USAID OIG Afghanistan Oversight Semiannual Brief Fiscal Year 2014

The office in Kabul had 13 staff members midway through fiscal year 2014. The Office of Inspector General performs a full complement of oversight activities in Afghanistan, including performance audits and reviews, financial audits, investigations of criminal, civil, and administrative violations, and outreach and coordination. Performance audits and reviews provide independent assessments of USAID systems, programs, activities, and functions against objective criteria, best practices, and other information. Since the start of fiscal year 2003, the Office of Inspector General has issued 136 financial audits, performance audits, and reviews of Afghanistan-related assistance efforts. These reports made 462 recommendations for improvement. Performance audits and reviews have addressed a broad range of USAID programs in Afghanistan, including activities to develop and sustain the country's infrastructure and financial system, government-to-government funding of Afghan ministries, programs focused on economic growth, and support to the country's electoral processes and efforts to foster an active civil society. OIG performance audits and reviews conducted in recent years have noted needed improvements in several areas. Two-thirds of OIG performance audit reports found noncompliance with relevant regulations or procedures. More than four in ten reports found inadequate internal controls. One-third of OIG reports found weaknesses in contract or project management. In the first half of fiscal year 2014, OIG issued 2 Afghanistan-based performance audits and 1 review. The audits focused on the Financial Access for Investing in the Development of Afghanistan Project and the Management Controls Over Overtime Compensation, as well as the Electoral Assistance Program. Financial audits are conducted annually on foreign nonprofits that expend $300,000+ in U.S. funds per year, U.S. nonprofits that expend $500,000+, and for-profit firms based on risk. OIG has overseen 79 financial audits of Afghanistan-based programs and activities since fiscal year 2003. These financial audits have covered nearly $2.2 billion in funds and identified more than $187 million in questioned costs. Of this total, USAID had sustained $116 million. OIG issued 8 Afghanistan-based financial audits during the period while 26 others were underway as of March 2014. The Office of Inspector General has initiated 214 investigations related to Afghanistan that have produced 44 referrals for civil or criminal prosecution, 15 arrests and 14 indictments, 13 convictions and pleadings, 125 administrative actions, and $164 million in savings and recoveries. OIG investigations are associated with a range of different types of allegations, with most cases pertaining to program fraud or bribery and kickbacks. By the end of the period, OIG had 51 ongoing investigations pertaining to activities in Afghanistan. During the period, investigators opened 7 cases in Afghanistan and closed 25 others. The Office of Inspector General coordinates investigative and audit activity with other oversight and law enforcement agencies and works with local authorities when appropriate. OIG's approach to oversight in Afghanistan has produced dividends for taxpayers, with the office expending $28.7 million on oversight since fiscal year 2003 and yielding $311 million in returns to the U.S. Government.