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$45 million U.S. payroll funds for Afghan police prone to theft

- The Washington Times - Tuesday, June 3, 2014

A big chunk of the "secure" payroll system created to provide salaries to Afghanistan's troubled national police force remains susceptible to theft and fraud, the chief watchdog of U.S. reconstruction in Afghanistan is warning U.S. military commanders.

Data viewed by the office of the Special Inspector General for Afghanistan Reconstruction found that up to $45.5 million in salary payments were vulnerable to theft.

The problem, the SIGAR auditor said, was that money paid through a system of "trusted agents" used by Afghanistan's Interior Ministry to nearly a fifth of the Afghan National Police "may be at risk of diversion" by "corrupt pay agents or other illicit means," according to a May 28 letter from SIGAR chief John Sopko to Gen. Joseph Dunford, the head of the U.S.-led international military mission in Afghanistan. The $45.5 million figure represents about 9 percent of the salary payments made to Afghan police officers in the current fiscal year.

"I remain concerned about the potential for theft from police salaries through the so-called 'trusted agent' payment process," Mr. Sopko wrote.

No government agency or office has provided oversight to the problematic payment program, SIGAR officials said. The system remains unregulated even though fraud among Afghan law enforcement is a long-standing issue.

"It's been a big problem from the very beginning," said Andrew Wilder, vice president of South and Central Asia programs at the United States Institute of Peace.

It is unclear exactly how much money has been stolen. SIGAR is conducting an audit.

The Afghan National Police, overseen by the Interior Ministry, is the leading police force of Afghanistan. It had about 157,000 active members as of September.

The $45.5 million at risk in fiscal year 2014 is a part of a U.S.-funded program to pay Afghan law enforcement officials through mobile technology. The secure payment network is still used by a small fraction of the overall force.

Payments to the Afghan law enforcement officers under the new system were credited to mobile phone accounts, and these credits were meant to be accepted as currency by local stores and businesses. SIGAR officials said the electronic payment system is working well and should be accelerated without the need for the suspect middlemen.

The potential for theft that SIGAR discovered centers around trusted agents, who give participants cash in return for the credits. According to the inquiry, up to 50 percent of these payments were susceptible to being diverted from law enforcement employees.

Mr. Wilder said diverted salaries has been a problem since the U.S. began military engagement in Afghanistan.

"You would have people saying they command 100 police officers when really only 20 exist, and collecting all the salaries," he said.

About 1,100 members of the police force are receiving salary deposits by this mobile method, although Afghan officials say they hope to nearly triple that number in the next year.

The mobile program has been mostly successful in diverting fraud, Mr. Wilder said, even with the problems identified by SIGAR.

"It's a considerable improvement, compared to what it was before," he said. "Now, people have to register themselves and open a bank account."

Mr. Sopko's letter also expressed hope that changing the trusted agent option and expanding mobile technology would ensure more full, timely payments to Afghan law enforcement officers.

"Increased participation in the [mobile payment] program should reduce the administrative and managerial costs per transaction associated with the mobile money system," Mr. Sopko wrote. "If expanded participation in the mobile money program results in lower costs and the virtual elimination of salary-skimming, it will be a step forward."

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