While debt-ceiling debates rage on in Washington, the Government Acountability Office (GAO) may have found a genuine source of government waste — aid to Afghanistan by the Department of Defense (DOD). Reports indicate that the distribution of direct aid by the United States government in Afghanistan might be profoundly wasteful and that, in some cases, the Department of Defense violated protocol in how it awarded funds.
Apparently U.S. contributions to Afghan organizations increased from more than $665 million in fiscal year 2009 to around $2 billion in fiscal 2010; as the GAO put it, “The United States more than tripled its awards and contributions of USAID and DOD direct assistance funds to the Afghan government.”
The trends go beyond increases in expenditures. The GAO also pointed out some large inefficiencies in the distribution of money to organizations in Afghanistan. USAID and DOD — the two major direct contributors to Afghan reconstruction examined by the report — are usually regulated by the World Bank and the United Nations Development Program. The GAO report, however, indicates that these and similar distributors of direct assistance have “not consistently complied with its multilateral trust fund risk assessment policies in awarding funds.”
The violations seem to be related to risk assessments of recipient organizations. The report states that in the case of one violation in March 2010, “USAID did not conduct a risk assessment before awarding an additional $1.3 billion to the World Bank” for Afghan organizations. It seems that distributors of U.S. money in Afghanistan broke protocol by failing to adequately assess the risk of giving money to some organizations.
This report comes on the same day the Wall Street Journal reported that U.S. financial auditors were dissatisfied with the level of cooperation by the Afghan government in multiple investigations. U.S. agencies are concerned by the lack of aggressive prosecution of suspected Afghan money launderers who may have allowed “billions of dollars to slip out of sight.
As Congress nitpicks for specific spending cuts, they might want to make sure that U.S. funds are being distributed abroad with at least a whiff of accountability.