More Upheaval in Oversight of U.S. Spending in Afghanistan
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The Fiscal Times
February 8, 2011

The departure last week of Arnold Fields as the special inspector general for Afghanistan Reconstruction marked another milestone in the troubled, controversial and highly costly U.S. effort to rebuild war-torn Afghanistan. Fields, a highly-decorated retired Marine Corps general, was forced out of his job by a handful of irate members of Congress after nearly three years of overseeing $56 billion of construction projects in Afghanistan — many of which have yet to see the light of day.

Fields sought to put a positive spin on his untimely departure. "At this time, having had this opportunity to contribute to the U.S. mission to Afghanistan, I depart confident in the knowledge that SIGAR is positioned to provide essential support to the President's strategy," he said in a statement.

Yet it has become increasingly clear that the U.S. government has little idea of where much of the development money has gone. Democratic and Republican lawmakers and the non-profit Project on Government Oversight have sharply questioned SIGAR's effectiveness and are challenging the agency's ability to track U.S. money in Afghanistan. At the same time, international development organizations are criticizing lawmakers for not demanding better accountability from contractors and not giving SIGAR the resources it needs to account for money spent. SIGAR officials now warn that the government will never get an accurate accounting of more than 90 percent of the billions spent.

”Right now, we’re spending too much money relative to what we’re providing,” said Andrew Wilder, the director of the Afghanistan and Pakistan programs at the United States Institute for Peace. “There’s a very weak paper trail to audit.”

According to the agency’s January 30 report to Congress, SIGAR has performed or is currently performing 105 audits of $4.4 billion in development projects and has been unable to readily account for $18 billion. It also reported that the Army Corp of Engineers provided $12 million to Basirat Construction, an Afghan-based construction company, to build government and police headquarters around Afghanistan. The agency found that the buildings constructed by Basirat were structurally unsound. SIGAR found numerous other instances where contractors failed to perform the work paid for by the U.S. government.

SIGAR’s work has resulted in four convictions for contracting abuses and recovery, fines or repayments of a mere $6 million in taxpayer funds — a tiny percentage of the $46.2 million in funding used to establish SIGAR. Ashley Jackson, head of policy in Afghanistan for Oxfam International, an anti-poverty and social justice confederation, also said SIGAR didn’t follow up on problems it identified.

Tens of billions of dollars are likely
to be spent with little or no accounting.


But Albert Huntington, acting deputy assistant inspector general for audit, said that SIGAR faces an uphill struggle to track money spent in Afghanistan. Huntington warned that the vast majority of Afghan reconstruction funds would never be audited — that tens of billions of dollars are likely to be spent with little or no accounting.

“Based on the experience with [the Iraq war inspector general] . . .  they estimated that they were able to conduct work that audited about 10 percent of the money going to Iraq,” he said. “You pick your targets, you establish a presence, you set up a climate in which people at least fear that there’s a pretty good chance they might get caught. I think that’s the usefulness of the special inspector general.

The lack of a viable oversight mechanism in Afghanistan is part of a seemingly endless cycle of spending without results. The backbone of the U.S. strategy in Afghanistan is to create viable Afghan institutions that can prevent the Taliban from returning to power. The United States is projected to spend a total of $71 billion to accomplish this goal by the end of 2011.

Sens. Claire McCaskill (D-MO), Tom Coburn (R-OK), and Susan Collins (R-ME) have been spearheading congressional efforts to reform SIGAR through changes in leadership. In November, they held hearings in which they openly questioned the ability of SIGAR Fields, who previously served as deputy director of the Africa Center for Strategic Studies in the Department of Defense.

“The thing with SIGAR is that you can audit something to death but you need to follow up and show that audit findings have weight,” said Jackson. “It found the same kinds of things over and over again.”

Last year, the Council of Inspectors General on Integrity and Efficiency (CIGIE), a government organization charged with overseeing watchdog agencies, found that SIGAR's oversight of spending in Afghanistan was lacking. "In our view, the safeguards and management procedures in this organization did not provide reasonable assurance of conforming with professional standards in the conduct of its investigations." The report was sent to Attorney General Eric Holder, who has the power to strip SIGAR of its oversight powers. Holder has yet to act on the report.

SIGAR Defends Auditing Processes
In an interview with The Fiscal Times, Huntington and Kathryn Bernet, acting assistant inspector general for audit at SIGAR, said, “We have a mandate as an agency to assess the effectiveness over $56 billion in reconstruction assistance. We have a bit of catch-up to play here, and that alone is a challenge.”

Bernet said the agency has made significant strides in recent years. SIGAR is now active in 22 of Afghanistan’s 34 provinces, has identified tens of millions of dollars of funds at risk of being used improperly, and has identified more than 7,000 vendors that have received U.S. funds.

However, Huntington warned that the vast majority of Afghan reconstruction funds would never be audited; tens of billions of dollars are likely to have been or will be spent with little accounting. According to development experts, infrastructure projects remain unfinished, SIGAR seems largely ineffective and is suffering a crisis of leadership, and the lawmakers who are critical of the agency have refused to provide the mechanisms necessary to track the billions of U.S. dollars allotted for development in Afghanistan.

“It’s not just about transparency about how the money is spent but about holding people to account,” said Oxfam’s Jackson. “SIGAR doesn’t have teeth because it doesn’t have backup. [That power] comes from Congress.”

Related Links:
Afghan Reconstruction Auditor Resigns (Yahoo News)
Finance Minister Seeks Afghan Fraud Inquiry (The Financial Times)

An editor-at-large for The Fiscal Times, David Francis has reported from all over the world on issues that range from defense to border security to transatlantic relations.