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Published: Friday January 31, 2014 MYT 1:30:59 AM
Updated: Friday January 31, 2014 MYT 1:31:55 AM

Will U.S. aid be misused? No guarantee at Afghan ministries - auditors

WASHINGTON (Reuters) - Sixteen Afghan government ministries cannot ensure that direct American aid to the war-ravaged country will not be misused, auditors privately warned the American government, a U.S. watchdog said in a report released Thursday.

The disclosure could further aggravate ties between the United States and Afghanistan, already being tested by Afghan President Hamid Karzai's refusal to sign a bilateral security pact allowing some U.S. troops to stay after NATO wraps up its combat mission this year.

The Afghan government has long been dogged by accusations of corruption.

Auditors Ernst & Young and KPMG assessed the Afghan ministries from January 2011 to August 2013, examining ways to improve accountability for direct U.S. assistance to Afghanistan.

The auditors made 696 recommendations for corrective action, ranging from 24 for Afghanistan's national power utility to 63 for the Ministry of Public Health.

"Of these, the contractors rated 41 percent of the recommendations as 'critical' or 'high risk,'" the U.S. government watchdog, known as the Special Inspector General for Afghanistan Reconstruction, or SIGAR, wrote.

Other ministries reviewed included the Ministry of Finance, the Ministry of Mines and Petroleum, and the farm ministry.

The review did not cover the entire Afghan government, only ministries that received aid from the U.S. Agency for International Development, or USAID.

In its report, SIGAR noted USAID efforts to improve accountability - but appeared to question whether aid should have kept flowing regardless, since only a fraction of risk-mitigation measures were actually implemented.

"The decision to continue with direct (U.S.) assistance seemingly conflicts with the 2012 congressional requirement, which mandates that funds be made available 'only if ... no level of acceptable fraud is assumed,'" according to the SIGAR report.

The report can be seen here: http://link.reuters.com/syd56v

The U.S. Congress, weary of the long war in Afghanistan, approved a law providing just $1.12 billion to Afghanistan for fiscal 2014 for overall civilian assistance, a 50 percent reduction from the previous fiscal year.

Ernst & Young and KPMG divided up the review of the ministries.

For the purposes of the review, the government-owned power utility, named Da Afghanistan Breshna Sherkat, was classified as a ministry.

(Reporting by Phil Stewart; Editing by Jonathan Oatis)

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