SIGAR QUARTERLY REPORT TO THE UNITED STATES CONGRESS JANUARY 30, 2016 SIGAR SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN RECONSTRUCTION 2530 Crystal Drive Arlington, VA 22202 www.sigar.mil FRAUD, WASTE, OR ABUSE MAY BE REPORTED TO SIGAR’S HOTLINE By phone: Afghanistan Cell: 0700107300 DSN: 318-237-3912 ext. 7303 All voicemail is in Dari, Pashto, and English. By phone: United States Toll-free: 866-329-8893 DSN: 312-664-0378 All voicemail is in English and answered during business hours. By fax: 703-601-4065 By e-mail: sigar.hotline@mail.mil By Web submission: www.sigar.mil/investigations/hotline/report-fraud.aspx SIGAR Special Inspector General for Afghanistan Reconstruction JAN 30 2016 QUARTERLY REPORT TO THE UNITED STATES CONGRESS 1 SIGAR Report Fraud, Waste or Abuse FINAL_Jan2016_Cover.indd 1 1/13/2016 11:00:13 AM The National Defense Authorization Act for FY 2008 (Pub. L. No. 110-181) established the Special Inspector General for Afghanistan Reconstruction (SIGAR). SIGAR’s oversight mission, as defined by the legislation, is to provide for the independent and objective • conduct and supervision of audits and investigations relating to the programs and operations funded with amounts appropriated or otherwise made available for the reconstruction of Afghanistan. • leadership and coordination of, and recommendations on, policies designed to promote economy, efficiency, and effectiveness in the administration of the programs and operations, and to prevent and detect waste, fraud, and abuse in such programs and operations. • means of keeping the Secretary of State and the Secretary of Defense fully and currently informed about problems and deficiencies relating to the administration of such programs and operation and the necessity for and progress on corrective action. Afghanistan reconstruction includes any major contract, grant, agreement, or other funding mechanism entered into by any department or agency of the U.S. government that involves the use of amounts appropriated or otherwise made available for the reconstruction of Afghanistan. Afghans affected by the October 2015 earthquake that shook 13 provinces carry shelters and supplies from a USAID relief distribution point. (USAID photo) Source: Pub. L. No. 110-181, “National Defense Authorization Act for FY 2008,” 1/28/2008. (For a list of the congressionally mandated contents of this report, see section 3.) Quarterly Report Staff Cover photo: Members of the DOD Task Force on Business Stability Operations (TFBSO) sometimes stayed at rented villas like this one in Kabul. (Former TFBSO employee photo) FINAL_Jan2016_Cover.indd 2 Michael Bindell, Economic and Social Development Subject Matter Expert Emmett Schneider, Senior Data Analyst/Senior Auditor Clark Irwin, Senior Writer/Editor Deborah Scroggins, Director of Research and Analysis Directorate/Editor Vong Lim, Visual Information Specialist Solange Toura Gaba, Research Assistant Jennifer Manzullo, Program Manager Daniel Weggeland, Governance Subject Matter Expert Jonathan Ned, Student Trainee Genevieve Wilson, Security Subject Matter Expert Olivia Paek, Visual Information Specialist Joseph Windrem, Deputy Director of Research and Analysis Directorate/Editor 1/13/2016 11:00:14 AM JOWZJAN BALKH SAMANGAN FARYAB SAR-E PUL BADGHIS HERAT GHOR KUNDUZ BADAKHSHAN BAGHLAN PANJSHIR NURISTAN KUNAR KAPISA PARWAN BAMYAN LAGHMAN KABUL WARDAK NANGARHAR LOGAR DAYKUNDI PAKTIYA GHAZNI KHOWST URUZGAN FARAH ZABUL NIMROZ TAKHAR HELMAND KANDAHAR PAKTIKA Provinces where SIGAR has conducted audit, inspection, and investigation work SPECIAL INSPECTOR GENERAL for AFGHANISTAN RECONSTRUCTION I am pleased to submit to Congress, and the Secretaries of State and Defense, SIGAR’s 30th quarterly report on the status of the U.S. reconstruction effort in Afghanistan. This quarterly report focuses on the Afghan economy, but as the essay in Section 1, “Growing an Economy in Stony Ground,” concludes, developing Afghanistan’s economy may depend more on improving security, the business climate, and the educational system than on implementing specific economic programs. However, in this reporting period, Afghanistan proved even more dangerous than it was a year ago. The Taliban now controls more territory than at any time since 2001. Vicious and repeated attacks in Kabul this quarter shook confidence in the national-unity government. A year after the Coalition handed responsibility for Afghan security to the Afghan National Defense and Security Forces (ANDSF), American and British forces were compelled on several occasions to support ANDSF troops in combat against the Taliban. The lack of security has made it almost impossible for many U.S. and even some Afghan officials to get out to manage and inspect U.S.-funded reconstruction projects. This quarter the dangers of absent oversight were exposed when a task force appointed by President Ashraf Ghani reportedly found that millions of dollars were being embezzled while Afghanistan pays for numerous nonexistent “ghost” schools, “ghost” teachers, and “ghost” students. Notwithstanding these obstacles, SIGAR, the largest U.S. oversight organization in Afghanistan, has managed to continue its work of overseeing U.S. programs and projects, partly through the creative use of local Afghan national staff. This quarter, SIGAR issued 11 audits, inspections, alert letters, and other products. SIGAR work to date has saved over $2 billion for the U.S. taxpayer. A SIGAR performance audit examined the United States’ $488 million effort to develop Afghanistan’s oil, mineral, and gas industries. The audit determined that 11 Task Force for Business and Stability Operations and two U.S. Agency for International Development (USAID) programs had mixed success due to challenges in dealing with the Afghan government. Another performance audit this quarter found that despite U.S. training efforts, the Afghan National Army’s National Engineer Brigade is incapable of operating independently. SIGAR completed five financial audits this quarter of U.S.-funded contracts and cooperative agreements to rebuild Afghanistan. SIGAR also announced five new financial audits of Defense and State Department contracts and grants with combined incurred costs of more than $122.5 million, bringing the total number of ongoing financial audits to 23 with more than $2.7 billion in auditable costs. During the reporting period, SIGAR investigations achieved significant results. A civil settlement agreement totaled $1.45 million; cost savings to the U.S. government amounted to over $100,000; and, fines, forfeitures, and restitutions amounted to $110,000. Additionally, there was one indictment, one conviction, and two sentencings. SIGAR initiated 17 new investigations and closed 14, bringing the total number of ongoing investigations to 309. 2530 Crystal Drive Arlington, Virginia 22202 The accomplishments of the quarter bring the cumulative total in criminal fines, restitutions, forfeitures, civil settlement recoveries, and U.S. government cost savings from SIGAR’s ongoing investigations to over $946.2 million. This quarter, SIGAR’s suspension and debarment program referred seven individuals and 10 companies for suspension or debarment based on evidence developed as part of investigations conducted by SIGAR in Afghanistan and the United States. Three of these individuals were referred for suspension based upon criminal charges being filed against them alleging misconduct related to or affecting reconstruction contracting in Afghanistan. These referrals bring the total number of individuals and companies referred by SIGAR since 2008 to 697, encompassing 368 individuals and 329 companies to date. SIGAR continues to provide vigorous oversight of reconstruction projects and programs, while examining Afghanistan reconstruction as a whole for lessons learned to be used in future contingency operations. My staff and I look forward to working with Congress and other stakeholders in the New Year to prevent waste, fraud, and abuse of U.S. funds appropriated for reconstruction in Afghanistan. Respectfully, John F. Sopko Special Inspector General for Afghanistan Reconstruction 2530 Crystal Drive Arlington, Virginia 22202 Executive Summary This report summarizes SIGAR’s oversight work and updates developments in the three major sectors of Afghanistan’s reconstruction effort from October 1 to December 31, 2015.* It also includes an essay on Afghanistan’s growing economic crisis, the barriers to private-sector economic growth, and options for bolstering the country’s economic prospects. During this reporting period, SIGAR published 11 audits, inspections, alert letters, and other reports assessing the U.S. efforts to build the Afghan security forces, improve governance, and facilitate economic and social development. These reports identified a number of problems, including a lack of accountability, failures of planning, deficiencies in internal controls, and noncompliance issues. The cost savings to the U.S. government from SIGAR’s investigative work amounted to over $100,000; civil settlement recoveries totaled $1.45 million; and fines, forfeitures, and restitutions amounted to $110,000. SIGAR investigations also resulted in one indictment, one conviction, and two sentencings. Additionally, SIGAR referred seven individuals and 10 companies for suspension or debarment based on allegations that they engaged in fraud and contract nonperformance. SIGAR OVERVIEW Audits SIGAR produced two performance audits and five financial audits. The performance audits found: • Task Force for Business and Stability Operations (TFBSO) and U.S. Agency for International Development (USAID) programs to develop Afghanistan’s oil, mineral, and gas industries had mixed success due to challenges in dealing with the Afghan government. • Despite U.S. training efforts, the Afghan National Army’s National Engineer Brigade is incapable of operating independently. The financial audits identified nearly $1.8 million in questioned costs as a result of internal-control deficiencies and noncompliance issues. These deficiencies and noncompliance issues included, among other things, failure to follow competitive procurement procedures, purchase of materials from restricted sources, overcharging due to utilization of improper currency exchange rates, lack of sufficient documentation to support costs incurred, and billing for ineligible tax fines and penalties. iv NEW AUDITS AND INSPECTIONS This quarter, SIGAR initiated one new performance audit to assess the administration, monitoring, and reporting of the Afghanistan Reconstruction Trust Fund. This brings the total number of ongoing performance audits to 15. SIGAR also announced five new financial audits of Department of Defense and Department of State awards with combined incurred costs of more than $122.5 million, bringing the total number of ongoing financial audits to 23 with more than $2.7 billion in auditable costs. Special projects During this reporting period, the Office of Special Projects issued three products, including one inquiry letter and one review letter addressing issues including: • TFBSO’s decision to spend nearly $150 million, or nearly 20% of its budget, on private housing and private security guards for its U.S. government employees in Afghanistan, rather than having those employees live on U.S. military bases. • The operating conditions of and inaccuracies in the geospatial coordinates for 32 USAID-funded publichealth facilities in Kabul Province. Special inspector general I Afghanistan reconstruction Executive Summary Investigations During the reporting period, SIGAR investigations resulted in cost savings to the U.S. government of over $100,000; fines, forfeitures, and restitutions amounted to $110,000; and civil settlement recoveries totaled $1.45 million. Criminal investigations resulted in one indictment, one conviction, and two sentencings. SIGAR initiated 17 new investigations and closed 14, bringing the total number of ongoing investigations to 309. SIGAR’s suspension and debarment program referred seven individuals and 10 companies for suspension or debarment. Investigations highlights include: • A U.S. Army sergeant pled guilty to conspiracy to receive and accept illegal bribes by a public official and was sentenced to 24 months’ incarceration, followed by 12 months’ supervised release. • Another U.S. Army sergeant pled guilty to the same charge and was sentenced to 12 months and one day of incarceration, followed by one year’s supervised release, and was ordered to forfeit $10,000. • An investigation of an alleged contract bid-rigging scheme led to a civil settlement recovery of $1.45 million. In a related criminal investigation, four individuals were sentenced for their roles in the scheme and were debarred from doing business with the U.S. government. • An investigation confirmed a duplicate payment made under the National Afghan Trucking contract, resulting in a cost savings to the U.S. government of more than $100,000. • A U.S. Army captain pled guilty to solicitation and receipt of a gratuity of $50,000 in return for facilitating the award and payment of transportation contracts to an Afghan trucking company. Special Inspector General John F. Sopko prepares to testify before a subcommittee hearing of the Senate Armed Services Committee on January 20, 2016. The hearing dealt with SIGAR’s work on the Task Force for Business Stability Operations, a former DOD component that operated nearly $800 million in programs and projects in Afghanistan. (SIGAR photo by Alex Bronstein-Moffly) * SIGAR may also report on products and events occurring after December 31, 2015, up to the publication date. Report to the united states congress I January 30, 2016 v Table of Contents Section 1 1 Growing an economy in stony soil 6 Many Barriers Impede Progress 7 Development May Take Many Forms 8 Measuring Results Is Another Challenge 10 What Should Afghanistan Do? 12 Caveats And Questions Section 2 15 SIGAR Oversight Activities 18 Audits 31 Special Projects 33 Lessons Learned 33 Investigations 38 Other SIGAR Oversight Activities This Quarter 41 SIGAR Budget 41 SIGAR Staff Section 3 43 Reconstruction Update 48 Status of Funds 64 Security 69 Quarterly Highlight: Insurgent Activity in Afghanistan 106 Governance 119 Quarterly Highlight: USAID Ceases Stability Programming 134 Economic and Social Development Table of Contents Section 4 171 Other Agency Oversight 173 Completed Oversight Activities 175 Ongoing Oversight Activities Appendices And Endnotes 182 Appendix A: Cross-Reference of Report to Statutory Requirements 186 Appendix B: U.S. Funds for Afghanistan Reconstruction 188 Appendix C: SIGAR Written Products 192 Appendix D: SIGAR Investigations and Hotline 199 Appendix E: Acronyms 205 Endnotes “Significant amounts of Afghan private capital are being held outside the country— probably tens of billions of dollars—which could be repatriated and invested productively in Afghanistan, but this cannot be expected to happen unless there is greater confidence in the future, a more effective NUG [National Unity Government], and prospects for reduction of violence and progress of reconciliation.” —-United States Institute of Peace Source: USIP, “Reviving Afghanistan’s Economy,” PeaceBrief 195, October 2015, p. 2. Growing an Economy Contentsan Economy Contents Growing Afghan Economy Remains In Crisis: Reconstruction Focus Needs To Change 3 Many Barriers Impede Progress 6 Development May Take Many Forms 7 Measuring Results Is Another Challenge 8 What Should Afghanistan Do? 10 Caveats And Questions 12 Photo on previous page A vehicle travels under lights powered by a new transmission line from Uzbekistan that has boosted electricity in Kabul from 4-hour to 24-hour availability. (Asian Development Bank photo) 2 Special inspector general I Afghanistan reconstruction Growing an Economy Growing an economy in stony soil Afghan Economy Remains In Crisis: Reconstruction Focus Needs To Change Intractable insurgents, cutbacks in foreign military personnel, persistent emigration of people and capital, and a slowing global economy are shifting Afghanistan’s economic prospects from troubling to bleak. President Ashraf Ghani recently summarized both the impact of the reduced foreign presence and the stubborn persistence of poverty in Afghanistan: Hundreds of thousands of people lost their jobs as a result of the [Coalition] troop withdrawals. In the transport sector alone, which constituted roughly 22 percent of GDP [gross domestic product], at least 100,000 jobs were lost. Construction of the military facilities was a major driver, with the service sector connected with it comprising an amazing 40 percent of gross domestic product. In addition, the large sum of funds that were provided in annual assistance did little to alleviate poverty, because the government did not focus on the poor. Today, 70 percent of the population still live on less than $1.75 a day.1 Afghanistan recently scored poorly in the “High Alert” and “Worsening” lists of the United Nations-supported Fund for Peace’s empirically driven Fragile States Index 2015, with particularly bad marks in areas like demographic pressure, refugees, poverty and economic decline, and security.2 The Fund noted that its data were drawn from 2014 sources. Facts emerging from 2015 reports touching on security, health, and education are unlikely to brighten the picture. SIGAR’s authorizing statute directs it to call attention to deficiencies in U.S. reconstruction efforts in Afghanistan and to suggest corrective actions.3 Afghanistan’s economic travails clearly demand corrective actions. The governments of Afghanistan and the United States share an urgent interest in spurring growth to raise Afghans from their pervasive poverty, offset the decline in foreign spending, and boost the Kabul regime’s fiscal soundness and legitimacy. But even seemingly simple steps to promote farming and small business may founder in the country’s overgrown Report to the united states congress I January 30, 2016 3 Growing an Economy thickets of insecurity, favoritism, corruption, and other obstacles to conducting business and trade. The reduced military presence of the United States and other foreign nations has trimmed cash flows and business opportunities for Afghan individuals and businesses who provide everything from bottled water to cargo transport for Coalition forces. International aid continues, but a recent report from the U.S. Institute of Peace (USIP) warns that “offsetting the negative demand shock of declining international military spending and aid will be impossible.” One reason, USIP notes, is that “significant amounts of Afghan private capital are being held outside the country—probably tens of billions of dollars” that are unlikely to return without better security and governance.4 With the sharp contraction in foreign presence, formerly robust Afghan GDP growth rates slowed from 14.4% in 2012 to 3.7% in 2013 and to 1.3% in 2014, according to the World Bank.5 (See Figure 1.1.) The slowdown, according to the USIP report, “also reflects loss of business and consumer confidence, lack of private investment, very low public investment, and deepening uncertainty over the political transition and security outlook,” as well as concerns about “the slow start and continuing weaknesses of the national unity government.”6 Figure 1.1 RATES OF INCREASE, AFGHAN REAL GROSS DOMESTIC PRODUCT, 2006–2016 (PERCENT) 25% 21 PERCENT GROWTHa 20% 15% 14.4 13.7 10% 5% 8.4 6.1 5.6 3.7 3.6 1.3 1.9b 3.1c 0% '06–'07 '07–'08 '08–'09 '09–'10 '10–'11 '11–'12 '12–'13 2013 2014 2015 2016 Note: a Figures exclude opium income. b Estimate. c Estimate, conditioned on security and reform improvements. Source: For 2006 through 2015, The World Bank, “Afghanistan: Emerging from Transition,” presentation, Senior Officials Meeting, Kabul, 9/4–5/2015, pp. 6, 10; for 2016, The World Bank, “Afghanistan Overview,” http://www.worldbank.org/en/country/afghanistanoverview, 10/20/2015. 4 Special inspector general I Afghanistan reconstruction Growing an Economy Private investment, the World Bank recently reported, has shown “strong signs of slowdown,” while registrations of new firms have declined by nearly half since 2012. The Bank says Afghanistan’s medium-term outlook is “unfavorable,” with “sluggish growth” of 1.9% projected for 2015, and a mild recovery in real (inflation-adjusted) GDP growth to 3.1% in 2016 and 3.9% in 2017. But that modest forecast carries a caveat—“conditioned on improvements in the security environment and strong reform momentum.”7 Even a return to real growth in the 3% range would do little to lift Afghanistan from the ranks of the world’s most impoverished countries. The nation’s population growth for the years 2011–2014 has run around 3%.8 Consequently, per capita GDP—a standard measure of economic wellbeing—would remain essentially unchanged. Per capita GDP is, moreover, an average that does not indicate whether income disparities are growing or shrinking. Uneven growth could deepen the hardships of the population if the scope and delivery of government services cannot mitigate them. That is not an idle concern. A 2015 study of the Afghan private sector by the Stockholm International Peace Research Institute (SIPRI) concludes that “The significant amount of aid and vast international military spending post-2001 has re-ingrained a culture of aid-rentierism: the Afghan elite competes internally for political rents from the international community. . . . The little wealth there is in the country is inequitably distributed, and the richpoor gap has been widening.”9 (Rentier states rely heavily or principally on aid, resource sales or royalties, transit fees and other external funds rather than domestic revenues, with possible consequences for government receptiveness to change and attentiveness to citizens’ well-being.10) Neither Afghanistan’s security outlook nor its economic prospects are doing anything to inspire confidence among the population. The Asia Foundation’s 2015 public-opinion survey of more than 9,500 Afghans in all 34 provinces found optimism at a low: “Afghans are particularly concerned about security, and the proportion who fear for their personal safety is at the highest point in the past decade.” The survey determined that the economy and unemployment are also major concerns, especially for women and young people.11 Considering the choices before them, many young Afghans are voting with their feet. The past year, according to the Asia Foundation, has found the Kabul Passport Office issuing more than 2,000 passports a day, six times the pace of a year earlier.12 Afghans accounted for 20% of the million-plus migrants to the European Union in 2015, second only to Syrians fleeing their own civil war.13 Even more worrisome, the emigrants may be disproportionately drawn from the younger, educated ranks of Afghans. “It’s a huge loss,” says economist Ahmed Siar Khoreishi, chief executive of Ghazanfar Bank. “The majority of these people are under the age of 30. This is really scary, we have very limited qualified, specialist people. . . . The brains are leaving.”14 Report to the united states congress I January 30, 2016 5 Growing an Economy The potential for a larger exodus seems real. The latest Asia Foundation public-opinion survey indicates nearly 40% of Afghans would leave the country if they could.15 Emigrants from Afghanistan take with them more than financial assets. They take away knowledge, skills, and other forms of human capital. Afghanistan can ill afford to suffer such losses. “There is a critical shortage of skilled labor in Afghanistan,” according to the U.S. State Department (State), partly because the literacy rate for ages 15 and up is only 32%.16 Harvard researchers have observed that “human capital is underdeveloped” in Afghanistan: business operators complained in interviews that architects, engineers, managers, plumbers, and electricians were hard to find.17 On a more positive note, State says “The Afghan government recognizes that the development of a vibrant private sector is crucial to the reconstruction of an economy impaired by decades of conflict and mismanagement.”18 Many Barriers Impede Progress Afghan man shops at the main market in Kabul: a strong retail sector can support local jobs and boost revenues for public purposes. (Asian Development Bank photo) Recognizing needs and realizing results are, of course, separate issues. The State Department says the Afghan government’s ability to advance a private-sector growth agenda has been limited by weak institutional capacity, economic “rent-seeking behavior” (individuals or firms obtaining special status, favored treatment, and legal prerogatives that could not be obtained in an open market), and lack of political will to undertake reforms.19 State’s list of obstacles to growth in Afghanistan is sobering. Problems include: • “Underdeveloped and irregularly implemented” legal and regulatory frameworks and enforcement mechanisms, all troubled by corruption • Unofficial “taxes” and bureaucratic delays • Anticompetitive behaviors aided by wealth and social connections • Weak property-rights protection, commercial-court incapacity, and corruption • “No serious enforcement of intellectual property rights” • “Systemic corruption at border crossings” • Lack of criminal prosecution or penalties for official corruption20 In a similar vein, another USIP report observes that “The ambivalence of government officials, which is due to a combination of ideology and self-interest, has delayed, suppressed, or hijacked implementation of liberalization policies.”21 Economists broadly agree that the design, operation, and incentive structure of a society’s institutions are a critical factor in economic growth. For settings like Afghanistan, however, it is important to note that institutions include more than ministries, courts, and regulatory agencies. “Institutions,” said economic historian Douglass C. North in his Nobel Prize acceptance 6 Special inspector general I Afghanistan reconstruction Growing an Economy lecture, “are the humanly devised constraints that structure human interaction. They are made up of formal constraints (rules, laws, constitutions), informal constraints (norms of behavior, conventions, and self-imposed codes of conduct), and their enforcement characteristics. Together they define the incentive structure of societies and specifically economies.”22 In that sense, widespread practice and expectations of corruption, traditional gender roles, some religious dictates and prohibitions, and patronage networks are among the institutions that can be detrimental to economic growth. Because of the many barriers to growth that exist in Afghanistan, the country’s circumstances require more—and more effective—action to spur development. Development May Take Many Forms Deciding what action to take is a judgmental challenge, for as the World Bank has observed, “There is no known formula for stimulating economic growth.”23 Governments have tried many ways to stimulate economic development. They may involve “industrial policy,” directed investment in specific sectors of the economy such as public investment in steel mills or cement plants. “Value-chain” development can include building processing capability to capture value added that is foregone when raw products are shipped out of the country for finishing and shipment. Import-substitution policies encourage domestic production of goods or services that are normally imported. Export-promotion policies focus on developing and marketing exportable goods to create new jobs and earn foreign exchange. Another stimulative effort might simply involve boosting the supply of money and credit, although particularly in Afghanistan, that could lead to more purchases of imports, as opposed to boosting domestic demand.24 British economist John Weiss notes that developing countries may still be attracted to industrial-policy interventions, which theoretically could be helpful, but adds, “Paradoxically, one can argue that where such interventions are most needed (in the lowest-income countries with thin markets and a small private sector) the capacity to introduce them is weakest.”25 Afghanistan, with its widely reported shortages of skilled civil servants, weaknesses in ministerial capacity, and prevalence of corruption (not to mention its low fiscal capacity and the prospect of declining foreign assistance) could well be one of those cases. Much of the foreign financial assistance that has flowed into Afghanistan since 2001 has been directed into projects that can provide foundational support for growth and development. The U.S. Agency for International Development (USAID), for example, has invested more than $2 billion to Report to the united states congress I January 30, 2016 7 Growing an Economy build and expand more than 2,000 kilometers of roads; has helped develop 172 megawatts of electric generation and increased the portion of the Afghan population linked to the electric grid from 6% in 2002 to 28% today; and has funded construction of more than 500 schools and 600 health facilities.26 U.S. funding of electrical-sector projects in Afghanistan via USAID and contributions to the Afghan Infrastructure Fund exceed $3 billion.27 Within the Department of Defense, the now-closed Task Force for Business Stability Operations (TFBSO) conducted 11 initiatives costing $215.4 million aimed at developing Afghanistan’s minerals and hydrocarbons potential by restoring productive capacity across industrial sectors, stimulating economic growth, and catalyzing private investments.28 (SIGAR has, however, documented serious shortcomings in some TFBSO initiatives; see Section 2, “SIGAR Oversight,” in this and previous quarterly reports for discussions.) Other efforts aimed at developing and growing the Afghan economy involve more targeted geographic-, function-, or sector-specific projects and programs. They take many forms, and are funded, directed, and executed by many actors, including the United States, United Kingdom, European Community, World Bank, Asian Development Bank, Afghanistan Reconstruction Trust Fund and other multilateral funds, and assorted nongovernmental organizations (NGO). Some of the reported outcomes may be less solid than they appear. As noted in many reports by SIGAR and other U.S. and international oversight organizations, development projects vary widely in the soundness of their conception, appropriateness to the Afghan context, adherence to schedule, sustainability, and success in attaining desired outcomes. A new RAND Corporation report prepared for the U.S. Secretary of Defense, for example, concludes that TFBSO “had problems implementing large, complicated infrastructure investments.” Causes included “a naïve view of the risks and difficulties of implementing a project or a lack of appreciation of local or market conditions.”29 In any case, despite more than a decade of these reconstruction and development efforts, the Afghan economy remains in fragile and worsening condition. As a recent report from the SIPRI concludes, Amid contracting aid resources and ongoing insecurity, posttransition economic instability is likely [in Afghanistan]. A toxic set of conditions has created a deadlock: the government can neither kick-start the economy nor provide the core public goods and services [e.g., roads, literacy, security] necessary for the formal private sector to blossom.30 Measuring Results Is Another Challenge Even if development initiatives—whether led by Afghan, international, or nongovernmental organizations—have optimized their chances of success 8 Special inspector general I Afghanistan reconstruction Growing an Economy by taking appropriate account of local environments, security threats, impediments to movement, conflicts of interest, staffing, sustainability, and vulnerabilities to corruption, there is another great difficulty. That is the challenge of monitoring programs and projects, and of collecting and using the information needed for decisions to expand, modify, redirect, relocate, or terminate a program. A number of SIGAR products have documented the difficulty of determining the conceptual soundness, quality of execution and oversight, and actual impact of donor-funded projects in Afghanistan. For example, • A 2015 audit of U.S. approaches to developing Afghanistan’s extractives industry to exploit large reserves of minerals, oil, and natural gas found divergent approaches and a lack of overall strategy, poor coordination and limited information sharing, and an inability of Kabul’s Ministry of Mines and Petroleum to handle contract research, awards, and management on its own.31 • A 2014 inquiry into the Gereshk Cold and Dry Storage Facility in Helmand province, a $2.89 million facility funded by the Department of Defense’s TFBSO, found it to be apparently well built, but never used, and with no private-sector interest in evidence.32 • A 2014 inspection of the USAID-funded Gorimar Industrial Park in Balkh Province found a lack of required documentation for contracts, task orders, and payments; power and water systems inoperable for lack of fuel; and an occupancy rate of less than 20%.33 • A 2013 audit of USAID’s Stability in Key Areas Program, which aimed to have contractors award “quick delivery” grants for projects like graveling roads, building culverts, and lining canals, found that the program had disbursed none of its $47 million six months after the program started, and had reached no formal agreement with Afghan government partners until nine months after the first contract was signed.34 USAID has funded many reconstruction projects in Afghanistan that aim to promote growth. Its efforts include establishing 125 business associations, including women-owned operations; facilitating marble exports; helping more than 2,700 Afghan firms obtain business loans; and providing management training and marketing assistance.35 USAID’s Office of the Inspector General recently audited the agency’s strategy for monitoring and evaluating its programs in Afghanistan. The audit made a number of troubling observations. The USAID/Afghanistan mission could show only one instance out of 127 contracts, grants, and cooperative agreements where prescribed multi-tier monitoring was being used. Reasons included lack of site access, making office visits and reading reports rather than going to work sites, and relying on software that could not centralize collected data.36 Report to the united states congress I January 30, 2016 9 A truck rolls along near Kandahar: the lack of good transportation infrastructure is a challenge in Afghanistan. (USACE photo by Karla Marshall) Growing an Economy Further, the USAID/Afghanistan mission provided plans for only six of its 127 project activities; none explained how USAID could decide how much monitoring was needed. Mission offices also had no annual monitoring plans, as required, to guide the work of contract third-party monitors, even though USAID has spent more than $242 million on their services since 2006.37 Given the mixed results of development efforts, the difficulties of assessing government- and NGO-funded initiatives, and the prospect of declining international assistance, it may be incumbent on Afghanistan and its international partners to sharpen the focus of their efforts to promote private economic activity. What Should Afghanistan Do? “Afghanistan’s economy has a complex mix of informal, formal, illicit and aid-sustained elements,” according to the SIPRI, with the formal private sector accounting for only 10–12% of GDP.38 By way of contrast, formal private-sector activity in the United States accounts for about 82% of GDP.39 “In its current state,” SIPRI says, “the Afghan private sector is not the engine of economic growth or instrument of social inclusion it has the potential to be.”40 In addition, individuals and firms operating outside the formal economy may be paying few or no taxes, worsening Afghanistan’s vast fiscal gap between revenues and expenditures. Stimulating the private sector toward spontaneous activity seems more likely to bolster Afghanistan’s economic standing than focusing on development projects that are closely tied to government operations. “Afghanistan can be characterized as a weak rentier state, subsisting on aid,” Dutch development scholars have written. They warn, “‘State building’ in this context cannot be successful,” for “more aid ‘ownership’ and a strengthening of the Afghan bureaucracy will simply consolidate aid rentierism rather than reverse-engineer a market democracy.”41 The focus on facilitating private activity makes sense. “The private sector holds the key,” a World Bank investment-climate report explains, “as 9 out of 10 jobs are created in the private sector. Consequently, a predictable and business-friendly investment climate stands as an integral component of the policy framework for job creation.”42 From that point of view, Afghanistan would benefit from business-climate change. The World Bank’s Doing Business 2016 report on regulatory quality and efficiency ranks Afghanistan 177th of 189 countries compared. It stands ahead of counties like Haiti, Chad, South Sudan, and last-place Eritrea, but trails some of its neighbors: Uzbekistan ranks 87th, Iran 118th, and Tajikistan 132nd.43 10 Special inspector general I Afghanistan reconstruction Growing an Economy Afghanistan’s only high mark is in ease of starting a business: 34th. Ease of paying taxes (89th) and getting credit (97th) are middling. Afghan standing in seven other categories includes 156th for obtaining electricity, 172nd for enforcing contracts, and a last-place 189th for protecting minority investors.44 The World Bank points out that “The economies performing best in the Doing Business rankings . . . are not those with no regulation but those whose governments have managed to create rules that facilitate interactions in the marketplace without needlessly hindering the development of the private sector.”45 The World Bank notes that many factors apart from the regulatory setting affect the growth and efficiency of private enterprises, including access to finance and managerial and technological capacities. In addition, the Doing Business ratings do not directly reflect matters of security, market size, macroeconomic stability, financial system, corruption, or labor-force training and skills. The Bank says it “focuses on the rules and regulations that can help the private sector thrive—because without a dynamic private sector, no economy can provide a good, and sustainable, standard of living for people.”46 Statistical research bears out the Doing Business message. World Bank economist Jamal Ibrahim Haidar’s team assembled five years of data from 172 countries and found “robust support for the claim that business regulatory reforms are good for economic growth,” each reform being correlated with an average 0.15% increase in the GDP growth rate.47 Another argument for business-climate reform comes from the United Kingdom’s Department for International Development (DFID). “High levels of regulation and red tape are used as a means of extracting bribes and other [economic] rents, in corrupt contexts,” DFID says. “For firms seeking to enter the market, this imposes an onerous bureaucratic process” that may persuade some firms to stay in or withdraw to the informal sector, with consequent reduced access to the financial and legal systems.48 For those who may be skeptical that growth can emerge in a sparseresource, low-capital setting like Afghanistan, New York University economist Paul M. Romer has noted that “Taiwan started with little of either and still grew rapidly.” He argues that investments in education, intellectual- and real-property protection, and avoidance of heavy regulation and high marginal tax rates can produce real benefits.49 The Asian Development Bank has likewise pointed out the “need and urgency of growth-friendly reforms in developing Asia,” especially regarding human capital, research and development, and institutions.50 Focusing national and provincial efforts on basic education could be one of the most powerful growth stimuli realistically within Afghanistan’s reach. Stanford University scholar Eric Hanushek points to empirical research findings that “Cognitive skills of the population—rather than Report to the united states congress I January 30, 2016 11 Exhibitors at a Kabul furniture fair show their chairs: promoting more local trades could reduce Afghanistan’s heavy reliance on imports. (USAF photo by Staff Sgt. Rachel Martinez) Growing an Economy About 40% of Afghan primary-school-aged children are not in school: low literacy rates, especially among girls, are a drag on economic growth. (Asian Development Bank photo) school attainment [years of attendance] are powerfully related to individual earnings, to the distribution of income, and most importantly to economic growth.” He adds that the lower technological levels of developing countries may entail a stronger demand for basic as opposed to high-level skills.51 Afghan officials and foreign donors have heard the education message. A World Bank presentation at the September 2015 Senior Officials Meeting in Kabul included the message that “Investment in adult literacy and skills could improve mobility and productivity of existing labor force, enhance participation of the poor in the growth process, and better equip them to participate in civil society processes and initiatives.”52 Unfortunately, the outlook for an education boost to Afghan growth is clouded. UNICEF, the United Nations Children’s Fund, reported in 2015 that most of the world’s out-of-school children live in South Asia, and that Afghanistan has the highest percentage of such children in the region. Some 4.2 million Afghan primary-school-age children, or nearly 43% of that age group, have either never enrolled in school or have dropped out. The group with the greatest likelihood of being out of school are girls in the poorest fifth of the income distribution.53 The Tolo News organization reported on January 2 that an Afghan presidential task-team had issued a report describing hundreds of nonexistent “ghost” schools, thousands of “ghost” teachers, Ministry of Education projects falsely reported as complete, large discrepancies in numbers of students reported in school, inflated salaries, and millions embezzled.54 SIGAR has previously raised concerns on some of these issues; if the official release of the report bears out the Tolo News description, it would be another large and troubling development both for the use of American taxpayers’ dollars and for the future of the Afghan people. Afghanistan’s civil, social, and economic future requires not only improving cultivation of cognitive skills, but getting more children—including girls—to school in the first place, and in keeping them there longer. It is a basic goal, and a daunting challenge. Caveats And Questions The realities of a large informal sector, a large insurgency, capacity constraints, and corruption suggest the following caveats regarding attempts to bolster Afghanistan’s economic prospects: • Continued and worsening security may depress both Afghans’ and foreigners’ willingness to invest or expand in the country, reducing GDP growth. • Reforms may trigger special-interest and bureaucratic opposition, and/ or create new opportunities for corruption and rent-seeking behaviors. 12 Special inspector general I Afghanistan reconstruction Growing an Economy • Even effective structural reforms may not bring many informal businesses into the formal, tax-paying structure because most are lowproductivity, low-margin firms with poorly educated managers who cannot bear the added costs of formal operations.55 With those caveats and the likelihood of declining aid in mind, the most promising path for economic development—assuming some level of security is maintained—is to focus on helping Afghans do things for themselves. U.S. lawmakers and policy makers might therefore wish to review American policy and operations from the standpoint of these questions: • Are the U.S. military presence and security-assistance programs in Afghanistan providing appropriate enabling contributions essential to helping the Afghan National Defense and Security Forces achieve the operational battlefield effectiveness necessary to suppress the insurgency that threatens all other objectives? • Are U.S. plans and programs rendering appropriate and effective support, including outreach to Afghan opinion leaders, essential for President Ghani’s anticorruption and counternarcotics campaigns? • Are U.S. plans and programs effectively assisting the Afghan government in systematically improving public services like education, health care, water, and electricity that not only support humanitarian objectives, but also promote business growth? • Are U.S. plans and programs providing appropriate and useful guidance and support for improving Afghanistan’s public economic institutions’ capacity to manage policy, business regulation, and investment climate? • Are U.S. plans and programs appropriately conceived and conducted to increase the Afghan government’s ability to provide fair, efficient, and transparent justice for all citizens? • Are U.S. strategies, plans, and programs being continuously reviewed for possible modification in light of new developments and facts on the ground? Economic development in Afghanistan requires more than aid, technical advice, training programs, subsidies, and trade fairs. It requires more than plunking down new projects and programs. It requires attention to growth-enabling fundamentals including improved security and honest governance, as well as energy, health, and education, spurred by recognition of a bedrock reality: fear, injustice, and corruption spur emigration, inhibit entrepreneurial impulses, and deter both domestic and foreign investment. Achieving business-climate reform and expanding education could be force multipliers for Afghan growth. But placing new furniture in a house gains little if the foundation is crumbling and the roof is rotten. Report to the united states congress I January 30, 2016 13 “Oversight is mission critical. If we don’t learn that lesson, I can safely predict to you, based upon my 30 years watching Washington government bureaucracies, that we will be doomed to repeat history.” —Special Inspector General John F. Sopko Source: SIGAR, “Prepared Remarks for Delivery at the Watson Institute for International Studies,” Providence, RI, November 18, 2015. Eqam__.m. 2. SIGAR oversight Activities Contents SIGAR Oversight Contents Audits 18 Special Projects 31 Lessons Learned 33 Investigations 33 Other SIGAR Oversight Activities This Quarter 39 SIGAR Budget 41 SIGAR Staff 41 Photo on previous page Discarded material awaits repurposing behind an Afghan health facility. (Integrity Watch Afghanistan photo) 16 Special inspector general I Afghanistan reconstruction SIGAR oversight Activities SIGAR Oversight Activities This quarter SIGAR issued 11 audits, inspections, alert letters, and other products. SIGAR work to date has saved the U.S. taxpayer over $2 billion. A performance audit reviewed 11 Task Force for Business and Stability Operations (TFBSO) projects and two of the U.S. Agency for International Development’s (USAID) three programs intended to develop Afghanistan’s extractive industries. The audit determined that these projects and programs had mixed success due to challenges in dealing with the Afghan government. Another performance audit this quarter found that despite U.S. training efforts, the Afghan National Army’s (ANA) National Engineer Brigade (NEB) is incapable of operating independently. SIGAR completed five financial audits this quarter of U.S.-funded contracts, grants, and cooperative agreements to rebuild Afghanistan. SIGAR also announced five new financial audits of USAID awards with combined incurred costs of more than $122.5 million, bringing the total number of ongoing financial audits to 23 with more than $2.7 billion in auditable costs. This quarter, SIGAR’s Office of Special Projects wrote to the Secretary of Defense to request information concerning TFBSO’s decision to spend nearly 20% ($150 million) of its budget on private housing and private security guards for its U.S. government employees in Afghanistan, rather than have the employees live on military bases. Additionally, the Office of Special Projects wrote to USAID to provide the results of recent site inspections conducted by SIGAR to verify the accuracy of USAID locational data and operating conditions at 32 USAID-funded public-health facilities in Kabul. During the reporting period, SIGAR investigations achieved significant results. A civil settlement agreement totaled $1.45 million; cost savings to the U.S. government amounted to over $100,000; and fines, forfeitures, and restitutions amounted to $110,000. Additionally, there was one indictment, one conviction, and two sentencings. SIGAR initiated 17 new investigations and closed 14, bringing the total number of ongoing investigations to 309. The accomplishments of the quarter bring the cumulative total in criminal fines, restitutions, forfeitures, civil settlement recoveries, and U.S. government cost savings from SIGAR’s ongoing investigations to over $946.2 million. Report to the united states congress I January 30, 2016 17 Testimony Given • Testimony 16-14-TY: DOD Task Force for Business and Stability Operations in Afghanistan: Preliminary Results Show Serious Management and Oversight Problems COMPLETED PERFORMANCE AUDITS • Audit 16-11-AR: Afghanistan’s Oil, Gas, and Minerals Industries • Audit 16-15-AR: Afghan National Engineer Brigade COMPLETED FINANCIAL AUDITS • Financial Audit 16-6-FA: USAID’s Improving Livelihoods and Governance through Natural Resource Management in Afghanistan Project • Financial Audit 16-8-FA: USAID’s Stability in Key Areas South Program • Financial Audit 16-10-FA: USAID’s Engineering, Quality Assurance, and Logistical Support Program • Financial Audit 16-12-FA: DOD’s Energy Support Services Program • Financial Audit 16-13-FA: DOD’s Strategic, Technical, and Analytical Support Services in Traditional and Alternative Energy Sectors COMPLETED SPECIAL PROJECT PRODUCTS • Inquiry Letter 16-05-SP: TFBSO Security • Letter 16-06-SP: Acknowledgement of DOD Response to TFBSO Security Letter • Review Letter 16-09-SP: USAIDSupported Health Facilities in Kabul SIGAR oversight Activities Performance audits: provide assurance or conclusions based on an evaluation of sufficient, appropriate evidence measured against stated criteria. Performance audits provide objective analysis so that management and those charged with governance can use the information to improve the program performance and operations, reduce costs, and facilitate decision-making by parties with responsibility to oversee or initiate corrective action for public accountability. Performance audits are conducted in accordance with generally accepted government auditing standards (GAGAS) and the Council of the Inspectors General on Integrity and Efficiency (CIGIE) Quality Standards for Federal Offices of Inspector General. Inspections: are systematic and independent assessments of the design, implementation, and/or results of an agency’s operations, programs, or policies. SIGAR conducts inspections, in accordance with CIGIE Quality Standards for Inspection and Evaluation, to provide information to Congress and the public on the quality of construction of facilities and infrastructure throughout Afghanistan; and generally, to provide an assessment of the extent to which the facilities were constructed in accordance with the contract requirements, used as intended, and are being maintained. Financial audits: provide an independent assessment of and reasonable assurance about whether an entity’s reported condition, results, and use of resources are presented in accordance with recognized criteria. SIGAR performs financial audits in accordance with GAGAS, which includes both requirements contained in the American Institute of Certified Public Accountants Statements on Auditing Standards and additional requirements provided in GAGAS. SIGAR also reviews financial audits conducted by independent public accountants (IPA). When an IPA conducts a financial audit, SIGAR conducts reasonable procedures to ensure compliance with GAGAS, based on the intended use of the IPA’s work and degree of responsibility accepted by SIGAR with respect to that work. This quarter, SIGAR’s suspension and debarment program referred seven individuals and 10 companies for suspension or debarment based on evidence developed as part of investigations conducted by SIGAR in Afghanistan and the United States. Three individuals were referred for suspension based upon criminal charges being filed against them alleging misconduct related to or affecting reconstruction contracting in Afghanistan. These referrals bring the total number of individuals and companies referred by SIGAR since 2008 to 697, encompassing 368 individuals and 329 companies. Audits SIGAR conducts performance audits, inspections, and financial audits of programs and projects connected to the reconstruction effort in Afghanistan. Since its last report to Congress, SIGAR has issued two performance audits and five financial-audit reports. This quarter, SIGAR also began one new performance audit, bringing the total number of ongoing performance audits to 15. One published performance-audit report examined the United States’ $488 million effort to develop Afghanistan’s oil, gas, and minerals industries. A second report was conducted to assess U.S. efforts to increase the ANA’s effectiveness through the creation of a National Engineer Brigade. The performance audits made two recommendations. The financial audits identified nearly $1.8 million in questioned costs as a result of internal-control deficiencies and noncompliance issues. Performance Audit Reports Published This quarter SIGAR published two performance audit reports. One report examined the United States’ $488 million effort to develop Afghanistan’s oil, gas, and minerals industries. A second report was conducted to assess U.S. efforts to increase the ANA’s effectiveness through the creation of an NEB. Audit 16-11-AR: Afghanistan’s Oil, Gas, and Minerals Industries $488 Million in U.S. Efforts Show Limited Progress Overall, and Challenges Prevent Further Investment and Growth The U.S. government estimates Afghanistan has more than $1 trillion in reserves of minerals, oil, and natural gas—collectively referred to as “extractives”—that could generate more than $2 billion in annual revenues for the Afghan government. Since 2009, the Department of Defense’s (DOD) TFBSO and USAID have obligated nearly $488 million on efforts designed to develop the extractive industries in Afghanistan. This is the second of two SIGAR reports focused on the U.S. efforts to develop Afghanistan’s extractive industries. In SIGAR’s April 2015 report, the agency found that TFBSO and USAID pursued divergent approaches 18 Special inspector general I Afghanistan reconstruction SIGAR oversight Activities to guide their projects; the U.S. Embassy in Kabul did little to coordinate interagency activities aimed at developing Afghanistan’s extractive industries because embassy officials lacked policymaking authority; and TFBSO generally did not coordinate with other agencies beyond perfunctory efforts. We also reported that TFBSO, at the conclusion of TFBSO activities in Afghanistan in December 2014, transferred all remaining projects to the Afghan Ministry of Mines and Petroleum (MOMP), and no U.S. agency in Afghanistan had any plans to provide continued monitoring, evaluation, or support for TFBSO extractive projects. Most TFBSO and USAID assistance to Afghanistan’s extractive industries has been directed toward developing capacity at the MOMP and its component organizations, and toward making regulatory reforms to attract private sector investment. TFBSO pursued short-term projects seeking immediate results, while USAID pursued longer-term capacity development efforts. Both the efforts of TFBSO and USAID in this area produced mixed results. Responding to SIGAR’s April 2015 report on TFBSO, USAID assessed the projects TFBSO transferred to the MOMP and estimated the costs to continue them. USAID concluded that it does not have the funding to support those projects. Separately, SIGAR determined that USAID’s own programs had mixed results because of the lack of MOMP commitment to reforms, and other challenges in Afghanistan’s operating environment. SIGAR evaluated the results of TFBSO’s 11 projects, worth a total of $215.4 million, to determine: (1) whether the programs achieved their stated programmatic objectives before the conclusion of TFBSO activities in Afghanistan, and (2) the extent to which these programs will be sustainable based on the observed capabilities of the Afghan government. SIGAR did not attempt a cost-benefit analysis. TFBSO’s projects were intended to, among other things, develop extractive resources, enhance access to energy resources, and strengthen institutional and technical capacity at the MOMP. As noted above, TFBSO’s 11 projects achieved mixed results, with three of those projects showing little to no appreciable results. For example, while TFBSO spent $46.5 million towards building capacity for mineral tender support, not a single tender resulted in a signed contract, largely because of delays created by the Afghan central government. SIGAR reviewed two of USAID’s three programs intended to develop Afghanistan’s extractives industries—the USAID Office of Inspector General plans to review the third program—and determined that these programs had mixed success due to challenges in dealing with the Afghan government. Specifically, the Mining Investment and Development for Afghan Sustainability (MIDAS) program, which aimed to build institutional capacity to develop and regulate Afghanistan’s extractive industries, fully met five, partially met two, and did not meet four of the 11 key performance indicators for fiscal year 2014. The Sheberghan Gas Generation Activity (SGGA), which was intended to provide training and technical assistance Report to the united states congress I January 30, 2016 19 COMPLETED PERFORMANCE AUDITS • Audit 16-11-AR: Afghanistan’s Oil, Gas, and Minerals Industries • Audit 16-15-AR: Afghan National Engineer Brigade SIGAR oversight Activities in support of Afghanistan’s hydrocarbons industry, completed only seven of its 24 program objectives for fiscal year 2014, partially met or was still working on 11, and cancelled or abandoned six objectives. Although other factors also played a role in USAID not meeting its program objectives, SIGAR’s review found that the MOMP’s management lacks the commitment to make necessary reforms to absorb on-budget assistance—funding that is channeled through the Afghan government’s core budget. For example, five of the 11 key performance indicators for MIDAS were either partially met or not met because of the delayed passage of the 2014 Minerals Law, staffing issues with the MOMP, and USAID’s eventual decision not to release on-budget funding for the MIDAS program due to capacity issues. USAID has recognized the problems within the MOMP and responded by reducing, and then in December 2014, discontinuing on-budget assistance under MIDAS to the MOMP. Neither the MOMP nor its component organizations have demonstrated the capacity to responsibly manage on-budget funding or a seriousness in addressing transparency and anti-corruption concerns, as called for by USAID guidance. Despite the issues highlighted above, U.S. government assistance to the MOMP has resulted in several positive developments. The Afghan government now has updated geological data for several dozen areas of interest, which it can use to attract investors. According to nongovernmental organizations monitoring the extractive industries in Afghanistan, the Minerals Law, while still deficient in several critical areas, has been amended to be more investor-friendly and conform better to internationally accepted best practices. Afghan government officials stated that the MOMP has begun to transition away from a centralized planning model for its extractive industries and towards a private sector-led model. Additionally, the MOMP and its component organizations have developed both greater capacity and greater confidence to market, negotiate, and regulate competitive contracts with some level of transparency. However, significant problems remain in the areas of corruption, infrastructure, security, and regulation. Corruption has been a major obstacle for sustainable growth in Afghanistan’s extractive industries. In particular, unregistered and illegal artisanal and small-scale mining operations continue to be a source of civil strife, unrealized government revenues, and lost economic output. One senior official in the Afghan government stated that many mines in Afghanistan operate illegally because of the inefficient and often corrupt registration process. Integrity Watch Afghanistan estimates that 1,400 mines operate illegally throughout Afghanistan, with 710 mines operating illegally in the Kabul area alone. By contrast, the Afghan government reports that only 200 mines are licensed to operate and paying taxes. Additionally, despite the 2014 Minerals Law’s prohibition on granting mining licenses to employees of the Ministries of Defense and the Ministry of Interior Affairs, as well as senior members of the national government, many 20 Special inspector general I Afghanistan reconstruction SIGAR oversight Activities mining operations are still controlled by political elites, warlords, military personnel, and the police. According to non-governmental organizations monitoring the growth of Afghanistan’s extractive industries, if the rampant corruption and disregard for central government oversight in the artisanal mining sector continues, there is a risk that it will cause Afghanistan’s security situation to further deteriorate, resulting in a resource conflict. Afghanistan’s road and rail networks remain generally inadequate to support the needs of its mining industry. The Afghan government notes that many roads are not easily passable by motor vehicles, and only half are serviceable throughout the year, making it difficult to move necessary equipment to often remote mining sites. Further, Afghanistan’s rail network is almost nonexistent, and according to representatives from TFBSO, the few lines that do exist use gauges that are incompatible with each other. Low-value bulk commodities, like Afghanistan’s iron and copper, generally require transport by rail to customer or port to be economically feasible. Further, although crude oil can be profitably transported by truck, representatives from the Department of State stated that this is not economically feasible given current global prices for crude. Even if prices were to rise, USAID subject matter experts say that Afghanistan lacks the infrastructure necessary to refine and load oil onto trucks. TFBSO and USAID officials agreed that transportation of Afghanistan’s natural gas will require updates to and expansion of its existing pipeline infrastructure. Afghanistan’s poor security environment is another ongoing challenge for the extractive industries. According to both Afghan and U.S. government officials, mineral- and hydrocarbon-rich areas are often located in remote areas outside of government control, rendering them dangerous to explore and develop. Other areas are contaminated by landmines and unexploded ordinance that will need to be cleared before these areas are suitable for exploration. Security issues will likely constrain Afghan government personnel working in the extractive industries. For example, Afghan geologists and hydrologists may not be willing or able to conduct field studies, and government inspectors may not be willing or able to conduct investigations of mines and wells suspected of violating Afghan laws and regulations in insecure areas. According to ECC Water & Power LLC, USAID’s MIDAS implementing partner, there are several ways in which the 2014 Minerals Law needs to be improved. Specifically, the law’s categorization of “rare earth elements” includes minerals that are not generally considered rare by the international scientific community, creating additional burdens for potential investors. Also, the Afghan Minerals Law requires that a tender process be used to award mining exploration licenses. However, according to MIDAS, most countries award licenses based on when applications are received because the tender process, except in very specific cases, is viewed as both cost and time prohibitive. Report to the united states congress I January 30, 2016 21 SIGAR oversight Activities SIGAR is making two recommendations to USAID. SIGAR recommends that the USAID administrator (1) using the results of the assessments done to date, develop a plan with the MOMP and its component organizations addressing the structural reforms needed at the ministry and establishing milestones for achieving them; and (2) condition any future on-budget assistance to the MOMP on the ministry achieving the milestones in the agreed-upon plan. Audit 16-15-AR: Afghan National Engineer Brigade An ANA soldier gets acquainted with the controls of the bulldozer during training to provide soldiers with basic skills necessary to use the bulldozers for construction operations in eastern Afghanistan. (Photo by U.S. Army Sergeant Thomas Gerkhe) Despite U.S. Training Efforts, the Brigade is Incapable of Operating Independently To improve the ANA’s effectiveness, U.S. Forces-Afghanistan (USFOR-A) determined that the ANA should have an NEB equipped with engineering equipment and vehicles. As a result, the NEB was established in December 2013 and envisioned as the ANA’s natural-disaster emergency-response unit with the capability to, among other things, build bridges and dig wells. As of November 2014, the NEB consisted of about 950 ANA soldiers. USFOR-A had responsibility for training the NEB, while the Combined Security Transition Command–Afghanistan (CSTC-A) had responsibility for ordering the brigade’s equipment and vehicles. In addition, U.S. subcommands, including Joint Task Force (JTF) Trailblazer, JTF Sapper, Naval Mobile Construction Battalion (NMCB) 25, and NMCB 28, trained the NEB in such areas as plumbing, electrical work, carpentry, masonry, and the operation of heavy equipment. Plans called for the NEB to receive at least $29 million in engineering equipment and vehicles. USFOR-A’s original goal was to establish a “fully capable” NEB for the ANA by October 1, 2014. However, in May 2014, USFOR-A lowered its goal to that of establishing only a “partially capable” NEB by December 31, 2014. USFOR-A was unable to achieve this goal, largely due to delays in basic soldier training and providing engineer equipment needed for training. To track the training progress, USFOR-A rated the NEB’s capability on a monthly basis. USFOR-A assessments for the period April 2014 through October 2014 showed that the NEB was rated overall as “developing,” the second lowest of five possible ratings, in each of the monthly rating periods during that seven-month period. In its explanation for the October 2014 “developing” rating, USFOR-A noted that the NEB was “reactionary and unable to forecast requirements 72 hours before execution.” The explanation also noted the NEB lacked initiative and only planned when USFOR-A advisors urged them to do so. Most significantly, the explanation noted that the NEB was not capable of carrying out its mission. Although USFOR-A had developed a detailed training plan for the NEB, delays in basic training, which is required before soldiers are selected for the engineer school, delayed the start of engineer training by about 45 days. Many of the same issues that delayed basic training—army staff on leave for holidays, political events, low literacy levels, and security concerns—also 22 Special inspector general I Afghanistan reconstruction SIGAR oversight Activities delayed NEB training. In addition, a Joint Task Force Trailblazer official told us that training was delayed by the fact that the ANA did not know who would be reporting for duty on any given day. Delays in receiving engineering equipment also hindered training efforts. Much of the NEB’s heavy engineering equipment was not available until August 2014. Adding to the problem, the NEB had only one of its authorized 30-ton cranes and none of its tractor trucks delivered by October 2014. Further, a Joint Task Force Trailblazer official told us that the Afghan Central Supply Depot could not account for all of the NEB’s equipment and some of the equipment was assigned to other areas of the ANA. In April 2015, SIGAR followed up with CSTC-A to determine what progress the NEB had made in developing its capabilities. In March and April 2015, the NEB participated in its first engineer mission using bulldozers to clear roadways in Helmand Province. However, due to missing equipment, the NEB still lacked the capability to provide natural-disaster relief. According to CSTC-A, the NEB had not been supplied with the required equipment—including hauling, heavy transport, and well drilling equipment—to increase its capabilities. SIGAR is not making any recommendations. New Performance Audits Announced This Quarter This quarter SIGAR initiated one new performance audit. It will assess the administration, monitoring, and reporting of the Afghanistan Reconstruction Trust Fund (ARTF). NEW PERFORMANCE AUDITS • Administration, Monitoring, and Reporting of the Afghanistan Reconstruction Trust Fund Administration, Monitoring, and Reporting of the Afghanistan Reconstruction Trust Fund The ARTF, administered by the World Bank, is a partnership between the international community and the Afghan government that aims to improve the effectiveness of the reconstruction effort. Established in March 2002, the ARTF was to initially serve as a short-term source of on-budget funding for Afghanistan’s non-security related operating budget until the Afghan government could raise enough revenues to cover its own operating costs. However, the life of the fund has been extended twice since its initial closing date of June 30, 2006, and now has a projected closing date of June 30, 2020. As of September 2015, international donors have pledged approximately $9 billion to the ARTF. The United States, through USAID, has pledged approximately $2.8 billion, or 31%, of this amount. According to a World Bank financial report, as of September 22, 2015, at least $6.8 billion has been disbursed to 20 ARTF-identified development projects. Although USAID does not independently oversee the use of U.S. contributions to the fund, per its grant agreement with the World Bank, the agency has limited rights to audit U.S. contributions to ensure the funds are used for their intended purposes. Report to the united states congress I January 30, 2016 23 SIGAR oversight Activities A previous SIGAR audit on the ARTF found limitations in the mechanisms the World Bank uses to administer, oversee, and report on the uses and results of donor funding. SIGAR also found that Afghan ministries had generally increased their ability to manage and account for government finances, including ARTF funds. SIGAR made two recommendations to the U.S. Ambassador to Afghanistan to urge the World Bank to take steps to ensure that site visits to the provinces are conducted, on a sample basis, to verify the eligibility of the Afghan government’s operating expenditures and enhance reporting to donors on ARTF-funded project results. This follow up audit will assess the extent to which the World Bank and the Afghan government (1) monitor and account for U.S. contributions to the ARTF; (2) evaluate whether ARTF-funded projects have achieved their stated goals and objectives; and (3) utilize and enforce any conditionality on ARTF funding. Financial Audits Table 2.1 SIGAR’s Financial Audit Coverage ($ Billions) 64 Completed Audits 23 Ongoing Audits Total $4.3 2.7 $7.0 Note: Numbers have been rounded. Coverage includes auditable costs incurred by recipients of U.S.-funded Afghanistan reconstruction contracts, grants, and cooperative agreements. Source: SIGAR Audits and Inspections Directorate. Questioned amounts: the sum of potentially unallowable questioned costs and unremitted interest on advanced federal funds or other revenue amounts payable to the government. Questioned costs: costs determined to be potentially unallowable. The two types of questioned costs are ineligible costs (violation of a law, regulation, contract, grant, cooperative agreement, etc., or an unnecessary or unreasonable expenditure of funds) and unsupported costs (those not supported by adequate documentation or proper approvals at the time of an audit). SIGAR launched its financial-audit program in 2012, after Congress and the oversight community expressed concerns about oversight gaps and the growing backlog of incurred-cost audits for contracts and grants awarded in support of overseas contingency operations. SIGAR competitively selects independent accounting firms to conduct the financial audits and ensures that the audit work is performed in accordance with U.S. government auditing standards. Financial audits are coordinated with the federal inspector-general community to maximize financial-audit coverage and avoid duplication of effort. This quarter, SIGAR completed five financial audits of U.S.-funded contracts and cooperative agreements to rebuild Afghanistan. SIGAR also announced five new financial audits of DOD and State awards with combined incurred costs of more than $122.5 million, bringing the total number of ongoing financial audits to 23 with more than $2.7 billion in auditable costs, as shown in Table 2.1. These audits help provide the U.S. government and the American taxpayer reasonable assurance that the funds spent on these awards were used as intended. The audits question expenditures that cannot be substantiated or are potentially unallowable. SIGAR issues each financial-audit report to the funding agency that made the award(s). The funding agency is responsible for making the final determination on questioned amounts identified in the report’s audit findings. Since the program’s inception, SIGAR’s financial audits have identified nearly $282.2 million in questioned costs and $289,880 in unremitted interest on advanced federal funds or other revenue amounts payable to the government. As of January 30, 2016, funding agencies had reached a management decision on 51 completed financial audits and over $16.7 million in questioned amounts are subject to collection. It takes time for funding agencies to carefully consider audit findings and recommendations. As a result, 24 Special inspector general I Afghanistan reconstruction SIGAR oversight Activities agency management decisions remain to be made for several of SIGAR’s issued financial audits. SIGAR’s financial audits have also identified and communicated 208 compliance findings and 245 internal-control findings to the auditees and funding agencies. SIGAR’s financial audits have four specific objectives: • Express an opinion on whether the Special Purpose Financial Statement for the award presents fairly, in all material respects, revenues received, costs incurred, items directly procured by the U.S. government, and balance for the period audited in conformity with the terms of the award and generally accepted accounting principles or other comprehensive basis of accounting. • Evaluate and obtain a sufficient understanding of the audited entity’s internal controls related to the award; assess control risk; and identify and report on significant deficiencies including material internal-control weaknesses. • Perform tests to determine whether the audited entity complied, in all material respects, with the award requirements and applicable laws and regulations; and identify and report on instances of material noncompliance with terms of the award and applicable laws and regulations. • Determine and report on whether the audited entity has taken adequate corrective action to address findings and recommendations from previous engagements. A list of completed and ongoing financial audits can be found in Appendix C of this quarterly report. Special Purpose Financial Statement: a financial statement that includes all revenues received, costs incurred, and any remaining balance for a given award during a given period. Financial Audits Published This quarter, SIGAR completed five financial audits of U.S.-funded contracts and cooperative agreements to rebuild Afghanistan. These financial audits identified nearly $1.8 million in questioned costs as a result of internalcontrol deficiencies and noncompliance issues. These deficiencies and noncompliance issues included assignment of employees to incorrect labor categories above requisite qualification levels, failure to submit timesheets for consultant labor charges, and incomplete and inadequately supported contractually mandated quarterly expenditure reports. Financial Audit 16-6-FA: USAID’s Improving Livelihoods and Governance through Natural Resource Management in Afghanistan Project Audit of Costs Incurred by the Wildlife Conservation Society On April 22, 2010, USAID issued a three-year, $8 million cooperative agreement to the Wildlife Conservation Society (WCS) to support the Improving Livelihoods and Governance through Natural Resource Management in Afghanistan project. The project was intended to encourage community Report to the united states congress I January 30, 2016 25 COMPLETED FINANCIAL AUDITS • Financial Audit 16-6-FA: USAID’s Improving Livelihoods and Governance through Natural Resource Management in Afghanistan Project • Financial Audit 16-8-FA: USAID’s Stability in Key Areas South Program • Financial Audit 16-10-FA: USAID’s Engineering, Quality Assurance, and Logistical Support Program • Financial Audit 16-12-FA: DOD’s Energy Support Services Program • Financial Audit 16-13-FA: DOD’s Strategic, Technical, and Analytical Support Services in Traditional and Alternative Energy Sectors SIGAR oversight Activities Band-e-Amir National Park: A contract to implement a USAID project to encourage community development by training Afghans in sustainable natural resource management, including at this park, was the subject of a SIGAR financial audit this quarter. (USAID photo by Lorene Flaming) Unsupported costs: not supported with adequate documentation or that did not have the required prior approval Ineligible costs: prohibited by agreement, applicable laws, or regulations Source: SIGAR Audits and Inspections Directorate. development by training Afghans in sustainable natural resource management in Bamyan and Wakhan, and strengthening ties with provincial and national government departments. After eight modifications, the period of performance was extended from April 9, 2013, to December 30, 2014, and program funding was increased to $14 million. SIGAR’s financial audit, performed by Davis and Associates Certified Public Accountants, PLLC (Davis), reviewed $4,641,256 in expenditures charged to the cooperative agreement between July 1, 2013, and December 30, 2014. Davis identified one material weakness in WCS’s internal controls and one instance of material noncompliance with the terms and conditions of the cooperative agreement. These two accounting deficiencies resulted from the same finding. Specifically, Davis identified that outside consultants were paid without being required to submit documentation to support the services provided. Additionally, WCS did not require these consultants to submit timesheets or other substantiating documentation to keep track of their work on the project. Therefore, Davis questioned the full amount of consultant labor charged to the project. As a result of the internal-control deficiency and instance of noncompliance, Davis identified $1,148,573 in total questioned costs, consisting entirely of unsupported costs. Davis did not identify any ineligible costs. Davis identified one prior review pertinent to WCS’s financial performance under the cooperative agreement. In July 2014, USAID Office of Inspector General issued an audit of WCS’s incurred costs that had two findings related to the Special Purpose Financial Statement. Specifically, WCS did not keep accurate timesheets for all their employees working under the cooperative agreement. Additionally, WCS charged the salaries of some U.S.-based employees as direct labor costs instead of indirect costs. Davis followed up these findings and concluded that WCS had taken adequate corrective action to address them. Davis issued a modified opinion on WCS’s Special Purpose Financial Statement due to unsupported program costs. Based on the results of the audit, SIGAR recommends that the responsible agreement officer at USAID: 1. Determine the allowability of and recover, as appropriate, $1,148,573 in total questioned costs identified in the report. 2. Advise WCS to address the report’s internal-control finding. 3. Advise WCS to address the report’s noncompliance finding. Financial Audit 16-8-FA: USAID’s Stability in Key Areas South Program Audit of Costs Incurred by AECOM International Development Inc. In 2012 and 2013, USAID awarded two contracts to AECOM International Development Inc. (AECOM) to implement the Stability in Key Areas (SIKA) South program. The primary goal of the program was to promote 26 Special inspector general I Afghanistan reconstruction SIGAR oversight Activities As part of the SIKA South program, community forums were conducted for more than 3,000 members of the district development assembly and community development councils in 14 districts in the south. A USAID contract to implement the program was the subject of a SIGAR financial audit this quarter. (USAID photo) stabilization in the southern region of Afghanistan by increasing the provision of basic services and implementing community-led initiatives in coordination with provincial governments. On April 10, 2012, USAID awarded an 18-month, $58.7 million contract to AECOM. In May 2013, due to a bid protest, USAID terminated this contract for convenience, and AECOM’s SIKA South program operations ceased on July 31, 2013. In total, $15,936,927 in expenses were charged to the contract. USAID recompeted the contract and, on March 4, 2013, awarded a second 18-month contract for $60.2 million to AECOM. After five modifications, the contract period was extended through March 3, 2015. SIGAR’s financial audit, performed by Williams, Adley & Company-DC LLP (Williams Adley), reviewed all expenses charged to the first contract, and $32,690,570 in expenses charged to the second contract from March 4, 2013, through September 3, 2014. Williams Adley did not identify any material weaknesses or significant deficiencies in AECOM’s internal controls, or instances of noncompliance with the terms and conditions of the SIKA South program contracts. As a result, Williams Adley did not identify any questioned costs, which would have included unsupported costs or ineligible costs. Report to the united states congress I January 30, 2016 27 SIGAR oversight Activities Williams Adley obtained and reviewed prior audit reports and other assessments that could have a material impact on the Special Purpose Financial Statement. Williams Adley identified seven audit findings from three prior SIGAR financial audits related to the scope of this audit: (1) SIGAR, USAID’s Stabilization in Key Areas East Program: Audit of Costs Incurred by AECOM International Development Inc., Financial Audit 15-76-FA, July 20, 2015; (2) SIGAR, USAID’s Stabilization in Key Areas West Program: Audit of Costs Incurred by AECOM International Development Inc., Financial Audit 15-75-FA, July 20, 2015; and (3) SIGAR, USAID’s Afghanistan Social Outreach Program: Audit of Costs Incurred by AECOM International Development Inc., Financial Audit 14-94-FA, September 3, 2014. All seven findings from the prior audits concerned document retention. After reviewing and assessing documentation, Williams Adley determined that AECOM had taken adequate corrective actions that addressed these findings. Williams Adley issued an unmodified opinion on AECOM’s Special Purpose Financial Statement, noting that it presents fairly, in all material aspects, revenues received, costs incurred, and the balance for the period audited. Williams Adley did not report any findings related to the SIKA South program. Therefore, SIGAR is not making any recommendations. Financial Audit 16-10-FA: USAID’s Engineering, Quality Assurance, and Logistical Support Program IRD provided quality-assurance services for this new power substation in Kandahar. IRD’s contract with USAID was the subject of a SIGAR financial audit this quarter. (USAID photo) Audit of Costs Incurred by International Relief and Development Inc. On April 20, 2011, USAID awarded a one-year, $96.8 million contract to International Relief and Development Inc. (IRD) to support the Engineering, Quality Assurance, and Logistical Support (EQUALS) program. The program was intended to help ensure that USAID construction projects in Afghanistan met prescribed standards and contract specifications, and to provide capacity building support to key Afghan ministries involved in the energy, roads, and water sectors. After 17 modifications, the period of performance was extended from April 17, 2012, to April 17, 2016, and program funding was increased to $126.3 million. SIGAR’s financial audit, performed by Crowe Horwath LLP (Crowe), reviewed $63,144,114 in expenditures charged to the contract from January 1, 2013, through March 31, 2015. Crowe identified two material weaknesses and one significant deficiency in IRD’s internal controls, and four instances of noncompliance with the terms and conditions of the contract. Specifically, Crowe found that IRD may have overcharged the government by $614,676 by billing employees under categories for which they may not have been qualified. For example, Crowe found that two of 25 tested employees were assigned to incorrect labor categories, resulting in $72,635 in possible overcharges. Crowe also noted that IRD reports submitted to USAID were incomplete and did not show 28 Special inspector general I Afghanistan reconstruction SIGAR oversight Activities evidence of supervisory review. Finally, Crowe found that IRD overcharged the government $3,610 as a result of currency conversion errors. As a result of the internal-control weaknesses and instances of noncompliance, Crowe identified $618,286 in total questioned costs, consisting entirely of ineligible costs. Crowe did not identify any unsupported costs. Crowe obtained and reviewed 13 prior audit reports and other assessments that could have a material impact on the Special Purpose Financial Statement. In these reports, Crowe identified and followed up on nine audit findings related to the scope of this audit. After reviewing and assessing documentation, Crowe determined that IRD had not taken adequate corrective actions on four findings related to inventory reconciliation, insufficient supporting documentation, and overcharges. Crowe noted similar findings concerning supporting documentation and overcharges in this audit. For example, two prior audits found that IRD did not support exchange rates with adequate documentation and incorrectly identified transaction dates for certain conversions, resulting in overcharges to the government. Although IRD modified its foreign currency conversion procedures and issued a standard operating procedure to document the process, Crowe found similar errors in currency conversions in the Engineering, Quality Assurance, and Logistical Support program. Crowe issued an unmodified opinion on IRD’s Special Purpose Financial Statement, noting that it presents fairly, in all material respects, revenues received, costs incurred, and balance for the indicated period audited. Based on the results of the audit, SIGAR recommends that the responsible contracting officer at USAID: 1. Determine the allowability of and recover, as appropriate, $618,286 in questioned costs identified in the report. 2. Advise IRD to address the report’s three internal-control findings. 3. Advise IRD to address the report’s four noncompliance findings. Financial Audit 16-12-FA: DOD’s Energy Support Services Program Audit of Costs Incurred by Zantech IT Services Inc. On December 14, 2010, the Department of the Interior, on behalf of the Department of Defense, awarded a 1-year, $4 million contract to Zantech IT Services Inc. (Zantech) to support TFBSO’s Energy Support Services program. The program was intended to support TFBSO’s energy programs by creating efficient, low-cost, and economically viable energy development opportunities for Afghanistan. After 19 modifications, the total cost of the contract was increased to $17.8 million, and the period of performance was extended to September 27, 2012. SIGAR’s financial audit, performed by Williams Adley, reviewed $17,793,003 in expenditures charged to the contract from December 14, 2010, through September 27, 2012. Report to the united states congress I January 30, 2016 29 SIGAR oversight Activities Williams Adley did not identify any material weaknesses or significant deficiencies in Zantech’s internal controls or instances of noncompliance with the terms and conditions of the Energy Support Services program contract. As a result, Williams Adley did not identify any questioned costs, which would have included unsupported costs—costs not supported with adequate documentation or that did not have required prior approval— or ineligible costs—costs prohibited by the contract, applicable laws, or regulations. Williams Adley obtained and reviewed prior audit reports, assessments, and reviews of Zantech that were applicable to the scope of the audit. Williams Adley found no prior findings or recommendations that could have a material impact on the Special Purpose Financial Statement. Williams Adley issued an unmodified opinion on Zantech’s Special Purpose Financial Statement, noting that it presents fairly, in all material respects, revenues received, costs incurred, and the balance for the period audited. Financial Audit 16-13-FA: DOD’s Strategic, Technical, and Analytical Support Services in Traditional and Alternative Energy Sectors Audit of Costs Incurred by Zantech IT Services Inc. On September 12, 2012, the Department of the Interior, on behalf of the Department of Defense, awarded a 1-year, $14.8 million contract to Zantech IT Services Inc. (Zantech) to support the TFBSO Strategic, Technical, and Analytical Support Services in Traditional and Alternative Energy Sectors program. The program was intended to support TFBSO’s energy programs by creating efficient, low-cost, and economically viable energy development opportunities for Afghanistan. After 14 modifications, the total cost of the contract was increased to $31.2 million, and the period of performance was extended to March 27, 2015. SIGAR’s financial audit, performed by Williams Adley, reviewed $12,083,931 in expenditures charged to the contract from September 28, 2012, through September 27, 2013. Williams Adley did not identify any material weaknesses or significant deficiencies in Zantech’s internal controls or instances of noncompliance with the terms and conditions of the Strategic, Technical, and Analytical Support Services in Traditional and Alternative Energy Sectors program contract. As a result, Williams Adley did not identify any questioned costs, which would have included unsupported costs—costs not supported with adequate documentation or that did not have required prior approval—or ineligible costs—costs prohibited by the contract, applicable laws, or regulations. Williams Adley obtained and reviewed prior audit reports, assessments, and reviews of Zantech that were applicable to the scope of the audit. Williams Adley found no prior findings or recommendations that could have a material impact on the Special Purpose Financial Statement. 30 Special inspector general I Afghanistan reconstruction SIGAR oversight Activities Williams Adley issued an unmodified opinion on Zantech’s Special Purpose Financial Statement, noting that it presents fairly, in all material respects, revenues received, costs incurred, and the balance for the period audited. Status of SIGAR Recommendations The Inspector General Act of 1978, as amended, requires SIGAR to report on the status of its recommendations. This quarter, SIGAR closed 12 recommendations contained in seven audit and inspection reports. Five of the reports contained recommendations that resulted in the recovery of $107,810 in ineligible or unsupported contract costs paid by the U.S. government. From 2009 through December 2015, SIGAR published 208 audits, alert letters, and inspection reports and made 619 recommendations to recover funds, improve agency oversight, and increase program effectiveness. SIGAR has closed over 83% of these recommendations. Closing a recommendation generally indicates SIGAR’s assessment that the audited agency has either implemented the recommendation or otherwise appropriately addressed the issue. In some cases, a closed recommendation will be the subject of follow-up audit work. The Inspector General Act of 1978, as amended, also requires SIGAR to report on any significant recommendations from prior reports on which corrective action has not been completed. In this quarter, SIGAR continued to monitor agency actions on recommendations in 39 audit and five inspection reports. In this quarter, for all recommendations over 12 months old, the agencies have produced a corrective-action plan that SIGAR believes would resolve the identified problem or have otherwise responded to the recommendations. However, there are 13 audit reports over 12 months old where SIGAR is waiting for the respective agencies to complete their agreed-upon corrective actions. Special Projects SIGAR’s Office of Special Projects was created to examine emerging issues and deliver prompt, actionable reports to federal agencies and the Congress. The team conducts a variety of assessments, producing reports on all facets of Afghanistan reconstruction. The directorate is made up of auditors, analysts, investigators, lawyers, subject-matter experts, and other specialists who can quickly and jointly apply their expertise to emerging problems and questions. This quarter, SIGAR’s Office of Special Projects wrote to the Secretary of Defense to request information concerning TFBSO’s decision to spend nearly 20% ($150 million) of its budget on private housing and private security guards for its U.S. government employees in Afghanistan, rather than have the employees live on military bases. Report to the united states congress I January 30, 2016 31 COMPLETED SPECIAL PROJECTS • Inquiry Letter 16-05-SP: TFBSO Security • Letter 16-06-SP: Acknowledgement of DOD Response to TFBSO Security Letter • Review Letter 16-09-SP: USAIDSupported Health Facilities in Kabul SIGAR oversight Activities Additionally, the Office of Special Projects wrote to USAID to provide the results of recent site inspections conducted by SIGAR to verify the accuracy of USAID locational data and operating conditions at 32 USAID-funded public-health facilities in Kabul. Inquiry Letter 16-05-SP: TFBSO Security On November 25, 2015, SIGAR wrote to the Secretary of Defense to request information concerning TFBSO’s decision to spend nearly $150 million, or nearly 20% of its budget, on private housing and private security guards for its U.S. government employees in Afghanistan, rather than having those employees live on U.S. military bases. It is unclear what benefit the United States received as the result of TFBSO’s decision to rent private housing and hire private security contractors, or if TFBSO conducted any cost-benefit analysis of the decision. Letter 16-06-SP: Acknowledgement of DOD Response to TFBSO Security Letter SIGAR wrote to DOD on December 8, 2015, to acknowledge DOD’s response to SIGAR’s TFBSO Security Letter (16-05-SP). Review Letter 16-09-SP: USAID-Supported Health Facilities in Kabul SIGAR’s site inspections of health facilities in Kabul revealed basic structural concerns at most facilities, such as cracked walls. (SIGAR photo) On January 5, 2016, SIGAR wrote to the USAID administrator to inform her of the results of recent site inspections conducted by SIGAR to verify the locations and operating conditions at 32 (of 42 total) USAIDfunded public-health facilities in Kabul Province. This is the second in a series of health-facility inspections SIGAR is conducting in provinces throughout Afghanistan. In the Kabul site inspections, SIGAR found substantial inaccuracies in the geospatial coordinates USAID provided for many of the 32 facilities, and observed that not all facilities had access to electricity and running water. All 32 facilities were funded by USAID’s $259.6 million Partnership Contracts for Health (PCH) program that began in July 2008 and ended in June 2015. A key component of the PCH program was the use of detailed geospatial location information to ensure health facilities were in the appropriate locations and providing the local population with needed health services. Since 2014, SIGAR has expressed concern regarding the oversight of facilities supported by PCH, including the accuracy of the geospatial coordinates. At each of the 32 site visits, SIGAR took a minimum of 34 time, date, and location-stamped photographs where possible; SIGAR also completed an overall assessment of the facility; recorded, among other things, geospatial coordinates of the facility, whether the facility appeared to be open and operational, and whether the facility had 32 Special inspector general I Afghanistan reconstruction SIGAR oversight Activities reliable access to electricity and water and an on-site pharmacy; and conducted interviews with a facility staff member and a member of the community served by the health facility. The site inspections revealed that the geospatial coordinates for 22 of the 32 facilities were within one kilometer of the actual facility location, three were within one to five kilometers, and seven were more than five kilometers away. All 32 health facilities were open and operational, and, of the 31 community members interviewed, 28 perceived the facilities to be in good working order. The site inspections noted some basic structural concerns at most facilities, including cracked walls, leaking roofs, broken doors, and broken windows. Additionally, 16 facilities disposed of medical waste in open-air kilns (some of which were publicly accessible), five did not have running water, three appeared not to have electricity, and eight may not have had adequate or consistent power required for proper lighting and refrigeration for pharmaceuticals and vaccines. This raises concerns that USAID is paying for services that the implementing partners are not providing. Also of concern is the documentation provided by USAID to identify the location and existence of the remaining 10 facilities (inaccessible to SIGAR due to security conditions). The files provided by USAID as evidence of the location and basic operations of the health facilities include only two to four photos for each facility; none included any embedded geospatial data. None of the USAID files included any site visit reports or other supporting documentation. Figure 2.1 Lessons Learned SIGAR created the Lessons Learned Program (LLP) to identify comprehensive lessons and best practices from Afghanistan reconstruction efforts from 2001 to the present. The LLP currently has five projects underway: interagency strategy and planning, coordination of international donor aid, U.S. perceptions of and responses to corruption, counternarcotics interventions, and private-sector development and economic growth. Investigations During the reporting period, SIGAR investigations achieved significant results. Cost savings to the U.S. government amounted to over $100,000; a civil settlement agreement totaled $1.45 million; and fines, forfeitures, and restitutions amounted to $110,000. Additionally, there was one indictment, one conviction, and two sentencings. SIGAR initiated 17 new investigations and closed 14, bringing the total number of ongoing investigations to 309, see Figure 2.1. Report to the united states congress I January 30, 2016 33 SIGAR INVESTIGATIONS: NUMBER OF OPEN INVESTIGATIONS, AS OF JANUARY 12, 2016 Total: 309 Other/ Miscellaneous Procurement 69 and Contract Public Fraud Corruption 117 67 Money Laundering 24 Theft 32 Source: SIGAR Investigations Directorate, 1/17/2016. SIGAR oversight Activities The accomplishments of the quarter bring the cumulative total in criminal fines, restitutions, forfeitures, civil settlement recoveries, and U.S. government cost savings from SIGAR’s ongoing investigations to over $946.2 million. Investigative outcomes include 103 arrests, 137 criminal charges, 102 convictions, and 80 sentencings. Two U.S. Military Members Sentenced for Bribery Scheme Criminal Information: a written accusation made by a public prosecutor, without the participation of a grand jury. The function of a criminal information is to inform the defendant of the nature of the charge made against him, and the act constituting such a charge so that he can prepare for trial and to prevent his being tried again for the same offense. Source: Black’s Law Dictionary. On December 10, 2015, in the Western District of Kentucky, U.S. Army Sergeant First Class Ramiro Pena was sentenced to 24 months’ incarceration, followed by 12 months’ supervised release and a special assessment of $100. In addition, Pena entered an agreement to forfeit a Harley-Davidson motorcycle, a Rolex watch, and $100,000. On July 2, 2015, Pena pled guilty to a one-count criminal information charging him with conspiracy to receive and accept illegal bribes by a public official. On October 1, 2015, in the Northern District of New York, U.S. Army Staff Sergeant Matthew Louis Bailly was sentenced to 12 months and one day incarceration, followed by one year’s supervised release and ordered to forfeit $10,000. On June 4, 2015, Bailly pled guilty to a one-count criminal information charging him with conspiracy to receive and accept illegal bribes by a public official. Both individuals were the subjects of a bribery investigation focusing on Afghan contractors paying bribes to U.S. military personnel in return for government contracts associated with the Humanitarian Aid Yard (HA Yard) at Bagram Airfield (BAF) in Afghanistan. The HA Yard functions as a storage facility for large quantities of clothing, food, school supplies, and other items available to military units in support of humanitarian aid for the Afghan people. The HA Yard, through the Commander’s Emergency Response Program, enables U.S. military commanders to respond to urgent humanitarian relief needs. Pena was project purchasing officer at the HA Yard and accepted approximately $100,000 in illegal bribes and a Rolex watch worth approximately $25,000 from Afghan vendors. Pena sent approximately $22,000 of the bribe money home in greeting cards addressed to his wife, who resided at Fort Campbell. He would send three to four bills totaling $300 to $400 in each card at a time so as to not call attention to the envelope at the post office. Further, Pena used bribe money to purchase a Harley-Davidson motorcycle and to pay his and his family’s personal expenses. Bailly, in his position as a project purchasing officer at the HA Yard, accepted approximately $12,000 in illegal bribes from Afghan vendors to ensure successful approval and processing of replenishment contracts to restock supplies. 34 Special inspector general I Afghanistan reconstruction SIGAR oversight Activities Investigation Results in Civil Settlement of $1.45 Million Associated with a Contract Bid-Rigging Scheme PAE Government Services Inc. (PAE) and RM Asia Limited (RM Asia) agreed to pay the United States $1.45 million to resolve allegations that they engaged in a bid-rigging scheme that resulted in false claims for payment under a U.S. Army contract in Afghanistan. PAE provides integrated global mission services and RM Asia provides motor vehicle parts and supplies. In 2007, the U.S. Army awarded PAE a contract to provide vehicle maintenance capabilities and training services for the Afghanistan National Army at multiple sites across Afghanistan. PAE partnered with RM Asia to supply and warehouse vehicle parts. The government alleged that former managers of PAE and RM Asia funneled subcontracts paid for by the U.S. government to companies owned by the former managers and their relatives by using confidential bid information to ensure that their companies would beat out other, honest competitors. In a related SIGAR criminal investigation, former PAE program manager Keith Johnson; Johnson’s wife, Angela Gregory Johnson; RM Asia’s former project manager, John Eisner; and deputy project manager Jerry Kieffer have been sentenced for their roles in the scheme. Additionally, Keith and Angela Johnson and two of their companies were debarred in February 2014 for a period of eight years. Kieffer was debarred in February 2014 for a period of six years and, in March 2014, Eisner and his company were debarred for a period of six years. Investigation Results in $103,614 Savings to the U.S. Government A savings of $103,614 for the U.S. government was realized after an investigation confirmed a duplicate payment had been made under the National Afghan Trucking contract. On July 25, 2015, SIGAR received information alleging a duplicate payment had been made to Aria Target Logistics (ATL). Special agents conducted a comparative analysis of the documentation and identified approximately 18 fuel missions for which ATL had submitted two separate invoices on two separate occasions to two different U.S. Army contracting entities. As a result, ATL received duplicate payments for the same 18 fuel missions. On July 27, 2015, SIGAR contacted members of the Regional Contracting Office at BAF and provided the same documentation to contracting officials. On November 2, 2015, SIGAR provided officials at BAF with a letter detailing some of the investigative findings with respect to the duplicate payment. Subsequently, contracting officials verified that in fact the U.S. Army had made a duplicate payment to ATL in the amount of $103,614. On November 4, 2015, SIGAR received notice from the contracting officer that a demand letter had been sent to ATL demanding payment of $103,614. Report to the united states congress I January 30, 2016 35 In November 2015, SIGAR Special Agent Doug Wethington provided fraud-awareness training to members of the Afghan National Procurement Authority. (SIGAR photo by Steve Mocsary) SIGAR oversight Activities U.S. Army Captain Pleads Guilty Special entity designations: exclusions in the General Services Administration’s System for Award Management based upon identifications by the CENTCOM commander of individuals and entities that are or have the potential to engage in contracting and have provided material support to insurgent or terrorist groups in accordance with Section 841 of the 2015 National Defense Authorization Act. Special entity designations are for an indefinite period and act as notice that contracts and subcontracts awarded to individuals and entities identified by the CENTCOM commander may be restricted, terminated, or voided as a matter of public policy. Administrative compliance agreements: entered into in lieu of debarment as the result of negotiations between suspension and debarment officials and contractors. Source: SIGAR Suspensions and Debarments. On November 5, 2015, in the Eastern District of North Carolina, U.S. Army Captain David A. Kline, pled guilty to one count of solicitation and receipt of a gratuity, and aiding and abetting the same. A criminal information was filed on September 9, 2015. Kline, while serving as a first lieutenant in the U.S. Army and stationed at Kandahar Airfield, sought and accepted $50,000 in gratuities from a contractor doing business with the U.S. military. Specifically, from January 2008 to April 2009, then-Lieutenant Kline was deployed as a member of the 189th Combat Sustainment Support Battalion, and served as the officer-in-charge of the Movement Control Team. As the officer-in-charge, Kline oversaw the handling of transportation movement requests, which are the means by which a military unit in the field submits a request for the transport of military items, to include fuel and equipment, food, and other supplies, from one location to another across Afghanistan. Although contracting procedures technically did not permit the authorizing officer to specify the particular Afghan trucking company that would perform the transportation, in practice, Kline and others were able to designate the Afghan company of their choice. Kline admitted he sought and accepted $50,000 in U.S. currency from an Afghan national who owned a trucking company doing business on government contracts at Kandahar Airfield, in return for Kline’s facilitation of the award and payment of numerous transportation contracts. The case was investigated by SIGAR, the Defense Criminal Investigation Service, Army Criminal Investigation Command, and the Federal Bureau of Investigation. Suspensions and Debarments This quarter, SIGAR’s suspension and debarment program referred seven individuals and 10 companies for suspension or debarment based on evidence developed as part of investigations conducted by SIGAR in Afghanistan and the United States. Three of these individuals were referred for suspension based upon criminal charges being filed against them alleging misconduct related to or affecting reconstruction contracting in Afghanistan. These referrals bring the total number of individuals and companies referred by SIGAR since 2008 to 697, encompassing 368 individuals and 329 companies, see Figure 2.2. As of the end of December 2015, the efforts of SIGAR to utilize suspension and debarment to address fraud, corruption, and poor performance in Afghanistan have resulted in a total of 129 suspensions, 374 finalized debarments, and 28 special entity designations of individuals and companies engaged in U.S. funded reconstruction projects. An additional 14 individuals and companies have entered into administrative compliance agreements 36 Special inspector general I Afghanistan reconstruction SIGAR oversight Activities Figure 2.2 SIGAR INVESTIGATIONS: CUMULATIVE REFERRALS FOR SUSPENSION AND DEBARMENT, Q2 FY 2011–Q1 FY 2016 700 600 500 400 300 200 100 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Source: SIGAR Investigations Directorate, 1/14/2016. with the government in lieu of exclusion from contracting since the initiation of the program. During the first quarter of 2016, SIGAR’s referrals resulted in two suspensions and eight finalized debarments of individuals and entities by agency suspension and debarment officials. Suspensions and debarments are an important tool for ensuring that agencies award contracts only to responsible entities. SIGAR’s program addresses three challenges posed by U.S. policy and the contingency contracting environment in Afghanistan: the need to act quickly, the limited U.S. jurisdiction over Afghan nationals and Afghan companies, and the vetting challenges inherent in the use of multiple tiers of subcontractors. SIGAR continues to look for ways to enhance the government’s responses to these challenges through the innovative use of information resources and investigative assets both in Afghanistan and the United States. SIGAR makes referrals for suspensions and debarments—actions taken by U.S. agencies to exclude companies or individuals from receiving federal contracts or assistance because of misconduct—based on completed investigations that SIGAR participates in. In most cases, SIGAR’s referrals occur in the absence of acceptance of an allegation for criminal prosecution or remedial action by a contracting office and are therefore the primary remedy to address contractor misconduct. In making referrals to agencies, SIGAR provides the basis for a suspension or debarment decision by the agency as well as all of the supporting documentation needed for an agency to support that decision Report to the united states congress I January 30, 2016 37 SIGAR oversight Activities should it be challenged by the contractor at issue. Based on the evolving nature of the contracting environment in Afghanistan and the available evidence of contractor misconduct and/or poor performance, on occasion SIGAR has found it necessary to refer individuals or companies on multiple occasions for consideration by agency suspension and debarment officials. SIGAR’s emphasis on suspension and debarment is exemplified by the fact that of the 697 referrals for suspension and debarment that have been made by the agency to date, 670 have been made since the second quarter of 2011. During the 12 month period prior to January 1, 2016, referrals by SIGAR’s suspension and debarment program resulted in the exclusion of 88 individuals and companies from contracting with the government. SIGAR’s referrals over this period represent allegations of theft, fraud, poor performance, financial support to insurgents, and mismanagement as part of reconstruction contracts valued at approximately $599.9 million. Debarment of Three Individuals for Attempted Theft of a Fire Truck and an Armored Truck from Bagram Airfield On November 12, 2015, the Army suspension and debarment official debarred Krishan Kumar, Janak Raj, and Roop Singh from contracting with the government based on their attempted theft of a fire truck and an armored truck from the Defense Logistics Agency’s Disposition Services Office at BAF. Specifically, Kumar, Raj and Singh while employed by ECOLOG International worked at the Maintenance and Repair Yard on BAF, a location used to store surplus military items, including vehicles, generators and other equipment gathered from various locations on the airfield as part of the retrograde of units from Afghanistan. During August 2014, all three approached informants working for SIGAR with offers to sell uparmored vehicles, heavy machinery, septic tanks, generators, copper wire, and other electrical equipment, as well as to provide the paperwork necessary to move these items off BAF so that they could be sold to third parties. As a result of an undercover operation involving SIGAR and the U.S. Army Criminal Investigation Command, Major Procurement Fraud Unit, all three were arrested following their attempt to sell a fire truck and an armored truck to investigators in exchange for a cash payment of $30,000. Following their arrest, all three individuals were barred from BAF by order of the installation commander, resulting in their departure from Afghanistan to their home country, India. Based on their actions, the Army suspension and debarment official debarred each of them for a period of five years, ending on May 14, 2020. 38 Special inspector general I Afghanistan reconstruction SIGAR oversight Activities Other SIGAR Oversight Activities This Quarter SIGAR Testifies on TFBSO Before Senate Armed Services Subcommittee On January 20, Special Inspector General John F. Sopko testified before the Senate Armed Services Subcommittee on Readiness and Management Support about SIGAR’s completed and ongoing work examining DOD’s TFBSO in Afghanistan. The nearly $800 million task force was DOD’s principal vehicle for stimulating private-sector growth and investment in Afghanistan’s war-torn economy. Unfortunately, SIGAR’s cumulative work to date has shown that TFBSO’s investment in Afghanistan has generally not delivered on its stated goals. Over the past two years, SIGAR has received more complaints of waste, fraud, and abuse relating to TFBSO activities than for any other organization operating in Afghanistan. Since SIGAR began investigating TFBSO activities, the agency has conducted more than 50 interviews with former TFBSO officials and contractors, and several dozen more with other U.S. and Afghan government officials with knowledge of TFBSO activities. In addition, SIGAR obtained documents and records related to TFBSO activities, in part, through subpoenas. As a result of this work, SIGAR has issued several reports and initiated a number of active criminal investigations. One of SIGAR’s most recent TFBSO reviews examined a TFBSO-funded compressed natural gas (CNG) filling station in the city of Sheberghan, Afghanistan. The reported cost of $43 million for this project far exceeded the cost of building CNG filling stations elsewhere. Moreover, it appears that TFBSO never examined the feasibility of the filling station prior to committing millions of dollars to its construction. This project is a glaring example of TFBSO projects SIGAR has examined that were ill-conceived, poorly planned, or left unfinished. Further, Sopko told the subcommittee, it appears that TFBSO’s activities in Afghanistan were stymied by a lack of strategy, leadership, and coordination. For example, SIGAR found that there was no overarching, government-wide strategy for the development of Afghanistan’s extractive industries—even though developing this sector constituted 36% of TFBSO’s total contract obligations and had been identified as vital to Afghanistan’s long-term economic development and viability. SIGAR’s April 2015 report examining TFBSO investments in Afghanistan’s extractives industries also found that senior TFBSO officials claimed uncertainty around TFBSO’s annual budget and high turnover among its leadership led to frequent shifts in TFBSO’s organizational direction. TFBSO and its counterparts, including State and USAID, also failed to coordinate their activities in several critical sectors, including extractives. As a result, nearly all of TFBSO’s large extractive projects remained incomplete when TFBSO concluded activities Report to the united states congress I January 30, 2016 39 Testimony Given • Testimony 16-14-TY: DOD Task Force for Business and Stability Operations in Afghanistan: Preliminary Results Show Serious Management and Oversight Problems SIGAR oversight Activities in Afghanistan on December 31, 2014, and not one TFBSO initiative in the extractives sector was transferred to State or USAID. Since April 2015, DOD has stated that since Congress ended funding for TFBSO, the department does not have the expertise, authority, or funding to respond to investigations related to TFBSO activities in Afghanistan. DOD’s inability to respond to SIGAR’s inquiries raises some questions, as it appears that several former TFBSO officials, including the most recent director of the task force, Dr. Joseph Catalino, still work for the department and other former TFBSO employees remain in the military and under the general purview of DOD. SIGAR is concerned that DOD has yet to provide any evidence that TFBSO reduced violence or increased stability despite its expenditure of nearly $800 million. SIGAR’s ongoing review of TFBSO activities in Afghanistan raises several key questions that remain unanswered and should be considered by Congress and any administration contemplating such TFBSO-like programs in the future. For example: • Should DOD be leading these types of economic-development activities in future contingency operations? • What impediments inhibited TFBSO, State, and USAID coordination and ultimately led to duplicative and sometimes competing activities, and how can they be addressed in the future? • How much private-sector direct investment did TFBSO’s $760 million obligation yield and how does that compare to traditional reconstruction models using USAID and State? • What impact did TFBSO projects and programs have on stabilizing Afghanistan, even at the local level, and can any of its successes be sustained? • Were there systemic problems with DOD’s management and oversight of TFBSO activities that need to be addressed? Members of Congress Ask SIGAR to Investigate Sexual Abuse A bipartisan, bicameral group led by Senator Patrick Leahy (D-VT) and Representative Thomas J. Rooney (R-FL) and 91 additional Members of Congress in December asked SIGAR to conduct an inquiry into the U.S. government’s experience with allegations of sexual abuse of children committed by members of the Afghan security forces. The inquiry will also look into the manner in which the Leahy amendment prohibiting DOD and the State Department from providing assistance to the units of foreign security forces that have committed gross violations of human rights is implemented in Afghanistan. SIGAR’s inquiry will complement a review initiated in October by the DOD Inspector General of the issue of child sex abuse by members of the ANDSF. The congressional request came in the wake of articles in the New York Times that sexual abuse of children by members of Afghan military and police forces has been rampant and that U.S. soldiers and Marines had been instructed not to intervene. 40 Special inspector general I Afghanistan reconstruction SIGAR oversight Activities Deputy Inspector General Speaks at NATO Lessons Learned Conference On November 11, 2015, Deputy Inspector General Gene Aloise spoke at the NATO Lessons Learned Conference in Lisbon. Aloise provided a brief history of inspectors general in the United States and highlighted some of SIGAR’s work in Afghanistan. The presentation also discussed SIGAR’s newly established Lessons Learned Program and articulated the seven key questions SIGAR created to better guide policy makers in current and future reconstruction efforts. Special Inspector General Speaks at Watson Institute for International Studies Special Inspector General Sopko spoke on November 18, 2015, at the Watson Institute for International Studies in Providence, Rhode Island, about the importance of learning from, and improving upon, the 14-year reconstruction effort in Afghanistan. Sopko explained the unique characteristics of SIGAR, highlighted the breadth of the agency’s work, and articulated specific, persistent challenges that are detrimental to the reconstruction mission. The special inspector general concluded with an overview of lessons learned, and reiterated the importance of noting the challenges faced in Afghanistan. SIGAR Budget SIGAR is funded through the Consolidated Appropriations Act, 2016. The funding level of $56.9 million is the same as fiscal year 2015. The budget supports SIGAR’s oversight activities and products by funding SIGAR’s (1) Audits and Inspections, (2) Investigations, (3) Management and Support, and (4) Research and Analysis directorates, as well as the Special Projects team and the Lessons Learned Program. SIGAR Staff SIGAR’s staff count remained steady since the last report to Congress, with 193 employees on board at the end of the quarter. At the end of the quarter, 29 SIGAR employees were at the U.S. Embassy Kabul and two others were at BAF. SIGAR employed seven local Afghans in its Kabul office to support the Investigations and Audits directorates. In addition, SIGAR supplements its resident staff with personnel assigned to short-term temporary duty in Afghanistan. This quarter, SIGAR had four employees on temporary duty in Afghanistan for a total of 40 days. Report to the united states congress I January 30, 2016 41 Special Inspector General Sopko shows the Kandahar deputy provincial governor SIGAR’s October 2015 Quarterly Report to the United States Congress, which featured an interview with Afghan President Ashraf Ghani. (SIGAR photo by Steve Mocsary) “Ordinary Afghans feel the pressure of a weakening economy acutely. This year 29.7% of respondents say their household financial situation has grown worse, the highest percentage since the survey began.” —The Asia Foundation Source: The Asia Foundation, Afghanistan in 2015: A Survey of the Afghan People, p. 55. UPDATE Reconstruction Update Reconstruction Update Contents Contents Overview 45 Status of Funds 48 Security 64 Governance 106 Economic and Social Development 134 Photo on previous page Demining operations along the Afghan-Tajik border are managed and coordinated by the Tajikistan National Mine Action Centre, supported by the United Nations. (UN Development Programme photo) 44 Special inspector general I Afghanistan reconstruction Reconstruction Update RECONSTRUCTION UPDATE Overview General John F. Campbell, commander of the U.S. forces in Afghanistan, reported that a U.S. investigation into the October 3, 2015, U.S. air strike on the Doctors Without Borders hospital in the northern city of Kunduz determined that the contributing causes for the accident were avoidable human error compounded by process and equipment failure, along with fatigue and high operational tempo. Some U.S. personnel were suspended and could face disciplinary action as a result of the incident. The United Nations reported an Afghan delegation submitted a report to the Afghan National Security Council on the temporary fall of Kunduz to the Taliban in September, although the findings were not released publicly. The reporting period saw an upsurge in insurgent activity from various terrorist groups across Afghanistan. Foreign Policy magazine reported that the Taliban now control more Afghan territory than at any time since 2001. The UN reported the presence of Islamic State in Iraq and the LevantKhorasan (ISIL-K) remains a concern, particularly in Nangarhar Province. In October 2015, the Afghan National Army conducted a large military operation against a new al-Qaeda group that formed in Afghanistan last year. After the New York Times reported that U.S. forces had been instructed to ignore the rape of young boys by members of the Afghan National Defense and Security Forces, members of Congress asked SIGAR to investigate the U.S. government’s experience with allegations of Afghan forces sexually abusing children. The inquiry will also look into the manner in which the Leahy amendment, which prohibits the Departments of Defense and State from providing assistance to units of foreign security forces that have committed gross violations of human rights, is implemented in Afghanistan. On January 14, 2016, the U.S. State Department announced the designation of ISIL-K, based in the Afghanistan/Pakistan region, as a foreign terrorist organization. Persons, groups, or companies that knowingly provide, attempt, or conspire to provide material support or resources to ISIL-K will be subject to sanctions under U.S. law. This quarter, President Ashraf Ghani announced one component of the Jobs for Peace program, a 24-to-30-month, jobs-focused stimulus and Report to the united states congress I January 30, 2016 45 Reconstruction Update stabilization program. The overall program is meant to provide short-term, labor-intensive employment in rural and urban areas. The initial cost of the first component is expected to be $100 million, growing to approximately $350 million as it expands to all provinces. The Afghan government initially estimates the entire Jobs for Peace program will cost approximately $1.18 billion, though some components still require budget estimates. In December, the United States announced plans to contribute $50 million to support the Afghan government’s job-creation efforts. On January 11, Afghan, Pakistani, U.S., and Chinese officials met in Islamabad in an effort to lay the groundwork for new talks with the Taliban. The Quadrilateral Coordination Group emphasized the immediate need for direct talks between representatives of the Afghan government and Taliban groups. Pakistani officials recommended that the Afghan government not demand concessions from Taliban leaders before beginning talks. Additionally, Pakistani officials said threats against Taliban members who refused to join the talks would be “counterproductive.” In December, the Asia Foundation released their 2015 Survey of the Afghan People. The survey found that in 2015, 36.7% of respondents nationwide say their country is moving in the right direction, down from 54.7% in 2014. This represents the lowest level of optimism recorded over the past 10 years, following last year’s record high during the presidential runoff election. Among the 57.5% of Afghans who say their country is moving in the wrong direction, the most frequently cited reason is insecurity (44.6%, up six percentage points from 2014), followed by unemployment (25.4%), corruption in general (13.0%), a bad economy (12.4%), and bad government (11.4%). Afghanistan’s economy did not recover as expected in 2015. The World Bank projected real GDP to grow 1.9% and to remain sluggish over the medium term. Deteriorating security, low investor and consumer confidence, declining investment, and the government’s struggle to deliver anticipated reforms have resulted in weak economic activity. The economic benefits associated with the once large international troop presence have waned, leading to tens of thousands of jobs lost and negatively impacting domestic demand. Meanwhile, the strength of the insurgency has caused the government to spend more on the military and less on job-creating investments. Afghanistan’s domestic revenues paid for 40% of budget expenditures through the first 11 months of fiscal year 1394. The country’s large budget deficits and trade imbalances will require substantial donor aid for the foreseeable future. The International Monetary Fund (IMF), which is working with the Afghan government on its macroeconomic policies and structural reform agenda through a Staff-Monitored Program, said Afghan authorities are aware of the challenges. This quarter, the IMF reported Afghanistan’s performance as satisfactory, but the deteriorating security environment 46 Special inspector general I Afghanistan reconstruction Reconstruction Update and delays in forming a government complicated implementation efforts. Afghanistan also made progress on structural benchmarks, albeit slower than planned. The IMF said Afghanistan’s economy is dependent on the government’s commitment to reforms, improved security conditions, and donor support. In December, the United Nations Office on Drugs and Crime (UNODC) published the Afghanistan Opium Survey noting that opium cultivation levels had decreased for the first time since 2009: the area under cultivation decreased 19% to 183,000 hectares from 2014’s estimate. However, the UNODC calls for caution when interpreting the results. A change in methodology used to measure cultivation levels may have the effect of making changes more significant. The survey also reported that eradication levels increased 40% to 3,760 hectares over the prior year’s results and opium production decreased 40% from the 2014 level to 3,300 tons. The Afghan government’s new counternarcotics strategy, the National Drug Action Plan (NDAP), was presented this quarter at meetings for the UN Partners for Afghanistan and Neighboring Countries as well as the Paris Pact Consultative Group. The United States is updating and revising its counternarcotics strategy for Afghanistan to support the goals and objectives outlined in the NDAP. Domestic drug dependency remains a large and growing problem. Addiction to opiates and heroin remain high and the population dependent on crystal meth has risen significantly in recent years. If not addressed, Afghanistan’s rising addiction rates may overwhelm efforts to combat the illicit drug economy. Interdiction results declined again this quarter, a likely outcome of the reduced military coalition presence. Nevertheless, the United States is reducing its support to all drug-treatment centers. On December 18, 2015, President Obama signed the Consolidated Appropriations Act, 2016, funding the U.S. government for the rest of the fiscal year and increasing cumulative funding for Afghanistan reconstruction to approximately $113.1 billion. When this report went to press, final FY 2016 allocations for Afghanistan from State and USAID accounts were still being determined. Total FY 2016 funding levels will increase when these amounts are finalized. Of the total cumulative amount appropriated for Afghanistan reconstruction, $95.7 billion went to the seven major reconstruction funds featured in the Status of Funds subsection of this report. As of December 31, 2015, approximately $11.5 billion of this amount remained in the pipeline for potential disbursement. Report to the united states congress I January 30, 2016 47 Status of Funds Status of Funds Contents U.S. Reconstruction Funding for Afghanistan 50 Afghanistan Reconstruction Funding Pipeline 52 Afghanistan Security Forces Fund 54 Commander’s Emergency Response Program 56 Afghanistan Infrastructure Fund 57 Task Force for Business and Stability Operations 58 DOD Drug Interdiction and Counter-Drug Activities 59 Economic Support Fund 60 International Narcotics Control and Law Enforcement 61 International Reconstruction Funding for Afghanistan 62 48 Special inspector general I Afghanistan reconstruction Status of Funds Status of Funds To fulfill SIGAR’s legislative mandate, this section details the status of U.S. funds appropriated, obligated, and disbursed for reconstruction activities in Afghanistan. As of December 31, 2015, the United States had appropriated approximately $113.09 billion for relief and reconstruction in Afghanistan since FY 2002. This total has been allocated as follows: • $68.44 billion for security ($4.40 billion for counternarcotics initiatives) • $31.79 billion for governance and development ($3.96 billion for counternarcotics initiatives) • $2.93 billion for humanitarian aid • $9.94 billion for civilian operations Figure 3.1 shows the major U.S. funds that contribute to these efforts. Figure 3.1 U.S. FUNDS SUPPORTING AFGHANISTAN RECONSTRUCTION EFFORTS ($ BILLIONS) FUNDING SOURCES (TOTAL: $113.09) ASFF CERP AIF TFBSO DOD CN ESF INCLE Other $63.92 $3.68 $0.99 $0.82 $3.00 $18.60 $4.69 $17.39 USAID $18.60 Department of State (State) $4.69 Distributed to Multiple Agenciesa $17.39 AGENCIES Department of Defense (DOD) $72.42 Note: Numbers have been rounded. Final FY 2016 appropriation amounts for State and USAID were still being determined when this report went to press. Multiple agencies include DOJ, State, DOD, USAID, Treasury, USDA, DEA, Broadcasting Board of Governors (BBG), and SIGAR. a Source: DOD, response to SIGAR data calls, 1/13/2016, 12/29/2015, 10/22/2012, 10/14/2009, and 10/1/2009; State, response to SIGAR data calls, 1/13/2016, 1/11/2016, 10/20/2015, 4/15/2015, 4/15/2014, 6/27/2013, 10/5/2012 and 6/27/2012; Treasury, response to SIGAR data call, 7/9/2015; OMB, response to SIGAR data calls, 4/16/2015, 7/14/2014, 7/19/2013 and 1/4/2013; USAID, response to SIGAR data calls, 1/11/2016, 10/15/2010, 1/15/2010, and 10/9/2009; DOJ, response to SIGAR data calls, 12/30/2015 and 7/7/2009; USDA, response to SIGAR data call, 4/2009; DFAS, "AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015," 1/16/2016; Pub. L. Nos. 114-113, 113-235, 113-76, 113-6, 112-74, 112-10, 111-212, 111-118. Report to the united states congress I January 30, 2016 49 ASFF: Afghanistan Security Forces Fund CERP: Commander’s Emergency Response Program AIF: Afghanistan Infrastructure Fund TFBSO: Task Force for Business and Stability Operations DOD CN: DOD Drug Interdiction and Counter-Drug Activities ESF: Economic Support Fund INCLE: International Narcotics Control and Law Enforcement Other: Other Funding Status of Funds U.S. Reconstruction Funding for Afghanistan ASFF CERP AIF TFBSO DODCN DOD ESF INCLE Other USAID State The amount provided to the seven major U.S. funds represents more than 84.6% (nearly $95.71 billion) of total reconstruction assistance in Afghanistan since ASFFFY 2002. Of this amount, over 89.5% (more than $85.66 billion) has been obligated, and nearly 83.4% (over DOD has been disbursed. An $79.79 billion) estimated $4.47 billion of the amount appropriated for these funds has expired. As of December 31, 2015, cumulative appropriations for relief and reconstruction in Afghanistan totaled approximately $113.09 billion, as shown in Figure 3.2. This total can be divided into four major categories of reconstruction funding: security, governance and development, humanitarian, and oversight and operations. Approximately $8.36 billion of these funds support counternarcotics initiatives which crosscut both the security ($4.40 billion) and governance and development ($3.96 billion) categories. For complete information regarding U.S. appropriations, see Appendix B. On December 18, 2015, President Obama signed the Consolidated Appropriations Act, 2016, funding the U.S. government for the rest of the fiscal year. When this report went to press, final FY 2016 appropriation amounts for State and USAID accounts were still being determined. The amount reported as appropriated for FY 2016 will increase from the Figure 3.2 CUMULATIVE CERP APPROPRIATIONS BY FUNDING CATEGORY, AS OF DECEMBER 31, 2015 ($ BILLIONS) $120 DOD $109.22 $110 $103.27 $100 $96.46 $90 $86.83 DOD CN $80 $72.18 $70 $60 $113.09 DOD $56.32 $50 $40 $39.61 ESF $30 $20 USAID $10 $0 2002–2009 2010 2011 Security 2012 Governance/Development 2013 Humanitarian 2014 2015 Civilian Operations 2016a Total INCLE Note: Numbers have been rounded. DOD reprogrammed $1 billion from FY 2011 ASFF, $1 billion from FY 2012 ASFF, and $178 million from FY 2013 ASFF to fund other DOD OCO requirements. ASFF data reflects the following rescissions: $1 billion from FY 2012 in Pub. L. No. 113-6, $764.38 million from FY 2014 in Pub. L. No. 113-235, and $400 million from FY 2015 in Pub. L. No. 114-113. DOD transferred $101 million from FY 2011 AIF, $179.5 million from FY 2013 AIF, and $55 million from FY 2014 AIF to the ESF to fund infrastructure projects implemented by USAID. a Final FY 2016 appropriation amounts for State and USAID accounts were still being determined when this report went to press. State Source: DOD, response to SIGAR data calls, 1/13/2016, 12/29/2015, 10/22/2012, 10/14/2009, and 10/1/2009; State, response to SIGAR data calls, 1/13/2016, 1/11/2016, 10/20/2015, 4/15/2015, 4/15/2014, 6/27/2013, 10/5/2012 and 6/27/2012; Treasury, response to SIGAR data call, 7/9/2015; OMB, response to SIGAR data calls, 4/16/2015, 7/14/2014, 7/19/2013 and 1/4/2013; USAID, response to SIGAR data calls, 1/11/2016, 10/15/2010, 1/15/2010, and 10/9/2009; DOJ, response to SIGAR data calls, 12/30/2015 and 7/7/2009; USDA, response to SIGAR data call, 4/2009; DFAS, "AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015," 1/16/2016; Pub. L. Nos. 114-113, 113-235, 113-76, 113-6, 112-74, 112-10, 111-212, 111-118. AIF 50 DOD Special inspector general I Afghanistan reconstruction Status of Funds $3.87 billion shown in Figure 3.3 when funding levels for these accounts are known. The United States aims to channel at least 50% of its development assistance on-budget to the Government of Afghanistan.56 This assistance is provided either directly to Afghan government entities or via contributions to multilateral trust funds that also support the Afghan government’s budget.57 Since 2002, the United States has provided more than $9.88 billion in on-budget assistance. This includes about $5.57 billion to Afghan government ministries and institutions, and more than $4.31 billion to three multinational trust funds—the World Bank’s Afghanistan Reconstruction Trust Fund (ARTF), the United Nations Development Programme’s Law and Order Trust Fund (LOTFA), and the Asian Development Bank’s Afghanistan Infrastructure Trust Fund (AITF). Table 3.1 shows U.S. on-budget assistance disbursed to the Afghan government and multilateral trust funds. Table 3.1 U.S. On-Budget Assistance to Afghanistan, Since 2002 ($ millions) Government-to-Government DOD $4,946 State 92 USAID 530 Multilateral Trust Funds LOTFA $1,527 ARTF 2,681 AITF 105 Note: Numbers have been rounded. Figures reflect amounts the United States has disbursed in on-budget assistance to Afghan government entities and multilateral trust funds. As of December 31, 2015, USAID has obligated approximately $1.3 billion for government-to-government assistance. Source: DOD, response to SIGAR data call, 6/25/2015; USAID, response to SIGAR data call, 1/11/2016; World Bank, “ARTF: Administrator’s Report on Financial Status as of December 21, 2015 (end of 12th month of FY 1394),” p. 5; UNDP, response to SIGAR data call, 1/19/2016. Figure 3.3 APPROPRIATIONS BY FISCAL YEAR, AMOUNT, AND CATEGORY ($ BILLIONS) $20 $18 $16.71 $15.86 $16 $14.65 $14 $12 $10.51 $9.63 $10 $8 $6.81 $5.95 $6 $3.87 $4 $2 $0 2009 2010 Security 2011 2012 Governance/Development 2013 2014 Humanitarian Civilian Operations 2015 2016a Total Note: Numbers have been rounded. DOD reprogrammed $1 billion from FY 2011 ASFF, $1 billion from FY 2012 ASFF, and $178 million from FY 2013 ASFF to fund other DOD OCO requirements. ASFF data reflects the following rescissions: $1 billion from FY 2012 in Pub. L. No. 113-6, $764.38 million from FY 2014 in Pub. L. No. 113-235, and $400 million from FY 2015 in Pub. L. No. 114-113. DOD transferred $101 million from FY 2011 AIF, $179.5 million from FY 2013 AIF, and $55 million from FY 2014 AIF to the ESF to fund infrastructure projects implemented by USAID. a Final FY 2016 appropriation amounts for State and USAID accounts were still being determined when this report went to press. Source: DOD, response to SIGAR data calls, 1/13/2016, 12/29/2015, 10/22/2012, 10/14/2009, and 10/1/2009; State, response to SIGAR data calls, 1/13/2016, 1/11/2016, 10/20/2015, 4/15/2015, 4/15/2014, 6/27/2013, 10/5/2012 and 6/27/2012; Treasury, response to SIGAR data call, 7/9/2015; OMB, response to SIGAR data calls, 4/16/2015, 7/14/2014, 7/19/2013 and 1/4/2013; USAID, response to SIGAR data calls, 1/11/2016, 10/15/2010, 1/15/2010, and 10/9/2009; DOJ, response to SIGAR data calls, 12/30/2015 and 7/7/2009; USDA, response to SIGAR data call, 4/2009; DFAS, "AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015," 1/16/2016; Pub. L. Nos. 114-113, 113-235, 113-76, 113-6, 112-74, 112-10, 111-212, 111-118. Report to the united states congress I January 30, 2016 51 Status of Funds Afghanistan Reconstruction Funding Pipeline Since 2002, Congress has appropriated more than $113.09 billion for Afghanistan relief and reconstruction. Of this amount, $95.71 billion (84.6%) was appropriated to the seven major reconstruction funds, as shown in Table 3.2. Figure 3.4 Table 3.2 CUMULATIVE AMOUNT REMAINING TO BE DISBURSED ($ BILLIONS) Total Appropriated: $95.71 Expired $4.47 Remaining $11.45 Disbursed $79.79 Cumulative Amounts Appropriated, Obligated, and Disbursed FY 2002–2016 ($ billions)   Appropriated Obligated Disbursed $63.92 $57.71 $56.20 $5.90 Commander’s Emergency Response Program (CERP) 3.68 2.28 2.27 0.02 Afghanistan Security Forces Fund (ASFF) Remaining Afghanistan Infrastructure Fund (AIF) 0.99 0.65 0.48 0.17 Task Force for Business & Stability Operations (TFBSO) 0.82 0.75 0.64 0.12 DOD Drug Interdiction and CounterDrug Activities (DOD CN) 3.00 2.88 2.88 0.11 18.60 17.06 13.72 4.17 4.69 4.31 3.60 0.95 $95.71 $85.66 $79.79 $11.45 Economic Support Fund (ESF) International Narcotics Control & Law Enforcement (INCLE) Total 7 Major Funds Other Reconstruction Funds Civilian Operations Total 7.45 9.94 $113.09 Note: Numbers have been rounded. Amount remaining reflects the total disbursement potential of the seven major reconstruction funds after deducting approximately $4.5 billion that expired before being obligated. Obligated and disbursed DOD CN funds reflect amounts transferred to the military services and defense agencies to be spent for Afghanistan. Figures reflect transfers, rescissions, and reprogramming activity to date. Source: SIGAR, analysis of appropriating legislation and quarterly obligation and disbursement data provided by DOD, State, and USAID, 1/19/2016. As of December 31, 2015, approximately $11.45 billion of the amount appropriated to the seven major reconstruction funds remained for possible disbursement, as shown in Figure 3.4. These funds will be used to train, equip, and sustain the ANDSF; complete on-going, large-scale infrastructure projects, such as those funded by the AIF and ESF; combat narcotics production and trafficking; and advance the rule of law, strengthen the justice sector, and promote human rights. On December 18, 2015, President Obama signed the Consolidated Appropriations Act, 2016, funding the U.S. government for the rest of the fiscal year. The bill provided an additional $3.65 billion for ASFF, $141.26 million for DOD CN, and $5 million for CERP. The amounts allocated to Afghanistan from ESF and INCLE will not be finalized until State completes the 653(a) congressional consultation process. While the AIF 52 Special inspector general I Afghanistan reconstruction Status of Funds hasn’t received additional funding since FY 2014, the bill allows DOD to obligate up to $50 million of ASFF funds to complete existing AIF projects. Congress appropriated nearly $5.63 billion to the seven major reconstruction funds for FY 2014. Of that amount, more than $1.29 billion remained for possible disbursement, as of December 31, 2015, as shown in Table 3.3 and Figure 3.5. Table 3.3 Figure 3.5 FY 2014 AMOUNT REMAINING TO BE DISBURSED ($ BILLIONS) FY 2014 Amounts Appropriated, Obligated, and Disbursed ($ millions)   Appropriated Obligated Disbursed Remaining ASFF $3,962.34 $3,959.86 $3,702.31 $257.55 CERP 30.00 6.62 6.44 0.19 144.00 0.00 0.00 0.00 21.88 AIF TFBSO 122.24 106.82 84.94 DOD CN 238.96 238.96 238.96 0.00 ESF 907.00 836.13 11.68 824.45 INCLE 225.00 224.74 33.81 190.93 $5,629.54 $5,373.12 $4,078.13 $1,294.99 Total Major Funds Note: Numbers have been rounded. Amount remaining reflects the total disbursement potential of the seven major reconstruction funds after deducting approximately $256 million that expired before being obligated. Obligated and disbursed DOD CN funds reflect amounts transferred to the military services and defense agencies to be spent for Afghanistan. Figures reflect transfers, rescissions, and reprogramming activity to date. Source: SIGAR, analysis of appropriating legislation and quarterly obligation and disbursement data provided by DOD, State, and USAID, 1/19/2016. Congress appropriated more than $4.80 billion to four of the seven major reconstruction funds for FY 2015. Of that amount, almost $2.51 billion remained for possible disbursement, as of December 31, 2015, as shown in Table 3.4 and Figure 3.6. Table 3.4 $1.29 Disbursed $4.08 Total Appropriated: $5.63 Expired $0.26 FY 2015 Remaining AMOUNT REMAINING $1.29 Disbursed TO BE DISBURSED ($ BILLIONS) $4.08 Expired $0.26 Total Appropriated: $4.80 Remaining FY 2015 AMOUNT REMAINING $2.51 TO BE DISBURSED ($ BILLIONS) ($ millions) Appropriated Obligated Disbursed Remaining ASFF $3,709.33 $2,840.26 $2,280.14 $1,429.20 CERP 10.00 3.36 1.18 2.18 ESF 831.90 0.00 0.00 831.90 INCLE 250.00 8.06 6.03 243.97 $4,801.23 $2,851.69 $2,287.34 $2,507.25 Total Major Funds FY 2014 AMOUNT REMAINING Remaining ($ BILLIONS) TO BE DISBURSED Figure 3.6 FY 2015 Amounts Appropriated, Obligated, and Disbursed   Total Appropriated: $5.63 Expired $0.01 Remaining $2.51 Note: Numbers have been rounded. Amount remaining reflects the total disbursement potential of the seven major reconstruction funds after deducting approximately $7 million that expired before being obligated. Obligated and disbursed DOD CN funds reflect amounts transferred to the military services and defense agencies to be spent for Afghanistan. Figures reflect transfers, rescissions, and reprogramming activity to date. Source: SIGAR, analysis of appropriating legislation and quarterly obligation and disbursement data provided by DOD, State, and USAID, 1/19/2016. Report to the united states congress I January 30, 2016 53 Disbursed $2.29$4.80 Total Appropriated: Disbursed $2.29 Expired $0.01 Status of Funds ASFF CERP AIF TFBSO DODCN DOD ESF INCLE Other USAID State Afghanistan Security Forces Fund ASFF DOD ASFF funds terminology DOD reported ASFF funds as appropriated, obligated, or disbursed CERP Appropriations: Total monies available for commitments Obligations: Commitments to pay monies DOD Disbursements: Monies that have been expended Source: DOD, response to SIGAR data call, 4/13/2010. DOD CN The Congress created the Afghanistan Security Forces Fund (ASFF) to provide the ANDSF with equipment, supplies, services, training, and funding, as well as facility and infrastructure repair, renovation, and construction.58 The primary organization responsible for building the ANDSF is the Combined Security Transition Command-Afghanistan.59 A financial and activity plan must be approved by the Afghanistan Resources Oversight Council (AROC) before ASFF funds may be obligated.60 The Consolidated Appropriations Act, 2016, appropriated more than $3.65 billion for the ASFF for FY 2016, increasing total cumulative funding to more than $63.92 billion.61 As of December 31, 2015, more than $57.71 billion of total ASFF funding had been obligated, of which nearly $56.20 billion had been disbursed.62 Figure 3.7 displays the amounts made available for the ASFF by fiscal year. DOD reported that cumulative obligations increased by nearly $795.71 million over the quarter, and cumulative disbursements increased by more than $410.31 million.63 Figure 3.8 provides a cumulative comparison of amounts made available, obligated, and disbursed for the ASFF. Figure 3.7 DOD Figure 3.8 ASFF APPROPRIATED FUNDS BY FISCAL YEAR ASFF FUNDS, CUMULATIVE COMPARISON ($ BILLIONS) ($ BILLIONS) $80 $12.0 ESF USAID Appropriated $63.92 Obligated $56.92 Obligated $57.71 Disbursed $55.79 Disbursed $56.20 As of Sep 30, 2015 As of Dec 31, 2015 $60 $9.0 INCLE Appropriated $60.67 $6.0 $40 $3.0 $20 State AIF $0.0 05 06 07 08 09 10 11 12 13 14 15 16 $0 DOD Note: Numbers have been rounded. Data reflects reprogramming actions and rescissions. DOD reprogrammed $1 billion of FY 2011, $1 billion of FY 2012, and $178 million of FY 2013 out of the ASFF to fund other DOD requirements. Pub. L. No. 113-6 rescinded $1 billion from FY 2012. Pub. L. No. 113-235 rescinded $764.38 million from FY 2014. Pub. L. No. 114-113 rescinded $400 million from FY 2015. TFBSO DOD Source: DFAS, "AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015," 1/16/2016; DFAS, "AR(M) 1002 Appropriation Status by FY Program and Subaccounts September 2015," 10/13/2015; Pub. L. Nos. 114-113, 113-235, 113-76, and 113-6. 54 Special inspector general I Afghanistan reconstruction Status of Funds ASFF Budget Activities DOD allocates funds to three budget activity groups within the ASFF: • Defense Forces (Afghan National Army, ANA) • Interior Forces (Afghan National Police, ANP) • Related Activities (primarily Detainee Operations) Budget Activity Groups: categories within each appropriation or fund account that identify the purposes, projects, or types of activities financed by the appropriation or fund Funds for each budget activity group are further allocated to four subactivity groups: Infrastructure, Equipment and Transportation, Training and Operations, and Sustainment.64 The AROC must approve the requirement and acquisition plan for any service requirements in excess of $50 million annually and any non-standard equipment requirement in excess of $100 million.65 As of December 31, 2015, DOD had disbursed nearly $56.20 billion for ANDSF initiatives. Of this amount, more than $37.59 billion was disbursed for the ANA, and nearly $18.22 billion was disbursed for the ANP; the remaining $387.44 million was directed to related activities.66 As shown in Figure 3.9, the largest portion of the funds disbursed for the ANA—nearly $15.51 billion—supported ANA troop sustainment. Of the funds disbursed for the ANP, the largest portion—nearly $7.48 billion—also supported sustainment of ANP forces, as shown in Figure 3.10.67  Figure 3.9 Figure 3.10 ASFF DISBURSEMENTS FOR THE ANA BY SUBACTIVITY GROUP, FY 2005–DEC 31, 2015 ($ BILLIONS) ASFF DISBURSEMENTS FOR THE ANP BY SUBACTIVITY GROUP, FY 2005–DEC 31, 2015 ($ BILLIONS) Total: $18.22 Total: $37.59 Infrastructure $5.66 Equipment and Transportation $12.81 Training and Operations $3.62 Sustainment $15.51 Infrastructure $2.99 Equipment and Transportation $4.12 Training and Operations $3.64 Sustainment $7.48 Note: Numbers have been rounded. Source: DFAS, "AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015," 1/16/2016. Report to the united states congress I January 30, 2016 55 Subactivity Groups: accounting groups that break down the command’s disbursements into functional areas Source: DOD, Manual 7110.1-M Department of Defense Budget Guidance Manual, accessed 9/28/2009; Department of the Navy, Medical Facility Manager Handbook, p. 5, accessed 10/2/2009. Status of Funds ASFF DOD Commander’s Emergency Response Program CERP DOD CERP funds terminology DOD reported CERP funds as appropriated, obligated, or disbursed DOD CN Appropriations: Total monies available for commitments Obligations:DOD Commitments to pay monies Disbursements: Monies that have been expended The Commander’s Emergency Response Program (CERP) enables U.S. commanders in Afghanistan to respond to urgent humanitarian relief and reconstruction requirements in their areas of responsibility by supporting programs that will immediately assist the local population. Funding under this program is intended for small projects that are estimated to cost less than $500,000 each.68 CERP-funded projects may not exceed $2 million each.69 The Consolidated Appropriations Act, 2016, appropriated $5 million for CERP, increasing total cumulative funding to more than $3.68 billion.70 Of this amount, DOD reported that more than $2.28 billion had been obligated, of which nearly $2.27 billion had been disbursed as of December 31, 2015.71 Figure 3.11 shows CERP appropriations by fiscal year, and Figure 3.12 provides a cumulative comparison of amounts appropriated, obligated, and disbursed for CERP projects. Source: DOD, response to SIGAR data call, 4/14/2010. ESF Figure 3.11 Figure 3.12 CERP APPROPRIATIONS BY FISCAL YEAR CERP FUNDS, CUMULATIVE COMPARISON $1,000 $4.0 ($ MILLIONS) USAID ($ BILLIONS) $3.6 INCLE Appropriated $3.68 Obligated $2.28 Disbursed $2.27 Obligated $2.28 Disbursed $2.27 $3.2 $800 $2.8 State $2.4 $600 $2.0 AIF Appropriated $3.68 $1.6 $400 $1.2 DOD $0.8 $200 $0.4 TFBSO $0 04 06 08 10 12 14 16 $0.0 As of Sep 30, 2015 As of Dec 31, 2015 Note: Numbers have been rounded. Data may include interagency transfers. DOD Source: DOD, response to SIGAR data calls, 1/19/2016 and 10/15/2015; OMB, response to SIGAR data call, 1/4/2013; Pub. L. Nos. 114-113, 113-235, 113-76, 113-6, 112-74, 112-10. 56 Special inspector general I Afghanistan reconstruction USAID Status of Funds INCLE State Afghanistan Infrastructure Fund The Afghanistan Infrastructure Fund (AIF) was established in FY 2011 to pay for high-priority, large-scale infrastructure projects that support the U.S. civilian-military effort. Congress intended for projects funded by the AIF to be jointly selected and managed by DOD and State. Each AIF-funded project is required to have a plan for its sustainment and a description of how it supports the counter-insurgency strategy in Afghanistan.72 The AIF received appropriations from FY 2011 through FY 2014. Although the AIF no longer receives appropriations, many projects remain in progress. DOD may obligate up to $50 million from FY 2016 ASFF to complete existing AIF projects.73 The AIF received cumulative appropriations of over $1.32 billion; however, $335.50 million of these funds were transferred to the Economic Support Fund (ESF) for USAID’s power transmission lines projects, bringing the cumulative amount remaining in the AIF to $988.50 million.74 Figure 3.13 shows AIF appropriations by fiscal year. As of December 31, 2015, nearly $779.75 million of total AIF funding had been obligated, and nearly $484.51 million had been disbursed, as shown in Figure 3.14.75 Figure 3.13 Figure 3.14 AIF APPROPRIATIONS BY FISCAL YEAR AIF FUNDS, CUMULATIVE COMPARISON $800 $1,200 ($ MILLIONS) ($ MILLIONS) $900 $600 Appropriated $988.50 Obligated $793.18 Obligated $779.75 Disbursed $475.87 Disbursed $484.51 $600 $400 $300 $200 $0 Appropriated $988.50 2011 2012 2013 $0 2014 As of Sep 30, 2015 As of Dec 31, 2015 Note: Numbers have been rounded. Updated data resulted in a lower obligated figure than reported last quarter. Data reflects the following transfers from AIF to USAID's Economic Support Fund: $101 million for FY 2011, $179.5 million for FY 2013, and $55 million for FY 2014. Source: DFAS, "AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015," 1/16/2016; DFAS, "AR(M) 1002 Appropriation Status by FY Program and Subaccounts September 2015," 10/13/2015; Pub. L. Nos. 113-76, 113-6, 112-74, and 112-10. Report to the united states congress I January 30, 2016 57 AIF DOD AIF funds terminology DOD reported AIF funds as appropriated, TFBSO obligated, or disbursed Appropriations: Total monies available for commitments DOD Obligations: Commitments to pay monies Disbursements: Monies that have been expended Source: DOD, response to SIGAR data call, 4/13/2012. State Status of Funds AIF DOD Task Force for Business and Stability Operations TFBSO DOD TFBSO funds terminology DOD reported TFBSO funds as appropriated, obligated, or disbursed Appropriations: Total monies available for commitments Obligations: Commitments to pay monies Disbursements: Monies that have been expended Source: DOD, response to SIGAR data call, 4/13/2010. In 2010, the Task Force for Business and Stability Operations (TFBSO) began operations in Afghanistan aimed at stabilizing the country and countering economically motivated violence by decreasing unemployment and creating economic opportunities for Afghans. TFBSO authorities expired on December 31, 2014, and the TFBSO concluded its operations on March 31, 2015. TFBSO projects included activities intended to facilitate private investment, industrial development, banking and financial system development, agricultural diversification and revitalization, and energy development.76 Through December 31, 2015, the TFBSO had been appropriated more than $822.85 million since FY 2009. Of this amount, nearly $754.50 million had been obligated and more than $638.50 million had been disbursed.77 Figure 3.15 displays the amounts appropriated for TFBSO by fiscal year, and Figure 3.16 provides a cumulative comparison of amounts appropriated, obligated, and disbursed for the TFBSO and its projects. Figure 3.15 Figure 3.16 TFBSO APPROPRIATIONS BY FISCAL YEAR TFBSO FUNDS, CUMULATIVE COMPARISON ($ MILLIONS) ($ MILLIONS) $250 $1,000 $200 $800 $150 $600 $100 $400 $50 $200 $0 09 10 11 12 13 14 15 16 $0 Appropriated $822.85 Obligated $758.79 Disbursed $638.54 As of Sep 30, 2015 Appropriated $822.85 Obligated $754.50 Disbursed $638.50 As of Dec 31, 2015 Note: Numbers have been rounded. Updated data resulted in lower obligated and disbursed figures than reported last quarter. Of the $822.85 million appropriated for the TFBSO, $366.05 million was from the Operations and Maintenance, Army, account to pay for the sustainment of U.S. assets, civilian employees, travel, security, and other operational costs; all FY 2015 funding was from this account. Source: DOD, response to SIGAR data calls, 1/13/2016, 10/16/2015, and 10/4/2011; Pub. L. Nos. 113-76, 113-6, 112-74, 112-10. 58 Special inspector general I Afghanistan reconstruction DOD Status of Funds CERP DOD DOD Drug Interdiction and Counter-Drug Activities DOD Drug Interdiction and Counter-Drug Activities fund (DOD CN) support efforts to stabilize Afghanistan by combating the drug trade and related activities. DOD uses the DOD CN to provide assistance to the counternarcotics effort by supporting military operations against drug traffickers; expanding Afghan interdiction operations; and building the capacity of Afghan law enforcement bodies—including the Afghan Border Police—with specialized training, equipment, and facilities.78 DOD CN funds are appropriated by Congress to a single budget line for all military services. DOD reprograms the funds from the Counter-narcotics Central Transfer Account (CTA) to the military services and defense agencies, which track obligations of the transferred funds. DOD reported DOD CN accounts for Afghanistan as a single figure for each fiscal year.79 DOD reported that DOD CN received nearly $141.26 million for Afghanistan for FY 2016, bringing cumulative funding for DOD CN to nearly $3 billion since FY 2004. Of this amount, more than $2.88 billion had been transferred to the military services and defense agencies for DOD CN projects, as of December 31, 2015.80 Figure 3.17 shows DOD CN appropriations by fiscal year, and Figure 3.18 provides a cumulative comparison of amounts appropriated and transferred from the DOD CN CTA. Figure 3.17 Figure 3.18 DOD CN APPROPRIATIONS BY FISCAL YEAR DOD CN FUNDS, CUMULATIVE COMPARISON $500 $3.0 DOD CN DOD DOD CN funds terminology DOD reported DOD CN funds as appropriated, obligated, or disbursed ESF Appropriations: Total monies available for commitments Obligations: Commitments toUSAID pay monies Disbursements: Monies that have been expended Source: DOD, response to SIGAR data call, 4/13/2010. INCLE State AIF ($ MILLIONS) ($ BILLIONS) $2.8 $400 Appropriated $3.00 Appropriated and Transferreda $2.86 DOD Transferreda $2.88 TFBSO $2.6 $300 DOD $2.4 $200 $2.2 $100 $2.0 $0 $0 05 06 07 08 09 10 11 12 13 14 15 16 As of Sep 30, 2015 As of Dec 31, 2015 Note: Numbers have been rounded. Prior-year adjustments are done periodically to reflect deobligation and/or realignment of multi-year procurement funding. DOD reprogrammed $125.13 million out of FY 2015 DOD CN due to several requirements for the Afghanistan Special Mission Wing being funded from the ASFF instead of DOD CN. a DOD reprograms all funds to the military services and defense agencies for obligation and disbursement. Source: DOD, response to SIGAR data calls, 12/29/2015 and 10/8/2015. OSD Comptroller, 15-23 PA: Omnibus 2015 Prior Approval Request, 6/30/2015, p. 42. Report to the united states congress I January 30, 2016 59 DOD Status of Funds DOD CN DOD Economic Support Fund USAID ESF funds terminology USAID reported ESF funds as appropriated, obligated, or disbursed INCLE Appropriations: Total monies available for commitments State Obligations: Commitments to pay monies Disbursements: Monies that have been expended AIF Source: USAID, response to SIGAR data call, 4/15/2010. DOD TFBSO DOD Economic Support Fund (ESF) programs advance U.S. interests by helping countries meet short- and long-term political, economic, and security needs. ESF programs support counterterrorism; bolster national economies; and assist in the development of effective, accessible, independent legal systems for a more transparent and accountable government.81 When this report went to press, final FY 2016 funding levels for the ESF had not been determined. USAID reported that cumulative funding for the ESF amounted to nearly $18.60 billion, including amounts transferred from AIF to the ESF for USAID’s power transmission lines projects. Of this amount, more than $17.06 billion had been obligated, of which more than $13.72 billion had been disbursed.82 Figure 3.19 shows ESF appropriations by fiscal year. USAID reported that cumulative obligations as of December 31, 2015, decreased by $639,026 and cumulative disbursements increased by nearly $184.85 million from the amounts reported last quarter.83 Figure 3.20 provides a cumulative comparison of the amounts appropriated, obligated, and disbursed for ESF programs. Figure 3.19 Figure 3.20 ESF APPROPRIATIONS BY FISCAL YEAR ESF FUNDS, CUMULATIVE COMPARISON $3.5 $20 ($ BILLIONS) $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 ($ BILLIONS) FY 16 APPROPRIATION AMOUNT HAS NOT BEEN DETERMINED ESF 02 04 06 08 10 12 14 16 $18 Appropriated $18.60 Appropriated $18.60 Obligated $17.06 Obligated $17.06 Disbursed $13.54 Disbursed $13.72 $16 $14 $12 $10 $0 As of Sep 30, 2015 As of Dec 31, 2015 Note: Numbers have been rounded. Data reflect the following transfers from AIF to the ESF: $101 million for FY 2011, $179.5 million for FY 2013, and $55 million for FY 2014. FY 2016 ESF appropriation amount will be determined after State completes the 653(a) congressional consultation process. Source: USAID, response to SIGAR data calls, 1/11/2016 and 10/13/2015; State, response to SIGAR data calls, 1/13/2016, 10/20/2015, 4/15/2015, and 4/15/2014. 60 Special inspector general I Afghanistan reconstruction DOD Status of Funds ESF USAID International Narcotics Control and Law Enforcement INCLE The U.S. Bureau of International Narcotics and Law Enforcement Affairs (INL) manages the International Narcotics Control and Law Enforcement (INCLE) account which funds projects and programs for advancing rule of law and combating narcotics production and trafficking. INCLE supports several INL program groups, including police, counter-narcotics, and rule of law and justice.84 When this report went to press, final FY 2016 funding levels for INCLE had not been determined. State reported that cumulative funding for INCLE amounted to more than $4.69 billion. Of this amount, more than $4.31 billion had been obligated, of which, nearly $3.60 billion had been disbursed.85 Figure 3.21 shows INCLE appropriations by fiscal year. State reported that cumulative obligations as of December 31, 2015, decreased by nearly $21.54 million compared to cumulative obligations as of September 30, 2015. Cumulative disbursements as of December 31, 2015, increased by nearly $63.91 million over cumulative disbursements as of September 30, 2015.86 Figure 3.22 provides a cumulative comparison of amounts appropriated, obligated, and disbursed for INCLE. Figure 3.21 Figure 3.22 INCLE APPROPRIATIONS BY FISCAL YEAR INCLE FUNDS, CUMULATIVE COMPARISON ($ MILLIONS) ($ BILLIONS) $5 FY 16 APPROPRIATION AMOUNT HAS NOT BEEN DETERMINED $800 $600 $400 $200 $4 Appropriated $4.69 Appropriated $4.69 Obligated $4.33 Obligated $4.31 Disbursed $3.54 Disbursed $3.60 $3 $2 $1 $0 $0 02 04 06 08 10 12 14 16 As of Sep 30, 2015 As of Dec 31, 2015 Note: Numbers have been rounded. Data may include interagency transfers. Updated data resulted in a lower obligated figure than reported last quarter. FY 2016 INCLE appropriation amount will be determined after State completes the 653(a) congressional consultation process. Source: State, response to SIGAR data calls, 1/13/2016 and 10/13/2015. Report to the united states congress I January 30, 2016 61 State INL funds terminology INL reported INCLE and other INL funds as AIF appropriated, obligated, or disbursed Appropriations: Total monies available DOD for commitments Obligations: Commitments to pay monies Disbursements: Monies that have been expended TFBSO Source: State, response to SIGAR data call, 4/9/2010. DOD Status of Funds International Reconstruction Funding for Afghanistan In addition to assistance provided by the United States, the international community provides a significant amount of funding to support Afghanistan relief and reconstruction efforts. Most of the international funding provided is administered through trust funds. Contributions provided through trust funds are pooled and then distributed for reconstruction activities. The two main trust funds are the Afghanistan Reconstruction Trust Fund (ARTF) and the Law and Order Trust Fund for Afghanistan (LOTFA).87 Contributions to the Afghanistan Reconstruction Trust Fund The largest share of international contributions to the Afghan operational and development budgets comes through the ARTF. From 2002 to December 21, 2015, the World Bank reported that 34 donors had pledged nearly $8.94 billion, of which more than $8.58 billion had been paid in.88 According to the World Bank, donors had pledged nearly $1.01 billion to the ARTF for Afghan fiscal year 1394, which ran from December 22, 2014 to December 21, 2015.89 Figure 3.23 shows the 11 largest donors to the ARTF for FY 1394. As of December 21, 2015, the United States had pledged more than $2.78 billion and paid in more than $2.68 billion since 2002.90 The United Figure 3.23 ARTF CONTRIBUTIONS FOR FY 1394 BY DONOR, AS OF DECEMBER 21, 2015 ($ MILLIONS) Total Commitments: $1,007 Total Paid In: $651 United States 378 276 132 128 118 United Kingdom EC/EU 12 Canada Germany 74 76 0 87 60 60 Japan Sweden 35 0 30 28 22 22 22 Norway Netherlands Denmark 13 17 13 Australia 29 25 Others 0 50 100 150 200 250 Commitments 300 350 400 Paid In Note: Numbers have been rounded. FY 1394 = 12/22/2014–12/21/2015. Source: World Bank, ARTF: Administrator's Report on Financial Status as of December 21, 2015 (end of 12th month of FY1394), p. 1. 62 Special inspector general I Afghanistan reconstruction Status of Funds States and the United Kingdom are the two biggest donors to the ARTF, together contributing nearly 49% of its total funding, as shown in Figure 3.24. Contributions to the ARTF are divided into two funding channels— the Recurrent Cost (RC) Window and the Investment Window.91 As of December 21, 2015, according to the World Bank, more than $3.73 billion of ARTF funds had been disbursed to the Afghan government through the RC Window to assist with recurrent costs such as salaries of civil servants.92 The RC Window supports the operating costs of the Afghan government because the government’s domestic revenues continue to be insufficient to support its recurring costs. To ensure that the RC Window receives adequate funding, donors to the ARTF may not “preference” (earmark) more than half of their annual contributions for desired projects.93 The Investment Window supports the costs of development programs. As of December 21, 2015, according to the World Bank, more than $4.15 billion had been committed for projects funded through the Investment Window, of which nearly $3.26 billion had been disbursed. The World Bank reported 21 active projects with a combined commitment value of nearly $2.82 billion, of which more than $1.92 billion had been disbursed.94 Contributions to the Law and Order Trust Fund for Afghanistan The United Nations Development Programme (UNDP) administers the LOTFA to pay ANP salaries and build the capacity of the Ministry of Interior Affairs (MOIA).95 Since 2002, donors have pledged nearly $4.53 billion to the LOTFA, of which nearly $4.17 billion had been paid in, as of December 31, 2015. UNDP reported that the United States had committed more than $1.64 billion since the fund’s inception and had paid in nearly $1.53 billion of the commitment.96 Figure 3.25 shows the four largest donors to the LOTFA since 2002. From January 1, 2015, through September 30, 2015, UNDP had transferred AFN 20.74 billion—approximately $348.45 million—to the Ministry of Finance (MOF) to pay for ANP and Central Prisons Directorate (CPD) staff.97 The LOTFA’s eighth phase began on July 1, 2015. The phase has an initial estimated budget of $883.56 million and is planned to run through December 31, 2016. The Phase VIII budget is divided between two individual projects. Over $850.56 million is for the Support to Payroll Management (SPM) project, which aims to develop the capacity of the Afghan government to independently manage all nonfiduciary aspects of its pay budget for the ANP and CPD staff by December 31, 2016. While capacity building is an important aspect of the project, most SPM project funding—nearly $842.44 million—will be transferred from the UNDP Country Office to the MOF for ANP and CPD staff remunerations.98 The MOIA and Police Development (MPD) project is budgeted the remaining $33 million. The MPD project focuses on institutional development of the MOIA and police professionalization of the ANP.99 Report to the united states congress I January 30, 2016 63 Figure 3.24 ARTF CONTRIBUTIONS PAID IN BY DONORS, 2002–DECEMBER 21, 2015 Total Paid In: $8.58 billion United States 31% Others 24% Netherlands 6% United Kingdom 18% Canada 8% EU 6% Germany 7% Note: Numbers have been rounded. EU = European Union. "Others" includes 28 donors. Source: World Bank, ARTF: Administrator's Report on Financial Status as of December 21, 2015 (end of 12th month of FY1394), p. 5. Figure 3.25 DONOR CONTRIBUTIONS TO THE LOTFA SINCE 2002, AS OF DECEMBER 31, 2015 Total Paid In: $4.2 billion United States 37% Others 16% Japan 29% EU 12% Germany 7% Note: Numbers have been rounded. EU = European Union. "Others" includes 24 donors. Source: UNDP, response to SIGAR data call, 1/19/2016. Security Security Contents Key Issues and Events This Quarter 65 U.S. Forces in Afghanistan 68 Quarterly Highlight: Insurgent Activity in Afghanistan 69 Essential Function Train, Advise, and Assist Highlights 70 ANDSF Strength Pulled Down by ANP Decreases 72 ANDSF Assessment 73 Ministries of Defense and Interior 76 Afghan National Army 80 Afghan National Police 87 Status of Women in the ANDSF 91 ANDSF Medical/Health Care 91 Removing Unexploded Ordnance 92 Counternarcotics 93 Alternative Development/ Alternative Livelihood 64 Special inspector general 98 I Afghanistan reconstruction Security Security As of December 31, 2015, the U.S. Congress had appropriated more than $68.4 billion to assist the Afghan National Defense and Security Forces (ANDSF). This accounts for 61% of all U.S. reconstruction funding in Afghanistan since FY 2002. Congress established the Afghanistan Security Forces Fund (ASFF) to build, equip, train, and sustain the ANDSF, which comprises all security forces under the Ministry of Defense (MOD) and the Ministry of Interior (MOI). Most U.S.-provided funds were channeled through the ASFF and obligated by either the Combined Security Transition Command-Afghanistan (CSTC-A) or the Defense Security Cooperation Agency. Of the $63.9 billion appropriated for the ASFF, $57.7 billion had been obligated and $56.2 billion disbursed.100 This section discusses assessments of the Afghan National Army (ANA), Afghan National Police (ANP), and the Ministries of Defense and Interior; gives an overview of how U.S. funds are used to build, equip, train, and sustain the Afghan security forces; and provides an update on efforts to combat the cultivation of and commerce in illicit narcotics in Afghanistan. Key Issues and Events This Quarter State Department Designates ISIL-Khorasan as a Foreign Terrorist Organization On January 14, 2016, the U.S. State Department (State) announced the designation of the Islamic State of Iraq and the Levant-Khorasan (ISIL-K) as a foreign terrorist organization under U.S. law. The designation includes a prohibition against knowingly providing, or attempting or conspiring to provide, material support or resources to this organization.101 Sanctions include denying the group access to U.S. financial systems.102 ISIL-K announced its formation on January 10, 2015. The group is based in the Afghanistan/Pakistan region and is composed primarily of former Tehrik-e Taliban Pakistan and Afghan Taliban members. The White House has granted the Pentagon legal authority to target the Islamic State of Iraq and the Levant in Afghanistan, according to a January 19, 2016, article in the Wall Street Journal. Under Operation Freedom’s Sentinel, military action by U.S. forces in Afghanistan was limited to targeting al-Qaeda. This is the first authorization given for military action against ISIL outside Iraq and Syria. Source: Wall Street Journal, “U.S. Clears Path to Target Islamic State in Afghanistan,” 1/19/2016. Report to the united states congress I January 30, 2016 65 Security UN Reports Afghanistan Continues to Face Formidable Security Challenges According to the latest report of the UN Secretary-General, security developments combined with slow economic growth, growing political pressures, and expressions of public discontent underlined the challenges faced by the Afghan government and security forces in maintaining stability.103 The UN reported the overall level of security incidents increased and intensified from August 2015 through the end of October, with 6,601 incidents as compared to 5,516 incidents (19% increase) during the same period in 2014.104 The 6,601 security incidents reported were the most since SIGAR began reporting in November 2012, and the average daily number of incidents that occurred equaled the number in the summer of 2014, as reflected in Figure 3.26. The Taliban temporarily seized Kunduz City, a provincial capital, as well as 16 district centers, primarily across the north during the period.105 While the ANDSF were able to regain control of Kunduz City and 13 of the district centers, the UN reports approximately 25% of districts remained contested throughout the country at the end of October.106 Figure 3.26 AVERAGE NUMBER OF REPORTED SECURITY INCIDENTS PER DAY 80 71.8 64.4 60 63.7 57.4 56.5 66.3 55.2 50.5 47.9 40 71.8 67.1 41.1 20 0 11/16/2012 2/16/2013 –2/15/2013 –5/15/2013 (92 days) (89 days) 6/1/2014 5/16/2013 8/16/2013 11/16/2013 3/1/2014 8/16/2014 11/16/2014 –8/15/2013 –11/15/2013 –2/15/2014 –5/31/2014 –8/15/2014 –11/15/2014 –2/15/2015 (76 days) (92 days) (92 days) (92 days) (92 days) (92 days) (92 days) 2/15/2015 –4/30/2015 (75 days) 5/1/2015 8/1/2015 –7/31/2015 –10/31/2015 (92 days) (92 days) Total Incidents During Period 3,783 4,267 5,922 5,284 4,649 5,864 5,456 5,199 5,075 5,033 6,096 6,601 Source: UN, reports of the Secretary-General, The situation in Afghanistan and its implications for International peace and security, 12/10/2015, p. 5; 9/1/2015, p. 4; 6/10/2015, p. 4; 2/27/2015, p. 4; 12/9/2014, p. 5; 9/9/2014, p. 6; 6/18/2014, p. 5; 3/7/2014, p. 5; 12/6/2013, p. 6; 9/6/2013, p.6; 6/13/2013, p. 5; and 3/5/2013, p. 5. 66 Special inspector general I Afghanistan reconstruction Security While the majority (62%) of security incidents were in the south, southeast, and east, the UN reported a notable intensification in the north and northeast with Sar-e Pul, Faryab, Jowzjan, Kunduz, and Takhar provinces being the most volatile.107 The UN reported the presence of the Islamic State of Iraq and the Levant (ISIL), particularly in Nangarhar Province, and of unconfirmed reports of clashes between ISIL affiliates and the Taliban.108 The UN reported armed clashes and incidents involving improvisedexplosive devices continued to account for the majority (68%) of the security incidents, a 20% increase over the same period in 2014.109 Among the incidents, 22 involved suicide attacks and 447 involved assassinations and abductions.110 Seventy-four incidents involving attacks against humanitarian personnel, assets, and facilities were registered with the UN and resulted in 21 humanitarian workers killed and 48 injured. The U.S. forces’ mistaken attack on the Doctors Without Borders hospital was the deadliest, killing at least 30 persons and injuring at least 37.111 Between August 1 and October 31, 2015, the UN Assistance Mission in Afghanistan documented 3,693 civilian casualties (1,138 persons killed and 2,555 injured), a 26% increase over the same period in 2014.112 Between January and September 2015, some 235,000 individuals were displaced, excluding the 17,000 families temporarily displaced during the Kunduz crisis, an increase of nearly 70% compared to the same period in 2014. The UN believes 2015 may have been the worst year for conflict-induced displacement in Afghanistan since 2002.113 The UN reported the breakdown in the rule of law in Kunduz during the insurgent attack. Their occupation created an environment in which arbitrary killings, violence, and criminality occurred with impunity. The fear of violence was a key factor in the mass displacement of women from Kunduz City and the temporary suspension of services protecting women in several adjacent provinces.114 Attacks on schools decreased from 41 in the prior period to 22. The offensive in Kunduz led to the temporary closure of all 497 schools. In addition, the UN reported the forced closure of six schools in Nangarhar and the departure of education personnel after receiving threats and intimidation.115 Due to the increased risks posed by the conflict, particularly in urban areas, the UN and other civilian actors curtailed program activities and temporarily relocated staff from Kunduz, Baghlan, Badakhshan, and Faryab Provinces.116 Calling the ANDSF a good investment to prevent Afghanistan from becoming a terrorist safe haven with an international reach, the SecretaryGeneral and the NATO foreign ministers recommitted support for the ANDSF at a meeting in Brussels on December 1, 2015.117 The Coalition will maintain its 12,000 force strength in Afghanistan through 2016 and continue to finance the current ANDSF authorized force level of 352,000 members through 2017.118 The Department of Defense (DOD) will also continue to Report to the united states congress I January 30, 2016 67 “When you go from 100,000 troops down to about 10,000, there should be no surprise that there’s a consequence in the security situation.” —Andrew Wilder, U.S. Institute of Peace Source: Foreign Policy, “Mapped: The Taliban Surged in 2015, but ISIS Is Moving In on Its Turf,” 1/4/2016. Security provide funding for the authorized force level of 30,000 Afghan Local Police (ALP) during this period.119 A campaign to finance the ANDSF from 2018 through 2020 will be addressed at a NATO summit in July.120 Results of the U.S. Investigation into the Air Strike DOD reported in December 2015 that the October 3, 2015, air strike on a Doctors Without Borders trauma center in the northern city of Kunduz resulted in the death of 30 staff and patients and injury of 37 others.121 Since then, Doctors Without Borders has informed DOD that the number of victims was significantly higher. DOD continues to work with Doctors Without Borders to identify all those affected by this tragedy and to offer appropriate condolences and compensation using the Commanders Emergency Response Program (CERP) authority.122 General John Campbell, commander of U.S. forces in Afghanistan, said a U.S. investigation determined that the proximate cause of the incident was avoidable human error compounded by process and equipment failure. Fatigue and high operational tempo, together with system and process failures, also contributed to the incident. These included: • Loss of electronic communication systems on the aircraft • The nature of the planning and approval process employed during operations • The lack of a single system to vet proposed targets against a no-strike list123 The investigation also produced specific recommendations to enable U.S. forces to avoid repeating such mistakes.124 General Campbell announced some U.S. personnel were suspended and could face disciplinary action as a result of the incident.125 However, the results of the investigation were not made public and Doctors Without Borders said its own investigation found that at least 42 people had been killed in the strike. Doctors Without Borders has demanded that an international investigation of the incident take place under the Geneva Conventions.126 The UN reported an Afghan delegation submitted a report on the factors that led to the fall of Kunduz to the Afghan National Security Council, although the findings were not released publicly.127 U.S. Forces-Afghanistan (USFOR-A) reported that the delegation presented their findings to the President of Afghanistan and that a declassified version of the 200-page report, with accompanying 1,800 pages of supporting documents, is expected to be released in the next few months.128 USFOR-A said the Resolute Support (RS) mission did not conduct a comprehensive review separate from that conducted by the Afghan government.129 U.S. Forces in Afghanistan According to DOD, approximately 8,950 U.S. forces were serving in Afghanistan as of December 30, 2015, along with approximately 6,650 68 Special inspector general I Afghanistan reconstruction Quarterly Highlight INSURGENT ACTIVITY IN AFGHANISTAN Afghanistan’s stability largely depends on whether the ANDSF can maintain security gains won through U.S. and Coalition military assistance over the last several years. This quarter saw a worrisome upsurge in insurgent activity. In late December 2015, the deputy governor of Helmand Province in southern Afghanistan publicly rebuked President Ashraf Ghani in a Facebook post, claiming that he was unable to contact the president and that without immediate assistance Taliban fighters were positioned to take control of the province. British forces were rushed to assist the ANA in the crucial district of Sangin, which the Taliban seemed close to taking over.130 In January, U.S. air support helped clear a town in Helmand of insurgents; one U.S. Special Forces soldier died in the battle.131 On December 21, 2015, roughly 30 miles north of Kabul, outside of Bagram Air Base, six U.S. Air Force personnel were killed in the most deadly attack on U.S. forces in Afghanistan since 2012. Approximately two weeks after that, a bomb containing an estimated 3,000 pounds of explosives was detonated in the Afghan capital near the U.S. Embassy compound, killing two and wounding dozens more. The Taliban took credit for both attacks.132 With the Taliban stepping up attacks long after the typical fighting season, other groups, such as al-Qaeda in the Indian Subcontinent (AQIS)—a relatively new offshoot of al-Qaeda that operates primarily in Afghanistan, Pakistan, and India—and the Islamic State of Iraq and the Levant-Khorasan Province (ISIL-K) expanded their presence. In late October, Army General John Campbell disclosed a multi-day operation in Kandahar Province that involved 200 Special Operations forces and targeted what was “probably the largest” al-Qaeda training camp ever found in Afghanistan, a sprawling complex that covered over 30 square miles. On January 8, 2016, a provincial council official warned the ISIL-K presence in five Nangarhar districts may lead to the provincial takeover if the insurgents are not stopped. That same day, a drone Report to the united states congress I January 30, 2016 strike reportedly killed 15 ISIL-K members in the Achin District of Nangarhar.133 USFOR-A reports that approximately 71.7% of the country’s districts are under Afghan government control or influence as of November 27, 2015. Of the 407 districts within the 34 provinces, 292 districts are under government control or influence, 27 districts (6.6%) within 11 provinces are under insurgent control or influence, and 88 districts (21.6%) are at risk.134 In a report issued in December, DOD stated that the security situation in Afghanistan has deteriorated. There are more effective insurgent attacks and more ANDSF and Taliban causalities. However, DOD remains optimistic that the ANDSF continues to improve its overall capability as the capabilities of the insurgent elements remain static.135 The insurgency in Afghanistan has achieved some success this past year by modifying its tactics. The most notable example is the Taliban’s brief capture of Kunduz in September. The insurgency is spreading the ANDSF thin, threatening rural districts in one area while carrying out ambitious attacks in more populated centers. The ANDSF has become reactive rather than proactive, DOD has reported.136 While DOD remains outwardly confident its mission to train, advise, and assist will build the ANDSF’s capacity, lawmakers in Afghanistan’s Wolesi Jirga (lower house) are growing concerned. Recently they summoned high-ranking officials within the ANDSF and National Directorate of Security (NDS) to answer questions about the spate of high-profile threats.137 RS Commander General Campbell told USA Today he is reassessing the situation. In an interview this past December, General Campbell said, “My job as commander on the ground is to continually make assessments. … If I don’t believe that we can accomplish the train, advise and assist and the [counterterrorism] missions, then I owe it to the senior leadership to come back and say, ‘Here’s what I need.’ If that’s more people, it’s more people.”138 69 Security Secretary Ashton Carter and acting Afghan Defense Minister Masoom Stanekzai during a press conference at Forward Operating Base Fenty in Jalalabad, Afghanistan, on December 18, 2015. (DVIDS photo by Staff Sergeant Tony Coronado) “They are forward deployed with Afghan commando units and they are very much in the thick of these fights. (U.S.) Special operations forces are going to be in the thick of this coming battle whether we want to talk about that or not.” –Lieutenant General David W. Barno, U.S. Army, Retired Source: Tolo News, “U.S. Forces Increasingly Drawn Back into Afghanistan’s Battles,” 1/9/2016. personnel from other Coalition nations. The U.S. force level includes approximately 6,800 military personnel contributing to the NATO-led Resolute Support mission.139 Since the RS mission began on January 1, 2015, through January 5, 2016, 11 U.S. military personnel were killed in action, in addition to 10 non-hostile deaths, for a total of 21 U.S. military deaths. During this period, 79 U.S. military personnel were wounded in action.140 These numbers include the six U.S. service members killed and two wounded in a suicide attack near Bagram Airfield on December 21, 2015, and the loss of one U.S. service member and wounding of two others in an operation in Helmand Province on January 5, 2016.141 The attack near Bagram Airfield was reported as the deadliest on Coalition troops in four months.142 Seven U.S. civilians or contractors were killed in action, in addition to nine non-hostile deaths, for a total of 16 DOD, U.S. civilian, or contractor deaths. Eight DOD, U.S. civilian, or contractors were wounded in action during this period.143 Four insider attacks against U.S. forces occurred from January 1, 2015, through December 31, 2015, killing three and wounding 15 soldiers.144 A fifth attack resulted in the death of one U.S. contractor.145 This quarter, there were several reports of U.S. Special Forces fighting alongside Afghan security forces. While the United States has two noncombat missions—training Afghan forces and supporting counterterrorism operations against the remnants of al-Qaeda—U.S. forces are also being drawn into fighting the Taliban.146 The Helmand Province operation in January was not the first time U.S. forces partnered with Afghans in fighting the Taliban. During the Kunduz siege in October, General Campbell reported U.S. forces engaged in heavy fighting for five consecutive days and nights.147 Essential Function Train, Advise, and Assist Highlights Key areas of the RS mission are organized under eight Essential Functions (EF). This quarter’s EF highlights include the following: • EF-1 (Multi-Year Budgeting and Execution): Both the MOD and MOI demonstrated significant progress in identifying unexecuted funds and proposing how to use the funds. Significant challenges exist in procurement and output remains slow. RS created a plan to improve contract execution by setting a deadline for prioritizing procurement plans before the FY 1395 procurement approval board convenes.148 • EF-2 (Transparency, Accountability, and Oversight): The MOI and MOD demonstrated progress in directing senior leaders to take active roles in countering corruption and mismanagement. MOI and MOD inspectors general (IGs) showed improvement on conducting inspections. The MOI IG referred corruption cases to the Attorney General’s Office for criminal investigation and the MOD IG’s inspection 70 Special inspector general I Afghanistan reconstruction Security • • • • • • of the Central Supply Depot revealed significant issues with inventory accuracy and a lack of qualified staff.149 EF-3 (Civilian Governance of Afghan Security Institutions): EF-3 is focused on providing training, advice, and assistance to the MOD and MOI on developing processes to prevent, track, investigate, and prosecute gross violations of human rights and significant acts of corruption. RS arranged for the U.S. Defense Institute of International Legal Studies to provide training on the law of armed conflict, human rights, investigations, and fighting corruption during a five-day workshop in November. The ANA is using an Afghan mobile-training team to train ANA corps personnel.150 EF-4 (Force Generation): The RS Police Institutional Advisory Team’s work with the MOI Training General Command resulted in a plan to train 22,300 ANP and new recruits by June 2016. RS also developed training materials and instructions for transitioning Afghan security personnel from the Soviet-design AK-47 rifle to the U.S. M-16 rifle.151 EF-5 (Sustainment): RS focused on right-sizing the ANDSF’s vehicle fleets to improve sustainability, effectiveness, and affordability by December 2016. RS is also working on procedures to integrate the Afghans into the long-term planning processes for spending ASFF funds and using DOD’s foreign military sales program as well as establishing relationships between U.S. commodity program managers and their MOD and MOI counterparts.152 EF-6 (Strategy and Policy, Planning, Resourcing, and Execution): This function has two components. For EF-6.1, RS works at the ministerial level.153 RS partnered with Afghans to develop documents that inform subordinate planners on strategic focus, threats, and resources. The MOI Strategic Planning Directive was signed by the Minister in October and the MOD Minister signed the National Military Strategy in December.154 For EF-6.2, RS works from the ministerial level through operational- and tactical-level execution. RS established 24-hour advisor support to the National Military Command Center, and the Joint Intelligence Operation Center opened a facility in Kabul.155 EF-7 (Intelligence): Afghan intelligence planning and analytic support to multi-pillar, multi-corps ANDSF operations has continued to improve through the creation of intelligence fusion cells. RS transitioned training on conducting credibility assessments based on portable lie-detection tests and on using cellular-exploitation machines that analyze portable electronic devices, to the MOD and MOI in October. RS also made progress on transitioning other training programs at the ministries’ Intelligence Training Centers to Afghan instructors.156 EF-8 (Strategic Communications): RS assisted President Ghani’s communication directorate in establishing a crisis communications/ rapid response protocol, which was later implemented. The MOI Report to the united states congress I January 30, 2016 71 Members of Congress Ask SIGAR to Investigate Sexual Abuse A bipartisan, bicameral group led by Senator Patrick Leahy (D-VT) and Representative Thomas J. Rooney (R-FL) and 91 additional members of Congress in December asked SIGAR to conduct an inquiry into the U.S. government’s experience with allegations of sexual abuse of children committed by members of the Afghan security forces. The inquiry will also look into the manner in which the Leahy amendment prohibiting DOD and the State Department from providing assistance to units of foreign security forces that have committed gross violations of human rights is implemented in Afghanistan. See Section 2, p. 40, of this report for more information. Security At the Program Management Review (PMR) session held October 26–30, 2015, in Arlington, Virginia, U.S. and Afghan officials discussed ANDSF requirements and capabilities as well as priorities to address program challenges for equipping and arming Afghan forces. The PMR resulted in an Afghan commitment to assume more responsibility for logistics, life-cycle sustainment processes, and the overall health of its vehicle fleet. Participants recognized the importance of ensuring the ANDSF requirements are affordable and sustainable. Officials also discussed the Afghan ability to use the U.S. foreign military sales process effectively. Source: CSTC-A, response to SIGAR data call, 12/4/2015; OSD-Policy, response to SIGAR vetting, 1/15/2016. communications directorate executed all fiscal year (FY) 1394 budget requirements and, for the first time, met the FY 1395 requirements submission date.157 • Gender Office: Three women were selected for the ANP rank of brigadier general and 389 ANP women graduated from a Turkish police academy.158 ANDSF Strength Pulled Down by ANP Decreases This quarter, ANDSF assigned force strength was 322,638 (including civilians), according to USFOR-A.159 As reflected in Table 3.5, this is 89.6% of the ANDSF target force strength of 360,004, counting MOD civilian employees. (The commonly cited end-strength goal of 352,000 does not count MOD civilians.) The new assigned-strength number reflects a decrease of 2,078 since July 2015 and 9,306 since May 2015.160 The ANP bore the brunt of the decrease this quarter with a loss of 2,270 personnel, while the ANA posted an increase of 192 personnel, as shown in Table 3.6.161 However, a January Associated Press report alleged that the actual number of ANDSF security forces is far less because the rolls are filled with nonexistent “ghost” soldiers and police officers. In that report, a provincial council member estimated 40% of the security forces in Helmand do not exist, while a former provincial deputy police chief said the actual number was “nowhere near” the 31,000 police on the registers, and an Afghan official estimated the total ANDSF number at around 120,000—less than half the reported 322,638.162 The success of military operations is at risk, because as one Afghan soldier in Helmand said, they do not have enough men to protect themselves. Additionally, an Afghan lawmaker claimed the government is not responding to the crisis because a number of allegedly corrupt parliamentarians are benefiting from the “ghost” security forces salaries.163 Table 3.5 ANDSF ASSIGNED FORCE STRENGTH, October 2015 ANDSF Component ANA including AAF a ANA Civilians including AAF Civilians ANA + AAF Total Afghan National Police ANDSF Total with Civilians Approved EndStrength Goal 195,000 Target Date December 2014 8,004 - 203,004 157,000 February 2013 360,004 Current Assigned as of October 2015 169,718 % of Target Authorization Difference Between Current Assigned and Approved EndStrength Goals Difference (%) 87.0% (25,282) (13.0%) 6,894 86.1% (1,110) (13.9%) 176,612 87.0% (26,392) (13.0%) 146,026 93.0% (10,974) (7.0%) 322,638 89.6% (37,366) (10.4%) Note: AAF = Afghan Air Force; ANA = Afghan National Army; ANDSF = Afghanistan National Defense and Security Forces. a The total “ANA including AAF” numbers for October 2015 is not fully supported by the detailed numbers in the USFOR-A response to SIGAR data call; Trainee, Transient, Holdee, and Students (TTHS) may represent all or part of the unreconciled portion. Source: DOD, Report on Progress Toward Security and Stability in Afghanistan, 12/2012, p. 56; USFOR-A, response to SIGAR data call, 12/14/2015. 72 Special inspector general I Afghanistan reconstruction Security Table 3.6 ANDSF ASSIGNED FORCE STRENGTH, FEBRUARY 2014–OCTOBER 2015 ANA including AAF ANPb Total ANDSF a 2/2014 5/2014 8/2014 11/2014 2/2015 5/2015 7/2015 10/2015 184,839 177,489 171,601 169,203 174,120 176,762 176,420 176,612 153,269 152,123 153,317 156,439 154,685 155,182 148,296 146,026 338,108 329,612 324,918 325,642 328,805 331,944 324,716 322,638 Note: ANDSF = Afghan National Defense and Security Forces; ANA = Afghan National Army; AAF = Afghan Air Force; ANP = Afghan National Police. ANA and AAF numbers include civilians; available data for ANP do not indicate whether civilians are included. a The total “ANA including AAF” numbers for July 2015 and October 2015 are not fully supported by the detailed numbers in the USFOR-A response to SIGAR data call; Trainee, Transient, Holdee, and Students (TTHS) may represent all or part of the unreconciled portion. b Reported November 2014 ANP number appears to double-count some Afghan Uniformed Police; actual number may be 151,272. Source: CSTC-A response to SIGAR data calls, 3/31/2014, 7/1/2014, and 10/6/2014; RS, response to SIGAR request for clarification, 3/14/2015; USFOR-A, response to SIGAR vetting, 4/10/2015 and 7/12/2015; USFOR-A, response to SIGAR data calls, 12/28/2014, 3/24/2015, 6/29/2015, 9/11/2015, and 12/14/2015. SIGAR has questioned the validity and reliability of Afghan securitypersonnel numbers (see “Questionable ANSF Numbers Thicken Fog of War in Afghanistan” in SIGAR’s April 2015 Quarterly Report to the United States Congress, pages 3–15). The Associated Press report underscores longstanding concerns that the reported ANDSF personnel numbers are not valid or reliable. This quarter, details of ANDSF force strength at corps level and below remained classified. SIGAR will report on them in a classified annex to this report. ANDSF attrition rates are holding steady, according to reports provided to RS by the MOD and MOI. The ANA had a monthly attrition rate of 3.0% in October 2015, up from the 2.4% rate in July 2015. The October rate is, however, below the average monthly attrition rates of 3.52% in February 2013 and 3.62% in February 2014.164 The ANP’s monthly average attrition rate was reported to have increased to a 2.5% rate in October from the 1.9% rate of May through July.165 DOD reports the total cost to sustain the ANDSF at an end-strength of 352,000 in FY 2016 is approximately $5 billion, for which the FY 2016 Omnibus Appropriations Act appropriated $3.65 billion to DOD for that purpose.166 ANDSF Assessment USFOR-A reports that U.S. advisors participating in the RS train, advise, and assist mission have little or no direct contact with ANDSF units below the ANA corps and ANP zone headquarters level.167 This situation contrasts dramatically from the previous International Security Assistance Force (ISAF) mission, when many Coalition advisors were embedded with ANDSF units. Now the smaller troop strength of the RS mission requires Coalition advisors to rely almost exclusively on data provided by the Afghan ministries to evaluate the operational readiness and effectiveness of the ANDSF. The Report to the united states congress I January 30, 2016 73 Security consistency, comprehensiveness, and credibility of data varies among ANA corps and ANP zone headquarters.168 USFOR-A said improving the quality of data is a priority for Coalition advisors. Capability gaps are identified and vetted by the advisors during train, advise, and assist activities; through analysis of Afghan data; and through direct reporting by and discussions with Afghan leaders.169 The year 2015 found the ANDSF operating with sharply reduced Coalition military support compared to the preceding decade. However, the UN assesses that Afghan security forces have largely withstood the mounting pressures and shown the ability to retake those areas temporarily under control of the insurgency.170 DOD’s December 2015 report, Enhancing Security and Stability in Afghanistan, noted the Afghan government retains control of Kabul, major transit routes, provincial capitals, and nearly all district centers.171 The December 2015 report of the UN Secretary-General on the situation in Afghanistan assessed the ANDSF response to the October siege in Kunduz. The report highlighted critical deficiencies in ANDSF logistics, planning, intelligence, and air support capabilities. The UN SecretaryGeneral also reported the Afghan government needs to strengthen the working relationships between the security and civilian authorities, which were reported to have been strained in Kunduz prior to the fall of the city.172 USFOR-A assesses the ANDSF performance as uneven, with numerous, high-profile tactical and operational setbacks detracting from its overall success in preventing the Taliban insurgency from achieving its strategic goals. ANDSF capability gaps in aviation, intelligence, logistics, maintenance, operational planning, and leadership persist. DOD assessed that the ANDSF continued to improve integration of indirect fire and close-air attack capabilities, but that the ANDSF’s capacity to hold areas after initial clearing operations is uneven: they remain in a primarily defensive posture that limits their agility across the country.173 DOD reports that although Afghans, especially in rural areas, think checkpoints and a fixed ANDSF presence, rather than patrols or a rotational presence, are important to maintaining area security, the ANDSF reliance on defending static checkpoints has resulted in increased ANDSF casualties. Insurgents, however, can choose to fight when they have the tactical advantage. DOD assesses that on occasion the insurgent tactic of massing forces, certain ANDSF units are being out-maneuvered by an overall numerically inferior insurgent force.174 Furthermore, USFOR-A assesses the large number of vulnerable checkpoints severely limits the security forces available for operations.175 USFOR-A assesses the ANA corps formations of a headquarters kandak, three to four infantry brigades, and various specialty kandaks, are capable of rapid employment in offensive operations. Critical to preparing the ANA for the 2016 fighting season is establishing an operational readiness cycle to 74 Special inspector general I Afghanistan reconstruction Security replenish the corps’ personnel and equipment, improve unit-level training, and increase recruitment and retention.176 DOD reports that after a number of large-scale, multi-corps, and crosspillar operations, such as in northern Helmand and on the Zabul-Ghazni border early in the year, ANDSF offensive operations tended to be much smaller later in the year. A majority of operations were conducted at the kandak and brigade level and were characterized by the need for stronger cross-pillar coordination and intelligence sharing. USFOR-A assesses that the Afghan Air Force (AAF) has been critical to the success of the ANDSF in combating the Taliban. However, taking on primary responsibility for close air support, which has elevated operational tempo, has presented a challenge for the AAF.177 Although the current focus of the ANP is to combine its capabilities with the ANA to fight the insurgency, DOD reports the long-term goal for the ANP is to transition to a traditional community police force. The ANP forces are often on the front lines during the “hold” phase of counterinsurgency operations. However, they are not sufficiently trained or equipped for traditional counterinsurgency tactics: they have limited crew-served weapons (a weapon that requires more than one person to operate); anti-armor weapons; armored vehicles; and intelligence, surveillance, and reconnaissance capabilities.178 DOD reports the ANP commanders must become more adept at translating ministerial-level guidance into operational plans for the ANP to execute and coordinate with their ANA counterparts. Furthermore, the overall deficiencies in the ANP planning process reflect the challenges associated with the MOI decentralized structure and its various force pillars.179 USFOR-A reports the 2015 fighting season appears likely to end in stalemate, while the outcome of the 2016 fighting season is predicated on the ability of the ANDSF to institutionalize the lessons learned this season, provide effective wide-area security, and successfully project force into traditional Taliban safe havens and operating areas.180 The Monthly ANDSF Assessment Report (MAAR) is one tool used by RS advisors to inform RS leaders of the collective assessment of capacitydevelopment progress. USFOR-A reported the percentage of ANDSF units rated as “capable” or better in the MAAR increased from 73% in January 2015 to 88% (86% if Afghan Special Security Force units are removed) by November 2015.181 USFOR-A reported that while the MAAR assessments of the ANDSF’s performance throughout the year reflect improvements, capability gaps persist and will remain a focus of RS advisors. The trials imposed by an insurgency with years of experience fighting a professional, well-equipped Coalition military force, revealed the ANDSF’s uneven performance and deficiencies during a difficult first fighting season of the RS mission.182 However, USFOR-A assessed that the ANDSF, while leading counterinsurgency operations, has persevered, proven their willingness to Report to the united states congress I January 30, 2016 75 “If we don’t stay engaged here to build their capacity to fight this, keep sanctuary down, it’s coming back to the homeland. So it’s pay a little bit now, build the capability, and keep this an away game as opposed to a home game.” –RS Commander, General John Campbell Source: USAToday.com, “Top U.S. general may seek more troops for Afghanistan,” 12/29/2015. Security fight, developed the capacity to learn from mistakes, and prevented insurgents from achieving their strategic objectives.183 This quarter, SIGAR will report on the classified aspects of the ANDSF assessment in the classified annex to this report. Ministries of Defense and Interior Each RS Essential Function (EF) directorate and the Gender Advisor office use the Essential Function Plan of Action and Milestones (POAM) to assess the essential-function capabilities of the offices in the ministries of Defense and Interior.184 MOD offices are assessed on 45 milestones; MOI offices are assessed on 40 milestones.185 The milestones are assessed using a five-stage rating system displayed in Table 3.7.186 Milestone assessments are combined to determine the overall assessment of a department. Department assessments are then combined to determine the assessment of the overall ministry.187 The five ratings reflect the degree to which Afghan systems are in place, functioning, and being used effectively. The highest rating, “sustaining capability,” indicates an Afghan ministry can perform a specific function without Coalition advising or involvement.188 This quarter the first “sustaining capability” assessment rating was achieved by the MOI for an EF-5 (Sustainment) milestone.189 In addition, two MOI milestones—one in EF-4 (Force Generation) and another in EF-5—sustained a “fully capable” rating since last quarter; however, that actually is a capability reduction as both offices had achieved two “fully capable” ratings last quarter.190 Within the MOD, a “fully capable” rating for two EF-5 milestones was sustained since last quarter and another “fully capable” rating was achieved for an EF-6 (Strategy and Policy, Planning, Resourcing, and Execution) milestone.191 This quarter, the RS assessment indicates the MOD has slightly increased the percentage of its “sustaining capability,” “fully capable,” or “partially capable” development milestones from 55.6% to 57.8%, whereas the MOI has increased its ratings, with 65% of its development milestones at “sustaining capability,” “fully capable,” or “partially capable” compared to 59.5% last quarter.192 For a third consecutive quarter, RS revised its forecast by lowering the expected capacity levels the MOD and MOI will achieve by the end of 2016.193 USFOR-A reported that due to continued changes in the operating environment, the EF directorates again refocused the plans and reassessed the end-of-mission forecast.194 RS now forecasts that 62% of MOD functions are predicted to be “sustaining” or “fully capable” (the highest and secondhighest ratings), a drop from the 69%, 74%, and 90% forecasts in the last three quarters.195 Lower expectations were forecast for the MOI, where 51% of the functions are expected to be “sustaining” or “fully capable,” reduced from previous quarters’ forecasts of 57%, 68%, and 86%.196 76 Special inspector general I Afghanistan reconstruction Security Table 3.7 MINISTRY MILESTONE ASSESSMENT USING NATO SYSTEM, AS OF NOVEMBER 2015 RATING Meaning EF1 EF2 EF3 EF4 EF5 EF6 EF7 EF8 Total Gender Q3 Q4 +/- Q3 Q4 +/- Q3 Q4 +/- Q3 Q4 +/- Q3 Q4 +/- Q3 Q4 +/- Q3 Q4 +/- Q3 Q4 +/- Q3 Q4 +/- Q3 Q4 +/- Ministry of Defense Assessment Rating 5 Sustaining Capability 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = Rating 4 Fully Capable/Effective 0 0 = 0 0 = 0 0 = 0 0 = 2 2 = 0 1 + 0 0 = 0 0 = 0 0 = 2 3 + Rating 3 Partially Capable/Effective 2 2 = 0 0 = 4 4 = 5 5 = 9 9 = 1 1 = 2 2 = 0 0 = 0 0 = 23 23 = Rating 2 Initiated (In Development) 4 4 = 4 4 = 0 0 = 1 1 = 1 1 = 2 1 - 1 1 = 0 3 + 2 2 = 15 17 + Rating 1 Scoped/Agreed 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 0 1 + 3 0 - 1 1 = 4 2 - Rating 0 Not Scoped/Agreed 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 1 0 - 0 0 = 0 0 = 1 0 - EF Total 6 6 = 4 4 = 4 4 = 6 6 = 12 12 = 3 3 = 4 4 = 3 3 = 3 3 = 45 45 = Rating 5 Sustaining Capability 0 0 = 0 0 = 0 0 = 0 0 = 0 1 + 0 0 = 0 0 = 0 0 = 0 0 = 0 1 + Rating 4 Fully Capable/Effective 0 0 = 0 0 = 0 0 = 2 1 - 2 1 - 0 0 = 0 0 = 0 0 = 0 0 = 4 2 - Rating 3 Partially Capable/Effective 3 3 = 0 1 + 2 2 = 2 3 + 9 9 = 2 2 = 0 1 + 0 2 + 0 0 = 18 23 + Rating 2 Initiated (In Development) 3 3 = 2 2 = 2 2 = 0 0 = 1 1 = 0 0 = 3 2 - 0 1 + 2 2 = 13 13 = Rating 1 Scoped/Agreed 0 0 = 1 0 - 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 1 1 = 2 1 - Rating 0 Not Scoped/Agreed 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = 0 0 = EF Total 6 6 = 3 3 = 4 4 = 4 4 = 12 12 = 2 2 = 3 3 = 0 3 + 3 3 = 37 40 + Ministry of Interior Assessment Note: EF = Essential Function; ASI = Afghan Security Institutions; EF1 = Multi-Year Budgeting and Execution; EF2 = Transparency, Accountability, and Oversight; EF3 = Civilian Governance of the ASI; EF4 = Force Generation; EF5 = Sustainment; EF6 = Strategy and Policy, Planning, Resourcing, and Execution; EF7 = Intelligence; EF8 = Strategic Communications. Quarter-to-quarter changes: same =, gain +, loss -. Q3 = August 25, 2015; Q4 = November 24, 2015. Source: USFOR-A, response to SIGAR data calls, 9/4/2015 and 12/4/2015; USFOR-A, response to SIGAR vetting, 1/13/2016. After the backlash following the security breakdown in Kunduz City, Ghani filled numerous ANP vacancies, appointing eight regional commanders and five provincial police chiefs.197 However, the MOD minister position remains filled by an individual in an acting capacity, as local officials and former administration officials claim the national-unity government agreement to split appointments between President Ghani and Chief Executive Abdullah Abdullah’s political parties had the unintended consequence of undermining the fight against the Taliban and creating chaos in the chain-of-command.198 Report to the united states congress I January 30, 2016 77 Security EF-8 reports the Afghan government lacks an effective lead spokesperson, a unifying anti-insurgent narrative, and an effective communications plan. Weaknesses include the ability to align communications assets, empower subordinates with guidance and priorities, and messaging that can reach and influence the Afghan populace and the ANDSF members at the corps/zone/province level.199 The MOD hired an experienced civilian strategic communications advisor this quarter, which according to RS, will bolster an underperforming office.200 MOD and MOI Literacy Training Contracts Continue to Await National Procurement Agency Approval This quarter USFOR-A reported the MOD and MOI literacy contract packages submitted last year still await final approval by the National Procurement Agency. In the interim, the ANA and ANP are conducting literacy training with internal assets.201 USFOR-A reports all ANA and ANP officers and noncommissioned officers are expected to be literate to hold their positions.202 ANA policy requires officer applicants to be fully literate—able to read, write, and grasp the idea of a topic—and requires noncommissioned officer applicants to be able to read and write.203 Afghan Local Police Afghan Local Police members, known as “guardians,” are usually local citizens selected by village elders or local power brokers to protect their communities against insurgent attack, guard facilities, and conduct local counterinsurgency missions.204 Effective June 15, 2015, the ALP transitioned to command and control by the Afghan Uniform Police (AUP). However, the ALP was not absorbed into the AUP tashkil (staff roster) and, even though the AUP is one of the ANP’s pillars, the ALP tashkil will remain independent of the ANP’s total authorized strength.205 As of October 22, 2015, according to the NATO Special Operations Component Command-Afghanistan (NSOCC-A), the ALP has 26,946 guardians, 20,980 of whom were fully trained.206 NSOCC-A expects a significant decrease in untrained ALP guardians by the end of the winter training surge in May 2016.207 According to Afghan reporting, 2.4% of ALP guardians were killed in action from January through November 2015. An additional 5.7% have been dropped from the rolls, 0.06% became disabled, and 2.3% were injured, yielding an aggregate attrition rate of 10.5%.208 During the first seven months of 2015, approximately 93% of the ALP guardians renewed their contracts.209 NSOCC-A reports the FY 2016 cost to support the ALP at its target end-strength of 30,000 is $117 million. The United States expects to fund approximately $112.5 million, with the Afghan government contributing the remaining $4.5 million.210 CSTC-A reports the total cumulative amount 78 Special inspector general I Afghanistan reconstruction Security of ASFF obligated in support of the ALP through September 28, 2015, was $308.7 million, of which $219.9 million had been expended.211 NSOCC-A reports, however, that there are no Coalition advisors outside the Kabulcapital region that maintain consistent situational awareness of the ALP.212 As of November 2015, MOI completed an internal assessment of 164 of the 170 districts in which the ALP operates, according to NSOCC-A. Subsequently the Minister of Interior issued 49 reforms focused on personnel recruiting, training, pay, as well as equipment fielding and maintenance.213 One of the most critical discrepancies identified in the assessment was misallocation and personnel reported as present for duty but unaccounted for. To remedy such personnel problems, tashkil positions were removed or reallocated to districts that use ALP guardians appropriately. Additionally, all the ALP tashkil were added to the Afghan Human Resources Information Management System (AHRIMS) in an effort to improve personnel accountability and allow payroll auditing.214 Another finding identified salary payments processed through bank branches in rural areas lacked the transparency and accountability available through an electronic funds transfer (EFT) process. An initiative to implement EFT in Kapisa Province produced such positive results that efforts are now under way to replace the trusted-agent system in Parwan and Kandahar Provinces with an EFT payment process.215 Because the assessment indicated the ALP has a higher casualty rate in engagements in remote terrain where other ANDSF elements are sparse, the MOD and MOI coordinated an effort to distribute 30,000 sets of personal protective equipment to better protect the ALP guardians.216 Other recommendations were to develop an enduring ALP district-level assessment plan and to implement a readiness-reporting system to maintain accountability of personnel, training, and equipment readiness.217 DOD reported the most successful ALP units are in areas where the former ISAF mission maintained a persistent Coalition presence alongside local security forces.218 Afghan Public Protection Force The Afghan Public Protection Force (APPF), a state-owned enterprise under the authority of the MOI, was established to provide fixed-site, convoy, and personal security on a fee-for-service basis. The APPF assumed security roles previously performed by private security companies, which were disbanded by Afghan Presidential Decree 62 in August 2010. The APPF has four directorates:219 • government projects • nongovernmental projects • international projects • protection and convoy security Report to the united states congress I January 30, 2016 79 Essential Function 1 (Multi-Year Budgeting and Execution) reports significant progress, in conjunction with the Afghan Ministry of Finance, toward implementing a Mobile Money program for paying the Afghan Local Police salaries. For more information, see pp. 70–72 of this section. Security CSTC-A reported that through September 29, 2014, the United States had spent more than $51 million on the APPF.220 Any additional funding DOD may provide to the APPF is for payment of security services rendered to DOD organizations or contractors. This is the last update SIGAR will be reporting on the APPF. USFOR-A does not conduct a train, advise, and assist mission for the APPF and therefore does not have access to report on APPF status.221 Afghan National Army As of December 31, 2015, the United States had obligated $38.6 billion and disbursed $37.6 billion of ASFF funds to build, train, equip, and sustain the ANA.222 ANA Military Personnel Increase Slightly Recent news-media reporting questions the validity and reliability of ANDSF personnel numbers. For more information, see pp. 72–73 of this section. As of October 20, 2015, the overall assigned strength within the MOD, including the ANA, the AAF, and civilians, was 176,612 personnel, according to USFOR-A.223 This is an overall increase of 192 ANA personnel since last quarter, when the July 2015 assigned end strength was reported at 176,420.224 The number of ANA civilians decreased by 154; the number of ANA military personnel increased by 346.225 ANA assigned military personnel are at 87% of the approved end strength.226 During the month of October 2015, the ANA attrition rate was 3%, with the AAF attrition at 1.5%. ANA and AAF attrition during July 2015 were 2.4% and 0.6%, respectively.227 RS EF-4 (Force Generation) advisors and recruiters from the U.S. Army Recruiting Command conducted a roadshow in November 2015 with their ANA Recruiting Command counterparts and ANA 201st Corps leaders to learn the challenges and issues experienced by the ANA recruiting force and to advise on recruiting, attrition, and reenlisting.228 The joint AfghanU.S. team also partnered with their National Afghan Volunteer Center (NAVC) counterparts to identify inefficiencies in current NAVC operations in order to give ANA leaders ways to improve recruitment.229 This quarter, details of ANA troop strength and attrition at corps level and below remain classified. SIGAR will report on them in a classified annex to this report. ANA Sustainment As of December 31, 2015, the United States had obligated $16.2 billion and disbursed $15.5 billion of ASFF for ANA sustainment.230 The most prominent use of ASFF sustainment funding is for salaries and incentive payments; other uses include items such as ammunition, organizational clothing and individual equipment (OCIE), aircraft operations and maintenance, and vehicle maintenance.231 CSTC-A reported the 80 Special inspector general I Afghanistan reconstruction Security total amount expended for all sustainment requirements in FY 2015 was $552.9 million.232 In mid-December, the new computer and server hardware for the ANDSF’s inventory and logistics information-management system known as CoreIMS arrived in-country.233 The CoreIMS logistics system tracks and monitors OCIE stock, among other types of equipment and parts. CoreIMS is updated when OCIE is received in-country and before the equipment is shipped to national supply warehouses. CSTC-A reported approximately 1,700 types of OCIE items were inputted into CoreIMS to enable the national and regional supply centers to account for the OCIE.234 The enhancements for the demand-based supply capability will be implemented at the national and regional logistics centers once the CoreIMS hardware is installed.235 CSTC-A reported 92 of 130 authorized Afghan logistical specialists are now employed at the national and regional centers providing training and assistance to the ANDSF in learning CoreIMS, developing computer skills, and cataloging items.236 ANA Salaries and Incentives As of September 28, 2015, CSTC-A reported the United States had provided $2.83 billion through the ASFF to pay for ANA salaries, food, and incentives since FY 2009.237 CSTC-A reported the funding required for ANA base salaries, bonuses, and incentives will average $682 million annually over the next five years, with $676.2 million required in FY 2016.238 During Afghan solar year 1394 (2015), the U.S. provided $207.7 million in on-budget support to the MOD for ANA salaries and contractor pay, with the significant majority of the funding, $138.2 million, applied toward officer base pay. An additional $69.1 million was used for noncommissioned officers and soldier pay, and $.4 million for ANA contractors’ base pay.239 To incentivize the MOD to use electronic-payment systems, CSTC-A plans to provide 100% funding only for those authorized tashkil positions being paid electronically, once the automated pay system is ready for use in 2016; pay for other positions will be 80% funded.240 USFOR-A reports as of November 27, 2015, that the MOD has input 99% of the ANA forces into AHRIMS with 97% of the force slotted into an approved FY 1394 tashkil position.241 However, as USFOR-A does not have the applicable AHRIMS access to create the report SIGAR requested on attrition and educational data by rank and province, USFOR-A requested the data from the MOD. Additionally, USFOR-A explained AHRIMS is an MOD- and MOI-owned system and the requested data may or may not be available in AHRIMS at this time as the initial data input effort is prioritizing other key data fields, such as name, rank, identification number, next of kin, and banking information required for electronic salary payments. Additional information pertaining to ANDSF members will be inputted incrementally.242 Report to the united states congress I January 30, 2016 81 Security USFOR-A also reported that AHRIMS will transition to the Afghan Personnel Pay System (APPS) in 2016, to provide greater accountability of personnel present for duty, properly assigned to a tashkil position, and paid the proper entitlements. However, SIGAR did not receive clarification if APPS will replace AHRIMS in its entirely or if APPS will replace only some of its functionality.243 ANA Equipment and Transportation As of December 31, 2015, the United States had obligated and disbursed $12.8 billion of ASFF for ANA equipment and transportation.244 Most of these funds were used to purchase vehicles, aircraft, communication equipment, weapons, and related equipment. Approximately 49.5% of U.S. funding in this category was for vehicles and related parts, as shown in Table 3.8. Since last quarter, the total cost of equipment procured for the ANA increased by over $530 million, not including the Special Mission Wing (SMW) aircraft costs of $766.9 million that were realigned from the ANP when the SMW transferred from the MOI to the MOD.245 There was no change in the amount of equipment transferred to the ANA since the last CSTC-A reporting of June 30, 2015. The vehicles “remaining to be procured” amount changed since the June reporting from “to be determined” to $604.4 million.246 Equipment purchased for the ANA that was later determined to no longer be required by the ANDSF or was damaged before transfer to the Afghan government can be transferred to DOD for disposition, after USFOR-A considers alternative dispositions and the U.S. Congress is notified. DOD notified SIGAR that no notification was processed during this reporting period, so the cumulative value remains at $215 million.247 Table 3.8 COST OF U.S.-FUNDED ANA EQUIPMENT, AS OF NOVEMBER 30, 2015 Type of Equipment Procured Procured and Fielded to the ANA Remaining to be Procured Weapons $642,032,285 $522,370,326 $19,045,740 Vehicles 7,293,934,837 6,440,981,649 604,435,625 840,433,973 703,298,191 82,830,726 Aircraft 2,139,192,713 1,342,811,508 327,131,596 Ammunition 2,469,192,080 2,180,830,996 380,830,461 0 Communications Transportation Services 40,000,000 13,459,569 C-IEDs 418,150,056 341,550,056 0 Other 884,304,375 773,658,682 1,005,377 Total $14,727,240,319 $12,318,960,977 $1,415,279,525 Note: C-IEDs = Counter-improvised explosive devices. Equipment category amounts include the cost of related spare parts. This quarter aircraft costs, which had been procured for the Special Mission Wing (SMW), were transferred to the ANA as the SMW was transferred from the MOI to the MOD. Source: CSTC-A, response to SIGAR data call, 1/13/2016. 82 Special inspector general I Afghanistan reconstruction Security DOD reports that during the past year the ANDSF have increased usage of their close-air support and lift assets, protected mobility vehicles, mortars and howitzers, and direct-fire systems.248 A review in early 2015 determined the SMW had intelligence, surveillance, and reconnaissance capabilities that the ANA and AAF did not. This gap is being addressed with the fielding in early 2016 of unmanned aerial vehicles, an additional surveillance tower and aerostat systems (lighter-than-air aircraft such as balloons).249 EF-5 (Sustainment) is analyzing the solar year 1394 equipment tashkil, or roster of authorizations of on-hand and required equipment and weapons, to use in identifying the requirements of the upcoming solar year equipment tashkil. The data will be used to “right-size” the ANDSF equipment tashkils through 2024.250 ANA Infrastructure As of December 31, 2015, the United States had obligated $6.0 billion and disbursed $5.7 billion of ASFF for ANA infrastructure such as military headquarter facilities, schoolhouses, barracks, air fields, and roads.251 As of November 30, 2015, the United States had completed 372 infrastructure projects valued at $5.2 billion, with another 22 projects valued at $183.9 million ongoing, according to CSTC-A.252 The largest ongoing ANA infrastructure projects this quarter are the second phase of the Marshal Fahim National Defense University (MFNDU) in Kabul (at a cost of $76.3 million), to be completed in December 2017, and the Logistics Officers Branch School in Kabul ($33.6 million) and the fourth phase of the Kabul Military Training Center in Kabul ($19.7 million), both to have been completed in December 2015.253 Construction of the Marshal Fahim National Defense University Joint Service Academy building in Kabul. (CSTC-A photo) Report to the united states congress I January 30, 2016 83 SIGAR AUDIT An ongoing SIGAR audit will review DOD’s support to the ANA’s portion of the Technical Equipment Maintenance Program (A-TEMP). Specifically, SIGAR plans to determine (1) the extent to which the ANA A-TEMP is meeting its stated goals and (2) whether key ANA A-TEMP contract requirements are being met. Security SIGAR AUDIT A January 2016 SIGAR audit, conducted to assess U.S. efforts to increase the ANA’s effectiveness through the creation of a National Engineering Brigade, determined the brigade was incapable of operating independently. For more information, see Section 2, pp. 22–23. In addition, three projects were completed at a cost of $173 million, including the brigade garrisons for the 2nd Brigade of the 201st Corps in Kunar ($115.7 million), and phases IIIA and IIIB of the MFNDU at a cost of $38 million and $19.3 million respectively.254 The transfer of the new MOD Headquarters facility to the Afghan government occurred with high-level interest and media attention. A ceremonial passing of the key between the CSTC-A chief engineer and the Afghan chief of the Construction Property Management Division occurred on November 25, 2015.255 That was followed by an inauguration event on December 28, 2015, with the President of Afghanistan, the Chief Executive, the acting MOD minister, and RS Commander General Campbell in attendance. The 700-room building took 10 years to build and cost approximately $160 million.256 Of the five contracts awarded this quarter at a cost of $7.7 million, one was for various regional logistical-support centers ($4 million) and another to construct barracks for females ($1.7 million).257 Of the 16 projects ($190.5 million) in the planning phase, three projects are to construct facilities for females ($30.1 million) and two projects are to construct facilities for the AAF.258 The ASFF-funded national operations and maintenance contract provides maintenance for 24 MOD facilities including the presidential palace, training and higher-learning facilities, a justice center, a detention center, and a hospital.259 The FY 1394 MOD financial-commitment letter required the Afghan government to provide CSTC-A a transition and sustainment plan, including the infrastructure security plan, for the facilities constructed with U.S. funding and transferred to the Afghan government.260 CSTC-A reports that while $29 million in conditional funding was withheld because the MOD did not provide the plan, the MOD has signed a plan to divest 90 excess facilities and has divested 22 facilities. The draft FY 1395 financial-commitment letter withholds an estimated $3 million pending the validated divestments of the 90 facilities and a plan for divesting the remaining 68 excess facilities.261 ANA and MOD Training and Operations As of December 31, 2015, the United States had obligated and disbursed $3.6 billion of ASFF for ANA and MOD training and operations.262 CSTC-A reported 21 ongoing U.S.-funded training programs: 17 focusing on technical training, one on professional military education, two on basic training, and one on English language.263 During this quarter, the EF-4 (Force Generation) Army Institutional Advisory Team (AIAT) developed three new officer training courses: • Kandak Pre-Command Course: a two-week course for newly appointed kandak commanders that includes combined-arms operations, cross-pillar coordination, air-to-ground integration, 84 Special inspector general I Afghanistan reconstruction Security operational readiness, and training management. Trained ANA instructors will teach the course with U.S. and UK advisors observing. The course will be held four times a year for approximately 20 students. The first course was held in December 2015.264 • Brigade Pre-Command Course: a two-week course for newly appointed brigade commanders is to cover the kandak pre-command course topics from a more senior commander’s perspective. The course will be held twice a year for approximately 10 students. The first course is scheduled for February 2016.265 • The Leader’s Course: a two-week leadership course for officers assigned to or moving to senior positions in the ANDSF or other government departments. The course, developed by members of the U.S. Army War College and the UK Defense Academy, was modeled after a UK program. The first course started at the end of November 2015.266 Afghan Air Force and the Special Mission Wing Between FY 2010 and FY 2015, the United States has obligated approximately $2.4 billion to develop the AAF, including over $912 million for equipment and aircraft.267 Since last quarter, DOD realigned its FY 2015 funding applied to the AAF from $683.3 million to $925.2 million; the amount applied toward sustainment rose from $437.6 million to $780.4 million.268 Additionally, the FY 2016 request is for $548.3 million, with the significant majority of the funds for training and sustainment.269 According to USFOR-A, this quarter, the AAF aircraft inventory, includes:270 • 11 Mi-35 helicopters • 49 Mi-17 helicopters (three less than last quarter) • 16 MD-530 helicopters • 24 C-208 airplanes (two less) • 4 C-130 airplanes Of these aircraft, 33 of the Mi-17s and all of the MD-530s, C-208s, and the C-130s were procured using ASFF.271 Additionally, 20 A-29 Super Tucanos, a light-attack aircraft for counterinsurgency, close-air support, and aerial reconnaissance, have been purchased. DOD said the first four arrived in-country on January 15, 2016.272 The pilots receive basic flight maneuvers and instrument training in a Beechcraft/Raytheon T-6 Texan II basic trainer aircraft, followed by more advanced fighter tactics, bombing, and strafing training in the A-29s. USFOR-A reports using this two-plane training structure is an efficient methodology that provides the greatest probability of graduating A-29 pilots.273 On December 17, the first eight pilots and twelve maintainers graduated from A-29 training at Moody Air Force Base, Georgia. Two other Afghan maintainers who were also scheduled to graduate went missing on December 8.274 As of January 13, 2016, one of the two maintainers was found; a U.S. Report to the united states congress I January 30, 2016 85 Security SIGAR Special Project In February 2015, SIGAR conducted a fact-finding visit on the A-29 Super Tucanos at Moody Air Force Base in Georgia. SIGAR will conduct ongoing monitoring of the program’s roll-out and the training of the Afghan pilots. Department of Homeland Security spokesman said the search for the other continues.275 USFOR-A stated that an additional 12 MD-530s are being purchased and are scheduled for delivery in 2016.276 In a September 2015 New York Times article about the MD-530 helicopters, an AAF corps commander stated that the helicopters were inadequate and dangerous. He claimed that the helicopters did not have the proper range to engage the Taliban, while an AAF pilot complained that the mounted .50-caliber machine guns would often jam.277 In response to the AAF’s criticism, USFOR-A said the initial operational challenges were overcome and the armed MD-530 is a capable aircraft. DOD determined the armed MD-530 was the only suitable alternative to address the close-air support gap that would exist following the end of Operation Enduring Freedom and the fielding of the A-29 Super Tucanos and the Mobile Strike Force Vehicles with 90 mm direct-fire weapons.278 The MD-530’s operational capability has allowed the AAF to increase air raids against insurgent groups and is in great demand to provide close-air support to the ANDSF during combat operations.279 AAF leadership reportedly now understands the capability and value of the MD-530, according to USFOR-A.280 On December 25, 2015, during Indian Prime Minister Narendra Modi’s official visit to Afghanistan, the Prime Minister presented the AAF with three Russian-made Mi-25 assault helicopters, with a fourth to be delivered later.281 DOD reports this agreement was made strictly between the governments of Afghanistan and India. DOD advised the Afghan government that U.S. funds would not be available to sustain these aircraft due to sanctions concerns. Afghanistan is actively seeking bilateral support from other regional partners.282 However, USFOR-A reported that Coalition advisors, who have supported the AAF’s Mi-17 and Mi-35 programs for several years, could train, advise, and assist the AAF in sustainment of the Mi-25.283 CSTC-A reported that between FY 2012 and FY 2015, the United States has invested over $1.8 billion in the development of the SMW, obligating roughly $991.1 million of that amount for equipment and aircraft.284 According to CSTC-A, the SMW fleet of 59 fielded aircraft comprises Mi-17 helicopters and PC-12 turboprop planes that have intelligence gathering, surveillance, and reconnaissance capabilities.285 Of these aircraft, 30 of the Mi-17s and all of the PC-12s were procured using ASFF.286 According to NSOCC-A, the SMW has 509 members, of which 108 are pilots, all part of the MOD. Fifty-four additional personnel are undergoing entry, Englishproficiency, and security background checks.287 86 Special inspector general I Afghanistan reconstruction Security Afghan National Police As of December 31, 2015, the United States had obligated $18.7 billion and disbursed $18.2 billion of ASFF funds to build, train, equip, and sustain the ANP.288 ANP Strength As of October 22, 2015, the overall assigned end strength of the ANP, including the Afghan Uniform Police, Afghan Border Police, Afghan National Civil Order Police, and MOI Headquarters and Institutional Support (MOI HQ & IS), was 146,026, according to USFOR-A.289 This is a decrease of 2,270 ANP personnel since last quarter, when the July 2015 assigned end strength was reported at 148,296, and 10,974 below the authorized end strength of 157,000, as reflected in Table 3.9.290 Police officers represent the largest component of the ANP with 70,886 members, 49,872 noncommissioned officers, and 25,268 officers.291 During the months of August, September, and October, the ANP experienced a 2.35%, 2.32%, and 2.5% attrition rate, respectively. The prior three months’ attrition rate was approximately 1.94%.292 Within the ANP, the Afghan National Civil Order Police continues to endure the highest attrition rates: 4.69%, 4.36%, and 5.53% over the three months.293 The UN Office of the Special Representative of the Secretary-General for Children and Armed Conflict reported two verified cases of the ANP and ALP recruiting children in a June 2015 report.294 CSTC-A reported the ANP Inherent Law, dated October 2010, requires that no recruits be under the age of 18.295 While restricting child police/soldier recruitment is not a condition for U.S. funding in the annual CSTC-A financial-commitment letters, USFOR-A says advisors will forward any human-rights violations to the RS Mission Legal Office.296 Table 3.9 ANP STRENGTH, QUARTERLY CHANGE Authorized ANP Component Q3 2015 Assigned Quarterly Change Q4 2015 Q3 2015 Q4 2015 Quarterly Change AUP 90,139 91,000 861 86,754 85,976 (778) ABP 22,955 23,313 358 21,775 21,520 (255) ANCOP 15,223 16,200 977 15,169 14,511 (658) MOI HQs & IS 28,523 26,487 (2,036) 24,598 24,019 (579) 156,840 157,000 148,296 146,026 (2,270) ANP Total (as reported) 160 Note: Quarters are calendar-year; Q3 2015 data as of 7/2015; Q4 2015 data as of 10/2015. AUP = Afghan Uniformed Police; ABP = Afghan Border Police; ANCOP = Afghan National Civil Order Police; MOI = Ministry of Interior; IS = Institutional Support personnel. Source: USFOR-A, response to SIGAR data calls, 9/11/2015 and 12/14/2015. Report to the united states congress I January 30, 2016 87 Recent news-media reporting questions the validity and reliability of ANDSF personnel numbers. For more information, see pp. 72–73 of this section. Security ANP Sustainment As of December 31, 2015, the United States had obligated $7.7 billion and disbursed $7.5 billion of ASFF for ANP sustainment.297 This includes contributions to the Law and Order Trust Fund for Afghanistan (LOTFA), which pays for ANP salaries, the most prominent ASFF sustainment funding. Other uses of ANP sustainment funding include vehicle and radio maintenance; organizational clothing and individual equipment; and ammunition.298 The U.S. contribution to LOTFA for calendar year 2015 was $112.3 million to fund salaries, incentives, and the UN Development Programme management fee.299 CSTC-A reports the U.S. funding required for LOTFA over the next five years will depend on the contributions of Coalition partners. The estimated annual expenses range from a high of $616.3 million to a low of $608.1 million, for an average of $613.2 million.300 The CSTC-A financial-commitment letter to the MOI for Afghan FY 1394 includes the LOTFA Steering Committee mandate for the MOI to provide 100% of ANP salaries through electronic funds transfer.301 To incentivize the MOI to use electronic payment systems, CSTC-A is to provide funding only for those authorized tashkil positions being paid electronically, once the automated pay system is ready for use later in 2016.302 USFOR-A reports as of November 22, 2015, that the MOI has input 90.8% of the ANP forces into AHRIMS.303 However, USFOR-A does not have the applicable AHRIMS access to create the report SIGAR requested on attrition and educational data by rank and province and, therefore, requested the data from the MOI. USFOR-A explained AHRIMS is a MOD- and MOIowned system and the requested data may or may not be available at this time because the initial data-input effort is prioritizing other key data fields, such as name, rank, identification number, next of kin, and banking information required for electronic salary payments. Additional information pertaining to ANDSF members will be inputted incrementally.304 USFOR-A additionally reported that AHRIMS will transition to the APPS in 2016, to provide greater accountability of personnel present for duty, properly assigned to a tashkil position, and paid the proper entitlements. However, SIGAR did not receive clarification if APPS will replace AHRIMS in its entirely or if APPS will replace only some of its functions.305 ANP Equipment and Transportation As of December 31, 2015, the United States had obligated and disbursed $4.1 billion of ASFF for ANP equipment and transportation.306 Most of these funds were used to purchase vehicles, aircraft, ammunition, weapons, and communication equipment as shown in Table 3.10. More than 68% of funding in this category was used to purchase vehicles and vehicle-related equipment. Since last quarter, the total cost of equipment procured for the ANP increased to over $76.6 million, all within the weapons and vehicle 88 Special inspector general I Afghanistan reconstruction Security Table 3.10 COST OF U.S.-FUNDED ANP EQUIPMENT, AS OF NOVEMBER 30, 2015 Type of Equipment Procured and Fielded to the ANA Procured Remaining to be Procured Weapons $291,495,548 $205,851,400 $19,045,740 Vehiclesa 3,468,042,669 3,109,856,026 164,435,625 Communications 230,376,282 224,995,225 11,588,547 Ammunition 738,345,011 419,352,362 0 Transportation Services C-IEDs 20,026,263 7,770,471 0 115,581,810 115,581,810 2,165,915 Other 243,097,382 91,438,300 14,412,160 Total $5,106,964,965 $4,174,845,594 $211,647,987 Note: C-IEDs = Counter-improvised explosive devices. Aircraft costs are no longer shown for the ANP. The Special Mission Wing (SMW) for which they were procured has been transferred to the ANA, moving from MOI to MOD control. a Vehicle costs includes vehicles and parts. Source: CSTC-A, response to SIGAR data call, 1/4/2016. categories.307 As with the ANA, there was no change in the amount of equipment that had been transferred to the ANP since the last CSTC-A reporting dated June 30, 2015.308 The weapons “remaining to be procured” amount changed since the June reporting from “to be determined” to $19 million. In addition, the vehicles “remaining to be procured” amount changed since the June reporting from “to be determined” to $164.4 million.309 In early 2015, DOD approved a CSTC-A plan to transition the ANP to U.S. standard weapons.310 The plan will transition up to 78,000 of the MOI’s AK-47 supply to the M-16A4 over the next several years. CSTC-A will develop a plan with the Afghans to consolidate, demilitarize, and ensure proper accountability of weapons turned in, consistent with DOD’s response to SIGAR’s July 2014 audit report, Afghan National Security Forces: Actions Needed to Improve Weapons Accountability (14-84-AR).311 CSTC-A will not transfer any new weapons until the Afghan ministries meet the turn-in, turnover, and demilitarization conditions.312 Equipment purchased for the ANP that was later determined to no longer be required by the ANDSF can be transferred to DOD for disposition, after the U.S. Congress is notified. DOD notified SIGAR that no notification was processed during the quarter, so the cumulative value of ANP equipment transferred to DOD remains at $18.4 million.313 ANP Infrastructure As of December 31, 2015, the United States had obligated $3.1 billion and disbursed $3.0 billion of ASFF for ANP infrastructure.314 As of November 30, 2015, the United States had completed 729 infrastructure projects valued at $3.7 billion, with another four ongoing projects valued at $73.5 million, according to CSTC-A.315 The largest ongoing ANP Report to the united states congress I January 30, 2016 89 Security Newly inaugurated MOI Headquarters building in Kabul. (CSTC-A file photo) infrastructure projects this quarter are the remaining facilities at the MOI headquarters complex in Kabul that began in March 2012 and are expected to be completed in February 2016, and two compounds for females in Nangarhar and Kabul ($6.4 million and $3.4 million respectively).316 While no projects were completed this quarter, the President of Afghanistan, the Afghan Minister of Interior, and RS Commander General Campbell presided over the formal inauguration of the new Ministry of the Interior building in Kabul on December 21, 2015.317 Three contracts were awarded at a cost of $10.1 million, including the two compounds for females and a fueling point at a regional logistics center in Nangarhar ($273 thousand).318 In addition, CSTC-A reports 13 projects are in the planning phase ($52.75 million).319 The ASFF-funded national operations and maintenance contract provides maintenance for five MOI facilities including the MOI headquarters and national and regional logistics centers. CSTC-A reports maintenance for four facilities is scheduled to transition to the MOI by the end of March 2016, and for the MOI headquarters by the end of February 2017.320 ANP Training and Operations As of December 31, 2015, the United States had obligated $3.7 billion and disbursed $3.6 billion of ASFF for ANP and MOI training and operations.321 CSTC-A reported six ongoing U.S.-funded training programs: five focused on technical training and one focused on basic training.322 The largest U.S.-funded training includes operational-specialty training, such as special-operations intelligence, vehicle maintenance, counter-improvisedexplosive-device procedures, explosive-ordnance disposal, and radio operation and maintenance.323 90 Special inspector general I Afghanistan reconstruction Security Status of Women in the ANDSF This quarter RS reported 3,728 women serving in the ANDSF, a slight decrease from the 3,753 reported last quarter.324 However, with the overall decrease in the ANDSF end strength, the percentage of women serving in the ANDSF stayed constant at 1.16%.325 Of the total, 2,802 were serving with the ANP: 1,208 officers, 1,258 NCOs, 1,119 soldiers, and 143 cadets.326 The number of women in an officer position increased by 381 since last quarter, not including three additional MOI females who were selected to the rank of brigadier general.327 The Women in Security Advisory Committee—General Campbell chairs and first lady Rula Ghani is an honorary member—provided strategic input to several initiatives. One proposal was to increase overseas training options as a way to increase recruiting and training capacity, as in-country training is limited to 485 women annually. The committee also contributed to the dialogue for national-level endorsement for female police officers to carry weapons.328 RS also reported the draft FY 1395 gender commitment letter will require the MOD to create 5,000 positions for women by the end of solar year 1395. These ANA tashkil positions are deemed essential to provide careeradvancing pathways for women.329 However, the ANDSF has not met its recruitment goals for women once in the 14 years the Coalition has been in Afghanistan.330 ANDSF Medical/Health Care While the overall number of doctors and other medical staff increased this quarter, according to CSTC-A, the number of physician vacancies also increased due to the increase in the number of authorized positions.331 As of November 25, 2015, CSTC-A reports there are 911 physicians and 2,678 other medical staff within the ANDSF health-care system.332 This quarter CSTC-A reported two accomplishments within the ANDSF health-care system. The first was the Afghan presidential decree approving the formation and charter of the Afghan Medical Council on November 12, 2015. The council serves the function similar to a U.S. state medical board, setting and enforcing medical standards, hospital accreditation, and physician licensing and education.333 The second accomplishment was a policy changing the maximum age of new hires, which should help to alleviate the personnel shortages at ANDSF hospitals. In November, the MOD approved hiring physicians above age 27, with an exception for physician specialists over age 40. The accession policy also eliminated the age restriction for hiring physician assistants and nurses.334 CSTC-A reports RS is to purchase critical medical equipment that the MOD and MOI were unsuccessful in purchasing on-budget last year.335 Report to the united states congress I January 30, 2016 91 Security Removing Unexploded Ordnance The Department of State’s Bureau of Political-Military Affairs’ Office of Weapons Removal and Abatement (PM/WRA) manages the conventionalweapons destruction program in Afghanistan to enhance the security and safety of the Afghan people. Since FY 2002, State has provided $328.3 million in weapons destruction and humanitarian mine-action assistance to Afghanistan. PM/WRA has two-year funding, and the majority of FY 2015 funds have been obligated. FY 2016 funds have not yet been made available for obligation.336 State directly funds five Afghan nongovernmental organizations (NGO), four international NGOs, and one U.S. government contractor. These funds enable the clearance of areas contaminated by explosive remnants of war (ERW) and support the clearance of conventional weapons used by insurgents to construct roadside bombs and other improvised explosive devices. As of September 30, 2015, State-funded implementing partners have cleared more than 177 million square meters of land (approximately 68.3 square miles) and removed or destroyed approximately 7.7 million landmines and other ERW such as unexploded ordnance, abandoned ordnance, stockpiled munitions, and home-made explosives since 1997 (see Table 3.11).337 The estimated total area of contaminated land continues to fluctuate as clearance activities reduce hazardous areas while ongoing survey activities find new contaminated land. At the beginning of this quarter, there were 213.1 square miles of contaminated minefields and battlefields. During the quarter, 1.8 square miles were cleared. However, ongoing surveys identified 4.6 square miles of additional contaminated areas, bringing the known contaminated area to 220.4 square miles at the end of the quarter. PM/WRA defines a minefield as the area contaminated by landmines, whereas a contaminated area can include both landmines and other ERW.338 Table 3.11 CONVENTIONAL WEAPONS DESTRUCTION PROGRAM METRICS, FISCAL YEARS 2009–2015 Minefields Cleared (m2) Estimated Contaminated Area Remaining (m2)* 4,339,235 39,337,557 650,662,000 21,966,347 31,644,360 602,000,000 22,912,702 46,783,527 550,000,000 10,148,683 25,059,918 521,000,000 346,484 9,415,712 22,071,212 511,600,000 33,078 88,798 4,062,478 12,101,386 570,800,000 1,875,987 5,765,731 72,845,157 176,997,960 570,800,000 Year AT/AP Destroyed UXO Destroyed 2010 13,879 663,162 1,602,267 2011 10,504 345,029 2,393,725 2012 11,830 344,363 1,058,760 2013 6,431 203,024 275,697 2014 12,397 287,331 2015 2,134 57,175 TOTAL SAA Destroyed Fragments Cleared Note: AT/AP = anti-tank/anti-personnel ordnance. UXO = unexploded ordnance. SAA = small arms ammunition. Fragments are reported because their clearance requires the same care as for other objects until their nature is determined. There are about 4,047 square meters (m2) to an acre. * Total area of contaminated land fluctuates as clearance activities reduce hazardous areas while ongoing survey identifies and adds new contaminated land in the Information Management System for Mine Action (IMSMA) database. Source: PM/WRA, response to SIGAR data calls, 4/1/2015, 6/26/2015, and 12/29/2015. 92 Special inspector general I Afghanistan reconstruction Security The U.S. Agency for International Development (USAID), in partnership with the UN Mine Action Centre for Afghanistan (UNMACA), provides services for victims and survivors of mines and ERW, as well as for civilians affected by conflict and persons with disabilities, through the Afghan Civilian Assistance Program (ACAP). The goal of this project is to mitigate the short-term and long-term impact of conflict on civilians, including victims of mines and ERW. UNMACA draws on its wider network under the Mine Action Programme of Afghanistan (MAPA), which consists of 50 international and national organizations, to access beneficiaries and communities. One of those organizations, the Mine Action Coordination Centre of Afghanistan (MACCA), collects casualty data on mine/ERW victims to help prioritize its clearance activities. According to USAID, ACAP funding will allow MACCA to expand its victim-assistance activities beyond service provision and data collection to include immediate assistance for individual survivors and their families. The $30.2 million ACAP program has expended $9.6 million to date and will conclude in February 2018.339 Counternarcotics As of December 31, 2015, the United States has provided $8.4 billion for counternarcotics efforts in Afghanistan since 2002. Congress appropriated most of these funds through the DOD Drug Interdiction and Counter-Drug Activities (DOD CN) Fund ($3 billion), the ASFF ($1.4 billion), the Economic Support Fund (ESF) ($1.6 billion), and a portion of the State Department’s International Narcotics Control and Law Enforcement (INCLE) account ($2.2 billion). USAID’s alternative-development programs support U.S. counternarcotics objectives by helping countries develop economic alternatives to narcotics production. In addition to reconstruction funding, the Drug Enforcement Administration (DEA) receives funding through direct appropriations to operate in Afghanistan.340 (See Appendix B.) In October 2015, the Afghan government approved its National Drug Action Plan (NDAP), developed in collaboration with the U.S. government. State’s Bureau of International Narcotics and Law Enforcement Affairs (INL) said it will support the NDAP by using available resources and future funding requests to bolster counternarcotics efforts. The United States is updating and revising its counternarcotics strategy for Afghanistan to support the goals and objectives outlined in the NDAP.341 In December 2015, the UN Office of Drugs and Crime (UNODC) published its Afghanistan Opium Survey 2015. UNODC estimated that the area under cultivation was 183,000 hectares, a 19% decrease from the previous year. Afghan opium production (3,300 tons) also decreased 48% from its 2014 level. However, UNODC cautioned that it changed its methodology between 2014 and 2015, which could make changes appear larger than they actually were. The decreases do not result from a single factor Report to the united states congress I January 30, 2016 93 Security Figure 3.27 AFGHAN OPIUM CULTIVATION AND PRODUCTION SINCE 2008 HECTARES TONS 250,000 10,000 224 209 200,000 150,000 157 8,000 6,000 154 123 100,000 123 131 4,000 2,000 50,000 0 0 2008 2009 2010 2011 Opium cultivation (HECTARES) 2012 2013 2014 2015 Opium production (TONS) Source: UNODC, Afghanistan Opium Survey 2008, 11/2008, p. 5; Afghanistan Opium Survey 2009, 12/2009, p. 5; Afghanistan Opium Survey 2010, 12/2010, p. 7; Afghanistan Opium Survey 2011: Summary Findings, 10/2011, p. 1; Afghanistan Opium Survey 2013, 12/2013, p. 12; Afghanistan Opium Survey 2014: Cultivation and Production, 11/2014, p. 7; Afghanistan Opium Survey 2015: Cultivation and Production, 12/2015, p. 8. The Partners for Afghanistan and Neighboring Countries: Also referred to as the Regional Programme for Afghanistan and Neighboring Countries, it was created in December 2011 by the UN to combat illicit drug and opium production and cultivation in the region. The program fosters cooperation, information sharing, networking, and partnerships between the countries in the region through a strategic framework. Source: UNODC, Regional Programme for Promoting Counter Narcotics in Afghanistan and Neighbouring Countries, SemiAnnual Progress Report Issue No. 5, January–June 2014, pp. 5, 6, and 10. or policy measure and do not represent a downward trend. According to UNODC, the declines are mainly a consequence of repeated crop failures in the southern and southwestern regions of Afghanistan. Production and cultivation results had been rising for the past decade, as illustrated in Figure 3.27.342 In December 2015, INL took part in two UNODC international meetings, the High-Level Meeting of Partners for Afghanistan and Neighboring Countries and the Paris Pact Consultative Group Meeting. The NDAP was presented at both. At these meetings, the United States reaffirmed support for counternarcotics efforts in Afghanistan and encouraged international commitments to the NDAP. During a recent winter visit to Afghanistan, the UNODC regional representative for Afghanistan and neighboring countries told Special Inspector General John F. Sopko that regional and international coordination is critical to achieve sustainable reductions in drug production. According to the regional representative, the UN was best suited to coordinate efforts to improve the efficiency of donors’ assistance.343 Drug Demand Reduction Although INL itself reports in its 2015 International Narcotics Control Strategy Report that “the prevalence of addiction and severity of 94 Special inspector general I Afghanistan reconstruction Security consumption [in Afghanistan] is the highest documented in the world,” INL is reducing funding to all treatment centers.344 In January 2015, INL transitioned its first group of 13 treatment programs to the Afghan Ministry of Public Health (MOPH) responsibility. Another 15 treatment centers will begin transitioning in January 2016; the remaining 69 treatment centers will be transitioned by the end of 2019. INL reduced funding to all facilities (including the original MOPH portfolio of 23 centers and the 13 that were in transition during 2015) by approximately 20% in 2015. According to INL, further cuts are necessary in the coming year. During 2015, the MOPH and INL’s implementing partner, the Colombo Plan, collaborated to transfer the clinical staff from the first group of treatment centers onto the Afghan government payroll. According to INL, this will be complete by January 2016. A total of 67 clinical staff members were trained between January and March 2015 by the Colombo Plan; additional staff were hired this quarter and 25 trained in December 2015. In 2015, UNODC provided training to 140 staff on new treatments and the MOPH provided “train the trainer” training to 120 staff on treatment methodologies.345 During the quarter, INL began working with the Ministry of Higher Education on the possibility of establishing an addiction studies department at Kabul University and continued its efforts with the Ministry of Education on preventative drug education teacher training.346 INL contributed over $4.6 million to the Colombo Plan in April 2015 and $12.9 million during 2015 for drug treatment and education programs. In 2014, INL contributed $7.6 million to the Colombo Plan and $9.4 million for drug treatment and education programs. SIGAR has written in previous quarterly reports about the insufficient number of treatment centers to address Afghanistan’s growing domestic addiction problem. In addition to the significant number of heroin and opiate users, Afghanistan has seen a rise in methamphetamine (crystal meth) users. The first crystal meth seizure was in 2008 in Helmand. In 2015, there were seizures in 14 provinces. Although Iran is the leading producer of crystal meth in the region, its manufacture is on the rise in Afghanistan. The meth seized in Afghanistan is of high quality, 90% or higher purity. This recent phenomenon has prompted the Counter Narcotics Police of Afghanistan (CNPA) to urge stronger legal penalties for trafficking in methamphetamine.347 If the numbers of crystal meth users and local manufacturing labs continue to rise, it will intensify the challenge of addressing the country’s already robust illicit drug economy. Counter Narcotics Community Engagement INL funds the nationwide Counter Narcotics Community Engagement (CNCE) program, which focuses on discouraging poppy cultivation, Report to the united states congress I January 30, 2016 95 The Paris Pact: The partnership of several countries and international organizations to combat illicit opium traffic from Afghanistan. It originated from a meeting of various ministers held in Paris in 2003 on central Asian drug routes. It aims to reduce opiumpoppy cultivation and production, and global consumption of heroin and other opiates, and establish a broad international coalition to combat Illicit traffic in opiates. Colombo Plan: Instituted as a regional intergovernmental organization to further economic and social development, it was conceived at a conference held in Colombo, Sri Lanka (then Ceylon), in 1950 with seven founding member countries, and has expanded to 26 member countries. INL continues to support the Colombo Plan’s Asian Centre for Certification and Education of Addiction Professionals (ACCE), a training unit of treatment experts to assist governments in developing a professional certification process for addiction professionals in Asia and Africa. Source: Paris Pact, “What is it?” www.paris-pact.net, accessed 7/16/2014; The Colombo Plan Secretariat, “History,” www.colombo-plan.org, accessed 4/7/2014; State, INL, International Narcotics Control Strategy Report: Volume I, Drug and Chemical Control, 3/2013, p. 20. Security preventing drug use by raising public awareness, and encouraging licit crop production. Since 2013, INL has expended $9.18 million on the program. The program was extended for one year on April 4, 2015, with an additional cost of $1.55 million. The program has a total cost of $9.7 million.348 The program pays an Afghan company, Sayara Media Communications, to place 42 reporters in Afghan provinces, to gather information and gauge perceptions of counternarcotics policies and messaging. Sayara assesses the effectiveness of campaigns and seeks to identify the provincial drivers of drug trafficking, opium cultivation, and public sentiment. According to INL, activities during the quarter focused on the 2016 preplanting-season campaign as well as numerous public outreach events, to include print, television and radio campaigns organized by the Ministry of Counter Narcotics (MCN).349 Sayara monitors counternarcotics-related items in the media and evaluates any changes on a monthly basis. The effectiveness of this media campaign is unclear. INL said some areas exposed to counternarcotics media experienced a decrease in opium cultivation, while in other areas where security and governance remain a challenge, cultivation numbers increased or remained the same. An independent evaluation of the INLfunded messaging program has not taken place since early in the program’s implementation, but a 2008 evaluation of a similar campaign concluded that “public CN [counternarcotics] awareness campaigns cannot be effective in isolation and, to increase the chances of success, need to be (i) coordinated with the development of the licit rural economy to provide alternatives to opium poppy cultivation, and (ii) accompanied by credible threats of punishment (including eradication).”350 Independent Directorate of Local Governance (IDLG): Created in 2007, the IDLG was established with the mandate of transferring civilian responsibilities of the Ministry of Interior to an independent entity. IDLG supports the provincial councils and is responsible for local governance. Its strategic plan is carried out in the national priority program on subnational governance. IDLG has developed the mentioned program for the purpose of strengthening subnational governance with the cooperation of relevant entities and agreement of the international partners. Source: Government of Afghanistan, Independent Directorate of Local Governance website, “History,” accessed 1/11/2016. Governor-Led Eradication Program INL funds the Governor-Led Eradication Program (GLE) program, which reimburses provinces for the cost of eradicating poppies. Since 2007, INL has contributed $10 million to the MCN for the GLE program, which accounts for less than 2% of INL’s annual counternarcotics budget for Afghanistan. The MCN tracks cumulative results—which are verified by UNODC. According to UNODC, a total of 3,720 hectares were eradicated in 2015, a 40% increase from last year’s results.351 Eradication results have been declining over the past few years, as shown in Figure 3.28. There were few security incidents during eradication, which UNODC attributes to improved coordination between the MCN, MOD, MOI and the Independent Directorate of Local Governance. Eradication took place near active military operations in Helmand and Kandahar, which reportedly improved security but also underscored the lack of government control in those areas.352 This quarter, INL made no GLE payments to the ministry. After UNODC verified the 2015 results in September, INL requested that the MCN fully 96 Special inspector general I Afghanistan reconstruction Security Figure 3.28 GOVERNOR LED OPIUM-POPPY ERADICATION, 2008–2015 (HECTARES) 10,000 9,672 8,000 6,000 7,348 5,480 5,351 3,810 4,000 3,760 2,692 2,316 2,000 0 2008 2009 2010 2011 2012 2013 2014 2015 Note: Program results are based on UNODC-verified eradication figures. Source: UNODC, Afghanistan Opium Survey 2008, 11/2008, p. 5; Afghanistan Opium Survey 2009, 12/2009, p. 5; Afghanistan Opium Survey 2010, 12/2010, p. 7; Afghanistan Opium Survey 2011: Summary Findings, 10/2011, p. 1; Afghanistan Opium Survey 2013, 12/2013, p. 12; Afghanistan Opium Survey 2014: Cultivation and Production, 11/2014, p. 7; Afghanistan Opium Survey 2015: Cultivation and Production, 12/2015, p. 8. account for advances it paid to provinces during 2015 and reconcile unearned advances by provinces from previous years. INL said it will disburse final payment once this occurs. The MCN has not finalized its 2016 eradication plans, which are expected to align with milestones laid out in the recently adopted National Drug Action Plan.353 Good Performer’s Initiative INL’s Good Performer’s Initiative (GPI) is a program implemented by the MCN that seeks to incentivize provincial counternarcotics performance. As of November 30, 2015, a total of 253 GPI projects with a value of more than $119.5 million have been approved. Some 195 projects have been completed, 56 were ongoing, and two were nearing completion. Under the terms of the original GPI, which ran through August 30, 2014, a province was eligible for financial support of GPI development projects for each year that it achieved UNODC-verified poppy-free status or reduced cultivation by more than 10% compared to the previous year’s levels. In September 2014, the MCN began implementing a redesigned GPI to encourage more integrated counternarcotics action and provide more focused support for rural alternative livelihoods. Under the new GPI (GPI II), the award categories for “good performers” were expanded to include progress in public outreach and law enforcement, in addition to cultivation. The Report to the united states congress I January 30, 2016 97 Security new program will continue to link action with rewards: provinces must demonstrate verifiable counternarcotics achievements against defined standards to receive awards.354 Negotiations on GPI II between the Afghan Government and U.S. Embassy Kabul are ongoing.355 INL ensures that projects proposed under the GPI program do not conflict with other U.S. government work through interagency consultation. INL and its implementing partners consult with USAID to avoid pitfalls such as duplicative work with the same beneficiaries or offering competing activities, and to develop complementary activities where possible. State’s Special Representative for Afghanistan and Pakistan hosts regular counternarcotics working groups to bring together interagency personnel from State, DOD, DEA, USAID, and other relevant agencies to maintain coordination on multiple programs.356 Ministry of Counter Narcotics Capacity Building The memorandum of understanding between INL and the MCN that provided funding for 24 Afghan advisors to help build capacity expired in September 2015. It was not extended due to the poor security conditions that limited the ability of U.S. advisors to access the MCN and hampered oversight of the program. To date, INL has obligated $331,479 and spent $126,491 on capacity-building items and $742,549 on the salaries of advisors.357 INL shifted from providing capacity-building support through embedded advisors to offering skills-based training to ministry staff and integrating the Asian University for Women fellows into the work of the MCN.358 In April 2015, INL published its independent risk assessment of the MCN’s public financial-management system, which identified significant deficiencies that increased the potential for misstatements in financial reporting, inefficient and ineffective operations, and noncompliance with laws and regulations. Areas of particular concern were internal control, program management and monitoring, and fixed-asset management. INL said it is procuring a contractor to implement the remediation plan.359 Alternative Development/Alternative Livelihood USAID’s alternative-development programs support U.S. counternarcotics objectives by helping countries develop economic alternatives to narcotics production. INL funding supports supply-reduction and alternative-development programs. INL told SIGAR it coordinates regularly with USAID to ensure that INL-supported alternative-development efforts complement past and ongoing investments by USAID in licit livelihoods and rural development in Afghanistan.360 98 Special inspector general I Afghanistan reconstruction Security Table 3.12 ALTERNATIVE LIVELIHOOD PROGRAMS Agency State (INL) USAID USAID USAID USAID USAID USAID Project Title Strengthening Afghan Governance and Alternative Livelihoods (SAGAL) Commercial Horticulture and Agriculture Marketing Program (CHAMP) Incentives Driving Economic Alternatives for the North, East, and West (IDEA-NEW) Kandahar Food Zone (KFZ) Regional Agricultural Development Program (RADP)-South Regional Agricultural Development Program (RADP)-North Regional Agricultural Development Program (RADP)-West Start Date 7/21/2014 2/1/2010 3/2/2009 7/31/2013 10/7/2013 5/21/2014 8/10/2014 End Date 1/20/2016 12/30/2016 9/30/2015 8/30/2016 10/6/2018 5/20/2019 8/9/2019 Total Estimated Cost ($) $11,884,816 45,296,184 159,878,589 27,695,788 125,075,172 78,429,714 69,973,376 Cumulative Disbursements, as of 12/31/2015 ($) $7,321,345 45,081,411 156,401,307 20,530,000 45,241,343 13,710,191 14,038,692 Note: USAID programs listed are not necessarily funded from the agency’s Alternative Development Fund. Source: USAID, response to SIGAR data call, 12/28/2015; USAID, Quarterly Pipeline Analysis Report as of 12/31/2015, 1/11/2016; INL, response to SIGAR data call, 12/23/2015. Strengthening Afghan Governance and Alternative Livelihoods The nongovernmental Aga Khan Foundation and its partners implement activities across 16 provinces under INL’s $11.9 million Strengthening Afghan Governance and Alternative Livelihoods (SAGAL) grant. The implementers favor activities, rather than stand-alone projects, with the following five objectives: • improve agricultural yields of high-potential licit crops • increase economic return for licit crops • improve farmers’ access to financing • reduce vulnerability of at-risk populations to engage in the illicit economy • improve subnational governance According to INL, SAGAL activities will complement past and ongoing investments in licit livelihoods and rural development by the U.S. government, including support for GPI II. Where possible, SAGAL will support a more decentralized GPI II project-selection and nomination process to improve the recognition of rural community needs. SAGAL has expended $7.3 million to date and will conclude in January 2016.361 Table 3.12 provides summary financial information on SAGAL and other alternative livelihood programs. Kandahar Food Zone (KFZ) The Kandahar Food Zone (KFZ) is a three-year, $27.7 million, USAID alternative livelihood project, implemented by International Relief and Development Inc. under a joint strategy and in close coordination with INL. KFZ is designed to identify and address the drivers of poppy cultivation in targeted districts of Kandahar Province through grants for activities that improve community infrastructure, strengthen alternative livelihoods, and support small businesses.362 KFZ expended $2.15 million between July Report to the united states congress I January 30, 2016 99 Security and September 2015. During year two, KFZ completed the construction or rehabilitation of 12 canals; conducted surveys and designs for another four canals; identified and awarded contracts for building greenhouses; and conducted training for recently hired staff to conduct village surveys to identify new infrastructure projects and identify the drivers of poppy cultivation. Cumulative disbursements, since the program’s inception in 2013, total $20.5 million as of December 31, 2015. For funding information on this alternative livelihood program, please refer to Table 3.12 on page 99 of this report. More information on KFZ is available in SIGAR’s October 30, 2015, Quarterly Report to the United States Congress.363 Regional Agricultural Development Program Value chain: the range of goods and services necessary for an agricultural product to move from the farm to the final customer or consumer. It encompasses the provision of inputs, actual on-farm production, post-harvest storage and processing, marketing and transportation, wholesale and retail sales. Source: USAID, response to SIGAR vetting, 4/12/2015. The Regional Agricultural Development Program (RADP) is intended to help Afghan farmers achieve more inclusive and sustainable economic growth. RADP projects are under way in the southern, western, and northern regions of Afghanistan. The projects focus on strengthening the capacity of farmers to improve the productivity of wheat, high-value crops, and livestock. Using a value chain approach, these projects work with farmers and agribusinesses to overcome obstacles hindering production, processing, sales, and overall development of agricultural value chains.364 As of December 31, 2015, USAID has made cumulative disbursements of $32.6 million to RADP-North, $30.9 million to RADP-South, and $28.0 million to RADP-West. RADP-North is a five-year, $78.4 million program covering Baghlan, Balkh, Jowzjan, Kunduz, and Samangan provinces. This quarter, the program conducted a short-message service (SMS or “text message”) marketing campaign to farmers and suppliers. The program also sponsored 22 agribusinesses to participate at the October Kabul International Agricultural Fair and provided training for the November 2015 “WorldFood Kazakhstan” industry exhibition.365 The purpose of RADP-South is to improve food and economic security for rural Afghans in Helmand, Kandahar, Zabul, and Uruzgan. It began in October 2013 and is scheduled to end in October 2018 with an estimated cost of $125 million. Between October 2014 and October 2015, RADPSouth’s key accomplishments included teaching over 22,000 farmers new production and productivity practices for wheat, high value crops, and livestock; providing new cooling techniques, improving packing materials and practices, which increased product shelf life for more than 3,100 high-valuechain farmers; and providing nutrition as well as entrepreneurship training for over 3,100 women, in addition to supporting 58 veterinary field units.366 The training for farmers involved on-farm and field demonstrations as well as classroom sessions to improve management practices and use of new techniques to increase crop yield.367 The implementing partner noted that insecurity presents challenges for monitoring project activities in the field. As a result, RADP-South will 100 Special inspector general I Afghanistan reconstruction Security explore options for third-party monitoring by partners with a significant presence in southern provinces. As of October 1, RADP-South suspended all activities with Coordination of Humanitarian Assistance, the key implementing partner in Helmand Province, as instructed by USAID’s Office of the Inspector General. USAID said after the suspension, it deployed a support team to ensure logistical and operational continuity.368 The project’s intended outcomes are to • increase agricultural productivity and profitability • increase and sustain the adoption of licit crops • increase profitability of small, medium and large agribusinesses • increase women’s participation in agriculture value chain activities In July 2015, SIGAR published a financial audit of the Southern Regional Agricultural Development (SRAD) program which ended in 2012. The audit revealed two material weaknesses and one internal control deficiency resulting in $28.4 million in questionable costs. SRAD, the precursor to RADP-South, focused its activities on cash-for-work temporary employment activities and agricultural voucher packages, to develop the region into a sustainable and prosperous agricultural economy. Prior SIGAR Quarterly Reports to the United States Congress (see July 30, 2012, for instance) addressed the waste and mismanagement under the $65 million SRAD program.369 The $160 million Incentives Driving Economic Alternatives for the North, East and West (IDEA-NEW) ended September 30, 2015. RADPEast, which is scheduled to start around March 2016, will pursue similar activities in the region as IDEA-NEW. USAID told SIGAR it foresees no negative impact despite the time gap between the end of IDEA-NEW’s activities and the start of RADP-East. As with most agriculture projects, RADP-East alternative livelihood activities will be more intense during nonwinter months.370 IDEA-NEW had partnered with micro, small, and medium-sized enterprises on the demand and supply sides of high-growth value chains; it also provided matching grants and promotional-activity grants that benefited the enterprises. According to USAID, RADP-East will leverage these partnerships and accomplishments to increase the impact of its activities. RADP-East will continue three successful IDEA-NEW interventions: • Use short message service (SMS) or “text message” marketing to deliver key information (i.e., crop-specific timing of fertilizer and pesticide application, availability of agriculture inputs, location of providersponsored farmer field days and training activities) to targeted farmers. • Employ “radio-based marketing and extension” through live radio shows that will be supported through the cost-share approach with suppliers. With limited reliance on donor funding, useful agricultural extension information is disseminated, while linking suppliers and existing/prospective buyers. Report to the united states congress I January 30, 2016 101 Agricultural extension: refers to the application of scientific research and new knowledge to agricultural practices through farmer education. Agricultural extension has now become recognized as an essential mechanism for delivering information and advice as an “input” into modern farming. In the less developed countries, the main focus remains on agricultural (mainly food) production. Source: FAO, Improving Agricultural Extension, A Reference Manual, 1997, Chapter 1, www.fao.org/docrep/w5830e/ w5830e00.HTM, accessed 1/5/2016. Security • Conduct “farmer field days,” where food processors and suppliers demonstrate and provide samples (fertilizers, tree saplings, farm equipment) to farmers.371 RADP-West focuses on helping rural Afghans in the western provinces of Herat, Farah, and Badghis. Despite security challenges during its first year, the program trained 603 wheat farmers in Herat and Badghis in harvesting, threshing, and storage; enabled private enterprises to contract with over 4,400 farmers to plant 100 metric tons of wheat; provided-high value crops to beneficiaries; and established a sustainable vegetable-seedling production center in Herat. The program supported and trained 16 veterinary field units in Herat and Badghis. RADP-West also enabled several farmers to contract with a food processing company in Herat to supply 12 metric tons of yellow carrots. Other activities resulted in establishing 21 female-operated vegetable plots and training 25 female workers on livestock disease, care, and food security.372 For summary information on this alternative livelihood program, see Table 3.12 on page 99 of this report.373 Commercial Horticulture and Agricultural Marketing Program The Commercial Horticulture and Agricultural Marketing (CHAMP) program is a $45.3 million USAID program designed to boost agricultural productivity and food security, provide market opportunities, and decrease poppy production. As of December 31, 2015, USAID has disbursed $45.1 million for CHAMP projects. CHAMP works to reduce poverty among rural Afghan farmers by helping them shift from relatively low-value subsistence crops, such as wheat and corn, to high-value crops such as fruits and vegetables.374 CHAMP has worked in half of the provinces of Afghanistan, providing training in agricultural best practices, building storage facilities, and helping grape farmers convert from traditional ground-level vineyards to higheroutput trellis systems. The program has been extended from its earlier end date of December 2014 until December 2016 to reinforce gains made in the export sector and increase Afghan exports to regional supermarkets by up to 10,000 metric tons annually. CHAMP is carrying out activities throughout six main value chains (apples, apricots, almonds, grapes, melons, and pomegranates). The program focuses on improving horticultural and marketing practices to produce high-quality fruit for high-value markets such as the United Arab Emirates and India.375 Since 2010, CHAMP’s various achievements include training 109,000 farmers, including 3,400 women, to improve agricultural techniques; planting nearly three million saplings and root cuttings benefitting 19,500 farmers; and exporting 38,000 tons of produce valued at $40.5 million to 102 Special inspector general I Afghanistan reconstruction Security international markets. CHAMP enabled the construction of over 230 storage facilities and created over 7,600 full-time jobs in agribusiness.376 During the third quarter of 2015, CHAMP provided training to over 1,500 farmers, including 174 women, at established farmer field schools in Kabul, Kandahar, Kapisa, Parwan, Logar, and Wardak provinces. At CHAMP farmer field schools, participants learn new agricultural practices such as orchard or trellis management and receive modern agricultural tools. In July 2015, CHAMP arranged training on food safety, hazard analysis, and critical control points. The program also arranged linkage meetings between farmers and traders during the export season. During the third quarter of 2015, the program facilitated deal negotiations resulting in the export of 86 metric tons of apricots, melons, and grapes to the United Arab Emirates and India.377 Between July and September 2015, CHAMP provided training to • 174 women grape producers from the provinces of Kabul, Kapisa, and Parwan on winter-season practices such as composting, pruning, and fertilizer application • 305 women from Kabul and Parwan provinces in raisin-drying training • 478 women on sulphur drying of apricots378 For summary financial information on this program, see Table 3.12 on page 99 of this report.379 Interdiction Operations and Results The Counternarcotics Police of Afghanistan consists of regular narcotics police and specialized units across the country. The specialized units include the Sensitive Investigation Unit (SIU), National Interdiction Unit (NIU), and the Intelligence Investigation Unit. Nearly half of the CNPA’s 2,800 personnel are assigned to Kabul. The INL interdiction program supports the maintenance of NIU/SIU and DEA facilities and a judicial wire intercept unit.380 DOD reported that from October 1 to December 16, 2015, Afghan security forces and law-enforcement agencies conducted 25 drug-interdiction operations and detained 45 individuals. These operations included routine patrols, cordon-and-search operations, vehicle interdictions, and detention operations. DOD is currently working with INL and DEA to relocate personnel to the international zone to enable DEA to continue mentoring and training the CNPA’s specialized investigative units. U.S. interdiction activities in Afghanistan throughout 2015 were minimal, as only one counternarcotic operation was conducted in April.381 Most interdiction activities occurred in the eastern and capital regions. In the past, interdictions were concentrated in southern regions, where the majority of opiates are grown, processed, and smuggled out of Afghanistan. DOD said the Coalition drawdown has had a negative impact on the CNPA and other Afghan counternarcotics agencies. The impact is most Report to the united states congress I January 30, 2016 103 Security Table 3.13 INTERDICTION RESULTS, FISCAL YEARS 2008–2016 Number of Operations Detainees Hashish seized (kg) 2008 2009 2010 2011 2012 2013 2014 2015 2016* TOTAL 136 282 263 624 669 518 333 265 25 3,115 49 190 484 862 535 386 441 391 45 3,383 241,353 58,677 25,044 182,213 183,776 37,826 19,088 24,784 114,466 887,227 Heroin seized (kg) 277 576 8,392 10,982 3,441 2,489 3,052 2,845 332 32,386 Morphine seized (kg) 409 5,195 2,279 18,040 10,042 11,067 5,925 505 — 53,462 15,361 79,110 49,750 98,327 70,814 41,350 38,307 26,083 3,531 422,633 4,709 93,031 20,397 122,150 130,846 36,250 53,184 234,981 — 695,548 Opium seized (kg) Precursor chemicals seized (kg) Note: The significant difference in precursor chemicals total seizures between 2014 and 2015 is due to a 12/22/2015 seizure of 135,000 liters (L) of precursor chemicals. * Results for period 10/1–12/16/2015 only. Source: DOD, response to SIGAR data calls, 9/24/2015 and 12/29/2015. Precursor chemical: a substance that may be used in the production, manufacture and/or preparation of narcotic drugs and psychotropic substances. Source: UNODC, “Multilingual Dictionary of Precursors and Chemicals,” 2009, viii. pronounced in the provinces of Helmand and Kandahar where the Coalition surge was focused and the subsequent withdrawal has had the greatest impact. According to DOD, the decrease of overall counterdrug missions is likely a result of less frequent partnering of U.S. and Coalition forces with Afghan forces and the need to use counternarcotic forces for general security roles due to the country’s declining security situation.382 In 2015, given the U.S. military’s reduced capabilities in Afghanistan, DOD created a Regional Narcotics Interagency Fusion Cell (RNIFC) to combat the regional drug trade. The RNIFC, located in Bahrain, tracks and interdicts the illicit movement of Afghan heroin and other illicit commodities on dhows (traditional sailing vessels) destined for the Middle East and East Africa. In addition to the CNPA, Afghan organizations contributing to interdiction activities include the Afghan Border Police, ANP, AUP, and the General Command of Police Special Unit.383 Afghan operations during this period also resulted in the reported seizures of the following narcotics contraband: • 3,531 kg of opium • 331.5 kg of heroin • 114,465.5 kg of hashish/marijuana There were no precursor chemicals seizures this quarter.384 As noted in previous SIGAR reports, interdiction results have been declining since 2012, as shown in Table 3.13. Aviation Support Between September and December 2015, State’s Air Wing counternarcotics support to INL consisted of 45.7 flight hours, 187 sorties, 529 personnel transported, and 25,217 pounds of cargo moved. Air Wing support to DEA (air shuttle and National Interdiction Unit movements) consisted of 104 Special inspector general I Afghanistan reconstruction Security 23.3 flight hours, 45 sorties, 406 personnel transported, and 19,650 pounds of cargo moved.385 INL’s ability to support tactical operations in the south and southwest regions of the country has been constrained since the June 2015 closure of INL’s base at Kandahar Airfield. NIU personnel continue to staff the regional law enforcement centers in Kandahar, Herat, and Kunduz. Additionally, NIU personnel occasionally support other MOI operations outside of Kabul. INL continues to assist the NIU and SIU with enablers, including operations and maintenance, while NIU typically uses the Special Mission Wing (SMW) for aviation support. See pages 85–86 of this report for more information on the SMW.386 Report to the united states congress I January 30, 2016 105 Governance Governance Contents Contents Governance 106 Key Events 107 National Unity Government Commitments 108 U.S. Assistance to the Afghan Government Budget 110 National Governance 115 Subnational Governance 117 Quarterly Highlight: USAID Ceases Stability Programming 119 Reconciliation and Reintegration 124 Rule of Law and Anticorruption 125 Human Rights 131 106 Special inspector general I Afghanistan reconstruction Governance Governance As of December 31, 2015, the United States had provided nearly $31.8 billion to support governance and economic development in Afghanistan. Most of this funding, more than $18.6 billion, was appropriated to the Economic Support Fund (ESF) administered by the State Department (State) and the U.S. Agency for International Development (USAID). The fiscal year (FY) 2016 ESF appropriation for Afghanistan was still being determined when this report went to press. Key Events This quarter, President Ashraf Ghani announced one component of the Jobs for Peace program, a 24-to-30-month, jobs-focused stimulus and stabilization program. The overall program is meant to provide short-term, labor-intensive employment in rural and urban areas. The initial cost of the first component is expected to be $100 million, growing to approximately $350 million as it expands to all provinces. The Afghan government initially estimates the entire Jobs for Peace program will cost approximately $1.18 billion, though some components still require budget estimates.387 In December, the United States announced plans to contribute $50 million to support the Afghan government’s job-creation efforts.388 On January 11, Afghan, Pakistani, U.S., and Chinese officials met in Islamabad in an effort to lay the groundwork for new talks with the Taliban. The Quadrilateral Coordination Group (QCG) emphasized the immediate need for direct talks between representatives of the Afghan government and Taliban groups. Pakistani officials recommended that the Afghan government not demand concessions from Taliban leaders before beginning talks. Additionally, Pakistani officials said threats against Taliban members who refused to join the talks would be “counterproductive.”389 In December, the Asia Foundation released their 2015 Survey of the Afghan People. The survey found that in 2015, 36.7% of respondents nationwide say their country is moving in the right direction, down from 54.7% in 2014. This represents the lowest level of optimism recorded over the past 10 years, following last year’s record high during the presidential runoff election. Among the 57.5% of Afghans who say their country is moving Report to the united states congress I January 30, 2016 107 Governance in the wrong direction, the most frequently cited reason is insecurity (44.6%, up six percentage points from 2014), followed by unemployment (25.4%), corruption in general (13.0%), a bad economy (12.4%), and bad government (11.4%).390 Despite government efforts to curb corruption, 89.9% of Afghans say that corruption is a problem in their daily lives, the highest percentage reported in a decade, with 61.1% saying it is a major problem and 28.8% saying it is a minor problem. This year, over half (53.3%) of Afghans who had contact with police within the past year say they paid a bribe, up from 45.1% in 2014. The frequency of bribes paid to officials in the municipality/district office (66.0%), judiciary and courts (63.4%), customs office (61.2%), provincial governor’s office (60.9%), state electricity supply (54.9%), Afghan National Police (ANP) (53.3%), public health services (52.6%), and Afghan National Army (ANA) (43.2%), and when applying for a job (58.7%), and for admissions to school/university (43.0%) all rose in 2015.391 On January 18, the elections commission announced that parliamentary and district council elections would occur on October 15. A spokesman for Chief Executive Abdullah responded that the election commission lacks legitimacy and that election reform is a precondition for elections. The elections commission chairman further stated that the Afghan government does not have the authority to remove elections commissioners. Abdullah, however, promised that a new commission will carry out the elections.392 National Unity Government Commitments Refreshed Mutual Accountability On September 5, international donors and the Afghan government met in Kabul for the second Senior Officials Meeting (SOM). The meeting was a continuation of the annual high-level meetings to follow up on mutual commitments from the July 2012 Tokyo Conference. The purpose of the SOM was to review progress on the Afghan reform program, discuss key policy issues, and to jointly decide the way forward.393 As a result of the September SOM, the Self-Reliance through Mutual Accountability Framework (SMAF) has superseded the Tokyo Mutual Accountability Framework (TMAF). The SMAF will now guide the activities of the Afghan government and the international community at least to the end of the term of the present government. The SMAF covers six areas: (1) improving security and political stability (with three associated indicators); (2) anticorruption, governance, rule of law, and human rights (14 indicators); (3) restoring fiscal sustainability and integrity of public finance and commercial banking (nine indicators); (4) reforming development planning and management, and ensuring citizens’ development rights (three indicators); (5) private-sector development and inclusive growth and 108 Special inspector general I Afghanistan reconstruction Governance Table 3.14 Status of Afghan government SMAF Short-Term Deliverables (due by the end of 2015) Short-Term Deliverable Completed? Appoint an attorney general; fill vacant deputy minister and governor posts No Five revenue-based ministries (Finance, Mines and Petroleum, Commerce and Industries, Transport and Civil Aviation, Communication and Information Technology) prepare anticorruption plans No An approved National Action Plan for Women Peace and Security implementation plan, including consultation with donors No Development councils approved and functioning to manage different sectors No Memorandum of understanding between government and civil society approved Yes Launch national program to survey informal settlements and provide 100% coverage of land tenure certificates in cities of Kabul, Herat, Kandahar, Mazar-e Sharif, and Jalalabad No Launch program to provide 5,000+ rural communities with funds for labor-intensive works to repair agricultural infrastructure Yes Launch pilot program for market gardening in urban peripheries No Complete new power-distribution systems to provide electricity to 40,000 poor households No Source: USAID, OPPD, response to SIGAR data call, 12/28/2015. development (four indicators); and (6) development partnerships and aid effectiveness (eight indicators).394 In addition to the SMAF indicators, there are 39 short-term deliverables across the same six areas that are collectively due to be completed by the end of 2016.395 As shown in Table 3.14, nine SMAF short-term deliverables were due to be completed by the end of 2015. According to USAID, as of December 28, 2015, only two were complete.396 Overall, SOM donors reaffirmed their Tokyo commitment of providing $16 billion to Afghanistan through 2015, and sustaining support through 2017 at or near the levels of the past decade.397 USAID said that although it cannot identify funds that may be awarded or withheld directly related to compliance or noncompliance with SMAF targets and indicators, noncompliance with SMAF indicators could erode donor confidence and reduce aid contributions.398 Electoral Reform Challenges According to State, the Afghan government made some progress on electoral reform this quarter. On December 16, President Ghani issued a presidential decree announcing the seven members of a selection committee that will decide on the candidates for the new Independent Election Commission (IEC) and the Central Complaints Commission (CCC) commissioners. The IEC will establish the timeline for parliamentary and district-council elections, as well as administer and supervise the elections. On December 21, the Special Elections Reform Commission (SERC) presented its final electoral-system recommendations. The SERC proposed that the IEC and the Electoral Complaints Commission (ECC) be merged, that election violations be prosecuted, and that a special court for election disputes be established.399 Report to the united states congress I January 30, 2016 109 Governance On December 26, the lower house of parliament rejected President Ghani’s electoral decree. This threw the status of the electoral selection committee into confusion; the head of the IEC supported parliament’s move, while the deputy of the selection committee accused the IEC of having lost its credibility.400 Chief Executive Abdullah Abdullah, reacting to parliament’s move, insisted that new commissioners would be appointed to the IEC and ECC.401 The 2014 presidential elections, which international monitors noted had experienced substantial fraud, highlighted Afghanistan’s continuing need for electoral reforms.402 As the United Nations Secretary-General observed in June, “Comprehensive electoral reforms will be crucial for restoring the faith of the Afghan people in the democratic process.”403 Overhauling the electoral process was a central part of the power-sharing deal brokered by the United States between President Ghani and his former election rival, current Chief Executive Abdullah, after the troubled presidential elections. The September 2014 agreement that led to formation of the national-unity government called for the immediate establishment of a special commission for election reform with the aim of implementing reform before the 2015 parliamentary elections, and distribution of electronic identity cards to all Afghan citizens as quickly as possible.404 U.S. Assistance to the Afghan Government Budget Summary of On-Budget Agreements On-budget assistance: encompasses donor funds that are aligned with Afghan government plans, included in Afghan government budget documents, and approved by the parliament and managed by the Afghan treasury system. On-budget assistance is primarily delivered either through direct bilateral agreements between the donor and Afghan government entities, or through multidonor trust funds. Off-budget assistance: encompasses donor funds that are excluded from the Afghan national budget and not managed through Afghan government systems. Source: SIGAR, Quarterly Report to the United States Congress, 7/30/2014, p. 130; Ministry of Finance, “Aid Management Policy for Transition and Beyond,” 12/10/2012, p. 8; State, response to SIGAR vetting, 1/14/2016. To improve governance and align development efforts with Afghan priorities, international donors at the 2010 Kabul Conference committed to increase to 50% the proportion of civilian development aid delivered on-budget through the Afghan government.405 Donors, including the United States, reiterated this pledge at the July 2012 Tokyo Conference and again at both the December 2014 London Conference and the September 2015 SOM.406 As shown in Table 3.15, USAID expects to spend $1.07 billion on active direct bilateral-assistance programs. It also expects to contribute $1.9 billion to the Afghanistan Reconstruction Trust Fund (ARTF), on top of $1.37 billion disbursed under the previous grant agreement between USAID and the World Bank. USAID has disbursed $105 million to the Afghanistan Infrastructure Trust Fund (AITF).407 The U.S. government announced in March 2015 that it intends to seek funding to support the Afghan National Defense and Security Forces (ANDSF), including the army and police, at the authorized force level of 352,000 personnel through at least 2017.408 The Department of Defense (DOD) was appropriated $3.7 billion to support the ANDSF for fiscal year (FY) 2016.409 110 Special inspector general I Afghanistan reconstruction Governance Table 3.15 USAID On-Budget Programs Project/Trust Fund Title Afghan Government On-Budget Partner Special Bank Account? Start Date End Date Total Estimated Cost ($) Cumulative Disbursements, as of 12/31/2015 ($) Bilateral Government-to-Government Projects Power Transmission Expansion and Connectivity Project (PTEC) Da Afghanistan Breshna Sherkat (DABS) Yes 1/1/2013 12/31/2018 $670,000,000 $66,354,254 Partnership Contracts for Health Services (PCH) Program Ministry of Public Health (MOPH) Yes 7/20/2008 12/31/2015 259,663,247 233,127,964 Kajaki Unit 2 Project (Installation of Turbine Generator Unit 2 at Kajaki Dam Hydropower Plant) DABS Yes 4/22/2013 12/31/2015 75,000,000 38,078,735 Afghanistan Workforce Development Project (AWDP) Ministry of Education (MOE) Yes 9/18/2013 4/3/2016 30,000,000 1,321,456 Basic Education, Literacy, and Training (BELT) Textbooks Printing and Distribution MOE Yes 11/16/2011 12/31/2015 26,996,813 24,970,742 E-Government Resource Center (EGRC) Ministry of Communications and Information Technology (MOCIT) Yes 8/28/2013 6/1/2016 3,900,000 405,000 Afghanistan Reconstruction Trust Fund (ARTF) (current award)* Multiple No 3/31/2012 3/31/2017 1,900,000,000 1,061,302,620 Afghanistan Infrastructure Trust Fund (AITF)** Multiple No 3/7/2013 3/6/2018 113,670,184 105,000,000 Multi-Donor Trust Funds Note: * USAID had a previous award to the ARTF that concluded in March 2012 and totaled $1,371,991,195 in disbursements. Cumulative disbursements from the two ARTF awards are currently $2,433,293,815. ** On October 9, 2014, USAID de-subobligated $179,500,000 from the AITF. Source: USAID, response to SIGAR data call, 1/11/2016. At the 2012 NATO Summit in Chicago, the United States, NATO allies, and other coalition partners announced an agreed vision for the ANDSF and committed to providing adequate funding for this force. This vision included a drawdown of the 352,000 ANDSF “surge” force by the end of 2015. This drawdown was predicated upon an improving security environment that would then allow for an enduring force of 228,500 ANDSF personnel at an estimated cost of $4.1 billion by the end of 2017. The summit participants agreed, however, to continue to work closely with the Government of Afghanistan to evaluate conditions on the ground, making adjustments as needed. According to DOD, security conditions have not yet warranted such a drawdown. As a result, in March 2015, Secretary of Defense Ashton Carter announced that DOD would seek funding for the 352,000 authorized force level through at least 2017.410 At a December meeting in Brussels, Belgium, NATO foreign ministers agreed to begin steps to secure international funding for the ANDSF through the end of 2020.411 Report to the united states congress I January 30, 2016 111 Governance For 2016, the United Nations Development Programme (UNDP) expects the U.S. to contribute $114 million for police salaries via the Law and Order Trust Fund for Afghanistan (LOTFA).412 At press time, DOD’s commitment letter for direct contributions to MOD was not finalized. DOD expects to contribute approximately $412 million in direct contributions to the MOI.413 Civilian On-Budget Assistance SIGAR Audit This quarter, SIGAR initiated a followup audit of the ARTF. In July 2011, SIGAR found that the World Bank and the Afghan government had established mechanisms to monitor and account for ARTF contributions, but that several limitations and challenges should be addressed. This audit will assess the extent to which the World Bank and the Afghan government (1) monitor and account for U.S. contributions to the ARTF; (2) evaluate whether ARTF-funded projects have achieved their stated goals and objectives; and (3) utilize and enforce any conditionality on ARTF funding. USAID provides on-budget civilian assistance through (1) bilateral agreements with four Afghan government entities and (2) contributions to two multidonor trust funds, the ARTF and the AITF.414 According to USAID, all bilateral-assistance funds are deposited in separate bank accounts established by the Ministry of Finance for each program.415 The ARTF, administered by the World Bank, provides funds to both the Afghan government’s operating and development budgets in support of Afghan government operations, policy reforms, and national-priority programs.416 The AITF, a multidonor trust fund administered by the Asian Development Bank, coordinates donor assistance for infrastructure projects in Afghanistan.417 According to USAID, the majority of on-budget funding has been and will continue to be directed through the multidonor trust funds, particularly the ARTF.418 Last quarter, USAID released the first $100 million tranche of funds for the $800 million, USAID-administered New Development Partnership (NDP). The NDP utilizes already budgeted or requested funding and is delivered via the ARTF.419 The NDP contains its own, independent conditions that were negotiated bilaterally between the U.S. and Afghan governments.420 In August, the U.S. and Afghan governments signed a memorandum of understanding (MOU) governing the NDP that proposed 40 development results that the Afghan government will be expected to achieve. Currently, 31 development results and indicators have been agreed to with nine to be determined. USAID noted that the results and indicators for 2017 and beyond may be modified given Afghanistan’s uncertain future. The Afghan government will receive $20 million through U.S. funds provided via the ARTF’s recurrent-cost window for achieving each development result.421 The Afghan government met several NDP indicators due by the end of 2015. The results partially met this quarter include the following indicators to justify the release of $80 million: (1) the issuance of a legislative decree from President Ghani on the ratification of the new banking law; (2) the development and approval of a salary scale for certain Afghan government civil servants as well as a salary scale for externally funded project staff; (3) the issuance of a preventative measure regulation by the central bank that complied with the Financial Action Task Force’s (FATF) action plan; (4) verification that 87.5% of senior Afghan government officials who are required by 112 Special inspector general I Afghanistan reconstruction Governance the Afghan constitution to declare their assets have done so; and (5) submission of an approved anti-harassment regulation for the public sector. The NDP indicators that were not completed by the December 31 deadline include: (1) legal amendments to the 2015 budget to increase revenues, including mobile phone top-ups and business receipt tax and (2) implementation by the customs department of an effective cash courier regulation for airports.422 In December 2014, the U.S. Embassy Kabul negotiated direct access to the Afghanistan Financial Management Information System (AFMIS) as one of two conditions for the accelerated release of $25 million to address a severe Afghan government budget gap. Direct AFMIS access was intended to give U.S. officials the ability to analyze Afghan government expenditures in real time. Technical issues, however, continue to prevent the U.S. Embassy Kabul from connecting to AFMIS. According to USAID, embassy personnel receive fiscal data on the Afghan government’s budgets but are unable to generate more detailed, customized reports such as Afghan government revenue broken out by province and source.423 State, however, questions the value of having U.S. government personnel review the raw AFMIS data saying, “we are not certain the raw data in [AFMIS] will be of significant benefit to U.S. government officials without devoting full time staff who are trained in the use of the database and tracking the data over time on a regular basis.”424 On-Budget Assistance to the ANDSF A large portion of on-budget U.S. assistance is for the Afghan security forces. DOD provides on-budget assistance to the Afghan government through (1) direct contributions from the Afghanistan Security Forces Fund (ASFF) to the MOD and the MOI, and (2) ASFF contributions to the multidonor LOTFA.425 Administered by the UNDP, LOTFA primarily funds Afghan National Police (ANP) salaries and incentives.426 Direct-contribution funding is provided to the Ministry of Finance, which allots it incrementally to the MOD and MOI, as required.427 In February 2011, the Under Secretary of Defense Comptroller authorized the Combined Security Transition Command-Afghanistan (CSTC-A) to provide direct contributions to the Afghanistan government from ASFF to develop ministerial capacity and capability in the areas of budget development and execution, acquisition planning, and procurement. CSTC-A administers all contributions of ASFF resources to the MOD and MOI. CSTC-A monitors and formally audits the execution of those funds to assess ministerial capability, ensure proper controls and compliance with documented accounting procedures, and compliance with the provisions in the annual commitment letters.428 The commitment letters express CSTC-A’s conditions for MOD and MOI assistance.429 MOD and MOI compliance with the conditions in the FY 1394 commitment letters has been mixed, CSTC-A said. The ministries have shown satisfactory progress toward a majority of conditions—35 for MOI Report to the united states congress I January 30, 2016 113 Governance Table 3.16 Number of FY 1394 MOD and MOI Commitment Letter Conditions Status Number of MOD-specific conditions Number of MOI-specific conditions Satisfactory progress to date 35 32 Insufficient progress due to MOD (or MOI) failure with no financial penalty 4 4 Insufficient progress due to MOD (or MOI) failure with a financial penalty 2 2 Insufficient progress due to factors beyond the control of MOD (or MOI) 3 5 Unresolved 0 0 Source: CSTC-A, response to SIGAR data call, 12/31/2015. and 32 for MOD—to date. Table 3.16 provides the number of conditions by status as assessed by CSTC-A.430 According to CSTC-A, the conditions requiring the MOI and MOD to input personnel information into the Afghan Human Resources Information Management System (AHRIMS) were examples of successful conditionality. According to CSTC-A, both the MOI and MOD made significant progress towards inputting 100% of personnel data in AHRIMS following, in the MOI’s case, imposition of progressively increasing penalties. After the MOI missed a March 1 deadline to have all police records loaded into AHRIMS, CSTC-A levied a 1% penalty on MOI operations-and-maintenance funds for March and April, and a 5% penalty in May. CSTC-A has now shifted its focus to validating the data loaded into AHRIMS.431 However, as reported on pages 78–88 of this report, the AHRIMS database appears incomplete, lacking data on attrition, province of origin, and educational levels for MOI and MOD personnel. For the commitment-letter conditions that were not met or enforced, CSTC-A deemed the circumstances were outside of MOD or MOI control. Generally, these conditions fell into one of three areas: • conditions based on assumptions about Afghan capacity and capability that did not mature as anticipated • conditions based on metrics or conditions that were not measurable or assessable as originally anticipated • conditions whose enforcement as written would have been overly detrimental to key capabilities required during the 2015 fighting season432 This quarter, CSTC-A concluded new commitment letters with the MOD and MOI to cover FY 1395. There were several new requirements for the Afghan government. MOI is required to jointly develop an anticorruption plan with CSTC-A by April 2016, load all personnel records into AHRIMS by March 2016, develop a plan by June 2016 for divesting excess facilities, ensure that untrained Afghan police do not represent more than 5% of the 114 Special inspector general I Afghanistan reconstruction Governance total force, and develop a randomized schedule for assessing each Afghan Local Police district at least once per year to check for “ghost” personnel.433 Ghani’s effort to reduce procurement-related corruption has slowed procurement and created what CSTC-A has labeled the “[Afghan fiscal year] 1394 Procurement Crisis.”434 According to CSTC-A, of the 648 MOD contract requirements, 544 have been submitted to the MOD acquisition agency and 285 contracts have been awarded, an increase from the 136 contracts awarded as of last quarter. The MOI is experiencing a similar backlog with 925 defined requirements, 378 of which have been submitted to the MOI procurement directorate, and 83 contracts have been awarded. According to CSTC-A, the procurement backlog significantly limits the opportunities to successfully transition off-budget contracts to on-budget procurement.435 National Governance Capacity-Building Programs USAID capacity-building programs seek to improve Afghan ministries’ ability to prepare, manage, and account for on-budget assistance. These programs also provide general assistance to support broader human and institutional capacity-building of Afghan government entities.436 As shown in Table 3.17, active programs include USAID’s $38 million Leadership, Management, and Governance Project that aims to strengthen Afghanistan’s financial-management systems and the capacity of the Ministry of Public Health and the Ministry of Education to meet requirements set at the 2010 Kabul International Conference for increased on-budget aid.437 USAID is also funding the Ministry of Women’s Affairs (MOWA) Organizational Restructuring and Empowerment (MORE) project, a $14 million project that, among other things, assists the ministry to improve its financial management, as required for future on-budget assistance.438 This quarter, MORE provided 70 scholarships for MOWA staff to attend private Afghan universities, supported MOWA’s development of a five-year Table 3.17 USAID Capacity-Building Programs at the National Level Afghan Government Partner Start Date End Date Total Estimated Cost ($) Ministry of Public Health, Ministry of Education 9/25/2012 12/31/2015 $38,341,106 $37,674,506 Assistance to Legislative Bodies of Afghanistan (ALBA) Parliament 3/28/2013 3/27/2018 24,990,827 12,966,693 Ministry of Women's Affairs Organizational Restructuring and Empowerment (MORE) Ministry of Women's Affairs 12/20/2012 12/19/2015 14,182,944 8,037,128 Project Title Leadership, Management, and Governance Project (LMG) Source: USAID, response to SIGAR data call, 1/11/2016. Report to the united states congress I January 30, 2016 115 Cumulative Disbursements, as of 12/31/2015 ($) Governance strategy, and conducted a communications campaign on women’s rights and gender-based violence.439 National Assembly Afghan senators conducted an oversight trip to Balkh Province. (USAID photo) Despite a constitutional requirement to hold elections 30–60 days prior to the expiration of the Wolesi Jirga (the lower house) term, the lower house’s term expired on June 22, 2015, with no elections held. President Ghani granted an extension to the lower-house members, but critics called that unconstitutional. Within parliament there were increased political tensions between the two houses, with members of the upper house questioning the legitimacy of the lower house due to the lack of new parliamentary elections.440 On January 18, the elections commission announced that parliamentary and district council elections would occur on October 15.441 Recently, the lower house rejected several presidential decrees covering a draft law to impose tax on mobile-phone recharge cards, an amendment to the customs laws, the establishment of a presidential economic advisory unit, and an amendment to allow acting security ministers to stay in their posts beyond their temporary appointments.442 Additionally, on December 21, the lower house rejected the government’s draft 2016 budget. On January 18, almost a month after the start of the new budget year, the parliament approved a revised budget.443 Parliament has traditionally faced challenges with achieving a quorum. Since the start of the current parliamentary session, the lower house achieved a quorum in 40% of its sessions; the upper house achieved a quorum in 77% of its sittings. The occurrence of two major Afghan holidays during this time affected attendance.444 USAID funds the $25 million Assistance to Legislative Bodies of Afghanistan project (ALBA) to help Afghanistan’s parliament operate as an independent and effective legislative, representative, and oversight body.445 ALBA provides assistance through the Afghanistan Parliamentary Institute (API). The API conducts specialized training for members of parliament and support staff as needed. According to USAID, API conducts daily training for approximately 300 participants from the staff of the upper and lower houses, members of parliament, and Ministry of Parliamentary Affairs staff in legal English, French, and Arabic and on information technology.446 In June, USAID issued a contracted midterm performance evaluation of ALBA. The evaluation found that ALBA’s support to legislative capacity building often took the form of direct technical assistance by ALBA staff rather than teaching parliamentary personnel the skills needed to perform legislative analysis, drafting, and amendment functions unaided. The result was capacity substitution rather than capacity building.447 According to USAID, ALBA is now focused on teaching parliamentary commission staff—rather than providing direct support—to ensure they enhance Afghan government institutional capacity.448 116 Special inspector general I Afghanistan reconstruction Governance Subnational Governance Rural Stabilization Programs USAID has conducted several stabilization programs aimed at helping the Afghan government extend its reach into unstable areas and building local governance capacity. The only programs active this quarter are the Community Cohesion Initiative (CCI) program and the Afghan Civilian Assistance Program III (ACAP III).449 Table 3.18 summarizes total program costs and disbursements to date. Last quarter, SIGAR reported on the work of the Measuring Impacts of Stabilization Initiatives (MISTI) program, a three-year, $19 million effort to measure and map changes in stability over time as well as evaluate the impact of USAID stabilization programs in key areas of Afghanistan.450 MISTI published the results of its data collection in 107 districts between September and November 2014 that builds upon previous surveys. According to MISTI, stability is an aggregate measure of whether participatory local-development projects succeed in strengthening perceptions of good governance and effective service delivery, thereby improving citizens’ lives and addressing local grievances that might otherwise contribute to support for insurgents. Resilience, on the other hand, measures how well local leaders are able to mobilize their communities to solve local problems with or without government support.451 MISTI found that villages that received USAID stability programming registered lower scores for stability—comparing surveys from June 2014 with the final survey that ended in November 2014—than those villages that did not receive assistance. MISTI characterized the period surveyed as one of “deep political uncertainty and unseasonable violence” and hypothesized that the villages selected to receive assistance were initially relatively stable, with higher expectations that were frustrated due to the violence and uncertainty surrounding the presidential elections. MISTI also found that villages receiving Stability in Key Areas (SIKA) assistance registered lower perceptions of Afghan government performance but higher perceptions of traditional-leader performance.452 USAID responded that while it agrees that expectations in villages receiving assistance were likely higher, it does not believe that the lower stability scores were exclusively SIGAR Audit SIGAR has an ongoing audit of the MISTI project. This audit plans to (1) assess the extent to which the MISTI contractor provided third-party monitoring services in accordance with the terms of the contract; (2) assess the extent to which USAID considered MISTI program results in planning and implementing stabilization programs; and (3) identify challenges in MISTI, if any, with USAID using third-party monitoring to evaluate stabilization reconstruction programs, and the extent to which USAID has addressed those challenges. Table 3.18 USAID Subnational (Rural) Programs Project Title Total Estimated Cost ($) Cumulative Disbursements, as of 12/31/2015 ($) Start Date End Date Afghanistan Civilian Assistance Program (ACAP III) 4/20/2015 2/14/2018 $30,223,597 $9,644,000 Community Cohesion Initiative (North, West)* 9/10/2013 12/2015 29,569,265 22,426,599 Note: * As of 12/28/2015. Source: USAID, response to SIGAR data calls, 12/28/2015 and 1/11/2016. Report to the united states congress I January 30, 2016 117 Governance MISTI's finding that USAID stability programming in Taliban-controlled villages increased support for the Taliban was based on analysis of the 72 villages MISTI determined were both (1) under Taliban control and (2) recipients of USAID stability assistance. These 72 villages were a subset of 860 villages that received USAID stability programming. According to the report, there was "a large average increase" in Taliban support in five of these 72 villages and a substantial boost in Taliban local popularity in 13 of the 72 villages. This finding was apparently significant enough for MISTI to highlight in the executive summary and to argue that the policy implication is that projects should not be implemented in areas under Taliban control. USAID and MISTI—in a later-added addendum— have said that the "five villages were not representative of the large majority of villages where stabilization programming took place between 2012 and 2014." However, the report does not describe the stability outcomes of the other villages covered by MISTI’s two-factor determination. Source: Management Systems International, MISTI Stabilization Trends and Impact Evaluation Survey Analytical Report, Wave 5: Sep 28 – Nov 3, 2014 (Updated with Addendum), 11/25/2015, pp. xxiii, 9, 14, 323–333, 357; USAID, OAPA, response to SIGAR vetting, 1/20/2016. due to USAID’s stability projects. USAID and the MISTI report cited external factors, such as general insecurity and political instability, as possible causes for the lower scores; however, these external factors would have affected all villages, not exclusively villages that received USAID stability assistance.453 USAID has publicly responded that the finding of increased Taliban support was only in a few villages, and the evaluation shows that “the vast majority of villages we worked in either increased or maintained support for the Afghan government.”454 The MISTI report, on the other hand, says district-level stability scores—containing the results for villages that received USAID assistance as well as those that did not—remained largely flat since September 2012. The report further states that while the overall opinion of the Afghan government has improved since September 2012, confidence varies at the local level at which USAID implemented its programs.464 Additionally, the report found that across all the villages MISTI surveyed, including those that received USAID assistance and those that did not, Afghans generally support the Taliban less than the Afghan government. Despite this, MISTI found that the majority of survey respondents are “on the fence” and have roughly equal support for both the Taliban and the Afghan government, or, conversely, are indifferent to both. MISTI did not find that relative support for one side over the other shifted significantly over the five surveys MISTI commissioned.465 While MISTI does say that stabilization programming has a negative impact on support for the Taliban, this appears to be contradicted by the village-level results comparing the most recent survey results with the previous survey results.466 In order to determine the impact of USAID stability projects, MISTI examined the differences in responses between villages that received USAID assistance with similar villages that did not receive USAID assistance.467 Using this method, MISTI reported that villages that received USAID assistance showed a marked decrease in their stability scores relative to the overall decrease in stability scores for both villages that did and those that did not receive USAID assistance. According to MISTI, the lower score for villages that received USAID assistance may be the consequence of villages having expectations raised while discussing project ideas, but having them dashed when implementation challenges followed.468 Stability in Key Areas MISTI recently issued its final performance evaluation for the SIKA programs, which collectively spent $306 million from 2011 to 2015. According to MISTI, the SIKA programs “did not, generally speaking, improve stability or good formal governance.”469 The programs did, however, improve community cohesion, resiliency, and perceptions of local leaders, albeit at the expense of government 118 Special inspector general I Afghanistan reconstruction Quarterly Highlight USAID Ceases Stability Programming Since 2003, USAID has spent at least $2.3 billion on stability programs meant to engage and support at-risk populations, extend the reach of the Afghan government to unstable areas, provide income generation opportunities, build trust between citizens and their government, and encourage local populations to take an active role in their development.455 This quarter, when SIGAR asked USAID whether the goals and/or approaches of stability programming no longer apply to the Afghanistan contingency, USAID responded simply that they have no plans to continue stabilization activities, and that they have not received resources from Congress for peace and security programming for FY 2015.456 Stability, however, remain central to U.S. goals for a secure, stable, and unified Afghanistan that can prevent the emergence of future threats.457 The findings of a USAID-contracted, third-party evaluation program on the impacts of its stabilization projects raise worrying questions. The MISTI program reported, for example, that villages receiving USAID stability projects scored lower on stability—an aggregate measure of whether the projects strengthened perceptions of good governance and effective service delivery—than similar villages that received no such assistance. And some villages reportedly under Taliban control that received USAID stability projects subsequently showed greater pro-Taliban support.458 SIGAR has not attempted to validate these findings, nor does it maintain that MISTI’s methodology is the only or best way to assess stability outcomes. Nonetheless, these findings point to a more general weakness in U.S. implementing agencies’ use of economic tools for stability. If the United States aims to increase stability as part of a whole-of-government effort to defeat an extremist threat, project impacts must be assessed against these political outcomes.459 USAID stability projects are not the only ones advancing stability-related outcomes. According to the U.S. Foreign Assistance for Afghanistan Post Performance Management Plan (2010–2015), even initiatives as diverse as public health, governance, education, and agriculture shared common security and stability goals. These goals included building active support for Report to the united states congress I January 30, 2016 the government (health), supporting and reinforcing efforts to improve security in Afghanistan (governance), increasing the legitimacy of the Afghan government (education), and increasing confidence in the Afghan government and “undercutting the appeal of the insurgency to potential recruits by offering economic alternatives and providing stability to communities that are on the frontlines of the war” (agriculture).460 USAID appears to have made no effort to assess the political outcomes for these other non-stability programs other than to reference national-level surveys like the Asia Foundation’s Survey of the Afghan People.461 However, it is unclear whether shifting Afghan perceptions have any appreciable impact on pro- or antigovernment behaviors. For example, the survey firm employed by both MISTI and the Asia Foundation for their respective surveys recently wrote: More than 90 percent of the Afghans surveyed do not want to return to Taliban rule, but they are caught between a government stating that they will punish any that assist the anti-government elements and the Taliban stating they will kill those who do not provide assistance.462 USAID appears to be largely indifferent to the implications of the MISTI findings. Last quarter and this quarter, SIGAR asked USAID for its perspective on two recent MISTI reports and the implications of the conclusions, but USAID did not express any opinion. For example, when SIGAR asked for USAID’s view of a key finding that the SIKA program “did not, generally speaking, improve stability or good formal governance,” despite SIKA’s goal to expand Afghan government authority and legitimacy, USAID responded by supplying an unrelated paragraph from the report that said, among other items, that SIKA “improved the perceptions of local leaders, albeit at the expense of government officials.” In another instance, USAID responded simply that SIGAR should read the report.463 It may be that MISTI’s approach was not precise or accurate enough to measure stability changes over time. However, SIGAR is concerned that USAID does not appear to have an alternative means of defining and measuring stability. 119 Governance High school students in Badghis Province paint for peace thanks to support from the USAID Community Cohesion Initiative. (USAID photo) officials. The SIKA programming method reportedly had the unintended effect of causing local residents to generally credit local, informal leaders for project benefits instead of formal government institutions. Part of the challenge MISTI identified is that SIKA projects were implemented in a number of districts (1) where there was only a token security apparatus and no functional district government, (2) where district governments lost authority and territory to insurgents and, (3) in some cases, where districts were under total insurgent control.470 According to MISTI, how SIKA local Afghan staff managed to implement project activities in these areas is still an open question, as expatriate monitoring and evaluation specialists were unable to personally monitor or verify what was being reported by local staff.471 USAID responded that “local staff were able to conduct regular phone calls and skype monitoring as well as initiate and verify with [Afghan government] counterparts on monitoring and communications regarding projects.”472 MISTI recommended that stabilization programming adhere to an explanatory “theory of change” that reflects the program’s strategic objective.473 In the case of the SIKA programs, the strategic objective was for Afghans to have increased confidence in their district government, leading to the expansion of Afghan provincial government authority and legitimacy.474 According to MISTI, “a fundamental fault of each SIKA project was the inability to focus on the strategic objective, instead choosing to focus on intermediate results that, when combined, did not fulfill the strategic objective.” MISTI also recommended that USAID require thorough and outcomes-based monitoring and evaluation, saying that senior implementing partner management and USAID personnel need to “take [monitoring and evaluation] results seriously when assessing programming effects.”475 MISTI concluded that although the “SIKA projects performed considerably well in executing their contracts, implementing all four intermediate results, and building up the capacity of [Ministry of Rural Rehabilitation and Development]-developed institutions, … the success of each SIKA project was measured not only in each [implementing partner’s] ability to execute its contract, but also in each project’s ability to contribute towards achievement of the stated USAID program and strategic objectives … which the SIKA program as a whole was unable to achieve.”476 Community Cohesion Initiative USAID’s Community Cohesion Initiative (CCI) program supports creating conditions for stability and development in conflict-prone and other priority areas of Afghanistan by (1) increasing cohesion within and between communities, (2) supporting peaceful and legitimate governance processes and outcomes, and (3) countering violent extremism.477 120 Special inspector general I Afghanistan reconstruction Governance As of September, CCI has focused on operational, administrative, and financial closeout processes. All CCI activities were fully implemented by early November.478 In November, the CCI independent monitoring unit (IMU) issued a report on Afghan government perspectives of CCI programming. The IMU interviewed 90 Afghan government officials in northern and western Afghanistan. According to the report, Afghan officials had a good understanding of CCI, its goals, and detailed knowledge of many CCI activities. The vast majority (85%) of Afghan government officials believed CCI programming to be organized well, transparent, and successful in achieving its objectives. Most Afghan government officials (90%) agreed that CCI programming contributed positively to community security and stability, and to improving relationships between the general public and the Afghan government. As one Afghan official in Herat Province stated Of course this project to some extent helped in bringing solidarity and improving security. This has also helped to bring smiles and happiness on the faces of the people who are most part of the years busy in earning money for their families or busy in agriculture. The smile on their face is huge support in reaching to the objectives which are stability, conflict resolutions, disputes resolving and improving overall security situation.479 Jobs for Peace In November, President Ashraf Ghani announced the first portion of the Jobs for Peace program, a 24-to-30-month jobs-focused stimulus and stabilization program that the Afghan government initially estimates will cost approximately $1.18 billion, though some components of the program still require budget estimates. The program is meant to provide short-term, labor-intensive employment in rural and urban areas.480 It not only aims to create short-term employment, but will also focus on political aspects of unemployment by targeting areas and populations that are especially susceptible to destabilization and insurgent recruitment.481 In December, the United States announced plans to contribute $50 million to support the Afghan government’s job-creation efforts.482 The Afghan government proposed the following initiatives as part of the Jobs for Peace program: • Rehabilitating agricultural infrastructure: This program would provide block grants to Community Development Councils (CDCs) that they could use to rehabilitate agricultural infrastructure, in particular water-resource management (irrigation, drainage) and field leveling to prepare farms for the coming year. Labor-intensive road and canal maintenance through the existing national roads and irrigation programs to work with CDCs would also be included. These programs are already up and running as they build upon the National Solidarity Program (NSP). This is estimated to cost approximately $350 million. Report to the united states congress I January 30, 2016 121 The Afghan Department of Education’s sports manager opens a volleyball tournament supported by the USAID Community Cohesion Initiative in Faryab Province. (USAID photo) Governance • Labor intensive urban cleanup and repair: Following the survey of urban settlements, this NSP urban program would release small block grants for labor-intensive cleanup, drainage, and regreening programs in poor urban neighborhoods. Urban programming can also include useful job opportunities for restive, educated youth, such as social work, field monitoring, contract teaching, and collective organizing for neighborhood improvement. This is estimated to cost approximately $200 million. • Fortifying urban peripheries: This initiative would involve establishing a civilian conservation corps to plant trees, form parks, and patrol the mountains around all of Afghanistan’s large cities. It will employ large numbers of at-risk youth and provide security benefits for the vulnerable urban peripheries. The program would also support market gardening for women and girls. This is estimated to cost approximately $80 million. • Micro-grants for female heads of households: This initiative would provide women producers small grants to buy farming inputs and productive equipment such as greenhouses, nurseries, or tools. Additionally, the Afghan government would aim to purchase products produced by poor women. Poor women, particularly female heads of households, will also be given employment maintaining community public infrastructure. This is estimated to cost approximately $50 million. • Housing finance: This program would use a state-owned enterprise to construct (through contracting) a large quantity of housing in at-risk urban peripheries, primarily Kabul. The program’s overall objective is to produce 200,000 units of affordable housing. This is estimated to cost $500 million. • Cash transfers against stunting and malnutrition: This program would provide a cash transfer and a health packet or (in urban areas) food vouchers for providing nutrition to stunted or malnourished children. No budget has yet been estimated. • Rebuilding the civil service: Under this program, the Afghan government would work with International Monetary Fund specialists to weed out underqualified, “legacy” Afghan civil servants and offer training to new recruits. The target groups of civil servants would include teachers, city police, urban managers, and community health workers. • Refugee return and migrant labor: This set of programs plans to use existing Afghan refugee-repatriation systems but to couple those with preferential refugee access to housing and certain types of job opportunities. Additionally, these programs aim to build up skills and systems that will allow family members thinking about migration to find employment in-country or through legal employment in the countries of the Middle East or Asia.483 Several of the Afghan government’s proposed Jobs for Peace initiatives build on the NSP and aim to advance stabilization goals. As SIGAR reported 122 Special inspector general I Afghanistan reconstruction Governance previously, USAID used to “preference” (earmark) funds to the NSP, via the ARTF, to advance counterinsurgency objectives in areas newly under Afghan government control. To its credit, USAID stopped preferencing funds to NSP after reviewing documents, including a 2011 SIGAR audit, that found that NSP is implemented in very insecure areas but does not mitigate violence or improve attitudes toward the government in those areas. USAID acknowledged a lack of evidence that NSP increases stability in insecure parts of Afghanistan and adjusted its funding accordingly. Prior to the change, USAID had preferenced a total of $865 million directly for NSP.484 Provincial and Municipal Programs USAID recently started two subnational programs focused on provincial centers and municipalities: the Initiative to Strengthen Local Administrations (ISLA) and Strong Hubs for Afghan Hope and Resilience (SHAHAR) programs. Table 3.19 summarizes total program costs and disbursements to date. Table 3.19 USAID Subnational (Provincial and Municipal) Programs Project Title Strong Hubs for Afghan Hope and Resilience (SHAHAR) Initiative to Strengthen Local Administrations (ISLA) Total Estimated Cost ($) End Date 11/30/2014 11/29/2017 $73,499,999 $9,675,134 2/1/2015 1/31/2020 62,364,687 4,064,477 Source: USAID, response to SIGAR data call, 1/11/2016. Initiative to Strengthen Local Administrations The ISLA program is meant to enable the Afghan government to improve provincial governance in the areas of fiscal and development planning, representation of citizens, and enhanced delivery of public services. ISLA aims to strengthen subnational systems of planning, operations, communication, representation, and citizen engagement. This should lead to services that more closely respond to all citizens’ needs in health, education, security, justice, and urban services.485 ISLA will operate from five regional hubs: Kabul, Mazar-e Sharif, Jalalabad, Kandahar, and Herat. Pending agreement with the Afghan government, it plans work in 16 provinces: Badghis, Baghlan, Balkh, Farah, Faryab, Ghazni, Ghor, Herat, Kandahar, Kunar, Laghman, Logar, Nangarhar, Parwan, Wardak, and Zabul.486 Strong Hubs for Afghan Hope and Resilience The objective of the SHAHAR program is to create well-governed, fiscally sustainable Afghan municipalities capable of meeting the needs of a growing urban population. Targeted support to municipal governments, as well as to the General Directorate of Municipal Affairs and municipal advisory Report to the united states congress I Cumulative Disbursements, as of 12/31/2015 ($) Start Date January 30, 2016 123 Governance Regional Economic Zones: areas within Afghanistan that have the potential to develop into geographic centers of increased production and commerce, promising high and inclusive economic growth. The zones are expected to act as catalysts for improved food security, economic development, job creation, and increased regional trade, by targeting investments in key sectors that are considered to be drivers of economic growth. Source: USAID, “Draft REZ Strategy,” 12/3/2013. boards, aims to improve municipal financial management, urban service delivery, and citizen consultation. The program will focus on 16 small and medium-sized provincial capitals located within USAID’s three designated Regional Economic Zones, as well as the four regional-hub provincial capitals of Kandahar, Herat, Mazar-e Sharif, and Jalalabad.487 Reconciliation and Reintegration According to the United Nations Secretary-General, the peace process is “at an impasse” with the Taliban showing no commitment to resuming direct talks with the Afghan government.488 In early December, Pakistan hosted a Heart of Asia summit attended by President Ghani, senior Chinese officials, and a U.S. delegation led by the Deputy Secretary of State. The summit was a forum for regional players to discuss their commitments to an Afghan-led and Afghan-owned peace process. According to State, Afghan officials were generally pleased by the positive statements issued by their Pakistani hosts. Pakistan’s Chief of Army Staff General Raheel Sharif later followed up with a visit to Kabul on December 27. On December 29, the Afghan Presidential Palace announced the four-way talks with Pakistan, the United States, and China that took place in the first week in January.489 Afghanistan Peace and Reintegration Program The Afghanistan Peace and Reintegration Program (APRP) is an Afghan-led program to reintegrate low-level insurgent fighters and their commanders into Afghan civil society.490 The APRP is the only institutional mechanism within the Afghan government with capacity to pursue both high-level reconciliation negotiations and provincial-level reintegration of insurgent fighters.491 For more information, see SIGAR’s October 2014 Quarterly Report to the United States Congress, pages 149–151. According to State, as of September 30, the APRP has facilitated a total of 10,578 reintegrees, 988 of whom were reportedly “commanders.” A total of 143 reintegrees were documented recidivists.492 Since September 30, there have been an additional 396 reintegrees processed.493 Nangarhar (156 reintegrees), Ghor (49 reintegrees), Badghis (42 reintegrees), and Farah (39 reintegrees) provinces dominated the results since September. The top five reintegration provinces for 2015 are Badghis (1,646 reintegrees), Baghlan (1,211 reintegrees), Herat (813 reintegrees), Nangarhar (766 reintegrees), and Ghor (569 reintegrees).494 According to State, reintegration efforts likely slowed because of intensified insurgent violence in the latter part of 2015.495 Continued violence diminishes the credibility of the APRP to promise a secure future for potential reintegrees and denies APRP personnel the space to advance the program’s objectives for peace and reconciliation.496 124 Special inspector general I Afghanistan reconstruction Governance The Afghan High Peace Council has reported to State that information gathered from the APRP reintegree program has contributed to a broader understanding of insurgent leadership, structure, operations, sanctuaries, hideouts, funding resources, supporting countries, recruitment methods, goals and objectives, relationships with international and regional terrorist organizations, ideological narrative, and sympathizers.497 In March, the United States announced that it will provide up to $10 million to UNDP to support APRP. According to State, this assistance is meant to support APRP’s provincial efforts in the event of peace talks and improve APRP’s strategic-communications capacity.498 Rule of Law and Anticorruption Project Summary The United States has assisted the formal and informal justice sectors through several mechanisms. These include the State Department’s Justice Sector Support Program (JSSP), and Justice Training Transition Program (JTTP). These and other rule-of-law and anticorruption programs are shown in Table 3.20. In the area of anticorruption, USAID has a cooperation arrangement with the United Kingdom’s Department for International Development to fund the Independent Joint Anti-Corruption Monitoring and Evaluation Committee (MEC). USAID support funds the MEC’s monitoring, analysis, and reporting activities, including its vulnerability-to-corruption assessments.499 This quarter, USAID modified the Afghanistan Electoral Reform and Civic Advocacy (AERCA) program to focus on anticorruption matters. AERCA is developing a work plan to identify reform efforts to (1) strengthen Afghan civil society organizations’ ability to perform Table 3.20 Rule of Law and Anticorruption Programs Project Title Justice System Support Program II (JSSP II) Electoral Reform and Civic Advocacy (AERCA)* Corrections System Support Program (CSSP III) Justice Training Transition Program (JTTP) Delegated Cooperation Agreement (DCAR) with the Department for International Development (DFID) for Independent Joint AntiCorruption Monitoring and Evaluation Committee (MEC) Cumulative Disbursements, as of 12/31/2015 ($) $203,431,814 36,857,948 Start Date 6/16/2010 7/13/2009 End Date 2/29/2016 6/30/2017 Total Estimated Cost ($) $224,142,053 51,302,682 1/1/2015 1/2/2013 2/29/2016 3/31/2016 22,161,965 47,435,697 12,939,270 47,435,697 5/19/2015 8/31/2020 3,000,000 500,000 Note: * On November 1, 2015, USAID extended the AERCA award beyond the planned December 31, 2015, end date, added $12.6 million in estimated costs, and incorporated additional anticorruption activities into the program description. The information in the table refers to the entire award, not simply the new anticorruption portion covered by the modification. Source: State, INL, response to SIGAR data call, 12/23/2015; USAID, response to SIGAR data calls, 12/28/2015 and 1/11/2016. Report to the united states congress I January 30, 2016 125 Governance watchdog functions and (2) support the Afghan government in implementing reforms that will combat corruption. AERCA aims to increase the demand from civil-society organizations to spur the Afghan government’s efforts to reduce administrative corruption while building a foundation of lawfulness that can over time chip away at what the World Bank has called “grand corruption.” USAID is also designing a new, five-year anticorruption program—AMANAT (Afghanistan’s Measure for Accountability and Transparency)—that will build upon the anticorruption activities carried out under AERCA.500 The State Department’s JSSP objectives include continuing to develop a case-management system (CMS) to track cases throughout Afghanistan’s justice system and to build the capacity and administrative skills of ministry officials.501 The CMS is used to monitor criminal cases on an individual or aggregated basis from the time of arrest until the end of confinement. All ministries in the formal criminal-justice sector have access to the CMS. The CMS is used to demonstrate inefficiencies in the criminal-justice system by identifying when cases are not being processed in a statutory manner. Ministries routinely utilize the CMS to analyze and understand the function of the formal justice sector. For example, the CMS can help identify an individual prosecutor’s case load and conviction rates, information that is useful for determining promotion eligibility. In addition to using the CMS to conduct criminal background checks on internal and external employment applicants, the MOI generates a weekly report of arrests in Kabul by the type of crime.502 From 2013 to December 2015, JTTP has reviewed 2,724 CMS cases of which 91% were found to be accurate. In the provinces, Balkh Province had the lowest amount (66%) of correct CMS files to date.503 The State Department’s JTTP provides regional training to justice-sector officials on a wide range of criminal-justice topics.504 JTTP aims to increase the confidence of Afghan citizens in their justice sector and to achieve two outcomes: (1) increase the capacity and competencies of Afghan justice sector professionals in delivering justice according to Afghan law, and (2) ensure that Afghan justice institutions are capable of managing the sustainable implementation of training programs.505 JTTP undertakes limited trial observation, focusing on cases within the criminal division jurisdiction at provincial and district levels. JTTP looks only at proceedings and appeals of cases that are subject to the Criminal Procedure Code. JTTP’s observation and reporting are narrowly focused to collect objective comparative data on a single fair-trial indicator (i.e., whether trials are deemed to be “open” in accordance with the procedure set out under the code). JTTP has reported to State’s Bureau of International Narcotics and Law Enforcement Affairs (INL) many instances in the formal-justice proceedings where attorneys and judges have increasingly applied the correct laws and sentencing requirements.506 126 Special inspector general I Afghanistan reconstruction Governance JTTP legal advisors visit courtrooms of judges who have graduated or will graduate from JTTP courses. If the legal advisors are granted access to the courtroom for a given trial, the trial is reported as “open.” If they are not permitted access to a courtroom for a given trial, and there is no permissible reason for the restriction, the trial is reported as “closed.”507 From 2013 to December 2015, JTTP observed a total of 808 trials, of which 93% were open. In the provinces, Nangarhar Province had the lowest overall percentage of open trials to date (39%).508 The Supreme Court and the Formal Justice Sector According to the SMAF, short-term deliverables related to the justice sector include the launch of a justice-sector reform plan and a draft of a revised penal code, both to be completed December 2016.509 In a statement issued last quarter, the MEC said, “The justice sector remains largely incapable of investigating and prosecuting corruption cases, especially against well-connected individuals who operate with near impunity, secure in the knowledge that they are effectively above the law.”510 Afghan Correctional System According to State, the inmate population of Afghanistan’s prisons managed by the General Directorate of Prisons and Detention Centers (GDPDC) has increased by an average of 6.51% annually over the past five years. As of October 31, the GDPDC incarcerated 25,823 males and 713 females, while the Ministry of Justice’s Juvenile Rehabilitation Directorate (JRD) incarcerated 888 male juveniles and 101 female juveniles. These incarceration totals Parliamentarians reviewed prisoner sentences and prison conditions during an oversight trip to Herat Province. (USAID photo) Report to the united states congress I January 30, 2016 127 Governance do not include detainees held by any other Afghan governmental organization, as INL does not have access to their data.511 Overcrowding is a persistent, substantial, and widespread problem within GDPDC facilities for adult males, although state-funded prison construction has added some new prison beds and presidential-amnesty decrees have reduced the prison population significantly. As of October 31, the total male provincial-prison population was at 190% of capacity, as defined by the International Committee of the Red Cross’s (ICRC) minimum standard 3.4 square meters per inmate. The total female provincialprison population was at 50.5% of the ICRC-recommended capacity. The JRD’s juvenile-rehabilitation centers’ population was at 72% of ICRCrecommended capacity.512 According to State, the GDPDC made tremendous strides over the past two years in the implementation of an industries program with the assistance of the Correction System Support Program (CSSP), which is meant to assist in the development of Afghanistan’s national corrections system. This quarter, GDPDC remodeled a large hangar at the central prison to provide space for the mechanized production of uniforms and boots for corrections officers. Thirteen provincial prisons will function as satellite uniform production facilities, using industrial sewing machines and boot-making equipment procured by CSSP for GDPDC. Remodeling of the hangar at the central prison was financed by GDPDC with money generated from the industries programs. With materials donated by CSSP, the industries program can produce as many as 12,000 uniforms per year for GDPDC officers.513 Anticorruption This quarter, serious anticorruption questions were raised when senior Afghan government officials announced a partnership with one of the key figures from the Kabul Bank scandal. In November, Khalilullah Ferozi—who was sentenced to 10 years in prison—was introduced by senior Afghan government officials as a business partner in an Afghan government township project.514 Additional details appear on pages 144–146 of this report. Afghan Attorney General’s Office The Afghan government has yet to nominate a new attorney general.515 The appointment of a new attorney general by the end of 2015 is a SMAF shortterm deliverable.516 Independent Joint Anti-Corruption Monitoring and Evaluation Committee The MEC was formally established in March 2010 by presidential decree. The MEC’s mandate is to develop anticorruption recommendations and benchmarks, to monitor efforts at fighting corruption, and to report on 128 Special inspector general I Afghanistan reconstruction Governance these efforts. It comprises three Afghan members and three international members and is led by an Afghan executive director. The MEC has approximately 20 staff, but USAID notes that the MEC may increase its staff since President Ghani has increasingly sought analytical products from it.517 According to State, the MEC continues to demonstrate administrative competence and technical capacity. State notes, however, that despite demonstrating the political will to address some of the toughest corruptionrelated questions confronting Afghanistan, the MEC lacks the authority to do more than illuminate poor or corrupt practices.518 In November, President Ghani issued a decree confirming two new international commissioners for the MEC.519 According to USAID, President Ghani has shown interest in expanding the MEC’s work beyond its current monitoring framework.520 However, the Wall Street Journal reported in December that donors have threatened to stop funding the MEC following accusations of irresponsible spending, abusing travel policies, and ignoring salary guidelines. The MEC executive director was quoted as saying he is resigning because “There was no oversight over the roles and activities of the committee.” Another resigning MEC member said that despite his hope that anticorruption would be a priority of the Afghan government, “Basically everything is standing still.”521 This quarter the MEC issued reports on a selection of foreign assistance programs, a vulnerability to corruption assessment of the Education Quality Improvement Program (EQUIP), corruption associated with the World Food Program’s distribution initiatives with the Ministry of Education, and conflicts of interest among government officials. In the review of selected foreign assistance programs report, the MEC found that there is a lack of consensus on what truly constitutes a worthwhile, effective project in Afghanistan. According to the MEC, many respondents believed that aid effectiveness was implicit in program alignment with Afghan government developmental goals and objectives. Additionally, divergent strategies, lack of consensus, and unprecedented volume of projects compromised true donor coordination. According to MEC, the relationship between the donor community and the Afghan government is still evolving, with donors becoming increasingly aware of the need to employ Afghans, where possible, but still hesitant to do so because of the widespread corruption that affects many Afghan government agencies.522 The MEC review of the World Bank-supported EQUIP concluded that although 72 schools funded by EQUIP were of good quality, the program’s myriad failures counterbalanced this achievement. According to the MEC, poor planning, unrealistic budgeting, and inadequate monitoring combined to create a toxic synergy that led to failed projects and misspent funds. The lack of trained personnel, nepotistic recruiting practices, substandard reporting policies, and no investigation or punishment of wrongdoers Report to the united states congress I January 30, 2016 129 Governance only served to worsen these structural flaws. Widespread corruption has led to the misuse or wasting of funds representing almost 30-40% of the project’s $517 million budget and has prevented EQUIP from meeting its expectations.523 The MEC’s review of the World Food Program’s (WFP) efforts to increase school enrollment by distributing food items to students found that while enrollment increased, weak oversight, inadequate monitoring, and instances of mismanagement allowed corrupt actors to embezzle funds and abscond with items intended for the students, and profit from the sale of those items. According to the MEC, the Afghan Ministry of Education (MOE) was insufficiently transparent in its administration of the program and often failed to submit to WFP any reports on MOE activities in remote provinces. WFP officials admitted to the MEC that there was at least 20% “wastage” caused by corruption in the food-distribution process administered by the MOE. MEC reports that recent WFP actions to mitigate corruption in the food-distribution process are apparently effective; however, no actions have been taken on the wrongdoing and profiteering which has occurred thus far.524 Finally, in a report on conflicts of interest among high-ranking Afghan government officials, the MEC found that the Afghan government’s procurement system is riddled with corruption. According to the MEC, an official from the Afghan National Procurement Authority said that pilot studies indicate about 80% of bids and contracts during the past 13 years were affected by corruption. Multiple senior officials interviewed by the MEC also indicated that contracts were either sold by a successful bidder to another bidder, or distributed among several bidders who were operating as part of a cartel. While the current Afghan administration has sought to centralize procurement in the hope of reducing corruption, the MEC notes that centralized procurement offices are not without risks of their own.525 High Office of Oversight and Anticorruption The High Office of Oversight and Anti-Corruption (HOO) was established in July 2008 by presidential decree to oversee and coordinate implementation of the Afghan government’s anticorruption strategy. The HOO collects corruption complaints through a hotline and complaint boxes installed in several ministries and other public-service delivery institutions, and conducts the initial investigation of corruption allegations that it receives before referring allegations to the Attorney General’s Office (AGO) for further investigation and possible prosecution. According to USAID, these investigations seldom lead to prosecution. Mutual recrimination between AGO and HOO is common.526 A SMAF short-term deliverable includes the requirement for 90% of government officials required to declare their assets to do so by mid-2016.527 In November, the HOO announced that President Ghani, Chief Executive 130 Special inspector general I Afghanistan reconstruction Governance Abdullah, second Vice President Sarwar Danish, and Special Representative for Reform and Good Governance Ahmad Zia Massoud had registered their assets.528 Security Services According to DOD, both the MOD and MOI began developing ministry-specific counter- and anticorruption plans following President Ghani’s direction at the September Senior Officials Meeting. These plans are to be implemented no later than the end of 2016. CSTC-A has included a requirement in the 1395 MOD and MOI commitment letters for these plans to be completed by April 2016.529 Ministry of Defense Three active forums are currently addressing corruption issues within the MOD: the Counter Corruption Working Group (CCWG), the Senior High Level Committee on Anti-Corruption (SHCAC), and the newly formed Senior Leader Counter Corruption Panel (SLCCP). This quarter, DOD reports that the CCWG has shown improvement through regular, monthly meetings and review of corruption cases. The SHCAC mechanism demonstrated its value as a decision-making body with the resolution of a long-standing weakness of the corps-level Transparency and Accountability Committees (TAC). At the last SHCAC meeting, the deputy minister of defense ordered that members of the TACs must be excluded from procurement committees to remove conflicts of interest. The SLCCP, chaired by the minister of defense, held its first meeting in November.530 Ministry of Interior Two quarters ago, the Afghan government removed the former MOI Inspector General (IG) and appointed Major General Rahimullah to the post.531 According to DOD, the new MOI IG has yet to start reforming the role, structure, and composition of his office. The MOI IG has focused on inspecting fuel processes, accountability, and inventories. These inspections will expand to 10 provincial police headquarters, an Afghan National Civil Order Police headquarters, the border police, and an MOI special forces unit over the next two months.532 Human Rights Refugees and Internal Displacement As of November, the United Nations High Commissioner for Refugees (UNHCR) estimated that at least 236,342 Pakistanis continue to reside in Afghanistan’s Khowst and Paktika Provinces since the June 2014 Pakistan military operations in neighboring North Waziristan. According to State, it Report to the united states congress I January 30, 2016 131 Governance SIGAR Audit Last quarter, SIGAR issued an audit of State’s efforts to assist Afghan refugees living in Pakistan and Iran, and Afghan returnees. The audit found that the UNHCR and State are unable to independently verify the number of Afghan refugees reported by the Pakistani and Iranian governments. The audit also found that the Afghan Ministry of Refugees and Repatriation— the ministry responsible for coordinating refugee and returnee affairs with other ministries and international organizations—has limited capacity to fulfill its obligations or to work with other ministries, and had been beset by allegations of corruption. is unlikely that there will be significant returns to Pakistan until 2016 due to the reconstruction needs in North Waziristan.533 According to the Afghan Ministry of Refugees and Repatriation, in 2015 more than 150,000 Afghans have left and sought asylum in Europe. Of those having left Afghanistan, approximately 3,000 returned.534 According to State, 58,412 Afghan refugees returned from Pakistan and Iran as of December. Many returned refugees have felt pressured to return to Afghanistan due to reported arrests, detention, extortion, and harassment by local Pakistani authorities following the December 2014 Peshawar school attacks and the Pakistani security response. While the rate of refugee returns from Pakistan are significantly higher than 2014, the returns from Iran are 35% lower than the previous year.535 As of November, UNHCR recorded a total of 1,116,546 conflict-affected internally displaced persons. During the first ten months of 2015, approximately 270,000 individuals in Afghanistan were displaced by conflict, far surpassing total internal displacement in 2014 (188,766) and representing an increase of approximately 104% compared to the same period during 2014. According to State, the surge in instability and fighting between armed groups and the Afghan security forces—particularly in northeastern Afghanistan—is the main cause for increased internal displacement.536 Gender The largest gender-focused initiative in USAID’s history is the Promote partnership that aims to assist over 75,000 Afghan women in achieving leadership roles over five years in all parts of society, including business, academia, politics, and public policy.537 As shown in Table 3.21, USAID has committed $216 million to Promote and hopes to raise an additional $200 million from other international donors.538 However, no donors have committed to contribute funds to Promote.539 In August, the Japan International Cooperation Agency signed a memorandum with USAID agreeing to cooperate on efforts that work towards advancing equality for women in Afghanistan. This partnership includes leadership training for Afghan female police recruits.540 This quarter, the Promote Women in Government (WIG) program is negotiating with the Afghan Independent Administrative Reform and Civil Service Commission to identify the first 200 interns to receive civil service training and certification. According to USAID, Afghan government ministries have expressed interest in accepting 1,428 WIG interns in the first two years of the program.541 The Promote Women’s Leadership Development program is currently preparing 679 trainees for graduation in January 2016.542 The SMAF includes several short-term deliverables related to women’s rights, including the requirement for a national action plan for women peace-and-security implementation and financing plan approved by the 132 Special inspector general I Afghanistan reconstruction Governance Table 3.21 USAID Gender Programs Project Title Afghan Women’s Leadership in the Economy Start Date End Date Total Estimated Cost ($) Cumulative Disbursements, as of 12/31/2015 ($) 7/1/2015 6/30/2020 $71,571,543 $1,906,692 Women's Leadership Development 9/23/2014 9/22/2019 41,959,377 7,251,508 Promote: Women in Government 4/21/2015 4/20/2020 37,997,644 1,969,805 Promote: Women’s Rights Groups and Coalitions 9/2/2015 9/1/2020 29,534,401 522,141 Promote: Economic Empowerment of Women in Afghanistan 5/8/2015 5/7/2018 1,500,000 300,000 Promote: Scholarships 3/4/2015 3/3/2020 1,247,522 1,247,522 Source: USAID, response to SIGAR data call, 1/11/2016. end of 2015, with implementation starting by mid-2016; an antiharassment regulation for improving working environments for public-sector women, to be issued by mid-2016; and dedicated violence-against-women prosecution units established in 26 provinces by December 2016.543 As of December, the requirement for an implementation and financing plan was not met.544 This quarter, the Afghanistan Independent Human Rights Commission (AIHRC) issued two women’s rights-focused reports: a 1394 update on violence against women and a report on forced gynecological exams. According to the AIHRC, “violence against women is the most serious human rights violation in Afghanistan.” AIHRC found at least 2,579 registered cases of violence against women in the first six months of 1394, a 7% increase over the same period the previous year. Of the 190 cases in which a women was killed, the perpetrators of 51 cases (26.84% of all the cases) were arrested and their files forwarded to the court.545 In a related report, the AIHRC interviewed 53 female detainees from 12 provinces held on charges of adultery to determine the extent to which women are subjected to virginity tests. According to AIHRC, while Afghan law is not clear on the legal status of compulsory virginity tests, such tests without the victim’s consent are a violation of human rights. Of the 53 female detainees, 48 were subjected to virginity tests with only nine reporting they did so willingly to refute accusations. The AIHRC called on the Afghan government to end virginity tests for moral crimes.546 Report to the united states congress I January 30, 2016 133 Economic and Social Development Economic Contents Key Events 135 Economic Profile 136 Banking and Finance 141 U.S. Economic and Development Support 147 Agriculture 149 Essential Services and Development 151 Transportation 157 Economic Growth 160 Education 162 Health 165 134 Special inspector general I Afghanistan reconstruction Economic and Social Development ECONOMIC AND SOCIAL DEVELOPMENT As of December 31, 2015, the U.S. government has provided more than $31.8 billion to support governance and economic and social development in Afghanistan. Most of these funds—nearly $18.6 billion—were appropriated to the U.S. Agency for International Development’s (USAID) Economic Support Fund. Of this amount, $17.1 billion has been obligated and $13.7 billion has been disbursed.547 The Consolidated Appropriations Act, 2016, provided additional funding for the Economic Support Fund, but the total amount designated for Afghanistan will not be known until the State Department (State) completes the fiscal year (FY) 2016 congressional notification process. Key Events This quarter saw several developments that could affect Afghanistan’s prospects for economic and social development: • Afghanistan began FY 1395 (December 22, 2015–December 21, 2016) without an approved budget, but parliament approved a $6.6 billion budget on January 18, 2016.548 • Domestic revenues collected in the first 11 months of FY 1394 (December 22, 2014–December 21, 2015) rose 21.1% above the same period in FY 1393, covering 40% of total expenditures. Expenditures increased 1.1% compared to the same period last year.549 • On December 17, 2015, World Trade Organization (WTO) trade ministers approved Afghanistan’s terms of accession. Afghanistan has until June 30, 2016, to ratify the deal, which the government hopes will create new economic opportunities.550 • The International Monetary Fund (IMF) issued an updated assessment of Afghanistan’s economic development and policies, known as the Article IV consultation report, which included a review of Afghanistan’s performance under the Staff-Monitored Program. It concluded that while progress has been made toward implementing macroeconomic policies and a structural-reform agenda, Afghanistan’s economy is dependent on the government’s commitment to these reforms, improved security conditions, and continued donor support.551 Report to the united states congress I January 30, 2016 135 Economic and Social Development Economic Profile “While opium is omitted from official GDP estimates, its earnings boost domestic demand and are a significant source of foreign exchange.” Source: Asian Development Bank, Outlook 2015, 3/2015, p. 167. Every other South Asian economy grew faster than Afghanistan’s in 2014 and 2015, a trend the Asian Development Bank (ADB) expects to continue in 2016.552 Agriculture drives Afghanistan’s economy and is the main source of gross domestic product (GDP), employment, and subsistence, according to the World Bank.553 The IMF said, “Apart from agriculture, (recent) economic activity has been subdued.”554 Agricultural output and income, though, fluctuate with the weather and economic growth based on this sector is necessarily volatile.555 Meanwhile, construction, trade, and services, all of which previously benefitted from the Coalition’s large presence, security spending, and aid flows, now remain depressed.556 Generally, the Afghan government said economic conditions were “not conducive to the kind of private sector investment that could drive a diversified and sustainable economy.”557 Afghanistan’s real (net of inflation) GDP, excluding opium, slowed significantly in 2014 to a World Bank-estimated $20 billion—1.3% growth versus 3.7% in 2013. The World Bank projected Afghanistan’s real GDP to grow 1.9% in 2015 to $20.4 billion, with medium-term performance expected to remain sluggish because of the deteriorating security environment. Afghan economic growth prospects, according to the World Bank, depend on the government’s progress on reforms, the country’s ability to create a sufficient number of jobs to meet the growing demand, and improved security.558 Private investment declined in 2014 and remained flat in 2015, according to the World Bank, which is indicative of Afghanistan’s risky market conditions and political developments. The number of new firm registrations—a measure of investor confidence—in 2014 dropped 26% across all economic sectors. New firm registration in the first six months of 2015 matched 2014, year-on-year.559 The ADB reported that investor and consumer confidence was low in the first half of 2015 as the political and security situation declined and the government struggled to deliver anticipated reforms. Foreign direct investment declined by 30%.560 Consumer price inflation, for both food and non-food items, dropped to an IMF-estimated average -1.3% in 2015 compared to 1.4% in 2014. This was attributed to weak economic activity, declining global food and fuel prices, and waning domestic demand.561 The World Bank said this deflationary pressure on Afghanistan’s economy was being offset by the inflationary pressure of their currency, the afghani, depreciating against the U.S. dollar. Exchange-rate depreciation would normally cause higher consumer prices for an import-dependent nation like Afghanistan, but this was offset by declining global prices.562 The Afghan government acknowledged that the speed, scale, and depth of its economic crisis and associated human costs is unsustainable. Although it is working with the IMF and other donors on long-term 136 Special inspector general I Afghanistan reconstruction Economic and Social Development reforms to the economy, the government reported that the country is suffering from a major economic downturn that has led to “large-scale job loss, deep popular unhappiness, widespread human suffering, and a large upswing in out-migration as disillusioned Afghans leave for Europe and beyond.”563 The government said it miscalculated the economic costs of the Coalition withdrawal. Lower foreign military spending has reduced demand for services, leading to tens of thousands of jobs lost, and negatively impacted domestic demand for products and services. Meanwhile, the strength of the insurgency has caused the government to spend more on the military and less on job-creating investments, reducing its ability to provide jobs for an estimated 700,000 Afghans entering the workforce annually, including 400,000 high school and college graduates.564 In response, President Ashraf Ghani announced this quarter a jobs-focused stimulus and stabilization program—Jobs for Peace—that aims to provide short-term, labor-intensive employment in rural and urban areas.565 For more information, see pages 121–123 of this report. Afghanistan’s Fiscal Outlook Afghanistan’s fiscal vulnerability remains high, according to the World Bank, and will require a large increase in revenues and sustained levels of aid. Its medium-term economic outlook is “unfavorable.”566 While domestic revenues have increased, the World Bank said security costs have grown beyond donors’ initial projections.567 The 2012 NATO summit in Chicago predicted Afghanistan’s contribution to the Afghanistan National Defense and Security Forces (ANDSF) costs would be at least $500 million in 2015.568 Afghanistan did not meet this commitment.569 The Department of Defense (DOD) reported that the Afghan economy cannot grow quickly enough in the next five years to cover a significantly larger share of ANDSF costs. Those costs were estimated at $5.4 billion in FY 2015, of which the United States paid $4.1 billion. FY 2016 costs are projected to be $5 billion.570 FY 1394 Revenues and Expenditures Update Total collected domestic revenues—a figure that excludes donor grants— stood at 106.7 billion afghanis (AFN) ($1.6 billion) in the first 11 months of FY 1394, about 21.1% above the same period in FY 1393, but below initial targets.571 The Afghan government is close to meeting the IMF’s revised (lower) 2015 revenue target of AFN 114.2 billion.572 Still, domestic revenues paid for less than half (40%) of Afghanistan’s total budget expenditures of AFN 266.8 billion ($4.0 billion) in that time; donor contributions make up the difference. Afghan government expenditures in FY 1394 increased by AFN 3.0 billion (by 1.1% or $45.1 million in current dollars) compared to the same period last year.573 Report to the united states congress I January 30, 2016 137 Donor funding commitments made at the 2012 Chicago summit were for ANDSF only, which comprises the Afghan National Army and Afghan National Police. Afghanistan’s other security-related expenditures—the National Directorate of Security and the Presidential Protective Service, for example—are funded through other means. Source: DOD, Enhancing Security and Stability in Afghanistan, 12/2015, p. 79. Economic and Social Development FY 1394 Budget Gap Afghanistan’s fiscal gap is large. Donor assistance either narrows or closes this gap, as depicted in Figure 3.29. In the first 11 months of FY 1394, Afghanistan had a $2.4 billion total budget deficit against domestic revenues; donor contributions reduced that deficit to $72.2 million. The operating budget, which includes recurring costs such as public-sector payroll, would have had a $1.4 billion deficit if not for donor assistance, which produced a $205.3 million surplus. Without donor assistance, the development budget would have had a $963.5 million deficit. After donor funds, the deficit was reduced to $277.5 million.574 Figure 3.29 AFGHANISTAN'S DOMESTIC REVENUES AND DONOR GRANTS COMPARED TO OPERATING AND DEVELOPMENT BUDGET EXPENDITURES (AFN MILLIONS) 350,000 300,000 (11-month FY) 250,000 (9-month FY) 200,000 150,000 100,000 50,000 0 Fiscal Year 1388 Domestic Revenues Fiscal Year 1389 Fiscal Year 1390 Donor Grants Fiscal Year 1391 Fiscal Year 1392 Operating Budget Fiscal Year 1393 Fiscal Year 1394 Development Budget Note: Until recently, Afghan fiscal years ran approximately March 20 to March 20 of Gregorian calendar years. FY 1388 corresponds to March 20, 2009, to March 20, 2010, and so on. Nine-month data for fiscal year 1391 reflect a change in the timing of the Afghan fiscal year. Afghan fiscal years now generally run December 22 through December 21. Grants represent funds received from donors. Donor grants are often for specific projects or activities, but can sometimes be spent at GIROA's discretion. FY1394 is first 11 months only. FY 1394 operating and development budget revenue and expenditure data are as of 12/3/2015. Source: MOF, Aqrab Financial Statements FY 1394, 12/3/2015; MOF, “Annual Fiscal Report 1393,” 3/12/2015; MOF "1394 National Budget," 1/28/2015; MOF, “1393 National Budget,” 2/1/2014. 138 Special inspector general I Afghanistan reconstruction Economic and Social Development A fiscal gap can widen or shrink, depending on variables including budget-execution rates, donor grants received, qualification for donor incentive funds, revenue collection, and changing expenditures.575 As this report was being prepared for press, the Afghan parliament approved a $6.6 billion national budget for FY 1395 on January 18, 2016.576 International Monetary Fund Staff-Monitored Program On November 3, 2015, the IMF completed the results of its first review of Afghanistan’s implementation of macroeconomic policies and structural-reform agenda under the Staff-Monitored Program, which ran April–December 2015. It deemed Afghanistan’s performance satisfactory, but the deteriorating security environment and delays in forming a government complicated implementation efforts. Most June 2015 fiscal and monetary quantitative targets were met, as were the September indicative targets, except for social and other priority spending targets. Revenue missed its September target by AFN 500 million.577 Progress on structural benchmarks through June 2015 was slower than planned. Revenue-generation measures like increased business-receipt taxes, fuel fees collected at customs, and a new telecommunications tax were delayed by several months. However, a new banking law was enacted in August and the structural benchmark for hiring an independent auditor to audit bad-debt recoveries at an unnamed state bank was met in September. The benchmark of issuing a regulation on currency reporting also was met, and was to be strengthened by the end of 2015.578 The IMF also said earlier bank reforms are not progressing as quickly as anticipated. All weak Afghan banks were subject to enforcement actions in 2015, notably two vulnerable publicly unidentified banks. One of these banks increased its capital and reduced foreign-exchange exposure. The other prepared a five-year operating strategy that is under review, hired chief operating and credit officers, but not a chief executive officer. Its capital targets appear to have been met as of June.579 Overall, the IMF concluded that while progress has been made, Afghanistan’s economy is dependent on the government’s commitment to reforms, improved security conditions, and continued donor support. IMF staff recommended the government step up efforts to mobilize revenue, prioritize spending, improve budget management, instill confidence in its currency, and “vigorously” implement their new banking, anti-money laundering, and combating the financing of terrorism laws and regulations. Staff said the Afghan authorities are aware of the challenges and are committed to reform.580 Indicative targets: quantitative indicators used to help assess progress in meeting objectives of an IMF program, including predictive economic trends where data are uncertain. Source: IMF, “Factsheet, IMF Conditionality,” 4/13/2015. “The principal connection between the Afghan economy and the rest of the world are donor inflows. These inflows finance most imports and dwarf (licit) exports…” Trade Afghanistan’s trade balance—negative $8.1 billion (39.6% of GDP) in 2014 and an estimated negative $8.4 billion (39.2% of GDP) in 2015—is Report to the united states congress I January 30, 2016 139 Source: IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, p. 13. Economic and Social Development unsustainable, and shows an urgent need for an environment that promotes domestic and foreign investment.581 The Afghan government pledged to simplify the visa process and work to identify ways to “expedite, rather than impede exports.” The government aims to increase the number of border crossings, develop dry ports to advance trade and transit agreements, and increase customs cooperation.582 Export and Import Data The IMF noted that like other data from Afghanistan, balance of payments data, which include the current account, suffer from weaknesses in coverage and consistency, but are broadly adequate for surveillance. Source: IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, p. 24. Although Afghanistan routinely sustains a large trade deficit, donor aid helped the country maintain an IMF-projected positive current-account balance of 4.5% of GDP—about $872 million—in 2015. Without it, the IMF estimates Afghanistan would have a current-account deficit equivalent to 38.9% of its GDP—about $7.9 billion. This estimate is $416 million (or 32.3%) lower than Afghanistan’s 2014 current account.583 During 2013–2014, Afghanistan exported around $3.2 billion–$4 billion worth of goods and services annually, but is projected to export $2.6 billion in 2015, not including illicit narcotics, according to the IMF.584 Unsurprisingly, IMF staff said that Afghanistan needs to increase and diversify its exports, which will stimulate innovation and good management.585 During 2013–2014, Afghanistan imported between $11.3 billion–$10.8 billion worth of goods and services annually. The IMF estimated Afghanistan’s 2015 imports at more than $10.6 billion of goods and services, with about $8.8 billion paid for by official donor grants.586 Afghanistan Trade and Revenue Project USAID’s four-year, $77.8 million Afghanistan Trade and Revenue (ATAR) project is a trade-facilitation program designed to (1) improve trade-liberalization policies, including support for Afghanistan’s accession to the World Trade Organization; (2) improve and streamline the government’s ability to generate revenue by modernizing Afghanistan’s customs institutions and practices; and (3) facilitate bilateral and multilateral regional trade agreements.587 To achieve sustainable economic growth, job creation, enhanced delivery of government services, and fiscal sustainability, it assumes that the Afghan government will carry out its commitments to reform, and a stable security environment will allow the private sector to take advantage of an improved business climate.588 On December 3, 2015, Afghanistan’s Customs Department and central bank expanded a program to allow customs duties in Balkh Province to be paid electronically from any commercial bank, rather than at central bank offices within customs houses. This follows a successful pilot program at Kabul International Airport and at Kabul’s inland customs office completed last quarter. The State Department said electronic payments expedite the release of goods at the border, reduce the need to carry cash, and reduce opportunities for graft.589 140 Special inspector general I Afghanistan reconstruction Economic and Social Development ATAR’s 2015 midterm evaluation found it was able to improve the government’s capacity to draft WTO-related legislation when it worked directly with staff, but not when it worked remotely and handed legislation to the government without proper explanation or Afghan input. The government also showed little capacity to implement or comply with WTO-related legislation.590 However, USAID said the evaluation took place in the early stages of ATAR’s capacity-building efforts; these efforts are ongoing with better results expected over the next two years.591 World Trade Organization Accession On December 17, 2015, WTO trade ministers approved terms for Afghanistan’s accession to the organization. Afghanistan has until June 30, 2016, to ratify the deal, and would become a full member 30 days after notification. Should that occur, Afghanistan would become the ninth least-developed country to become a member since the organization was established in 1995. Afghanistan applied for membership in 2004.592 Afghanistan’s First Deputy Chief Executive described the accession requirements as an engine for achieving sound structural reforms, and a way for the country to embrace market-economy principles, an open and transparent economy, rule of law, good governance, non-discrimination, and market instruments.593 The WTO director-general said approval for Afghanistan’s accession was an endorsement of its efforts in this regard.594 Banking and Finance –President Ashraf Ghani The World Bank said access to finance remains low and is a major constraint to economic growth. Only 5.7% of Afghan firms are reported to have a bank loan, and only 2% use banks to finance investments. More generally, less than 10% of the Afghan population uses banks,595 preferring to hold cash. The ADB said this reflects continued distrust of banks and weak banking-sector performance since the massive Kabul Bank failure.596 The IMF reported that lax governance and regulatory enforcement in early 2014 caused the financial positions of some Afghan banks to deteriorate, two of which were characterized as in “hazardous condition.” Recognizing the necessity of banking-sector profitability, Afghan authorities, with donor and IMF assistance, began to address banking vulnerabilities in 2015. The IMF said important, albeit delayed, progress was made, including passing a new banking law to strengthen bank governance, amending the anti-money laundering law, improving revenue and customs department capacities, and renewing preparations to sell New Kabul Bank. Additionally, the IMF said supervisory and regulatory enforcement is getting stronger, the restructuring of weak banks continues, and the newly established Bad Debt Commission is helping recover nonperforming loans (participation for public banks is required, but voluntary for private banks).597 Report to the united states congress “Our country’s accession to the WTO will serve as a catalyst for domestic reforms and transformation to an effective and functioning market economy that attracts investment, creates jobs and improves the welfare of the people of Afghanistan.” I January 30, 2016 141 Source: WTO, “Afghanistan WTO Accession Package Ready for Formal Adoption in Nairobi,” 11/11/2015. Economic and Social Development U.S. Treasury Assistance The U.S. Treasury’s Office of Technical Assistance (OTA) continued implementing its March 23, 2015, agreement to develop technical assistance and capacity-building programs for Afghanistan’s Ministry of Finance (MOF).598 Budget and Treasury Management APFM is the United States’ principal offbudget effort to help strengthen the Afghan government’s ability to generate domestic revenue, manage its budget, and become more fiscally sustainable. It aims to build the government’s capacity for forecasting revenue; increase payment compliance, collection, and transfers to the treasury; and strengthen budget planning, execution, monitoring, reporting, and coordination. Source: USAID, response to SIGAR data calls, 9/23/2015 and 10/8/2015; USAID, Contract Number AID-306-TO-15-00065, 7/27/2015. This quarter, OTA conducted its third mission to Kabul, December 1–14, to discuss cooperation and capacity building for budget and treasury management with MOF officials, U.S. embassy in Kabul staff, and donor partners.599 OTA clarified key MOF needs, including support for the macro-fiscal policy directorate, guidance on linking national planning programs to the national and provincial budgeting process, and development of baseline budgets and forward estimates. OTA expects new budget processes to help the MOF make more informed decisions about unavoidable budget reductions in the future.600 The MOF also provided feedback to OTA’s proposal to strengthen Afghanistan’s policy development, budget formulation and results monitoring process. OTA will incorporate some key concepts of the national planning system already developed by the Afghan government.601 Additionally, OTA met with USAID about their Afghanistan Public Financial Management (APFM) project, which will include budget and revenue technical assistance, and about their joint development of a five-year fiscal performance management improvement plan for the MOF that will be linked to New Development Partnership and Afghanistan Reconstruction Trust Fund incentive milestones.602 Banking and Financial Services OTA embarked on an initial assessment mission in September 2015 to strengthen Afghan bank supervision and problem-bank resolutions. OTA is seeking funding from USAID to support a banking-supervision assistance program for Afghanistan’s central bank. Meanwhile, OTA is reviewing the central bank’s five-year supervision action plan, and is discussing assistance plans with other donors, including the World Bank, USAID, and the United Kingdom’s Department for International Development (DFID), to better understand how the potential work of OTA advisors would relate to other efforts.603 Challenges OTA said security-imposed travel restrictions are a major constraint in establishing a more sustained presence in Afghanistan. A revised threat assessment by the U.S. Embassy in Kabul in November limits the types of missions it will allow and the length of stay for visiting officials to three to four days. The embassy also said it lacks housing for U.S. personnel.604 OTA also said additional funding is needed for more robust engagement with Afghan authorities in FY 2016. USAID is finalizing an interagency agreement that would provide $2 million for OTA budget, banking, and 142 Special inspector general I Afghanistan reconstruction Economic and Social Development tax assistance activities. The State Department’s Bureau of International Narcotics and Law Enforcement is preparing an agreement to provide $178,000 for OTA assistance to help Afghan authorities combat economic crimes.605 Financial Action Task Force At its most recent plenary session in Paris, France on October 21–23, 2015, the Financial Action Task Force (FATF) chose to keep Afghanistan on its “Improving Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) Global Compliance” document, also known as the “gray list.” This means that while Afghanistan has strategic AML/CFT deficiencies, its government has developed an action plan, made a high-level political commitment to address those deficiencies, and is making progress.606 In October, FATF reported on Afghanistan’s progress since the June 2015 plenary, issuing a “fit and proper” regulation for the financial sector, and a regulatory framework to implement a cross-border system to detect the transportation of cash and bearer negotiable instruments.607 Treasury had previously said that Afghanistan’s draft banking law, which required prospective bank owners to be deemed “fit and proper” contained a problematic loophole for anyone “convicted by an authorized court of an offense for which he was sentenced to imprisonment unless such sentence was motivated by his religious or political views or activities” (emphasis added).608 FATF determined that certain strategic deficiencies remain and urged Afghanistan to further implement its legal framework for identifying, tracing, and freezing terrorist assets; implement an adequate AML/CFT oversight program for all financial sectors; and further establish and implement effective controls for cross-border cash transactions.609 Treasury explained that Afghanistan’s efforts to resolve deficiencies in its crossborder declaration system at airports are greatly hampered by general capacity limitations and resource challenges that are exacerbated at porous land borders in often fractious areas. Treasury remains concerned about these deficiencies and Afghanistan’s implementation of the legal framework for freezing terrorist assets.610 This is the fifth consecutive FATF review in which Afghanistan has maintained this status since being downgraded to the “gray” list in February 2014.611 Kabul Bank Theft Accountability Under the Tokyo Mutual Accountability Framework, the basis for donor support to Afghanistan until September 2015, the Afghan government was required to take all possible steps to recover more assets stolen from Kabul Bank. However, the current basis for support, the Self-Reliance through Mutual Accountability Framework (SMAF), does not. Instead, SMAF includes a general “zero-tolerance” for corruption policy and calls for transparent and accountable governance.612 Report to the united states congress I January 30, 2016 143 Financial Action Task Force (FATF): an intergovernmental policy-making body that sets standards and promotes effective implementation of legal, regulatory, and operational measures for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system. Its 36 members include the United States, United Kingdom, Switzerland, and the European Union; observers include the UN and the Asian Development Bank. Source: Financial Action Task Force website, “Who We Are,” and “Members and Observers,” accessed 1/3/2016. The U.S. Treasury and the FATF Treasury leads the U.S. delegation to the FATF and participates closely in all working group discussions. Specifically, within the FATF, the International Cooperation Review Group (ICRG)—co-chaired by the United States and Italy—is tasked with leading the process to identify and monitor countries with AML/CFT deficiencies. Afghanistan was one of over 20 countries the ICRG reviewed at the October 2015 FATF plenary. Before each ICRG meeting, Treasury reviews the information provided by the monitored countries, including laws or regulations, other legal instruments, and supporting materials, and then discusses with other agencies in the U.S. delegation what action(s) should be taken at the FATF on the identified countries of concern. It then works to establish consensus with fellow FATF members during deliberations. Source: Treasury, response to SIGAR data call, 12/30/2015. Economic and Social Development The United States continually stresses in meetings with Afghan officials that it will hold the government accountable to its promises to address endemic corruption, including taking action against those responsible for the more than $900 million stolen from Kabul Bank.613 However, while some U.S. funding through the $800 million New Development Partnership with the Afghan government is tied to anticorruption initiatives, none is explicitly conditioned on resolving the Kabul Bank case. The U.S. Department of Justice (DOJ) said Afghan authorities have been successful recently in continuing to monitor and arrest low-level Kabul Bank debtors, but not in adhering to the rule of law regarding the Kabul Bank judgment. In August 2015, the Afghan government released convicted ex-Kabul Bank chief executive officer Khalilullah Ferozi from prison, reportedly at behest of high-ranking Afghan government officials, after he had served only a fraction of his 10-year sentence.614 DOJ and State said Ferozi has returned to prison to serve out his remaining sentence.615 Ferozi and ex-Kabul Bank Chairman Sherkhan Farnood are two of 36 individuals and companies who were convicted in the nearly $1 billion theft that brought the bank near collapse in 2010.616 DOJ was not aware of any new investigations this quarter.617 According to State, cases referred to Afghanistan’s Attorney General’s Office (AGO) have not progressed and it remains to be seen whether the AGO has the political will to carry out prosecutions. State added that the AGO’s Anti-Corruption Unit does not currently possess the necessary political will to be fully effective.618 For its part, the AGO said it provided names of Kabul Bank debtors who have not signed a repayment agreement with the government to Afghan authorities, but no arrests were made.619 The AGO also added Ahmad Fahim Turab to the no-fly list. An employee of the Shaheen Money Exchange, Turab was one of Farnood and Ferozi’s 16 aiders and abettors.620 On June 22, 2015, President Ghani set a one-week deadline for debtors to settle their accounts or be referred to the AGO for prosecution and banned from leaving the country.621 Last quarter, the AGO listed 14 primary Kabul Bank debtors who failed to settle their obligations on official no-fly lists, although it is believed that they are no longer living in the country.622 Khalilullah Ferozi and the “Smart City” Project Ferozi was introduced as a major contributor to a government-backed land development project this quarter. On November 4, 2015, the Afghan government inaugurated a $900 million “Smart City Township” project in a ceremony that featured Ferozi; President Ghani’s legal advisor and head of the Kabul Bank Clearance Committee, Dr. Abdul Ali Mohammadi; Special Representative for Reforms and Good Governance Ahmad Zia Massoud; and Minister of Urban Development Sayed Saadat Mansur Naderi. Ferozi was supposed to be in prison, but instead he was introduced at the ceremony as a shareholder and signed a memorandum of understanding 144 Special inspector general I Afghanistan reconstruction Economic and Social Development with Minister Naderi through which he would provide land for the project and the Nabi Zada Construction Company would perform the work.623 Dr. Mohammadi said this collaboration is part of a plan to enable Kabul Bank debtors to start businesses to help satisfy their debts.624 The collaboration with Ferozi seemed to contradict the intent of President Ghani’s October 2014 decree ordering the pursuit and prosecution of all those involved in the Kabul Bank case, as well as the government’s September 2015 self-graded assessment that its actions taken in response to Kabul Bank broke the “aura of impunity that had surrounded high level malfeasance.”625 The Afghanistan Analysts Network reported palace insiders describing “scenes of stunned disbelief and exasperation when the news broke.”626 Afghan officials initially defended the arrangement but, on November 7, 2015, President Ghani declared the memorandum of understanding nonbinding, null, and void; reaffirmed that no government branch outside the judiciary has the authority to amend the court’s verdict against Ferozi; and ordered a review on transferring Ferozi’s property to the government as compensation for his debts.627 Ferozi is reportedly back in prison.628 On November 18, President Ghani suspended his legal advisor, Dr. Mohammadi, relieving him of all responsibilities, and ordered an investigation into the Kabul Bank loan-recovery process. Mohammadi, the only person held accountable so far, reportedly told parliamentarians that President Ghani and the Kabul Bank Clearance Committee—established by a March 2015 presidential decree to look into and help resolve the Kabul Bank case—knew in advance of the Smart City project plan and its association with Ferozi.629 Cash and Asset Recoveries The Kabul Bank Receivership (KBR) informed the Justice Department that actual recoveries reportedly stand at $250.9 million as of October 29, 2015, $4.7 million more than reported last quarter. KBR also reported total recoveries—a new category—of $569.2 million. This figure comprises cash recoveries, forgiven Kabul Bank debts, and assets recovered or seized, as well as the amount still owed by 12 major debtors who signed loanrepayment agreements in 2015, typically to be indemnified within three to five years. KBR calculated the outstanding loan portfolio at $417.8 million. DOJ is unaware of any Afghan government rationale for the methodology it uses to calculate recoveries—actual or total—from Kabul Bank debtors.630 However, the methodology may be contained in the monthly KBR activity and cost reports, which include the status and financial details of asset recovery, required by the IMF’s Staff Monitored Program.631 Farnood and Ferozi Repayments The Afghan government has been unable to compel full repayment from Farnood and Ferozi.632 Farnood, who also remains in prison, is said to have paid back approximately $62 million in cash—not quite 11% of his Report to the united states congress I January 30, 2016 145 SIGAR Investigation As a result of SIGAR’s investigation that uncovered corruption in the award of a nearly $1 billion, multi-year Afghan Ministry of Defense fuel contract, this quarter the Afghan government requested SIGAR’s assistance in helping it recover some of the funds stolen from Kabul Bank. SIGAR agreed to provide support. Economic and Social Development $571.6 million obligation—as well as $18.2 million in assets. KBR’s estimates of what the two men owe is dramatically lower than the judgment of Afghanistan’s appellate court. According to the KBR, Farnood still owes $336.8 million.633 The KBR puts Farnood’s total obligations at $417 million, or $155 million lower than the appellate court judgment.634 KBR has reportedly collected approximately $10.1 million from Ferozi— about 3% of the $333.8 million court judgment, which includes embezzled amounts, interest, and fines.635 State said Ferozi also pledged $127 million in collateral assets, which the KBR considers a recovery.636 KBR puts Ferozi’s total obligations at approximately $137.2 million, or $197 million lower than the appellate court judgment. After Kabul Bank’s near-collapse in 2010, the MOF issued an eight-year, $825 million bond to the central bank to compensate it for the losses it incurred. Repayments by the government, which sometimes include the proceeds of recovered Kabul Bank assets, are to be made quarterly through budget appropriations. Parliament has not consistently authorized these repayments, while payments that were authorized are in arrears. No repayments appear to have been made since 2013. Cash and Asset Recovery Challenges The KBR said its main challenge in recovering cash and assets is inadequate pressure on borrowers to repay their debts, primarily because so many have significant political ties or allies. Integrity Watch Afghanistan, a donor-supported independent civil society organization, blamed the Afghan government for lacking the political will to support the KBR and the AGO in their efforts to collect debts.637 Although President Ghani predicted that his government would “make history” by recovering the public money lost in the scandal, State acknowledged KBR’s continuing challenges, and DOJ said it has seen no evidence this quarter that the Afghan government has overcome any of them.638 Source: IMF, Islamic Republic of Afghanistan, Memorandum of Economic and Financial Policies, 11/1/2011, p. 9; Treasury, response to SIGAR data calls, 6/25/2015 and 12/30/2015. U.S. Assistance Justice Department officials met with the Afghan Attorney General, the director of the AGO’s Anti-Corruption Unit, and the deputy director of the Kabul Bank Receivership this quarter. The Justice Department requests to travel with these and other Afghan justice sector representatives to other meetings were either rejected or cancelled by the U.S. Embassy-Kabul’s Regional Security Officer due to security conditions in Kabul.639 In May 2015, Afghanistan requested legal assistance from DOJ to recover Kabul Bank assets. DOJ said mutual legal assistance agreements play a vital role in criminal prosecutions, allowing the prosecuting country to obtain evidence and information they would otherwise not have a legal or jurisdictional basis to collect.640 However, DOJ deemed Afghanistan’s request deficient and identified corrective actions needed before DOJ could assist. DOJ reviewed these actions again this quarter with the director of the AGO’s Anti-Corruption Unit. Neither the U.S. Embassy-Kabul nor DOJ received new or revised diplomatic notes, or other official requests, from the Afghan government about recovering Kabul Bank assets and beginning discussions to request mutual legal assistance.641 DOJ said Afghanistan’s AGO has a critical need for anti-money-laundering training. DOJ continued to provide that training this quarter, hosting a 146 Special inspector general I Afghanistan reconstruction Economic and Social Development one-day anti-money laundering program for 32 prosecutors from the anticorruption and antiterrorism units at the AGO and several representatives from the High Office of Oversight. DOJ said it is too soon to assess whether the trainees have made or will make use of the training.642 New Kabul Bank New Kabul Bank (NKB) is a temporary “bridge bank” containing the good assets and deposits from Kabul Bank. NKB operates at a loss, $65 million over the last six years by one estimate, due in part to its lack of lending portfolio, restrictions on developing lending, and the need to maintain a conservative asset-management strategy prior to its contemplated sale.643 Privatizing NKB, which provides salary payment and direct-deposit services to hundreds of thousands of government employees, has been a long-standing objective of Afghanistan’s central bank and the international community.644 Past efforts were unsuccessful.645 With IMF assistance, the Afghan government reinitiated efforts to sell NKB and announced a new bid for the bank on December 26, 2015. Responses were due on January 28, 2016. Further details will be provided to qualified investors thereafter.646 U.S. Economic and Development Support Most assistance from the Economic Support Fund goes toward USAID’s development programs. In September 2015, USAID published an updated Performance Management Plan to guide and measure its development objectives, and articulate its development strategy through 2018. The plan will be reviewed at least annually and updated as necessary.647 Figure 3.30 shows USAID assistance by sector. Figure 3.30 USAID DEVELOPMENT ASSISTANCE, CUMULATIVE DISBURSEMENTS, AS OF DECEMBER 31, 2015 ($ MILLIONS) Infrastructure Stabilization Governance Agriculture Economic Growth Health Unpreferenced* Education Program Support $0 4,031 2,343 2,177 1,951 1,049 978 962 794 252 $1,000 $2,000 $3,000 $4,000 $5,000 Note: Numbers rounded. Agriculture programs include Alternative Development. Infrastructure programs include power, roads, extractives, and other programs that built health and education facilities. * Unpreferenced funds are U.S. contributions to the ARTF that can be used for any ARTF-supported initiatives. Source: SIGAR analysis of USAID response to SIGAR data call, 1/11/2016; SIGAR analysis of World Bank, ARTF, Administrator’s Report on Financial Status, as of December 21, 2015, accessed 1/17/2016. Report to the united states congress I January 30, 2016 147 Economic and Social Development Development Of Natural Resources President Ghani listed mining as one of the country’s most important economic assets in his September 2015 interview with SIGAR. So far, however, mining has contributed only slightly to the country’s GDP.648 Actual receipts were only about AFN 613 million (31% of the budget projection) in the first 11 months of FY 1394. Compared to the same time last year, extractives revenue decreased approximately 33.5%.649 The need for infrastructure financing, progress on regulatory and legislative frameworks, and an improved security environment make the timing of significant revenues from this sector uncertain.650 The majority of mining contracts and tenders are still being reassessed by the Ministry of Mines and Petroleum (MOMP) due to what the minister called a lack of transparency in the award process under the Karzai administration.651 USAID said the Afghan government is taking a slow, methodical approach to the sector until it feels it has the capacity to manage tenders and contracts, and has instructed the MOMP to proceed cautiously.652 Mining Investment and Development for Afghan Sustainability SIGAR Audit This quarter, SIGAR published the second of two reports focused on the U.S. efforts to develop Afghanistan’s extractive industries. It determined that these programs had mixed success, largely due to challenges in dealing with the Afghan government. The report recommended that the USAID administrator (1) use the results of the assessments done to date to develop a plan with the MOMP and its component organizations addressing the structural reforms needed at the ministry and establish milestones for achieving them; and (2) condition any future on-budget assistance to the MOMP on the ministry achieving the milestones in the agreed-upon plan. For more information, see pp. 18–22. USAID’s Mining Investment and Development for Afghan Sustainability (MIDAS) program aims to strengthen MOMP and relevant private sectorentity capacities to exploit Afghanistan’s natural resources, in accordance with international standards.653 In recent months, Minister of Mines and Petroleum Daud Saba has put a hold on new drilling activities. USAID said he modified the types of assistance he wanted from MIDAS. He requested MIDAS be rescoped to help develop legal and institutional frameworks, followed by on-the-job trainings, for the sustainable and efficient development and exploitation of Afghanistan’s natural resources.654 Also this quarter, MIDAS advisors continued training Afghan Geological Survey staff to prepare, process, and analyze samples for a future granite tender. MIDAS also supported geospatial/geographic-data training, and geophysics training for Geological Survey staff; legal training on mineralcontract reviews and negotiations for MOMP legal advisors; and gender awareness training for extractives sector employees.655 MIDAS and USAID’s other extractives-assistance programs are listed in Table 3.22. Hydrocarbons Afghanistan’s efforts to develop its oil and gas reserves focus on the Amu Darya Basin and Afghan-Tajik Basin, both in northern Afghanistan.656 Afghanistan has only small-scale topping plants—early-stage refineries that can process only limited petroleum components of crude oil—and remains heavily dependent on fuel imports.657 The country imports 10,000 tons of oil products a day from Turkmenistan, Uzbekistan, Russia, Pakistan, and Iran, representing roughly one-fourth of all annual Afghan imports, or approximately $1.5 billion.658 148 Special inspector general I Afghanistan reconstruction Economic and Social Development Table 3.22 USAID Extractives-Assistance Programs Project Title Sheberghan Gas Generation Activity (SGGA) Sheberghan Gas Development Project (SGDP) Mining Investment and Development for Afghan Sustainability (MIDAS) Start Date 12/21/2011 5/15/2012 3/31/2013 End Date 7/31/2016 8/31/2016 3/30/2016 Source: USAID, response to SIGAR data call, 1/11/2016. Sheberghan Programs The Sheberghan gas fields hold the potential for cheap natural-gasgenerated power that could be competitive with imported power from Uzbekistan, according to the World Bank.659 USAID is supporting the Sheberghan project to help Afghanistan identify and manage gas resources to be used for power generation through two mechanisms: (1) the $90 million, on-budget Sheberghan Gas Development Project (SGDP) to rehabilitate and drill wells in the Amu Darya Basin and fund a gas-gathering system and gas-processing plant; and (2) the $30.4 million, off-budget Sheberghan Gas Generation Activity (SGGA) for capacity building and technical assistance to the MOMP.660 Although the entire Sheberghan program is behind its original 2012 schedule due to a year-long absence of a minister of mines and petroleum, and because the government had to replace almost the entire Afghanistan Petroleum Authority staff, this quarter, USAID said SGDP is keeping to its revised schedule. Turkish Petroleum Corporation, SGDP’s drilling contractor, succeeded in drilling one new well and rehabilitating another.661 SGGA issued and received responses to a request for proposals for evaluating data and reserve estimates for seven Sheberghan gas fields; helped train Afghanistan Petroleum Authority staff on drilling contract payment processes; and briefed the authority’s leadership on critical drilling program administrative matter.662 In November, SGGA reported that the MOMP continued to demonstrate an inability and unwillingness to make petroleum operation-related decisions. For example, the ministry refused to remove a well from a drilling contract and appointed a committee to study the matter, even though the same study had already been conducted by the Afghanistan Petroleum Authority and USAID had already rescinded funding. The delay in the ministry’s decision to cancel a second well also far exceeded commercial industry norms.663 Agriculture Agriculture continues to be the main source of employment and subsistence for the Afghan population, accounting for about 25% of GDP, employing more than 50% of the labor force, and affecting 75% of Afghans who depend Report to the united states congress I January 30, 2016 149 Total Estimated Cost ($) $30,440,958 90,000,000 50,096,175 Cumulative Disbursements, as of 12/31/2015 ($) $23,178,440 21,895,875 24,351,004 Economic and Social Development on agricultural activities for their livelihoods.664 USAID believes agriculture can stimulate and sustain Afghan-led economic growth. USAID’s agricultural projects focus on wheat, high-value horticultural crops, and livestock, and aim to help farmers improve their output and sales through new technology, management practices, and the cultivation of key high-value crops, while also focusing on improving natural-resource management, and creating or rehabilitating irrigation and drainage systems.665 USAID is implementing two projects previously under the auspices of the U.S. Department of Agriculture that are aimed at strengthening the capacity of the Ministry of Agriculture, Irrigation, and Livestock (MAIL): (1) The Afghan Agricultural Extension Program, which has established 268 farmer field schools and trained more than 1,300 government staff; and (2) the Capacity Building and Change Management Program, which has already placed specialists at 14 of MAIL’s provincial-level affiliates, conducted monitoring and evaluation training, and helped coordinate between the various donor programs.666 Since 2002, USAID has disbursed nearly $2.0 billion to improve agricultural production, increase access to markets, and develop income alternatives to growing poppy.667 Pages 98–103 of this quarterly report discuss USAID’s alternative-development programs. A list of all active USAID agriculture programs is found in Table 3.23. Agricultural Economic Activity in Regional Economic Zones An Afghan family stands in their vineyard, trellised with U.S. aid. (USAID/CHAMP photo) Economic activity in southern Afghanistan is dependent on the security situation on the ground. USAID said economic activity in Kandahar is growing, with grapes and pomegranates particularly promising. Wheat is still a major economic activity in Helmand even though security has deteriorated there. USAID agriculture programs are working to improve business ties between Helmand wheat producers and buyers, particularly in Kandahar, a net consumer of wheat. Programs in Zabul are focusing on figs and stone fruits, but in Uruzgan—potentially the least secure of the four provinces— agricultural economic activity is more constrained but projects continue to support orchard and vegetable crops, as well as wheat and livestock.668 In FY 2016, USAID programming will focus on almonds in targeted districts in Uruzgan.669 Economic activity in the northern economic zone, paralleling Highway 1, particularly in the Mazar-e Sharif area, is increasing, according to USAID. However, the economic zone following the road through Baghlan and Kunduz Provinces to Tajikistan is experiencing a slowdown in economic activity due to the heightened insecurity in the region.670 Agricultural Credit Enhancement II The Agricultural Credit Enhancement (ACE) II project is the technical-assistance/advisory support component of the conditions-based Agricultural 150 Special inspector general I Afghanistan reconstruction Economic and Social Development Table 3.23 USAID Active Agriculture Programs Project Title Total Estimated Cost ($) Cumulative Disbursements, as of 12/31/2015 ($) $19,814,702 $6,831,775 Start Date End Date 10/1/2014 9/30/2017 Agriculture Credit Enhancement II (ACE II) 6/24/2015 6/23/2018 18,234,849 1,586,787 Capacity Building and Change Management Program II (CBCMP II) 7/10/2014 7/9/2017 19,999,989 9,565,518 Afghanistan Agriculture Extension Project II (AAEP-II) Famine Early Warning System Network (FEWSNET) Phase III 12/29/2011 12/28/2016 7,492,739 3,420,553 3/25/2011 12/31/2016 7,824,209 6,560,129 12/16/2014 12/31/2016 5,000,000 5,000,000 Strengthening Afghan Agricultural Faculties (SAAF) Mothers and Under-Five Nutrition and Child Health (MUNCH) SERVIR 9/14/2015 9/30/2020 3,600,000 0 Regional Agriculture Development Program (RADP)-South 10/7/2013 10/6/2018 125,075,172 45,241,343 Regional Agriculture Development Program (RADP)-West 8/10/2014 8/9/2019 69,973,376 14,038,692 Regional Agriculture Development Program (RADP)-North 5/21/2014 5/20/2019 78,429,714 13,710,191 Note: Some of the USAID programs listed receive both Alternative Development and Agriculture Development funds. For more information on Alternative Development programs, see Table 3.12 on p. 99 of this report. Source: USAID, response to SIGAR data call, 1/11/2016. Development Fund (ADF) that was transitioned to MAIL in December 2014. The USAID-ADF grant to the MAIL extends agriculture-related credit access to small- and medium-sized farms and agribusinesses in all regional economic zones, particularly to those who add value to agricultural products such as distributors, producers, processors, and exporters.671 ACE II support was modified in November 2015 to help the ADF achieve operational sustainability—operating income that is sufficient to cover operational expenses—within three years. An activity manager was hired to help monitor the ACE II program.672 ACE II will continue its other support to ADF by encouraging other financial intermediaries— banks, farm stores, leasing companies, and food processors—to enter into agriculture-related finance.673 This quarter, USAID reported that with ACE help, ADF has cumulatively provided around $67 million: $21.8 million in loans to farmers in the north, $15 million in the central region, $14.1 million in the east, $4.1 million in the south, and $13 million in the west.674 Essential Services and Development Since 2002, the United States has provided reconstruction funds to increase the electricity supply, build roads and bridges, and improve health and education in Afghanistan. This section addresses key developments in U.S. efforts to improve the government’s ability to deliver these essential services. Report to the united states congress I January 30, 2016 151 Economic and Social Development Power Supply Afghanistan has one of the lowest rates of electrification in the world, with an estimated 25–33% of Afghans connected to the power grid.675 Most parts of urban areas like Kabul, Herat, Kandahar, and Mazar-e Sharif have 24-hour power, although power outages are common, but only 10% of the rural population have access to grid-connected power.676 Afghanistan imports approximately 81% of its total electricity.677 Electricity imports are expected to rise in the near term, according to the World Bank, which also noted that limited access to electricity is one of Afghanistan’s biggest constraints to private-sector development.678 Afghanistan will need regional cooperation to meet its energy demands.679 Regional Energy Initiatives On December 13, 2015, Turkmenistan, Afghanistan, Pakistan, and Indian leaders attended a ground-breaking ceremony for the development of the Galkynysh gas field that will eventually feed the $9 billion, 1,127-mile natural gas Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline.680 The pipeline, as shown in Figure 3.31, will transport up to 33 billion cubic meters of natural gas per year from Turkmenistan to these other countries. Afghanistan will collect a transit fee from those countries for the gas passing Figure 3.31 PROPOSED TURKMENISTAN-AFGHANISTAN-PAKISTAN-INDIA (TAPI) PIPELINE UZBEKISTAN CHINA TAJIKISTAN TURKMENISTAN Ashgabat Major gas fields Kabul Kabul Herat IRAN AFGHANISTAN Islamabad INDIA PAKISTAN Kandahar Fazilka Source: U.S. Energy Information Administration, Overview of Oil and Natural Gas in the Caspian Sea Region, 8/26/2013, p. 24; Council on Foreign Relations, Building The New Silk Road, 5/25/2015, p. 3. 152 Special inspector general I Afghanistan reconstruction Economic and Social Development through its territory.681 The Minister of Mines told parliament that a 7,000 member security force will guard the pipeline during construction.682 Afghanistan, through the Afghanistan-Tajikistan-Kyrgyzstan-Pakistan, Central Asia-South Asia Electricity Transmission and Trade project (CASA1000) will receive up to 300 MW of generation capacity from Tajikistan and Kyrgyzstan, and will collect transit-fee revenue from electricity delivered to Pakistan.683 CASA-1000 is behind schedule. All main project agreements have been signed, procurement for major infrastructure is advancing, and a feasibility study is complete. However, construction contracts were not signed by a June 30, 2015, deadline, and a revised target date was set for April 2016. Construction is reportedly to begin in May 2016 with electricity distribution starting in 2018.684 Another regional energy initiative involving Afghanistan is the Turkmenistan-Uzbekistan-Tajikistan-Afghanistan-Pakistan (TUTAP) transmission line that will enable power to be dispatched from Turkmenistan to Pakistan through Afghanistan.685 This quarter, the Afghan government proposed pausing TUTAP to review the proposed route to better benefit the country’s central provinces.686 TUTAP is financed by the ADB and the ADB-administered Afghanistan Infrastructure Trust Fund, to which USAID contributes. Work is scheduled to be completed in 2020. Even with CASA1000- and TUTAP-generated power, the Afghan government said it will still face an energy deficit.687 U.S. Power Sector Assistance Since 2002, USAID obligated more than $2.7 billion to build generators, substations, and transmission lines, and provide technical assistance in the sector.688 USAID believes that economic expansion and increased employment depends on maintaining and improving Afghanistan’s electrical infrastructure. It is helping Afghanistan’s national electric utility, Da Afghanistan Breshna Sherkat (DABS), to increase electricity supply and revenue generation by improving sustainability, management, and commercial viability.689 For its part, DOD has provided approximately $292 million for power projects through the Commander’s Emergency Response Program, and roughly $1.1 billion through the Afghanistan Infrastructure Fund (AIF), which is jointly managed by DOD and State.690 Afghanistan’s two primary power systems are the Northeast Power System (NEPS) and the Southeast Power System (SEPS). USAID projects to connect and increase the electricity supply in both systems include: (1) the Power Transmission Expansion and Connectivity (PTEC) project to construct a transmission line connecting Kabul with Kandahar and build the capacity of DABS to sustain energy-infrastructure investments; (2) the Sheberghan Gas Development Project to attract private investment to develop gas resources in Sheberghan and build power plants; and (3) the now-concluded Kandahar-Helmand Power Project, which was intended Report to the united states congress I January 30, 2016 153 NEPS: imports electricity from the Central Asian Republics to provide power to Kabul and the communities north of Kabul. SEPS: draws most of its power from the Kajaki Dam and from diesel generators in Kandahar City to provide power in the Helmand and Kandahar areas. Source: DOD, Report on Progress Toward Security and Stability in Afghanistan, 11/2013, p. 107. Economic and Social Development to include installation of a third turbine at Kajaki Dam and improving the transmission system connecting Kajaki with Kandahar, but that responsibility was transitioned to DABS in 2013.691 USAID’s active power-infrastructure projects are listed in Table 3.24. Kandahar-Helmand Power Project On December 30, 2015, USAID concluded the last subcomponent of the fiveyear, $229 million Kandahar-Helmand Power Project. The subcomponent provided technical support to DABS in its efforts to increase long-term, sustainable hydropower from Kajaki Dam to Kandahar and Helmand Provinces by installing a third turbine, known as Unit 2, in the powerhouse.692 USAID transferred responsibility for installing, testing, and commissioning the third turbine to DABS, along with a $75 million commitment, in April 2013.693 As of December 31, 2015, $38 million has been disbursed.694 Turbine-installation efforts were interrupted this quarter. Fighting and security concerns caused Kajaki Dam contractors to be evacuated in September 2015. A limited number returned on November 20 to resume critical activities, but full remobilization awaits authorization from the U.S. ambassador.695 DOD said ongoing fighting in Kandahar and Helmand Provinces continued to challenge contractors at Kajaki Dam and SEPS construction sites between Tangi and Sangin. Insurgent activity this quarter continued to cause road closures along Route 611—the road between Sangin and Kajaki—delaying delivery of construction materials and possibly affecting project completion schedules.696 Work on the project will continue without USAID support. The turbine-installation completion date was revised to fall 2016, but is subject to change depending on the timeline for full remobilization of staff and possible actions to accelerate work.697 Power Transmission Expansion and Connectivity Program The U.S.-funded PTEC program was designed to strengthen and expand Afghanistan’s power-generation, transmission, and distribution systems, including funding the 320-mile transmission line between Kabul and Kandahar to connect NEPS with SEPS.698 PTEC’s DABS commercialization and capacity-building components aim to increase revenues using utility management software in Kabul, Mazar-e Sharif, Herat, and Jalalabad, while reducing technical and commercial losses through training and support.699 Construction has started on the transmission line and substations between Arghandi and Ghazni, the first segment of the NEPS-SEPS connector, which USAID sees as essential for power-sector development. USAID said the contractor is making progress to overcome security-related delays with construction scheduled to be completed in December 2016. To date, $66.4 million has been disbursed to PTEC contractors for this segment.700 USAID is providing $179.5 million in direct assistance to DABS in support of the second segment of the NEPS-SEPS connector, Ghazni to 154 Special inspector general I Afghanistan reconstruction Economic and Social Development Table 3.24 USAID Active Power-Infrastructure Projects Total Estimated Cost ($) Cumulative Disbursements, as of 12/31/2015 ($) Project Title Start Date End Date Power Transmission Expansion and Connectivity 1/1/2013 12/31/2018 $670,000,000 $66,354,254 Contributions to the Afghanistan Infrastructure Trust Fund 3/7/2013 3/6/2018 113,670,184 105,000,000 4/22/2013 12/31/2015 75,000,000 38,078,735 2/1/2014 1/31/2016 1,789,224 1,730,435 Utility Executive Exchange 9/30/2007 9/30/2017 698,555 698,555 Afghan Engineering Support Program 11/9/2009 11/8/2016 97,000,000 70,425,219 PEER Grants 7/25/2011 7/24/2016 5,440,647 5,440,647 TBD (Unknown) 8/24/2015 8/24/2017 3,994,902 279,760 Kajaki Dam Unit 2 Public Awareness Campaign to Increase Afghans' Knowledge of Energy Development Programs Note: The Sheberghan Gas Generation Activity (SGGA), Sheberghan Gas Development Project (SGDP), and Mining Investment and Development for Afghan Sustainability (MIDAS) programs, which are categorized under the power sector in USAID’s funding pipeline report, are listed in the extractives-sector programs subsection on pp. 148–149 of this report. Source: USAID, response to SIGAR data call, 1/11/2016. Kandahar. DABS issued two requests for proposals to construct one transmission line and five substations; bids are being evaluated and signed contracts are scheduled for May 2016. USAID said security will be a major challenge to implementing this project.701 USAID reported that power generation in Shorandam Industrial Park, one of two industrial parks in Kandahar City that received a combined $141 million in U.S. fuel subsidies for their diesel generators, dropped to 1.5 MW output, on average, per eight-hour day.702 To help bridge the gap between Kandahar’s electric-generation capacity and demand until the NEPS-SEPS transmission line is completed, PTEC is funding a reverse auction whereby independent power producers will compete to construct and sell power to DABS from a solar power plant. This plant, expected to be operational by mid-to-late 2016, may be able to operate at an installed capacity of 10 MW of power; the diesel generators in Kandahar City have a combined average capacity of 8–13 MW.703 USAID reported that DABS accepted a power-purchase agreement and tariff rate ceiling, and the construction of an 11.2-mile overhead transmission line connecting the solar plant to the distribution substation. The MOF transferred 60 acres of land to DABS for this effort.704 Afghanistan Infrastructure Fund Power Programs AIF projects were initiated to support critical counterinsurgency and economic development objectives in Afghanistan. Although DOD’s mission has since evolved to advising and assisting Afghan security forces and ministries, as well as counterterrorism operations, it is also focused on completing AIF projects.705 Report to the united states congress I January 30, 2016 155 Economic and Social Development Table 3.25 AIF FY 2014 AIF FY 2013 AIF FY 2012 AIF FY 2011 Afghanistan Infrastructure Fund Power Projects, As of December 9, 2015 ($ millions) AIF Project Description Kandahar Power Bridging Solution Provides fuel and O&M for diesel generators in Kandahar City SEPS - Kajaki DamLashkar Gah Repair, install transmission lines and rebuild, construct power substations Design, construct transmission line and NEPS - SEPS substation (first segment of NEPS-SEPS Connector, Arghandi connection) to Ghazni USAID: PTEC Notified Amount Obligated 40.5 39.1 39.1 Complete 130.0 66.4 51.1 Terminated due to security cost increase 101.0 101.0 45.0 Under construction (transmission line completion extended one year to December 2017; substation, 17 months to June 2018) Disbursed Status NEPS - Arghandi to Pul-e Alam Design, construct transmission line and power substation 93.7 50.3 13.8 * Transmission line under construction (completion and occupancy dates extended 9 and 7 months, respectively to 12/2016); substation design under review Kandahar Power Bridging Solution Provides fuel and O&M for diesel generators in Kandahar City 67.0 64.7 64.7 Complete SEPS - Maiwand to Durai Junction Phase 2 Design, construct transmission line, rebuild and construct substations 40.0 28.7 8.1 * Under construction (completion and occupancy dates extended to 9 and 10 months respectively, July, August 2016) NEPS - Pul-e Alam to Gardez - Phase 2 Design, construct transmission line and power substation 77.5 69.9 44.2 ** Transmission line under construction; substation in design (completion and occupancy dates extended 9 months 10/2016 and 12/2016, respectively) NEPS - Charikar to Gul Bahar and Nejrab - Phase 3 Design, construct transmission lines and power substation 42.5 38.8 18.2 ** Transmission line under construction; substation design under review (completion and occupancy dates extended 9 months 10/2016 and 12/2016, respectively) Kandahar Power Bridging Solution Provides fuel and O&M for diesel generators in Kandahar City 37.0 34.0 34.0 Complete NEPS - Charikar to Gul Bahar and Nejrab - Phase 3 Design, construct transmission lines and power substation 33.0 25.2 18.4 Transmission line under construction; substation design under review Design, construct, and rehabilitate substations in Tangi, Sangin North and South 15.0 Design, construct transmission lines from Sangin North to Lashkar Gah 62.9 37.6 60.0 NEPS - SEPS Connector, Ghazni to Kandahar Design, construct transmission line and substations. Final Phase of NEPS-SEPS connector. USAID: PTEC 179.5 179.5 0.0 Bids under evaluation by DABS; expected award: 5/2016 Kandahar Power Bridging Solution Provides fuel and O&M for diesel generators in Kandahar City 4.0 3.9 3.7 Complete SEPS Completion Phase 2 Design, construct transmission line, and install equipment and commission substations 55.0 55.0 0.0 Transferred to USAID; expected award: 5/2016. NEPS - Gardez to Khowst - Phase 4 Design, construct transmission line and substation. DOD's final contribution to NEPS. 130.0 119.0 0.4 Demining complete; security, quality control, work safety, and design schedule plans approved; demining certifications, accident prevention, and activity hazard plans under review SEPS Completion Phase 1 Under construction (ongoing delays); security challenges * Design approved; under construction (completion and occupancy dates extended six months to 12/2016) Note: All AIF power projects are to be sustained by Afghanistan’s Ministry of Energy and Water, and Da Afghanistan Breshna Sherkat (DABS), Afghanistan’s national electric utility. Notified amount reflects estimated project ceiling cost. Obligations and disbursements are as of 11/30/2015. All other information is as of 12/9/2015. * Occupancy schedule extensions caused by the Ministry of Energy and Water’s longer than expected right-of-way approval process, due in part, to the replacement of key ministry officials. ** Occupancy schedule extensions caused by the relocation of two planned electrical substations to more suitable locations. Source: DOD, response to SIGAR data call, 12/28/2015. 156 Special inspector general I Afghanistan reconstruction Economic and Social Development U.S. Forces-Afghanistan have completed 11 AIF power and road projects so far. This quarter, fighting in Kandahar and Helmand Provinces, as well as bureaucratic delays working with the Ministry of Energy and Water, continue to challenge AIF contractors and project completion schedules. However, DOD remained focused on implementing power projects to complete its portion of the NEPS and SEPS using FY 2011–FY 2014 AIF money as shown in Table 3.25.706 No FY 2015 or FY 2016 AIF funds were requested or appropriated, but up to $50 million from the FY 2016 Afghanistan Security Forces Fund may be used under limited circumstances to help finish existing AIF projects.707 Afghanistan’s Capacity to Sustain Power Projects DABS and other government entities will be responsible for sustaining NEPS-SEPS power projects, including operations and maintenance (O&M) costs once they are completed and turned over to the government. SIGAR has raised questions about DABS’s capacity and said Afghanistan lacks the resources necessary—financial and otherwise—to pay for O&M.708 DOD has notified Congress that increased revenue from an expanded customer base and improved collection capabilities will help DABS provide long-term sustainment of infrastructure.709 USAID said DABS’s revenues have increased over the last three years, allowing it to pay for more of its operating expenses, although nonrecurring major capital-infrastructure expenses are still mainly funded by donors.710 A World Bank report cautioned that even though DABS, with donor assistance, has been able to reduce some commercial losses and improve revenue collections, its commercial and technical (distribution) losses “remain significant.” The report added that DABS cannot raise or expect donors to provide the capital necessary to meet Afghanistan’s energy infrastructure requirements.711 Transportation Afghanistan’s lack of transportation infrastructure hinders internal commerce, foreign trade, and economic growth. The World Bank said Afghanistan’s transportation-infrastructure shortcomings constrain the service and agriculture sectors, which have typically been the leading drivers of the economy. It also holds back the mining industry, whose future revenues the Afghan government and international donor community are counting on to offset declining international aid.712 This quarter, the Afghan government announced plans to procure a feasibility study on expanding its northern rail network.713 Only one completed freight rail line currently exists—a 47-mile (75 km) line from Hairatan, on the border with Uzbekistan, to Mazar-e Sharif.714 State said developing Afghanistan’s railways remains a critical priority, but the security Report to the united states congress I January 30, 2016 157 SIGAR Audit An ongoing SIGAR audit focuses on DOD and State Department progress in completing FY 2011 Afghanistan Infrastructure Fund (AIF) projects, the impact on other infrastructure priorities and counterinsurgency objectives, and sustainment challenges. Economic and Social Development Table 3.26 USAID Active Road-Construction and Operations-and-Maintenance Programs Project Title Start Date Technical Assistance to Ministry of Public Works Gardez to Khowst Road, Phase IV Salang Tunnel Maintenance End Date Total Estimated Cost ($) Cumulative Disbursements, as of 12/31/2015 ($) 8/3/2014 8/2/2017 $25,486,058 $9,884,674 6/26/2014 12/31/2015 32,960,265 31,988,789 4/1/2013 3/30/2016 3,533,350 3,036,653 Engineering, Quality Assurance, and Logistical Support (EQUALS) 4/18/2011 4/17/2016 126,307,645 115,189,627 Support for USAID's Construction of Health and Education Facilities Program 1/19/2008 12/31/2015 57,160,749 56,465,885 Emergency Road O&M 12/1/2015 11/30/2016 5,000,000 778,000 Source: USAID, response to SIGAR data call, 1/11/2016; USAID, response to SIGAR vetting, 1/14/2016. environment is a major obstacle to investors. Turkmenistan has made significant progress on their portion of the rail link between it, Afghanistan, and Tajikistan. Since Afghanistan has not yet begun constructing its portion, international financial institutions have put funding on hold.715 Meanwhile, the United States continued its efforts to develop the capacity of the Ministry of Public Works in the areas of road construction, operations, and maintenance.716 Roads The United States has provided approximately $2.1 billion cumulatively for road construction and O&M, and will spend up to $5 million this year for additional O&M.717 Yet the World Bank has said 85% of Afghan roads are in poor shape and a majority cannot be used by motor vehicles.718 Afghanistan does not currently have sufficient funding and technical capacity to maintain its roads and highways, according to USAID. Afghanistan is estimated to spend $17 million annually for O&M, leaving a projected $100 million annual shortfall.719 USAID’s active road construction and O&M programs are listed in Table 3.26. Afghanistan Infrastructure Fund Road Projects SIGAR Audit An ongoing SIGAR audit is reviewing U.S. efforts to sustain roads and strengthen the Afghan government’s ability to perform road maintenance. DOD has obligated $62.3 million and disbursed $56.2 million for five road projects under the AIF, as of November 30, 2015. Some of these projects had multiple phases, three of which—Saracha Bridge, Parwan to Bamiyan Road, and the Ghulam Khan Transportation Corridor—were completed this quarter, as shown in Table 3.27.720 Gardez-Khowst Road Rehabilitation Phase IV The final phase of USAID’s only active road construction project—a $233 million, 63-mile, asphalt-paved highway—concluded on December 31, 2015.721 The Gardez-Khowst road gives Khowst and Paktiya Provinces access to major trading routes to Pakistan, to Kabul, and to the Ring Road 158 Special inspector general I Afghanistan reconstruction Economic and Social Development Table 3.27 AIF FY 2011 Afghanistan Infrastructure Fund Road Projects, As of December 9, 2015 ($ millions) AIF Project Description Notified Amount Obligated Lashkar Gah to Nawar Road Design, construct 22.5 km road $22.0 $20.5 $20.5 8.0 6.8 6.2 27.6 12.7 12.3* Complete AIF FY 2012 Complete Saracha Bridge Design, construct 0.16 km bridge over Chaparhar River, along Hwy 7 in Nangahar Province Ghulam Khan Corridor Design, construct 24.1 km road, four bridges, culverts, switchback repairs in Khowst Province Section 6.1 Design, construct 7 km road of Salang bypass in Bamyan Province 3.0 3.0 3.0 Complete Section 6.2 Design, construct 11 km road of Salang bypass in Parwan Province 7.0 7.0 7.0 Complete Dahla Dam Phase 2 - Site Preparation (Route Bear Road) Realign 4.7 km road along NW shore of Dahla Dam 11.2 7.2 7.2 Complete Ghulam Khan Corridor - Phase 2 Design, construct remaining 7 km road to Khowst city and one bridge to complete Ghulam Khan Transportation Corridor 0.0 Submittals approved: demining, community relations, quality control, area use, security plan, geo-tech investigation; submittal under review: baseline schedule RC-East Border Transportation Corridor AIF FY 2013 Disbursed Status Parwan to Bamyan Road Section 6 10.0 5.1 Construction complete Note: Notified amount reflects estimated project ceiling cost. Obligations and disbursements are as of 11/30/2015. All other information is as of 12/9/2015. * The contract amount for the Ghulam Khan Transportation Corridor increased $310,000 to repair a causeway section that was damaged by flooding. Source: DOD, response to SIGAR data call, 12/28/2015. connecting Kabul, Kandahar, and Herat. It includes bridges, causeways, drainage structures, excavation, “river training” structures to control flow and sedimentation, and asphalt pavement.722 Salang Tunnel Maintenance Built in 1962 by the Soviet Union, the Salang Corridor is the only road route between Kabul and northern Afghanistan. It includes the 1.6 mile Salang Tunnel, 21 snow-discharge tunnels (to protect against avalanches and heavy snow), and 52 miles of paved road. It is heavily trafficked and is in “atrocious condition with poor driving surfaces, drainage, lighting, and ventilation.” USAID said the corridor is a strategic-priority access route for the retrograde of material from Afghanistan, and “keeping it passable is vital to the security of Afghanistan and U.S. operations.” Therefore, USAID assistance focuses on stop-gap measures until a viable alternative road route between Kabul and northern Afghanistan can be found; on responses to crisis situations—avalanches, landslides, and structural failures that block the Salang Corridor; and on capacity building to help the Ministry of Public Works operate and maintain the corridor.723 Report to the united states congress I January 30, 2016 159 Economic and Social Development In October 2015, the Salang Highway Repair and Maintenance (Salang Tunnel Maintenance) program conducted road repairs—asphalt excavation, surfacing, binding, and coating—and constructed a new retaining wall.724 USAID’s Engineering, Quality Assurance, and Logistical Support also conducted 26 quality and work-progress-monitoring site inspections, and worked with the contractor to ensure project specifications were met, and identify and address any deficiencies.725 Economic Growth This quarter the World Bank ranked Afghanistan 177th of 189 countries in its Doing Business 2016 report on regulatory quality and efficiency—a six-place improvement from 2015. While Afghanistan ranks high in starting a business (34th), increased registration and publication fees made it more costly to do so. Afghanistan is nearly last in dealing with construction permits (185), getting electricity (156), registering property (184), trading across borders (174), and enforcing contracts (172). It is considered the worst country in protecting minority investors, partly a reflection of the country’s corporate-governance rules and the weakness of its legal institutions.726 President Ghani has stressed the need for accountability in carrying out the difficult economic reforms needed for Afghanistan to build a competitive, export-oriented economy, with access to neighboring markets.727 USAID, which is assisting in this effort, has disbursed more than $1 billion cumulatively for economic growth programs in Afghanistan.728 Active programs can be found in Table 3.28. Afghanistan Workforce Development Program USAID’s four-year, $62.6 million Afghanistan Workforce Development Program (AWDP) aims to increase economic opportunities for 25,000 Afghans (target ratio: 75% men, 25% women) through vocational education and training, business-management training programs, and job-placement services. AWDP also seeks to mitigate high unemployment and address the scarcity of technically skilled Afghan labor. The goal of the program, through on- and off-budget assistance, is to facilitate job creation, develop a skilled and semiskilled workforce, increase self-employment, and promote economic recovery in Afghanistan.729 AWDP is also supporting efforts to build the capacity of technical/vocational educators and trainers. AWDP seeks to improve the quality of these training programs through public-private partnerships, and make them more accessible.730 As of December 31, 2015, more than 26,000 Afghans had been trained and more than 17,000 either placed in jobs or promoted to mid-career/semi-professional jobs. Training areas ranged from project and financial management to construction, information technology, and 160 Special inspector general I Afghanistan reconstruction Economic and Social Development marketing. So far, USAID said 36% of those trained, placed, or promoted were women, exceeding the program’s target of 25%. The AWDP disbursed approximately $29.5 million.731 Financial Access for Investing in the Development of Afghanistan USAID’s $108.3 million, 66-month Financial Access for Investing in the Development of Afghanistan (FAIDA) program aims to promote an inclusive, diverse, and sustainable financial sector that generates jobs and provides a range of services for micro, small, and medium enterprises. FAIDA helps Afghan partners build capacity to deliver financial services, develop a legal framework and market infrastructure, provide technical assistance to mobile network operators for mobile-money services, and assist Afghan women entrepreneurs with business-development training so they can gain access to financing and opportunities for economic and professional growth.732 Table 3.28 USAID ACTIVE ECONOMIC-GROWTH PROGRAMS Total Estimated Cost ($) Cumulative Disbursements, as of 12/31/2015 ($) Project Title Start Date End Date Financial Access for Investing in the Development of Afghanistan (FAIDA) 2/7/2011 8/5/2016 $108,258,374 $98,727,006 Afghanistan Trade and Revenue Project (ATAR) 11/7/2013 11/6/2017 77,754,267 37,997,112 Afghanistan Public Financial Management (APFM) 7/27/2015 7/26/2018 22,130,033 1,021,316 Afghan Women's Leadership in the Economy (AWLE) 7/1/2015 6/30/2020 71,571,543 1,906,692 Turquoise Mountain Smithsonian Exhibition 3/9/2015 12/31/2016 535,055 92,918 10/15/2010 10/30/2017 4,030,000 4,030,000 AIB Guarantee Agreement 9/27/2012 9/27/2020 2,000,000 190,400 DCA with FINCA OXUS and 1st Microfinance Banks 9/25/2014 9/24/2020 1,953,875 0 3/1/2014 9/30/2019 10,000,000 3,434,220 Afghanistan Workforce Development Program (AWDP) On-Budget 9/18/2013 4/3/2016 30,000,000 1,321,456 Afghanistan Workforce Development Program (AWDP) Off-Budget 4/5/2012 4/4/2016 32,647,898 26,219,241 8/28/2013 6/1/2016 3,900,000 405,000 N/A N/A 50,022 50,022 Assistance in Building Afghanistan by Developing Enterprise (ABADE) 10/16/2012 10/16/2016 104,997,656 61,522,734 Strengthening the Revenue Collection Capacity of GIROA 11/30/2014 12/30/2018 4,000,000 4,000,000 N/A N/A 3,750,000 0 Rebranding Afghanistan: Creating Jobs, Changing Perceptions, Empowering Women 11/2/2015 11/1/2018 4,800,000 0 Afghanistan Investment Climate Program 3/27/2015 3/26/2020 13,300,000 10,074 IFC PIO Grant - Support of Business Environment Reform Commercial Law Development Program E-Government Resource Center II Mobile-izing Saving Study Regional Water Management Source: USAID, response to SIGAR data call, 1/11/2016. Report to the united states congress I January 30, 2016 161 Economic and Social Development A recent FAIDA evaluation report found mixed progress and results similar to a 2014 USAID Office of the Inspector General audit of the program. Namely, while FAIDA had some achievements, it has not necessarily resulted in the intended outcome of a more sustainable, diverse, and inclusive financial sector. FAIDA only claimed direct credit for creating 1,134 full-time equivalent jobs in four years, judging its interventions in this area as neither effective nor efficient. Even this figure is suspect because the FAIDA-assisted organizations differ in how they calculate full-time jobs.733 Additionally, FAIDA trained and provided technical and monetary assistance to financial-sector organizations, but most recipients require continuing engagement and donor support.734 Twenty-seven percent of loans by volume went to female-owned businesses, but they represented only 7% of loans by amount, showing little improvement from what existed before programming began. USAID said this accurately reflects the reality of gender segregation in Afghanistan, which will take time to improve. FAIDA spent millions on mobile-money products that were never developed because market demand was too small.735 For example, a donor pilot program to pay police salaries via mobile money was terminated for lack of use. However, the mobile-money products may yet prove useful. After taking office, President Ghani reestablished mobile-money pilot programs for government salaries, essentially creating market demand for these services.736 He declared his intent to expand its use nationwide at the London donor conference in December 2014.737 USAID is supporting the government’s effort.738 Education Following a June 2015 SIGAR letter to USAID requesting information about the reliability of Afghan-provided data that USAID uses to oversee and fund education programs in Afghanistan, President Ghani ordered an investigation into allegations of corruption within the Ministry of Education (MOE).739 In August 2015, provincial teams were assigned to collect more reliable figures for 6,000 schools across all 34 provinces. Field work began September 1; data collection was scheduled to be completed by September 20.740 On January 2, 2016, Tolo News reported the following alleged results of the investigation:741 • Millions of dollars have been embezzled. • Data on nonexistent “ghost” schools provided by MOE departments to investigators were inconsistent and underreported. • Thousands of “ghost” teachers were included in the official rolls. • “Ghost” training seminars were conducted in some provinces. • Houses were rented for schools at great expense. 162 Special inspector general I Afghanistan reconstruction Economic and Social Development • Discrepancies existed in student education, registration, and attendance records. • More than 1,000 MOE projects reported as completed were not. • Several advisors had received $15,000/month salaries. • Between 2013 and 2015, 340 people were paid an average $98,000 per year ($100 million total). On January 4, 2016, USAID attended a meeting with President Ghani to discuss the investigation’s preliminary findings. USAID said President Ghani outlined specific organizational and management reforms, such as introducing a national electronic payment system and a national public corruption council to minimize fraud and corruption. The final investigation report had not been made public as this report went to press.742 Ministry of Education Data According to the Education Management Information System (EMIS), Afghanistan reportedly has 15,030 general education (government) schools, including 639 inactive schools, with 8.6 million students enrolled.743 The number of enrolled students is the sum of present and absent students.744 The MOE counts students who have been absent for up to three years as enrolled because it says they might return to school.745 Challenges within Afghanistan’s Education System Minister Balkhi told parliament in May 2015 that more than half of all teachers do not have the necessary skill sets, the general-education curriculum is insufficient, students do not have timely access to textbooks, and educational services are unbalanced. He also confirmed that some nonexistent schools receive funding in insecure areas and that EMIS data on the number of functioning schools are imprecise.746 USAID said barriers to collecting information on the number of open and closed schools (temporarily or permanently), and teacher and student attendance, cause inaccuracies in the EMIS data.747 In June 2015, the Independent Joint Anti-Corruption Monitoring and Evaluation Committee reported that efforts to improve teaching quality were being subverted by a recruitment system that is highly vulnerable to corruption, and that Afghan students’ educations were being “significantly undermined by bribery and nepotism.” Moreover, it said that “ghost” teachers have been a long-standing problem, and in most cases student attendance sheets are not filled out or are frequently forged.748 Minister of Education Balkhi pledged to improve data quality and the MOE started its own assessment, hiring a third-party monitoring firm to verify a sample of EMIS data.749 The report was to be shared with donors in December 2015, but no additional information was available when this report went to press.750 USAID is working with, and sees progress in, the MOE’s monitoring efforts.751 Report to the united states congress I January 30, 2016 163 The United Nations Children’s Fund (UNICEF) reported that 42.7% (about 4.2 million) of Afghanistan’s primary-schoolage children are not enrolled in school or had left before completing their studies. Source: UNICEF, Educate All Girls and Boys in South Asia, 8/2015. Economic and Social Development State said that in recent meetings, Minister Balkhi reemphasized his commitment to increasing transparency within the MOE, rooting out corruption, and curtailing the misuse of funds. Afghan law allows teacher salaries to be paid for 12 months during temporary school closures. Minister Balkhi advised Parliament that it should revisit this policy, suggesting that salaries either be immediately stopped the moment a school closes, or that salaries be reduced 50% for the duration of the closure. He is also exploring the possibility of paying teachers’ salaries via mobile device in order to better track payments.752 USAID Programs USAID aims to improve equitable access to quality education in Afghanistan—through community-based classes in remote regions—as well as provide relevant, in-demand technical skills to better prepare Afghans for employment. Its programs focus on early-grade reading, raising literacy rates through training and coaching teachers and educators, as well as providing textbooks and other learning material.753 USAID had disbursed more than $794 million for education programs in Afghanistan, as of December 31, 2015.754 USAID’s priority education programs are aligned with Afghanistan’s objectives to increase quality education, improve workforce development, and strengthen the quality of higher education. The programs are: • Basic Education, Learning, and Training (BELT): an overarching basic education program that aims to improve education access and quality, BELT encompasses a number of activities, including a new national early-grade reading program. A 20-month national reading assessment of 2nd and 4th grade students was awarded on July 27, 2015. Additionally, 1.2 million textbooks and other reading materials were distributed nationwide in FY 2015, covering the entire primary school student population.755 • American University of Afghanistan (AUAF): in FY 2015, 4,578 students were enrolled (2,882 male and 1,696 female) in U.S.-supported degree programs. AUAF also reached 40% female enrollment for the first time during the fall 2015 semester. USAID reported that 371 undergraduate and 385 graduate degrees have been issued, as of August 2015.756 • Afghanistan University Support and Workforce Development Program (USWDP): strengthens the ability of the Ministry of Higher Education (MOHE) and 11 public universities to deliver market-relevant education services. This quarter, USWDP supported a partnership agreement with Ball State University to start new MBA/BBA degrees at Kabul University; letters of agreement were signed for MBA and marketing associate degree programs at Nangarhar University, and an accounting associate degree program at Balkh University; degree policy 164 Special inspector general I Afghanistan reconstruction Economic and Social Development Table 3.29 USAID Active Education Programs Project Title Afghanistan's Global Partnership for Education Support to American University of Afghanistan Strengthening Education in Afghanistan (SEA II) Total Estimated Cost ($) Cumulative Disbursements, as of 12/31/2015 ($) Start Date End Date 10/11/2012 3/31/2016 $3,108,580 $1,922,955 8/1/2013 7/31/2018 40,000,000 18,374,246 5/19/2014 5/18/2019 29,835,920 6,221,775 PROMOTE Scholarships 3/4/2015 3/3/2020 1,247,522 1,247,522 Assessment of Learning Outcomes and Social Effects in Community-Based Education 1/1/2014 12/31/2017 7,262,016 1,520,431 Afghanistan University Support and Workforce Development Program 1/1/2014 12/31/2018 91,927,769 21,511,702 9/17/2014 12/31/2019 77,402,457 54,027,000 11/16/2011 12/31/2015 26,996,813 24,970,742 Early Grade Reading Survey 7/27/2015 3/27/2017 12,487,469 590,293 BELT/All Children Reading and Improved Access 7/27/2015 3/27/2017 427,585 202,124 Increasing Access to Basic Education and Gender Equality Basic Education, Learning, and Training (BELT) Textbooks Source: USAID, response to SIGAR data call, 1/11/2016; USAID, OED, response to SIGAR vetting, 7/12/2015. documents for several universities were either in progress or completed; and trainings/workshops took place at several targeted universities.757 • Community Based Education: provides access to basic, primary education (grades 1–6) in 13 provinces, where no formal or boys-only schooling exists, or where other constraints prevent children from attending formal classrooms. As of December 2015, 903 communitybased classes and 71 accelerated learning centers have been established providing access to more than 45,800 boys and girls.758 • Education Quality Improvement Project (EQUIP) II: USAID funds teacher training through World Bank-administered EQUIP II. More than 84,000 teachers have been trained with U.S. government assistance.759 A full list of USAID’s active education programs can be found in Table 3.29. Health Afghanistan has registered improvements in its health indicators since 2002, though it remains below average among low-income countries. Afghanistan’s public health is beset by many challenges—tuberculosis, polio, poor maternal health, and one of the world’s highest levels of child malnutrition, according to the World Bank.760 Insecurity for aid and development workers is also a strain on effective health delivery services to the population, according to the Agency Coordinating Body for Afghan Relief & Development—an advocacy organization working in Afghanistan comprising 135 national and international Report to the united states congress I January 30, 2016 165 A monitoring report of textbooks distributed by the MOE in Badghis, Farah, Ghor, and Herat provinces through the USAID-funded BELT program found: 67% of visited schools received textbooks the MOE reported sending. Schools in Ghor fared the worst with only 35% of visited schools receiving textbooks, compared to 93% in Badghis, 88% in Farah, and 84% in Herat. Most schools reported textbook shortages, incomplete orders, and not receiving books for certain grades and subjects. Challenges to monitoring included school principal/ administrator absenteeism, inaccurate records, lack of infrastructure (making certain schools difficult to locate), access to remote areas, and security. Source, USAID, Final Report, Textbook Distribution Verification of the Basic Education, Literacy, and Technical-Vocational Education and Training Program, Short-Term Objective Monitoring in Regional Platform-West, 8/2015. Economic and Social Development SIGAR Audit An ongoing SIGAR audit is focusing on USAID’s efforts to support and improve Afghanistan’s healthcare services and focuses on the extent to which USAID assessed the overall impact of its efforts and the extent to which USAID collects, verifies, and reconciles healthcare data to determine its accuracy. BPHS: provides primary health-care services—such as immunizations and prenatal care—at small and rural health clinics and forms the core of health service delivery for all primary care facilities in Afghanistan. EPHS: outlines the medical services each type of hospital in the Afghan health-care system should provide in terms of general services, staff, equipment, diagnostic services, and medications while promoting a health referral system that integrates the BPHS with hospitals. nongovernmental organizations. The agency said Afghanistan has more major attacks on aid workers than all other countries except Somalia and Syria.761 USAID Funding and Health Programs U.S. health-sector programs aim to preserve and enhance gains made since 2002. USAID assistance to the Ministry of Public Health (MOPH) includes capacity-building, training, and quality-assurance activities to strengthen the ministry’s management and control over health-care delivery across Afghanistan.762 U.S. on- and off-budget assistance to Afghanistan’s health sector totaled nearly $1 billion, as of December 31, 2015.763 On-budget assistance to the MOPH provides basic health care and essential hospital services. Off-budget assistance includes activities to strengthen health systems, engage the private sector, reduce child and maternal deaths, reduce tuberculosis-related deaths, reduce child undernutrition, improve the use of modern family-planning methods, and eliminate polio.764 USAID believes that the MOPH’s ability to deliver quality health care through the Basic Package of Health Services (BPHS) and Essential Package of Hospital Services (EPHS)—the cornerstone of health service delivery in Afghanistan—is critical to improve health outcomes. Between 2015 and 2018, USAID will aim to further improve health services, outcomes, and access for women, infants, and children.765 USAID’s active health programs have a total estimated cost of $525 million, and are listed in Table 3.30. USAID’s five-year, $40 million Health Sector Resiliency (HSR) Project began in September 2015. HSR will assist the MOPH to strengthen its governance, finance, and human-resource capacities during this transition period of declining international military and donor assistance. HSR will act as a technical advisor to the ministry as it considers and implements critical sector-wide reforms to make Afghanistan’s health system more efficient, sustainable and self-reliant.766 Polio Source: SIGAR, Health Services in Afghanistan: Two New USAIDFunded Hospitals May Not be Sustainable and Existing Hospitals are Facing Shortages in Some Key Medical Positions, Audit Report 13-9, 4/2013, p. 1. Afghanistan is one of two nations in the world that still has incidence of wild (occurring in nature as distinct from human-borne) polio virus.767 As of December 5, 2015, 17 new cases were reported in Afghanistan, a decrease from 28 from the same period last year.768 The Global Polio Eradication Initiative (GPEI), a public and private-funded effort supported, in part, by USAID and the World Health Organization, stated that in May 2015 “500,000 children under the age of five [in Afghanistan] remain unvaccinated.”769 A report from the Independent Monitoring Board of the GPEI found that 62% of children in the southern areas of Afghanistan are said to be unavailable when vaccination teams call. For another 17%, the parents refuse the vaccination, and 5% of the time the vaccination team did not show up. The 166 Special inspector general I Afghanistan reconstruction Economic and Social Development Table 3.30 USAID Active Health Programs Project Title Strengthening Pharmaceutical System Challenge Tuberculosis Start Date End Date 8/28/2011 7/10/2017 Total Estimated Cost ($) Cumulative Disbursements, as of 12/31/2015 ($) $34,399,936 $23,955,510 1/1/2015 12/31/2020 15,000,000 2,546,790 Partnership Contracts for Health (PCH) 7/20/2008 12/31/2015 259,663,247 233,127,964 Weekly Iron Folic Acid Supplementation 11/7/2014 12/31/2017 5,610,012 5,408,826 Disease Early Warning System (DEWS Plus) 9/30/1996 9/30/2022 32,728,000 16,287,035 Family Planning and Assessment 5/16/2015 5/15/2016 634,833 634,833 Health Sector Resiliency (HRS) 9/28/2015 9/27/2020 40,000,000 386,740 9/9/2013 9/8/2018 5,453,731 1,000,000 Leadership Management and Governance (LMG) 9/25/2012 12/31/2015 38,341,106 37,674,506 Regional Fortification in the Central Asian Republics and Afghanistan 9/29/2014 9/29/2016 9,722,000 9,722,000 Enhance Community Access, Use of Zinc, ORS for Management of Childhood Diarrhea 7/21/2015 7/7/2020 15,002,610 4,400,000 1/7/2015 1/6/2020 60,000,000 5,618,825 9/17/2015 12/31/2017 8,000,000 0 Demographic and Health Surveys Helping Mother and Children Thrive (HEMAYAT) Basic Package for Health Service (BPHS) Note: The Regional Fortification in the Central Asian Republics and Afghanistan project aims to increase iron, zinc, folic acid, and vitamin A nutrient intake by 20% through distribution of fortified wheat and edible oil. Source: USAID, response to SIGAR data call, 1/11/2016; Global Alliance for Improved Nutrition, “Regional Fortification in the Central Asian Republics,” accessed 1/15/2016. Monitoring Board stated that Afghanistan’s “security situation cannot be used as an excuse for poor performance—where access is available, it is too often being let down by poor supplementary immunization activity quality.”770 The World Health Organization agreed, reporting “operational deficits in accessible areas.”771 USAID works closely with the GPEI by providing disease surveillance, financial support and technical leadership.772 Tuberculosis Afghanistan is one of 22 countries with the highest burden (incidence, prevalence, and mortality) of tuberculosis in the world.773 While tuberculosis treatment has improved, the World Bank said the incidence of new cases has remained constant in Afghanistan for the last 20 years.774 Every year, an estimated 14,000 Afghans die from this disease.775 USAID’s, six-year, $15 million Challenge Tuberculosis program plans to:776 • strengthen leadership and management for tuberculosis control • increase tuberculosis notification • strengthen health systems to minimize the gap in tuberculosis notification Report to the united states congress I January 30, 2016 167 SIGAR Special Projects SIGAR presented its findings this quarter after conducting 32 site inspections of USAID-supported health facilities in Kabul Province. SIGAR found substantial inaccuracies in the geospatial coordinates USAID provided and observed that not all had access to electricity and running water. This is the second in a series of health-facility inspections SIGAR is conducting in provinces throughout Afghanistan. In October 2015, SIGAR released its findings of 23 site inspections in Herat Province. For more information, see Section 2, pp. 32–33. Economic and Social Development • implement tuberculosis infection control to reduce the risk of transmission in health care facilities • strengthen monitoring, evaluation, and operational research USAID has obligated approximately $11.1 million for tuberculosis-related programs in Afghanistan, as of December 31, 2015.777 Maternal Health USAID is funding the Afghanistan Demographic and Health Survey, a nationally representative survey designed to provide health and demographic information to help the Afghan government develop modern health and social programs. Survey results will be compiled according to international standards and be comparable to results collected in other countries. Weather and security-related issues in certain target communities have delayed data collection and completion timelines. Source: USAID, OHN, response to SIGAR data calls, 9/23/2015 and 12/28/2015; USAID, OSSD, response to SIGAR data call, 6/25/2015; USAID, response to SIGAR vetting, 4/12/2015 and 1/14/2016. USAID has obligated $317.9 million for maternal-health and family-planning programs in Afghanistan, as of December 31, 2015.778 USAID’s most recent project, Helping Mothers and Children Thrive (HEMAYAT), aims to increase access to and utilization of family planning and maternal health services through BPHS and also strengthen referral systems to hospitals through EPHS. This past year, HEMAYAT hosted a national workshop for improved family planning and birth spacing services, and held a series of trainings for project staff on family planning requirements.779 The World Bank’s estimate of Afghanistan’s Maternal Mortality Ratio (MMR), the number of women who die per 100,000 live births, remains significantly higher than the world’s average as well as its neighboring countries, as shown in Figure 3.32. Afghanistan’s MMR was estimated between 1,600 and 2,200 in 2003. MMR estimates still vary. The 2010 Afghanistan Mortality Survey reported MMR at 327, which differed considerably from a multinational donor report that reported MMR at 584. That same multidonor report lists MMR at 396 for 2015.780 Figure 3.32 MATERNAL MORTALITY RATIO PER COUNTRY PER 100,000 LIVE BIRTHS, 2015 Afghanistan Pakistan World Average Kyrgyzstan Iraq Turkmenistan Uzbekistan Tajikistan Iran 0 50 100 150 200 250 300 350 400 Source: The World Bank,"Maternal Mortality Ratio," online country data, http://data.worldbank.org/indicator/SH.STA.MMRT, accessed 1/4/2016. 168 Special inspector general I Afghanistan reconstruction Economic and Social Development Childhood Undernutrition According to the UN’s 2013 National Nutrition Survey, 40.9% of children under five in Afghanistan suffer from moderate to severe stunting.781 The National Risk and Vulnerability Assessment of Afghanistan also reported that in 2012, 30.1% of all Afghans lacked food security. This number is up from 28.2% in 2007.782 USAID’s Weekly Iron Folic Acid Supplementation (WIFS) Project addresses the growing prevalence of iron deficiency (one form of undernutrition) among adolescents, particularly girls between the ages of 10 and 19. WIFS provides weekly iron folic acid supplements, information on how to improve dietary intake, and screening for anemia. WIFS will be implemented via schools throughout rural and urban Afghanistan. The program is also intended to reach out-of-school girls through a network of community health volunteers or a peer-to-peer approach.783 USAID has obligated $124.1 million in nutrition-related projects as of December 31, 2015.784 Additionally, President Ghani’s Jobs for Peace program plans to provide food vouchers and health packets to supplement nutrition for stunted or malnourished children. Delivery for this program would be through the existing, trained community health workers and BPHS clinics.785 For more information on the Jobs for Peace Program, see pages 121–123 in this report. Report to the united states congress I January 30, 2016 169 Food security: when all people at all times have sufficient access to nutritious food for a healthy and active life. Households in Afghanistan meet the threshold for food security at a minimum of 2,100 calories per person per day. Source: Government of Afghanistan, “National Risk and Vulnerability Assessment 2011–2012,” 7/26/2014, p. 211. OVERSIGHT ?a ,i .a .L 'n Other Agency Oversight Other Agency Oversight Contents Contents Completed Oversight Activities 173 Ongoing Oversight Activities 175 Photo on previous page The walled compounds and terraced fields of an Afghan town spread out to mountain foothills. (Regional Command-East photo) 172 Special inspector general I Afghanistan reconstruction Other Agency Oversight OTHER AGENCY OVERSIGHT SIGAR’s enabling legislation requires it to keep the Secretary of State and the Secretary of Defense fully informed about problems relating to the administration of reconstruction programs, and to submit a report to Congress on SIGAR’s oversight work and on the status of the U.S. reconstruction effort no later than 30 days after the end of each fiscal quarter. Each quarter, SIGAR requests updates from other agencies on completed and ongoing oversight activities. This section compiles these updates. Publicly available copies of completed reports are posted at the agencies’ respective websites. The descriptions appear as submitted, with minor changes to maintain consistency with other sections of this report: acronyms and abbreviations in place of full names; standardized capitalization, punctuation, and preferred spellings; and third-person instead of first-person construction. These agencies perform oversight activities in Afghanistan and provide results to SIGAR: • Department of Defense Office of Inspector General (DOD IG) • Department of State Office of Inspector General (State OIG) • Government Accountability Office (GAO) • U.S. Army Audit Agency (USAAA) • U.S. Agency for International Development Office of Inspector General (USAID OIG) Completed Oversight Activities Table 4.1 lists the two oversight projects related to reconstruction that participating agencies reported as completed this quarter. TABLE 4.1 Recently completed oversight activities of other U.S. agencies, as of December 31, 2015 Agency Report Number Date Issued Project Title GAO GAO-15-569R 6/22/2015 Defense Logistics: Marine Corps and Army Reset Liability Estimates USAID OIG F-306-16-001-P 12/10/2015 Audit of USAID/Afghanistan’s Strategy for Monitoring and Evaluating Programs Throughout Afghanistan Source: DOD IG, response to SIGAR data call, 12/21/2015; State OIG, response to SIGAR data call, 12/14/2015; GAO, response to SIGAR data call, 12/14/2015; USAAA, response to SIGAR data call, 11/24/2015; USAID OIG, response to SIGAR data call, 12/10/2015. Report to the united states congress I January 30, 2016 173 Other Agency Oversight U.S. Department of Defense Office of Inspector General During this quarter, DOD IG issued no reports related to Afghanistan reconstruction. U.S. Department of State Office of Inspector General-Middle East Regional Operations During this quarter, State OIG released no reports related to Afghanistan reconstruction. Government Accountability Office During this quarter, GAO issued one report related to Afghanistan reconstruction. Defense Logistics: Marine Corps and Army Reset Liability Estimates (Report No. GAO-15-569R, Issued June 22, 2015) The Marine Corps and Army have each developed their own processes for producing reset liability estimates for the amount of funding that may be required by a service to reset—i.e., repair, recapitalize, and replace— equipment returning from operations, thereby returning the equipment to combat-ready condition. According to department officials, there is no DOD guidance for the services to use as they produce their reset liability estimates. There are similarities in the services’ processes for estimating reset liability amounts, but also key differences. The services use the same definition of reset in preparing their estimates, which is defined in a January 2007 DOD memorandum, in part, as actions taken to restore units to a desired level of combat capability commensurate with the units’ future mission. However, the services apply that definition to different categories of equipment and calculate reset liability over different time periods. For example, the Marine Corps’ reset liability estimate includes ground equipment, while the Army estimate includes both ground and aviation equipment. Also, the Marine Corps’ reset liability estimate covers all fiscal years until reset is complete, while the Army estimate covers a two-year period (current fiscal year and next fiscal year) even though reset may not be completed within those two fiscal years. Further, when producing their estimates, the Marine Corps and Army use similar cost factors, such as parts and labor. However, the services make different assumptions about the condition—worst case or historical average—of the returning equipment that they will reset. In making differing assumptions about condition, each service can differ on the estimated unit repair cost for a piece of equipment common to each service scheduled for reset in the same year. For example, in fiscal year 2014, both services projected an amount needed to repair each 155 millimeter towed howitzer returning from combat 174 Special inspector general I Afghanistan reconstruction Other Agency Oversight and planned for reset. The Marine Corps estimated the unit repair cost to be $311,090, assuming the howitzer would return in worst-case condition. The Army estimated the unit repair cost to be $246,778 by applying historical information to produce its average estimated unit repair cost for the howitzer. Service-unique differences can yield varying reset costs and reset estimates for an item common to both services. Such process differences result in reset liability estimates that are not comparable. U.S. Army Audit Agency The USAAA completed no audits related to Afghanistan reconstruction this quarter. U.S. Agency for International Development Office of Inspector General This quarter, USAID OIG issued one audit related to reconstruction activities. Audit of USAID/Afghanistan’s Strategy for Monitoring and Evaluating Programs Throughout Afghanistan (Report No. F-306-16-001-P, Issued December 10, 2015) The audit reported five findings: • Strategy lacked standards to measure effective, sufficient oversight; • Database’s weaknesses made it less useful; • Implementation support team did not analyze data or make recommendations; • Mission did not establish annual monitoring plans; and • Evaluations and recommendations were not recorded and tracked in database. The audit found that although steps have been taken to implement the multi-tiered monitoring approach, it has not been fully implemented. In addition, (1) the mission lacked standards for measuring whether sufficient oversight was being provided; (2) Afghan Info was not functioning as intended; (3) the mission’s Implementation Support Team was not functioning as envisioned; (4) evaluation recommendations were not being tracked and implemented; and (5) technical offices were not ensuring that annual project monitoring plans were prepared as required. The report included nine recommendations to address these issues. Ongoing Oversight Activities As of December 31, 2015, the participating agencies reported 11 ongoing oversight activities related to reconstruction in Afghanistan. The activities reported are listed in Table 4.2 on the following page and described in the following sections by agency. Report to the united states congress I January 30, 2016 175 Other Agency Oversight Table 4.2 Ongoing oversight activities of other U.S. agencies, as of December 31, 2015 Agency Project Number Date Initiated Project Title DOD IG D2016-D00SPO-0054.000 11/25/2015 Assessment of U.S./Coalition Efforts to Train, Advise, Assist, and Equip the Afghan National Army Special Operations Forces DOD IG D2016-D000PT-0003.000 10/16/2015 Summary Report on Inspections of DOD Facilities and Military Housing DOD IG D2015-D000JB-0239.000 8/14/2015 Audit of Contract Oversight in Afghanistan DOD IG D2015-D000JB-0174.000 4/20/2015 Audit of Controls over Afghanistan Ministry of Interior Fuels Contracts State OIG 16AUD051 12/22/2015 Audit of Department of State Compliance with Critical Environment Contracting Requirements State OIG 15AUD063 4/29/2015 Audit of the Embassy Kabul Operations and Maintenance Contract GAO 321071 5/27/2015 Maintenance of Hesco Security Barrier in Afghanistan GAO 291279 5/6/2015 Effectiveness of Hyperbaric Oxygen Therapy to Treat Traumatic Brain Injuries (TBI) and Post-Traumatic Stress Disorder (PTSD) GAO 321059 2/5/2015 Afghan Special Immigrant Visa Program GAO 351991 11/21/2014 Military Construction in a Contingency Environment USAID OIG FF100315 3/31/2015 Audit of USAID/Afghanistan’s Assistance in Building Afghanistan by Developing Enterprises Program Source: DOD IG, response to SIGAR data call, 12/21/2015; State OIG, response to SIGAR data call, 12/14/2015; GAO, response to SIGAR data call, 12/14/2015; USAAA, response to SIGAR data call, 11/24/2015; USAID OIG, response to SIGAR data call, 12/10/2015. U.S. Department of Defense Office of Inspector General DOD continues to face many challenges in executing its Overseas Contingency Operations (OCO). DOD IG has identified priorities based on those challenges and high risks. For fiscal year (FY) 2016, DOD IG will continue focus on the areas of monitoring and oversight of acquisition and contracting processes that support training, equipping, and sustaining Afghanistan’s security forces. DOD IG will also continue to review and assess the Department’s efforts to train and equip Afghan National Defense and Security Forces. The DOD IG-led Southwest Asia Joint Planning Group assists in coordinating and deconflicting federal and DOD OCO-related oversight activities. DOD IG, working with the SIGAR as well as fellow Inspectors General and Defense oversight-community members, have issued the FY 2016 Comprehensive Oversight Plan for Overseas Contingency Operations (COP–OCO), formerly known as the Comprehensive Oversight Plan for Southwest Asia. The COP–OCO includes the Joint Strategic Oversight Plans (JSOP) for Operation Inherent Resolve in Afghanistan. The Afghanistan JSOP includes Operation Freedom’s Sentinel (OFS), as well as reconstruction and humanitarian assistance programs and activities that are separate from OFS. Assessment of U.S./Coalition Efforts to Train, Advise, Assist, and Equip the Afghan National Army Special Operations Forces (Project No. D2016-D00SPO-0054.000, Initiated November 25, 2015) DOD IG is determining whether U.S. government and Coalition goals, objectives, plans, and resources to train the Afghan National Army Special Operations Forces are sufficient, operative, and relevant. 176 Special inspector general I Afghanistan reconstruction Other Agency Oversight Summary Report on Inspections of DOD Facilities and Military Housing (Project No. D2016-D000PT-0003.000, Initiated October 16, 2016) This project will collectively evaluate the results of the previous DOD IG inspections of buildings and housing facilities in Afghanistan, Japan, Korea, and regions of the continental United States, as well as the ongoing facility inspection in Jordan. DOD IG is performing additional analysis based on these reports to identify any potential broader findings and recommendations related to electrical system safety, fire protection systems, environmental health and safety, etc. Specifically, DOD IG will evaluate common deficiencies and systemic issues found throughout DOD facilities during the previous inspections. DOD IG will also evaluate DOD policy regarding health and safety standards and requirements for DOD-occupied facilities world-wide. Audit of Contract Oversight in Afghanistan (Project No. D2015-D000JB-0239.000, Initiated August 14, 2015) DOD IG is determining whether contracting officer’s representatives were properly appointed and trained, and were able to effectively perform their oversight responsibilities for contracts in Afghanistan. Audit of Controls Over Afghanistan Ministry of Interior Fuels Contracts (Project No. D2015-D000JB-0174.000, Initiated April 20, 2015) DOD IG is continuing its series of audits related to Afghanistan contract oversight. In this specific audit, DOD IG will determine whether the Combined Security Transition Command-Afghanistan (CSTC-A) and the Ministry of Interior (MOI) have established effective controls for oversight of MOI fuel contracts. U.S. Department of State Office of Inspector General-Middle East Regional Operations State OIG has two ongoing projects this quarter related to Afghanistan reconstruction. Audit of Department of State Compliance with Critical Environment Contracting Requirements (Project No. 16AUD051, Initiated December 22, 2015) The primary objective of this audit is to determine whether the Critical Environment Contracting Analytics Staff has conducted risk assessments and developed risk mitigation plans for operational and political risks associated with contractor performance in Iraq and Afghanistan. Report to the united states congress I January 30, 2016 177 Other Agency Oversight Audit of the Embassy Kabul Operations and Maintenance Contract (Project No. 15AUD063, Initiated April 29, 2015) Pacific Architects and Engineers Government Services Inc. (PAE) operates and maintains the utility systems for the U.S. embassy compound and Camp Sullivan in Kabul, Afghanistan. (Camp Sullivan is located by Kabul International Airport and provides the living quarters for the embassy’s security force.) PAE provides support services 24 hours a day, 365 days a year, for electrical generation and distribution, heating and ventilation, water-supply purification and distribution, fire protection, sewage and wastewater treatment, elevator maintenance, and fuel storage and distribution for generators and vehicles. PAE also provides unscheduled services to embassy offices and living quarters, and escort services for subcontractors and other individuals without security clearances who work at secure sites on the embassy compound. This audit will be the first in a series of audits on the PAE operations and maintenance contract. An audit of the PAE operations and maintenance contract will address risk areas related to department management and oversight of contractor performance, an area identified by OIG as a management and performance challenge. (See Fiscal Year 2014 Agency Financial Report, United States Department of State; pp. 118 – 120; 11/2014.) The first audit will focus on risk areas in the fuel-storage and distribution system and possibly offer the opportunity for monetary benefits. Future audits will focus on other services provided by PAE. Government Accountability Office GAO has four ongoing projects this quarter related to Afghanistan reconstruction. Maintenance of Hesco Security Barrier in Afghanistan (Project No. 321071, Initiated May 27, 2015) In 2014, a foreign construction worker employed by a Department of State (State) contractor in Kabul, Afghanistan, was killed when a wall of Hesco security barriers at a U.S. facility toppled and crushed him. These security barriers are collapsible wire-mesh containers lined with heavy-duty fabric and filled with dirt, sand, or gravel. The death of a worker at a State construction site required a mishap investigation report. Question: (1) How has State responded to this incident?  Effectiveness of Hyperbaric Oxygen Therapy to Treat Traumatic Brain Injuries (TBI) and Post-Traumatic Stress Disorder (PTSD) (Project No. 291279, Initiated May 6, 2015) Traumatic brain injuries and post-traumatic stress disorder are the signature wounds suffered in the conflicts in Iraq and Afghanistan. Question: (1) What has published research concluded about the effectiveness of 178 Special inspector general I Afghanistan reconstruction Other Agency Oversight hyperbaric oxygen therapy in the treatment of traumatic brain injury and posttraumatic stress disorder?  Afghan Special Immigrant Visa Program (Project No. 321059, Initiated February 5, 2015) The Afghanistan Special Immigrant Visa (SIV) program provides visas to Afghan nationals and their families who are under threat because of their work for State and USAID, or other U.S. agencies. A high rate of applications for the Afghan SIV program, coupled with short tours by State and USAID U.S. personnel in Afghanistan, could diminish the U.S. government’s institutional knowledge, local relationships, and cultural understanding in that country. Key Questions: (1) How has State and USAID’s workforce in Afghanistan been affected by the departure of SIV recipients? (2) To what extent, if any, have State and USAID developed plans to mitigate the departure of Afghan SIV recipients? (3) What actions, if any, have State and USAID taken to mitigate the departure of Afghan SIV recipients?  Military Construction in a Contingency Environment (Project No. 351991, Initiated November 21, 2014) The audit will examine: (1) the processes DOD officials used to make decisions about military construction in Iraq and Afghanistan, to include procedures for determining whether a structure should be permanent or temporary; (2) the costs associated with decisions made about military construction in Iraq and Afghanistan, to include the sources of funding; (3) any lessons the department has learned about military construction during contingency operations based on the experiences of Iraq and Afghanistan; and (4) any other issues related to military construction in a contingency environment that may come to light during the course of the audit. U.S. Army Audit Agency This quarter the USAAA has no ongoing audits related to Afghanistan reconstruction. U.S. Agency for International Development Office of Inspector General This quarter USAID OIG has one ongoing audit related to reconstruction initiatives. Audit of USAID/Afghanistan’s Assistance in Building Afghanistan by Developing Enterprises Program (Project No. FF100315, Initiated March 31, 2015) Audit Objective: • Is USAID/Afghanistan’s Assistance in Building Afghanistan by Developing Enterprises Program increasing private-sector investment, creating new jobs, and improving the business environment as planned? Report to the united states congress I January 30, 2016 179 Appendices And Endnotes Contents Appendix A 182 Appendix B 186 Appendix C 188 Appendix D 192 Appendix E 199 Endnotes 205 The Official Seal of SIGAR The official seal of SIGAR represents the coordination of efforts between the United States and Afghanistan to provide accountability and oversight of reconstruction activities. The phrases in Dari (top) and Pashto (bottom) on the seal are translations of SIGAR’s name. APPENDICES AND ENDNOTES Appendices Appendix a Cross-reference of report to statutory requirements This appendix cross-references the pages of this report to the quarterly reporting and related requirements under SIGAR’s enabling legislation, the National Defense Authorization Act for Fiscal Year 2008, Pub. L. No. 110181, § 1229 (Table A.1). Table A.1 Cross-reference to SIGAR quarterly reporting requirements under pub. L. no. 110-181, § 1229 Public Law Section SIGAR Enabling Language SIGAR Action Report Section To provide for an independent and objective means of keeping the Secretary of State and the Secretary of Defense fully and currently informed about problems and deficiencies relating to the administration of such programs and operations and the necessity for and progress on corrective action. Ongoing; quarterly report Full report The Inspector General shall report directly to, and be under the general supervision of, the Secretary of State and the Secretary of Defense. Report to the Secretary of State and the Secretary of Defense Full report OVERSIGHT OF AFGHANISTAN RECONSTRUCTION — It shall be the duty of the Inspector General to conduct, supervise, and coordinate audits and investigations of the treatment, handling, and expenditure of amounts appropriated or otherwise made available for the reconstruction of Afghanistan, and of the programs, operations, and contracts carried out utilizing such funds, including subsections (A) through (G) below. Review appropriated/ available funds Full report Section 1229(f)(1)(A) The oversight and accounting of the obligation and expenditure of such funds. Review obligations and expenditures of appropriated/ available funds SIGAR Oversight Funding Section 1229(f)(1)(B) The monitoring and review of reconstruction activities funded by such funds. Review reconstruction activities funded by appropriations and donations SIGAR Oversight Section 1229(f)(1)(C) The monitoring and review of contracts funded by such funds. Review contracts using appropriated and available funds Note 1 Section 1229(f)(1)(D) The monitoring and review of the transfer of such funds and associated information between and among departments, agencies, and entities of the United States, and private and nongovernmental entities. Review internal and external transfers of appropriated/available funds Appendix B Section 1229(f)(1)(E) The maintenance of records on the use of such funds to facilitate future audits and investigations of the use of such fund[s]. Maintain audit records SIGAR Oversight Appendix C Appendix D Purpose Section 1229(a)(3) Supervision Section 1229(e)(1) Duties Section 1229(f)(1) Review programs, operations, contracts using appropriated/ available funds Continued on the next page 182 Special inspector general I Afghanistan reconstruction Appendices Table A.1 (Continued) cross-reference to SIGAR quarterly reporting requirements under pub. L. no. 110-181, § 1229 Public Law Section SIGAR Enabling Language SIGAR Action Report Section Section 1229(f)(1)(F) The monitoring and review of the effectiveness of United States coordination with the governments of Afghanistan and other donor countries in the implementation of the Afghanistan Compact and the Afghanistan National Development Strategy Monitoring and review as described Audits Section 1229(f)(1)(G) The investigation of overpayments such as duplicate payments or duplicate billing and any potential unethical or illegal actions of Federal employees, contractors, or affiliated entities, and the referral of such reports, as necessary, to the Department of Justice to ensure further investigations, prosecutions, recovery of further funds, or other remedies Conduct and reporting of investigations as described Investigations Section 1229(f)(2) OTHER DUTIES RELATED TO OVERSIGHT — The Inspector General shall establish, maintain, and oversee such systems, procedures, and controls as the Inspector General considers appropriate to discharge the duties under paragraph (1). Establish, maintain, and oversee systems, procedures, and controls Full report Section 1229(f)(3) DUTIES AND RESPONSIBILITIES UNDER INSPECTOR GENERAL ACT OF 1978 — In addition, … the Inspector General shall also have the duties and responsibilities of inspectors general under the Inspector General Act of 1978. Duties as specified in Inspector General Act Full report Section 1229(f)(4) COORDINATION OF EFFORTS — The Inspector General shall coordinate with, and receive the cooperation of, each of the following: (A) the Inspector General of the Department of Defense, (B) the Inspector General of the Department of State, and (C) the Inspector General of the United States Agency for International Development. Coordination with the inspectors general of DOD, DOS, and USAID Other Agency Oversight Federal Support and Other Resources Section 1229(h)(5)(A) ASSISTANCE FROM FEDERAL AGENCIES — Upon request of the Inspector General for information or assistance from any department, agency, or other entity of the Federal Government, the head of such entity shall, insofar as is practicable and not in contravention of any existing law, furnish such information or assistance to the Inspector General, or an authorized designee. Expect support as requested Full report Section 1229(h)(5)(B) REPORTING OF REFUSED ASSISTANCE — Whenever information or assistance requested by the Inspector General is, in the judgment of the Inspector General, unreasonably refused or not provided, the Inspector General shall report the circumstances to the Secretary of State or the Secretary of Defense, as appropriate, and to the appropriate congressional committees without delay. None reported N/A Continued on the next page Report to the united states congress I January 30, 2016 183 Appendices Table A.1 (Continued) Cross-reference to SIGAR quarterly reporting requirements under pub. L. no. 110-181, § 1229 Public Law Section SIGAR Enabling Language SIGAR Action Report Section QUARTERLY REPORTS — Not later than 30 days after the end of each fiscal-year quarter, the Inspector General shall submit to the appropriate committees of Congress a report summarizing, for the period of that quarter and, to the extent possible, the period from the end of such quarter to the time of the submission of the report, the activities during such period of the Inspector General and the activities under programs and operations funded with amounts appropriated or otherwise made available for the reconstruction of Afghanistan. Each report shall include, for the period covered by such report, a detailed statement of all obligations, expenditures, and revenues associated with reconstruction and rehabilitation activities in Afghanistan, including the following – Report – 30 days after the end of each calendar quarter Full report Appendix B Section 1229(i)(1)(A) Obligations and expenditures of appropriated/donated funds. Obligations and expenditures of appropriated/donated funds Appendix B Section 1229(i)(1)(B) A project-by-project and program-by-program accounting of the costs incurred to date for the reconstruction of Afghanistan, together with the estimate of the Department of Defense, the Department of State, and the United States Agency for International Development, as applicable, of the costs to complete each project and each program. Project-by-project and program-by-program accounting of costs. List unexpended funds for each project or program Funding Note 1 Section 1229(i)(1)(C) Revenues attributable to or consisting of funds provided by foreign nations or international organizations to programs and projects funded by any department or agency of the United States Government, and any obligations or expenditures of such revenues. Revenues, obligations, and expenditures of donor funds Funding Section 1229(i)(1)(D) Revenues attributable to or consisting of foreign assets seized or frozen that contribute to programs and projects funded by any U.S. government department or agency, and any obligations or expenditures of such revenues. Revenues, obligations, and expenditures of funds from seized or frozen assets Funding Section 1229(i)(1)(E) Operating expenses of agencies or entities receiving amounts appropriated or otherwise made available for the reconstruction of Afghanistan. Operating expenses of agencies or any organization receiving appropriated funds Funding Appendix B Section 1229(i)(1)(F) In the case of any contract, grant, agreement, or other funding mechanism described in paragraph (2)* — (i) The amount of the contract or other funding mechanism; (ii) A brief discussion of the scope of the contract or other funding mechanism; (iii) A discussion of how the department or agency of the United States Government involved in the contract, grant, agreement, or other funding mechanism identified and solicited offers from potential contractors to perform the contract, grant, agreement, or other funding mechanism, together with a list of the potential individuals or entities that were issued solicitations for the offers; and (iv) The justification and approval documents on which was based the determination to use procedures other than procedures that provide for full and open competition. Describe contract details Note 1 Reports Section 1229(i)(1) Summarize activities of the Inspector General Detailed statement of all obligations, expenditures, and revenues Continued on the next page 184 Special inspector general I Afghanistan reconstruction Appendices Table A.1 (Continued) Cross-reference to SIGAR quarterly reporting requirements under pub. L. no. 110-181, § 1229 Public Law Section SIGAR Enabling Language SIGAR Action Report Section Section 1229(i)(3) PUBLIC AVAILABILITY — The Inspector General shall publish on a publicly available Internet website each report under paragraph (1) of this subsection in English and other languages that the Inspector General determines are widely used and understood in Afghanistan. Publish report as directed at www.sigar.mil Full report Section 1229(i)(4) FORM — Each report required under this subsection shall be submitted in unclassified form, but may include a classified annex if the Inspector General considers it necessary. Publish report as directed Full report Section 1229(j)(1) Inspector General shall also submit each report required under subsection (i) to the Secretary of State and the Secretary of Defense. Submit quarterly report Full report Dari and Pashtu translation in process Note 1: Although this data is normally made available on SIGAR’s website (www.sigar.mil), the data SIGAR has received is in relatively raw form and is currently being reviewed, analyzed, and organized for future SIGAR use and publication. * Covered “contracts, grants, agreements, and funding mechanisms” are defined in paragraph (2) of Section 1229(i) of Pub. L. No. 110-181 as being— “any major contract, grant, agreement, or other funding mechanism that is entered into by any department or agency of the United States Government that involves the use of amounts appropriated or otherwise made available for the reconstruction of Afghanistan with any public or private sector entity for any of the following purposes: To build or rebuild physical infrastructure of Afghanistan. To establish or reestablish a political or societal institution of Afghanistan. To provide products or services to the people of Afghanistan.” Report to the united states congress I January 30, 2016 185 Appendices Appendix B U.S. FUNDS FOR AFGHANISTAN RECONSTRUCTION ($ MILLIONS) Table B.1 lists funds appropriated for Afghanistan reconstruction by program, per year, as of December 31, 2015. Table B.2 lists fund appropriated for counternarcotics initiatives since 2002. Table b.2 COUNTERNARCOTICS, CUMULATIVE AMOUNT APPROPRIATED, SINCE 2002 ($ Millions) ASFF DOD CN $1,399.44 2,999.34 ESF 1,559.89 INCLE 2,173.72 DEA Total 229.70 $8,362.09 Table B.2 Note: Numbers have been rounded. Counternarcotics funds cross-cut both the Security and Governance & Development spending categories; these funds are also captured in those categories in Table B.1. Figures represent cumulative amounts committed from appropriated funds for counternarcotics initiatives in Afghanistan since 2002. Intitatives include eradication, interdiction, support to Afghanistan’s Special Mission Wing, counternarcotics-related capacity building, and alternative agricultural development efforts. ASFF, ESF, and INCLE figures show the cumulative amounts committed to counternarcotics intiatives from those funds. Table B.2 Source: SIGAR analysis of counternarcotics funding, 1/19/2016. State, response to SIGAR data call, 1/13/2016; DOD, response to SIGAR data call, 12/29/2015; USAID, response to SIGAR data call, 1/11/2016; DOJ, response to SIGAR data call, 12/30/2015. Table B.1 Note: Numbers have been rounded. DOD reprogrammed $1 billion from FY 2011 ASFF, $1 billion from FY 2012 ASFF, and $178 million from FY 2013 ASFF to fund other DOD OCO requirements. ASFF data reflects the following rescissions: $1 billion from FY 2012 in Pub. L. No. 113-6, $764.38 million from FY 2014 in Pub. L. No. 113-235, and $400 million from FY 2015 in Pub. L. No. 114-113. DOD transferred $101 million from FY 2011 AIF, $179.5 million from FY 2013 AIF, and $55 million from FY 2014 AIF to the ESF to fund infrastructure projects implemented by USAID. a Final FY 2016 appropriation amounts for State and USAID accounts were still being determined when this report went to press. Table B.1 Source: DOD, response to SIGAR data calls, 1/13/2016, 12/29/2015, 10/22/2012, 10/14/2009, and 10/1/2009; State, response to SIGAR data calls, 1/13/2016, 1/11/2016, 10/20/2015, 4/15/2015, 4/15/2014, 6/27/2013, 10/5/2012 and 6/27/2012; Treasury, response to SIGAR data call, 7/9/2015; OMB, response to SIGAR data calls, 4/16/2015, 7/14/2014, 7/19/2013 and 1/4/2013; USAID, response to SIGAR data calls, 1/11/2016, 10/15/2010, 1/15/2010, and 10/9/2009; DOJ, response to SIGAR data calls, 12/30/2015 and 7/7/2009; USDA, response to SIGAR data call, 4/2009; DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2015; Pub. L. Nos. 114-113, 113-235, 113-76, 113-6, 112-74, 112-10, 111-212, 111-118. U.S. FUNDING SOURCES AGENCY Security Afghanistan Security Forces Fund (ASFF) Train & Equip (DOD) Foreign Military Financing (FMF) International Military Education and Training (IMET) Drug Interdiction & Counter-Drug Activities (DOD CN) Total - Security Governance & Development Commander's Emergency Response Program (CERP) Afghanistan Infrastructure Fund (AIF) Task Force for Business and Stability Operations (TFBSO) Economic Support Fund (ESF) Development Assistance (DA) Afghanistan Freedom Support Act (AFSA) Child Survival & Health (CSH + GHAI) Commodity Credit Corp (CCC) USAID (Other) Non-Proliferation, Antiterrorism, Demining & Related (NADR) Provincial Reconstruction Team Advisors Treasury Technical Assistance International Narcotics Control & Law Enforcement (INCLE) Drug Enforcement Administration (DEA) Total - Governance & Development Humanitarian P.L. 480 Title I P.L. 480 Title II Disaster Assistance (IDA) Transition Initiatives (TI) Migration & Refugee Assistance (MRA) Voluntary Peacekeeping (PKO) Emergency Refugee & Migration Assistance (ERMA) Food for Progress 416(b) Food Aid Food for Education Emerson Trust Total - Humanitarian International Affairs Operations Oversight Other Total - International Affairs Operations TOTAL FY 2002–04 DOD DOD State State DOD $63,922.65 440.00 1,059.14 16.22 2,999.34 $68,437.36 0.00 150.00 662.34 1.24 71.80 885.37 DOD DOD DOD USAID USAID DOD USAID USAID USAID State USDA Treasury State DOJ 3,684.00 988.50 822.85 18,599.01 886.50 550.00 554.60 31.48 51.98 692.99 5.70 4.45 4,690.86 229.70 $31,792.62 40.00 0.00 0.00 1,248.06 213.98 450.00 90.60 8.80 5.50 145.60 0.00 1.96 280.00 7.17 2,491.67 5.00 891.28 572.83 37.67 1047.41 69.33 25.20 109.49 95.18 50.49 22.40 $2,926.27 5.00 205.60 294.00 30.98 265.90 53.83 25.00 14.04 95.18 15.39 0.00 1,004.92 419.75 9,516.32 $9,936.07 0.00 403.34 403.34 $113,092.32 4,785.31 USDA USAID USAID USAID State State State USDA USDA USDA USDA Total Funding 186 Special inspector general I Afghanistan reconstruction Appendices FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 995.00 290.00 396.80 0.95 224.54 1,907.28 1,908.13 0.00 0.00 0.98 108.05 2,017.17 7,406.40 0.00 0.00 1.19 290.97 7,698.57 2,750.00 0.00 0.00 1.66 192.81 2,944.47 136.00 0.00 0.00 1,283.00 169.21 100.00 38.00 0.00 0.00 40.65 0.00 0.95 709.28 16.77 2,493.85 215.00 0.00 0.00 473.39 185.08 0.00 41.45 0.00 0.00 35.72 0.00 0.19 232.65 23.66 1,207.14 209.00 0.00 0.00 1,224.75 166.81 0.00 100.77 0.00 0.00 36.72 0.00 0.13 251.74 20.38 2,010.30 0.00 49.20 4.23 1.60 47.10 15.50 0.00 30.10 0.00 10.02 0.00 157.75 0.00 56.60 0.04 0.00 41.80 0.00 0.00 23.24 0.00 25.08 0.00 146.76 0.00 136.29 136.29 0.00 131.90 131.90 4,695.16 FY 2012 FY 2013 FY 2014 5,606.94 0.00 0.00 1.40 230.06 5,838.40 9,166.77 10,619.28 0.00 0.00 0.00 0.00 1.76 1.56 392.27 379.83 9,560.80 11,000.67 9,200.00 0.00 0.00 1.18 472.99 9,674.16 4,946.20 0.00 0.00 1.42 255.81 5,203.44 3,962.34 0.00 0.00 1.50 238.96 4,202.80 3,709.33 3,652.26 0.00 0.00 0.00 0.00 1.40 0.00 0.00 141.26 3,710.73 3,793.51 488.33 0.00 0.00 1,399.51 149.43 0.00 63.04 10.77 21.96 29.72 0.00 0.75 307.56 40.59 2,511.66 550.67 0.00 14.44 2,077.49 0.40 0.00 58.23 4.22 2.81 59.92 5.70 0.47 493.90 18.88 3,287.14 1,000.00 0.00 59.26 3,346.00 0.30 0.00 92.30 4.22 4.90 70.74 0.00 0.00 589.00 19.20 5,185.92 400.00 299.00 239.24 2,168.51 0.00 0.00 69.91 3.09 6.25 69.30 0.00 0.00 400.00 18.70 3,673.99 400.00 400.00 245.76 1,836.76 0.00 0.00 0.00 0.38 7.10 65.32 0.00 0.00 357.92 18.70 3,331.93 200.00 145.50 138.20 1,802.65 0.35 0.00 0.25 0.00 1.84 52.60 0.00 0.00 593.81 17.00 2,952.19 30.00 144.00 122.24 907.00 0.00 0.00 0.01 0.00 0.80 43.20 0.00 0.00 225.00 18.70 1,490.96 10.00 0.00 3.72 831.90 0.95 0.00 0.04 0.00 0.82 43.50 0.00 0.00 250.00 9.05 1,149.97 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.91 5.91 0.00 60.00 0.03 0.00 54.00 0.00 0.00 9.47 0.00 0.00 0.00 123.50 0.00 60.00 16.87 0.00 44.25 0.00 0.00 20.55 0.00 0.00 22.40 164.07 0.00 177.00 27.13 0.75 76.79 0.00 0.20 12.09 0.00 0.00 0.00 293.96 0.00 58.13 29.71 0.85 80.93 0.00 0.00 0.00 0.00 0.00 0.00 169.62 0.00 112.55 66.39 1.08 65.00 0.00 0.00 0.00 0.00 0.00 0.00 245.01 0.00 0.00 56.00 0.63 99.56 0.00 0.00 0.00 0.00 0.00 0.00 156.18 0.00 46.20 21.51 0.32 76.07 0.00 0.00 0.00 0.00 0.00 0.00 144.09 0.00 66.00 28.19 0.83 107.89 0.00 0.00 0.00 0.00 0.00 0.00 202.91 0.00 0.00 25.71 0.60 88.12 0.00 0.00 0.00 0.00 0.00 0.00 114.43 0.00 0.00 3.04 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.07 2.50 207.80 210.30 14.30 435.51 449.81 25.20 1,065.86 1,091.06 34.40 1,761.70 1,796.10 37.20 905.10 942.30 59.00 1,425.42 1,484.42 58.70 1,272.64 1,331.34 62.65 852.64 915.29 68.60 909.50 978.10 57.20 8.62 65.82 6,070.00 10,510.56 16,712.43 15,861.97 14,646.69 9,631.06 6,811.95 Report to the united states congress I January 30, 2016 187 FY 2015 FY 2016a FY 2011 3,502.96 10,042.67 FY 2010 5,953.23 3,868.32 Appendices Appendix C SIGAR WRITTEN PRODUCTS SIGAR Audits Completed Performance Audits SIGAR completed two performance audits during this reporting period. COMPLETED SIGAR PERFORMANCE AUDITS AS OF JANUARY 30, 2016 Report Identifier SIGAR Audit 16-15-AR SIGAR Audit 16-11-AR Report Title Afghan National Engineer Brigade: Despite U.S. Training Efforts, the Brigade is Incapable of Operating Independently Afghanistan’s Oil, Gas, and Minerals Industries: $488 Million in U.S. Efforts Show Limited Progress Overall, and Challenges Prevent Further Investment and Growth Date Issued 1/2016 10/2015 New Performance Audits SIGAR initiated one performance audits during this reporting period. NEW SIGAR PERFORMANCE AUDITS AS OF JANUARY 30, 2016 Project Identifier SIGAR 112A Project Title Administration, Monitoring, and Reporting of the Afghanistan Reconstruction Trust Fund Date Initiated 12/2015 Ongoing Performance Audits SIGAR had 14 performance audits in progress during this reporting period. ONGOING SIGAR PERFORMANCE AUDITS AS OF JANUARY 30, 2016 Project Identifier SIGAR 111A SIGAR 110A SIGAR 109A SIGAR 108A SIGAR 107A SIGAR 106A SIGAR 105A SIGAR 104A SIGAR 103A SIGAR 102A SIGAR 101A SIGAR 100A 188 Project Title Date Initiated Award, Administration, and Performance of Legacy Research Contracts 8/2015 Effectiveness of the Commander’s Emergency Response Program in 8/2015 Afghanistan U.S. Salary Supplements for Afghan Government Employees and 5/2015 Technical Advisors USAID’s Efforts to Support Land Reform in Afghanistan 5/2015 U.S. Efforts to Sustain Afghanistan’s Road Infrastructure 5/2015 Accountability for ANSF Organizational Clothing and Individual Equipment 12/2014 USAID’s Efforts to Support and Improve Afghanistan’s Health Sector 11/2014 U.S. Efforts to Assist and Improve Afghanistan’s Primary and Secondary 12/2014 Education Systems USAID Measuring Impacts of Stabilization Initiatives Program 11/2014 Afghanistan Infrastructure Fund Follow-Up 11/2014 Afghanistan Technical Equipment Maintenance Program (A-TEMP) for 10/2014 ANA Vehicle Maintenance and Capacity Building DOD Oversight of Infrastructure Projects Transferred to the Afghan 8/2014 Government Continued on the next page Special inspector general I Afghanistan reconstruction Appendices ONGOING SIGAR PERFORMANCE AUDITS AS OF JANUARY 30, 2016 (Continued) Project Identifier SIGAR 096A (part II) SIGAR 088A Project Title U.S. Efforts to Assist Afghan Refugees and Internally Displaced Persons U.S. Government Efforts to Assist in Reconstruction and Commercialization of Afghanistan’s Information and Communication Technology Sector Date Initiated 2/2014 11/2013 Completed Financial Audits SIGAR completed five financial audits during this reporting period. COMPLETED SIGAR FINANCIAL AUDITS AS OF JANUARY 30, 2016 Report Identifier SIGAR Financial Audit 16-13-FA SIGAR Financial Audit 16-12-FA SIGAR Financial Audit 16-10-FA SIGAR Financial Audit 16-8-FA SIGAR Financial Audit 16-6-FA Report Title Date Issued DOD’s Strategic, Technical, and Analytical Support Services in Traditional and Alternative Energy Sectors Program: Audit of Costs Incurred by 1/2016 Zantech Services Inc. DOD’s Energy Support Services Program: Audit of Costs Incurred by 1/2016 Zantech IT Services Inc. USAID’s Engineering, Quality Assurance, and Logistical Support Program: 1/2016 Audit of Costs Incurred by International Relief and Development Inc. USAID’s Stability in Key Areas South Program: Audit of Costs Incurred by 12/2015 AECOM International Development Inc. USAID’s Improving Livelihoods and Governance through Natural Resource Management in Afghanistan Project: Audit of Costs Incurred by 12/2015 the Wildlife Conservation Society New Financial Audits SIGAR initiated five financial audits during this reporting period. NEW SIGAR FINANCIAL AUDITS AS OF JANUARY 30, 2016 Project Identifier F-089 F-088 F-087 F-086 F-085 Project Title DOD Contract with Sterling Global Operations for Afghanistan-wide Mine, Battle Area, and Range Clearance–Phase II DOD Contract with AECOM for Construction of Nimroz Border Patrol Facilities State Grant with Sayara Media and Communications for Afghanistan Counternarcotic Program State Grant with Aga Khan Foundation USA for the Strengthening Afghan Governance and Alternative Livelihoods (SAGAL) Program State Grants with Lapis LTD & Lapis Strategic Communications for Producing TV, Radio, and Media Campaigns Date Initiated 11/2015 11/2015 11/2015 11/2015 11/2015 Ongoing Financial Audits SIGAR had 18 financial audits in progress during this reporting period. ONGOING SIGAR FINANCIAL AUDITS AS OF JANUARY 30, 2016 Project Identifier F-084 F-083 Project Title Date Initiated USAID Contract with Black & Veatch Special Projects Corporation for 10/2015 the Kandahar-Helmand Power Program USAID Contract with Democracy International for Electoral Reform and 10/2015 Civic Advocacy (AERCA) Program Continued on the next page Report to the united states congress I January 30, 2016 189 Appendices ONGOING SIGAR FINANCIAL AUDITS AS OF JANUARY 30, 2016 (Continued) Project Identifier F-082 F-081 F-080 F-079 F-078 F-077 F-076 F-075 F-074 F-073 F-072 F-071 F-070 F-069 F-066 F-061 Project Title Date Initiated USAID Contract with Counterpart International for the Promoting Afghan 10/2015 Civic Education (PACE) Program State Grants with The Halo Trust for Mine Clearance and Survey in 3/2015 Afghanistan DOD Contract with PRI DJI, A Construction JV for Construction of District 3/2015 HQ Uniform Police Station, Marjah DOD Contract with PRI DJI, A Construction JV for Construction of 4th 3/2015 Special Forces Kandak, Shindand DOD Contract with AMEC Earth & Environmental Inc. for Construction of 3/2015 Afghan Defense University, Qarghah DOD Contract with PRI/DJI, A Construction JV for repair of Shindand 3/2015 Runway, Shindand DOD Contract with Gilbane Federal for Construction of 1st Commando 3/2015 Brigade HQ & Transient Kandak, Gardez DOD Contract with Gilbane Federal for Construction of Afghan National 3/2015 Civil Order Police Battalion & Brigade HQ, Marjah DOD Contract with Environmental Chemical Corp. for Construction of 3/2015 2nd Special Forces Kandak, Kandahar DOD Contract with Mission Essential Personnel LLC for Translation/ 3/2015 Linguist Support Services USAID Contract with Perini Management Services Inc. to implement the 2/2015 Irrigation and Watershed Management Program USAID Contract with University Research Company LLC for Support to 2/2015 the Health Care Improvement Project USAID Cooperative Agreement with the American University of Afghanistan for Academic Program Development and Operating 2/2015 Support State Grants Contract with Mine Detection Dog Center for Community3/2015 Based Demining Project USDA Cooperative Agreement with the American Soybean Association for the Provision of Agricultural Commodities for Afghanistan through 8/2014 the Food for Progress Act DOD Contract with Dyncorp, International LLC for Mentoring and 4/2014 Training Services in Support of the ANSF SIGAR Special Projects Completed Special Projects SIGAR completed three Special Project products this reporting period. COMPLETED SIGAR SPECIAL PROJECTS AS OF JANUARY 30, 2016 Product Identifier Special Project 16-09-SP Special Project 16-06-SP Special Project 16-05-SP 190 Product Title USAID-Supported Health Facilities in Kabul Acknowledgement of DOD Response to TFBSO Security Letter TFBSO Security Inquiry Letter Special inspector general I Date Issued 1/2016 12/2015 11/2015 Afghanistan reconstruction Appendices SIGAR Lessons Learned Projects Ongoing Lessons Learned Projects SIGAR has five ongoing Lessons Learned projects this reporting period. ONGOING SIGAR LESSONS LEARNED PROJECTS AS OF JANUARY 30, 2016 Project Identifier SIGAR-LL-05 SIGAR-LL-04 SIGAR-LL-03 SIGAR-LL-02 SIGAR-LL-01 Project Title Private Sector Development and Economic Growth Counternarcotics in Afghanistan Reconstruction Corruption in Afghanistan: Perceptions and Responses of the U.S. Government U.S. Coordination with External Partners in Administering Aid Interagency Coordination on Strategy and Planning Date Initiated 10/2015 4/2015 5/2015 12/2014 12/2014 Other SIGAR Written Products This reporting period, Special Inspector General for Afghanistan Reconstruction, John F. Sopko, testified before Congress once. NEW SIGAR Testimony AS OF January 30, 2016 Testimony Identifier SIGAR 16-14-TY Testimony Title DOD Task Force for Business and Stability Operations in Afghanistan: Preliminary Results Show Serious Management and Oversight Problems Report to the united states congress I January 30, 2016 Testimony Submitted 1/2016 191 Appendices Appendix D SIGAR investigations and hotline SIGAR Investigations This quarter, SIGAR opened 17 new investigations and closed 14, bringing the total number of open investigations to 309. Of the new investigations, most involved procurement and contract fraud, as shown in Figure D.1. Most closed investigations were due to lack of investigative merit, as shown in Figure D.2. Figure D.1 Figure D.2 SIGAR NEW INVESTIGATIONS, OCTOBER 1–DECEMBER 31, 2015 SIGAR INVESTIGATIONS: CLOSED INVESTIGATIONS, OCTOBER 1–DECEMBER 31, 2015 Total: 17 10 Lack of Investigative Merit 1 Administrative Corruption 4 Other/ Miscellaneous 3 Procurement/ Contract Fraud 5 Money Laundering 2 Unfounded Allegations 3 Civil Judgment – Criminal Conviction – 0 3 2 3 4 6 8 10 Total: 14 Theft 3 Source: SIGAR Investigations Directorate, 1/14/2016. Source: SIGAR Investigations Directorate, 1/14/2016. 192 Special inspector general I Afghanistan reconstruction Appendices SIGAR Hotline Of the 108 Hotline complaints received this quarter, most were received electronically, as shown in Figure D.3. In addition to working on new complaints, the Investigations directorate continued its work this quarter on complaints received prior to July 1, 2015. This quarter, the directorate processed 131 complaints, most of which were closed, as shown in Figure D.4. Figure D.4 Figure D.3 STATUS OF SIGAR HOTLINE COMPLAINTS: OCTOBER 1–DECEMBER 31, 2015 SOURCE OF SIGAR HOTLINE COMPLAINTS, OCTOBER 1–DECEMBER 31, 2015 49 Under Review (Open) Total: 108 Referred Out (Open) – 2 Under Investigation (Open) Electronic 104 70 Closed Administratively 4 Referred Out (Closed) 6 Closed after Investigation 0 10 20 30 40 50 60 70 80 Total: 131 Note: 108 complaints received during quarter; total includes status changes to complaints made in earlier periods. Source: SIGAR Investigations Directorate, 1/14/2016. Table D.1 is a comprehensive list of finalized suspensions, debarments, and special entity designations relating to SIGAR’s work in Afghanistan as of December 31, 2015. SIGAR lists its suspensions, debarments and special entity designations for historical purposes only. For the current status of any individual or entity listed herein as previously suspended, debarred, or listed as a special entity designation, please consult the System for Award Management, www.sam.gov. Entries appearing in both the suspension and debarment sections are based upon their placement in suspended status following criminal indictment or determination of non-responsibility by the agency suspension and debarment official. Final debarment was imposed following criminal conviction in U.S. Federal District Court and/or final determination by the agency suspension and debarment official regarding term of debarment. I January 30, 2016 Written (other) 3 Source: SIGAR Investigations Directorate, 1/14/2016. SIGAR Suspensions and Debarments Report to the united states congress Phone 1 193 Appendices Table D.1 Special Entity Designations, SUSPENSIONS, AND DEBARMENTS AS OF December 31, 2015 Special Entity Designations Arvin Kam Construction Company Khan, Haji Mohammad Almas Saadat, Vakil Arvin Kam Group LLC, d.b.a. “Arvin Kam Group Security,” d.b.a. “Arvin Kam Group Foundation,” d.b.a. “Arvin Global Logistics Services Company” Noh-E Safi Mining Company Triangle Technologies Noor Rahman Company Wasim, Abdul Wakil Noor Rahman Construction Company Zaland, Yousef Nur Rahman Group, d.b.a. “NUCCL Construction Company,” d.b.a. “RUCCL Rahman Umar Construction Company,” d.b.a. “Rahman Trading and General Logistics Company LLC Zurmat Construction Company Ayub, Mohammad Fruzi, Haji Khalil Haji Amir Muhammad Haji Dhost Mohammad Zurmat Construction Company Jan, Nurullah Rahman, Nur, a.k.a. “Noor Rahman”, a.k.a. “Noor Rahman Safa” Zurmat Foundation Zurmat General Trading Zurmat Group of Companies, d.b.a. “Zurmat LLC” Zurmat Material Testing Laboratory Rhaman, Mohammad Suspensions Al-Watan Construction Company Sharpway Logistics Rivera-Medina, Franklin Delano Basirat Construction Firm United States California Logistics Company Peace Thru Business Brophy, Kenneth Yousef, Najeebullah Pudenz, Adam Jeff Julias Naqibullah, Nadeem Rahimi, Mohammad Edris Elham, Yaser, a.k.a. “Najibullah Saadullah” Rahman, Obaidur Wooten, Philip Steven Everest Faizy Logistics Services Campbell, Neil Patrick Domineck, Lavette Kaye Faizy Elham Brothers Ltd. Borcata, Raul A. Markwith, James Faizy, Rohullah Close, Jarred Lee All Points International Distributors Inc. Hekmat Shadman General Trading LLC Logistical Operations Worldwide Cipolla, James Hekmat Shadman Ltd., d.b.a. “Hikmat Shadman Ltd.” Robinson, Franz Martin Hercules Global Logistics Hikmat Shadman Construction and Supply Company Taylor, Zachery Dustin Schroeder, Robert Aaria Group Construction Company AISC LLC Aaria Group American International Security Corporation Aaria Herai General Trading Brothers, Richard S. Hikmat Shadman Logistics Services Company, d.b.a. “Hikmat Shadman Commerce Construction and Supply Company,” d.b.a. “Hikmat Shadman Commerce Construction Services” Aaria M.E. General Trading LLC David A Young Construction & Renovation Inc. Aaria Middle East Force Direct Solutions LLC Aaria Middle East Company LLC Harris, Christopher Saif Hikmat Construction Logistic Services and Supply Co. Aaria Middle East Company Ltd. – Herat Hernando County Holdings LLC Shadman, Hikmatullah, a.k.a. “Hikmat Shadman,” a.k.a. “Haji Hikmatullah Shadman,” a.k.a. “Hikmatullah Saadulah” Aaria Supplies Company LTD Hide-A-Wreck LLC Travis, James Edward Aaria Supply Services and Consultancy Panthers LLC Sherzai, Akbar Ahmed Aftech International Paper Mill Village Inc. Bertolini, Robert L. Aftech International Pvt. Ltd. Shroud Line LLC Kahn, Haroon Shams, a.k.a. “Haroon Shams” Alam, Ahmed Farzad Spada, Carol Shams Constructions Limited Albahar Logistics Taylor, Michael Shams General Services and Logistics Unlimited American Aaria Company LLC Welventure LLC American Aaria LLC World Wide Trainers LLC Shams Group International, d.b.a. “Shams Group International FZE” Barakzai, Nangialai Young, David Formid Supply and Services Espinoza, Mauricio Greenlight General Trading Long, Tonya Kabul Hackle Logistics Company Brophy, Kenneth Michael 194 Shams London Academy Shams Production Shams Welfare Foundation Autry, Cleo Brian Chamberlain, William Todd Special inspector general I Afghanistan reconstruction Appendices Table D.1 (Continued) Special Entity Designations, SUSPENSIONS, AND DEBARMENTS AS OF December 31, 2015 (Continued) Suspensions (continued) Cook, Jeffrey Arthur Vergez, Norbert Jamil, Omar K. Harper, Deric Tyron Mayberry, Teresa Pulsars Company Swim, Alexander Addas, James San Francisco for Housing Company Walls, Barry Lee, Jr. Advanced Ability for U-PVC Sura Al Mustakbal Ciampa, Christopher Al Bait Al Amer Top Techno Concrete Batch Casellas, Luis Ramon Al Iraq Al Waed Edmondson, Jeffrey B. International Contracting and Development Al Quraishi Bureau Lugo, Emanuel Sobh, Adeeb Nagib, a.k.a. “Ali Sobh” Al Zakoura Company Montague, Geoffrey K. Stallion Construction and Engineering Group Al-Amir Group LLC Pena, Ramiro Wazne Group Inc., d.b.a. “Wazne Wholesale” Al-Noor Contracting Company Ware, Marvin Wazne, Ayman, a.k.a. “Ayman Ibrahim Wazne” Al-Noor Industrial Technologies Company Green, Robert Warren Hampton, Seneca Darnell California for Project Company Bailly, Louis Matthew Green, George E. Civilian Technologies Limited Company Albright, Timothy H. Tran, Anthony Don Industrial Techniques Engineering Electromechanically Company Debarments Farooqi, Hashmatullah Safi, Fazal Ahmed Mutallib, Abdul Hamid Lais Construction Company Shin Gul Shaheen, a.k.a. “Sheen Gul Shaheen” Nasrat, Sami Hamid Lais Group Espinoza-Loor, Pedro Alfredo National General Construction Company Lodin, Rohullah Farooqi Campbell, Neil Patrick Passerly, Ahmaad Saleem Bennett & Fouch Associates LLC Navarro, Wesley Rabi, Fazal Brandon, Gary Hazrati, Arash Rahman, Atta K5 Global Midfield International Rahman, Fazal Ahmad, Noor Moore, Robert G. Roshandil, Mohammad Ajmal Noor Ahmad Yousufzai Construction Company Noori, Noor Alam, a.k.a. “Noor Alam” Saber, Mohammed Ayeni, Sheryl Adenike Northern Reconstruction Organization Safi, Azizur Rahman Cannon, Justin Shamal Pamir Building and Road Construction Company Safi, Matiullah Constantino, April Anne Constantino, Dee Wade, Desi D. Shaheed, Murad Constantino, Ramil Palmes Blue Planet Logistics Services Shirzad, Daulet Khan Crilly, Braam Mahmodi, Padres Uddin, Mehrab Drotleff, Christopher Mahmodi, Shikab Watson, Brian Erik Fil-Tech Engineering and Construction Company Saber, Mohammed Wooten, Philip Steven Handa, Sdiharth Watson, Brian Erik Espinoza, Mauricio Jabak, Imad Abbasi, Shahpoor Alam, Ahmed Farzad Jamally, Rohullah Amiri, Waheedullah Greenlight General Trading Khalid, Mohammad Atal, Waheed Aaria Middle East Company LLC Khan, Daro Daud, Abdulilah Aaria Middle East Company Ltd. – Herat Mariano, April Anne Perez Dehati, Abdul Majid Aaria M.E. General Trading LLC McCabe, Elton Maurice Fazli, Qais Aaria Middle East Mihalczo, John Hamdard, Mohammad Yousuf Barakzai, Nangialai Qasimi, Mohammed Indress Kunari, Haji Pir Mohammad Formid Supply and Services Radhi, Mohammad Khalid Mushfiq, Muhammad Jaffar Aaria Supply Services and Consultancy Report to the united states congress I January 30, 2016 195 Sahak, Sher Khan Appendices Table D.1 (Continued) Special Entity Designations, SUSPENSIONS, AND DEBARMENTS AS OF December 31, 2015 (Continued) Debarments (continued) Kabul Hackle Logistics Company Ali, Esrar Military Logistic Support LLC Yousef, Najeebullah Gul, Ghanzi Eisner, John Aaria Group Taurus Holdings LLC Aaria Group Construction Company Luqman Engineering Construction Company, d.b.a. “Luqman Engineering” Aaria Supplies Company LTD Safiullah, a.k.a. “Mr. Safiullah" Abdul Haq Foundation Rahimi, Mohammad Edris Sarfarez, a.k.a."Mr. Sarfarez" Adajar, Adonis All Points International Distributors Inc. Wazir, Khan Calhoun, Josh W. Hercules Global Logistics Akbar, Ali Schroeder, Robert Crystal Construction Company, d.b.a. “Samitullah Road Construction Company” Clark Logistic Services Company, d.b.a. “Clark Construction Company" Helmand Twinkle Construction Company Waziri, Heward Omar Zadran, Mohammad Afghan Mercury Construction Company, d.b.a. “Afghan Mercury Construction & Logistics Company” Mirzali Naseeb Construction Company Montes, Diyana Naseeb, Mirzali Robinson, Franz Martin Smith, Nancy Sultani, Abdul Anas a.k.a. “Abdul Anas” Faqiri, Shir Hosmat, Haji Brophy, Kenneth Michael Farkas, Janos Samitullah (Individual uses only one name) Flordeliz, Alex F. Ashna, Mohammad Ibrahim, a.k.a. “Ibrahim” Knight, Michael T., II Gurvinder, Singh Lozado, Gary Jahan, Shah Mijares, Armando N., Jr. Shahim, Zakirullah a.k.a. “Zakrullah Shahim”, a.k.a. “Zikrullah Shahim” Mullakhiel, Wadir Abdullahmatin Alyas, Maiwand Ansunullah a.k.a. “Engineer Maiwand Alyas” Sardar, Hassan, a.k.a. “Hassan Sardar Inqilab” BMCSC Maiwand Haqmal Construction and Supply Company New Riders Construction Company, d.b.a. “Riders Construction Company,” d.b.a. “New Riders Construction and Services Company” Rainbow Construction Company Shah, Mohammad Nadir, a.k.a. “Nader Shah" Tito, Regor Brown, Charles Phillip Sheren, Fasela, a.k.a. “Sheren Fasela” Anderson, Jesse Montel Riders Constructions, Services, Logistics and Transportation Company Charboneau, Stephanie, a.k.a. “Stephanie Shankel” Riders Group of Companies Khan, Noor Zali, a.k.a. “Wali Kahn Noor" Garst, Donald Domineck, Lavette Kaye Mukhtar, Abdul a.k.a. “Abdul Kubar” Markwith, James Saheed, a.k.a. “Mr. Saheed;” a.k.a. “Sahill;” a.k.a. “Ghazi-Rahman" Noori Mahgir Construction Company Martinez, Rene Weaver, Christopher Noori, Sherin Agha Maroof, Abdul Al Kaheel Oasis Services Long, Tonya Qara, Yousef Al Kaheel Technical Service Isranuddin, Burhanuddin Royal Palace Construction Company CLC Construction Company Matun, Navidullah, a.k.a. “Javid Ahmad” Bradshaw, Christopher Chase CLC Consulting LLC Matun, Wahidullah Zuhra Productions Complete Manpower Solutions Navid Basir Construction Company Zuhra, Niazai Mohammed, Masiuddin, a.k.a. “Masi Mohammed” Navid Basir JV Gagar Baba Construction Company Boulware, Candice a.k.a. “Candice Joy Dawkins" Rhoden, Bradley L., a.k.a. “Brad L. Rhoden” NBCC & GBCC JV Dawkins, John Rhoden, Lorraine Serena Noori, Navid Mesopotamia Group LLC Royal Super Jet General Trading LLC Asmatullah, Mahmood, a.k.a. “Mahmood” Nordloh, Geoffrey Super Jet Construction Company Khan, Gul Kieffer, Jerry Super Jet Fuel Services Khan, Solomon Sherdad, a.k.a. “Solomon” Johnson, Angela Super Jet Group Mursalin, Ikramullah, a.k.a. “Ikramullah” CNH Development Company LLC Musafer, Naseem, a.k.a. “Naseem” Johnson, Keith Super Jet Tours LLC, d.b.a. “Super Jet Travel and Holidays LLC” Jim Black Construction Company Arya Ariana Aryayee Logistics, d.b.a. “AAA Logistics,” d.b.a. “Somo Logistics” 196 Hightower, Jonathan Special inspector general I Afghanistan reconstruction Appendices Table D.1 (Continued) Special Entity Designations, SUSPENSIONS, AND DEBARMENTS AS OF December 31, 2015 (Continued) Debarments (continued) Super Solutions LLC Mohibzada, Ahmadullah, a.k.a. “Ahmadullah Mohebzada” LTCCORP/Kaya Dijbouti LLC Abdullah, Bilal Farmer, Robert Scott Neghat, Mustafa LTCCORP/Kaya Romania LLC Mudiyanselage, Oliver Qurashi, Abdul LTCCORP/Kaya Rwanda LLC Kelly, Albert, III Raouf, Ashmatullah LTCORP Technology LLC Ethridge, James Shah, David Fernridge Strategic Partners Touba, Kajim AISC LLC Zahir, Khalid American International Security Corporation Aryubi, Mohammad Raza Samim Toltest Inc., d.b.a. “Wolverine Testing and Engineering,” d.b.a. “Toledo Testing Laboratory,” d.b.a. “LTC,” d.b.a. “LTC Corp,” d.b.a. “LTC Corp Ohio,” d.b.a. “LTC Ohio” David A Young Construction & Renovation Inc. Atlas Sahil Construction Company Force Direct Solutions LLC Bab Al Jazeera LLC Harris, Christopher Emar-E-Sarey Construction Company Hernando County Holdings LLC Muhammad, Pianda Hide-A-Wreck LLC Sambros International, d.b.a. “Sambros International LTD,” d.b.a. “Sambros-UK JV” Panthers LLC LTCCORP/Kaya East Africa LLC Toltest/Desbuild Germany JV LLC Veterans Construction/Lakeshore JV LLC Afghan Royal First Logistics, d.b.a. “Afghan Royal” American Barriers Arakozia Afghan Advertising Dubai Armored Cars Sambros JV Emar-E-Sarey Construction Company, d.b.a. “Sambros JV ESCC” Enayatullah, son of Hafizullah Antes, Bradley A. Inland Holdings Inc. Welventure LLC Lakeshore Engineering & Construction Afghanistan, Inc., d.b.a. “Lakeshore General Contractors Inc.” Intermaax FZE World Wide Trainers LLC Lakeshore Engineering Services, Inc. Young, David Andrew Karkar, Shah Wali Lakeshore Engineering Services/Toltest JV LLC Woodruff and Company Sandman Security Services Lakeshore Toltest – Rentenbach JV LLC Travis, James Edward Siddiqi, Atta Lakeshore Toltest Corporation, d.b.a. “Lakeshore Group,” d.b.a. “LTC Newco d.b.a. “LTC CORP Michigan,” d.b.a. “Lakeshore Toltest KK” Specialty Bunkering Paper Mill Village Inc. Shroud Line LLC Spada, Carol Khairfullah, Gul Agha Khalil Rahimi Construction Company Momand, Jahanzeb, a.k.a. “Engineer Jahanzeb Momand” Lakeshore Toltest Guam LLC Yar-Mohammad, Hazrat Nabi Lakeshore Toltest RRCC JV LLC Walizada, Abdul Masoud, a.k.a. “Masood Walizada” Lakeshore/Walsh JV LLC LakeshoreToltest METAG JV LLC Aman, Abdul LTC & Metawater JV LLC Anwari, Laila LTC Holdings Inc. Anwari, Mezhgan LTC Italia SRL Anwari, Rafi LTC Tower General Contractors LLC Arghandiwal, Zahra, a.k.a. “Sarah Arghandiwal” LTCCORP Commercial LLC Azizi, Farwad, a.k.a. “Farwad Mohammad Azizi” LTCCORP E&C Inc. Intermaax Inc. Spidle, Chris Calvin Vulcan Amps Inc. Worldwide Cargomasters Lakeshore Toltest JV LLC Alizai, Zarghona Farhas, Ahmad Aziz, Haji Abdul, a.k.a. “Abdul Aziz Shah Jan,” a.k.a. “Aziz” Castillo, Alfredo, Jr. Abbasi, Asim Muturi, Samuel Mwakio, Shannel Ahmad, Jaweed Ahmad, Masood A & J Total Landscapes Aryana Green Light Support Services Bashizada, Razia LTCCORP Government Services - OH Inc. Coates, Kenneth LTCCORP Government Services Inc. Mohammad, Sardar, a.k.a. “Sardar Mohammad Barakzai” Gibani, Marika LTCCORP Government Services-MI Inc. Pittman, James C., a.k.a. “Carl Pittman” Haidari, Mahboob LTCCORP O&G LLC Poaipuni, Clayton Latifi, Abdul LTCCORP Renewables LLC Wiley, Patrick McCammon, Christina LTCCORP Inc. Crystal Island Construction Company Report to the united states congress I January 30, 2016 197 Appendices Table D.1 (Continued) Special Entity Designations, SUSPENSIONS, AND DEBARMENTS AS OF December 31, 2015 (Continued) Debarments (continued) Afghan Columbia Constructon Company Jean-Noel, Dimitry Security Assistance Group LLC Ahmadi, Mohammad Omid Hampton, Seneca Darnell Bailly, Louis Matthew Dashti, Jamsheed Dennis, Jimmy W. Kumar, Krishan Hamdard, Eraj Timor, Karim Raj, Janak Hamidi, Mahrokh Wardak, Khalid Singh, Roop Raising Wall Construction Company Rahmat Siddiqi Transportation Company Masraq Engineering and Construction Company Artemis Global, Inc., d.b.a. “Artemis Global Logistics and Solutions,” d.b.a. “Artemis Global Trucking, L.L.C.” Siddiqi, Rahmat Miakhil, Azizullah Siddiqi, Sayed Attaullah Stratton, William G O’Brien, James Michael, a.k.a. “James Michael Wienert” Umbrella Insurance Limited Company Umeer Star Construction Company Taylor, Michael Zahir, Mohammad Ayub Gardazi, Syed Marshal Afghan American Construction Company Smarasinghage, Sagara Marshal, Sayed Abbas Shah Tamerlane Global Services Inc. d.b.a. “Tamerlane Global, L.L.C.,” d.b.a. “Tamerlane, L.L.C.,” d.b.a. “Tamerlane Technologies, L.L.C.” 198 Special inspector general I Afghanistan reconstruction Appendices Appendix E Abbreviations and Acronyms Acronym or Abbreviation Definition AAF Afghan Air Force ABP Afghan Border Police ACAP Afghan Civilian Assistance Program ACCE Asian Centre for Certification and Education of Addiction Professionals ACE Agricultural Credit Enhancement AD Alternative Development ADB Asian Development Bank ADF Agricultural Development Fund AECOM AECOM International Development Inc. AERCA Afghanistan Electoral Reform and Civic Advocacy Program AFMIS Afghan Financial Management Information System AFN afghani (currency) AFOSI Air Force Office of Special Investigation (U.S.) AGO Attorney General’s Office AHRIMS Afghan Human Resource Information Management System AIAT Army Institutional Advisory Team AIF Afghanistan Infrastructure Fund AIHRC Afghanistan Independent Human Rights Commission AITF Afghanistan Infrastructure Trust Fund ALBA Assistance to Legislative Bodies of Afghanistan ALP Afghan Local Police AML/CFT Anti-Money Laundering/Combating the Financing of Terrorism ANA Afghan National Army ANCOP Afghan National Civil Order of Police ANDSF Afghan National Defense and Security Forces ANP Afghan National Police APFM Afghanistan Public Financial Management program API Afghanistan Parliamentary Institute APPF Afghan Public Protection Force APRP Afghan Peace and Reintegration Plan AQIS al-Qaeda in the Indian Subcontinent AROC Afghanistan Resources Oversight Council ARTF Afghanistan Reconstruction Trust Fund ASFF Afghanistan Security Forces Fund ASI Afghan Security Institutions ATAR Afghanistan Trade and Revenue Project A-TEMP Afghanistan Technical Equipment Maintenance Program ATL Aria Target Logistics Continued on the next page Report to the united states congress I January 30, 2016 199 Appendices Acronym or Abbreviation Definition AUAF American University of Afghanistan AUP Afghan Uniform Police AWDP Afghanistan Workforce Development Program BAF Bagram Airfield BELT Basic Education, Literacy, and Technical-Vocational Education and Training BBG Broadcasting Board of Governors BPHS Basic Package of Health Services CAN Center for Naval Analyses CASA-1000 Central Asia-South Asia Electricity Transmission and Trade Project CCC Central Complaints Commission CCI Community Cohesion Initiative CCWG Counter Corruption Working Group CDC Community Development Council CENTCOM U.S. Central Command CERP Commander’s Emergency Response Program CHAMP Commercial Horticulture and Agricultural Marketing Program CIGIE Council of the Inspectors General on Integrity and Efficiency CMS case-management system CNCE Counter Narcotics Community Engagement CNG compressed natural gas CNPA Counter Narcotics Police of Afghanistan CSSP Corrections System Support Program CSTC-A Combined Security Transition Command-Afghanistan CTA Central Transfer Account DABS Da Afghanistan Breshna Sherkat DEA Drug Enforcement Administration (U.S.) DFID Department for International Development DOD Department of Defense (U.S.) DOD CN Department of Defense Drug Interdiction and Counter-Drug Activities fund (U.S.) DOD IG Department of Defense Office of Inspector General DOJ Department of Justice (U.S.) DVIDS Defense Video & Imagery Distribution System ECC Electoral Complaints Commission EF essential function EFT electronic funds transfer EGRC E-Government Resource Center EMIS Education Management Information System (Afghan) EPHS Essential Package of Hospital Services EQUALS Engineering, Quality Assurance, and Logistical Support EQUIP Education Quality Improvement Project ERW Explosive Remnants of War ESF Economic Support Fund FAIDA Financial Access for Investing in the Development of Afghanistan Continued on the next page 200 Special inspector general I Afghanistan reconstruction Appendices Acronym or Abbreviation Definition FATF Financial Action Task Force FBI Federal Bureau of Investigation (U.S.) FY fiscal year GAGAS Generally Accepted Government Auditing Standards GAO Government Accountability Office (U.S.) GDP gross domestic product GDPDC General Directorate of Prisons and Detention Centers GIROA Government of the Islamic Republic of Afghanistan GLE Governor-Led Eradication GPEI Global Polio Eradication Initiative GPI Good Performer's Initiative HA Yard Humanitarian Aid Yard HEMAYAT Helping Mothers and Children Thrive HMMWV high-mobility, multipurpose wheeled vehicle HOO High Office of Oversight for Anti-Corruption (aka "HOOAC") (Afghan) HSR Health Sector Resiliency Project ICRC International Committee of the Red Cross IDEA-NEW Incentives Driving Economic Alternatives-North, East, and West IDLG Independent Directorate of Local Governance IEC Independent Election Commission (Afghan) IG inspector general IMF International Monetary Fund IMSMA Information Management System for Mine Action IMU independent monitoring unit INCLE International Narcotics Control and Law Enforcement (U.S.) INL Bureau of International Narcotics and Law Enforcement Affairs (U.S.) IPA Independent Public Accountant IRD International Relief and Development Inc. ISAF International Security Assistance Force ISIL Islamic State in Iraq and the Levant ISIL-K Islamic State in Iraq and the Levant-Khorasan ISLA Initiative to Strengthen Local Administrations JRD Juvenile Rehabilitation Directorate JSSP Justice Sector Support Program (State) JTTP Justice Training Transition Program (State) KBR Kabul Bank Receivership KFZ Kandahar Food Zone LLP Lessons Learned Program LMG Leadership, Management, and Governance Project LOTFA Law and Order Trust Fund for Afghanistan MAAR Monthly ANDSF Assessment Report MACCA Mine Action Coordination Centre of Afghanistan MAIL Ministry of Agriculture, Irrigation, and Livestock (Afghan) Continued on the next page Report to the united states congress I January 30, 2016 201 Appendices Acronym or Abbreviation Definition MAPA Mine Action Programme of Afghanistan MCN Ministry of Counter-Narcotics (Afghan) MEC Monitoring and Evaluation Committee (Afghan) MFNDU Marshal Fahim National Defense University MIDAS Mining Investment and Development for Afghan Sustainability MISTI Measuring Impacts of Stabilization Initiatives MMR maternal mortality ratio MOCIT Ministry of Communications and Information Technology (Afghan) MOD Ministry of Defense (Afghan) MOHE Ministry of Higher Education (Afghan) MOE Minister of Education (Afghan) MOF Ministry of Finance (Afghan) MOI Ministry of Interior (Afghan) MOI HQ & IS Ministry of Interior Headquarters and Institutional Support (Afghan) MOMP Ministry of Mines and Petroleum (Afghan) MOPH Ministry of Public Health (Afghan) MORE Ministry of Women's Affairs Organizational Restructuring and Empowerment project MOU Memorandum of Understanding MOWA Ministry of Women's Affairs NATO North Atlantic Treaty Organization NAVC National Afghan Volunteer Center NCO noncommissioned officer NDAP National Drug Action Plan NDP New Development Partnership NDS National Directorate of Security (Afghan) NEPS Northeast Power System NEPS IV Northern Electrical Power System Phase IV NGO nongovernmental organization NIU National Interdiction Unit NKB New Kabul Bank NSOCC-A NATO Special Operations Component Command-Afghanistan NSP National Solidarity Program O&M operations and maintenance OCIE operational clothing and individual equipment OCO overseas contingency operations ODA office of development assistance OIG Office of the Inspector General OPPD Office of Program and Project Development (USAID) OSD Office of the Secretary of Defense (U.S.) OSD-CN Office of the Secretary of Defense-Counter-Narcotics (U.S.) OTA Office of Technical Assistance (U.S. Treasury) PAE PAE Government Services Inc. PCH Partnership Contracts for Health Continued on the next page 202 Special inspector general I Afghanistan reconstruction Appendices Acronym or Abbreviation Definition PD Presidential Decree PM/WRA Bureau of Political-Military Affairs-Office of Weapons Removal and Abatement (U.S.) PMR Project Management Review POAM Plan of Action and Milestones Promote Promoting Gender Equity in National Priority Programs (USAID) PTEC Power Transmission Expansion and Connectivity PTSD post-traumatic stress disorder QCG Quadrilateral Coordination Group RADP Regional Agriculture Development Program RC recurrent cost RNIFC regional narcotics interagency fusion cell RRCC Road and Roof Construction Company RS Resolute Support SAGAL Strengthening Afghan Governance and Alternative Livelihoods SEPS Southeast Power System SERC Special Electoral Reform Commission (Afghan) SGDP Sheberghan Gas Development Program SGGA Sheberghan Gas Generation Activity SHAHAR Strong Hubs for Afghan Hope and Resilience SHCAC Senior High-Level Committee on Anti-Corruption SIGAR Special Inspector General for Afghanistan Reconstruction SIKA Stability in Key Areas SIU Sensitive Investigation Unit SLCCP Senior Leader Counter Corruption Panel SMAF Self-Reliance through Mutual Accountability Framework SMS short-message service or "text message" SMW Special Mission Wing (Afghan) SOM Senior Officials Meeting SRAD Southern Regional Agricultural Development State OIG Department of State Office of the Inspector General TAC Transparency Accountability Committee TAPI Turkmenistan-Afghanistan-Pakistan-India pipeline project TBI traumatic brain injury TFBSO Task Force for Business and Stability Operations in Afghanistan TMAF Tokyo Mutual Accountability Framework TTHS Trainee, Transient, Holdee, and Students TUTAP Turkmenistan-Uzbekistan-Tajikistan-Afghanistan-Pakistan transmission line UN United Nations UNAMA UN Assistance Mission in Afghanistan UNDP UN Development Programme UNHCR UN High Commissioner for Refugees UNICEF UN Children's Fund UNMACA UN Mine Action Centre for Afghanistan Continued on the next page Report to the united states congress I January 30, 2016 203 Appendices Acronym or Abbreviation Definition UNODC UN Office on Drugs and Crime USAAA U.S. Army Audit Agency USACE U.S. Army Corps of Engineers USAID U.S. Agency for International Development USAID OIG USAID Office of the Inspector General USDA U.S. Department of Agriculture USFOR-A U.S. Forces-Afghanistan USIP U.S. Institute of Peace USWDP Afghanistan University Support and Workforce Development Program UXO unexploded ordnance WCS Wildlife Conservation Society WFP World Food Program WIG Promote Women in Government WIFS Weekly Folic Acid Supplementation Project WTO World Trade Organization USAID OIG USAID Office of the Inspector General USDA U.S. Department of Agriculture USFOR-A U.S. Forces-Afghanistan USIP U.S. Institute of Peace USWDP Afghanistan University Support and Workforce Development Program UXO unexploded ordnance VSO Village Stability Operations WAW Women for Afghan Women WIG Promote Women in Government WLD Promote Women's Leadership Development WTO World Trade Organization 204 Special inspector general I Afghanistan reconstruction Endnotes 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Der Spiegel (Germany), “Interview with Afghan President Ashraf Ghani,” http://www.spiegel.de/international/world/spiegelinterview-with-afghan-president-ashraf-ghani-a-1064978.html, 12/2/2015. The Fund for Peace, Fragile States Index 2015, pp. 6, 7, 35. Pub. L. No. 110-181, §1229. United States Institute of Peace, “Reviving Afghanistan’s Economy,” PeaceBrief 195, 10/2015, p. 2. The World Bank Group, “Afghanistan: Emerging from Transition,” presentation to the Senior Officials Meeting, Kabul, 9/4–5/2015, slide 6. United States Institute of Peace, “Reviving Afghanistan’s Economy,” PeaceBrief 195, 10/2015, p. 1. The World Bank, “Afghanistan Overview,” http://www.worldbank.org/en/country/afghanistan/overview, 10/20/2015, accessed 12/22/2015. The World Bank, “Population growth (annual %),” online data base, http://www.worldbank.org/indicator/SP.POP.GROW/countries/AF, accessed 12/22/2015. Stockholm International Peace Research Institute, Afghanistan’s Private Sector: Status and ways forward, 10/2015, p. 8. Iranian economist Hossein Mahdavy elaborated the theory of the rentier state in a much-cited essay on Iran under the Shah, “The Pattern and Problems of Economic Development in Rentier States: The Case of Iran,” in Studies in the Economic History of the Middle East, ed. M.A. Cook (Oxford, 1970), pp. 428, 437, 443. The Asia Foundation, Afghanistan in 2015: A Survey of the Afghan People, 11/10/2015, p. 1. The Asia Foundation, “Looking Ahead in Afghanistan: A Conversation with Political Economist Timor Sharan,” http:// asiafoundation.org/in-asia/2015/11/18/looking-ahead-in-afghanistan-a-conversation-with-political-economist-timor-sharan/, 11/18/2015. International Business Times (UK), “The year of the refugee: Epic journeys of a million migrants who came to the EU in 2015,” 12/23/2015. Quoted in Reuters, “Wave of young Afghan migrants seen hurting economy they leave behind,” www.reuters.com, 12/6/2015. The Asia Foundation, Afghanistan in 2015: A Survey of the Afghan People, 11/10/2015, p. 9. Department of State, Afghanistan Investment Climate Statement 2015, June 2015, p. 17. Ewing Marion Kauffman Foundation, Bactrian Gold: Challenges and Hope for Private-Sector Development in Afghanistan, Kauffman Foundation Research Series: Expeditionary Economics, 2/2011, p. 12. Department of State, Afghanistan Investment Climate Statement 2015, June 2015, p. 3. Department of State, Afghanistan Investment Climate Statement 2015, June 2015, p. 3. Department of State, Afghanistan Investment Climate Statement 2015, June 2015, pp. 3–15. United States Institute of Peace, “Afghan Economic Policy, Institutions, and Society Since 2001,” special report, 10/2015, p. 1. Douglass C. North, “Economic Performance through Time,” Nobel lecture on receiving the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1993, www.nobelprize.org/ nobel_prizes/economic-sciences/laureates/1993/north-lecture. html, 12/9/1993. Report to the united states congress I January 30, 2016 23 The World Bank, “Economy & Growth,” online data resource, http://data.worldbank.org/topic/economy-andgrowth?display=graph, accessed 12/16/2015. 24 United States Institute of Peace, “Reviving Afghanistan’s Economy,” PeaceBrief 195, 10/2015, p. 3. 25 John Weiss (Bradford U., UK), “Industrial Policy in the Twenty-First Century: Challenges for the Future,” in Adam Szirmai et al., eds., Pathways to Industrialization in the Twenty-First Century: New Challenges and Emerging Paradigms (Oxford, 2013), p. 409. 26 USAID, “Infrastructure,” http://www.usaid.gov/afghanistan/infrastructure, 1/4/2016. 27 SIGAR compilation of funding data responses for USAID, AIF, and CERP electrification programs. See section 3 for details. 28 SIGAR, Afghanistan’s Mineral, Oil, and Gas Industries: Unless U.S. Agencies Act Soon to Sustain Investments Made, $488 Million in Funding is at Risk, SIGAR Audit Report 15-55-AR, ii. 29 RAND Corporation, National Defense Research Institute, Task Force for Business Stability Operations: Lessons from Afghanistan, 1/2016, p. 82. 30 Stockholm International Peace Research Institute, Afghanistan’s Private Sector: Status and ways forward, 10/2015, p. 9. 31 SIGAR, Afghanistan’s Mineral, Oil, and Gas Industries: Unless U.S. Agencies Act Soon to Sustain Investments Made, $488 Million in Funding is at Risk, SIGAR Audit Report 15-55-AR, 4/2015, iii. 32 SIGAR, Gereshk Cold and Dry Storage Facility: Quality of Construction Appears To Be Good, but the Facility Has Not Been Used to Date, SIGAR Inspection 14-82-IP, 7/2014, ii. 33 SIGAR, Gorimar Industrial Park: Lack of Electricity and Water Have Left This $7.7 Million U.S.-funded Industrial Park Underutilized by Afghan Businesses, SIGAR Inspection 15-30-IP, 1/2015, pp. 2–3. 34 SIGAR, Stability in Key Areas (SIKA) Program: After 16 Months and $47 Million Spent, USAID Had Not Met Essential Program Objectives, SIGAR Audit Report 13-16-AR, 7/2013, ii. 35 USAID, “Economic Growth,” http://www.usaid.gov/afghanistan/ economic-growth, accessed 1/2/2016. 36 USAID OIG, Audit of USAID/Afghanistan’s Strategy for Monitoring and Evaluating Programs Throughout Afghanistan, Audit Report No. F-306-16-001-P, 12/10/2015, p. 2. 37 USAID OIG, Audit of USAID/Afghanistan’s Strategy for Monitoring and Evaluating Programs Throughout Afghanistan, Audit Report No. F-306-16-001-P, 12/10/2015, pp. 4, 8. 38 Stockholm International Peace Research Institute, Afghanistan’s Private Sector: Status and ways forward, 10/2015, ix. 39 Department of Commerce, Bureau of Economic Analysis, SIGAR calculation from “Table 1.1.5. Gross Domestic Product,” http:// www.bea.gov, iTable, 10/29/2015. 40 Stockholm International Peace Research Institute, Afghanistan’s Private Sector: Status and ways forward, 10/2015, ix. 41 Willemijn Verkoren (Radboud U., Nijmegen, NL) and Bertine Kamphuis (U. of Amsterdam), “State Building in a Rentier State: How Development Policies Fail to Promote Democracy in Afghanistan,” Development and Change 44:3, Special Issue: Forum 2013, 5/2013, abstract. 42 The World Bank, Investment Climate Reforms and Job Creation in Developing Countries: What Do We Know and What Should We Do? Policy Research Working Paper 7025 by Aminur Rahman, 9/2014, p. 2. 205 Endnotes 43 The World Bank, Doing Business 2016: Measuring Regulatory Quality and Efficiency, 10/12/2015, p. 5. 44 The World Bank, Doing Business 2016: Measuring Regulatory Quality and Efficiency, 10/12/2015, p. 183. 45 The World Bank, Doing Business 2016: Measuring Regulatory Quality and Efficiency, 10/12/2015, p. 4. 46 The World Bank, Doing Business 2016: Measuring Regulatory Quality and Efficiency, 10/12/2015, v, 21, 19. 47 Jamal Ibrahim Haidar, The World Bank, “Do Business Regulatory Reforms Impact Economic Growth?” Web posting, http://blogs. worldbank.org/psd/do-business-regulatory-reforms-impact-economic-growth, 5/30/2012. 48 Department for International Development, UK Government, Analysing the impact of corruption on private sector development, 4/2015, p. 23. 49 Paul M. Romer (Stanford U.), “Economic Growth,” The Concise Encyclopedia of Economics, 2008, available at http://www.econlib.org/library/Enc/EconomicGrowth.html, accessed 11/15/2015. 50 Asian Development Bank, Long-Term Projections of Asian GDP and Trade, 2011, v. 51 Eric Hanushek (Stanford U.), “Economic Growth in Developing Countries: The Role of Human Capital,” online at http://hanushek. stanford.edu/sites/default/files/publications/Hanushek%202013%20 EER%2037.pdf, 4/2013, pp. 2, 15. Also published in Economics of Education Review 37 (2013), pp. 204–212. 52 The World Bank Group, “Afghanistan: Emerging from Transition,” presentation to the Senior Officials Meeting, Kabul, 9/4–5/2015, slide 17. 53 UNICEF, Educate All Girls and Boys in South Asia, 8/2015, pp. 6, 8. 54 Tolo News, “Task Team Uncovers Hundreds of Ghost Schools,” www.tolonews.com, 1/2/2015. 55 The World Bank, Investment Climate Reforms and Job Creation in Developing Countries: What Do We Know and What Should We Do? Policy Research Working Paper 7025 by Aminur Rahman, 9/2014, p. 16; Rafael La Porta (Dartmouth) and Andrei Shleifer (Harvard), “Informality and Development,” Journal of Economic Perspectives 28:3 (Summer 2014), pp. 109–110. 56 London Conference on Afghanistan, “Communiqué,” 1/28/2010. 57 USAID/Afghanistan, “Mission Order 220.03,” 3/24/2015. 58 Pub. L. No. 111-32, 6/24/2009. 59 DOD, response to SIGAR vetting, 7/20/2009. 60 Pub. L. No. 112-74, Section 9009, 12/23/2011; Deputy Secretary of Defense, “Afghanistan Resources Oversight Council (AROC) memorandum,” 8/3/2011. 61 See Appendix B of this report. 62 DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016. 63 DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016; DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts September 2015,” 10/19/2015. 64 DOD OIG, Distribution of Funds and the Validity of Obligations for the Management of the Afghanistan Security Forces Fund Phase I, Report No. D-2008-012, 11/5/2007, p. 2. 65 Pub. L. No. 112-74, Section 9009; Deputy Secretary of Defense, Afghanistan Resources Oversight Council (AROC) memorandum, 8/3/2011. 66 DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016. 206 67 DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016. 68 DOD, “Commanders’ Emergency Response Program (CERP),” DOD Financial Management Regulation Vol. 12, Ch. 27, 1/2009, p. 27-3. 69 Pub. L. No. 113-235, 12/16/2014. 70 See Appendix B of this report. 71 DOD, response to SIGAR data call, 1/19/2016. 72 Pub. L. No. 112-74, Section 9009, 12/23/2011; Deputy Secretary of Defense, “Afghanistan Resources Oversight Council (AROC) memorandum,” 8/3/2011; U.S. Senate Committee on Armed Services, press release, “Senate Passes Ike Skelton National Defense Authorization Act for Fiscal Year 2011,” 12/22/2010. 73 Pub. L. No. 112-74, Section 9009, 12/23/2011; Deputy Secretary of Defense, “Afghanistan Resources Oversight Council (AROC) memorandum,” 8/3/2011; U.S. Senate Committee on Armed Services, press release, “Senate Passes Ike Skelton National Defense Authorization Act for Fiscal Year 2011,” 12/22/2010. 74 See Appendix B of this report. 75 DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016; USAID, response to SIGAR data call, 1/11/2016. 76 TFBSO, “About TFBSO,” accessed 10/20/2011; DOD, responses to SIGAR data call, 1/13/2015 and 7/22/2011. 77 DOD, response to SIGAR data call, 1/13/2016. 78 DOD, “Drug Interdiction and Counter-Drug Activities, Defense FY 2009 Supplemental Request,” accessed 4/13/2010. 79 DOD OIG, Independent Auditor’s Report on the DOD FY 2011 Detailed Accounting Report of the Funds Obligated for National Drug Control Program Activities, Report No. DODIG-2012-04, 1/30/2012. 80 DOD, response to SIGAR data call, 12/29/2015. 81 USAID, U.S. Foreign Assistance Reference Guide, 1/2005, p.6. 82 USAID, response to SIGAR data call 1/11/2016; State, response to SIGAR data calls, 1/13/2016, 4/15/2015 and 4/15/2014; DOD, response to SIGAR data call, 10/6/2014. 83 USAID, response to SIGAR data calls, 1/11/2016 and 10/13/2015. 84 State, response to SIGAR data call, 10/13/2009. 85 State, response to SIGAR data calls, 10/13/2015. 86 State, response to SIGAR data calls, 10/13/2015 and 7/14/2015. 87 SIGAR, Quarterly Report to the United States Congress, 7/30/2010, p. 51. 88 The World Bank, “ARTF: Administrator’s Report on Financial Status as of December 21, 2015 (end of 12th month of FY 1394),” p. 5. 89 The World Bank, “ARTF: Administrator’s Report on Financial Status as of December 21, 2015 (end of 12th month of FY 1394),” p. 1. 90 The World Bank, “ARTF: Administrator’s Report on Financial Status as of December 21, 2015 (end of 12th month of FY 1394),” p. 5. 91 The World Bank, “Quarterly Country Update: Afghanistan,” 4/2011, p. 16. 92 The World Bank, “ARTF: Administrator’s Report on Financial Status as of December 21, 2015 (end of 12th month of FY 1394),” p. 7. 93 The World Bank, “Quarterly Country Update: Afghanistan,” 4/2011, p. 16. 94 The World Bank, “ARTF: Administrator’s Report on Financial Status as of December 21, 2015 (end of 12th month of FY 1394),” p. 7. 95 EC, “Afghanistan: State of Play, January 2011,” 3/31/2011, p. 7. 96 UNDP, response to SIGAR data call, 1/19/2016. Special inspector general I Afghanistan reconstruction Endnotes 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 UNDP, “Law and Order Trust Fund for Afghanistan (LOTFA) Support to Payroll Management MOIA and Police Development: Quarter Progress Report July–September 2015,” 11/21/2015, p. 33. UNDP, “Law and Order Trust Fund for Afghanistan [LOTFA] 1 July 2015–December 2016 (Phase VIII Project Document),” 6/29/2015, pp. ii, x, 34. UNDP, “Law and Order Trust Fund for Afghanistan [LOTFA] 1 July 2015–December 2016 (Phase VIII Project Document),” 6/29/2015, pp. x, 45, 54. DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016; See Appendix B of this report. State, “Foreign Terrorist Organization Designation of ISILKhorasan (ISIL-K),” 1/14/2016. State, “Foreign Terrorist Organization Designation of ISILKhorasan (ISIL-K),” 1/14/2016. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. Report to the united states congress I January 30, 2016 117 NATO, “Press conference by NATO Secretary General Jens Stoltenberg following the Resolute Support meeting at the level of Foreign Ministers – Secretary General’s opening remarks,” 12/1/2015. 118 Reuters, “NATO agrees to keep troops in Afghanistan, seeks Army funding,” 12/1/2015; DOD, Report on Progress Toward Security and Stability in Afghanistan, 12/2012, p. 56; USFOR-A, response to SIGAR data call, 12/14/2015. 119 OSD-Policy, response to SIGAR vetting, 1/15/2016. 120 Reuters, “NATO agrees to keep troops in Afghanistan, seeks Army funding,” 12/1/2015. 121 DOD, Enhancing Security and Stability in Afghanistan, p. 28, 12/2015. 122 DOD, OSD-Policy, response to SIGAR vetting, 1/15/2016. 123 DOD, OSD-Policy, response to SIGAR vetting, 1/15/2016. 124 DOD, Enhancing Security and Stability in Afghanistan, p. 28, 12/2015. 125 Newsweek, “U.S. Investigation Calls Kunduz Hospital Strike ‘Tragic Mistake’,” 11/25/2015; OSD-Policy, response to SIGAR vetting, 1/15/2016. 126 New York Times, “Doctors Without Borders Raises Toll in Kunduz Strike to 42,” 12/12/2015. 127 UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. 128 USFOR-A, response to SIGAR data call, 12/4/2015. 129 USFOR-A, response to SIGAR data call, 12/4/2015. 130 New York Times, “British Forces Rush to Help Afghans Hold Off the Taliban in Helmand,” 12/22/15. 131 The Independent, “Helmand governor takes to Facebook to warn Afghan president of Taliban threat,” 12/20/15; Reuters, “U.S. conducts air strikes as fighting rages in Afghan province,” 1/6/2016; Army Times, “DoD identifies Special Forces soldier killed in Afghanistan,” 1/6/2016. 132 CNN, “6 U.S. troops killed in motorcycle bomb attack in Afghanistan, officials say,” 12/21/15; CNN, “6 U.S. troops killed in Afghan attack identified by Air Force,” 12/23/15; Stars and Stripes, “Monday Kabul blast injures US embassy workers,” 1/5/2016. 133 Washington Post, “‘Probably the largest’ al-Qaeda training camp ever destroyed in Afghanistan,” 10/30/15; Tolo News, “Daesh Presence ‘Widespread’ in Nangarhar Province,” 1/8/2016; Tolo News, “15 Daesh Fighters Killed in Nangarhar Drone Strike,” 1/9/2016. 134 USFOR-A, response to SIGAR request for clarification, 1/13/2016. 135 New York Times, “Taliban Fighters Capture Kunduz City as Afghan Forces Retreat,” 9/28/2015; DOD, Enhancing Security and Stability in Afghanistan, 12/25/15. 136 DOD, Enhancing Security and Stability in Afghanistan, 12/25/15. 137 Tolo News, “MPs Summon Security Officials as Taliban Eye Strategic Towns,” 1/9/2016. 138 USA Today, “Top U.S. general may seek more troops for Afghanistan,” 12/29/2015. 139 RS News, “Troop Contributing Nations,” 12/2015; OSD-Policy, response to SIGAR vetting, 1/18/2016. 140 USFOR-A, response to SIGAR data call, 12/4/2015; Associated Press, “US troops killed near Bagram, Taliban insurgency intensifies,” 12/21/2015; RS News, “Resolute Support Casualty Report,” 1/5/2016. 207 Endnotes 141 Associated Press, “US troops killed near Bagram, Taliban insurgency intensifies,” 12/21/2015; RS News, “Resolute Support Casualty Report,” 1/5/2016. 142 Associated Press, “US troops killed near Bagram, Taliban insurgency intensifies,” 12/21/2015. 143 USFOR-A, response to SIGAR data call, 12/4/2015. 144 USFOR-A, response to SIGAR data call, 12/4/2015; OSD-Policy, response to SIGAR vetting, 1/17/2016. 145 USFOR-A, response to SIGAR vetting, 1/12/2016. 146 The White House, “Fact Sheet: Wales Summit – NATO’s Changing Role in Afghanistan,” 9/4/2014; Tolonews.com, “U.S. Forces Increasingly Drawn Back Into Afghanistan’s Battles,” 1/9/2016. 147 Tolo News, “U.S. Forces Increasingly Drawn Back Into Afghanistan’s Battles,” 1/9/2016. 148 CSTC-A, response to SIGAR data call, 12/4/2015. 149 CSTC-A, response to SIGAR data call, 12/4/2015. 150 CSTC-A, response to SIGAR data call, 12/4/2015. 151 CSTC-A, response to SIGAR data call, 12/4/2015. 152 CSTC-A, response to SIGAR data call, 12/4/2015. 153 CSTC-A, response to SIGAR data call, 12/4/2015. 154 CSTC-A, response to SIGAR data call, 12/4/2015; DOD, Enhancing Security and Stability in Afghanistan, p. 17, 12/2015. 155 USFOR-A, response to SIGAR data call, 12/4/2015. 156 USFOR-A, response to SIGAR data call, 12/14/2015; DOD, “Justification for FY 2015 Overseas Contingency Operations (OCO) Afghanistan Security Forces Fund (ASFF),” 6/2014; NBC, “What is PCASS and how does it work,” 4/9/2008. 157 CSTC-A, response to SIGAR data call, 12/4/2015. 158 CSTC-A, response to SIGAR data call, 12/4/2015. 159 USFOR-A, response to SIGAR data call, 12/14/2015. 160 USFOR-A, response to SIGAR data calls, 5/6/2015, 9/11/2015 and 12/14/2015; SIGAR, ANDSF analysis, 1/2016. 161 USFOR-A, response to SIGAR data calls, 5/6/2015, 9/11/2015 and 12/14/2015; SIGAR, ANDSF analysis, 1/2016. 162 Associated Press, “Afghan forces struggle as ranks thinned by ‘ghost’ soldiers,” 1/10/2016. 163 Associated Press, “Afghan forces struggle as ranks thinned by ‘ghost’ soldiers,” 1/10/2016. 164 USFOR-A, response to SIGAR data calls, 3/31/2014, 9/11/2015 and 12/14/2015. 165 USFOR-A, response to SIGAR data call, 12/14/2015. 166 OSD-Policy, response to SIGAR data call, 12/30/2015; DOD, “Report on Progress Toward Security and Stability in Afghanistan,” 12/2012, p. 56; USFOR-A, response to SIGAR data call, 12/14/2015. 167 USFOR-A, response to SIGAR data call, 12/4/2015. 168 USFOR-A, response to SIGAR data call, 12/4/2015. 169 USFOR-A, response to SIGAR data call, 12/4/2015. 170 UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. 171 DOD, Enhancing Security and Stability in Afghanistan, p. 17, 12/2015. 172 UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. 173 OSD-Policy, response to SIGAR vetting, 1/15/2016. 174 DOD, Enhancing Security and Stability in Afghanistan, p. 28, 12/2015; OSD-Policy, response to SIGAR vetting, 1/17/2016. 175 USFOR-A, response to SIGAR data call, 12/4/2015. 208 176 USFOR-A, response to SIGAR data call, 12/4/2015. 177 USFOR-A, response to SIGAR data call, 12/4/2015. 178 DOD, Enhancing Security and Stability in Afghanistan, p. 70, 12/2015. 179 DOD, Enhancing Security and Stability in Afghanistan, p. 68, 12/2015. 180 USFOR-A, response to SIGAR data call, 12/4/2015. 181 USFOR-A, response to SIGAR data call, 12/4/2015. 182 USFOR-A, response to SIGAR data call, 12/4/2015; USFOR-A, response to SIGAR vetting, 1/13/2016. 183 USFOR-A, response to SIGAR vetting, 1/13/2016; OSD-Policy, response to SIGAR vetting, 1/13/2016. 184 USFOR-A, response to SIGAR data calls, 6/6/2015 and 12/4/2015. 185 USFOR-A, response to SIGAR data call, 12/4/2015. 186 USFOR-A, response to SIGAR data call, 12/4/2015. 187 USFOR-A, response to SIGAR data call, 12/28/2014. 188 USFOR-A, response to SIGAR data call, 12/4/2015. 189 USFOR-A, response to SIGAR data call, 12/4/2015. 190 USFOR-A, response to SIGAR data calls, 9/4/2015 and 12/4/2015. 191 USFOR-A, response to SIGAR data calls, 9/4/2015 and 12/4/2015. 192 USFOR-A, response to SIGAR data calls, 9/4/2015 and 12/4/2015; SIGAR, ANDSF analysis, 1/2016. 193 USFOR-A, response to SIGAR data calls, 3/11/2015, 6/6/2015, 9/4/2015, and 12/4/2015. 194 USFOR-A, response to SIGAR data calls, 9/4/2015 and 12/4/2015. 195 USFOR-A, response to SIGAR data calls, 3/11/2015, 6/6/2015, 9/4/2015, and 12/4/2015. 196 USFOR-A, response to SIGAR data calls, 3/11/2015, 6/6/2015, 9/4/2015, and 12/4/2015. 197 UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015. 198 Reuters, “Afghan opposition group pressures Ghani on security crisis,” 12/28/2015. 199 CSTC-A, response to SIGAR data call, 12/4/2015. 200 CSTC-A, response to SIGAR data call, 12/4/2015. 201 USFOR-A, response to SIGAR data call, 12/14/2015. 202 USFOR-A, response to SIGAR data call, 9/10/2015. 203 OSD-P, response to SIGAR vetting, 10/10/2015. 204 USIP, Special Report 322, Police Transition in Afghanistan, 2/2013; NSOCC-A, response to SIGAR data call, 11/27/2015. 205 NSOCC-A, response to SIGAR data call, 9/10/2015. 206 NSOCC-A, response to SIGAR data call, 11/27/2015. 207 NSOCC-A, response to SIGAR data call, 11/27/2015. 208 NSOCC-A, response to SIGAR data call, 11/27/2015. 209 NSOCC-A, response to SIGAR data call, 11/27/2015. 210 NSOCC-A, response to SIGAR data call, 11/27/2015. 211 CSTC-A, response to SIGAR data call, 12/4/2015. 212 NSOCC-A, response to SIGAR data call, 11/27/2015. 213 NSOCC-A, response to SIGAR data call, 11/27/2015. 214 NSOCC-A, response to SIGAR data call, 11/27/2015. 215 NSOCC-A, response to SIGAR data call, 11/27/2015. 216 NSOCC-A, response to SIGAR data call, 11/27/2015. 217 NSOCC-A, response to SIGAR data call, 11/27/2015. 218 DOD, Enhancing Security and Stability in Afghanistan, p. 73, 12/2015. 219 USFOR-A, response to SIGAR data call, 12/14/2015. 220 CSTC-A, response to SIGAR data call, 2/6/2015. Special inspector general I Afghanistan reconstruction Endnotes 221 USFOR-A, response to SIGAR data call, 12/14/2015; OSD-Policy, response to SIGAR vetting, 1/17/2016. 222 DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016. 223 USFOR-A, response to SIGAR data call, 12/14/2015. 224 USFOR-A, response to SIGAR data call, 9/11/2015. 225 USFOR-A, response to SIGAR data calls, 9/11/2015 and 12/14/2015. 226 USFOR-A, response to SIGAR data call, 12/14/2015; SIGAR, ANDSF analysis, 1/2016. 227 USFOR-A, response to SIGAR data calls, 5/6/2015, 9/11/2015, and 12/14/2015. 228 USFOR-A, response to SIGAR data call, 12/14/2015. 229 USFOR-A, response to SIGAR data call, 12/14/2015. 230 DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016. 231 CSTC-A, response to SIGAR data call, 12/4/2015; OSD-Policy, response to SIGAR vetting, 1/17/2016. 232 CSTC-A, response to SIGAR data call, 12/4/2015. S002-D02 233 CSTC-A, response to SIGAR data call, 12/4/2015. 234 CSTC-A, response to SIGAR data call, 12/4/2015. 235 CSTC-A, response to SIGAR data call, 12/4/2015. 236 CSTC-A, response to SIGAR data call, 12/4/2015. 237 CSTC-A, response to SIGAR data calls, 9/4/2015 and 12/4/2015; SIGAR, ANDSF analysis, 1/2016. 238 CSTC-A, response to SIGAR data call, 12/4/2015. 239 CSTC-A, response to SIGAR data call, 12/4/2015. 240 CSTC-A, “MOD FY 1394 Financial Commitment Letter,” 11/26/2014. 241 USFOR-A, response to SIGAR data call, 12/14/2015. 242 USFOR-A, response to SIGAR request for clarification, 12/7/2015; USFOR-A, response to SIGAR vetting, 1/13/2016. 243 USFOR-A, response to SIGAR data call, 12/14/2015. 244 DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016. 245 CSTC-A, response to SIGAR data calls, 9/4/2015, 12/31/2015, and 1/13/2016. 246 CSTC-A, response to SIGAR data calls, 9/4/2015 and 1/13/2016. 247 OUSD-C, response to SIGAR data call, 1/4/2016; CSTC-A, response to SIGAR data call, 9/4/2015; OSD-Policy, response to SIGAR vetting, 1/15/2016; SIGAR, ANDSF analysis, 1/2016. 248 OSD-Policy, response to SIGAR data call, 12/30/2015. 249 OSD-Policy, response to SIGAR data call, 12/30/2015; OSD-Policy, response to SIGAR vetting, 1/15/2016. 250 CSTC-A, response to SIGAR data call, 12/4/2015. 251 DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016. 252 CSTC-A, response to SIGAR data call, 12/4/2015. 253 CSTC-A, response to SIGAR data call, 12/4/2015. 254 CSTC-A, response to SIGAR data call, 12/4/2015. 255 RS News, “Afghan Ministry of Defense celebrates new headquarters building,” 11/25/2015. 256 Tolo News, “Ghani and Abdullah officially open new MOD building,” 12/28/2015. 257 CSTC-A, response to SIGAR data call, 12/4/2015. 258 CSTC-A, response to SIGAR data call, 12/4/2015. 259 CSTC-A, response to SIGAR data call, 12/4/2015. 260 CSTC-A, MOD FY 1394 Financial Commitment Letter, 12/15/2014. 261 CSTC-A, response to SIGAR data call, 12/4/2015. 262 DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016. Report to the united states congress I January 30, 2016 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 CSTC-A, response to SIGAR data call, 12/4/2015. USFOR-A, response to SIGAR data call, 12/14/2015. USFOR-A, response to SIGAR data call, 12/14/2015. USFOR-A, response to SIGAR data call, 12/14/2015. CSTC-A, response to SIGAR data call, 12/4/2015. CSTC-A, response to SIGAR data calls, 9/24/2015 and 12/4/2015. DOD, “Budget FY 2016, Justification for FY 2016 OCO ASFF,” 2/2015, pp. 14, 28, 31, and 36. USFOR-A, response to SIGAR data call, 12/4/2015; OSD-Policy, response to SIGAR vetting, 1/15/2016. OSD-Policy, response to SIGAR vetting, 1/15/2016. USFOR-A, response to SIGAR data call, 12/4/2015; OSD-Policy, response to SIGAR vetting, 1/17/2016. USFOR-A, response to SIGAR data call, 12/4/2015; Militaryfactory.com, “Beechcraft/Raytheon T-6 Texan II TandemSeat Basic Trainer (2000),” 10/27/2014. Air Force Times, “First Afghan A-29 pilots, maintainers finish training,” 12/22/2015. USA Today, “1 of 2 Afghan airman missing from Ga. Base located,” 1/13/2016. USFOR-A, response to SIGAR data call, 12/4/2015. New York Times, “U.S. Is Struggling in Its Effort to Build an Afghan Air Force,” 9/26/2015. OSD-Policy, response to SIGAR vetting, 1/15/2016. USFOR-A, response to SIGAR vetting, 1/13/2016. USFOR-A, response to SIGAR data call, 12/4/2015. Tolo News, “India Delivers Attack Helicopters During Modi’s Visit,” 12/25/2015. OSD-Policy, response to SIGAR vetting, 1/15/2016. USFOR-A, response to SIGAR data call, 12/4/2015. CSTC-A, response to SIGAR data call, 12/4/2015. CSTC-A, response to SIGAR data call, 12/4/2015; “Pilatus Aircraft, PC-12 info sheet,” 4/8/2015. OSD-Policy, response to SIGAR vetting, 1/15/2016. NSOCC-A, response to SIGAR data call, 12/4/2015. DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016. USFOR-A, response to SIGAR data call, 12/14/2015. USFOR-A, response to SIGAR data calls, 9/11/2015 and 12/14/2015; DOD, Report on Progress Toward Security and Stability in Afghanistan, p. 56, 12/2012. USFOR-A, response to SIGAR data call, 12/14/2015. USFOR-A, response to SIGAR data call, 12/14/2015. USFOR-A, response to SIGAR data call, 12/14/2015. UN, Office of the Special Representative of the Secretary-General for Children and Armed Conflict, “Afghanistan,” https://childrenandarmedconflict.un.org/countries/%20afghanistan/, accessed 1/19/2016. Government of Afghanistan, Ministry of Interior, General Department of Police Legal Affairs, “ANP Inherent Law,” 10/2010. CSTC-A, response to SIGAR data call, 12/22/2015. DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016. CSTC-A, response to SIGAR data call, 12/4/2015. CSTC-A, response to SIGAR data call, 12/4/2015. CSTC-A, response to SIGAR data call, 12/4/2015. CSTC-A, “MOI FY 1394 Financial Commitment Letter,” 11/26/2014. CSTC-A, “MOI FY 1394 Financial Commitment Letter,” 11/26/2014. USFOR-A, response to SIGAR data call, 12/14/2015. 209 Endnotes 304 USFOR-A, response to SIGAR request for clarification, 12/7/2015; USFOR-A, response to SIGAR vetting, 1/13/2016. 305 USFOR-A, response to SIGAR data call, 12/14/2015. 306 DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016. 307 CSTC-A, response to SIGAR data calls, 9/4/2015 and 12/31/2015. 308 CSTC-A, response to SIGAR data calls, 9/4/2015 and 12/31/2015. 309 CSTC-A, response to SIGAR data calls, 9/4/2015 and 12/31/2015. 310 OSD-Policy, response to SIGAR vetting, 1/17/2016. 311 OSD-Policy, response to SIGAR vetting, 1/15/2016. 312 CSTC-A, response to SIGAR data call, 12/4/2015; USFOR-A, response to SIGAR vetting, 1/13/2016. 313 OUSD-C, response to SIGAR data call, 1/4/2016; CSTC-A, response to SIGAR data call, 9/4/2015; OSD-P, response to SIGAR data call, 12/30/2014; SIGAR, ANDSF analysis, 1/2016. 314 DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016. 315 CSTC-A, response to SIGAR data call, 12/4/2015. 316 CSTC-A, response to SIGAR data call, 12/4/2015. 317 CSTC-A, response to SIGAR data call, 12/4/2015; Pajhwok.com, “President inaugurates Ministry of Interior,” 12/19/2015. 318 CSTC-A, response to SIGAR data call, 12/4/2015. 319 CSTC-A, response to SIGAR data call, 12/4/2015. 320 CSTC-A, response to SIGAR data call, 12/4/2015. 321 DFAS, “AR(M) 1002 Appropriation Status by FY Program and Subaccounts December 2015,” 1/16/2016. 322 CSTC-A, response to SIGAR data call, 12/4/2015. 323 CSTC-A, response to SIGAR data call, 12/4/2015. 324 USFOR-A, response to SIGAR data calls, 9/3/2015 and 12/4/2015. 325 USFOR-A, response to SIGAR data calls, 9/3/2015 and 12/4/2015; SIGAR, ANDSF analysis, 1/2016. 326 USFOR-A, response to SIGAR data call, 12/4/2015. 327 USFOR-A, response to SIGAR data calls, 9/3/2015 and 12/4/2015; SIGAR, ANDSF analysis, 1/2016. 328 USFOR-A, response to SIGAR data call, 12/4/2015; OSD-Policy, response to SIGAR vetting, 1/18/2016. 329 USFOR-A, response to SIGAR data call, 12/4/2015. 330 USFOR-A, response to SIGAR data calls, 9/3/2015 and 12/4/2015. 331 CSTC-A, response to SIGAR data call, 12/4/2015; SIGAR, ANDSF analysis, 1/2016. 332 CSTC-A, response to SIGAR data call, 12/4/2015; SIGAR, ANDSF analysis, 1/2016. 333 CSTC-A, response to SIGAR data call, 12/4/2015. 334 CSTC-A, response to SIGAR data call, 12/4/2015. 335 CSTC-A, response to SIGAR data call, 12/4/2015; DVIDS, “News: Medical facility enables Afghans to help Afghans,” 4/28/2011; USFOR-A, response to SIGAR vetting, 1/12/2016. 336 State, PM/WRA, response to SIGAR data call, 12/29/2015. 337 State, PM/WRA, response to SIGAR data call, 12/29/2015. 338 State, PM/WRA, response to SIGAR data call, 12/29/2015. 339 USAID, response to SIGAR data call, 12/28/2015; USAID, Quarterly Pipeline Analysis Report as of 12/31/2015, 1/11/2016. 340 See Appendix B of this report; White House, FY 2015 Budget and Performance Summary, Companion to the National Drug Control Strategy, 7/2014, p. 255; DOJ, Drug Enforcement Administration FY 2016 Performance Budget Congressional Submission, pp. 37–38. 341 State, response to SIGAR data call, 12/23/2015. 210 342 UNODC, Afghanistan Opium Survey 2015: Cultivation and Production, 12/2015, p. 6, 7; Jelena Bjelica, AAN, One Year’s Result is Not a Trend: the 2015 opium cultivation decrease, p. 5, 10/2015; David Mansfield, Alcis, Where have all the flowers gone? The real reasons for the drop in the poppy crop in Afghanistan in 2015, 10/20/2015, pp. 1–2. 343 State, INL, response to SIGAR data call, 12/23/2015; UNODC, “Partners meet to discuss action plan against illicit drugs in Afghanistan,” 12/14/2015; UNODC, response to information request, 1/20/2016; State, INL, response to SIGAR vetting, 1/14/2016. 344 State, INL, response to SIGAR data call, 12/23/2015; INL, International Narcotics Control Strategy Report, Volume I: Drug and Chemical Control, 3/2015, p. 96. 345 State, INL, response to SIGAR data call, 12/23/2015; State, INL, response to SIGAR vetting, 1/14/2016. 346 State, INL, response to SIGAR data call, 12/23/2015. 347 Jelena Bjelica, AAN, Afghanistan Breaking Bad: Crystal meth, a new drug on the market, 12/7/2015, pp. 1–4; State, INL, response to SIGAR vetting, 1/21/2016. 348 State, INL, International Narcotics Control Strategy Report, Volume I: Drug and Chemical Control, 3/2015, p. 96; State, INL, response to SIGAR data call, 12/23/2015; State, INL, response to SIGAR vetting, 1/14/2016. 349 State, INL, response to SIGAR data call, 12/23/2015. 350 State, INL, response to SIGAR data call, 12/23/2015; UNODC, Synthesis Report: The Impact and Effectiveness of Various Counter Narcotics Media Campaigns, 10/2008, p. 26. 351 UNODC, Afghanistan Opium Survey 2015: Cultivation and Production, 12/2015, p. 25. 352 UNODC, Afghanistan Opium Survey 2015: Cultivation and Production, 12/2015, p. 25. 353 State, INL, response to SIGAR data call, 9/24/2015 and 12/23/2015. 354 State, INL, response to SIGAR data call, 12/23/2015; State, INL, response to SIGAR vetting, 7/10/2015 and 10/14/2014. 355 State, INL, response to SIGAR data call, 12/23/2015; State, INL, response to SIGAR vetting, 1/14/2016. 356 State, INL, response to SIGAR data call, 12/23/2015. 357 State, INL, response to SIGAR vetting, 1/14/2016. 358 State, INL, response to SIGAR data call, 12/23/2015. 359 GMG Management Consulting, Public Financial Management Risk Assessment of the Ministry of Counter Narcotics of the Government of the Islamic Republic of Afghanistan, 4/2015, pp. 8, 28; State, INL, response to SIGAR data call, 12/23/2015. 360 White House, FY 2015 Budget and Performance Summary, Companion to the National Drug Control Strategy, 7/2014, pp. 248, 255; State, INL, response to SIGAR data call, 12/23/2015. 361 State, INL, response to SIGAR data call, 12/23/2015. 362 USAID, Kandahar Food Zone Program Monthly Report, September 2015, 2015, p. 1; USAID, response to SIGAR data call, 12/28/2015. 363 USAID, Kandahar Food Zone Program Monthly Report, September 2015, 9/12/2015, pp. 1–2; USAID, Kandahar Food Zone Program Monthly Report, July 2015, 7/26/2015, pp. 1–2; USAID, Quarterly Pipeline Analysis Report as of 12/31/2015. 364 USAID, response to SIGAR vetting, 1/14/2016, 1/12/2015 and 4/12/2015. 365 USAID, Regional Agricultural Development Program-North FY2016 October Monthly Report, 11/30/2015, pp. 4–5, 9. 366 USAID, response to SIGAR vetting, 1/14/2016. Special inspector general I Afghanistan reconstruction Endnotes 367 USAID, Regional Agricultural Development Program-South Year Two Annual Report: October 2014–October 2015, 11/6/2015, pp. 7–8; USAID, response to SIGAR vetting, 7/12/2015 and 1/14/2016. 368 USAID, Regional Agricultural Development Program-South Year Two Annual Report: October 2014–October 2015, 11/6/2015, pp. 8–9; USAID, Regional Agricultural Development Program-South Monthly Report: October 2015, 11/15/2015, p. 6. 369 SIGAR 15-73 Financial Audit, USAID’s Southern Regional Agricultural Development Program: Audit of Costs Incurred by International Relief and Development, Inc., 7/2015, p. 2; USAID Website, “Southern Region Agricultural Development Project (SDRAP), https://www.usaid.gov/node/51056, accessed 1/10/2016. 370 USAID, response to SIGAR data call, 12/28/2015; USAID, response to SIGAR vetting, 4/12/2015. 371 USAID, response to SIGAR data call, 12/28/2015. 372 UAID, Annual Report Regional Agricultural Development Program-West October 2014–September 2015, 11/17/2015, pp. 7–9. 373 USAID, Quarterly Pipeline Analysis Report as of 12/31/2015, 1/11/2016. 374 USAID, Commercial Horticulture and Agricultural Marketing Program (CHAMP) October 2015 Monthly Report, p. 3, 11/30/2015; USAID, Commercial Horticulture and Agricultural Marketing Program (CHAMP) Quarterly Report July–September 2015, p. 1. 375 USAID, Commercial Horticulture and Agricultural Marketing Program (CHAMP) October 2015 Monthly Report, pp. 3, 9, 11/30/2015. 376 USAID, Commercial Horticulture and Agricultural Marketing Program (CHAMP) October 2015 Monthly Report, p. 4, 11/30/2015. 377 USAID, Commercial Horticulture and Agricultural Marketing Program (CHAMP) Quarterly Report July–September 2015, p. 5. 378 USAID, Commercial Horticulture and Agricultural Marketing Program (CHAMP) Quarterly Report July–September 2015, p. 5. 379 USAID, Quarterly Pipeline Analysis Report as of 12/31/2015, 1/11/2016. 380 DOD, Enhancing Security and Stability in Afghanistan, 12/2015, p. 76; INL, response to SIGAR data call, 12/23/2015. 381 DOD, response to SIGAR data call, 12/29/2015; DOD, response to SIGAR vetting, 7/8/2015. 382 DOD, response to SIGAR data call, 12/29/2015; DOD, response to SIGAR vetting, 7/8/2015. 383 DOD, response to SIGAR data call, 12/29/2015; DOD, Enhancing Security and Stability in Afghanistan, 12/2015, pp. 71, 72, 74, 76; DOD, response to SIGAR vetting, 1/14/2016; SIGAR, Quarterly Report to the United States Congress, 7/30/2015, p. 132. 384 DOD, response to SIGAR data call, 12/29/2015. 385 State, INL, response to SIGAR data call, 12/23/2015; State, INL, response to SIGAR vetting, 1/14/2016. 386 State, INL, response to SIGAR data call, 12/23/2015; State, INL, response to SIGAR vetting, 1/14/2016; OSD-P, response to SIGAR vetting, 1/17/2016. 387 New York Times, “Afghan Jobs Program Aims to Stem Exodus of Young,” 11/14/2015; Government of the Islamic Republic of Afghanistan, Jobs for Peace: A Proposal for an Economic Smoothing Program for Afghanistan Draft 2, 11/2015, p. 1, 4–6. 388 U.S. Embassy Kabul, “The United States Government Provides $50 million for Immediate Job Creation,” 12/20/2015. 389 Los Angeles Times, “Four nations, including U.S., try to jump-start peace talks in Afghanistan,” 1/11/2016; State, “Joint Press Release Report to the united states congress I January 30, 2016 of the Quadrilateral Coordination Group on Afghan Peace and Reconciliation,” 1/11/2016. 390 The Asia Foundation, A Survey of the Afghan People: Afghanistan in 2015, 12/2015, pp. 5–6. 391 The Asia Foundation, A Survey of the Afghan People: Afghanistan in 2015, 12/2015, p. 10. 392 Tolo News, “IEC Announces Election Date Amid Controversy Over Reforms,” 1/19/2016. 393 Ministry of Finance, “Second Senior Officials Meeting Co-Chairs’ Statement,” 9/8/2015. 394 Government of Afghanistan, Self-Reliance through Mutual Accountability Framework (SMAF), 9/5/2015, pp. 2–7. 395 Government of Afghanistan, Self-Reliance through Mutual Accountability Framework (SMAF), 9/5/2015, pp. 7–11. 396 USAID, OPPD, response to SIGAR data call, 12/28/2015. 397 Ministry of Finance, “Second Senior Officials Meeting Co-Chairs’ Statement,” 9/8/2015. 398 USAID, OPPD, response to SIGAR data call, 9/23/2015. 399 State, SCA, response to SIGAR data call, 12/29/2015. 400 Tolo News, “Wolesi Jirga Rejects President’s Decree On Electoral Law,” 12/26/2015; Tolo News, “Selection Committee Activities Illegal: Nuristani,” 1/6/2016; Tolo News, “CEO Renews Call for Electoral Reforms After MPs Reject Decree,” 1/7/2016. 401 Tolo News, “CEO Renews Call for Electoral Reforms After MPs Reject Decree,” 1/7/2016. 402 SIGAR, Quarterly Report to the United States Congress, 1/30/2015, pp. 122–123; State, SRAP, response to SIGAR vetting, 7/15/2015. 403 UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 6/10/2015, p. 15. 404 Afghanistan Analysts Network, “The ‘government of national unity’ deal” (full text), 9/21/2014. 405 USAID, OPPD, response to SIGAR vetting 10/13/2014. 406 Government of Afghanistan, “Communiqué: Conference Outcomes, Contributions and Participants,” 1/28/2010, p. 5; “The Tokyo Declaration: Partnership for Self-Reliance in Afghanistan from Transition to Transformation,” 7/8/2012; USAID, OPPD, response to SIGAR vetting, 10/13/2014; The London Conference on Afghanistan, “Afghanistan and International Community: Commitments to Reforms and Renewed Partnership: Communiqué,” 12/4/2014; Government of Afghanistan, Self-Reliance through Mutual Accountability Framework (SMAF), 9/5/2015, p. 6. 407 USAID, response to SIGAR data call, 1/14/2016. 408 State, “Fact Sheet: Strengthening the Strategic Partnership of the United States and Afghanistan,” 3/24/2015. 409 Pub. L. No. 114-113. 410 DOD, OSD-P, response to SIGAR vetting, 1/17/2016. 411 NATO, “Press conference by NATO Secretary General Jens Stoltenberg following the Resolute Support meeting at the level of Foreign Ministers—Secretary General’s opening remarks,” 12/1/2015. 412 UNDP, response to SIGAR data call, 1/19/2016. 413 DOD, Combined Security Transition Command-Afghanistan’s (CSTC-A) Commitment to Ministry of Interior (MoI) Fiscal Year (FY) 1394 Budget, 11/26/2014, p. 2; Combined Security Transition Command-Afghanistan, 1395 Bilateral Commitment Letter, 12/28/2015, p. i. 414 USAID, OPPD, response to SIGAR data call, 12/30/2013. 211 Endnotes 415 USAID, OPPD, response to SIGAR data call, 6/30/2014. 416 USAID, “Afghanistan Reconstruction Trust Fund (ARTF),” 8/26/2013. 417 USAID, “U.S. government contributed $105 million to Asian Development Bank Infrastructure Fund for Afghanistan,” 3/18/2014. 418 USAID, OPPD, response to SIGAR data call, 12/30/2013. 419 SIGAR, Quarterly Report to the United States Congress, 10/30/2015, p. 137. 420 USAID, OPPD, response to SIGAR data call, 9/23/2015. 421 The Government of the United States of America, Memorandum of Understanding for the “New Development Partnership” between the Government of the Islamic Republic of Afghanistan and the Government of the United States of America, 8/3/2015, pp. 3–5; USAID, OPPD, response to SIGAR vetting, 10/12/2015. 422 USAID, “New Development Partnership (NDP) Verification Implementation Letter 03: Payment of NDP Incentive Funds in pursuant to the Achievement of NDP Results six b (6b), seven (7) eight a (8a), nine (9) and ten (10) from the NDP Framework dated July 25, 2015,” 12/19/2015, pp. 1–4. 423 USAID, OPPD, response to SIGAR data call, 9/23/2015; P. Michael McKinley, “Letter to His Excellency Mr. Mustafa Mastoor, Acting Minister of Finance, Islamic Republic of Afghanistan, Kabul,” 12/14/2014; Dr. Mohammad Mustafa Mastoor, “Request for Assistance to Address the Fiscal Situation,” 12/15/2015; State, SCA, response to SIGAR data call, 12/29/2015. 424 State, SCA, response to SIGAR data call, 10/7/2015. 425 CSTC-A, response to SIGAR data call, 3/23/2015. 426 CSTC-A, response to SIGAR data calls, 4/4/2014 and 7/1/2014. 427 CSTC-A, response to SIGAR data call, 4/4/2014. 428 CSTC-A, response to SIGAR data call, 3/23/2015. 429 SIGAR, Quarterly Report to the United States Congress, 7/30/2015, p. 3. 430 CSTC-A, response to SIGAR data call, 12/31/2015. 431 CSTC-A, response to SIGAR data call, 12/31/2015. 432 CSTC-A, response to SIGAR data call, 12/31/2015. 433 Combined Security Transition Command-Afghanistan, 1395 Bilateral Commitment Letter, 12/28/2015, pp. 9, 31, 50, 55, 63. 434 CSTC-A, CJ8, Financial Management Oversight (FMO) Division, Monthly Report: End-of-Month September 2015, 10/20/2015, p. 5. 435 CSTC-A, response to SIGAR data call, 9/25/2015 and 12/31/2015. 436 USAID, OPPD, response to SIGAR vetting, 4/12/2015. 437 Management Sciences for Health, “Leadership, Management, and Governance Project in Afghanistan,” 7/15/2013; USAID, OSSD, response to SIGAR vetting, 4/14/2014. 438 USAID, “Cooperative Agreement No. AID-306-A-13-00001, Ministry of Women’s Affairs Organizational Restructuring and Empowerment (MORE),” 12/20/2012, pp. 29–30. 439 USAID, OPPD, response to SIGAR data call, 12/28/2015. 440 USAID, ODG, response to SIGAR data call, 9/23/2015; State, SRAP, response to SIGAR data call, 6/25/2015; Government of Afghanistan Constitution, art. 83, 1/26/2004. 441 New York Times, “Afghan Panel Sets Election Date, Drawing Government Criticism,” 1/18/2016. 442 State, SCA, response to SIGAR data call, 12/29/2015; Tolo News, “Parliament Rejects Ghani’s Decree on Caretaker Law,” 11/14/2015. 443 Tolo News, “Parliament Rejects Draft Budget for 2016,” 12/21/2015; Tolo News, “MPs Approve New Fiscal Budget,” 1/18/2016. 444 USAID, ODG, response to SIGAR data call, 12/28/2015. 212 445 USAID, “Contract No. AID-OAA-I-12-00003/AID-306-TO-13-00004,” 3/28/2013, p. 9; USAID, ODG, response to SIGAR vetting, 1/14/2016. 446 USAID, ODG, response to SIGAR data call, 9/23/2015 and 12/28/2015. 447 Checchi and Company Consulting Inc., Mid-Term Evaluation (March 2013–June 2015) Assistance to Legislative Bodies of Afghanistan (ALBA), 6/2015, p. 2. 448 USAID, ODG, response to SIGAR data call, 12/28/2015. 449 USAID, OPPD, response to SIGAR vetting, 7/14/2014; USAID, OPPD, response to SIGAR vetting, 10/13/2014. 450 USAID, “Measuring Impacts of Stabilization Initiatives (MISTI),” 10/25/2013; USAID, response to SIGAR data call, 1/11/2016. 451 Management Systems International, MISTI Stabilization Trends and Impact Evaluation Survey Analytical Report, Wave 5: Sep 28 – Nov 3, 2014, 4/28/2015, pp. 1, 3. 452 Management Systems International, MISTI Stabilization Trends and Impact Evaluation Survey Analytical Report, Wave 5: Sep 28 – Nov 3, 2014, 4/28/2015, pp. 6–7, 323. 453 USAID, ODG, response to SIGAR data call, 9/23/2015. 454 Donald “Larry” Sampler, “To the Editor: U.S.A.I.D. Afghan Programs,” New York Times, 12/29/2015. 455 SIGAR, Quarterly Report to the United States Congress, 10/30/2014, p. 173; U.S. Mission Afghanistan, U.S. Foreign Assistance for Afghanistan Post Performance Management Plan-2011–2015, 10/2010, p. VII-3. 456 USAID, ODG, response to SIGAR data call, 12/28/2015. 457 President Barack Obama, “Statement by the President on Afghanistan,” 10/15/2015. 458 Management Systems International, MISTI Stabilization Trends and Impact Evaluation Survey Analytical Report, Wave 5: Sep 28 – Nov 3, 2014, 4/28/2015, pp. 3, 6–7, 9, 13. 459 Department of State, Afghanistan and Pakistan Regional Stabilization Strategy, 2/2010, p. i; US Mission Afghanistan, U.S. Foreign Assistance for Afghanistan Post Performance Management Plan-2011-2015, 10/2010, pp. 2–4. 460 U.S. Mission Afghanistan, U.S. Foreign Assistance for Afghanistan Post Performance Management Plan-2011-2015, 10/2010, pp. Annex I-2, Annex II-3; Annex III-3; Annex V-3–4. 461 U.S. Mission Afghanistan, U.S. Foreign Assistance for Afghanistan Post Performance Management Plan-2011–2015, 10/2010, p. 9. 462 D3 and ACSOR-Surveys, Taliban and Da’esh: A Growing Challenge to Afghan Security, 11/10/2015, p. 12. 463 USAID, ODG, response to SIGAR data call, 9/23/2015; USAID, OPPD, response to SIGAR data call, 9/23/2015; USAID, response to SIGAR data call, 12/28/2015. 464 Management Systems International, MISTI Stabilization Trends and Impact Evaluation Survey Analytical Report, Wave 5: Sep 28 – Nov 3, 2014, 4/28/2015, pp. 3, 5, 26, 338, 353. 465 Management Systems International, MISTI Stabilization Trends and Impact Evaluation Survey Analytical Report, Wave 5: Sep 28 – Nov 3, 2014, 4/28/2015, pp. 3, 5, 338, 353. 466 Management Systems International, MISTI Stabilization Trends and Impact Evaluation Survey Analytical Report, Wave 5: Sep 28 – Nov 3, 2014, 4/28/2015, p. 352. 467 Management Systems International, MISTI Stabilization Trends and Impact Evaluation Survey Analytical Report, Wave 5: Sep 28 – Nov 3, 2014, 4/28/2015, pp. 3, 5, 338. Special inspector general I Afghanistan reconstruction Endnotes 468 Management Systems International, MISTI Stabilization Trends and Impact Evaluation Survey Analytical Report, Wave 5: Sep 28 – Nov 3, 2014, 4/28/2015, pp. 324–326. 469 Management Systems International, Stability in Key Areas (SIKA) Program Final Performance Evaluation, 9/2015, pp. 1–2; USAID, response to SIGAR data call, 1/11/2016. 470 Management Systems International, Stability in Key Areas (SIKA) Program Final Performance Evaluation, 9/2015, pp. 1–2. 471 Management Systems International, Stability in Key Areas (SIKA) Program Final Performance Evaluation, 9/2015, pp. 1–2. 472 USAID, ODG, response to SIGAR data call, 12/28/2015. 473 Management Systems International, Stability in Key Areas (SIKA) Program Final Performance Evaluation, 9/2015, p. 4. 474 SIGAR, Stability in Key Areas (SIKA) Programs: After 16 Months and $47 Million Spent, USAID Had Not Met Essential Program Objectives, Audit Report 13-16-AR, 7/2013, p. 2. 475 Management Systems International, Stability in Key Areas (SIKA) Program Final Performance Evaluation, 9/2015, p. 4. 476 Management Systems International, Stability in Key Areas (SIKA) Program Final Performance Evaluation, 9/2015, pp. 1, 6. 477 IOM, Community Cohesion Initiative Quarterly Report, April– June 2015, 6/2015, p. 1. 478 USAID, OTI, response to SIGAR data call, 12/28/2015. 479 Rahman Safi International (RSI) Consulting, Case Study: GIRoA Perspectives of OTI/CCI Programming, 11/2015, pp. 6, 21. 480 New York Times, “Afghan Jobs Program Aims to Stem Exodus of Young,” 11/14/2015; Government of Afghanistan, Jobs for Peace: A Proposal for an Economic Smoothing Program for Afghanistan Draft 2, 11/2015, pp. 1, 4–6. 481 Government of Afghanistan, Jobs for Peace: A Proposal for an Economic Smoothing Program for Afghanistan Draft 2, 11/2015, p. 1. 482 U.S. Embassy Kabul, “The United States Government Provides $50 million for Immediate Job Creation,” 12/20/2015. 483 Government of Afghanistan, Jobs for Peace: A Proposal for an Economic Smoothing Program for Afghanistan Draft 2, 11/2015, pp. 4–6. 484 SIGAR, Quarterly Report to the United States Congress, 4/30/2014, p. 136. 485 Tetra Tech, Initiative to Strengthen Local Administrations in Afghanistan (ISLA) Project) Monthly Report, February 2015, 3/15/2015, ii. 486 Tetra Tech, Initiative to Strengthen Local Administrations in Afghanistan (ISLA) Project) Monthly Report, February 2015, 3/15/2015, ii; USAID, ODG, response to SIGAR vetting, 4/12/2015. 487 DAI, Strong Hubs for Afghan Hope and Resilience (SHAHAR): Monthly Report February 2015, 3/15/2015, p. 4. 488 UN, report of the Secretary-General, The situation in Afghanistan and its implications for international peace and security, 12/10/2015, p. 17. 489 State, SCA, response to SIGAR data call, 12/29/2015; State Department, “Joint Press Release of the Quadrilateral Coordination Group on Afghan Peace and Reconciliation,” 1/11/2016. 490 State, POLMIL, response to SIGAR vetting, 1/14/2014. 491 State, SCA, response to SIGAR data call, 12/18/2015. 492 State, SCA, response to SIGAR data call, 9/30/2015. 493 State, SCA, response to SIGAR data call, 1/15/2016. 494 State, SCA, response to SIGAR vetting, 1/15/2016. 495 State, SCA, response to SIGAR data call, 12/18/2015. 496 State, SCA, response to SIGAR data call, 12/18/2015. Report to the united states congress I January 30, 2016 497 State, SRAP, response to SIGAR data call, 6/26/2015. 498 State, SRAP, response to SIGAR data call, 6/26/2015. 499 USAID, ODG, response to SIGAR data call, 6/25/2015; USAID, ODG, response to SIGAR vetting, 7/12/2015. 500 USAID, ODG, response to SIGAR data call, 12/28/2015. 501 SIGAR, Support for Afghanistan’s Justice Sector: State Department Programs Need Better Management and Stronger Oversight, Audit Report 14-26-AR, 1/2014, p. 1. 502 State, INL, response to SIGAR data call, 3/27/2015. 503 IDLO, Completing the Transition in Afghanistan: Justice Training Transition Program, IDLO Bi-Weekly Report, 12/9/2015, p. 13. 504 State, INL, response to SIGAR vetting, 10/14/2014. 505 IDLO, External Mid-Term Evaluation of Afghanistan Justice Training Transition Program (JTTP) (2013–2014), 11/10/2014, p. 16. 506 State, INL, response to SIGAR data call, 3/27/2015. 507 State, INL, response to SIGAR data call, 3/27/2015. 508 IDLO, Completing the Transition in Afghanistan: Justice Training Transition Program, IDLO Bi-Weekly Report, 12/9/2015, p. 13. 509 Government of Afghanistan, Self-Reliance through Mutual Accountability Framework (SMAF), 9/5/2015, p. 8. 510 Independent Joint Anti-Corruption Monitoring and Evaluation Committee, “News Release: Uneven Results in the Fight Against Corruption,” 9/17/2015, p. 1. 511 State, INL, response to SIGAR data call, 12/23/2015. 512 State, INL, response to SIGAR data call, 12/23/2015. 513 State, INL, response to SIGAR data call, 12/23/2015; State, response to SIGAR vetting, 1/14/2016. 514 Tolo News, “Kabul Bank Defaulters Now Partner To Government Projects,” 11/5/2015; New York Times, “Afghan President Calls Off Business Deal With Banker Convicted of Fraud,” 11/7/2015. 515 State, INL, response to SIGAR data call, 12/23/2016. 516 Government of Afghanistan, Self-Reliance through Mutual Accountability Framework (SMAF), 9/5/2015, p. 8. 517 USAID, ODG, response to SIGAR data call, 6/25/2015. 518 State, INL, response to SIGAR data call, 12/23/2015. 519 USAID, ODG, response to SIGAR data call, 12/28/2016. 520 USAID, ODG, response to SIGAR data call, 6/25/2015; USAID, ODG, response to SIGAR vetting, 7/12/2015. 521 Wall Street Journal, “Foreign Donors Threaten to Pull Funding to Afghanistan Anticorruption Group,” 12/4/2015. 522 Independent Joint Anti-Corruption Monitoring and Evaluation Committee, A Review of Selected Foreign-Assistance Programs Implemented in Afghanistan, 11/8/2015, pp. 5–6, 43. 523 Independent Joint Anti-Corruption Monitoring and Evaluation Committee, Vulnerability to Corruption Assessment (VCA) of the Education Quality Improvement Program (EQUIP) in the Ministry of Education, 11/21/2015, pp. 3, 10. 524 Independent Joint Anti-Corruption Monitoring and Evaluation Committee, Corruption Practices in the World Food Programme’s Food distribution Initiatives in the Ministry of Education, 11/21/2015, pp. 1, 3. 525 Independent Joint Anti-Corruption Monitoring and Evaluation Committee, Report on Conflicts of Interest, 12/9/2015, pp. 2, 7. 526 USAID, ODG, response to SIGAR data call, 6/25/2015; State, response to SIGAR vetting, 1/14/2016. 527 Government of Afghanistan, Self-Reliance through Mutual Accountability Framework (SMAF), 9/5/2015, p. 8. 213 Endnotes 528 Pajhwok News, “HOOAC registers assets of President Ghani, CEO Abdullah,” 11/29/2015. 529 CSTC-A response to SIGAR data call, 12/31/2015. 530 CSTC-A, response to SIGAR data call, 12/31/2015. 531 CSTC-A, response to SIGAR vetting, 7/12/2015. 532 CSTC-A, response to SIGAR data call, 12/31/2015. 533 State, PRM, response to SIGAR data call, 12/28/2015. 534 Tolo News, “3,000 Afghans Return Home, 150,000 Leave: Ministry,” 12/23/2015. 535 State, PRM, response to SIGAR data call, 12/28/2015; State, response to SIGAR vetting, 1/15/2016. 536 State, PRM, response to SIGAR data call, 12/28/2015. 537 USAID, “Remarks by Administrator Rajiv Shah at the U.S. Institute of Peace Regarding Afghanistan Promote,” 7/18/2013. 538 USAID, “USAID Launches Long-Term Commitment to Afghan Women and Girls,” 11/8/2014; USAID, OPPD, response to SIGAR vetting, 10/12/2015. 539 USAID, OPPD, response to SIGAR data call, 12/28/2015. 540 USAID, OPPD, response to SIGAR data call, 9/23/2015; USAID, OPPD, response to SIGAR data call, 12/28/2015. 541 USAID, OPPD, response to SIGAR data call, 12/28/2015. 542 USAID, OPPD, response to SIGAR data call, 12/28/2015. 543 Government of Afghanistan, Self-Reliance through Mutual Accountability Framework (SMAF), 9/5/2015, p. 9. 544 USAID, OPPD, response to SIGAR data call, 12/28/2015. 545 Afghanistan Independent Human Rights Commission, “Elimination of violence against women 1394,” 11/30/2015. 546 Afghanistan Independent Human Rights Commission, Forced Gynecological Exams as Sexual Harassment and Human Rights Violation, 12/5/2015, pp. 6, 11–13. 547 See Appendix B. 548 MOF, “Moshrano Jirga Approves the 1395 Fiscal Year National Budget,” 11/23/2015; Wolesi Jirga, “Wolesi Jirga Rejects Budget Draft of Fiscal Year 1395,” 12/21/2015; MOF, “Afghan Parliament Approves the 1395 Year National Budget,” 1/18/2016. 549 SIGAR, analysis of MOF, Aqrab Financial Statements FY1394, 12/3/2015; SIGAR, analysis of MOF, Aqrab Financial Statements FY1393 V2, 12/1/2014. 550 WTO, “Ministers Approve Afghanistan’s WTO Membership at MC10,” 12/17/2015. 551 IMF, “IMF Executive Board Concludes 2015 Article IV Consultation with Islamic Republic of Afghanistan, Press Release No. 15/542,” 12/1/2015, pp. 1–2; IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the StaffMonitored Program, 11/3/2015, p. 27. 552 ADB, Outlook 2015 Update: Enabling Women, Energizing Asia, 9/2015; ADB, Outlook Database accessed 1/8/2016. 553 The World Bank, Afghanistan Country Snapshot, 10/2015, p. 10. 554 IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, p. 6. 555 The World Bank, Afghanistan Economic Update, 4/2015, p. 5. 556 ADB, Outlook 2015 Update: Enabling Women, Energizing Asia, 9/2015 p. 116; IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, pp. 6, 16; The World Bank, Afghanistan Economic Update, 4/2015, pp. 5–6; Der Spiegel (Germany), “Interview with Afghan President Ashraf Ghani,” http://www. spiegel.de/international/world/spiegel-interview-with-afghanpresident-ashraf-ghani-a-1064978.html, 12/2/2015. 214 557 Government of Afghanistan, Afghanistan’s Road to Self-Reliance: The First Mile Progress Report, 9/5/2015. p. 1. 558 The World Bank, World Development Indicators, Afghanistan, 12/22/2015; The World Bank, Afghanistan Economic Update, 4/2015, p. 5; The World Bank, Afghanistan Country Snapshot, 10/2015, pp. 1–2. 559 The World Bank, Afghanistan Economic Update, 4/2015, pp. 6–7, 20; The World Bank, Afghanistan Country Snapshot, 10/2015, p. 2. 560 ADB, Outlook 2015 Update: Enabling Women, Energizing Asia, 9/2015, p. 116. 561 IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, p. 49; IMF, “Statement By Jafar Mojarrad, Executive Director For The Islamic Republic Of Afghanistan and Abdelalil Jbili, Advisor to Executive Director,” 11/18/2015, p. 2. 562 The World Bank, Afghanistan Country Snapshot, 10/2015, p. 2. 563 Government of Afghanistan, “Jobs for Peace, A proposal for an Economic Smoothing Program for Afghanistan, Draft 2,” 11/2015. 564 Government of Afghanistan, “Jobs for Peace, A proposal for an Economic Smoothing Program for Afghanistan, Draft 2,” 11/2015, p. 2. 565 New York Times, “Afghan Jobs Program Aims to Stem Exodus of Young,” 11/14/2015. 566 The World Bank, Afghanistan Country Snapshot, 10/2015, p. 1. 567 SIGAR, analysis of MOF, Aqrab Financial Statements FY1394, 12/3/2015; MOF, Aqrab Financial Statements FY1393 V2, 12/1/2014; The World Bank, Afghanistan: Emerging from Transition, Senior Officials Meeting, September 4–5, 2015, 9/2015, p. 11. 568 NATO, “Chicago Summit Declaration on Afghanistan,” 5/21/2012. 569 OSD-P, response to SIGAR vetting, 1/17/2016. 570 DOD, Enhancing Security and Stability in Afghanistan, 12/2015, pp. 80, 26. 571 For comparison purposes, the exchange rate on the date the MOF pulled financial data for FY 1394, month 11 was AFN 66.88 to $1. For the FY 1393 data, it was AFN 57.96 to $1. All FY 1394 and FY 1393 currency conversions use these rates; SIGAR, analysis of MOF, Aqrab Financial Statements FY1394, 12/3/2015; SIGAR, analysis of MOF, Aqrab Financial Statements FY1393 V2, 12/1/2014; The World Bank, Afghanistan Country Snapshot, 10/2015, p. 1. 572 State, SCA, response to SIGAR data call, 12/29/2015. 573 For comparison purposes, the exchange rate on the date the MOF pulled financial data for FY 1394, month 11 was AFN 66.88 to $1. For the FY 1393 data, it was AFN 57.96 to $1. All FY 1394 and FY 1393 currency conversions use these rates; SIGAR, analysis of MOF, Aqrab Financial Statements FY1394, 12/3/2015; SIGAR, analysis of MOF, Aqrab Financial Statements FY1393 V2, 12/1/2014. 574 For comparison purposes, the exchange rate on the date the MOF pulled financial data for FY 1394, month 11 was AFN 66.88 to $1. SIGAR, analysis of MOF, Aqrab Financial Statements FY1394, 12/3/2015. 575 Treasury, response to SIGAR vetting, 10/9/2015. 576 MOF, “Afghan Parliament Approves the 1395 Year National Budget,” 1/18/2016. 577 IMF, 2015 Article IV Consultation and First Review Under the Staff-Monitored Program–Press Release; Staff Report; And Statement By The Executive Director For The Islamic Republic Of Afghanistan, 11/2015, p. 1; IMF, “IMF Mission Reaches Staff-Level Agreement on SMP with the Islamic Republic of Afghanistan, Press Release No. 15/128,” 3/20/2015; IMF, “IMF Executive Board Concludes 2015 Article IV Consultation with Special inspector general I Afghanistan reconstruction Endnotes Islamic Republic of Afghanistan, Press Release No. 15/542,” 12/1/2015, p. 2; IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, p. 25. 578 IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, p. 25. 579 IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, p. 25. 580 IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, pp. 1, 14. 581 IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, p. 41. 582 Government of Afghanistan, Afghanistan’s Road to Self-Reliance: The First Mile Progress Report, 9/5/2015. pp. 15, 18. 583 IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, p. 41. 584 IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, p. 41. 585 IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, p. 16. 586 IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, p. 41. 587 USAID, response to SIGAR data calls, 12/28/2014 and 1/11/2016. 588 USAID, The Afghanistan Trade and Revenue Project, Mid-Term Evaluation (June 4–August 12, 2015), 7/23/2015, p. 9. 589 State, SCA, response to SIGAR data call, 12/29/2015; USAID, response to SIGAR data call, 9/23/2015; USAID, OEGI response to SIGAR vetting, 10/12/2015. 590 USAID, The Afghanistan Trade and Revenue Project, Mid-Term Evaluation (June 4–August 12, 2015), 7/23/2015, pp. 3, 17. 591 USAID, OEG, response to SIGAR vetting, 1/14/2016. 592 WTO, “Ministers Approve Afghanistan’s WTO Membership at MC10,” 12/17/2015. 593 Government of Afghanistan, “Remarks by HE Mohammad Khan Rahmani, First Deputy Chief Executive, The Islamic Republic of Afghanistan at the WTO Tenth Ministerial Conference, Nairobi Kenya,” 12/17/2015. 594 WTO, “Afghanistan Accession Plenary Session–Remarks by Director-General Roberto Azevedo,” 12/17/2015. 595 State, International Narcotics Control Strategy Report, Vol. II, 3/2015. 596 ADB, Outlook 2015, 3/2015, p. 168. 597 IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, pp. 21–22; IMF, “IMF Executive Board Concludes 2015 Article IV Consultation with Islamic Republic of Afghanistan, Press Release No. 15/542,” 12/1/2015, p. 2. 598 Treasury, response to SIGAR data call, 12/30/2015; State, “Strengthening the Strategic Partnership of the United States and Afghanistan,” 3/24/2015. 599 Treasury, response to SIGAR data calls, 12/30/2015 and 1/4/2016. 600 Treasury, response to SIGAR data calls, 12/30/2015 and 1/4/2016. 601 Treasury, response to SIGAR data call, 12/30/2015. 602 Treasury, response to SIGAR data calls, 12/30/2015 and 1/4/2016. 603 Treasury, response to SIGAR data call, 12/30/2015. 604 Treasury, response to SIGAR data call, 12/30/2015. 605 Treasury, response to SIGAR data call, 12/30/2015. 606 FATF, “Outcomes of the FATF Plenary Meeting, Paris, 21–23 October 2015,” 10/23/2015; FATF, “Improving Global AML/CFT Report to the united states congress I January 30, 2016 607 608 609 610 611 612 613 614 615 616 617 618 619 620 621 622 623 624 625 626 627 628 629 Compliance: On-Going Process,” 10/23/2015; Treasury, response to SIGAR vetting, 4/10/2015. FATF, “Improving Global AML/CFT Compliance: On-Going Process,” 10/23/2015. Treasury, response to SIGAR data call, 3/27/2015. FATF, “Improving Global AML/CFT Compliance: On-Going Process,” 10/23/2015. Treasury, response to SIGAR data calls, 3/27/2015 and 12/30/2015. FATF, “Improving Global AML/CFT Compliance: On-Going Process,” 2/14/2014, 6/27/2014, 10/24/2014, 2/27/2015, 6/26/2015, 10/23/2015. Government of Afghanistan, “Government Development and Governance Hard Deliverables Under TMAF Thematic Areas,” 4/9/2013; Government of Afghanistan, Self-Reliance Through Mutual Accountability Framework, 9/5/2015. State, SCA, response to SIGAR data call, 12/29/2015; DOJ, response to SIGAR data call, 12/17/2015; Independent Joint AntiCorruption Monitoring and Evaluation Committee, Report of the Public Inquiry into the Kabul Bank Crisis, 11/15/2012, p. 9. DOJ, response to SIGAR data calls, 9/13/2015 and 12/17/2015. DOJ, response to SIGAR vetting, 11/11/2016; State, response to SIGAR vetting, 1/14/2016. DOJ, response to SIGAR data call, 9/13/2015; Independent Joint Anti-Corruption Monitoring and Evaluation Committee, Unfinished Business: The Follow-Up Report on Kabul Bank, 10/2/2014, pp. 16, 30. DOJ, response to SIGAR data call, 12/17/2015. State, INL, response to SIGAR data call, 12/29/2015; State, SCA, response to SIGAR data call, 12/29/2015. DOJ, response to SIGAR data call, 12/17/2015. DOJ, response to SIGAR data calls, 1/5/2015 and 12/17/2015. Government of Afghanistan, Office of the President, “President Ghani Chairs Kabul Bank Clearance Committee Meeting,” 6/22/2015. DOJ, response to SIGAR data call, 9/13/2015; DOJ, response to SIGAR vetting, 10/6/2015. Afghanistan Analysts Network, “The Afghan Government and the ‘Smart City’ Debacle: Who Out-Smarted Whom?” 11/21/2015. Tolo News, “Kabul Bank Defaulters Now Partner to Government Projects,” 11/4/2015; Government of Afghanistan, Office of the President, “Press Release on the Validity of the MOU Signed by Ferozi and the Ministry of Urban Development,” 11/7/2015. Government of Afghanistan, Office of the President, “President’s Order on Kabul Bank Crisis,” 10/1/2014; Government of Afghanistan, Afghanistan’s Road to Self-Reliance: The First Mile Progress Report, 9/5/2015, p. 8. State, SCA, response to SIGAR data call, 12/29/2015; Afghanistan Analysts Network, “The Afghan Government and the ‘Smart City’ Debacle: Who Out-Smarted Whom?” 11/21/2015. Afghanistan Analysts Network, “The Afghan Government and the ‘Smart City’ Debacle: Who Out-Smarted Whom?,” 11/21/2015; Government of Afghanistan, Office of the President, “Press Release on the Validity of the MOU Signed by Ferozi and the Ministry of Urban Development,” 11/7/2015. DOJ, response to SIGAR vetting, 1/11/2016. Afghanistan Analysts Network, “The Afghan Government and the ‘Smart City’ Debacle: Who Out-Smarted Whom?” 11/21/2015; Tolo News, “Ghani Supervised Entire Process of Smart City Contract: Ex-Advisor Claims,” 12/14/2015; Government of Afghanistan, Office of the President, “President Ghani Chairs Kabul Bank Clearance Committee Meeting,” 6/22/2015. 215 Endnotes 630 DOJ, response to SIGAR data calls, 9/13/2015 and 12/17/2015. 631 IMF, “IMF Executive Board Concludes 2015 Article IV Consultation with Islamic Republic of Afghanistan, Press Release No. 15/542,” 12/1/2015, p. 1. 632 State, SCA, response to SIGAR data call, 12/29/2015. 633 DOJ, response to SIGAR data calls, 12/17/2015 and 1/5/2015; State, SCA, response to SIGAR data call, 12/29/2015. 634 SIGAR, analysis of DOJ, response to SIGAR data calls, 12/17/2015 and 1/5/2015; SIGAR, analysis of State response to SIGAR data call, 12/29/2015. 635 DOJ, response to SIGAR data calls, 12/17/2015 and 1/5/2015. 636 State, SCA, response to SIGAR data call, 12/29/2015. 637 DOJ, response to SIGAR data call, 9/13/2015; Integrity Watch Afghanistan, “About Us, Introduction,” 1/5/2015. 638 SIGAR, Quarterly Report to the United States Congress, 10/30/2015, p. 10; State, SCA, response to SIGAR data call, 12/29/2015; DOJ, response to SIGAR data call, 12/17/2015. 639 DOJ, response to SIGAR data call, 12/17/2015. 640 DOJ, response to SIGAR data calls, 6/29/2015, 9/13/2015 and 12/17/2015. 641 State, SCA, response to SIGAR data call, 12/29/2015; DOJ, response to SIGAR data calls, 6/29/2015 and 12/17/2015. 642 DOJ, response to SIGAR data calls, 9/13/2015 and 12/17/2015. 643 Treasury, response to SIGAR data call, 3/29/2012; IMF, “Islamic Republic of Afghanistan-First Review Under the Extended Credit Facility Arrangement, Request for Waiver of Nonobservance of a Performance Criterion, Modification of Performance Criteria, and Rephasing of Disbursements,” 6/19/2012, accessed 7/3/2013; Tolo News, “Analysts Push for Action on New Kabul Bank,” 8/30/2015. 644 Treasury, response to SIGAR data call, 3/31/2014; DAB, Report on Kabul Bank Asset Recovery, 9/30/2013 (published, after approval, on 11/1/2013), p. 2; IMF, “Islamic Republic of Afghanistan-First Review Under the Extended Credit Facility Arrangement, Request for Waiver of Nonobservance of a Performance Criterion, Modification of Performance Criteria, and Rephasing of Disbursements,” 6/19/2012, pp. 13, 49. 645 Treasury, response to SIGAR data call, 3/31/2014; State, response to SIGAR data call, 4/1/2014. 646 IMF, Staff Report for the 2015 Article IV Consultation and the First Review Under the Staff-Monitored Program, 11/3/2015, p. 51; MOF, “Final Announcement for Privatisation of New Kabul Bank,” 12/26/2015. 647 USAID, Afghanistan, Performance Management Plan: Afghanistan Implementation Plan for Transition 2015–2018, 9/2015, pp. 6–8. 648 The World Bank, Afghanistan Economic Update, 4/2015, p. 22; SIGAR, Quarterly Report to the United States Congress, 10/30/2015, pp. 13–14. 649 MOF, National Budget Document, 1394 Fiscal Year, 1/28/2015, p. 8; MOF, Aqrab Financial Statements FY1394, 12/3/2015; SIGAR analysis of MOF, Aqrab Financial Statements FY1393, 12/1/2014. 650 The World Bank, Afghanistan Economic Update, 4/2015, pp. 22, 19, 20. 651 Tolo News, “Minister Says Mining Contracts to be Reexamined,” 2/20/2015; USAID, OEGI, response to SIGAR data call, 12/28/2015. 652 USAID, OEGI, response to SIGAR data calls, 6/25/2015, 9/23/2015, and 12/28/2015. 653 USAID, Mining Investment and Development for Afghan Sustainability, Monthly Progress Report, August 2015, 9/5/2015. 216 654 USAID, OEGI, response to SIGAR data call, 12/28/2015; USAID, Mining Investment and Development for Afghanistan Sustainability, Monthly Progress Report, November 2015, 12/5/2015, p. 4. 655 USAID, OEGI, response to SIGAR data call, 12/28/2015. 656 MOMP, “Oil and Gas Resources,” accessed 7/14/2014; MOMP, “Contracts, Hydrocarbons,” accessed 7/14/2014. 657 TFBSO, response to SIGAR vetting, 10/9/2014; BIC Alliance Magazine, “WBI Energy’s Bietz: Topping Plant to Begin Operation in 2014, Special Feature,” accessed 10/9/2014. 658 ACCI, “The First Afghanistan’s Refinery Opened,” 8/25/2013; The World Bank, Afghanistan Economic Update, 4/2015, p. 10. 659 The World Bank, Afghanistan Country Snapshot, 10/2015, p. 9. 660 USAID, response to SIGAR data calls, 12/31/2013 and 1/11/2016. 661 USAID, OEGI, response to SIGAR data calls, 9/23/2015 and 12/28/2015. 662 USAID, OEGI, response to SIGAR data call, 12/28/2015. 663 USAID, Sheberghan Gas Generation Activity, SGGA Monthly Report, November 1–November 30, 2015, 11/30/2015, pp. 1–2. 664 The World Bank, Afghanistan Economic Update, 4/2015, p. 22; USAID, Afghanistan, Performance Management Plan: Afghanistan Implementation Plan for Transition 2015–2018, 9/2015, p. 9. 665 USAID, Afghanistan, Performance Management Plan: Afghanistan Implementation Plan for Transition 2015–2018, 9/2015, p. 9; USAID, OAG, response to SIGAR data call, 12/28/2015. 666 USAID, OAG, response to SIGAR data call, 12/28/2015. 667 SIGAR, analysis of USAID, response to SIGAR data call, 1/11/2016; SIGAR, analysis of The World Bank, ARTF, Administrator’s Report on Financial Status, As of December 21, 2015, accessed 1/17/2016. 668 USAID, OAG, response to SIGAR data call, 12/28/2015. 669 USAID, OAG, response to SIGAR vetting, 11/14/2016. 670 USAID, OAG, response to SIGAR data call, 12/28/2015. 671 USAID, response to SIGAR data calls, 9/30/2013, 6/25/2015 and 12/28/2015; USAID, response to SIGAR vetting, 7/14/2014 and 1/14/2016. 672 USAID, OAG, response to SIGAR data call, 12/28/2015. 673 USAID, response to SIGAR data calls, 9/30/2013 and 6/25/2015; USAID, response to SIGAR vetting, 7/14/2014. 674 USAID, response to SIGAR vetting, 1/14/2016. 675 MFA, Towards Regional Economic Growth and Stability: The Silk Road Through Afghanistan, 9/2015, p. 37. 676 The World Bank, Afghanistan Country Snapshot, 10/2015, p. 9. 677 DABS, “Da Afghanistan, Breshna Sherkat, Presentation,” 5/20/2015. 678 The World Bank, Afghanistan Country Snapshot, 10/2015, p. 9; The World Bank, Report No: ACS8228, Islamic State of Afghanistan, Pathways to Inclusive Growth, 3/2014. 679 The World Bank, Afghanistan Economic Update, 4/2015, p. 23. 680 MFA, Towards Regional Economic Growth and Stability: The Silk Road Through Afghanistan, 9/2015, p. 13; State, response to SIGAR vetting, 1/14/2016; The Express Tribune, “PM Inaugurates TAPI Gas Pipeline Project in Turkmenistan,” 12/13/2015. 681 MOMP, “Turkmenistan-Afghanistan-Pakistan-India (TAPI) Pipeline,” accessed 12/14/2015. 682 Pakistan Tribune, “Afghanistan to Raise 7,000-Member Security Force for TAPI Project,” 12/28/2015. 683 UN, Report of the Secretary-General, The Situation in Afghanistan and its Implications for International Peace and Security, 6/10/2015, p. 7; State, response to SIGAR vetting, 1/14/2016. Special inspector general I Afghanistan reconstruction Endnotes 684 The World Bank, CASA-1000 Implementation Status and Results Report, 1/4/2016; Daily Times, “Delegation Leaves for Tajikistan Today for Power Talks,” 1/11/2016; The World Bank, Afghanistan Country Snapshot, 10/2015, p. 10. 685 USAID, response to SIGAR vetting, 4/12/2015. 686 Pajhwok, “CASA-1000 Route Changed, TUTAP Being Reviewed,” 1/12/2016. 687 MFA, Towards Regional Economic Growth and Stability: The Silk Road Through Afghanistan, 9/2015, pp. 37, 59. 688 USAID, response to SIGAR data call, 12/28/2014. 689 USAID, Afghanistan, Performance Management Plan: Afghanistan Implementation Plan for Transition 2015–2018, 9/2015, p. 9. 690 DOD, response to SIGAR vetting, 7/14/2015; DOD, response to SIGAR data call 12/28/2015. 691 USAID, response to SIGAR vetting, 4/12/2015; USAID, “Implementation Letter No. IL-56 for the Installation of Turbine Generator Unit 2 at Kajaki Dam Hydropower Plant,” 4/22/2013. 692 USAID, response to SIGAR data calls, 12/28/2015 and 1/11/2016; USAID, response to SIGAR vetting, 7/12/2015; USAID, Fact Sheet, “Installation of Turbine Generator Unit 2 at Kajaki Dam Hydropower Plant,” 8/17/2015. 693 USAID, “Implementation Letter No. IL-56 for the Installation of Turbine Generator Unit 2 at Kajaki Dam Hydropower Plant,” 4/22/2013. 694 USAID, response to SIGAR data call, 1/11/2016. 695 State, SCA, response to SIGAR data call, 12/29/2015; USAID, OEGI, response to SIGAR data call, 12/28/2015. 696 DOD, response to SIGAR data calls, 9/28/2015 and 12/28/2015. 697 State, SCA, response to SIGAR data call, 12/29/2015. 698 USAID, response to SIGAR vetting, 1/15/2014; USAID, Fact Sheet, “Power Transmission Expansion and Connectivity Project Overview,” 8/25/2015. 699 USAID, response to SIGAR vetting, 7/12/2015; USAID, Fact Sheet, “Power Transmission Expansion and Connectivity Project Overview,” 8/25/2015. 700 USAID, response to SIGAR data calls, 12/28/2015 and 1/11/2016; USAID, Fact Sheet, “Power Transmission Expansion and Connectivity Project Overview,” 8/25/2015. 701 DOD, response to SIGAR data call 12/28/2015; USAID, response to SIGAR data calls, 3/26/2015 and 12/28/2015. 702 U.S. Embassy Kabul/USFOR-A, Memorandum for United States Secretary of State, United States Secretary of Defense, Afghanistan Infrastructure Fund Reprogramming for Fiscal Year 2014, 5/8/2015; DOD, response to SIGAR data call, 9/28/2015; USAID, OEGI, response to SIGAR data call, 12/28/2015. 703 USAID, USAID Energy Projects in Afghanistan, 8/2015; DOD, response to SIGAR data call, 9/30/2013; DOD, response to SIGAR vetting, 7/11/2014. 704 USAID, response to SIGAR data call, 9/23/2015; USAID, response to SIGAR vetting, 10/12/2015. 705 DOD, response to SIGAR data call, 9/28/2015; DOD, response to SIGAR vetting, 1/15/2016. 706 DOD, response to SIGAR data call, 12/28/2015. 707 Pub. L. No: 113-235, Consolidated and Further Continuing Appropriations Act, 2015, Division C–Department of Defense Appropriations Act, 2015, 12/16/2014; Pub. L. No: 114-113, Consolidated Appropriations Act, 2016, 12/18/2015. 708 DOD, response to SIGAR data call, 10/7/2014; SIGAR, Fiscal Year 2011 Afghanistan Infrastructure Fund Projects Are Behind Report to the united states congress I January 30, 2016 Schedule and Lack Adequate Sustainment Plans, Audit Report 12-12-AR, 7/2012, p. 9. 709 DOD, response to SIGAR data call, 10/7/2014; SIGAR, Fiscal Year 2011 Afghanistan Infrastructure Fund Projects Are Behind Schedule and Lack Adequate Sustainment Plans, Audit Report 12-12-AR, 7/2012, p. 9. 710 USAID, OEGI, response to SIGAR data call, 12/28/2015. 711 The World Bank, Afghanistan Country Snapshot, 10/2015, pp. 9–10. 712 The World Bank, Afghanistan: Country Snapshot, 10/2015; The World Bank, “Afghanistan Transport Sector,” accessed 7/8/2013; The World Bank, Afghanistan Economic Update, 4/2015, pp. 19, 23; The World Bank, “Competitiveness and Inclusive Growth for Sustainable Jobs,” 5/7/2013. 713 State, SCA, response to SIGAR data call, 12/29/2015. 714 The World Bank, Afghanistan: Country Snapshot, 10/2015, p. 11; Afghanistan Railway Authority, “Overview of National Railway Plan,” accessed 1/14/2016. 715 State, SCA, response to SIGAR data call, 12/29/2015. 716 USAID, response to SIGAR data call, 9/23/2015. 717 USAID, response to SIGAR vetting, 1/12/2015 and 7/12/2015. 718 The World Bank, Afghanistan: Country Snapshot, 3/2014, p. 13; The World Bank, Afghanistan: Country Snapshot, 10/2015, p. 11. 719 USAID, OEGI, responses to SIGAR data calls, 12/28/2014 and 6/25/2015. 720 DOD, response to SIGAR data call, 12/28/2015. 721 USAID, Gardez-Khowst Road Dashboard, 3/18/2015; USAID, response to SIGAR data call, 12/28/2015. 722 USAID, response to SIGAR vetting, 7/14/2014; USAID, GardezKhowst Road Dashboard, 3/18/2015; USACE, River Engineering Basics, http://mvs-wc.mvs.usace.army.mil/arec/Basics.html, accessed 4/9/2015. 723 USAID, Salang Highway Repair and Maintenance, Monthly Report, October 1–October 31, 2015, 11/7/2015. 724 USAID, Salang Highway Repair and Maintenance, Monthly Report, October 1–October 31, 2015, 11/7/2015. 725 USAID, Engineering Quality Assurance and Logistical Support, Salang Corridor R&M (Phase II), Monthly Monitoring Report, October 2015, 11/23/2015. 726 The World Bank, Doing Business 2016: Measuring Regulatory Quality and Efficiency, 10/12/2015, pp. 5, 20, 36, 169, and 183; The World Bank, Doing Business 2015, 1028/2014, p. 4. 727 MOF, “Second Senior Officials Meeting Co-Chairs’ Statement,” 9/8/2015. 728 SIGAR, analysis of USAID response to SIGAR data call, 1/11/2016; SIGAR, analysis of The World Bank, ARTF, Administrator’s Report on Financial Status, As of December 21, 2015, accessed 1/17/2016. 729 USAID, Afghanistan Workforce Development Program (AWDP) Agreement No. AID-306-C-12-00007, FY 2015, Quarterly Progress Report, July 1–September 30, 2015, 10/31/2015; USAID, response to SIGAR vetting, 1/14/2016. 730 USAID, Afghanistan Workforce Development Program (AWDP) Agreement No. AID-306-C-12-00007, FY 2015, Quarterly Progress Report, July 1–September 30, 2015, 10/31/2015. 731 USAID, Afghanistan Workforce Development Program (AWDP), Weekly Progress Report, November 29–December 5, 2015, 12/6/2015; USAID, Afghanistan Workforce Development Program (AWDP) Agreement No. AID-306-C-12-00007, FY 2015, Quarterly Progress Report, July 1–September 30, 2015, 10/31/2015; USAID, response to SIGAR vetting, 1/14/2016. 732 USAID, Financial Access for Investing in the Development of Afghanistan, Final Performance Evaluation, 7/2015, pp. 1, 7. 217 Endnotes 733 USAID, Financial Access for Investing in the Development of Afghanistan, Final Performance Evaluation, 7/2015, pp. 2, 12; USAID OIG, Audit of USAID/Afghanistan’s Financial Access for Investing in the Development of Afghanistan Project, Audit Report No. F-306-14-002-P, 3/29/2014; USAID, response to SIGAR vetting, 1/14/2016. 734 USAID, Financial Access for Investing in the Development of Afghanistan, Final Performance Evaluation, 7/2015, p. 3. 735 USAID, Financial Access for Investing in the Development of Afghanistan, Final Performance Evaluation, 7/2015, pp. 3–4, 21. USAID OIG, Audit of USAID/Afghanistan’s Financial Access for Investing in the Development of Afghanistan Project, Audit Report No. F-306-14-002-P, 3/29/2014, pp. 2–3; USAID, response to SIGAR vetting, 1/14/2016. 736 DOD, CSTC-A, response to SIGAR data call, 3/23/2015; DOD, CSTC-A, “Memorandum of Understanding, Electronic Fund Transfers/Mobile Money Pilot Phase Two Expansion,” 6/30/2015; USAID, response to SIGAR vetting, 1/14/2016. 737 Government of Afghanistan, Realizing Self-Reliance, Commitments to Reforms and Renewed Partnership, 12/2014, pp. 9–10. 738 USAID, OEGI, response to SIGAR data call, 12/28/2015; USAID, response to SIGAR vetting, 1/14/2016. 739 SIGAR, “Afghanistan Education Data,” Inquiry Letter-15-62-SP, 6/11/2015; Ariana TV, “Afghan President Assigns Delegation to Probe Corruption Allegation in Ministry,” 7/14/2015; Tolo News, “Task Team Uncovers Hundreds of Ghost Schools,” 1/2/2016. 740 USAID, response to SIGAR vetting, 10/12/2015; USAID, OE, response to SIGAR data call, 9/23/2015. 741 Tolo News, “Task Team Uncovers Hundreds of Ghost Schools,” 1/2/2016. 742 USAID, response to SIGAR vetting, 1/14/2016. 743 USAID, response to SIGAR vetting, 10/12/2015; USAID, OED, response to SIGAR data call, 12/28/2015. 744 USAID, response to SIGAR vetting, 7/9/2014 and 10/12/2015. 745 USAID, “Response to the Inquiry Letter on Afghanistan Education Data Reliability, (SIGAR Inquiry Letter-15-62-SP),” 6/30/2015. 746 UNAMA, “WJ Proceedings Summary,” 5/27/2015. 747 USAID, response to SIGAR vetting, 1/14/2016. 748 Independent Joint Anti-Corruption Monitoring and Evaluation Committee, Vulnerability to Corruption Assessment of Teacher Recruitment in the Ministry of Education, 6/2015, p. 6. 749 UNAMA, “WJ Proceedings Summary,” 5/27/2015; USAID, “Response to the Inquiry Letter on Afghanistan Education Data Reliability, (SIGAR Inquiry Letter-15-62-SP),” 6/30/2015; USAID, response to SIGAR vetting, 7/12/2015; UNAMA, “WJ Proceedings Summary,” 5/27/2015. 750 USAID, OED, response to SIGAR data call, 12/28/2015. 751 USAID, response to SIGAR vetting, 1/14/2016. 752 State, SCA, response to SIGAR data call, 12/31/2015. 753 USAID, Afghanistan, Performance Management Plan: Afghanistan Implementation Plan for Transition 2015–2018, 9/2015, pp. 10–11; USAID, response to SIGAR vetting, 7/12/2015; USAID, OED, response to SIGAR data call, 12/28/2015. 754 SIGAR, analysis of USAID, response to SIGAR data call, 1/11/2016; SIGAR, analysis of The World Bank, ARTF, Administrator’s Report on Financial Status, As of December 21, 2015, accessed 1/17/2016. 755 USAID, OED, response to SIGAR vetting, 7/12/2015; USAID, OED, response to SIGAR data call, 12/28/2015. 218 756 USAID, OED, response to SIGAR data call, 12/28/2015; USAID, AUAF, Quarterly Report, July 1, 2015–September 30, 2015 and Year Two Annual report (October 1, 2014–September 30, 2015), 10/28/2015. 757 USAID, OED, response to SIGAR vetting, 7/12/2015; USAID, OED, response to SIGAR data call, 12/28/2015. 758 USAID, OED, response to SIGAR data call, 12/28/2015. 759 USAID, OED, response to SIGAR vetting, 7/12/2015; USAID, OED, response to SIGAR data call, 12/28/2015. 760 USAID, Fact Sheet: Improved Health for Afghan Mothers and Children, 5/2015; USAID, “Health,” https://www.usaid.gov/afghanistan/health, accessed 1/16/2016; The World Bank, Afghanistan: Country Snapshot, 10/2015, p. 14. 761 ACBAR, “ACBAR Newsletter,” 9/21/2015; ACBAR, “ACBAR Scope of Services (SoS),” http://www.acbar.org/Scope-of-Services/, accessed 1/16/2016. 762 USAID, Afghanistan, Performance Management Plan: Afghanistan Implementation Plan for Transition 2015–2018, 9/2015, pp. 10, 19. 763 SIGAR analysis of USAID, response to SIGAR data call, 1/11/2016; SIGAR, analysis of The World Bank, ARTF, Administrator’s Report on Financial Status, As of December 21, 2015, accessed 1/17/2016. 764 USAID, response to SIGAR vetting, 7/12/2015. 765 USAID, Afghanistan, Performance Management Plan: Afghanistan Implementation Plan for Transition 2015–2018, 9/2015, pp. 6, 10; USAID, Partnership Contracts for Health Services, Semi-Annual Report, October 2014–March 2015, 7/12/2015, p. 7. 766 USAID, response to SIGAR data calls, 12/28/2015 and 1/11/2016; USAID, OHN, response to SIGAR vetting, 1/14/2016. 767 WHO, Poliomyelitis Report by the Secretariat, 12/11/2015, p. 1. 768 Afghanistan Polio Eradication Initiative, Surveillance Update Epidemiological Week 48, 12/8/2015, p. 2. 769 GPEI, “The Afghan Frontier,” 7/6/2015. 770 GPEI, Independent Monitoring Board of the Global Polio Eradication Initiative: Twelfth Report, 10/6/2015. 771 WHO, Poliomyelitis Report by the Secretariat, 12/11/2015, p. 2. 772 USAID, “Support to Polio Eradication Activities,” 8/3/2015, p. 2. 773 WHO, Global Tuberculosis Report 2015, pp. V, 95. 774 The World Bank, “Incidence of tuberculosis,” online country data, http://data.worldbank.org/indicator/SH.TBS, accessed 12/21/2015. 775 WHO, Global Tuberculosis Report 2015, p. 125. 776 USAID, Challenge TB Afghanistan Annual Report, 10/30/2015, p. 7. 777 SIGAR analysis of USAID, response to SIGAR data call, 1/11/2016. 778 SIGAR analysis of USAID, response to SIGAR data call, 1/11/2016. 779 USAID, HEMAYAT 2015 Annual Report, 10/31/2015, p. 6; USAID, OHN, response to SIGAR vetting, 1/14/2016. 780 USAID, Afghanistan Mortality Survey 2010, 11/2011, pp. 126, 128; WHO, UNICEF, UNFPA, The World Bank Group and the United Nations Population Division, Trends in Maternal Mortality: 1990 to 2015, 11/2015. 781 UNICEF, National Nutrition Survey Afghanistan 2013, 7/26/2014, p. 5. 782 Government of Afghanistan, “National Risk and Vulnerability Assessment 2011-2012,” 7/26/2014, p. 57. 783 MOPH, MOE, Memorandum of Understanding, 11/10/2015. 784 SIGAR analysis of USAID, response to SIGAR data call, 1/11/2016. 785 Government of Afghanistan, “Jobs for Peace, A proposal for an Economic Smoothing Program for Afghanistan, Draft 2,” 11/2015. Special inspector general I Afghanistan reconstruction The National Defense Authorization Act for FY 2008 (Pub. L. No. 110-181) established the Special Inspector General for Afghanistan Reconstruction (SIGAR). SIGAR’s oversight mission, as defined by the legislation, is to provide for the independent and objective • conduct and supervision of audits and investigations relating to the programs and operations funded with amounts appropriated or otherwise made available for the reconstruction of Afghanistan. • leadership and coordination of, and recommendations on, policies designed to promote economy, efficiency, and effectiveness in the administration of the programs and operations, and to prevent and detect waste, fraud, and abuse in such programs and operations. • means of keeping the Secretary of State and the Secretary of Defense fully and currently informed about problems and deficiencies relating to the administration of such programs and operation and the necessity for and progress on corrective action. Afghanistan reconstruction includes any major contract, grant, agreement, or other funding mechanism entered into by any department or agency of the U.S. government that involves the use of amounts appropriated or otherwise made available for the reconstruction of Afghanistan. Afghans affected by the October 2015 earthquake that shook 13 provinces carry shelters and supplies from a USAID relief distribution point. (USAID photo) Source: Pub. L. No. 110-181, “National Defense Authorization Act for FY 2008,” 1/28/2008. (For a list of the congressionally mandated contents of this report, see section 3.) Quarterly Report Staff Cover photo: Members of the DOD Task Force on Business Stability Operations (TFBSO) sometimes stayed at rented villas like this one in Kabul. (Former TFBSO employee photo) FINAL_Jan2016_Cover.indd 2 Michael Bindell, Economic and Social Development Subject Matter Expert Emmett Schneider, Senior Data Analyst/Senior Auditor Clark Irwin, Senior Writer/Editor Deborah Scroggins, Director of Research and Analysis Directorate/Editor Vong Lim, Visual Information Specialist Solange Toura Gaba, Research Assistant Jennifer Manzullo, Program Manager Daniel Weggeland, Governance Subject Matter Expert Jonathan Ned, Student Trainee Genevieve Wilson, Security Subject Matter Expert Olivia Paek, Visual Information Specialist Joseph Windrem, Deputy Director of Research and Analysis Directorate/Editor 1/13/2016 11:00:14 AM SIGAR QUARTERLY REPORT TO THE UNITED STATES CONGRESS JANUARY 30, 2016 SIGAR SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN RECONSTRUCTION 2530 Crystal Drive Arlington, VA 22202 www.sigar.mil FRAUD, WASTE, OR ABUSE MAY BE REPORTED TO SIGAR’S HOTLINE By phone: Afghanistan Cell: 0700107300 DSN: 318-237-3912 ext. 7303 All voicemail is in Dari, Pashto, and English. By phone: United States Toll-free: 866-329-8893 DSN: 312-664-0378 All voicemail is in English and answered during business hours. By fax: 703-601-4065 By e-mail: sigar.hotline@mail.mil By Web submission: www.sigar.mil/investigations/hotline/report-fraud.aspx SIGAR Special Inspector General for Afghanistan Reconstruction JAN 30 2016 QUARTERLY REPORT TO THE UNITED STATES CONGRESS 1 SIGAR Report Fraud, Waste or Abuse FINAL_Jan2016_Cover.indd 1 1/13/2016 11:00:13 AM