SIGAR

To many of you in the audience, these questions will seem simple. And, in fact, they are. But, unfortunately, what we have found is that they are often ignored by those designing and implementing our reconstruction programs.

I’d like to take some time to go through these questions with you, explain why I think they’re important, discuss what our work and the work of others in the oversight community say about them, and share our plans for using them as we proceed with our audit and investigative work over the next two years.

Let’s look at that first question: Does the project or program make a clear and identifiable contribution to our national interests or strategic objectives? As you are all aware, the United States’ primary goal in Afghanistan has been to prevent Afghanistan from becoming, once again, a safe haven for Al Qaeda or other terrorist groups to launch attacks against the U.S.

One central tenet of the U.S. campaign to achieve this goal has been the counterinsurgency or “COIN” approach, with its three primary phases of “clear,” “hold,” “build.”

However, our work has found instances in which reconstruction programs have failed to achieve this intended benefit and, in some cases, may have actually resulted in adverse effects.

In April of last year, for example, we released an audit report on the Local Governance and Community Development program (LGCD), which the U.S. Agency for International Development described as its “flagship COIN program.” The program’s primary goal was to help create—in partnership with the Afghan government—a stable environment for long-term political, economic, and social development.

However, we reported that the program had not met its primary goal of extending the legitimacy of the Afghan government. Nor had it brought the government closer to the people, nor fostered stability. In fact, my auditors found that each of the eight provinces with the most LGCD activity experienced dramatic increases in the level of violence between 2006 and 2010.

Although the effects of LGCD on security levels cannot be isolated, violence data is a useful indicator of stability. And this data certainly suggested that the LGCD program was not achieving its intended results.

Likewise, in July of last year, we issued a report on the Afghanistan Infrastructure Program (AIP), which Congress created to leverage and coordinate Department of Defense and Department of State resources for large-scale infrastructure projects in Afghanistan.

We found that five of the seven Fiscal Year 2011 AIP projects were behind schedule and that some of these projects may not achieve positive COIN effects for several years. We also identified some instances of projects that may have resulted in adverse effects because they either created an expectations gap among the affected population or lacked citizen support.

SIGAR intends to conduct more assessments of programs designed to support the COIN strategy, including an audit we will initiate soon on the Stabilization in Key Areas program, a $177 million community development program. Likewise, SIGAR intends to increase its focus over the next year on the second question that should be asked for each reconstruction project: Do the Afghans want it and need it? You’d be surprised how often we find that the answer to this question is no.

Let me give you an example. A few days ago, we released an inspection report on a $7.3 million border police facility built in Kunduz Province. When our inspectors went to visit the site, they found that it was sitting unused. Although the facility was built to house 175 people, there were only 12 Afghan personnel on site and no one was sure if anyone was planning on using the facility. Moreover, our inspectors could not even access most of the buildings because they were locked and the border police personnel present did not have keys.

There is a bit of good news, here, though. As a result of our inspection, the Combined Security Transition Command – Afghanistan (CSTC-A) under Gen. Bolger, which is responsible for equipping, training, and basing the Afghan National Security Forces, agreed with our recommendation to reassess its plans and determine whether construction contracts can be downsized or facilities eliminated or redesigned to reduce unnecessary costs. I think this is a great example of how our work can lead to tangible improvements in the reconstruction effort. And, I am especially pleased with the continued cooperation of Gen. Bolger and his team in attempting to improve CSTC-A’s record on reconstruction.

Now, let’s turn to another troubling problem and our third question: Has the program or project been coordinated with other U.S. implementing agencies, with the Afghan government, and with other international donors? The border police facility I just mentioned is certainly an example of poor coordination with the Afghan government.

But, let me give you an example of poor coordination within the U.S. government. In 2011, SIGAR conducted a thorough assessment of U.S. efforts to strengthen the financial sector in Afghanistan and to safeguard U.S. funds as they flow through the Afghan economy. We found that, even though the Department of Defense and the Department of Homeland Security were working with the same commercial banks to strengthen controls over funds held in those banks, neither agency was aware of the other’s efforts. In addition, the Department of Homeland Security had not been included in an important interagency working group designed to coordinate efforts to gain visibility over cash flows. As we reported, limited interagency coordination puts U.S. agencies at risk of working at cross purposes or, at a minimum, missing opportunities to leverage existing relationships and programs.

The next question is particularly important for SIGAR, because it impacts us almost as much as it impacts the agencies implementing reconstruction programs. And that is whether security conditions permit effective implementation and oversight?

Although the U.S. combat role is scheduled to end by December 2014, or sooner, the withdrawal of U.S. troops is well underway. U.S. and coalition forces have already pulled out of a number of locations in Afghanistan, leaving some of those places too dangerous for us or other agencies to visit.

Some of you may have heard the term the “golden hour.” This refers to the policy unique to U.S. forces in Afghanistan to only provide military security in areas within an hour of a facility that can provide emergency medical care. The safe zone or “bubble” around these medical facilities extends about as far as a twenty minute helicopter ride. As troops continue to withdraw, the amount of territory within Afghanistan that fall outside these “bubbles” will increase.

Accordingly, the number of U.S.-funded projects and programs that can be monitored and overseen by U.S. personnel will decrease. If we can’t get out to review a project or inspect a facility, it’s highly unlikely that the agencies funding them can either. That means more reconstruction projects with no direct U.S. oversight.

We have already seen the effect of security limitations on the reconstruction effort, as well as on our operations and that of our colleagues in the oversight and law enforcement community. For example, we reported in 2011 that the World Bank had not conducted site visits outside of Kabul to monitor activities funded through the multi-billion dollar Afghanistan Reconstruction Trust Fund because of security concerns.

Security restrictions are not limited to the World Bank. Just recently, one of my inspection teams was told that a location in Northern Afghanistan was beyond the security “bubble” and therefore deemed too unsafe to visit. As a result, we are unable to inspect 38 facilities worth approximately $72 million.

I must also give credit to Task Force Centurion Prime, led by Lt. Col. J.R. Bass and Chief Sgt. Maj. John W. Black of the 4th Alabama National Guard, who have greatly supported us and did what they could – but still we are up against the “bubble.”

Even in Kabul, we’re finding that we cannot always get the protection we need to conduct our work. Although Kabul is clearly within the “bubble,” the Embassy’s regional security officer has informed us that because of limited resources, it is already becoming increasingly difficult to support all the requests for movements by U.S. employees to conduct their business in and around the city.

Despite these restrictions, SIGAR is committed to forging ahead, even under the most severe conditions. For example, just recently, two of my agents went out into the field to inspect a particularly dangerous stretch of road as part of their investigation into a contractor’s failure to build systems designed to prevent insurgents from placing explosives in culverts along the road. My agents were surrounded by heavily armed U.S. military units, who protected them as they literally ran down the road from one culvert to the next, inspecting and photographing poorly constructed or non-existent culvert protection.

We are developing alternative ways to conduct oversight in Afghanistan’s evolving security environment. For example, we have local nationals on our staff, who are not subject to the same security restrictions that our American employees are. In some cases, we may have to rely on them to do some of our fieldwork. We are also exploring the use of geospatial imaging to assist our oversight work. Finally, we will continue to share information, data, and resources with our colleagues in the I.G. community to maximize oversight coverage and develop “best practices” for oversight.

These tools are helpful, but they are not perfect. And they certainly are not substitutes for the type of aggressive oversight we intend to provide. That’s why I’m grateful to Amb. Cunningham and Gen. Allen for their expressions of support for our work. Both promised me during my latest visit that they would ensure that our people will be able to access the same locations that their people can access.

But, ultimately, the question will be how far and where the safe zone will reach. As it gets smaller and smaller, I fear many of our programs will be exposed to increased risk of theft and misuse – especially if we increase direct or “on budget” assistance to the Afghan government without first imposing strict pre-conditions on the Afghan government to permit effective oversight of these funds by U.S. personnel.

The next question deals with a different, but equally significant problem: namely, corruption. Do reconstruction projects include adequate safeguards to detect, deter, and mitigate corruption?

Afghanistan’s reputation for corruption is deep-rooted and widespread. A 2012 survey found that 60 percent of Afghans believe that corruption is a major problem in their local government, and even more believe that it is a major problem in their government. We have seen, in our work, clear instances in which corruption undermines important reconstruction initiatives.

For example, our Office of Special Projects recently reported on a program to place currency counters in Kabul International Airport to count and track bulk cash flows out of Afghanistan. Estimates of cash taken out of Afghanistan in a given year are as high as $4.5 billion. However, although the currency counters were purchased and installed in 2011, the Afghan government has refused to use them. Even worse, those identified by the Afghan government as VIPs are allowed to bypass key controls, raising the risk of money laundering and bulk cash smuggling.

The Afghan government has acknowledged that corruption is a significant problem and has made commitments to curb it. The July 2012 international donors’ conference in Tokyo led to a set of mutually agreed upon principles that include incentives for the Afghan government to carry out commitments to combat corruption.

Unfortunately, we are concerned that not enough is being done quickly enough on these critical benchmarks. It is now almost eight months since this landmark agreement and we still have not seen concrete proposals. If not now, when will we see them?

I can tell you that as a result of my latest trip to Afghanistan, I will be shortly putting the agencies on notice that both Congress and American taxpayers need to see concrete steps in place to ensure Afghan government progress to combat corruption and improve governance. If this is not done immediately, I fear we risk the loss of U.S. and international donor support for ongoing reconstruction.

Corruption can also undermine the sustainability of reconstruction programs—a key concern for the U.S. and other international donors. This leads me to the next in our series of questions: Do the Afghans have the financial resources, technical capacity, and political will to sustain the reconstruction programs we are funding and turning over to them?

Through our audit and inspection work, we have identified numerous examples in which the United States created a program or built a facility without consideration as to whether the Afghan government could sustain it. In October 2012, for example, we reported that the Afghan government will likely be incapable of fully sustaining ANSF facilities after the transition in 2014. We found that the ANSF lacks personnel with technical skills required to operate and maintain critical facilities and that the Afghan government had filled less than 40 percent of its authorized operation and maintenance positions.

Likewise, in a 2010 audit of reconstruction in Nangarhar, Afghanistan, we found that the Afghan government was severely limited in its ability to operate and maintain U.S. completed development projects in that province. As a result, we found many projects that had become dilapidated or were in disrepair, including a number of projects that had been completed under the Commander’s Emergency Response Program or CERP.

According to U.S. officials we spoke to as part of our audit, they neither prepare operation and maintenance cost estimates for CERP projects nor expect that the Afghan government will actually sustain the projects. Some senior officials even told us that they do little more than “check the box” in CERP project files to indicate that the government of Afghanistan agreed to fund sustainment.

The logical result of such policies is a waste of US taxpayer money by building infrastructure and or developing programs that the Afghans will never effectively use.

The seventh and last in my series of questions is this: Have implementing agencies established real metrics for measuring success? And if so, are they applying them to these programs?

Too often, we find that agencies are focused on outputs, not outcomes. For example, how many teachers did we train? How many hospitals did we build? How many kilometers of road did we build?

These metrics give us part of the picture, but they do not truly give us meaningful assessments of whether programs achieved their goals.

For example, in 2011, we assessed efforts to build the capacity of the Afghan Ministry of Agriculture to better serve farmers and promote private sector development. We found that the U.S. Embassy could not determine how much progress had been made in building ministry capacity, in part because it largely measured the products of capacity-building efforts (such as the number of national research stations and labs built or rehabilitated), rather than the results achieved by their construction.

As we proceed with our audit work, we are going to be increasingly looking for ways to go beyond the stated output metrics to assess impact. What did a project or program actually achieve? If we cannot answer that question, then why did we spend the money? At the end of the day, the American people need to know what the U.S. reconstruction effort has accomplished in Afghanistan.

So, in sum, these are our seven simple but critical questions. To the extent that agencies can answer in the affirmative to them, we believe that a project or program has a better chance of achieving its objectives. But, if, as in the case of the Afghanistan Infrastructure Program or the border police facility in Kunduz or the currency counters at Kabul International Airport, the agencies spending our reconstruction dollars find that the answer to these very basic questions is no, it is time for them to reevaluate continuing or starting that project or program.

However, these questions are especially troubling now because we have been told that some agencies in Afghanistan may be poised to obligate as much money as they can as soon as they can before the troop drawdown takes place. If this happens without our first answering these questions in the affirmative, we are likely to waste billions.

Likewise, it is incumbent upon Congress to also keep these questions in mind as they review new authorizations and appropriations. In addition, Congress needs to assure itself that the almost $19 billion already appropriated but not yet obligated only be spent if they have evidence that the projects meet these seven requirements.

Now, we recognize there may be instances for proceeding with some projects that do not meet these seven questions because the potential benefit clearly outweighs the inherent risk of failure. But, if that is the case, implementing agencies need to clearly articulate and justify their reasons for doing so and Congress needs to strictly hold those agencies accountable to protect taxpayer funds.

In conclusion, we are about to embark upon a dramatic drawdown in our troop level. At the same time, we are poised to turn over to the Afghan government an unprecedented amount of buildings, projects, and funds with the hope that they can manage them effectively. This is a risky endeavor and I believe that strong, independent oversight needs to be an essential part of such withdrawal plans if reconstruction activities are to succeed.

At no other time in our decade-long struggle in Afghanistan has reconstruction been so critical to our ultimate success. Actually, as our military role recedes, the next two years and beyond – the “Decade of Transformation” – will really be the “Decade of Reconstruction”. Therefore, Congress and the Executive Branch agencies need now to conduct a thorough reexamination of reconstruction issues, programs and projects. Likewise, they need to ensure continued robust oversight and accountability.

We at SIGAR look forward to the challenges ahead. And, I can assure you we are also committed to the success of the military drawdown and to working closely with the implementing agencies and Congress as we embark upon this new critical stage in Afghanistan reconstruction.

Thank you again to CSIS for the opportunity to be here today and I look forward to your questions.

Febuary 04, 2013