	The United States Faces Challenges in Managing and Overseeing Programs in Afghanistan

Various factors challenge U.S. efforts to ensure proper management and  oversight of U.S. development efforts in Afghanistan. Among the most  noteworthy has been the “high-threat” working environment U.S.  personnel and others face in Afghanistan, the difficulties in preserving  institutional knowledge due in part to a high rate of staff turnover, and the  Afghan government’s lack of capacity and corruption challenges. 1). This problem is exacerbated by the  lack of mechanisms for retaining and sharing institutional knowledge  during transitions of USAID personnel and the rate at which USAID staff  turn over, which USAID acknowledged as hampering program design and  implementation. The USAID monitoring officials for  the eight agricultural programs we focused on during our review of  USAID’s agricultural development efforts in Afghanistan were in place, on  average, 7.5 months (see table 1). While  relying on contractors to perform such functions can provide benefits, we  found that USAID did not always fully address related risks. Limited Ministerial Capacity and Corruption Challenge Development Efforts

USAID has increasingly included and emphasized capacity building among  its programs to address the government of Afghanistan’s lack of capacity  to sustain and maintain many of the programs and projects put in place by  donors. USAID has undertaken some steps to address the Afghan ministries’  limited capacity and corruption in Afghanistan by including a capacity- building component in its more recent contracts. The assessment noted that “substantial USAID  assistance  already designed to strengthen transparency,  accountability, and effectiveness—prime routes to combat corruption.”
Additionally, we reported in 2009 that USAID’s failure to adhere to its  existing policies severely limited its ability to require expenditure  documentation for Afghanistan-related grants that were associated with  findings of alleged criminal actions and mismanaged funds. USAID Did Not Consistently Follow Established Performance Management and Evaluation Procedures

USAID’s Mission to Afghanistan manages and oversees most U.S.  development assistance programs in Afghanistan and relies on  implementing partners to carry out its programs. USAID’s Automated  Directives System (ADS) establishes performance management and  evaluation procedures for managing and overseeing its assistance  programs. These procedures, among other things, require (1) the  development of a Mission Performance Management Plan (PMP); (2) the  establishment of performance indicators and targets; and (3) analyses and  use of program performance data. USAID had generally required the same performance management and  evaluation procedures in Afghanistan as it does in other countries in which  it operates. However, in October 2008, USAID approved new guidance that  proposed several alternative monitoring methods for USAID projects in  high-threat environments. USAID Needs an Approved PMP to Guide Management and Oversight Efforts

The ADS requires USAID officials to complete a Mission PMP for each of  its high-level objectives as a tool to manage its performance management  and evaluation procedures. While the Afghanistan Mission had developed  a PMP in 2006, covering the years 2006, 2007, and 2008, the Afghanistan  Mission has operated without a PMP to guide development assistance  efforts after 2008. USAID Needs to Consistently Approve and Establish Indicators and Targets

Under USAID’s current policies, implementing partners working on USAID  development assistance projects in Afghanistan are required to develop  and submit monitoring and evaluation plans that include performance  indicators and targets to USAID for approval. However, during our most  recent review of USAID’s agricultural development programs, we found  that USAID did not always approve implementing partner performance  indicators and targets. While the implementing partners for the eight  agricultural programs we reviewed did submit monitoring and evaluation  plans, which generally contained performance indicators and targets, we  found that USAID had not always approved these plans and did not  consistently require targets to be set for all of indicators as required. For  example, only 2 of 7 active agricultural programs included in our review  had set targets for all of their indicators for fiscal year 2009. USAID Could Improve Its Assessment and Use of Performance Data

In addition to collecting performance data and assessing the data’s quality,  ADS also includes the monitoring activities of analyzing and interpreting  performance data in order to make program adjustments, inform higher- level decision making, and resource allocation. However, we are uncertain of the extent to which USAID  used the 2007 evaluation to adapt current programs and plan future  programs. We reviewed U.S.  government performance management and evaluation, funding; and  reporting documents related to USAID programs in Afghanistan. Our  reports and testimonies include analysis of documents and other  information from USAID and other U.S. agencies, as well as private  contractors and other implementing partners working on U.S.-funded  programs in Washington, D.C., and Afghanistan. This is a work of the U.S. government and is not subject to copyright protection in the  United States.
Why GAO Did This Study

This testimony discusses oversight of U.S. assistance programs in Afghanistan. Strengthening the Afghan economy through development assistance efforts is critical to the counterinsurgency strategy and a key part of the U.S Integrated Civilian-Military Campaign Plan for Afghanistan. Since fiscal year 2002, the U.S. Agency for International Development (USAID) has awarded over $11.5 billion in support of development assistance programs in Afghanistan. Since 2003, GAO has issued several reports and testimonies related to U.S. security, governance, and development efforts in Afghanistan. In addition to reviewing program planning and implementation, we have focused on efforts to ensure proper management and oversight of the U.S. investment, which are essential to reducing waste, fraud, and abuse. Over the course of this work, we have identified improvements that were needed, as well as many obstacles that have affected success and should be considered in program management and oversight. While drawing on past work relating to U.S. development efforts in Afghanistan, this testimony focuses on findings in our most recent report released yesterday on the USAID's management and oversight of its agricultural programs in Afghanistan. It will address (1) the challenges the United States faces in managing and overseeing development programs in Afghanistan; and (2) the extent to which USAID has followed its established performance management and evaluation procedures.

What GAO Found

Various factors challenge U.S. efforts to ensure proper management and oversight of U.S. development efforts in Afghanistan. Among the most significant has been the "high-threat" working environment, the difficulties in preserving institutional knowledge due to the lack of a formal mechanism for retaining and sharing information during staff turnover, and the Afghan government ministries' lack of capacity and corruption challenges. USAID has taken some steps to assess and begin addressing the limited capacity and corruption challenges associated with Afghan ministries. In addition, USAID has established performance management and evaluation procedures for managing and overseeing its assistance programs. These procedures, among other things, require (1) the development of a Mission Performance Management Plan (PMP); (2) the establishment and approval of implementing partner performance indicators and targets; and (3) analyses and use of performance data. Although USAID disseminated alternative monitoring methods for projects in high-threat environments such as Afghanistan, USAID has generally required the same performance management and evaluation procedures in Afghanistan as it does in other countries in which it operates. Summary USAID has not consistently followed its established performance management and evaluation procedures. There were various areas in which the USAID Mission to Afghanistan (Mission) needed to improve upon. In particular, we found that the Mission had been operating without an approved PMP to guide its management and oversight efforts after 2008. In addition, while implementing partners have routinely reported on the progress of USAID's programs, we found that USAID did not always approve the performance indicators these partners were using, and that USAID did not ensure, as its procedures require, that its implementing partners establish targets for each performance indicator. For example, only 2 of 7 USAID-funded agricultural programs active during fiscal year 2009, included in our review, had targets for all of their indicators. We also found that USAID could improve its assessment and use of performance data submitted by implementing partners or program evaluations to, among other things, help identify strengths or weaknesses of ongoing or completed programs. Moreover, USAID needs to improve documentation of its programmatic decisions and put mechanisms in place for program managers to transfer knowledge to their successors. Finally, USAID has not fully addressed the risks of relying on contractor staff to perform inherently governmental tasks, such as awarding and administering grants. In the absence of consistent application of its existing performance management and evaluation procedures, USAID programs are more vulnerable to corruption, waste, fraud, and abuse. We reported in 2009 that USAID's failure to adhere to its existing policies severely limited its ability to require expenditure documentation for Afghanistan-related grants that were associated with findings of alleged criminal actions and mismanaged funds. To enhance the performance management of USAID's development assistance programs in Afghanistan, we have recommended, among other things, that the Administrator of USAID take steps to: (1) ensure programs have performance indicators and targets; (2) fully assess and use program data and evaluations to shape current programs and inform future programs; (3) address preservation of institutional knowledge; and (4) improve guidance for the use and management of USAID contractors. USAID concurred with these recommendations, and identified steps the agency is taking to address them. We will continue to monitor and follow up on the implementation of our recommendations.