SIGAR HIGH-RISK LIST

HIGH-RISK LIST
inconsistent use of daily rosters, lack of verification of numbers, unsupervised paper-based
and manually submitted data systems, weak controls, and Afghan ministry failures to submit
financial records to the U.S. military, among other difficulties. 93
Additionally, a 2013 SIGAR audit examined $4.7 billion in planned and ongoing ANDSF
construction projects. The report concluded that DOD was funding a program that is potentially
building permanent facilities in excess of the ANDSF’s eventual needs, and it was
doing so without knowledge of the facilities’ utilization or the Afghan government’s willingness
or ability to sustain them. In order to reduce construction of new U.S.-funded facilities
and save reconstruction funds, SIGAR recommended, among other things, that DOD
develop a plan to reduce future excess capacity taking into consideration potential cuts
to the number of ANDSF personnel, and identify the extent to which current U.S.-funded
facilities were underutilized. 94
Combined Security Transition Command-Afghanistan (CSTC-A) stated at that time
that it had several initiatives under way to identify areas of excess capacity and projects
that could be descoped or cancelled. CSTC-A said these initiatives, coupled with routine
reviews, reduced U.S. and coalition funding by over $432 million from January 2013 to
August 2013. General Dunford, then-commander of International Security Assistance Force
(ISAF), requested quarterly reviews to ensure ANDSF facility requirements remain valid
and that construction is on track. 95
Afghan Public-Sector Sustainability
While security is a significant driver of costs, public-sector development in Afghanistan has
also contributed to the country’s growing fiscal gap. Each new development project that
the United States and other international donors fund increases the country’s operation and
maintenance costs, adding pressure to Afghanistan’s operating budget. Indeed, Afghanistan
has one of the lowest rates of domestic-revenue collection in the world, averaging 9% of
GDP from 2006 through 2013, according to the IMF. 96 It slipped to 8.5% of GDP in 2014. 97
On a positive note, the Afghan government is working with the IMF on macroeconomic
policies and a structural-reform agenda, having recently agreed to a three-year, $45 million
Extended Credit Facility (ECF) loan agreement with Afghanistan. The ECF, which follows
the satisfactory conclusion of an informal Staff-Monitored Program, is to focus on institution
building, fiscal and financial reforms, and combating corruption to lay the foundations
for increased private-sector development. 98 Afghanistan’s poor record with its two previous
ECF arrangements, the most recent of which expired in November 2014, caused program
reviews to be suspended. The IMF said both previous ECFs fell short of their goals. 99 The
newly approved ECF could give the National Unity Government additional options for managing
its financial affairs during the current period of economic and fiscal stress.
Energy-Sector Sustainability
Afghanistan has one of the lowest rates of electrification in the world, with only an estimated
25–33% of Afghans connected to the power grid. 100 Since 2002, USAID disbursed
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION