Golden Hammer: IG says U.S. aid dollars unaccounted for in Afghan health program

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A U.S. government program to improve public health standards in Afghanistan might have misspent as much as $190 million thanks to a “high risk of waste, fraud and abuse,” though poor recordkeeping makes it difficult to know how much might have been lost, federal investigators say.

The top U.S. watchdog in Afghanistan said that despite the high potential for fiscal abuse at the Afghan Ministry of Public Health (MoPH), “the U.S. Agency for International Development (USAID) continues to provide millions of U.S. taxpayer dollars in direct assistance with little assurance that the MoPH is using these funds as intended.”

In fact, the Special Inspector General for Afghanistan Reconstruction (SIGAR) said in a report released earlier this month that USAID has ignored repeated warnings about waste at MoPH, including reports from the agency’s own internal inspector general and an independent third-party audit.

SIGAR said that despite repeated warnings about a lack of financial controls in Afghanistan, a USAID official told them the agency had no responsibility to address MoPH’s internal problems, and went ahead with a $236 million assistance program anyway.

USAID is spending millions of dollars that’s vulnerable to corruption and abuse. That not only represents a potential waste of taxpayer dollars, but means the money might not go to the people it was supposed to help. So USAID wins this week’s Golden Hammer, a distinction awarded by The Washington Times for instances of fiscal mismanagement.

USAID officials have called SIGAR’s report an unfair evaluation of the program, saying they take “strong exception” to the IG’s implication of fiscal abuse.

“The report provides no evidence that the extensive measures taken by USAID to safeguard taxpayer resources have resulted in high risk of misuse of funds, or that there have been incidences of waste, fraud and abuse,” said a statement from William Hammink, the USAID Mission Director to Afghanistan.

Troubled joint venture

The program — Partnership Contracts for Health — is a joint venture between USAID and the Afghan health ministry to support local hospitals and clinics providing basic health care in 13 provinces and hospital services in five.

USAID officials said the program has vastly improved the health of the Afghan people, and more than a million people visit USAID-supported health centers each month. Plus, the partnership with MoPH has more than quadrupled the number of health facilities from 498 in 2002 to 2,100 in 2012.

“As a result of U.S. assistance through the PCH program, millions of people in rural Afghanistan now have access to primary health care for the first time,” Mr. Hammink said.

But USAID’s latest assessment of MoPH earlier this year was in sharp contrast to their previous findings and admitted there were serious problems and a risk of corruption. Yet the PCH money continued to flow overseas.

USAID said it continues to work with MoPH to improve any financial issues, and has already fixed many problems SIGAR is concerned about.

But SIGAR chief John Sopko said he was concerned the changes aren’t taking place fast enough.

“We’re pleased that USAID conducted an assessment of the Ministry of Public Health, but we’re disappointed that they’ve done almost nothing to address the shortcomings that were identified,” he said. “So we’re still concerned that American taxpayer dollars are at risk, and that’s why we continue to urge USAID to implement our recommendations.”

Cloudy numbers

So far, $127 million has been spent, and SIGAR said it’s difficult to know how much of that money might have been lost to corruption. Some $63 million has been authorized for Afghanistan but has not been spent, and SIGAR wants that returned. Plus, the auditors want to stop the last bit of $46 million from being spent on the program, stating USAID needs to stop its funding until problems at MoPH are fixed.

USAID officials disagreed that funding should be stopped, stating that their cost estimates for the PCH program were accurate and oversight is rigorous. Plus, cutting off funds immediately would deprive millions of Afghans of needed medical services.

The 2012 third-party investigation by an accounting firm found a couple of troubling issues at MoPH, the inspector general said. Salaries for some officials were paid in cash, with little recordkeeping. External audits were not being performed and MoPH’s internal auditors weren’t qualified for their jobs. Plus there were few budget procedures in place, and few explanations when something went over budget.

This isn’t the first time SIGAR has targeted USAID’s medical assistance to Afghanistan. In April, the IG criticized the construction of two hospitals that it said the Afghans wouldn’t have the resources to maintain after U.S. funds stopped coming in. One hospital built was twelve times larger than the facility it was replacing, with an upkeep cost estimated at $3.2 million.

The U.S. has spent nearly $100 billion on rebuilding Afghanistan since the start of military action in 2002. Federal officials have faced a daunting task of trying to get the nation to support itself by building infrastructure — including public health — from the ground up.

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