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Afghan Ministries incapable of managing donor funds- SIGAR reports

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Afghan Ministries incapable of managing donor funds- SIGAR reports

SIGARAccording to a recent report by the Special Inspector General for Afghanistan Reconstruction (SIGAR), Afghan Ministries are unable to manage and account for funds unless they implemented recommendations included in the public financial management assessment reports.

Following the completion of these assessment reports, USAID/Afghanistan completed internal risk reviews of 7 of the 16 Afghan ministries—the Ministry of Public Health; the Ministry of Mines and Petroleum; the Ministry of Agriculture, Irrigation, and Livestock; the Ministry of Communication and Information Technology; the Ministry of Education; the Ministry of Finance; and Da Afghanistan Breshna Sherkat. These 7 ministries all have planned or active direct assistance programs. The risk reviews found 104 major risks—such as “concealing vital monitoring and evaluation information” and “misappropriation of cash arising from payment of salaries in cash”—with 99 of the risks rated either critical or high. USAID/Afghanistan prescribed 333 total mitigating measures to address the identified risks. Although USAID/Afghanistan concluded in each of the seven risk reviews that the ministry was unable to manage direct assistance funds without a risk mitigation strategy in place and that the mission would not award direct assistance to the ministry “under normal circumstances,” USAID/Afghanistan signed agreements with each of the reviewed ministries to approve direct assistance programs.

In the 16 public financial management assessments , conducted by Ernst & Young and KPMG, 696 total recommendations for correction action were identified, ranging from 24 for Da Afghanistan Breshna Sherkat (DABS) to 63 for the Ministry of Public Health.

Following the completion of these assessment reports, USAID/Afghanistan completed internal risk reviews of 7 of the 16 Afghan ministries—the Ministry of Public Health; the Ministry of Mines and Petroleum; the Ministry of Agriculture, Irrigation, and Livestock; the Ministry of Communication and Information Technology; the Ministry of Education; the Ministry of Finance; and Da Afghanistan Breshna Sherkat. These 7 ministries all have planned or active direct assistance programs. The risk reviews found 104 major risks—such as “concealing vital monitoring and evaluation information” and misappropriation of cash arising from payment of salaries in cash”—with 99 of the risks rated either critical or high.

USAID/Afghanistan prescribed 333 total mitigating measures to address the identified risks. Although USAID/Afghanistan concluded in each of the seven risk reviews that the ministry was unable to manage direct assistance funds without a risk mitigation strategy in place and that the mission would not award direct assistance to the ministry “under normal circumstances,” USAID/Afghanistan signed agreements with each of the reviewed ministries to approve direct assistance programs.

Perhaps most troubling is the nature of USAID’s official communications with Congress regarding the Afghanistan direct assistance program. Not only did USAID fail to fully disclose to Congress that none of the ministries it assessed was capable of managing direct assistance funds, it also did not reveal that it only included a small number of risk mitigation measures identified through its risk reviews as conditions that Afghan ministries must meet prior to receiving funds. We believe it was and is incumbent upon USAID to share this information with Congress.

Giving the Afghan government the ultimate responsibility to allocate, manage, and track funds through the increased use of direct assistance is an important step in the reconstruction of Afghanistan, because it will largely be up to the Afghan government to sustain the reconstruction effort in the long run.

Nevertheless, the pervasiveness of corruption in Afghanistan makes it critical that the U.S. government use every safeguard at its disposal to ensure that the over $1 billion in open-ended commitments that USAID intends to provide to Afghanistan in direct assistance is not subject to identified vulnerabilities and weaknesses in the ministries.



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