SIGAR looks into 10 years of US aid to Afghanistan

By Michael Igoe 28 January 2014

The flag of the United States flanked by the flags of Afghanistan (right) and the U.S. Agency for International Development (left). In USAID's 10 years of work in Afghanistan, it has spent $13.3 billion in the war-torn nation. Photo by: USAID Afghanistan

The U.S. Special Inspector General for Afghan Reconstruction on Monday released an analysis of over ten years of U.S. Agency for International Development spending in the war-torn nation — providing a welcome glimpse into the often opaque world of post-conflict contracting and grant-making.

According to the report, $7.7 billion (58 percent of total obligations) has gone to the top ten agency implementing partners in the country.

The World Bank tops the list with 13 percent of USAID’s total obligated spending, while International Relief and Development, Development Alternatives, Inc. and a joint venture between The Louis Berger Group and Black and Veatch Special Projects Corp. each garnered about 8 percent of USAID’s total obligated spending in the country.

Unlike most SIGAR reports, the analysis foregoes the kinds of recommendations and heated criticisms that have riled the agency and its implementing partners in the past.

Still, the broad overview of how USAID has spent $13.3 billion since the U.S.-led invasion in 2002 includes a number of findings that are likely to fuel both support and condemnation of USAID’s reconstruction effort.

It also comes in the midst of a push by U.S. officials to forge an agreement that will shape U.S. engagement in Afghanistan after the upcoming presidential elections and planned drawdown of foreign troops in late 2014.

Obligated vs. unobligated funding

If direct government-to-government funding is supposed to be a big part of that bilateral agreement, a lot will have to change in the way that USAID spends its money on Afghanistan. So far, $6.9 billion of obligated funds have been doled out in contracts, but only a tenth of that ($688 million) has been direct government-to-government agreements.

SIGAR’s report also notes that as of June 30, 2013, the U.S. Congress had appropriated $16.65 billion to Afghanistan through USAID’s Economic Support Fund, while the agency has so far only obligated $13.3 billion of that appropriation.

That $3.3 billion of unobligated funding could help explain why USAID says the massive cut to the agency’s Afghanistan budget in the fiscal year 2014 spending package passed this month will not derail the reconstruction effort. The spending bill slashed development aid for the country in half — but with $3 billion already appropriated and available to carry over, the agency’s Afghanistan portfolio may be able to absorb most of the impact.

SIGAR’s analysis also makes it clear that despite USAID’s lauded accomplishments in health and education — including efforts that have led to a dramatic increase in life expectancy — the agency’s primary focus has been infrastructure.

According to the report, almost one-third of the agency’s spending went to “construction and infrastructure.” USAID has obligated more for “stabilization” efforts (10 percent) than it has on health and education combined. Just over five percent of the agency’s spending was directed to health, and approximately four percent has gone to education.

SIGAR, under the outspoken leadership of Inspector General John Sopko, has been quick to allege instances of wasteful spending and criticize USAID’s internal controls. Without drawing any specific policy conclusions, this latest report notes that the percentage of agency obligated spending for “other oversight and financial management” was only 0.003 percent of total obligated funds.

“USAID has made considerable achievements in Afghanistan,” a USAID official told Devex.

“The funds provided by the American people have helped to bring about a five-fold increase in GDP, triple access to reliable power supplies, raise life expectancy by fifteen to twenty years, and significantly expand access to education with more than 8 million students in school today compared to 900,000 in 2002,” the official added. “Given where Afghanistan was just a decade ago, the progress has been remarkable, although it still has a long way to go.”

More details

USAID reported 406 total awards for the period between 2002 and June 2013. Of those awards, 27 percent are active, meaning their period of performance is ongoing. 73 percent were either completed, meaning officially closed-out, or inactive, meaning the period of performance has ended but the award has not been officially closed out.

SIGAR does not provide a breakdown of how much of the 73 percent is inactive awards, which have not been completed.

In addition to breaking down information related to USAID’s biggest prime contractors — the organizations and firms who bid directly on grants and contracts — the report also details sub-contractors and sub-awardees.

In the appendix, SIGAR lists the 25 entities who received sub-awards over $10 million, noting that “USAID provided a list of all sub-awardees for the period between 2002 and June 2013.”

Some experts say more transparency around sub-contractors would be extremely helpful for the agency’s “local solutions” effort, a keystone of Administrator Rajiv Shah’s USAID Forward reform effort, under which the agency is seeking to identify potential local partners and procure 30 percent of its overall services from them directly, instead of through the international firms and NGOs that currently win the vast majority of USAID grants and contracts.

Local organizations that already have experience as sub-contractors and sub-awardees on USAID projects seem like a natural starting place for building “local partnerships,” but the agency has been vague about whether it keeps information from implementing partners about these sub-contracting entities. SIGAR’s report, on the other hand, suggests USAID has tracked all of its sub-awardees in Afghanistan for the past decade.

Check back with Devex soon for more on the ongoing evolution of U.S. aid to Afghanistan.

Read more on U.S. aid reform online, and subscribe to The Development Newswire to receive top international development headlines from the world’s leading donors, news sources and opinion leaders — emailed to you FREE every business day.

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About the author

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Michael Igoe@AlterIgoe

Michael Igoe is a global development reporter for Devex. Based in Washington, D.C., he covers U.S. foreign aid and emerging trends in international development and humanitarian policy. Michael draws on his experience as both a journalist and international development practitioner in Central Asia to develop stories from an insider's perspective.

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