SIGAR Ministerial Assessments Audit

Taken Question
Office of the Spokesperson
Washington, DC
January 30, 2014

Question: What are State and USAID’s concerns with the recent SIGAR audit of ministerial assessments? What has State and USAID done to address SIGAR’s concerns?

Answer: USAID, in the field and in Washington, is acutely conscious of the trust that has been placed with us to safeguard taxpayer funds and we value the work of SIGAR and other IGs working in Afghanistan in our efforts to protect taxpayer dollars. While there is no way to completely eliminate risk, USAID applies stringent oversight and accountability mechanisms to ensure that its assistance to the Afghan government is implemented properly.

We disagree with the impression left by the SIGAR audit report, and conveyed in some of the surrounding media and social media campaign, that USG funds are being subjected to unnecessary risk in Afghanistan because of the deficiencies identified in the Afghan Ministries. The USAID response letter attached to the report lays out those areas of disagreement clearly and in detail. We are pleased that SIGAR addressed some of the issues we identified in their final draft, but others remain.

The allegation in the media that the Department of State or USAID “gambles” with funds in the implementation of our programs is absolutely without merit. In fact, the audit report makes no finding of waste, fraud, or abuse in the implementation of direct assistance in Afghanistan. The report says clearly that SIGAR did not examine the safeguards that USAID puts in place to ensure oversight and accountability of USG direct assistance programming. Of the $1 billion currently planned for direct assistance programming, USAID has disbursed less than $300 million to date, in large part because of the rigorous methodology employed in the implementation of these programs.

SIGAR’s audit reflects one part of our overall approach to direct assistance. We note the risks which this audit highlights were identified by USAID as the first step in our efforts to ensure the proper safeguards are in place before any funds are disbursed. While we acknowledge risk as a factor in our work in Afghanistan, there is absolutely no assumption of an acceptable level of fraud in the implementation of USAID’s programs, in Afghanistan or anywhere else.

USAID demands rigorous oversight and numerous safeguards to ensure U.S. assistance is being used appropriately and for the purposes intended. No funding is disbursed until USAID verifies and documents that goods and services have been received and required conditions achieved. After verification, funds are disbursed into a separate project bank account at the Central Bank.

As SIGAR notes in its report, direct assistance helps the Afghans build their capacity for managing their own their own budget and to build their capacity for doing so. We agree. This capacity helps the Afghan government take increasing ownership for development and sustain the gains made over the past decade, thereby decreasing Afghan reliance on foreign assistance.