COSTS IN SUPPORT OF THE KABUL 

AFGHANISTAN AIRPORT

INFRASTRUCTURE IMPROVEMENT AND 

CAPACITY BUILDING PROJECT ARE 

SUPPORTED AND VALID

Federal Aviation Administration

Report Number: FI-2011-073

Date Issued: April 6, 2011
U.S. Department of

Memorandum

Transportation

Office of the Secretary

of Transportation

Office of Inspector General

Subject: ACTION: Report on the Audit of the Kabul 

Afghanistan Airport Infrastructure and Capacity 

Building Project, FAA

Report Number FI-2011-073 

Date: April 6, 2011

From: Earl C. Hedges

Acting Assistant Inspector General for Financial 

and Information Technology Audits 

Reply to 

Attn. of: JA-20 

To: Acting Manager, Presidential Initiatives, FAA

The U.S. Agency for International Development (USAID) supports long-term and 

equitable economic growth, and advances U.S. foreign policy objectives by 

supporting agriculture and trade, global health, democracy, and humanitarian 

assistance. This independent Federal Agency accomplishes its mission by 

working in close partnership with many entities, including foreign governments 

and other U.S. Government agencies. 

In March 2006, USAID entered into a memorandum of agreement (MOA) with 

the Federal Aviation Administration's (FAA) Office of International Aviation 

(API), and transferred $25 million to make infrastructure improvements at the 

Kabul Afghanistan International Airport (KAIA). The improvements were 

necessary, in part, to bring KAIA up to international standards,1 and to improve 

airport security. In August 2006, API awarded $19.6 million to FAA's Logistics 

Center (AML) for services in support of the KAIA improvements. The MOA 

stipulated that FAA would request the Office of Inspector General (OIG) to 

perform periodic audits of the use of these funds. 

We reviewed costs associated with the work performed under agreement between 

API and AML to determine if they were supported and valid under the agreement's 

terms and conditions. We conducted this performance audit in accordance with 

generally accepted government auditing standards as prescribed by the 

 

1 The International Civil Aviation Organization, the global forum for civil aviation, adopts standards and recommended 

practices for international aviation.
2

Comptroller General of the United States, and included tests we considered 

necessary to detect fraud, waste, and abuse. A detailed description of our scope 

and methodology can be found in Exhibit A.

RESULTS IN BRIEF

Costs in support of the KAIA infrastructure improvement and capacity building 

project were supported and valid. AML provided adequate documentation to 

support 55 statistically selected cost line items (out of 1,470), and we found these 

costs to be valid under the terms and conditions of API's agreement with AML. 

We tested $11,292,200 (92 percent) out of a universe of $12,331,460, and found 

no exceptions. Therefore, we estimate with 90 percent confidence that the 

percentage of unsupported costs as of September 1, 2010 is between 0 and

3.2 percent, or between $0 and $399,470. We performed additional analyses on 

$7,289,540 not expended as of that date, and found that AML could provide a 

reasonable explanation of how these funds would be expended.

BACKGROUND

Decades of unrest and conflict have devastated Afghanistan's civil aviation 

infrastructure, depleted its skilled aviation workforce, and severely diminished the 

country's capacity to provide air navigation services, and regulatory and safety 

oversight. At the request of Afghanistan's Ministry of Transport, and as directed 

by the U.S. Secretary of Transportation, FAA developed a comprehensive plan to 

help rebuild Afghanistan's national civil aviation system, including plans for 

technical and managerial expertise to assist in the development, improvement, and 

operation of the country's civil aviation infrastructure, standards, procedures, 

policies, training, and equipment. FAA also agreed to train Afghan personnel, 

inspect and calibrate existing equipment and air navigation facilities, and provide 

resources, logistical support, and equipment. API's August 2006 agreement with 

AML provided for the products and services needed to accomplish these

improvements at KAIA, including terminal surveillance equipment and 

appropriate training, airport security equipment and services, control tower 

refurbishment, and communications equipment.2

 API selected AML for its 

available resources, including staffing, equipment, and the logistical capabilities

necessary to accomplish the objectives.

IMPROVEMENT COSTS AT KAIA ARE SUPPORTED AND VALID 

We found that AML supported the statistically selected line item costs we tested,

and that the costs were valid under the terms and conditions of API's agreement 

 2 Service Order Agreement Number: API-01-06-001-59002. API retained overall management and oversight of the 

project and required AML to provide scheduled project updates.
3 

with AML. Our review included 55 unique project cost items, with a value of 

$11,292,200, or 92 percent of a universe of $12,331,460 expended on the project 

as of September 1, 2010. We found no exceptions, and therefore estimate with 

90 percent confidence that the percentage of unsupported costs as of 

September 1, 2010 is between 0 and 3.2 percent, or between $0 and $399,470. 

Project costs were applicable to one of four work elements attributable to the 

reconstruction plan for KAIA,3

Project Costs Were Applicable to Five Categories

and we found that AML applied project costs to 

one of five categories—AML Agreements, Other, Materials, Labor Hours, and 

Travel. We performed additional analyses on $7,289,540 not expended as of 

September 1, 2010, and found that AML could provide reasonable explanations 

for how these funds would be expended. 

We found that the $12,331,460 expended on the project was distributed among 

five specific cost categories. See Table 1. 

Table 1. KAIA Project Funds Expended by Category

Cost Category Funds Expended as of 

September 1, 2010 ($'s)

AML Agreements 10,032,275

Other 943,320

Materials 717,515

Labor Hours 540,567 

Travel 97,783

Total $12,331,460

 Source: OIG 

AML's agreement costs accounted for more than 81 percent of the funds 

expended. The highest value agreement —$8,320,880 at the time of our review—

was with the Space and Naval Warfare (SPAWAR)4

 

3 According to the Statement of Work accompanying the service order between API and AML, the following work 

elements apply: 1) Approach control surveillance system; 2) Training of Air Traffic Control professionals; 3) 

Rehabilitation of the control tower; and 4) Airport security manager/equipment/contract. 

 Systems Center, located in 

North Charleston, South Carolina, for infrastructure and capability improvement 

services to KAIA, and in particular, the installation of an approach control 

surveillance system and the rehabilitation of KAIA's control tower and radio 

4 SPAWAR is one of the Department of the Navy's three major acquisition commands. 
4

equipment. In AML’s decision to select SPAWAR, the Center's experience in 

providing support to the Department of Defense in underdeveloped countries with 

potentially hostile environments, and expertise in installing similar systems in Iraq 

and other areas of Afghanistan, were important attributes. Although we reviewed 

costs associated with this agreement, we did not audit the award of this agreement 

to SPAWAR. 

AML also awarded $1.9 million to the U.S. Army Corps of Engineers for tasks 

such as site preparation, and for the construction of a security building and 

perimeter fencing. It awarded another $400,000 to the Transportation Security 

Administration to identify deficiencies in KAIA's aviation security operations and 

assist in the establishment of work plans to correct those deficiencies. 

The "Other" cost category accounted for $943,320, or almost 8 percent of the 

funds expended. A small portion of these costs were attributable to AML's

overhead and the project's administration, but the majority was for work 

performed by FAA’s Training Academy, Airports and International Training 

Division (AITD) under agreement with AML. An important component of the 

KAIA reconstruction effort involved identifying and training Afghan candidates as 

air traffic controllers and air traffic control system technicians. AITD primarily 

provided the following services:

• Assessments and training of personnel to control traffic from the aerodrome 

control tower, and for associated airport approach control;

• Development and oversight of electronics and equipment-related training

for equipment and systems deployed at KAIA; and 

• Oversight for on-the-job training of technicians tasked with maintaining 

equipment and deployed systems, and of air traffic controllers.

A significant portion of AITD's costs were directly related to instructors’ travel to

Afghanistan. AITD also brought Afghan students to the United States for 

specialized training at the Mike Monroney Aeronautical Center in Oklahoma City, 

Oklahoma.

Costs in the "Materials" category totaled $717,515, or less than 6 percent of the 

funds expended. This category included costs for labor and materials associated 

with the refurbishment and installation of an Airport Surveillance Radar 8 system, 

and an Air Traffic Control Beacon Interrogator Model 5 system. FAA's Logistics 

Center maintains and tracks parts for these systems which gradually have been 

taken out of service in the U.S. in favor of newer and more advanced systems. 

The Logistics Center can refurbish these systems and has identified a need for 
5

them on the international market. In discussions with FAA, we found that AML’s

ability to refurbish the systems led to its involvement in the KAIA Project. 

The remaining $638,000 (approximately 5 percent) expended were AML labor 

and travel costs, spent primarily to sustain the project's program management 

component. The agreement between API and AML required AML to hold weekly 

meetings and provide API with monthly project status reports comparing planned 

milestones to actual accomplishments. It also required AML to conduct quarterly 

program reviews at API's office in Washington D.C. AML’s project manager 

traveled to Afghanistan to further assess project status.

Project Funds Not Yet Expended 

We performed analyses on the $7,289,540 not expended as of September 1, 2010,

and found that AML could provide reasonable explanations for how these funds 

would be expended. We found that at the time of our review, $4.9 million had 

been obligated for expenditure, and $2.4 million were not obligated (see Table 2).

Table 2. KAIA Project Funding Status as of September 1, 2010

Status of Funding Dollar Amount Percentage of 

Available Funds

Expended 12,331,460 62.85

Obligated, Not 

Expended 4,852,605 24.73

Not Obligated and 

Not Expended 2,436,935 12.42

Total $19,621,000 100.00%

 Source: OIG

Upon request, AML provided a cost schedule that identified how the remaining 

funds would be used, outlined by cost category. AML also provided short 

narratives describing in detail the KAIA infrastructure project element to which

the funds were obligated, and how unobligated funds would be used. For 

example, obligated funding included the purchase of an Airport Fire Rescue 

Vehicle, at a cost of $760,000. Funding for continued training for air traffic 

controllers and equipment technicians was obligated at $700,000. AML also 

anticipated that unobligated funds would be used to support the purchase and 
6

installation of a communications switch at a cost of $1 million, to sustain and 

complete on-the-job training for controllers and technicians ($600,000), and to 

purchase flight data software ($33,000). 

CONCLUSION

FAA's assistance in rebuilding KAIA is crucial to the overall economic recovery 

and future growth of Afghanistan. The project provides an opportunity for FAA to 

demonstrate its personnel's technical abilities and its available resources to assist 

with other countries' aviation needs. At the same time, U.S. taxpayers demand 

accountability for funding provided in support of projects such as the KAIA

improvements. Because AML had adequately supported KAIA's project costs as 

of September 1, 2010, and reasonably explained how the remaining $7.3 million

would be applied, we are making no recommendations. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

We discussed the results of this report with FAA officials on March 29, 2011 and 

they agreed with our results.

We appreciate the courtesies and cooperation of AML representatives during this 

audit. If you have any questions concerning this report, please contact Earl 

Hedges, Acting Assistant Inspector General for Financial and Information 

Technology Audits at (410) 962-1729.

#

cc: Martin Gertel, M-1

Anthony Williams, AAE-001

Shauna L. Martinez, AMQ-210

Mark Jones, AML-025

 
7

Exhibit A. Scope and Methodology

EXHIBIT A. SCOPE AND METHODOLOGY 

At the request of AML,5we conducted this audit on a reimbursable basis6

Our objective for this audit was to determine if FAA's costs for the KAIA 

improvements project were supported and valid under the terms and conditions of 

API's agreement with AML. To address our audit objectives, we reviewed 

applicable laws and regulations. We interviewed FAA personnel responsible for 

the administration and oversight of the $19.6 million that API provided to AML in 

support of infrastructure and capacity improvements at KAIA, service order 

API-01-06-001-59002. We discussed program activities, policies and procedures, 

and performed a walk-through of accounting functions and other applicable 

management processes.

from 

September 2010 through March 2011, in accordance with generally accepted 

government auditing standards. Those standards require that we plan and perform 

the audit to obtain sufficient, appropriate evidence to provide a reasonable basis 

for our findings and conclusions based on our audit objectives. We believe that the 

evidence obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives.

For testing purposes, we obtained a schedule of all costs incurred from AML on 

the project as of September 1, 2010, a total of $12,331,460. We validated the 

totals against total expenditures as of that date in the Department's accounting 

system, DELPHI. Project costs were applicable to one of five cost categories—

AML Agreements, Other, Materials, Labor Hours, and Travel. In coordination 

with OIG's senior statistician, we stratified the universe of 1,470 line items by 

dollar amount and selected line items with probability proportional to size with 

replacement from each stratum for a total sample size of 71. Because the sample 

was selected with replacement, 10 line items were selected more than once for an 

actual sample size of 55 at a value of $11,292,199.50.

We requested and reviewed documentation in support of these items. The 

documentation included, but was not limited to, AML agreements, award 

decisions, invoices, status reports, requisition records, cost schedules, vouchers, 

and time cards. When necessary, we requested follow-up documentation, made 

subsequent inquiries and held meetings for clarification and or explanation. 

 5

 Pursuant to Section 509(c) of Public Law 109-102, which appropriated funds for USAID and other purposes for 

fiscal year 2006, any agreement for the transfer or allocation of funds appropriated by that Law, or prior Laws, entered 

into between USAID and other Federal agencies under the authority of Section 632(a) of the Foreign Assistance Act of 

1961 or any comparable provision of law, shall expressly provide that the Office of the Inspector General for the 

agency receiving the transfer or allocation of such funds shall perform periodic program and financial audits of the use 

of such funds. 6 Intra-Agency Agreement DTFAAC-10-X-80006, August 2010.
8

Exhibit A. Scope and Methodology

We also examined $7,289,540 not expended on the project as of 

September 1, 2010. We reviewed a schedule detailing how these funds were 

budgeted for expenditure. We reviewed associated cost narrative explanations for 

reasonableness and validity in accordance with the KAIA infrastructure project 

and API's agreement with AML.
9

Exhibit B. Major Contributors to This Report

EXHIBIT B. MAJOR CONTRIBUTORS TO THIS REPORT 

Mark Rielly Project Manager

Name Title

Brian Frist Senior Analyst

Allison Sturges Analyst

Petra Swartzlander Senior Statistician

Susan Neil Writer-Editor