Afghan Reconstruction Watchdog Criticizes USAID

Org cites $70M in waste

June 27, 2013

The U.S. government’s top oversight official in Afghanistan slammed America’s top taxpayer-funded aid group on Thursday for what it alleged is widespread cronyism and corruption that led to the waste of $70 million in Afghan reconstruction funds.

The Special Inspector General for Afghanistan Reconstruction (SIGAR) reported in a letter on Thursday that the government-funded USAID failed to provide adequate oversight over a key Afghan agricultural program.

USAID’s failure to properly oversee the Southern Regional Agricultural Development (S-RAD) program led to multiple instances of "fraud, waste, and mismanagement," according to top SIGAR inspector John Sopko.

USAID awarded in 2011 a $70 million "cooperative agreement" to International Relief and Development, Inc. (IRD), a nonprofit that works on development programs across the world.

SIGAR found in its investigation that USAID failed to ensure the money was properly spent and that it may have awarded the contract to IRD based on cronyism.

"Our review found that poor coordination, waste, and mismanagement under S-RAD was allowed to occur because USAID did not exercise effective oversight of the implementing partner," Sopko wrote in his letter, which was addressed to U.S. Ambassador to Afghanistan James B. Cunningham, as well as top officials at USAID and IRD.

"USAID did not review and approve IRD's work plan for the S-RAD until four months after the start of the one-year program, when $44 million had already been obligated," a SIGAR official told the Washington Free Beacon.

Additionally, "one of the USAID officials involved in facilitating the approval process of the work plan was a former IRD employee who joined USAID one month prior to the program being awarded to IRD," according to SIGAR.

SIGAR conducted its investigation following a rash of complaints about the program in early 2012.

USAID was supposed to ensure that the S-RAD program increased the Afghan people’s agricultural know-how and output to ensure stability following America’s departure from the country.

The S-RAD program was supposed to provide farm supplies, tractors, and other training equipment in order to boost the country’s agricultural output.

Instead, the program became a magnet for corruption and waste, according to SIGAR.

"IRD did not effectively coordinate and execute the S-RAD project activities we reviewed," Sopko wrote in a lengthy letter that included direct evidence of massive waste.

"While IRD indicated that it had coordinated with—and incorporated input from—key stakeholders to ensure that its work plan was based upon collective priorities and that expectations for the project were realistic and attainable, we found that IRD did not effectively coordinate with some key U.S. officials at the Kandahar provincial reconstruction team, local district stabilization teams, or local U.S. military units who were responsible for program oversight," Sopko wrote.

SIGAR also found evidence that an IRD employee was engaging in fraud.

"A USAID official indicated that an IRD employee was observed producing fake identification documents, or tazkira, to help villagers pose as farmers to claim seed and fertilizer kits," Sopko states in the letter.

"However, IRD officials we spoke with told us that they had no records of an employee by the name cited in the allegation," Sopko wrote. "According to a February 2012 Panjwai district stabilization team report, local officials found that some recipients of seed distribution packages had used these fake tazkira."

"The report also noted instances of insurgent groups intimidating farmers into giving up their tazkira or extorting payment in exchange for being allowed to keep the document authorizing them to receive the seed distribution packages," according to Sopko.

The former IRD employee who joined USAID one month later was not supposed to work on programs related to his former employer, according to SIGAR.

"Several U.S. officials we spoke with expressed concerns that this individual, at least in appearance if not in fact, was instrumental in IRD’s decisions to exclude some of their recommendations from the work plan developed for the S-RAD program," Sopko wrote.

IRD additionally "deviated from its work plan by distributing items that were more expensive than those called for in the plan or items that had not been called for under the plan," Sopko found.

IRD, for instance, bought several four-wheel tractors that were not authorized, leading to an additional $1.2 million in costs.

A USAID official later approved these purchases retroactively "without any documented explanation," SIGAR reported.

One-third of the 95 tractors purchased later went missing.

IRD also purchased $690,000 worth of solar panels that both Afghan and U.S. officials warned were unneeded and likely to be stolen, according to the report.

IRD additionally handed out some $7.8 million in agricultural supplies that U.S. officials believed were unnecessary due to their high cost and "questionable value," according to SIGAR.

"Neither USAID nor IRD officials were able to explain how they determined that Helmand province needed 16,000 irrigation pumps and acknowledged that they had not conducted a capability needs assessment," SIGAR reported.

USAID did not return request for comment by press time. They also have not replied publicly to the report, which SIGAR provided in advance of publication.