Latest SIGAR report

The Special Inspector General for Afghanistan Reconstruction (SIGAR) has filed his latest quarterly report to Congress. He is quite busy as the total number of ongoing investigations is 267. He is producing results. In the last quarter SIGAR produced three criminal indictments, one criminal information charge, three arrests, three convictions, one sentencing, over $200,000 in restitutions, and more than $5.5 million in savings for the U.S. government. Recent audits could not account for $27,229,340 because of poor internal control and noncompliance with requirements, such as incorrect employee payments and miscalculations of travel costs, exceeding maximum budgets without prior approval, and insufficient documentation to support project expenses. 

The Special Inspector General for Afghanistan (SIGAR) has just issued its latest High-Risk List, which spells out the greatest threats to the ultimate success of our more than 15-year-long U.S.-funded reconstruction effort in Afghanistan. That investment is now more than $115 billion and will continue at around $5billion a year until 2020. It is the largest expenditure to rebuild a single country in our nation’s history. It has been used to train Afghan security forces, stand up the Afghan government, and develop the local economy. But it is not doing well. This especially true with regard to the capabilities of the Afghan security forces and government corruption.

Other high risk areas are Sustainability, On-Budget Support, Counternarcotics, Contract Management, Oversight and Strategy and Planning.

Roads don't last long in Afghanistan

Since 2002, the United States, has spent approximately $2.8 billion building and maintaining Afghanistan’s road infrastructure, while working to implement more than $150 million in other road-related programs to improve the Afghan Ministry of Public Works’(MOPW) management of road construction and maintenance. Sigar (Special Inspector General for Afghanistan Reconstruction) has just completed an audit of these efforts. The results are not good.

First, Sigar could not get enough information on one program (costing $366,000,000) to audit the program. The audit also found that some projects had the same identifying numbers. And in some projects they could not find out how much was spent on road-related activities. In August 2015, an MOPW official stated that 20 percent of the roads were destroyed and the remaining 80 percent continue to deteriorate. The official added that the Kabul to Kandahar highway is beyond repair and needs to be rebuilt. 54 percent of Afghanistan’s road infrastructure suffered from poor maintenance and required rehabilitation.

USAID did have a plan for the road maintenance operations, but was unsuccessful in establishing a sustainable road maintenance plan and program because: (1) performing capacity-building programs alongside the road maintenance programs caused a disincentive for the MOPW to improve its capacity, and (2) the MOPW was unwilling to reorganize itself in an effective manner to create a sustainable road maintenance program.

More mismanagement in Afghanistan

Five years ago we signed a contract with an organization entitled "Afghanistan Integrated Support Services JV" to maintain the vehicles of the Afghanistan army and police force. The contract was for five years and $182,000,000. Well, the Special Inspector General for Afghanistan Reconstruction (SIGAR) audited the results, such as they were, and concluded that we: (1) made inaccurate assumptions about the capacity of the Afghans to manage the supply chain and conduct maintenance, (2) underestimated the cost of spare parts, and (3) established performance metrics that did not accurately assess contractor performance or progress towards contract goals. These added more than $100,000,000 to the costs of the contract. Furthermore, the performance metrics established by DOD to track contractor performance were vague and unenforceable.

The contract is being renewed as DOD has promised to remedy the problems. The estimated cost over the next several years is estimated to be $1 Billion. 

The title says it all

The Special Inspector General for Afghanistan Reconstruction (SIGAR) has issued another report. It is titled "Afghanistan’s Oil, Gas, and Minerals Industries: $488 Million in U.S. Efforts Show Limited Progress Overall, and Challenges Prevent Further Investment and Growth."

I've summarized most of them. It's really sad reviewing this chronicle of waste.

Now it's the TFBSO

In 2006 the Defense Department established the Task Force for Business and Stability Operations (TFBSO) to help revive the post-invasion economy of Iraq. In 2009 TFBSO moved into Afghanistan. Well, the Special Inspector General for Afghanistan (SIGAR) has some questions about the task force's work in Afghanistan. I wrote about some of these back in November. Here are some new issues.

Housing TFBSO personnel. About 20% of its budget was spent on private housing and private security guards for its U.S. government employees in Afghanistan, rather than live on U.S military bases.

Pretty fancy housing - specially furnished, privately owned “villas” and hired contractors providing 24-hour building security and food services. TFBSO personnel were supplied with queen size beds in certain rooms, a flat screen TV in each room that was 27 inches or larger, a DVD player in each room, a mini refrigerator in each room. 

Good food - “at least 3 stars” meals, with each meal containing at least two entrée choices and three side order choices, as well as three course meals for “Special Events.

Security. TFBSO leadership paid and housed bodyguards for TFBSO staff and visitors traveling in country. 

Why didn't these people live on army bases?

Another $800,000,000 down the drain

It's amazing how many of my posts about Aghanistan have included the words "down the drain" in their titles. I have not added up the money wasted, but it is likely in the billions. 

The latest report by the Special Inspector General for Afghanistan Reconstruction (SIGAR) talks about the Task Force for Stability and Business Operations (TFBSO). This Task Force was disbanded earlier this year after it had spent $800,000,000. When SIGAR started asking questions about the Task Force, DOD said that, since the Task Force was disbanded, there was no one to answer the questions.

Special Inspector General for Afghanistan Reconstruction decided to concentrate on the Task Force's Downstream Gas Utilization project  to construct a compressed natural gas (CNG) automobile filling station in the city of Sheberghan, Afghanistan. The main purpose of the project was to demonstrate the commercial viability of CNG for automobiles in Afghanistan as part of a broader effort to take advantage of Afghanistan’s domestic natural gas reserves and reduce the country’s reliance on energy imports. 

The project cost SIGAR almost $43,000,000. Yet Pakistan was able to build a CNG station for $500,000. SIGAR could find no trace of a feasibility study to determine the potential return on the investment. Had they done so, they may have discovered that converting a gasoline-powered car to run on CNG would be very expensive for the average Afghan. TFBSO’s contractor, CADG, states that conversion to CNG costs $700 per car; other sources estimate that it costs up to $800.18 According to the World Bank, the average annual income in Afghanistan is $690. 

Was there a market for CNG?

More money down the drain in Aghanistan

There have been a number of reports that there is something wrong with our expenditures in Afghanistan. The latest report from the Special Inspector General for Afghan Reconstruction (SIGAR) published found that"the Department of Defense could only provide financial information relating to the disbursement of funds for CERP projects totaling $890 million (40 percent) of the approximately $2.2 billion in obligated funds at that time," That is the Pentagon could not provide information as to how $1.3 billion was spent.

$456,669 down the drain

The Special Inspector General for Afghan Reconstruction (SIGAR) published another dispiriting report.  In 2012 we signed a fixed price contract with Qesmatullah Nasrat Construction Company (QNCC) to build a dry fire range (DFR) at the Afghan Special Police Training Center. The DFR replicates a typical Afghan village and is used to conduct simulated police search and clearance exercises. Four months after the project was completed, the DFR’s buildings began to disintegrate. Why? Because the contractor did not comply with contractual requirements and used substandard bricks and other building materials. Plus, in the words of SIGAR "this problem was compounded by poor oversight on the part of the responsible U.S. government officials." 

This is not the only botched contract in this botched war.

SIGAR's latest report

SIGAR is the special inspector general for Afghanistan reconstruction. He has just released his quarterly report to Congress. Elias Groll summarizes some of the findings.

• The United States has spent $7.6 billion on counternarcotics efforts in Afghanistan, but opium cultivation there -- a key Taliban funding source -- has risen for the past three years, and helped push global quantities of the crop to a record level. The U.S. Department of Agriculture spent $34.4 million toward a soybean project in the face of scientific evidence indicating that the crop was "inappropriate for conditions and farming practices in northern Afghanistan, where the program was implemented." The United States Agency for International Development has pledged $75 million toward the ill-fated Kajaki Dam project, but the inspector general questions whether that project is at all economically viable. The United States has spent $626 million to provide weapons and equipment to Afghan forces. That aid includes 465,000 small arms, but, according to the IG, for 43 percent of those arms, information was missing in a database used to track their receipt in Afghanistan.
• So it's perhaps no surprise that the report notes that the Afghan government is far from financial independence. Last year, the Afghan government saw revenues of about $2 billion. Its budget was far larger: $5.4 billion. Donors mostly made up that difference. In January, Afghanistan approved a $7.6 billion budget, with donors chipping in about $4.8 billion.

We spent $104 billion on the Marshall Plan. We've topped that in Afghanistan. Compare the results.

Another $58,500,000 Down The Drain

The government requires its contractors to provide appropriate insurance for its workers overseas. The government reimburses the contractors for these costs. Since 2005, these workers have been covered by a policy issued by CNA. The Special Inspector General for Afghanistan Reconstruction (SIGAR) recently audited the government's handling of this insurance. The auditors were not pleased with the handling.

First, they found that the premiums CNA charged were not based on actual losses; they were higher than they should have been. The government had the right to audit the figures on which the premiums were based; it chose not to do so.

The policies are actually taken out by the contractors. However, the audit found that some contractors had not taken out a policy, some had specified the wrong valuations, some did not renew their policies.

The big money was in the reimbursements. The auditors estimated that the government reimbursed the contractors $58,500,000 more than they should have.

How many Social Security checks could be cut for the amount of money? Do our representatives ever look at the reports of the numerous Inspectors General we are paying for?

Another Place to Cut the Budget

Okay, we want to save Afghanistan and bring it into at least the 20th century. We have a comprehensive plan to do so. One part of our plan is to kill the bad guys. Another part is to improve that country's banking and financial system. The Special Inspector General for Afghanistan (SIGAR) has some opinions as to how well we are doing with the latter. His recent audit says not well.

The first problem is that we have more than one agency working on improving the banking system. They don't work well together - cooordination of their efforts is minimal - nor does any one of them do an outstanding job. For example, they do not record the serial numbers of cash disbursed to contractors and other recipients. They have difficulty tracking the money they pay their contractors, some of which winds up in hands we don't approve of.

And then there's the problem of dealing with the Afghan's historic way of doing things. For example, they are not too concerned with bringing thieves and fraudsters to court. Karzai doesn't allow our agents into the central bank. The banks can't or won't track electronic payments, so how do we know where the money is going. Afghan officials at the Kabul airport seem to want to make it difficult to track cash flowing out of the airport, especially that taken by VIPs.

Even if we get our house in order (which would save some money), there is little chance of us changing the way Afghans have lived for centuries. It's time to declare victory and leave.

Not Exactly a Cigar

It's SIGAR, the Special Inspector General for Afghanistan Reconstruction. Readers know that I've been an enthusiastic supporter of Stuart Bowen, the Special Inspector General for Iraq Reconstruction (SIGIR). Who will the next Special Inspector General be? What war theater will he be responsible for reconstructing?

Anyway, despite some senators pushing to throw out the SIGIR, Arnold Fields, his office has filed some interesting reports, if you think reports of incompetence are interesting.

The first report that has caught my eye was reported by McClatchy. Basically, SIGAR found that six newly built police stations were constructed by someone like me, who knows nothing about construction. As a result, the buildings feature "electrical wires strung through windows, cracks in walls, gas lines hanging in the open, windows installed at a tilt and shoddy roofing".

Hey, it's only money!

It's starting all over

Well, I suppose that we should be thankful that there is a Special Inspector General for Afghan Reconstruction (SIGAR). Otherwise, we would never have guessed that there may be some mismanagement of the reconstruction funds allocated to Afghanistan, just as there was with the reconstruction funds for Iraq.

Thus far, $18 billion has been allocated to the Afghanistan reconstruction fund. SIGAR investigated a relatively small portion of this. They looked at a $404,000,000 contract to provide training at 17 locations in Afghanistan. Mistake #1: responsibility for overseeing this contract resides in Maryland. Mistake #2: Only one representative of the contract overseer was based in Afghanistan. Mistake #3: The representative was ineffectual in that he never visited the sites. Result: There was no oversight. Has our money been wasted? You tell me.

Remember the name Arnold Fields; he is the IG for Afghanistan. If he does his job, he'll be as well known as Stuart Bowen.