Audit of the Office of the AID Representative for Afghanistan Affairs" controls over grants and cooperative agreements

The Office of the A.I.D. Representative for Afghanistan (O/AID/REP) made 43 active grants and cooperative agreements with PVOs from the program"s inception in 8/85 through 12/92, with expenditures totalling $127.3 million. Review of selected PVO/NGO reports indicates that tangible outputs were being obtained. These have included: health posts set up and staffed, and medical supplies provided; small irrigation systems, footpaths, roads, and bridges built or repaired; and wheat seed and fertilizer distributed or sold. However, it is impossible to determine the impacts of these activities, or to make an objective assessment of whether outputs have been achieved in congruence with program targets. Management -- and evaluation -- of the Afghanistan program are extremely difficult due the unique characteristics of the A.I.D. program there. (1) A.I.D./W authorized an abbreviated method for project design, implementation, and monitoring in 1985 due to security concerns and to permit rapid response and creativity in projects. As a result, there was a general understanding within the O/AID/REP that the program was not subject to standard A.I.D. regulations and administrative procedures. (2) Participating PVOs established their objectives in a very general way so that they would have maximum flexibility in implementation; such objectives do not lend themselves to performance measurement. (3) O/AID/REP could not physically monitor inputs because a substantial portion of the assistance was provided inside Afghanistan, where U.S. citizens were prohibited from traveling. Further, the risk of the assistance not reaching its intended recipients is extremely high as the projects are implemented in a chaotic and lawless environment where a substantial portion of the assistance is provided in cash payments and marketable commodities. Projects are administered through several layers of intermediaries (contractors, U.S. PVOs, Afghan NGOs), increasing the chances that some assistance will go astray. Indeed, O/AID/REP"s records indicate that losses of commodities and funds have been high. Theft and diversion of 20%-25% of program assistance have, in effect, been accepted by A.I.D. as the cost of doing business in Afghanistan, and it would be difficult if not impossible to eliminate them the way the program is currently operating. In summary, the O/AID/REP did not establish clear objectives that could be measured and was unable to use effective implementing and monitoring controls. Thus, the audit could not determine the overall impacts of A.I.D. assistance. However, O/AID/REP"s methods of establishing objectives, implementing the plan, and monitoring results no longer appear relevant to present conditions. Given the withdrawal of Soviet troops in 2/89 and removal of the Soviet-backed government in 4/92, the program"s sensitivity and the need for rapid response and special dispensations from A.I.D. procedures no longer seem necessary. The entire program should be reassessed to determine if USAID involvement should be continued and under what conditions. Since this audit began USAID/Pakistan and the O/AID/REP have merged. The new AID/REP (USAID/Pakistan Mission Director) and the O/AID/REP program personnel generally agree with the audit findings and recommendations.