SIGAR AUDIT SHOWS U.S. AGENCIES UNABLE TO READILY REPORT ON NEARLY $18 BILLION IN RECONSTRUCTION CONTRACTS IN AFGHANISTAN

SIGAR News Room

An audit released today by the Special Inspector General for Afghanistan Reconstruction (SIGAR), Arnold Fields, shows that despite the extensive use of contractors for reconstruction work in Afghanistan, the Departments of Defense (DOD) and State, and the U.S. Agency for International Development (USAID) are unable to readily report on how much money they spend on contracting for reconstruction activities in Afghanistan. The report shows that nearly $18 billion was obligated from FY '-07 through FY '-09 by DOD, State, and USAID to nearly 7,000 contractors. This audit is unprecedented in its scope by identifying where Afghanistan reconstruction money is being spent and which contractors are spending it.

"This audit is crucial because if we don't even know who we're giving money to, it is nearly impossible to conduct system wide oversight," said Special IG Fields.

Congress mandated the SIGAR office with the unique ability to look across U.S. government agencies at reconstruction money spent in Afghanistan. Because the U.S. has been investing in Afghanistan reconstruction since 2002, SIGAR auditors tried to analyze the scale and scope of contracting prior to FY '07, but much of the data available from the agencies prior to 2007 was too poor to be analyzed.

SIGAR identified about 7,000 contractors and other entities, including for-profit and non-profit organizations and multilateral organizations involved in reconstruction activities in Afghanistan. Among the largest was $691 million to an Afghan construction firm to build military facilities and $1.8 billion to a U.S.-based firm to provide police training for Afghanistan's National Police forces. Nearly $800 million was provided to multilateral organizations, like the United Nations or the World Bank, or transferred to other federal agencies.

"With this report we can more effectively prioritize future contract audits and more quickly identify contracts at risk of fraud, waste and abuse," said Special IG Fields. "It certainly helps to reduce the stove pipes and lend more transparency to U.S. departments and agencies so that they may learn more about what their own organizations are doing and what other departments and agencies are contracting for in support of reconstruction," said IG Fields.

The audit shows that navigating the confusing labyrinth of government contracting is difficult, at best. Within the Defense Department alone, there are four contracting organizations managing DOD funded reconstruction contracts. The audit found that not only do those four DOD contracting organizations not coordinate and share information with one another, there is minimal sharing of information across government agencies.

SIGAR has previously recommended that DOD, State, and USAID consider the creation of a centralized management information system that is integrated across all agencies and command. However, according to the audit, there is still no central U.S. government database to track reconstruction projects from the various U.S. agencies and departments, let alone, the international community.

SIGAR is the first organization to provide this "snapshot" of the reconstruction contracting environment in Afghanistan. Other offices of Inspectors General at the various U.S. departments are not able to provide this view of the entire contracting landscape, as they are not charged with looking across U.S. government agencies.

"Prior to this audit report there was no comprehensive study on contractors and the money the U.S. is spending through contractors on Afghan reconstruction," said IG Fields. "The concluding observations in this audit are crucial to helping U.S. departments and agencies and SIGAR continue to conduct aggressive, system wide oversight," he said.