SIGAR Audit -11-1 Anti-Corruption/Sub-National Governance

OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN RECONSTRUCTION

Weaknesses in Reporting and Coordination of

Development Assistance and Lack of Provincial Capacity 

Pose Risks to U.S. Strategy in Nangarhar Province

October 26, 2010
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page i 

OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN RECONSTRUCTION

October 26, 2010 

The Honorable Robert Gates

U.S. Secretary of Defense

The Honorable Hillary Rodham Clinton 

U.S. Secretary of State 

The Honorable Karl W. Eikenberry

U.S. Ambassador to Afghanistan 

General David Petraeus 

Commander, U.S. Forces-Afghanistan, and 

Commander, International Security Assistance Force

Dr. Rajiv Shah 

Administrator 

U.S. Agency for International Development 

Mr. Earl Gast 

USAID Mission Director to Afghanistan

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

Reconstruction’s (SIGAR) review of U.S. development funds expended in Afghanistan’s Nangarhar 

Province. The report includes five recommendations to help ensure that the government of Afghanistan 

and U.S. personnel are aware of provincial-level U.S. development activities, priorities, and 

expenditures; the Afghanistan government develops an accurate picture of provincial-level expenditures 

for the external budget; U.S. development funds expended in Nangarhar are used to further cohesive, 

Afghan provincial development priorities; the government of Afghanistan sustains completed U.S. 

development projects; and, Nangarhar’s provincial directorates develop the capacity to absorb 

additional development funds and implement projects. 

A summary of this report is on page ii. This performance audit was conducted by SIGAR under the 

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

preparing the final report, we considered comments from U.S. Forces-Afghanistan and U.S. Embassy 

Kabul. These comments indicated concurrence with our findings and recommendations. Copies of these 

comments are included, respectively, in appendices VIII and IX of this report.

John Brummet

Assistant Inspector General for Audits

Office of the Special Inspector General 

 for Afghanistan Reconstruction
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page ii

SIGAR

Special Inspector General for Afghanistan Reconstruction

SIGAR Audit-11-1 October 2010

Weaknesses in Reporting and Coordination of 

Development Assistance and Lack of Provincial 

Capacity Pose Risks to U.S Strategy in 

Nangarhar Province

What SIGAR Reviewed

Enhancing sub-national governance is essential to building the government of Afghanistan’s capacity and linking Afghan 

citizens to their government. The success of the U.S. government’s new funding strategy—channeling significantly more 

development funding through the Afghan government—will depend largely on the capacity of provincial 

administrations to manage development funding to achieve coherent and cohesive development objectives. This report 

assesses (1) the amount and type of U.S., Afghan, and donor development funding expended in Nangarhar Province; 

(2) the degree to which U.S. projects are aligned with Nangarhar’s development priorities; and (3) the extent to which 

Nangarhar’s provincial administration is prepared to absorb and execute additional development funds. SIGAR 

conducted this performance audit in Kabul and Nangarhar, Afghanistan, from May to September 2010 in accordance 

with generally accepted government auditing standards.

What SIGAR Found

The centralized nature of the Afghan government, the lack of donor reporting, and the scope of some development projects

make identifying and assessing the total amount of development funds expended in Nangarhar problematic. Nangarhar 

receives both operating and development funds from various sources, including the Afghan government, international donors, 

and other stakeholders. Nangarhar’s provincial directorates and offices expend about 85 percent ($51.3 million) of the core 

operating budget on wages and salaries, and 4 percent of core budget expenditures on development. The U.S. government 

and other donors fund most of the development in Nangarhar, including more than $100 million in estimated U.S. 

development activities identified by SIGAR during fiscal year 2009. However, donors, including the United States, do not track, 

report, or coordinate provincial funding with other donors. 

U.S. government agencies providing development funds and assistance to Nangarhar have made some progress in aligning 

development projects and programs with provincial priorities. However, U.S. government development projects and programs 

are currently being implemented without the benefit of provincially generated, government of Afghanistan endorsed 

development priorities. Nangarhar Province does not have a functioning development planning process or provincial 

development plan. For example, Nangarhar Province’s completed provincial development plan is outdated, not tied to any 

dedicated funding, and largely ignored by Afghanistan’s national and provincial government, the U.S. government, and the 

international community. Moreover, according to SIGAR analysis and several senior U.S. officials responsible for multi-million 

dollar development projects in Nangarhar Province, many U.S.-funded development projects in Nangarhar are not being 

sustained by the Afghanistan government. Furthermore, the government of Afghanistan lacks visibility over and or input into 

many externally funded and implemented development projects, and donors in Nangarhar have not effectively coordinated 

their efforts.

The level of centralization and lack of procurement authority and budget input has left Nangarhar’s line directorates with little

capacity to absorb significantly more development funding. Any control or influence Nangarhar Province has over public 

resources comes through its ability to shape the national budget or its influence over budget execution. Nangarhar’s line 

directorates play a limited role in development activities in Nangarhar. Nearly all of the Afghan government’s core 

development activities are centralized in Kabul at the ministry level.

What SIGAR Recommends

The report includes five recommendations to help prevent waste in the implementation of U.S. development projects in 

Nangarhar, and to help ensure that the government of Afghanistan and U.S. personnel are aware of provincial-level U.S. 

development activities, priorities, and expenditures; the Afghan government can develop an accurate picture of 

provincial-level expenditures for the external budget; U.S. development funds expended in Nangarhar are used to 

further Afghan provincial development priorities; the Afghan government is able to sustain completed U.S. 

development projects; and Nangarhar’s provincial directorates are able to develop the capacity to absorb additional 

development funds and implement projects. 

In response to a draft of the report, U.S.Forces-Afghanistan and U.S. Embassy Kabul indicated general concurrence with 

the recommendations. U.S.Forces-Afghanistan outlined steps it would take to address the recommendation to help 

ensure that CERP projects are sustained by the Afghan government. While U.S. Embassy Kabul generally agreed with 

the findings and recommendations, it did not indicate how it would address the recommendations. 

For more information contact: SIGAR Public Affairs at (703) 602-8742 or PublicAffairs@sigar.mil
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page iii

TABLE OF CONTENTS

Background ................................................................................................................................................... 1

Development Funding in Nangarhar is Not Well Reported or Coordinated................................................. 3

U.S. Development Projects and Programs in Nangarhar Are Not Tied to Cohesive 

Provincial Development Priorities and are Implemented without 

Government of Afghanistan Input ......................................................................................................... 8

Nangarhar’s Line Directorates Lack the Capacity Necessary to Absorb 

Significantly More Development Funding............................................................................................12

Conclusion...................................................................................................................................................16

Recommendations......................................................................................................................................16

Comments...................................................................................................................................................17

Appendix I: Scope and Methodology.........................................................................................................19

Appendix II: Government of Afghanistan Core Budget Information .........................................................21

Appendix III: Nangarhar Province Core Budget Information......................................................................26

Appendix IV: CERP Budget Information in Nangarhar Province ................................................................. 29

Appendix V: USAID Budget Information in Nangarhar Province ................................................................30

Appendix VI: State Department Budget Information in Nangarhar Province ............................................34

Appendix VII: Un-Habitat Activities in Nangarhar Province........................................................................35

Appendix VIII: Comments from U.S. Forces – Afghanistan ........................................................................36

Appendix IX: Comments from the U.S. Embassy Kabul ..............................................................................37

TABLES

Table 1: Nangarhar’s SY 1388 and SY 1389 (Partial Year) Core Development 

Budget Execution.................................................................................................................................... 6

Table 2: UN Agencies with Projects in Nangarhar Province, FY 2009........................................................... 7

Table 3: Core Development Budget Funds Executed by Line Directorates in 

Nangarhar Province, SY 1389 (March – June 2010) .............................................................................15

Table I: Government of Afghanistan Total Operating and Development Budget, 

SY 1388 .................................................................................................................................................23

Table II: Government of Afghanistan Operating Budget by Code, SY 1388................................................24

Table III: Government of Afghanistan Operating Budget by Economic Category, 

SY 1388 .................................................................................................................................................24

Table IV: Government of Afghanistan Core Development Budget by Sector, 

SY 1388 .................................................................................................................................................25

Table V: Nangarhar Province Operating Budget by Budget Code, SY 1388................................................26

Table VI: Allocation of Nangarhar Province Operating Budget by Government 

Department, SY 1388............................................................................................................................27

Table VII: Nangarhar Province Consolidated Operating (by Budget Code) and 

Development Budget (by Ministry), SY 1388 .......................................................................................28

Table VIII: Total Obligations by CERP in Nangarhar Province by Project Category, 

October 1, 2008 to March 31, 2010 .....................................................................................................29

Table IX: Estimated USAID Disbursements and Percentages in Nangarhar 

Province by Primary Sector, FY 2009....................................................................................................30

Table X: USAID Implementing Partners in Nangarhar Province by Number of 

Projects and Sector, Fiscal Years 2009 and 2010 (Partial Year) ...........................................................31
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page iv

Table XI: State Department Grants for Nangarhar Province, Fiscal Years 2009 

and 2010 (Partial Year).........................................................................................................................34

Table XII: Budget and Expenditures for Performance Based Governor's Fund 

SY 1389 (Partial Year) for Nangarhar Province.....................................................................................34

Table XIII: Projects Conducted by UN-Habitat (United Nations Human 

Settlements Programme) in Nangarhar Province, FY 2009..................................................................35

FIGURES AND PHOTOS

Figure 1: Map of Afghanistan Highlighting Nangarhar Province. ................................................................. 3

Figure 2: Nangarhar’s SY 1388 Recurrent Operating Budget, by Budget Code............................................ 4

Figure 3: Nangarhar’s SY 1388 Recurring Operating Budget, by Ministry.................................................... 4

Figure I: Government of Afghanistan’s SY 1388 Budget, by Budget Code .................................................21

Figure II: Government of Afghanistan’s SY 1388 Recurring Operating Budget, by 

Economic Categories............................................................................................................................22

Figure III: Estimated USAID Disbursements Percentages in Nangarhar Province 

by Primary Sector, FY 2009...................................................................................................................30
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page v 

ACRONYMS

ADT Agribusiness Development Team

ARTF Afghanistan Reconstruction Trust Fund 

CERP Commander’s Emergency Response Program

MAAWS-A Money as a Weapon System – Afghanistan

MoF Ministry of Finance

NGO Non-governmental organization

O&M Operations and maintenance

PDC Provincial Development Committee

PDP Provincial Development Plan

PRT Provincial Reconstruction Team

SNGP Sub-national Governance Policy

TF Task Force 

TWG Technical Working Group

UN United Nations

UNAMA United Nations Assistance Mission in Afghanistan

USAID U.S. Agency for International Development

USFOR-A U.S. Forces-Afghanistan
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 1 

Weaknesses in Reporting and Coordination of Development Assistance and Lack 

of Provincial Capacity Pose Risks to U.S. Strategy in Nangarhar Province

Since 2002, the majority of U.S. development assistance to Afghanistan has been managed by U.S. 

agencies, bypassing the Afghan government. In January 2010, however, the United States and other 

members of the international donor community committed to increasing the percentage of assistance 

delivered through the Afghan government to 50 percent over the next two years. At the Kabul 

Conference in July 2010, the international community reaffirmed this commitment. For the U.S. 

government and international community to fulfill their commitment, the government of Afghanistan 

must reduce corruption, improve financial management and budget execution, and increase the 

capacity of the central and provincial government agencies to deliver public services. 

The international community has ongoing initiatives to strengthen sub-national governance, which is 

essential to building the government of Afghanistan’s capacity and linking Afghan citizens to their 

government. The success of the international community’s new funding strategy also depends on the 

capacity of provincial administrations to absorb and execute development funding to achieve coherent 

and cohesive development objectives. As the government of Afghanistan moves to devolve additional

development authorities and channel more funds to the sub-national level, the capacity of these 

institutions to absorb and execute development funding will be critical to the strategy’s success. 

This report assesses (1) the amount and type of Afghan, U.S., and other donors’ development funding 

expended in Nangarhar Province, (2) the degree to which U.S. projects are aligned with Nangarhar’s 

development priorities, and (3) the extent to which Nangarhar’s provincial administration is prepared to 

absorb and execute additional development funds. To accomplish these objectives, we reviewed 

relevant U.S., Afghan, and international laws, policies, conventions, standards, and development 

strategies. We interviewed officials from the Departments of Defense, State, Agriculture, and the 

Treasury; the U.S. Agency for International Development (USAID); international organizations such as 

the United Nations Assistance Mission in Afghanistan (UNAMA); Afghan government institutions in 

Kabul and Nangarhar; and USAID implementing partners. We conducted our work in Kabul and 

Nangarhar, Afghanistan, from May to September 2010 in accordance with generally accepted 

government auditing standards. A discussion of our scope and methodology is included in appendix I.

BACKGROUND 

Afghanistan is a centralized state with limited authority to govern at the provincial and sub-provincial 

levels. The Afghan constitution defines provinces as administrative units of the central government; 

municipalities are the only recognized type of local government. The provincial tier includes the 

provincial directorates of central ministries, the governor’s offices, and the provincial council—an 

elected body with oversight but no legislative authority. The provincial governors lead planning, 

budgeting, and coordination. They oversee and monitor the activities of provincial line directorates to 
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 2 

ensure that the directorates implement programs in accordance with provincial plans. The directors of 

provincial departments are appointed and report to their respective central line ministries, although this 

line of accountability is blurred by their relationship to provincial governors, who are also appointed 

officials.

Chaired by governors (or the governor’s representative), Provincial Development Committees (PDC) 

were established to coordinate the activities of the line ministries, prepare Provincial Development 

Plans (PDP), improve donor coordination, monitor the implementation of development projects, and 

enhance the capacity of the provincial administration for public administration and public service 

delivery. PDC roles, functions, and membership vary by province, and the oversight and monitoring 

activities of the PDCs and provincial councils overlap. In some provinces, including Nangarhar Province, 

Technical Working Groups (TWG) serve as functional subcommittees for the PDC. Directors of provincial 

line directorates—and perhaps other stakeholders—hold monthly meetings to discuss sectoral and 

economic development, security, and education. TWGs often present development projects and 

recommendations to the PDC.

Budgetary authority within the government of Afghanistan is centralized in Kabul, with budgets 

allocated to central line ministries and other central government entities (appendix II contains more 

information on the government of Afghanistan’s core budget). Governors and ministry directorates in 

the provinces are not budgetary units. Despite efforts in recent years to involve provincial entities in the 

budget process, they continue to have little or no say in budget formulation. The government of 

Afghanistan’s budget provides funding for the central-level agencies, which in turn determine provincial 

needs and allocations. As a result, the “provincial budget” is the sum of all ministerial funds allocated to 

and expended by the provincial directorates of the central government.

Strategically situated along a primary gateway for trade with Pakistan, Nangarhar is the second highest 

revenue-generating province in Afghanistan (see Figure 1 for map of Afghanistan identifying the location 

of Nangarhar Province). Highway 1A is the most important trade route in the Eastern region, connecting 

Kabul to Pakistan, with Torkham Gate serving as the border crossing at the Kyber Pass. Nangarhar’s 

capital city Jalalabad serves as the cultural, political, and economic center of the eastern region. 

Nangarhar is the most densely populated province in Afghanistan, with an estimated population of 1.85 

million people, most of whom are ethnic Pashtuns. Nangarhar is considered the most stable province in 

the eastern region, though the security situation has deteriorated significantly over the last year. 
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 3 

Figure 1: Map of Afghanistan Highlighting Nangarhar Province.

Source:http://afghanistan.usaid.gov/en/province.22.aspx. 

DEVELOPMENT FUNDING IN NANGARHAR IS NOT WELL REPORTED OR COORDINATED

The centralized nature of the Afghan government, the lack of donor reporting, and development 

projects that span multiple provinces make identifying and assessing the total amount of development 

funds expended in Nangarhar problematic. Nangarhar receives both operating and development funds 

from various sources, including the Afghan government, international donors, and other stakeholders. 

Nangarhar Province expends about 85 percent of its core operating budget on wages and salaries and 

4 percent of core budget expenditures on development. The U.S. government and other donors fund 

most of the development in Nangarhar but do not track funds or coordinate provincial funding with 

other donors.

Nangarhar Province Expends 85 Percent of Its Core Operating Budget on Wages and Salaries

Nangarhar’s total core operating expenditures for solar year (SY) 1388, the most recent solar year for 

which complete data are available, was $60,701,884.1

 

1 The 1388 solar year is the Afghanistan government’s fiscal year, from approximately March 22, 2009 to March 21, 

2010.

Eighty-five percent of operating expenditures, or 

$51.3 million, was used for salaries and wages (see figure 2 for a breakdown of Nangarhar Province’s 

operating budget by budget code). The Afghan government’s 1388 budget notes that the high 

percentage of the budget dedicated to wages and salaries is of serious concern because low spending on 

goods and services can adversely affect service delivery.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 4 

Figure 2: Nangarhar’s SY 1388 Recurrent Operating Budget, by Budget Code

Source: SIGAR analysis of Ministry of Finance data.

Note: Total does not equal 100 percent due to rounding.

Two provincial directorates—those of the Ministry of Interior and Education—received 72 percent of 

Nangarhar’s operating budget in SY 1388. These two directorates primarily used their funding to pay for 

the wages and salaries of police and teachers. As seen in figure 3, the remaining directorates received 

28 percent of the total operating budget for the province (see appendix III for more detailed information 

on Nangarhar’s core operating budget).

Figure 3: Nangarhar’s SY 1388 Recurring Operating Budget, by Ministry

Source: SIGAR analysis of Ministry of Finance data.

Note: Total does not equal 100 percent due to rounding.

85%

11%

5%

0%

Wages and Salaries

Use of Goods and Services

Subsidies, Grants & Social 

Expenditures

Acquisition of Assets

38%

33%

7%

4%

4%

13%

Ministry of Interior 

Ministry of Education 

Ministry of Higher 

Education 

Ministry of Martyrs, 

Disabled and Social Affairs

Ministry of Agriculture 

All Other Ministries
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 5 

Government of Afghanistan Reporting Gaps Result in an Unclear Picture of the Development 

Funds Provided in Nangarhar

The centralized nature of the Afghan budget and execution process, and development projects that 

affect multiple provinces, make obtaining complete data on development funds in Nangarhar 

problematic.2

The government of Afghanistan is, however, able to track core development funds that are expended by 

Nangarhar’s provincial directorates. These funds are transferred from central ministries to provincial 

directorates and expended. However, according to MoF data, total core development expenditures by 

Nangarhar’s provincial institutions amounted to $2,366,074—4 percent of total core budget

expenditures—in solar year 1388. As seen in table I, the Ministry of Education executed most of this 

funding (see appendix III for more detailed information on Nangarhar’s core development budget).

The government of Afghanistan does not collect data on core development funding 

execution on a provincial basis. The central ministries in Kabul perform nearly all of the development 

budget activities—including project approval, bidding, contractor selection, payment authorizations, and 

payment disbursement—and provincial line directorates are generally uninvolved in these activities. 

Although a development project may benefit a particular province, core development funds are rarely 

allocated to or expended by provincial line directorates, and no centrally administered system exists to 

capture data on projects by province. Although one ministry recently made attempts to capture and 

report such costs on a by-province basis to the Ministry of Finance (MoF), doing so proved too difficult 

because many projects affect multiple provinces and determining the extent to which a project 

benefited one province versus another was too complicated. As a result, the government of Afghanistan 

does not have a consolidated view of core provincial development fund executions.

3

 

2 While it may be possible for the Afghan Financial Management Information System to determine the amount of 

money allocated to, and executed by, Nangarhar’s line directorates, this information would not capture 

Nangarhar-based, centrally managed development projects.

 

3 According to its director, Nangarhar’s Education Directorate makes development budget decisions based on 

needs identified by local shuras—typically comprised of tribal leaders, head masters, elders, and teachers—who 

make decisions about the use of allocated development funds on a school-by-school basis. Development funds are 

allocated to shuras by formula based on the amount in the development budget and the number of students. 

Typically, the shuras use these funds to purchase educational goods and equipment and make school repairs. 
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 6 

Table 1: Nangarhar’s SY 1388 and SY 1389 (Partial Year) Core 

Development Budget Execution

Line Directorate 1388 1389a

Finance $146,791 N/A

Education $2,265,342 $64,815

Public Health $78,775 N/A

Justice $9,931 $9,931

National Olympic Committee $95,120 N/A

Totalb $2,595,959 $74,746

Amount Remitted to Central 

Treasuryc $229,885 N/A

Total Development Budget 

Executed by Line 

Directorates

$2,366,074 $74,746

Source: SIGAR analysis of data provided by the MoF. 

Notes:

a March 22 through June 13, 2010. b Figures may not equal the total due to currency conversions and 

rounding.

c According to the MoF, funds may be remitted to the central treasury 

because project amounts are cut, projects come in under budget, or donor 

pledges are not kept.

The United States and Other Donors Fund Most of Nangarhar Province’s Development 

Activities but Do Not Report Externally Funded Development Expenditures by Province

The United States and other donors funded most of Nangarhar’s development activities during this 

period, with the United States funding more than any other donor.4

 U.S. development activities in 

Nangarhar during fiscal year 2009 have an estimated value of more than $100 million and include the 

following: 5

• The Commander’s Emergency Response Program (CERP) made $58,729,443 available for 202 

projects in Nangarhar. More than half of the funding was dedicated to transportation, with an 

additional 37 percent going for agriculture, rule of law and governance, and education (see 

appendix IV for more detailed information on CERP expenditures). 

• USAID estimated that implementing partners made more than $42 million in development 

funding available for projects in Nangarhar, carried out through 37 program activities and 26 

 

4 Afghanistan’s development budget is divided into the core development budget, which is executed through the 

government’s budget system, and the external development budget, which consists of expenditures by 

international donor organizations that are not routed through the government’s budget or treasury system.

5 Additionally, beginning in SY 1389, Nangarhar is entitled to receive up to $300,000 annually from the 

Performance Based Governor's Fund. The Independent Directorate for Local Governance, an Afghan government 

agency, coordinates the program, which is funded by multilateral donors and managed by The Asia Foundation 

(see appendix VI for more information on the Performance Based Governor’s Fund). The total program cost is 

$16.4 million, funded by the United States (83.9 percent), the United Kingdom (11.6 percent), and Belgium 

(4.5 percent).
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 7 

implementing partners. Of this amount, 37 percent went for governance, 27 percent for roads 

and transportation, and 14 percent for economic growth (see appendix V for more detailed 

information on USAID expenditures). 

• The Department of State estimated that it made more than $2.5 million in development grants 

available for projects in Nangarhar throughout fiscal year 2009 and, to date, in fiscal year 2010. 

Refugees and migration programs absorbed virtually all of the funding (see appendix VI for more 

detailed information on State Department expenditures).

• In 2008, the State Department’s Bureau of International Narcotics and Law Enforcement Affairs

made $10,000,000 available to Nangarhar under its Good Performers Initiative for effectively 

decreasing poppy production to zero status. As of July 2010, $2,342,570 was expended through 

the core development budget for 41 micro-hydroelectric projects in 10 districts.6 Bureau of 

International Narcotics and Law Enforcement Affairs

The 

also awarded the governor’s office with 

$16,200—between fiscal years 2008 and 2010—under the Governor-Led Eradication Program.

UN agencies and other donors were also active in Nangarhar in fiscal year 2009. For example, UNAMA 

reported that 6 UN agencies conducted 852 projects, as shown in table 2 (see appendix VII for 

information on UN-Habitat activities in Nangarhar throughout fiscal year 2009).7

Table 2: UN Agencies with Projects in Nangarhar Province, FY 2009

 

UN Agencies

Projects in 

Nangarhar 

Province

United Nations Human Settlements Program 689

United Nations World Food Program 54

United Nations Children's Fund 40

Food and Agriculture Organization of the United Nations 38

Office of the United Nations High Commissioner for 

Refugees

16

UN Office on Drugs and Crime 15

Total 852

Source: SIGAR analysis of UNAMA data.

Major donors—including USAID and the UN—do not routinely collect or disseminate detailed provinciallevel data on development assistance execution for externally funded projects and programs. Almost all 

of USAID’s 37 development projects and programs operating in Nangarhar are active in more than one 

province, or throughout Afghanistan. USAID does not routinely require the 26 implementing partners 

responsible for these projects and programs to report provincial-level expenditure data (see appendix V 

for USAID projects and their implementing partners operating in Nangarhar).8

 

6 Twenty-eight of these projects have been completed; the remainder are near completion. The remaining monies 

have gone unspent because Nangarhar’s provincial government, the Ministry for Counter-Narcotics, and the State 

Department have been unable to agree on appropriate projects to fund.

Determining the amount 

of USAID development funds expended in Nangarhar would require detailed data calls from each of 

7 UNAMA did not report the total amount of funds associated with these projects.

8 Although USAID requires implementing partners to record estimated disbursements in USAID’s Afghan Info 

database, these figures only represent an implementing partner’s “best guess” at actual expenditures. Only 

summary data are provided to the government of Afghanistan. In addition, USAID’s financial management system 

does not track implementing partner expenditure either by sub-contract or location.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 8 

USAID’s implementing partners; even then, province-specific data may not be available. As a result, U.S. 

officials working at the sub-national level do not have the information necessary to effectively monitor 

and evaluate USAID programs. 

Although UNAMA is responsible for promoting coherence and coordination of UN and international aid 

and facilitating the alignment of donor activities to Afghan priorities, UNAMA officials in Nangarhar and 

Kabul indicated that they are not able to obtain or report on donor funding or expenditure levels in 

Nangarhar. For example, while UNAMA is aware of the project and program activities of various UN 

organizations operating in Nangarhar, UNAMA is not routinely able to collect budget or expenditure 

information pertaining to these organizations by province. UNAMA officials stated that UN organizations 

do not divulge funding information to UNAMA or others because doing so could put them at a 

competitive disadvantage with other aid organizations.

U.S. DEVELOPMENT PROJECTS AND PROGRAMS IN NANGARHAR ARE NOT TIED TO COHESIVE 

PROVINCIAL DEVELOPMENT PRIORITIES AND ARE IMPLEMENTED WITHOUT GOVERNMENT 

OF AFGHANISTAN INPUT

While U.S. government agencies have made some progress in aligning development projects and 

programs with Nangarhar’s provincial priorities, U.S. projects and programs are currently implemented 

without the benefit of provincially generated, government of Afghanistan-endorsed development 

priorities. Moreover, according to SIGAR analysis and several senior U.S. officials responsible for multimillion dollar development projects in Nangarhar, many U.S.-funded development projects in the 

province are not being sustained by the Afghanistan government. Further complicating the national and 

the Nangarhar provincial government’s ability to plan for and sustain development projects is the 

inability of donors in Nangarhar to effectively coordinate their efforts.

Nangarhar Province Does Not Have a Functioning Development Planning Process or Provincial 

Development Plan

According to USAID implementing partners, UNAMA, and senior U.S. officials in Nangarhar, the 

Provincial Development Committee (PDC) and technical working group (TWG) process is not functioning 

as intended. In July 2009, Nangarhar’s U.S. Provincial Reconstruction Team (PRT) began providing each 

TWG with a quarterly CERP budget.9 The provision of a budget, combined with intense mentorship and 

tutelage of Nangarhar’s line directors, resulted in a substantial improvement in Nangarhar’s PDC and 

TWGs.10

Moreover, UNAMA officials have expressed dissatisfaction with the direction and level of involvement of 

U.S. officials in Nangarhar. According to these UNAMA officials, the heavy and unnecessary involvement 

Nevertheless, a primary role of TWGs—as determined by the Afghanistan government—is to 

prepare, budget for, and monitor sectoral development plans. However, according to some UNAMA and 

U.S. government officials, the PRT’s efforts resulted in line directors paying a disproportionate amount 

of attention to other functions such as soliciting and selecting development projects. This turned the 

TWGs into voting forums that simply approved the uncoordinated development projects proposed by 

TWG members. 

 

9 The PRT provided each TWG with a budget, by allowing them to suggest projects up to a certain amount for 

which the PRT would provide CERP funds, if all the conditions required for CERP funding were met. All contracting 

and funding functions remained with the PRT, and no funds were allocated or contracting decisions delegated to 

provincial officials.

10 In June 2009, the Nangarhar provincial government did not have a functional PDC. The PDC and the six TWGs 

responsible for supporting it did not hold regular meetings attended by members. However, as a result of the 

PRT’s efforts, members began attending meetings and coordination improved.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 9 

of some U.S. officials in Nangarhar has negatively affected the workings of the TWGs and widened the 

gap between the international community and Afghans. In contrast, senior U.S. officials in Nangarhar 

maintain that the TWG and PDC members are far from ready to manage any of the development 

process without substantial, ongoing mentorship, and that without substantial mentorship, the process 

would disintegrate. 

As the TWGs became project development and voting bodies, the task force (TF) and the PRT found that 

the TWGs were primarily focused on developing and implementing projects in the provincial capital of 

Jalalabad, rather than in more rural districts.

11 For example, the TWGs and the PDC were spending a 

disproportionate amount of dedicated CERP funding to build government infrastructure in Jalalabad, 

which resulted in the TF verbally requiring TWGs to allocate 75 percent of their CERP budgets to areas 

outside of Jalalabad.12

Nangarhar Province has a PDP; however, it is outdated, unused, and not implemented. In 2007, 

Nangarhar held sub-national consultations to develop Nangarhar’s PDP and finalized it in March 2008. 

PDPs were intended to be prioritized and fiscally sustainable development plans. However, the central 

ministries viewed PDPs as not fiscally constrained, prioritized, or reflective of the will of the populace. 

Moreover, the PDPs were not tied to any dedicated funding and were largely ignored by the national 

and provincial governments, the U.S. government, and the international community. Most of the 

projects in Nangarhar’s PDP were not implemented, and the PDP has never been updated. For example, 

our analysis of the files associated with CERP projects in Nangarhar showed that none of the project files 

we reviewed was for a project explicitly included in the PDP (even though project files for 14 of 26 

projects indicated that the CERP project was included in Nangarhar’s PDP). 

However, this guidance was never formally issued, and it is still unclear how this 

directive is to be implemented. For example, during our visit to the Nangarhar PRT in June 2010, the PRT 

did not know if the 75/25 split referred to cost or number of projects.

The Government of Afghanistan Does Not Have Visibility or Input into Many Externally 

Funded and Implemented Development Projects and Programs

To construct the external development budget for Nangarhar, the MoF depends on reporting by donor 

agencies that fund external projects, but the extent to which funding data are provided to the national 

government or associated line directorates is varied and project dependent. The national and provincial 

governments attempt to construct the external budget by piecing together estimated costs of projects 

that they are made aware of by external donors. This process does not capture all projects or actual 

costs, and the national and provincial governments must estimate—to the extent they can—the amount 

of Nangarhar’s external budget. For example, the U.S. government, the largest development donor in 

Nangarhar through the PRT and USAID, does not share financial information on externally financed 

development projects with the national government or the provincial administration, according to 

Nangarhar’s provincial arm of the Independent Directorate for Local Governance and Nangarhar’s 

Governor’s Office. Moreover, neither U.S. Forces-Afghanistan (USFOR-A) Headquarters nor Task Force

(TF) level personnel responsible for CERP management are aware of any formal CERP expenditure 

reporting to national or provincial authorities. The national or provincial governments may be aware of 

 

11 In much of Afghanistan, the North Atlantic Treaty Organization (NATO) manages reconstruction efforts through 

combined military/civilian command posts. In Nangarhar, NATO operates three reconstruction and stabilization 

teams—Provincial Reconstruction Team (PRT), Agribusiness Development Team (ADT), and Special Troop 

Battalions (STB)—out of Camp Finley Shields in Jalalabad. Task Force Bastogne, also based in Nangarhar, oversees 

PRTs, ADTs, and Special Troop Battalions in Nangarhar, Laghman, Kunar, and Nuristan Provinces. 

12 TF and PRT officials acknowledged that while it was necessary to build infrastructure in Jalalabad, the extent to 

which TWG and PDC members focused on Jalalabad concerned them and led to the directive.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 10

a given project, but the extent to which final project costs are divulged to either the national 

government or associated line directorates varies on a project-by-project basis.13

Nangarhar provincial officials attempt to obtain externally financed, development project information 

from the PRT and USAID, or their contractors, for tax purposes, according to the Nangarhar’s Governor’s 

Office and the provincial arm of the Independent Directorate for Local Governance. Afghan officials 

further stated—and our work confirms—that the PRT and USAID do not provide this information. 

Contractors often tell administration officials that USAID or the PRT prohibits them from disclosing 

contract award amounts, but U.S. officials stated that the contractors purposefully evade government 

contract information requests to avoid paying taxes. Without insight into contract costs, the provincial 

government—on behalf of the Afghan government—is unable to levy taxes commensurate with 

contractor revenues, thus denying the government legitimate revenue. Senior MoF officials in 

Nangarhar would like the PRT and USAID to provide the Nangarhar mustofiats—the MoF’s provincial 

directorates—copies of contracts to help mitigate fraud and tax evasion and help with tax revenue 

collection. The PDC chair—the governor of Nangarhar—has officially requested this contract information 

from the PRT and USAID. U.S. non-reporting of external development projects in Nangarhar has resulted 

in the Afghan government having virtually no insight into U.S. government spending in Nangarhar. For 

example, MoF data on U.S. external development spending in Nangarhar throughout 2009 only captures 

2 projects, worth a total of $3.2 million, nearly $101 million less than the amount identified by SIGAR

over roughly that same period.

 

14

Additionally, USAID-funded projects do not go through the TWG/PDC process and are often 

implemented without the knowledge or involvement of the national or provincial governments. 

According to senior USAID and Department of State officials, while some USAID implementing partners 

occasionally attend TWG meetings, no implementing partner has yet undertaken a project that has gone 

through the full PDC process. Similarly, our analysis of the files associated with CERP projects executed 

in Nangarhar revealed that, while 24 of 26 project files indicated that projects were coordinated with 

the national government, only 4 showed any evidence that they were coordinated.

15 According to U.S. 

officials in Nangarhar, previous U.S. development teams in Nangarhar—the PRT and Agribusiness 

Development Team (ADT)—did not have a well thought out project selection strategy and often 

conducted projects without consulting local officials.16

 

13 Previous studies have found that support provided by the major donor agencies and international financial 

institutions is largely captured by the government of Afghanistan’s external development budget (see 

Intergovernmental Fiscal Relations and Sub-national Expenditures in Afghanistan, World Bank, August 2008). 

However, we saw little evidence that the national government or provincial administration know how much 

funding the United States is externally spending in Nangarhar.

These conditions culminate in an unclear picture 

of the development funds expended in or benefiting Nangarhar and leave the government of 

Afghanistan with little or no visibility into the amount of U.S. external development spending in 

Nangarhar Province. 

14 MoF data on U.S. external development spending in Nangarhar included funding executed by the U.S. 

government for the Capacity Development Program and the Food Insecurity Response for Urban Populations. 

Moreover, the $3.2 million captured funds executed in 5 provinces, so the amount executed in Nangarhar is likely 

considerably less than the $3.2 million identified.

15 CERP project files indicating that they were coordinated with the government of Afghanistan included a 

“checked box” on one of the required documents. CERP project files that showed evidence of coordination 

included documented evidence of coordination, such as sustainment agreements. 

16 In July 2009, PRT officials committed to vetting most CERP projects in Nangarhar through the PDC process; 

however, the first PDC vote did not occur until January 2010. During that time, PRT officials focused on completing 

previously initiated projects. 
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 11

The ineffective coordination amongst the various donors operating in Nangarhar adds to the 

government of Afghanistan’s lack of visibility into externally executed development projects. According 

to PRT and TF officials, Nangarhar’s various donors, line directorates, and NGOs have their own 

objectives and priorities, and coordination between the PRT and most of the NGOs operating in 

Nangarhar is minimal. This lack of coordination has resulted in an environment in which donors, NGOs, 

and provincial directorates may duplicate one another’s work. For example, one senior Afghan official 

stated that while his directorate has a good relationship with the PRT and USAID, the number of donors 

involved in the provision of public services results in the completion of projects that are uncoordinated 

and unnecessary. TF officials stated that they began holding twice weekly meetings with the provincial 

representative of UNAMA in spring 2010, in an effort to coordinate the efforts of the donors in the 

region. However, these officials stated that getting donors and NGOs to attend such meetings has been 

difficult because donors and NGOs have different objectives. 

The Government of Afghanistan Is Not Sustaining Completed U.S. Development Projects in 

Nangarhar Province 

Afghans are severely limited in their ability to operate and maintain U.S.-completed development 

projects in Nangarhar Province. Because no comprehensive inventory of provincial assets exists, 

Nangarhar’s line directors are unable to provide anticipated operations and maintenance (O&M) budget 

requirements to central ministries in Kabul. Further, the national and provincial directorates are unable 

to identify the ordinary (recurrent) requirements of the budget because U.S. and donor-funded projects 

may be completed without their knowledge. In some cases, even if a government official agrees to 

sustain a CERP project upon completion, the official has not conducted the planning necessary to ensure 

that funds will be available for sustainment. 

According to senior TF officials, the government of Afghanistan did not operate or maintain many 

previously completed CERP projects in Nangarhar, and many of these projects have become dilapidated 

and are in disrepair. For example, the Nangarhar ADT has had to retrofit or repair many previously 

completed and unmaintained CERP projects. Nevertheless, the United States does not prepare O&M 

cost estimates for CERP projects and does not expect that the government of Afghanistan will sustain 

most projects, according to TF, PRT, and ADT officials. In fact, senior PRT officials noted that they do 

little more than “check the box” in CERP project files to indicate that the government of Afghanistan

agreed to fund sustainment. They do not generally document the Afghan government’s acceptance of 

O&M in CERP project packages. Our analysis of Nangarhar’s CERP project files showed that 24 of 26 

CERP files—of CERP projects completed by the PRT or ADT during fiscal years 2009 and 2010—did not 

contain a U.S. and Afghan sustainment agreement or the signature of a government official accepting 

responsibility for O&M, as CERP requires. 17

According to TF officials, beginning October 1, 2010, the TF, PRT, and ADT will no longer provide TWGs 

with a quarterly budget. They will instead provide every provincial line director in the TF’s area of 

responsibility—Nangarhar, Nuristan, Kunar, and Laghman—with a budget of $100,000 per quarter. 18

 

17 Money as a Weapon System – Afghanistan, U.S. Forces, Afghanistan Publication 1-06, updated December 2009, 

requires Commanders to include a Memorandum of Agreement for sustainment between USFOR-A and the 

government of Afghanistan in CERP project files for projects greater than $50,000. Our sample contained 15 

projects valued at over $50,000, with six valued at between $30,000 and $49,999.

To 

18 Beginning October 1, 2010, the TF/PRT/ADT/CERP will begin providing each District Development Assembly in 

the TF’s area of responsibility with a budget of $75,000 per quarter. This money will not be cumulative and cannot 

be used for any structures or projects that require quality control/quality assurance from engineers. Projects 

requiring this must go through the provincial line directors, which helps ensure that efforts are coordinated 

throughout the province and mitigates the effect of the Afghan and U.S. governments’ limited capacity for quality 

assurance/quality control at the district-level. In cases where the PRT or TF provides Afghan entities with a 
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 12

help the line directors establish development priorities and determine needs, they will be required to 

inventory all the structures and facilities they are responsible for maintaining. Although the TF 

acknowledges that the inventories developed by the directors will likely be quite poor, the TF believes 

this exercise will provide a starting point for developing budget priorities. Under this new guidance, 

directors will be required to consider and forecast O&M costs and compose a business plan outlining the

project and its sustainment needs when preparing projects for PRT consideration using CERP funds.

19

NANGARHAR’S LINE DIRECTORATES LACK THE CAPACITY NECESSARY TO ABSORB 

SIGNIFICANTLY MORE DEVELOPMENT FUNDING

While the TF’s proposed direction may help develop the capacity of individual directors, additional 

guidance and requirements could significantly delay already delayed project implementation. It is 

unclear how this shift may affect the TWG/PDC process. Moreover, as of the date of this report, the TF 

has not issued formal guidance regarding these directives.

Any control or influence Nangarhar has over public resources comes through its ability to shape the 

national budget or through its influence over budget execution, to the extent that resources flow to the 

provincial level. Nangarhar’s line directorates play a very limited role in development activities in 

Nangarhar, and nearly all of the Afghan government’s core development activities are centralized in 

Kabul at the ministry level. The level of centralization has left Nangarhar’s line directorates with little 

capacity to absorb significantly more development funding.

Provincial Directorates Have a Limited Role in Formulating Budgets and Implementing 

Development Projects

Although the government of Afghanistan’s Provincial Budget Handbook indicates that PDCs and 

provincial directorates play a significant role in budget formulation, both the Department of the 

Treasury and SIGAR have observed that provincial directorates are not involved in the budget process 

and their input is not solicited.

20

Virtually all procurement functions are centralized at the ministerial level, and according to senior 

Afghan government officials, Afghanistan’s procurement laws—and the concentration of procurement 

skills in Kabul—ensure that most major procurement activities occur in the central government, not at 

the provincial level. The government of Afghanistan’s procurement law provides that a minister is the 

sole award authority for virtually all contracts, and that it is the minister’s discretion to delegate award 

authority to deputy ministers or provincial line directors.

Due to the centralization of development functions in Afghanistan, the 

provincial line directorates are remitted only 17 percent of public funds even though they can be 

considered the beneficiary of 61 percent of public expenditures. Nangarhar’s provincial directorates 

have very little or no input into central ministries’ decisions regarding core budget allocations or tashkil

authorizations and have little control over the planning of provincially delivered services. In addition, 

line directors’ operational budgets do not include sufficient funding for the goods and services required

to carry out their mission or to operate and maintain completed infrastructure projects. 

21

 

“budget,” no funds are transferred and no contracting authorities are given to Afghan government entities; the TF 

or PRT retains control over these functions. 

At present, none of the Nangarhar line 

directors has any real procurement authority, and the central ministries enter into all procurement 

contracts. The central ministries select contractors, submit contracts for bids, make contract awards, 

19 Any project proposed by a district development assembly for CERP funding must also include a memorandum 

from the associated provincial line director asserting the directorate’s ability and willingness to sustain the project.

20 A Handbook for Provincial Budgeting in Afghanistan, Islamic Republic of Afghanistan, 2008.

21 The Government of Afghanistan’s Public Procurement Law, 1384, as amended.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 13

and pay contractors from central funds. Engineers from the line directorates may assist in construction 

oversight—usually with assistance from the Directorate for Urban Development—and pre-authorize 

contract award payments; however, funding and award approvals are made at the ministry level. The 

absence of procurement authority within Nangarhar’s provincial directorates means that central officials 

manage procurements without adequate information and provincial officials are effectively 

disenfranchised.

Limited Provincial Capacity and Centralization Challenge Efforts to Devolve Greater 

Development Authorities

The international community and the government of Afghanistan agree that decentralization of 

authority to the sub-national level is an appropriate way to improve governance.22 For example, the 

government of Afghanistan’s recently endorsed Sub-National Governance Policy (SNGP) calls for the 

implementation of provincial plans to be delegated to the provincial directorates of the ministries.23

In recent years, the government of Afghanistan has implemented provincial budgeting pilots in many 

provinces and ministries—including several directorates with whom SIGAR spoke in Nangarhar—in an 

effort to involve provincial directorates in the budgeting process.

To 

realize this goal, the SNGP requires expenditure responsibilities related to provincial plans to be 

delegated to provincial line directorates, with the provincial directorates accountable for the use of 

funds to the parent ministries, the provincial governors, and the provincial councils. Although the 

communiqué from the Kabul Conference called for the SNGP to be implemented within a year, the 

capacity for managing this new process in Nangarhar does not exist. We have seen no evidence that 

Nangarhar’s provincial directorates are ready or capable of taking on additional development 

responsibilities. For example, one provincial line director stated that, even if the ministry provided the 

directorate with development funding, he would not know what to do with the funds because his office 

currently does not have the capacity to implement and manage projects. Nangarhar’s line directorates 

have never had such a role and lack the capacity to fulfill SNGP’s mandate in the prescribed timeframe. 

According to senior UNAMA officials, the timelines for SNGP implementation—and decentralization—

are irrelevant, and the government is not likely to meet these self-imposed dates. The SNGP notes that 

many of its goals are “aspirational.” 

24 Despite these ongoing efforts, and 

recent recommitments to provincial inclusion in the budget process, provincial directorates in 

Nangarhar stated that they were removed from the budget process and the pilot efforts have not 

resolved the central ministries’ inequitable allocation of resources across provinces.25

Central ministries have difficulty arriving at a rational provincial allocation of resources, and there is 

evidence that central allocation processes do not connect with provincial needs. For example, the 

government of Afghanistan’s solar year 1389 budget allocated $349 million to five provinces—Balkh, 

Kandahar, Kunduz, Badakhshan, and Kabul—while the remaining 29 provinces—including Nangarhar—

were allocated $369 million. The inability of the central government to allocate resources equitably 

across provinces limits the government’s ability to deliver adequate public services. Provincial officials 

 

 

22 Historically, in Afghanistan, both the government and citizenry have considerable desire for strong 

centralization, in part because of historical legacies and fear of fragmentation, and in part because conflict did not 

destroy centralized state structures.

23 Sub-National Governance Policy, Spring 2010.

24 A Handbook for Provincial Budgeting in Afghanistan, Islamic Republic of Afghanistan, Ministry of Finance, 2008. 

Sub-National Governance Policy, Spring 2010.

25 Due to the low capacity of the provincial directorates and the PDCs, many of the budgets produced in the 

provinces needed extensive revision and work before submission to the MoF. Hence, the participating ministries 

still control the budgeting process.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 14

we spoke with stated that they have no control or input into the directorate’s budget and lack the staff 

and expertise required to deliver public services effectively.

According to senior officials at most of the directorates and ministries we interviewed, there is poor 

communication between the central ministries and provincial directorates. Poor communication 

between central ministries and provincial directorates further indicate the unlikelihood of meaningful 

devolution of development authorities. According to senior MoF officials, as the government of 

Afghanistan enters into a performance management culture, ministers that are held accountable for 

procurement and budget execution will have greater incentives to retain procurement operations in 

Kabul, rather than devolve authority to the provinces.

Several of Nangarhar’s Line Directorates Are Allocated a Core Development Budget, but Few 

Ministries Execute Any of the Associated Funds 

Influencing budget execution is one of the primary mechanisms through which Nangarhar’s provincial 

directorates may exert control over public resources, to the extent that resources flow through the 

provincial level. Although each directorate in Nangarhar executes a core operating budget, very few 

directorates are able to execute a core development budget. While 2 directorates were able to execute 

approximately $75,000 in development budget expenditures, this represents five percent of total 

development budget allocations in solar year 1389.26 The national development budget execution rates 

are low in most ministries; a significant number of central ministries have less than 30 to 40 percent 

execution rates. However, in Nangarhar Province, execution of the development budget is even lower, 

demonstrating the low capacity, the need for further capacity building, and improvements in both 

budget preparation and execution processes (see table 3 for a summary of Nangarhar line directorates’ 

solar year 1389 core development budget execution).27

 

26 This is based on partial year data on funds allocated and executed between March 21 and June 13, 2010. 

27 Some reasons for low development budget execution include a provincial directorate’s failure to meet all of the 

funding conditions associated with a particular development budget activity (that is, the provincial directorate 

would have to meet all the planning and accountability requirements associated with the funds), central ministries 

not releasing allocated funds to the directorate, and donors not providing committed funds. 
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 15

Table 3: Core Development Budget Funds Executed by Line Directorates in 

Nangarhar Province, SY 1389 (March – June 2010) 

Ministry Directorate Budgeted Funds Executed Funds Execution Rate

Ministry of Energy 

and Water

$326,198 $0 0%

Ministry of Public 

Works

$287,065 $0 0%

Ministry of Commerce $240,965 $0 0%

Ministry of Education $146,080 $64,815 44% 

Ministry of 

Agriculture

$135,233 $0 0%

Ministry of Rural 

Rehabilitation and 

Development

$131,801 $0 0%

Ministry of Finance $58,920 $0 0%

Ministry of Higher 

Education

$37,851 $0 0%

National Olympic 

Committee

$34,021 $0 0%

Ministry of Economy $22,989 $0 0%

Afghanistan National 

Standard Authority

$16,121 $0 0%

Ministry of Haj and 

Religious Affairs

$12,138 $0 0%

Ministry of Refugees 

and Repatriates

$8,300 $0 0%

Ministry of Public 

Health

$7,110 $0 0%

Independent 

Directorate of Local 

Governance

$4,287 $0 0%

Election Commission $2,299 $0 0%

Attorney General $690 $0 0%

Ministry of Martyrs, 

Disabled and Social 

Affairs

$284 $0 0%

Ministry of Justice $0 $9,931 Unknown

Total $1,472,350 $74,746 5%

Source: SIGAR analysis of data provided by the MoF. 
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 16

CONCLUSION 

To a large extent, the Afghan government funds only salaries for education and security in 

Nangarhar. To manage a significant increase in development funds, the Nangarhar provincial 

government and administration requires improved budget input and visibility, project prioritization and 

sectoral planning capacity, and closer interaction and insight into externally funded development 

projects. Nangarhar’s provincial officials cannot manage or maintain what they cannot see, and most of 

the externally funded U.S. and international development activities we identified in Nangarhar are 

implemented without the input or visibility of provincial officials. Good development projects can result 

in waste if they are not properly maintained, and Nangarhar’s provincial government and administration 

are severely limited in their ability to sustain U.S.-funded development projects. Development partners, 

especially U.S. military officials implementing CERP projects and USAID project implementers, need to 

work with Afghan partners in Nangarhar province to ensure that schools, irrigation systems, roads and 

other infrastructure projects are sustained and provide the essential services for which they were built.

The lack of sectoral development planning in Nangarhar—on the part of the U.S. and Afghan 

government—has resulted in an incoherent approach to development because accomplishments cannot 

be measured against needs identified in a plan, and ultimately impeded capacity development within 

the provincial government. The international community needs to help reorient Nangarhar’s provincial 

government—especially the PDC and TWGs—to focus on producing cohesive sectoral strategies and 

development plans, rather than focus on preparing project proposals for individual donors such as the 

U.S. PRT. 

RECOMMENDATIONS 

To help prevent waste in the implementation of U.S. development projects in Nangarhar, and to

strengthen the capacity of Nangarhar’s provincial administration to manage development funds, 

strategically prioritize needs, and sustain completed projects, SIGAR is making the following five 

recommendations. 

To help ensure that Nangarhar’s provincial directorates develop the capacity required to implement, 

absorb, and execute additional development funds and implement development projects—as outlined 

in the government of Afghanistan’s Sub-National Governance Policy—SIGAR recommends that the U.S. 

Ambassador to Afghanistan, in coordination with the Nangarhar PRT and USFOR-A:

1. Work with the MoF and other ministries to develop a cohesive, interagency strategy focused on 

developing Nangarhar Province’s capacity in budget formulation and execution, planning and 

project development, management and oversight, and operations and maintenance.

To ensure that the government of Afghanistan and U.S. personnel are aware of provincial-level U.S. 

development activities, priorities, and expenditures across Afghanistan, and to ensure that the 

Afghanistan government is able to develop an accurate picture of provincial-level expenditures for 

inclusion in the external budget, SIGAR recommends that the U.S. Ambassador to Afghanistan, in 

coordination with USFOR-A and the Afghan government: 

2. Develop a strategy and methodology to formally report provincial-level project and expenditure 

data—at the appropriate level of detail—to the government of Afghanistan and provincially 

based Afghan and U.S. officials; this may require provincial-level expenditure reporting from 

implementing partners.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 17

To ensure U.S. development funds executed in Nangarhar are used in accordance with cohesive, 

government of Afghanistan sanctioned, provincial development priorities, SIGAR recommends that the 

U.S. Ambassador to Afghanistan:

3. Coordinate with USFOR-A, UNAMA, and other stakeholders to assist Nangarhar’s line directors 

and technical working groups in developing meaningful, comprehensive sectoral development 

plans that can lead to sustainable economic improvement.

4. Advance and implement a development assistance plan for Nangarhar in a manner that 

increasingly transfers development management to the provincial government institutions, 

including line ministers, and the technical working groups/Provincial Development Committee

process. This includes encouraging and/or requiring implementing partners to formally involve 

provincial officials in development projects and programs.

To ensure that completed CERP projects are sustained by the government of Afghanistan, and therefore 

benefit the long-term development of Afghanistan, SIGAR recommends that USFOR-A:

5. Improve CERP procedures for documenting the Afghan government’s acceptance of 

responsibility for sustainment of completed construction, to include (1) the name and 

position/level of the Afghan government officials authorized to accept sustainment for projects 

at various costs; (2) sustainment plans that identify operations and maintenance costs for the 

projected lifetime of CERP projects; and (3) ensuring that project file documentation includes

sustainment agreements, as currently required.

COMMENTS 

USFOR-A and U.S. Embassy Kabul provided official comments on a draft of this report. The comments 

are included in appendices VIII and IX, respectively. In its comments, USFOR-A concurred with our 

recommendation to help ensure that completed CERP projects are sustained by the government of 

Afghanistan and benefit Afghanistan’s long-term development and outlined steps it would take to 

address the recommendation. U.S. Embassy Kabul indicated general concurrence with the report’s 

recommendations but expressed some concerns regarding two of the recommendations. The comments

did not outline specific steps that U.S. Embassy Kabul planned to take to address any of the 

recommendations. 

U.S. Embassy Kabul generally concurred with the recommendation to help ensure that Nangarhar’s 

provincial directorates develop the capacity required to implement, absorb, and execute additional 

development funds and implement development projects—provided that this is done in close 

coordination with central ministries in Kabul, particularly the MoF. Based the Embassy’s response, 

SIGAR has included language in the recommendation to indicate the MoF’s and other ministries’ key role 

in such efforts. The Embassy also outlined some recent provincial capacity development initiatives. 

While we commend the initiatives to improve Nangarhar Province’s capacity in this regard, these efforts 

are in the early stages of implementation. The primary effort identified by USAID—USAID’s Economic 

Growth and Governance Initiative—began its activities in Nangarhar on September 20, 2010, the day 

SIGAR sent a draft of this report for comment. Moreover, it is unclear whether these initiatives include 

all relevant stakeholders, such as the U.S. Department of the Treasury, which is critical to avoid 

duplication of effort and maximize efficiency and effectiveness. 

U.S. Embassy Kabul also generally concurred with our recommendation to ensure that government of 

Afghanistan and U.S. personnel are aware of provincial-level U.S. development activities, priorities, and 

expenditures across Afghanistan, and to ensure that the Afghan government is able to develop an 

accurate picture of provincial-level expenditures for inclusion in the external budget. The Embassy
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 18

expressed concern, however, about the complexity and potential misunderstandings created by the 

provision of these data. To address these concerns, SIGAR revised the language in the recommendation 

to indicate that only necessary and appropriate information—such as project or program expenditures, 

goals, and outcomes rather than salary information—need be reported. Despite the potential challenges

that obtaining and disseminating this information may present, SIGAR maintains that this information is 

critical to the ability of U.S. officials working at the sub-national level to effectively monitor and evaluate 

programs and to the government of Afghanistan to maintain an accurate picture of provincial

expenditures for inclusion in the external budget. 

In addition, the U.S. Embassy stated that there needs to be a more comprehensive absorptive capacity 

assessment conducted. Although the scope of our audit did not include such an assessment, based on 

the results outlined in this report we agree that it would be appropriate for the U.S. government to 

undertake such an assessment prior to channeling more funds through the provincial governments of 

Afghanistan.

U.S. Embassy Kabul and the U.S. Department of the Treasury also provided technical comments that 

SIGAR incorporated in this report as appropriate.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 19

APPENDIX I: SCOPE AND METHODOLOGY

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

Reconstruction’s (SIGAR) review of U.S. development funding in Nangarhar Province. 

To identify the amount and type of government of Afghanistan, U.S. government, and other donor 

development funding expended in Nangarhar Province, we obtained and analyzed budget and 

expenditure data from the Ministry of Finance, Nangarhar’s mustofiat, the U.S. Departments of Defense, 

State, Agriculture, and the Treasury, and the U.S. Agency for International Development (USAID). 

Included in our data analysis were government of Afghanistan budget documents, such as 

documentation from the official budget, the Afghan Management Information System, and the 

Development Assistance Database Afghanistan, U.S. Forces-Afghanistan information on the 

Commanders’ Emergency Response Program (CERP) extrapolated from the Combined Information Data 

Network Exchange, and State and USAID expenditure data. We supplemented these data by conducting 

interviews with responsible officials at each of these entities to form a complete picture of development 

funding in Nangarhar. In reporting Afghan budget data in this report, all conversions from Afghanis to 

U.S. dollars are based on the currency conversion rate of 0.0229885 (Afghani to Dollar).

To assess the degree to which U.S. projects are aligned with Nangarhar’s development priorities, we 

used information obtained through the documents and interviews described above, observed meetings 

of Nangarhar’s Provincial Development Committee and technical working groups, and conducted 

additional interviews with a USAID implementing partner, and Afghan government officials, including 

leadership at the Ministry of Finance, the Control and Audit Office, Nangarhar’s provincial directorates 

of Education, Urban Development, Agriculture, Public Health, Rural Rehabilitation and Development, the 

Independent Directorate for Local Governance, the Mustofiat, and the Governor’s Office. Further, we 

conducted qualitative analyses of a judgmental sample of CERP project files and obtained information 

from the contracting or agreement officers responsible for projects or programs in Nangarhar to 

determine the extent to which files demonstrated that projects were coordinated with the Afghan 

government and included in Nangarhar’s Provincial Development Plan.

To determine the extent to which Nangarhar’s provincial administration is prepared to absorb and 

execute additional development funds, we used information obtained through the documents and 

interviews described above and developed conclusions based on that evidence. After identifying the 

current capacity of Nangarhar’s provincial administration to absorb and execute additional development 

funds, we compared those findings with criteria for provincial capacity as described in various Afghan 

government documents.

During the planning stage of the review, we considered whether the use of internal controls, compliance 

with laws, regulations, or provisions of contracts and grant agreements, and fraud risk were significant 

to the audit objectives. We determined that none of these elements were significant. We used 

computer-processed data from United States and Afghan government sources to determine budgetary

information. Except where noted in the report, we determined the data to be reliable for the purposes 

of identifying the amount and type of funds expended in Afghanistan and Nangarhar Province.

This report is part of a series of SIGAR audits addressing U.S. efforts to combat corruption and 

strengthen governance. We conducted work in Kabul and Nangarhar, Afghanistan, from May to 

September 2010 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 

the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit 
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 20

objectives. The audit was conducted by SIGAR under the authority of Public Law No. 110-181, and the 

Inspector General Act of 1978, as amended.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 21

APPENDIX II: GOVERNMENT OF AFGHANISTAN CORE BUDGET INFORMATION

The government of Afghanistan’s total budget consists of a core operating budget and a development 

budget. The operating budget is structured by primary budget organization (e.g., ministry, department, 

or government agency) and budget code (e.g., wages and salaries, goods and services, and acquisition of 

assets). Figures I and II show the allocation of the Afghan government’s 1388 budget by code and 

economic classification, respectively.

Figure I: Government of Afghanistan’s SY 1388 Budget, by Budget Code

Source: SIGAR analysis of Ministry of Finance data. 

Note: Total does not equal 100 percent due to rounding.

60%

19%

2%

19% Wages and Salaries

Goods and Services

Acquisition of Assets

Contingency Fund for 

Ministry of Defence 
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 22

Figure II: Government of Afghanistan’s SY 1388 Recurring Operating Budget, by 

Economic Categories

Source: SIGAR analysis of Ministry of Finance data. 

Notes: Non-economic codes include items such as salary supplements, fuel subsidies, pensions, and 

emergency funds. Other economic categories include health, infrastructure and natural resources, social 

protection, economic governance and private sector development, and agriculture and rural 

development. 

Total does not equal 100 percent due to rounding.

The development budget is divided into the core development budget, which is executed through the 

government’s budget system, and the external development budget, which consists of expenditures by 

international donor organizations that are not routed through the government’s budget or treasury 

system. The core development budget is presented at the project level, sorted by ministry, and 

separated into approved budget (projects for which the budget resources are available) and approved 

projects (projects that are conditionally approved upon funding made available from external sources).28

In addition to funding the entire external development budget, donor grants, whether from individual 

donor countries or multilateral agencies, support a large portion of the operating budget and fund 

nearly the entire core development budget.

 

29

• The Afghanistan Reconstruction Trust Fund (ARTF)—through its recurrent cost window—

supports the overall operations of Afghanistan’s government;

Three sources of donor grants support the core operating 

budget:

• The Law and Order Trust Fund for Afghanistan supports the Afghan National Police; and

• The Afghan Security Forces Fund—through the Combined Security Transition CommandAfghanistan—supports the Afghan National Army and other security expenditures.

 

28 The core development budget is almost fully funded by donor contributions and consists of discretionary 

spending, which is allocated to the government of Afghanistan when certain performance indicators are achieved, 

and nondiscretionary spending, which is provided to fund specific development projects and programs.

29 The government of Afghanistan’s solar year 1388 core development budget was $903 million, plus carry-over 

funds estimated between $700 million and $1 billion. The largest donors were ARTF ($302 million); World Bank 

($287.9 million); and the Asian Development Bank ($134.4 million).

42%

24%

18%

7%

9% Security

Non-Economic Codes

Education

Governance, Rule of Law 

and Human Rights

Other Economic 

Categories
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 23

Of these three assistance sources, only ARTF supports operations and development outside the security 

sector. ARTF is a partnership between the international community and the Afghan government to 

support the improved effectiveness of the reconstruction effort. Since 2002, 30 donors have contributed 

more than $3 billion to ARTF, making it the largest contributor to the Afghan budget—for both 

operating costs and development programs.30 ARTF’s management committee consists of the World 

Bank (as the administrator), the Islamic Development Bank, the Asian Development Bank, and the UN 

(United Nations Assistance Mission in Afghanistan and UN Development Program).31

ARTF allocates funding through its recurrent cost window, which reimburses the government of 

Afghanistan for a certain portion of eligible and non-security related operating expenditures every year, 

or its investment window, which provides grant financing for national development programs in the 

development budget.32 The recurrent cost window still finances around half of the government’s nonsecurity costs. The investment window has increased significantly in volume and scope over the last two

years due to increased levels of donor contributions, particularly from the United States. The 

“preferenced” portion of donor contributions has been the main factor driving growth in the ARTF over 

the past few years.

33

The following tables contain summary information related to the government of Afghanistan’s 1388 

core budget, including total core budget information (see table I), operating budget allocation by budget 

code (see table II), operating budget by economic category (see table III), and a breakdown of the 

development budget by sector (see table IV).

To ensure that ARTF has sufficient funding to finance the recurrent cost window, 

donors may not preference more than half of their annual contributions.

Table I: Government of Afghanistan Total Operating and Development Budget, 

SY 1388

Government of Afghanistan National Budget, 

SY 1388 U.S. Dollars Percentage of Core Budget

Core Budget $3,517,507,856 100%

Operating Budget $2,159,851,644 61%

Development Budget $1,357,654,833 39%

Source: SIGAR analysis of government of Afghanistan data.

 

30 Approximately 15 donors contribute every year. 

31ARTF donors meet quarterly to discuss broader strategy with the government and ARTF management.

32 Domestic revenues continue to be insufficient to cover the costs of government. The ARTF recurrent cost 

window has therefore ensured the basic functioning of government. 

33 Preferences are a formal recognition by the fund administrator of the donor’s preference to allocate a certain 

portion of a contribution toward a particular project.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 24

Table II: Government of Afghanistan Operating Budget by Code,

SY 1388

Budget Code U.S. Dollars Percentage of 

Total

Wages and Salaries $1,304,884,294 60%

Goods and Services $410,677,346 19%

Acquisition of Assets $38,873,691 2%

Other Codes $405,416,243 19%

Total $2,159,851,575 100%

Source: SIGAR analysis of government of Afghanistan data.

Table III: Government of Afghanistan Operating Budget by Economic Category, SY 1388

Economic Category U.S. Dollars Percentage

of Total

Security $914,859,562 42%

Other Codes $513,794,377 24%

Education $383,295,072 18%

Governance, Rule of Law and Human Rights $157,640,153 7%

Health $42,446,610 2%

Infrastructure & Natural Resources $42,072,288 2%

Social Protection $38,005,088 2%

Economic Governance and Private Sector Development $35,337,127 2%

Agriculture and Rural Development $32,401,297 2%

Source: SIGAR analysis of government of MoF data.

Note: The total percentage does not equal 100% due to rounding.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 25

Table IV: Government of Afghanistan Core Development Budget by Sector, 

SY 1388

Sector Total Budget Allocation

Infrastructure & Natural Resources $1,016,229,631

Agriculture & Rural Development $640,229,725

Education $329,425,205

Health $235,402,240

Economic Governance and Private Sector Development $221,494,198

Good Governance, Rule of Law and Human Rights $60,942,514

Unclassified $59,770,100

Social Protection $35,885,049

Security $11,494,250

Total $2,610,872,911

Source: SIGAR analysis of government of MoF data.

Note: Actual development budget expenditures were $1,357,654,833.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 26

APPENDIX III: NANGARHAR PROVINCE CORE BUDGET INFORMATION

Appendix III contains summary information related to Nangarhar Province’s 1388 core budget, including 

operating budget allocation by budget code (see table V), operating budget by government department 

(see table VI), and consolidated operating (by budget code) and development budget (by ministry) (see 

table VII). 

Table V: Nangarhar Province Operating Budget by Budget 

Code, SY 1388

Budget Code U.S. Dollars Percentage

of Total

Wages and Salaries (21) $51,317,713 85%

Use of Goods and Services (22) $6,543,791 11%

Subsidies, Grants & Social 

Expenditures (24)

$2,771,988 5%

Acquisition of Assets (25) $68,392 0%

Grand Total $60,701,884

Source: SIGAR analysis of Afghan government data.

Note: The total percentage does not equal 100% due to rounding.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 27

Table VI: Allocation of Nangarhar Province Operating Budget by Government Department, 

SY 1388

Government Department U.S. Dollars

Percentage of 

Total 

Operating 

Budget

Ministry of Interior $23,171,848 38.2% 

Ministry of Education $20,300,296 33.4% 

Ministry of Higher Education $4,432,017 7.3% 

Ministry of Martyrs, Disabled and Social Affairs $2,696,658 4.4% 

Ministry of Agriculture $2,350,256 3.9% 

Independent Directorate of Local Governance $1,364,320 2.2% 

Ministry of Justice $1,341,814 2.2% 

Ministry of Finance $1,192,226 2.0% 

Ministry of Public Health $792,102 1.3% 

Supreme Court $533,201 0.9% 

Attorney General $308,096 0.5% 

Ministry of Haj and Religious Affairs $237,000 0.4% 

Ministry of Communication $236,238 0.4% 

Ministry of Rural Rehabilitation and Development $215,217 0.4% 

Ministry of Information and Culture $203,517 0.3% 

Ministry of Public Works $150,039 0.2% 

Ministry of Defense $143,360 0.2% 

Ministry of Energy and Water $116,976 0.2% 

Ministry of Urban Development $97,171 0.2% 

Geodesy and Cartography Office $96,718 0.2% 

Ministry of Frontiers and Tribal Affairs $84,715 0.1% 

Ministry of Transport and Aviation $69,081 0.1% 

IARCSC (Civil Service) $68,119 0.1% 

Ministry of Refugees and Repatriates $66,601 0.1% 

Ministry of Foreign Affairs $62,933 0.1% 

Directorate of Environment $59,274 0.1% 

Ministry of Women Affairs $49,251 0.1% 

Ministry of Economy $47,062 0.1% 

Ministry of Commerce and Industry $45,103 0.1% 

National Olympic Committee $39,188 0.1% 

Office of Disaster Preparedness $34,638 0.1% 

Central Statistics Office $32,359 0.1% 
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 28

Government Department U.S. Dollars

Percentage of 

Total 

Operating 

Budget

Ministry of Counter Narcotics $32,065 0.1% 

Election Commission $18,288 0%

Directorate of Kochis $14,138 0%

Total $60,701,884 100%

Source: SIGAR analysis of Afghan government data.

Table VII: Nangarhar Province Consolidated Operating 

(by Budget Code) and Development Budget (by 

Ministry), SY 1388

Operating Budget U.S. Dollars

Wages and Salaries $51,317,713

Use of Goods and services $6,543,791

Subsidies, Grants & Social Expenditures $2,771,988

Acquisition of Assets $68,392

Subtotal $60,701,884

Development Budget 

Ministry of Health $2,265,342

Ministry of Finance $146,791

National Olympic Committee $95,120

Ministry of Public Health $78,775

Ministry of Justice $9,931

Returned Funds -$229,885

Subtotal $2,366,074

Total Budget $63,067,958

Operating Budget Percentage of Total 96%

Source: SIGAR analysis of Afghan government data.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 29

APPENDIX IV: CERP BUDGET INFORMATION IN NANGARHAR PROVINCE

Appendix IV contains summary information related to CERP expenditure in Nangarhar province, 

including fiscal year 2009 and 2010 (October 1, 2008 to March 31, 2010) CERP obligations delineated by 

project category (see table VIII). 

Table VIII: Total Obligations by CERP in Nangarhar Province by Project 

Category, October 1, 2008 to March 31, 2010

Project Category Obligations Percentage

of Total

Transportation $32,033,283 55%

Agriculture $10,445,165 18%

Rule of Law and Governance $5,758,294 10%

Education $5,022,779 9%

Water and Sanitation $1,895,660 3%

Healthcare $903,543 2%

Repair of Civic and Cultural Facilities $744,753 1%

Other Urgent Humanitarian and Reconstruction 

Projects

$599,530 1%

Food Production and Distribution $488,348 1%

Electricity $284,351 0%

Protective Measures $259,715 0%

Economic, Financial, and Management Improvements $150,864 0%

Condolence Payments $139,118 0%

Battle Damage Repair $4,039 0%

Total $58,729,443

Source: SIGAR analysis of CERP data.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 30

APPENDIX V: USAID BUDGET INFORMATION IN NANGARHAR PROVINCE

Appendix V contains summary information related to USAID estimated development expenditures in 

Nangarhar Province, including total estimated fiscal year 2009 disbursements delineated by primary 

sector (see table IX and figure III) and implementing partners responsible for various USAID projects or 

programs in Nangarhar and the primary sector of those projects or programs (see table X). 

Table IX: Estimated USAID Disbursements 

and Percentages in Nangarhar Province by 

Primary Sector, FY 2009

Primary Sector Est. FY 2009 

Disbursements

Governance $15,597,245

Roads and Transportation $11,632,178

Economic Growth $6,072,846

Basic Education $3,650,895

Agriculture $3,081,652

Civilian Assistance/Solatia $991,329

All Other Sectors $1,381,996

Total $42,408,141

Source: SIGAR analysis of USAID data.

Figure III: Estimated USAID Disbursements Percentages in Nangarhar Province 

by Primary Sector, FY 2009

Source: SIGAR analysis of USAID data.

Note: Solatia are the payments or other recompense for mental suffering or financial or other loss.

37%

27%

14%

9%

7%

2% 3%

Governance 

Roads and Transportation

Economic Growth

Basic Education

Agriculture

Civilian Assistance/Solatia

All Other Sectors
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 31

Table X: USAID Implementing Partners in Nangarhar Province by Number of Projects and Sector, 

Fiscal Years 2009 and 2010 (Partial Year)

USAID Implementing Partners

Number 

of 

Projects

Mechanism Title Sectors

(ARD) Associates in Rural 

Development

1 The Afghan Sustainable Water 

Supply and Sanitation (SWSS) 

Project

Potable Water & 

Sanitation

Academy For Educational 

Development

2 (1) Agriculture, Rural Investment 

and Enterprise Strengthening 

Program (ARIES) (2) Higher 

Education Program / HEP

Economic Growth; 

Higher Education

Asia Foundation, The 2 (1) Financial Management 

Services for the American 

University of Afghanistan (2) 

Ministry of Women Affairs' 

Strengthening Policy and 

Advocacy (MISPA)

Basic Education; 

Women

CAII-Creative Associates 

International, Inc.

1 Building Education Support 

System for Teachers (BESST)

Basic Education

CARE 1 Partnership for Advancing 

Community Education in 

Afghanistan (PACE-A) 

Basic Education

Central Asia Development 

Group, Inc. (CADG)

1 Support for Food insecurity 

Response for urban population 

(PRT-FIRUP)

Economic Growth

CEPPS - Consortium for Elections 

and Political Process 

Strengthening

1 To support increased Electoral 

Participation in Afghanistan with 

Consortium for Elections and 

Political Process Strengthening 

(CEPPS

Elections

CI-Chemonics International 1 Accelerating Sustainable 

Agriculture Program (ASAP)

Agriculture

Counterpart International Inc 1 Initiative to Promote Afghan Civil 

Society (I-PACS)

Civil Society 

Deloitte Consulting LLP 3 (1) Economic Growth and 

Governance Initiative (EGGI) (2) 

Economic Growth and 

Governance Initiative (EGGI) (3) 

Afghan Civil Service Support 

(ACSS)

Economic Growth (2); 

Governance
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 32

USAID Implementing Partners

Number 

of 

Projects

Mechanism Title Sectors

Development Alternatives, Inc. 4 (1) Incentive Driving Economic 

Alternatives Northeast and West 

(IDEA- NEW) (2) Afghanistan Small 

and Medium Enterprise 

Development Program (ASMED) 

(3) Afghanistan Stabilization 

Initiative (ASI) (4) Local 

Governance and Community 

Development (LGCD) Project

Economic Growth (2); 

Governance; 

Agriculture

Futures Group International, LLC 1 Expanding Access to Private 

Sector Health Products and 

Services

Health

IFES, Inc. 1 Elections and Political Processes Elections

International City/County 

Management Association Inc

2 (1) Afghanistan Municipal 

Strengthening Program (2) 

Commercialization of Afghanistan 

Water & Sanitation Activity 

(CAWSA) 

Governance; Potable 

Water & Sanitation

International Organization for 

Migration

2 (1) Construction of Health and 

Education Facilities (CHEF) (2) 

Civilian Assistance Program - Inc. 

Fund funding to Afghan Civilian 

Assistance Program (ACAP) / 

Leahy Initiative

Agriculture; Civilian 

Assistance/Solatia*

International Relief and 

Development, Inc.

2 (1) Human Resources and Logistic 

Support (2) Strategic Provincial 

Roads-South and East Afghanistan

Roads and 

Transportation

Internews Network 1 Independent Media in 

Afghanistan

Media/Communications

JHPIEGO Corporation 1 Health Service Support Project 

(HSSP)

Health

Louis Berger Group Inc., The 2 (1) Afghanistan Infrastructure 

Rehabilitation Program (AIRP) TO# 

14 Operation and Maintenance 

(O&M)/ Capacity Building (2) 

Quick Response II

Roads and 

Transportation (2)

New Mexico State University 

(NEMESTUN)

1 Afghanistan Water, Agriculture 

and Technology Transfer (AWATT)

Agriculture

Purdue University 1 Advancing Afghan Agriculture 

Alliance

Agriculture

State University of New York 1 Afghanistan Parliamentary 

Assistance Program (APAP II)

Governance 

United Nations Habitat 1 Learning for Community 

empowerment Program (LCEP II)

Basic Education
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 33

USAID Implementing Partners

Number 

of 

Projects

Mechanism Title Sectors

University of California, Davis 1 Pastoral Engagement, Adaptation 

and Capacity Enhancement 

(PEACE)

Agriculture

Washington State University 

(WSU)

1 Afghan E-Quality Alliance Higher Education

Wildlife Conservation Society Inc 1 Biodiversity Conservation at the 

Landscape Scale Program

Environment

Source: SIGAR analysis of USAID data.

Note: Solatia are the payments or other recompense for mental suffering or financial or other loss.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 34

APPENDIX VI: STATE DEPARTMENT BUDGET INFORMATION IN NANGARHAR PROVINCE 

Appendix VI contains summary information related to State Department’s estimated development 

expenditures in Nangarhar Province, including total estimated fiscal year 2009 and 2010 grant 

disbursements (see table XI) and budget and expenditures under the Performance Based Governor’s 

Fund in SY 1389 (see table XII). 

Table XI: State Department Grants for Nangarhar Province, Fiscal Years 2009 

and 2010 (Partial Year)

Funding Agency Number of 

Grants Total

Bureau of Population Refugees and Migration 3 $2,499,563

Embassy Kabul 8 $149,896

Total 11 $2,649,459

Source: SIGAR analysis of Department of State data.

Note: Grant totals may include funding for multiple provinces. The list may be incomplete 

because the State Department does not require grants to be tracked by province.

Table XII: Budget and Expenditures for Performance Based Governor's Fund SY 1389 (Partial Year) 

for Nangarhar Province

Hamal (21 March - 20 April) Swar (21 April - 21 May) Total to date

Category Budget Spent Variance Budget Spent Variance Budget Spent Variance 

Total $25,000 $7,862 $17,138 $24,800 $25,759 -$959 $49,800 $33,621 $16,179

Vehicle and 

Equipment

$8,600 $7,452 $1,148 $7,900 $15,703 -$7,803 $16,500 $23,155 -$6,655

Transportation $3,000 $0 $3,000 $3,000 $533 $2,467 $6,000 $533 $5,467

Maintenance and 

Repair of Public 

Facilities

$6,500 $0 $6,500 $7,000 $0 $7,000 $13,500 $0 $13,500

ICT and 

Communications

$0 $410 -$410 $0 $0 $0 $0 $410 -$410

Capacity Building $2,500 $0 $2,500 $2,500 $23 $2,477 $5,000 $23 $4,977

Community 

Outreach

$4,400 $0 $4,400 $4,400 $9,500 -$5,100 $8,800 $9,500 -$700

Source: SIGAR analysis of PBGF data.

Note: Total annual budget for Nangarhar is $300,000.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 35

APPENDIX VII: UN-HABITAT ACTIVITIES IN NANGARHAR PROVINCE

Appendix VII contains summary information related to UN-Habitat activities in Nangarhar throughout 

FY 2009. Table XIII describes the number of projects under this program, delineated by various project 

categories. 

Table XIII: Projects Conducted by UN-Habitat 

(United Nations Human Settlements 

Programme) in Nangarhar Province, FY 2009

Project Categories Number of 

Projects

Building 4 

Construction 3 

Education 291

Human Capital Development 118

Health 1 

Irrigation 20

Latrine 2 

Power 23

Sanitation 44

Shallow Well 1 

Shelter 21

Transportation 64

Water Supply 63

Watsan (Water & Sanitation) 34

Total Projects 689

Source: SIGAR analysis of UNAMA data.
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 36

APPENDIX VIII: COMMENTS FROM U.S. FORCES – AFGHANISTAN 
SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 37

APPENDIX IX: COMMENTS FROM THE U.S. EMBASSY KABUL
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SIGAR Audit-11-1 Anti-Corruption/Sub-National Governance Page 43

(This report was conducted under the audit project code SIGAR-008A).
SIGAR’s Mission 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. 

Obtaining Copies of SIGAR 

Reports and Testimonies

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

SIGAR’s Web site (www.sigar.mil). SIGAR posts all 

released reports, testimonies, and correspondence on its 

Web site.

To Report Fraud, Waste, and 

Abuse in Afghanistan 

Reconstruction Programs

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: hotline@sigar.mil

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

• Phone DSN Afghanistan 318-237-2575 

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

• Phone DSN International: 312-664-0378 

• U.S. fax: +1-703-604-0983 

Public Affairs Public Affairs Officer

• Phone: 703-602-8742 

• Email: PublicAffairs@sigar.mil 

• Mail: SIGAR Public Affairs

400 Army Navy Drive

Arlington, VA 22202