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Special Inspector General for
Afghanistan ReconstructionSIGARJULY 30
2010
QUARTERLY REPORT TO THE UNITED STATES CONGRESS
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Cover Captions (clockwise from left):
Tribal and religious leaders gather in
Kandahar to discuss a range o local
issues in June. Earlier in the month, the
GIRoA hosted the three-day Peace Jirga,
at which some 1,600 religious scholars,tribal leaders, civil society organization
leaders, Aghan reugees, and govern-
ment representatives discussed ways to
end violence and achieve lasting peace in
Aghanistan. (U.S. Navy photo)
An Afghan soldier rom the ANAs Close
Support Kandak participates in the frst-ever
joint engineering task with the 21st Regi-
ment o the British Armys Royal Engineers.
The combined teams are working on inra-
structure projects at Patrol Base Rahim in
Nahr-e Saraj, Helmand. (ISAF photo)
Fifteen Afghan women attend a workshopin journalism held at Herat University. The
workshop was promoted by the Herat PRT
this quarter. (ISAF photo)
Two Afghans measure grain to sell at
the Koru Chareh Bazaar in Marjah in May.
Since the initial fghting to take the city
rom insurgent control, residents have
returned to their homes, and the market-
placethe hub o the communityhas
reopened. (U.S. Marine Corps photo,
LCpl James Clark)
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The National Defense Authorization Act (P.L. 110-181) established
the Special Inspector General for Afghanistan Reconstruction (SIGAR).
SIGARs oversight mission, as defned by the legislation, is to provide or the indepen-
dent and objective
conduct and supervision o audits and investigations relating to the programs and
operations unded with amounts appropriated or otherwise made available or the
reconstruction o Aghanistan.
leadership and coordination o, and recommendations on, policies designed to pro-
mote economy, efciency, and eectiveness in the administration o the programs
and operations; and prevent and detect waste, raud, and abuse in such programs
and operations.
means o keeping the Secretary o State and the Secretary o Deense ully and
currently inormed about problems and defciencies relating to the administration o
such programs and operation and the necessity or and progress on corrective action.
Aghanistan reconstruction includes any major contract, grant, agreement, or other
unding mechanism entered into by any department or agency o the U.S. government
that involves the use o amounts appropriated, or otherwise made available or the
reconstruction o Aghanistan.
Source:P.L. 110-181, National Deense Authorization Act or FY 2008, 1/28/2008.
Special Inspector General or
Aghanistan ReconstructionSIGARJULY 30
2010
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TURKMENISTAN
UZBEKISTAN
TAJIKISTAN
PAKISTAN
IRAN
CHINA
PAKTIKA
KHOWST
TAKHAR BADAKHSHAN
BAGHLAN
BAMYAN
FARYAB
WARDAK
KUNAR
KUNDUZ
NURISTAN
NANGARHAR
FARAH
NIMROZHELMAND
KANDAHAR
URUZGAN
ZABUL
GHOR
GHAZNI
BALKH
BADGHIS
KABUL
KAPISA
PAKTIYA
LOGAR
LAGHMAN
JOWZJAN
PARWAN
SAR-E PUL
HERAT
DAYKUNDI
SAMANGAN
PANJSHIR
ISLAMIC REPUBLIC OF AFGHANISTAN
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SPECIAL INSPECTOR GENERAL FOR
AFGHANISTAN RECONSTRUCTION
2221 SOUTH CLARK STREET, SUITE 800 ARLINGTON, VIRGINIA 22202
July 30, 2010
I am pleased to submit SIGARs quarterly report to Congress on the U.S. reconstruction eort in
Aghanistan. This report documents SIGARs activities and provides an update on the status o reconstruc-
tion programs in Aghanistan or the quarter ending June 30, 2010.
SIGARs auditors and investigators had a productive quarter. We issued 4 audit reports and announced
5 new audits, bringing the total number o ongoing contract, perormance, and orensic audits to 18. SIGAR
opened 27 new investigations and closed 14 cases, bringing the number o ongoing investigations to 55.
We participated in a number o joint investigations, including one in which two Aghan companies have
pleaded guilty to bribery. SIGAR also collaborated with other ederal law enorcement agencies to investi-
gate the sources o bulk cash shipments leaving Aghanistan through the Kabul airport.
In the past year, SIGAR has produced 24 reports, including audits o construction contracts and project
management as well as perormance reviews o large programs, such as the $627 million that the Congress
has earmarked or Aghan women and girls. As I testifed on two occasions this quarteronce beore
the Commission on Wartime Contracting and once beore the State, Foreign Operations Appropriations
Subcommittee o the House o Representativesour work has made me increasingly concerned about our
issues that are impeding the reconstruction eort.
lack o accountability and insufcient oversight by implementers
inadequate attention to metrics
inadequate attention to sustainability
insufcient capacity building in Aghan institutions
SIGARs work has identifed a number o areas where implementing agencies could improve their
ability to monitor projects and better account or reconstruction dollars. For example, U.S. agencies have
no shared database o reconstruction contracts. Despite the recommendations o our audit last year, the
United States still lacks an integrated management inormation system that would help agencies coordi-
nate projects and track completed, ongoing, and planned reconstruction activities. Implementing agencies
need accurate and timely inormation to ensure appropriate oversight.
We must establish better metrics to use in determining whether a program is sustainable. This quar-
ter, we ound that the Capability Milestone rating system, which had been used since 2005 to measure the
progress o the Aghan security orces, was unreliable. This audit underscored the critical need or good
metrics. Similarly, our audit o the energy sector ound that the U.S. government did not have an eective
way to track progress toward delivering more electricity to the Aghan people.
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2221 SOUTH CLARK STREET, SUITE 800 ARLINGTON, VIRGINIA 22202
We must also give much greater thought to sustainability: all o SIGARs audits o inrastructure projects have
identifed operations and maintenance issues. For example, the Government o the Republic o Aghanistan is not
yet able to operate and maintain any o the acilities that have been built to house the Aghan security orces. To
protect our investment, the U.S. government is awarding two contractstotaling $800 millionto provide opera-
tions and maintenance or more than 650 security orce acilities over the next fve years. SIGAR is seeing similar
sustainability issues throughout the reconstruction eort.
I am also concerned that we have not done enough to build the Aghans capacity to manage their govern-
ment and develop their economy. U.S. implementing agencies must include robust capacity-building measures in
every reconstruction program. The U.S. Department o State is taking steps to address this problem through its
civilian surge and by channeling more reconstruction dollars through Aghan institutions. A key component o
SIGARs mission is to provide oversight o this crucial eort.
Last February, in just our 16th month o unded operations, I asked the Council o the Inspectors General on
Integrity and Efciency (CIGIE) to conduct an early peer review o SIGAR. A peer review typically occurs ater
the third year o operations, but I requested this early review so that we could quickly beneft rom the input o
our peers and enhance our ability to conduct eective oversight. In July, CIGIE concluded its review. Our Audit
Directorate passed the review with defciencies, and we are implementing CIGIEs recommendations to correct
them. The CIGIE review ound that the Investigations Directorate was not yet in ull compliance with certain
administrative requirements, but CIGIE concluded that our implementation o new policies and procedures is
likely to result in ull compliance in the near uture.
The United States is in its ninth year in Aghanistan, implementing an extensive reconstruction program in a
dangerous, difcult, and rapidly changing environment. The United States and its coalition partners are trying to
simultaneously provide security, build governing institutions, and promote economic development so that
military orces can be drawn down a year rom now. Because o the complexity o this eort, it is critical to
identiy systemic problems quickly.
As our work this quarter demonstrates, SIGAR is providing real-time oversight o individual projects as
well as o the systems that underpin the entire reconstruction eort. We will continue to conduct the broad
range o contract, perormance, and orensic audits needed to detect and prevent the waste, raud, and abuse
o unds appropriated or the reconstruction o Aghanistan.
Very respectully,
Arnold Fields
Special Inspector General or Aghanistan Reconstruction
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TABLE OF CONTENTS
SECTION 1AFGHANISTAN OVERVIEW
3 Kabul Conference Streamlines
Reconstruction Priorities
4 Security
6 Governance and the Rule of Law
7 Economic and Social Development
8 Reconciliation and Reintegration
9 Regional Cooperation 9 Looking Ahead
SECTION 2SIGAR OVERSIGHT
13 SIGAR Audits
30 SIGAR Investigations
32 Peer Review
33
SIGAR Budget 33 SIGAR Staff
SECTION 3RECONSTRUCTION UPDATE
37 Overview
41 Status of Funds 55 Security
69 Governance
89 Economic and Social Development
107 Counter-Narcotics
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TABLE OF CONTENTS
SECTION 4OTHER AGENCY OVERSIGHT
119 Completed Oversight Activities
123 Ongoing Oversight Activities
132 Other Agency Investigations
133 Other Agency Inspections
APPENDICES & ENDNOTES
136 Appendix A: Cross-Reference of Report
to Statutory Requirements
140 Appendix B: U.S. Government Appropriated Funds
142 Appendix C: SIGAR Audits
144 Appendix D: SIGAR Investigations and Hotline
145 Appendix E: Abbreviations and Acronyms
148 Endnotes
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION222
Moving orward
A U.S. soldier travels to the village o Paspajak in Logar
province in June. The new Aghan reconstruction plan puts
Aghan security orces in charge o military operations
throughout the country by 2014.
(U.S. Army photo, SGT Russell Gilchrest)
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1AFGHANISTANOVERVIEW
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION2
AFGHANISTAN OVERVIEW
The Aghan government can
guarantee security only when its
people are confdent in its
ability to deliver public services,
good governance, human rights
protectionincluding gender equality
and economic opportunities.
Kabul Conference Communiqu
Source: Kabul Conerence, Communiqu, 7/19/2010.
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REPORT TO THE UNITED STATES CONGRESS I JULY 30, 2010 3
AFGHANISTAN OVERVIEW
AFGHANISTAN OVERVIEW
This reporting period, concerns mounted over the pace o the reconstruction
eort in Aghanistan, now in its ninth year. A sense o urgency pervades both
Aghanistan and the international community: the Government o the Islamic
Republic o Aghanistan (GIRoA) must take more responsibility or the countrysuture. The success o the U.S. and international strategy or reconstruction rests
on the GIRoAs ability to independently provide or the nations security and lead
sustained economic development.
The GIRoA took an important step toward achieving these goals by develop-
ing a new reconstruction plan, which the international community endorsed at
the Kabul Conerence on July 20. At this conerence, the largest ever hosted in
Aghanistan, representatives rom more than 60 countries and a dozen interna-
tional organizations gathered to realign the international reconstruction eort
with Aghan priorities.
U.S. Secretary o State Hillary Clinton called the conerence a milestone in a
long and difcult journey. At the same time, she cautioned that the road ahead
would not be easy: it will be necessary to honestly assess the progress made,
identiy the gaps between expectations and perormance, and resolve to close
those gaps. Closing those gaps will require robust oversight o the reconstruction
program.
KABUL CONFERENCE STREAMLINESRECONSTRUCTION PRIORITIESThe Kabul Conerence delegates endorsed a new, three-year Prioritization and
Implementation Plan, which builds on the 2008 Aghanistan National Development
Strategy. The new plan establishes Aghan national priorities in fve critical areas:
security
governance and the rule o law economic and social development
reconciliation and reintegration
regional cooperation
The international participants at the conerence agreed to realign their
assistance to advance Aghanistans priorities and supported the goal o chan-
neling at least 50% o their aid through the GIRoAs budget within two years. This
commitment is contingent on the GIRoA successully implementing reorms
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION4
AFGHANISTAN OVERVIEW
to strengthen public management systems, reduce corruption, improve budget
execution, and increase revenue collection to fnance critical national programs.
The Kabul Conerence underscored how much the U.S. reconstruction
strategy has evolved over the last two yearsrom one that primarily bypassedthe Aghan government by unding reconstruction projects through private
contracts, cooperative agreements, and grants, to one that channels unds
through the Aghan government. To do this eectively and to protect these unds
rom waste and corruption, Aghanistans public institutions must be greatly
strengthened.
In this rapidly changing environment in which the United States is spending
large sums o money, oversight bodies must quickly identiy systemic prob-
lems so that implementing agencies can adjust programs beore tax dollars are
wasted. To provide eective oversight, SIGAR is conducting a broad mix o
contract, program management, and perormance audits that ocus on the use o
U.S. unds in the newly realigned priority areas o the reconstruction eort.
SECURITYMore than $25 billionabout hal o all U.S. reconstruction dollars spent in
Aghanistan since 2001has been appropriated or the Aghan Security Forces
Fund (ASFF) to train, equip, and house the Aghan National Security Forces
(ANSF). The Administrations requests or the FY 2011 appropriation and the
FY 2010 supplemental appropriation include an additional $14 billion to increase
the troop strength o the Aghan National Army to 171,600 and the Aghan
Delegates rom more than 60 countries take part in the International Conerence on
Aghanistan, co-hosted by the GIRoA and the UN. The Kabul Conerence endorsed Aghan-led
programs aimed at improving development, governance, and security. (UNAMA photo)
The Aghan people have
charted a comprehensive
strategy or their uture.Their plans are detailed,
practical, and reect a
great deal o work and
consultation. And we are
here as representatives
o individual nations and
as members o the global
community to oer our
support and align our
resources behind Aghangoals and Aghan policies.
U.S. Secretary of State
Hillary Clinton
Source: DoS, Remarks: Secretary o State Hillary RodhamClinton, Intervention at the Kabul Conerence, 7/20/2010.
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REPORT TO THE UNITED STATES CONGRESS I JULY 30, 2010 5
AFGHANISTAN OVERVIEW
National Police to 134,000 by October 2011a 30% increase rom current
security orce levels.Under the current U.S. strategy or securing and stabilizing Aghanistan, the
United States will begin to withdraw its military orces in July 2011. U.S. ofcials
have said the rate o this withdrawal will depend on conditions in Aghanistan;
however, the Aghan Prioritization and Implementation Plan established a
timeline that would put Aghan security orces in charge o military operations
throughout the country by 2014. The success o both U.S. and Aghan plans
depends on the success o eorts to build the capability o the Aghan army and
police orces to provide security. As o June 30, 2010, the U.S. Department o
Deense (DoD) has allocated nearly $5.75 billion or the inrastructure projects
needed to house and train the ANSF.
This quarter, SIGAR issued three audits related to eorts to build the capabil-
ity o the ANSF:
an evaluation o the Capability Milestone (CM) rating system
a review o construction to build a garrison or the ANA in Farah province
a review o construction o an ANP compound in Kandahar
When SIGAR began its audit o the CM rating system, the CM was the primary
metric or measuring the development o the ANSF. SIGAR ound that the
system, which had been in use since 2005, could not provide a reliable or consis-
tent assessment o the capabilities o the ANSF. In early March, SIGAR auditors
brieed military commanders on their fndings. In late April, the International
Security Assistance Force (ISAF) Joint Command replaced this system with a
new, unit-level assessment. It is too early to assess the new system, but SIGARs
fndings and recommendations pertain to any system designed to evaluate theoperational eectiveness o the ANSF. The United States and the GIRoA must
have a reliable way to measure the progress o the ANA and the ANP i they are
to achieve their goal o transerring responsibility or the security o Aghanistan
to the ANSF. Section 2 o this report provides a summary o this audit.
SIGARs audits o the ANA garrison in Farah province and an ANP compound
in Kandahar identifed a number o problems, including inadequate project plan-
ning and insufcient quality assurance, that have resulted in project delays and
cost increases. For example, the ANA garrison at Farah was built in two phases,
both o which were more than a year behind schedule at the time SIGAR com-
pleted its audit. The estimated cost o phase one$29.4 millionhad increased
by about 30%.
Similarly, construction o the our acilities that constitute the Joint RegionalAghan Security Forces Compound (JRAC) in Kandahar experienced delays rang-
ing rom six months to two years. Moreover, the U.S. Army Corps o Engineers
(USACE), which was responsible or the contract, did not have a master plan
that integrated the our projects. Consequently, the JRAC has some redundant
power, water, and sewer systems, as well as a variety o heating and cooling
systems. In addition, the armory was placed next to the barracks, unnecessarily
posing a potential danger to security orces stationed at the JRAC. Section 2 o
this report provides summaries o both o these SIGAR audits.
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION6
AFGHANISTAN OVERVIEW
SIGAR has our ongoing audits in the security sector. Two are assessing three
inrastructure contracts to build eight ANSF acilities. One is reviewing theprocess that the United States, its coalition partners, and the GIRoA are using
to determine how many ANA and ANP acilities are needed and where these
acilities should be built. SIGARs ourth audit is evaluating the ANPs personnel
management systems. As part o this work, SIGAR will identiy the sources o
unding or ANP salaries and the extent to which the ANP has systems in place to
mitigate the risks o raud, waste, and abuse.
GOVERNANCE AND THE RULE OF LAWBoth the U.S. strategy and the Aghan Prioritization and Implementation Plan
emphasize the need to improve governance and strengthen the rule o law at
every levelrom Kabul to the provincial capitals and rural communities. Thecommuniqu released at the close o the Kabul Conerence underscored that
need: Good governance, the rule o law, and human rights orm the oundation
o the strategy to achieve a stable and prosperous Aghanistan. Improvements in
these areas should not only increase the confdence o the Aghan people in their
own uture, but also underpin security improvements and social developments.1
The GIRoA pledged to take action on numerous issues to improve gover-
nance, including strengthening local institutional capacity, combating corruption,
and implementing electoral reorm. The U.S. government is relying on an inux
o civilians to assist Aghans. Since the beginning o this year, the Department
o State (DoS), in coordination with other U.S. departments and agencies, has
tripled the number o civilian experts deployed to help build Aghan capac-
ity. According to Ambassador Richard Holbrooke, Special Representative orAghanistan and Pakistan, these civilians are engaged in a range o activities,
rom rebuilding Aghanistans once vibrant agriculture sector, to working with
key Aghan ministries to improve the provision o health, education, justice, and
other services outside o provincial capitals.2
The success o the U.S. strategy depends on the ability o these civilians
to work with their Aghan counterparts to design, implement, and oversee
reconstruction projects. SIGAR is conducting an audit o the civilian surge to
identiy the number and types o personnel who are being deployed through-
out Aghanistan and to assess the extent to which these civilians are able to
work with their Aghan counterparts to advance U.S. strategic and program-
matic reconstruction goals. In July 2010, SIGAR and the DoS Ofce o Inspector
General agreed to conduct portions o this audit jointly.
CorruptionCorruption continues to be o serious concern to both international donors and
Aghan citizens. Because the United States is committed to provide more unding
assistance through Aghan ministries, these ministries must have the capability
to account or this unding. SIGAR will be looking closely at the steps taken by
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REPORT TO THE UNITED STATES CONGRESS I JULY 30, 2010 7
AFGHANISTAN OVERVIEW
U.S. agencies to help ensure that donor unds channeled through the GIRoA are
reasonably protected rom waste, raud, and abuse.More than a year ago, SIGAR initiated a series o audits to determine the
ollowing:
what the United States and other donor countries are doing to build the capac-
ity o Aghan institutions to deter corruption and strengthen the rule o law
the extent to which Aghan institutions that receive signifcant U.S. unding
have the systems in place to account or donor unds
As part o this program to assess Aghan institutional capacity, SIGAR has
completed seven audits and is conducting our. Two o the completed audits
assessed key Aghan oversight bodiesthe High Ofce o Oversight (HOO)
and the Control and Audit Ofce (CAO). Despite the important role that these
Aghan oversight institutions should play in combating corruption and providing
accountability over donor unding, very little had been done until recently to help
them develop their capacity.
SIGAR is fnalizing a review o U.S. assistance programs that are designed to
help the GIRoA develop its anti-corruption capabilities. Although multiple U.S.
agencies now conduct anti-corruption assistance programs, most o this assis-
tance has been provided without the beneft o a comprehensive anti-corruption
strategy. Although a drat strategy exists, a fnal strategy is urgently needed to
guide and direct U.S. anti-corruption assistance. SIGAR will report on this review
next month.
Electoral Reorm
The United States and the international community view elections as critical tosustaining a legitimate government. Ater last years raud-marred presidential
election, a SIGAR audit recommended that the international community take
steps to build the capacity o Aghanistans Independent Election Commission
(IEC) to sustain the electoral process. In the Kabul Conerence communiqu, the
GIRoA pledged to initiate within six months a strategy or long-term electoral
reorm that addresses in particular the sustainability o the electoral process. 3
Since the presidential election, President Karzai has replaced key electoral
ofcials, but it is not clear how these changes will aect the September parlia-
mentary elections. In July, the IEC announced the fnal list o 2,556 candidates,
which included 406 women. The United States is providing assistance to a num-
ber o organizations, including the United Nations, or these elections.
During the next quarter, SIGAR will publish a review that identifes lessonslearned rom past elections to improve the electoral process in Aghanistan.
ECONOMIC AND SOCIAL DEVELOPMENTIn his opening remarks at the Kabul Conerence, President Karzai urged the
international community to support Aghan-run programs, such as the National
Solidarity Program (NSP). The Aghan Ministry o Rural Rehabilitation and
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION8
AFGHANISTAN OVERVIEW
Development started this program in 2003 to help Aghan communities develop
their own projects. Since then, the United States and other international donorshave provided nearly $1 billion or the program, which the ministry says has
brought 40,000 projects to completion.
SIGAR is conducting an audit o the NSP to identiy donor assistance, to deter-
mine what the United States and other donors have done to ensure that the NSP
can account or their contributions, and to examine the capacity o the Ministry
o Rural Rehabilitation and Development to plan, manage, and monitor the pro-
gram. The United States has pledged $440 million to this program.
The GIRoAs new priorities to spur the economy include building large-scale
inrastructure projects to develop the countrys mineral resources, expanding
irrigation systems, extending the road network, and increasing the supply o
electricity. Earlier this year, a SIGAR review o the energy sector ound that the
GIRoA urgently needed an updated master plan to guide international investment
in this sector.
Participants at the Kabul Conerence reiterated their commitment to protect
womens rights. From 2003 through 2010, the Congress has appropriated
$627 million to address the needs o Aghan women and girls. This quarter, SIGAR
issued an audit assessing whether DoS and the U.S. Agency or International
Development (USAID) had complied with congressional directives and whether
this money had unded activities that were consistent with U.S. and Aghan
national strategies. SIGAR ound that DoS and USAID did not coordinate their
approach to reporting on the use o these unds, only partially met congressional
directives, and did not show linkages between U.S.-unded activities and Aghan
goals and benchmarks. Section 2 o this report provides a summary o this audit.
RECONCILIATION AND REINTEGRATIONIn early June, the GIRoA convened a Consultative Peace Jirga to discuss ways to
begin a process o reconciliation with insurgents who are willing to accept the
Aghan Constitution and renounce ties to al-Qaeda and other terrorist groups.
About 1,600 Aghans rom around the country participated in the Peace Jirga and
issued a 16-point resolution that called on the government to develop a program
to implement a peace process.
At the Kabul Conerence, the GIRoA unveiled the Aghanistan Peace and
Reintegration Program. President Karzai had earlier announced the ormation
o the High Peace Council to lead the program. A new Peace and Reintegration
Trust Fund, supported though international contributions, has been established
to und its activities. The program seeks to reintegrate thousands o ormer
combatants and stabilize 4,000 communities in 220 districts over 5 years.
DoD has received congressional approval to provide $100 million rom
the Commanders Emergency Response Program or the reintegration eort.
Ambassador Holbrooke said the reintegration program was one o the most impor-
tant initiatives to come out o the Kabul Conerence because deeating the Taliban
requires a political process that goes hand in hand with the military campaign.
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REPORT TO THE UNITED STATES CONGRESS I JULY 30, 2010 9
AFGHANISTAN OVERVIEW
Improving security is essential to the success o the reconstruction program in
Aghanistan. SIGAR will continue to observe the evolving process o reconcilia-tion and provide oversight o U.S. spending as needed.
REGIONAL COOPERATIONThe United States and its international partners have been encouraging greater
regional cooperation to help stabilize Aghanistan and acilitate increased trade
and investment to uel economic development. These eorts have been par-
ticularly ocused on improving Aghanistans relationship with Pakistan. In a
breakthrough this quarter, the two countries reached a trade transit agreement
that will allow Aghan trucks to transport products through Pakistan to the
Indian border.
Aghanistans Prioritization and Implementation Plan calls or greater interna-tional investment in regional inrastructure projects, such as railways and roads
to link Aghan cities to markets in central Asia, south Asia, and Europe. Other
priorities include building a natural gas pipeline and expanding regional electric-
ity transmission networks. Most o these projects would have to be unded by the
international community and will require eective oversight.
LOOKING AHEADAt the Kabul Conerence, the GIRoA vowed to implement key reorms, such as
improving its public fnancial management systems, to ensure that donor unds
channeled through the government beneft the Aghan people. The fnal commu-
niqu rom the Conerence noted that donors must review the GIRoAs progress
in achieving its goals; nevertheless, it did not provide a mechanism or timeline
or conducting those reviews.
U.S. implementing agencies have the primary obligation to ensure that
taxpayer dollars are spent wisely in support o U.S. strategic goals. SIGAR is
committed to providing the critical real-time oversight needed to quickly identiy
problems and prevent the waste, raud, and abuse o U.S. reconstruction unds.
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION10
Growing local industries
An Aghan worker packs honey into jars in a USAID-unded
acility in Jalalabad. Regenerating agribusiness is a key goal
o the U.S. Aghanistan and Pakistan Regional Stabilization
Strategy. (USAID Photo)
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2SIGAROVERSIGHT
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION12
SIGAR OVERSIGHT
Accountability is the cornerstone
o good governance. Without it, we risk
losing our investment in Aghanistan
to waste, corruption, and raud.
Everyone involved in the
reconstruction eortthe U.S.
implementing agencies, private
contractors, nongovernment
organizations, and the Aghan
governmentmust be held
accountable or public unds at
their disposal.
Special Inspector General Arnold Fields
Source: Special Inspector General Arnold Fields, Oversight o U.S. Civilian Assistance or Aghanistan, testimony beore the State,Foreign Operations Appropriations Subcommittee, U.S. House o Representatives, 7/15/2010.
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REPORT TO THE UNITED STATES CONGRESS I JULY 30, 2010 13
SIGAR OVERSIGHT
SIGAR OVERSIGHT
SIGARs Audit, Investigations, and Management directorates had a highly
productive quarter. SIGAR completed our audits and announced fve new
audits, bringing the total number o ongoing contract, perormance, and orensic
audits to 18. SIGAR opened 26 new investigations; it also participated in jointoperations with other ederal law enorcement agencies to determine the source
o bulk cash shipments leaving Aghanistan through the Kabul airport. As a result
o SIGARs public outreach campaign, the SIGAR Hotline recorded a 77% jump in
the number o complaints it received alleging raud, waste, and abuse o recon-
struction dollars. Table 2.1 lists SIGARs completed audits as o July 30.
During this reporting period, SIGAR also continued to build its sta. SIGAR has
93 ull-time employees when this report went to press. SIGAR is working with the
U.S. Embassy in Kabul and U.S. Forces - Aghanistan to increase the number o
people it can station at the Embassy and at other locations in Aghanistan.
SIGAR AUDITSA key goal o the U.S. strategy in Aghanistan is to develop sel-sufcient Aghansecurity orces that can independently provide internal and external security or
the country. More than hal o all reconstruction unding is used to train, equip,
and house the Aghan National Army (ANA) and the Aghan National Police
(ANP). Three o the our SIGAR audits completed this quarter were related to
this critical eort.
The United States has also committed to promoting gender equity in
Aghanistan. SIGARs ourth completed audit this quarter reviewed the use o
TABLE 2.1
COMPLETED SIGAR AUDITS, APRIL 1JULY 30, 2010Report Identifer Report Title Date Issued
SIGAR-Audit-10-14 ANA Garrison at Farah Appeared Well Built Overall, but Some Construction
Issues Should Be Addressed
7/30/2010
SIGAR-Audit-10-13 Greater Coordination Needed in Meeting Congressional Directives To
Address and Report on the Needs o Aghan Women and Girls
7/30/2010
SIGAR-Audit-10-12 ANP Compound at Kandahar Generally Met Contract Terms but Has Project
Planning, Oversight, and Sustainability Issues
7/22/2010
SIGAR-Audit-10-11 Actions Needed To Improve the Reliability o Aghan Security Force
Assessments
6/29/2010
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION14
SIGAR OVERSIGHT
the $627 million that the Congress has earmarked since 2003 to assist Aghan
women and girls.
Completed Audit ReportsThis quarter, SIGAR issued our audit reports, which are summarized in the
ollowing subsections.
Audit 10-11: Aghanistan Security ForcesActions Needed To Improve the Reliability o Aghan Security Force Assessments
The U.S. strategy in Aghanistan depends on building the countrys capacity by
training and equipping the Aghan National Security Forces (ANSF) to provide or
security. Since 2002, the United States has provided about $27 billionmore than
hal o all reconstruction dollarsor ANSF training, equipping, and sustainment.Current ANSF orce-generation goals, which were agreed to by the GIRoA and the
international community, call or 171,600 ANA troops and 134,000 ANP members
by October 2011. In the short term, ANSF capabilities are essential to the U.S. and
coalition counter-insurgency strategy, which calls or securing key population areas
and relies on bolstering the Aghan peoples confdence in their government. In the
long term, ANSF progress is critical because the United States and the international
community aim to transer responsibility or security to the Aghan security orces.
Since 2005, the United States has used the Capability Milestone (CM) rating system
to monitor and report on progress in the development o ANSF capabilities.
OBJECTIVES
The audit addressed our objectives: Assess the reliability o the CM rating system.
Assess summary reports provided to decision makers.
Identiy challenges to U.S. and coalition eorts to assess the ANSF.
Identiy systemic ANSF defciencies that have undermined eorts to develop
unit-level capabilities.
FINDINGS
1. SIGAR ound that the CM rating system has not provided reliable or con-
sistent assessments o ANSF capabilities. The assessments depended on
quantitative data such as supplies and numbers o personnel rather than
subjective evaluations o a units ability to perorm its mission eectively. In
some cases, ANA personnel numbers were inated because they were based
on the number assigned to a unit rather than the number present or duty.
2. The measurements used in the assessment system overstated the capabili-
ties o the ANSF, particularly or top-rated army and police units that did
not always maintain the ability to conduct independent operations. The
rating system inadvertently created disincentives or ANSF units to progress
toward a top-level rating, because they aced the prospect o losing orce
protection, expertise, supplies, unding, and prestige.
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REPORT TO THE UNITED STATES CONGRESS I JULY 30, 2010 15
SIGAR OVERSIGHT
3. Summary reports o ANSF capability ratings included outdated assessment
data because monthly CM assessments were missing. The submissions weremissing because o a lack o mentors and partners to provide reporting,
among other reasons. In the case o ANP records, the ratings either were
missing or had been carried over or as long as our months.
4. U.S. and coalition eorts to assess the ANSFs capabilities ace serious
challenges, including security conditions, mentor shortages, and inadequate
training. ANP mentoring and assessment have been signifcantly limited and
sometimes ineective in areas where enemy activity is intense. The shortall
in mentors and partners and their lack o training have signifcantly aected
the development and assessment o ANSF units, particularly the police.
5. Systemic ANSF defciencies have undermined eorts to develop unit capa-
bilities. These defciencies include logistics problems, personnel attrition,
inadequate personnel authorizations, inrastructure defciencies, corrup-
tion, drug abuse, and illiteracy. For example, mentors and partners reported
logistics problems such as vanishing supply requests, hoarding, and the
inability to track supply request orms through ministerial supply chain sys-
tems. Another key issue is the attrition that has drained a large portion o the
police trained through the Focused Police District Development (FPDD) pro-
gram. The attrition occurred largely because o pressure rom anti-coalition
orces and disappointment over pay levels.
RECOMMENDATIONS
In use since 2005, the CM rating system has not provided a consistent and reli-
able means o reporting on the eectiveness o ANSF units. According to ofcialsrom the International Security Assistance Force (ISAF) Joint Command (IJC),
the CM rating system is being replaced by a new unit-level assessment system,
which SIGAR has not yet reviewed. SIGARs recommendations remain relevant
to the new system: without the recommended measures, decision makers will
not have a clear understanding o the extent to which progress is being made in
developing Aghan security orces that are capable o independently conducting
operations and ultimately securing Aghanistan.
To obtain more reliable assessments o ANSF operational eectiveness,
SIGAR recommended that IJC take the ollowing actions:
Emphasize subjective assessment o the overall operational capability
provided by mentor and partner team evaluators.
Develop a manual or mentors and partners that incorporates real-worldexamples and best practices to support more consistent evaluation.
Work with the NATO Training Mission - Aghanistan/Combined Security
Transition Command - Aghanistan (NTM-A/CSTC-A) to provide additional
training and guidance to mentor and partner teams on decrees and proce-
dures rom the Ministry o Interior (MoI) and the Ministry o Deense (MoD).
Encourage an equivalent understanding among raters o dierent ANSF units
to ensure that rating-level defnitions are consistent.
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION16
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Incorporate present-or-duty fgures as a percentage o assigned personnel
into assessments or both ANP and ANA units. Conduct independent validations o top-level ANP unit capabilities.
To improve the transparency and accuracy o ANSF assessment reporting,
SIGAR recommended that IJC take these actions:
Begin to systematically track the number o unit-level evaluations not sub-
mitted each month and the number o elements not observed within those
assessments.
Add an additional overall rating level to represent units not assessed where
no mentors/partners are assigned.
To maximize visibility into ANP capabilities, SIGAR recommended that IJC
take this action:
Require all U.S. and coalition military mentor and partner teams to submit
unit assessments, and begin requesting unit assessments rom civilian advis-
ers in districts where no military mentors/partners are assigned.
To counteract disincentives resulting rom the ANSF assessment system,
SIGAR recommended that IJC take this action:
Evaluatein conjunction with NTM-A/CSTC-A, MoI, and MoDthe creation
o an incentive system to reward Aghan units or top-level capabilities.
SIGAR also recommended that NTM-A/CSTC-A take these actions:
To monitor supply requests, work with MoI and MoD to implement better
tracking systems.
To counterbalance the eects o attrition in FPDD units, develop a program
to train new recruits who are assigned to FPDDs that have previously
received training.
To enable each ANSF unit to extend driver training using its own personnel,
implement a train-the-trainer driving program.
AGENCY COMMENTS
IJC concurred or partially concurred with 10 recommendations, stating that
it intended to address the recommendations as it implemented its new rating
system, the Commanders Unit Assessment Tool (CUAT). IJC disagreed with two
recommendations, which SIGAR removed rom the fnal report because IJCs
responses ulflled the spirit o the recommendations.
In its response, NTM-A/CSTC-A concurred with the recommendations but sug-gested that the report included out-o-date inormation. However, SIGARs audit
work relied on interviews and inormation collected rom October 2009 through
May 2010, including feld observations o 18 ANSF units made during February
and March 2010.
The Ofce o the Secretary o Deense (OSD) Policy provided additional inor-
mation, including clarifcation about the nature o DoD reports to the Congress
and comments regarding DoDs concerns about the CM rating system. OSD
Personnel and Readiness also commented on the report and provided additional
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REPORT TO THE UNITED STATES CONGRESS I JULY 30, 2010 17
SIGAR OVERSIGHT
inormation regarding the history o eorts to improve ANSF assessments,
including details on OSDs involvement in attempting to address reliability andintegrity problems with the CM rating system.
Audit 10-12: Kandahar ANP CompoundANP Compound at Kandahar Generally Met Contract Terms but Has Project Planning,
Oversight, and Sustainability Issues
The international coalition in Aghanistan is working to provide acilities to train
and house the ANP. With the ANP orce size growing rom 95,000 in December
2009 to 134,000 by October 2011, CSTC-A has helped und a country-wide build-
ing program to meet the ANPs needs. As a part o this eort, CSTC-A provided
$45 million to the U.S. Army Corps o Engineers (USACE) to und the construc-
tion o the Joint Regional Aghanistan Security Forces Compound (JRAC) in
Kandahar. The compound is located outside the Kandahar Airfeld.
The compound consists o our separate ANP projects: a Regional Logistics
Center, an Aghan National Civil Order Police battalion, the Aghan Uniorm
Polices regional headquarters, and the Aghan Border Polices zone command.
USACE awarded a frm-fxed-price contract or the Regional Logistics Center proj-
ect and frm-fxed-price task orders or construction o the projects or the Aghan
National Civil Order Police, Aghan Uniorm Police, and Aghan Border Police.
OBJECTIVES
The audit addressed three objectives:
Determine whether the JRAC was constructed within the terms o the con-
tracts, including schedule and cost. Assess whether USACE oversight o construction was conducted in accor-
dance with the Federal Acquisition Regulation (FAR), USACE requirements,
and oversight provisions o the contract.
Identiy what plans are in place to sustain these acilities once they are
turned over to the GIRoA.
FINDINGS
1. SIGAR ound that three o the our JRAC projects experienced delays rang-
ing rom 6 to 12 months. The ourth project was delayed two years, in part
because o a land dispute between CSTC-A and the U.S. Drug Enorcement
Administration, which led to its relocation to the JRAC site. Nearly $280,000
in USACE expenses was related to the projects relocation. In addition, theprime contractor has fled a request or equitable adjustment or $665,000 in
additional costs. SIGAR noted that the fnal JRAC project is scheduled or
occupancy by July 2010. SIGARs inspection o completed work revealed no
apparent construction problems.
2. Inadequate project planning aected all our projects. USACE sta did not
prepare a master plan or the JRAC that ully integrated the our projects. As
a result, the JRAC had some redundant power, water, and sewer systems and
New generators begin operation at the
Kandahar ANP compound. SIGAR ound that
the JRAC had some redundant power sys-
tems due to a lack o integrated planning.
(SIGAR photo)
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION18
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varying heating and cooling systems. In addition, an armory or one project
was constructed adjacent to a barracks or another project.
3. Project oversight was also defcient in several respects. USACE qualityassurance procedures were not ully adhered to, which raises the risk that
construction problems could surace later in the lie o the project, increase
operations and maintenance costs, and compromise occupant saety. In
addition, the results o site inspections were not always documented; prime
contractors did not adequately document the results o site inspections and
whether required testing and inspections had occurred.
4. CSTC-A ofcials stated that the GIRoA does not have the fnancial or tech-
nical capacity to sustain ANSF acilities in the near term once they are
completed. To address this issue, USACE intends to award two fve-year
contracts or the operation and maintenance o ANSF acilities throughout
Aghanistan, at an estimated cost o $800 million. These contracts include
provisions or developing the ANSFs sustainment capabilities.5. A key development that will help the ANP provide or its own operations and
maintenance is the move toward austere construction standards, as defned
by CSTC-A. However, these standards do not include details on heating and
cooling options and electrical and plumbing fxtures that could promote the
long-term sustainability o U.S.-constructed acilities such as the JRAC.
Work continues on the Kandahar ANP Compound. This quarter, a SIGAR audit made a
number o recommendations to ensure that the GIRoA can sustain the acilities in the uture.
(SIGAR photo)
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REPORT TO THE UNITED STATES CONGRESS I JULY 30, 2010 19
SIGAR OVERSIGHT
RECOMMENDATIONS
The United States has already committed to paying an estimated $800 million to
support all ANSF acilities over the next fve years. To enhance compliance with
USACEs quality assurance and control procedures and increase the likelihood
that the GIRoA will be able to sustain the acilities without assistance rom the
United States, SIGAR recommended that the Commanding General, USACE, take
the ollowing actions:
Direct that uture projects adhere to USACEs established quality assurance
and quality control procedures.
Review and update current guidance on austere construction standards to
include more details on heating and cooling options or dierent types o
acilities, with the option o allowing or regional dierences.
Include additional guidance regarding appropriate electrical, plumbing, and
other fxtures or acilities.
AGENCY COMMENTS
CSTC-A concurred with SIGARs recommendations to update guidance on
austere construction standards in Aghanistan. USACE concurred with the
recommendation to better adhere to quality assurance and quality control pro-
cedures. Both CSTC-A and USACE commented on SIGARs observation that an
armory and a barracks had been built adjacent to each other. CSTC-A indicated
that the armory was or securing weapons and not ammunition, implying that
there was no saety concern. In contrast, USACE stated that it was in discussions
with CSTC-A about installing 20-oot concrete barriers between the two areas.
SIGAR noted that this matter needs to be resolved because the acilities will betranserred to Aghan authorities at the end o July 2010, according to USACE
ofcials rom Aghanistan Engineering District (AED)-South.
Audit 10-13: Women and GirlsGreater Coordination Needed in Meeting Congressional Directives To Address and Report
on the Needs o Aghan Women and Girls
From 2003 through 2010, the Congress earmarked $627 million in appropri-
ated unds to address the needs o Aghan women and girls. The Congress also
periodically directed the Department o State (DoS) to report on the use o
these unds. These earmarked unds signal congressional concern that, without
greater attention to the challenges acing women and girls in Aghanistan, the
countrys prospects or economic growth and democratic development will besharply reduced, according to a 2004 conerence report. Although the United
States and its allies cited the deense o womens rights as one o the primary
reasons or commitment to Aghanistans uture ater the deeat o the Taliban,
Aghan women continue to be among the worst o in the world, according to a
December 2009 Human Rights Watch Report.
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION20
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OBJECTIVES
The audit had three objectives:
Assess the approach that DoS and the U.S. Agency or International
Development (USAID) used to attribute and report on unds covering activi-
ties or Aghan women and girls or FY 2008 and FY 2009.
Determine the extent to which specifc earmarks to certain organizations
met congressional directives. Assess whether reported activities were consistent with U.S. and Aghan
national strategies, including the National Action Plan or the Women o
Aghanistan.
FINDINGS
1. SIGARs report ocused on the DoS October 2009 report o U.S.-unded
activities or women and girls in Aghanistan, and to some extent on DoSs
2008 report. In reviewing the 2009 report, SIGAR ound that DoS and USAID
did not coordinate their approach to reporting on the use o the unds ear-
marked or Aghan women and girls. The reports submitted to the Congress
in 2008 and 2009 did not provide complete and consistent inormation about
the reported activities in which women and girls were intended benefcia-ries, such as relating unded activities to numbers o emale benefciaries or
services provided.
2. SIGAR ound other problems with DoSs reporting. For example, the
reports used dierent time rames or and approaches to the data presented.
Although DoS and USAID took action in the past year to coordinate gender-
related issues in Kabul, DoS did not develop guidelines or a rationale or
determining and reporting earmark attributions. The report provided no
explanation or why certain activities were included and others were not.
Beore the Kabul Conerence,U.S. Secretary o State Hillary Rodham Clinton participates in
a womens empowerment event hosted by EU High Representative or Foreign Policy Catherine
Ashton in Kabul on July 20, 2010. (DoS photo)
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REPORT TO THE UNITED STATES CONGRESS I JULY 30, 2010 21
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As a result, the reports to the Congress did not provide a clear picture o
how the unds were used to address the needs o Aghan women and girls.3. Congressional legislation also specifed that certain Aghan organizations
should receive earmarks o specifc amounts. DoS and USAID partially met
these congressional directives. For example, the Ministry o Womens Aairs,
which has responsibility or implementing GIRoA policies to secure and
expand the legal rights o women, did not receive appropriated unds or
each year it was mentioned in legislation. Other organizations received only
partial amounts o the unds earmarked or them by the Congress, including
the Aghanistan Independent Human Rights Commission and nongovernmen-
tal organizations and civil society organizations led by Aghan women.
4. U.S. policy is to support womens rights, gender integration, and Aghan
national strategies. However, the 2009 report did not show linkages between
U.S.-unded activities and Aghan goals and benchmarks included in the
National Action Plan or Women in Aghanistan, a key tool by which the GIRoA
seeks to realize its gender equity goals. Such linkage is important to ensure
that the reported activities address the needs o Aghan women and girls.
RECOMMENDATIONS
Earmarks o appropriated unds or addressing the needs o Aghan women
and girls have increased signifcantly over time, rom $5 million in 2003 to
$175 million or 2010. Although the Congress has directed DoS to report on the
use o these unds or Aghan women and girls, the reporting has not provided a
clear picture o how the unds have been used to beneft Aghan women and girls
or how U.S.-unded activities support the goals o National Action Plan or theWomen o Aghanistan. SIGAR thus recommended that the Secretary o State,
in consultation with the USAID Administrator, take the ollowing actions beore
September 30, 2010, when DoSs next report to the Congress is due:
Develop consistent reporting requirements or all USAID and DoS programs
and activities to provide data on emale benefciaries and on the measurable
impacts o activities intended to address the needs o Aghan women and girls.
Develop a coordinated approach or determining the earmark attribution
amounts and reporting on the use o earmarked unds that provides consis-
tent inormation about each activity, identifes unding sources, and provides
the rationale or reporting activities.
Align activities to ensure consistency with the goals and benchmarks stated
in Aghanistans national strategies, particularly the National Action Plan orthe Women o Aghanistan.
Target unds to address the organizations specifed in the legislation
including the Ministry o Womens Aairs, the Aghanistan Independent
Human Rights Commission, and nongovernmental organizations and civil
society organizations led by Aghan womento ensure that appropriated
unds are used as directed by the Congress and address the needs o Aghan
women and girls.
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION22
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AGENCY COMMENTS
At the time this publication went to press, the agencies were still preparing ormal
comments on a drat o the report. The fnal audit report contains the agency
comments and response to the fndings and recommendations (www.sigar.mil).
Audit 10-14 Farah ANA GarrisonANA Garrison at Farah Appeared Well Built Overall, but Some
Construction Issues Should Be Addressed
The international coalition seeks to build Aghanistans capacity to provide or
its own security by training and equipping the ANSF. From FY 2005 to FY 2010,
more than $25 billion has been appropriated or the Aghanistan Security Forces
Fund, which provides the unding to train and equip the ANSF. New require-
ments call or the ANA troop levels to grow to 171,600 by October 2011. As aresult, additional acilities are needed to train and base the Aghan orce. The
garrison at Farah, located in Farah province, will house approximately 2,000
personnel. The ANA began occupying the garrison in October 2009. CSTC-A is
unding two contracts, or a total o $68.1 million, to construct the garrison in
two phases. USACEs AED-South awarded two frm-fxed-price contracts or
program management and oversight o Phases I and II to Fazlullah Construction
and Engineering Co. (an Aghan frm) and United Inrastructure Projects (an
American frm).
OBJECTIVES
The audit addressed our objectives:
Determine whether the Farah garrison was constructed within the terms othe contract, including schedule and cost.
Assess USACE oversight o construction and whether it was conducted in
accordance with the FAR, USACE requirements, and oversight provisions o
the contract.
Review the plans or sustaining ANSF acilities.
Identiy CSTC-As overall justifcation or the garrison.
FINDINGS
1. SIGAR ound that, although the Farah garrison project was nearly complete,
Phase I was completed about 16 months ater its original completion date.
Phase II was scheduled to be completed by July 2010about 12 months past
its original completion date. The cost to CSTC-A o Phase I, awarded or$29.4 million, increased by almost $10 million, largely because o contract
options exercised by AED-South and changes to the scope o work. In addi-
tion, issues with the security o ground transportation led to an increase o
$100,000 to y in building materials. The cost o Phase II, awarded or
$34.6 million, decreased by more than $5.7 million because o the removal
o line items that duplicated Phase I.
2. Overall, the garrison appeared to be well constructed; however, during the
site inspection, SIGAR observed some construction issues related to site
The Farah Garrison project is nearly
complete. When fnished, the acility will
house approximately 2,000 ANA personnel.
(SIGAR photo)
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REPORT TO THE UNITED STATES CONGRESS I JULY 30, 2010 23
SIGAR OVERSIGHT
grading, asphalt roads, and silt accumulation that should be addressed.
Grading at the site was not sufciently sloped, which will allow water tocollect around buildings. Asphalt was not always properly compacted and
will deteriorate and will need repair. The unlined drainage ditches at the site
will collect silt and require requent maintenance.
3. SIGAR ound that overall contract management and oversight met contract
requirements. Progress payments were documented properly, and qual-
ity assurance reports met USACE requirements. However, the Resident
Management System reports and two modifcations or Phase I contained
some incorrect inormation.
4. According to CSTC-A, the GIRoA does not have the fnancial or technical
capacity to sustain all ANSF acilities. AED-South is in the process o award-
ing two contracts to provide operations and maintenance or ANSF acilities.
The contracts as planned total $800 million and will cover 663 ANSF sites.
5. CSTC-A did not provide SIGAR with an overall justifcation or the Farah garri-
son, such as a rationale or its location. SIGAR reviewed various documents that
addressed certain other ANSF acilities, but none addressed garrisons. Rather
than make a recommendation regarding acility planning at this time, SIGAR is
undertaking a separate audit o CSTC-As planning eorts or ANSF acilities.
RECOMMENDATIONS
The United States has provided more than $68 million to build this garrison
to support ANA operations in Farah province. To protect the U.S. investment
and provide a sustainable acility or ANA troops, the construction issues that
SIGAR observed should be addressed. To ensure that the garrison is completedin accordance with the contract and that sustainability issues are minimized,
SIGAR recommended that the Commanding General, USACE, direct AED-South
to address the ollowing construction issues:
Ensure that the site is properly graded around buildings to prevent the
pooling o water.
Ensure that the asphalt roads and parking lots are properly compacted to
minimize deterioration.
Consider mitigating silt accumulation in the unlined drainage ditches around
the garrison to minimize maintenance.
AGENCY COMMENTS
At the time this publication went to press, the agencies were still preparing or-mal comments on a drat o the report. The fnal audit report contains the agency
comments and response to the fndings and recommendations (www.sigar.mil).
New Audits Announced This QuarterThis quarter, SIGAR initiated fve new audits that will assess the planning and
implementation o inrastructure projects or the Aghan security orces, review
cooperative agreements with nongovernmental organizations, and evaluate a
Aghan workers dig a drainage trench dur-
ing construction o ANA acilities in Farah
province. A SIGAR audit this quarter identi-
fed a number o construction issues that
should be addressed.
(SIGAR photo)
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION24
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selection o projects that are unded by the Commanders Emergency Response
Program (CERP).
Planning or ANSF FacilitiesThis audit is examining the process used in providing a rationale or ANSF
inrastructure and acilities and or meeting the ANSFs changing requirements.
As noted in SIGAR audit reports issued this quarter, without an updated acilities
plan that reects current ANSF requirements, CSTC-A runs the risk o building
acilities that are inadequate or the ANSFs projected orce strength. The audit
has three objectives:
Review CSTC-As overall plan or constructing ANSF inrastructure and acili-
ties in Aghanistan.
Review CSTC-As strategic and tactical rationale or ANSF inrastructure and
acilities, including justifcations or the deployment o ANSF personnel, the
locations o the various acilities, and their role in the operational missions
o the ANA and the ANP.
Assess how CSTC-A updates its acilities plans to ensure that current and
planned ANSF inrastructure and acilities meet changing requirements.
Review o U.S. Air Force Center or Engineering and theEnvironment Inrastructure Projects in Herat and in Mazar-e ShariSIGAR is examining two inrastructure projects undertaken by the U.S. Air Force
Center or Engineering and the Environment. This review has three objectives:
Assess whether the projects are being completed within the terms o the
contracts, including schedule and cost. Determine whether construction is in accordance with approved construc-
tion plans and specifcations.
Assess whether U.S. contract administration and construction oversight
are eective.
Review o Construction Projects or Six ANP Facilitiesin Helmand and KandaharSIGAR is initiating a perormance audit to assess the construction and progress
o six ANP district headquarters acilities, which are being constructed under
USACE contract. The work will be conducted at three sites in the Helmand
districts o Garmsir, Nahri Saraj, and Nad Ali, and three sites in the Kandahar
districts o Spin Boldak, Zheley, and Registan. This audit has three objectives: Determine whether the inrastructure projects were completed within the
terms o the contract, including schedule and cost.
Assess whether the construction is in accordance with approved construc-
tion plans and specifcations.
Evaluate the nature and adequacy o U.S. contract administration and con-
struction oversight.
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REPORT TO THE UNITED STATES CONGRESS I JULY 30, 2010 25
SIGAR OVERSIGHT
Review o USAIDs Cooperative Agreement with CARE
International or the Food Insecurity Response or UrbanPopulations o Kabul (FIRUP-K) ProgramSIGAR is initiating an audit o an estimated $60 million cooperative agreement
between USAID and CARE International. The agreement, the Food Insecurity
Response or Urban Populations o Kabul (FIRUP-K), is or one o our programs
addressing ood insecurity in major urban areas in Aghanistan. Although the
completion date o the one-year program was originally March 2010, USAID
has recently indicated it was extended to September 2011. SIGAR will examine
USAIDs award and oversight processes, program start dates and results, and
challenges to implementation. The audit has three objectives:
Assess USAIDs process or awarding cooperative agreements, particularly
FIRUP-K, and USAIDs management and oversight o the program. Review the goals and objectives o the program, assess how USAID mea-
sures results, and identiy what the program has achieved.
Identiy challenges the program has encountered, how they have aected
implementation, and what USAID and CARE have done to address them, in
particular the rationale or extending the planned completion date.
Review o Selected CERP Projects in AghanistanThis review is a pilot audit o a selection o Commanders Emergency Response
Program (CERP) projects. SIGAR intends to replicate the pilot in selected
geographical areas and categories o CERP assistance. The audit will examine
schedules and costs, outcomes, U.S. oversight, and plans or sustaining the
projects. The audit will address our objectives: Assess whether the CERP projects were completed within the terms o the
project plans, including schedule and cost.
Examine the processes in place or evaluating CERP projects and the extent
to which CERP project outcomes have been assessed.
Assess the nature and extent o U.S. administration and oversight or
CERP projects.
Identiy the plans that exist or Aghan authorities to take possession o the
projects, perorm maintenance, and pay or sustainment.
Ongoing AuditsDuring this reporting period, SIGAR continued work on 10 audits, including
contract assessments, program reviews, and audits related to SIGARs anti-
corruption initiative. The audits address reconstruction issues related to security,
governance, and development.
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION26
SIGAR OVERSIGHT
Review o the Implementation o the Civilian Uplit in
Support o the U.S. Reconstruction Eort in AghanistanSIGAR has coordinated the scope o this audit with the Government Accountability
Ofce (GAO). GAO is examining how the U.S. government determined its
requirements; SIGAR is assessing the implementation o the increased civilian
deployment. The audit has three objectives:
Identiy the number and types o personnel provided to implement the
civilian uplit.
Assess the extent to which required resources have been provided to
support the operational and support needs o these additional personnel
in Aghanistan.
Assess the extent to which civilians in the feld are being used to achieve
stated strategic and programmatic goals, including collaborating withmilitary and international partners and assisting with contract oversight
responsibilities.
Review o Aghanistans National Solidarity ProgramThis audit is related to a series o audits SIGAR is conducting to examine U.S.
and other donor assistance in support o the GIRoAs anti-corruption capabilities.
These audits also assess the internal controls that Aghan public institutions are
able to exercise to ensure that donor assistance unds provided to the GIRoA are
reasonably protected against waste, raud, and abuse.
In 2003, the Aghan Ministry o Rural Rehabilitation and Development estab-
lished the National Solidarity Program to help Aghan communities identiy,
plan, manage, and monitor their own development projects. Since then, theprogram has received more than $900 million in international unding and has
reported completing nearly 40,000 small inrastructure projects. The audit has
two objectives:
Identiy U.S. and donor assistance to the program and determine actions
taken by the United States and other donors to ensure that their contri-
butions are adequately accounted or, appropriately programmed, and
ultimately used or their intended purposes.
Examine the capacity o the Ministry o Rural Rehabilitation and
Development to plan, manage, and monitor the program, to provide reason-
able assurance that adequate internal controls are in place and are used
properly to achieve the programs intended results.
Review o U.S. Eorts To Improve the Accountabilityand Anti-Corruption Capabilities and Perormance o theNangarhar Provincial GovernmentThis audit is examining unding, accountability, and capacity issues related to
Nangarhar province. This is a pilot audit resulting rom survey work conducted
on the accountability and anti-corruption capabilities and perormance o pro-
vincial governments. I successul, SIGAR will replicate this audit in other key
provinces in the uture. The audit has three objectives:
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REPORT TO THE UNITED STATES CONGRESS I JULY 30, 2010 27
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Identiy the amounts, sources, and purposes o donor and Aghan unding
or Nangarhar. Assess the steps the U.S. government has taken to ensure that U.S. recon-
struction unds provided or Nangarhar are used according to national and
provincial priorities.
Determine the extent to which Nangarhars provincial government can
ensure that unds are properly protected rom misuse and used according to
national and provincial priorities.
U.S. and International Eorts To Build the AghanGovernments Capacity To Fight CorruptionMost o the more than $51 billion provided or the reconstruction o Aghanistan
has been managed directly by U.S. agencies, bypassing the GIRoA. Consistent
with a new donor approach adopted in January 2010, the United States plans
to direct up to hal o uture development assistance through GIRoA channels.
However, this support is contingent on the GIRoAs ability to reduce corruption,
among other things. The audit is assessing U.S. and international eorts to help
the GIRoA build the capacity to manage, monitor, and account or donor unds
and deter corruption.
Review o Salary Support Provided by U.S. GovernmentAgencies to Aghan Government OfcialsThis audit is part o SIGARs eort to assess the internal controls and account-
ability procedures o key GIRoA institutions. It is reviewing all U.S. government
salary support or GIRoA ofcials, except or uniormed ANSF members. Thereview has these objectives:
Identiy all U.S. government salary support to Aghan ofcials.
Examine the internal controls and other accountability mechanisms or
determining the recipients o salaries and the amounts paid.
Identiy challenges, i any, in providing salary support.
Identifcation o Major Vendors or ReconstructionContracts in AghanistanSIGAR initiated this audit to identiy and describe the largest U.S. reconstruc-
tion contracts; this inormation will help guide SIGARs contract audits. GAO has
provided SIGAR with access to the database it compiled to prepare its reports
addressing contracting in Aghanistan during FY 2007, FY 2008, and the frst sixmonths o FY 2009. SIGAR has analyzed GAOs data to identiy and rank the prime
vendors by total obligations during that period. This audit has three objectives:
Ensure that the vendors and associated contracts identifed are or recon-
struction in Aghanistan (rather than support or the U.S. presence).
Determine the value and purpose o the contracts identifed.
Document each contracts reported total obligations and expenditures
through FY 2009.
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION28
SIGAR OVERSIGHT
SIGAR is working with DoS, DoD, and USAID to identiy any prime contrac-
tors that have active contracts or substantive reconstruction assistance toAghanistan that did not appear in GAOs database. To minimize duplication o
eort, SIGAR is coordinating this work with GAOs ongoing compilation o contract
obligations or the last six months o FY 2009.
Review o U.S. Assistance or the Preparation and Conduct oPresidential and Provincial Council Elections in AghanistanThis audit, the third in a series o reports on the election process, is reviewing
independent assessments o the 2009 presidential and provincial council elections
and actions taken by U.S. and international donors to support the 2010 parlia-
mentary elections. This review will identiy the lessons learned rom the 2009
elections and actions taken to address electoral reorms priorities and issues.
Review o U.S. Agencies Use o Contractors To ProvideSecurity or Reconstruction Programs in AghanistanSIGAR is conducting this audit to identiy the number and volume o contracts in
place to provide security services in Aghanistan. The audit has these objectives:
Determine the number o security contractors and personnel working or
U.S. ederal agencies in Aghanistan.
Assess the agencies management and oversight o security contractors
and subcontractors.
Determine the extent to which GAO and the inspector general community
have conducted audits o private security contracts.
Contract Audit: Reconstruction Security Support Servicesrom Global Strategies Group, Inc.This audit, which is related to SIGARs audit o private security contractors in
Aghanistan, is examining whether the USACE received the security services it
needed rom the contractor at a reasonable cost. This quarter, SIGAR re-scoped
this audit to clariy the objectives. The re-scoped audit has these objectives:
Identiy the services provided by Global Strategies Group (Global) and deter-
mine whether those services were provided in accordance with the contract,
including schedule, cost, and any modifcations.
Determine whether USACE conducted its oversight o the Global contract in
accordance with the Federal Acquisition Regulation, USACE requirements,
and any oversight provisions in the contract. Identiy the private security subcontractors that were used, i any, and deter-
mine how they were vetted and considered to be capable o perorming the
contracted services.
Review o Aghan National Police (ANP) Personnel ManagementSIGAR is conducting this audit to evaluate the extent to which the ANP has
developed accurate systems or personnel accounting. This audit originally
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SIGAR OVERSIGHT
ocused on both the ANP and ANA, but SIGAR re-scoped the audit to ocus only
on the ANP in order to avoid duplicating work being conducted by GAO and tomeet the growing interest in the ANP. The re-scoped audit has our objectives:
Describe ANP personnel management processes and systems.
Describe actions taken by the GIRoA and donors to implement and maintain
ANP personnel management processes and systems.
Identiy any challenges that may impede the implementation and sustain-
ment o ANP personnel management processes and systems.
Identiy the extent to which risks o raud, waste, and abuse are being
mitigated.
Forensic Audits
SIGAR is conducting three reviews, including two announced this quarter,under the authority o P.L. 110-181, as amended. The legislation requires SIGAR
to investigate improper paymentssuch as duplicate payments or duplicate
billingsand to prepare a fnal orensic audit report on all programs and opera-
tions unded with amounts appropriated or otherwise made available or the
reconstruction o Aghanistan. The new reviews will examine USAID and DoS
transaction data related to reconstruction unding.
Forensic Review o Aghanistan Security Forces FundTransaction DataSIGAR initiated a review o DoD appropriation, obligation, and expenditure
transaction data related to the Aghanistan Security Forces Fund (ASFF) or
FY 2005 to FY 2009. This initiative will analyze transactional data to identiyanomalies that may indicate raud, using data-mining techniques and raud indi-
cators. The results could support or lead to SIGAR audits or investigations.
Forensic Review o U.S. Agency or International DevelopmentTransaction Data Related to Aghanistan ReconstructionSIGAR is initiating a review o USAID appropriation, obligation, and expenditure
transaction data related to Aghanistan reconstruction activities rom FY 2002
to the present. This initiative will analyze transaction data to identiy anomalies,
using data-mining techniques and raud indicators. The results could support or
lead to SIGAR audits or investigations.
Forensic Review o Department o State TransactionData Related to Aghanistan ReconstructionSIGAR has announced an initiative to review DoS appropriation, obligation,
and expenditure transaction data related to Aghanistan reconstruction activi-
ties rom FY 2002 to the present. The objective o this initiative is to analyze
transaction data to identiy anomalies, using data-mining techniques and raud
indicators. The results could support or lead to SIGAR audits or investigations.
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION30
SIGAR OVERSIGHT
SIGAR INVESTIGATIONSThis quarter, the SIGAR Investigations Directorate opened 27 new cases andclosed 14 cases. SIGAR has 55 ongoing cases divided among three investigative
activities, as authorized by the Attorney General guidelines or inspectors general
with statutory law enorcement authority. The three activities are assessments,
preliminary investigations, and ull investigations; the distinctions between them
derive rom the authorized investigative methods and the nature o the inorma-
tion regarding the alleged crime. As o July 30, 2010, SIGAR is conducting
1 assessment, 19 preliminary investigations, and 35 ull-scale investigations.
SIGAR thoroughly assesses all allegations o criminal activity to determine
whether reconstruction unds are involved. The United States is unding so many
interrelated military and civilian activities in Aghanistan that contractors and
their subcontractors oten work or multiple entities engaged in multiple activi-ties. This oten makes it difcult to quickly determine the source o unds, such
as in the case o bulk cash shipments.
The cases under investigation involve contract raud, public corruption, pro-
curement raud, and miscellaneous criminal activities. Figure 2.1 and Figure 2.2
provide a breakdown o the cases by status and type.
Building Investigative CapacitySince the last reporting period, SIGAR has hired three new investigators and
is on track to meet its targeted stafng level o 32 by the end o the fscal year.
SIGAR investigators are senior-level, career law enorcement ofcers with expe-
rience in white collar crime, accounting, and raud examination.
O the 24 investigators already on sta, 14 are in Aghanistan, and 10 are
based at SIGAR headquarters in Arlington, Virginia. SIGAR has assigned inves-
tigators to the U.S. Embassy in Kabul, CSTC-A headquarters at Camp Eggers,
Bagram Air Field, and Kandahar Air Field. To expand its investigative pres-
ence in Aghanistan, SIGAR is in the process o adding seven new feld ofces
in fve provinces where signifcant reconstruction work is planned or under
wayNangarhar, Logar, Khowst, Herat, and Balkh. SIGAR is coordinating with
the commanders o ISAF and USFOR-A and with DoS ofcials to acilitate the
logistics, including orce protection and lie support services.
SIGAR investigators work in close cooperation with other ederal law enorce-
ment agencies in Aghanistan and in the United States to maximize resources
and to ensure that all allegations o the misuse o U.S. taxpayer dollars are seri-
ously considered. SIGAR maintains a permanent, ull-time presence at the Joint
Operation Center o the International Contract Corruption Task Force (ICCTF)
in Washington, D.C. The ICCTF is the principal U.S. law enorcement organiza-
tion coordinating U.S. ederal investigations o raud internationally.
Source: SIGAR Investigations Directorate, 7/19/2010.
Total: 55
FullInvestigations
35
Assessments
1
PreliminaryInvestigations
19
CASES UNDER INVESTIGATION BY STATUS
Source: SIGAR Investigations Directorate, 7/19/2010.
Procurement
Fraud
11
ContractFraud
23
Other
7
PublicCorruption
14
Total: 55
CASES UNDER INVESTIGATION BY TYPE
FIGURE 2.1
FIGURE 2.2
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REPORT TO THE UNITED STATES CONGRESS I JULY 30, 2010 31
SIGAR OVERSIGHT
Two Aghan Companies Plead Guilty to Bribery and Are Fined$4.4 MillionOn June 25, 2010, two Aghan trucking companies pleaded guilty to paying bribes
to U.S. public ofcials in exchange or unair advantages in obtaining trucking
service contracts at the Bagram Air Field. These companies were transporting
reconstruction materials, among other commodities. The case is the result o
a joint investigation by SIGAR, the Deense Criminal Investigative Service, the
U.S. Army Criminal Investigation Command Division, and other members o
the ICCTF. The plea agreements require the companies, Aghan International
Trucking (AIT) and Aghan Trade Transportation (ATT), to pay a combined total
o $4.4 million in criminal fnes.
The investigation revealed that AIT made corrupt payments totaling more than
$120,000 to various U.S. military ofcials, and ATT made corrupt payments o morethan $30,000 to one o those ofcials. According to the statement o acts, AIT
employees began oering money to ofcials in the transportation ofce in 2004. At
one point, AIT paid a government ofcial $70,000 cash stued in a box o candy.
SIGAR Is Investigating Cash Leaving AghanistanSIGAR investigators are working closely with other ederal agencies, including
U.S. Immigration and Customs Enorcement (ICE), to determine the source o
bulk cash shipments leaving Aghanistan through the Kabul Airport. At the end
o March, ICE and other ederal law enorcement agencies launched a three-day
operation to examine cash leaving the airport. During this period, seven passen-
gers declared $8.2 million in cash. No arrests were made because each o these
passengers had declared the money in their possession, as required by Aghan law.
During April and May, SIGAR investigative teams made three trips to Dubai
to support ongoing investigations, which included looking at the ow o cash
between Aghanistan and Dubai. SIGAR has provided relevant inormation con-
cerning raud and bulk cash shipments to ICE in both Kabul and Dubai.
SIGAR Hotline and Complaints Management SystemThis quarter, the SIGAR Hotline and Complaints Management System (HCMS)
received 62 complaintsup 77% rom last quarter. Since becoming operational
in January 2009, the HCMS has received 196 reports o alleged raud, waste, and
abuse in Aghanistan reconstruction.
O the 62 complaints received this quarter, SIGAR reerred 11 internally orappropriate action and 13 to other agencies; 19 are being coordinated or are under
review. Also, SIGAR closed 19 complaints that were ound to be without merit.
During this reporting period, the Hotline received several complaints alleg-
ing that Aghan subcontractors had not been paid or work completed. SIGAR
is looking into these allegations because ailure by a U.S. contractor to pay
Aghan subcontractors or work properly executed undermines the U.S.
reconstruction eort.
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SPECIAL INSPECTOR GENERAL I AFGHANISTAN RECONSTRUCTION32
SIGAR OVERSIGHT
SIGAR Investigations initiated a broad public outreach campaign this quarter
to increase awareness o the SIGAR Hotline, using these and other methods:
posters and business cards in Engli