Watchdog: Follow the Money

Lax US oversight of Afghani fuel purchases could waste another $1 billion

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Watchdog,Watchdog Blog,Michal Conger,Afghanistan,Inspectors General,Military Budget,Waste and Fraud,Follow the Money

Poor oversight by U.S. officials has put millions of U.S. taxpayer dollars at risk of waste and fraud in Afghanistan and could risk more than $1 billion more if officials continue with a plan to give the Afghan National Army direct funding for its fuel purchases.

The Combined Security Transition Command-Afghanistan, or CSTC-A, trains and equips the Afghan National Police, including funding ANP's fuel needs.

But CSTC-A has been writing checks to ANP's fuel budget without making sure the money is spent properly, according to a report released Wednesday by the Special Inspector General for Afghan Reconstruction.

"The ANP fuel program... remains at high risk of loss, theft, or misuse of U.S. funds and purchased fuel and, if not improved, may increasingly place large amounts of U.S. funds at risk of fraud, waste, and abuse," wrote SIGAR John F. Sopko.

CSTC-A wasted almost $1 million in just two months in Kabul by not using the lowest-priced vendors to purchase and deliver fuel, according to SIGAR.

In Helmand Province, officials ordered $4.6 million more in fuel than ANP could store over a 28-month period, but although CSTC-A suspected fraud, it didn't investigate.

Fuel contracts were also inflated by Afghan taxes and delivery fees that are not allowed under U.S.-Afghan agreements, according to SIGAR.

Even though direct funding for fuel costs is considered a "high risk" for waste and fraud, CSTC-A approved a $243 million 2014 fuel budget for ANP, without a plan to address risks.

CSTC-A based its budget request on past fuel orders, including the excess orders in Helmand Province, without data on ANP's actual consumption or storage capacity.

The complete lack of attention to actual costs meant CSTC-A also overstated its 2013 budget request for fuel by $94 million, according to SIGAR, after spending much less than requested in 2012.

CSTC-A plans to spend a total of $1.4 billion on ANP fuel through 2018, according to SIGAR.

"In addition to the ongoing risks we 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 fiscal year 2018 for ANP fuel," the IG wrote.

SIGAR recommended CSTC-A improve oversight of ANP's fuel purchases; recover improper taxes, fees and fuel prices from purchases as far back as 2007; obtain fuel capacity and consumption data, and use that data for future fuel orders; and keep track of fuel capacity to prevent fraud like the excess orders in Helmand Province. SIGAR also requested that CSTC-A lower its 2013 fuel budget requirement by $94 million and put the extra funds to better use, which CSTC-A agreed to do.

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