Last week, a report in USA Today brought to light a story of aid funds going badly astray. In case you have not followed the story, it seems that back in 2003, USAID contracted with the UNDP and UNOPS to complete a series of “quick impact” infrastructure projects in Afghanistan, to build badly needed roads, bridges, and community buildings. A US government report on the project, sparked by a tip from an anonymous complainant, found that many of the projects reported as “complete” by the UN were in fact unfinished or had such “life-threatening oversights” that they could not be used.
The USA Today reporter filed a Freedom of Information Act Request to access the government report, which he then published along with the article.
Here are a few highlights of the report:
- According to a former UNOPS employee, some $10 million of the USAID grant funds was diverted to projects outside of Afghanistan, in Sudan, Haiti, Sri Lanka and, most memorably, Dubai.
- The UNDP withdrew $6.7 million of project funds in 2007, after the project had ended and without USAID’s knowledge. The investigators could not pin down how those funds were spent.
- A bank was built for $375,000 without electricity, plumbing or proper drainage. The report found that the basement had flooded, destroying stacks of money, and the walls were rotting.
- A $250,000 bridge, reported as “completed,” was dangerous and unusable, having been designed too small for the site where it was built.
- An airstrip budgeted at $300,000 actually cost $729,000 to build. After a description of the major engineering flaws in the construction of the airstrip, the report concluded that military planes cannot safely land there and that “erosion rills or ruts will continue to expand until they reach the runway itself, destroying it completely.” In other words, USAID paid $729,000 for a patch of mud.
- There may be more to come: “questions remain unanswered” because several UN officials refused to be interviewed and the UN failed to provide requested documents during the investigation.
USAID is also to blame for choosing such a bad contracting arrangement, and for not having procedures to catch this earlier and seek full compensation. USA Today reported:
Federal prosecutors in New York City were forced to drop criminal and civil cases because the U.N. officials have immunity. USAID has scaled back its dealings with the U.N. and hired a collection agency to seek $7.6 million back, Deputy Administrator James Bever said. The aid agency hasn’t heeded its inspector general’s request to sever all ties.
“There are certain cases where working with the U.N. is the only option available,” Bever said in an e-mail.
At a UN briefing last week, the UNDP spokesman said that “there have already been a number of meetings, including at the highest level of UNDP and USAID, to work through this matter.” He said that he expected that the UNDP would have to pay USAID no more than $1.5 million.
A disastrous aid outcome, exposure in the mass media — so what were the consequences? A number of meetings, possibly some money back, USAID disregards its own Inspector General’s request to break off ties with the UN (some unspecified “scaling back” except in other unspecified “certain cases”), and yet more meetings “at the highest levels.”
Since the initial reports, there has been no further media coverage or commentary except for an editorial critical of USAID in the Las Vegas Sun on April 17th. The USAID web site accessed on Monday, April 20, 2009 still listed as implementing partners UNDP (who announces it “remains responsive to the changing needs of a nation still in transition from conflict to peace”) and UNOPS (“we help our clients turn ideas into reality.”)
The USA Today story broke the same day that a USAID rep presented at a meeting in Washington called “Open Innovation for Government: Answering President Obama’s Call for More Open, Effective Public Service.”
6 Comments
Actually, USAID is not the only big donor to use UNDP or UNOPS as implementing partners or third-party monitors in fragile states. So do multi-lateral development Banks. If anything, USAID had far better monitoring and evaluation requirements than most other donors even if the numbers weren’t always as….accurate as they could have been. During the time I worked for UNDP in Kabul, I did not see one project completion report or evaluation (one was done on my project, NABDP, but the results were not shared with us), and since UNDP paid and managed the consultants who did it, I doubted the veracity of the report. In some worlds, that’s a conflict of interest. BUT…what incensed me the MOST was to see UNODC staff members smoking hash at parties while advocating eradication of the poppy fields, which were the only source of livelihoods for many tenant farmers – without providing an alternative crop to substitute for the poppy. I need to stop now. Too many bad memories coming back.
This is nothing new, when I wrote a research paper on this subject back in 2006 there was a lot of empirical and statistical evidence of massive corruption, embezzlement, fraud in Afghanistan both by Afghans and the internationals who came as vultures.
Most foreigners were working in Africa, and after 911 most of them decided to come to … Read MoreAfghanistan. What good has the international aid community done in Africa? very little, and now those same individuals who f*cked up Africa are now in Afghanistan wasting resources and committing fraud.
From a financial perspective, I think we had a fairly good control process over contracting, particularly if we were implementing directly. Where we were funding the government as it was with NABDP, there was less control since it was a government operation and government run program where they did the contracting and monitoring although we were imposing guidance and oversight. Stuff happens. In any program in these environments, it is foolish to think you will get 100% compliance. You can’t get that in the US, who thinks they can get it in a developing country. When you point out a few poor examples in all the hundreds of various programs completed, you do these organizations and yourself an injustice by not being fair and impartial. Organizations like USAID and EU as do most other donors althought ehy would like 100% compliance routinely expect that a success rate of 80 to 85% is a good outcome.
p.s. I also worked with Homira for a period.
I agree with the previous post about the reality of working in such environments, but if you take lousy environments and combine it with a lot of pressure to spend large sums of money quickly, large scale fraud is the result. In addition to the lost funds, it creates an environment in which aid funds are seen as easy money to be stolen and squandered however one can.
It is disappointing to hear that the UNDP and UNOPS in Afghanistan proved to be an unreliable implementer for these infrastructure projects. However, as a development partner throughout most of the developing world and as the development arm of the world’s only international organization with truly-global membership, the suggestion that USAID should sever all ties with the UNDP in ridiculous.
I am not sure what other governments take as their rule of thumb regarding the misappropriation and misuse of appropriations. But the GAO generally expects 10% of U.S. funds to be lost for any program. I am not sure what the lesson is supposed to be here….that the UNDP is corrupt and unreliable; that a single grant instrument went wrong for USAID; or that the media has failed to realize that $10 million in Afghanistan programming might signal a broader problem. It might be that this story is reason for broader concern. But there is nothing in it that suggests a systemic problem.
Devastating indeed. A far worse example is the CPA in Baghdad. Congress found that over $20bn in vacuum packed blocks had been sent out in the last weeks of occupation, and was never accounted for just as a taster.
But it’s spreading freedom and democracy, right?