Watchdog: Follow the Money

USAID hides Afghan corruption, financial risks from Congress, watchdog says

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Watchdog,Michal Conger,Afghanistan,USAID,Waste and Fraud,Follow the Money,SIGAR

Afghanistan's government can't handle U.S. money without serious risk of waste and corruption, the U.S. Agency for International Development found, but agency officials hid that information from Congress and asked a top federal watchdog to keep the information secret as well.

USAID did share its assessment with the 16 Afghan ministries it audited, but designated it "sensitive" and asked that it not go outside the executive branch, according to the Special Inspector General for Afghanistan Reconstruction.

"In other words, USAID's view is that this information can be given to the Afghan government, but not to Congress or the American public. I simply cannot find any support for this proposition in the law or as a matter of good public policy," SIGAR John F. Sopko said in a report released Thursday.

USAID has committed more than $1 billion to the Afghan government in direct assistance, instead of through U.S. contractors, putting taxpayer dollars at higher risk of being misused because of the lack of oversight the U.S. has over Afghan government ministries.

USAID commissioned assessments of 16 ministries and did its own audits of seven ministries. Both efforts found serious risks throughout the Afghan government.

"All ministries assessed were unable to manage and account for funds unless they implemented recommendations included in the public financial management assessment reports," the SIGAR report said.

Serious problems included USAID concluding that the public health ministry was at risk of “concealing vital monitoring and evaluation information” and “misappropriation of cash arising from payment of salaries in cash,” according to SIGAR.

At the Ministry of Mines and Petroleum, “waste, fraud, and abuse may go undetected” and the ministry was at risk of “paying higher prices for commodities and services to finance kickbacks and bribes.”

After discovering these problems, USAID waived its own requirements for direct assistance — the only such waiver it has ever issued, SIGAR said.

The agency's own rules require that foreign governments actively address serious problems before receiving U.S. money.

The agency admitted it wouldn't give direct assistance to a government with such severe transparency and corruption risks "under normal circumstances," but because direct assistance was already a foreign policy objective, requiring the ministries to fix their problems before getting U.S. money was "unnecessary."

USAID didn't alert Congress to the severity of the risks or the fact that it wasn't requiring the ministries to act on most of the reforms necessary to make them financially accountable, even though that information was required.

Instead, the agency said each ministry had successfully addressed its risks and was able to properly manage U.S. funds.

This failure to disclose such information compromised congressional oversight of the money, Sopko said.

"Frankly, USAID’s continued insistence that SIGAR withhold this information from Congress and the public may undermine the credibility of its assertions that it has appropriately mitigated the risks uncovered by the ministry assessments and its internal risk reviews," Sopko said.

USAID said the information was "sensitive but unclassified," and warned SIGAR that disclosing it might reduce cooperation from the Afghan government.

But under State Department rules, only classified information is exempt from disclosure.

While the Afghan government's inability to properly manage U.S. funds is problematic, "perhaps most troubling is the nature of USAID’s official communications with Congress regarding the Afghanistan direct assistance program," Sopko said in his report.

"We believe it was and is incumbent upon USAID to share this information with Congress."

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