jurisdiction: US

text: b"January \xe2\x80\x93 March 2012\n\x0c Message From the Deputy Inspector General\n\n\nThe U.S. Agency for International Development (USAID) Office of Inspector General (OIG) is\nresponsible for providing oversight of USAID programs and activities. Our work promotes the\nintegrity of USAID programs and activities and the efficiency and effectiveness of its assistance\nefforts around the world. Provided limited oversight resources, OIG takes a targeted approach\nto executing its mission, prioritizing oversight activities in high-risk\nsettings of particular interest to Congress and the administration.\n\nUSAID programs and activities in Afghanistan and Pakistan are\nundertaken in a challenging operating environment that exposes\nthem to increased risks of fraud, waste, and abuse. Because the\nlarge-scale programs in these countries support U.S. national\nsecurity interests as well as reconstruction, stabilization, and\ndevelopment goals, oversight of them is the top priority for OIG.\n\nOIG has been providing oversight of USAID activities in Afghanistan and Pakistan since the\nAgency reopened its missions in these countries in 2002. Our oversight there covers the full\nspectrum of USAID programs and helps ensure that taxpayer dollars are being spent wisely.\n\nWe publish the following report quarterly to increase transparency about our work and\nobservations regarding assistance programs in these countries. This edition of the report\ndescribes OIG\xe2\x80\x99s oversight program in Afghanistan and Pakistan and highlights our activities\nfrom January to March 2012.\n\n\n\n\n Michael G. Carroll\n Deputy Inspector General\n\x0c\x0c Table of Contents\n\nUSAID Office of Inspector General Oversight ................................................................................. 1\n\nAfghanistan Oversight Program and Activities ............................................................................. 9\n\nPakistan Oversight Program and Activities ..................................................................................17\n\nAppendixes...................................................................................................................................................29\n\n Appendix 1 \xe2\x80\x93 Suspension and Debarment Exclusions Resulting From\n OIG Investigations .......................................................................................................................29\n\n Appendix 2 \xe2\x80\x93 Recommendations Pending Management Decisions ......................30\n\n Appendix 3 \xe2\x80\x93 Recommendations Pending Final Action After 6 Months .............33\n\n Appendix 4 \xe2\x80\x93 Audited Amounts, Questioned Costs, and\n Funds Recommended to Be Put to Better Use................................................................38\n\n Appendix 5 \xe2\x80\x93 Completed Audit Reports ............................................................................53\n\n Appendix 6 \xe2\x80\x93 Summaries of Performance Audit and Review\n Findings, FYs 2010-2012 .........................................................................................................66\n\nAbbreviations..............................................................................................................................................94\n\x0c\x0cUSAID Office of Inspector General Oversight\nEstablished pursuant to the Inspector General Act, Public Law 95-452 (October 12, 1978), the\nOffice of Inspector General (OIG) is an independent oversight organization within USAID.\nResponsible for oversight of approximately $31 billion in foreign assistance funds, OIG received\n$51 million in fiscal year (FY) 2012 appropriations.\n Inspector General Act of 1978\nOIG executes its mission to protect and enhance the The Inspector General Act establishes\nintegrity of the U.S. Government\xe2\x80\x99s foreign assistance Offices of Inspector General as independ-\nprograms through audit and investigative efforts. OIG ent, objective units responsible for con-\nmaintains a staff of approximately 195 direct-hire em- ducting and supervising audits and inves-\nployees and 38 other personnel that includes auditors, tigations of agency programs and activi-\ncertified public accountants, investigators, and pro- ties. It directs OIGs to provide leadership\n and coordination and recommend poli-\ngram analysts, as well as specialists in management,\n cies to promote economy, efficiency, and\nbudget, information technology, and personnel opera-\n effectiveness and prevent and detect\ntions. fraud and abuse. The act also requires\n Inspectors General to keep Congress and\nApproximately 70 direct-hire OIG positions are based the head of the agency fully and currently\noverseas, and the remaining workforce is stationed in informed about related problems and\nWashington, D.C. OIG has overseas offices in Baghdad, deficiencies and the need for and pro-\nCairo, Dakar, Kabul, Islamabad, Manila, Port-au-Prince, gress of corrective actions.\nPretoria, San Salvador, and Tel Aviv.\n The Inspector General Act gives the\n Inspector General the authority to:\nSome of OIG\xe2\x80\x99s work is mandated by statute or regula-\ntion. Other work is performed at OIG\xe2\x80\x99s discretion after Make investigations and reports the\nconsidering risks associated with program activities Inspector General deems necessary\nand assessing potential internal control vulnerabilities. or desirable.\nOIG places a high priority on oversight of foreign assis- Access all records and other materi-\ntance efforts in Afghanistan and Pakistan and balances als related to programs and opera-\nthese critical oversight requirements with other im- tions under the Inspector General\xe2\x80\x99s\nportant oversight responsibilities around the world. purview.\n\n Require production of information\nIn both countries, we have adjusted our approach to and documentary evidence by sub-\nensure the maximum possible oversight of the in- poena.\ncreasing levels of assistance provided to local nongov-\n Request information or assistance\nernmental organizations and host governments in the\n from any federal, state, or local unit\nform of project assistance and direct budget support. of government.\n\n Administer oaths and take affidavits.\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 1\n\x0c Financial Returns on OIG Work in OIG\xe2\x80\x99s considered approach to oversight in these\n Afghanistan and Pakistan, FYs 2003-2012 settings has produced dividends for taxpayers.\n Whereas we have expended $24.6 million on\n oversight activities in Afghanistan and Pakistan\n since FY 2003, our audit and investigative work\n has yielded $324.7 million in returns to the Gov-\n ernment in the form of audit and investigative\n USAID OIG\n savings and recoveries. This amounts to a\n Savings and Recoveries\n $13.21 $13.21 return on each dollar spent on USAID OIG\n oversight in these countries. In addition to these\n direct savings and recoveries for the\n Government, USAID OIG prevents a significant\n OIG\n amount of waste, fraud, and abuse, and\n Costs\n contributes to future economies and efficiencies\n $1\n through investigative and audit work.\n\n\n\nAudit Program\nUSAID OIG is responsible for conducting and supervising audits involving USAID programs and\noperations. OIG auditors, certified public accountants, and program analysts design and conduct\naudits and reviews to determine whether Agency programs and operations are working as\nenvisioned. Audit activities include performance audits of programs, financial statement audits,\naudits related to financial accountability of grantees and contractors, and audits of information\ntechnology systems.\n\nPerformance Audits and Reviews\nOIG performance audits and reviews provide an independent assessment of the performance and\nmanagement of USAID systems, programs, activities, and functions against objective criteria, best\npractices, and other information. Performance audits and reviews address a wide variety of\nobjectives, including those related to assessing program effectiveness and results; economy and\nefficiency; internal controls; and adherence to legal and other requirements and standards.\n\nWhen OIG auditors find areas for improvement, they make recommendations to the corresponding\norganizational unit within USAID. When Agency officials agree with an OIG recommendation and\npresent a plan of action with milestones that would fully address a recommendation, OIG\ndetermines that a \xe2\x80\x9cmanagement decision\xe2\x80\x9d has been reached. When the Agency confirms that\ncorrective actions have been implemented, we consider that USAID has taken \xe2\x80\x9cfinal action\xe2\x80\x9d in\nresponse to the recommendation.\n\n\n\n\n2 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cUSAID managers have an opportunity to review and comment on OIG findings and\nrecommendations before they are published. USAID management comments on draft performance\naudits and reviews are included in their entirety in an appendix of the final report.\n\nOIG engages in an extensive planning process to\n Enhanced Personnel Authorities\ndetermine where to focus performance audit and review\nwork. This planning process accounts for program risks A key ingredient in OIG\xe2\x80\x99s success in con-\n flict and postcrisis settings has been the\nand is intended to identify topics of interest to OIG\n organization\xe2\x80\x99s temporarily enhanced\ncustomers and stakeholders. OIG\xe2\x80\x99s annual plan, which\n hiring authority. The Supplemental Ap-\nrepresents the culmination of the yearly planning cycle, propriations Act of 2010, Public Law 111-\nprovides information on audits and reviews scheduled 212 (July 29, 2010), gave OIG the author-\nfor the ensuing fiscal year. OIG adjusts these plans ity to waive compensation restrictions for\nthroughout the year as circumstances warrant. reemployed annuitants so that they can\n earn pay for their services while receiv-\nOIG provides particularly intensive oversight of pro- ing retirement benefits.\ngrams in high-risk settings such as Afghanistan and\nPakistan, where program success or failure can have This authority has enabled us to hire\n experienced personnel with the spe-\nnational security implications. OIG\xe2\x80\x99s performance audit\n cialized skills we require to respond to\nprogram in Afghanistan and Pakistan is particularly\n emerging oversight needs. OIG has used\nrobust as a result.\n this authority in both Afghanistan and\n Pakistan.\nFinancial Audits\nUSAID OIG uses different approaches to audit USAID Unfortunately, this OIG authority is set to\n expire in the coming months. Unless\nfunds expended by different types of organizations.\n Congress acts to extend this enhanced\n hiring authority, OIG will not be able to\nUSAID requires foreign nonprofit organizations that retain reemployed annuitants on a con-\nexpend $300,000 per year or more in USAID funds to tinuing basis after the end of FY 2012.\nundergo an annual financial audit. These audits focus\nspecifically on USAID funds and follow the rules and\nprocedures contained in USAID\xe2\x80\x99s Guidelines for Financial Audits Contracted by Foreign Recipients.\nFor routine audits, the recipient awards the audit contract using a standard statement of work\ndeveloped by OIG. The audits are performed by public accounting firms vetted by OIG. OIG\nreviews final audit reports and transmits them to USAID for action. For a subset of these audits,\nOIG also visits the audit firms, examines audit documentation, and interviews the auditors\nresponsible for the work. These audits are called recipient-contracted audits.\n\nUSAID may also award audit contracts directly. For agency-contracted audits, OIG is involved in\nthe audit from the outset, approving the audit program, attending entrance and exit briefings, and\napproving draft and final audit reports. OIG is responsible for the quality of all recipient-\ncontracted and agency-contracted audits.\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 3\n\x0cU.S.-based nonprofit organizations that expend $500,000 or more in federal awards annually are\nrequired to be audited under the provisions of the Single Audit Act, Public Law 98-502 (October 19,\n1984), as amended, and Office of Management and Budget (OMB) Circular A-133. These A-133\naudits cover a sample of expenditures under federal awards.\n\nFor-profit entities are also subject to financial audit. USAID conducts annual risk assessments of\nfor-profit entities to decide when a for-profit entity should be audited. Financial audits of for-profit\norganizations examine the direct and indirect costs incurred under the awards to determine the\nallowable direct costs and recommend indirect cost rates. These audits are performed by the\nDefense Contract Audit Agency (DCAA) or by public accounting firms.\n\n Audits often identify questioned costs and sometimes\n Fraud Reporting\n recommend that funds be put to better use. Auditors\n USAID implementing partners have an question as ineligible any costs that are not reasona-\n obligation to report allegations of fraud\n ble, allowable under the terms of the underlying con-\n related to USAID projects under the\n tract or grant, or allocable to the program they were\n Federal Acquisition Regulation and\n charged to. They question as unsupported any costs\n USAID requirements.\n that lack evidence, such as bidding documents, in-\n USAID award recipients can use this form voices, or receiving reports, that the auditors would\n on USAID OIG\xe2\x80\x99s Web site to satisfy the need to examine to determine whether the costs are\n requirement that they notify OIG reasonable, allowable, and allocable. USAID contract-\n whenever they have credible evidence ing or agreement officers make final determinations\n that a principal, employee, agent, or on questioned costs and seek reimbursement for any\n subcontractor of USAID has committed a sustained questioned costs. Funds recommended to\n violation of the Civil False Claims Act or a be put to better use are funds that could be used more\n violation of federal criminal law involving\n efficiently if managers take action to implement OIG\n fraud, conflict of interest, bribery, or\n recommendations. Unnecessary expenditures that can\n gratuity violations in connection with a\n federal award or the performance or be avoided in the future and costs that will not be in-\n closeout of a contract or any related curred if operational changes are made in response to\n subcontract. OIG recommendations are examples of funds put to\n better use.\n Members of the public, USAID employees,\n and employees of USAID contractors and Investigations\n grantees are encouraged to use the OIG\n hotline to report fraud, waste, or abuse in OIG conducts investigations into possible violations of\n USAID programs or activities: federal laws, rules, and regulations to preserve and\n protect the integrity of the programs and activities we\n E-mail: IG.Hotline@usaid.gov oversee. OIG investigations of criminal, civil, and ad-\n Phone: 1-800-230-6539 or ministrative violations cover all facets of USAID pro-\n 202-712-1023 grams and operations.\n Web form: transition.usaid.gov/oig/\n hotline/hotline.htm\n\n\n\n4 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cMost OIG investigations are conducted in response to reported allegations of wrongdoing on the\npart of Agency personnel or implementing partners. However, OIG also conducts proactive\ninvestigations into programs and activities vulnerable to fraud.\n\nComplaints regarding USAID programs and activities may be made through the OIG hotline or in\nperson to OIG personnel. OIG protects the confidentiality of complainants\xe2\x80\x99 identity pursuant to\nSection 7(b) of the Inspector General Act. This provision prohibits OIG from disclosing the identity\nof an employee who reports an allegation without first obtaining the employee\xe2\x80\x99s consent, unless\nOIG determines that disclosure is unavoidable during the course of the investigation.\n\nWhistleblower protections are available to Federal employees and applicants who report\ninformation that is reasonably believed to provide evidence of violations of law, rule, or regulation;\ngross mismanagement; gross waste of funds; abuse of authority; or a substantial and specific\ndanger to public health or safety (unless disclosure of such information is specifically prohibited by\nlaw and such information is specifically required by executive order to be kept secret in the\ninterest of national defense or the conduct of foreign affairs). Retaliation against an employee or\napplicant for making a protected disclosure is prohibited by law. Managers are strictly prohibited\nfrom taking, failing to take, or threatening to take or not take a personnel action on an employee or\napplicant because of the employee\xe2\x80\x99s or applicant\xe2\x80\x99s disclosure of covered information.\n\n\n\n\n A billboard advertises the Anti-Fraud Hotline to passersby in Pakistan\xe2\x80\x99s Punjab\n Province. (Photo by OIG, 2011)\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 5\n\x0cIn order to promote fraud reporting, OIG works to establish or link to existing country-specific\nhotlines in high-risk environments such as conflict and postcrisis settings. Newly established\nhotlines like the Anti-Fraud Hotline in Pakistan are supported by local marketing efforts,\ntranslation services, and top-of-the-line security controls, vetting, and analytical capabilities.\n\nWhen our investigations confirm allegations of wrongdoing, OIG special agents collaborate with\nU.S. and local law enforcement and prosecutors, other federal agencies and offices, and\nimplementing partners to put a stop to the prohibited activity. OIG special agents are sworn law\nenforcement officers with the authority to carry firearms, execute search warrants, and make\narrests.\n\nOutreach and Coordination\nOutreach and coordination are important elements of the oversight process, and OIG extensively\nengages in these activities. OIG investigators conduct fraud awareness briefings to alert\nparticipants to fraudulent practices and schemes and to provide guidance on how to report fraud if\nit is encountered. OIG auditors provide training to Agency personnel, host-government audit\nauthorities, and local audit firms on cost principles and federal audit and accountability\nprocedures and requirements.\n\nUSAID OIG works with other law enforcement agencies including the Federal Bureau of\nInvestigation\xe2\x80\x99s International Contract Corruption Task Force, the National Procurement Fraud\nTask Force, the Financial Crimes Enforcement Network, and U.S. embassies\xe2\x80\x99 legal attach\xc3\xa9 offices to\ncoordinate investigative work, eliminate duplication, and maximize the efficient use of government\nresources.\n\nWhen OIG identifies fraud, waste, or abuse in foreign assistance programs, we seek to neutralize\nthis activity by any legal means at our disposal. OIG routinely works with prosecutors from the U.S.\nDepartment of Justice to put an end to civil and criminal violations and frequently works with\nother U.S.-based and foreign prosecutorial authorities to bring perpetrators to justice.\nInvestigative findings on administrative matters are referred to Agency management for action.\nOIG also works with USAID implementing partners to resolve investigative matters with a bearing\non their activities.\n\nOIG auditors work closely with Agency managers to address our findings and identify appropriate\ncorrective actions in response to our recommendations. We also routinely collaborate and consult\nwith other oversight organizations. We work with DCAA in conducting audits, reviews, and\npreaward surveys related to foreign assistance programs. USAID OIG employees regularly meet\nwith representatives from the OIGs of the Departments of State and Defense to coordinate plans,\nreports, and activities of mutual interest. We also work with the Government Accountability Office\n(GAO) in developing our audit plans to prevent duplication and ensure effective coordination.\n\n\n\n6 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cOIG is also a key participant in the Southwest Asia Joint Planning Group. The group, which is led by\nthe Department of Defense OIG, helps coordinate oversight of U.S. Government activities in\nSouthwest Asia. Other members of the group include representatives from the Office of Inspector\nGeneral for the Department of State, DCAA, the Government Accountability Office, the Special\nInspector General for Afghanistan Reconstruction, and the Special Inspector General for Iraq\nReconstruction. The group issues a coordinated oversight plan for the region on an annual basis\nthat includes planned and ongoing oversight activities by the member organizations.\n\nOIG has taken a leadership role in working to harmonize audit standards among international\ndonors, working initially with eight bilateral donors. We work extensively with supreme audit\ninstitutions and public accounting firms overseas, and endeavor to expand and deepen those\nrelationships wherever they would be mutually beneficial.\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 7\n\x0c8 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cPhoto of flood plain cultivation with the Pamir Mountains as a backdrop in Wakhan, Afghanistan. (Photo by\nJohn Winnie Jr., Wildlife Conservation Society-Afghanistan, 2011)\n\n\n\n\nAfghanistan Oversight Program and Activities\nUSAID OIG provides oversight of USAID activities in Afghanistan through an intensive program of\naudits, investigations, and outreach and coordination activities.\n\nTo execute this program as effectively as possible, OIG has expanded its presence in Afghanistan in\nrecent years. In the past, OIG provided oversight remotely using personnel based in Washington,\nD.C., and our regional office in the Philippines. In 2009, we established a permanent, on-the-\nground presence in Kabul. Our Country Office in Afghanistan currently has 17 personnel.\n\nOIG spent approximately $16.4 million to provide oversight for Afghanistan from FY 2003 through\nthe second quarter of FY 2012. USAID OIG oversight activities there during the same period\nproduced $199.2 million in returns to the U.S. Government.\n\nThe U.S. Government reopened the USAID mission in Kabul in 2002. Since FY 2002, USAID has\nprovided approximately $14.0 billion to increase Afghan stability, provide humanitarian\nassistance, and address needs in education, health, economic growth, and governance.\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 9\n\x0cIn recent years, OIG has covered a wide array of\nUSAID programs in Afghanistan, including those\nfor relief and stabilization, reconstruction,\neconomic growth, education, and health care.\nSince the start of FY 2003, USAID OIG has issued\n97 financial audits, performance audits, and\nreviews of Afghanistan-related assistance efforts.\nThese reports made 326 recommendations for\nimprovements to USAID programs and activities.\n\nPerformance Audits and Reviews\n\nUSAID OIG has issued 50 performance audits and\nreviews relating to USAID programs and activities\nin Afghanistan since FY 2003. Performance audits\nand reviews conducted in recent years have noted Map of Afghanistan. (Central Intelligence Agency\nthe need for improvements in a range of World Factbook, 2011)\nmanagement and performance areas. Six in ten reports have identified contract or project\nmanagement deficiencies and noncompliance with relevant procedures or regulations. More than\na third have found internal control weaknesses, and three in ten have noted risks to project\nsustainability and that security problems hampered project implementation or monitoring.\n\nOIG completed one performance audit in Afghanistan during the quarter:\n\n Audit of USAID/Afghanistan\xe2\x80\x99s Skills Training for Afghan Youth Project (Report No. F-306-\n 12-002-P). In April 2010, USAID awarded the Education Development Center, Inc. (EDC) a\n $49.9 million, 3-year cooperative agreement to design and implement the Skills Training for\n Afghan Youth (STAY) Project. An important element of the project is providing financial and\n technical assistance to two Afghan vocational skills training centers: the Afghanistan Technical\n Vocational Institute (ATVI) and the Kunar Vocational Organization (KVO).\n\n By funding operational costs, the project has enabled ATVI and KVO to continue conducting\n vocational training. In addition, the project has trained staff at ATVI and KVO in financial\n management, procurement, and reporting. However, after 16 months, little evidence exists\n that the project has made progress toward strengthening the overall technical capacity of these\n institutions or empowering youth.\n\n The \xe2\x80\x9cdesign and build\xe2\x80\x9d strategy used for the project, which was incorporated in the cooperative\n agreement\xe2\x80\x99s program description, allowed EDC to design and present its implementation plan\n to USAID for approval after the award. However, the description included in the cooperative\n agreement was loosely defined and largely illustrative, and there was little to demonstrate that\n\n\n\n10 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c USAID and EDC agreed on key elements of the design. Further, USAID and EDC differed on\n whether the design had been approved and on what specific activities were to be implemented\n during the second phase. OIG determined that without a clearly defined program description\n outlining USAID\xe2\x80\x99s expectations for results and a mutual understanding of an approved design,\n the project is less likely to implement activities that contribute to the overall goals of the\n mission.\n\n\n\n\n A carpentry student works at Kunar Vocational Organization in Shigal, Laghman\n Province. (Photo by OIG, July 2011)\n\n\n The program description also did not clearly communicate the project\xe2\x80\x99s purpose, goals,\n objectives, priorities, and activities. In fact, a report by an education specialist who assessed\n the project in May 2011 noted that the mission could aid program progress by clearly\n articulating its priorities to EDC and that it should address key issues such as what deliverables\n are of critical importance, what targets are acceptable, and which program areas should be\n prioritized for implementation. These factors contributed to the lack of a clear purpose, goals,\n objectives, priorities, and activities in the project.\n\n OIG made four recommendations. Management decisions were made on all four, and final\n action has been taken on two.\n\nFour additional OIG performance audits and reviews were under way on March 31, 2012:\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 11\n\x0c Audit of Internal Controls Over the Separate Maintenance Allowance at\n USAID/Afghanistan. This audit will determine whether USAID/Afghanistan has adopted\n appropriate internal controls to prevent improper use of the separate maintenance allowance\n benefit.\n\n Audit of USAID/Afghanistan\xe2\x80\x99s Incentives Driving Economic Alternatives for the North,\n East, and West Program. This audit will determine whether the program is increasing licit\n and commercially viable agricultural employment alternatives for rural Afghans.\n\n Review of USAID/Afghanistan\xe2\x80\x99s Monitoring and Evaluation System. This review will\n assess whether the USAID mission in Afghanistan has a monitoring and evaluation system in\n place to manage program activities effectively.\n\n Review of USAID/Afghanistan\xe2\x80\x99s Use of the Commander\xe2\x80\x99s Emergency Response Program\n (CERP) Funds for Selected Projects. The objectives of this review are to determine\n (1) whether CERP funds provided to USAID by U.S. Forces-Afghanistan for specific projects\n were used for their intended purposes and in compliance with applicable laws and regulations,\n and (2) whether costs charged to CERP-funded projects were reasonable, allowable, and\n allocable.\n\nIn addition to these performance audits and reviews, OIG has 17 others planned for FY 2012.\nThese planned audits and reviews will address the following topics:\n\n Kandahar Power Initiative\n The Regional Municipalities Program for Urban Populations for Regional Platforms\n The Regional Municipalities Program for Urban Populations\xe2\x80\x94East\n The Performance-Based Governor\xe2\x80\x99s Fund\n The Limited Scope Grant in Support of the District Development Program\n Sustainability in Office of Infrastructure, Engineering, and Energy programs\n Sustainability in the education program\n Financial sustainability of energy sector programs\n Gender-related activities in selected programs\n Approaches to providing technical assistance to the Government of Afghanistan\n Transition plans\n Field staff monitoring of programs\n Management controls for efficiently managing program operations\n Internal controls for payroll\n Contracts and cooperative agreements\n Use of third-country national employees\n Follow-up on selected OIG recommendations\n\n\n\n12 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cFinancial Audits\nIn addition to organization-wide audits of U.S.-based firms operating in Afghanistan, OIG has\noverseen 47 financial audits of Afghanistan-based programs and activities since FY 2003. These\nfinancial audits have covered more than $1.081 billion in funds and identified approximately\n$150.1 million in questioned costs. Of this total, USAID had sustained more than $2.5 million in\nquestioned costs by the end of the reporting period.\n\nOIG works with private accounting firms to conduct financial audits in Afghanistan. Before using\nany private accounting firms for this type of work, OIG assesses their capability to perform the\nwork. As of March 31, 2012, USAID OIG had a roster of 13 eligible audit firms to call on in\nAfghanistan.\n\nIn addition to required audits of local recipients and U.S.-based NGOs and for-profit entities\noperating in Afghanistan, USAID funds audits of all locally incurred costs to enhance the\naccountability of its programs.\n\nFrom January 1 to March 31, 2012, OIG issued two financial audits in Afghanistan:\n\n Financial Audit of Costs Incurred in Afghanistan Under USAID Contract No. 306-DOT-I-\n 01-08-00033-00 With Chemonics International Inc. for the Period October 1, 2009, to\n September 30, 2010 (Report No. F-306-12-005-N). This audit covered $13,839,901 in\n USAID funds associated with the Afghanistan Stabilization Initiative. The auditors did not\n identify any questioned costs or weaknesses in internal control or material instances of\n noncompliance. However, auditors noted that their work was subject to scope limitations\n including the cancellation of planned site visits due to security conditions in Kandahar\n Province.\n\n Financial Audit of the Local (Non-U.S.) Costs (Costs Incurred and Paid in Afghanistan)\n Under USAID Contract No. 306-I-00-06-00517-00 With the Joint Venture Louis Berger\n Group Inc./Black & Veatch Corp., for the Period October 1, 2009, to September 30, 2010\n (Report No. F-306-12-004-N). The fourth in a series of five planned financial audits of the\n Joint Venture contract, this audit covered $10,779,112 in locally incurred costs and payments.\n The auditors identified 20 material weaknesses, 8 significant deficiencies in internal control,\n and 4 material instances of noncompliance. Auditors also found $2,196,583 in questioned\n costs.\n\nAs of March 31, 2012, eight financial audits of USAID funds were in progress in Afghanistan:\n\n Audit of Local Costs Incurred by International Relief and Development Inc. for the\n Strategic Provincial Road\xe2\x80\x94Southern and Eastern Afghanistan Program, for the Period\n October 1, 2009, to September 30, 2010.\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 13\n\x0c Concurrent Financial Audit of the Local Costs Under USAID Contract No. 306-I-00-06-\n 00517 With the Joint Venture Louis Berger Group Inc./Black & Veatch Special Projects\n Corp. for the Period October 1, 2009, Through September 30, 2010.\n\n Closeout Audit of Costs Incurred and Billed by Oasis International Schools Inc. to USAID\n Under Agreement No. 306-A-00-05-00522-00, Establishment of International School of\n Kabul for the Period May 27, 2005, Through December 31, 2010.\n\n Audit of Local Costs Incurred by United Nations Office of Project Services for the Kabul\n Schools Construction Program for the Period October 1, 2009, Through September 30,\n 2010.\n\n Audit of Costs Incurred in Afghanistan by the Citizen Network for Foreign Affairs,\n Afghanistan Farm Services Alliance for the Period January 1, 2010, Through September\n 30, 2011.\n\n Closeout Financial Audit of Local Costs Incurred by Creative Associates International Inc.\n Under the Ambassador\xe2\x80\x99s Small Grants Program, Cooperative Agreement No. 306-A-00-\n 09-00517-00, for the Period July 2, 2009, Through January 31, 2012, and Assessment of\n Procurement Systems.\n\n Statement of Work Financial Audits of the Local Costs Incurred and Paid in Afghanistan\n Under Contract No. 306-EEM-I-04-07-00005 With Deloitte Consulting for the Period\n August 15, 2009, to September 30, 2010.\n\n Financial Audit of Local Costs Incurred by the American University of Afghanistan,\n Cooperative Agreement No. 306-A-00-08-00525-00, for the Period July 1, 2009, Through\n December 31, 2010, and Assessment of Procurement Systems.\n\nThirty-six other financial audits of USAID funds in Afghanistan were in the planning stage at the\nend of the quarter.\n Investigative Outcomes\nInvestigations Since FY 2003, OIG investigations in\n Afghanistan have resulted in:\nAs of March 31, 2012, USAID OIG had 67 ongoing\ninvestigations pertaining to Afghanistan. During the 38 referrals for civil or criminal pros-\nreporting period, OIG investigators opened nine cases ecution\nin Afghanistan and closed eight others. Since FY 2002, 13 arrests\nOIG has initiated 182 investigations related to Af-\n 13 indictments\nghanistan. These investigations have been associated\nwith a range of different types of allegations. In most 11 convictions and pleadings\ncases, underlying allegations have pertained to pro- 104 administrative actions (e.g., con-\ngram fraud (38 percent) or bribery and kickbacks (23 tract and employee terminations)\npercent).\n $163 million in savings and recoveries\n\n\n14 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cDuring the January 1 through March 31, 2012, reporting period, an OIG investigation resulted in\nthe suspension of two employees of USAID implementing partners:\n\nTwo Contractor Employees Suspended for Sharing Sensitive Information Inappropriately.\nThe Louis Berger Group/Black & Veatch Special Projects Corp. subcontracts for security services as\npart of its Kabul Power Plant expansion and improvement efforts on behalf of USAID in\nAfghanistan. OIG investigated allegations that Louis Berger Group/Black & Veatch\xe2\x80\x99s corporate\nsecurity manager illegally obtained confidential information from the firm\xe2\x80\x99s security subcontractor\nand shared it with a representative of a firm bidding to take over the security subcontract. The\ninvestigation confirmed the allegation and found that the information provided to the firm bidding\non the security subcontract gave it an unfair and illegal advantage over other bidders. As a result\nof the investigation, USAID has suspended both individuals involved in the illicit exchange of\ninformation from participating in future federal contracts, grants, cooperative agreements, or\nother awards.\n\nOutreach and Coordination\nOIG investigators conduct fraud awareness briefings to alert participants\xe2\x80\x94employees, contractors,\ngrantees, and subrecipients\xe2\x80\x94to fraudulent practices and schemes and to provide guidance on how\nto report fraud. OIG has provided 118 fraud awareness briefings in Afghanistan to 2,293\nparticipants since FY 2003. During the reporting period, special agents in Afghanistan delivered 22\nfraud awareness briefings attended by 414 participants, including representatives of USAID\nimplementing partners.\n\nOIG conducts many of its investigations in concert with other law enforcement agencies, often in\nassociation with the International Contract Corruption Task Force, a joint law enforcement agency\ntask force that seeks to detect, investigate, and dismantle corruption and contract fraud resulting\nfrom U.S. contingency operations. When cases involving Afghan nationals are declined for\nprosecution by the U.S. Department of Justice, the matters are presented to the local public\nprosecutor, with whom OIG has developed a successful working relationship.\n\nOIG also has a close working relationship with USAID/Afghanistan, and investigators regularly\nbrief contracting personnel on fraud detection and prevention. OIG provides an orientation to all\nincoming USAID staff members in Afghanistan on their role in helping promote effectiveness and\naccountability in USAID projects and programs, as well as on the operating environment in\nAfghanistan, fraud indicators, and the OIG\xe2\x80\x99s audit and investigative programs.\n\nOIG has also established working relationships with many implementing partners and regularly\nprovides fraud awareness briefings for their staff. OIG also supports implementing partners in\ntheir efforts to identify and address allegations of fraud by quickly referring cases to USAID\xe2\x80\x99s Office\nof Acquisitions and Assistance (OAA) and local prosecutors when appropriate. OIG continues to\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 15\n\x0ccollaborate with OAA by referring entities for possible suspension or debarment and meeting\nregularly to review referrals. As this process becomes more robust, it will become increasingly\ndifficult for individuals to prey on multiple USAID projects. Since FY 2011, OAA has taken\nsuspension or debarment actions against 40 individuals and firms based on OIG referrals related to\nAfghanistan.\n\nUSAID OIG coordinates audit plans and ongoing activities with other oversight bodies through the\nInspector General Shura, a body made up of the OIGs for USAID and the Departments of State and\nDefense, the Special Inspector General for Afghanistan Reconstruction, and GAO.\n\n\n\n\n16 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cImage of a field cultivated under USAID\xe2\x80\x99s Agricultural Recovery Project in Khyber Pakhtunkhwa, Pakistan.\n(Photo by USAID/Pakistan, March 2011)\n\n\n\n\nPakistan Oversight Program and Activities\nUSAID OIG provides oversight of USAID activities in Pakistan through rigorous audit and\ninvestigative work and extensive outreach and coordination.\n\nTo execute this program as effectively as possible, the OIG has expanded its presence in Pakistan in\nrecent years. In the past, the OIG provided oversight remotely using personnel based in\nWashington, D.C., and our regional office in the Philippines. In 2009, we established a permanent,\non-the-ground presence in Islamabad. As of March 31, 2012, OIG\xe2\x80\x99s Pakistan Country Office had 14\npermanent staff supplemented by a staff member on temporary duty.\n\nOIG has spent approximately $8.2 million to provide oversight for Pakistan from FY 2003 through\nthe second quarter of FY 2012. USAID OIG oversight activities there during the same period have\nproduced $125.5 million in returns to the U.S. Government.\n\nThe U.S. Government reopened the USAID mission in Islamabad in 2002. From FY 2002 through\nthe second quarter of FY 2012, USAID provided more than $5.4 billion to address needs in\neducation, health, economic growth, and good governance and to help with reconstruction and\nrecovery after earthquakes, floods, and armed conflict.\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 17\n\x0cIn recent years, OIG has covered a wide array of\nUSAID programs in Pakistan, for relief and stabili-\nzation, reconstruction, sustainable development,\neducation, and health care. Since the start of FY\n2003, USAID OIG has issued 73 financial audits,\nperformance audits, and reviews of Pakistan-re-\nlated assistance efforts. These reports made 128\nrecommendations for improvements to USAID\nprograms and activities.\n\nPerformance Audits and Reviews\nUSAID OIG has issued 19 performance audits and\nreviews relating to USAID programs and activities\nin Pakistan since FY 2003. Performance audits and\nreviews conducted in recent years have noted the Map of Pakistan. (Central Intelligence Agency\nneed for improvements in a range of management World Factbook, 2011)\nand performance areas. Most have identified\ncontract or project management deficiencies and internal control weaknesses, and more than four\nin ten have found noncompliance with relevant procedures or regulations.\n\nFrom January 1 to March 31, 2012, OIG completed two performance audits.\n\n Audit of USAID/Pakistan\xe2\x80\x99s Pre-Service Teacher Education Program (Report No. F-306-\n 11-003-P). To improve teacher education in Pakistan, in September 2008 USAID/Pakistan\n awarded a $37 million cooperative agreement to the Academy for Educational Development\n (AED) to implement the Pre-Service Teacher Education Program (Pre-STEP). After the\n Government of Pakistan terminated its memorandum of understanding with AED, USAID\n canceled the cooperative agreement as well and awarded the program to EDC.\n\n In its first 3 years, the program made progress toward achieving improved teacher education\n by developing and helping the Pakistani Government implement education policy reforms. The\n Higher Education Commission approved two new education degree programs based in part on\n Pre-STEP recommendations. These programs, introduced with USAID\xe2\x80\x99s support, should\n ultimately affect teacher training colleges and universities throughout Pakistan and help\n improve the overall quality of education. In part because of Pre-STEP\xe2\x80\x99s efforts, 16 Pakistani\n teaching institutions have adopted the new degree programs. Pre-STEP plans to increase the\n number of colleges and universities offering the new degrees over the next 2 years by\n supporting their implementation at target colleges and universities and expanding the number\n of students enrolled in the new degree programs.\n\n\n\n18 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c Despite the progress in developing and implementing policy reforms at the provincial and\n national levels, the program did not achieve most of its targets. For example, USAID funded\n only 410 of 2,297 planned scholarships to students enrolled in the new teaching curriculum\n and distributed only 10 of 36 planned research grants with an average value of $9,000 to\n teaching institutions in 2011. These shortfalls occurred in part because key personnel hired to\n manage the program did not have the necessary management skills. Another contributing\n factor was the change in implementers. Even though the mission awarded the new agreement\n the day after terminating the AED agreement, EDC still needed time to hire additional staff, find\n new office space, develop work plans, and establish internal controls.\n\n In addition, the mission\xe2\x80\x99s technical office had many competing priorities and lacked time to\n provide adequate oversight. During the period under review, the mission assigned one\n agreement officer\xe2\x80\x99s representative to manage Pre-STEP\xe2\x80\x99s $75 million agreement. This\n individual was assigned to manage three other projects whose average budget was $9 million.\n This situation contributed to the missed targets.\n\n OIG made two recommendations, and management decisions have been reached on both.\n\n Audit of USAID\xe2\x80\x99s Pakistan Transition Initiative Program (Report No. G-391-12-003-P).\n Assisting the Government of Pakistan in bringing peace and security to the unstable regions of\n Pakistan\xe2\x80\x94the Federally Administered Tribal Areas (FATA) and Khyber Pakhtunkhwa\xe2\x80\x94is\n pivotal to U.S. foreign policy objectives and national security. To achieve this goal, USAID\n awarded a 3-year, $102 million contract in September 2009 to implement a portion of the\n Pakistan Transition Initiative in FATA and Khyber Pakhtunkhwa. USAID\xe2\x80\x99s Office of Transition\n Initiatives (OTI) manages the program with a staff of seven located at USAID/Pakistan.\n\n OIG confirmed that the program is a quick, efficient mechanism to deliver projects that the local\n communities want\xe2\x80\x94like the suspension bridge pictured on the next page\xe2\x80\x94and it has allowed\n the Government of Pakistan to cultivate trust and confidence in its services. Key\n accomplishments include 48,000 meters of streets paved, 22,800 meters of drainage and\n sanitation piping constructed, and 7,000 meters of retaining walls built to withstand flooding.\n\n The program formed committees for each project that were made up of community\n representatives who then conducted inspections and evaluations throughout project\n implementation. For example, the audit team interviewed the community members who had\n overseen the installation of a water supply system. They explained that, after extremists\n destroyed portions of their water system, villagers had been forced to get water from a distant\n well, exposing themselves to danger along the path. After the Pakistani military cleared the\n area, the program installed a new water tank and pumps.\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 19\n\x0c An overarching goal of the program is to improve relations between the Government of\n Pakistan and communities in FATA and Khyber Pakhtunkhwa, thereby reducing violence and\n extremism. In addition to the infrastructure projects, the program rehabilitated 92 educational\n facilities, including the Government Girls\xe2\x80\x99 High School. After the school closed for several\n months to house displaced persons during military operations and sustained significant\n damage, the program rehabilitated the school and provided school supplies.\n\n\n\n\n A bridge funded by the Pakistan Transition Initiative Program allows for quick and safe\n river crossing. (Photo by OIG, October 2011)\n\n However, OIG found that the mission had not developed a formal written plan with clear\n criteria linking the implementation of program activities with long-term activities planned for\n FATA and Khyber Pakhtunkhwa. As a result, OTI officials agree that, if funding stops, the\n program will collapse.\n\n A management decision has been made on the one recommendation in this report.\n\nAs of March 31, 2012, USAID OIG had three performance audits and one review in progress.\n\n\n\n\n20 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c Audit of USAID/Pakistan\xe2\x80\x99s Entrepreneurs Program. The objective of this audit is to\n determine whether USAID/Pakistan\xe2\x80\x99s Entrepreneur Project made progress building the\n capacity of partners and expanding opportunities for owners of microenterprises.\n\n Audit of USAID/Pakistan\xe2\x80\x99s Benazir Income Support Program. This audit will determine\n whether USAID/Pakistan\xe2\x80\x99s cash transfers provided to the Benazir Income Support Program\n reached intended beneficiaries.\n\n Audit of USAID/Pakistan\xe2\x80\x99s Reconstruction Activities in Earthquake Affected Areas. The\n objective of this audit is to determine whether USAID/Pakistan\xe2\x80\x99s reconstruction activities in\n earthquake-affected areas have been implemented effectively.\n\n Review of USAID/Pakistan\xe2\x80\x99s Cost Estimates for Shipping and Storage. The objective of this\n review is to develop a more reasonable way to estimate how much funding to obligate for the\n shipping and storage of goods for employees assigned to USAID/Pakistan.\n\nOIG has plans to conduct four other performance audits during FY 2012. These performance\naudits will assess USAID/Pakistan\xe2\x80\x99s Jamshoro Thermal Power Station Repair and Maintenance\nActivity, Gomal Zam Multipurpose Dam Project, Assessment and Strengthening Program for local\norganizations and Government of Pakistan entities, and Monitoring and Evaluation Program.\n\nFinancial Audits\nIn addition to organization-wide audits of U.S.-based firms operating in Pakistan, OIG has overseen\n54 financial audits of Pakistan-based programs and activities since FY 2003. These financial audits\nhave covered more than $829 million in funds and identified approximately $6.7 million in\nquestioned costs. Of this total, USAID has sustained more than $3.1 million in questioned costs to\ndate.\n\nOIG has developed relationships with local institutions, such as the Auditor General of Pakistan, to\nhelp strengthen the accountability environment. OIG\xe2\x80\x99s memorandum of understanding with the\nAuditor General permits that organization\xe2\x80\x99s audits to be accepted as meeting the requirement for\nannual audits of Pakistani Government entities implementing USAID-funded programs. Before\naccepting Auditor General audits as meeting this requirement, however, OIG reviews them to\nverify that they were performed in accordance with OIG guidelines. OIG recently provided a\nfinancial audit training session with a segment on fraud awareness to the Auditor General\xe2\x80\x99s staff.\n\nOIG also uses local accounting firms to conduct financial audits in Pakistan. Before using any local\nfirms for this type of work, OIG assesses their capability to perform the work. As of March 31,\n2012, USAID OIG had a roster of 27 eligible audit firms in Pakistan to call on. OIG has nearly\ndoubled the size of this roster since the start of FY 2010.\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 21\n\x0cFrom January 1 to March 31, 2012, USAID OIG issued six financial audits and one quality control\nreview:\n\n Financial Audit of the Aga Khan University Flood Response Program, USAID/Pakistan\n Cooperative Agreement No. 391-G-00-10-01188-00, Managed by Aga Khan University,\n for the Period August 30 to December 31, 2010 (Report No. G-391-12-003-R). This audit\n covered Aga Khan University program revenues and costs of $723,764 and $1,057,045,\n respectively. The audit firm concluded that the fund accountability statement presented fairly,\n in all material respects, program revenues and costs incurred under the agreement for the\n period audited. The audit firm did not identify any questioned costs, material internal control\n weaknesses, or material instances of noncompliance. However, the audit report identified two\n significant deficiencies in internal control over fixed assets and inventory and recommended\n that USAID/Pakistan ensure that the Aga Khan University corrects these significant\n deficiencies.\n\n Financial Audit of the Anti-Corruption Program in Pakistan, USAID/Pakistan\n Cooperative Agreement No. 391-A-00-09-01117-00, and Anti-Fraud Hotline Project in\n Pakistan, USAID/Pakistan Cooperative Agreement No. 391-A-00-10-01194-00, Managed\n by Transparency International-Pakistan, for the Year Ended June 30, 2011 (Report No.\n G-391-12-004-R). This audit covered Transparency International-Pakistan\xe2\x80\x99s program\n revenues and costs of $450,829 and $387,825, respectively. The audit concluded that the fund\n accountability statement presented fairly, in all material respects, program revenues and costs\n incurred under the agreement for the period audited. The audit did not identify any\n questioned costs, material internal control weaknesses, or material instances of\n noncompliance, and the report did not make any recommendations.\n\n Financial Audit of the Merit- and Need-Based Scholarship Project, USAID/Pakistan\n Agreement No. 391-G-00-04-01023-00, Managed by the Higher Education Commission,\n for the Period July 2, 2004, to June 30, 2010 (Report No. G-391-12-005-R). This audit\n covered project revenues and costs of $6,089,134 and $6,055,675, respectively. The Auditor\n General concluded that all six fund accountability statements audited presented fairly, in all\n material respects, program revenues and costs incurred under the agreement for the period\n audited. The Auditor General did not identify any material internal control weaknesses or\n material instances of noncompliance in its audit report. However, in a separate management\n letter issued to the Higher Education Commission, the Auditor General questioned costs of\n $1,665,174. These questioned costs stemmed from a number of observations in the audit\n report involving noncompliance with the agreement and policies and procedures. The report\n made five recommendations to address these issues.\n\n Financial Audit of Budgetary Support, USAID/Pakistan Program Assistance Agreement\n No. 391-012, Implementation Letter No. 1, Managed by the Economic Affairs Division of\n\n\n\n22 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c the Government of Pakistan, for the Period June 8, 2009, to June 15, 2011 (Report No. G-\n 391-12-006-R). This audit covered budgetary support of $44 million to the Government of\n Pakistan. The Auditor General concluded that the fund accountability statement presented\n fairly, in all material respects, program revenues and costs incurred under the agreement for\n the period audited. The Auditor General did not identify any questioned costs, material\n internal control weaknesses, or material instances of noncompliance in its audit report.\n However, in a separate management letter issued to the management of the Economic Affairs\n Division, the Auditor General highlighted a number of report observations including those\n related to issues with eligibility criteria for program beneficiaries, unclaimed funds for\n beneficiaries, and quarterly reporting to USAID. The Auditor General did not make any related\n recommendations because the program had ended.\n\n Financial Audit of the Pakistan Competitiveness Support Fund, USAID/Pakistan Grant\n Agreement No. 391-G-00-06-01073-00, Managed by the Competitiveness Support Fund,\n for the Period July 1, 2010, to June 30, 2011 (Report No. G-391-12-007-R). This audit\n covered Competitiveness Support Fund program revenues and costs of $2,318,674 and\n $2,197,622, respectively. USAID OIG reviewed the report and found that it generally met the\n requirements of U.S. Government Auditing Standards and OIG guidelines. The audit firm\n concluded that the fund accountability statement presented fairly, in all material respects,\n program revenues and costs incurred under the cooperative agreement for the period audited.\n The audit firm did not identify any questioned costs or material internal control weaknesses.\n However, the audit identified two material instances of noncompliance and made one\n recommendation to USAID/Pakistan to correct them.\n\n Financial Audit of USAID/Pakistan\xe2\x80\x99s Rupee Trust Fund, for the Period October 1, 2009, to\n September 30, 2011 (Report No. G-391-12-001-N). This audit covered USAID/Pakistan\xe2\x80\x99s\n rupee trust fund receipts of $167,886 and costs of $859,543. USAID OIG reviewed the report\n and found that the audit was performed in accordance with U.S. Government Auditing\n Standards and OIG guidelines. The audit firm concluded that the fund accountability statement\n presented fairly, in all material respects, funds received and costs incurred under the\n agreement. The audit firm did not identify any questioned costs or make any\n recommendations.\n\n Quality Control Review of the Financial Audit Conducted by the Directorate General for\n Audit, Federal Government, Department of the Auditor General of Pakistan, of the Merit-\n and Need-Based Scholarship Project, USAID/Pakistan Agreement No. 391-G-00-04-\n 01023-00, Managed by the Higher Education Commission, for the Period July 2, 2004, to\n June 30, 2010 (Report No. G-391-12-001-Q). OIG reviewed the audit to determine whether\n Pakistan\xe2\x80\x99s Office of the Auditor General performed the subject audit in accordance with the\n auditing standards promulgated by the International Organization of Supreme Audit\n Institutions and USAID\xe2\x80\x99s Guidelines for Financial Audits Contracted by Foreign Recipients. OIG\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 23\n\x0c auditors found that the audit work generally met international standards and USAID\n requirements. However, the review noted that the Office of the Auditor General could have\n improved documentation, analytical procedures, and risk assessments.\n\nAs of March 31, 2012, USAID OIG had seven financial audits, one agreed-upon procedures\nengagement, and one quality control review in progress:\n\n Financial Audit of USAID Funds Managed by the Ministry of Economic Affairs and\n Statistics (Economic Affairs Division) Under the Cash Transfer Grant Agreement, Activity\n No. 391-012-IL-03 for University and Technical Education in FATA Through the Pakistan\n Higher Education Commission, for the Period September 30, 2009, to June 30, 2010.\n\n Financial Audit of USAID Funds Managed by the Water and Power Development\n Authority Under Agreement No. 391-TDR-FARA-002-00 for the Year Ended June 30,\n 2011.\n\n Financial Audit of USAID Funds Managed by the Water and Power Development\n Authority Under Agreement No. 391-PEPA-ENR-GOMAL-PIL-001 for the Year Ended\n June 30, 2011.\n\n Financial Audit of USAID Funds Managed by the Water and Power Development\n Authority Under Agreement No. 391-PEPA-ENR-SATPARA-PIL-001 for the Year Ended\n June 30, 2011.\n\n Financial Audit of USAID Funds Managed by Jamshoro Power Company Limited Under\n Agreement No. 391-JAM-FARA-003-00 for the Year Ended June 30, 2011.\n\n Financial Audit of USAID Funds Managed by Northern Power Generation Company\n Limited Under Agreement No. 391-MUZ-FARA-004-00 for the Year Ended June 30, 2011.\n\n Financial Audit of the Assessment and Strengthening Program, USAID/Pakistan\n Cooperative Agreement No. 391-A-00-11-01202-00, and Financial Audit of Merit- and\n Needs-Based Scholarship Program, Subaward Under USAID/Pakistan Cooperative\n Agreement No. 391-G-00-04-01023-00, Managed by Lahore University of Management\n Sciences, for the Year Ended June 30, 2011.\n\n Agreed-Upon Procedures Engagement on USAID/Pakistan Resources Managed by the Rural\n Support Programmes Network Under Agreement No. 391-A-00-11-01213-00, for the Sindh\n Agricultural Recovery Project, for the Period November 13, 2010, to July 31, 2011.\n\n\n\n\n24 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c Quality Control Review of the Audit Report and Audit Documentation for the Financial\n Audit Conducted by Avais Hyder Liaqut Nauman for the Anti-Corruption Pakistan\n Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-09-01117-00, and Anti-\n Fraud Hotline Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-10-\n 01194-00, Managed by Transparency International-Pakistan, for the Year Ended\n June 30, 2011.\n\nTen other financial audits of USAID funds in Pakistan were in the planning stage on March 31,\n2012.\n\nInvestigations\nAs of March 31, 2012, USAID OIG had 26 ongoing\ninvestigations pertaining to Pakistan. During the Investigative Outcomes\nreporting period, OIG investigators opened seven cases Since FY 2003, OIG investigations in\nin Pakistan and closed six others. Since FY 2003, OIG Pakistan have resulted in:\nhas initiated 84 investigations related to Pakistan. 4 referrals for civil or criminal prose-\nThese investigations have been associated with a range cution\nof different types of allegations. In most cases, under-\n 1 civil judgment\nlying allegations have pertained to program fraud\n(32 percent) or bribery and kickbacks (31 percent). 33 administrative actions (e.g., con-\n tract and employee terminations)\nDuring the January 1 through March 31, 2012, $102 million in savings and recover-\nreporting period, an OIG investigation resulted in the ies\nrecovery of funds from a USAID implementing partner,\nas detailed below:\n\nFunds Collected From Implementer for Fraud and Theft in FATA Program. In April 2008,\nUSAID\xe2\x80\x99s primary implementer for the FATA Livelihood Development Program entered into a\nsubcontract with Abt Associates Inc. to undertake a $6 million cash-for-work tree-planting\nprogram in FATA with the aim of creating job opportunities for youth and unemployed individuals\nin the area. Abt Associates, in turn, sought competitive bids from vendors to supply tree saplings.\n\nAs a result of allegations made to USAID OIG, the primary implementer, CHF International,\nconducted an audit of the program and determined that, of the 2.2 million trees contracted to be\nplanted, only 1.2 million trees were documented as having been purchased. In addition, three of\nthe five vendors that Abt Associates had selected to procure saplings were owned and controlled\nby the same family. OIG\xe2\x80\x99s investigation confirmed that USAID funds were lost as a result of theft,\noverpayment, fraud, and mismanagement by Abt Associates. In response to the investigative\nfindings, USAID collected $336,603 in reimbursements from CHF International in March 2012.\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 25\n\x0cOutreach and Coordination\nUSAID OIG collaborates with the OIGs for the Departments of State and Defense to prepare a\nquarterly report on the progress and oversight of the U.S. Government\xe2\x80\x99s civilian assistance\nprogram in Pakistan. Now in its ninth edition, this report provides information on developments\nrelated to the full scope of U.S. civilian assistance programs and activities in Pakistan. The report\ninforms stakeholders about progress achieved to date, problems encountered during program\nimplementation, and actions taken to address them.\n\nWith the aim of increasing reporting on fraud, waste, and abuse in assistance programs, OIG and\nUSAID/Pakistan collaborated to establish an anti-fraud hotline in Pakistan. The Anti-Fraud Hotline\nbecame fully operational in February 2011. This 5-year project is funded by a cooperative\nagreement between USAID/Pakistan and Transparency International \xe2\x80\x93Pakistan in partnership with\nOIG.\n\nOIG is solely responsible for handling complaints received through the hotline. During the\nreporting period, USAID OIG continued to work closely with the hotline to vet and investigate\nincoming complaints. This quarter, the hotline received 605 complaints.\n\nAs shown in the following graphic, the majority of complaints received during the reporting period\nrelated to service delivery.\n\n\n\n\n Source: Transparency International-Pakistan.\n\n\nSince its introduction in February 2011, the Anti-Fraud Hotline has been widely advertised on\ntelevision, radio, newspaper, and billboards. As the only one of its kind in Pakistan, the hotline has\n\n\n26 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0creceived a large volume of complaints related to programs implemented by other agencies. USAID\nOIG refers these complaints to the appropriate agency for further review and investigation. From\nJanuary 1 to March 31, 2012, OIG referred 314 hotline complaints to outside entities, including the\nU.N. World Food Programme, UNICEF, the U.N. Development Programme, the U.N. Office for Project\nServices, the U.N. Food and Agriculture Organization, the World Bank, the United Kingdom\xe2\x80\x99s\nDepartment for International Development, Pakistan\xe2\x80\x99s Benazir Income Support Program (BISP),\nSave the Children, Mercy Corps, and the Awaz Foundation (a Pakistani NGO).\n\nOIG also works closely with hotline personnel to monitor and address complaints regarding viola-\ntions of the Pakistan Public Procurement Rules (PPR) of 2004 in the tendering of USAID-funded\nprojects being carried out by the Government of Pakistan. Allegations of PPR violations received\nthrough the hotline are handled in accordance with the procedures set forth in the PPR, which\nrequire the tendering government agency to review and\nrespond to the complaint within a set period. When a Accessing the Hotline\nviolation of the PPR has occurred, the tendering agency The Anti-Fraud Hotline operates 24\nis required to cancel or correct the procurement. If the hours a day and accepts allegations in\n English, Urdu, Pashto, Baloch, and\nissue is not properly resolved by the tendering agency, Punjabi.\nthe Pakistan Public Procurement Regulatory Agency\nand the Supreme Court of Pakistan can intervene. Complaints may be made to the hotline\n via a toll-free number (0800-84700),\nIn February 2012, the hotline received a complaint from online (www.anti-fraudhotline.com), by\na Pakistani firm relating to BISP, the Government of mail or fax, or in person.\nPakistan\xe2\x80\x99s program designed to set up an effective na-\ntional safety net and foster the long-term development of the poor. According to the complaint,\nactions by BISP staff on bids for a data-processing contract violated the PPR. The bid from one\nbidder on the contract arrived shortly after the deadline for submissions, but the other bidder\nconsented to including the late bid in the evaluation process. BISP personnel consulted with the\nPakistan Public Procurement Regulatory Agency on what action to take in the procurement and\nwere advised to evaluate both bids or call for new ones. Despite this, BISP officials initially elected\nto evaluate only the first bid. After hotline personnel advised BISP officials of their responsibilities\nunder the PPR, they reconsidered and reinvited the tendering of bids for the data-processing\ncontract.\n\nOIG has established a working relationship with Pakistan\xe2\x80\x99s National Accountability Bureau (NAB),\nthe primary law enforcement agency in Pakistan responsible for investigating white-collar crime\nand public corruption and the only national law enforcement agency authorized to conduct\ninvestigations in FATA. OIG has coordinated efforts with NAB since early 2010 and collaborates\nwith it on investigations.\n\nOIG investigators also conduct fraud awareness briefings to alert participants\xe2\x80\x94employees,\ncontractors, grantees, and subrecipients\xe2\x80\x94to fraudulent practices and schemes and to provide\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 27\n\x0cguidance on how to report fraud. OIG has provided 39 fraud awareness briefings in Pakistan to\n1,055 participants since FY 2003. During the reporting period, special agents in Pakistan delivered\nseven fraud awareness briefings attended by 275 participants, including representatives of USAID\nimplementing partners and NAB.\n\nIn late February 2012, USAID\xe2\x80\x99s Acting Inspector General and the special agent in charge for the\nregion participated in a fraud awareness and prevention seminar in Karachi sponsored by\nTransparency International\xe2\x80\x93Pakistan. More than 80 people attended the seminar, including\nrepresentatives of USAID implementing partners, Government of Pakistan personnel implementing\nUSAID-funded projects, and staff and cooperating partners of the U.N. World Food\nProgramme. The seminar featured presentations by USAID OIG, the Sindh Public Procurement\nRegulatory Authority, and the staff of the Anti-Fraud Hotline. USAID OIG\xe2\x80\x99s presentation focused on\nrecent fraud trends and reporting requirements. Other presenters at the event provided an\noverview of hotline work to date and discussed Pakistani public procurement rules that apply to\nUSAID-funded projects implemented by provincial government agencies.\n\nOIG also provides training on standards and requirements for financial audits of U.S. Government\nfunds. To date, OIG has provided this training to 60 staff members at USAID/Pakistan and 26\nemployees from ten Pakistani provincial government ministries. In FY 2012, USAID OIG also\nprovided this training to 13 employees of Pakistan\xe2\x80\x99s Office of the Auditor General and 55\nparticipants from 24 local public accounting firms.\n\n\n\n\n28 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cAppendix 1 \xe2\x80\x93 Suspension and Debarment Exclusions\nResulting From OIG Investigations\nOIG works with USAID\xe2\x80\x99s OAA to prevent individuals and organizations that are not presently\nresponsible from receiving federal awards. OIG gives information to OAA to assist with Agency\ndeterminations on whether to suspend or debar individuals and organizations, thereby preventing\nthem from receiving federal contracts, grants, cooperative agreements, and other awards.\n\nOIG investigations in Afghanistan and Pakistan have been an important source of information for\nUSAID in making suspension and debarment decisions. The following individuals and\norganizations were ineligible for federal awards as of March 31, 2012, pursuant to Afghanistan-\nand Pakistan-related information that was developed by our office.\n\n\n Excluded Entity Action End\n Date Date\n\nSuspensions\n\n Cameron, Ian 02/24/12 02/24/13\n Peel, Ian 03/12/12 03/12/13\n Wolff, Derish 12/22/11 Indefinite\n\nDebarments\n\n Ahsan Aman Construction Company (AACC) 08/01/11 05/24/14\n Burrows, Bryan Lee 06/02/11 05/27/13\n Masud, Atif 08/27/10 08/27/13\n McMonigle, Ryan Scott 05/07/10 05/07/13\n Mehr, Behzad 12/13/11 09/27/14\n Mohammad, Raz (Roz) 08/01/11 05/24/14\n Pellettieri, Precy 07/15/11 01/11/14\n Pepe, Salvatore 07/15/11 01/11/14\n Samimi, Mohammed Qaseem 02/09/12 11/15/12\n Sediqi, Ahman Samim 07/12/11 01/11/14\n SERVCOR, LLC 07/07/11 12/15/13\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 29\n\x0cAppendix 2 \xe2\x80\x93 Recommendations Pending Management\nDecisions\nUSAID OIG establishes the basis for audit findings and recommendations to persuade Agency\nofficials that recommended corrective actions are warranted. Agency officials communicate their\nagreement or disagreement with OIG recommendations upon review of draft OIG reports. When\nAgency officials agree with an OIG recommendation and present a plan of action with milestones\nthat would fully address the recommendation, OIG determines that a management decision has\nbeen reached.\n\nThe following OIG recommendations were pending management decisions as of March 31, 2012.\nUSAID management decisions were pending on 11 recommendations related to Agency programs\nin Afghanistan and on 2 relating to Pakistan. The following table lists these recommendations by\ncountry and by the USAID office to which the recommendation was directed.\n\n\n Report\n Report Title* Recommendation\n Date\n\nAfghanistan\n\n USAID/Afghanistan\n\n10/03/11 Financial Audit of the Partnership 1. Determine the allowability of and recover, as\n Contracts for Health Services Program appropriate, questioned costs of $1,328,310.\n Managed by the Ministry of Public Health,\n for the Period July 20, 2008, Through\n September 22, 2010 (F-306-12-001-N)\n\n12/20/11 Independent Audit of Black & Veatch 1. Determine the allowability of and recover, as\n Special Projects Corporation Direct Costs appropriate, unsupported questioned costs of\n Incurred and Billed on Contract No. 306-I- $32,198,382.\n 00-06-00517-00 From August 25, 2006, to\n September 30, 2008 (F-306-12-001-D)\n12/26/11 Review of Responses to Internal Audit 1. Determine the allowability of $748,683 in questioned\n Findings on the Local Governance and costs related to vehicles leased without proper\n Community Development Project approvals and without full and open competition and\n (F-306-12-001-S) recover from Development Alternatives Inc. (DAI)\n any amounts determined to be unallowable.\n 2. Determine the allowability of $325,500 in questioned\n costs associated with lease payments for the Local\n Governance and Community Development Project\n office space and guesthouses disclosed in the DAI\n internal audit report, and recover from DAI any\n amounts determined to be unallowable.\n\n\n\n30 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c Report\n Report Title* Recommendation\n Date\n\n 3. Determine the allowability of $2,019,036 in\n questioned costs related to services procured\n without full and open competition and recover from\n DAI any amounts determined to be unallowable.\n 4. Determine the allowability of and recover from DAI,\n as appropriate, $3,424,400 in inadequately supported\n fuel purchases for the Local Governance and\n Community Development Project.\n 5. Determine whether DAI billed USAID for $48,530 in\n unliquidated and uncollectible project advances and, if\n so, determine the allowability of these costs and\n recover from DAI any amounts determined to be\n unallowable.\n02/15/12 Financial Audit of Local (non-U.S.) Costs 1. Determine the allowability of and recover, as\n (Costs Incurred and Paid in Afghanistan) appropriate, questioned costs of $2,196,583\n Under USAID Contract No. 306-I-00-06- ($114,669 ineligible and $2,081,914 unsupported)\n 00517-00 With the Joint Venture Louis identified in the fund accountability statement.\n Berger Group Inc./Black & Veatch Corp.\n 2. Ensure that the Joint Venture Louis Berger Group\n for the Period October 1, 2009, to\n Inc./Black & Veatch Special Projects Corp. (LBGI/B&V)\n September 30, 2010 (F-306-12-004-N)\n corrects the 20 material weaknesses and 8 significant\n deficiencies identified in the report.\n 3. Ensure that LBGI/B&V corrects the four material\n instances of noncompliance identified in the report.\n\n\n Office of Transition Initiatives\n\n10/13/11 Audit of USAID/Afghanistan\xe2\x80\x99s Afghanistan 14. Determine the allowability of $6.5 million in security\n Stabilization Initiative for the Southern costs and recover costs determined to be\n Region (F-306-12-001-P) unallowable.\n\nPakistan\n\n USAID/Pakistan\n\n11/03/11 Audit of USAID/Pakistan\xe2\x80\x99s Firms Project 5. Determine the allowability of $1,359,337 in\n (G-391-12-001-P) unsupported questioned costs and recover those\n costs determined to be unallowable.\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 31\n\x0c Report\n Report Title* Recommendation\n Date\n\n03/06/12 Financial Audit of the Pakistan 1. Instruct the Competitiveness Support Fund to\n Competitiveness Support Fund, correct two material instances of noncompliance\n USAID/Pakistan Grant Agreement related to revenue generation and procurement\n No. 391-G-00-06-01073-00, Managed by without competition identified in the audit report.\n the Competitiveness Support Fund, for the\n Period July 1, 2010, to June 30, 2011\n (G-391-12-007-R)\n\n\n*\n Hyperlinks are provided to the OIG performance audits and reviews referenced in this table and the tables in the\n following two appendices. Hyperlinks are not provided to financial audits in these tables, however, because\n financial information in these reports may be privileged.\n\n\n\n\n32 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cAppendix 3 \xe2\x80\x93 Recommendations Pending\nFinal Action for 6 Months\nAfter we have agreed to the course of action USAID managers have proposed to address an OIG\nrecommendation, we track the implementation of the actions. When the Agency confirms these\ncorrective actions, we consider that USAID has taken final action on the recommendation and that\nit is closed. In some cases, we conduct follow-up audits and reviews to verify that corrective\nactions were taken and that they have had the intended effect of improving Agency programs and\noperations.\n\nFinal action had been pending for 6 months or longer on the following recommendations as of\nMarch 31, 2012. In particular, final action had been pending for 6 months or more on 28 recom-\nmendations related to USAID programs in Afghanistan and on 4 relating to Pakistan. Target action\ndates that passed without final action are indicated in red below.\n\n\nDate Report Recommendation Target\n Action Date\n\nAfghanistan\n\n USAID/Afghanistan\n\n12/20/10 Financial Audit of Fiduciary Support to 2. Ensure that the American University of 03/21/12\n the American University of Afghanistan Afghanistan corrects the three significant internal\n Subgrant Under the Asia Foundation control deficiencies identified in the report.\n for the Period July 1, 2008, to June 30,\n 3. Obtain evidence that the American University of 03/21/12\n 2009 (F-306-11-002-R)\n Afghanistan has made additional cost sharing\n contributions of $688,901 as required by the\n cooperative agreement.\n\n03/27/11 Audit of USAID/Afghanistan\xe2\x80\x99s 3. Review the eligibility of the cost of the prayer 03/31/12\n Construction of Health and Education buildings and prayer rooms included in the\n Facilities Program (F-306-11-002-P) provincial teacher training centers and recover\n any costs found to be unallowable.\n\n 9. After preparing an analysis of the Government 02/16/12\n of Afghanistan\xe2\x80\x99s ability to fund maintenance for\n the structures turned over under the program,\n (1) determine the need for a separate operation\n and maintenance program and (2) revise as\n appropriate the 611(e) certification previously\n prepared for the Construction of Health and\n Education Facilities Program.\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 33\n\x0cDate Report Recommendation Target\n Action Date\n\n06/09/11 Review of USAID/Afghanistan\xe2\x80\x99s Portion 1. Implement a nominal charge for no-show 04/30/12\n of the Embassy Air Program passengers.\n (F-306-11-004-S)\n 2. Clarify the contract\xe2\x80\x99s environmental 04/30/12\n requirements and obtain evidence that the\n contractor is complying with them.\n\n06/19/11 Audit of USAID/Afghanistan\xe2\x80\x99s Support 5. Prepare an implementation plan for use of the 04/30/12\n to the Electoral Process (STEP) and $1.4 million in supplemental funding for rural\n Support for Increased Electoral radios consistent with the goals of the program,\n Participation in Afghanistan (IEP) or reprogram these funds for other mission\n Programs (F-306-11-003-P) programs.\n\n 7. Determine the allowability of the $6,350,319 01/31/12\n incurred by the International Republican\n Institute for security expenses, and recover any\n costs determined to be unreasonable.\n\n07/21/11 Financial Audit of the Civilian Technical 1. Determine the allowability of and recover, as 05/05/12\n Assistance Program, appropriate, ineligible questioned costs of\n USAID/Afghanistan Grant Agreement $2,045.\n No. 306-09-CTAP-0001, Managed by\n the Ministry of Finance, for the Period\n September 30, 2009, to September 30,\n 2010 (F-306-11-001-N)\n\n08/23/11 Audit of Technologist Inc. Costs 1. Determine the allowability of and recover, as 04/10/12\n Incurred/Billed Under USAID Task appropriate, questioned costs of $6,563,050\n Order No. 306-O-00-04-00539-00, detailed in the report.\n for the Afghanistan Industrial Estate\n Development Program for the Period\n May 24, 2004, Through December 31,\n 2007 (F-306-11-001-D)\n\n08/31/11 Review of USAID/Afghanistan\xe2\x80\x99s 2. Determine the allowability of and recover as 05/31/12\n Afghan Civilian Assistance Program appropriate from the International Organization\n (F-306-11-005-S) for Migration the cost of stored food that is no\n longer fit for human consumption, which we\n estimate at up to $2,660,924.\n\n 4. Determine the allowability of and recover, as 05/31/12\n appropriate, the $1,360,800 in shelter assistance\n grants in Helmand Province that could not be\n verified.\n\n\n\n\n34 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cDate Report Recommendation Target\n Action Date\n\n 5. Arrange for a financial audit of the Afghan 05/31/12\n Civilian Assistance Program to help ensure that\n the costs charged to USAID are reasonable,\n allowable, and allocable.\n\n 6. Determine the allowability of and recover, as 05/31/12\n appropriate, $180,000 that was reportedly\n embezzled from the program.\n\n 7. Determine the allowability of and recover, as 05/31/12\n appropriate, the $3,437,000 that the\n International Organization for Migration spent\n to buy used vehicles without USAID approval.\n\n09/29/11 Audit of USAID/Afghanistan\xe2\x80\x99s On- 1. In collaboration with the Ministry of Public 05/31/12\n Budget Funding Assistance to the Health, develop and implement a plan that\n Ministry of Public Health in Support of (1) improves the nongovernmental organization\n the Partnership Contracts for Health contractors\xe2\x80\x99 supervision, monitoring, and\n Services Program (F-306-11-004-P) problem solving at their health facilities and\n (2) verifies the successful implementation of a\n reliable quality assurance mechanism by the\n nongovernmental organization contractors,\n including the establishment of quality assurance\n committees at each of the health facilities.\n\n 2. Assist the Ministry of Public Health in 05/31/12\n establishing and implementing a plan to ensure\n that nongovernmental organization contractors\n are verifying that the requirement of second-\n person verification is being effectively\n implemented at health facilities.\n\n 3. In collaboration with the Ministry of Public 05/31/12\n Health, develop a plan to (1) identify a pool of\n qualified civil service employees who would\n benefit from capacity-building training to sustain\n the ministry\xe2\x80\x99s capacity for managing the\n Partnership Contracts for Health Services\n Program and (2) provide the training.\n\n 4. Work with the Ministry of Public Health and the 05/31/12\n Ministry of Finance to streamline the payment\n process to accelerate payments to\n nongovernmental organization contractors and\n health workers.\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 35\n\x0cDate Report Recommendation Target\n Action Date\n\n 5. Work with the Ministry of Public Health and the 05/31/12\n Ministry of Finance to (1) implement written\n policies and procedures that clearly define the\n roles, responsibilities, and approval authorities\n for the payment process and (2) provide further\n training on the advance/liquidation mode of\n payment process.\n\n 6. Work with the Ministry of Public Health and the 05/31/12\n Ministry of Finance to implement procedures\n limiting the frequency of changes made to the\n payment process and providing sufficient\n notification and clear instructions to\n nongovernmental organization contractors on\n any changes.\n\n 7. Review internal administrative procedures, such 05/31/12\n as the processing of implementation letters, to\n ensure the smooth and timely flow of the\n payment process for on-budget assistance\n agreements.\n\n 8. Issue a mission order to provide an 05/31/12\n organizational framework with clearly defined\n roles and responsibilities of all mission offices\n responsible for managing on-budget assistance\n activities.\n\n 9. Provide a formal designation letter similar to an 05/31/12\n officer's technical representative designation\n letter to staff members monitoring\n implementation of on-budget assistance\n agreements.\n\n 10. Work with the Ministry of Public Health to 05/31/12\n prepare a performance management plan for\n the Partnership Contracts for Health Services\n Program.\n\n 11. Provide the Ministry of Public Health with 05/31/12\n clearly written definitions of Afghan Info\n performance indicators.\n\n 12. Implement procedures to review and verify the 05/31/12\n accuracy of data entered into Afghan Info and\n provide timely feedback to users.\n\n\n\n\n36 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c Date Report Recommendation Target\n Action Date\n\n 13. In collaboration with the Ministry of Public 05/31/12\n Health, implement a plan to confirm and\n document accurate GPS coordinates for the\n ministry's health facilities.\n\nPakistan\n\n USAID/Pakistan\n\n12/10/10 Audit of USAID/Pakistan\xe2\x80\x99s Livelihood 5. Make a management decision regarding the 04/18/12\n Development Program in the Lower allowability of $767,841 in questioned costs\n Region of the Federally Administered identified in the financial review and recover\n Tribal Areas (G-391-11-001-P) those costs determined to be unallowable.\n\n06/20/11 Audit of USAID/Pakistan\xe2\x80\x99s Road 5. Provide implementers with copies of USAID's 05/31/12\n Rehabilitation and Reconstruction policies on ethics and conflicts of interest and\n Activities Under the Quick Impact with written explanations and examples of\n Projects in South Waziristan potential conflicts.\n (G-391-11-005-P)\n 8. Develop and implement a plan to monitor and 05/31/12\n document the status of branding and marking plans\n of contractors working on the Quick Impact\n Projects in South Waziristan, and provide training\n as necessary for compliance with Automated\n Directives System 320.1\n\n 9. Provide additional details to the Federally 05/31/12\n Administrated Tribal Areas Secretariat concerning\n publicizing and marking USAID\xe2\x80\x99s contribution to\n the Quick Impact Projects in South Waziristan as\n specified in the implementation letter dated\n December 31, 2009.\n\n\n\n\n1\n The Automated Directives System is USAID\xe2\x80\x99s system for managing internal policies, procedures, and guidance.\nChapter 320 of the Automated Directives System pertains to branding and marking.\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 37\n\x0c Appendix 4 \xe2\x80\x93 Audited Amounts, Questioned Costs, and\n Funds Recommended to Be Put to Better Use\n Financial audits examine designated funds over a given period of time. The dollar value of the\n funds audited, regardless of whether they are defined in terms of costs, expenditures, or revenues,\n is the \xe2\x80\x9camount audited.\xe2\x80\x9d2 As shown in the following table, OIG has presided over financial audits of\n more than $1.9 billion in USAID funds since FY 2003.\n\n Financial audits, like performance audits and reviews, sometimes identify questioned costs and\n recommend that funds to be put to better use. Questioned costs are costs determined not to be\n allowable, allocable, or reasonable, or costs that auditors cannot determine to be allowable,\n allocable, or reasonable because documentation or other evidence to support these determinations\n is not available for their review. USAID contracting or agreement officers make final\n determinations on identified questioned costs and seek reimbursement for any \xe2\x80\x9csustained\xe2\x80\x9d\n questioned costs. Funds recommended to be put to better use are funds that could be used more\n efficiently if managers take action to implement OIG recommendations. When Agency managers\n agree to implement OIG recommendations to put funds to better use, the Agency is regarded as\n having \xe2\x80\x9cconcurred\xe2\x80\x9d that the funds could be put to better use.\n\n The following table provides information on dollars audited during the course of financial audits.\n It also lists all financial audits, performance audits, and reviews that identified questioned costs or\n funds recommended to be put to better use since FY 2003. This information is presented alongside\n Agency determinations regarding these funds (i.e., determinations to sustain questioned costs or\n agree that funds could be put to better use. The corresponding audit reports are listed by country\n and presented in reverse chronological order.\n\n\n Date Report Title and Number\n\n Amount Questioned Amount Funds to Be Put Amount\n Audited ($) Costs Sustained to Better Use Concurred\n\n Afghanistan\n\n Financial Audit of Costs Incurred in Afghanistan Under USAID Contract No. 306-DOT-I-01-08-\n03/15/12 00033-00 With Chemonics International Inc. for the Period October 1, 2009, to September 30,\n 2010 (F-306-12-005-N)\n\n 13,839,901 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n\n\n 2Because performance audits and reviews do not apply the same procedures as financial audits, we do not\n compute an \xe2\x80\x9camount audited\xe2\x80\x9d for that work.\n\n\n\n 38 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c Date Report Title and Number\n\n Amount Questioned Amount Funds to Be Put Amount\n Audited ($) Costs Sustained to Better Use Concurred\n\n Financial Audit on the Local (Non-U.S.) Costs (Costs Incurred and Paid in Afghanistan) Under\n02/15/12 USAID Contract No. 306-I-00-06-00517-00 With the Joint Venture Louis Berger Group Inc./Black\n & Veatch Corp., for the Period October 1, 2009, to September 30, 2010 (F-306-12-004-N)\n\n 10,779,108 2,196,583 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Review of Responses to Internal Audit Findings on the Local Governance and Community\n12/26/11\n Development Project (F-306-12-001-S)\n\n N/A 6,570,931 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Independent Financial Audit of Black & Veatch Special Projects Corporation Direct Costs Incurred\n12/20/11 and Billed on Contract No. 306-I-00-06-00517-00, From August 25, 2006, to September 30, 2008\n (F-306-12-001-D)\n\n 136,000,000 32,198,382 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit on the Local (non-U.S.) Costs (Costs Incurred and Paid in Afghanistan) Under\n12/19/11 USAID Contract No. 306-I-00-06-00517-00 With the Joint Venture Louis Berger Group Inc./Black\n & Veatch Corp. for the Period October 1, 2009, to September 30, 2010 (F-306-12-004-N)\n\n 10,779,108 2,196,583 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Audit of USAID/Afghanistan's Afghanistan Stabilization Initiative for the Southern Region\n11/13/11\n (F-306-12-001-P)\n\n N/A 6,512,200 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Ministry of Finance-Salary Support Program, USAID/Afghanistan Project\n10/13/11 Implementation No. 306-IL-10-01, Managed by the Ministry of Finance, for the Period June 6, 2010,\n to September 30, 2010 (F-306-12-003-N)\n\n 1,000,000 356,469 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Local Costs' Financial Audit of the Small and Medium Sized Enterprise Development Activity\n10/10/11 Managed by Development Alternatives Inc. Contract No. 306-C-00-07-00503-00, for the Period\n October 1, 2009, to September 30, 2010 (F-306-12-002-N)\n\n 18,631,159 88,650 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Partnership Contracts for Health Services Program, USAID/Afghanistan\n10/03/11 Grant Agreement No. 306-08-IL-06-00, Managed by the Ministry of Public Health, for the Period\n From Program Inception on July 20, 2008, Through September 22, 2010 (F-306-12-001-N)\n\n 32,812,937 1,328,310 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 39\n\x0c Date Report Title and Number\n\n Amount Questioned Amount Funds to Be Put Amount\n Audited ($) Costs Sustained to Better Use Concurred\n\n Financial Audit of the Policy Capacity Initiative Activity Project, USAID/Afghanistan Grant\n Agreement No. 306-IL-09-12-0004.00, Managed by the Ministry of Communication and\n09/29/11\n Information Technology, for the Period From Program Inception on April 09, 2009, Through\n September 30, 2010 (F-306-11-003-N)\n\n 450,138 118,478 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n08/31/11 Review of USAID/Afghanistan's Afghan Civilian Assistance Program (F-306-11-005-S)\n\n N/A 8,379,055 5,142,039 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit Report of Technologist Inc. Costs Incurred/Billed Under USAID Task Order No.\n08/23/11 306-O-00-04-00539-00, for the Afghanistan Industrial Estate Development Program for the Period\n May 24, 2004, Through December 31, 2007 (F-306-11-001-D)\n\n 21,463,590 6,563,050 493,444 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Civilian Technical Assistance Program, USAID/Afghanistan Grant Agreement\n07/21/11 No. 306-09-CTAP-0001, Managed by the Ministry of Finance, for the Period September 30, 2009,\n to September 30, 2010 (F-306-11-001-N)\n\n 5,500,000 2,045 77 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Regenerating Murad Khane, Restoring Refurbishing and Revitalizing the Old\n City Program, USAID/Afghanistan Cooperative Agreement No. 306-A-09-00503-00, Managed by\n07/14/11\n the Turquoise Mountain Trust, for the Period From January 1, 2010, to December 31, 2010\n (F-306-11-003-R)\n 2,551,558 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Audit of USAID/Afghanistan's Support to the Electoral Process (STEP) and Support for Increased\n06/19/11\n Electoral Participation In Afghanistan (IEP) Programs (F-306-11-003-P)\n\n N/A 6,350,319 \xe2\x80\x93 1,400,000 1,400,000\n\n06/09/11 Review of USAID/Afghanistan's Portion of the Embassy Air Program (F-306-11-004-S)\n\n N/A 525,467 31,902 9,440,000 9,440,000\n\n Audit of USAID/Afghanistan's Construction of Health and Education Facilities Program\n03/27/11\n (F-306-11-002-P)\n\n N/A 309,011 299,811 762,153 762,153\n\n Financial Audit of Fiduciary Support to the American University of Afghanistan (AUAf), Subgrant\n Under Asia Foundation Award No. 306-G-00-05-00525-00, and USAID Direct Support to AUAf,\n12/20/10\n Cooperative Agreement No. 306-A-00-08-00525-00, for the Period July 1, 2008, to June 30, 2009\n (F-306-11-002-R)\n\n 9,539,090 685,643 116,273 \xe2\x80\x93 \xe2\x80\x93\n\n\n\n\n40 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c Date Report Title and Number\n\n Amount Questioned Amount Funds to Be Put Amount\n Audited ($) Costs Sustained to Better Use Concurred\n\n Financial Audit of Local Costs Incurred by the Joint Venture Louis Berger Group Inc./Black &\n Veatch Special Projects Corp., to Implement the Afghanistan Infrastructure Rehabilitation Program,\n11/16/10\n USAID/Afghanistan Contract No. 306-I-00-06-00517-00, for the Period October 1, 2008 to\n September 30, 2009 (5-306-11-002-N)\n\n 10,773,130 2,292,891 76,046 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Regenerating Murad Khane, Restoring Refurbishing and Revitalizing the Old\n10/26/10 City Program, USAID/Afghanistan Cooperative Agreement No. 306-A-09-00503-00, Managed by the\n Turquoise Mountain Trust, for the Period January 1, 2009 to December 31, 2009 (F-306-11-001-R)\n\n 2,501,824 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Cost Incurred and Billed for the Human and Institutional Capacity Building for\n Afghanistan Energy and Natural Resources Sector Project, Task Order No. DOT-I-04-04-00022-00,\n09/28/10\n USAID/Afghanistan Cooperative Agreement No. 306-P-00-10-00514-00, Managed by Advanced\n Engineering Associates International, for the Period July 3, 2008, to June 30, 2009 (5-306-10-002-D)\n\n 3,523,452 12,115 12,115 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Afghanistan First Loss Reserve Fund, USAID/Afghanistan Cooperative\n Agreement No. 306-A-00-05-00512-00, Managed by Deutsche Investitions und\n03/30/10\n Entwicklungsgesellschaft mbh, for the Period February 4, 2005, to December 31, 2008\n (5-306-10-001-D)\n\n 1,281,561 56,974 1,952 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by the Joint Venture Louis Berger Group Inc./Black &\n Veatch Special Projects Corp., to Implement the Afghanistan Infrastructure Rehabilitation Program,\n02/25/10\n USAID/Afghanistan Contract No. 306-I-00-06-00517-00, for the Period October 1, 2007, to\n September 30, 2008 (5-306-10-002-N)\n\n 5,594,190 46,912 4,200 \xe2\x80\x93 \xe2\x80\x93\n\n Audit of USAID/Afghanistan's Power Sector Activities Under Its Afghanistan Infrastructure\n11/10/09\n Rehabilitation Program (5-306-10-002-P)\n\n N/A 2,078,426 2,078,426 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Regenerating Murad Khane, Restoring, Refurbishing and Revitalizing the Old\n City Program, USAID/Afghanistan Cooperative Agreement No. 306-A-00-09-00503-00, Managed\n09/29/09\n by the Turquoise Mountain Trust, for the Period November 2, 2008, to December 31, 2008\n (5-306-09-021-R)\n\n 421,310 17,781 17,781 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Costs Incurred and Billed by BearingPoint Inc. USAID/Afghanistan Contract No.\n08/19/09\n 306-C-00-03-00001-00, for the Period November 1, 2002, to December 15, 2005 (5-306-09-002-D)\n\n 95,817,000 95,817,000 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 41\n\x0c Date Report Title and Number\n\n Amount Questioned Amount Funds to Be Put Amount\n Audited ($) Costs Sustained to Better Use Concurred\n\n Financial Audit of Local Costs Incurred by the Joint Venture Louis Berger Group Inc./Black &\n Veatch Special Projects Corp. to Implement the Afghanistan Infrastructure Rehabilitation Program,\n06/25/09\n USAID/Afghanistan Contract No. 306-I-00-06-00517-00, for the Period August 25, 2006, to\n September 30, 2007 (5-306-09-005-N)\n\n 2,268,126 267,556 254,526 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Costs Incurred in the United States by Louis Berger Group Inc. to Implement\n06/18/09 the Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan Contract No.\n 306-C-00-02-00500-00, for the Period January 1, 2007, to May 31, 2008 (5-306-09-001-D)\n\n 18,579,476 3,142,521 264,651 \xe2\x80\x93 \xe2\x80\x93\n\n09/30/08 Audit of USAID/Afghanistan's Capacity Development Program (5-306-08-012-P)\n\n N/A \xe2\x80\x93 \xe2\x80\x93 11,100,000 \xe2\x80\x93\n\n08/08/08 Audit of USAID/Afghanistan's Accelerating Sustainable Agriculture Program (5-306-08-009-P)\n\n N/A 210,006 172,433 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Costs Incurred in the United States by Louis Berger Group Inc. to Implement\n05/16/08 the Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan Contract No.\n 306-C-00-02-00500-00, for the Period July 1, 2006, to December 31, 2006 (5-306-08-003-D)\n\n 39,274,703 846,872 51,014 \xe2\x80\x93 \xe2\x80\x93\n\n Closeout Financial Audit of the Business Advisory Services to Small and Medium-Sized Enterprises\n in Afghanistan Project, USAID/Afghanistan Cooperative Agreement No. 306-A-00-04-00570-00,\n04/25/08\n Managed by Acap Management Limited, for the Period September 30, 2004, to March 29, 2007\n (5-306-08-019-R)\n\n 925,459 695,374 695,374 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n11/27/07 of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n 00500-00, for the Period April 1, 2007, to June 30, 2007 (5-306-08-001-N)\n\n 1,262,209 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n06/27/07 of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n 00500-00, for the Period January 1, 2007, to March 31, 2007 (5-306-07-008-N)\n\n 1,299,053 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n\n\n\n42 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c Date Report Title and Number\n\n Amount Questioned Amount Funds to Be Put Amount\n Audited ($) Costs Sustained to Better Use Concurred\n\n Financial Audit of Costs Incurred in the United States by Louis Berger Group Inc. to Implement\n05/25/07 the Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan Contract No.\n 306-C-00-02-00500-00, for the Period January 1, 2006, to June 30, 2006 (5-306-07-002-D)\n\n 53,702,753 581,418 124,108 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n04/18/07 of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n 00500-00, for the Period October 1, 2006, to December 31, 2006 (5-306-07-006-N)\n\n 1,488,612 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n12/11/06 of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-00500-00,\n for the Period July 1, 2006, to September 30, 2006 (5-306-07-004-N)\n\n 1,740,855 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n10/16/06 of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n 00500-00, for the Period April 1, 2006, to June 30, 2006 (5-306-07-001-N)\n\n 2,121,214 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Treatment of Specified Costs Incurred by Camp, Dresser, & McKee\n Constructors Inc. Under the Afghanistan Water and Sanitation Program, USAID/Afghanistan\n08/10/06\n Contract No. 306-C-00-04-00568-00, for the Period September 30, 2004, to February 25, 2006\n (5-306-06-004-D)\n\n 261,390 221,509 31,509 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Costs Incurred in the United States by Louis Berger Group Inc. to Implement\n08/02/06 the Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan Contract No.\n 306-C-00-02-00500-00, for the Period April 1, 2005, to December 31, 2005 (5-306-06-003-D)\n\n 181,086,841 528,239 36,248 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n06/28/06 of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n 00500-00, for the Period January 1, 2006, to March 31, 2006 (5-306-06-005-N)\n\n 3,097,361 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n03/21/06 of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n 00500-00, for the Period October 1, 2005, to December 31, 2005 (5-306-06-004-N)\n\n 2,144,967 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 43\n\x0c Date Report Title and Number\n\n Amount Questioned Amount Funds to Be Put Amount\n Audited ($) Costs Sustained to Better Use Concurred\n\n Audit of Funds Earmarked by Congress to Provide Assistance for Displaced Persons in Afghanistan\n12/21/05\n (9-306-06-004-P)\n\n N/A \xe2\x80\x93 \xe2\x80\x93 14,366,000 14,366,000\n\n Financial Audit of Costs Incurred in the United States by Louis Berger Group Inc. to Implement\n12/19/05 the Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan Contract No.\n 306-C-00-02-00500-00, for the Period July 1, 2004, to March 31, 2005 (5-306-06-002-D)\n\n 125,286,559 348,122 3,399 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n12/08/05 of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n 00500-00, for the Period July 1, 2005, to September 30, 2005 (5-306-06-002-N)\n\n 2,114,250 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n08/29/05\n 00500-00, for the Period April 1, 2005, to June 30, 2005, Including Contract Line Item No. 2\n Costs, for the Period July 1, 2004, to June 30, 2005 (5-306-05-009-N)\n\n 2,944,192 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n06/30/05\n 00500-00, for the Period January 1, 2005, to March 31, 2005, Including Contract Line Item No. 2\n Costs, for the Period April 1, 2004, to June 30, 2004 (5-306-05-008-N)\n\n 1,606,343 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Costs Incurred in the United States by Louis Berger Group Inc. to Implement\n04/19/05 the Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan Contract No.\n 306-C-00-02-00500-00, for the Period October 1, 2003, to June 30, 2004 (5-306-05-006-D)\n\n 185,440,813 1,049,881 98,146 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n03/14/05 of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n 00500-00, for the Period October 1, 2004, to December 31, 2004 (5-306-05-006-N)\n\n 1,525,711 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n12/09/04\n 00500-00, for the Period July 1, 2004, to September 30, 2004\n (5-306-05-002-N)\n\n 1,539,697 3,056 779 \xe2\x80\x93 \xe2\x80\x93\n\n\n\n\n44 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c Date Report Title and Number\n\n Amount Questioned Amount Funds to Be Put Amount\n Audited ($) Costs Sustained to Better Use Concurred\n\n Financial Audit of Costs Incurred in the United States by Louis Berger Group Inc. to Implement\n09/16/04 the Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan Contract No.\n 306-C-00-02-00500-00, for the Period July 1, 2003, to September 30, 2003 (5-306-04-003-D)\n\n 40,486,450 109,186 91,678 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n08/23/04 of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n 00500-00, for the Period April 1, 2004, to June 30, 2004 (5-306-04-006-N)\n\n 2,039,979 14,112 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n07/09/04 of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n 00500-00, for the Period January 1, 2004, to March 31, 2004 (5-306-04-005-N)\n\n 1,578,442 137,596 9,127 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n05/17/04 of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n 00500-00, for the Period October 1, 2003, to December 31, 2003 (5-306-04-004-N)\n\n 863,610 115,136 44,738 \xe2\x80\x93 \xe2\x80\x93\n\n Audit of the Application of Agreed-Upon Procedures on Costs Incurred in the United States by\n Louis Berger Group Inc. to Implement the Rehabilitation of Economic Facilities and Services\n05/17/04\n Program, USAID/Afghanistan Contract No. 306-C-00-02-00500-00, for the Period September 30,\n 2002, to June 30, 2003 (5-306-04-002-D)\n\n 23,096,297 92,983 90,022 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n03/26/04 of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n 00500-00, for the Period July 1, 2003, to September 30, 2003 (5-306-04-003-N)\n\n 666,841 114,020 13,001 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the Rehabilitation\n01/23/04 of Economic Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n 00500-00, for the Period September 30, 2002, to June 30, 2003 (5-306-04-001-N)\n\n 1,227,901 29,449 3,882 \xe2\x80\x93 \xe2\x80\x93\n\n Afghanistan Total\n\n 1,072,150,052 181,013,728 10,258,701 37,068,153 25,968,153\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 45\n\x0c Date Report Title and Number\n\n Amount Questioned Amount Funds to Be Put Amount\n Audited ($) Costs Sustained to Better Use Concurred\n\n Pakistan\n\n Financial Audit of USAID/Pakistan's Rupee Trust Fund for the Period October 1, 2009, to\n03/20/12\n September 30, 2011 (G-391-12-001-N)\n\n 859,543 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Pakistan Competitiveness Support Fund, USAID/Pakistan Grant Agreement\n 03/06/12 No. 391-G-00-06-01073-00, Managed by the Competitiveness Support Fund, for the Period July 1,\n 2010, to June 30, 2011 (G-391-12-007-R)\n\n 2,197,662 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Budgetary Support, USAID/Pakistan Program Assistance Agreement No. 391-\n 02/24/12 012, Implementation Letter No. 1, Managed by the Economic Affairs Division of the Government\n of Pakistan, for the Period June 8, 2009, to June 15, 2011 (G-391-12-006-R)\n\n 44,000,000 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Merit and Need Based Scholarship Project, USAID/Pakistan Agreement No.\n 02/17/12 391-G-00-04-01023-00, for the Period July 2, 2004, to June 30, 2010, Managed by the Higher\n Education Commission (G-391-12-005-R)\n\n 6,055,675 428,144 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Anti-Corruption Program Pakistan, USAID/Pakistan Cooperative Agreement\n No. 391-A-00-09-01117-00, and the Anti-Fraud Hotline Program, USAID/Pakistan Cooperative\n 01/13/12\n Agreement No. 391-A-00-10-01194-00, Managed by Transparency International-Pakistan, for the\n Year Ended June 30, 2011 (G-391-12-004-R)\n\n 387,825 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Aga Khan University's Flood Response Program, USAID/Pakistan Cooperative\n 01/06/12 Agreement No. 391-G-00-10-01188-00, for the Period August 30, 2010, to December 31, 2010,\n Managed by Aga Khan University (G-391-12-003-R)\n\n 1,057,045 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n 11/23/11 Audit of USAID/Pakistan\xe2\x80\x99s Energy Efficiency and Capacity Program (G-391-12-002-P)\n\n N/A \xe2\x80\x93 \xe2\x80\x93 20,000,000 20,000,000\n\n 11/03/11 Audit of USAID/Pakistan's Firms Project (G-391-12-001-P)\n\n N/A 1,359,337 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n\n\n\n 46 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c Date Report Title and Number\n\n Amount Questioned Amount Funds to Be Put Amount\n Audited ($) Costs Sustained to Better Use Concurred\n\n Financial Audit of Budgetary Support to the Government of Pakistan, USAID/Pakistan Program\n11/03/11 Assistance Agreement No. 391-005-ES-07, Managed by the Ministry of Finance, for the Year Ended\n June 30, 2008 (G-391-12-002-R)\n\n 200,000,000 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of Budgetary Support, USAID/Pakistan Program Assistance Agreement No. 391-\n10/26/11 AAG-012-IL-02, Managed by the Benazir Income Support Program, for the Period September 30,\n 2009, to March 31, 2011 (G-391-12-001-R)\n\n 85,000,000 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Business Revitalization Program, USAID/Pakistan Cooperative Agreement\n09/21/11 No. 391-A-00-10-01145-00, Managed by Khushhali Bank, for the Period February 6, 2010, to\n December 31, 2010 (G-391-11-005-R)\n\n 8,443,128 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Closeout Financial Audit of the Forman Christian College, USAID/Pakistan Grant Agreement No.\n06/23/11 391-G-00-04-01036-00, Managed by Forman Christian College, for the Period July 1, 2009, to\n March 31, 2010 (G-391-11-004-R)\n\n 1,974,491 122,515 90,655 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of USAID/Pakistan\xe2\x80\x99s Rupee Trust Fund for the Period October 1, 2006, to\n05/26/11\n September 30, 2009 (G-391-11-001-N)\n\n 1,511,547 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Pakistan Competitiveness Support Fund, USAID/Pakistan Grant Agreement\n05/10/11 No. 391-G-00-06-1073-00, Managed by the Competitiveness Support Fund, for the Period July 1,\n 2009, to June 30, 2010 (G-391-11-003-R)\n\n 2,184,844 2,822 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Closeout Financial Audit of the Interactive Teaching and Learning Project, USAID/Pakistan\n Cooperative Agreement No. 391-A-00-06-01075-00, and the Financial Audit of Links to Learning\n04/08/11 Education Support to Pakistan Program, Subaward Under USAID/Pakistan Cooperative Agreement\n No. 391-A-00-08-01100-00, Managed by Children\xe2\x80\x99s Global Network Pakistan Limited, for the\n Period July 1, 2008, to February 26, 2010 (G-391-11-002-R)\n\n 1,315,348 12,669 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Closeout Financial Audit of the Developing Non-Bankable Territories for Financial Services\n12/30/10 Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01011-00, Managed by\n Khushhali Bank, for the Period January 1, 2009, to September 30, 2009 (G-391-11-001-R)\n\n 450,607 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 47\n\x0c Date Report Title and Number\n\n Amount Questioned Amount Funds to Be Put Amount\n Audited ($) Costs Sustained to Better Use Concurred\n\n Audit of USAID/Pakistan's Livelihood Development Program in the Lower Region of the Federally\n12/10/10\n Administered Tribal Area (G-391-11-001-P)\n\n N/A 767,841 352,470 \xe2\x80\x93 \xe2\x80\x93\n\n Audit of Costs Incurred Under the School Enhancement Program Component of the Pakistan\n Education Sector Reform Assistance Program, USAID/Pakistan Cooperative Agreement No. 391-\n11/08/10\n A-00-03-01000-00, Managed by RTI International, for the Period December 4, 2002, to\n December 31, 2007 (G-391-11-001-D)\n\n 14,432,228 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Pakistan Competitiveness Support Fund, USAID/Pakistan Grant Agreement\n08/04/10 No. 391-G-00-06-01073-00, Managed by the Competitiveness Support Fund, for the Period\n February 3, 2006, to June 30, 2009 (G-391-10-001-R)\n\n 5,637,011 355,471 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the College Improvement Program, USAID/Pakistan Grant Agreement No. 391-\n05/18/10 G-00-04-01036-00, Managed by Forman Christian College, Lahore, for the Period July 1, 2007, to\n June 30, 2009 (5-391-10-033-R)\n\n 394,255 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Developing Non-Bankable Territories for Financial Services Program,\n04/30/10 USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01011-00, Managed by Khushhali Bank,\n for the Year Ended December 31, 2008 (5-391-10-029-R)\n\n 1,653,377 89,934 65,652 \xe2\x80\x93 \xe2\x80\x93\n\n Closeout Financial Audit of the Improved Pakistani Family Planning and Reproductive Health\n Services Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01016-00, Managed\n03/24/10\n by Greenstar Social Marketing Pakistan (Guarantee) Limited, for the Period July 1, 2007, to\n December 31, 2007 (5-391-10-026-R)\n\n 2,146,908 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Closeout Financial Audit of the Aga Khan University Examination Board, USAID/Pakistan\n02/10/10 Cooperative Agreement No. 391-A-00-03-01003-00, for the Period January 1, 2007, to\n December 31, 2007 (5-391-10-020-R)\n\n 1,853,975 63,367 63,367 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of USAID Funds Managed by Children's Global Network Pakistan (Guarantee)\n12/22/09\n Limited, for the Year Ended June 30, 2008 (5-391-10-012-R)\n\n 1,863,786 376,942 242 \xe2\x80\x93 \xe2\x80\x93\n\n\n\n\n48 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c Date Report Title and Number\n\n Amount Questioned Amount Funds to Be Put Amount\n Audited ($) Costs Sustained to Better Use Concurred\n\n Financial Audit of the Budgetary Support, USAID/Pakistan Program Assistance Agreement Nos.\n08/13/09 391-005-ES-05 and 391-005-ES-06, Managed by the Ministry of Finance, Government of Pakistan,\n for the Years Ended June 30, 2006, and 2007 (5-391-09-006-N)\n\n 400,000,000 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Developing Non-Bankable Territories for Financial Services Program,\n06/25/09 USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01011-00, Managed by Khushhali Bank,\n for the Period January 1 to December 31, 2007 (5-391-09-013-R)\n\n 1,776,113 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of USAID/Pakistan's Rupee Trust Fund for Operating Expenses, for Fiscal Years\n05/11/09\n Ended September 30, 2005, and 2006 (5-391-09-002-N)\n\n 979,028 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the College Improvement Program, USAID/Pakistan Grant Agreement No. 391-\n04/30/09 G-00-04-01036-00, Managed by Forman Christian College, Lahore, for the Period August 23, 2004,\n to June 30, 2007 (5-391-09-008-R)\n\n 2,631,254 1,163,564 56,008 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Aga Khan University Examination Board, USAID/Pakistan Cooperative\n04/29/09 Agreement No. 391-A-00-03-01003-00, for the Period January 1, 2006, to December 31, 2006\n (5-391-09-007-R)\n\n 979,040 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Interactive Teaching and Learning Program in Pakistan, USAID/Pakistan\n Cooperative Agreement No. 391-A-00-06-01075-00, Managed by Children's Resources\n12/15/08\n International Pakistan (Guarantee) Limited, for the Period March 1, 2006, to June 30, 2007\n (5-391-09-006-R)\n\n 1,557,736 763,449 158 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Improved Pakistani Family Planning and Reproductive Health Services\n Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01016-00, Managed by\n09/26/08\n Greenstar Social Marketing Pakistan (Guarantee) Limited, for the Period July 1, 2006, to June 30,\n 2007 (5-391-08-035-R)\n\n 4,295,177 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Improved Pakistani Family Planning and Reproductive Health Services\n Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01016-00, Managed by\n09/25/08\n Greenstar Social Marketing Pakistan (Guarantee) Limited, for the Period July 1, 2005, to June 30,\n 2006 (5-391-08-034-R)\n\n 5,399,408 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 49\n\x0c Date Report Title and Number\n\n Amount Questioned Amount Funds to Be Put Amount\n Audited ($) Costs Sustained to Better Use Concurred\n\n Financial Audit of the Improved Pakistani Family Planning and Reproductive Health Services\n Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01016-00, Managed by\n09/19/08\n Greenstar Social Marketing Pakistan (Guarantee) Limited, for the Period July 1, 2004, to June 30,\n 2005 (5-391-08-032-R)\n\n 5,707,948 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Closeout Financial Audit of the Rewarding Innovation at the District Level Program,\n USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01015-00, for the Period July 1, 2005,\n08/27/08 to March 31, 2006, and the Establishing Tent Schools and Cash for Work Program, Grant\n Agreement No. 391-G-00-06-0169-00, for the Period December 9, 2005, to June 15, 2006,\n Managed by the Rural Support Programmes Network (5-391-08-030-R)\n\n 2,847,871 222,294 222,294 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Technical Assistance and Training to Improve Project and Financial\n Management of Provincial and District Health and Population Welfare Services in Pakistan Project,\n08/20/08 USAID/Pakistan Limited Scope Grant Agreement No. 391-G-00-04-01020-00, Managed by Options\n Consultancy Services Limited\xe2\x80\x94Technical Assistance Management Agency, for the Period January 1,\n 2004, to March 31, 2006 (5-391-08-005-N)\n\n 697,058 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Closeout Financial Audit of the Enterprise Development Facility Program, Cooperative Agreement\n08/15/08 No. 391-A-00-03-01010-00, Managed by the Pakistan Poverty Alleviation Fund, for the Period\n July 1, 2006, to September 30, 2007 (5-391-08-029-R)\n\n 734,597 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Aga Khan University Examination Board, USAID/Pakistan Cooperative\n07/02/08 Agreement No. 391-A-00-03-01003-00, for the Period January 1, 2005, to December 31, 2005\n (5-391-08-027-R)\n\n 902,755 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Developing Non-Bankable Territories for Financial Services Program,\n04/15/08 USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01011-00, Managed by Khushhali Bank,\n for the Period January 1, 2005, to December 31, 2006 (5-391-08-017-R)\n\n 2,662,527 82,126 66,916 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the 4-Year Bachelor's Degree Program, USAID/Pakistan Grant Agreement No.\n09/28/07 391-G-00-04-01036-00, Managed by Forman Christian College, Lahore, for the Period July 1, 2005,\n to June 30, 2006 (5-391-07-024-R)\n\n 769,134 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n\n\n\n50 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c Date Report Title and Number\n\n Amount Questioned Amount Funds to Be Put Amount\n Audited ($) Costs Sustained to Better Use Concurred\n\n Financial Audit of the Enterprise Development Facility Program, Cooperative Agreement No. 391-\n08/22/07 A-00-03-01010-00, Managed by the Pakistan Poverty Alleviation Fund, for the Period July 1, 2005,\n to June 30, 2006 (5-391-07-023-R)\n\n 1,160,768 951,400 921,512 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Improved Pakistani Family Planning and Reproductive Health Services\n Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01016-00, Managed by\n07/25/07\n Greenstar Social Marketing Pakistan (Guarantee) Limited, for the Period November 7, 2003, to\n June 30, 2004 (5-391-07-020-R)\n\n 1,805,257 34,804 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Aga Khan University Examination Board, USAID/Pakistan Cooperative\n05/03/07 Agreement No. 391-A-00-03-01003-00, for the Period July 1, 2003, to December 31, 2004\n (5-391-07-014-R)\n\n 771,546 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Fulbright-USAID Scholarship Program, Grant Agreement No. 391-G-00-04-\n02/22/07 01035-00, Managed by the United States Educational Foundation in Pakistan, for the Period\n September 1, 2004, to August 31, 2005 (5-391-07-010-R)\n\n 234,757 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the 4-Year Bachelor's Degree Program, USAID/Pakistan Grant Agreement No.\n01/12/07 391-G-00-04-01036-00, Managed by Forman Christian College, Lahore, for the Period August 23,\n 2004, to June 30, 2005 (5-391-07-006-R)\n\n 764,472 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Enterprise Development Facility Program, Cooperative Agreement No. 391-\n01/12/07 A-00-03-01010-00, Managed by the Pakistan Poverty Alleviation Fund for the Period October 1,\n 2003, to June 30, 2005 (5-391-07-007-R)\n\n 3,194,633 1,999,553 1,639,230 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Developing Non-Bankable Territories for Financial Services Project,\n09/27/06 USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01011-00, Managed by Khushhali Bank,\n for the Period October 1, 2003, to December 31, 2004 (5-391-06-033-R)\n\n 1,853,591 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Rural Support Programmes Network, USAID Grant Rewarding Innovations\n09/26/06 at the District Level, Agreement No. 391-A-00-03-01015-00, for the Period Ended June 30, 2005\n (5-391-06-032-R)\n\n 997,500 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 51\n\x0c Date Report Title and Number\n\n Amount Questioned Amount Funds to Be Put Amount\n Audited ($) Costs Sustained to Better Use Concurred\n\n Financial Audit of the Rural Support Programmes Network, USAID Grant Rewarding Innovations\n09/13/06 at the District Level, Agreement No. 391-A-00-03-01015-00, for the 9-Month Period Ended\n June 30, 2004 (5-391-06-031-R)\n\n 471,255 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of the Improved Pakistani Family Planning and Reproductive Health Services\n Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01016-00, Managed by\n05/11/06\n Greenstar Social Marketing Pakistan (Guarantee) Limited, for the Period November 7, 2003, to\n June 30, 2004 (5-391-06-020-R)\n\n 1,805,257 830 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Financial Audit of USAID/Pakistan\xe2\x80\x99s Rupee Trust Fund for Operating Expenses, for Fiscal Years\n01/10/06\n Ended September 30, 2002, 2003, and 2004 (5-391-06-003-N)\n\n 432,270 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93 \xe2\x80\x93\n\n Pakistan Total\n\n 828,850,207 8,797,062 3,478,504 20,000,000 20,000,000\n\n\n\n\n52 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cAppendix 5 \xe2\x80\x93 Completed Audit Reports\nThe following table provides a listing of OIG audits by the country they pertain to and fiscal year in\nwhich they were issued. For purposes of this report, the term \xe2\x80\x9cfinancial audit\xe2\x80\x9d refers to both\nfinancial audits and quality assurance reviews. As it is used in this report, the term \xe2\x80\x9cperformance\naudit and review\xe2\x80\x9d, in turn, refers to other audits, reviews, risk assessments, and survey reports.\n\n\n Date Number Title\n\nAfghanistan\n\n FY 2012\n03/15/12 F-306-12-005-N Financial Audit of Costs Incurred in Afghanistan Under USAID Contract No. 306-\n DOT-I-01-08-00033-00 With Chemonics International Inc. for the Period October 1,\n 2009, to September 30, 2010\n02/07/12 F-306-12-002-P Audit of USAID/Afghanistan\xe2\x80\x99s Skills Training for Afghan Youth Project\n02/15/12 F-306-12-004-N Financial Audit on the Local (Non-U.S.) Costs (Costs Incurred and Paid in\n Afghanistan) Under USAID Contract No. 306-I-00-06-00517-00 With the Joint\n Venture Louis Berger Group Inc./Black & Veatch Corp., for the Period October 1,\n 2009, to September 30, 2010\n12/26/11 F-306-12-001-S Review of Responses to Internal Audit Findings on the Local Governance and\n Community Development Project\n12/20/11 F-306-12-001-D Independent Financial Audit of Black & Veatch Special Projects Corporation Direct\n Costs Incurred and Billed on Contract No. 306-I-00-06-00517-00 From August 25,\n 2006, to September 30, 2008\n12/19/11 F-306-12-004-N Financial Audit on the Local (non-U.S.) Costs (Costs Incurred and Paid in Afghanistan)\n Under USAID Contract No. 306-I-00-06-00517-00 With the Joint Venture Louis\n Berger Group Inc./Black & Veatch Corp., for the Period October 1, 2009, to\n September 30, 2010\n11/13/11 F-306-12-001-P Audit of USAID/Afghanistan\xe2\x80\x99s Afghanistan Stabilization Initiative for the Southern\n Region\n10/13/11 F-306-12-003-N Financial Audit of the Ministry of Finance Salary Support Program, USAID/Afghanistan\n Project Implementation Number 306-IL-10-01, Managed by the Ministry of Finance,\n for the Period June 6, 2010, to September 30, 2010\n10/10/11 F-306-12-002-N Local Costs' Financial Audit of the Small and Medium Sized Enterprise Development\n Activity by Development Alternatives Inc. Contract No. 306-C-00-07-00503-00, for\n the Period October 1, 2009, to September 30, 2010\n10/03/11 F-306-12-001-N Financial Audit of the Partnership Contracts for Health Services Program,\n USAID/Afghanistan Grant Agreement No. 306-08-IL-06-00, Managed by the Ministry\n of Public Health, for the Period From Program Inception on July 20, 2008, Through\n September 22, 2010\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 53\n\x0c FY 2011\n\n09/29/11 F-306-11-004-P Audit of USAID/Afghanistan\xe2\x80\x99s On-Budget Funding Assistance to the Ministry of Public\n Health in Support of the Partnership Contracts for Health Services Program\n09/29/11 F-306-11-003-N Financial Audit of the Policy Capacity Initiative Activity Project, USAID/Afghanistan\n Grant Agreement No. 306-IL-09-12-0004.00, Managed by the Ministry of\n Communication and Information Technology, for the Period From Program Inception\n on April 9, 2009, Through September 30, 2010\n08/31/11 F-306-11-005-S Review of USAID/Afghanistan\xe2\x80\x99s Afghan Civilian Assistance Program\n08/23/11 F-306-11-001-D Financial Audit of Technologist Inc. Costs Incurred/Billed Under USAID Task Order\n No. 306-O-00-04-00539-00, for the Afghanistan Industrial Estate Development\n Program for the Period May 24, 2004, Through December 31, 2007\n07/21/11 F-306-11-001-N Financial Audit of the Civilian Technical Assistance Program, USAID/Afghanistan\n Grant Agreement No. 306-09-CTAP-0001, Managed by the Ministry of Finance, for\n the Period September 30, 2009, to September 30, 2010\n07/14/11 F-306-11-003-R Financial Audit of the Regenerating Murad Khane, Restoring Refurbishing and\n Revitalizing the Old City Program, USAID/Afghanistan Cooperative Agreement No.\n 306-A-09-00503-00, Managed by the Turquoise Mountain Trust, for the Period From\n January 1, 2010, to December 31, 2010\n06/19/11 F-306-11-003-P Audit of USAID/Afghanistan\xe2\x80\x99s Support to the Electoral Process (STEP) and Support\n for Increased Electoral Participation in Afghanistan (IEP) Programs\n06/09/11 F-306-11-004-S Review of USAID/Afghanistan\xe2\x80\x99s Portion of the Embassy Air Program\n03/27/11 F-306-11-002-P Audit of USAID/Afghanistan\xe2\x80\x99s Construction of Health and Education Facilities\n Program\n03/16/11 F-306-11-003-S Review of USAID/Afghanistan\xe2\x80\x99s Bank Supervision Assistance Activities and the Kabul\n Bank Crisis\n03/07/11 F-306-11-002-S Review of Cash Disbursement Practices Employed by Selected USAID/Afghanistan\n Contractors and Grantees\n02/13/11 F-306-11-001-P Audit of USAID/Afghanistan\xe2\x80\x99s Agriculture, Water, and Technology Transfer Program\n12/20/10 F-306-11-002-R Financial Audit of the Fiduciary Support to the American University of Afghanistan\n (AUAf) Program, Subgrant Under Asia Foundation Award No. 306-G-00-05-00525-\n 00, and USAID Direct Support to AUAF, Cooperative Agreement No. 306-A-00-08-\n 00525-00, for the Period July 1, 2008, to June 30, 2009\n11/16/10 5-306-11-002-N Financial Audit of Local Costs Incurred by the Joint Venture Louis Berger Group\n Inc./Black & Veatch Special Projects Corp. to Implement the Afghanistan\n Infrastructure Rehabilitation Program, USAID/Afghanistan Contract No. 306-I-00-06-\n 00517-00, for the Period October 1, 2008, to September 30, 2009\n11/06/10 F-306-11-001-S Review of USAID/Afghanistan\xe2\x80\x99s Ministerial Assessment Process\n11/05/10 5-306-11-002-P Audit of USAID/Afghanistan\xe2\x80\x99s Support to the American University of Afghanistan\n10/28/10 5-306-11-001-P Audit of USAID/Afghanistan\xe2\x80\x99s Partnership for Advancing Community-Based Education\n in Afghanistan (PACE-A) Program\n\n\n\n54 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c10/26/10 F-306-11-001-R Financial Audit of the Regenerating Murad Khane, Restoring Refurbishing and\n Revitalizing the Old City, Program, USAID/Afghanistan Cooperative Agreement No.\n 306-A-09-00503-00, Managed by the Turquoise Mountain Trust, for the Period\n January 1, 2009, to December 31, 2009\n\n FY 2010\n\n09/29/10 5-306-10-002-S Review of Security Costs Charged to USAID Projects in Afghanistan\n09/28/10 5-306-10-002-D Financial Audit of Cost Incurred and Billed for the Human and Institutional Capacity\n Building for Afghanistan Energy and Natural Resources Sector Project (Task Order\n No. DOT-I-04-04-00022-00), USAID/Afghanistan Cooperative Agreement No. 306-P-\n 00-10-00514-00, Managed by Advanced Engineering Associates International, for the\n Period July 3, 2008, to June 30, 2009\n07/29/10 5-306-10-011-P Audit of USAID/Afghanistan\xe2\x80\x99s Alternative Development Program Expansion, South\n West\n06/24/10 5-306-10-002-O Review of School and Health Clinic Buildings Completed Under the Schools and\n Clinics Construction and Refurbishment Program\n05/21/10 5-306-10-009-P Audit of USAID/Afghanistan\xe2\x80\x99s Oversight of Private Security Contractors in\n Afghanistan\n05/18/10 5-306-10-001-Q Quality Control Review of the Financial Audit Conducted by KPMG Afghanistan\n Limited of the Local Costs Incurred by the Louis Berger Group Inc./Black & Veatch\n Special Projects Joint Venture to Implement the Afghanistan Infrastructure\n Rehabilitation Program, USAID/Afghanistan Contract No. 306-I-00-06-00517-00, for\n the Period October 1, 2007, to September 30, 2008\n04/20/10 5-306-10-008-P Audit of USAID/Afghanistan\xe2\x80\x99s Afghanistan Vouchers for Increased Productive\n Agriculture (AVIPA) Program\n03/31/10 5-306-10-007-P Audit of USAID/Afghanistan\xe2\x80\x99s Human Resources and Logistical Support Program\n Financial Audit of the Afghanistan First Loss Reserve Fund, USAID/Afghanistan\n Cooperative Agreement No. 306-A-00-05-00512-00, Managed by the Deutsche\n03/30/10 5-306-10-001-D\n Investitions und Entwicklungsgesellschaft mbh, for the Period February 4, 2005, to\n December 3, 2008\n Financial Audit of Local Costs Incurred by the Louis Berger Group Inc./Black &\n Veatch Special Projects Joint Venture to Implement the Afghanistan Infrastructure\n02/25/10 5-306-10-002-N\n Rehabilitation Program, USAID/Afghanistan Contract No. 306-I-00-06-00517-00, for\n the Period October 1, 2007, to September 30, 2008\n01/29/10 5-306-10-006-P Audit of USAID/Afghanistan\xe2\x80\x99s Building Education Support Systems for Teachers\n Project\n12/15/09 5-306-10-004-P Audit of USAID/Afghanistan\xe2\x80\x99s Afghan Civilian Assistance Program\n11/10/09 5-306-10-002-P Audit of USAID/Afghanistan\xe2\x80\x99s Power Sector Activities Under Its Afghanistan\n Infrastructure Rehabilitation Program\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 55\n\x0c FY 2009\n\n09/29/09 5-306-09-021-R Financial Audit of the Regenerating Murad Khane, Restoring, Refurbishing and\n Revitalizing the Old City Program, USAID/Afghanistan Cooperative Agreement No.\n 306-A-00-09-00503-00, Managed by the Turquoise Mountain Trust, for the Period\n November 2, 2008, to December 31, 2008\n08/19/09 5-306-09-002-D Financial Audit of Costs Incurred and Billed by BearingPoint Inc. USAID/Afghanistan\n Contract No. 306-C-00-03-00001-00, for the Period November 1, 2002, to\n December 15, 2005\n06/25/09 5-306-09-005-N Financial Audit of Local Costs Incurred by the Joint Venture Louis Berger Group\n Inc./Black & Veatch Special Projects Corp. to Implement the Afghanistan\n Infrastructure Rehabilitation Program, USAID/Afghanistan Contract No. 306-I-00-06-\n 00517-00, for the Period August 25, 2006, to September 30, 2007\n06/18/09 5-306-09-001-D Financial Audit of Costs Incurred in the United States by Louis Berger Group Inc. to\n Implement the Rehabilitation of Economic Facilities and Services Program,\n USAID/Afghanistan Contract No. 306-C-00-02-00500-00, for the Period January 1,\n 2007, to May 31, 2008\n06/08/09 5-306-09-004-P Audit of USAID/Afghanistan\xe2\x80\x99s Land Titling and Economic Restructuring in Afghanistan\n Project\n05/11/09 5-306-09-003-P Audit of USAID/Afghanistan\xe2\x80\x99s Local Governance and Community Development\n Project in Southern and Eastern Regions of Afghanistan\n12/04/08 5-306-09-002-P Audit of USAID/Afghanistan\xe2\x80\x99s Higher Education Project\n\n FY 2008\n\n09/30/08 5-306-08-012-P Audit of USAID/Afghanistan\xe2\x80\x99s Capacity Development Program\n08/08/08 5-306-08-009-P Audit of USAID/Afghanistan\xe2\x80\x99s Accelerating Sustainable Agriculture Program\n06/23/08 5-306-08-006-P Audit of USAID/Afghanistan\xe2\x80\x99s Small and Medium Enterprise Development Activity\n05/16/08 5-306-08-003-D Financial Audit of Costs Incurred in the United States by Louis Berger Group Inc. to\n Implement the Rehabilitation of Economic Facilities and Services Program,\n USAID/Afghanistan Contract No. 306-C-00-02-00500-00, for the Period July 1, 2006,\n to December 31, 2006\n04/25/08 5-306-08-019-R Closeout Financial Audit of the Business Advisory Services to Small and Medium-\n Sized Enterprises in Afghanistan Project, USAID/Afghanistan Cooperative Agreement\n No. 306-A-00-04-00570-00, Managed by Acap Management Limited, for the Period\n September 30, 2004, to March 29, 2007\n03/17/08 5-306-08-003-P Audit of USAID/Afghanistan\xe2\x80\x99s Alternative Development Program\xe2\x80\x93Southern Region\n01/22/08 5-306-08-001-P Audit of USAID/Afghanistan\xe2\x80\x99s Agriculture, Rural Investment and Enterprise\n Strengthening Program\n11/27/07 5-306-08-001-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period April 1, 2007, to June 30, 2007\n\n\n\n\n56 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c FY 2007\n\n08/31/07 5-306-07-009-P Audit of Selected Follow-On Activities Under USAID/Afghanistan\xe2\x80\x99s Economic\n Program\n06/27/07 5-306-07-008-N Financial Audit of Local Costs incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period January 1, 2007, to March 31,\n 2007\n06/07/07 5-306-07-006-P Audit of USAID/Afghanistan\xe2\x80\x99s Urban Water and Sanitation Program\n05/25/07 5-306-07-002-D Financial Audit of Costs Incurred in the United States by Louis Berger Group Inc. to\n Implement the Rehabilitation of Economic Facilities and Services Program,\n USAID/Afghanistan Contract No. 306-C-00-02-00500-00, for the Period January 1,\n 2006, to June 30, 2006\n05/21/07 5-306-07-004-P Audit of Critical Power Sector Activities Under USAID/Afghanistan\xe2\x80\x99s Rehabilitation of\n Economic Facilities and Services Program\n04/18/07 5-306-07-006-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period October 1, 2006, to\n December 31, 2006\n02/13/07 5-306-07-002-P Audit of USAID/Afghanistan\xe2\x80\x99s Alternative Livelihoods Program-Eastern Region\n12/11/06 5-306-07-004-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-00500-00, for the Period July 1, 2006, to September 30, 2006\n10/16/06 5-306-07-001-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period April 1, 2006, to June 30, 2006\n\n FY 2006\n\n08/18/06 5-306-06-008-P Audit of USAID/Afghanistan\xe2\x80\x99s School and Health Clinic Reconstruction Activities\n08/16/06 5-306-06-007-P Audit of USAID/Afghanistan\xe2\x80\x99s Rural Expansion of Afghanistan\xe2\x80\x99s Community-Based\n Healthcare Program\n08/10/06 5-306-06-004-D Financial Audit of Treatment of Specified Costs Incurred by Camp, Dresser & McKee\n Constructors Inc. Under the Afghanistan Water and Sanitation Program,\n USAID/Afghanistan Contract No. 306-C-00-04-00568-00, for the Period\n September 30, 2004, to February 25, 2006\n08/02/06 5-306-06-003-D Financial Audit of Costs Incurred in the United States by Louis Berger Group Inc. to\n Implement the Rehabilitation of Economic Facilities and Services Program,\n USAID/Afghanistan Contract No. 306-C-00-02-00500-00, for the Period April 1,\n 2005, to December 31, 2005\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 57\n\x0c06/28/06 5-306-06-005-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period January 1, 2006, to March 31,\n 2006\n05/18/06 5-306-06-005-P Audit of USAID/Afghanistan\xe2\x80\x99s Reconstruction of the Kandahar-Herat Highway Under\n the Rehabilitation of Economic Facilities and Services Program\n03/28/06 5-306-06-002-P Audit of USAID/Afghanistan\xe2\x80\x99s Rebuilding Agricultural Markets Program\n03/21/06 5-306-06-004-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period October 1, 2005, to\n December 31, 2005\n01/10/06 5-306-06-001-P Audit of USAID/Afghanistan\xe2\x80\x99s Cashiering Operations\n12/21/05 9-306-06-004-P Audit of Funds Earmarked by Congress to Provide Assistance for Displaced Persons\n in Afghanistan\n12/19/05 5-306-06-002-D Financial Audit of Costs Incurred in the United States by Louis Berger Group Inc. to\n Implement the Rehabilitation of Economic Facilities and Services Program,\n USAID/Afghanistan Contract No. 306-C-00-02-00500-00, for the Period July 1, 2004,\n to March 31, 2005\n12/08/05 5-306-06-002-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period July 1, 2005, to September 30,\n 2005\n\n FY 2005\n\n08/29/05 5-306-05-009-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period April 1, 2005, to June 30, 2005,\n Including Contract Line Item No. 2 Costs for the Period July 1, 2004, to June 30,\n 2005\n06/30/05 5-306-05-008-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period January 1, 2005, to March 31,\n 2005, Including Contract Line Item No. 2 Costs for the Period April 1, 2004, to\n June 30, 2004\n04/19/05 5-306-05-006-D Financial Audit of Costs Incurred in the United States by Louis Berger Group Inc. to\n Implement the Rehabilitation of Economic Facilities and Services Program,\n USAID/Afghanistan Contract No. 306-C-00-02-00500-00, for the Period October 1,\n 2003, to June 30, 2004\n04/14/05 5-306-05-005-P Audit of USAID/Afghanistan\xe2\x80\x99s Primary Education Program\n03/14/05 5-306-05-003-P Audit of USAID/Afghanistan\xe2\x80\x99s School and Clinic Reconstruction Program\n\n\n\n\n58 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c03/14/05 5-306-05-006-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period October 1, 2004, to\n December 31, 2004\n12/09/04 5-306-05-002-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period July 1, 2004, to September 30,\n 2004\n\n FY 2004\n\n09/21/04 5-306-04-006-P Audit of the Kabul to Kandahar Highway Reconstruction Activities Financed by\n USAID/Afghanistan\xe2\x80\x99s Rehabilitation of Economic Facilities and Services Program\n09/16/04 5-306-04-003-D Audit of Costs Incurred in the United States by Louis Berger Group Inc. to\n Implement the Rehabilitation of Economic Facilities and Services Program,\n USAID/Afghanistan Contract No. 306-C-00-02-00500-00, for the Period July 1, 2003,\n to September 30, 2003\n08/23/04 5-306-04-006-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period April 1, 2004, to June 30, 2004\n08/17/04 5-306-04-005-P Audit of the Sustainable Economic Policy and Institutional Reform Support Program\n at USAID/Afghanistan\n07/09/04 5-306-04-005-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period January 1, 2004, to March 31,\n 2004\n05/17/04 5-306-04-004-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period October 1, 2003, to\n December 31, 2003\n05/17/04 5-306-04-002-D Audit of the Application of Agreed-Upon Procedures on Costs Incurred in the United\n States by Louis Berger Group Inc. to Implement the Rehabilitation of Economic\n Facilities and Services Program, USAID/Afghanistan Contract No. 306-C-00-02-\n 00500-00, for the Period September 30, 2002, to June 30, 2003\n05/11/04 5-306-04-001-F Audit of USAID/Afghanistan\xe2\x80\x99s Cashiering Operations\n04/15/04 5-306-04-002-S Risk Assessment of Major Activities Managed by USAID/Afghanistan\n03/31/04 RIG Memo Second Review of the Road Project Financed by USAID/Afghanistan's Rehabilitation of\n 04-003 Economic Facilities and Services Program\n03/26/04 5-306-04-003-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period July 1, 2003, to September 30,\n 2003\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 59\n\x0c01/23/04 5-306-04-001-N Financial Audit of Local Costs Incurred by Louis Berger Group Inc. to Implement the\n Rehabilitation of Economic Facilities and Services Program, USAID/Afghanistan\n Contract No. 306-C-00-02-00500-00, for the Period September 30, 2002, to June 30,\n 2003\n11/13/03 RIG Memo Review of the Road Project Financed by USAID/Afghanistan's Rehabilitation of\n 04-002 Economic Facilities and Services Program\n\n FY 2003\n\n03/11/03 5-306-03-001-S Risk Assessment of Major Activities Managed by USAID/Afghanistan\n\nPakistan\n\n FY 2012\n\n03/20/12 G-391-12-001-N Financial Audit of USAID/Pakistan\xe2\x80\x99s Rupee Trust Fund for the Period October 1,\n 2009, to September 30, 2011\n03/16/12 G-391-12-004-P Audit of USAID/Pakistan\xe2\x80\x99s Pre-Service Teacher Education Program\n03/06/12 G-391-12-007-R Financial Audit of the Pakistan Competitiveness Support Fund, USAID/Pakistan Grant\n Agreement No. 391-G-00-06-01073-00, Managed by the Competitiveness Support\n Fund, for the Period July 1, 2010, to June 30, 2011\n02/24/12 G-391-12-006-R Financial Audit of Budgetary Support, USAID/Pakistan Program Assistance Agreement\n No. 391-012, Managed by the Economic Affairs Division of the Government of\n Pakistan, for the Period June 8, 2009, to June 15, 2011\n02/03/12 G-391-12-003-P Audit of USAID\xe2\x80\x99s Pakistan Transition Initiative Program\n02/17/12 G-391-12-001-Q Quality Control Review of the Financial Audit Conducted by the Directorate General\n Audit, Federal Government, Department of the Auditor General of Pakistan, of the\n Merit and Need Based Scholarship Project, USAID/Pakistan Agreement No. 391-G-\n 00-04-01023-00, Managed by the Higher Education Commission, for the Period July 2,\n 2004, to June 30, 2010\n02/17/12 G-391-12-005-R Financial Audit of the Merit and Need Based Scholarship Project, USAID/Pakistan\n Agreement No. 391-G-00-04-01023-00, Managed by the Higher Education\n Commission, for the Period July 2, 2004, to June 30, 2010\n01/13/12 G-391-12-004-R Financial Audit of Anti-Corruption Program Pakistan, USAID/Pakistan Cooperative\n Agreement No. 391-A-00-09-01117-00, and Anti-Fraud Hotline Pakistan,\n USAID/Pakistan Cooperative Agreement No. 391-A-00-10-01194-00, Managed by\n Transparency International-Pakistan, for the Year Ended June 30, 2011\n01/06/12 G-391-12-003-R Financial Audit of the Aga Khan University Flood Response Program, USAID/Pakistan\n Cooperative Agreement No. 391-G-00-10-01188-00, for the Period August 30,\n 2010, to December 31, 2010\n11/23/11 G-391-12-002-P Audit of USAID/Pakistan\xe2\x80\x99s Energy Efficiency and Capacity Program\n11/03/11 G-391-12-001-P Audit of USAID/Pakistan\xe2\x80\x99s Firms Project\n\n\n\n\n60 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c11/03/11 G-391-12-002-R Financial Audit of Budgetary Support to the Government of Pakistan, USAID/Pakistan\n Program Assistance Agreement No. 391-005-ES-07, Managed by the Ministry of\n Finance, for the Year Ended June 30, 2008\n\n10/26/11 G-391-12-001-R Financial Audit of Budgetary Support, USAID/Pakistan Program Assistance Agreement\n No. 391-AAG-012-IL -02, Managed by the Benazir Income Support Program, for the\n Period September 30, 2009, to March 31, 2011\n\n FY 2011\n\n09/21/11 G-391-11-005-R Financial Audit of the Business Revitalization Program, USAID/Pakistan Cooperative\n Agreement No. 391-A-00-10-01145-00, Managed by Khushhali Bank, for the Period\n February 6, 2010, to December 31, 2010\n08/29/11 G-391-11-006-P Audit of USAID/Pakistan\xe2\x80\x99s Community Rehabilitation Infrastructure Support Program\n06/23/11 G-391-11-003-Q Quality Control Review of the Audit Report and Audit Documentation for the\n Financial Audit Conducted by A.F. Ferguson, of the Forman Christian College,\n USAID/Pakistan Grant Agreement No. 391-G-00-04-01036-00, Managed by Forman\n Christian College, for the Period July 1, 2009 to March 31, 2010\n06/23/11 G-391-11-004-R Closeout Financial Audit of the Development of a 4-Year Bachelor Degree Program\n and Strengthening Programs in Basic Science and Information Technology,\n USAID/Pakistan Grant Agreement No. 391-G-00-04-01036-00, Managed by Forman\n Christian College, for the Period July 1, 2009, to March 31, 2010\n06/20/11 G-391-11-005-P Audit of USAID/Pakistan\xe2\x80\x99s Road Rehabilitation and Reconstruction Activities Under\n the Quick Impact Projects in South Waziristan\n05/26/11 G-391-11-001-N Financial Audit of USAID/Pakistan\xe2\x80\x99s Rupee Trust Fund for the Period October 1,\n 2006, to September 30, 2009\n05/10/11 G-391-11-002-Q Quality Control Review of the Audit Report and Audit Documentation for the\n Financial Audit Conducted by Nasir Javaid Maqsood Imran of the Pakistan\n Competitiveness Support Fund, USAID/Pakistan Grant Agreement No. 391-G-00-06-\n 10730, Managed by the Competitiveness Support Fund, for the Period from July 1,\n 2009, to June 30, 2010\n05/10/11 G-391-11-003-R Financial Audit of the Pakistan Competitiveness Support Fund, USAID/Pakistan Grant\n Agreement No. 391-G-00-06-01073-00, Managed by the Competitiveness Support\n Fund, for the Period July 1, 2009, to June 30, 2010\n05/06/11 G-391-11-004-P Audit of USAID/Pakistan\xe2\x80\x99s Management of Preaward Assessments\n04/08/11 G-391-11-001-Q Quality Control Review of the Audit Report and Audit Documentation for Financial\n Audits Conducted by Khalid Majid Rahman Sarfraz Rahim Iqbal Rafiq of the\n Interactive Teaching and Learning Project Managed by Children\xe2\x80\x99s Global Network\n Pakistan Limited Under USAID/Pakistan Cooperative Agreement No. 391-A-00-06-\n 01075-00, for the Period July 1, 2008, to February 26, 2010\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 61\n\x0c04/08/11 G-391-11-002-R Closeout Financial Audit of the Interactive Teaching and Learning Project,\n USAID/Pakistan Cooperative Agreement No. 391-A-00-06-01075-00, and Financial\n Audit of Links to Learning Education Support to Pakistan Program, Subaward Under\n USAID/Pakistan Cooperative Agreement No. 391-A-00-08-01100-00, Managed by\n Children\xe2\x80\x99s Global Network Pakistan Limited, for the Period July 1, 2008, to\n February 26, 2010\n01/24/11 G-391-11-003-P Audit of USAID/Pakistan\xe2\x80\x99s Flood Relief Efforts as Administered by Local\n Nongovernmental Organizations\n12/30/10 G-391-11-001-R Closeout Financial Audit of the Developing Non-Bankable Territories for Financial\n Services Program , USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01011-\n 00, Managed by Khushhali Bank Limited, for the Period January 1, 2009, to\n September 30, 2009\n12/10/10 G-391-11-002-P Audit of USAID/Pakistan\xe2\x80\x99s Livelihood Development Program for the Upper Region of\n the Federally Administered Tribal Areas\n12/10/10 G-391-11-001-P Audit of USAID/Pakistan\xe2\x80\x99s Livelihood Development Program for the Lower Region of\n the Federally Administered Tribal Areas\n11/08/10 G-391-11-001-D Financial Audit of Costs Incurred Under the School Enhancement Program\n Component of the Education Sector Reform Assistance Program, USAID/Pakistan\n Cooperative Agreement No. 391-A-00-03-01000-00, Managed by RTI International,\n for the Period December 4, 2002, to September 30, 2007\n\n FY 2010\n\n08/31/10 5-391-10-012-P Audit of USAID/Pakistan\xe2\x80\x99s Family Advancement for Life and Health Program\n08/04/10 G-391-10-001-R Financial Audit of the Pakistan Competitiveness Support Fund, USAID/Pakistan Grant\n Agreement No. 391-G-00-06-01073-00, Managed by the Competitiveness Support\n Fund, for the Period February 3, 2006, to June 30, 2009\n06/28/10 5-391-10-010-P Audit of USAID/Pakistan\xe2\x80\x99s Primary Healthcare Revitalization, Integration and\n Decentralization in Earthquake-Affected Areas Project\n06/28/10 5-391-10-001-S Review of USAID\xe2\x80\x99s Internally Displaced Persons Programs in Pakistan\n05/18/10 5-391-10-033-R Financial Audit of the College Improvement Program, USAID/Pakistan Grant\n Agreement No. 391-G-00-04-01036-00, Managed by Forman Christian College,\n Lahore, for the Period July 1, 2007, to June 30, 2009\n04/30/10 5-391-10-029-R Financial Audit of the Developing Non-Bankable Territories for Financial Services\n Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01011-00,\n Managed by Khushhali Bank, for the Year Ended December 31, 2008\n03/24/10 5-391-10-026-R Closeout Financial Audit of the Improved Pakistani Family Planning and Reproductive\n Health Services Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-\n 01016-00, Managed by Greenstar Social Marketing Pakistan (Guarantee) Limited, for\n the Period July 1, 2007, to December 31, 2007\n\n\n\n\n62 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c02/11/10 5-391-10-020-R Closeout Financial Audit of the Aga Khan University Examination Board,\n USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01003-00, for the Period\n January 1, 2007, to December 31, 2007\n01/28/10 5-391-10-005-P Audit of USAID/Pakistan\xe2\x80\x99s Capacity Building for the Federally Administered Tribal\n Areas Development Program\n12/22/09 5-391-10-012-R Financial Audit of USAID Funds Managed by Children's Global Network Pakistan\n (Guarantee) Limited for the Year Ended June 30, 2008\n\n FY 2009\n\n08/13/09 5-391-09-006-N Financial Audit of Budgetary Support, USAID/Pakistan Program Assistance Agreement\n Nos. 391-005-ES-05 and 391-005-ES-06, Managed by the Ministry of Finance,\n Government of Pakistan, for the Years Ended June 30, 2006, and 2007\n06/25/09 5-391-09-013-R Financial Audit of the Developing Non-Bankable Territories for Financial Services\n Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01011-00,\n Managed by Khushhali Bank, for the Period January 1 to December 31, 2007\n05/11/09 5-391-09-002-N Financial Audit of USAID/Pakistan\xe2\x80\x99s Rupee Trust Fund for Operating Expenses, for\n Fiscal Years Ended September 30, 2005, and 2006\n04/30/09 5-391-09-008-R Financial Audit of the College Improvement Program, USAID/Pakistan Grant\n Agreement No. 391-G-00-04-01036-00, Managed by Forman Christian College,\n Lahore, for the Period August 23, 2004, to June 30, 2007\n04/30/09 5-391-09-001-Q Quality Control Review of the Audit Report and Audit Documentation for the\n Financial Audit Conducted by A.F. Ferguson & Co. of the College Improvement\n Program, USAID/Pakistan Grant Agreement No. 391-G-00-04-01036-00, Managed by\n Forman Christian College, Lahore, for the Period August 23, 2004, to June 30, 2007\n04/29/09 5-391-09-007-R Financial Audit of the Aga Khan University Examination Board, USAID/Pakistan\n Cooperative Agreement No. 391-A-00-03-01003-00, for the Period January 1, 2006,\n to December 31, 2006\n12/15/08 5-391-09-006-R Financial Audit of the Interactive Teaching and Learning Program in Pakistan,\n USAID/Pakistan Cooperative Agreement No. 391-A-00-06-01075-00, Managed by the\n Children\xe2\x80\x99s Resources International Pakistan (Guarantee) Limited, for the Period\n March 1, 2006, to June 30, 2007\n11/25/08 5-391-09-001-P Audit of USAID/Pakistan\xe2\x80\x99s Earthquake Reconstruction Activities\n\n FY 2008\n\n09/26/08 5-391-08-035-R Financial Audit of the Improved Pakistani Family Planning and Reproductive Health\n Services Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01016-\n 00, Managed by Greenstar Social Marketing Pakistan (Guarantee) Limited, for the\n Period July 1, 2006, to June 30, 2007\n09/25/08 5-391-08-034-R Financial Audit of the Improved Pakistani Family Planning and Reproductive Health\n Services Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01016-\n 00, Managed by Greenstar Social Marketing Pakistan (Guarantee) Limited, for the\n Period July 1, 2005, to June 30, 2006\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 63\n\x0c09/19/08 5-391-08-032-R Financial Audit of the Improved Pakistani Family Planning and Reproductive Health\n Services Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01016-\n 00, Managed by Greenstar Social Marketing Pakistan (Guarantee) Limited, for the\n Period July 1, 2004, to June 30, 2005\n08/27/08 5-391-08-030-R Closeout Financial Audit of the Rewarding Innovation at the District Level Program,\n USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01015-00, for the Period\n July 1, 2005, to March 31, 2006, and the Establishing Tent Schools and Cash for Work\n Program, Grant Agreement No. 391-G-00-06-0169-00, for the Period December 9,\n 2005, to June 15, 2006, Managed by Rural Support Programmes Network\n08/20/08 5-391-08-005-N Financial Audit of the Technical Assistance and Training to Improve Project and\n Financial Management of Provincial and District Health and Population Welfare\n Services in Pakistan Project, USAID/Pakistan Limited Scope Grant Agreement No.\n 391-G-00-04-01020-00, Managed by the Options Consultancy Services Limited\xe2\x80\x93\n Technical Assistance Management Agency, for the Period January 1, 2004, to\n March 31, 2006\n08/15/08 5-391-08-029-R Closeout Financial Audit of the Enterprise Development Facility Program,\n Cooperative Agreement No. 391-A-00-03-01010-00, Managed by the Pakistan\n Poverty Alleviation Fund, for the Period July 1, 2006, to September 30, 2007\n07/02/08 5-391-08-027-R Financial Audit of the Aga Khan University Examination Board, USAID/Pakistan\n Cooperative Agreement No. 391-A-00-03-01003-00, for the Period January 1, 2005,\n to December 31, 2005\n04/15/08 5-391-08-017-R Financial Audit of the Developing Non-Bankable Territories for Financial Services\n Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01011-00,\n Managed by Khushhali Bank, for the Period January 1, 2005, to December 31, 2006\n03/28/08 5-391-08-004-P Audit of USAID/Pakistan\xe2\x80\x99s Education Sector Reform Assistance Program\n\n FY 2007\n\n09/28/07 5-391-07-024-R Financial Audit of the 4-Year Bachelor\xe2\x80\x99s Degree Program, USAID/Pakistan Grant\n Agreement No. 391-G-00-04-01036-00, Managed by Forman Christian College,\n Lahore, for the Period July 1, 2005, to June 30, 2006\n08/22/07 5-391-07-023-R Financial Audit of the Enterprise Development Facility Program, Cooperative\n Agreement No. 391-A-00-03-01010-00, Managed by the Pakistan Poverty Alleviation\n Fund, for the Period July 1, 2005, to June 30, 2006\n07/25/07 5-391-07-020-R Financial Audit of the Improved Pakistani Family Planning and Reproductive Health\n Services Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01016-\n 00, Managed by Greenstar Social Marketing Pakistan (Guarantee) Limited, for the\n Period November 7, 2003, to June 30, 2004\n05/23/07 5-391-07-005-P Audit of Selected Activities Under USAID/Pakistan\xe2\x80\x99s Basic Health Program\n\n05/03/07 5-391-07-014-R Financial Audit of the Aga Khan University Examination Board, USAID/Pakistan\n Cooperative Agreement No. 391-A-00-03-01003-00, for the Period July 1, 2003, to\n December 31, 2004\n\n\n\n\n64 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0c02/22/07 5-391-07-010-R Financial Audit of the Fulbright-USAID Scholarship Program, Grant Agreement No.\n 391-G-00-04-01035-00, Managed by the United States Educational Foundation in\n Pakistan, for the Period September 1, 2004, to August 31, 2005\n01/12/07 5-391-07-007-R Financial Audit of the Enterprise Development Facility Program, Cooperative\n Agreement No. 391-A-00-03-01010-00, Managed by the Pakistan Poverty Alleviation\n Fund, for the Period October 1, 2003, to June 30, 2005\n01/12/07 5-391-07-006-R Financial Audit of the 4-Year Bachelor\xe2\x80\x99s Degree Program, USAID/Pakistan Grant\n Agreement No. 391-G-00-04-01036-00, Managed by Forman Christian College,\n Lahore, for the Period August 23, 2004, to June 30, 2005\n10/06/06 5-391-07-001-Q Quality Control Review of the Audit Report and Audit Documentation for the\n Financial Audit Conducted by KPMG Taseer Hadi & Co. of the Aga Khan University\n Examination Board, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-\n 01003-00, for the Period July 1, 2003, to December 31, 2004\n\n FY 2006\n\n09/27/06 5-391-06-033-R Financial Audit of the Developing Non-Bankable Territories for Financial Services\n Project, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01011-00,\n Managed by Khushhali Bank, for the Period October 1, 2003, to December 31, 2004\n09/26/06 5-391-06-003-Q Quality Control Review of the Audit Report and Audit Documentation for the\n Financial Audit Conducted by Ford Rhodes Sidat Hyder & Co., Pakistan, of the\n Improved Pakistani Family Planning and Reproductive Health Services Program,\n USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01016-00, Managed by\n Greenstar Social Marketing Pakistan (Guarantee) Limited, for the Period\n November 7, 2003, to June 30, 2004\n09/26/06 5-391-06-032-R Financial Audit of the Rural Support Programmes Network USAID Grant Rewarding\n Innovations at the District Level, Agreement No. 391-A-00-03-01015-00, for the\n Period Ended June 30, 2005\n09/13/06 5-391-06-031-R Financial Audit of the Rural Support Programmes Network USAID Grant Rewarding\n Innovations at the District Level, Agreement No. 391-A-00-03-01015-00, for the 9-\n Month Period Ended June 30, 2004\n05/11/06 5-391-06-020-R Financial Audit of the Improved Pakistani Family Planning and Reproductive Health\n Services Program, USAID/Pakistan Cooperative Agreement No. 391-A-00-03-01016-\n 00, Managed by Greenstar Social Marketing Pakistan (Guarantee) Limited, for the\n Period November 7, 2003, to June 30, 2004\n01/10/06 5-391-06-003-N Financial Audit of USAID/Pakistan\xe2\x80\x99s Rupee Trust Fund for Operating Expenses, for\n Fiscal Years Ended September 30, 2002, 2003, and 2004\n\n FY 2004\n\n10/30/03 5-391-04-001-S Risk Assessment of Major Activities Managed by USAID/Pakistan\n\n FY 2003\n\n01/07/03 0-000-03-001-F Audit of USAID\xe2\x80\x99s Bureau for Asia and the Near East Monitoring of the Government\n of Pakistan\xe2\x80\x99s Compliance With the Provisions of USAID Grant No. 391-K-005\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 65\n\x0cAppendix 6 \xe2\x80\x93 Summaries of Performance Audit and Review\nFindings, FYs 2010-2012\nThe following pages provide summaries of OIG performance audit and review findings from\nOctober 1, 2009, to the end of the last reporting period, December 31, 2011. Report summaries are\npresented by country with the most recent performance audits and reviews noted first.\n\nAfghanistan\n\nReview of Responses to Internal Audit Findings on the Local Governance and Community Develop-\nment Project (Report No. F-306-12-001-S, December 26, 2011)\n\nLaunched in October 2006, the Local Governance and Community Development Project sought to promote\nstability in Afghanistan. Focused in Kandahar City and the Maywand District, Development Alternatives Inc.\n(DAI) implemented the project through a contract that ended in August 2011.\n\nThe project had many successes, including the completion of more than 2,500 community stabilization\nprojects; generation of immediate short-term employment totaling 1.5 million employment days through\ncash-for-work activities; and completion of significant and lasting improvements in rural infrastructure,\nincluding gravel roads, footbridges, and irrigation systems. However, in March 2011, OIG received a copy of\na DAI internal audit report detailing financial and internal control problems occurring from August 2008\nthrough August 2009. DAI had not provided this report to USAID or returned any funds related to\nquestioned expenditures identified in the report.\n\nProcurements for the project, including service contracts, fuel supply, and building and vehicle leasing had\nseveral deficiencies. For instance, analysis of payment vouchers and the associated procurement documents\nrevealed $2,019,036 in noncompetitive procurements. In addition, OIG\xe2\x80\x99s review of leases for office space\nand guesthouses, at an amount of $6.7 million over 4\xc2\xbd years, revealed that project personnel had entered\ninto several leases without the required competition, and without required approvals. In addition, some\nrental payments were apparently made to the project cashier, instead of to the lessors identified in the lease\nagreements. DAI staff explained that because many of the property owners did not have bank accounts,\nlease payments needed to be in cash. OIG found no documentation showing that the lessors had signed for\nreceipt of their monthly rents.\n\nFurthermore, OIG determined the contract files for three vehicle leasing companies lacked preaward\ndocuments, bid solicitations, other vendors\xe2\x80\x99 quotations, and approvals from DAI procurement managers. In\none incident, a bid submitted for one procurement (to provide armored and unarmored vehicles) was\ncopied and included as proof of competitive bidding in another procurement, and correction fluid had been\nused to obscure relevant information. DAI staff members were also unable to locate the contract file,\npayment vouchers, or project receipts for fuel purchases totaling $3,424,400 from Khyber Afghan\nPetroleum, one of DAI\xe2\x80\x99s suppliers. DAI staff had no explanation for this lack of documentation.\n\n\n\n\n66 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cAudit of USAID/Afghanistan\xe2\x80\x99s Afghanistan Stabilization Initiative for the Southern Region (Report No.\nF-306-12-001-P, November 13, 2011)\n\nIn June 2009, the USAID\xe2\x80\x99s OTI signed a 3-year, $159.6 million contract with Chemonics International Inc.\n(Chemonics) to implement the Afghanistan Stabilization Initiative for the Southern Region (ASI-SR). ASI-SR\nimplemented project activities through grants in districts and municipalities in Kandahar and Helmand\nProvinces.\n\nOIG was unable to reach a conclusion about whether the program as a whole was achieving its goal because\nof multiple issues with the program. Many of these problems stemmed from program implementation,\nwhich was delayed by a lack of formal work plans, inadequate OTI oversight, staffing difficulties, and poor\nquality subcontractors. In addition, Chemonics did not properly manage its budget and began running out of\nfunds in the first quarter of FY 2011.\n\nSome security costs incurred for the initiative were questionable. Chemonics paid $1.2 million for personal\nsecurity details for staff members who lived on military bases and traveled exclusively in military convoys,\neven though no other contractor incurred this type of cost when the contractor\xe2\x80\x99s staff members resided on a\nmilitary installation.\n\nFurthermore, Chemonics officials stated that the company had leased 13 armored vehicles because it felt the\nvehicles were needed to provide sufficient security. However, Chemonics\xe2\x80\x99 security personnel prohibited\nexpatriate staff from traveling into the field, and to maintain a low profile, local staff members were using\nunarmored vehicles. In addition, vehicle leasing costs were unreasonably high.\n\nThe long-term benefits of the initiative were also undercut by a lack of planning. Although some key\ndistricts were ready for longer-term development projects, no comprehensive plans were in place to guide\nthis transition. Without a comprehensive transition plan to prepare for longer-term development, key\ndistricts may not be able to sustain gains in stability, as district governors may not have the resources to\nmeet the needs of their communities.\n\nFinancial controls were also problematic. For example, Chemonics used cash to make large tax payments to\nthe Afghan Government, increasing the risk that a payment may be stolen. In May 2011, an employee sent to\na bank in Lashkar Gah with $62,398 to pay taxes to the Ministry of Finance disappeared with the money.\nAlthough most of the money was ultimately recovered, this incident exposed weaknesses in Chemonics\xe2\x80\x99\ninternal controls.\n\nAudit of USAID/Afghanistan\xe2\x80\x99s On-Budget Funding Assistance to the Ministry of Public Health in\nSupport of the Partnership Contracts for Health Services Program (Report No. F-306-11-004-P,\nSeptember 29, 2011)\n\nIn 2008, USAID signed an implementation letter with the Government of the Islamic Republic of Afghanistan\nto provide the mission\xe2\x80\x99s first core-budget funding assistance to the Ministry of Public Health (MoPH) in\nsupport of the Partnership Contracts for Health Services Program. Under this program, the mission planned\nto provide MoPH with up to $236 million in budget assistance over 5 years to support the delivery of\nstandardized health services in more than a dozen target provinces. In 2009, MoPH awarded $80 million in\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 67\n\x0ccontracts to ten nongovernmental organizations (NGOs). These NGOs were responsible for providing\nstandardized health services in more than 500 health facilities and 5,500 health posts throughout the target\nprovinces.\n\nOIG\xe2\x80\x99s audit found that sustainability of the program was a concern. The government\xe2\x80\x99s extremely low\ncontribution to healthcare raises questions about the long-term viability of health services. With shrinking\ndonor support in the foreseeable future, the Afghan Government\xe2\x80\x99s ability to increase healthcare coverage to\n90 percent of the population appears unlikely, while its ability to sustain the current level of coverage\nremains uncertain. Unless the Afghan government is able to generate sufficient revenue to cover its\nhealthcare costs, the health sector\xe2\x80\x99s dependency on donor support will continue.\n\nAlthough the program has contributed to increasing access to and use of health services, OIG noted\ndeficiencies in quality at all health facilities visited. Doctors and staff at several facilities complained that the\nvolume of patients was up to double their capacity to handle. Patients sometimes waited up to 5 hours\nbefore receiving medical services, and others would go home without receiving treatment. Some of the\nhealth facilities had old equipment that needed repair or replacement. One health facility had a newly\ndonated anesthesia machine, but the responsible NGO ignored repeated staff requests for training on the\nequipment. Several of the buildings were in poor condition, requiring repairs, renovation, and painting.\n\nProgram management also needs to be tightened. Confusion over who responds to MoPH\xe2\x80\x99s technical\ninquiries has led to delayed responses or inadequate feedback from USAID. In addition, the mission has\nlimited experience in managing on-budget assistance activities. In fact, when trying to resolve the problem\nof consistently late payments to the NGOs, Ministry and USAID staff had difficulty explaining the lengthy and\ncomplicated process, and OIG could not find anyone who could explain the process from start to finish. Staff\nattempted to explain the process within their own areas of responsibility, but they contradicted one another,\nand most were not sure what happened outside of their own areas.\n\nReview of USAID/Afghanistan\xe2\x80\x99s Afghanistan Civilian Assistance Program (Report No. F-306-11-005-S,\nAugust 31, 2011)\n\nThe Afghan Civilian Assistance Program was designed to assist Afghan families and communities that have\nsuffered losses as a result of military operations against insurgents and the Taliban. The program is\nimplemented through a $76 million, 4\xc2\xbd-year cooperative agreement with the International Organization for\nMigration (IOM). Program beneficiaries are generally given in-kind assistance, often in the form of kits that\ninclude food, household items, school supplies, or tools and equipment for agriculture or small business\nactivities.\n\nIOM did not properly manage commodities under the program. Large quantities of flour, beans, rice, tomato\nsauce, and cooking oil that had expired were found, some with dates as far back as 2004. Rats had gnawed\nopen dozens of food bags, and auditors noted feces inside and around the bags. Further, expired and\ncontaminated food items were not segregated from food that was fit for use. Other items, such as\nwheelbarrows and shovels, were stored in disorganized piles or even kept outside.\n\nIn addition to problems with commodities, there were also difficulties with verifying beneficiaries. A report\ncommissioned by IOM to confirm assistance concluded that at least 34 percent of the beneficiaries in two\n\n\n\n68 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cdistricts could not be verified, most likely because of fraud. Moreover, the report\xe2\x80\x99s authors believed that\nprogram personnel were actively working to undermine the results of their investigation. Additionally,\nother funds were misspent when IOM used more than $3.6 million in program funds to purchase cars for\nbeneficiaries without USAID\xe2\x80\x99s approval. Furthermore, OIG determined that $180,000 embezzled by field\nstaff had not been properly been reimbursed to USAID.\n\nAudit of USAID/Afghanistan\xe2\x80\x99s Support to the Electoral Process (STEP) and Support for Increased\nElectoral Participation in Afghanistan (IEP) Programs (Report No. F-306-11-003-P, June 19, 2011)\n\nTo help strengthen Afghanistan\xe2\x80\x99s electoral system, USAID/Afghanistan has provided assistance through the\nSTEP Program implemented under a contract with the International Foundation for Electoral Systems, and\nthe IEP Program implemented through a cooperative agreement with the Consortium for Election and\nPolitical Process Strengthening.\n\nThe STEP program has achieved many short term objectives\xe2\x80\x94in particular, those dealing with civic\neducation and outreach, training, and staffing of the Independent Election Commission and the Electoral\nComplaints Commission. The program has helped to increase the capacity of both commissions to\nadminister elections and has contributed to the credibility of elections themselves.\n\nThe IEP program has also performed well, training tens of thousands of Afghans who participated in\nelections as political party or coalition members and election observers. Furthermore, IEP implemented\ncivil and voter education programs that reached hundreds of thousands of people.\n\nDespite these accomplishments, however, no persuasive evidence exists that these short-term results have\nproduced increased citizen awareness of the electoral process or a stronger democratic political party\nsystem. In fact, auditors reported on a number of longer-term issues that need to be addressed to better\nensure credible elections, including legal reforms to protect the independence of the Electoral Commission\nand Electoral Complaints Commission, reform of the \xe2\x80\x9csingle nontransferable vote\xe2\x80\x9d system of representation\nin favor of a system in which votes and electoral results have a more predictable and proportional\nrelationship, actions to make Afghanistan\xe2\x80\x99s electoral system more sustainable, and a more reliable voter\nregistry.\n\nMoreover, costs could have been reduced by consolidating consortium expenses. Specifically, each\nconsortium participant had its own Kabul-based home office, living quarters, and support functions such as\nsecurity, human resources, and information technology. Combining these costs would have saved the\nmission a combined 15 percent to 20 percent, or $6 million to $8 million.\n\nReview of USAID/Afghanistan\xe2\x80\x99s Portion of the Embassy Air Program (Report No. F-306-11-004-S,\nJune 9, 2011)\n\nOn January 4, 2010, USAID awarded Aircraft Charter Solutions Inc. a 2-year, $361 million contract to supply\nair transportation in Afghanistan. The contractor provided aircraft, personnel, equipment, tools, material,\nmaintenance, spare parts, and supervision for transportation to and from various locations in the country.\nThe aircraft provided by the contractor include seven 18-passenger Beechcraft 1900s, three 8-passenger\nBeechcraft Super King Air 200s, two Bell 412 helicopters, and four MI-8 helicopters.\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 69\n\x0cOIG\xe2\x80\x99s review found that the USAID-funded portion of the Embassy Air program was providing safe and\nreliable air service in support of provincial reconstruction teams and other U.S. Government development\nassistance programs in Afghanistan; however, the review identified many opportunities for improvement.\nFor instance, between February 2010 and January 2011, 20 percent of passengers (almost 10,000 people)\nwith reservations on Embassy Air did not appear for their flights but did not cancel 24 hours in advance as\nrequired. There was no penalty for these passengers, and with a cancellation system in place, these seats\ncould have been offered to others. Additionally, unapproved international travel by Aircraft Charter\nSolutions personnel led to more than $525,000 in questioned costs.\n\nFurthermore, Aircraft Charter Solutions did not provide the mission with required work plans, performance\nmanagement plans, or progress reports that would detail problems encountered or resolved, best practices,\nflights or activities completed, or performance standards. Without these reports, the mission was unable to\nmonitor the program effectively.\n\nOIG also noted that USAID markings were missing from all of the aircraft and that environmental\nrequirements for the contract were ambiguous and needed to be updated.\n\nAudit of USAID/Afghanistan\xe2\x80\x99s Construction of Health and Education Facilities Program (Report No. F-\n306-11-002-P, March 27, 2011)\n\nTo help respond to unmet health and education needs in Afghanistan, USAID/Afghanistan entered into a $57\nmillion cooperative agreement with IOM in January 2008, effective through January 2011, to implement the\nConstruction of Health and Education Facilities Program. The agreement was subsequently extended\nthrough June 2012.\n\nThe objective of the audit was to determine whether USAID/Afghanistan\xe2\x80\x99s program was achieving its main\ngoals of strengthening the Government of the Islamic Republic of Afghanistan\xe2\x80\x99s (GIRoA\xe2\x80\x99s) ability to provide\nhealth services to its citizens and train competent teachers by constructing provincial hospitals, midwife\ntraining centers, and provincial teacher training colleges.\n\nWhile the mission has realized some successes\xe2\x80\x94for example, in strengthening the capacity of local\nconstruction companies and adhering to the international building code\xe2\x80\x94the program was not on schedule\nto achieve its main goals. Construction fell significantly behind schedule. The program was approximately\n18 months behind schedule and was making slow progress toward achieving its goals. Cost and security\nissues reduced the scope of new construction. Achievement of the original goals of the agreement was\nhindered by funding limitations. Federal requirements also were violated when the mission approved the\nbuilding of religious structures. IOM\xe2\x80\x99s technical proposal clearly indicated that these religious structures\nwould be incorporated into the designs of the provincial teacher training colleges, but USAID staff failed to\nrecognize these structures as being ineligible for USAID funding.\n\nThe audit disclosed several instances of noncompliance with IOM\xe2\x80\x99s quality control manual, which is\nincorporated into the cooperative agreement and approved by the mission. The manual required specific\ntests of construction materials to be performed at specified intervals, but we noted instances where there\nwas no evidence that required tests were performed. For example, of 49 cases we reviewed in which 7-day\n\n\n\n70 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cconcrete compression strength tests were required, IOM could only provide evidence that 35 were\nperformed.\n\nAdditionally, facility sustainability was questionable. The ability of the Ministries of Education and Public\nHealth to maintain completed structures was questionable because of competing priorities for ministry\nfunds, which could further hinder achievement of the program\xe2\x80\x99s main goals.\n\nReview of USAID/Afghanistan\xe2\x80\x99s Bank Supervision Assistance Activities and the Kabul Bank Crisis\n(Report No. F-306-11-003-S, March 16, 2011)\n\nSince 2003, USAID/Afghanistan has supported a number of capacity-building activities at the Afghanistan\nCentral Bank (DAB) to help DAB regulate the banking sector. Deloitte provided DAB technical assistance in\nbank supervision and examination through a $92 million task order for the Economic Growth and\nGovernance Initiative, which includes many activities in addition to bank supervision and examination. The\npurpose of the task order was to increase Afghanistan's ability to develop and implement sound economic\nand regulatory policies that provide the foundation for private sector growth in a market economy.\nAccording to Deloitte's work plan, one of the main goals of the assistance Deloitte provided to DAB was to\nassist DAB in fulfilling its statutory responsibilities\xe2\x80\x95to promote the stability and contribution to economic\ngrowth of the financial sector and to prevent avoidable losses. Deloitte provided onsite technical advisors at\nDAB\xe2\x80\x99s Directorate for Financial Supervision.\n\nAfter depositors\xe2\x80\x99 run on Kabul Bank, senior officials in the U.S. Embassy raised concerns about Deloitte\xe2\x80\x99s\nperformance. Specifically, they were concerned that Deloitte staff did not warn the U.S. Government about\nlooming problems at Kabul Bank before the first news reports broke in February 2010. They also\nquestioned Deloitte\xe2\x80\x99s effectiveness and performance because Deloitte staff had provided bank supervision\nassistance to DAB for 7 years, yet DAB supervisors were unable to prevent the near collapse of Afghanistan's\nlargest bank. In January 2011, USAID/Afghanistan requested OIG assistance in determining whether USAID\nor Deloitte staff members were negligent in failing to report Kabul Bank fraud.\n\nIn response to USAID/Afghanistan\xe2\x80\x99s request, OIG conducted this review to determine what opportunities\nUSAID and contractor staff had to learn of fraudulent activities at Kabul Bank through USAID\xe2\x80\x99s Economic\nGrowth and Governance Initiative and its predecessor, the Economic Growth and Private Sector\nStrengthening Activity. The review also sought to determine how staff learned of the fraud and what actions\nthey took once they became aware of the fraud.\n\nThe audit found that BearingPoint and Deloitte advisers who were embedded at DAB encountered fraud\nindications at Kabul Bank on a number of occasions over a span of 2 years before the run on Kabul Bank in\nearly September 2010. However, they did not aggressively follow up on indications of serious problems at\nKabul Bank. Also, Deloitte advisers did not report fraud indicators at Kabul Bank to USAID, and the mission\ndid not have a policy requiring contractors and grantees to report indications of fraud in host government\ninstitutions or possible problems that could reasonably be considered to be of foreign policy interest to\nUSAID and the U.S. Government. OIG auditors also concluded that USAID/Afghanistan\xe2\x80\x99s management of its\ntask order with Deloitte was weak. If senior program managers and technical experts had been on staff at\nthe mission, USAID would have had greater capacity to detect deficiencies in Deloitte's technical assistance\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 71\n\x0cactivities, to question Deloitte advisers' written and oral reports, and to delve more deeply into those\nreports, rather than accepting them at face value.\n\nIn hindsight, Deloitte\xe2\x80\x99s lead adviser acknowledged that Deloitte should have taken more aggressive actions\nin November 2009, such as resuming participation by Deloitte\xe2\x80\x99s advisers in onsite bank examinations\nalongside the DAB examiners. This practice was suspended in November 2008 because an adviser received\ndeath threats. The lead adviser said that if Deloitte\xe2\x80\x99s onsite assistance had restarted in November 2009, the\nfraud could have been detected earlier, and the magnitude of losses would have been smaller.\n\nReview of Cash Disbursement Practices Employed by Selected USAID/Afghanistan Contractors and\nGrantees (Report No. F-306-11-002-S, March 7, 2011)\n\nIn late 2001, following decades of conflict, the financial and banking systems of Afghanistan were\ndevastated. Afghanistan had six licensed, state-owned commercial banks that were almost entirely based in\nKabul and, to a large extent, inactive. Besides lacking connectivity and reliable information on assets and\nliabilities, the banks did not follow generally accepted accounting standards. Vital functions of the central\nbank were not defined or carried out, and Afghanistan lacked a credible, formal payment system. The lack of\nconfidence in the banking system and uncertainties and difficulties faced by the population and the business\nsector led them to rely almost exclusively on the hawala money transfer system, an informal network of cash\nbrokers who operate based on trust and reputation.\n\nOIG examined the cash disbursement practices of ten USAID contractors and grantees. Selected contractors\nand grantees represented about 42 percent of USAID/Afghanistan\xe2\x80\x99s total active awards ($3.4 billion) and\nincluded six of the mission\xe2\x80\x99s program areas: infrastructure, democracy and governance, education, health,\neconomic growth, and stabilization in support of the U.S. Government\xe2\x80\x99s counterinsurgency strategy. Using\nan OIG risk assessment of USAID/Afghanistan\xe2\x80\x99s contractors and grantees, we evaluated internal controls\nover cash disbursements, performed a walk-through of the cash voucher payment process, reviewed a\njudgmental sample of cash vouchers and supporting documents, identified areas for improvement, and\nnoted best practices employed.\n\nAccording to information provided by the selected implementing partners, they made $13.5 million in cash\npayments in 2010, representing 7 percent of the $181.1 million in total costs they incurred in Afghanistan.\nFor individual implementing partners, cash payments as a percentage of total costs incurred in Afghanistan\nranged from 2 percent to 69 percent. The types of costs paid in cash included office supplies, local travel,\nprepaid phone cards, utilities, and maintenance. The implementing partners that had a higher percentage of\ncosts paid in cash also used cash for programmatic activities such as small grants, cash-for-work programs,\nand microfinance loans.\n\nOverall, OIG auditors determined that audited cash expenditures were reasonable, allocable, and allowable.\nHowever, no controls can completely eliminate the risk of fraud, loss, and personal harm to staff associated\nwith handling and transporting cash in a war zone. And, following the review, five of the ten selected\nimplementing partners took steps to reduce their cash exposure risk by proactively seeking ways to make\npayments through electronic funds transfers, check, or hawala transfers. The selected implementing\npartners also implemented a number of best practices for managing cash disbursements that other\nUSAID/Afghanistan implementing partners should consider adopting.\n\n\n\n72 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cAudit of USAID/Afghanistan\xe2\x80\x99s Agriculture, Water, and Technology Transfer Program (Report No. F-\n306-11-001-P, February 13, 2011)\n\nAccording to USAID/Afghanistan, nearly 80 percent of Afghans earn their living from agriculture.\nUSAID/Afghanistan\xe2\x80\x99s active agriculture and alternative livelihoods programs, with reported obligations of\n$701 million and disbursements of $494 million as of September 30, 2010, are intended to create jobs and\nincrease incomes in the agricultural sector and increase Afghans\xe2\x80\x99 confidence in their government,\nparticularly in the Ministry of Agriculture, Irrigation and Livestock. One such program, the Afghanistan\nAgriculture, Water, and Technology Transfer Program, is implemented through a $20 million cooperative\nagreement with New Mexico State University (NMSU).\n\nThe objective of this audit was to determine whether the program was achieving its main goals, which dealt\nwith irrigation water management, agricultural technology transfer, and institution building. Two-and-a-\nhalf years into the 3-year program, NMSU had achieved a number of successes in introducing new\nagricultural and water technologies, and many farmers were participating in on-farm demonstrations of\nthese technologies. Auditors found some evidence of demand for these new technologies\xe2\x80\x94laser land\nleveling being the clearest example\xe2\x80\x94but adoption of the technologies remained in the future.\n\nFinancial records for the program showed that about 61 percent of spending was in Afghanistan, while the\nother 39 percent was in the United States. Officials connected with the program raised concerns that the\nhigh proportion of expenditures in the United States left fewer resources available for activities in\nAfghanistan and raised other questions about the financial management of the program. To address these\nissues, OIG contracted with an audit firm to conduct financial audits of NMSU and its partner universities in\nthe United States and issued a separate report with audit results.\n\nUSAID\xe2\x80\x99s cooperative agreement with NMSU also established the development of an institutional framework\nfor effective supply and demand management of the country\xe2\x80\x99s limited water resources as a key objective.\nNMSU demonstrated a number of water-conserving technologies and successfully stimulated demand for\nsome of them. However, farmers had not adopted these technologies for wider use, and NMSU placed\nrelatively little emphasis on improving distribution of irrigation water resources.\n\nNMSU\xe2\x80\x99s efforts had not yet resulted in a more equitable, community-based system for managing irrigation\nwater. NMSU officials noted that the water-conserving technologies that they introduced could make more\nwater available for farmers at the tail of irrigation canals. For this to occur, however, the technologies must\nbe widely adopted, and evidence of adoption of these technologies was lacking.\n\nReview of USAID/Afghanistan\xe2\x80\x99s Ministerial Assessment Process (Report No. F-306-11-001-S,\nNovember 6, 2010)\n\nThe U.S. Government planned to deliver 50 percent of its development aid to Afghanistan through GIRoA\xe2\x80\x99s\ncore budget by the end of calendar year 2011. With this expectation, USAID/Afghanistan conducted a series\nof preaward assessments of GIRoA ministries to see whether the ministries could responsibly manage U.S.\nGovernment resources. A preaward assessment (sometimes called a preaward survey or preaward audit)\ninvolves inquiries, observations, and tests to see whether the assessed entity has the requisite procedures,\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 73\n\x0cinternal controls, experienced personnel, and other resources needed to manage U.S. Government funds\nresponsibly.\n\nOIG\xe2\x80\x99s review\xe2\x80\x94which focused on assessments already performed by USAID/Afghanistan, as well as draft\nscopes of work for future assessments\xe2\x80\x94found that those conducted did not provide reasonable assurance of\ndetecting significant vulnerabilities. The scope of the assessments varied from one ministry to another, but\nsome significant limitations existed. For example, reviewers did not know what programs the ministries\nwould be asked to manage and could not therefore address the ministries\xe2\x80\x99 capacity in these areas. In\naddition, none of the assessments explicitly considered the control environment in Afghanistan or in\nindividual ministries (e.g., the existence of widespread impunity or the ability of high-level officials to\ninterfere with law enforcement institutions and processes).\n\nOIG found a need for more testing to see whether internal control procedures were followed. In addition,\nmore coverage of controls over fixed assets and payroll and attendance was required. Reviewers needed\nmore guidance on how to assess compliance with applicable laws and regulations, and more extensive\nUSAID supervisory review of assessment reports was also required.\n\nAudit of USAID/Afghanistan\xe2\x80\x99s Support to the American University of Afghanistan (Report No. 5-306-\n11-002-P, November 5, 2010)\n\nThe Afghan Constitution and Civil Code, which took effect in July 2004, chartered the American University of\nAfghanistan to provide a high-quality education that meets international standards and emphasizes a liberal\narts curriculum and higher education for the professions (e.g., offering courses in business English,\ninformation technology, leadership, and business management). The university began offering\nundergraduate courses and professional programs in September 2006.\n\nTo assist in the university\xe2\x80\x99s development, USAID/Afghanistan entered into a $42 million cooperative\nagreement with the university in August 2008, effective through July 2013.\n\nOIG\xe2\x80\x99s audit found that the university, with USAID/Afghanistan\xe2\x80\x99s support, had increased student enrollment\nand improved school infrastructure, although the development of a new campus was behind schedule. The\nuniversity had increased the number of qualified staff, one of the program goals. However, the university\nhad not made progress in becoming self-sustaining. Despite increasing revenue from student tuition, it was\nstruggling with fund-raising, which is essential for sustainability. As of May 2010, AUAf had raised only\n$4.5 million of the $14 million required and only $2.2 million had been collected, the remainder consisting\nonly of pledges. Additionally, although the university planned to raise $23 million in capital for the\nconstruction of the new campus, as of May 2010, AUAf had identified only two donors; therefore, OIG\nquestioned whether AUAf will become self-sustaining after U.S. Government funding ceases.\n\nThe audit found that the university was also behind schedule in reforming its undergraduate program,\nwhich is making it less competitive with other private universities in Afghanistan. Furthermore, the\nUniversity\xe2\x80\x99s Professional Development Institute had poor attendance because students lacked interest, and\nmost of the reviewed course syllabi contained no written completion requirements. Because the university\nhad not submitted required planning documents, including its second-year budget, the mission was\nwithholding additional funding. Further, the university was unlikely to meet its goal of increasing\n\n\n\n74 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cenrollment of women to 30 percent; Afghan cultural norms make families unwilling to send girls to an\nAmerican higher education facility because of the stigma against associating with people from other\ncountries.\n\nIn addition to documenting funding and curriculum problems, OIG found that the university did not follow\nenvironmental procedures in construction of the new campus or in renovations of existing facilities.\n\nAudit of USAID/Afghanistan\xe2\x80\x99s Partnership for Advancing Community-Based Education in Afghanistan\n(PACE-A) (Report No. 5-306-11-001-P, October 28, 2010)\n\nPACE-A is a 5-year program to expand quality learning and life opportunities for marginalized communities\nand their children in Afghanistan. The program\xe2\x80\x99s core objectives are to expand access to community-based\nschools, strengthen community structures and processes that support basic education, and improve the\nquality of community-based education. Under this agreement, the program\xe2\x80\x99s activities were expected to\ndirectly benefit a total of 93,240 students\xe2\x80\x94of whom at least 60 percent were to be girls or women\xe2\x80\x94in over\n1,000 communities in 90 districts and 20 provinces.\n\nAlthough the majority of program activities involved primary education classes covering grades 1 through 6,\nthe program also offered other types of classes, including early childhood development and adult literacy,\nfor learners younger or older than primary school age (7 to 12 years old).\n\nThe audit determined that while the program was partially achieving its goals but was not offering its\nteachers basic training to ensure that their students received a quality education. Results data reported on\nthis and other program areas also were not adequately supported. In addition, efforts to integrate the\nprogram\xe2\x80\x99s primary classes into the Ministry of Education system were not always implemented effectively.\n\nAccording to PACE-A\xe2\x80\x99s progress report for the quarter ending March 31, 2010, program activities to date\nhad resulted in the establishment of 3,695 classes attended by 98,212 students\xe2\x80\x94the majority of whom were\ngirls\xe2\x80\x94in a total of 1,672 communities located in 97 districts and 19 provinces, meeting or exceeding at least\nsome of the program\xe2\x80\x99s targets. The program has also made progress in facilitating the integration of many of\nits classes into the Ministry of Education system, with 51 percent of the program\xe2\x80\x99s primary classes\nintegrated into the school system to date.\n\nPACE-A has not been fully achieving all of its core objectives, however. One area in which program efforts\nhave fallen short has been teacher training, which is the primary means of ensuring that PACE-A supported\nstudents receive a quality education.\n\nAn examination of the records for four tested provinces also disclosed that data reported under several\nperformance measures relating to teacher training and other activities were not adequately supported,\npartly because of recordkeeping deficiencies.\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 75\n\x0cReview of Security Costs Charged to USAID Projects in Afghanistan (Report No. 5-306-10-002-S,\nSeptember 29, 2010)\n\nUSAID/Afghanistan relies on private security contractors (PSCs) to supply an array of security services for\ncontractors and grantees that implement USAID-funded projects in Afghanistan. PSCs free up military forces\nfor their core missions and provide protection to USAID\xe2\x80\x99s implementing partners in hostile environments.\nUSAID/Afghanistan\xe2\x80\x99s practice has been to delegate responsibility and oversight for security to its\nimplementing partners and factor the cost of security into their program budgets. These implementing\npartners typically subcontract their security services to PSCs. USAID indirectly pays for PSCs when the\nimplementing partners submit their invoices, which include the cost of security services, for payment.\n\nIn the past year, news reports have said that U.S. Government funds paid to contractors for reconstruction\nprojects were being siphoned off to Taliban insurgents in exchange for \xe2\x80\x9cprotection\xe2\x80\x9d to prevent attacks. For\nexample, one news article reported that USAID funds were ending up in the hands of the Taliban through a\nprotection racket for contractors. Another article said that in southern Afghanistan, no contract can be\nimplemented without the Taliban taking a cut, sometimes at various steps along the way. Other news\nreports said that PSCs were involved in the negotiations with insurgents. OIG staff met with one of the\nreporters involved to obtain additional details.\n\nOIG conducted a review of Edinburgh International\xe2\x80\x99s security costs charged to the following three USAID-\nfunded projects in Afghanistan implemented by Development Alternatives Inc.:\n Afghanistan Small and Medium Enterprises Development\n Incentives Driving Economic Alternatives for the North, East, and West\n Local Governance and Community Development (LGCD)\n\nThe review found no indication that Edinburgh International had misused USAID funds to pay the Taliban or\nothers in exchange for protection. However, there were indications that Afghan subcontractors working on\nthe LGCD project had paid insurgents for protection in remote and insecure areas of Afghanistan. The\npayments were allegedly made as part of a security arrangement with local communities that very likely\nincluded the Taliban or groups that support them.\n\nOIG also found indications of pervasive fraud in DAI\xe2\x80\x99s LGCD office in Jalalabad and indications of endemic\ncorruption in Nangarhar Province, where Jalalabad is located. It is conducting an investigation with\nmembers of the International Contract Corruption Task Force, including the Special Inspector General for\nAfghanistan Reconstruction and the Federal Bureau of Investigation, as well as the local Afghanistan\nprosecutor\xe2\x80\x99s office and the Afghanistan Major Crimes Task Force. In June 2010, DAI terminated ten LGCD\nemployees who were involved in the fraud scheme.\n\nAudit of USAID/Afghanistan's Alternative Development Program Expansion, South West (Report No.\n5-306-10-011-P, July 29, 2010)\n\nThe production and trafficking of illicit narcotics in Afghanistan breeds corruption and provides resources\nto the Taliban, drug lords, and other terrorist groups. The U.S. Government has supported the Afghan\nGovernment\xe2\x80\x99s counternarcotics strategy of providing incentives to stop growing opium poppy through\n\n\n\n\n76 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0calternative development projects, supporting strong disincentives in the form of provincial governor-led\neradication, interdiction, and law enforcement, and spreading the antinarcotics message.\n\nUSAID is implementing a 3-year, $75 million program (through Associates in Rural Development) to counter\nillicit poppy cultivation by providing alternative development programs, improved economic opportunities,\nand diverse regional economic growth.\n\nThe program has made progress. A 32 percent decrease in poppy production between 2008 and 2009 was\nattributed to strong antipoppy messages from provincial governors, increased interdiction activities, an\noverproduction of poppy in prior years that suppressed market prices, and provision of alternative\neconomic opportunities in targeted districts within each province. The implementer put in place 45 cash-\nfor-work projects that included road, canal, and market rehabilitations. One project provided employment\nto 220 workers, while another project targeted 30 disadvantaged women, mainly widows. The program also\nassisted local farmers with sales of produce totaling nearly $3.8 million. Further, it helped the Farah\nFarmer\xe2\x80\x99s Union, a cooperative of 8,700 growers, identify business opportunities and develop the Farah\nAgricultural Center, which will provide an all-inclusive hub for market expansion and business development.\n\nDespite the program\xe2\x80\x99s progress, issues need to be addressed. First, continued reductions in poppy\ncultivation may not be sustainable because no follow-on alternative development program has been\napproved beyond March 2011, and a critical southern province is not included in the current\nprogram. Second, the program experienced delays in implementation, partly because of security\nissues. Also, a new embassy-led annual program review process, the restructuring of the regional\ncommands, and the mission\xe2\x80\x99s plan to implement regional platforms presented challenges that could hamper\nprogram implementation if not properly managed.\n\nReview of School and Health Clinic Buildings Completed Under the Schools and Clinics Construction\nand Refurbishment Program (Report No. 5-306-10-009-P, June 24, 2010)\n\nIn September 2002, USAID/Afghanistan began to build and reconstruct schools and health clinics\nthroughout Afghanistan under the Schools and Clinics Construction and Refurbishment Program. During the\nfollowing 4 years, the mission increased the number of structures subject to the program from fewer than\n100 to 776. Similarly, the number of implementing partners grew to more than a half dozen, and\ndisbursements under the program amounted to more than $105 million.\n\nIn October 2004, OIG audited school and health clinic reconstruction activities.3 The audit found that the\nprogram was behind schedule, and it recommended that the mission develop a new implementation plan.\n\nOIG contracted with KPMG Afghanistan\xe2\x80\x94whose staff could travel more easily within Afghanistan\xe2\x80\x94to\nconduct site visits for this review. OIG provided KPMG a statistical sample of 50 buildings\xe2\x80\x9430 schools and\n20 clinics\xe2\x80\x94from the 776 schools and clinics completed across Afghanistan under the program. The review\nhad two objectives: (1) to determine whether schools and clinics constructed under the program were being\n\n\n3Audit of USAID/Afghanistan\xe2\x80\x99s School and Clinic Reconstruction Program, Report No. 5-306-05-003-P, March 14,\n2005.\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 77\n\x0cused for their intended purposes and (2) to measure the impact of the program on the provision of\neducation and health services to the people of Afghanistan.\n\nKPMG visited and inspected 50 buildings to verify their physical existence and observe how they were being\nused. Overall, KPMG found that 48 of the 50 facilities were being used for their intended purposes. The two\nexceptions were due to security concerns in the surrounding area and one building\xe2\x80\x99s inability to\naccommodate area students.\n\nKPMG noted numerous physical deficiencies in the condition of the school and health clinic buildings. These\ndeficiencies included structural problems, poor hardware, lack of electrical supply (because buildings were\nlocated in areas where electrical service is unavailable), deficient water service and plumbing (or none), and\ntoilet problems. However, KPMG could not determine whether the deficiencies were attributable to work\nperformed under the program or to a subsequent lack of maintenance.\n\nKPMG noted that the deficiencies created an environment that was not conducive to quality education and\nhealth services and might expose the students, patients, and staff working in those buildings to unhealthy\nand even dangerous conditions. In addition, the report noted operational problems in the schools and\nclinics. These problems included poor maintenance, inadequate personnel, and lack of furniture and\nequipment. These conditions, however, were the responsibility of GIRoA.\n\nTo measure the impact of the program on providing educational and health services to the people of\nAfghanistan, KPMG scheduled its field visits when the schools and clinics would be in use and reviewed\nrecords and documentation maintained at each location. KPMG found that the 30 schools visited were\nstaffed with 1,385 teachers providing instruction to 57,744 students. The 20 health clinics visited employed\n109 clinical staff and provided medical treatment to approximately 39,500 patients a month. KPMG\nconcluded, however, that these figures did not provide a meaningful indication of the completed buildings\xe2\x80\x99\nimpact on the provision of education and health services in Afghanistan because baseline information was\nnot available for comparison.\n\nAudit of USAID/Afghanistan\xe2\x80\x99s Oversight of Private Security Contractors in Afghanistan (Report No. 5-\n306-10-009-P, May 21, 2010)\n\nUSAID program implementers rely on PSCs to protect their operations in hostile environments. However,\nthe murder of 4 PSCs in Iraq in 2004 and the killing of 17 Iraqi civilians by PSCs in 2007 raised concerns\nabout failures to supervise PSCs adequately and to properly investigate alleged killings by security\ncontractors. In January 2008, Congress enacted detailed oversight requirements for PSCs in combat\noperation areas, to be implemented by Department of Defense (DOD) regulation and the Federal Acquisition\nRegulation.\n\nOIG examined the reporting of serious security incidents, whether USAID implementing partners had\nsubcontracted with responsible firms, the costs of these services, and the oversight of those costs. We found\nthat detailed statutory oversight requirements intended to cover both non-DOD and DOD PSCs in\nAfghanistan had not been implemented by USAID because the Chief of Mission had not issued mission-wide\ninstructions in accordance with DOD implementing regulation. As a result, USAID PSCs did not report\ncertain serious security incidents (e.g., persons killed or injured as a result of PSC conduct) that they\n\n\n\n78 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cotherwise would have been required to report had mission-wide instructions implementing the statutory\nrequirements been issued. The mission-wide instructions would have also incorporated statutorily-\nmandated procedures to ensure PSCs in Afghanistan are qualified and responsible. The report found such\nprocedures were not in place.\n\nUSAID/Afghanistan has provided only limited oversight and direction relative to standards and\nrequirements for security and cannot ensure that responsible security firms are employed. The audit found\nthat two PSCs were not licensed with the Afghan Government and that USAID/Afghanistan did not provide\nsubcontracting consent for 17 private security firms or include in its contracts a clause to require various\nsecurity measures. Moreover, USAID/Afghanistan has no standard grant award provision related to\nsecurity, so about one-third of its awards with subcontracted PSCs have no standard security requirements.\nWith respect to security costs, prime implementing partners reported that they had charged about\n$167 million for subcontracted PSC services during the review period. On average, these services accounted\nfor 8.3 percent of award disbursements. The audit found no specific requirements applicable to this\ncategory of costs and few requirements relative to the audit of subcontractor costs.\n\nAudit of USAID/Afghanistan's Afghanistan Vouchers for Increased Productive Agriculture (AVIPA)\nProgram (Report No. 5-306-10-008-P, April 20, 2010)\n\nThe AVIPA Program was initially designed to provide wheat seed and fertilizer to drought-affected\nsubsistence farmers to help them increase wheat production in targeted areas of the country.\n\nThe audit found that the program had contributed to the country\xe2\x80\x99s increase in wheat production; however,\nthe extent of the program\xe2\x80\x99s role in this increase was unclear, since the audit determined that some of the\nreported results were not reliable. In addition, the program\xe2\x80\x99s stabilization activities in the country\xe2\x80\x99s\nsouthern region were not being implemented as widely as originally planned.\n\nThe audit identified several other problems: In addition to the lack of reliable data to measure program\nresults, the program suffered from insufficient oversight. The implementer could not retain staff, in part\nbecause of death threats, and project staff members were overburdened by requests for information and\nbriefings from officials outside of USAID. In some cases, materials did not reach beneficiaries (a finding that\nhas been referred to OIG\xe2\x80\x99s Office of Investigations). Moreover, the audit noted that up to $50 million in\nunspent program funds could be reprogrammed for other activities.\n\nAudit of USAID/Afghanistan\xe2\x80\x99s Human Resources and Logistical Support Program (Report No. 5-306-\n10-007-P, March 31, 2010)\n\nUSAID/Afghanistan launched its Human Resources and Logistical Support Program in February 2007 to help\ndesign, monitor, and support the activities of USAID-funded contractors. The program intended to (1)\nenhance capacity at selected ministries, (2) identify USAID-constructed buildings that do not meet seismic\nstandards, and (3) provide quality assurance and engineering oversight for mission construction projects.\nUSAID awarded a 5-year, $72 million contract to International Relief and Development Inc. to implement the\nprogram.\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 79\n\x0cThe audit found that the program had made progress in capacity building within selected Afghan ministries,\nidentified defective USAID-built structures, and provided engineering oversight for mission construction\nprojects.\n\nIn support of its first goal, the program provided the Afghan Government with additional capacity. Technical\nconsultants hired under the program assisted Ministry of Mines personnel in preparing a proposal for the\nrehabilitation of gas fields to generate electrical power for the country. Meanwhile, at the Ministry of Public\nWorks, program advisers initiated the development of a pilot program to teach ministry staff how to\nimplement and monitor road construction projects and provide them with a more efficient means of\nmanaging and maintaining roads in the future. At the Ministry of Energy and Water, the program contractor\nprovided a transboundary water-rights adviser to help the ministry develop water policies for negotiations\nwith neighbors in other countries.\n\nWith regard to the second goal\xe2\x80\x94evaluating and identifying USAID-built structures that did not meet seismic\nstandards\xe2\x80\x94the program was successful in establishing a process for identifying structures that are not\nearthquake resistant. The mission had a database of 1,474 USAID-built structures, but the database was not\ncomplete. As of October 2009, the program had completed preliminary assessments of 468 of these\nstructures and detailed structural seismic evaluations of 35. At that point, the program had found 15\nstructures to be unsafe for occupancy.\n\nWith regard to the third goal, of providing quality assurance and engineering oversight on USAID\nconstruction projects, the program had succeeded in providing these services for projects initiated by the\nmission\xe2\x80\x99s Office of Infrastructure, Engineering and Energy. However, the mission had not been so successful\nin providing quality-assurance services for construction projects initiated by other program offices within\nthe mission.\n\nDespite the program\xe2\x80\x99s progress in addressing its three main goals, it has serious issues that need to be\naddressed. The most critical issue is to identify the many defective structures that likely remain among the\nestimated 1,474 mission-built structures. The total number of defective structures will be determined when\nthe remainder of the preliminary assessments and any subsequent detailed seismic evaluations are\ncompleted. The mission anticipates that the contractor will complete 200 seismic evaluations by the end of\nthe contract. In addition, significant defects in five buildings reported in a prior Office of Inspector General\naudit report (\xe2\x80\x9cAudit of USAID/Afghanistan\xe2\x80\x99s Accelerating Sustainable Agriculture Program,\xe2\x80\x9d Report No. 5-\n306-08-009-P, August 8, 2008) had yet to be corrected.\n\nIf all defective structures are not identified, and if those already identified are not repaired or rebuilt, a\ncatastrophic earthquake could cause many injuries and deaths.\n\nAudit of USAID/Afghanistan\xe2\x80\x99s Building Education Support Systems for Teachers Project (Report No. 5-\n306-10-006-P, January 29, 2010)\n\nAlmost 4 years into a $94 million, 5-year contract with Creative Associates International Inc. to implement\nUSAID\xe2\x80\x99s Building Education Support Systems for Teachers project, OIG\xe2\x80\x99s audit concluded that the project\nwas making progress in helping to improve the quality of education in Afghanistan but had not achieved its\n\n\n\n\n80 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0ctwo main goals: improving teaching through teacher training, and institutionalizing ministry structures and\nsystems that support high-quality teaching.\n\nAfghanistan has one of the highest illiteracy rates in the world. More than 11 million Afghans over the age of\n15 cannot read or write. In rural areas, where three-fourths of all Afghans live, 90 percent of the women and\nover 60 percent of the men are illiterate. Under the Taliban, girls were not allowed to go to school, fewer\nthan 900,000 boys were enrolled, and many received religious education in lieu of academics. The\nimplications of this lack of education can be felt in all domains of life. Afghans have little access to\ninformation about good health practices, and most of the country\xe2\x80\x99s judges and civil servants do not have\nmore than a high school diploma. Today more than 5.7 million students attend school. However, the Afghan\nGovernment is striving to improve education for its people, and the Ministry of Education worked with\nUSAID and other donors to implement a 5-year National Education Strategic Plan (2006\xe2\x80\x932010).\n\nThe audit found that much of the training of teachers had been completed. For example, 50,600 of the target\nof 54,000 teachers in the 11 provinces had received in-service training for teachers already working for the\nMinistry of Education. Although the project had not attempted to measure the extent to which teaching had\nactually been improved, teachers we spoke with expressed satisfaction with the training they had\nreceived. And much of the technical assistance to the Ministry of Education had been completed. For\nexample, Creative Associates had assisted in recruiting and selecting most of the 444 candidates who were\nexpected to help the Ministry of Education develop its capacity to improve the quality of teaching.\n\nIn addition, the audit found that district teacher training teams had been established to help conduct\ntraining in all 11 provinces. This approach used a cascading process of training existing teachers as\ninstructors who in turn would train other teachers. The project teamed with subcontractors to select and\nhire 181 team leaders, 1,361 team members, and 8 provincial project monitoring officers, all by December\n2007. Moreover, the project developed (1) an action plan for the Ministry of Education\xe2\x80\x99s 5-year strategic\nplan, (2) a human resources policy manual, (3) a training curriculum for management skills, and (4) an\naction plan for the integration of the Human Resources Department and the Reform Implementation and\nManagement Unit at the Ministry of Education.\n\nNotwithstanding these accomplishments, the audit found that some significant tasks and activities included\nin the project\xe2\x80\x99s contract and work plan had not been completed. For example, the project had not completed\nthe curriculum development and related in-service teacher training or the accelerated program for teachers\nwho did not meet Ministry of Education teaching qualifications for their specific subject/grade level, as\nplanned under component 1 of the project. The project also did not complete some activities planned under\ncomponent 2\xe2\x80\x94for example, technical assistance intended for the Ministry of Education\xe2\x80\x99s Human Resources\nDepartment, such as development of a curriculum and staff training on a human resource database; creation\nof a training manual for the payroll database for budget staff; and preparation of at least one workshop on\npedagogical methods for faculty at each provincial teacher training college. The contractor hoped to\ncomplete these efforts by the contract\xe2\x80\x99s end.\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 81\n\x0cAudit of USAID/Afghanistan\xe2\x80\x99s Civilian Assistance Program (Report No. 5-306-10-004-P, December 15,\n2009)\n\nThe Civilian Assistance Program is being implemented through a $27 million, 3-year cooperative agreement\n(April 2007 to April 2010) with the International Organization for Migration. OIG\xe2\x80\x99s audit found that the\nprogram\xe2\x80\x94which is intended to provide help to Afghan families and communities that have suffered losses\nbecause of military operations\xe2\x80\x94was not on target to assist eligible program beneficiaries.\n\nAssistance under the program was generally provided in the form of goods and services to those who have\nsuffered losses\xe2\x80\x94a farmer might receive a tractor or livestock and a grocer might receive merchandise to\nrestock his store. At the midpoint of the program, just over 800 of the more than 6,000 eligible families in\nthe program were receiving assistance, about 13 percent. As of January 22, 2009, the implementer reported\nthat it had assisted only about 40 percent of families included in its revised recovery plan, which had been\nsubmitted just after the implementation midpoint.\n\nIn addition, until the program was halfway through, USAID officials had very limited involvement in the\nprogram and little information about its progress. Officials had not followed up regularly on the status of\nthe implementer\xe2\x80\x99s implementation plan, monitoring and evaluation plan, or quarterly program reports. The\nmission also had not made sufficient site visits to evaluate the program\xe2\x80\x99s progress and had not properly\nmonitored the staffing of positions for the implementing organization.\n\nSecurity concerns contributed to the program\xe2\x80\x99s understaffing, which continued to be a challenge at the time\nof the audit. As of January 2009, a subcontractor for the implementer had hired only 56 of the 86 employees\nthat it believed necessary to meet program targets. At the time of the audit, the implementer\xe2\x80\x99s documents\nindicated that its subcontractor was still in the process of hiring 30 staff members for the 6 regional offices\nwhere the program was being implemented. In addition, the implementer had not taken advantage of\nopportunities to improve the effectiveness and efficiency of the program, such as limiting the program\xe2\x80\x99s\neligibility period and requiring beneficiaries to present Afghan national identification cards.\n\nAudit of USAID/Afghanistan\xe2\x80\x99s Power Sector Activities Under Its Afghanistan Infrastructure\nRehabilitation Program (Report No. 5-306-10-002-P, November 10, 2009)\n\nProviding electrical power to the Afghan population is crucial to Afghanistan\xe2\x80\x99s development. As a key to\npolitical stability, sufficient, reliable electrical power is especially important for both the capital city of Kabul\nand the southern agricultural provinces of Helmand and Kandahar. To improve the availability of electricity\nin these areas, USAID/Afghanistan awarded two major task orders under its Afghanistan Infrastructure\nRehabilitation Program to the Louis Berger Inc./Black and Veatch Special Projects Corp. Joint Venture.\n\nOIG\xe2\x80\x99s audit report highlighted problems faced by two power projects in Afghanistan\xe2\x80\x94building a 105-\nmegawatt plant in Kabul and making improvements in the Kajakai Dam\xe2\x80\x94which were intended to supply\npower to key cities and provinces.\n\nThe audit concluded that, because of construction delays, USAID had not increased reliable power supplies\nto these two areas within the planned timeframes. For the Kabul Power Plant, the delays were caused by an\ninitial inability to obtain adequate title to land for the power plant, an ambiguous statement of work\n\n\n\n82 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cresulting in poor planning and implementation, subcontractor performance problems, a lack of onsite\nquality assurance, and problems clearing equipment and material through customs. For the Kajakai Dam\nproject, deteriorating security in southern Afghanistan and inconsistent contractor performance contributed\nto the delay.\n\nBy May 2009, the USAID-funded projects had completed construction of generators with the ability to\nproduce only 12 megawatts of power out of the original goal of 140 megawatts\xe2\x80\x94and this increase in power\nhad not actually been delivered to the Afghan population. As a result, the economic benefits anticipated for\nKabul and the southern provinces of Helmand and Kandahar were not being realized. Additionally, the\ncontractor estimated that cost overruns attributable to the delays would amount to $39 million to complete\nthe Kabul Power Plant by December.\n\nThe audit also found that the host government might not be able to afford to operate the Kabul Power Plant\nbecause of the rising cost of diesel fuel and the government\xe2\x80\x99s inability to collect revenue for the generated\nelectricity. Further complicating operation of the power plant is the configuration of the Kabul transmission\nsystem, which does not allow for the use of other power sources at times of year when those power sources\nare more competitive.\n\nWith regard to subcontractor performance on the Kabul power plant, the audit found that the contractor had\ncharged USAID for subcontractor costs that the contractor had not paid. The contractor had not paid these\ncosts because of disputes and questionable claims in subcontractor invoices. The total amount the\ncontractor received from USAID for these questionable costs (including contractor overhead, fixed fees, and\nimputed interest) amounted to an overbilling of USAID by $2.1 million.\n\nAs for the Kajakai Dam project, the original subcontractor left after its personnel received kidnapping\nthreats, and the project could not be completed until a new subcontractor is selected. USAID had to continue\npaying the fixed costs of securing and maintaining the facility until work on the plant can be resumed. These\nfixed costs amount to an estimated $1 million per month, even though none of the 35 extra megawatts of\npower had been delivered.\n\nPakistan\n\nAudit of USAID/Pakistan\xe2\x80\x99s Energy Efficiency and Capacity Program (Report No. G-391-12-002-P,\nNovember 23, 2011)\n\nTo help address power blackouts and other severe supply shortages, USAID/Pakistan awarded a 3-year,\n$23.5 million contract in March 2009 to the International Resources Group to focus on training in the energy\nsector and on a variety of conservation activities throughout Pakistan. In April 2010, in response to a shift in\nU.S. Government strategy, the mission modified the program\xe2\x80\x99s goal to focus on reducing energy demand\nthrough an activity to improve the efficiency of tube wells. This activity was designed to replace irrigation\npumps used by farmers with more energy-efficient models.\n\nIn the first year of the program, OIG found that the mission had not achieved the majority of its targets. It\nhad not helped any distribution companies implementing conservation strategies or any energy companies\nevaluating energy efficiency, upgrading equipment, or with energy conservation plans.\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 83\n\x0cIt also had trained less than half the energy sector individuals intended.\n\nAfter the shift in strategy, the mission planned to install 11,000 energy efficient irrigation pumps. Although\na pilot phase determined that the activity was unlikely to succeed, the mission proceeded with the program.\nBy September of 2011, less than 1,000 pumps, or 9 percent, had been installed. This was the result of\nmultiple problems, including the mission setting unrealistic goals and budgets. For instance, the mission\nbudgeted almost $1,500 per pump, but in actuality paid almost $9,000. In addition, partners and\nbeneficiaries often did not participate as intended. The regional energy distribution company, a key partner,\ndid not fully support the program and farmers would not pay the additional cost of installing the pumps,\nincluding the costs of masonry and electrical work.\n\nAudit of USAID/Pakistan\xe2\x80\x99s Firms Project (Report No. G-391-12-001-P, November 3, 2011)\n\nTo help improve Pakistan\xe2\x80\x99s economic stability, USAID/Pakistan awarded a 4-year, $89.8 million contract to\nChemonics International to implement the Firms Project. In 2010, 14 months after the project began, USAID\nmodified the project goal to promote economic development in vulnerable areas as an alternative to\nextremism.\n\nDespite the mission\xe2\x80\x99s attempt to increase sales and employment in a number of sectors\xe2\x80\x94leather, livestock,\ntextile, dates, and mangoes\xe2\x80\x94project activities did not increase sales or employment. Efforts to boost sales\nand jobs were stalled, and activities to improve competitiveness through economic policy reform were\nbehind schedule. This is in part because of shifts in the mission\xe2\x80\x99s strategy that resulted in the cancellation of\nthese activities. In addition, the mission did not set realistic targets. For example, though Chemonics was\ntasked with working with the Government of Pakistan to enact regulatory reform, they are not expected to\nachieve this by 2013. According to Chemonics, long term reform is a 10- to 12-year process because of all of\nthe stakeholders involved.\n\nThe mission also focused activities around increasing sales and production of mangoes, but these activities\nwere a year behind schedule. Further, the implementer intended to supply processing equipment to the\nmango farmers, but did not deliver them on schedule. One farmer did receive all of the equipment promised,\nbut was unable to operate it because a design flaw prevented its assembly.\n\nAlthough a performance management plan was approved by the mission, it did not comply with Agency\nstandards. As a result, sales and employment figures were overstated and methods for collecting data were\ninconsistent and unreliable. In addition, the contracting officer\xe2\x80\x99s technical representative did not provide\nsufficient monitoring and oversight, in particular for the procurement process.\n\nFor instance, the contracting officer\xe2\x80\x99s technical representative did not conduct any site visits to the project\nand approved over 20 invoices without knowing whether the material ordered had been received.\nConsequently, the mission did not discover multiple problems in the process.\n\n\n\n\n84 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cAudit of USAID/Pakistan\xe2\x80\x99s Community Rehabilitation Infrastructure (Report No. G-391-11-006-P,\nAugust 29, 2011)\n\nOne of the many problems facing Pakistan is poor infrastructure for delivering basic human services such as\neducation, health care, water supply, sanitation, electricity, and transportation. To address these issues,\nUSAID/Pakistan signed a 5-year, $150 million cooperative agreement with Winrock International to\nimplement the Community Rehabilitation Infrastructure Support Program.\n\nOIG found that the program had made very little progress toward achieving any of the main goals of the\nproject. Although tasked with rebuilding or renovating up to 2,000 schools and constructing up to\n350 small- to medium-sized infrastructure projects, the program was far behind schedule. Specifically, more\nthan 2 years after signing the agreement, the mission had completed only four minor renovations of\nuniversities, six career centers, two design projects, and conducted two feasibility studies and the\nprocurement of furniture and equipment for a children\xe2\x80\x99s health institute.\n\nPart of the program\xe2\x80\x99s lack of progress was due to poor program design. Although Winrock is the main\nimplementer, 70 percent of the award\xe2\x80\x99s budget was implemented by subcontractors, who in turn also\nemployed subcontractors. Employing multiple subcontractors led to duplicate layers of construction\noversight. According to the mission, Winrock did not have the staff or technical expertise to monitor\nsubcontractors\xe2\x80\x99 management of the projects effectively. In the few cases where projects were completed,\nthe mission often did not consider whether the project could be sustained. For instance, $900,000 worth of\nfurniture and equipment was delivered to the Khyber Institute of Child Health in Peshawar, but a year after\nits delivery, most of the material remained in storage unused. The institute\xe2\x80\x99s director said that the institute\ndid not have the funding to support the operations of the facility, adding that he could not even pay the\nmonthly electric bill. By not ensuring that the institute was viable, the mission spent more than $900,000\nthat could have been put to better use.\n\nMoreover, an internal control was often bypassed to approve projects above $500,000, which according to\nthe project\xe2\x80\x99s activity approval document, required written consent. When the new mission director did not\nwant to authorize the projects, the mission established an unwritten policy to bypass this step and approved\nnearly $13 million in projects that did not follow the program\xe2\x80\x99s objectives. Furthermore, the mission\napproved cost-sharing contributions from the project that cannot be supported.\n\nAudit of USAID/Pakistan\xe2\x80\x99s Road Rehabilitation and Reconstruction Activities Under the Quick Impact\nProjects in South Waziristan (Report No. G-391-11-005-P, June 20, 2011)\n\nIn 2009, the Governments of Pakistan and the United States signed a strategic agreement that provided a\ncommitment to help generate broad-based economic growth through infrastructure development.\nAccording to the agreement, USAID is providing $55 million directly to the FATA Secretariat to implement\nQuick Impact Projects (i.e., rebuild roads, develop water infrastructure, and improve power systems).\n\nOIG conducted an audit of these activities in South Waziristan, part of FATA. Despite some difficulties OIG\nnoted with mission operations, auditors determined that the road rebuilding efforts were on track. Two\nsections of road totaling 215 kilometers were completed to specifications and had met all requirements for\nreimbursement by USAID. Although security issues caused some delays, work progressed on schedule.\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 85\n\x0cMultiple site visits by officials from the local satellite office in Peshawar strengthened the management of\nthe road activities, and the use of fixed-amount reimbursement agreements reduced financial risk to the\nprogram.\n\nThe FATA Secretariat hired the Frontier Works Organization (Frontier Works) of Pakistan to carry out road\nactivities. For additional support, Frontier Works subcontracted with the Pakistani engineering firm\nNational Engineering Services Pakistan Limited (NESPAK). Both Frontier Works and NESPAK have\nextensive experience building roads and other infrastructure projects, and both will work on all of the Quick\nImpact Projects in South Waziristan, including the water infrastructure and power systems. OIG found that\nthese two entities contributed to the initial success of the road activities.\n\nDespite early successes, however, OIG found room for improvement: The scope of work for the contractor to\nbuild the capacity of the FATA secretariat was too broad, and subsequent changes caused deliverables to be\nfar behind schedule. Contract files were missing critical documentation such as branding and marking\nplans, site visit reports, meeting notes, and correspondence with contractors, including documentation\nrelated to extensions and justifications. Environmental assessments did not meet regulations and caused\ndelays of up to 5 months. In addition, although no ethical problems arose; neither the mission nor the\ncontractor had ethics procedures or policies in place, as required, to ensure that employees working on\nprojects were aware of the USAID\xe2\x80\x99s ethical standards and its position on conflicts of interest.\n\nAudit of USAID/Pakistan\xe2\x80\x99s Management of Preaward Assessments (Report No. G-391-11-004-P, May 6,\n2011)\n\nThe Enhanced Partnership with Pakistan Act of 2009 (Public Law 111-73) authorized $7.5 billion in U.S.\ngovernment assistance over 5 years to promote an enhanced strategic partnership with Pakistan and its\npeople. In authorizing these funds, the act encourages the use of Pakistani firms and nongovernmental\norganizations to work with local leaders to build local capacity. To facilitate this strategy, USAID estimated\nthat approximately 50 percent of fiscal year 2010 funding, or $750 million, would go through Pakistani\nfederal and provincial agencies and local organizations.\n\nWith the implementation of the strategy to build Pakistani capacity, concerns have been raised in the media\nand the U.S. Government that providing too much money to Pakistani recipients too quickly could jeopardize\nU.S. funds. USAID/Pakistan recognized the challenges and took proactive steps to address the risks. A key\nstep taken by the mission was to contract with international and local accounting firms to conduct preaward\nassessments of potential first-time recipients. The intent of these assessments is to determine whether the\nrecipients can effectively manage and account for these funds.\n\nOIG\xe2\x80\x99s audit on USAID/Pakistan\xe2\x80\x99s management of preaward assessments found that mission\xe2\x80\x99s preaward\nprocess provided a reasonable basis for identifying significant financial management vulnerabilities;\nhowever, the audit noted weaknesses in the mission\xe2\x80\x99s management of the preaward process. The mission\ndid not prioritize or follow up on significant vulnerabilities identified in assessments. Of the 28 assessment\nreports completed during fiscal year 2010, the 8 selected for testing noted over 250 weaknesses in the\npotential recipients\xe2\x80\x99 ability to manage funds properly. The mission included 55 of the reported weaknesses\nin the recipients\xe2\x80\x99 agreements and stipulated that the weaknesses should be adequately addressed before or\n\n\n\n86 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cafter the initial disbursement of funds. The mission did not include or otherwise address the remaining 195\nweaknesses because it did not have a comprehensive plan for prioritizing and determining which of the 250\nweaknesses should or should not be prioritized.\n\nMany weaknesses resulted from the mission not including in the recipients\xe2\x80\x99 agreements information on the\nrecipients\xe2\x80\x99 payment mechanisms and systems for procurement, accounting and overall monitoring and\nassessment.\n\nAudit of USAID/Pakistan\xe2\x80\x99s Flood Relief Efforts as Administered by Local Nongovernmental\nOrganizations (Report No. G-391-11-003-P, January 24, 2011)\n\nHeavy rainfall in multiple regions of Pakistan led to devastating flooding in July 2010. The flooding affected\n82 of Pakistan\xe2\x80\x99s 122 districts and displaced 12 million people, half of whom required humanitarian\nassistance.\n\nUSAID/Pakistan committed $10 million for emergency flood relief efforts through cooperative agreements.\nFive million dollars was awarded to two Pakistani NGOs: the Pakistan Poverty Alleviation Fund (PPAF) and\nRural Support Programmes Network.\n\nThe two NGOs were to provide immediate relief in the provinces of Balochistan, Punjab, Sindh, and Khyber\nPakhtunkhwa in the form of food hampers and hygiene kits, and medical supplies to an affected population\nof 190,058 people.\n\nOIG conducted this audit to determine whether USAID/Pakistan\xe2\x80\x99s flood relief efforts were meeting the\nimmediate needs of the flood victims. To answer the audit objective, we reviewed mission documentation\nrelated to managing and monitoring the program, including implementation plans, implementing partner\nagreements, performance measures, and performance results.\n\nAuditors found that USAID/Pakistan\xe2\x80\x99s implementing partners delivered food hampers, hygiene kits, and\nmedical supplies to meet the immediate needs of the flood victims. As of November 15, 2010, the two\nimplementers reported distributing food and hygiene kits to 80,098 households and administering medical\nsupplies and treatment to an affected population of 159,620 people and 307,116 livestock.\n\nAuditors observed that PPAF issued food hampers and hygiene kit tokens to each household. PPAF\nestablished separate teams for token registration, token distribution, and distribution of the relief items. In\nestablishing a distribution policy, PPAF gave priority to households that had not received any aid from other\ndonors.\n\nAuditors observed that PPAF teams followed the organization\xe2\x80\x99s distribution policy. First, the team\nresponsible for distribution of the relief items matched recipients\xe2\x80\x99 tokens and Pakistani national identity\ncards to recipients\xe2\x80\x99 names on the master token distribution list. Second, the team directed recipients to a\ncounter where they exchanged their tokens for food hampers and hygiene kits. Lastly, the team collected\nrecipients\xe2\x80\x99 signatures or thumb impressions to record the transaction.\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 87\n\x0cAudit of USAID/Pakistan\xe2\x80\x99s Livelihood Development Program for the Upper Region of the Federally\nAdministered Tribal Areas (Report No. G-391-11-002-P, December 10, 2010)\n\nFATA has high unemployment, widespread poverty, and separate legal structures. Located in northwestern\nPakistan, FATA shares its rugged and mountainous border with Afghanistan. Extremist and terrorist groups\ntake advantage of the geographic and social isolation and lack of governing systems to exert their influence\non the people of this region. Development in FATA has become vital to Pakistan\xe2\x80\x99s progress in fighting\ninsurgents.\n\nThe main goal of the Livelihood Development Program is to provide social and economic stabilization in\nFATA to counter the growing influence of extremist groups. The program has three components: 1) creating\njobs, increasing incomes, and teaching employable skills with a focus on unemployed youth, 2) revitalizing\ncommunity infrastructure and essential services, and 3) supporting established businesses and developing\nnew sustainable businesses.\n\nAfter a review of the first 2 years of activities, OIG found that the program has not achieved its main goal of\nsocial and economic stabilization to counter the growing influence of extremist and terrorist groups in\nupper FATA. The mission had no baseline data to determine progress toward countering the influence of\nthese groups. In addition, the program had executed only 53 percent of planned activities, and program\noutcomes were weak.\n\nSecurity issues were the main cause of the delays and poor performance. Specific incidents included the\nassassination of the chief of party for the implementer working in lower FATA, the kidnapping of an aid\nworker, and threats to monitoring teams. Allegations of wrongdoing also impeded progress. The\nimplementer stated that program activities were delayed because the implementer had to counter these\nallegations and because of additional tiers of oversight put in place to ensure greater accountability.\nMoreover, program activities stopped for 6 months until security measures were improved and a new chief\nof party was appointed.\n\nTwo additional factors contributed to program delays. First, USAID/Pakistan used program resources to\nprovide humanitarian and disaster assistance to flood victims and internally displaced persons fleeing\nconflict areas of FATA. The assistance began in August 2008, only months after the upper FATA program\nstarted, and continued until the implementer\xe2\x80\x99s termination. Mission officials acknowledged that the work\ndiverted time and resources from Livelihood Development Program activities. Second, in September 2009\nthe U.S. Department of State (State Department) initiated a shift in strategy toward using more Pakistani\ninstitutions to implement USAID programs. During this time, all USAID/Pakistan incremental funding\nrequests went through the State Department for approval. The delays in incremental funding created more\nbudgetary problems for the program.\n\nDespite some successes, overall progress for program activities was slow, largely because of the intervening\nfactors already mentioned. Although some factors were beyond the mission\xe2\x80\x99s control, USAID/Pakistan\nneeded to address the following problems that were within its control. USAID/Pakistan staff did not follow\nmanagement controls. Technical staff in the mission addressed contractual matters that should be handled\nonly by the agreement officer or took action without proper approvals. Additionally, USAID/Pakistan relied\non contractors to perform services closely related to inherently governmental functions. A third-party\n\n\n\n88 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0ccontractor\xe2\x80\x99s conflict of interest in overseeing another contractor\xe2\x80\x99s work created risks when the mission did\nnot address the gap in services created by the conflict.\n\nThe audit showed that performance deteriorated when USAID/Pakistan staff overrode management\ncontrols and bypassed organizational structures. Much time and funding went toward disaster response\nand emergency relief efforts, draining resources from the planned Livelihood Development Program\nactivities. In addition, allowing outside pressures to take precedence over important management controls\ncontributed to poor program results.\n\nAudit of USAID/Pakistan\xe2\x80\x99s Livelihood Development Program for the Lower Region of the Federally\nAdministered Tribal Areas (Report No. G-391-11-001-P, December 10, 2010)\n\nPakistan\xe2\x80\x99s mountains FATA is located on the border with Afghanistan. FATA is one of the most\nunderdeveloped regions in Pakistan, where only 17 percent of the overall population is literate. FATA\xe2\x80\x99s\nweak economy, widespread unemployment, lack of social services, and ineffective government make it\nsusceptible to the spread of extremism. According to USAID/Pakistan, countering extremist influences in\nFATA will require a robust economic development program. In response to this need, USAID/Pakistan\nestablished the FATA Livelihood Development Program.\n\nThe main goal of the program is to provide social and economic stabilization in FATA to counter the growing\ninfluence of extremist groups. To measure progress in attaining this goal, the mission established outcome\nmeasures and targets for each measure. Targets for the program include creating 29,375 long-term jobs and\nreaching a goal of 55 percent of FATA citizens expressing satisfaction with the basic public services by\nMarch 2013.\n\nOIG audited the program to determine whether it was achieving its main goal of social and economic\nstabilization in the lower FATA region.\n\nThe audit found that USAID/Pakistan had made little progress in reaching annual targets. The main cause\nfor the program achieving so little was the hostile environment in FATA. The implementing partner\nexperienced kidnappings, harassments, and the tragic assassination of its chief of party in November 2008;\nconsequently, program activities stopped for 6 months until security measures were improved and a new\nchief of party took office. During this time, the implementing partner relocated its country office from\nPeshawar to Islamabad.\n\nAlthough the hostile situation contributed to the program\xe2\x80\x99s limited results, the mission did not ensure\nadequate monitoring and oversight to achieve program goals. In addition, the program\xe2\x80\x99s ability to achieve\nplanned results was hindered by a strategic shift in U.S. Government strategy and the mission\xe2\x80\x99s request to\nprovide humanitarian assistance activities. In September 2009, the U.S. Government\xe2\x80\x99s strategy shifted\ntoward greater involvement of Pakistani organizations in implementing U.S. assistance programs. As a\nresult, the mission began to rethink its strategy of providing the bulk of its program assistance through U.S.-\nbased implementers.\n\nAs a result of the setbacks and shifts in implementation, program funds were not used efficiently. For\nexample, according to the implementing partner, it expended $29.2 million in the first 2 years of the\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 89\n\x0cprogram; however, only $7.6 million was spent on direct program activities, $2.7 million of that going to\nhumanitarian assistance activities.\n\nAudit of USAID/Pakistan\xe2\x80\x99s Family Advancement for Life and Health Program (Report No. 5-391-10-\n012-P, August 31, 2010)\n\nIn 2007, USAID/Pakistan signed a cooperative agreement with the Population Council, a U.S.-based\nnongovernmental organization, to implement Family Advancement for Life and Health (FALAH). FALAH is a\n5-year, $60.4 million program intended to increase demand for and use of birth spacing and family planning\nservices in 26 districts in Pakistan. The country has a relatively high rate of population growth, and in 2009\nthe estimated Pakistani population was about 181 million\xe2\x80\x94the sixth largest in the world.\n\nOIG\xe2\x80\x99s audit found that FALAH was achieving its main goals. Among its accomplishments were:\n\n An increased demand for family planning services. Program implementers provided family planning\n information to more than 2 million men and women. In addition, program messages on birth spacing\n and family planning services blanketed the media. Almost 28,000 commercials were aired during\n November and December 2009 alone.\n\n Improved family planning services in the public sector. Program implementers placed a team of master\n trainers in each of the 26 program districts. The trainers were expected to support group meetings in\n the community and help public health-care providers better serve their clients. Fifty-nine percent of all\n public service delivery points in the FALAH districts had trained providers for family planning\n counseling and services in their facilities. Furthermore, FALAH planned to equip 80 percent of public\n service delivery points in program districts to provide appropriate family planning services by the end\n of the program.\n\n Improved family planning services in the private sector. Improved family planning services in the private\n sector were being led by Greenstar Social Marketing, a Pakistani nongovernmental organization. The\n program hoped to expand the number of Greenstar health-care providers to 1,000 in the program\xe2\x80\x99s\n rural areas. As of December 31, 2009, Greenstar had established 557 new providers and completed\n training for more than 4,000 health-care providers overall. Greenstar also conducted meetings at\n factories and other workplaces to discuss the benefits of birth spacing and was operating a national\n hotline serviced by its physicians.\n\nAudit of USAID/Pakistan\xe2\x80\x99s Primary Healthcare Revitalization, Integration and Decentralization in\nEarthquake-Affected Areas Project (Report No. 5-391-10-010-P, June 28, 2010)\n\nOn October 8, 2005, a magnitude 7.6 earthquake in northern Pakistan claimed more than 74,000 lives and\nleft 3.5 million people homeless. More than half of the deaths occurred in the Mansehra District in the\nNorth-West Frontier Province and the Bagh Districts of Azad Jammu and Kashmir. Thousands of teachers,\nhealth-care providers, and civil servants were among those killed or badly injured. Public systems that had\nsupported essential services, including logistics and administration for health care, no longer existed. In\nresponse to this disaster, USAID/Pakistan designed the Primary Healthcare Revitalization, Integration, and\nDecentralization in Earthquake-Affected Areas Project and awarded a $28.5 million cooperative agreement\n\n\n\n90 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cto the International Rescue Committee, a U.S.-based nongovernmental organization, to provide technical\nsupport to the public sector health system in the earthquake-affected districts of Mansehra and Bagh\nthrough a consortium of implementers including Management Sciences for Health, Jhpiego, and the\nPopulation Council. The project\xe2\x80\x99s three main goals were to (1) improve public health service and\nmanagement system performance, (2) increase access to primary health-care services, and (3) promote\nhealthier behaviors and community participation in health services.\n\nThe audit found that the project had contributed to improving the quality of primary health-care services,\nbut much work needed to be done to improve access to these services\xe2\x80\x94particularly with regard to referring\npatients to facilities that offer a higher level of health care when patients\xe2\x80\x99 conditions could not be treated at\nprimary health-care facilities.\n\nTo promote wider access to such services, the project had planned to strengthen the patient referral system.\nHowever, the preliminary planning for improving the referral system was completed a year later than\nanticipated, and\xe2\x80\x94at the time of the audit\xe2\x80\x94an improved system had not yet been implemented. Delays were\nattributed to the lack of availability of Government of Pakistan staff scheduled to work with the project\nimplementer. Moreover, other project activities took precedence over revamping the patient referral\nsystem.\n\nReview of USAID\xe2\x80\x99s Internally Displaced Persons Programs in Pakistan (Report No. 5-391-10-001-S,\nJune 28, 2010)\n\nBetween August 2008 and September 2009, conflict between the Government of Pakistan and militant\ngroups in the North-West Frontier Province (NWFP, subsequently renamed Khyber Pakhtunkhwa) and the\nFATA displaced over 400,000 Pakistani households. While many displaced persons took shelter with host\nfamilies, the remaining families took shelter in official Pakistani Government-run camps. As the internally\ndisplaced persons (IDPs) crisis escalated in May 2009, USAID and other U.S. Government agencies\nresponded quickly by providing humanitarian assistance to Pakistani IDPs. USAID obligated more than\n$285 million in humanitarian assistance for the crisis, of which more than half was for food aid.\n\nDespite the deteriorating security situation in Pakistan, USAID responded immediately to provide rapid\nassistance through 21 nongovernmental organizations, 5 U.N. organizations, a contractor, and the\nGovernment of Pakistan. USAID\xe2\x80\x99s programs consisted of support for the immediate needs of people who\nwere displaced and for people returning to their areas of origin after the conflict in their home areas had\ndiminished.\n\nAlthough USAID carried out numerous displaced persons programs in Pakistan, OIG found that monitoring\nand evaluation methods needed improvement. Specifically, USAID\xe2\x80\x99s \xe2\x80\x9calternative monitoring\xe2\x80\x9d methods\xe2\x80\x94\nused to monitor activities in dangerous and insecure areas, such as NWFP and FATA\xe2\x80\x94needed to be\nstrengthened. In addition, USAID had not implemented monitoring controls that were meant to provide\nreasonable assurance that $44 million in cash-transfer funds had actually reached 140,000 IDP families as\nintended.\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 91\n\x0cUSAID/Pakistan\xe2\x80\x99s Capacity Building Program for the Federally Administered Tribal Areas\nDevelopment Program (Report No. 5-391-10-005-P, January 28, 2010)\n\nThis audit pointed to several implementation difficulties in USAID\xe2\x80\x99s capacity building programs in the FATA\nof Pakistan. The FATA region, which is the most economically depressed area of the country, has a\npopulation with a literacy rate estimated at only 17 percent, and 66 percent of people live below the national\npoverty line.\n\nLocal Pakistani institutions responsible for overall governance, health care, education, and public works\nprojects lack the capacity to manage services and development resources effectively. In an attempt to\nremedy this problem, in 2008 USAID awarded a 3-year, $46 million contract to Development Alternatives\nInc. to increase the capacity of these institutions.\n\nOIG\xe2\x80\x99s audit found that, although the program had provided training, taken initial steps to automate FATA\ninstitutions, and completed some media activities, little had yet been achieved to build the capacity of FATA\ngovernmental institutions and NGOs responsible for providing services. The program had been in place for\nnearly 2 years of its 3-year planned lifespan, and it had not made significant progress with two of the\nprogram\xe2\x80\x99s main goals: improving institutions\xe2\x80\x99 capacity to govern, and improving the capacity of NGOs to\npromote good governance.\n\nSome of the problems could be attributed to the fact that the program had gotten off to a slow start. During\nthe first year, the contractor focused its resources on working out best approaches to designing and\nimplementing activities, building up relationships with FATA institutions, and developing work plans. Also,\nthe deteriorating security situation in Peshawar and the November 2008 assassination of the chief of party\nof another USAID program delayed progress in the FATA capacity building program.\n\nMoreover, although the program had implemented a few activities to address FATA NGO weaknesses, the\nfew FATA-based NGOs that existed lacked the human and financial resources to promote good governance\neffectively. In most instances, FATA NGOs needed to strengthen their proposal preparation skills, financial\nmanagement practices, and monitoring and evaluation capabilities before they could start to promote good\ngovernance.\n\nBecause of a high-level change of emphasis in U.S. Government strategy toward greater involvement of\nPakistani organizations in implementing assistance programs, the mission began to rethink its strategy of\nproviding the bulk of its program assistance through U.S.-based implementers such as DAI. As a result, in\nJune 2009 the mission refrained from fully funding a DAI incremental funding request of $15.3 million and, 4\nmonths later, approved only $4.7 million in additional funds. In October 2009, the mission asked DAI to\nconsider preparing a 90-day demobilization plan. However, as of mid-November 2009, no final decision had\nbeen made as to whether the DAI contract would undertake early demobilization and termination or, if\nterminated, what program implementation mechanisms would replace the U.S.-based contractor.\n\nIn addition to the difficulties associated with the transition to a new implementation strategy, the audit\nfound that overall capacity building in automation had achieved little success, and most of the computer\nhardware purchased for the program remained boxed up and unused. Furthermore, monitoring and\nreporting systems for managing development projects\xe2\x80\x94such as a geographic information system that\n\n\n\n92 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cenables project information to be represented on maps and a database system to document the life cycle of\ndevelopment projects\xe2\x80\x94have not been completed, and they may not be completed until June 2010.\n\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 93\n\x0cAbbreviations\nAED Academy for Educational Development\n\nASI-SR Afghanistan Stabilization Initiative for the Southern Region\n\nATVI Afghanistan Technical Vocational Institute\n\nAUAf American University of Afghanistan\n\nAVIPA Afghanistan Vouchers for Increased Productive Agriculture Program\n\nBISP Benazir Income Support Program\n\nCERP Commander's Emergency Response Program\n\nCOPP Compliance and Oversight of Partner Performance Division, Office of Acquisitions\n and Assistance, U.S. Agency for International Development\n\nDAB Afghanistan Central Bank\n\nDAI Development Alternatives Inc.\n\nDCAA Defense Contract Audit Agency\n\nDOD Department of Defense\n\nEDC Education Development Center Inc.\n\nFALAH Family Advancement for Life and Health Program\n\nFATA Federally Administered Tribal Areas\n\nFY fiscal year\n\nGAO Government Accountability Office\n\nGIRoA Government of the Islamic Republic of Afghanistan\n\nIDP internally displaced person\n\n\n\n94 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cIEP Increased Electoral Participation in Afghanistan Program\n\nIOM International Organization for Migration\n\nKVO Kunar Vocational Organization\n\nLBGI/B&V Joint Venture Louis Berger Group Inc./Black & Veatch Special Projects Corp.\n\nLGCD Local Governance and Community Development Program\n\nMoPH Ministry of Public Health, Government of the Islamic Republic of Afghanistan\n\nNAB National Accountability Bureau, Government of Pakistan\n\nNESPAK National Engineering Services Pakistan Limited\n\nNGO nongovernmental organization\n\nNMSU New Mexico State University\n\nNWFP North-West Frontier Province (now Khyber Pakhtunkhwa)\n\nOAA Office of Acquisitions and Assistance, U.S. Agency for International Development\n\nOIG Office of Inspector General, U.S. Agency for International Development\n\nOMB Office of Management and Budget, Executive Office of the President\n\nOTI Office of Transition Initiatives, U.S. Agency for International Development\n\nPACE-A Partnership for Advancing Community-Based Education in Afghanistan\n\nPPAF Pakistan Poverty Alleviation Fund\n\nPPR Pakistan Public Procurement Rules\n\nPre-STEP Pre-Service Teacher Education Program\n\nPSC private security contractor\n\nSTAY Skills Training for Afghan Youth Project\n\n\n\nUSAID OIG Afghanistan and Pakistan Oversight Report 95\n\x0cSTEP Support to the Electoral Process\n\nUSAID U.S. Agency for International Development\n\n\n\n\n96 USAID OIG Afghanistan and Pakistan Oversight Report\n\x0cUSAID Office of Inspector General\n 1300 Pennsylvania Ave, NW\n Washington, DC 20235\n www.usaid.gov/oig\n 202.712.1150\n\x0c"