By: Bryant Le
On January 30, 2014, the Special Inspector General for Afghanistan Reconstruction (SIGAR) issued its quarterly report to Congress regarding its oversight work and the status of obligations and programs relating to the reconstruction of Afghanistan.
After facilitating performance and financial audits over the reporting period, SIGAR identified deficiencies in internal controls and noncompliance in several areas. Key findings within the 225-page report include:
- The U.S. Agency for International Development (USAID) has not fully remediated significant issues within Afghan ministries that will receive over $1 billion in direct, government-to-government assistance (see SIGAR report on USAID Direct Assistance).
- SIGAR noted continued concern over contract oversight and monitoring, and specifically concerns around previous progress assessment systems that generated disparate and inconsistent information, undermining the value of the information.
- SIGAR also noted that organizations performed limited risk assessments and had incomplete budget processes, which heightened risk with respect to contract oversight.
- SIGAR performed eight financial audits during the quarter and, as a result, identified more than $10.7 million in questioned costs. SIGAR cited internal control deficiencies and noncompliance issues as the catalyst to the questioned costs, primarily related to:
- Reclassification of costs in excess of line-item budgets
- Ineligible personnel costs
- Missing timesheets
- Failure to conduct suspension and debarment checks
- Property loss due to theft and fire
- Poor record retention
- Lack of supporting documentation
- Unapproved international travel and property purchases
- Failure to adhere to procurement procedures.
- To date, SIGAR has referred 402 individuals and companies for suspension and debarment based on investigations involving fraud, corruption, and poor performance.
SIGAR’s findings and bases for questioned costs reinforce the significance and requirement that organizations establish, implement, and monitor adequate policies and procedures surrounding issues including labor charging, property management, purchasing, and record retention.
These findings, coupled with a decreasing U.S. military and civilian footprint, heighten concern regarding the transition and completion of these programs. Organizations seeking similar awards that require an ultimate transition of responsibility to native/local organizations and personnel should consider establishing, improving, and solidifying procedures that will ultimately highlight strong contract oversight, remote monitoring, and transitional capabilities.
The views expressed in this article are those of the author and do not necessarily reflect the position or policy of Berkeley Research Group, LLC.