Objective
Our objective was to determine whether the Government of the Islamic Republic of Afghanistan’s (GIRoA) Ministries of Defense (MoD) and Interior (MoI) have controls in place to ensure a transparent and accountable fiscal process for the direct funding provided for the sustainment of the Afghan National Security Force (ANSF).
Findings
GIRoA lacked the basic controls to provide reasonable assurance that it appropriately spent $3.3 billion of ASFF direct contributions. These controls are key aspects of a transparent and accountable fiscal process. Specifically,
- Ministry of Finance (MoF) could not provide a current cash balance for direct contributions or account for currency gains of at least $110.4 million made on Afghanistan Security Forces Fund (ASFF) direct contributions.
- MoF could not provide support for $17.4 million and MoI could not support $9.9 million withheld from ANSF salaries.
- MoD and MoI controls over the payroll process were not adequate.
- MoI processed $40 million in payroll payments that appeared improper.
- MoD and MoI incorrectly charged $82.7 million of ASFF direct contribution funds.
This occurred because GIRoA did not develop the ministerial capability and capacity tomanage and oversee ASFF direct contributions and Combined Security Transition Command–Afghanistan (CSTC-A) had not held GIRoA accountable for not implementing controls and improper handling of ASFF direct contribution funds.
As a result, CSTC-A could not verify that GIRoA used ASFF direct contributions properly or for their intended purposes. In addition, the $13 billion in additional direct contributions DoD plans to provide to the ANSF between FY 2015 and FY 2019 may be subject to wasteful spending and abuse.
Recommendations
We recommend that CSTC-A:
- improve its commitment letters with the MoD and MoI byrequiring GIRoA to modify how it accounts for and reports its use of ASFF direct contributions,
- distribute ASFF direct contributions to GIRoA in afghani instead of U.S. dollars,
- coordinate with GIRoA to develop capacities within MoD and MoI to address identified weaknesses in the ANSF payroll process and MoD and MoI’s expenditure process for ASFF direct contributions, and
- withhold future ASFF direct contributions if GIRoA does not correct the conditions identified or document the reasons for not withholding future contributions.
Management Comments and Our Response
Comments from the Commander, CSTC-A, addressed all of the specifics of the recommendations, and no further action is required.