**GAO-10-932T**                      Published: Jul 15, 2010. Publicly Released: Jul 15, 2010.                  

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## Highlights

This testimony discusses oversight of U.S. assistance programs in Afghanistan. Strengthening the Afghan economy through development assistance efforts is critical to the counterinsurgency strategy and a key part of the U.S Integrated Civilian-Military Campaign Plan for Afghanistan. Since fiscal year 2002, the U.S. Agency for International Development (USAID) has awarded over $11.5 billion in support of development assistance programs in Afghanistan. Since 2003, GAO has issued several reports and testimonies related to U.S. security, governance, and development efforts in Afghanistan. In addition to reviewing program planning and implementation, we have focused on efforts to ensure proper management and oversight of the U.S. investment, which are essential to reducing waste, fraud, and abuse. Over the course of this work, we have identified improvements that were needed, as well as many obstacles that have affected success and should be considered in program management and oversight. While drawing on past work relating to U.S. development efforts in Afghanistan, this testimony focuses on findings in our most recent report released yesterday on the USAID's management and oversight of its agricultural programs in Afghanistan. It will address (1) the challenges the United States faces in managing and overseeing development programs in Afghanistan; and (2) the extent to which USAID has followed its established performance management and evaluation procedures.

Various factors challenge U.S. efforts to ensure proper management and oversight of U.S. development efforts in Afghanistan. Among the most significant has been the "high-threat" working environment, the difficulties in preserving institutional knowledge due to the lack of a formal mechanism for retaining and sharing information during staff turnover, and the Afghan government ministries' lack of capacity and corruption challenges. USAID has taken some steps to assess and begin addressing the limited capacity and corruption challenges associated with Afghan ministries. In addition, USAID has established performance management and evaluation procedures for managing and overseeing its assistance programs. These procedures, among other things, require (1) the development of a Mission Performance Management Plan (PMP); (2) the establishment and approval of implementing partner performance indicators and targets; and (3) analyses and use of performance data. Although USAID disseminated alternative monitoring methods for projects in high-threat environments such as Afghanistan, USAID has generally required the same performance management and evaluation procedures in Afghanistan as it does in other countries in which it operates. Summary USAID has not consistently followed its established performance management and evaluation procedures. There were various areas in which the USAID Mission to Afghanistan (Mission) needed to improve upon. In particular, we found that the Mission had been operating without an approved PMP to guide its management and oversight efforts after 2008. In addition, while implementing partners have routinely reported on the progress of USAID's programs, we found that USAID did not always approve the performance indicators these partners were using, and that USAID did not ensure, as its procedures require, that its implementing partners establish targets for each performance indicator. For example, only 2 of 7 USAID-funded agricultural programs active during fiscal year 2009, included in our review, had targets for all of their indicators. We also found that USAID could improve its assessment and use of performance data submitted by implementing partners or program evaluations to, among other things, help identify strengths or weaknesses of ongoing or completed programs. Moreover, USAID needs to improve documentation of its programmatic decisions and put mechanisms in place for program managers to transfer knowledge to their successors. Finally, USAID has not fully addressed the risks of relying on contractor staff to perform inherently governmental tasks, such as awarding and administering grants. In the absence of consistent application of its existing performance management and evaluation procedures, USAID programs are more vulnerable to corruption, waste, fraud, and abuse. We reported in 2009 that USAID's failure to adhere to its existing policies severely limited its ability to require expenditure documentation for Afghanistan-related grants that were associated with findings of alleged criminal actions and mismanaged funds. To enhance the performance management of USAID's development assistance programs in Afghanistan, we have recommended, among other things, that the Administrator of USAID take steps to: (1) ensure programs have performance indicators and targets; (2) fully assess and use program data and evaluations to shape current programs and inform future programs; (3) address preservation of institutional knowledge; and (4) improve guidance for the use and management of USAID contractors. USAID concurred with these recommendations, and identified steps the agency is taking to address them. We will continue to monitor and follow up on the implementation of our recommendations.

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## Topics

International Affairs

Agricultural assistanceAgricultural productionAgricultural programsDrugsEconomic assistanceEconomic developmentEconomic growthEconomic stabilizationEconomically depressed areasEvaluation methodsForeign economic assistanceInstitutional knowledgeInternational economic relationsMonitoringNarcoticsPerformance managementPerformance measuresPlanningProgram evaluationStrategic planningProgram implementation