Report: USAID Wasting Millions in Taxpayer Dollars in Afghanistan

SIGAR says lack of oversight has led to waste

Rajiv Shah, the head of the U.S. Agency for International Development / AP
September 5, 2013

The U.S. Agency for International Development (USAID) has continued to provide millions of American taxpayer dollars to an Afghan government agency that has been repeatedly cited for fraud and abuse, according to a new report.

USAID signed a $236 million contract with the Afghan Ministry of Public Health (MoPH) in 2008. Since then, the American aid group has exercised little oversight over the taxpayer dollars despite warnings there is a "high risk" that the Afghan agency is engaging in "waste, fraud, and abuse."

This potential loss of millions in U.S. taxpayer dollars was discovered by the Special Inspector General for Afghanistan Reconstruction (SIGAR) and revealed in a new report issued on Thursday by the oversight group.

"Despite financial management deficiencies at the Afghan Ministry of Public Health (MoPH), the U.S. Agency for International Development (USAID) continues to provide millions of U.S. taxpayer dollars in direct assistance with little assurance that the MoPH is using these funds as intended," SIGAR wrote.

The SIGAR report is just the latest in a series that outlines how U.S. taxpayer dollars have been wasted and spent on projects that benefit Iran, al Qaeda, and even the Taliban.

It is also not the first time that SIGAR has singled out USAID for criticism.

In June, SIGAR cited USAID for what it called "widespread cronyism and corruption that led to the waste of $70 million in Afghan reconstruction funds."

This time around, the aid group was caught taking a hands-off approach when it came to overseeing the use of some $127 million in U.S. taxpayer dollars, according to SIGAR’s report.

Taxpayer dollars committed to the program are likely subject to "waste, fraud, and abuse," SIGAR reported. "USAID is providing funds without assurance that the MoPH has adequate accounting systems and internal controls to account for and protect these funds. "

Afghanistan’s MoPH is tasked with delivering health services across Afghanistan, including immunizations, prenatal care, and other services.

The MoPH signed a $236 million "Partnership Contracts for Health" (PCH) contract with USAID in 2008.

Under the deal, the American aid group promised to fund the MoPH’s "delivery of health services to local Afghan clinics and hospitals" in 18 Afghan provinces, according to SIGAR.

USAID has already disbursed $190 million despite warnings from SIGAR that the money is likely being wasted.

"The assessment found deficiencies in the MoPH’s internal audit, budget, accounting, and procurement functions," SIGAR reported. "USAID officials stated that they have not verified what, if any, actions the MoPH has taken to address these deficiencies."

USAID has maintained that it has "no obligation" to remedy the Afghan health agency’s issues.

"A USAID official told SIGAR that USAID has no obligation to address the deficiencies identified or to verify any corrective actions that the MoPH may have implemented for the ongoing PCH program," SIGAR reported.

SIGAR said that its finding raises "serious concerns about the integrity of the PCH program."

USAID has provided $190 million of the $236 million it promised.

"However, SIGAR’s review found that about $127 million has actually been spent, resulting in potential excess obligations of about $63 million," according to the report.

SIGAR is recommending that USAID immediately cut off its funding "until program cost estimates are validated as legitimate."

USAID disputed SIGAR’s findings in a letter sent late last month to the watchdog group prior to the report’s release.

"Overall, USAID took strong exception to the title of our draft report and any implication that there is a high risk of misuse of funds for the PCH program," SIGAR said.

However, USAID has promised to review its funding and determine whether the Afghan health agency could be misusing taxpayer funds.