SIGAR Special Inspector General for 

Afghanistan Reconstruction

SIGAR Audit 13-4

AFGHAN NATIONAL ARMY: CONTROLS OVER 

FUEL FOR VEHICLES, GENERATORS, AND 

POWER PLANTS NEED STRENGTHENING TO 

PREVENT FRAUD, WASTE, AND ABUSE

JANUARY

201 3

SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability
For more information contact SIGAR Public Affairs at (703) 545-5974 or sigar.pentagon.ccr.mbx.public-affairs@mail.mil.

WHAT SIGAR REVIEWED 

Since 2005, Congress has appropriated 

more than $50 billion to train, equip, and 

sustain the Afghan National Security Forces 

(ANSF), which include the Afghan National 

Army (ANA) and Afghan National Police. The 

NATO Training Mission-Afghanistan/

Combined Security Transition CommandAfghanistan (CSTC-A) has primary 

responsibility for purchasing ANA’s 

petroleum, oil, and lubricants (POL) and 

works with top-level (above-Corp) ANA and 

Ministry of Defense (MOD) officials. The 

International Security Assistance Force Joint 

Command provides oversight and 

assistance to operational and tactical 

commands. The MOD is responsible for 

requesting, distributing and accounting for 

ANA fuel. 

This report assesses (1) internal controls to 

account for ANA POL and prevent fraud, 

waste, and abuse; (2) whether funding 

requests for ANA POL were based on 

accurate data; and (3) CSTC- A’s efforts to 

ensure the MOD has sufficient capacity to 

manage the purchase, delivery, storage, 

and consumption of ANA POL following the 

drawdown of U.S. and coalition forces by 

the end of 2014. SIGAR obtained data and 

met with officials from the International 

Security Assistance Force, CSTC-A, Task 

Force 2010, the Department of Defense 

Inspector General, U.S. Army Audit Agency, 

and the Defense Logistics Agency. This 

report builds on a September 2012 interim 

report and alert letter. SIGAR conducted 

this work in Kabul, Afghanistan from 

February 2012 to January 2013 in 

accordance with generally accepted 

government auditing standards. 

WHAT SIGAR FOUND 

CSTC-A lacked sufficient accountability in the process 

used to order, receive, and pay for POL for ANA vehicles, 

generators, and power plants. This lack of 

accountability increases the risk that U.S. funds and 

fuel will be stolen. Specifically, SIGAR found that

• CSTC-A records relating to fuel purchases paid 

for between March 2010 to February 2011 were 

missing;

• CSTC-A’s data on fuel purchases covering the 

period March 2011 to March 2012, was 

inaccurate and incomplete; and

• CSTC-A could not account for fuel that was 

spilled or lost. 

In addition, CSTC-A’s processes for price approval, 

ordering, receipt, delivery and payment of fuel were 

beset by major vulnerabilities. For example:

• CSTC-A approved payments for fuel without 

verifying vendors’ statements that they had 

made deliveries in full and of acceptable quality. 

• CSTC-A fuel orders were not based on required 

SIGAR

Special Inspector General for 

Afghanistan Reconstruction

January 2013

AFGHAN NATIONAL ARMY: CONTROLS OVER FUEL FOR VEHICLES, 

GENERATORS, AND POWER PLANTS NEED STRENGTHENING TO 

PREVENT FRAUD, WASTE, AND ABUSE

SIGAR AUDIT 13-4 

ANA 2,700 liter (700 gallons) fuel truck at Pol-e-Charkhi on May 23, 

2012.
For more information contact SIGAR Public Affairs at (703) 545-5974 or sigar.pentagon.ccr.mbx.public-affairs@mail.mil.

Estimated Current and Anticipated Annual 

ANA POL Funding Requirements

(in million USD)

Source: Afghanistan Security Forces Fund enacted 

amount for fiscal year 2012, CSTC-A request for fiscal 

year 2013, and CSTC-A estimates for fiscal years 2014.

consumption data and, for power 

plants, the fuel orders did not follow 

the authorized process. 

Second, SIGAR found that CSTC-A based its 

estimates for funding on unsupported data, 

which potentially overstates actual 

requirements. The approximately $2.8 

billion that CSTC-A estimates will be 

necessary to fund purchases of ANA POL 

between fiscal years 2014 and 2018 are 

based on questionable calculations. In 

addition, SIGAR estimates that CSTC-A 

should have more than $266 million of 

fiscal year 2012 funds still available to 

purchase fuel in fiscal year 2013. 

Lastly, despite concerns about ANA’s 

capacity to purchase fuel, CSTC-A plans to 

directly contribute more than $1 billion in 

U.S. funds to the Afghan government to 

purchase ANA fuel over the next 6 years. 

CSTC-A’s assessments of MOD’s capacity, 

coupled with SIGAR and the Army Audit 

Agency reports, have questioned whether 

MOD can adequately serve as a steward of 

public resources.

WHAT SIGAR RECOMMENDS 

SIGAR makes six recommendations to the Commander, NTM-A/CSTC-A. Specifically, 

SIGAR recommends three actions to improve accountability of U.S. funds and 

purchased fuel through full compliance with required MOD logistics processes; two 

actions to develop more realistic fuel budget requests and future year funding 

estimates, with the potential for realizing substantial savings immediately and in the 

future; and one action to assure proper stewardship and transparency of U.S. funds 

and fuel purchases when fuel management responsibility is transferred to the MOD. 

CSTC-A generally concurred with the recommendations and provided comments, 

which are reproduced in this report. 

 
January 24, 2013

The Honorable Leon E. Panetta 

Secretary of Defense

General James N. Mattis

Commander, U.S. Central Command

General John R. Allen

Commander, U.S. Forces-Afghanistan, and 

Commander, International Security Assistance Force

Lieutenant General Daniel P. Bolger

Commanding General, NATO Training Mission-Afghanistan/

Combined Security Transition Command-Afghanistan 

This report discusses the results of the Office of the Special Inspector General for Afghanistan 

Reconstruction’s (SIGAR) audit of the Afghan National Army’s (ANA) logistics capability for 

petroleum, oil, and lubricants. This report also expands on the issues discussed in our interim 

report (SIGAR 12-14) and alert letter (SIGAR Alert Letter 12-2), issued September 10, 2012.

This report includes six recommendations to the Commanding General, CSTC-A, designed to 

improve the fuel purchasing process.

When preparing the final report, we considered comments from CSTC-A, which are reproduced 

in appendix III along with SIGAR’s responses to them. CSTC-A and U.S. Army Central generally 

concurred with all six recommendations. SIGAR conducted this audit under the authority of 

Public Law No. 110-181, as amended, the Inspector General Act of 1978, and the Inspector 

General Reform Act of 2008 and in accordance with generally accepted government auditing 

standards.

John F. Sopko

Special Inspector General

for Afghanistan Reconstruction
TABLE OF CONTENTS 

SIGAR Audit 13-4 / Afghan National Army Petroleum, Oil, and Lubricants Capability Page i

Background...........................................................................................................................................................3

Weaknesses in ANA Fuel Ordering, Delivery, and Payment Processes Increase Risk of Fraud, Waste, and Abuse

......................................................................................................................................................................5

CSTC-A’s Estimates For Funding Are Based on Unsupported Data and Potentially Overstated ......................... 11

Despite Concerns about ANA’s Capacity to Purchase Fuel, CSTC-A Intends to Provide the Afghan Government 

with $1 Billion in Direct Funding ................................................................................................................ 12

Conclusion.......................................................................................................................................................... 13

Recommendations ............................................................................................................................................. 13

Agency Comments.............................................................................................................................................. 14

Appendix I - Scope and Methodology.................................................................................................................. 15

Appendix II - Additional Audit Information........................................................................................................... 17

Appendix III - Comments from the Combined Security Transition Command-Afghanistan ................................. 20

Appendix IV - Comments from U.S. Army Central................................................................................................ 29

Appendix V - Acknowledgments.......................................................................................................................... 31

TABLES

Table 1 - SIGAR Summary of Reported Potential Fuel Theft Incidents ..................................................................8

Table I - Results of Internal Control Tests........................................................................................................... 17

Table II - Summary of Annual Afghanistan Security Forces Fund ANA Fuel Budget and Financial Data for Fiscal 

Years 2007-2018 (in millions)................................................................................................................... 19

FIGURES

Figure 1 - Annual Afghanistan Security Forces Fund and Other Funding for ANA POL (in million USD).................4

Figure 2 - Percentage of Requested Documents Provided for 150 Fuel Orders between March 2011 and March 

2012, by Form...............................................................................................................................................6

Figure 3 - Example of One Vendor’s Average Fuel Price for April 2012.................................................................9

Figure 4 - ANA Fuel Ordering Process................................................................................................................. 10

Figure I - Timeline of ANA Fuel Documentation and Key Audit Events................................................................ 18
SIGAR Audit 13-4 / Afghan National Army Petroleum, Oil, and Lubricants Capability Page ii

ABBREVIATIONS & ACRONYMS

ANA Afghan National Army

ANSF Afghan National Security Forces

CSTC-A Combined Security Transition Command-Afghanistan

DOD Department of Defense

MMC-A Material Management Center-Army

MOD Ministry of Defense

POL petroleum, oil, and lubricants

SIGAR Special Inspector General for Afghanistan Reconstruction
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 2

The Combined Security Transition Command-Afghanistan (CSTC-A)1 is responsible for equipping and training 

the Afghan National Army (ANA) through the Afghanistan Security Forces Fund. This fund was created by 

Congress to provide the Afghan National Security Forces (ANSF) with equipment, supplies, services, and 

training, as well as facility and infrastructure repair, renovation, and construction.

The Department of Defense (DOD) Inspector General reported significant concerns with the logistical readiness 

of the ANA, and other U.S. government audits and investigative units have cited significant concerns with the 

purchase of fuel for ANSF and Coalition Forces across Afghanistan. Specifically, in December 2011, the DOD 

Inspector General assessed that U.S. and coalition efforts to develop sustainable ANA logistics had been

deficient in several areas including, among other things, fuel accountability and management internal 

controls.2

In September 2012, SIGAR issued an interim report on ANA petroleum, oil, and lubricants (POL) that addressed 

concerns on the impending transition of fuel responsibilities and funds to the Afghan government beginning 

January 1, 2013.3 Specifically, we found that

• CSTC-A does not have a valid method to estimate fuel requirements, and proposed ANA POL funding 

amounts are not supported by a systematic process to determine actual fuel needs; and

• CSTC-A has not addressed compliance and accountability challenges within the entire ANA fuel 

process.

Also in September 2012, we issued an alert letter addressing the possible destruction of financial documents 

from ANA POL purchases.4 The letter discussed the alleged shredding of ANA POL payment records totaling 

nearly $475 million from October 2006 to February 2011. Subsequently, CSTC-A officials stated that a 

portion of these payment records—dating from March 2010 through February 2011—were actually converted 

to electronic media but, as of December 2012, CSTC-A had not located the electronic copies. We also 

conducted a separate investigation into the alleged document shredding and confirmed that two CSTC-A fuel 

ordering officers had shredded fuel records for the period of March 2010 through February 2011, citing 

efficiency and saving physical storage space as factors in deciding to scan and shred the documents. Although 

we found no evidence of criminal activity, we noted that the failure to retain these records violated certain 

federal regulations and DOD orders.5

This audit, which builds on our earlier interim report and alert letter, assesses U.S. efforts to develop ANA’s 

capability to acquire, distribute, and account for POL supplies to its forces. Specifically, this audit assesses 

• the internal controls in place to provide accountability for ANA POL and to prevent fraud, waste, and 

abuse; 

• the extent to which CSTC-A’s funding requests for ANA POL are based on accurate requirements data; 

and 

• CSTC-A’s efforts to ensure the Afghan Ministry of Defense (MOD) has sufficient capacity to manage the 

purchase, delivery, storage, and consumption of ANA POL following the drawdown of U.S. and coalition 

forces by the end of 2014. 

 

1 CSTC-A is a joint command with the NATO Training Mission-Afghanistan. Because CSTC-A distributes and manages all 

U.S. funding to support the ANSF, this report refers to CSTC-A.

2 DOD IG Special Plans and Operations: Assessment of U.S. Government and Coalition Efforts to Develop the Logistics 

Sustainment Capability of the Afghan National Army, dated December 9, 2011 (Report No. DODIG-2012-028).

3 Interim Report on Afghan National Army Petroleum, Oil, and Lubricants, dated September 10, 2012 (SIGAR 12-14).

4 “Destruction of Operation Enduring Freedom Financial Documents Related to ANA POL Audit,” dated September 10, 2012 

(SIGAR Alert Letter 12-2).

5 Afghan National Army: $201 Million in DOD Fuel Purchases Still Unaccounted For because Records Were Shredded, 

December 20, 2012 (SIGAR Investigative Report 13-1).
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 3

To accomplish our objectives, we reviewed relevant MOD guidance and financial and fuel-related 

documentation and interviewed officials at the International Security Assistance Force, CSTC-A, DOD Inspector 

General, U.S. Army Audit Agency, Defense Logistics Agency, and Task Force 2010.6 We reviewed a sample of 

ANA paid fuel orders for the 13-month period from March 2011 to March 2012. We conducted our work in 

Kabul, Afghanistan from February to December 2012, in accordance with generally accepted government 

auditing standards. A more detailed discussion of our scope and methodology is in appendix I.

BACKGROUND 

Since 2005, Congress has appropriated almost $50.7 billion to the Afghanistan Security Forces Fund to train, 

equip and sustain the ANSF, which include the ANA and the Afghan National Police. The appropriation includes 

funding for diesel, aviation, and packaged fuels, which CSTC-A purchases for the ANA.

Since 2007, CSTC-A has established and managed 10 blanket purchase agreements with vendors to provide 

fuel. In April 2012, CSTC-A noted that vendors delivered fuel to 754 ANSF fuel locations throughout 

Afghanistan, of which 254 were ANA facilities, including: two national depots in Kabul, six Regional Logistic 

Support Centers, and 26 power plants. Once vendors deliver CSTC-A-ordered fuel, the ANA is responsible for 

the allocation, storage, and consumption of all fuel intended for vehicles, generators, and power plants. CSTCA and the International Security Assistance Force Joint Command provide limited oversight and accountability 

of fuel. CSTC-A works with ANA national and regional (above-Corps) levels and the Joint Command with Corps 

and below-Corps ANA units; the Joint Command also provides oversight and assistance to operational and 

tactical commands. Although CSTC-A manages blanket purchase agreements, Kabul Regional Contracting 

Center―within CENTCOM-Joint Theater Support Contracting Command―approves and issues the agreements. 

In April 2009, CSTC-A created a checkbook―in Microsoft Access―to record details of fuel orders received from 

ANA units and power plants. Checkbook entries by fuel ordering officers include delivery location, order 

number, point of contact, type of fuel, invoice number, and other detailed information related to each order 

received. CSTC-A stated the fiscal year 2013 budget request and its estimates for fiscal years 2014-2018 are 

based on the prior years’ fuel orders in the checkbook.

Funding for the Afghan National Army’s Petroleum, Oil, and Lubricants

Congress authorizes CSTC-A to use a portion of Afghanistan Security Forces Funds for the purchase of fuel for 

ANA vehicles, generators, and power plants. During fiscal years 2007 through 2012, DOD received more than

$1.1 billion in Afghanistan Security Forces Fund assistance for POL, including $429 million in fiscal year 2012 

alone. For fiscal year 2013, DOD has requested $343 million to fund ANA POL, with$123 million (for jet fuel

and kerosene) expected to be provided by international donors.7 

For fiscal years 2014 through 2018, CSTC-A proposes to increase the Afghanistan Security Forces Fund portion 

of the ANA POL budget to $555 million. Starting in 2013, CSTC-A plans to provide one-third of this funding 

directly to the Afghan government for it to purchase POL for the ANA itself.8 Figure 1 provides a breakdown of 

 

6 Task Force 2010 provides commanders and acquisition teams with situational understanding regarding the flow of 

contract funds and property losses and recommends actions to deny power brokers, criminal networks, and insurgents the 

opportunity to benefit from the stolen property or illicit revenue.

7 DOD funded jet fuel and kerosene at $123 million for fiscal year 2012.

8 On June 13, 2012, CSTC-A introduced its plan to begin directing two-thirds of its funding from the Afghanistan Security 

Forces Fund to the Afghan government starting January 1, 2013. However, at the initial Bulk Fuel Transition Executive 

Committee meeting on September 12, 2012, CSTC-A proposed a change in direct contributions. Instead of providing twothirds of the funds directly to the Afghan government, only one-third will initially be provided in direct funding with a 

proposed earliest starting date of March 2013.
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 4

annual ANA POL amounts received between fiscal years 2007 and 2012, requested for fiscal year 2013, and 

estimated for fiscal years 2014-2018.

Ministry of Defense Logistics and Fuel Decrees

MOD issued decrees on procedures for ANA logistical operations, including POL. Additionally, the MOD Tashkil

is the master ANA document listing authorized numbers of ANA personnel and equipment in military units 

throughout Afghanistan. MOD decrees serve as the basis for logistics regulations in Afghanistan and regulate 

policy and support procedures, materiel accountability, and POL management. The required processes and 

forms specified in MOD Decree 4.6 are intended to maintain accurate records of fuel orders, issues and

receipts throughout the POL procurement process. The MOD has issued three decrees that specify policies, 

procedures, and forms to be used for ANA POL logistics operations: 

Decree 4.0, Supported and Supporting Unit Logistics Policy and Support Procedures establishes ANA logistics 

procedures, formats, and forms to be used. 

Decree 4.2, Materiel Accountability Policy and Procedures outlines accountability policies and procedures for 

all categories of materiel, equipment and supplies, and real property.

Decree 4.6, ANA POL Section Organization, Responsibilities, and Procedure describes the organization, 

responsibilities, and procedures for ANA POL activities. Four of the key MOD forms required by this decree are 

listed below: 

• MOD Form 14―Materiel Request Form (used to request fuel);

Figure 1 - Annual Afghanistan Security Forces Fund and Other Funding for ANA POL (in million USD)

Source: Afghanistan Security Forces Fund section of annual Army fiscal year budget justifications, with enacted amounts 

through fiscal year 2012, requested for fiscal year 2013, and estimated for fiscal years 2014-18.
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 5

• MOD Form 8―Materiel Receiving Report (used as a fuel receipt form at national and regional ANA 

depots. The form includes documentation of fuel quantity delivered);

• MOD Form 9―ANA Issue and Turn-In Document (used for fuel issue to ANA non-depot locations from 

ANA depots. The form includes documentation of quantity of fuel delivered); and 

• MOD Form 32―Monthly Fuel Consumption Report, which consolidates daily receipt and consumption 

from (a) inventory reconciliation forms (MOD Form 1235 and 1237) and (b) vehicle fuel point issue 

document (MOD Form 3643), and compares monthly beginning and ending fuel balances to physical 

inventory to indicate variances. 

MOD Decree 4.6 requires ANA units to request fuel based on documented consumption using MOD forms 14 

and 32. ANA units are required to send requests to the Regional Logistics Support Command, which will then 

submit the request to Material Management Center-Army (MMC-A), the command and control center for the 

MOD Logistics Command. MMC-A approves and validates fuel requests, including checking against the unit’s 

authorized fuel allocation9 and accompanied by a MOD Form 32. Once MMC-A approves a request, MMC-A 

sends the fuel request to national depots to fill the order or submits it to CSTC-A to order from vendors. 

However, as discussed in the report, requests are sent directly to CSTC-A, circumventing the MMC-A process, 

with CSTC-A purchasing the fuel for vendors to deliver to the requesting ANA location without MMC-A approval.

Transitioning Responsibility for Afghan National Army Logistics to the Ministry of Defense

CSTC-A is coordinating with the MOD to equip the ANSF, build the logistics system, and train logisticians, 

including POL. CSTC-A intends to build the MOD capacity to assume responsibility for all national logistics and 

maintenance, including ANA POL. CSTC-A plans to begin contributing funds directly to the MOD for the 

purchase of ANA POL as early as March 2013. To improve accountability over ANA POL, CSTC-A revised one 

blanket purchase agreement to implement the use of seals to provide evidence of any tampering of fuel 

deliveries, require the use of flow meters, and clarify that responsibility for equipment for tests rests with 

receiving entity. CSTC-A also plans to, among other things, reduce the number of ANSF fuel delivery sites from 

754 to 98, from which fuel will be further distributed throughout Afghanistan. 

WEAKNESSES IN ANA FUEL ORDERING, DELIVERY, AND PAYMENT PROCESSES

INCREASE RISK OF FRAUD, WASTE, AND ABUSE

CSTC-A’s Data on Fuel Orders is Inaccurate and Incomplete

CSTC-A’s checkbook, a database of fuel records starting in April 2009, contains data on fuel order numbers 

and dates, delivery dates, quantities, prices, and invoice numbers. However, we found that the checkbook had 

errors, including fuel delivery dates that pre-dated corresponding fuel orders, duplicate entries, and missing 

data fields.

To test the checkbook’s completeness and accuracy, we randomly selected 150 out of 2,922 fuel orders paid

over a 13-month period from March 2011 through March 2012. The 150 orders totaled $13.9 million out of 

the total $238 million in paid fuel orders that occurred between these dates. For these 150 orders, we 

requested the full set of supporting documentation, which should have included 8 supporting MOD, DOD, and 

vendor forms and documents for each order, totaling approximately 1,200 documents. Prior to our interim 

report in September 2012, we received partial documentation for about half of the 150 fuel orders in our 

sample and no documentation for the remaining orders. Following our interim report and our September 13, 

2012 testimony, CSTC-A provided us with partial documentation for nearly all remaining fuel orders.

 

9 Requests are checked to ensure that they do not exceed a unit’s authorized fuel allocation by more than 10 percent.
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 6

In our review of these 150 fuel orders, we found

• 681 problems―or exceptions―within the documentation. Exceptions include, among other things, 

delivery tickets that were not signed by ANA recipients or delivery drivers, fuel orders not signed by 

MMC-A, or no ANA documentation of fuel quality or quantity reported by vendors;

• missing delivery tickets―which are required by the blanket purchase agreements to support quantities 

of fuel specified on paid invoices―for 32 orders;

• missing invoices for 2 orders; and 

• missing DD 250 forms (DOD’s Material Inspection and Receiving Report, which documents, among 

other things, DOD acknowledgement of receipt of material) for 3 orders.

In total, CSTC-A could only provide the complete set of documents for 4 of the 150 orders. Of the remaining 

146 orders, we found incomplete documentation (for example, a missing MOD form) and exceptions in the 

provided documentation (for example, a missing signature). Figure 2 illustrates, by percentage, the presence 

of each form required to be in a full set of documentation in our sample of 150 fuel orders.

Figure 2 - Percentage of Requested Documents Provided for 150 Fuel Orders between March 2011 and 

March 2012, by Form.

Source: SIGAR analysis of documentation provided for 150 fuel orders.

Furthermore, CSTC-A failed to reconcile checkbook-recorded orders with payments to vendors made by

Defense Finance and Accounting Services, which maintains DOD’s financial management systems and its 

accounting operations. Standards for Internal Control in the Federal Government state that periodic 
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 7

comparison of resources with the recorded accountability—such as invoices and other documentation—should 

be made to help reduce the risk of errors, fraud, misuse, or unauthorized alteration.10 CSTC-A officials were

not reconciling any orders or payments for the 13-month period until June 2012, 4 months into SIGAR’s audit. 

CSTC-A did not enforce reconciliation standards and has not established standard operating procedures for 

fuel ordering officers to follow. Such guidance would have assisted in reducing missing information within the 

checkbook as well as helped ensure that orders, invoices, and payments were consistent. Our review of the 

checkbook also found incomplete transactions. For example, we identified 1,147 fuel orders with missing 

invoice numbers totaling $36 million. As a result, information within the checkbook is incomplete, increasing 

the risk that funds and purchased fuel have been subject to fraud, waste, and abuse.

CSTC-A Lacks 12 Months of Fuel and Payment Records

In our September 2012 alert letter, we stated that CSTC‐A did not have any records of fuel purchase and 

payment information prior to March 2011 because, according to CSTC‐A, all ANA POL financial records totaling 

nearly $475 million from fiscal year 2007 through February 2011 had been shredded in violation of DOD and 

Department of the Army policies. Federal internal control standards state that all documentation and records 

should be properly managed, maintained, and be readily available for examination.11 In addition, the DOD 

Financial Management Regulation states that all original disbursing office records and associated papers as 

well as supporting documentation should be kept for 6 years and 3 months, consistent with the National 

Archives and Records Administration General Records Schedule 6.12 Subsequent to our September 2012 alert 

letter, CSTC-A made available ANA POL financial records from fiscal year 2007 to February 2010. However, 

paid fuel records from March 2010 through February 2011 remain missing. The previous CSTC-A fuel ordering 

officers stated these records were shredded after converting the original hard copies to electronic media. To 

date, however, CSTC-A has not located the electronic copies. 

CSTC-A Has No Records of Spilled or Lost Fuel

CSTC-A does not monitor whether fuel it purchased for the ANA is stolen or lost to spillage or mishaps. 

According to MOD guidance, safeguards must be in place to defend against theft. Furthermore, ANA units are 

required to control spills through a prevention program and report any spillage to the MOD.

We found, however, that although CSTC-A was notified of three potential theft cases, the fuel ordering officer 

did not have a clear path forward to resolve cases. For example, a fuel ordering officer reported to CSTC-A, the 

U.S. Army Corps of Engineers, and Task Force 2010 that fuel ordered for the two power plants was not being 

received (see table 1). The CSTC-A fuel ordering officer did not have clear guidance on how to address 

allegations, and there was no evidence of actions taken to investigate or resolve the incidents by identifying

losses or fraudulent activity. Further, ANA units did not prepare spillage and mishap reports, so CSTC-A could

not investigate potential discrepancies. As a result, accountability for fuel after purchase is weak and permits

opportunities for theft and significant losses.

 

10 U.S. Government Accountability Office, Standards for Internal Control in the Federal Government, GAO/AIMD-00.21.3.1, 

November 1999.

11 GAO, Standards for Internal Control in the Federal Government.

12 DOD Financial Management Regulation, Volume 5, Chapter 21, December 2010.
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 8

Table 1 - SIGAR Summary of Reported Potential Fuel Theft Incidents

ANA Location Quantity Ordered 

(Liters)

Quantity Delivered 

(Liters)

Variance 

(Liters)

Kabul (PEC Power plant) 500,000 196,800 303,200

Paktiya (Gardez Power Plant) 299,535 29,500 270,035

Camp Leatherneck (Shorabak) 160,000 144,440 15,560

Source: SIGAR Review of emails reporting fuel theft and related issues provided by Task Force 2010.

Weaknesses Exist in U.S. Processes to Purchase, Deliver, and Pay for Fuel

Kabul Regional Contracting Center Limited Competition and Did Not Independently Verify Fuel Prices, Risking Increased Cost to 

the U.S. Government 

The Kabul Regional Contracting Center established blanket purchase agreements with 10 vendors but, as of 

October 2012, only 2 were in use, resulting in limited competition. These agreements limit the ability of the 

U.S. government to compel a vendor to fill a fuel order, as vendors are not obligated to respond to a call placed 

against it. The Federal Acquisition Regulation states that blanket purchase agreements should be established 

with more than one supplier to provide “maximum practicable competition.”13 Furthermore, competition 

provisions for blanket purchase agreements require that ordering officers rotate purchases among vendors 

that provide the same supplies/services at virtually the same prices. Of the two vendors currently in use, one 

solely provides aviation fuel and the other solely provides petroleum-based fuel, such as diesel. This has left 

each vendor with de facto monopolies for aviation and ground fuel, significantly raising the possibility that the 

best price for either type of fuel will not be received.14

In addition, the Kabul Regional Contracting Center approved vendors’ prices for liters of fuel based on 

unverified cost justifications. The Federal Acquisition Regulation states that the contracting officer that 

entered into the blanket purchase agreement shall maintain awareness of changes in market conditions, 

sources of supply and other pertinent factors.15 In the case of ANA fuel, vendors submit a price justification 

spreadsheet to the contracting center on a monthly basis. This spreadsheet details the various costs 

comprising the final fuel price. The contracting center provided us with an example of a vendor-reported 

justification, showing what the vendor charged for Afghan Oil Authority fees, customs duties, transportation 

costs and other fees (see figure 3, with price per liter converted to gallons). These fees are rolled up into a 

single, price per liter and submitted on a monthly basis to the contracting center. The contracting center only 

began requiring price justifications in January 2012. In addition, we found that the center relies on the vendorprovided price justification with little or no independent verification of its accuracy or comparison with market 

prices. For example, according to a contracting official, he “misleads” the vendor into believing the contracting 

center will independently verify vendors’ prices with Platts Energy News—a source for energy information. 

However, the contracting center does not, in fact, have access to Platts Energy News.

 

13 Federal Acquisition Regulation, Subpart 13.303-2(c)(1).

14 In November 2012, CSTC-A stated that one of the two BPAs was closed and BPAs were issued to seven additional 

vendors.

15 Federal Acquisition Regulation, Subpart 13.303-6.
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 9

CSTC-A’s Fuel Orders Are Not Based on Fuel Consumption Data and Do Not Follow Ministry of Defense Procedure

As established by MOD Decree 4.6, the ANA requests fuel using MOD Form 14—a materiel request form used

to order fuel. To justify the requested fuel, this form is to be accompanied by a MOD Form 32, which 

documents fuel consumption. These forms are submitted by ANA units to the Afghan MMC-A for approval after 

verifying the orders do not exceed approved fuel allocations. The Afghan MMC-A is also supposed to receive 

and approve orders for fuel from power plants.

However, in our sample of 150 fuel orders, we found that 80 orders did not include the required MOD Form 14 

and 42 of the remaining 70 forms lacked the required MMC-A signatures in violation of procedures established 

by the MOD decree. According to one fuel ordering officer, MOD took too long to process fuel requests, leading 

CSTC-A to exclude the Afghan MMC-A from the process. CSTC-A issued all fuel to power plants without MOD 

Forms 14 or MMC-A authorization. Such a bypass of Afghan authority may risk duplicate fuel orders as CSTC-A

pushes fuel to power plants based on contractor-reported re-order points. Figure 4 illustrates the appropriate 

fuel ordering process as well as the actual process that was used in violation of the MOD decree.

Figure 3 - Example of One Vendor’s Average Fuel Price for April 2012

Source: SIGAR Analysis (difference due to rounding error)

*All costs are vendor reported.
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 10

Figure 4 - ANA Fuel Ordering Process

Source: SIGAR Analysis Based on CSTC-A and MOD documentation.

With regard to fuel consumption, 120 of the 150 fuel orders did not have the required MOD Form 32 

documenting fuel consumption. Five of the remaining 30 fuel orders that did contain the form lacked specific 

consumption data. In total, CSTC-A authorized over $11.1 million of the $13.9 million in fuel orders in our 

sample that were not supported by consumption data and were not approved by the Afghan government.

As a result of SIGAR’s findings over the course of our audit, CSTC-A issued fragmentary orders16 to strengthen

adherence to the fuel ordering process established by MOD Decree 4.6 and improve controls. Specifically, in 

May 2012, CSTC-A issued a fragmentary order to, among other things, require MOD Forms 14 and 32 to be 

submitted to CSTC-A monthly to support fuel orders submitted for payment. CSTC-A issued a follow-on 

fragmentary order in September 2012 that added language to reinforce MOD Decree 4.6 requirements and 

stipulate that units will not be eligible to receive fuel and the MOD Forms 14 will be rejected if MOD Forms 32 

(documenting consumption) is not on file.

CSTC-A Does Not Verify Quantity or Quality of Delivered Fuel

MOD Decree 4.6 requires ANA units to prepare MOD forms to document receipt and distribution of fuel, but 

CSTC-A is not required to use these MOD forms (8 and 9, used to document fuel quantity delivered and 

distributed) when ordering or acknowledging receipt of the vendor-reported fuel quantity and quality delivered.

Also, SIGAR’s test found 88 instances where invoices were paid without proof of quality on the delivery ticket.

Blanket purchase agreements also require quantity and quality controls, including requirements that the 

contractor provide lab reports of fuel quality for all shipments on at least a monthly basis as well as to further 

certify that delivered fuel is free of contaminants. A current fuel ordering officer stated that required lab 

reports are not realistic in Afghanistan due to the absence of labs. In our sample of 150 fuel orders, we found 

that CSTC-A could not provide the required MOD forms documenting receipt of vendor-reported fuel for 99 

orders (66 percent).

 

16 A fragmentary order is an abbreviated form of an operation order (verbal, written, or digital) usually issued on a day-today basis that eliminates the need for restating information contained in the basic operation order. It is issued after an 

operation order to change or modify that order.
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 11

CSTC-A Exceeded Agreement-Imposed Fuel Ordering Limits and Lacks Separation of Duties in Fuel Ordering and Payment

The agreements established by the Kabul Regional Contracting Center, which were in effect during our audit,

authorize CSTC-A’s fuel ordering officer to place orders up to $500,000 and require that any orders exceeding 

that figure be placed instead by the contracting officer. However, we found 39 paid fuel orders in the 

checkbook that were placed by CSTC-A’s fuel ordering officers that exceeded $500,000, including one for 

$768,000. Seven of these 39 orders occurred on a single day in January 2012. CSTC-A’s fuel ordering officer 

did not provide us with documentation to justify exceeding the $500,000 limit. As a result, the fuel ordering 

officer placed unauthorized fuel purchases and committed U.S. funds above the limit authorized in the 

agreements, potentially exposing those funds to fraud, waste, and abuse.

We also found that a CSTC-A fuel ordering officer was responsible for fuel ordering, reporting, and payment 

processes. Internal control standards state that no one person should control all key aspects of a transaction 

or event to reduce the risk of error or fraud. Instead, responsibilities for authorizing, processing, recording, and 

reviewing transactions, as well as handling related assets, should be separated.17 However, we found 147 

instances where the same fuel ordering officer placed a fuel order with a vendor, updated the checkbook, and 

acknowledged fuel quality and quantity delivered to initiate vendor payment. A payment system based so 

heavily on a single individual leaves the U.S. government open to increased risk of fraud, waste, and abuse. 

CSTC-A’S ESTIMATES FOR FUNDING ARE BASED ON UNSUPPORTED DATA AND 

POTENTIALLY OVERSTATED

The approximately $2.8 billion that CSTC-A estimates will be necessary to fund purchases of ANA POL between 

fiscal years 2014 and 2018 are based on questionable calculations. Specifically, funding estimates were not 

based on known fuel consumption. Instead, CSTC-A’s funding estimates were based on fuel orders in which 

SIGAR found significant control issues, including inconsistent use of MOD delivery forms, consumption forms 

and approvals by MMC-A. CSTC-A, in April 2012, told SIGAR that 254 ANA locations received fuel, but could not 

provide us with a list of these locations until July 2012, when it offered a list of 188 sites.18 CSTC-A did not 

have consumption data or reliable information on ANA vehicles and generators, but nonetheless increased its 

estimate of the funding needed to fulfill these fuel requirements from fiscal year 2012 to fiscal year 2018. 

CSTC-A’s method for estimating future fuel requirements and the funding required to fulfill these requirements 

is not clear to us. According to a CSTC-A official, a single month’s fuel ordering data from March 2012 was 

used to calculate fuel requirements for all of fiscal year 2013. The fiscal year 2013 budget request then 

formed the basis for CSTC-A’s fiscal years 2014 through 2018 funding estimates. In its response to our 

September 2012 interim report, CSTC-A stated that fiscal year 2012 expenditures are anticipated to be 

approximately $480 million for ANA POL, based on fuel orders placed from August 2011 through July 2012, 

rather than on the single month of March 2012. However, CSTC-A’s supporting documentation does not 

support this statement. The 12 months of fuel orders CSTC-A cites totaled $493.5 million for all of the ANSF 

and $338.3 million for ANA, raising concerns about the basis for CSTC-A’s $480 million estimate.

CSTC-A’s problems in estimating fuel requirements are evident in the fact that 9 months into fiscal year 2012, 

CSTC-A was still using fiscal year 2011 funds. SIGAR estimates that by January 2013, 3 months into fiscal year 

2013, CSTC-A will have more than $266 million available in fiscal year 2012 funds for fiscal year 13 fuel 

orders. This raises the question as to whether CSTC-A requires its full fiscal year 2013 funding request.

 

17 GAO, Standards for Internal Control in the Federal Government.

18 In October 2012, the CSTC-A fuel ordering officer told us that the reduction of ANA fuel locations receiving direct

deliveries from vendors was ongoing but noted that direct deliveries were still being made to approximately 240 ANA fuel 

locations.
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 12

DESPITE CONCERNS ABOUT ANA’S CAPACITY TO PURCHASE FUEL, CSTC-A 

INTENDS TO PROVIDE THE AFGHAN GOVERNMENT WITH $1 BILLION IN DIRECT 

FUNDING

SIGAR has raised concerns about CSTC-A’s fuel accountability, and the Army Audit Agency has reported 

concerns about controls over CSTC-A’s direct contributions to the Afghan government. Assessments of MOD 

and ANA, through the Capability Milestone ratings system, suggest that MOD is not ready to assume sole 

responsibility for POL, especially with concerns about the accountability and transparency of the use of prior 

direct contributions to the Afghan government. Nevertheless, CSTC-A is proceeding with plans to directly 

provide at least $1 billion to the Afghan government between early 2013 and fiscal year 2018 for MOD to 

purchase its own fuel.19

In 2012, the Army Audit Agency observed that direct contributions are inherently high risk due in large part to 

procedural and cultural difference between the U.S. and Afghan governments. As noted above, we also raised 

concerns about fuel accountability and the feasibility of increasing direct contributions in an interim report and 

two congressional testimonies on the subject in September 2012. As noted previously, CSTC-A plans to 

provide direct contributions of one-third of its ANA POL budget to the Afghan government, which―according to 

estimates through fiscal year 2018―total more than $1 billion over the next 6 years. 

In addition to external agency reports, CSTC-A’s Capability Milestone rating system, which CSTC-A uses to 

assess the abilities and capacity of MOD on a quarterly basis, suggested weaknesses in MOD and ANA logistics 

capacity. Further, CSTC-A’s standard operating procedures state that it must conduct a risk assessment prior 

to direct contributions and that this assessment must include a “deliberate examination of the risk to overall 

capacity development, the security mission, and the stewardship of public resources.” In April 2011, CSTC-A 

reported that MOD logistics, which includes fuel management and the MMC-A, still requires “some coalition 

assistance.” However, as of February 2012, DOD assessed a national-level logistics entity as still requiring 

some coalition assistance, as well as giving MOD accountability, visibility, and department support for the 

Afghan Air Force20 and ground force command operations the lowest rating of “the department exists but 

cannot accomplish its mission.” This raises questions about whether MOD can adequately serve as a steward 

of public resources, as is necessary according to CSTC-A’s own standard operating procedures for direct 

contributions. As a result, CSTC-A may contradict its own standard operating procedures—which require

recipients to demonstrate appropriate stewardship of public resources—by beginning to provide funds directly 

to the Afghan government. This direct funding will be in spite of its own assessments and those of the Army 

Audit Agency, which question the readiness and controls, respectively, of MOD. 

 

19 Direct contributions became part of the Afghanistan Security Forces Fund after a statement on May 12, 2010, by 

Presidents Obama and Karzai reaffirmed the need to further direct U.S. assistance through the Afghan government. 

Pursuant to this effort, DOD developed a program to provide funding directly to the ministries. Based on a DOD report on 

progress toward security and stability in Afghanistan, DOD approved operating guidelines for providing Afghanistan Security 

Forces Funds directly to the Afghanistan security ministries through the Ministry of Finance. 

20 According to CSTC-A, the total POL funding requirement for the Afghan Air Force will be over $457 million for fiscal years 

2014 to 2018.
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 13

CONCLUSION

Successful management of POL, particularly fuel for vehicles, generators, and power plants, is critical to 

ensuring effective logistics capability for ANA. However, CSTC-A’s current process for managing the supply of 

POL to ANA lacks the necessary accountability and leaves U.S. funds vulnerable to fraud, waste, and abuse. 

CSTC-A’s problems successfully managing ANA POL include, among other things, failing to keep complete and 

accurate records, not following up on potential theft or tracking loss of fuel due to spillage or mishap, failing to

follow established fuel ordering procedures, not verifying fuel deliveries, and limiting competition among

vendors thereby potentially exposing the U.S. government to increased fuel costs. Moreover, by basing its 

future years’ funding estimates on prior fuel ordering activities rather than a systematic analysis of fuel 

requirements for ANA vehicles, generators, and power plants, CSTC-A risks overstating the amount of funding 

that will be necessary in the future. Despite these problems, CSTC-A continues to press forward with 

substantially increasing annual ANA POL budgets without validating fuel needs and plans to provide billions of 

dollars over the next several years directly to the Afghan government for the purchase of ANA POL. Given that 

CSTC-A’s current process for ordering, delivering, and paying for fuel lacks the necessary accountability to 

protect U.S. funds from fraud, waste, and abuse, we are not confident that an Afghan-managed process would 

lead to greater accountability—particularly given the extensive problems with Afghan logistics capacity we and 

others have repeatedly identified.

RECOMMENDATIONS

To improve accountability of U.S. funds and purchased fuel, we recommend that the Commanding General, 

NATO Training Missions-Afghanistan/CSTC-A:

1. Comply with existing DOD regulations to retain original or electronic records in order to prevent 

destroyed or unavailable records. 

2. Develop a process to identify, investigate, and resolve differences between quantities of fuel ordered 

and quantities of fuel delivered and any allegations of fuel theft. 

3. In coordination with plans being developed for the Afghan government, immediately develop an action 

plan to improve the fuel process from price approval, ordering, delivery, receipt, and payment of fuel 

to better account for U.S. funds and to assure fuel is appropriately purchased, received, and 

consumed by ANA forces. Such a plan should include, but not be limited to: 

a. Improving methods for ensuring the price paid for fuel is commensurate with market 

conditions and for verifying that costs charged to the U.S. government for such items as 

Afghan government fees are allowable;

b. Ensuring that all fuel orders are authorized by the Afghan MMC-A and the required MOD forms 

32 and 14 are maintained and used to support consumption and fuel requirements;

c. Ensuring that CSTC-A rejects all fuel orders not authorized by the Afghan MMC-A;

d. Developing controls to assure that fuel ordering officers cannot exceed fuel ordering limits 

established by blanket purchase agreements without evidence of contracting officer approval;

e. Developing controls to assure the use of MOD Forms 8 and 9 to verify the quantity and quality 

of vendor-reported fuel delivered to ANA; 

f. Developing safeguards to ensure CSTC-A fuel ordering responsibilities are separated and no 

one person has control over ordering, acknowledging receipt, and authorizing payment; 
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 14

g. Implementing standard operating procedures for reconciling fuel orders with receipts, 

invoices, and payments made by Defense Finance and Accounting Services; and

h. Retaining the appropriate supporting documentation for all fuel orders.

To more realistically estimate its budget requests and future years’ funding estimates for fuel, we recommend 

that the Commanding General, NATO Training Missions-Afghanistan/CSTC-A:

4. Establish the fiscal year 2013 funding level at the fiscal year 2012 ANA funding level of $306 million 

and use along with the remaining available fiscal year 2012 appropriated ANA fuel funds to meet the 

ANA fuel requirement for fiscal year 2013. 

5. Systematically analyze ANA fuel consumption in order to reformulate its funding estimates for fiscal 

years 2014 to 2018 based on validated ANA fuel requirements rather than prior years’ fuel ordering 

activities. 

To assure proper stewardship and transparency of U.S. funds and fuel purchases in the future, we recommend 

that the Commanding General, NATO Training Missions-Afghanistan/CSTC-A:

6. Revise CSTC-A’s strategy for providing direct contributions to the Afghan government for future fuel 

purchases until MOD demonstrates transparency and accountability without coalition assistance. For 

example, CSTC-A could begin with a small amount of direct contributions to purchase fuel for specific 

units and/or power plants and then adjust upwards based upon assessments of MOD capacity and 

accountability of fuel ordered, delivered, and consumed. 

 

AGENCY COMMENTS

CSTC-A and U.S. Army Central generally concurred with all six recommendations and provided written 

comments on a draft of this report, which are reproduced in appendices III and IV. NTM-A/CSTC-A stated that it 

concurred with our recommendations and described actions it has taken or will take to address them. In 

particular, CSTC-A noted that it shares our concerns for MOD transparency and accountability and will initiate 

procedures, including incremental funding and monthly audits, to minimize corruption and provide more 

oversight as it transitions fuel funding and responsibility to MOD.

However, some of CSTC-A’s comments either did not reflect the intent of our recommendation or made 

assertions with which we disagree or cannot verify before issuing this report. For example, we disagree that

using the vendor delivery ticket alone verifies that quantity ordered equals quantity delivered. The vendor fills 

out the delivery ticket and does not include supporting documentation from a meter reading, scale, or other 

proof of the actual fuel quantity delivered. CSTC--A further states that fuel is off-loaded after the recipient 

verifies that the fuel passed quality tests, however, we found numerous instances of no evidence that quality 

tests were performed for the selected 150 paid fuel orders that we tested. 

Furthermore, CSTC-A concurred with our recommendation to use the fiscal year 2012 ANA budget, but only as 

a starting baseline—along with other factors—to establish the fiscal year 2013 budget. However, as noted in 

our report, CSTC-A estimated fiscal year 2013 ANA expenditures at $480 million without providing 

documentation to support that amount. Further, more than $266 million in fiscal year 2012 funds will still be 

available to use along with the recommended $306 million for fiscal year 2013. Therefore, we continue to 

recommend that the fiscal year 2013 budget should not be increased beyond that of fiscal year 2012

Our specific responses to CSTC-A’s and U.S. Army Central’s comments and actions are also included in 

appendices III and IV.
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 15

APPENDIX I - SCOPE AND METHODOLOGY

In February 2012, the Office of the Special Inspector General for Afghanistan Reconstruction (SIGAR) initiated 

an audit of the Afghan National Army’s (ANA) logistics capability regarding petroleum, oil, and lubricants (POL). 

SIGAR’s overall objective was to assess U.S. efforts to develop ANA’s capability to acquire, distribute, and 

account for POL supplies to its forces. This report assesses (1) the internal controls in place to provide 

accountability for ANA POL and to prevent fraud, waste, and abuse; (2) the extent to which the NATO Training 

Missions-Afghanistan/Combined Security Transition Command-Afghanistan’s (CSTC-A) funding requests for 

ANA POL are based on accurate requirements data; and (3) CSTC-A’s efforts to provide direct contributions to 

the Afghan government. Although CSTC-A recorded fuel orders in a checkbook beginning in 2009, the 

checkbook did not contain complete information and source documentation was not available for orders 

placed between March 2010 and February 2011. As a result, we limited the scope of our audit to evaluate the 

internal controls in place to account for POL to paid ANA fuel orders placed for the 13-month period from 

March 2011 to March 2012. 

To assess compliance with MOD guidance and evaluate the sufficiency of internal controls, we reviewed MOD

policies and procedures and related Department of Defense (DOD) guidance including the use of required 

MOD and DOD forms and other documentation to determine if ANA is following established POL guidance. We 

also analyzed CSTC-A’s ANA POL budgetary and financial data and summarized quantities and resources 

needed and available. We interviewed CSTC-A, Kabul Regional Contracting Center, and Task Force 2010 

officials and CSTC-A advisors to obtain an understanding MOD/ANA logistics. We analyzed the processes and 

controls in place and reporting/reconciliation processes, including resolution of variances. We performed data 

mining techniques on CSTC-A’s checkbook and our audit population of 2,922 paid fuel orders to identify trends 

and irregularities, and followed up to address issues with CSTC-A. We considered Defense Logistics Agency, 

Army Audit Agency, Task Force 2010 reports to determine the level of risk associated with ANA POL. We also 

reconciled fuel orders with DFAS payments and summarized fuel theft reports received by Task Force 2010 to

assess the sufficiency of CSTC-A’s actions taken on the reports. 

As part of evaluating the sufficiency of internal controls in place to account for POL, we randomly selected a 

sample from CSTC-A’s checkbook of 150 paid fuel orders from a population of 2,922 paid fuel orders placed 

during the period from March 2011 through March 2012. We calculated our sample size at a 95-percent

confidence level with a 5-percent tolerable deviation rate from a population of 2,922 using Interactive Data 

Extraction and Analysis sample generation software. In calculating this sample, we assumed a 2-percent

expected deviation rate. The sample represented a total volume of approximately 8.3 million liters with a total 

value of approximately $13.9 million. We requested and reviewed MOD forms, invoices, Defense Finance and 

Accounting Services computer-processed payment data, Material Inspection and Receiving Reports (DD 250),

vendor delivery tickets, and monthly approved fuel rates for the 150 sample items. Although we exceeded the 

maximum tolerable deviation errors, we completed the test work of the sample items to obtain a more 

accurate picture of ANA POL operations throughout the country for the 13-month audit period.

To determine the funding levels needed to meet ANA POL requirements, we examined DOD’s fiscal year 2012 

and 2013 budget and the supporting documentation used to estimate annual funding levels. 

To determine the status of the CSTC-A efforts to develop ANA’s capacity to manage POL direct contributions, 

we (i) analyzed CSTC-A reported issues and DOD Inspector General audit reports and (ii) interviewed 

logistics/POL officials at CSTC-A, Task Force 2010, and Defense Logistics Agency to obtain the status of 

identified challenges and issues to develop a capable and sustainable ANA POL processes. We reviewed and 

analyzed MOD logistics and ANA POL policies and procedures, blanket purchase agreements, and CSTC-A and 

Task Force 2010 POL presentation slides. 

To assess the reliability of our population of paid ANA fuel orders, we (i) reviewed the fuel orders in CSTC-A’s 

fuel ordering office’s and Kabul Regional Contracting Center’s checkbooks and the Defense Finance and 

Accounting Services’ computer-generated payment data, (ii) performed data mining procedures, and (iii) traced 

fuel orders to source documents. Subsequent to our reconciliations and verification of revisions made to the 

checkbook during the period from March 2011 through March 2012, we determined that the audit population 
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 16

was sufficiently reliable and the needed documentation was available, given the research questions and 

intended use of the data. We also assessed internal controls over the ANA POL processes and considered 

allegations of fraud through review of CSTC-A briefings and documentation of fuel contracts, orders, and 

payments. The results of our reconciliation and assessments are included in the body of this report. 

We conducted work in Kabul, Afghanistan from February 2012 to January 2013 in accordance with generally 

accepted government auditing standards. These 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. The audit was conducted by the Office of Special Inspector General 

for Afghanistan Reconstruction under the authority of Public Law No. 110‐181, as amended, the Inspector 

General Act of 1978, and the Inspector General Reform Act of 2008. 
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 17

APPENDIX II - ADDITIONAL AUDIT INFORMATION

Table I - Results of Internal Control Tests

Description Number Liters Amount

Audit Population 2,922 139,471,572 $237,966,042

Sample Size 150 8,287,539 $13,878,966

Test Results – Missing Forms and Exceptions:

Missing Forms (38 percent of sample documents):

MOD Form 32 120 6,422,718 $10,433,764

MOD Form 14 80 2,838,083 $4,704,471

MOD Forms 8/9 99 4,077,400 $6,996,323

Vendor Delivery Tickets 32 1,424,074 $2,540,860

Vendor Invoice 2 200,000 $306,000

DOD Form DD250 3 260,000 $399,600

Vendor Price List 81 2,871,745 $4,769,596

Blanket Purchase Agreement Payment Call 13 278,051 $464,372

Exceptions Noted (35 percent of sample document):

MOD Form 14/fuel order not processed through depots 24 3,751,416 $5,969,271

Fuel order not signed by MMC-A 42 4,397,143 $7,078,603

Delivery Ticket not signed by ANA receiver 3 65,092 $131,230

Delivery Ticket not signed by driver 106 6,456,786 $10,533,498

No proof of vendor quality 88 4,674,170 $7,577,358

ANA did not document fuel quantity 51 4,273,178 $6,798,993

ANA did not document fuel quality 51 4,273,178 $6,798,993

Vendor quality not acknowledged 140 6,881,248 $11,389,843

No separation for fuel duties 147 8,065,578 $13,395,715

Invoice and approved fuel rate did not agree 15 n/a $38,402

Fuel order not based on actual consumption 5 456,943 $751,401

Fuel not reconciled to actual inventory 7 509,727 $848,607

Source: SIGAR analysis of detailed audit test results.
SIGAR Audit 13-4/Afghan National Army Petroleum, Oil, and Lubricants Capability Page 18

Figure I - Timeline of ANA Fuel Documentation and Key Audit Events
SIGAR Audit 13-4 / Afghan National Army Petroleum, Oil, and Lubricants Capability Page 19

Table II - Summary of Annual Afghanistan Security Forces Fund ANA Fuel Budget and Financial Data for 

Fiscal Years 2007-2018 (in millions)

Fiscal Year Enacted/Requesteda Obligationsb Disbursementsc

2007 $12.2 $107.0 $102.1

2008 $53.1 $115.9 $105.8

2009 $174.8 $127.3 $42.3

2010 $293.3 $252.6 $246.1

2011 $190.0 $274.1 $216.5

2012 $428.8 $ - $ -

2013 $343.1 $ - $ -

2014 $574.9 $ - $ -

2015 $555.0 $ - $ -

2016 $555.0 $ - $ -

2017 $555.0 $ - $ -

2018 $555.0 $ - $ -

Source: CSTC-A Finance Office through May 2012 and Afghanistan Security Forces Fund fiscal year 2007 through 2013 

budget justifications.

Notes:

aAfghanistan Security Forces Fund funding level estimated to meet annual ANA POL requirements; fiscal years 2007 

through 2012 amounts were enacted in annual DOD appropriations.

bAmount actually obligated to meet ANA fuel requirement.

cPayment of obligated funds for submitted invoices for fuel amounts purchased and delivered.
SIGAR Audit 13-4 / Afghan National Army Petroleum, Oil, and Lubricants Capability Page 20

APPENDIX III - COMMENTS FROM THE COMBINED SECURITY TRANSITION 

COMMAND-AFGHANISTAN
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SIGAR’s Response to CSTC-A’s January 2, 2013 Memorandum

1. We agree that the MOD forms are the property of the Afghan government and should be maintained by 

the MOD. However, we continue to believe that the MOD forms can act as tools for CSTC-A to 

independently review and verify fuel orders, deliveries, and consumption to improve accountability and 

controls. 

2. We disagree with CSTC-A’s assertion that the vendor delivery ticket alone verifies that quantity ordered 

equals quantity delivered. The vendor fills out the delivery ticket and does not include supporting 

documentation from a meter reading, scale, or other proof of the actual fuel quantity delivered. Further, 

CSTC-A has not had officials who could independently confirm delivery at all of the reported locations. 

CSTC-A further states that, upon verification by the recipient that the fuel passes quality tests, the fuel is 

off-loaded. However, we found numerous instances of no evidence that quality tests were performed for 

the selected 150 paid fuel orders that we tested. During our audit, CSTC-A also reported to us that fuel 

testing kits were too advanced for Afghanistan, and more basic kits would need to be ordered. 

Additionally, CSTC-A stated that discrepancy issues are immediately addressed to the COR and that 

CSTC-A will report, through its Inspector General, alleged or suspected fuel theft incidents to three 

organizations dedicated to fight Afghan vendor corruption. However, we were not provided any evidence 

of such discrepancy issues or referrals. 

3a. We agree that the contracting officer at CENTCOM Joint Theater Support Contracting Command is 

responsible for negotiating and approving fuel prices. However, as noted in our report, we did not 

receive evidence of review and approval of fuel prices. 

3b. To clarify the intent of our recommendation, we have updated this to state “maintained and used to 

support consumption and fuel requirements.” CSTC-A stated that since September 2012, coalition 

advisors at MMC-A ensure that MOD forms accompany each order and that all orders lacking supporting 

documentation are rejected. CSTC-A told us, however, that a single Afghan contractor at MMC-A 

reviewed ANA fuel orders prior to sending forward to CSTC-A. We did not receive information on how the 

contractor verifies MMC-A approval of each fuel request or the level of CSTC-A oversight of contractor.

3c. CSTC-A stated that coalition advisors at MMC-A ensure that MOD forms accompany each order and are 

reviewed against authorized fuel allocations. As noted, CSTC-A informed us that a single Afghan 

contractor was resident at MMC-A to review fuel orders prior to forwarding to CSTC-A.

3d. CSTC-A stated that it undertakes appropriate administrative checks to ensure that fuel orders do not 

exceed BPA limits. We noted that the specific administrative actions need to be clearly identified to 

ensure that fuel orders placed by fuel ordering officers do not exceed BPA limits without evidence of the 

required contracting officer approval. 

3e. CSTC-A stated that its use of delivery tickets conforms to Federal Acquisition Regulation Subpart 

32.905. However, our review of this clause found no language related to vendor-reported delivery 

tickets, including guidance as to whether such tickets are appropriate support for payment of an invoice. 

Specifically, the clause states that supporting documentation for authorizing payment should include 

quantities of supplies received and accepted, the date that a designated Government official accepted 

the supplies or approved the progress payment, and the signature of this designated official. However, 

as noted in the report findings, we found multiple instances where delivery tickets were not signed by 

the ANA and the vendor’s driver and the delivery tickets generally lacked proof of fuel quality. The 

delivery tickets reviewed found no notation of a “designated Government official” or that designated 

officials accepted the fuel or other independent verification of vendor-reported fuel quality and quantity. 

CSTC-A commented that the use of MOD Forms 8 and 9 is not the “optimal solution.” We disagree, as 

the MOD Decree requires these forms, which can help document fuel quantity. Such a step can help 

CSTC-A improve accountability and develop capacity within the ANA and MOD.
SIGAR Audit 13-4 / Afghan National Army Petroleum, Oil, and Lubricants Capability Page 28

3f. CSTC-A stated that receipt of fuel delivery is performed by personnel assigned to MMC-A and verified by 

CSTC-A’s contractors, and that this verification is done under the supervision of coalition advisors. 

However, CSTC-A officials told us that only one Afghan contractor works at MMC-A, and this contract 

began in August 2011. As a result, the level of verification between 2007 and August 2011 is unclear. 

Due to the apparent reliance on this individual, CSTC-A should determine the proper separation of duties 

to ensure orders from CSTC-A’s contractor at MMC-A are accurate. 

3g. CSTC-A stated that “order reconciliation is performed on a monthly basis upon receipt of monthly 

invoices from vendors...and performed by the COR.” However, CSTC-A did not regularly reconcile orders 

and payments until June 2012—5 years into funding of ANA POL. We did not verify the continued 

reconciliations by fuel ordering officers (contracting officer representative) because any subsequent 

monthly reconciliations took place after our audit period. 

4. CSTC-A generally concurred with our recommendation to use the fiscal year 2012 ANA budget, but only 

as a starting baseline to establish the fiscal year 2013 budget. CSTC-A added that other factors must be 

considered to develop the fiscal year 2013 budget. However, as noted in our report, CSTC-A estimated 

fiscal year 2013 ANA expenditures at $480 million without providing documentation to support that 

amount. Further, more than $266 million in fiscal year 2012 funds will still be available to use along 

with the recommended $306 million for fiscal year 2013. Therefore, we continue to recommend that 

the fiscal year 2013 budget should not be increased beyond that of fiscal year 2012.

5. CSTC-A stated that its advisors have directed MOD to implement a fuel allocations requirement for all 

MOD units that is justifiable and meets operational requirements, but added that MOD leadership was 

not able to provide adequate fuel allocation data and detailed some flaws with what was reported. In 

November 2012, we saw a draft model of the allocation procedures, originally expected to be rolled out 

in December 2012. We did not assess the procedures because they had not been finalized during the 

course of our fieldwork. We reiterate the need to validate any funding levels estimated to meet ANA fuel 

requirements. 

6. CSTC-A stated that it shares our concerns with fuel transparency and accountability and noted it will 

begin to transfer one-third of all fuel funding and responsibilities to the MOD in 2013 and the remaining 

two-thirds in 2014 based upon demonstrated success. CSTC-A also commented that it will incrementally 

disburse funds and conduct monthly audits. We believe that, at a minimum, such audits should include 

the verification of vendor fuel orders and vendor-reported deliveries to MOD forms and reconciliation of 

(a) contributions to MOD payments and remaining balances; (b) fuel orders to vendor deliveries and 

MoD payments; and (c) vendor deliveries to ANA distribution, consumption, losses, and remaining 

inventory. Further, CSTC-A should assure that the sources of information and systems are reliable.

Lastly, CSTC-A noted that MOD will assume control of diesel fuel for two of the seven ANA Corps but did

not detail which two these will be. CSTC-A appears to limit its definition of “responsibility” and “control” 

to be areas other than financing, which CSTC-A assumes it will support until at least 2018. We believe 

that full and complete Afghan “control” and “responsibility” will not exist until the Afghan government

can generate its own financing to meet its security mission. 
SIGAR Audit 13-4 / Afghan National Army Petroleum, Oil, and Lubricants Capability Page 29

APPENDIX IV - COMMENTS FROM U.S. ARMY CENTRAL
SIGAR Audit 13-4 / Afghan National Army Petroleum, Oil, and Lubricants Capability Page 30

SIGAR’s Response to U.S. Army Central’s December 27, 2012 Memorandum:

1. U.S. Army Central commented that CSTC-A may have “no other alternative” than to base budget requests 

on fuel orders because the needed consumption data may not exist. We disagree. Reliance on fuel 

orders without factoring battle losses and theft, in an environment riddled with vulnerabilities as detailed 

in this report would expose U.S. dollars to a high risk of fraud, waste, and abuse. We believe that CSTC-A 

must take significant steps to gain insight into actual consumption and losses to assure proper 

stewardship of U.S. taxpayer dollars.
SIGAR Audit 13-4 / Afghan National Army Petroleum, Oil, and Lubricants Capability Page 31

APPENDIX V - ACKNOWLEDGMENTS

Nicolas “Nick” Torres, Senior Audit Manager

Steven Haughton, Auditor-in-Charge

Christina Andersson, Senior Analyst

Dinusha Jayasinghe, Senior Auditor

The following staff provided analytical support:

Greg Paige, Forensic Auditor

Mia Bonarski, Communication Analyst/Graphics
SIGAR Audit 13-4 / Afghan National Army Petroleum, Oil, and Lubricants Capability Page 32

This audit report was conducted under project 

code SIGAR-054A.
SIGAR’s Mission

Obtaining Copies of SIGAR 

Reports and Testimonies

To Report Fraud, Waste, and 

Abuse in Afghanistan 

Reconstruction Programs

Public Affairs

The mission of the Special Inspector General for Afghanistan 

Reconstruction (SIGAR) is to enhance oversight of programs for the 

reconstruction of Afghanistan by conducting independent and 

objective audits, inspections, and investigations on the use of 

taxpayer dollars and related funds. SIGAR works to provide accurate 

and balanced information, evaluations, analysis, and 

recommendations to help the U.S. Congress, U.S. agencies, and 

other decision-makers to make informed oversight, policy, and 

funding decisions to: 

• improve effectiveness of the overall reconstruction 

strategy and its component programs; 

• improve management and accountability over funds 

administered by U.S. and Afghan agencies and their 

contractors; 

• improve contracting and contract management 

processes; 

• prevent fraud, waste, and abuse; and 

• advance U.S. interests in reconstructing Afghanistan. 

To obtain copies of SIGAR documents at no cost, go to SIGAR’s Web 

site (www.sigar.mil). SIGAR posts all publically released reports, 

testimonies, and correspondence on its Web site. 

To help prevent fraud, waste, and abuse by reporting allegations of 

fraud, waste, abuse, mismanagement, and reprisal, contact SIGAR’s 

hotline: 

• Web: www.sigar.mil/fraud 

• Email: sigar.pentagon.inv.mbx.hotline@mail.mil 

• Phone Afghanistan: +93 (0) 700-10-7300 

• Phone DSN Afghanistan: 318-237-3912 ext. 7303 

• Phone International: +1-866-329-8893 

• Phone DSN International: 312-664-0378 

• U.S. fax: +1-703-601-4065 

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• Email: sigar.pentagon.ccr.mbx.public-affairs@mail.mil

• Mail: SIGAR Public Affairs

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