SIGAR HIGH-RISK LIST

HIGH-RISK LIST
budget were financial, rather than performance audits that would report on the efficiency
and effectiveness of ARTF funding; (2) ARTF monitoring outside of Kabul was limited; and
(3) the World Bank could improve its dissemination and reporting on the results and outcomes
of ARTF-funded development projects. 156
In a 2013 review of DOD’s safeguards for funds provided to Afghanistan’s Ministries of
Defense (MOD) and Interior (MOI), SIGAR identified weaknesses that increased the risk
that on-budget funds provided to the ANDSF through a Ministry of Finance account at
Afghanistan’s central bank were particularly vulnerable to waste, fraud, and abuse. At the
time of SIGAR’s review, the Combined Security Transition Command-Afghanistan (CSTC-
A)’s process did not provide its trainers and decision makers with an overall understanding
of each ministry’s financial-management capacity, or help them identify risks associated
with capacity weaknesses. 157
According to CSTC-A, once funds enter the Afghan government’s bank account,
oversight becomes significantly more challenging. CSTC-A currently makes a weekly
comparison of data reported on Afghanistan Financial Management Information System
(AFMIS) against approved amounts in its commitment letters with the ministries. CSTC-A
also uses audits designed to detect and correct improper spending to monitor high-risk
areas such as fuel and pay. Based on results of those efforts, CSTC-A employs a process by
which its financial contributions are withheld until Afghan ministries can demonstrate that
they have corrected oversight mechanisms and weaknesses. 158
What has Changed since the last High-Risk List
Since these SIGAR audits, USAID has shown an increasing preference for multi-donor
trust funds over bilaterally managed programs. Bilateral on-budget programs entail a significant
management burden and are labor intensive for USAID staff. Multi-donor trust
funds transfer management burden, financial risk, and programmatic risk to the trust-fund
administrator, but mean that USAID has less control over implementation, monitoring,
and verification of meaningful results. 159 USAID previously supported Afghan government
health services through the PCH, but now does so through an ARTF-supported program
managed by the World Bank. 160 USAID also uses the ARTF to deliver assistance for the $800
million, bilaterally negotiated New Development Partnership (NDP) program. The NDP
contains 40 development results, each worth $20 million to the Afghan government if successfully
completed. USAID must verify achievements, but thereafter relies on the World
Bank to administer the funds. 161
USAID has since reported that their confidence in the World Bank’s administration of the
ARTF is based on the U.S. government’s conclusion that the World Bank does not require
any special determinations in order to receive U.S. government funds. Additionally, USAID
has told SIGAR that USAID no longer considers itself responsible for oversight of health
facilities supported by USAID contributions managed by the World Bank (and in turn, the
Afghan Ministry of Public Health). 162 When SIGAR subsequently requested USAID to provide
ARTF monitoring reports, USAID responded with some examples, but said it was at
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION