghan public, parliament, president, and the international community.470 State notes that anticorruption progress has been made in two areas: drafting a new procurement law and achieving greater transparency in publishing Afghan government contracts. However, issues remain regarding the Kabul Bank scandal, civil service appointments, and articles related to the Afghan Attorney General’s Office (AGO).471 According to State, the JCMB, established in 2006 after the international London Conference to oversee implementation of the “Afghanistan Compact” and to align Afghan and international-community efforts to meet objectives agreed to in the compact, had not endorsed the National Transparency and Accountability Program (NTAP).472 The NTAP is Afghanistan’s second National Priority Program within the governancedevelopment cluster. Afghanistan, with the support of the international community has established NPPs to guide reconstruction assistance. The NTAP has failed to satisfactorily meet three “red lines” established by the international community. The red lines identified by State include unverified asset declarations by senior Afghan government officials, portions of the Access to Information Law draft that civil society finds problematic, and U.S. government concerns with amendments to the National Audit Law. According to USAID, one of the red lines related to procedures for construction permits in Kabul municipality appears largely to have been met late in the quarter though USAID acknowledges implementation remains untested.473 State indicated that the NTAP may be considered at the next JCMB meeting scheduled for early 2014; however, the Afghan government is reportedly considering giving up on the NTAP.474 As of September 30, 2013, the DOJ was not aware of any corruption charges filed against high-level officials during this quarter.475 The DOJ has no way to track prosecution of lower-level Afghan government officials; however, international mentors believe that the Anti Corruption Unit (ACU) selectively prosecutes cases with a bias toward those without political connections or money.476 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 135 SIGAR SPECIAL REPORT A SIGAR special report this quarter found that the United States lacks a strategic plan and mechanisms to track progress in fighting corruption in Afghanistan. For more information, see Section 2, page 43. GOVERNANCE Afghan Attorney General’s Office The Attorney General’s Office (AGO) was directed by President Karzai in July 2012 to assess and identify corrupt personnel within the AGO and report to the office of the president with its findings in six months. According to State, the AGO appears not to have met this requirement, as the international community is not aware of a report being prepared or presented. The AGO was also directed to establish a unit to address corruption within the AGO within 60 days of the decree.477 The AGO only recently established a surveillance department with a team of 20 prosecutors for this task.478 According to State, this unit is minimally supported and the cases being pursued have focused on allegations of lower-level police corruption rather than on the primary intended purpose of investigating government prosecutors and attorneys.479 State reports that information-sharing between the AGO’s ACU and the Military Anti-Corruption Unit (MACU) has declined during the quarter. State assesses morale in these two AGO units to be very low with prosecutors reluctant to speak openly with international mentors for fear of retribution.480 State views the lack of candor in discussions between international mentors and AGO personnel as making it highly unlikely that the DOJ will become aware of high-level AGO interference in corruption cases.481 According to State, although the ACU has demonstrated capacity to prosecute minor corruption cases, it remains ineffective against higher-level corruption due to a lack of will among the AGO and Afghan government leadership. High-level corruption continues and political will remains the major impediment to reform.482 Despite this, State believes that there is value in continuing DOJ and INL engagement with the ACU and MACU. These engagements are meant to help prepare for prosecutions should the political will change and to demonstrate continued international-community interest in the activities of the ACU, MACU, and AGO.483 Special Cases Committee As of August 2013, the Special Cases Committee (SCC), an elite sub-unit of the ACU and MACU, is officially defunct.484 The Afghan Attorney General announced that the SCC had completed its review of cases and had therefore fulfilled its purpose. The DOJ proposed that the SCC be formalized into a permanent unit to pursue the most politically challenging cases; however, the Attorney General rejected the proposal.485 According to USAID, the international community had viewed the SCC as a last-chance opportunity for the Attorney General to demonstrate sincerity in combating high-level corruption and doubted the AGO’s assertion that each case in the SCC’s initial portfolio was satisfactorily resolved.486 136 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION GOVERNANCE Major Crimes Task Force The Major Crimes Task Force (MCTF) was recently designated the investigatory arm for a new AGO internal control and monitoring unit. However, high-level corruption cases developed by the MCTF continue to be stifled by the AGO.487 Federal Bureau of Investigation (FBI) mentors disengaged from the MCTF in February 2013, and were succeeded by personnel from the Combined Joint Interagency Task Force–Afghanistan (CJIATF-A). State believes the change in mentors has not materially changed MCTF effectiveness.488 Independent Joint Anti-Corruption Monitoring and Evaluation Committee The Independent Joint Anti-Corruption Monitoring and Evaluation Committee (MEC) issued their latest six-month report on September 28, 2013. The MEC previously raised concerns regarding the United Nations High Commissioner for Refugees (UNHCR) and the Ministry of Refugees and Repatriations (MORR). The MEC found that significant steps have been taken by both institutions—with the support of UN leadership—to address MEC’s concerns.489 The concerns are now the subject of a financial audit by the UN internal-oversight division and a promised audit of the MORR by the Supreme Audit Office (SAO). In the meantime, the UNHCR has discontinued rental payments for a MORR sub-office in Kabul, closed secondary accounts, and suspended suspicious transfers of funds.490 The MEC also raised concerns about nepotism and fraud affecting the Afghan government Civilian Technical Assistance Programme (CTAP). The MEC recommended increasing transparency of the CTAP; however, the MEC has not received an official response from the Ministry of Finance and the SAO has declined to perform an audit due to a lack of capacity.491 The U.S. government has assisted the MEC by providing political support and helping to locate donor funding. USAID’s Assistance to Afghanistan’s Anticorruption Authority (4A Project) also provides technical support to the MEC Technical Secretariat. USAID is moving toward providing direct financial support to the MEC’s operational budget.492 High Office of Oversight and Anticorruption State and USAID agree that the High Office of Oversight and Anticorruption (HOO) remains dysfunctional, ineffective, and politicized.493 USAID’s 4A Project reports that the HOO has sufficient technical capacity to function as an effective anticorruption institution.494 Although HOO may have the technical skill, both agencies agree it lacks the political will to be effective.495 The work of USAID’s 4A Project with the HOO remains limited to providing assistance to its Human Resources Directorate per the HOO’s request. According to USAID, the HOO refuses to share information with the 4A Project since the level of funding it provided over the last two years is no REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 137 GOVERNANCE longer available.496 USAID’s 4A Project assisted the HOO this quarter in revising the terms of reference for various HOO positions; reviewing and revising a draft policy on Tobacco, Drugs, and Narcotics Free Workplace; and piloting a digital data-entry system.497 USAID has obligated $9.4 million for the 4A Project with $8.3 million disbursed as of September 30, 2013.498 Corruption in Afghan Security Forces U.S. implementing agencies and international organizations say anticorruption efforts have had mixed results in the Afghan National Security Forces (ANSF). According to DOD, the Ministry of Defense (MOD) is making a serious effort to increase transparency and accountability of the ANA, while anticorruption efforts have slowed at the MOI, which is responsible for the ANP.499 This view was echoed this quarter by Transparency International in a new report that assesses transparency, accountability, and countercorruption in the ANSF, MOD, and MOI. The report observed the MOD was making good progress, “propelled by strong political commitment over several years at Ministerial Level,” but that the “MOI appears to be in an opposite situation, with a very difficult political environment and no common direction” on addressing corruption.500 DOD reported that the MOD has begun to embed, rather than only discuss, Transparency and Accountability Committees (TAC). There are currently 15 TACs, located in each corps of the ANA. The MOI acting minister reportedly has made countering corruption a priority and has removed deputies he believed were corrupt. The MOI has, however, reduced its inspector general staff and has not reinstated inspectors general at the provincial level.501 CJIATF-Shafafiyat and Task Force 2010 Combined Joint Interagency Task Force (CJIATF)-Shafafiyat, an ISAF interagency group created in 2010 to coordinate anticorruption efforts, has been encouraging ISAF and Afghan leaders to take corruption and organized crime into account when planning for transition.502 During this quarter, CJIATF-Shafafiyat was transferred to the Combined Security Transition Command-Afghanistan (CSTC-A) to better support MOI and MOD ministerial development.503 CJIATF-Shafafiyat continues its efforts to shape and influence MOI and MOD ministerial development by focusing on the Inspectors General, TACs, and in developing processes to monitor corruption. CJIATF relies on mentoring and advisor engagements for influence and is supporting development of a financial levers strategy to affect significant behavior changes by the MOI and MOD.504 On July 1, 2013, Task Force 2010 (TF 2010) assumed responsibility as the contracting officer representative for the Vendor Vetting Reachback Cell (VVRC) contract.505 The VVRC is responsible for vetting all non-U.S. contractors bidding for contracts equal to or above $100,000 in the Afghanistan theater of operations. The VVRC creates an analytical report and classifies 138 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION GOVERNANCE contractors into one of four force protection risk levels: moderate, significant, high, or extremely high. High or extremely high risk levels generally result in the contractor being excluded from further consideration for new contract awards.506 TF 2010 now serves as the as the central point of contact for past, current, and potential vendor/contractor assessments and ratings.507 Corruption in Customs Collections In June 2013, the Afghan Council of Ministers decided not to authorize the charter of the proposed Presidential Executive Commission on Borders, Airports, and Customs Depots (PEC), an executive-level Afghan interagency body tasked with tackling customs-sector corruption.508 The PEC was originally established in August 2011 by President Karzai; however, as of July 2012 the MEC assessed that the commission had not yet been implemented.509 In February 2013, the Minister of Finance had signed the charter of the PEC and it was State’s view that the PEC could significantly improve the transparency and accountability of the sector.510 The Ministry of Finance indicated that the issue of the PEC would not likely be raised again now that the Council of Ministers has withdrawn support.511 The Afghan government also continued to expand implementation of the Borders Management Model project. The project seeks to clarify roles and responsibilities at the borders to reduce the number of extraneous government agencies involved at border crossings. It was operating at six border crossings at the end of the quarter. State noted that the expansion of this project will be an IMF benchmark for future donor assistance.512 HUMAN RIGHTS Gender Equity This quarter, USAID announced plans to commit $200 million for the Promoting Gender Equity in National Priority Programs (PROMOTE) program designed to increase education, training, and promotion of women in Afghanistan’s government, business sector, and civil society. The USAID Administrator called the initiative “the largest single investment USAID has ever made in its history in the future of women and girls anywhere in the world.” USAID is seeking to persuade other donors to contribute the same amount, for a total package of $416 million over five years. The funds are to be released as the Afghan government meets its commitments to reforms per the 2012 Tokyo conference.513 According to USAID, PROMOTE is not expected to begin until mid-2014, and the program is in no way dependent on the U.S. troop presence.514 USAID also announced the Ministry of Women’s Affairs (MOWA) Organizational Restructuring and Empowerment Project (MORE), a three-year $15 million project aimed at strengthening MOWA’s capacity to REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 139 GOVERNANCE A U.S. civilian representative, at head of table, hosts an Afghan female shura at Parwan Province government offices on women's participation in presidential and provincial council elections in 2014. (DOD photo) advance its policy mandate, gender equality, and women’s empowerment in Afghanistan. MORE seeks to facilitate organizational and strategic reform at MOWA through specific courses on policy leadership and advocacy, strategic planning, human resource management, gender mainstreaming, financial management, monitoring and evaluation, and public outreach. The project intends to strengthen ties between MOWA and other Afghan ministries to incorporate gender mainstreaming in their own policy development in line with National Action Plan for Women of Afghanistan (NAPWA).515 USAID is launching these programs at a time when there is increasing concern that the gains women have made over the last decade are being eroded. The UNHCR noted during a visit to Afghanistan that there is widespread concern among civil-society groups that the momentum on advancing women’s rights had halted and may be regressing.516 The revised U.S. Civil-Military Strategic Framework states that advancing the role of women in society will remain an important focus of the U.S. government for some time. The framework states that women must be able to participate in society and contribute fully to it, which requires that their social, political, and economic rights be protected and promoted. According to the framework, the U.S. government will support policies and programs that continue to advance the essential role of women in society, including increased access for women to justice, health care, education, and economic and political leadership opportunities. U.S. policy and programs will seek to engage all aspects of the Afghan population on the positive impacts of women’s development and empowerment. In particular, the framework states that the USG will continue to support the Afghan government’s implementation of the Elimination of Violence Against Women law (EVAW) and the NAPWA.517 140 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION GOVERNANCE The Afghanistan Research and Evaluation Unit issued a report on women’s economic empowerment that found women serve as a driver of change in urban areas and select rural pockets. However, the report also found that available data showed there has been no substantive surge in women’s economic participation since 2002. The report attributed this lack of progress in part to two phenomena. First, most women who work occupy jobs at the lower end of value chains. Second, women continue to lack access to many resources that could enhance their skills and income. The research also found that women’s economic participation is hugely dependent upon a community’s perspective on female participation in development projects and the development of strong links to markets.518 The International Crisis Group (ICG) issued a report on women and conflict in Afghanistan and found that despite the considerable improvement in women’s legal status, there is already a reversal of progress in women’s empowerment.519 The report traces the progress of women’s empowerment from the 1978 communist coup to the present day and offers some parallels. According to ICG, historical examples of women’s empowerment have included appointment to senior government jobs including ministerial posts in the mid- to late-1970s; the promise of women’s equal rights, compulsory education and protection from forced, arranged, and child marriage by the communist government; and the success of women filling 70% of civil servant teacher positions and over 40% of doctor positions by the mid-1990s.520 The ICG finds current examples of women’s empowerment include the appointment of women to senior government positions including provincial governor and heads of ministries; the constitutionally mandated equal rights of men and women; and the success of women filling 31% of school teacher positions.521 The report notes several challenges that remain including weak application of legal safeguards, the limited capacity of the MOWA to influence policy, and threats from the insurgency.522 The ICG concludes that the gains of women are at risk and advocates for constitutionally-guaranteed gender equality and adherence to laws protecting and empowering women as a prerequisite for peace negotiations.523 The United States and its international allies have encouraged the Afghan government to recruit more women in the security forces. The British aid agency Oxfam published a report this quarter arguing that recruiting more women into the police is critical for the safety of Afghan women and national stability. The report noted that while Afghanistan is often described as one of the most dangerous countries in the world for women, it has only 1,551 female police officers, or one for every 10,000 women.524 In September 2013, one of Afghanistan’s highest ranking policewomen was assassinated. Lieutenant Negar was shot by motorcycle gunmen in Helmand Province on September 16. Negar, who like many Afghans used only one name, had replaced Helmand’s former senior female commanding officer, Islam Bibi, who had been gunned down in July 2013.525 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 141 GOVERNANCE Refugees and Internal Displacement The UNHCR Solutions Strategy 2013 report noted a 40% decrease in Afghan refugee returnees as of September 2013 as compared to the same period in 2012.526 UNHCR also issued updated eligibility guidelines for asylum-seekers from Afghanistan and noted a rise in the number of conflict-related internally displaced persons (IDP) to 590,184 with 113,241 newly displaced in 2013.527 UNHCR notes, however, that official figures for the number of IDPs are widely considered to underrepresent the scale of the displacement problem in Afghanistan as they exclude those dispersed in urban and semi-urban areas, as well as those displaced to rural locations in areas inaccessible to humanitarian actors.528 UNHCR claims to have direct access to approximately half of Afghanistan’s territory with indirect access to approximately 75% of the territory through a combination of local NGOs, authorities, and community networks.529 Human Rights Watch reported that the Iranian government has revealed a new plan in which undocumented Afghans and holders of temporary visas, whose visas expired on September 6, 2013, would have to leave Iran or face imprisonment, fines, and/or expulsion.530 According to State, Afghan government officials are continuing to work with their Iranian counterparts to address this visa issue.531 According to Human Rights Watch, only 800,000 of the 3 million Afghans currently estimated as living in Iran have legal status as refugees. Another 400,000 to 600,000 Afghans hold temporary visas, while the rest are undocumented.532 The Government of Pakistan approved a National Policy on Management and Repatriation of Afghan Refugees on July 25, 2013. The Department of State views the policy as a positive step toward a more progressive, longterm policy for managing Afghan refugees. The policy is broadly aligned with the Solutions Strategy for Afghan Refugees to create conditions conducive to voluntary repatriation, and support refugee-hosting communities, and assist resettlement in third countries. UNHCR noted that the policy encourages developing a new refugee law, and expressed optimism that Pakistan could move forward with more concrete, alternative-stay arrangements for the residual population.533 The Pakistan government appointed a ministerial committee to oversee implementation of the policy. The ministerial committee is tasked with adopting policy and procedures to ensure documentation and registration of Afghan refugees and unregistered Afghan migrants residing in Pakistan; ensuring expeditious voluntary returns to Afghanistan; engaging the international community and the Afghan government to undertake efforts for sustainable reintegration inside Afghanistan; devising procedures and mechanisms for effective border control and management; reaching consensus on a national refugee law; minimizing the negative impact of Afghan refugees on Pakistan‘s socio-economic and security environment; 142 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION GOVERNANCE and working with the international community and Afghan government to improve sustainable reintegration.534 Human Trafficking According to State, the Afghan government must increase its efforts to implement its plan to prevent human trafficking. State notes that although the Afghan High Commission Against Trafficking in Persons has continued its quarterly meetings, participation is declining.535 Presently, State is funding coordination activities between the Afghan government and civil society organizations regarding human trafficking as well as conducting research to identify trafficking hot spots and the nature and magnitude of the problem in four regions of Afghanistan.536 State also plans to award a carpet-weaving program to provide assistance to rescued trafficking victims.537 In early FY 2014, State also hopes to complete a grant that will work to increase the capacity of Afghanistan’s police, prosecutors, and judges to mount an effective anti-trafficking program.538 Afghanistan Independent Human Rights Commission The top UN human rights official warned this quarter that the Afghanistan Independent Human Rights Commission (AIHRC) could lose its international “A” status­­ —which signifies compliance with the Paris Principles—as recognized by the International Coordinating Committee (ICC) due to the appointments President Karzai made to the commission last quarter.539 The ICC is conducting its five-year review of the AIHRC to determine if it conforms to the Paris Principles accepted by the Afghan government.540 The Paris Principles are a set of international standards which frame and guide statefunded, independent National Human Rights Institutions (NHRI) and were adopted by the UN in 1993. According to Office of the High Commissioner for Human Rights (OHCHR), NHRIs comply with the Principles which identify their human rights objectives and provide for their independence, broad human rights mandate, adequate funding, and an inclusive and transparent selection and appointment process. The Principles are broadly accepted as the test of an institution’s legitimacy and credibility.541 State anticipates an initial status recommendation from the ICC to either retain the A rating or downgrade to a B status. The AIHRC would then have one year to respond to the recommendations before the ICC ranking is finalized.542 Karzai appointed five new commissioners to the nine-member commission in June 2013. None were on a list proposed by leading human rights and civic organizations.543 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 143 ECONOMIC AND SOCIAL DEVELOPMENT ECONOMIC CONTENTS Key Events This Quarter 145 Economic Profile 146 Extended Credit Facility Arrangement 148 U.S. Economic Support Strategy 149 Banking and Finance 151 Development of Natural Resources 155 Agriculture 160 Essential Services/Development 163 Transportation 169 Education 170 Health 173 Private Sector Development 144 176 ECONOMIC AND SOCIAL DEVELOPMENT ECONOMIC AND SOCIAL DEVELOPMENT As of September 30, 2013, the U.S. government has provided more than $24.7 billion to support governance and economic development in Afghanistan. Most of the appropriated funds flowed into four major programs and accounts, as shown in Table 3.9. Of the $22 billion appropriated for these funds, approximately $18 billion had been obligated and $14 billion disbursed as of September 30, 2013. TABLE 3.9 CUMULATIVE APPROPRIATIONS FOR AFGHANISTAN DEVELOPMENT, AS OF SEPTEMBER 30, 2013 ($ BILLIONS) REPORT TO THE UNITED STATES CONGRESS I 145 DOD $3.6 DOD $0.7 AIF OCTOBER 30, 2013 USAID TFBSO Three developments this quarter will affect the U.S. effort to promote economic development in Afghanistan: the United States released a revised Civil-Military Strategic Framework for Afghanistan, the Independent Joint Anti-Corruption Monitoring and Evaluation Committee (MEC) released a new assessment, and the International Monetary Fund (IMF) continued to delay a review of its Extended Credit Facility (ECF) Arrangement with Afghanistan. The Civil-Military Strategic Framework for Afghanistan for 2015–2024 replaces the October 2012 version. With a heightened focus on transition, it aims to guide U.S. government efforts for achieving U.S. national goals in Afghanistan, and serves to facilitate U.S. civilian and military cooperation.544 The MEC, which was established in 2010 to develop anticorruption recommendations and benchmarks, as well as monitor and evaluate Afghan and international community anticorruption efforts, issued its fourth six-month report assessing Afghan and international donor progress in implementing the MEC’s anticorruption recommendations. The MEC also completed its tenth mission visit to Afghanistan, where it found, in part, that Afghanistan has not made serious efforts to track and seize money stolen from Kabul Bank or to recover money from other debtors.545 Afghanistan made no progress this quarter in implementing economic and financial reforms. The IMF’s ECF Arrangement review and disbursement remain delayed due to insufficient Afghan progress toward meeting the agreement’s quantitative and legislative requirements.546 The Afghan government has not held any more people accountable for the Kabul Bank scandal, nor has it made any additional cash recoveries this quarter.547 The Managed by ESF CERP KEY EVENTS THIS QUARTER Name STATE/DOD Total Appropriated $16.7 $1.0 $22.0 Notes: ESF = Economic Support Fund; CERP = Commander’s Emergency Response Program; TFBSO = Task Force for Business and Stability Operations; AIF = Afghanistan Infrastructure Fund. Sources: DOD, responses to SIGAR data call, 10/23/2013 and 10/1/2013; USAID, response to SIGAR data call, 10/10/2013; State, response to SIGAR data call, 6/27/2013; OMB, response to SIGAR data call, 7/19/2013; P.L. 113-6, 3/26/2013. ECONOMIC AND SOCIAL DEVELOPMENT government continues to delay the new mining law, which in turn hinders significant private investment in the mining sector.548 ECONOMIC PROFILE Gross domestic product (GDP): is the value of all final goods and services produced in a country in one year. Gross national product (GNP): is the value of all final goods and services produced in a country in one year (gross domestic product) plus income that residents have received from abroad, minus income claimed by nonresidents. Source: World Bank, “Beyond Economic Growth,” accessed 10/17/2013. Opium production is not calculated in official GDP figures (nearly $19 billion in 2012), although it figures prominently in the economy. Farm-gate price of the opium economy is estimated at the equivalent of 3.3% of GDP by the World Bank and 4% by the UN Office on Drugs and Crime. Higher-priced opium exports are calculated at 7–8% of GDP by the World Bank and 10–11% by the UN. Sources: World Bank, “Afghanistan Partnership: Country Program Snapshot,” p. 3, 8/29/2013; UNODC, “Afghanistan Opium Survey 2012,” pp. 9, 13, 5/2013. This quarter, the IMF, the World Bank, and the Asian Development Bank (ADB) all reported that Afghanistan’s gross domestic product (GDP) growth has slowed considerably from about 11.8 percent in 2012 to an estimated 3–4% for 2013. They attribute the decline in GDP to increasing uncertainty about the economy because of the volatile political and security environment and a contraction in agricultural production.549 With an expected reduction in international aid and spending after 2014, World Bank projections show average real GDP growth declining to 4–6% annually during 2011–2018, with slower growth during the transition years.550 Fueled by international military spending and development assistance Afghanistan’s economy grew an average 9.4% between 2002 and 2012.551 The services sector has been the most important driver of economic growth, with demand buoyed by increased public spending in 2013.552 Non-poppy agriculture remains the second leading contributor to real GDP, typically accounting for between a quarter and a third of GDP, depending on output.553 But production fluctuates with the weather. Good rains in 2012 led to a near-record-breaking wheat and cereal harvest, but this year a moderate rainfall should yield a more conventional harvest.554 Fiscal Sustainability The Afghan government’s revenues declined in FY 2012 at the same time that public spending increased, according to the World Bank. In its latest report the Bank said that public spending increased by about 45% to $3.7 billion in fiscal year (FY) 2012 while revenues decreased.555 The Bank also stated that budget expenditures are expected to continue rising, largely due to spending on security, service delivery, building essential infrastructure, and operations and maintenance.556 Afghanistan’s fiscal sustainability ratio—domestic revenues versus operating expenses—remains one of the lowest in the world, according to the Department of Defense (DOD).557 Recent World Bank calculations show that Afghanistan’s fiscal sustainability ratio declined to 60% in FY 2012 compared to 65% in FY 2011. Low fiscal sustainability ratios limit a country’s ability to pay for discretionary services and are likely to delay its progress to self reliance.558 The Bank describes Afghanistan’s fiscal outlook as subpar and likely to delay its progress to self-reliance.559 Revenue Generation Last year, the Afghan Ministry of Finance (MOF) projected domestic revenue for FY 1392 (December 2012 to December 2013) at $2.4 billion 146 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT FIGURE 3.33 AFGHANISTAN'S DOMESTIC REVENUES COMPARED TO OPERATING BUDGET ($ MILLIONS) $3,500 $3,000 9 Months $2,500 Part Year $2,000 $1,500 $1,000 $500 $0 Fiscal Year 1388 Fiscal Year 1389 Fiscal Year 1390 Domestic Revenues Fiscal Year 1391 Fiscal Year 1392 Operating Budget Notes: Until recently, Afghan fiscal years ran approximately March 21 to March 20 of Gregorian calendar years. FY 1388 corresponds to March 21, 2009, to March 20, 2010, and so on. Nine-month data for fiscal year 1391 reflect a change in the timing of the Afghan fiscal year. FY 1392 (2013) is not over. Sources: MOF, “1388 National Budget,” accessed 7/2/13; MOF, “1389 National Budget,” accessed 7/2/13; MOF, “1390 National Budget,” accessed 7/2/13; MOF, “1391 National Budget,” accessed 7/2/13; MOF, “National Budget Procedures Fiscal Year 1391,” accessed 6/26/13; MOF, “Annual Fiscal Report 1391,” accessed 6/20/2013; MOF, “1392 National Budget,” accessed 7/1/13; MOF, “Monthly Fiscal Bulletin, Month 7,” 8/21/2013, accessed 10/17/2013; Da Afghanistan Bank, "Daily Exchange Rates of Selected Currencies to Afghani," 8/21/2013, accessed 10/23/2013. (calculating the currency exchange rate of 51.6 afghanis (AFN) to $1 in January 2013), an increase of 33% over FY 1391 (March 2012 to December 2012).560 However, in the first seven months of FY 1392, total domestic revenues decreased by 6.3% from the same period in FY 1391, and missed MOF budget targets by 12%.561 Figure 3.33 depicts the disparity between the government’s domestic revenues—derived primarily from taxes and customs duties—and budget operating expenditures from FY 1388 to FY 1392. In its latest report, the World Bank noted that domestic revenues paid for only 40% of Afghanistan’s operating budget and development expenditures in FY 2012; the rest was covered by donor grants.562 According to the World Bank, Afghanistan’s weak revenue performance continues to be caused by the slowdown in economic activity, changes in REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 147 ECONOMIC AND SOCIAL DEVELOPMENT the structure of imports, and from corruption, particularly in customs collections. The Bank estimates that domestic revenues will amount to about 10.1% of GDP in 2013. Afghanistan’s commitments under the Tokyo Mutual Accountability Framework call for it to increase revenues to 15% of GDP by 2016 and 19% by 2025. The Bank warned that the current decline in revenue poses risks to long-term sustainability and to Tokyo Mutual Accountability Framework targets, upon which donor assistance is predicated.563 Trade In its latest analysis, the World Bank found that Afghanistan’s trade deficit is equivalent to 43% of GDP, which was largely offset by foreign aid. This assistance allowed for an overall surplus in Afghanistan’s balance of payments and a record $7.1 billion in international reserves at the end of 2012. Reserves have since declined to $6.3 billion in June 2013.564 Additionally, Afghanistan’s exports declined 5% in 2012 to $2.6 billion, while imports rose 5% to $11.2 billion. Afghanistan has relatively few tradable products, and those are concentrated in a few markets, such as agricultural products. Dry fruits, which typically account for about one third of official exports, declined by 21%, according to the report. Foreign direct investment remained stagnant at 2% of GDP.565 EXTENDED CREDIT FACILITY ARRANGEMENT The Afghan government failed to make sufficient progress on specific banking and financial structural reforms required by the IMF to qualify for the Extended Credit Facility (ECF). The Afghan government has neither submitted an internationally acceptable revised law to parliament to combat money laundering and financing of terrorism, nor met the quantitative macroeconomic targets set forth under the ECF Arrangement. For example, Afghanistan failed to achieve agreedto revenue targets for SY 1391 and SY 1392 (quarters 1 and 2).566 Afghanistan’s failure to meet IMF targets once again delayed IMF Board reviews and accompanying disbursement of funds. Neither the second review, originally planned for December 2012, nor the third, originally planned for March 2013, has been completed. IMF staff visited Afghanistan this quarter to assess Afghanistan’s progress on its agreed-to measurements to determine whether to present its reviews to the IMF Executive Board. Treasury reports that progress was not yet sufficient to trigger a review.567 The three-year, $129 million ECF loan agreement signed in November 2011 makes disbursements contingent upon completion of program reviews, as determined by IMF Management and the Executive Board. The IMF has released two disbursements of $18.2 million—the first at initial ECF approval, and the second in June 2012.568 148 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT U.S. ECONOMIC SUPPORT STRATEGY The U.S. economic transition strategy in Afghanistan seeks to mitigate the negative economic impact of the withdrawal of most international security forces by 2014 and the expected accompanying reduction in donor assistance. It also seeks to help Afghanistan develop its resources for sustainable growth. In its FY 2014 budget request to Congress for Afghanistan, State has asked for $3.1 billion to fund development programs and promote good governance: $2.2 billion for assistance, and $0.9 billion to support embassy operations in Kabul and a diplomatic presence in other parts of the country. The majority of this assistance will be provided through the Economic Support Fund (ESF).569 Most ESF support is used for USAID’s development programs. Figure 3.34 shows USAID assistance by sector. FIGURE 3.34 USAID DEVELOPMENT ASSISTANCE, AS OF SEPTEMBER 30, 2013 ($ MILLIONS) Infrastructure Agriculture Democracy Economic Growth Program Supporta Construction Education Health Stabilization 2,972 1,480 1,340 556 1,785 94 350 400 1,107 0 500 1,000 1,500 2,000 2,500 3,000 Notes: Numbers rounded. a Program Support projects include staffing, salaries, performance metrics, results tracking, technical assistance to ministries, and funding to the ARTF. Source: USAID, response to SIGAR data call, 10/10/2013. U.S. On-Budget Assistance to the Afghan Government In line with donor commitments made at the 2010 Tokyo Conference and the 2013 senior officials’ follow-up conference to the Tokyo Mutual Accountability Framework, the United States has been gradually increasing the amount of development assistance it provides directly to the Afghan government. This quarter, USAID obligated approximately $400 million and disbursed more than $76 million in on-budget assistance, from prior fiscal-year funds. Cumulatively, USAID obligated $2.83 billion and disbursed $2.02 billion in on-budget assistance, as of September 30, 2013, as shown in Figure 3.35 on the following page.570 The United States includes as on-budget assistance multilateral trustfund contributions to the Law and Order Trust Fund for Afghanistan (LOTFA) and the Afghan Reconstruction Trust Fund (ARTF). These funds, REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 149 ECONOMIC AND SOCIAL DEVELOPMENT FIGURE 3.35 USAID ON-BUDGET ASSISTANCE SUBOBLIGATED AND DISBURSED, FY 2002–FY 2013 ($ MILLIONS) $700 $615 $612 $600 Sub-Obligated Afghanistan Reconstruction Trust Fund Total Sub-Obligated Bilateral Assistance $500 Disbursed $378 $400 $359 $290 $300 $200 $200 $144 $124 $100 $0 $89 $72 $40 $38 $0 2002 $0 2003 $72 $48 $14 2004 $2 2005 $.1 2006 $54 $4 2007 $27 2008 2009 $81 $91 2010 2011 $5 2012a TBD 2013b Notes: Numbers have been rounded. Subobligation is funding for project-level agreements. a Most FY 2012 USAID funding for on-budget assistance had not been obligated as of September 30, 2013. b Spending in 2013 is being done from prior fiscal year funds. Suboligations and Disbursements for FY 2013 are not yet known. Source: USAID, response to SIGAR data call, 10/10/2013. which are managed by the UNDP and the World Bank respectively, support the Afghan national budget, but aren’t fully under the Afghan government’s control. See page 78 for details about U.S. and international contributions to the LOTFA and ARTF. The U.S. Civil-Military Strategic Framework for Afghanistan This quarter, the United States released an updated U.S. Civil-Military Strategic Framework for Afghanistan, emphasizing transition to Afghan control and preserving gains into the next decade. The framework reiterates the two overarching U.S. strategic goals in Afghanistan: (1) to disrupt, dismantle, and eventually defeat al-Qaeda and its affiliates and prevent their return to Afghanistan; and (2) to strengthen Afghanistan so that it can never again be a safe haven for international terrorism. Under this framework, the United States will focus on shoring up three reconstruction pillars—governance, rule of law, and socio-economic development—all built upon a foundation of security. The framework outlines four priorities in the socio-economic sectors: 150 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT • supporting economic growth through development of key industries, including agriculture, extractives, telecommunications, light manufacturing, and services • improving the health and education of Afghans through advice and assistance to the Afghan government, as well as related investments in health and education • promoting Afghanistan’s regional economic integration through support and assistance to relevant Afghan ministries • supporting economic growth through development of key economic infrastructure and strengthening Afghan government capacity to manage that infrastructure571 According to State, the U.S. government aims to replace the CivilMilitary Strategic Framework in 2014 with a multi-year Integrated Country Strategy that will outline policy priorities, objectives, and the means for achieving them.572 The Civil-Military Strategic Framework is built upon a set of assumptions that may or may not be valid. For example, it assumes that the Afghan government will make sufficient progress on indicators outlined in the Tokyo Mutual Accountability Framework, resulting in continued financial support from the international community. However, the July 2013 Senior Leaders Meeting Joint Report assessing the Afghan government’s progress on meeting Tokyo Mutual Accountability Framework benchmarks concluded that it has not made progress in some key areas, such as improved revenue collection. The senior leaders pointed out that the Afghan government’s enforcement of taxation is increasingly hindered by a deteriorating security situation, limitations on the rule of law, and low organizational capacity.573 The updated U.S. strategic framework also assumes that the security environment will allow implementing partners to continue development assistance activities as well as conduct adequate oversight. Yet in its 2012 review of USAID/Afghanistan’s monitoring and evaluation, the USAID Office of Inspector General stated that managing development programs in highthreat environments like Afghanistan presents special oversight risks and challenges. The review describes the security situation in Afghanistan— even with international forces present—as a “significant and continuing constraint to USAID/Afghanistan’s program monitoring and evaluation.”574 BANKING AND FINANCE Afghanistan’s banking and financial sector has not recovered from the 2010 near-collapse of Kabul Bank, and suffers from a loss of consumer confidence. Audits of major banks in Afghanistan conducted in the wake of the Kabul Bank scandal have revealed “systemic fragility and vulnerability in all areas of banking governance and operations,” according to a 2013 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 151 SIGAR SPECIAL PROJECT SIGAR continues to be concerned about the ability to ensure adequate oversight of the U.S.-funded reconstruction effort as most international combat forces transition out of Afghanistan in 2014. For more information, see Section 2, page 45. The Tokyo Mutual Accountability Framework, established by the Afghan government and international community at the donors’ conference in 2012, was created to structure international development assistance to Afghanistan through 2015. Assistance depends on the Afghan government delivering on its commitments described in the Framework. ECONOMIC AND SOCIAL DEVELOPMENT Loan-to-Deposit Ratio: is used to assess a bank’s liquidity (short-term viability) by dividing its total loans by its total deposits, expressed as a percentage. It is used to calculate the financial institution’s ability to cover customer demands to withdraw funds. If the ratio is too high, the bank may have insufficient liquidity to cover unforeseen requirements. If it is too low, banks may not be earning as much as they could. Correspondent Accounts: Accounts maintained by foreign financial institutions at U.S. banks in order to gain access to the U.S. financial system and take advantage of services and products that may not be available in the foreign financial institution’s jurisdiction. Financial Action Task Force (FATF): an intergovernmental policy-making body that sets standards and promotes effective implementation of legal, regulatory, and operational measures for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system. The United States is a member and Afghanistan is an associate member through the Asia/Pacific Group on Money Laundering. Sources: Investopedia, “Loan-To-Deposit Ratio,” accessed 9/30/2013; Finance Formulas, “Loan to Deposit Ratio,” accessed 9/30/2013; Federal Financial Institutions Examination Council Bank Secrecy Act/Anti-Money Laundering InfoBase, “Correspondent Accounts (Foreign)—Overview,” accessed 10/1/2013; Financial Action Task Force, “Who We Are,” accessed 10/4/2013. World Bank report.575 State reports that Afghanistan’s banks suffer from political interference and lack of oversight.576 For example, Afghanistan’s anti-money-laundering/combating-terrorism-financing controls are widely viewed as deficient.577 The general population distrusts banks, preferring to borrow and save with family and friends, and transfer money through informal, honor-based “hawalas.”578 Consequently, the banking sector’s loan-to-deposit ratio dropped from 56.8% in 2010 to 23% in 2012.579 Treasury characterizes the sector as generally weak, with few banks operating at international standards, while capacity, including bank supervision, remains low. The sector is also highly dollarized whereby Afghans prefer the use of foreign currency over their national currency, the afghani (AFN), which is depreciating against the dollar (57 AFN to $1). According to Treasury, no single bank poses a systemic risk on par with the Kabul Bank crisis, but the banking sector as whole is vulnerable to future distress.580 Meanwhile, some major international banks are limiting their dealings with foreign banks to reduce risk and exposure to heightened regulatory scrutiny. This may jeopardize Afghan banks’ correspondent account relationships, according to Treasury.581 Money Laundering Afghanistan’s draft Anti-Money-Laundering/Combating the Financing of Terrorism (AML/CFT) legislation—which is pending parliamentary approval— does not meet globally recognized Financial Action Task Force (FATF) standards, despite input from the United States and its international partners. The cabinet approved the draft legislation on July 1.582 FATF specifically recommends Afghanistan, which has developed a AML/ CFT action plan, address its deficiencies by adequately criminalizing money laundering and terrorist financing; establishing and implementing a legal framework to identify, trace, and freeze terrorist assets; implementing an adequate oversight program for all financial sectors; establishing and implementing adequate procedures for confiscating money-laundering assets; establishing a fully functional and operational financial-intelligence unit; and establishing effective controls for cross-border cash transactions.583 If the suggested changes are not made to Afghanistan’s action plan and Parliament passes the draft legislation as written, FATF is likely to downgrade Afghanistan, according to State.584 A FATF downgrade may further weaken Afghanistan’s banking sector. In extreme cases where the international financial system is deemed threatened, FATF members may be asked to apply financial countermeasures, such as rejecting correspondent relationship requests from high risk countries to open branches and subsidiaries in their jurisdictions. Currently, only two countries meet that criterion: Iran and North Korea.585 152 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT State’s recent International Narcotics Control Strategy Report listed Afghanistan as a major money-laundering country in 2012. The report says illegal financial activities “continue to pose serious threats to the security and development of Afghanistan.” According to the report, hawala methods of transferring money are the source of most of the money-laundering. Afghans rely upon traditional hawala networks because of official corruption and weakness in the banking sector.586 The Kabul Bank Before its near-collapse in 2010, the Kabul Bank had been Afghanistan’s largest banking service provider, distributing most civil salaries on behalf of the Afghan government. Over 92% of $935 million that was stolen from the bank went to 19 individuals and companies associated with the bank. Afghanistan’s central bank, Da Afghanistan Bank (DAB), covered these losses, equivalent to 5–6% of Afghanistan’s GDP.587 Cash and Asset Recoveries During this reporting period, U.S. implementing agencies reported no new recoveries of money stolen from the Kabul Bank.588 There is also no firm consensus amongst international actors on the amount the Kabul Bank Receivership has recovered so far. DAB reported $168.4 million has been recovered as of June 30, 2013. The Senior Officials Meeting Joint Report on Tokyo Mutual Accountability Framework Implementation recorded $173.2 million as of July 3, 2013. Afghanistan’s Independent Joint Anti-Corruption and Monitoring and Evaluation Committee’s (MEC) latest six-month report (January 1–June 30, 2013) has cash recoveries at $172.9 million.589 Whatever the precise number may be, each reported number amounts to less than 20% of the stolen funds. Appeals On March 5, 2013, the Special Tribunal of the Supreme Court on Kabul Bank issued its judgment on 21 individuals charged with fraud. The two leaders of the fraud, ex-chairman Sherkhan Farnood and ex-CEO Khalillullah Ferozi, were given modest five-year prison sentences and ordered to pay only partial restitution. Afghanistan’s Attorney General’s Office (AGO) appealed the verdict on March 16, 2013, seeking longer prison terms and additional convictions for both men.590 This quarter two appeals hearings were held before the public-security division of the Kabul Appellate Court, on September 15 and September 29. According to the U.S. Department of Justice (DOJ), the appellate court was dissatisfied with the AGO’s submissions, particularly its legal rationale for the appeal and the amount of money outstanding, but has afforded prosecutors the opportunity to modify them.591 According to the MEC, the deficiencies in the submissions are glaring, especially since technical REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 153 ECONOMIC AND SOCIAL DEVELOPMENT assistance was available to the AGO.592 It is not known when the appellate court will render a decision. Following that decision, which could be tougher or lighter than the original verdict, the appeal can go to the Supreme Court for a final review.593 Prosecutions Afghanistan’s AGO launched no new investigations, filed no new charges, and indicted no additional defendants this quarter despite the March 2013 order by the Supreme Court’s special tribunal on Kabul Bank that it do so. At that time, the special tribunal ordered the arrest and prosecution of 16 individuals with existing warrants—many of whom have since fled the country—and the investigation and prosecution of 16 others as recipients of illegal loans. The DOJ has repeatedly discussed this inaction with various AGO representatives, to no avail.594 Independent Joint Anti-Corruption Monitoring and Evaluation Committee This quarter, the MEC traveled on its tenth quarterly mission to Afghanistan and released its fourth six-month report, which covers January 1–June 30, 2013. In the socio-economic realm, the MEC made the following observations: • Only four donors have fully complied with its recommendation that donor development projects be registered in the Ministry of Finance’s Development Assistance Database (Canada, Norway, Sweden, and the EU). Some donors complained that the database is not user-friendly, but the MEC stated that failure to register will cause oversight and sustainability problems for Afghan agencies after transition. • The Afghanistan National Standards Authority funded several qualitycontrol laboratories at various border points as well as mobile laboratories to test the quality of goods in stores, storage, and being transported on highways. Yet after a year, the labs are still not operating. • Afghanistan has not made serious efforts to track and seize Kabul Bank money that was laundered to 28 different countries, or to recover money from other debtors.595 New Kabul Bank The MOF and Afghanistan’s central bank renewed their efforts this quarter to privatize New Kabul Bank (NKB), a temporary “bridge bank” containing the good assets and deposits from Kabul Bank. The initial privatization effort failed earlier this year, when the MOF rejected the one bid received.596 The MOF and DAB announced a new privatization tender on September 3, 2013; bidder registration ended September 30. The deadline for proposals is October 30; official bids will open November 1.597 Privatizing NKB, which provides salary payment and direct deposit services to hundreds of thousands of government employees, is an ECF benchmark. 154 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT The MOF intends to sell NKB to private investors or liquidate it by the end of 2013.598 An independent, calendar-year 2012 financial audit of NKB by Grant Thornton LLP expressed unqualified concern regarding the bank’s ability to continue business without successful privatization. NKB lost an average of $1.85 million per month in 2012.599 Treasury quoted an Afghan government official as saying NKB losses are currently running at $500,000 per month. The official anticipates losses declining to $300,000 per month in the coming months.600 According to the IMF and Treasury, NKB’s lack of a lending portfolio, restrictions on developing lending before being offered for sale, and the need to maintain a conservative asset-management strategy mean it will continue to suffer modest operating losses prior to sale.601 DEVELOPMENT OF NATURAL RESOURCES The United States, the Afghan government, and the international donor community count on developing Afghanistan’s natural resources to underpin future economic growth in the face of declining external aid. Although mining has contributed less than 2% to the country’s GDP to date, the Afghan government expects to receive significant revenues from largescale investments in the Aynak (copper) and Hajigak (iron-ore) mines, and from oil and gas fields in the Afghan-Tajik basin.602 However, SIGAR has consistently cautioned that the Afghan government may not be able to earn substantial revenues from Afghanistan’s minerals, coal, petroleum, and natural gas resources any time soon because of the considerable infrastructure investment required to develop them. The United States, through DOD’s Task Force for Business and Stability Operations (TFBSO), has supported the Afghan government’s efforts to attract investment in the mining sector. TFBSO has fully obligated its $17.2 million total for mining-sector development in FY 2013, as of September 30, 2013.603 New Minerals Law There was no movement this quarter on the draft new minerals law pending before Parliament. As of September 30, 2013, the draft minerals law is under review with the Natural Resources Committee of the lower house of parliament, which has sought multiple explanations and clarifications from Ministry of Mines and Petroleum (MOMP) officials. Once passed by both the lower and upper houses, it will be sent to the president for final approval.604 DOD’s TFBSO warns that without legislative reform that, in part, links investor exploration and extraction rights, and institutes a formal and fixed royalty rate, many companies will not bid on new tenders and may not sign contracts on existing awards. The delay has significantly hindered privatesector investment, according to TFBSO.605 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 155 ECONOMIC AND SOCIAL DEVELOPMENT Several major mining contracts remain on hold pending passage of a new minerals law, including: Hajigak (iron ore, awarded in November 2011);606 Shaida (copper, November 2012); Badakhshan (gold, November 2012); Balkhab (copper, November 2012); and Zarkashan (gold, December 2012).607 Passage of a revised minerals law is meant to better protect Afghan resources, encourage investors, and align regulations to international best practices. It is an important IMF and Tokyo Mutual Accountability Framework benchmark to improve Afghanistan’s revenues and overall fiscal sustainability.608 As currently written, however, the draft minerals law requires mining companies to use Afghan labor exclusively and to prioritize purchasing Afghan, rather than foreign, goods. These provisions are unlikely to comply with World Trade Organization rules and could deter private investment, according to State.609 Assistance to the Ministry of Mines and Petroleum, and the Afghanistan Geological Survey The United States continued to provide technical assistance this quarter to the MOMP, the ministry’s Afghanistan Petroleum Authority (APA), and the Afghan Geological Survey (AGS), largely through the TFBSO and the U.S. Geological Survey (USGS). These organizations are supporting mineral and hydrocarbon tenders, oil-and-gas data management, and are providing engineering, legal documentation, and financial-transaction services for its international mining and hydrocarbon-tender programs. They are also building capacity at the MOMP and AGS through hands-on training and classroom modules in modern data collection techniques.610 TFBSO provides subject-matter-expert support to the APA—technical (oil and gas engineering), legal (contract implementation), and financial (accounting and analysis)—primarily assisting in the oversight of the Amu Darya Exploration and Production Sharing Contract. TFBSO helped develop APA’s organizational chart, and is advising its human-resources department on recruiting processes.611 Additionally, a TFBSO-funded legal and geology team is working with the MOMP to identify and tender new areas of interest, including three cement-making areas and two copper/gold-mining areas. The MOMP announced the cement tenders on September 22, 2013, with submissions due November 5. The copper and gold tenders were expected to be released in October 2013.612 Mining Investment and Development for Afghan Sustainability The Mining Investment and Development for Afghan Sustainability (MIDAS) is a $41.6 million program with on- and off-budget components. The off-budget Phase I is focusing on legal and regulatory reform, technical assistance to the MOMP, small and medium-size enterprise development, 156 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT and assistance in geo-science field investigation. It will provide other support as needed. The on-budget Phase II is designed to strengthen the MOMP so that it can procure, implement, and monitor completion of mining tender packages. As of September 30, 2013, USAID had obligated $6 million from FY 2010 and FY 2011 funds to begin off-budget implementation.613 USAID expects to achieve the following results from MIDAS: • make amendments to the mining law that reflect the needs of the private sector • improve capacity at MOMP in governance, internal controls, procurement procedures, and financial management • improve capacity of Afghan small-to-medium enterprises to provide support services to the mining sector • establish communications between the MOMP, the private sector, and local communities • implement programs for small-to-medium Afghan enterprises to participate in research, development, and management of mines • create a system for effective monitoring of on-budget funding.614 USAID will measure MIDAS’s success against the following metrics: the political will to foster a business-friendly environment for foreign and domestic investment in the mining sector; a business-friendly regulatory environment, aligned with international standards to attract investment; transparency in tendering and awarding contracts; and gender equality in the extractives industries sector.615 Prospects for progress in this area, however, will be affected by the difficulties described earlier on page 155. TFBSO Transition Plan Congress required that DOD develop a plan for transitioning TFBSO programs to either State or USAID. On September 13, 2013, Secretary of Defense Hagel signed the initial version of FY 2013 National Defense Authorization Act-mandated Task Force for Business and Stability Operations Fiscal Year 2013 Transition Plan and Report on Transition Implementation. It must be reviewed, revised, and signed by the Secretary every 90 days. Currently, no TFBSO mining programs are proposed for transfer to USAID or any other U.S. government agency upon dissolution of TFBSO. Instead, TFBSO said it will wind down all its projects at the MOMP by the end of 2014, either by shutting them down outright or transferring them to the Afghan government or a private Afghan firm. However, projects could be continued and funded by other U.S. implementing agencies beyond 2014.616 Mine Security Providing security for the mining areas continues to be a challenge for the Afghan government. Mine security was supposed to be the responsibility of Afghan Mines Protection Units (MPUs), which still have only 1,500 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 157 ECONOMIC AND SOCIAL DEVELOPMENT personnel, according to the MOMP website, even though the ministry planned to ramp up to 7,000. These figures have remained unchanged over the last year despite several attacks in 2011 and 2012 targeting mining interests, including against Aynak, Amu Darya Basin, and Afghan-Tajik Basin, as well as marble quarries, a coal mine, and a gold mine.617 State has previously reported that because the MPUs have not developed as anticipated, the Afghan National Police have taken over security for the extractive industries. However, according to State, the Ministry of Interior and MOMP have also failed to adequately address site security issues. TFBSO said it is unclear if the MPUs will be able to provide sufficient protection once Hajigak and the four copper and gold mines begin extraction.618 Both State and TFBSO said they are unaware of additional attacks since 2012, but congressionally funded Radio Free Europe/Radio Liberty (RFE/ RL) reports that workers came under attack from a local militia in the Amu Darya Basin in September, halting oil production. It also highlighted disputes between local leaders over control of gold and precious stones trade, as well as fights between the central government and provincial and tribal leaders in resource-rich areas. Furthermore, RFE/RL said natural resources are being used by armed groups to fund conflict, while the security environment at major mining operations such as Hajigak, Aynak, and Amu Darya is becoming increasingly unstable due to militant activity.619 Aynak Copper Mine The Afghan government awarded the contract for extraction rights at the Mes Aynak copper mine in Logar province to Metallurgical Corporation of China (MCC) in 2008, but the Chinese company has not been able to begin excavation. Development of the mine remains delayed by the discovery of cultural relics in the area, difficulties in land acquisition, lack of primary infrastructure, and security concerns.620 Despite these problems, the Afghan government is relying on Aynak’s revenue stream to meet its future revenue predictions.621 This quarter, the Afghan media reported MCC intends to exercise its option to renegotiate the contract. State said that MCC wanted to specifically renegotiate its commitments to build a railroad, a power plant, and a copper smelting plant. TFBSO stated that the government could attempt to cancel and re-tender the mine altogether. Even if there is no renegotiation, State said MCC may defer further investment until it evaluates the results of Afghanistan’s 2014 presidential election and post-transition security environment.622 However, in the wake of the Euro-Asia Economic Forum in Beijing in September, the MOMP announced that President Karzai received assurances from the Chinese president and deputy vice president that China’s Aynak and Amu Darya contractual commitments would be “honored and actively implemented.”623 158 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT North Aynak Drilling TFBSO’s $4.5 million North Aynak drilling exploration program, which began in November 2012, ended in spring 2013, and will be followed by a MOMP tender. A follow-on training project started this quarter, combining classroom-based modules and hands-on drill training with equipment owned by the AGS. TFBSO is trying to help AGS drillers and geologists use the equipment in their inventory, rather than buy new drills.624 Hajigak Iron-Ore Mine Contract negotiations for the Hajigak iron-ore concessions continue. The MOMP awarded three blocks to AFISCO, a seven-member Indian consortium led by state-owned Steel Authority of India Ltd. in November 2011, and one block to Canadian Kilo Iron Ore, a subsidiary of Kilo Goldmines.625 Kilo Iron Ore has consented in principle to all contract-negotiation terms. Both firms continue to await parliamentary approval of the new minerals law before signing contracts. TFBSO, although not involved in the negotiations, reports the eventual deal between AFISCO and the Afghan government is likely to be smaller than initially thought because of Indian investor concerns.626 Hydrocarbons Afghanistan’s efforts to develop its oil and gas reserves focus on the Amu Darya Basin and Afghan-Tajik Basin, both in northern Afghanistan. This quarter, Afghanistan’s first two oil refineries went online in and around Hairatan in northern Afghanistan. Afghan-based Ghazanfar Group’s and Kam International Oil’s refineries will produce gasoline, kerosene, diesel, fuel oil, and asphalt for domestic consumption. Both refineries also have phased expansion plans. However, even with both refineries operational, Afghanistan would remain heavily import-dependent for fuels. The country currently imports 10,000 tons of oil products a day from Turkmenistan, Uzbekistan, Russia, Pakistan, and Iran.627 Afghan-Tajik Basin Contract On September 23, 2013, Afghanistan’s Council of Ministers approved an Afghan-Tajik oil and gas contract with an international consortium comprising Dragon Oil (UAE), Turkish Petroleum Corporation (Turkey), and Ghazanfar Group (Afghanistan). The contract was signed on October 8. The consortium won exploration and production-sharing rights for the two blocks it was awarded in November 2012. Financial details of the bids have not yet been announced, nor is the value of the tenders available.628 TFBSO provided technical, legal, and commercial assistance to the MOMP throughout the tender process, including subject-matter experts to advise the MOMP Contract Evaluation Team and the Inter-Ministerial Commission during the qualification and bid-evaluation processes; transparency consultants; and funding for a MOMP bidder-information conference.629 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 159 ECONOMIC AND SOCIAL DEVELOPMENT Amu Darya Basin Production On September 30, 2013, MOMP announced a new tender for the exploration, development, and production of 7,131 square kilometers in the Amu Darya Basin. The contract area contains two known gas fields and 50 proven and prospective mining structures. Expressions of interest are due January 2014.630 The three awarded blocks of the Amu Darya Basin are estimated to contain 87 million barrels of crude oil, according to State and TFBSO.631 The China National Petroleum Corporation Watan Energy Afghanistan (CNPCI-W) produced approximately 14,916 barrels of crude this year from three blocks as of August 31, 2013, approximately 4,200 more than reported last quarter. However, CNPCI-W is not on track to produce the minimum production requirements for FY 2013 of 1.65 million barrels, according to TFBSO. The Afghan government had received $4.67 million in royalty and surface rental fees as of August 31, 2013, representing no change from last quarter.632 Because Afghanistan lacks adequate refining capacity, CNPCI is producing below capacity while it works to secure a buyer for its output. According to TFBSO, CNPCI-W has a buyer for 1.75 million barrels, but is waiting for the Afghan government to negotiate cross-border transit agreements so that it can export its crude oil to a neighboring country to be refined.633 AGRICULTURE Agriculture continues to be the main source of employment and subsistence for the Afghan population. Only 12% of the land is arable and less than 6% is cultivated, yet the sector accounts for 31% of GDP and, according to the latest World Bank report, provides employment to about 59% of the labor force.634 Given its importance, agriculture could be a catalyst for GDP growth, improved food security, and more stable employment opportunities.635 Between FY 2002 and FY 2012, USAID has appropriated approximately $2.46 billion for agricultural and alternative development funding to improve production, increase access to markets, and provide alternatives to poppy cultivation.636 Of that, USAID has obligated about $29 million and disbursed $9 million in direct assistance to build capacity at the Ministry of Agriculture, Irrigation, and Livestock (MAIL).637 USAID is currently providing on- and off-budget assistance to the agriculture sector through several programs. USAID’s three highest-priority programs, worth more than $350 million total, are: • Agricultural Development Fund (ADF) and Agricultural Credit Enhancement (ACE) • Incentives Driving Economic Alternatives-North, East, and West (IDEA-NEW) • Commercial Horticulture and Agricultural Marketing Program (CHAMP) 160 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT Agricultural Development Fund and Agricultural Credit Enhancement The Agricultural Development Fund and Agricultural Credit Enhancement (ADF-ACE), a $150 million agricultural-credit project, has two complemen­ tary activities that aim to support MAIL’s efforts to provide loans and build ADF staff capacity to manage them. ADF was established to provide loans across the agricultural value chain through banks, farm stores, leasing com­ anies, and food processors, which in turn provide agricultural credp its to farmers. ADF-ACE designed and launched nine innovative financial lending products.638 ACE is the technical-assistance component that manages all ADF lending activities and helps build MAIL capacity.639 This quarter, USAID reported that due to delays in registering ADF as a financial institution, MAIL requested ADF be descoped by $25.6 million from its initial $100 million on-budget funding to the ACE USAID contractor (off-budget) to be used for loans made on behalf of ADF.640 According to USAID, ADF has over 20,000 clients in 30 of Afghanistan’s 34 provinces. A total of $80 million in loans have been approved, and of that, $34 million has been disbursed. USAID reports a loan default rate of only 4%. Despite these successes, USAID noted that Afghan political and legal obstacles delayed ADF legal registration and access to lending funds, which, in turn, affected the number of loans approved and the number of beneficiaries.641 Incentives Driving Economic Alternatives-North, East, and West Incentives Driving Economic Alternatives-North, East, and West (IDEANEW) is a five-year, $160 million, cooperative-agreement project that provides agricultural assis­ ance and economic alternatives to growing t poppies in select provinces in eastern Afghanistan and in poppy regions in the northern and western parts of the country. IDEA-NEW is supposed to help farmers shift from growing poppies to legal agricultural production by increasing commercial opportunities, extending access to financial services, and promoting value-chain development for key regional industries and trade corridors. It also facilitates connections between producers, traders, and buyers through mar­ et-information activities and sales promotion.642 k USAID reported over a million households have directly ben­ fitted e from IDEA-NEW compared to 52,242 reported last quarter. USAID said that Afghanistan’s agricultural exports totaled more than $5.2 million this quarter, a huge jump from the $500,000 reported last quarter. In addition, USAID said the program had put 12,760 hectares of land under alternative crop cultivation and created 47,298 full-time equivalent jobs created. As of September 30, 2013, USAID has obligated $146.1 million to IDEA-NEW ($15 million more than reported last quarter) and has disbursed approximately $118.3 million ($6.8 million less than reported last quarter).643 USAID REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 161 ECONOMIC AND SOCIAL DEVELOPMENT did not respond to SIGAR’s inquiry about the remarkable 19-fold surge in household beneficiaries reported between last quarter and this one. A USAID Office of Inspector General audit of IDEA-NEW in June 2012 found a number of problems, concluding that: the program was unfocused, program directives were not followed, program goals were deleted from the performance management plan, and evidence of progress could not be produced. The audit also found that staff turnover brought about frequent changes in vision, priorities, and operating style; activities were insufficiently monitored or documented by USAID and its implementing partners; program assistance efforts were unsustainable; and there were no standard policies and procedures for its cash-for-work projects.644 The program’s fast-approaching end date precludes a full poppyimpact assessment. However, USAID is discussing geospatial-mapping support to gauge the program’s impact and supplement IDEA-NEW’s endof-project survey.645 According to USAID implementers, oversight continues to be a chal­ lenge. USAID acknowledges that concerns about safety and site access are becoming more acute as provincial reconstruction teams and foreign combat forces leave Afghanistan.646 SIGAR has repeatedly raised concerns about oversight as the international footprint in Afghanistan shrinks. Commercial Horticulture and Agricultural Marketing Program The Commercial Horticulture and Agricultural Marketing Program (CHAMP), a $40 million program begun in 2010, aims to help farmers plant and operate more profitable orchards and vineyards by enhancing crop quality and promoting export and trade corridors. The pro­ ram also g works with traders to improve harvesting, packing, cool storage, and shipping methods.647 USAID reported more than 13,000 households have directly benefited from CHAMP, while 2.8 million fruit trees have been planted on over 6,000 hectares of land. As CHAMP approaches the 2014 transition, it will shift focus to post-harvest commercialization of high-value crops. It seeks to increase exports through marketing, and promote import substitution. However, USAID said insecurity con­ inues to challenge full t implementation of CHAMP. Insurgent groups threaten both CHAMP staff and farmers, particularly in Kandahar, Helmand, Zabul, Wardak, Logar, and Ghazni provinces.648 As of September 30, 2013, USAID has obligated $30.3 million to CHAMP (no change from last quarter) and has disbursed $29.7 million ($3.2 million more than last quarter).649 162 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT ESSENTIAL SERVICES/DEVELOPMENT Since 2002, the United States has provided reconstruction funds to increase electricity, build roads and bridges, and improve health and education. This section addresses key developments in U.S. efforts to improve the government’s ability to deliver essential services such as electricity, transportation, health, and education. Energy The latest World Bank report noted that Afghanistan has one of the lowest rates of energy usage in the world, with only 28% of its population connected to the grid. Of those who are connected, an estimated 77% live in urban areas.650 Because electricity is critical to Afghanistan’s development, the United States in collaboration with the Afghan government and the international community has made developing an integrated energy sector one of its top reconstruction priorities since 2002.651 From 2002–2011, USAID alone has provided close to $2 billion from the ESF to build generators, substations, and transmission lines, and provide technical assistance to the sector. It plans to spend at least $500 million more over the next few years.652 In addition, DOD has provided approximately $292 million for electricity projects through the Commander’s Emergency Response Program (CERP) and roughly $700 million through the Afghanistan Infrastructure Fund (AIF), which is jointly managed by DOD and State.653 This assistance has lifted the number of Afghans with access to electricity from 5% of the population in 2001 to 30% in 2012.654 Afghanistan currently has nine separate power systems. The primary two are the Northeast Power System (NEPS) and the Southeast Power System (SEPS). USAID has three projects to connect and increase the electricity supply in both systems—Sheberghan; Kandahar-Helmand Power Project, which includes Kajaki Dam hydropower; and the Power Transmission Expansion and Connectivity Program. DOD is contributing to both NEPS and SEPS through AIF projects. The Afghan government, coordinating closely with USAID and DOD, prioritized these programs with the goal of increasing the availability of affordable, grid-based power.655 Connecting the power grids is intended to promote the best use of lowest-cost generation, reduce duplicative generating reserves, and improve system reliability. Sheberghan Program Afghanistan currently imports more than 70% of its energy needs, according to USAID.656 Together with the ADB, the Overseas Private Investment Corporation (OPIC), and the MOMP, USAID is supporting the Sheberghan project to help Afghanistan identify and manage gas resources to be used REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 163 ECONOMIC AND SOCIAL DEVELOPMENT for power generation.657 Gas reserves are expected to be confirmed in early 2014.658 USAID is implementing its part of the Sheberghan Program through two mechanisms: the $90 million, on-budget Sheberghan Gas Development Project (SGDP), and the $35 million, off-budget Sheberghan Gas Generation Activity.659 As of September 17, 2013, $30 million has been obligated for SGDP, with $0 disbursed, representing no change from last quarter; while approximately $12 million has been obligated for Sheberghan Gas Generation Activity, of which almost $9.2 million was disbursed, representing $1.8 million more than last quarter.660 USAID is funding 21% of the Sheberghan program; the Overseas Private Investment Corporation is backing financ­ng of a $300 million privately i funded 200 MW gas-fired power plant (52% of total funding); the ADB will support construction of the associated transmission lines (22% of total funding); and the MOMP will cover the remaining 5%.661 Kandahar-Helmand Power Project The Kajaki hydroelectric station in Helmand Province. (U.S. Embassy Kabul photo) The Kandahar-Helmand Power Project (KHPP) is intended to increase the power supply in Kandahar and make power more accessible to the population. It was designed to support interim diesel power for critical needs, increase long-term sustainable hydro power, and reduce losses while strengthening the southern transmission and distribution system.662 In 2010, USAID awarded a $266 million contract to Black & Veatch to rehabilitate power substations, upgrade the medium-voltage distribution system in Kandahar City, install a third turbine at the Kajaki Dam, and design and install new, yet temporary, die­ el-powered generators. s DOD is funding the fuel for the U.S. Army Corps of Engineers-installed generators through 2014 using AIF, and Da Afghanistan Breshna Sherkat (DABS) is providing fuel for the other existing generators in the area. The U.S. fuel subsidy may be extended, but USAID expects it to decrease as Afghanistan’s national utility, DABS, takes the required steps to secure the revenue needed to sustain the fuel costs.663 Improving revenue collection will be challenging. A SIGAR audit found that despite USAID investments that resulted in some commercialization successes for DABS-Kabul, including increasing cash collections by 60%, the Afghan utility is still operating at a financial loss. DABS may not be able to pay its bills without continued government subsidies, set to expire in 2014. Additionally, USAID did not enforce a contractual requirement for installing a billing system in DABS-Kandahar that would be compatible and coordinated with DABS-Kabul. The different system was deemed a failure by USAID and DABS; nearly $700 million was wasted. Finally, SIGAR found that millions in taxpayer-funded electricity distribution equipment for Kandahar and Helmand sat unused in U.S. government-controlled storage 164 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT with no clear plan for installation.664 USAID has since developed an installation plan, according to DOD.665 In May 2013, USAID signed a bilateral, on-budget implementation letter with the Afghan government, and committed $75 million that was descoped from the initial Black & Veatch contract, for DABS to assume responsibility for installing the third turbine at the Kajaki hydropower station. The turbine parts, transported to the power station by a U.S.-British military mission in 2008, have sat unassembled under tarps since 2008. This quarter DABS selected the CM-AR firm to install the third turbine and provide a construction-management consultant. Contract negotiations are ongoing. A third-party monitoring contract will be funded off-budget by USAID.666 Until that contract is signed and CM-AR is able to take over Kajaki site security, Black & Veatch’s contract has been extended for three months beyond its September 30, 2013, expiration in order to provide security via the Afghan Public Protection Force (APPF).667 As of September 17, 2013, USAID had obligated $229.6 million of ESF funds for the KHPP, and of that, approximately $191.4 million had been disbursed, an increase of $14.8 million from last quarter.668 Power Transmission Expansion and Connectivity Program The U.S.-funded Power Transmission Expansion and Connectivity (PTEC) program was designed to strengthen and expand the power-generation, trans­ ission, and distribution systems. This program directly supports the m National Energy Supply Program of the Afghanistan National Development Strategy. The strategy calls for improving the collection rate against energy billings and increasing the supply of power.669 A key component of PTEC is funding to construct a transmission line between Kabul and Kandahar to connect NEPS with SEPS as seen in Figure 3.36 on the next page. This 530 km con­ ection, together with the rehabilin tation of the Kajaki Hydropower Plant, was identified in 2010 as the only viable, long-term solution to displace costly and unsustainable diesel-power generation in Kandahar.670 Connecting NEPS to SEPS is a multi-donor effort. The ADB is responsible for the first 40 km Kabul-Arghandi substation connector, and the 332 km Ghazni-Kandahar East substation connector will be constructed by ADB with substantial USAID funds.671 USAID will fund construction of the 120 km section from Arghandi to Ghazni with $101 million in on-budget aid to DABS provided by DOD’s AIF. USAID, the MOF, and DABS formalized the bilateral agreement for this segment in February 2013. This quarter, USAID warned that security is deteriorating in Regional Command-East and on Route 1, in particular, which PTEC will follow.672 DOD, through the U.S. Army Corps of Engineers (USACE), is expanding NEPS by constructing the transmission line from Arghandi to Pul-e Alam and Gardez. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 165 SIGAR SPECIAL PROJECT In an ongoing special project, SIGAR is examining USAID’s safeguards for on-budget assistance it is providing to DABS for the installation of Kajaki’s third turbine. ECONOMIC AND SOCIAL DEVELOPMENT FIGURE 3.36 POWER TRANSMISSION POWER PROGRAM UZBEKISTAN TAJIKISTAN Future Sheberghan Gas Power Plant TURKMENISTAN JOWZJAN KUNDUZ BALKH PANJSHIR NURISTAN SAR-E PUL BADGHIS PARWAN KAPISA KUNAR LAGHMAN BAMYAN KABUL NANGARHAR WARDAK HERAT GHOR LOGAR DAYKUNDI GHAZNI IRAN URUZGAN FARAH BADAKHSHAN BAGHLAN SAMANGAN FARYAB TAKHAR ZABUL PAKTIYA KHOWST PAKTIKA PAKISTAN HELMAND NIMROZ KANDAHAR Energy Import Routes Existing Substation Proposed Substation Existing Transmission Lines Projects in Progress Kajaki Hydro Power Plant Sources: USAID, response to SIGAR data call, 7/1/2013, 9/30/2013; USAID, response to SIGAR vetting, 7/15/2013. USAID plans to contribute $417.6 million from its $814 million PTEC project to ADB’s Afghanistan Infrastructure Trust Fund (AITF). Of this, approximately $290 million will be used to construct the remaining transmission line from Ghazni to Kandahar to complete the NEPS to SEPS connection. The ADB established the AITF in December 2010, to allow bilateral, mul­ ilateral, and individual contributors to partner with the ADB t in financing infrastructure investments. AITF will fund projects on-budget through DABS or other Afghan government ministries. Current contributors to AITF also include the UK’s Department for International Development (DFID) and the Japanese Embassy. As of September 17, 2013, USAID has obligated $180.3 million to AITF and disbursed $45 million, representing no change from last quarter. USAID has also obligated $263.3 million in on-budget assistance to the MOF and DABS for PTEC, but has not yet disbursed any funds.673 166 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT DOD-Funded Programs Reliable and sustainable power generation, transmission, and distribution are the linchpins to security, stability, and economic growth in Afghanistan, according to DOD. This quarter, DOD continued implementing several priority energy-sector projects using FY 2012 and FY 2013 AIF money. These included:674 • the Kandahar Power Bridging Solution • Kandahar–Durai Junction transmission lines • Charikar–Bazirak and Charikar–Mahmood Raqi transmission lines and power substations Kandahar Power Bridging Solution This project is providing fuel for the diesel power generators in Kandahar City until affordable, sustainable power becomes available through the joint DOD-USAID effort to expand and connect NEPS and SEPS systems.675 The generators at Shorandam Industrial Park and Bagh-e-Pol have a combined average output of 8–13 MW. Funding levels have not changed from last quarter. FY 2012 funding remains at $79.8 million for fuel and operations and maintenance (O&M). The estimated FY 2013 cost is $100 million, which includes $90 million for fuel and $10 million for O&M.676 The president’s FY 2014 budget request includes $100 million for the diesel power generators and to integrate prior DOD and USAID power projects. This will improve overall power management in Kandahar by consolidating Kandahar’s “power islands” into an integrated grid. DOD plans to continue purchasing fuel and providing O&M support into FY 2015, but intends to transfer the generators to DABS in December 2013, along with six months of spare parts. DOD said it will provide technical support for one year following the transition.677 It sees this electricity as critical to the counterinsurgency strategy to help stabilize Kandahar by supporting economic development and improving citizens’ quality of life. DOD said the Kandahar Bridging Solution is central to the Afghanistan Electrification Plan and the State Department’s development plan for Afghanistan.678 Kandahar to Durai Junction Transmission Lines Part of the effort to expand SEPS, this project continues earlier efforts to install or repair transmission lines from Kandahar City to Durai Junction and to construct or repair substations at Maiwand and Pashmul. The cost for this projects, which began in 2012, remains $40 million in FY 2012 funds. This transmission line constitutes a key element for the larger PTEC project linking SEPS and NEPS and addresses the need for reliable electricity in Afghanistan’s south and southeast. DOD’s goal is to promote economic growth, security, stability, and capacity-building efforts within DABS to help it generate sufficient revenues to fund capital improvements to the grid. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 167 ECONOMIC AND SOCIAL DEVELOPMENT Completion of this project is essential to distribute power generated by the third turbine awaiting installation at Kajaki Dam, according to DOD.679 Charikar–Bazirak and Charikar–Mahmood Raqi Transmission Lines and Power Substations This project will install 83 km of transmission lines from Charikar to Bazirak and from Charikar to Mahmood Raqi. It will also build three power substa­ ions to expand NEPS. DOD has allocated $38 million in FY 2012 t funds and $33 million in FY 2013 funds for the project, for a total estimated cost of $71 million, according to an updated DOD notification to Congress this quarter. Annual estimated O&M costs for the transmission lines and substations are $580,000. DOD told Congress the project will bring reliable electricity to 1.15 million Afghans across three provinces and help fuel pri­ ate-sector growth, v especially in the agriculture, processing, manufacturing, and mining sectors. Consistent with all AIF-funded projects, and by formal agreement, this project will be transferred to the Afghan government upon completion. DABS will assume responsibility for O&M. Increased revenue from an expanded customer base and improved collection capabilities will help DABS provide long-term sustainment, according to DOD.680 However, SIGAR has raised questions about DABS’s capac­ty, and other audits have said Afghanistan i lacks the resources necessary to pay for O&M.681 Kajaki Dam to Musa Qalah Transmission Lines This project is building new transmission lines from the Kajaki Dam hydropower plant to Musa Qalah in Helmand Province. The $12 million in FY 2013 funds allocated for Phase I of the project will construct approximately 15 km of new 110 kV transmission line from Kajaki to a new substation that will join with the existing 20 kV transmission line. Phase II plans to use $49 million in FY 2014 funds to build 37 km of 110 kV transmission line from the substation to Musa Qalah, build a new 110 kV substation, and rehabilitate the existing 20 kV substation at Musa Qalah. The project aims to benefit the approximately 60,000 residents of Musa Qalah, according to DOD.682 Other components of the project are designed to help integrate SEPS projects into a single, interconnected system. Consistent with all AIF-funded projects, and by formal agreement, this project will be transferred to the Afghan government upon completion. DABS will assume responsibility for O&M. Increased revenue from an expanded customer base and improved collection capabilities will help DABS provide long-term sustainment, according to DOD.683 As noted above SIGAR audits have raised concerns about DABS’ capacity and resources. 168 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT Gardez to Khowst Transmission Lines This project is supposed to expand NEPS by designing and installing approximately 95 km of single-circuit 220 kV transmission lines and 30 km of 20 kV distribution lines. In his FY 2014 DOD budget submission requests, the President has asked Congress to provide $130 million for these efforts. The transmission lines will go from Gardez to Khowst in the east, and new substations will be built at Waza-Khvajeh and Khowst.684 CERP Projects in the Electricity Sector DOD also uses CERP funds to pay for small-scale electricity projects, such as installing generators, solar-panel systems, and utility poles. Nearly $100,000 in FY 2013 funds has been obligated and disbursed as of June 30, 2013 (the most recent data available).685 TRANSPORTATION Afghanistan’s lack of transportation infrastructure hinders internal commerce, foreign trade, and economic growth. The World Bank said restoring the transportation sector is imperative for economic recovery and development.686 Afghanistan’s infrastructure shortcomings particularly constrain the service and agriculture sectors, which currently contribute most to GDP. They also hold back the extractives industry, whose future revenues the Afghan government and international donor community are counting on to supplement declining aid.687 This quarter, the United States continued its efforts to assist Afghanistan in developing transportation laws, ministry capacity, and compliance with inter­ ational standards.688 n Civil Aviation Since 2002, the U.S. Air Force has operated air traffic control in the Kabul region under an agreement signed with Afghanistan’s Ministry of Transport and Civil Aviation (MOTCA). The U.S. Air Force intends to transfer its air traffic control (ATC) and communications, navigation, and surveillance (CNS) infrastructure system to the Afghan government no later than December 2014. The U.S. Air Force and the U.S. Embassy Kabul assisted the MOTCA to prepare a contract for the Afghan government to assume responsibility of Afghanistan’s airspace, but contract signing has been delayed for five months waiting for Afghan government funding and a release of a request for proposal.689 The U.S. Air Force spends approximately $49 million per year on ATC/ CNS services, and has spent approximately $447 million in Global War on Terror/Overseas Contingency Operations funds to build civil aviation capabilities and improve flight safety in Afghanistan since 2002. Title 10 USC funding prevents the U.S. Air Force from training civil aviation personnel or REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 169 ECONOMIC AND SOCIAL DEVELOPMENT developing training facilities. That support comes instead from U.S. Embassy Kabul, USAID, and International Civil Aviation Organization programs.690 The U.S. Department of Transportation (DOT) Office of the Transportation Counselor (OTC), in conjunction with USAID, has been developing the Kabul Air Traffic Control System and Safety Oversight Training Program for Afghan aviation professionals since 2012. According to DOT, its goal is to bring Afghanistan into compliance with international standards and prepare Afghans to operate and provide oversight for their national civil-aviation program in advance of the transition of Afghan airspace from the U.S. military to civilian control. The U.S. program is focused on safety oversight, technical operations, and air traffic control. Out of the $4.6 million currently obligated from FY 2011 USAID funds, $824,000 has been disbursed as of September 30, 2013.691 OTC has developed a comprehensive training curriculum for Afghan aviation professionals, including for high-level administrative directors of the Afghanistan Civil Aviation Authority in air traffic control and communications, navigation, and surveillance familiarization. After completing on-the-job training, the controllers can become watch supervisors, able to assume managerial supervision of the air traffic environment. According to DOT, this capability did not exist prior to OTC involvement. As of September 30, 2013, DOT reported 49 Afghan aviation trainees have received classroom training. DOT is also measuring the career-track progress of trainees and the amount of training provided.692 DOT also reported several challenges. All aviation career tracks require on-the-job training after completing classroom training. However, Afghanistan does not have qualified instructors, so training must be contracted out. For its part, DOT/OTC has not been able to bring in qualified instructors because there is no entity to sponsor them or provide support services such as country clearances, secure housing and transportation, threat protection, and Status of Forces Agreement protection. On-the-job training opportunities are being explored in International Civil Aviation Organization-compliant countries in the region. It can take up to two years to build up sufficient skills, according to DOD. Therefore, during the airspace transition, Afghanistan will have to outsource radar control and other aviation services.693 EDUCATION According to the data available to USAID last quarter from the Ministry of Education’s (MOE) Information Management System (EMIS), Afghanistan had a total of 13,562 primary, lower secondary, and upper secondary schools in solar year (SY) 1390 (March 2011–March 2012). The same data showed more than 185,255 teachers employed across all education programs in 170 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT Afghanistan, and approximately 7.5 million students enrolled in primary, government lower secondary, and government upper secondary schools.694 However, USAID said it was concerned about the reliability of MOE/ EMIS data, which is the only database tracking education metrics. USAID told SIGAR it cannot verify the data. With more USAID assistance now going on-budget, USAID relies primarily on EMIS—but without real-time update access—for its information. However, USAID said it also uses internal reports from its officers, ISAF, and implementing partners to check certain levels of field information.695 SIGAR is concerned that U.S. government agencies and international donors are unable to verify Afghanistan’s oft-cited gains in education. Moreover, SIGAR is concerned about providing more direct assistance to the Ministry of Education in light of USAID’s view that the ministry lacks sufficient capacity to adequately and properly manage and account for USAID funds.696 Since 2002, USAID has supported education through aid for building and refurbishing schools, developing curricula, and conducting training. USAID’s ongoing priority programs in the Education sector funded through the ESF this quarter include: • Basic Education, Literacy and Technical-Vocational Education and Training (BELT) • Higher Education Project (HEP) • American University of Afghanistan (AUAF) Basic Education, Literacy, and Technical-Vocational Education and Training Basic Education, Literacy, and Technical-Vocational Education and Training (BELT) is a three-year (December 2011–October 2014), $173 million on-budget program funded through the ESF. It aims to improve access to quality basic education in communities typically beyond the reach of the government. The program provides textbooks, technical-vocational education, and training, as well as community-based education programs. As of September 30, 2013, USAID has obligated $88.9 million, compared to $20 million last quarter. Of that, USAID disbursed $23.7 million, compared to $5.8 million last quarter, an increase of $17.9 million.697 BELT has five components: capacity building for the MOE, textbook printing, teacher training, community-based education, and Technical Vocational Education and Training (TVET). BELT TVET aims to build the quality and professionalism of TVET educators by providing students with nationally accredited and certified skills, as well as equivalency for TVET in the MOE. The overall objective of BELT is to improve access to quality education and training, focusing on girls and other marginalized populations, according to USAID. An implementation letter spelling out substantive matters—student targets, performance milestones, means of verification, and funding levels for the program—remains REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 171 SIGAR AUDIT In a newly announced audit, SIGAR is examining the U.S. government’s efforts to assist and improve the education sector in Afghanistan. For more information, see Section 2, page 34. ECONOMIC AND SOCIAL DEVELOPMENT delayed. BELT TVET is in the milestone development stage. USAID expects to sign an implementation letter and forward it to the MOE next quarter.698 USAID did, however, sign an implementation letter with the Minister of Finance and the Minister of Education on July 28, 2013, amending the amount of funds used to print and distribute textbooks that follow an approved curriculum from $26.7 million to $27 million. Of this, $1.13 million in USAID funds will be used to distribute the textbooks. ($833,187 obligated from the original implementation-letter agreement and $296,813 in new funding).699 USAID did not contemplate having to fund textbook distribution, but will because the MOE said it did not have enough money in its budget.700 The distribution challenges are not new. Insecurity, textbook transit delays, and winter weather that made some areas unreachable have hampered distribution of textbooks in some provinces in the past.701 The textbook-implementation letter contains “conditions precedents” that must be met before funds are disbursed. Furthermore, USAID contracted Ernst and Young to conduct an external audit to verify the quantity and quality of textbooks printed, and the distribution of textbooks to the school level. The audit will cover 20% of schools and reach all 34 provinces, according to USAID.702 Finally, performance milestones under the community-based education program have been agreed to this quarter, culminating in an implementation letter signed in September 2013. The agreement sets targets for the number of classes established, students reached, means of verification, and funding levels for each milestone.703 Higher Education Project Since the Higher Education Project (HEP) project began in 2006, it has supported the Ministry of Higher Education to execute its National Higher Education Strategic Plan. HEP’s latest phase, extended to February 28, 2014, provides technical assistance to increase ministry capacity through professional training, quality assurance and accreditation, curriculum review, university partnerships, academic policies, and regulation.704 As of September 30, 2013, USAID had obligated $21.2 million toward HEP (no change from last quarter) and dis­ ursed $15.6 million, an increase of b approximately $2 million from last quarter.705 USAID used two past program analyses to help design Strengthening Tertiary Education Program-University Partnerships (STEP-UP), a $92.7 million follow-on higher education program that aims to improve the quality and relevance of the Afghanistan higher education system, and the institutional capacity of the Ministry of Higher Education. STEP-UP will work with up to 10 universities to improve university management systems, academic programs and student services; will continue operational support for the American University of Afghanistan; and will strengthen Ministry of 172 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT Higher Education systems and management capacity. STEP-UP is an offbudget program, currently under procurement.706 USAID has previously reported that it did not have significant outcome data to quantify the impact of the more than $15 million spent on HEP. However, an impact assessment of its faculty-development and teachertraining activities for its master’s degree program, as well as an independent gender assessment, were completed. USAID is reviewing the findings.707 American University of Afghanistan This quarter, USAID finalized a new $40 million, five-year cooperative agreement (August 2013–July 2018) designed to continue support for developing the American University of Afghanistan’s (AUAF) English-language undergraduate and continuing-education programs. Support will come from USAID’s STEP-UP program using ESF and ESF-OCO funds, and will help introduce new science, education, and management curricula, as well as a new master’s program, distance learning, and on-line resources. The four components of this agreement aim to strengthen academic and professional development programs, enhance program quality, expand programs for women, and increase financial self-sufficiency. As of September 30, 2013, USAID had obligated $10 million but had not disbursed any money.708 AUAF is a private institution that continues to receive substantial assistance from the United States. So that the university can sustain itself after the transition, this new five-year cooperative agreement is a cost-share arrangement with clear, explicit sustainability components, according to USAID. It requires AUAF to contribute more than $62 million in nonU.S.-government funds.709 A performance-measurement plan has not yet been finalized by the university or approved, but the cooperative agreement contains a series of specific reporting and evaluation requirements, including the need to maintain “appropriate, adequate and accurate documentation,” citing SIGAR, the USAID Office of Inspector General, and the Government Accountability Office’s interest in U.S. government programs in Afghanistan.710 HEALTH Afghanistan has experienced significant improvements in its health indicators since 2002, according to USAID. Although the country still has one of the highest maternal-and-child mortality rates in the world, the USAIDfunded Afghanistan Mortality Survey 2010 found that life expectancy has increased by as much as 20 years to an average of 62–64 years.711 However, other institutions have cited more modest gains. The CIA World Factbook gives the Afghan life expectancy from birth as 50.11 years, while the World Bank calculated life expectancy at 48.712 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 173 ECONOMIC AND SOCIAL DEVELOPMENT From FY 2002 through FY 2012, U.S. on- and off-budget assistance to Afghanistan’s health sector totaled $1.06 billion.713 On-budget assistance to the Ministry of Public Health (MOPH) includes salary payments to workers in U.S.-funded facilities, medical and non-medical sup­ lies, in-service p training, minor renovations of facilities, medical equipment, and monitoring and supervision. Off-budget assistance includes activities in health systems strengthening, private sector engagement, and procurement of pharma­ ceuticals and contraceptives.714 This quarter, SIGAR released an audit of the MOPH’s capacity to account for U.S. direct assistance. It found that despite financial-management deficiencies at the MOPH, USAID continues to provide millions of U.S. taxpayer dollars in direct assistance with little assurance that the ministry is using these funds as intended.715 USAID’s highest-priority programs in the health sector this quarter include: • Partnership Contracts for Health (PCH) Services • Health Policy Project (HPP) • Leadership, Management, Governance Project (LMG) All three were extended until October 31, 2014.716 Partnership Contracts for Health Services SIGAR INSPECTIONS SIGAR published two inspections of Afghan medical facilities this quarter: a Gardez hospital and a Walayatti medical clinic. For more information, see Section 2, pages 38 and 41. The five-year (2009–2014), host-country contract Partnership Contracts for Health (PCH) program supports the MOPH’s efforts to provide the Basic Package of Health Services (BPHS) and the Essential Package of Hospital Services (EPHS) in 13 provinces. The United States supports 547 of these health facilities, including:717 • 5 Provincial Hospitals • 27 District Hospitals • 13 Comprehensive Health Centers+ • 157 Comprehensive Health Centers • 271 Basic Health Centers • 64 Health Sub-Centers, and • 10 Prison Health Facilities USAID also supports 6,279 Health Posts throughout Afghanistan.718 The PCH allocation is $236 million. As of September 30, 2013, USAID had obligated $190.2 million to this program—representing no change from last quarter—and disbursed $146.8 million, an increase of approximately $11 million from last quarter.719 PCH delivers health care ranging from primary health care services to highly specialized diag­ ostic and treatment services. It also supports the n Community Midwifery Education program, which helps to increase the number of female healthcare workers and contributes to reduction in both maternal and child mortality. USAID, through its forthcoming semi-annual report in October 2013, will update PCH programmatic challenges and 174 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT successes.720 Specific metrics and performance evaluation standards were not provided to SIGAR. As noted above, SIGAR’s audit of the MOPH also found that the ministry internal control deficiencies put U.S. funds provided under the PCH program at risk of fraud, waste, and abuse. USAID officials stated that they have not verified what, if any, actions the MOPH has taken to address these deficiencies. One USAID official determined that USAID has no obligation to address the deficiencies identified, or to verify any of the corrective actions that the MOPH may have implemented for the ongoing PCH program.721 Health Policy Project The Health Policy Project (HPP), a 28-month (June 2012–October 2014) program, is building MOPH capacity to address basic health needs through design, negotiation, and management of hospital public-private partnerships (PPPs). The project also aims to build the capacity of local private-sector organizations to partner with the Afghan government in the generating of demand for and delivery of high-quality health services through social media marketing. HPP allocations this quarter increased to $28 million, a $10 million increase over last quarter, due to a one-year extension of the project. As of September 30, 2013, USAID had obligated $15.5 million to the program (no change from last quarter) and disbursed $13.7 million through ESF and Global Health funding accounts for the program.722 HPP’s lack of access to qualified international consultants to help support PPPs, as well as lack of a central PPP unit at the MOF, has resulted in delays of PPP activities. However, HPP is actively recruiting for these positions. Additionally, insecurity in several provinces limited outreach activities and sales of social-marketing products. However, HPP was able to conduct training programs this quarter, including on the correct use of socially marketed health products aimed at reducing maternal and child mortality, gender-based-violence training for health providers, and several HIV workshops. HPP also completed feasibility studies of two hospitals, and helped establish a system to collect health data from private hospitals to report to the MOPH.723 USAID did not provide specific metrics and performance evaluation standards for HPP to SIGAR. HIV/AIDS HPP supports the advocacy component of Afghanistan’s National AIDS Control Program (NACP) through the HIV and AIDS Coordination Committee of Afghanistan (HACCA). HACCA is a national, multi-sector advisory body to NACP. According to NACP, there are 1,250 officially reported HIV cases in Afghanistan, with the highest prevalence among injection drug users. Other tracked groups at high risk are female sex workers, road transport workers and their assistants, prisoners, and men who have sex with men. The 2012 Integrated Biological and Behavioral Surveillance REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 175 ECONOMIC AND SOCIAL DEVELOPMENT study found that while the risk of infection is high among these groups, the overall prevalence is low, and that Afghanistan is not at risk for an outbreak among the general population.724 Leadership, Management, Governance Project The 26-month (September 2012–October 2014), $26 million Leadership, Management, Governance (LMG) Project works with the MOPH and the MOE at the provincial and central levels to build lead­ rship, managee ment, and governance capacity within Afghanistan’s health and education systems. It also aims to improve transparency and account­ bility within a the MOPH and helps both ministries manage on-budget assistance. As of September 30, 2013, USAID had obligated $20.6 million (no change from last quarter) and disbursed $10.6 million through ESF and Global Health funds for the program.725 This quarter, through LMG assistance, the MOPH launched three Health Information Systems assessments, including a household survey and census in USAID and EU-funded provinces, and a data quality and use assessment in all 34 provinces. MOPH also completed mapping all In-Service Training (IST)—also known as on the job training—providers, to help create guidelines and standards for all IST activities at the BPHS and EPHS levels. Moreover, the MOPH provided standardized training for the first time to 700 community health supervisors.726 USAID did not provide SIGAR with specific metrics and performance evaluation standards for the program. Despite advances in hospital autonomy at 14 national hospitals, USAID reported that LMG efforts to provide technical assistance to the hospitals in rationalizing human resources—the next step in the autonomy process— were challenged by social and political factors affecting hospitals’ internal staffing decisions this quarter.727 Additionally, the MOPH provincial liaison department has yet to define, clarify, or reinforce the role of the Provincial Liaison Department in strengthening provincial health systems. And thus far, implementing LMG partners have limited capacity to respond to Community-Based Health Care needs throughout Afghanistan, making it a challenge to LMG to help the ministry ramp up interventions nationwide.728 PRIVATE SECTOR DEVELOPMENT The United States is supporting private-sector development through the ESF, TFBSO, and CERP. From FY 2002 to FY 2012, USAID appropriated $1.06 billion for economic growth in Afghanistan.729 USAID’s top ongoing priority economic-growth project, funded through the ESF, is Assistance in Building Afghanistan by Developing Enterprises (ABADE). 176 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ECONOMIC AND SOCIAL DEVELOPMENT Assistance in Building Afghanistan by Developing Enterprises USAID’s $105 million Assistance in Building Afghanistan by Developing Enterprises (ABADE) program is focused on helping produc­ ive, Afghant registered, small-to-medium enterprises add jobs, increase investment, and improve sales of domestic products and services through public-private alliances. It does so through three components: implementing public-private alliances once they are approved, identifying, selecting and supporting the alliances, and working with the Afghan government to improve the environment for business.730 In one case, ABADE entered into an alliance with a PVC and aluminum production company, procuring approximately $515,000 in equipment, which helped leverage $2.4 million invested by the company. According to USAID, the company can triple its production capacity, improve product quality to international standards, and employ 200 people.731 As of September 18, 2013, USAID obligated $29.6 million in Economic Support Funds to support the ABADE program—$12 million more than last quarter—and disbursed approximately $9.3 million—$1.8 million more than last quarter.732 Since ABADE’s launch in February 2013, USAID reported that 12 public-private alliances have been approved and awarded—compared to five reported last quarter, and 30 applications are awaiting approval. Additionally, business-outreach and government capacity-building efforts continued this quarter, as did two Business Development Services (BDS) surveys to identify BDS capabilities and unmet demand for such services. ABADE implementation is facing restrictions from Presidential Decree 62, which requires the use of APPF and Risk Management Companies for security. The APPF is unable to provide adequate mobile escort units or vehicles, making it difficult for ABADE staff to travel across the region.733 Moreover, USAID now depends upon commercial flights, which travel only to major city centers. This effectively puts programs outside of these areas either out of reach, or forces implementing partners to use more expensive charter flights. Risk Management Companies cannot carry weapons to protect U.S. government staff on commercial air. Charter flight companies have yet to respond to USAID requests for such accommodations.734 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 177 OTHER AGENCY CONTENTS CONTENTS Completed Oversight Activities 182 Ongoing Oversight Activities 185 Photo on previous page U.S. Secretary of State John Kerry and President Hamid Karzai speak at an outdoor news conference in Kabul on October 12, 2013, as U.S.-Afghan discussions continue on a new Bilateral Security Agreement. (State photo) 180 OTHER AGENCY OVERSIGHT OTHER AGENCY OVERSIGHT SIGAR’s enabling legislation requires it to keep the Secretary of State and the Secretary of Defense fully informed about problems relating to the administration of reconstruction programs, and to submit a report to Congress on SIGAR’s oversight work and on the status of the U.S. reconstruction effort no later than 30 days after the end of each fiscal quarter. Each quarter, SIGAR requests updates from other agencies on completed and ongoing oversight activities. This section contains these updates. The descriptions appear as submitted, with minor changes to maintain consistency with other sections of this report: acronyms and abbreviations in place of full names; standardized capitalization, hyphenation, punctuation, and preferred spellings; and third-person instead of first-person construction. These agencies perform oversight activities in Afghanistan and provide results to SIGAR: • Department of Defense Office of Inspector General (DOD OIG) • Department of State Office of Inspector General (State OIG) • Government Accountability Office (GAO) • U.S. Army Audit Agency (USAAA) • U.S. Agency for International Development Office of Inspector General (USAID OIG) REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 181 OTHER AGENCY OVERSIGHT TABLE 4.1 RECENTLY COMPLETED OVERSIGHT ACTIVITIES OF OTHER U.S. AGENCIES, AS OF SEPTEMBER 30, 2013 Agency Report Number Date Issued DOD OIG DODIG-2013-129 9/20/2013 DOD OIG DODIG-2013-123 8/30/2013 DOD OIG DODIG-2013-099 7/18/2013 State OIG AUD/MERO-13-37 9/2013 USAID OIG USAID OIG F-306-13-001-P F-306-13-002-P 9/25/2013 8/31/2013 Project Title Planning for the Effective Development and Transition of Critical ANSF Enablers to Post-2014 Capabilities Part I Afghan National Army Enabler Description Army Needs To Improve Mi-17 Overhaul Management and Contract Administration Compliance with Electrical and Fire Protection Standards of U.S. Controlled and Occupied Facilities in Afghanistan Audit of the Bureau of International Narcotics and Law Enforcement Affairs’ Corrections System Support Program in Afghanistan Audit of USAID/Afghanistan’s Kandahar Helmand Power Project Audit of USAID/Afghanistan’s Use of Third Country National (TCN) Employees Sources: DOD OIG, response to SIGAR data call, 9/19/2013; State OIG, response to SIGAR data call, 9/5/2013; GAO, response to SIGAR data call, 9/18/2013; USAAA, response to SIGAR data call 9/23/2013; USAID OIG, response to SIGAR data call, 9/18/2013. COMPLETED OVERSIGHT ACTIVITIES Table 4.1 lists the six oversight projects related to reconstruction that participating agencies reported as completed this quarter. U.S. Department of Defense Office of Inspector General During this quarter, DOD OIG issued three reports related to Afghanistan reconstruction. Planning for the Effective Development and Transition of Critical ANSF Enablers to Post-2014 Capabilities Part I Afghan National Army Enabler Description (Report No. DODIG-2013-129, Issued September 20, 2013) This report is classified. Army Needs To Improve Mi-17 Overhaul Management and Contract Administration (Report No. DODIG-2013-123, Issued August 30, 2013) This report is For Official Use Only. Compliance with Electrical and Fire Protection Standards of U.S. Controlled and Occupied Facilities in Afghanistan (Report No. DODIG-2013-099, Issued July 18, 2013) Continuing its oversight of health and safety issues in Southwest Asia, at selected U.S. controlled and occupied facilities in Kandahar Air Field and Bagram Air Field, Afghanistan, the DOD OIG inspected for compliance with the National Electrical Code (NEC); Unified Facilities Criteria (UFC); National Fire Protection Association (NFPA) standards; and corrective actions to past DOD OIG electrical and fire protection findings. In this current inspection, DOD OIG found: 182 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION OTHER AGENCY OVERSIGHT • Hazardous conditions due to a lack of consistent adherence to minimum NEC and NFPA standards as evidenced by 1,089 findings; 440 findings violate NEC electrical standards and 649 findings violate UFC and/or NFPA fire protection standards. • Fire protection systems were not maintained and/or repaired. • Garrison commands lacked qualified Government or dedicated contractor electricians, fire alarm, or fire suppression technicians on their staffs to perform inspection, testing, and maintenance. • Inadequate Government oversight and inspection of facilities. • Lack of independent technical support for the Government Contracting Office resulted in overreliance on facility construction and maintenance contractors. • The Base Camp Master Plans lacked a comprehensive fire protection plan. • Corrective actions for previous DOD OIG audits and inspections were incomplete and ineffective for many findings. U.S. Department of State Office of Inspector General–Middle East Regional Office During this quarter, State OIG issued one report related to Afghanistan reconstruction. Audit of the Bureau of International Narcotics and Law Enforcement Affairs’ Correction System Support Program in Afghanistan (Report No. AUD/MERO-13-37, Issued September 2013) State OIG determined that on November 28, 2012, the Deputy Secretary certified to Congress that fiscal year (FY) 2012 Bureau of International Narcotics and Law Enforcement Affairs (INL) funds would not be obligated unless INL programs met the requirements of the USAID sustainability guidance. However, on March 13, 2013, INL began obligating FY 2012 Corrections System Support Program (CSSP) funds without fully meeting those requirements. Specifically, INL had not conducted a program review to determine CSSP program cost and effectiveness, estimated the costs and activities necessary for the Afghans to sustain the corrections program, or developed a quarterly assessment and reporting process for measuring CSSP success in achieving its program outcomes and Government of Afghanistan (GIROA) progress on meeting its commitments. As a result, INL has no basis for determining whether CSSP is an effective program, with a positive return on its $226 million investment; whether the program should be revised, reduced, or canceled; or whether the Afghans will have the capacity to sustain the corrections program once international contributions are reduced. At current GIROA funding levels, the Afghan corrections program is not sustainable without continued international support. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 183 OTHER AGENCY OVERSIGHT Government Accountability Office During this quarter, GAO did not issue any publicly available reports related to Afghanistan reconstruction. U.S. Army Audit Agency The USAAA did not complete any audits related to Afghanistan reconstruction this quarter. U.S. Agency for International Development Office of Inspector General During this quarter, USAID OIG completed two reports related to Afghanistan reconstruction. Audit of Kandahar Helmand Power Project (Report No. F-306-13-001-P, Issued September 25, 2013) The audit objective was to assess project oversight, compliance with environmental requirements and sustainability planning. The audit found that key processes and personnel that should have been in place at inception were not. For these reasons, the audit will report six findings: • sustainability plan was not fully developed; • environmental compliance monitoring was performed late; • mission could not track incremental progress adequately; • mission did not verify invoices consistently; • mission did not approve a performance management plan in a timely manner; • third-party monitoring was impaired. USAID OIG also reported an administrative matter related to subcontracting recordkeeping. The report includes 3 recommendations to address these issues. Audit of USAID/Afghanistan’s Use of Third Country National Employees (Report No. F-306-13-002-P, Issued August 31, 2013) The audit reported three findings: • Mission records did not justify the use of third country national (TCN) employees; • TCN contract positions lacked proper classifications; • Mission did not sufficiently justify sole sourced TCN contracts. In answering the first part of the audit objective, the audit found that the mission was partially in line with the U.S. strategy for employing TCN employees only under exceptional and temporary circumstances. From 2004 to 2012, the use of TCNs was an exception to normal recruitment practices in general, but in some offices their use was not temporary. In response to the second objective, the use of TCNs was not managed in 184 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION OTHER AGENCY OVERSIGHT accordance with human resource and contract management policies in the areas described in the findings. The report included six recommendations to address these issues. ONGOING OVERSIGHT ACTIVITIES As of September 30, 2013, the participating agencies reported 21 ongoing oversight activities related to reconstruction in Afghanistan. The activities reported are listed in Table 4.2 and described in the following sections by agency. TABLE 4.2 ONGOING OVERSIGHT ACTIVITIES OF OTHER U.S. AGENCIES, AS OF SEPTEMBER 30, 2013 Agency Project Number Date Initiated DOD OIG D2013-D00SPO-0181.000 6/13/2013 DOD OIG D2013-D00SPO-0154.000 4/26/2013 DOD OIG D2013-D000AS-0097.000 2/8/2013 DOD OIG D2013-D000AT-0083.000 1/3/2012 DOD OIG D2013-D00SPO-0087.000 12/18/2012 DOD OIG D2013-D000FL-0056.000 12/3/2012 DOD OIG D2013-D000AS-0052.000 11/1/2012 DOD OIG D2013-D000AS-0001.000 10/5/2012 DOD OIG D2012-D000JA-0221.000 9/28/2012 State OIG-MERO 13AUD082 6/13/2013 State OIG-MERO 13AUD52 2/2013 State OIG-MERO 12AUD79 12/2012 GAO GAO GAO GAO GAO USAID OIG USAID OIG USAID OIG 351851 320985 351819 121119 351798 FF100113 FF100712 FF100612 8/16/2013 6/26/2013 5/9/2013 3/6/2013 1/18/2013 4/1/2013 11/28/2012 10/9/2012 USAID OIG FF101712 10/25/2012 Project Title Assessment of U.S. Government Efforts to Transition Security Cooperation and Assistance Activities Supporting the Government of the Islamic Republic of Afghanistan from Department of Defense Authority to Department of State Authority Assessment of the U.S. Military and Coalition Efforts to Develop Effective and Sustainable Healthcare Capability for the Afghan National Police Mi-17 Cockpit Modifications Under Task Order W58RGZ-09-D-0130-0102 Price Reasonableness Determinations for Datron World Communications, Inc. Contracts Awarded by the U.S. Army Contracting Command for the Afghan National Security Forces Assessment of Planning for the Effective Development and Transition of Critical Afghanistan National Security Forces Enablers to Post-2014 Capabilities Examination of Department of Defense Execution of North Atlantic Treaty Organization Contributing Countries Donations to Afghanistan National Army Trust Fund for Approval Sustainment Projects as of September 30, 2012 Shindand Training Contracts Surveillance Structure on Contracts Supporting the Afghanistan Rotary Wing Program for the U.S. Transportation Command Contract Management and Oversight of Military Construction Projects for the Special Operation Forces Complexes at Bagram Airfield, Afghanistan Audit of Bureau of International Narcotics and Law Enforcement Affairs Counternarcotics Assistance to Afghanistan Audit of Bureau of Diplomatic Security Worldwide Protective Services Contract Task Orders 2, 9, and 11 for Movement and Static Security Services in Jerusalem and Afghanistan Audit of the Department of State Transition Planning for a Reduced Military Presence in Afghanistan Drawdown of DOD Contractors in Afghanistan Use of Foreign Labor Contractors Abroad Costs of DOD’s Transition to the Afghan Public Protection Force Department of State and U.S. Agency for International Development Contingency Contracting Afghanistan Equipment Reduction and Base Closures Audit of USAID/Afghanistan’s Elections Assistance Program Audit of USAID/Afghanistan’s Transition Plans (suspended) Audit of USAID/Afghanistan’s Management Controls over Premium Pay Review of USAID/Afghanistan’s Use of the Commander’s Emergency Response Program Funds for Selected Projects Sources: DOD OIG, response to SIGAR data call, 9/19/2013; State OIG, response to SIGAR data call, 9/5/2013; GAO, response to SIGAR data call, 9/18/2013; USAAA, response to SIGAR data call 9/23/2013; USAID OIG, response to SIGAR data call, 9/18/2013. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 185 OTHER AGENCY OVERSIGHT Department of Defense Office of Inspector General The Department of Defense continues to face many challenges in executing its Overseas Contingency Operations (OCO). The Department of Defense Office of Inspector General (DOD OIG) has identified priorities based on those challenges and high-risks. In FY 2013, DOD OIG focused oversight on overseas contingency operations with a majority of its resources supporting operations in Afghanistan. The DOD OIG focus in Afghanistan primarily continued in the areas of the management and execution of the Afghanistan Security Forces Fund, military construction, safety of personnel, and the administration and oversight of contracts supporting coalition forces. In addition, DOD OIG oversight in Afghanistan started addressing matters pertaining to the drawdown of forces in Afghanistan and shifting of operations. As billions of dollars continue to be spent in Afghanistan, in addition to drawdown efforts, a top priority continues to be the monitoring and oversight of acquisition and contracting processes focused on training, equipping, and sustaining Afghanistan Security Forces (ASF). The DOD OIG planned oversight efforts address the administration and oversight of contracts for equipping ASF, such as rotary wing aircraft, airplanes, ammunition, radios, and night vision devices. The DOD OIG will also continue to review and assess the Department’s efforts in managing and executing contracts to train the Afghan National Police. The DOD OIG led Southwest Asia Joint Planning Group assists in the coordination and deconfliction of Federal and DOD OCO related oversight activities. The DOD OIG, working with the SIGAR as well as fellow Inspectors General and Defense oversight community members, have finalized the FY 2014 strategic audit plan for the oversight community working in Afghanistan and plans to issue the FY 2014 Comprehensive Oversight Plan for Southwest Asia in October 2013. A key theme in the FY 2014 plan development is the anticipated force restructuring/drawdown of operations in Afghanistan. Ongoing Operation Enduring Freedom-related oversight addresses accountability of property; improper payments; contract administration and management including construction projects; oversight of the contract for training the Afghan police; logistical distribution within Afghanistan; retrograde operations, health care; and acquisition planning and controls over funding for Afghan Security Forces. 186 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION OTHER AGENCY OVERSIGHT Assessment of U.S. Government Efforts to Transition Security Cooperation and Assistance Activities Supporting the Government of the Islamic Republic of Afghanistan from Department of Defense Authority to Department of State Authority (Project No. 2013-D00SPO-0181.000, Initiated June 13, 2013) DOD OIG is assessing plans and activities that have been accomplished or implemented thus far to transfer the security cooperation and assistance activities in Afghanistan from DOD to State Department authority, and to make recommendations to facilitate or improve the transition of these functions to the State Department in accordance with existing security cooperation guidance and security assistance regulations that may pertain. Specific objectives are to determine whether: a. U.S. government goals; objectives, plans, and guidance are sufficient, issued and operative for the transition of the Combined Security Transition Command-Afghanistan (CSTC-A) security assistance activities in Afghanistan from DOD authority to a security cooperation organization under Department of State authority. b. Ongoing efforts by U.S. forces to provide security assistance to the Government of Afghanistan are adversely impacted by the implementation of drawdown plans for U.S. Forces-Afghanistan (USFOR-A) and the transition of International Security Assistance Force (ISAF) and ISAF Joint Command (IJC) to a command organization under NATO authority. Assessment of the U.S. Military and Coalition Efforts to Develop Effective and Sustainable Healthcare Capability for the Afghan National Police (Project No. D2013-D00SPO-0154.000, Initiated April 26, 2013) DOD OIG is assessing the progress of U.S. and Coalition efforts to develop effective and sustainable healthcare capability in support of the Afghan National Police (ANP). Specifically, the assessment will determine whether: • plans to develop effective and sustainable healthcare services to the ANP are sufficiently comprehensive, coordinated with the Government of Afghanistan, and being implemented so as to meet the timeline for transition goals, • advisory resources are sufficient and appropriate in order to develop the healthcare services necessary to support the medical needs of the ANP, and • developmental efforts are on schedule and effective in ensuring there is adequate medical capability to provide proper medical support to ANP personnel from the point of injury to the next required level of care. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 187 OTHER AGENCY OVERSIGHT Mi-17 Cockpit Modifications under Task Order W58RGZ-09D-0130-0102 (Project No. D2013-D000AS-0097.000, Initiated February 8, 2013) DOD OIG is conducting a follow-on audit to the Audit of Task Orders for Mi-17 Overhauls and Cockpit Modifications (Project No. D2012D000AS-0075.000). In this follow-on audit, DOD OIG is determining whether DOD officials properly awarded and administered indefinite-delivery, indefinite-quantity contract W58RGZ-09-D-0130, Task Order 0102, for the modification of DOD-owned Mi-17 variant aircraft in accordance with federal and DOD regulations and policies. Under the prior project, DOD OIG reviewed the procurement of overhaul services and parts for Pakistanowned Mi-17 variant aircraft, awarded by modification to Task Order 0102. Price Reasonableness Determinations for Datron World Communications, Inc. Contracts Awarded by the U.S. Army Contracting Command for the Afghan National Security Forces (Project No. 2013-D000AT-0083.000, Initiated January 3, 2013) DOD OIG is determining whether the U.S. Army Contracting Command obtained fair and reasonable prices for communications equipment and components procured from Datron World Communications Inc. for the Afghan National Security Forces (ANSF). This project is the second in a series of audits focusing on Datron World Communications Inc. contracts. The first audit in this series is D2012-D000AT-0129.000. Assessment of Planning for the Effective Development and Transition of Critical Afghanistan National Security Forces Enablers to Post-2014 Capabilities (Project No. D2013-D00SPO-0087.000, Initiated December 18, 2012) DOD OIG is determining whether U.S. and Coalition goals, objectives, plans, guidance, and resources are sufficient to effectively develop, manage, and transition critical ANSF operational enablers to Afghan National Army (ANA) and ANP capabilities. In addition DOD OIG is determining what critical enabling task capabilities will require further development beyond the end of 2014. Also, DOD OIG is determining whether mitigating actions are planned and what they consist of for any critical ANSF enabling capabilities that are expected to be or may still be under development after 2014. In essence, DOD OIG will review what plans and activities are in place to mature enabling force functions deemed critical for the ANSF to conduct and sustain independent operations. The first report, DODIG-2013-129 (classified report), was issued on September 20, 2013. A second report is expected late first quarter FY 2014. 188 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION OTHER AGENCY OVERSIGHT Examination of Department of Defense Execution of North Atlantic Treaty Organization Contributing Countries Donations to Afghanistan National Army Trust Fund for Approval Sustainment Projects as of September 30, 2012 (Project No. D2013-D000FL-0056.000, Initiated December 3, 2012) The Under Secretary of Defense (Comptroller)/Chief Financial Officer, DOD [USD(C)/CFO] requested this examination. The USD(C)/CFO plans to assert that the following schedules are fairly presented in all material respects: • Schedule of Contributing Country Donations to Afghanistan National Army Trust Fund Approved Sustainment Projects as of September 30, 2012 • Schedule of Financial Status of Contributing Country Donations to Afghanistan National Army Trust Fund Transferred to the United States of America for Approved Sustainment Projects as of September 30, 2012 DOD OIG is determining whether the USD(C)/CFO fairly presented receipts and expenditures of funds contributed to the Afghanistan National Army Trust Fund and transferred to DOD for execution under the terms of the Memorandum of Understanding Among the United States of America and North Atlantic Treaty Organization and Supreme Headquarters Allied Powers-Europe Regarding Management and Administration of Trust Fund Donations for Support and Sustainment of the Afghanistan National Army. In addition, DOD OIG will review internal controls over financial reporting and compliance with laws and regulations as it relates to its engagement objective. The USD(C)/CFO is responsible for the aforementioned schedules. DOD OIG’s responsibility is to express an opinion based on its examination. Shindand Training Contracts (Project No. D2013-D000AS-0052.000, Initiated November 1, 2012) DOD OIG is determining whether pilot-training contracts for fixed-wing and rotary-wing aircraft at Shindand Air Base are properly managed and administered in accordance with federal and DOD requirements. Specifically, DOD OIG will determine whether contract requirements are being met and evaluate the effectiveness of contract oversight. Surveillance Structure on Contracts Supporting the Afghanistan Rotary Wing Program for the U.S. Transportation Command (Project No. D2013-D000AS-0001.000, Initiated October 5, 2012) DOD OIG is conducting its second in a series of audits on the Afghanistan rotary-wing transport contracts. The overall objective is to determine whether U.S. Transportation Command and U.S. Central Command officials have adequate oversight of processes and procedures for the contracts. The first audit was “Afghanistan Rotary Wing Transport Contracts for the U.S. Transportation Command” (D2012-D000AS-0031.000). REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 189 OTHER AGENCY OVERSIGHT Contract Management and Oversight of Military Construction Projects for the Special Operation Forces Complexes at Bagram Airfield, Afghanistan (Project No. D2012-D000JA-0221.000, Initiated September 28, 2012) DOD OIG is determining whether DOD is providing effective oversight of military construction projects in Afghanistan. Specifically, DOD OIG will determine whether the U.S. Army Corps of Engineers is properly monitoring contractor performance and adequately performing quality-assurance oversight responsibilities for construction projects for Special Operations Forces at Bagram Airfield. Department of State Office of Inspector General–Middle East Regional Office State OIG has three ongoing projects this quarter related to Afghanistan reconstruction. Audit of Bureau of International Narcotics and Law Enforcement Affairs Counternarcotics Assistance to Afghanistan (Project No. 13AUD082, Initiated June 2013) The audit overall objective is to evaluate the management and oversight of the Bureau of International Narcotics and Law Enforcement Affairs (INL) counternarcotics program for Afghanistan, including whether INL has achieved intended and sustainable outcomes and whether INL has applied adequate internal controls over the administration of direct assistance for the Afghanistan counternarcotics program. Audit of Bureau of Diplomatic Security Worldwide Protective Services Contract Task Orders 2, 9, and 11 for Movement and Static Security Services in Jerusalem and Afghanistan (Project No. 13AUD52, Initiated February 2013) The overall audit objective is to determine the effectiveness of the Department’s management and oversight of the Worldwide Protective Services Contract Task Orders 2, 9, and 11. Specifically, the audit team will determine whether the contractor is performing in accordance with contract terms and conditions, the contractor’s work is adequately monitored, and invoice review and approval procedures are in place to ensure accuracy and completeness of costs. Audit of the Department of State Transition Planning for a Reduced Military Presence in Afghanistan (Project No. 12AUD79, Initiated December 2012) The overall audit objective is to evaluate the Department’s planning for the transition from a predominately military to a civilian-led mission in Afghanistan. Specifically, OIG will determine whether the Department 190 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION OTHER AGENCY OVERSIGHT has adequately defined its mission and support requirements, evaluated its personnel and funding needs, and integrated its planning with the Department of Defense and other relevant U.S. agencies, the Government of Afghanistan, and other non-U.S. government agencies. State OIG will also determine whether planning has incorporated lessons learned from the transition in Iraq. Government Accountability Office GAO has five ongoing projects this quarter related to Afghanistan reconstruction Drawdown of DOD Contractors in Afghanistan (Project No. 351851, Initiated August 16, 2013) The key objectives are to determine (1) the extent to which DOD is applying operational contract support lessons learned as it begins its drawdown of contractors and their equipment in Afghanistan; (2) the processes established by DOD and USFOR-A to drawdown its contractor workforce and associated equipment and whether this process is consistent with established guidance; (3) the extent to which DOD is using cost and other information to help ensure it is making cost-effective operational contract support decisions, including decisions on the disposition of contractor-managed government-owned equipment; (4) actions the Department has taken to ensure that there are sufficient oversight personnel in place to oversee contractors as it reduces the number of military forces in Afghanistan; and (5) the extent to which DOD and USFOR-A have begun planning for the use of contractors after December 2014. In addition, GAO will identify the factors that are being considered as DOD begins to plan its post-2014 contractor requirements and what actions DOD is taking to ensure that the operational contractor support needed to support the post-2014 footprint is being provided in the most cost-effective manner possible. Use of Foreign Labor Contractors Abroad (Project No. 320985, Initiated June 26, 2013) The United States relies on contractors to provide diverse services overseas. Despite prohibiting the use of trafficked labor for all U.S. government contracts, concerns remain about the protections afforded to foreign workers recruited by U.S. contractors because prevailing practices in some host countries diverge from U.S. standards. Key questions: (1) What are the practices of U.S. government contractors in recruiting foreign workers for work outside the United States? (2) What legal and other authorities do U.S. agencies identify as providing protection to foreign workers employed by U.S. government contractors outside the United States? (3) To what extent do federal agencies provide oversight and enforcement of such authorities? REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 191 OTHER AGENCY OVERSIGHT Costs of DOD’s Transition to the Afghan Public Protection Force (Project No. 351819, Initiated May 9, 2013) The Afghan Public Protection Force (APPF) began assuming security responsibilities in March 2012. Private security contractors (PSCs), used to secure military bases, were to have been replaced by either the APPF or military personnel by March 2013. Key questions: To what extent has: (1) DOD implemented the transition of security services from private security contractors to the APPF; (2) DOD developed cost estimates related to the transition to the APPF and what actions are being taken to minimize these costs; and (3) DOD assessed the current and potential security risks to U.S. personnel and logistics as a result of the transition to the APPF and taken measures to minimize these risks? Department of State and U.S. Agency for International Development Contingency Contracting (Project No. 121119, Initiated March 6, 2013) The Department of State and USAID have relied extensively on contractors in Iraq and Afghanistan. While the use of contractors in such contingency operations is not new, GAO and others have found that State and USAID experienced challenges managing contracts in these operations. The project will ask, to what extent have State and USAID: (1) assessed their organizational structures related to contracting for contingency operations and determined whether related changes are needed; (2) assessed their contract award and management policies for contingency operations and determined whether changes to those policies are needed; and (3) assessed their workforces, including reliance on contractors, for contingency operations and determined whether changes are needed? Afghanistan Equipment Reduction and Base Closures (Project No. 351798, Initiated January 18, 2013) DOD has stated that it will cost at least $5.7 billion to draw down an estimated 90,000 containers of material and 50,000 vehicles from Afghanistan. Given the large number of bases and difficult conditions in Afghanistan, an efficient and cost-effective drawdown will likely depend on DOD knowing how much equipment it has in Afghanistan and making cost-effective decisions about its disposition. Key Questions: To what extent (1) has DOD implemented base-closure procedures, including the accountability of equipment, to meet command-established objectives and timelines? (2) Are command-established objectives and timelines for the Afghanistan equipment drawdown supported by DOD facilities and processes? (3) Is DOD using cost and other information to help ensure it is making cost-effective disposition decisions? 192 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION OTHER AGENCY OVERSIGHT U.S. Army Audit Agency This quarter, the USAAA has no ongoing audits related to reconstruction initiatives. U.S. Agency for International Development Office of Inspector General This quarter, USAID OIG has three ongoing audits related to reconstruction initiatives. One project, also listed below, has been suspended. Audit of USAID/Afghanistan’s Elections Assistance Program (Project No. FF100113, Initiated April 1, 2013) Audit Objectives: • To determine whether USAID’s assistance strengthened the ability of the Government of the Islamic Republic of Afghanistan institutions, Afghan civil society, and other organizations to enable credible, inclusive, and transparent presidential and provincial council elections in 2014. • To determine if USAID’s assistance contributed to Afghan solutions to the longer-term issues identified in the OIG’s previous audit of elections assistance (Report No. F-306-11-003-P, June 19, 2011). Audit of USAID/Afghanistan’s Transition Plans (Project No. FF100712, Initiated November 28, 2012) Objective: Does USAID/Afghanistan have plans to address contingencies related to the U.S. Government’s transition in Afghanistan? (Note: this audit was suspended). Audit of USAID/Afghanistan’s Management Controls Over Premium Pay (Project No. FF100612, Initiated October 9, 2012) Objective: To determine if USAID/Afghanistan is using sufficient management controls over the submission, authorization, approval, and certification of premium-pay benefits for its staff in accordance with federal time-and-attendance policies and procedures. Review of USAID/Afghanistan’s Use of the Commander’s Emergency Response Program Funds for Selected Projects (Project No. FF101712, Initiated October 25, 2012) Objective: To determine whether the Commander’s Emergency Response Program (CERP) funds distributed by USFOR-A to USAID/Afghanistan for specific projects were used for their intended purposes, and were in compliance with applicable laws and regulations. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 193 APPENDICES AND ENDNOTES CONTENTS Appendix A 196 Appendix B 202 Appendix C 204 Appendix D 208 Appendix E 212 Endnotes 216 The Official Seal of SIGAR The Official Seal of SIGAR represents the coordination of efforts between the United States and Afghanistan to provide accountability and oversight of reconstruction activities. The phrase along the top side of the seal’s center is in Dari and means “SIGAR.” The phrase along the bottom side of the seal’s center is in Pashtu and has the same meaning. 194 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES AND ENDNOTES APPENDICES APPENDIX A CROSS-REFERENCE OF REPORT TO STATUTORY REQUIREMENTS This appendix cross-references the pages of this report to the quarterly reporting and related requirements under SIGAR’s enabling legislation, the National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110-181, § 1229 (Table A.1), and to the semiannual reporting requirements prescribed for inspectors general more generally under the Inspector General Act of 1978, as amended (5 U.S.C. App. 3) (Table A.2). TABLE A.1 CROSS-REFERENCE TO SIGAR QUARTERLY REPORTING REQUIREMENTS UNDER P.L. NO. 110-181, § 1229 Public Law Section SIGAR Enabling Language SIGAR Action Report Section To provide for an independent and objective means of keeping the Secretary of State and the Secretary of Defense fully and currently informed about problems and deficiencies relating to the administration of such programs and operations and the necessity for and progress on corrective action. Ongoing; quarterly report Full report The Inspector General shall report directly to, and be under the general supervision of, the Secretary of State and the Secretary of Defense Report to the Secretary of State and the Secretary of Defense Full report OVERSIGHT OF AFGHANISTAN RECONSTRUCTION — It shall be the duty of the Inspector General to conduct, supervise, and coordinate audits and investigations of the treatment, handling, and expenditure of amounts appropriated or otherwise made available for the reconstruction of Afghanistan, and of the programs, operations, and contracts carried out utilizing such funds, including subsections (A) through (G) below. Review appropriated/ available funds Full report Section 1229(f)(1)(A) The oversight and accounting of the obligation and expenditure of such funds Review obligations and expenditures of appropriated/ available funds SIGAR Oversight Funding Section 1229(f)(1)(B) The monitoring and review of reconstruction activities funded by such funds Review reconstruction activities funded by appropriations and donations SIGAR Oversight Section 1229(f)(1)(C) The monitoring and review of contracts funded by such funds Review contracts using appropriated and available funds Note 1 Section 1229(f)(1)(D) The monitoring and review of the transfer of such funds and associated information between and among departments, agencies, and entities of the United States, and private and nongovernmental entities Review internal and external transfers of appropriated/ available funds Appendix B Section 1229(f)(1)(E) The maintenance of records on the use of such funds to facilitate future audits and investigations of the use of such fund[s] Maintain audit records SIGAR Oversight Appendix C Appendix D Purpose Section 1229(a)(3) Supervision Section 1229(e)(1) Duties Section 1229(f)(1) 196 Review programs, operations, contracts using appropriated/ available funds SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES TABLE A.1 (CONTINUED) CROSS-REFERENCE TO SIGAR QUARTERLY REPORTING REQUIREMENTS UNDER P.L. NO. 110-181, § 1229 Public Law Section SIGAR Enabling Language SIGAR Action Report Section Section 1229(f)(1)(F) The monitoring and review of the effectiveness of United States coordination with the Governments of Afghanistan and other donor countries in the implementation of the Afghanistan Compact and the Afghanistan National Development Strategy Monitoring and review as described Audits Section 1229(f)(1)(G) The investigation of overpayments such as duplicate payments or duplicate billing and any potential unethical or illegal actions of Federal employees, contractors, or affiliated entities, and the referral of such reports, as necessary, to the Department of Justice to ensure further investigations, prosecutions, recovery of further funds, or other remedies Conduct and reporting of investigations as described Investigations Section 1229(f)(2) OTHER DUTIES RELATED TO OVERSIGHT — The Inspector General shall establish, maintain, and oversee such systems, procedures, and controls as the Inspector General considers appropriate to discharge the duties under paragraph (1) Establish, maintain, and oversee systems, procedures, and controls Full report Section 1229(f)(3) DUTIES AND RESPONSIBILITIES UNDER INSPECTOR GENERAL ACT OF 1978 — In addition,. . .the Inspector General shall also have the duties and responsibilities of inspectors general under the Inspector General Act of 1978 Duties as specified in Inspector General Act Full report Section 1229(f)(4) COORDINATION OF EFFORTS — The Inspector General shall coordinate with, and receive the cooperation of, each of the following: (A) the Inspector General of the Department of Defense, (B) the Inspector General of the Department of State, and (C) the Inspector General of the United States Agency for International Development Coordination with the inspectors general of DoD, DoS, and USAID Other Agency Oversight Federal Support and Other Resources Section 1229(h)(5)(A) ASSISTANCE FROM FEDERAL AGENCIES — Upon request of the Inspector General for information or assistance from any department, agency, or other entity of the Federal Government, the head of such entity shall, insofar as is practicable and not in contravention of any existing law, furnish such information or assistance to the Inspector General, or an authorized designee Expect support as requested Full report Section 1229(h)(5)(B) REPORTING OF REFUSED ASSISTANCE — Whenever information or assistance requested by the Inspector General is, in the judgment of the Inspector General, unreasonably refused or not provided, the Inspector General shall report the circumstances to the Secretary of State or the Secretary of Defense, as appropriate, and to the appropriate congressional committees without delay None reported N/A Reports REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 197 APPENDICES TABLE A.1 (CONTINUED) CROSS-REFERENCE TO SIGAR QUARTERLY REPORTING REQUIREMENTS UNDER P.L. NO. 110-181, § 1229 Public Law Section SIGAR Enabling Language SIGAR Action Report Section Section 1229(i)(1) QUARTERLY REPORTS — Not later than 30 days after the end of each fiscal-year quarter, the Inspector General shall submit to the appropriate committees of Congress a report summarizing, for the period of that quarter and, to the extent possible, the period from the end of such quarter to the time of the submission of the report, the activities during such period of the Inspector General and the activities under programs and operations funded with amounts appropriated or otherwise made available for the reconstruction of Afghanistan. Each report shall include, for the period covered by such report, a detailed statement of all obligations, expenditures, and revenues associated with reconstruction and rehabilitation activities in Afghanistan, including the following – Report – 30 days after the end of each calendar quarter Full report Appendix B Section 1229(i)(1)(A) Obligations and expenditures of appropriated/donated funds Obligations and expenditures of appropriated/donated funds Appendix B Section 1229(i)(1)(B) A project-by-project and program-by-program accounting of the costs incurred to date for the reconstruction of Afghanistan, together with the estimate of the Department of Defense, the Department of State, and the United States Agency for International Development, as applicable, of the costs to complete each project and each program Project-by-project and program-by-program accounting of costs. List unexpended funds for each project or program Funding Note 1 Section 1229(i)(1)(C) Revenues attributable to or consisting of funds provided by foreign nations or international organizations to programs and projects funded by any department or agency of the United States Government, and any obligations or expenditures of such revenues Revenues, obligations, and expenditures of donor funds Funding Section 1229(i)(1)(D) Revenues attributable to or consisting of foreign assets seized or frozen that contribute to programs and projects funded by any U.S. government department or agency, and any obligations or expenditures of such revenues Revenues, obligations, and expenditures of funds from seized or frozen assets Funding Section 1229(i)(1)(E) Operating expenses of agencies or entities receiving amounts appropriated or otherwise made available for the reconstruction of Afghanistan Operating expenses of agencies or any organization receiving appropriated funds Funding Appendix B Section 1229(i)(1)(F) In the case of any contract, grant, agreement, or other funding mechanism described in paragraph (2)* — (i) The amount of the contract or other funding mechanism; (ii) A brief discussion of the scope of the contract or other funding mechanism; (iii) A discussion of how the department or agency of the United States Government involved in the contract, grant, agreement, or other funding mechanism identified and solicited offers from potential contractors to perform the contract, grant, agreement, or other funding mechanism, together with a list of the potential individuals or entities that were issued solicitations for the offers; and (iv) The justification and approval documents on which was based the determination to use procedures other than procedures that provide for full and open competition Describe contract details Note 1 198 Summarize activities of the Inspector General Detailed statement of all obligations, expenditures, and revenues SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES TABLE A.1 (CONTINUED) CROSS-REFERENCE TO SIGAR QUARTERLY REPORTING REQUIREMENTS UNDER P.L. NO. 110-181, § 1229 Public Law Section SIGAR Enabling Language SIGAR Action Report Section Section 1229(i)(3) PUBLIC AVAILABILITY — The Inspector General shall publish on a publicly available Internet website each report under paragraph (1) of this subsection in English and other languages that the Inspector General determines are widely used and understood in Afghanistan Publish report as directed at www.sigar.mil Full report Section 1229(i)(4) FORM — Each report required under this subsection shall be submitted in unclassified form, but may include a classified annex if the Inspector General considers it necessary Publish report as directed Full report Section 1229(j)(1) Inspector General shall also submit each report required under subsection (i) to the Secretary of State and the Secretary of Defense. Submit quarterly report Full report Dari and Pashtu translation in process Note 1: Although this data is normally made available on SIGAR’s website (www.sigar.mil), the data SIGAR has received is in relatively raw form and is currently being reviewed, analyzed, and organized for all future SIGAR purposes. * Covered “contracts, grants, agreements, and funding mechanisms” are defined in paragraph (2) of Section 1229(i) of P.L. No. 110-181 as being— “any major contract, grant, agreement, or other funding mechanism that is entered into by any department or agency of the United States Government that involves the use of amounts appropriated or otherwise made available for the reconstruction of Afghanistan with any public or private sector entity for any of the following purposes: To build or rebuild physical infrastructure of Afghanistan. To establish or reestablish a political or societal institution of Afghanistan. To provide products or services to the people of Afghanistan.” REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 199 APPENDICES TABLE A.2 CROSS-REFERENCE TO SEMIANNUAL REPORTING REQUIREMENTS UNDER SECTION 5 OF THE IG ACT OF 1978, AS AMENDED (5 U.S.C. APP. 3) (“IG ACT”) IG Act Section IG Act Language SIGAR Action Section Section 5(a)(1) Description of significant problems, abuses, and deficiencies Extract pertinent information from SWA/JPG member reports List problems, abuses, and deficiencies from SIGAR audit reports, investigations, and inspections Other Agency Oversight Extract pertinent information from SWA/JPG member l reports Other Agency Oversight Section 5(a)(2) Description of recommendations for corrective action…with respect to significant problems, abuses, or deficiencies List recommendations from SIGAR audit reports See Letters of Inquiry at www.sigar.mil See Letters of Inquiry at www.sigar.mil Section 5(a)(3) Identification of each significant recommendation described in previous semiannual reports on which corrective action has not been completed List all instances of incomplete corrective action from previous semiannual reports In process Section 5(a)(4) A summary of matters referred to prosecutive authorities and the prosecutions and convictions which have resulted Extract pertinent information from SWA/JPG member reports Other Agency Oversight Section 5(a)(5) A summary of each report made to the [Secretary of Defense] under section 6(b)(2) (instances where information requested was refused or not provided) Extract pertinent information from SWA/JPG member reports A listing, subdivided according to subject matter, of each audit report, inspection report and evaluation report issued...showing dollar value of questioned costs and recommendations that funds be put to better use Extract pertinent information from SWA/JPG member reports Section 5(a)(7) A summary of each particularly significant report Extract pertinent information from SWA/JPG member reports Section 5(a)(8) Statistical tables showing the total number of audit reports and the total dollar value of questioned costs Extract pertinent information from SWA/JPG member reports See reports of SWA/JPG members Develop statistical tables showing dollar value of questioned cost from SIGAR reports In process Statistical tables showing the total number of audit reports, inspection reports, and evaluation reports and the dollar value of recommendations that funds be put to better use by management Extract pertinent information from SWA/JPG member reports See reports of SWA/JPG members Develop statistical tables showing dollar value of funds put to better use by management from SIGAR reports In process A summary of each audit report, inspection report, and evaluation report issued before the commencement of the reporting period for which no management decision has been made by the end of reporting period, an explanation of the reasons such management decision has not been made, and a statement concerning the desired timetable for achieving a management decision Extract pertinent information from SWA/JPG member reports See reports of SWA/JPG members Provide a synopsis of SIGAR audit reports in which recommendations by SIGAR are still open None List SIGAR Investigations that have been referred Section 5(a)(6) Section 5(a)(9) Section 5(a)(10) 200 Other Agency Oversight List instances in which information was refused SIGAR auditors, investigators, or inspectors Other Agency Oversight List SIGAR reports Other Agency Oversight A full list of significant reports can be found at Provide a synopsis of the significant SIGAR reports www.sigar.mil SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES TABLE A.2 (CONTINUED) CROSS-REFERENCE TO SEMIANNUAL REPORTING REQUIREMENTS UNDER SECTION 5 OF THE IG ACT OF 1978, AS AMENDED (5 U.S.C. APP. 3) (“IG ACT”) IG Act Section IG Act Language SIGAR Action Section Section 5(a)(11) A description and explanation of the reasons for any significant revised management decision Extract pertinent information from SWA/JPG member reports See reports of SWA/JPG members Explain SIGAR audit reports in which significant revisions have been made to management decisions None Extract pertinent information from SWA/JPG member reports See reports of SWA/JPG members Explain SIGAR audit reports in which SIGAR disagreed with management decision No disputed decisions during the reporting period Information described under [Section 804(b)] of the Federal Financial Management Improvement Act of 1996 (instances and reasons when an agency has not met target dates established in a remediation plan) Extract pertinent information from SWA/JPG member reports See reports of SWA/JPG members Provide information where management has not met targets from a remediation plan No disputed decisions during the reporting period Section 5(a)(14)(A) An Appendix containing the results of any peer review conducted by another Office of Inspector General during the reporting period; or SIGAR has posted in full the results of, and reports from, SIGAR’s most recent peer reviews (completed during July 2010, prior to the current reporting period), on its Web site Posted in full at www.sigar.mil Section 5(a)(14)(B) If no peer review was conducted within that report- 15 July 2010 ing period, a statement identifying the date of the last peer review conducted by another Office of Inspector General Posted in full at www.sigar.mil Section 5(a)(15) A list of any outstanding recommendations from any peer review conducted by another Office of Inspector General that have not been fully implement, including a statement describing the status of the implementation and why implementation is not complete None – all peer review recommendations effectively addressed, and remedial measures implemented, by 30 September 2010 Recommendations and related materials posted in full at www.sigar.mil Section 5(a)(16) Any peer reviews conducted by SIGAR of another IG Office during the reporting period, including a list of any outstanding recommendations made from any previous peer review . . . that remain outstanding or have not been fully implemented Not applicable (SIGAR did not conduct, or participate in the conduct, of a peer review of another Office of Inspector General during the reporting period) SIGAR Oversight Section 5(a)(12) Section 5(a)(13) Information concerning any significant management decision with which the Inspector General is in disagreement REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 201 APPENDICES APPENDIX B U.S. FUNDS FOR AFGHANISTAN RECONSTRUCTION ($ MILLIONS) Table B.1 lists funds appropriated for Afghanistan reconstruction by program, per year, as of September 30, 2013. TABLE B.1 Notes: Numbers have been rounded. DOD reprogrammed $1 billion from FY 2011 ASFF. DOD reprogrammed $1 billion from FY 2012 ASFF. P.L. 113-6 rescinded $1 billion from FY 2012 ASFF. DOD transferred $101 million from FY 2011 AIF to FY 2011 ESF to fund an infrastructure project to be implemented by USAID. Sources: DOD, responses to SIGAR data call, 10/23/2013, 10/9/2013, 9/30/2013, 10/22/2012, 10/14/2009, and 10/1/2009; State, responses to SIGAR data call, 10/18/2013, 7/2/2013, 6/27/2013, 10/5/2012 and 6/27/2012; Treasury, response to SIGAR data call, 10/4/2013; OMB, responses to SIGAR data call, 7/19/2013 and 1/4/2013; USAID, responses to SIGAR data call, 10/10/2013, 10/15/2010, 1/15/2010, and 10/9/2009; DOJ, response to SIGAR data call, 7/7/2009; USDA, response to SIGAR data call, 4/2009; P.L. 113-6, 3/26/2013; P.L. 112-74, 12/23/2011; P.L. 112-10, 4/15/2011; P.L. 111-212, 10/29/2010; P.L. 111-118, 12/19/2009; FY 2010 Defense Explanatory Statement. SECURITY Afghanistan Security Forces Fund (ASFF) Train & Equip (DOD) Foreign Military Financing (FMF) International Military Education and Training (IMET) NDAA Section 1207 Transfer Total - Security GOVERNANCE & DEVELOPMENT Commander's Emergency Response Program (CERP) Afghanistan Infrastructure Fund (AIF) Task Force for Business and Stability Operations (TFBSO) Economic Support Fund (ESF) Development Assistance (DA) Afghanistan Freedom Support Act (AFSA) Child Survival & Health (CSH + GHAI) Commodity Credit Corp (CCC) USAID (other) Non-Proliferation, Antiterrorism, Demining & Related (NADR) Provincial Reconstruction Team Advisors Treasury Technical Assistance Total - Governance & Development COUNTER-NARCOTICS International Narcotics Control & Law Enforcement (INCLE) Drug Interdiction & Counter-Drug Activities (DOD CN) Drug Enforcement Administration (DEA) Total - Counter-Narcotics HUMANITARIAN P.L. 480 Title I P.L. 480 Title II Disaster Assistance (IDA) Transition Initiatives (TI) Migration & Refugee Assistance (MRA) Voluntary Peacekeeping (PKO) Emergency Refugee & Migration Assistance (ERMA) Food for Progress 416(b) Food Aid Food for Education Emerson Trust Total - Humanitarian INTERNATIONAL AFFAIRS OPERATIONS Oversight Other Total - International Affairs Operations TOTAL FY 2002 DOD DOD State State Other 52,776.82 440.00 1,059.14 13.32 9.90 54,299.18 0.00 0.00 57.26 0.18 0.00 57.44 DOD DOD DOD USAID USAID DOD USAID USAID USAID State USDA Treasury 3,639.00 1,024.00 692.15 16,673.06 885.45 550.00 554.58 31.65 48.48 606.29 5.70 4.45 24,714.82 0.00 0.00 0.00 117.72 18.30 0.00 7.52 7.48 0.00 44.00 0.00 0.90 195.92 State DOD DOJ 4,181.80 2,617.35 127.37 6,926.52 60.00 0.00 0.58 60.58 USDA USAID USAID USAID State State State USDA USDA USDA USDA 5.00 903.69 516.88 36.36 834.84 69.33 25.20 109.49 95.18 50.49 22.40 2,668.85 0.00 159.50 197.09 8.07 135.47 23.93 25.00 0.00 46.46 0.00 0.00 595.52 231.30 7,757.00 7,988.30 0.00 155.60 155.60 96,597.67 U.S. FUNDING SOURCES 1,065.06 AGENCY TOTAL FUNDING 202 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 0.00 0.00 191.00 0.39 0.00 191.39 0.00 150.00 414.08 0.67 0.00 564.75 995.00 290.00 396.80 0.95 0.00 1,682.75 1,908.13 0.00 0.00 0.98 0.00 1,909.11 7,406.40 0.00 0.00 1.19 0.00 7,407.59 2,750.00 0.00 0.00 1.66 9.90 2,761.56 5,606.94 0.00 0.00 1.40 0.00 5,608.34 9,166.77 0.00 0.00 1.76 0.00 9,168.53 10,619.28 0.00 0.00 1.56 0.00 10,620.84 9,200.10 0.00 0.00 1.18 0.00 9,201.28 5,124.20 0.00 0.00 1.42 0.00 5,125.62 0.00 0.00 0.00 223.79 42.54 300.00 49.68 1.33 0.50 34.70 0.00 1.00 653.54 40.00 0.00 0.00 893.83 153.14 150.00 33.40 0.00 5.00 66.90 0.00 0.06 1,342.33 136.00 0.00 0.00 1,283.00 169.21 100.00 38.00 0.00 0.00 40.65 0.00 0.95 1,767.80 215.00 0.00 0.00 473.39 184.99 0.00 41.45 0.00 0.00 35.72 0.00 0.19 950.74 209.00 0.00 0.00 1,224.24 166.81 0.00 100.77 0.00 0.00 36.72 0.00 0.13 1,737.67 488.33 0.00 0.00 1,399.51 149.43 0.00 63.07 10.77 20.00 29.72 0.00 0.75 2,161.57 550.67 0.00 14.44 2,083.16 0.40 0.00 58.23 4.22 2.81 59.92 5.70 0.47 2,780.03 1,000.00 0.00 59.26 3,346.00 0.30 0.00 92.30 4.22 4.90 70.74 0.00 0.00 4,577.72 400.00 299.00 239.24 2,168.51 0.00 0.00 69.91 3.09 6.25 69.30 0.00 0.00 3,255.29 400.00 400.00 241.82 1,836.76 0.35 0.00 0.00 0.55 7.18 65.32 0.00 0.00 2,951.98 200.00 325.00 137.40 1,623.15 0.00 0.00 0.25 0.00 1.84 52.60 0.00 0.00 2,340.23 0.00 0.00 2.87 2.87 220.00 71.80 3.72 295.52 709.28 224.54 16.77 950.59 232.65 108.05 23.66 364.36 251.74 290.97 20.38 563.09 307.57 192.81 40.59 540.97 484.00 230.06 18.80 732.86 589.00 392.27 0.00 981.27 400.00 376.53 0.00 776.53 358.75 422.96 0.00 781.71 568.81 307.36 0.00 876.17 5.00 46.10 85.52 11.69 61.50 9.90 0.00 4.96 14.14 9.27 0.00 248.08 0.00 49.20 11.16 11.22 63.30 20.00 0.00 9.08 34.58 6.12 0.00 204.66 0.00 56.60 4.22 1.60 47.10 15.50 0.00 30.10 0.00 10.02 0.00 165.14 0.00 60.00 0.04 0.00 41.80 0.00 0.00 23.24 0.00 25.08 0.00 150.16 0.00 60.00 0.03 0.00 53.80 0.00 0.00 9.47 0.00 0.00 0.00 123.30 0.00 177.00 16.90 0.00 44.25 0.00 0.00 20.55 0.00 0.00 22.40 281.10 0.00 65.41 27.13 0.75 76.79 0.00 0.20 12.09 0.00 0.00 0.00 182.37 0.00 58.13 29.73 0.87 81.48 0.00 0.00 0.00 0.00 0.00 0.00 170.21 0.00 112.55 66.68 1.10 65.00 0.00 0.00 0.00 0.00 0.00 0.00 245.33 0.00 59.20 56.33 0.64 99.35 0.00 0.00 0.00 0.00 0.00 0.00 215.52 0.00 0.00 22.04 0.42 65.00 0.00 0.00 0.00 0.00 0.00 0.00 87.46 0.00 35.30 35.30 0.00 211.16 211.16 0.00 136.29 136.29 0.00 131.90 131.90 2.50 207.80 210.30 14.30 435.13 449.43 25.20 1,060.70 1,085.90 34.40 1,761.70 1,796.10 37.20 905.10 942.30 59.00 1,427.41 1,486.41 58.70 1,288.90 1,347.60 1,131.18 2,618.43 4,702.56 3,506.27 10,041.96 6,194.63 10,389.50 16,693.82 15,840.28 14,636.90 9,777.08 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 203 APPENDICES APPENDIX C SIGAR WRITTEN PRODUCTS SIGAR AUDITS Completed Audits SIGAR completed four audits during this reporting period. COMPLETED SIGAR AUDITS AS OF OCTOBER 30, 2013 Report Identifier Report Title Date Issued SIGAR Audit 14-3 Afghan National Army: Combined Security Transition CommandAfghanistan Lacks Key Information on Inventory in Stock and Requirements for Vehicle Spare Parts 10/2013 SIGAR Audit 14-1 Afghan National Police Fuel Program: Concerted Efforts Needed to Strengthen Oversight of U.S. Funds 10/2013 SIGAR Audit 13-18 Afghan National Security Forces: Additional Action Needed to Reduce Waste in $4.7 Billion Worth of Planned and Ongoing Construction Projects 9/2013 SIGAR Audit 13-17 USAID Continues Providing Millions of Dollars to the Ministry of Public Health Despite the Risk of Misuse of Funds 9/2013 New Audits SIGAR initiated two audits during this reporting period. NEW SIGAR AUDITS AS OF OCTOBER 30, 2013 Audit Identifier Project Title Date Initiated SIGAR 087A Women’s Initiatives 8/2013 SIGAR 086A Education Sector 8/2013 Ongoing Audits SIGAR had 10 audits in progress during this reporting period. ONGOING SIGAR AUDITS AS OF OCTOBER 30, 2013 Audit Identifier Project Title Date Initiated SIGAR 085A Mobile Strike Force Vehicles for the Afghan National Army 7/2013 SIGAR 083A U.S. Agency for International Development (USAID) and Department of Homeland Security Customs and Border Protection (CBP) Efforts to Develop and Strengthen Afghanistan’s Capacity to Assess and Collect Customs Revenue 7/2013 SIGAR 082A U.S. Efforts to Develop and Strengthen the Capacity of Afghanistan’s Central Bank 6/2013 SIGAR 078A Accountability of Weapons and Equipment Provided to the Afghan National Security Forces (ANSF) 5/2013 SIGAR 081A Assessments of Afghan Ministerial Capacity 4/2013 SIGAR 080A U.S. Government Reconstruction Transition Plan 3/2013 204 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES ONGOING SIGAR AUDITS AS OF OCTOBER 30, 2013 Audit Identifier Project Title Date Initiated SIGAR 079A Reliability of Afghan National Security Forces Personnel Data 2/2013 SIGAR 077A USAID Assistance to Afghanistan’s Water Sector 2/2013 SIGAR 073A Training of Afghan Justice Sector Personnel 12/2012 SIGAR 072A Afghan National Security Literacy Training 11/2012 Completed Financial Audit SIGAR completed one financial audit during this reporting period. COMPLETED SIGAR FINANCIAL AUDIT AS OF OCTOBER 30, 2013 Report Identifier Report Title Date Issued SIGAR Financial Audit 14-9 USAID’s Afghanistan Rule of Law-Informal Project and USAID’s Services Under Program and Project Offices for Results Tracking Project: Audit of Costs Incurred by Checchi & Company Consulting, Inc. 10/2013 New Financial Audits SIGAR initiated 13 financial audits during this reporting period. NEW SIGAR FINANCIAL AUDITS AS OF OCTOBER 30, 2013 Audit Identifier Project Title Date Initiated F-037 USAID Task Order with Tetra Tech ARD for technical support to the Rule of Law Stabilization Program–Formal 9/2013 F-036 State Grant with Sayed Majidi Architecture and Design (SMAD) for project management services for architectural and engineering design of the new national museum in Kabul 9/2013 F-035 State Cooperative Agreement and Grant with CETENA Group for support to the Afghan TV Content Production Manager project and the Nationwide Adult Literacy project 9/2013 F-034 State Grants with the Mine Clearance Planning Agency to provide support for the removal of land mines and unexploded ordnance 9/2013 F-033 State Task Order with PAE for technical support to the Civilian Police Program 9/2013 F-032 USAID Task Order with IRG (now part of Engility) for technical support to the Afghan Clean Energy Program (ACEP) 9/2013 F-031 USAID Cooperative Agreement with ICMA for technical support to the Afghanistan Municipal Strengthening Program (AMSP) 9/2013 F-030 USAID Task Order with Tetra Tech DPK for technical support to the Rule of Law Stabilization Program–Formal 9/2013 F-029 USAID Cooperative Agreement with CARE International for technical support to the Partnership for Advancing Community-based Education in Afghanistan (PACE-A) 9/2013 F-028 USAID Task Order with AECOM for technical support to the Afghanistan Social Outreach Program (ASOP) 9/2013 F-027 USAID Cooperative Agreement with PACT to strengthen the independent media sector in Afghanistan 9/2013 F-026 USAID Task Order with ARD (now part of Tetra Tech) to provide technical support to the Sustainable Water Supply and Sanitation (SWSS) project 9/2013 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 205 APPENDICES NEW SIGAR FINANCIAL AUDITS AS OF OCTOBER 30, 2013 Audit Identifier Project Title Date Initiated F-025 USAID Cooperative Agreement with IRD to implement the Afghanistan Vouchers for Increased Production in Agriculture (AVIPA) program 9/2013 Ongoing Financial Audits SIGAR had 12 financial audits in progress during this reporting period. ONGOING SIGAR FINANCIAL AUDITS AS OF OCTOBER 30, 2013 Audit Identifier Project Title Date Initiated F-024 USAID Contract with Chemonics for Afghanistan Stabilization Initiative to Support Counterinsurgency Operations by Improving Economic and Social Conditions in Afghanistan (Southern Region) & Accelerated Sustainable Agriculture Program (ASAP) 7/2013 F-023 USAID Contract with Development Alternatives Inc for Afghan Small and Medium Enterprise Development (ASMED) Project & Afghanistan Stabilization Initiative 7/2013 F-022 State Grants with Afghan Technical Consultants for the removal of land mines and unexploded ordinance in Afghanistan 4/2013 F-021 USAID Cooperative Agreement with World Vision for support to the Initiative to Promote Afghan Civil Society (I-PACS) 4/2013 F-020 USAID Cooperative Agreement with Counterpart International Inc. for support to the Initiative to Promote Afghan Civil Society (I-PACS) 4/2013 F-019 USAID Cooperative Agreement with World Council of Credit Unions for support to the Rural Finance and Cooperative Development Program in Southern and Eastern Afghanistan 4/2013 F-018 USAID Cooperative Agreement with CARE International for the Food 4/2013 Insecurity Response for Urban Populations Program (FIRUP) in Kabul F-017 USAID Cooperative Agreement with Mercy Corps for the Food Insecurity Response for Urban Populations Program (FIRUP) in Northern Afghanistan 4/2013 F-016 USAID Cooperative Agreement with JHPIEGO Corporation for support to the Health Service Support Project (HSSP) 4/2013 F-015 USAID Task Order and Cooperative Agreement with Creative Associates International for support to the Basic Education Program in Afghanistan 4/2013 F-013 USAID Cooperative Agreement with Central Asia Development Group Inc. (CADG) for the Food Insecurity Response for Urban Populations Program (FIRUP) in Southern and Eastern Afghanistan 4/2013 F-012 USAID Cooperative Agreement with International Relief and Development Inc for the Strategic Provincial Roads Project in Southern and Eastern Afghanistan 12/2012 Audit Alert Letters SIGAR issued one Audit Alert Letter during this reporting period. NEW SIGAR AUDIT ALERT LETTERS ISSUED AS OF OCTOBER 30, 2013 Letter Identifier Letter Title Date Issued Alert 14-2 Design Flaws at the Weesh-Chaman Border Crossing Point 9/2013 206 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES SIGAR INSPECTIONS Completed Inspections SIGAR completed four inspections during this reporting period: COMPLETED SIGAR INSPECTIONS AS OF OCTOBER 30, 2013 Report Identifier Report Title Date Issued SIGAR Inspection 14-10 Walayatti Medical Clinic: Facility Was Not Constructed According to Design Specifications and Has Never Been Used 10/2013 SIGAR Inspection 14-7 Justice Center in Parwan Courthouse: Poor Oversight Contributed to Failed Project and Action May Be Needed to Avoid Unnecessary Costs to the U.S. Government 10/2013 SIGAR Inspection 14-6 Gardez Hospital: After Almost Two Years, Construction Not Yet Completed because of Poor Contractor Performance, and Overpayments to the Contractor Need to Be Addressed by USAID 10/2013 SIGAR Inspection 14-5 Archi District Police Headquarters: Extensive Mold, Lack of Running Water, and Inoperable Electrical Systems Show Facilities Are Not Being Sustained 10/2013 SIGAR SPECIAL PROJECTS Completed Special Projects SIGAR completed two Special Project reports this reporting period. COMPLETED SIGAR SPECIAL PROJECTS AS OF OCTOBER 30, 2013 Project Identifier Project Title Date Initiated SP-14-4 Oversight Access Inquiry 10/2013 SP-13-9 Anti-Corruption Efforts: A Strategic Plan and Mechanisms to Track Progress Are Needed in Fighting Corruption in Afghanistan 9/2013 REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 207 APPENDICES APPENDIX D SIGAR INVESTIGATIONS AND HOTLINE SIGAR Investigations FIGURE D.1 NEW SIGAR INVESTIGATIONS, JULY 1–SEPTEMBER 30, 2013 This quarter, SIGAR opened 64 new investigations and closed 47, bringing the total number of open investigations to 306. Of the new investigations, most involved procurement/contract fraud and public corruption, as shown in Figure D.1. Of the closed investigations, most were closed due to unfounded allegations, as shown in Figure D.2. Total: 64 FIGURE D.2 Procurement/ Contract Fraud 25 Public Corruption 17 SIGAR INVESTIGATIONS: CLOSED INVESTIGATIONS, JULY 1–SEPTEMBER 30, 2013 Miscellaneous 16 Unfounded Allegations 31 Lack of Investigative Merit Theft 6 8 Administrative 4 Criminal Declination Source: SIGAR Investigations Directorate, 10/10/2013. 2 Exoneration 1 Conviction 1 0 5 10 15 20 25 30 35 Total: 47 SIGAR Investigations Directorate, 10/10/2013. 208 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES SIGAR Hotline FIGURE D.3 Of the 75 Hotline complaints received this quarter, most were received electronically, as shown in Figure D.3. Of these complaints, most were closed, as shown in Figure D.4. FIGURE D.4 SOURCE OF SIGAR HOTLINE COMPLAINTS, JULY 1–SEPTEMBER 30, 2013 Total: 101 STATUS OF SIGAR HOTLINE COMPLAINTS: JULY 1–SEPTEMBER 30, 2013 62 Closed Under Review Electronic (email, web, or fax) 97 29 Opened as an Investigation 10 0 10 20 30 40 50 60 70 80 Phone 4 Total: 101 Source: SIGAR Investigations Directorate, 10/11/2013. Source: SIGAR Investigations Directorate, 10/11/2013. Suspensions and Debarments From SIGAR Referrals As of September 30, 2013, SIGAR’s referrals for suspension and debarment have resulted in 61 suspensions and 94 debarments, as shown in chronological order in Table D.1. TABLE D.1 SUSPENSIONS AND DEBARMENTS AS OF SEPTEMBER 30, 2013 Suspensions Debarments Al-Watan Construction Company Basirat Construction Firm Brophy, Kenneth Naqibullah, Nadeem Rahman, Obaidur Campbell, Neil Patrick Borcata, Raul A. Close, Jarred Lee Logistical Operations Worldwide Robinson, Franz Martin Taylor, Zachery Dustin Aaria Group Construction Company Aaria Group Aaria Herai General Trading Aaria M.E. General Trading LLC Aaria Middle East Farooqi, Hashmatullah Hamid Lais Construction Company Hamid Lais Group Lodin, Rohullah Farooqi Bennett & Fouch Associates LLC Brandon, Gary K5 Global Ahmad, Noor Noor Ahmad Yousufzai Construction Company Ayeni, Sheryl Adenike Cannon, Justin Constantino, April Anne Constantino, Dee Constantino, Ramil Palmes Crilly, Braam Drotleff, Christopher REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 209 APPENDICES TABLE D.1 (CONTINUED) SUSPENSIONS AND DEBARMENTS AS OF JULY 1, 2013 Suspensions Debarments Aaria Middle East Company LLC Aaria Middle East Company Ltd.–Herat Aaria Supplies Company LTD Aaria Supply Services and Consultancy Aftech International Aftech International Pvt, Ltd. Alam, Ahmed Farzad Albahar Logistics American Aaria Company LLC American Aaria LLC Barakzai, Nangialai Formid Supply and Services Greenlight General Trading Kabul Hackle Logistics Company Sharpway Logistics United States California Logistics Company Yousef, Najeebullah Rahimi, Mohammad Edris Wooten, Philip Steven Domineck, Lavette Kaye Markwith, James All Points International Distributors Inc. Fil-Tech Engineering and Construction Company Handa, Sidharth Jabak, Imad Jamally, Rohullah Khalid, Mohammad Khan, Daro Mariano, April Anne Perez McCabe, Elton Maurice Mihalczo, John Qasimi, Mohammed Indress Radhi, Mohammad Khalid Safi, Fazal Ahmed Shin Gul Shaheen, a.k.a. “Sheen Gul Shaheen” Espinoza-Loor, Pedro Alfredo Campbell, Neil Patrick* Navarro, Wesley Hazrati, Arash Midfield International Moore, Robert G. Noori, Noor Alam, a.k.a. “Noor Alam" Northern Reconstruction Organization Shamal Pamir Building and Road Construction Company Wade, Desi D. Blue Planet Logistics Services Mahmodi, Padres Mahmodi, Shikab Saber, Mohammed Watson, Brian Erik All Points International Distributors, Inc Hercules Global Logistics Schroeder, Robert Helmand Twincle Construction Company Waziri, Heward Omar Zadran, Mohammad Afghan Mercury Construction Company, d.b.a. “Afghan Mercury Construction & Logistics Company” Mirzali Naseeb Construcion Company Montes, Diyana Naseeb, Mirzali Robinson, Franz Martin* Smith, Nancy Sultani, Abdul Anas a.k.a. “Abdul Anas” Faqiri, Shir Cipolla, James Hercules Global Logistics Schroeder, Robert AISC LLC American International Security Corporation Brothers, Richard S. David A Young Construction & Renovation Inc. Force Direct Solutions LLC Harris, Christopher Hernando County Holdings LLC Hide-A-Wreck LLC Panthers LLC Paper Mill Village Inc Shrould Line LLC Spada, Carol Taylor, Michael Welventure LLC World Wide Trainers LLC Young, David Espinoza, Mauricio 210 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES TABLE D.1 (CONTINUED) SUSPENSIONS AND DEBARMENTS AS OF JULY 1, 2013 Suspensions Debarments Long, Tonya Peace Thru Business Pudenz, Adam Jeff Julias Hosmat, Haji Jim Black Construction Company Arya Ariana Aryayee Logistics, d.b.a. “AAA Logistics,” d.b.a. “Somo Logistics” Garst, Donald Mukhtar, Abdul a.k.a. “Abdul Kubar” Noori Mahgir Construction Company Noori, Sherin Agha Long, Tonya* Isranuddin, Burhanuddin Rahimi, Mohammad Edris Matun, Navidullah, a.k.a. “Javid Ahmad” Matun, Wahidullah Navid Basir Construction Company Navid Basir JV Gagar Baba Construction Company NBCC & GBCC JV Noori, Navid Asmatullah, Mahmood, a.k.a. "Mahmood" Khan, Gul Khan, Solomon Sherdad, a.k.a. "Solomon" Mursalin, Ikramullah, a.k.a. "Ikramullah" Musafer, Naseem, a.k.a. "Naseem" Gul, Ghanzi Luqman Engineering Construction Company, d.b.a. “Luqman Engineering” Wazir, Khan Gurvinder, Singh Jahan, Shah Shahim, Zakirullah a.k.a. “Zakrullah Shahim,” a.k.a. “Zikrullah Shahim” Alyas, Maiwand Ansunullah a.k.a. “Alyas Maiwand,” a.k.a. “Maiwand Allias,” a.k.a. “Maiwand Aliass,” a.k.a. “Engineer Maiwand Alyas” BMCSC Maiwand Haqmal Construction and Supply Company New Riders Construction Company, d.b.a. “Riders Construction Company, ” d.b.a. “New Riders Construction and Services Company” Riders Constructions, Services, Logistics and Transportation Company Riders Group of Companies Domineck, Lavette Kaye Markwith, James Martinez, Rene Note: * indicates previously in suspended status following criminal indictment. Final debarment imposed following criminal conviction in U.S. District Court. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 211 APPENDICES APPENDIX E ABBREVIATIONS AND ACRONYMS ACRONYM OR ABBREVIATION DEFINITION 4A ABADE ABP ACE AERCA ACU ADB ADF AECOM AFN AGO AGS AIF AIHRC AITF ALBA ALP AMDEP ANA ANCOP ANP ANSF APPF APRP ARTF ASF ASFF AUAF AUP BDS BELT BSA CENTCOM CERP CHAMP CIA CIGIE CJIATF C-JTSCC CM CNJC Assistance to Afghanistan's Anti-Corruption Authority Assistance in Building Afghanistan by Developing Enterprises Afghan Border Police Agricultural Credit Enhancement Afghanistan Electoral Reform and Civic Advocacy Anti-Corruption Unit Asian Development Bank Agricultural Development Fund AECOM International Development Inc. Afghanis (currency) Attorney General’s Office Afghan Geological Survey Afghanistan Infrastructure Fund Afghanistan Independent Human Rights Commission Afghanistan Infrastructure Trust Fund Assistance to Legislative Bodies of Afghanistan Afghan Local Police Afghanistan Media Development and Empowerment Project Afghan National Army Afghan National Civil Order of Police Afghan National Police Afghan National Security Forces Afghan Public Protection Force Afghan Peace and Reintegration Plan Afghanistan Reconstruction Trust Fund Afghan Security Forces Afghanistan Security Forces Fund American University of Afghanistan Afghan Uniform Police Business Development Services Basic Education, Literacy, and Technical-Vocational Education and Training Bilateral Security Agreement U.S. Central Command Commander’s Emergency Response Program Commercial Horticulture and Agricultural Marketing Program U.S. Central Intelligence Agency Council of the Inspectors General on Integrity and Efficiency Combined Joint Interagency Task Force U.S. Central Command's Joint Theater Support Contracting Command Capability Milestone Counternarcotics Justice Center 212 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES ACRONYM OR ABBREVIATION DEFINITION CNPA CNPCI-W COR CPC CSSP CSTC-A CUAT DAB DABS DCC DCIS DEA DOD DOD CN DOD OIG DOJ ECC ECF EMIS ESF EVAW FATF FBI FOB Futures Group FY GAGAS GAO GDP GDPDC GLE GPI GSCC HEP HOO HPP ICC ICG IDEA-NEW IDLG IEC IED IJC IMF INCLE INL Counter-Narcotics Police of Afghanistan China National Petroleum Corporation Watan energy Afghanistan, Ltd. Contracting Officer's Representative Criminal Procedure Code Correctional System Support Program Combined Security Transition Command-Afghanistan Commander’s Unit Assessment Tool Da Afghanistan Bank Da Afghanistan Breshna Sherkat District Coordination Council Defense Criminal Investigative Service (U.S.) Drug Enforcement Administration (U.S.) Department of Defense (U.S.) Department of Defense Drug Interdiction and Counter-Drug Activities fund (U.S) Department of Defense Office of Inspector General Department of Justice (U.S.) Electoral Complaints Commission Extended Credit Facility Ministry of Education's Information Management System (Afghan) Economic Support Fund Elimination of Violence Against Women law Financial Action Task Force Federal Bureau of Investigation (U.S.) Forward Operating Base Futures Group International Llc. Fiscal Year Generally Accepted Government Auditing Standards Government Accountability Office (U.S.) Gross Domestic Product General Directorate of Prisons and Detention Centers Governor-Led Eradication Good Performer's Initiative General Support Contracting Command Higher Education Program High Office of Oversight for Anti-Corruption (Afghan) Health Policy Project International Coordinating Committee International Crisis Group Incentives Driving Economic Alternatives-North, East, and West Independent Directorate of Local Governance (Afghan) Independent Election Commission (Afghan) Improvised Explosive Device International Security Assistance Force Joint Command International Monetary Fund International Narcotics Control and Law Enforcement (U.S) Bureau of International Narcotics and Law Enforcement Affairs (U.S.) REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 213 APPENDICES ACRONYM OR ABBREVIATION DEFINITION IOCC IPACS IRD ISAF JCMB JTTP KCI KHPP LMG LOTFA MACU MAIL MCC MCN MCTF MEC MIDAS MOD MOF MOI MOMP MOPH MORE MOTCA MOWA MPU MRRD NAI NATO NDAA NEPS NGO NHRI NKB NPP NTAP NTM-A O&M OCO OHCHR OMB OSD PBGF PCH PGO PJST Interagency Operations Coordination Center Initiative to Promote Afghan Civil Society International Relief and Development Inc. International Security Assistance Force Joint Coordination and Monitoring Board Justice Training Transition Program Kabul City Initiative Kandahar-Helmand Power Project Leadership, Management, Governance Project Law and Order Trust Fund for Afghanistan Military Anti-Corruption Unit Ministry of Agriculture, Irrigation, and Livestock (Afghan) Metallurgical Corporation of China Ministry of Counternarcotics (Afghan) Major Crimes Task Force Monitoring and Evaluation Committee (Afghan) Mining Investment and Development for Afghan Sustainability Ministry of Defense (Afghan) Ministry of Finance (Afghan) Ministry of Interior (Afghan) Ministry of Mines and Petroleum (Afghan) Ministry of Public Health (Afghan) Ministry of Women's Affairs Organizational Restructuring and Empowerment Project Ministry of Transport and Civil Aviation (Afghan) Ministry of Women's Affairs (Afghan) Afghan Mines Protection Units Ministry of Rural Rehabilitation and Development Nai Supporting Open Media in Afghanistan North Atlantic Treaty Organization National Defense Authorization Act Northeast Power System Nongovernmental Organization National Human Rights Institution New Kabul Bank National Priority Program National Transparency and Accountability Program NATO Training Mission-Afghanistan Operations and Maintenance Overseas Contingency Operations Office of the High Commissioner for Human Rights Office of Management and Budget Office of the Secretary of Defense Performance Based Governance Fund Partnership Contracts for Health Services Provincial governor's office Provincial Joint Secretariat Teams 214 SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION APPENDICES ACRONYM OR ABBREVIATION DEFINITION PM/WRA PPP PROMOTE PSC PTEC RAMP-UP RASR RC RLS-F RLS-I ROLFF-A SCC SEPS SGDP SHAHAR SIGAR SIKA SMW S-RAD State OIG STEP-UP SY TFBSO TMR TVET UN UNAMA UNDP UNODC USAAA USACE USACE-TAN USAID USAID OIG USFOR-A USGS VSO VVRC Bureau of Political-Military Affairs-Office of Weapons Removal and Abatement (U.S.) Public-Private Partnership Promoting Gender Equality in the National Priority Program Private Security Contractor Power Transmission Expansion and Connectivity Regional Afghan Municipalities Program for Urban Populations Regional Command ANSF Assessment Report Recurrent Cost Rule of Law Stabilization-Formal Rule of Law Stabilization-Informal Rule of Law Field Force-Afghanistan (USFOR-A) Special Cases Committee (Afghan) Southeast Power System Sheberghan Gas Development Program Strengthening Hubs for Afghanistan Resilience Special Inspector General for Afghanistan Reconstruction Stability in Key Areas Special Mission Wing (Afghan) Southern Regional Agricultural Development Program Department of State Office of the Inspector General Strengthening Tertiary Education Program-University Partnerships Solar Year Task Force for Business and Stability Operations in Afghanistan Transportation Movement Request Technical Vocational Education and Training United Nations United Nations Assistance Mission in Afghanistan United Nations Development Programme UN Office on Drugs and Crime U.S. Army Audit Agency U.S. Army Corps of Engineers USACE Afghanistan Engineer District North U.S. Agency for International Development USAID Office of the Inspector General U.S. Forces-Afghanistan United States Geological Survey Village Stability Operations Vendor Vetting Reachback Cell REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 215 ENDNOTES 1 On September 23, 2013, Special IG John Sopko wrote on behalf of SIGAR to Secretary of State John Kerry to commend Herat RSO Paul H. Davies and Assistant RSOs Anthony D. Ragan and Shawn P. Stewart for “outstanding performance.” Sopko observed, “not only did they show extreme valor in risking their own lives that day, but the preparations they took to improve security at the consulate in the months leading up to the attack undoubtedly saved lives.” 2 United Nations Security Council news release, “Security Council Extends Authorization for International Security Assistance Force In Afghanistan, Adopting Resolution 2120 (2013),” 10/11/2013. 3 DOD, report to Congress, Progress Toward Security and Stability in Afghanistan, December 2012, p. 2. This periodic report is known as the “1230 report,” for the section of the National Defense Authorization Act that requires it. 4 Unless otherwise noted, information in this section was provided by SIGAR’s Investigations Directorate. 5 FBI fact sheet on IAFIS, undated, accessed October 20, 2013. 6 Statement of Kevin L. Perkins, Assistant Director, Criminal Investigative Division, FBI, before the Commission on Wartime Contracting in Iraq and Afghanistan, Washington, DC, May 24, 2010, accessed 10/13/2013. 7 Associated Press, “La. man sentenced in Afghanistan kickback scheme,” 8/22/2013, accessed 10/25/2013. 8 Congressional Record—Senate, “Authorizing Document Production,” re S. Res. 158, 5/23/2013, p. S3878. 9 SIGAR Quarterly Report to the United States Congress, July 30, 2013, p. 66. 10 DOJ news release, “Former Department of Defense Contractor Sentenced to 30 Months in Prison for Smuggling Kickback Proceeds from Afghanistan to the United States,” 2/12/2013. 11 Basel Institute on Governance (Switzerland), “The Basel Institute on Governance publishes the 2013 edition of the Basel AML [Anti-Money Laundering] Index,” accessed 10/14/2013. 12 See, for example, Genny Ngai, “Money Laundering,” American Criminal Law Review 49:2 (2012), pp. 1011–1019. 13 DOJ news release, “Former Army Reserve Captain Sentenced to 120 Months in Prison for Soliciting $1.3 Million in Bribes and Conspiring to Traffic Heroin, 9/23/2011. 14 SIGAR Investigations Directorate, internal e-mail case summary, 10/22/2013. 15 Estimate based on DOD information provided to SIGAR. 16 CENTCOM quarterly census, “Contractor Support of U.S. Operations in the USCENTCOM Area of Responsibility to Include Iraq and Afghanistan,” accessed 10/13/2013. 17 SIGAR news release, “SIGAR Special Agent Testifies in Afghan Criminal Court,” 4/8/2013. 18 Cornell University School of Law, “18 USC §3181 Code list– Scope and limitation of chapter,” accessed 10/14/2013. 19 In addition to straightforward financial transfers, direct assistance can take the form of, for example, USAID bilateral agreements with negotiated conditions and contributions to the World Bank-administered Afghanistan Reconstruction Trust Fund, and DOD contributions to the United Nations Development Programme-administered Law and Order Trust Fund for Afghanistan. See SIGAR Testimony SIGAR-13-5T, “Direct Assistance to the Afghan Government Presents Risks,” Statement of John F. Sopko Before the Subcommittee on 216 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 National Security, Homeland Defense, and Foreign Operations, Committee on Oversight and Government Reform, House of Representatives, 2/13/2013, pp. 4–5. The White House Office of the Press Secretary, “Remarks by the President Announcing the Fiscal Year 2014 Budget,” 4/10/2013; OMB, response to SIGAR data call, 7/19/2013; OSD Comptroller, “Department of Defense Budget Amendment to the Fiscal Year 2014 President’s Budget Request for Overseas Contingency Operations (OCO): Operation and Maintenance Programs (O-1) Revolving and Management Funds (RF-1),” 5/2013, pp. 1–3. The White House Office of the Press Secretary, “Statement by the President” 9/30/2013. See Appendix B of this report. DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, pp. 16–17. P.L. 111-32, 6/24/2009. DOD, response to SIGAR vetting, 7/20/2009. See Appendix B of this report. DOD, response to SIGAR data call, 10/9/2013. DOD, responses to SIGAR data call, 10/9/2013 and 7/22/2013. DOD OIG, Distribution of Funds and the Validity of Obligations for the Management of the Afghanistan Security Forces Fund - Phase I, Report No. D-2008-012, 11/5/2007, p. 2. DOD, response to SIGAR data call, 10/9/2013. DOD, response to SIGAR data call, 7/22/2013. DOD, “Commanders’ Emergency Response Program (CERP),” DOD Financial Management Regulation Vol. 12, Ch. 27, 1/2009, p. 27-3. USFOR-A, “Commander’s Emergency Response Program (CERP) SOP,” USFOR-A Pub 1-06, 2/2011, p. 35; P.L. 112-74, 12/23/2011. See Appendix B of this report. DOD, response to SIGAR data call, 10/23/2013. U.S. Senate Committee on Armed Services, press release, “Senate Passes Ike Skelton National Defense Authorization Act for Fiscal Year 2011,” 12/22/2010. See Appendix B of this report. DOD, response to SIGAR data call, 7/22/2013; DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts,” 9/17/2013. TFBSO, “About TFBSO,” accessed 10/20/2011; DOD, response to SIGAR data call, 7/22/2011. See Appendix B of this report. DOD, response to SIGAR data call, 10/1/2013. DOD, “Drug Interdiction and Counter-Drug Activities, Defense FY 2009 Supplemental Request Drug Interdiction and Counterdrug Activities,” accessed 4/13/2010. DOD OIG, Independent Auditor’s Report on the DOD FY 2011 Detailed Accounting Report of the Funds Obligated for National Drug Control Program Activities, Report No. DODIG2012-04, 1/30/2012. DOD, response to SIGAR data call, 9/30/2013. USAID, “U.S. Foreign Assistance Reference Guide,” 1/2005, p.6. USAID, response to SIGAR data call 10/10/2013; State, response to SIGAR data call, 6/27/2013. USAID, responses to SIGAR data call, 10/10/2013 and 7/17/2013. State, response to SIGAR data call, 10/13/2009. State, response to SIGAR data call, 10/18/2013 and 6/27/2013. State, responses to SIGAR data call, 10/18/2013 and 7/15/2013. SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ENDNOTES 51 52 SIGAR, “Quarterly Report to the U.S. Congress,” 7/30/2010, p. 51. World Bank, “ARTF: Administrator’s Report on Financial Status as of September 22, 2013 (end of 9th month of FY 1392),” p. 5. 53 World Bank, “ARTF: Administrator’s Report on Financial Status as of September 22, 2013 (end of 9th month of FY 1392),” p. 1. 54 World Bank, “ARTF: Administrator’s Report on Financial Status as of September 22, 2013 (end of 9th month of FY 1392),” p. 5. 55 World Bank, “Quarterly Country Update: Afghanistan,” 4/2011, p. 16. 56 World Bank, “ARTF: Administrator’s Report on Financial Status as of September 22, 2013 (end of 9th month of FY 1392),” p. 7. 57 World Bank, “Quarterly Country Update: Afghanistan,” 4/2011, p. 16. 58 World Bank, “ARTF: Administrator’s Report on Financial Status as of September 22, 2013 (end of 9th month of FY 1392),” p. 7. 59 EC, “Afghanistan: State of Play, January 2011,” 3/31/2011, p. 7. 60 UNDP, “LOTFA Phase VI Quarterly Progress Report Q2/2013,” 8/11/2013, p. 66; SIGAR analysis of UNDP’s quarterly and annual LOTFA reports, 7/23/2013. 61 UNDP, “LOTFA Phase VI Quarterly Progress Report Q2/2013,” 8/11/2013, p. 67; SIGAR analysis of UNDP’s quarterly and annual LOTFA reports, 7/23/2013. 62 UNDP, “LOTFA Phase VI Quarterly Progress Report Q2/2013,” 8/11/2013, p. 66; SIGAR analysis of UNDP’s quarterly and annual LOTFA reports, 7/23/2013. 63 DOD, response to SIGAR data call, 10/9/2013. 64 The Guardian, “Afghan forces suffering too many casualties, says top NATO commander,” 9/2/2013, accessed 10/3/2013. 65 The Guardian, “Afghan forces suffering too many casualties, says top NATO commander,” 9/2/2013, accessed 10/3/2013. 66 Thomas Reuters Foundation, “Afghan police deaths double as foreign troops withdraw,” 9/2/2013, accessed 10/3/2013; CNN, “Afghan police deaths double as international troops exit,” 9/3/2013, accessed 10/3/2013. 67 DOD, News Transcript, “Department of Defense Press Briefing with Gen. Dunford from the Pentagon Briefing Room,” 6/18/2013, accessed 10/3/2013. 68 DOD, Progress Toward Security and Stability in Afghanistan, 7/2013, p. 1. 69 DOD, Progress Toward Security and Stability in Afghanistan, 7/2013, p. 10. 70 DOD, response to SIGAR data call, 10/3/2013. 71 UN Security Council, The situation in Afghanistan and its implications for international peace and security, 9/6/2013, p. 5. 72 UN Security Council, The situation in Afghanistan and its implications for international peace and security, 9/6/2013, p. 5. 73 UN Security Council, The situation in Afghanistan and its implications for international peace and security, 9/6/2013, p. 5. 74 CSTC-A, response to SIGAR data call, 10/1/2013. 75 CSTC-A, response to SIGAR data call, 10/1/2013. 76 Department of State, “Kerry Says U.S. Seeks Enduring Partnership with Afghanistan,” 10/15/2013. 77 SIGAR, Quarterly Report to the United States Congress, 7/30/2013, p. 94. 78 Associated Press, “Summary of Obama Interview with Associated Press,” 10/6/2013, accessed 10/8/2013. 79 Radio Free Europe/Radio Liberty, “Karzai to Call Loya Jirga Over Security Pact,” 10/8/2013, accessed 10/8/2013. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 80 The New York Times, “Afghan Envoy to Pakistan is Appointed Interior Minister,” 9/1/2013, accessed 10/3/2013; Tolo News, “Omer Daudzai Wins ‘Vote of Confidence,’ Appointed as Interior Minister,” 9/25/2013, accessed 10/3/2013. 81 VOA, “Afghan Interior Minister Loses No-Confidence Vote,” 7/22/2013, accessed 10/3/2013. 82 DW, “Germany Forces Hand Over Command of Kunduz Camp to Afghans,” 10/6/2013, accessed 10/9/2013. 83 ISAF, Key Facts and Figures, 8/1/2013. 84 DW, “Kunduz Locals Fear Exit of German Military,” 10/6/2013, accessed 10/9/2013. 85 DOD, response to SIGAR data call, 10/1/2013. 86 DOD, response to SIGAR data call, 10/1/2013. 87 DOD, response to SIGAR data call, 10/1/2013. 88 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 1. 89 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 2. 90 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 6. 91 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 5. 92 IJC, response to SIGAR data call, 9/30/2013; SIGAR, Audit Report 10-11, Actions Needed to Improve the Reliability of Afghan Security Force Assessments, 6/29/2010, p. 2. 93 SIGAR, Audit Report 10-11, Actions Needed to Improve the Reliability of Afghan Security Force Assessments, 6/29/2010, p. ii. 94 SIGAR, Audit Report 10-11, Actions Needed to Improve the Reliability of Afghan Security Force Assessments, 6/29/2010, p. ii. 95 UN Security Council, The situation in Afghanistan and its implications for international peace and security, 9/6/2013, p. 6. 96 UN Security Council, The situation in Afghanistan and its implications for international peace and security, 9/6/2013, p. 6. 97 VOA, “Taliban Militants Attack U.S. Consulate in Afghanistan,” 9/13/2013. 98 Department of State, Daily Press Briefing, 9/13/2013. 99 UNAMA, Afghanistan Mid-year Report 2013: Protection of Civilians in Armed Conflict, 7/31/2013, p. 1. 100 CENTCOM, response to SIGAR data call, 10/1/2013. 101 ISAF, Key Facts and Figures, 10/1/2013. 102 DOD, Operation Enduring Freedom U.S. Casualty Status, 10/1/2013. 103 CSTC-A, response to SIGAR data call, 10/1/2013. 104 DOD, Progress Toward Security and Stability in Afghanistan, 4/2012, p. 4. 105 DOD, Progress Toward Security and Stability in Afghanistan, 12/2012, p. 56. 106 USFOR-A, response to SIGAR data call, 10/1/2013. 107 DOD, response to SIGAR data call, 10/1/2013. 108 DOD, response to SIGAR data call, 10/1/2013. 109 UN Security Council, The situation in Afghanistan and its implications for international peace and security, 9/6/2013, p. 5. 110 DOD, response to SIGAR data call, 10/1/2013. 111 DOD, response to SIGAR data call, 10/1/2013. 112 Ariana News, “Senators Criticize Functions of Local Police,” 10/7/2013. 113 SIGAR, Quarterly Report to the United States Congress, 4/30/2013, p. 90. 217 ENDNOTES 114 SIGAR, Quarterly Report to the United States Congress, 4/30/2011, p. 55. 115 SIGAR, Quarterly Report to the United States Congress, 10/30/2012, p. 87. 116 CSTC-A, response to SIGAR data call, 10/1/2013. 117 CSTC-A, response to SIGAR data call, 10/1/2013. 118 CSTC-A, response to SIGAR data call, 10/1/2013. 119 IJC, response to SIGAR data call, 9/30/2013. 120 IJC, response to SIGAR data call, 9/30/2013. 121 IJC, response to SIGAR data call, 9/30/2013. 122 IJC, response to SIGAR data call, 9/30/2013. 123 IJC, response to SIGAR data call, 6/27/2013. 124 IJC, response to SIGAR data call, 9/30/2013; The RASR Assessment provided by IJC showed 64 ANA units were assessed by the RASR in September 2013. However, all units assessed by the RASR added up to 72 units including those awaiting to be fielded and 65 units excluding those awaiting to be fielded. SIGAR will seek clarification on the discrepancy. 125 IJC, response to SIGAR data call, 9/30/2013. 126 IJC, response to SIGAR data call, 9/30/2013. 127 The RASR Assessment provided by IJC showed 64 ANA units were assessed by the RASR in September 2013. However, all units assessed by the RASR added up to 72 units including those awaiting to be fielded and 65 units excluding those awaiting to be fielded. SIGAR will seek clarification on the discrepancy; IJC, response to SIGAR data call, 9/30/2013. 128 UN Security Council, The situation in Afghanistan and its implications for international peace and security, 9/6/2013, p. 5. 129 NTM-A, “MOD/GS Assessment ACG-AD Jan–Mar 2012,” p. 3. 130 CSTC-A, response to SIGAR vetting, 7/15/2013; CSTC-A, response to SIGAR data call, 10/1/2013. 131 CSTC-A, response to SIGAR vetting, 7/15/2013; CSTC-A, response to SIGAR data call, 10/1/2013. 132 CSTC-A, response to SIGAR vetting, 7/15/2013. 133 CSTC-A, response to SIGAR vetting, 7/15/2013; CSTC-A, response to SIGAR data call, 10/1/2013. 134 CSTC-A, responses to SIGAR data call, 7/2/2013 and 10/1/2013. 135 CSTC-A, responses to SIGAR data call, 7/2/2013 and 10/1/2013. 136 DOD, response to SIGAR data call, 10/9/2013. 137 CSTC-A, response to SIGAR data call, 10/1/2013. 138 DOD, response to SIGAR data call, 10/9/2013. 139 CSTC-A, response to SIGAR data call, 10/1/2013. 140 CSTC-A, responses to SIGAR data call, 10/1/2013. 141 CSTC-A, responses to SIGAR data call, 7/2/2013 and 7/7/2013. 142 CSTC-A, responses to SIGAR data call, 10/1/2013. 143 CSTC-A, responses to SIGAR data call, 7/2/2013 and 7/7/2013. 144 DOD, response to SIGAR data call, 10/9/2013. 145 CSTC-A, response to SIGAR data call, 10/1/2013. 146 CSTC-A, response to SIGAR data call, 4/1/2013. 147 CSTC-A, responses to SIGAR data call, 7/2/2013 and 7/7/2013. 148 CSTC-A, response to SIGAR data call, 10/1/2013. 149 CSTC-A, responses to SIGAR data call, 7/2/2013. 150 CSTC-A, response to SIGAR data call, 10/1/2013. 151 CSTC-A, response to SIGAR data call, 10/1/2013. 152 CSTC-A, response to SIGAR data call, 10/1/2013. 153 CSTC-A, response to SIGAR data call, 7/6/2013; CSTC-A, response to SIGAR vetting, 7/11/2013. 218 154 DOD OIG, Statement of Ms. Lynne M. Halbrooks, Principal Deputy Inspector General, Department of Defence Inspector General, before the Committee on Oversight and Government Reform, 3/19/2013, p. 12. 155 CSTC-A, responses to SIGAR data call, 7/2/2013 and 10/1/2013. 156 CSTC-A, response to SIGAR data call, 10/1/2013. 157 DOD, “Contracts for February 27, 2013,” 2/27/2013. 158 SIGAR Audit Report 13-13, Afghan Special Mission Wing: DOD Moving Forward with $771.8 Million Purchase of Aircraft that the Afghans Cannot Operate and Maintain, 6/28/2013, p. 2. 159 CSTC-A, responses to SIGAR data call, 10/1/2013. 160 DOD, response to SIGAR data call, 10/9/2013. 161 CSTC-A, response to SIGAR data call, 10/1/2012. 162 CSTC-A, response to SIGAR data call, 10/1/2012. 163 DOD, response to SIGAR data call, 10/9/2013. 164 CSTC-A, response to SIGAR data call, 10/1/2013. 165 CSTC-A, response to SIGAR data call, 10/1/2013. 166 CSTC-A, response to SIGAR data call, 10/12/2012. 167 CSTC-A, response to SIGAR data call, 10/12/2012. 168 CSTC-A, response to SIGAR data call, 9/30/2013. 169 CSTC-A, response to SIGAR data call, 9/30/2013. 170 CSTC-A, response to SIGAR data call, 7/2/2013. 171 CSTC-A, response to SIGAR data call, 10/1/2013. 172 CSTC-A, response to SIGAR data call, 7/2/2013. 173 CSTC-A, response to SIGAR data call, 10/1/2013. 174 CSTC-A, response to SIGAR data call, 10/1/2013. 175 CSTC-A, response to SIGAR data call, 10/1/2013. 176 CSTC-A, response to SIGAR data call, 10/1/2013. 177 CSTC-A, response to SIGAR data call, 10/1/2013. 178 DOD, response to SIGAR data call, 10/9/2013. 179 CSTC-A, response to SIGAR data call, 10/1/2013. 180 DOD, response to SIGAR data call, 10/9/2013. 181 CSTC-A, response to SIGAR data call, 10/1/2013. 182 CSTC-A, response to SIGAR data call, 10/1/2013. 183 DOD, response to SIGAR data call, 10/9/2013. 184 CSTC-A, response to SIGAR data call, 10/1/2013. 185 CSTC-A, responses to SIGAR data call, 7/2/2013 and 10/1/2013. 186 CSTC-A, response to SIGAR data call, 10/1/2013. 187 CSTC-A, response to SIGAR data call, 7/2/2013. 188 CSTC-A, response to SIGAR data call, 10/1/2013. 189 DOD, response to SIGAR data call, 10/9/2013. 190 CSTC-A, response to SIGAR data call, 10/1/2013. 191 CSTC-A, response to SIGAR data call, 10/1/2013. 192 DOD, response to SIGAR data call, 10/9/2013. 193 CSTC-A, response to SIGAR data call, 10/1/2013. 194 CSTC-A, response to SIGAR data call, 10/1/2013. 195 CSTC-A, response to SIGAR data call, 10/1/2013. 196 CSTC-A, response to SIGAR data call, 10/12/2012. 197 CSTC-A, response to SIGAR data call, 10/1/2013. 198 CSTC-A, response to SIGAR data call, 10/1/2013. 199 CSTC-A, response to SIGAR data call, 7/2/2013. 200 CSTC-A, response to SIGAR data call, 10/1/2013. 201 CSTC-A, response to SIGAR data call, 10/1/2013. 202 CSTC-A, response to SIGAR data call, 10/1/2013. 203 CSTC-A, response to SIGAR data call, 10/1/2013. 204 CSTC-A, response to SIGAR data call, 10/1/2013. 205 CSTC-A, response to SIGAR data call, 10/1/2013. 206 CSTC-A, response to SIGAR data call, 10/1/2013. SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ENDNOTES 207 208 209 210 211 212 213 214 CSTC-A, response to SIGAR data call, 10/1/2013. State, PM/WRA, response to SIGAR data call, 10/1/2013. State, PM/WRA, response to SIGAR data call, 10/1/2013. State, PM/WRA, response to SIGAR data call, 10/1/2013. State, PM/WRA, response to SIGAR data call, 10/1/2013. UNODC, World Drug Report 2013, p. x. UNODC, Afghanistan Opium Survey 2012, 5/2013, p. 9. World Bank, World Bank Group - Afghanistan Partnership: Country Program Snapshot, 8/29/2013; World Bank, Data: Afghanistan, accessed 10/21/2013; UNODC, Afghanistan Opium Survey 2012, 5/2013, pp. 9, 13. 215 World Bank, World Bank Group - Afghanistan Partnership: Country Program Snapshot, 8/29/2013. 216 UNODC, Afghanistan Opium Survey 2012, 5/2013, pp. 9, 13. 217 DOD, Progress Toward Security and Stability in Afghanistan, 4/2010, p. 9. 218 DOD, response to SIGAR data call, 9/30/2013; State response to SIGAR data call, 10/18/2013. 219 State, INL, response to SIGAR data call, 6/27/2013. 220 DOD, response to SIGAR data call, 10/1/2013; CSTC-A, response to SIGAR vetting, 10/15/2013. 221 UNODC, Afghanistan Opium Survey 2012, 5/2013, p. 13. 222 UNODC, Afghanistan Opium Survey 2012, 5/2013, p. 13. 223 State, INL, response to SIGAR data call, 9/30/2013. 224 State response to SIGAR data call, 10/18/2013. 225 State, INL, response to SIGAR data call, 9/30/2013. 226 State, INL, response to SIGAR data call, 9/30/2013. 227 State response to SIGAR data call, 10/18/2013. 228 State, INL, response to SIGAR data call, 9/30/2013. 229 State, INL, response to SIGAR data call, 9/30/2013. 230 State, INL, response to SIGAR data call, 9/30/2013. 231 DOD, response to SIGAR data call, 10/1/2013. 232 DOD, response to SIGAR data call, 10/1/2013. 233 DOD, response to SIGAR data call, 10/1/2013. 234 CSTC-A, response to SIGAR vetting, 10/15/2013. 235 DOD, response to SIGAR data call, 10/1/2013. 236 DOD, response to SIGAR data call, 10/1/2013. 237 DOD, response to SIGAR data call, 10/1/2013. 238 CSTC-A, response to SIGAR data call, 10/1/2013. 239 DOD, response to SIGAR data call, 10/1/2013. 240 DOD, response to SIGAR data call, 10/1/2013. 241 DOD, response to SIGAR data call, 10/1/2013. 242 See Appendix B of this report. 243 Radio Free Europe, “Registration Ends For Afghan Presidential Hopefuls,” 10/6/2013, accessed 10/7/2013; The Wall Street Journal, “Former Islamist Warlord Vies for Afghan Presidency,” 10/3/2013, accessed 10/4/2013. 244 ToloNews, “Complete List of Registered Presidential Tickets,” 10/7/2013, accessed 10/7/2013; Independent Election Commission Secretariat, “IEC Press Release on Announcement of Preliminary List of 2014 Presidential and Provincial Council Election Candidates,” 10/22/2013, accessed 10/23/2013. 245 Tolo News, “IEC Announces Preliminary List of 2014 Presidential Candidates,” 10/22/2013, accessed 10/22/2013; Afghanistan Analysts Network, “And Then They Were Ten: Preliminary final list of presidential candidates out,” 10/22/2013, accessed 10/22/2013; Independent Election Commission Secretariat, “IEC Press Release on Announcement of REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 Preliminary List of 2014 Presidential and Provincial Council Election Candidates,” 10/22/2013, accessed 10/23/2013. ToloNews, “Selection Committee Member Reacts Against the Selection Process for IEC Membership,” 7/30/2013, accessed 9/17/2013. Office of the UN High Commissioner for Human Rights, “Opening remarks by UN High Commissioner for Human Rights Navi Pillay at a press conference during her visit to Afghanistan,” 9/17/2013, accessed 9/17/2013. DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. iii. BBC News, “Grim consequences of Afghan Governor Jamal’s death,” 10/15/2013, accessed 10/16/2013. BBC News, “Afghan politician defects to Taliban,” 9/19/2013, accessed 10/3/2013. Independent Election Commission of Afghanistan, “Timeline of 2014 Presidential and Provincial Council Elections,” accessed 10/15/2013. 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The Washington Post, “Afghan commission disqualifies 16 candidates from running for president in April election,” 10/22/2013, accessed 10/22/2013. ToloNews, “ECC to Start Scrutinizing Registered Candidates’ on Monday,” 10/6/2013, accessed 10/7/2013; Radio Free Europe, “Registration Ends For Afghan Presidential Hopefuls,” 10/6/2013, accessed 10/7/2013. ToloNews, “2327 Candidates, 240 Women Registered for Provincial Elections,” 10/6/2013, accessed 10/7/2013; Independent Election Commission Secretariat, “IEC Press Release on Announcement of Preliminary List of 2014 Presidential and Provincial Council Election Candidates,” 10/22/2013, accessed 10/23/2013. State, response to SIGAR data call, 9/26/2013. Tokyo Mutual Accountability Framework, 7/8/2012, accessed 10/4/2013. State, “Current U.S. Policy in Afghanistan and Pakistan,” 9/16/2012, accessed 9/17/2013. UN, response to SIGAR vetting, 10/16/2013. State, response to SIGAR data call, 9/26/2013. USAID, response to SIGAR data call, 9/30/2013. UN, response to SIGAR vetting, 10/9/2013. United Nations Development Programme, Enhancing Legal and Electoral Capacity for Tomorrow- Phase II (ELECT II), 1/201212/2015, pp. 6–7. 219 ENDNOTES 267 268 269 270 UN, response to SIGAR vetting, 10/9/2013. USAID, response to SIGAR data call, 9/30/13. UN, response to SIGAR vetting, 10/9/2013. USAID, response to SIGAR vetting, 10/14/2013; SIGAR, Audit Report 10-16, Lessons Learned in Preparing and Conducting Elections in Afghanistan, 9/9/10, p. 2; SIGAR, Report of Interview with Craig Jenness, Director, and Asma Nassery, Electoral/Political Affairs Officer, Electoral Assistance Division, United Nations, 9/13/2012. 271 SIGAR, Report of Interview with Craig Jenness, Director, and Asma Nassery, Electoral/Political Affairs Officer, Electoral Assistance Division, United Nations, 9/13/2012. 272 UN, response to SIGAR vetting, 10/16/2013. 273 State, response to SIGAR data call, 9/26/2013. 274 State, response to SIGAR data call, 9/26/2013. 275 State, response to SIGAR data call, 9/26/2013. 276 State, response to SIGAR data call, 9/26/2013. 277 State, response to SIGAR data call, 9/26/2013; USAID, response to SIGAR vetting, 10/14/2013. 278 State, response to SIGAR vetting, 10/10/2013. 279 State, response to SIGAR data call, 10/8/2013. 280 State, response to SIGAR vetting, 10/10/2013. 281 The Wall Street Journal, “Afghan Election Chairman Warns About Security,” 8/18/2013, accessed 10/3/2013. 282 ToloNews, “First Meeting of Selection Committee for the IEC Held,” 7/18/2013, accessed 10/3/2013; State, response to SIGAR data call, 9/26/2013. 283 UN Secretary-General, The situation in Afghanistan and its implications for international peace and security, 9/18/2013, p. 3. 284 SIGAR, Audit Report 10-16, Lessons Learned in Preparing and Conducting Elections in Afghanistan, 9/9/10, p. 7. 285 SIGAR, Quarterly Report to the United States Congress, 4/30/2013, p. 114. 286 SIGAR, Report of Interview with Craig Jenness, Director, and Asma Nassery, Electoral/Political Affairs Officer, Electoral Assistance Division, United Nations, 9/13/2012. 287 SIGAR, Audit 10-16 Report, Lessons Learned in Preparing and Conducting Elections in Afghanistan, 9/9/10, p. 7. 288 UN, response to SIGAR vetting, 10/9/2013. 289 SIGAR, Quarterly Report to the United States Congress, 4/30/2013, p. 114. 290 UN, response to SIGAR vetting, 10/16/2013. 291 SIGAR, Report of Interview with Craig Jenness, Director, and Asma Nassery, Electoral/Political Affairs Officer, Electoral Assistance Division, United Nations, 9/13/2012. 292 USAID, response to SIGAR vetting, 10/10/2013. 293 SIGAR, Quarterly Report to the United States Congress, 4/30/2013, p. 114. 294 SIGAR, Report of Interview with Craig Jenness, Director, and Asma Nassery, Electoral/Political Affairs Officer, Electoral Assistance Division, United Nations, 9/13/2012. 295 SIGAR, Quarterly Report to the United States Congress, 7/30/2013, p. 123. 296 USAID, response to SIGAR vetting, 10/14/2013; Tolo News, “IEC Takes Steps to Prepare Candidates, Increase Voter Registration,” 9/13/2013, accessed 9/17/2013. 297 SIGAR, Quarterly Report to the United States Congress, 4/30/2013, p. 114. 220 298 Reuters, “Votes sell for about $5 in Afghanistan as presidential race begins,” 10/14/2013, accessed 10/16/2013. 299 Reuters, “Votes sell for about $5 in Afghanistan as presidential race begins,” 10/14/2013, accessed 10/16/2013. 300 ToloNews, “Vote-Buying Already a Problem: IEC,” 10/16/2013, accessed 10/16/2013. 301 Afghanistan Analysts Network, “A Slow Start: Afghan voter registration in urban centres first,” 6/8/2013, accessed 10/16/2013. 302 SIGAR, Report of Interview with Craig Jenness, Director, and Asma Nassery, Electoral/Political Affairs Officer, Electoral Assistance Division, United Nations, 9/13/2012. 303 UN, response to SIGAR vetting, 10/9/2013. 304 UN, response to SIGAR vetting, 10/9/2013. 305 State, response to SIGAR data call, 9/30/13. 306 SIGAR, Report of Interview with Craig Jenness, Director, and Asma Nassery, Electoral/Political Affairs Officer, Electoral Assistance Division, United Nations, 9/13/2012. 307 ToloNews, “Security Threats an Issue for Nearly Half of All Voting Sites: IEC,” 9/2/2013, accessed 9/2/2013. 308 UN Secretary-General, The situation in Afghanistan and its implications for international peace and security, 9/18/2013, p. 4; ToloNews, “Security Threats an Issue for Nearly Half of All Voting Sites: IEC,” 9/2/2013, accessed 9/2/2013, UN, response to SIGAR vetting, 10/9/2013. 309 USAID, response to SIGAR vetting, 10/14/2013 ; ToloNews, “Security Threats an Issue for Nearly Half of All Voting Sites: IEC,” 9/2/2013, accessed 9/2/2013; UN, response to SIGAR vetting, 10/9/2013. 310 The New York Times, “Taliban Announce on Twitter the Killing of Election Official,” 9/18/2013, accessed 9/18/2013 311 Associated Press, “Taliban leader says group to fight US-Afghan deal,” 10/14/2013, accessed 10/17/2013. 312 SIGAR, Quarterly Report to the United States Congress, 10/30/2009, p. 78. 313 UN, response to SIGAR vetting, 10/9/2013. 314 SIGAR, Audit Report 10-16, Lessons Learned in Preparing and Conducting Elections in Afghanistan, 9/9/10, p. i. 315 State, response to SIGAR data call, 9/30/13. 316 State, response to SIGAR data call, 9/30/13. 317 State, response to SIGAR data call, 9/30/2013 . 318 USAID, response to SIGAR data call, 9/30/13. 319 UN, response to SIGAR vetting, 10/16/2013. 320 State, response to SIGAR data call, 9/26/ 2013; State, response to SIGAR vetting, 10/10/2013. 321 State, response to SIGAR data call, 9/26/2013. 322 State, response to SIGAR vetting, 10/10/2013. 323 State, response to SIGAR data call, 9/26/2013; USAID, response to SIGAR vetting, 10/14/2013. 324 SIGAR, Audit Report 10-1, Barriers to Greater Participation by Women in Afghan Elections, 10/28/2009, p. ii. 325 UN, response to SIGAR vetting, 10/9/2013. 326 Reuters, “Shortage of Female Security Forces Could Keep Women From the Vote,” 8/28/2013; CSTC-A, response to SIGAR data call, 10/1/2013; UN, response to SIGAR vetting, 10/16/2013. 327 USAID, response to SIGAR vetting, 10/14/2013. 328 USAID, response to SIGAR data call, 9/30/2013. 329 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 12. SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ENDNOTES 330 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 12. 331 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 12. 332 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 3. 333 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 7. 334 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 8. 335 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 3. 336 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, pp. 8, 10. 337 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 5. 338 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 5. 339 UN, Letter dated 9 July 2012 from the representatives of Afghanistan and Japan to the United Nations addressed to the Secretary-General, 7/12/2012, pp. 11–12. 340 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 12. 341 State, “Current U.S. Policy in Afghanistan and Pakistan,” 9/16/2012, accessed 9/17/2013. 342 Radio Free Europe, “Afghan President Ends Pakistan Visit,” 8/27/2013, accessed 9/17/2013. 343 Reuters, “Held by Pakistan, ex-Afghan Taliban commander’s touted peace role in Doubt,” 9/26/2013, accessed 9/26/2013; The New York Times, “Taliban and Pakistan Argue Over Fate of Islamist Detainee,” 10/9/2013, accessed 10/9/2013. 344 Reuters, “Taliban commanders refuse to meet former leader in Pakistan: sources,” 10/3/2013, accessed 10/7/2013; The New York Times, “Taliban and Pakistan Argue Over Fate of Islamist Detainee,” 10/9/2013, accessed 10/9/2013. 345 The New York Times, “Taliban and Pakistan Argue Over Fate of Islamist Detainee,” 10/9/2013, accessed 10/9/2013; Radio Free Europe, “Pakistan Insists Afghan Taliban Leader Mullah Baradar ‘Free’,” 10/9/2013, accessed 10/10/2013. 346 The Wall Street Journal, “Pakistan Releases Seven Taliban Prisoners,” 9/7/2013, accessed 9/17/2013. 347 State, “Current U.S. Policy in Afghanistan and Pakistan,” 9/16/2012, accessed 9/17/2013. 348 Reuters, “Afghan president visits Pakistan seeking help with peace process,” 8/26/2013, accessed 10/3/2013. 349 Department of Defense, Progress Toward Security and Stability in Afghanistan, 7/2013, p. 37. 350 DOD, response to SIGAR data call, 9/30/2013; State, response to SIGAR data call, 10/4/2013. 351 DOD, response to SIGAR data call, 9/30/2013; State, response to SIGAR data call, 10/4/2013. 352 DOD, response to SIGAR data call, 9/30/2013; State, response to SIGAR data call, 10/4/2013. 353 DOD, response to SIGAR data call, 9/30/2013; State, response to SIGAR data call, 10/4/2013. 354 DOD, response to SIGAR data call, 9/30/2013; State, response to SIGAR data call, 10/4/2013. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 355 Ministry of Rural Rehabilitation and Development, 1391 Annual Implementation Plan for the Afghanistan Peace and Reintegration Programme (APRP), 4/2012, p. 6; Ministry of Rural Rehabilitation and Development, 1390 Annual Implementation Plan for the Afghanistan Peace and Reintegration Programme (APRP), 9/2011, p. 6. 356 DOD, response to SIGAR data call, 9/30/2103; State, response to SIGAR data call, 10/4/2013. 357 DOD, response to SIGAR data call, 9/30/2013; State, response to SIGAR data call, 10/4/2013. 358 DOD, response to SIGAR data call, 9/30/2013; State, response to SIGAR data call, 10/4/2013. 359 UN Secretary-General, The situation in Afghanistan and its implications for international peace and security, 9/18/2013, p. 2. 360 USAID, response to SIGAR data call, 9/30/2013. 361 Foreign Policy, “Lessons from Afghanistan’s tribal elders,” 8/12/2013, accessed 9/11/2013. 362 UN Secretary-General, The situation in Afghanistan and its implications for international peace and security, 9/18/2013, p. 10. 363 Ministry of Finance Policy Department, “19th JCMB: 12 February 13, Kabul, Afghanistan,” 10/7/2013, accessed 10/9/2013. 364 Government of the Islamic Republic of Afghanistan, Aid Management Policy (AMP) For Transition and Beyond, 12/10/2012, p. 2. 365 UN Secretary-General, The situation in Afghanistan and its implications for international peace and security, 9/18/2013, p. 10. 366 Government of the Islamic Republic of Afghanistan, Communiqué, Kabul International Conference on Afghanistan, 7/20/2010, p. 3 and Ministry of Foreign Affairs of Japan, The Tokyo Declaration Partnership for Self-Reliance in Afghanistan From Transition to Transformation, 7/8/2012, Section 14. 367 Government of the Islamic Republic of Afghanistan, Aid Management Policy (AMP) For Transition and Beyond, 12/10/2012, pp. 5, 8. 368 UN Secretary-General, The situation in Afghanistan and its implications for international peace and security, 9/18/2013, p. 10. 369 Department of Defense, Progress Toward Security and Stability in Afghanistan, 12/2012, p. 107. 370 Pajhwok, “Parliament’s summer recess from tomorrow,” 7/22/2013, accessed 10/4/2013; ToloNews, “Lower House Resumes Work, Security Remains Top Priority,” 9/7/2013, accessed 10/4/2013. 371 ToloNews, “Lower House Approves Crucial Land Grabbing Prevention Law,” 9/23/2013, accessed 9/24/2013. 372 ToloNews, “Omer Daudzai Wins “Vote of Confidence,” Appointed as Interior Minister,” 9/25/2013, accessed 9/30/2013. 373 Institute for War & Peace Reporting, “Afghan Women Face Growing Threats,” 9/20/2013, accessed 10/4/2013. 374 The Wall Street Journal, “Ex-Warlord Plans Run for Afghan High Office,” 9/24/2013, accessed 10/4/2013; The Wall Street Journal, “Former Islamist Warlord Vies for Afghan Presidency,” 10/3/2013, accessed 10/4/2013; Pajhwok News, “Replacements for resigning MPs soon: IEC,” 10/9/2013, accessed 10/10/2013. 375 USAID, response to SIGAR data call, 9/30/2013; SIGAR, Quarterly Report to the United States Congress, 7/30/2013, p. 126. 376 USAID, response to SIGAR data call, 9/30/2013. 377 USAID, response to SIGAR data call, 9/30/2013. 378 State, response to SIGAR data call, 9/26/2013. 221 ENDNOTES 379 UNAMA, Mid-Year Report 2013: Protection of Civilians in Armed Conflict, 7/31/2013, p. 20. 380 UNAMA, Mid-Year Report 2013: Protection of Civilians in Armed Conflict, 7/31/2013, p. 23. 381 UNHCR, Eligibility Guidelines for Assessing the International Protection Needs of Asylum-Seekers from Afghanistan, 8/6/2012, p. 31. 382 International Rescue Committee, “IRC Shocked and Saddened at Killing of Five Staff Members in Afghanistan,” 8/27/2013, accessed 9/11/2013. 383 Ministry of Rural Rehabilitation and Development, “MRRD condemns indiscriminate killing of staff in Herat,” 8/2013, accessed 9/11/2013. 384 Center for New American Security, “A Pathway to Success in Afghanistan: The National Solidarity Program,” 3/2009, p. 3. 385 USAID, response to SIGAR data call, 9/30/2013. 386 USAID, response to SIGAR data call, 9/30/2013; SIGAR Audit 13-16, Stability in Key Areas (SIKA) Programs: After 16 Months and $47 Million Spent, USAID Had Not Met Essential Program Objectives, 7/29/2013, p. 7. 387 USAID, response to SIGAR data call, 9/30/2013. 388 USAID, response to SIGAR data call, 9/30/2013. 389 USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR vetting, 10/17/2013. 390 USAID, response to SIGAR data call, 9/30/2013. 391 USAID, response to SIGAR data call, 9/30/2013. 392 USAID, response to SIGAR data call, 9/30/2013. 393 USAID, response to SIGAR data call, 9/30/2013. 394 USAID, response to SIGAR data call, 9/30/2013. 395 SIGAR, Quarterly Report to the United States Congress, 7/30/2013, pp. 128-129. 396 DOD, response to SIGAR data call, 9/30/2013. 397 DOD, response to SIGAR data call, 9/30/2013. 398 SIGAR, Quarterly Report to the United States Congress, 4/30/2013, p. 121. 399 World Bank, “Defining Civil Society,” accessed 10/15/2013. 400 SIGAR, Quarterly Report to the United States Congress, 4/30/2013, p. 121. 401 USAID, response to SIGAR vetting, 10/14/2013. 402 USAID, response to SIGAR data call, 9/30/2013. 403 International Center for Not-for-Profit Law, “President Karzai signs into law bill expanding associational rights in Afghanistan,” 9/23/2013, accessed 10/7/2013. 404 USAID, response to SIGAR data call, 9/30/2013. 405 USAID, response to SIGAR data call, 9/30/2013. 406 USAID, response to SIGAR data call, 9/30/2013. 407 SIGAR, Quarterly Report to the United States Congress, 7/30/2013, p. 129. 408 SIGAR, Quarterly Report to the United States Congress, 7/30/2013, p. 130. 409 USAID, response to SIGAR data call, 9/30/2013. 410 USAID OIG, Memorandum: USAID/Afghanistan’s Performance Based Governors’ Fund (No. F-306-13-001-S), 10/12/2012, pp. 1-4. 411 USAID OIG, Memorandum: USAID/Afghanistan’s Performance Based Governors’ Fund (No. F-306-13-001-S), 10/12/2012, pp. 1-3. 412 SIGAR, Quarterly Report to the United States Congress, 7/30/2013, p. 130. 413 USAID, response to SIGAR data call, 9/30/2013. 222 414 USAID, response to SIGAR data call, 9/30/2013. 415 USAID, response to SIGAR data call, 9/30/2013. 416 USAID, response to SIGAR data call, 9/30/2013. 417 USAID, response to SIGAR data call, 9/30/2013. 418 USAID, response to SIGAR data call, 9/30/2013. 419 USAID, response to SIGAR data call, 9/30/2013. 420 SIGAR, Quarterly Report to the United States Congress, 7/30/2013, pp. 127–128. 421 Checchi and Company Consulting, Inc., Performance Evaluation: Support to Sub-National Governance Structures (SNG), 2/5/2013, p. 2. 422 Checchi and Company Consulting, Inc., Performance Evaluation: Support to Sub-National Governance Structures (SNG), 2/5/2013, pp. 13–14. 423 Checchi and Company Consulting, Inc., Performance Evaluation: Support to Sub-National Governance Structures (SNG), 2/5/2013, p. 30. 424 Checchi and Company Consulting, Inc., Performance Evaluation: Support to Sub-National Governance Structures (SNG), 2/5/2013, pp. 46–47. 425 USAID, response to SIGAR vetting, 10/14/2013; USAID, response to SIGAR data call, 9/30/2013. 426 USAID, response to SIGAR data call, 9/30/2013. 427 SIGAR, Quarterly Report to the United States Congress, 7/30/2013, p. 131. 428 USAID, response to SIGAR vetting, 10/14/2013. 429 ToloNews, “Journalists Stage Protests Demanding Approval of RTI Law,” 9/18/2013; Government of Afghanistan, The Constitution of Afghanistan, 1/3/2004, p. 14. 430 ToloNews, “Pro-Media Organisations Demand Amendment of “Media Law” Articles,” 9/29/2013, accessed 10/2/2013. 431 USAID, response to SIGAR data call, 9/30/2013. 432 DOD, response to SIGAR data call, 9/30/2013. 433 State, response to SIGAR data call, 9/26/2013. 434 State, response to SIGAR data call, 9/26/2013. 435 ToloNews, “Omer Daudzai Wins “Vote of Confidence,” Appointed as Interior Minister,” 9/25/2013, accessed 9/30/2013. 436 State, response to SIGAR data call, 9/26/2013. 437 State, INL, response to SIGAR data call, 9/30/2013. 438 SIGAR, Quarterly Report to the United States Congress, 7/30/2013, p. 133. 439 UNAMA, Mid-Year Report 2013: Protection of Civilians in Armed Conflict, 7/31/2013, p. 22. 440 UNAMA, Mid-Year Report 2013: Protection of Civilians in Armed Conflict, 7/31/2013, p. 22. 441 UNAMA, Mid-Year Report 2013: Protection of Civilians in Armed Conflict, 7/31/2013, p. 23. 442 SIGAR, Alert Letter 13-6, Serious Deficiencies Related to the Afghanistan Justice Training Transition Program Administered by the Department of State, 7/22/2013, p. 1. 443 State, “SIGAR Inspection of INL Justice Training Transition Program,” accessed 10/15/2013. 444 State, response to SIGAR vetting, 10/16/2013; State, response to SIGAR vetting, 10/11/2013; State, response to SIGAR data call, 12/31/2012. 445 State, response to SIGAR vetting, 10/11/2013. 446 State, INL, response to SIGAR data call, 9/30/2013; State, response to SIGAR vetting, 10/14/2013. SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ENDNOTES 447 448 449 450 451 452 453 454 455 456 457 458 459 460 461 462 463 464 465 466 467 468 469 470 471 472 473 474 475 476 477 478 479 480 481 482 483 484 485 486 487 488 489 490 491 492 State, INL, response to SIGAR data call, 9/30/2013. DOD, response to SIGAR data call, 9/30/2013. USAID, response to SIGAR data call, 9/30/2013. USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR vetting, 10/14/2013. USAID, response to SIGAR data call, 9/30/2013. State, INL, response to SIGAR data call, 9/30/2013. State, INL, response to SIGAR data call, 9/30/2013. State, INL, response to SIGAR data call, 9/30/2013. State, response to SIGAR vetting, 10/9/2013. State, INL, response to SIGAR data call, 9/30/2013. State, INL, response to SIGAR data call, 9/30/2013. State, INL, response to SIGAR data call, 9/30/2013. State, INL, response to SIGAR data call, 9/30/2013. State, INL, response to SIGAR data call, 9/30/2013. State, INL, response to SIGAR data call, 9/30/2013. State, INL, response to SIGAR data call, 9/30/2013. State, INL, response to SIGAR data call, 9/30/2013. State, INL, response to SIGAR data call, 9/30/2013. State, INL, response to SIGAR data call, 9/30/2013. State, INL, response to SIGAR data call, 9/30/2013. SIGAR Special Project 13-9, U.S. Anti-Corruption Efforts: A Strategic Plan and Mechanisms to Track Progress Are Needed in Fighting Corruption in Afghanistan, 9/11/2013, p. 2. State, response to SIGAR data call, 9/26/2013. State, response to SIGAR data call, 9/26/2013. USAID, response to SIGAR vetting, 10/14/2013; MEC website, “About Us,” accessed 10/05/2013. State, response to SIGAR data call, 9/26/2013. Joint Coordination and Monitoring Board, “JCMB Background,” accessed 10/15/2013; State, response to SIGAR data call, 9/26/2013. USAID, response to SIGAR vetting, 10/14/2013. State, response to SIGAR data call, 9/26/2013. State, response to SIGAR data call, 9/26/2013. State, response to SIGAR data call, 9/26/2013. State, response to SIGAR data call, 9/26/2013. Independent Joint Anti-Corruption Monitoring and Evaluation Committee, “Fourth Six Month Report,” 9/28/2013, p. 15. State, response to SIGAR data call, 9/26/2013. State, response to SIGAR data call, 9/26/2013. State, response to SIGAR data call, 9/26/2013. State, response to SIGAR vetting, 10/11/2013. State, response to SIGAR data call, 9/26/2013. State, response to SIGAR data call, 9/26/2013; USAID, response to SIGAR data call, 9/30/2013. State, response to SIGAR data call, 9/26/2013. USAID, response to SIGAR data call, 9/30/2013. State, response to SIGAR data call, 9/26/2013. State, response to SIGAR data call, 9/26/2013. Independent Joint Anti-Corruption Monitoring and Evaluation Committee, “Fourth Six Month Report,” 9/28/2013, p. 7. Independent Joint Anti-Corruption Monitoring and Evaluation Committee, “Fourth Six Month Report,” 9/28/2013, p. 9. Independent Joint Anti-Corruption Monitoring and Evaluation Committee, “Fourth Six Month Report,” 9/28/2013, p. 8. State, response to SIGAR data call, 9/26/2013. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 493 State, response to SIGAR data call, 9/26/2013; USAID, response to SIGAR vetting, 10/14/2013. 494 USAID, response to SIGAR data call, 9/30/2013. 495 USAID, response to SIGAR vetting, 10/14/2013. 496 USAID, response to SIGAR data call, 9/30/2013. 497 State, response to SIGAR data call, 9/26/2013. 498 USAID, response to SIGAR data call, 9/30/2013. 499 DOD, CJIATF-A, response to SIGAR data call, 9/30/2013. 500 Transparency International UK, Improving Transparency, Accountability and Counter-Corruption (TACC) in the ANSF, MoD, and MoI, 10/2/2013, p. 2. 501 DOD, CJIATF-A, response to SIGAR data call, 9/30/2013. 502 SIGAR, Quarterly Report to the United States Congress, 7/30/2013, p. 137. 503 DOD, CJIATF-A, response to SIGAR data call, 9/30/2013. 504 DOD, CJIATF-A, response to SIGAR data call, 9/30/2013. 505 DOD, CJIATF-A, response to SIGAR data call, 9/30/2013. 506 SIGAR Audit Report 13-6, Contracting with the Enemy: DOD has Limited Assurance that Contractors with Links to Enemy Groups are Identified and their Contracts Terminated, 4/11/2013, p. 13. 507 DOD, CJIATF-A, response to SIGAR data call, 9/30/2013. 508 State, response to SIGAR data call, 9/26/2013. 509 Independent Joint Anti-Corruption Monitoring and Evaluation Committee, “Fourth Set of Recommendations and Benchmarks,” 7/20/2012. 510 SIGAR, Quarterly Report to the United States Congress, 4/30/2013, p. 130. 511 State, response to SIGAR data call, 9/26/2013. 512 SIGAR, Quarterly Report to the United States Congress, 4/30/2013, p. 130; State, response to SIGAR data call, 9/26/2013. 513 United States Institute of Peace, “Afghan Women’s Progress Targeted with U.S. Plan to Spend $200 Million,” 7/18/2013, accessed 10/02/2013. 514 USAID, response to SIGAR data call, 9/30/2013. 515 USAID, response to SIGAR data call, 10/10/2013; The Asia Foundation, “Afghan Women’s Ministry Launches National Restructuring Project,” 9/10/2013, accessed 10/3/2013. 516 Office of the UN High Commissioner for Human Rights, “Opening remarks by UN High Commissioner for Human Rights Navi Pillay at a press conference during her visit to Afghanistan,” 9/17/2013, accessed 9/17/2013. 517 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 12. 518 Afghanistan Research and Evaluation Unit, Women’s Economic Empowerment in Afghanistan: Creating Spaces and Enabling the Environment, 8/2013, p. 2. 519 International Crisis Group, Women and Conflict in Afghanistan, 10/14/2013, pp. i–ii. 520 International Crisis Group, Women and Conflict in Afghanistan, 10/14/2013, p. 2. 521 International Crisis Group, Women and Conflict in Afghanistan, 10/14/2013, pp. 7, 9, 20. 522 International Crisis Group, Women and Conflict in Afghanistan, 10/14/2013, p. 15. 523 International Crisis Group, Women and Conflict in Afghanistan, 10/14/2013, p. 38. 223 ENDNOTES 524 Oxfam, Women and the Afghan Police, 9/10/2013, pp. 1–2; Oxfam, “Afghan women at risk while police force remains 99 percent male,” 9/10/2013, accessed 10/4/2013. 525 BBC News, “Top Afghanistan female police officer dies,” 9/16/2013, accessed 10/4/2013. 526 UNHCR, “Solutions Strategy for Afghan Refugees Summary Progress Report,” 9/2013, p. 1. 527 UNHCR, Eligibility Guidelines for Assessing the International Protection Needs of Asylum-Seekers from Afghanistan, 8/6/2012, p. 4; UNHCR, “Solutions Strategy for Afghan Refugees Summary Progress Report,” 9/2013, p. 1. 528 UNHCR, Eligibility Guidelines for Assessing the International Protection Needs of Asylum-Seekers from Afghanistan, 8/6/2012, p. 27. 529 UNHCR, “Solutions Strategy for Afghan Refugees Summary Progress Report,” 9/2013, p. 1. 530 Human Rights Watch, “Iran: Honor Afghans’ Right to Seek Asylum,” 9/9/2013, accessed 9/11/2013. 531 State, response to SIGAR vetting, 10/10/2013. 532 Human Rights Watch, “Iran: Honor Afghans’ Right to Seek Asylum,” 9/9/2013, accessed 9/11/2013. 533 State, response to SIGAR data call, 9/25/2013. 534 State, response to SIGAR data call, 9/25/2013. 535 State, response to SIGAR data call, 10/2/2013. 536 State, response to SIGAR data call, 10/2/2013. 537 State, response to SIGAR data call, 10/2/2013. 538 State, response to SIGAR data call, 10/2/2013. 539 Office of the UN High Commissioner for Human Rights, “Opening remarks by UN High Commissioner for Human Rights Navi Pillay at a press conference during her visit to Afghanistan,” 9/17/2013, accessed 9/17/2013; International Coordinating Committee of National Institutions for the Promotion and Protection of Human Rights, “Chart of the Status of National Institutions,” 2/11/2013, accessed 10/7/2013. 540 State, response to SIGAR data call, 10/2/2013. 541 Office of the High Commissioner for Human Rights, “Paris Principles: 20 years guiding the work of National Human Rights Institutions,” 5/30/2013, accessed 10/7/2013. 542 State, response to SIGAR data call, 10/2/2013. 543 State, response to SIGAR data call, 10/2/2013. 544 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 1. 545 Independent Joint Anti-Corruption Monitoring and Evaluation Committee, “Fourth Six-Month Report (January 1, 2013 – June 30, 2013),” 9/28/2013; Anti-Corruption Authorities, “Profiles: Afghanistan,” 6/2012, accessed 10/8/2013. 546 Treasury, response to SIGAR data call, 9/30/2013. 547 DOJ, response to SIGAR data call, 9/30/2013; State, response to SIGAR data call, 9/26/2013; Treasury, response to SIGAR data call, 9/30/2013; State, response to SIGAR data call, 9/26/2013. 548 TFBSO, response to SIGAR data call, 9/30/2013. 549 World Bank, “Afghanistan Economic Update,” 4/2013, p. 17; ADB, “Outlook 2013, Update,” 10/2013, pp. 107–108; World Bank, “Afghanistan Partnership: Country Program Snapshot,” 8/29/2013; IMF, “World Economic Outlook,” 10/2013. 550 World Bank, “Afghanistan Economic Update,” 4/2013, p. 17; World Bank, “Afghanistan Partnership: Country Program Snapshot,” 8/29/2013. 224 551 World Bank, “South Asia Economic Focus,” Fall 2013, p. 39, accessed 10/10/2013. 552 World Bank, “Afghanistan Economic Update,” 4/2013, pp. 4, 17. 553 World Bank, “Afghanistan Partnership: Country Program Snapshot,” 8/29/2013. 554 World Bank, “Afghanistan Economic Update,” 4/2013, pp. 4, 17; World Bank, “Afghanistan In Transition: Looking Beyond 2014,” 2/28/2013, accessed 7/4/2013; ADB, “Outlook 2013, Update,” 10/2013, pp. 107–108. 555 World Bank, “Afghanistan Partnership: Country Program Snapshot,” 8/29/2013. 556 World Bank, “South Asia Economic Focus,” Fall 2013, accessed 10/10/2013. 557 DOD, Progress Toward Security and Stability in Afghanistan, 7/2013, p. 133. 558 World Bank, “Afghanistan, From Transition to Transformation II, Senior Officials Meeting,” 7/2/2013; DOD, Progress Toward Security and Stability in Afghanistan, 7/2013, p. 133. 559 World Bank, “South Asia Economic Focus,” Fall 2013, accessed 10/10/2013. 560 MOF, “1392 National Budget,” accessed 10/17/2013; Da Afghanistan Bank, “Daily Exchange Rates of Selected Currencies to Afghani,” 1/8/2013, accessed 10/17/2013. 561 MOF, “Monthly Fiscal Bulletin, Month 7,” 8/21/2013, accessed 10/17/2013. 562 World Bank, “Afghanistan Partnership: Country Program Snapshot,” 8/29/2013. 563 World Bank, “South Asia Economic Focus,” Fall 2013, accessed 10/10/2013. 564 World Bank, “Afghanistan Partnership: Country Program Snapshot,” 8/29/2013. 565 World Bank, “Afghanistan Partnership: Country Program Snapshot,” 8/29/2013. 566 Treasury, response to SIGAR data call, 9/30/2013; Treasury, response to SIGAR vetting, 7/12/2013. 567 Treasury, response to SIGAR data call, 9/30/2013; Treasury, response to SIGAR vetting, 7/12/2013. 568 IMF, “IMF Executive Board Completes First Review Under the Extended Credit Facility Arrangement for the Islamic Republic of Afghanistan, Approves US$18.2 Million Disbursement,” 6/29/2012, accessed 7/3/2013; IMF, “Islamic Republic of Afghanistan-First Review Under the Extended Credit Facility Arrangement, Request for Waiver of Nonobservance of a performance Criterion, Modification of Performance Criteria, and Rephasing of Disbursements,” 6/19/2012, accessed 7/3/2013; Treasury, response to SIGAR vetting, 7/12/2013. 569 State, “FY 2014 Budget Submission to Congress,” 4/10/2013, accessed 10/4/2013. 570 USAID, response to SIGAR data call, 7/16/2013; USAID, response to SIGAR data call, 10/10/2013. 571 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 10. 572 State, response to SIGAR data call, 6/25/2013. 573 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 10; Senior Officials Meeting Report, Tokyo Mutual Accountability Framework, 7/3/2013, p. 11. 574 DOD/State, U.S. Civil-Military Strategic Framework for Afghanistan: Revision 2, 8/2013, p. 10; USAID-OIG, Review of SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ENDNOTES 575 576 577 578 579 580 581 582 583 584 585 586 587 588 589 590 591 592 593 594 595 596 597 598 USAID/Afghanistan’s Monitoring and Evaluation System (Report No. F-306-12-002-S), 9/26/2012, accessed 10/5/2013. World Bank, “Afghanistan Economic Update,” 4/2013, p. 12. State, response to SIGAR data call, 9/26/2013. Treasury, response to SIGAR data call, 9/30/2013; State, “International Narcotics Control Strategy Report, Vol. II,” 3/2013, accessed 9/30/2013; Financial Action Task Force, “Improving Global AML/CFT Compliance: On-going Process, Afghanistan,” 6/21/2013. State, response to SIGAR data call, 9/26/2013. World Bank, “Afghanistan Economic Update,” 4/2013, p. 11. Treasury, response to SIGAR data call, 9/30/2013; Da Afghanistan Bank, “Daily Exchange Rates of Selected Currencies to the Afghani,” 10/1/2013. Treasury, response to SIGAR data call, 9/30/2013. State, response to SIGAR data call, 9/26/2013. Financial Action Task Force, “Improving Global AML/CFT Compliance: On-going Process, Afghanistan,” 6/21/2013. State, response to SIGAR data call, 9/26/2013. Financial Action Task Force, “High Risk and Non-Cooperative Jurisdictions,” accessed 10/6/2013. State, “International Narcotics Control Strategy Report, Vol. II,” 3/2013, accessed 7/11/2013. Independent Joint Anti-Corruption Monitoring and Evaluation Committee, “Report of the Public Inquiry Into the Kabul Bank Crisis,” 11/15/2012, p. 2. Treasury, response to SIGAR data call, 9/30/2013; State, response to SIGAR data call, 9/26/2013. GIROA, “Report on Kabul Bank Asset Recovery,” 6/30/2013; MOF, “Senior Officials Meeting Joint Report,” 7/3/2013, accessed 7/16/2013; Independent Joint Anti-Corruption Monitoring and Evaluation Committee, “Fourth Six-Month Report (January 1, 2013–June 30, 2013),” 9/28/2013. State, response to SIGAR data call, 3/25/2013. DOJ, response to SIGAR data call, 9/30/2013; State, response to SIGAR data call, 9/26/2013. Independent Joint Anti-Corruption Monitoring and Evaluation Committee, “Fourth Six-Month Report (January 1, 2013 – June 30, 2013),” 9/28/2013. DOJ, response to SIGAR data call, 9/30/2013; State, response to SIGAR data call, 9/26/2013. DOJ, response to SIGAR data call, 9/30/2013. DOJ, response to SIGAR data call, 6/29/2013. Independent Joint Anti-Corruption Monitoring and Evaluation Committee, “Fourth Six-Month Report (January 1, 2013 – June 30, 2013),” 9/28/2013. IMF, “Islamic Republic of Afghanistan-First Review Under the Extended Credit Facility Arrangement, Request for Waiver of Nonobservance of a performance Criterion, Modification of Performance Criteria, and Rephasing of Disbursements,” 6/19/2012, accessed 7/3/2013; The Frontier Post, “Only Bid for Kabul Bank Rejected,” 3/6/2013. Treasury, response to SIGAR data call, 9/30/2013; MOF, “New Kabul Bank is Re-Advertised for Privatization,” 9/3/2013; State, response to SIGAR data call, 9/26/2013. IMF, “Islamic Republic of Afghanistan-First Review Under the Extended Credit Facility Arrangement, Request for Waiver of Nonobservance of a performance Criterion, Modification REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 599 600 601 602 603 604 605 606 607 608 609 610 611 612 613 614 615 616 617 618 619 of Performance Criteria, and Rephasing of Disbursements,” 6/19/2012, accessed 7/3/2013. Grant Thornton, New Kabul Bank Financial Statements and Auditor’s Report, For the Year Ended December 31, 2012, 7/30/2013. Treasury, e-mail to SIGAR, 9/30/2013. Treasury, response to SIGAR data call, 3/29/2012; IMF, “Islamic Republic of Afghanistan-First Review Under the Extended Credit Facility Arrangement, Request for Waiver of Nonobservance of a performance Criterion, Modification of Performance Criteria, and Rephasing of Disbursements,” 6/19/2012, accessed 7/3/2013. World Bank, “Afghanistan Economic Update,” 4/2013, p. 4; World Bank, “Inclusive Growth for Sustainable Jobs,” 5/7/2013. p. 20; MOF, “H.E. Finance Minister’s Speech for for Misrano Jirga Regarding Submission of 1392 National Budget,” 11/6/2012, accessed 10/14/2013. TFBSO, response to SIGAR data call, 10/1/2013; TFBSO, response to SIGAR vetting, 10/11/2013. State, response to SIGAR data call, 9/26/2013; TFBSO, response to SIGAR data call, 9/30/2013. TFBSO, response to SIGAR data call, 9/30/2013. TFBSO, response to SIGAR data call, 10/11/2013. MOMP, “Afghanistan Ministry of Mines Announces the Winning Bidders for the Hajigak Iron Ore Project Tender,” 6/23/2012. State, response to SIGAR data call, 9/26/2013; MOMP, “Preferred Bidder for Current Mineral Tenders,” 12/6/2012; MOMP, “Preferred Bidder for Zarkashan Project,” 12/16/2012. IMF, “Islamic Republic of Afghanistan-First Review Under the Extended Credit Facility Arrangement, Request for Waiver of Nonobservance of a performance Criterion, Modification of Performance Criteria, and Rephasing of Disbursements,” 6/19/2012, accessed 7/3/2013; Tokyo Conference on Afghanistan, “Tokyo Mutual Accountability Framework,” 7/8/2012, accessed 7/4/2013; MOMP, “Ministry of Mines Begins Consultative process in Support of Improved Minerals Law,” 5/5/2012, accessed 7/4/2013. State, response to SIGAR data call, 9/26/2013. TFBSO, response to SIGAR data call, 9/30/2013. TFBSO, response to SIGAR data call, 7/3/2013; TFBSO, response to SIGAR data call, 4/2/2013. TFBSO, response to SIGAR data call, 9/30/2013. TFBSO, response to SIGAR data call, 9/30/2013; MOMP, “MOMP Begins Cement Factory Tender process in Jabal-U-Saraj, Herat and Ghori,” 9/23/2013. USAID, response to SIGAR data call, 9/30/2013; USAID, “Contract No: AID-306-I-00-12-00544,” 3/31/2013; USAID, “Contract No: AID-306-I-00-12-00544,” 3/31/2013. USAID, “Contract No: AID-306-I-00-12-00544,” 3/31/2013. TFBSO, response to SIGAR data call, 9/30/2013; State, response to SIGAR vetting, 10/11/2013. MOMP, “Frequently Asked Questions: Tenders,” accessed 10/3/2013; SIGAR, Quarterly Report to the United States Congress, 10/2012, p. 143. State, response to SIGAR data call, 10/1/2012; State, response to SIGAR data call, 9/26/2013; TFBSO, response to SIGAR data call, 9/30/2013. State, response to SIGAR data call, 9/26/2013; TFBSO, response to SIGAR data call, 9/30/2013; RFE/RL, “Mineral Wealth Could harm, Not Aid, Afghanistan’s Future,” 10/2/2013. 225 ENDNOTES 620 State, response to SIGAR data call, 9/26/2013. 621 ACTA, “1392 National Budget Review,” 12/2/2012, accessed 10/4/2013. 622 Tolo News, “Chinese Company Seeks Amendments to Ainak Copper Mine Contract,” 8/22/2013, accessed 9/11/2013; State, response to SIGAR data call, 6/24/2013; State, response to SIGAR data call, 9/26/2013; TFBSO, response to SIGAR data call, 9/30/2013. 623 MOMP, “China to Actualize Commitments Regarding to Aynak Copper project and Amo-Darya Oil Basin,” 9/30/2013. 624 TFBSO, response to SIGAR data call, 9/30/2013; TFBSO, response to SIGAR vetting, 10/11/2013; TFBSO, response to SIGAR data call, 1/3/2013; State, response to SIGAR data call, 9/26/2013. 625 MOMP, “Afghanistan Ministry of Mines Announces the Winning Bidders for the Hajigak Iron Ore Project Tender,” 6/23/2012. 626 TFBSO, response to SIGAR data call, 7/3/2013; TFBSO, response to SIGAR data call, 9/30/2013; State, response to SIGAR data call, 9/26/2013. 627 ACCI, “The First Afghanistan’s Refinery Opened,” 8/25/2013, accessed 9/12/2013; State, response to SIGAR vetting, 10/11/2013; Ghazanfar Group, “Ghazanfar Oil Refinery,” accessed 10/11/2013; Kam Group, “Companies: Kam International Oil,” accessed 9/12/2013. 628 State, response to SIGAR data call, 9/26/2013; TFBSO, response to SIGAR data call, 4/2/2013; Dragon Oil, PLC, “Formal Signing of Contracts for Two Blocks in Afghanistan,” 10/8/2013. 629 State, response to SIGAR data call, 9/26/2013; TFBSO, response to SIGAR data call, 9/30/2013. 630 MOMP, “Request for Expression of Interest for Oil and Gas Exploration and Production,” 9/30/2013; MOMP, “Request for Expression of Interest-Oil and Gas Exploration and production Tender,” 9/1/2013. 631 State, response to SIGAR data call, 3/26/2013; TFBSO, response to SIGAR vetting, 7/17/2013. 632 TFBSO, response to SIGAR data call, 9/30/2013;TFBSO, response to SIGAR data call, 7/3/2013; TFBSO, response to SIGAR vetting, 7/17/2013. 633 TFBSO, response to SIGAR data call, 7/3/2013; TFBSO, response to SIGAR data call, 9/30/2013. 634 World Bank, “Afghanistan Partnership: Country Program Snapshot,” 8/29/2013; USDA, “Agriculture in Afghanistan Overview,” accessed 6/14/2013. 635 NSC, “Report in Response to Section 1535(c) of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 (P.L. 111-383),” accessed 9/18/2012. 636 USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR vetting, 10/13/2013; SIGAR analysis of USAID Quarterly Pipeline Report, 9/30/2013. 637 USAID, response to SIGAR data call, 10/10/2013. 638 USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR data call, 7/1/2013; USAID, response to SIGAR vetting, 10/13/2013. 639 USAID, response to SIGAR data call, 9/30/2013. 640 USAID, response to SIGAR data call, 9/30/2013. USAID, response to SIGAR data call, 7/1/2013; USAID, response to SIGAR vetting, 10/13/2013. 226 641 USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR vetting, 10/13/2013. 642 USAID, response to SIGAR data call, 9/30/2013 643 USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR vetting, 10/13/2013; USAID, response to SIGAR data call, 7/1/2013. 644 USAID OIG, Audit of USAID/Afghanistan’s Incentives Driving Economic Alternatives for the North, East, and West Program, Audit report No. F-306-12-004-P, 6/29/2012. 645 USAID, response to SIGAR data call, 9/30/2013. 646 USAID, response to SIGAR data call, 9/30/2013. 647 USAID, response to SIGAR data call, 9/30/2013; USAID, “Commercial Horticulture and Agriculture Marketing Program, Factsheet,” 1/2013. 648 USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR vetting, 10/13/2013. 649 USAID, response to SIGAR data call, 9/30/2013. 650 World Bank, “Afghanistan Partnership: Country Program Snapshot,” 8/29/2013. 651 DOD, Progress Toward Security and Stability in Afghanistan, 7/2013, p. 164; USAID, “Factsheet: Infrastructure,” 2/2013, accessed 9/10/2013. 652 USAID, response to SIGAR vetting, 10/13/2013. 653 USAID, response to SIGAR vetting, 4/15/2013; DOD, response to SIGAR vetting, 10/16/2013. 654 GIROA, “National Energy Supply Program (NESP),” 1/2013, accessed 10/9/2013. 655 USAID, response to SIGAR data call, 7/1/2013; USAID, response to SIGAR vetting, 4/15/2013; DOD, response to SIGAR vetting, 10/16/2013. 656 USAID, response to SIGAR data call, 7/1/2013. 657 USAID, response to SIGAR data call, 9/30/2013. 658 USAID, response to SIGAR data call, 10/13/2013. 659 USAID, response to SIGAR data call, 9/30/2013. 660 USAID, response to SIGAR data call, 9/30/2013. 661 USAID, response to SIGAR data call, 9/30/2013. 662 USAID, response to SIGAR data call, 7/1/2013. 663 USAID, response to SIGAR data call, 7/1/2013; USAID, response to SIGAR vetting, 4/15/2013; DOD, response to SIGAR vetting, 10/16/2013. 664 SIGAR, Audit Report 13-7, Afghanistan’s National Utility: Commercialization Efforts Challenged By Expiring Subsidy and Poor USFOR-A and USAID Project Management, 4/18/2013; SIGAR, Quarterly Report to the United States Congress, 4/2013, p. 26. 665 DOD, response to SIGAR vetting, 10/16/2013. 666 USAID, response to SIGAR data call, 7/1/2013; USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR data call, 9/30/2013. 667 USAID, response to SIGAR data call, 10/13/2013. 668 USAID, response to SIGAR data call, 9/30/2013. 669 USAID, response to SIGAR vetting, 4/15/2013. 670 USAID, response to SIGAR vetting, 7/15/2013; 671 USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR vetting, 10/13/2013; USAID, response to SIGAR vetting, 10/20/2013. SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION ENDNOTES 672 USAID, response to SIGAR data call, 7/1/2013; USAID, response to SIGAR vetting, 7/15/2013; USAID, response to SIGAR data call, 9/30/2013; DOD, response to SIGAR vetting, 10/16/2013. 673 USAID, response to SIGAR data call, 7/1/2013; USAID, response to SIGAR vetting, 7/15/2013; USAID, response to SIGAR vetting, 7/17/2013; USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR vetting, 10/20/2013. 674 DOD, response to SIGAR data call, 9/30/2013; DOD, response to SIGAR vetting, 10/16/2013. 675 DOD, response to SIGAR vetting, 10/16/2013. 676 DOD, response to SIGAR data call, 9/30/2013; DOD, response to SIGAR vetting, 7/15/2013; DOD, response to SIGAR vetting, 10/16/2013. 677 DOD, response to SIGAR data call, 9/30/2013; SIGAR, Quarterly Report to the United States Congress, 4/2013, p. 157; DOD, response to SIGAR vetting, 7/15/2013; DOD, response to SIGAR vetting, 10/16/2013. 678 DOD, response to SIGAR data call, 9/30/2013. 679 DOD, response to SIGAR data call, 9/30/2013; DOD, response to SIGAR vetting, 10/16/2013. 680 DOD, response to SIGAR data call, 6/27/2013; DOD, response to SIGAR data call, 9/30/2013; DOD, response to SIGAR vetting, 10/16/2013. 681 SIGAR, Audit Report 12-12, Fiscal Year 2011 Afghanistan Infrastructure Fund Projects Are Behind Schedule and Lack Adequate Sustainment Plans, 7/2012. 682 DOD, response to SIGAR data call, 9/30/2013; DOD, response to SIGAR vetting, 10/16/2013. 683 DOD, response to SIGAR vetting, 10/16/2013. 684 DOD, response to SIGAR data call, 9/30/2013. 685 DOD, response to SIGAR data call, 9/30/2013. 686 World Bank, Afghanistan Transport Sector, accessed 7/8/2013. 687 SIGAR, Quarterly Report to the United States Congress, 4/2013, p. 160; Civil-Military Fusion Centre, “The Rise of the Afghan Rails: Regional Railway Linkages and Economic Growth in Afghanistan,” 3/2013, pp. 1, 5. 688 DOT, response to SIGAR data call, 9/30/2013. 689 DOD, response to SIGAR data call, 10/3/2013. 690 DOD, response to SIGAR data call, 10/3/2013. 691 DOT, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR data call, 10/13/2013. 692 DOT, response to SIGAR data call, 9/30/2013; DOT, response to SIGAR vetting, 10/10/2013. 693 DOT, response to SIGAR data call, 9/30/2013; DOT, response to SIGAR vetting, 10/10/2013. 694 USAID, response to SIGAR vetting, 10/13/2013; MOE, “1390 (2011/2012) EMIS Statistical Analytical Report,” 2012, accessed 10/13/2013. 695 USAID, response to SIGAR data call, 7/1/2013; USAID, response to SIGAR data call, 9/30/2013. 696 USAID, response to SIGAR data call, 12/30/2012. 697 USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR data call, 12/30/2012; USAID, response to SIGAR vetting, 10/13/2013. 698 USAID, response to SIGAR data call, 4/1/2013; USAID, response to SIGAR vetting, 10/13/2013. REPORT TO THE UNITED STATES CONGRESS I OCTOBER 30, 2013 699 USAID, “BELT Program, Implementation Letter Number 20-05,” 7/28/2013; USAID, BELT, Print and Supply of Primary School textbooks for the Afghan Ministry of Education, progress Report, 5/21/2013. 700 USAID, “BELT Program, Implementation Letter Number 20-05,” 7/28/2013; USAID, BELT, Print and Supply of Primary School textbooks for the Afghan Ministry of Education, progress Report, 5/21/2013. 701 USAID, response to SIGAR data call, 12/30/2012; USAID, BELT, Print and Supply of Primary School textbooks for the Afghan Ministry of Education, Progress Report, 5/21/2013. 702 USAID, response to SIGAR vetting, 10/13/2013. 703 USAID, response to SIGAR vetting, 10/13/2013. 704 USAID, response to SIGAR data call, 7/1/2013; USAID, response to SIGAR vetting, 10/13/2013. 705 USAID, response to SIGAR data call, 7/1/2013; USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR vetting, 10/13/2013. 706 USAID, response to SIGAR data call, 9/30/2013; USAID, “USAID Provides $40 Million to Support a New Five-Year Program at American University of Afghanistan,” 8/6/2013; USAID, response to SIGAR vetting, 10/13/2013. 707 USAID, response to SIGAR data call, 7/1/2013; USAID, response to SIGAR data call, 7/1/2013; USAID, response to SIGAR vetting, 10/13/2013. 708 USAID, “USAID Provides $40 Million to Support a New FiveYear Program at American University of Afghanistan,” 8/6/2013; USAID, response to SIGAR data call, 9/30/2013; USAID, “Cooperative Agreement No. 306-A-13-00004 for the Support of the American University of Afghanistan,” 8/1/2013. 709 USAID, response to SIGAR data call, 9/30/2013. 710 USAID, “Cooperative Agreement No. 306-A-13-00004 for the Support of the American University of Afghanistan,” 8/1/2013. 711 USAID, “Health Programs, Health Snapshot,” accessed 7/6/2013; USAID, Afghanistan Mortality Survey 2010, Key Findings, 12/2011, accessed 7/6/2013. 712 CIA, “World Factbook: Afghanistan,” 8/22/2013; World Bank, Afghanistan In Transition: Looking Beyond 2014, 2/28/2013, accessed 7/4/2013. 713 USAID, response to SIGAR data call, 9/30/2013. 714 USAID, response to SIGAR data call, 4/11/2013; USAID, response to SIGAR data call, 4/1/2013; USAID, response to SIGAR vetting, 10/13/2013. 715 SIGAR, Audit Report 13-17, Health Services in Afghanistan: USAID Continues Providing Millions of Dollars to the Ministry of Public Health Despite the Risk of Misuse of Funds, 9/2013. 716 USAID, response to SIGAR data call, 7/1/2013. 717 USAID, “Partnership Contracts for Health: Fact Sheet,” 1/2013; USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR vetting, 10/13/2013. 718 USAID, response to SIGAR data call, 9/30/2013. 719 USAID, response to SIGAR data call, 9/30/2013. 720 USAID, “Partnership Contracts for Health: Fact Sheet,” 1/2013; USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR vetting, 10/13/2013. 721 SIGAR, Audit Report 13-17, Health Services in Afghanistan: USAID Continues Providing Millions of Dollars to the Ministry of Public Health Despite the Risk of Misuse of Funds, 9/2013. 227 ENDNOTES 722 USAID, response to SIGAR data call, 7/1/2013; USAID, “Health Policy Project: Factsheet,” 1/2013; USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR vetting, 10/13/2013. 723 USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR vetting, 10/13/2013. 724 USAID, response to SIGAR data call, 9/30/2013. 725 USAID, “Leadership, management, Governance: Fact Sheet,” 1/2013; USAID, response to SIGAR data call, 9/30/2013. 726 USAID, response to SIGAR data call, 9/30/2013. 228 727 USAID, response to SIGAR vetting, 10/13/2013. 728 USAID, response to SIGAR data call, 9/30/2013; USAID, response to SIGAR vetting, 10/13/2013. 729 USAID, response to SIGAR data call, 9/30/2013. 730 USAID, response to SIGAR data call, 9/30/2013. 731 USAID, response to SIGAR data call, 10/13/2013. 732 USAID, response to SIGAR data call, 9/30/2013. 733 USAID, response to SIGAR data call, 9/30/2013. 734 USAID, response to SIGAR data call, 10/13/2013. SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION The National Defense Authorization Act for FY 2008 (P.L. 110-181) established the Special Inspector General for Afghanistan Reconstruction (SIGAR). SIGAR’s oversight mission, as defined by the legislation, is to provide for the independent and objective • conduct and supervision of audits and investigations relating to the programs and operations funded with amounts appropriated or otherwise made available for the reconstruction of Afghanistan. • leadership and coordination of, and recommendations on, policies designed to promote economy, efficiency, and effectiveness in the administration of the programs and operations, and to prevent and detect waste, fraud, and abuse in such programs and operations. • means of keeping the Secretary of State and the Secretary of Defense fully and currently informed about problems and deficiencies relating to the administration of such programs and operation and the necessity for and progress on corrective action. Afghanistan reconstruction includes any major contract, grant, agreement, or other funding mechanism entered into by any department or agency of the U.S. government that involves the use of amounts appropriated or otherwise made available for the reconstruction of Afghanistan. Source: P.L. 110-181, “National Defense Authorization Act for FY 2008,” 1/28/2008. (For a list of the congressionally mandated contents of this report, see Section 3.) Cover photo: A typical, heavily loaded Afghan truck waits at the U.S.-funded Weesh crossing on the Afghanistan-Pakistan border. An alert letter issued this quarter pointed out SIGAR auditors’ observation that many Afghan trucks are too tall to pass through a new inspection device at the crossing. (SIGAR photo) FINAL_Oct2013_Cover.indd 2 Sheep and goats share Kabul’s main highway with cars and trucks. (SIGAR photo) 10/21/2013 2:14:50 PM 2530 Crystal Drive Arlington, VA 22202 www.sigar.mil FRAUD, WASTE, OR ABUSE MAY BE REPORTED TO SIGAR’S HOTLINE By Phone: Afghanistan Cell: 0700107300 DSN: 318-237-3912 ext. 7303 All voicemail is in Dari, Pashto, and English. By Phone: United States Toll Free: 866-329-8893 DSN: 312-664-0378 All voicemail is in English and answered during business hours. By Fax: 703-601-4065 By E-mail: sigar.hotline@mail.mil By Web Submission: www.sigar.mil/investigations/hotline/ www.sigar.mil/investigations/hotline/report-fraud.aspx IGAR | Quarterly Report to the United States Congre ss | Special Inspector General for Afghanistan Reconstruction S SIGAR sigar Special Inspector General for Afghanistan Reconstruction Oct 30 2013 Quarterly Report to the United States Congress October 30, 2013 4 FINAL_Oct2013_Cover.indd 1 10/21/2013 2:14:47 PM