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Report | Feb. 26, 2015

The Government of Islamic Republic of Afghanistan's Controls Over the ContractManagement Process for U.S. Direct Assistance Need Improvement DODIG-2015-082

Objective

We determined whether the Combined Security Transition Command–Afghanistan (CSTC-A) and the Government of Islamic Republic of the Afghanistan’s (GIRoA’s) Ministries of Defense and Interior (MoD and MoI) have established effective controls over the contract management process.

Finding

GIRoA MoI and MoD did not have effective controls over the contract management process for U.S. direct assistance funding provided to sustain the Afghan National Security Forces. Specifically, the ministries did not adequately develop, award, execute, or monitor individual contracts funded with U.S. direct assistance. This occurred because the Ministry of Finance (MoF) did not sufficiently oversee MoD and MoI’s planning, accounting, and expenditure of U.S. direct assistance funding, and MoD and MoI did not develop internal compliance functions within the ministries to ensure adherence to the Procurement Law and Bilateral Financial Commitment Letters (commitment letters).

MoD and MoI Inspectors General did not adequately oversee the contract management process. This occurred because the Inspectors General did not: identify areas of high risk within the process, conduct compliance audits or inspections, or investigate senior ministry officials.

Furthermore, CSTC-A has not fully developed the capacity of the ministries to operate effectively, independently, and transparently. This occurred because CSTC-A did not hold the ministries accountable for not instituting the necessary controls over the contract management process and did not enforce the requirements within the commitment letters.

As a result, future direct assistance funds are vulnerable to increased fraud and abuse because GIRoA had numerous contract award and execution irregularities and Procurement Law and commitment letter violations. Until CSTC-A mitigates these challenges, GIRoA will continue to depend on Coalition-provided capabilities.

Management Actions Taken

During the audit, we made observations and several suggestions to improve GIRoA and CSTC-A controls over U.S. direct assistance. CSTC-A reported several initiatives either planned or implemented to provide stronger controls over U.S. direct assistance. These initiatives included stricter language added to the commitment letters, improving the ministry IGs’ oversight, and building ministerial capacity.

Recommendation

We recommend the Commander, Combined Security Transition Command–Afghanistan, use the ministerial advisory contract to place subject matter experts within the ministries to develop and increase the capacity to independently develop, award, execute, and monitor contracts funded with U.S. direct assistance to sustain the Afghan National Security Forces.

Management Comments and Our Response

The Commander, Combined Security Transition Command–Afghanistan, fully addressed all specifics of the recommendation, and no further comments are required.

This report is a result of Project No. D2014-D000JB-0213.000.