UNDP faces allegations of mismanagement of multi-billion dollar Afghan police fund
LONDON, Oct 9 (Thomson Reuters Foundation) - A United Nations agency in charge of administering billions of dollars in aid to Afghan police has come under renewed fire for mismanagement, including a failure to account for $200 million in deductions from a fund set up to improve law and order.
Special Inspector General for Afghanistan Reconstruction John Sopko warned of growing concerns about fraud and lack of oversight in the management of the Law and Order Trust Fund for Afghanistan (LOTFA), run by the United Nations Development Programme (UNDP) to pay for Afghan police salaries and pensions.
The United States has been building up Afghan security forces before withdrawing its combat troops by the end of this year. LOTFA has paid out $1.62 billion since January 1, 2011.
International donors have spent billions of dollars on reconstruction in Afghanistan, but it is ranked one of the most corrupt countries in the world, and major donors are concerned about its lack of progress in fighting graft.
In a series of letters, Sopko said funds had been used to inflate police salaries and make payments to "ghost employees", and wrote of "questionable deductions" that the Afghan Ministry of Interior (MoI) may have taken from police salaries.
"In particular, I requested that UNDP describe how it has accounted for up to $200 million in 'deductions' that the MoI may have taken from the salaries of (police) employees, who are paid with LOFTA funds," Sopko wrote in a letter to UNDP Administrator Helen Clark dated Sept.12 and released this month.
Sopko said he was disturbed to learn that LOTFA may have made direct cash payments to interior ministry and police staff. According to the UNDP's own records, this could have constituted a violation of Afghan law.
The UNDP played down its responsibility for overseeing LOTFA and failed to acknowledge "the problems that continue to plague this programme", the inspector general wrote.
Oversight of payments by the fund is crucial, particularly after a U.S. government audit found the interior ministry could not account for $17.4 million in pension withholdings and $9.9 million in additional payroll deductions in 2013.
LOTFA donors, including the European Union, had expressed significant concerns regarding the need for transparency in the police payroll system, Sopko said.
Given donors' strong interest in greater LOTFA transparency, Sopko wrote he was baffled that the UNDP said it could not investigate how LOTFA funds were spent.
In a written response to Sopko, the UNDP said it had limited responsiblity to oversee LOTFA and no institutional mandate to conduct audits and investigations of the interior ministry.
The UNDP acknowledged that its own internal review had turned up a number of irregularities, including $15 million of "miscoded and ineligible" expenses by the Afghan government.
It had also gone beyond its responsibilities in raising many payroll-related issues with the Afghan government and international partners and taken steps to make systems more efficient, the UNDP said.
The agency acknowledged that "in some cases there were delays in the discovery of the problems."
It said it was hiring an international company to conduct a study of the payroll process and provide recommendations to improve the administration of the fund.
The UNDP was not available for further comments.
Overall, the United States has poured some $104 billion into reconstruction efforts in Afghanistan, and Sopko is responsible for monitoring how effectively the money is spent.
(Editing by Astrid Zweynert and Tim Pearce)
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