Afghanistan Reconstruction: Despite Some Progress, Deteriorating 
Security and Other Obstacles Continue to Threaten Achievement of 
U.S. Goals (28-JUL-05, GAO-05-742).				 
                                                                 
In October 2001, coalition forces forcibly removed the Taliban	 
regime from Afghanistan, responding to their protection of al	 
Qaeda terrorists who attacked the United States. Congress	 
subsequently passed the Afghanistan Freedom Support Act of 2002  
authorizing funds to help Afghanistan rebuild a stable, 	 
democratic society. The act directed GAO to monitor the 	 
implementation of U.S. humanitarian, development, and		 
counternarcotics assistance. This report analyzes, for fiscal	 
year 2004, (1) U.S. obligations and expenditures, (2) progress	 
and results of assistance efforts, (3) assistance management and 
coordination, and (4) major obstacles that affected the 	 
achievement of U.S. goals.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-742 					        
    ACCNO:   A31477						        
  TITLE:     Afghanistan Reconstruction: Despite Some Progress,       
Deteriorating Security and Other Obstacles Continue to Threaten  
Achievement of U.S. Goals					 
     DATE:   07/28/2005 
  SUBJECT:   Federal aid to foreign countries			 
	     Foreign aid programs				 
	     Foreign governments				 
	     International cooperation				 
	     International relations				 
	     Performance measures				 
	     Physical security					 
	     Strategic planning 				 
	     Federal funds					 
	     Funds management					 
	     Afghanistan					 

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GAO-05-742

                 United States Government Accountability Office

                     GAO Report to Congressional Committees

July 2005

AFGHANISTAN RECONSTRUCTION

 Despite Some Progress, Deteriorating Security and Other Obstacles Continue to
                       Threaten Achievement of U.S. Goals

                                       a

GAO-05-742

Highlights of GAO-05-742, a report to congressional committees

In October 2001, coalition forces forcibly removed the Taliban regime from
Afghanistan, responding to their protection of al Qaeda terrorists who
attacked the United States. Congress subsequently passed the Afghanistan
Freedom Support Act of 2002 authorizing funds to help Afghanistan rebuild
a stable, democratic society. The act directed GAO to monitor the
implementation of U.S. humanitarian, development, and counternarcotics
assistance. This report analyzes, for fiscal year 2004, (1) U.S.
obligations and expenditures, (2) progress and results of assistance
efforts, (3) assistance management and coordination, and (4) major
obstacles that affected the achievement of U.S. goals.

To better assess progress toward achieving U.S. policy goals, and to
provide a basis for planning future reconstruction, GAO recommends that
the Administrator of USAID (1) establish a performance management plan
complying with USAID directives, (2) require future contractors to develop
performance plans, and (3) more completely communicate performance
information to decision-makers in Washington. In its comments, USAID
generally concurred with our recommendations and stated that improvements
to its performance measurement process were underway.

www.gao.gov/cgi-bin/getrpt?GAO-05-742.

To view the full product, including the scope and methodology, click on
the link above. For more information, contact David Gootnick at (202)
512-3149 or [email protected].

July 2005

AFGHANISTAN RECONSTRUCTION

Despite Some Progress, Deteriorating Security and Other Obstacles Continue to
Threaten Achievement of U.S. Goals

The United States spent $720 million on nonsecurity-related assistance to
Afghanistan in fiscal year 2004. Approximately 75 percent paid for
reconstruction activities, with the remainder supporting humanitarian and
quick-impact projects. Conversely, in 2002-2003, humanitarian and
quickimpact assistance accounted for more than three-fourths of U.S.
spending. The United States continued to be the largest donor,
contributing about 38 percent of the $3.6 billion pledged by the
international community.

600 Dollars in millions      
                            538 
500                          Humanitarian/quick impact 
400                               Reconstruction       

300

200

100

0 2002 2003 2004 Fiscal year

Source: GAO analysis of agency data.

U.S. humanitarian assistance benefited vulnerable populations in fiscal
year 2004. Further, the United States increased reconstruction assistance
to Afghanistan and made notable progress in several sectors through its
"Accelerating Success Initiative". Although progress varied among sectors,
the United States did not meet all of its targets due to security and
other obstacles. For example, USAID intended to rehabilitate or build 286
schools by the end of 2004. However, owing to poor contractor performance
and security problems, by September 2004 it had completed only 8.

As in 2002-2003, complete financial information was not readily available,
and USAID lacked a comprehensive strategy to direct its efforts. Further,
USAID did not consistently require contractors to fulfill contract
provisions needed to ensure accountability and oversight. USAID also did
not systematically collect information needed to assess the progress of
its major projects. Moreover, measures provided by the embassy to
decision-makers in Washington did not comprehensively portray progress in
each sector or the overall U.S. program.

Deteriorating security, increased opium production, and delayed funding
continued to obstruct U.S. reconstruction efforts in fiscal year 2004 and
threatened the achievement of U.S. goals. Deteriorating security rendered
large areas inaccessible to the assistance community, and the continued
rise in opium production undermined legitimate economic activity. In
addition, most assistance funds were not available until nearly 6 months
into the fiscal year, preventing USAID from accelerating reconstruction
efforts.

Contents

  Letter

1 Results in Brief 3 Background 5 U.S. Spending in 2004 Focused on
Reconstruction 10

U.S. Assistance Benefited Afghanistan, but Accelerated Reconstruction Did
Not Meet All Targets 16 Lack ofSecurity, Opium Cultivation, and Funding
Delays Obstructed

Reconstruction and Threatened Achievement of U.S. Goals 55 Conclusions 63
Recommendations for Executive Action 64 Agency Comments and Our Evaluation
64

Appendixes

Appendix I: Appendix II:

Appendix III: Appendix IV:

Appendix V:

Appendix VI: Objectives, Scope, and Methodology

Obligations and Expenditures by U.S. Agencies and International Donor
Pledges, Fiscal Year 2004

Sector Level Performance Indicators

Opium Production and Counternarcotics Efforts in Afghanistan

Comments from the U.S. Agency for International Development

GAO Contacts and Staff Acknowledgements

                                       66

                                     70 73

                                       84

                                     86 90

Tables Table 1:

Table 2: Table 3:

Table 4: Table 5: Table 6:

Development Indicators for Afghanistan Compared with
Averages for Low-Income Countries and The United
States 7
U.S. Quick-Impact Projects in Afghanistan for fiscal years
2002 through 2004, by Funding Source 19
Obligations and Expenditures for Humanitarian and
Reconstruction Assistance by U.S. Agencies, Fiscal Year
2004 70
Major Donors' Reported Pledges for Assistance to
Afghanistan as of November 16, 2004 70
Agriculture Sector Measures Reported to the Afghanistan
Interagency Operations Group in Fiscal Year 2004 73
Agriculture Sector Performance Measures and Status
Reported by Chemonics International Inc. 74

                                    Contents

Table 7:	Democracy and Governance Sector Measures Reported to the
Afghanistan Interagency Operations Group in Fiscal Year 2004 75

Table 8:	Democracy and Governance Sector Performance Measures and Status
Reported by Management Systems International 75

Table 9:	Economic Governance Sector Performance Measures Reported to
Afghanistan Interagency Operations Group in Fiscal Year 2004 76

Table 10: Economic Governance Performance Measures and Status Reported by
Bearing Point 77 Table 11: Education Sector Measures Reported to
Afghanistan Interagency Operations Group in Fiscal Year 2004 78 Table 12:
Education Sector Performance Measures and Status Reported by Creative
Associates International, Inc. 78 Table 13: Health Sector Measures
Reported to Afghanistan Interagency Operations Group in Fiscal Year 2004
79 Table 14: Health Sector Performance Measures and Status Reported by
Management Sciences for Health 80

Table 15: Infrastructure Sector Measures Reported to the Afghanistan
Interagency Operations Group in Fiscal Year 2004 81

Table 16: Infrastructure Sector Performance Measures and Status Reported
by Louis Berger Group, Inc. 82 Table 17: Objectives for Assistance to
Afghan Women Contained in U.S. Legislation 83 Table 18: Opium Production
in Afghanistan, Fiscal Year 2002-2004 84 Table 19: Major Counternarcotics
Efforts in Afghanistan, Fiscal Year 2001-2005 84

Figures Figure 1:

Figure 2: Figure 3: Figure 4:

Figure 5:

Figure 6:

Figure 7:

Map of Afghanistan Including Provinces and Major
Roads 6
Political History of Afghanistan, 1749-2005 8
Expenditures by Type, Fiscal Years 2002-2004 11

Nonsecurity-Related U.S. Agency Expenditures in
Afghanistan, Fiscal Year 2004 13
Map of USAID Funding Obligations by Province, Fiscal
Year 2004 15
Percentages of Assistance to Afghanistan Pledged by
United States and Other Donors for 2004 16
Agriculture 20

Contents

Figure 8: Democracy and Governance 23 Figure 9: Economic Governance 26
Figure 10: Education 29 Figure 11: Health 32 Figure 12: Infrastructure 35
Figure 13: Women's Initiatives 38 Figure 14: Major U.S. Interagency Afghan
Assistance Coordination

Mechanisms Used in Fiscal Year 2004 50 Figure 15: Consultative Group
Structure 2004 53 Figure 16: UN Security Risk Maps, June 2003 and October
2004 56 Figure 17: Timeline for Funding of Reconstruction in

Afghanistan 62

Abbreviations

APEP Afghanistan Primary Education Program
ARG Afghanistan Reconstruction Group
CERP Commander's Emergency Response Program
DOD Department of Defense
HHS Department of Health and Human Services
MSH Management Sciences for Health
MSI Management Systems International
OFDA Office of Foreign Disaster Assistance
OTI Office of Transition Initiatives
PRT Provincial Reconstruction Team
QIP Quick Impact Projects
RAMP Rebuilding Agricultural Markets Program
REACH Rural Expansion of Afghanistan's Community-Based Health

care REFS Rehabilitation of Economic Facilities and Services Program UN
United Nations UNHCR United Nations High Commissioner for Refugees USAID
United States Agency for International Development

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
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                                    Contents

A

United States Government Accountability Office Washington, D.C. 20548

July 28, 2005

The Honorable Richard G. Lugar
Chairman
The Honorable Joseph R. Biden, Jr.
Ranking Minority Member
Committee on Foreign Relations
United States Senate

The Honorable Henry J. Hyde
Chairman
The Honorable Tom Lantos
Ranking Minority Member
Committee on International Relations
House of Representatives

In 2001, when U.S. and coalition forces removed the Taliban regime from
power in Afghanistan, the country faced the task of rebuilding itself.
Almost a quarter century of war and years of drought had destroyed
Afghanistan's government, judicial, economic, and social institutions and
its transportation, health, and other infrastructure. To help rebuild the
country and create a stable Afghan society that would not be a threat to
itself or others, in fiscal years 2002 and 2003 the United States spent
$900
million on humanitarian and reconstruction projects. In June 2004, we
reported that U.S. humanitarian and short-term assistance over the 2-year
period had helped Afghanistan's vulnerable population but that longer-term
reconstruction efforts achieved limited results in creating a stable
Afghan
society.1 Delayed U.S. funding, small staff size, inadequate working
conditions, and a lack of a comprehensive strategy impeded progress; at
the same time, security deteriorated and opium production increased. In
October 2003, to speed reconstruction and produce visible signs of
progress before Afghanistan's first presidential elections in 2004, the
United States implemented the "Accelerating Success in Afghanistan"
initiative.

The Afghanistan Freedom Support Act of 2002 directs the U.S. Government
Accountability Office (GAO) to monitor U.S. humanitarian, reconstruction,

1GAO, Afghanistan Reconstruction: Deteriorating Security and Limited
Resources Have Impeded Progress; Improvements in U.S. Strategy Needed,
GAO-04-403, (Washington, D.C.: June 2, 2004).

and counternarcotics assistance to Afghanistan.2 To meet this requirement
and provide Congress with a comprehensive accounting of U.S. nonsecurity
related assistance to Afghanistan for fiscal year 2004, we analyzed (1)
U.S. obligations and expenditures, (2) the progress and results of U.S.
humanitarian and reconstruction efforts,3 (3) the management of U.S.
assistance and mechanisms to coordinate U.S. and international assistance,
and (4) the major factors that obstructed the advancement of the
assistance effort and the achievement of U.S. policy goals.

To address these issues, we collected and analyzed information from the
U.S. Departments of Agriculture, Defense, Health and Human Services,
State, and the Treasury; the U.S. Agency for International Development
(USAID); the United Nations (UN); the Afghan government; and
nongovernmental organizations and private contractors responsible for
implementing U.S. government-funded projects. We analyzed data on
obligations and expenditures by U.S. government agencies providing
assistance to Afghanistan in fiscal year 2004. We conducted reliability
checks of the financial data provided by U.S. agencies and determined that
the data are sufficiently reliable for the purposes of our analysis. To
determine the reliability of the data, we contacted each of the agencies
providing assistance and each of the offices within each agency
responsible for managing specific components of the assistance,
cross-checked and corroborated the financial information provided, and
created a consolidated financial database of U.S. assistance to
Afghanistan. This effort was necessary because there is no single,
consolidated source of obligation and expenditure data for U.S. assistance
to Afghanistan. Because U.S. assistance to Afghanistan is provided as part
of a larger effort by the international community, we also analyzed
information on the contributions of other donors.4 In addition, we
traveled to Afghanistan in

2Title I of Pub. L. 107-327 pertains to humanitarian, reconstruction, and
counternarcotics assistance; Title II, to security assistance; and Title
III, to miscellaneous provisions. As mandated by the act, this report
focuses on Title I-related assistance. For the purposes of this report,
humanitarian assistance refers to the provision of emergency assistance
that meets needs for adequate water, sanitation, nutrition, food, shelter,
and health care. Quickimpact projects refer to short-term assistance that
helps Afghanistan transition from humanitarian to development
assistance-that is, to longer-term reconstruction projects.

3In the report, we refer to progress as the status of individual
development activities such as the construction of a school, and result is
defined as a significant, intended, and measurable change in Afghanistan,
its institutions, or other entities that impact the Afghan people.

4In this report, "international community" is defined as the collective
grouping of bilateral, multilateral, and international assistance agencies
and nongovernmental organizations.

October 2004 to examine U.S. assistance-related operations in the country.
While in Afghanistan, we spoke with officials from U.S., UN, and
nongovernmental organizations; private contractors; and the Afghan
government; however, the number and location of project sites we visited
in Afghanistan were limited owing to Department of State security
restrictions. We conducted our review from August 2004 through May 2005 in
accordance with generally accepted government auditing standards. (For
further details of our objectives, scope, and methodology, see app. I.)

Results in Brief	In fiscal year 2004, the focus of U.S. spending in
Afghanistan shifted from humanitarian and quick-impact assistance to
reconstruction. Of the $1.4 billion that the United States obligated for
nonsecurity-related assistance to Afghanistan in 2004, about $720 million
was spent. Approximately 75 percent of that amount-$538 million-paid for
reconstruction contracts, with the remainder supporting humanitarian and
quick-impact projects such as the construction of wells. In contrast,
humanitarian and quickimpact assistance accounted for more than
three-fourths of U.S. spending in fiscal years 2002-2003. Among U.S.
agencies, USAID provided the largest amount of nonsecurity-related
assistance in Afghanistan in fiscal year 2004, accounting for about 82
percent of total U.S. expenditures for reconstruction, humanitarian, and
quick-impact projects. About two-thirds of USAID's obligations supported
local projects in Afghanistan's 34 provinces, with Kabul and Kandahar
provinces receiving approximately 70 percent of these funds, mainly for
roads. Overall, as in 2002-2003, the United States was the largest donor
of assistance to Afghanistan, contributing about 38 percent of the $3.6
billion pledged by the international community for 2004.5

U.S. humanitarian and quick-impact assistance and the acceleration of
reconstruction programs benefited Afghanistan's vulnerable populations and
local communities in fiscal year 2004; however, due to security and other
obstacles, the United States did not meet all of its reconstruction
targets. The United States provided food and other emergency assistance to
refugees and other vulnerable populations, primarily through USAID and the
Department of State. In addition, the number of USAID and Department of
Defense (DOD) quick-impact projects managed through provincial

5Donors vary in their definition of pledges. The United States reports
only money that has been appropriated, while other donors report amounts
that may be a statement of intentions but have not necessarily been
mobilized.

reconstruction teams increased owing to the addition of USAID's
Quick-Impact Program and DOD's Commanders' Emergency Response Program.
Reconstruction progress and problems encountered during the Accelerating
Success in Afghanistan initiative varied among sectors. Despite notable
progress, particularly in the democracy and governance sector, such as the
successful presidential election, the U.S. government did not meet all of
its 2004 targets or project objectives. For example, in the education
sector, the U.S. government intended to rehabilitate or build 286 schools
by the end of 2004, but by September 2004 it had substantially completed
only 8 new structures and refurbished about 77 others. Likewise, in the
health sector, the U.S. government aimed to construct or rehabilitate 253
clinics by the end of 2004, but by the end of September, owing to, among
other things, Afghan ministries' insistence on new construction rather
than refurbishment, poor contractor performance and security problems, had
rehabilitated none and substantially completed only 15 new structures.

Problems associated with the management and coordination of U.S.
assistance to Afghanistan impacted the assistance effort in fiscal year
2004. Despite partial improvements to U.S. tracking of financial data
after the publication of our 2004 report, complete and accurate
information was still not readily available; consequently, U.S. efforts to
plan, assess progress, and make informed resource allocations were
impaired. As in fiscal years 2002-2003, USAID lacked a comprehensive
operational strategy to direct its efforts in Afghanistan in fiscal year
2004, although the agency was developing a strategy for 2005. Further,
USAID did not always require contractors to fulfill contract provisions
such as work plans needed to ensure contractor accountability and
facilitate USAID oversight. Although USAID regulations require missions to
establish systems for measuring progress toward intended objectives, we
found that USAID did not systematically use available tools to collect the
information needed to assess the progress or results of its major projects
or its overall program. Moreover, the measures that the embassy provided
to decision makers in Washington did not comprehensively portray progress
or results in each sector or the overall U.S. program. Meanwhile, although
U.S. interagency assistance coordination occurred daily in 2004, the
Afghanistan Reconstruction Group, a new advisory group in Kabul, lacked a
clear mission, which led to some confusion between it and USAID assistance
contractors. Finally, problems associated with coordination between the
Afghan government and donor nations, including the United States,
continued to occur in 2004.

As in fiscal years 2002-2003, several factors obstructed U.S.
reconstruction efforts in fiscal year 2004 and threatened the achievement
of overall U.S. goals. Deteriorating security in some regions rendered
large areas effectively inaccessible to the assistance community; despite
efforts by U.S., Afghan, and international forces, attacks against aid
workers, Afghan security forces, and international forces increased.
Further, a continued rise in opium production undermined legitimate
economic activities and the establishment of the rule of law. According to
UN and U.S. reports, drug trafficking revenues equaled approximately 50 to
60 percent of Afghanistan's gross domestic product over the 2002-2004
period and provided support to factional and antigovernment groups.
Finally, funding delays continued to negatively impact the U.S. assistance
effort in Afghanistan in 2004. Most assistance funds were not available
until nearly 6 months into the fiscal year, preventing USAID from
accelerating reconstruction efforts.

We are recommending that USAID take several steps to improve the
management and assessment of U.S. reconstruction efforts and to provide a
basis for planning future reconstruction projects. The steps should
include (1) establishing a performance management plan that complies with
USAID directives, (2) clearly stipulating in all future reconstruction
contracts that contractors are to develop performance management plans
specific to the work they are conducting, and (3) more completely
communicating the performance information obtained from the performance
management plans to executive branch decision-makers in Kabul and
Washington.

We provided a draft of this report to the Departments of State and Defense
and to USAID to obtain their comments. The Departments of State and
Defense declined to comment on the report. USAID commented that in general
it found the report to be a comprehensive and detailed assessment of the
U.S. civilian reconstruction efforts in Afghanistan during fiscal year
2004. USAID concurred with the report's recommendations and indicated that
it has made progress in improving its strategic planning and performance
measurement processes. USAID also provided information on more recent
activities and technical comments, which we incorporated where
appropriate.

Background	Afghanistan is a mountainous, arid, landlocked country with
limited natural resources, bordered by Pakistan to the east and south;
Tajikistan, Turkmenistan, Uzbekistan, and China to the north; and Iran to
the west

(see fig. 1). At 647,500 square kilometers, Afghanistan is slightly
smaller than the state of Texas; its population, estimated at between 24
and 30 million, is ethnically diverse, largely rural, and mostly
uneducated. The country is divided into 34 provinces.

        Figure 1: Map of Afghanistan Including Provinces and Major Roads

                                  Source: GAO.

Afghanistan is one of the world's poorest countries. As table 1 shows,
development indicators published by the World Bank and the UN rank
Afghanistan at the bottom of virtually every category, including
nutrition; infant, child, and maternal mortality; life expectancy; and
literacy.

Table 1: Development Indicators for Afghanistan Compared with Averages for
                   Low-Income Countries and The United States

Average for low-income Indicator Afghanistana countriesb United States

Infant mortality 115 per 1000 live births 82 per 1000 live births 7 per
1000 live births

Under 5 mortality 172 per 1000 live births 126 per 1000 live births 8 per
1000 live births

Maternal mortality 1,600 per 100,000 live births 671 per 100,000 live births 17
                            per 100,000 live births

Life expectancy (years) 45 males/44 females 57 males/59 females 75
males/80 females

Percentage of children 12-23 months 30 percent 64 percent 93 percent
immunized against diphtheria

Percentage of population undernourished 70 percent 25 percent N/A

Percentage of population with access to safe 23 percent 75 percent 100
percent water

Percentage of population with access  12 percent  41 percent  100 percent  
                    to                                           
            adequate sanitation                                  
                                         43 percent  68 percent    97 percent 
         Literacy-age 15 and over          males/      males/          males/ 
                                         14 percent  48 percent    97 percent 
                                           females     females        females 

Sources: The World Bank and UN.

aData as of most recent year available.

bLow-income countries are defined as countries with an annual per capita
gross national income of less than $765. (Afghanistan's 2003 per capita
gross national income was $250.)

Over the last two decades, political conflicts ravaged Afghanistan (see
fig. 2). Factional control of the country following the withdrawal of
Soviet troops in 1989, coupled with the population's fatigue of fighting,
allowed a fundamentalist Islamic group, the Taliban, to seize control of
the country. Although the Taliban regime provided some political stability
during the late 1990s, its destructive policies, highlighted in its
repressive treatment of women, and its continuing war with the opposition
Northern Alliance further impeded international aid and development.

Figure 2: Political History of Afghanistan, 1749-2005

Source: GAO.

aThe Durrani tribe ruled most of present-day Afghanistan from 1749 through
1978.

In December 2001, less than 2 months after U.S. and coalition forces
forcibly removed the Taliban regime, a 9-day international summit in Bonn,
Germany, established a framework for a new Afghan government.6 This
framework, known as the Bonn Agreement, focused on writing a new
constitution by the end of October 2003 and holding democratic elections
by June 2004.7 The agreement was endorsed by the UN Security Council on
December 6, 2001, through UN Resolution 1383.

In December 2002, the United States passed the Afghanistan Freedom Support
Act of 2002, authorizing increased assistance to Afghanistan. The U.S.
goal is to firmly establish Afghanistan as a democratic nation
inhospitable to international terrorism and drug trafficking and
cultivation, at peace with its neighbors, and able to provide its own
internal and external security. U.S. efforts in support of this goal are
intended to help create national security institutions, provide
humanitarian and reconstruction assistance, and reinforce the primacy of
the central government over Afghanistan's provinces. The act strongly
urged the

6This report refers to the Afghan Interim Authority and the Transitional
Islamic State of Afghanistan as the government of Afghanistan.

7Presidential elections were held in October 2004. National Assembly and
provincial elections are scheduled for September 2005.

President to designate a coordinator within the Department of State to,
among other things, be responsible for (1) designing an overall strategy
to advance U.S. interests in Afghanistan; (2) ensuring program and policy
coordination among U.S. agencies; (3) coordinating assistance with other
countries and international organizations; and (4) ensuring proper
management, implementation, and oversight by agencies responsible for
assistance programs.8

The U.S. Agency for International Development (USAID) 9 provides U.S.
assistance to underdeveloped countries through UN agencies,
nongovernmental organizations, and private contractors. The main
organizational units responsible for managing USAID's reconstruction
programs and operations in Afghanistan in fiscal year 2004 were the
agency's mission in Kabul, Afghanistan; the Bureau for Asia and the Near
East; and the Bureau for Democracy, Conflict, and Humanitarian Assistance
through the Office of U.S. Foreign Disaster Assistance, Office of Food for
Peace, Office of Transition Initiatives (OTI), and Office for Democracy
and Governance.10 Other U.S. government agencies provided additional
assistance, including DOD through its provincial reconstruction teams
(PRT) located at sites throughout Afghanistan. In fiscal year 2004, the 12
U.S.-led PRTs11 ranged in size from 60 to 100 civilian and military
personnel, including civil affairs units, force protection soldiers, and
representatives of the Departments of Agriculture and State and USAID. The
teams are intended to deliver assistance that advances military goals and
enhance security, to increase the reach of the Afghan central

8Pub. L. 107-327, section 104(a).

9USAID is the principal U.S. agency that provides foreign assistance to
countries recovering from disaster, escaping poverty, and engaging in
democratic reforms.

10The Bureau for Asia and the Near East is one of four USAID geographic
bureaus that are responsible for activities in the countries within the
geographic region. The USAID mission in Kabul, Afghanistan, falls under
the jurisdiction of the bureau. The Bureau for Democracy, Conflict, and
Humanitarian Assistance's mission is to save lives, alleviate suffering,
support democracy, and promote opportunities for people adversely affected
by poverty, conflict, natural disasters, and a breakdown of good
governance. OTI provides short-term assistance to pre-and post-transition
countries experiencing significant political change or facing critical
threats to stability and democratic reform.

11As of June 2004, the U.S. supported PRTs included: Parwan, Asadabad,
Jalalabad, Gardez, Khost, Qalat, Kandahar, Lashkar Gah, Tarin Kowt,
Ghazni, Farah, and Herat. Coalition and NATO forces supported 3 other
PRTs: Mazar-e-Sharif, Konduz, and Bamian.

government in the provinces and allow assistance agencies to implement
projects.

In spring 2003, DOD, recognizing the lack of progress in the U.S. effort
in Afghanistan, drafted a political-military strategy for Afghanistan. The
strategy did not include reconstruction. The strategy was vetted by the
National Security Council and approved by the President in June 2003. At
the time, Department of State and USAID officials drafted a plan to
increase funding and expedite reconstruction efforts, particularly in
infrastructure, democratization and human rights, and security. This plan
served as the basis for the Accelerating Success in Afghanistan Initiative
announced by the U.S. government in September 2003. The initiative was
designed to be implemented in advance of the Afghanistan Presidential
elections scheduled for June 2004. The U.S. government planned to provide
$1.76 billion for the initiative, targeting approximately $1 billion of
this amount for elections, major and secondary road construction, health
and education programs, economic and budget support to the Afghan
government, senior advisors and technical experts, and private sector
initiatives. The remaining $700 million was to fund efforts to build the
Afghan National Army, train and equip the police force, expand the
counternarcotics program, and establish rule of law.

U.S. Spending in 2004 Focused on Reconstruction

In fiscal year 2004, the focus of U.S. spending in Afghanistan shifted
from humanitarian and quick-impact assistance to reconstruction. Of the
nine U.S. government departments and agencies involved in assistance to
Afghanistan, USAID provided the largest amount of nonsecurity-related
assistance. The largest investment went to USAID's infrastructure sector,
which received approximately half of the agency's total obligations for
Afghanistan in fiscal year 2004. About two-thirds, or $922 million, of
USAID's obligations supported local projects in Afghanistan's 34
provinces, with Kabul and Kandahar provinces receiving approximately 70
percent of these funds, mainly for roads. The United States provided the
largest share of international assistance to Afghanistan, contributing
about 38 percent of the $3.6 billion that the international community
pledged for 2004.

U.S. Spending Shifted to The focus of U.S. spending in Afghanistan in
fiscal year 2004 shifted from Longer-Term humanitarian and quick-impact
assistance, such as building wells, to larger-Reconstruction scale
reconstruction. The U.S. government obligated about $1.4 billion and

spent approximately $720 million on nonsecurity-related assistance to

Afghanistan; the largest percentage of this amount was spent on
reconstruction, especially infrastructure projects.12 In contrast to
fiscal years 2002-2003, when more than three-fourths of U.S. spending was
for humanitarian and quick-impact assistance, approximately 75 percent-
about $538 million-of the 2004 expenditures supported reconstruction and
development projects. The remaining amount was spent on humanitarian and
quick-impact projects. (See fig. 3)

Figure 3: Expenditures by Type, Fiscal Years 2002-2004

                              Dollars in millions

                                      538

512

2002 2003 2004 Fiscal year

                    Humanitarian/quick impact Reconstruction

                      Source: GAO analysis of agency data.

12For the purposes of this report obligations are defined as amounts of
orders placed, contracts awarded, services received, and similar
transactions during a given period that will require payments during the
same or future period. Expenditures are defined as the issuance of checks,
disbursement of cash, or electronic transfer of funds made to liquidate a
federal obligation.

USAID Provided Most U.S. Funding

Of the U.S. government departments and agencies providing assistance in
Afghanistan, USAID spent the largest amount, about $587 million, for
reconstruction, humanitarian, and quick-impact projects. The Department of
State spent the next largest amount, about $70 million, primarily for
assistance to refugees. DOD spent approximately $45 million for
nonsecurity-related assistance, chiefly small projects through the
Commanders' Emergency Response Program. Six other U.S. government agencies
also provided some assistance to Afghanistan in fiscal year 2004. (See
fig. 4 for agency percentages; for more details, see app. II.)

                                      $85

                                    $20 $22

                                      $23

                                      $23

                                      $75

                                      $97

less than $6 million. USAID and DOD obligated $44 million and $47 million,
respectively, through the PRTs, mainly for small-scale infrastructure
projects.

Kabul and Kandahar Received Most U.S. Assistance

In an effort to expand the reach of the Afghan government-a major U.S. and
Afghan government priority-USAID directed about two-thirds, or $922
million, of its obligations13 to local projects in Afghanistan's 34
provinces, with Kabul and Kandahar provinces receiving approximately 70
percent of these funds (see fig. 5). The remaining funds went to national
programs, such as government reform initiatives. USAID directed the
majority of the funds obligated for Kabul and Kandahar-approximately $527
million of a total $647 million-toward road construction.14 In addition,
DOD distributed approximately $47 million throughout the areas covered by
the PRTs, the majority of them near Afghanistan's border with Pakistan.

13USAID does not maintain expenditure data by province. 14The U.S.-funded
Kabul-Kandahar highway passes through multiple provinces.

    Figure 5: Map of USAID Funding Obligations by Province, Fiscal Year 2004

                                  Source: GAO.

United States Remained As in previous years, the United States provided
the largest share of

Largest International Donor	international assistance to Afghanistan,
contributing about 38 percent of the $3.6 billion pledged by the
international community for 2004. (See fig. 6; for 2004 pledges by donor,
see app. II.) The U.S. share for 2001-2003 was about 34 percent of the
approximately $9.7 billion pledged by the

international community. According to the Center on International
Cooperation, as of February 2005, donors had obligated about 29 percent,
or $3.9 billion, of the $13.4 billion pledged since 2001.

Figure 6: Percentages of Assistance to Afghanistan Pledged by United
States and Other Donors for 2004

                   32 Other donors combined ($1,010 million)

U.S. humanitarian and quick-impact assistance benefited vulnerable
populations and returning refugees; however, the success of efforts to
accelerate large-scale reconstruction varied. USAID provided almost $60
million in emergency assistance, including food aid, and the Department of
State provided about $60 million to assist refugees in fiscal year 2004.
In addition, the U.S. government obligated approximately $120 million for
small-scale, quick-impact projects such as the construction of wells and
bridges.15 Further, the United States accelerated its major reconstruction

                     Asian Development Bank ($205 million)

Japan ($200 million)

United Kingdom ($216 million)

                       European Commission ($294 million)

World Bank ($285 million)

United States ($1,383 million)

                                  Source: GAO.

Note: Donors vary in their definition of pledges. The U.S. pledge amount
represents obligated funds, while other donors report amounts that may
represent only statements of intent.

U.S. Assistance Benefited Afghanistan, but Accelerated Reconstruction Did
Not Meet All Targets

15This includes $29 million obligated by USAID's Office of Transition
Initiatives.

programs to increase visible progress before the 2004 Afghan presidential
elections. However, progress and results in each of the reconstruction
sectors-agriculture, democracy and governance, economic governance,
education, health, infrastructure, and gender-varied, as did the problems
each sector faced.

U.S. Government Responded to Ongoing Humanitarian Crisis

In fiscal year 2004, the U.S. government provided food and other emergency
assistance to Afghanistan's vulnerable populations and assisted the return
of refugees. Afghanistan suffered its sixth year of drought and produced a
below-average harvest, and the percentage of people in need of food aid
rose from 20 percent in 2003 to an estimated 37 percent in 2004. In
addition, approximately 900,000 refugees returned to Afghanistan, with
more expected to return in coming years owing to the closing of refugee
camps operated by the UN High Commissioner for Refugees (UNHCR) in
Pakistan.16

USAID's Office of Food for Peace, through the UN World Food Program (WFP),
provided Afghanistan with 79,330 metric tons of wheat and other emergency
food assistance (valued at $49 million) in fiscal year 2004,17 which
equaled approximately 25 percent of the international food assistance that
WFP requested during that time period. In addition, USAID, through its
Office of Foreign Disaster Assistance, provided almost $10 million in
other emergency assistance in fiscal year 2004, compared with $137.8
million in fiscal years 2002 and 2003. According to USAID, the office
supported transitional shelter for refugees; the return of internally
displaced persons; winter programs, such as snow clearance and road
rehabilitation; and emergency funds to respond to the ongoing drought.

The Department of State's Bureau of Population, Refugees, and Migration
(PRM) provided almost $63 million to help refugees, compared with $234
million in previous years. PRM provided more than half of the 2004 funding
through the UNHCR to support traditional assistance, such as shelter and
education for refugees. In addition, the agency facilitated out-of-country
registration and voting so that Afghan refugees living in Pakistan and
Iran

16Approximately 4.2 million Afghan refugees live in Pakistan and Iran.
This is equivalent to 15 percent of the population presently living in
Afghanistan.

17WFP is the UN's major provider of food assistance. Most U.S. food is
provided through WFP. USAID provided this assistance through Pub. L. 480,
Title II.

could vote in the October 2004 Afghanistan presidential election. PRM also
provided funds through the International Committee of the Red Cross and UN
Children's Fund, as well as about $17 million in direct grants to
nongovernmental organizations. These grants provided shelter, water and
sanitation, health care, education, and economic assistance and training
to refugees and internally displaced people. PRM provided funding for the
construction of 5,900 shelters; however, as of September 30, 2004, 8,000
shelters were still needed.

USAID and DOD Continued Quick-Impact Efforts

In fiscal year 2004, USAID and DOD continued efforts to respond rapidly to
small-scale reconstruction needs in Afghanistan. USAID launched the
Quick-Impact Program (QIP), supplementing the activities of the existing
Office for Transition Initiatives, and DOD launched the Commanders'
Emergency Response Program (CERP) to operate alongside its Overseas
Humanitarian, Disaster, and Civic Aid (OHDACA) program (see table 2). The
aims of these programs is to extend the reach of the Afghan central
government through benefits to rural communities and to facilitate the
transition to longer-term reconstruction programs. Although CERP and
OHDACA funds address humanitarian needs, the projects are determined by
the tactical need to obtain the support of the populace and are primarily
tools for achieving U.S. security objectives. Since 2002, the U.S.
government has programmed almost $136 million for about 3,600 smallscale,
quick-impact projects through USAID and DOD.

CERP and QIP funds worked in tandem through the PRTs in fiscal year 2004,
with CERP funding smaller projects costing less than $20,000 on average
and QIP funding larger, more expensive projects. DOD regulations allow PRT
commanders to approve the use of up to $25,00018 in CERP funds for the
rapid implementation of small-scale projects, such as providing latrines
for a school or a generator for a hospital. USAID representatives at PRTs
used QIP funds for larger, more complex projects such as local roads,
bridges, and government buildings. To ensure accountability and long-term
sustainability, USAID regulations require that the mission, before
granting approvals for QIP projects, conduct technical assessments and
ensure Afghan government involvement in projects. DOD does not require
similar assessments for CERP-funded projects.

18More expensive projects, such as providing vehicles or communication
systems to the local police, required approval from the brigade, joint
task force, or Central Command.

Table 2: U.S. Quick-Impact Projects in Afghanistan for fiscal years 2002 through
                            2004, by Funding Source

Estimated total project cost

                                               Estimated average project cost

Projects begun

Projects completed

                  Agency Goal of implementing projects Program

DOD	To achieve U.S. security objectives by improving DOD visibility,
access, and influence with military and civilian counterparts; building
security in host nation; generating goodwill for DOD to enhance U.S.
ability to shape regional security; bolstering host nation disaster
response; and readying U.S. military personnel.

OHDACA $25,344,192 $61,515 412

        To enable U.S. military      CERP 39,707,370 17,152 2,315 Not tracked 
             commanders in                                        
        Afghanistan to address                                    
        humanitarian relief and                                   
    reconstruction by carrying out                                
          programs that will                                      
     immediately assist the Afghan                                
                people.                                           

USAID     To support the rehabilitation and      OTI 41,876,468 65,844 636 
                         political                                        
         stabilization in postconflict Afghanistan,                       
             increasing the Afghan government's                           
         responsiveness to citizens' needs,                               
         increasing                                                       
         citizen participation in democratic                              
         processes,                                                       
          and increasing the capacity of the Afghan                       
                                             media.                       

To link communities with district, provincial,  QIP 28,968,217 137,944 210 
                         and                                              
       central governments by conceptualizing,                            
    planning, and implementing projects. Projects                         
include water systems, road-related activities,                        
    rehabilitation and construction of government                         
                and public buildings.                                     

                        Total $135,896,247 $38,034 3,573

OHDACA = Overseas Humanitarian, Disaster, and Civic Assistance Program

CERP = Commander's Emergency Response Program

OTI = Office for Transition Initiatives

QIP = Quick-Impact Program Sources: Department of Defense and USAID.

Progress in Accelerated Efforts to accelerate existing USAID programs in
each reconstruction Reconstruction Projects sector-agriculture, democracy
and governance, economic governance, Varied by Sector education, health,
and infrastructure-achieved varying degrees of

progress toward project objectives and accelerated targets. Efforts to

promote gender equity in each sector also demonstrated varying levels of
progress.

                             Figure 7: Agriculture

           Source: GAO analysis of USAID and Afghan government data.

Although the 2004 Accelerating Success initiative targets for the
agriculture sector were generally met or exceeded, the contractor failed
to integrate project activities, thus limiting the project's results.19 To
address the needs of the agriculture sector, USAID implemented the
Rebuilding Agricultural Markets Program in 13 of Afghanistan's 34
provinces, concentrating the program's activities on physical
infrastructure, rural finance, and agricultural technology and market
development.20 USAID signed the

19See appendix III, table 5 for a list of the targets.

20In addition to the primary contract with Chemonics, RAMP is being
implemented through cooperative agreements with Land-O-Lakes, the Central
Asian Development Group, IF Hope, and the U.S. Department of Agriculture.

program's $153 million primary 3-year contract on July 3, 2003. The
contractor, Chemonics International, Inc., was to use a "market chain"
approach to improve the operations of, and linkages between, the market
chain components (i.e., farmers, processors, transporters, input
suppliers, creditors, regulators, wholesalers, and retailers).

As of September 2004, Chemonics had implemented numerous activities
through subcontracts and grants with 40 organizations, including local and
international nongovernmental organizations, private firms, and
international organizations. The progress of these activities as reported
by Chemonics is as follows:

o 	Physical infrastructure. By September 2004, over 320 kilometers of
irrigation canals, approximately 230 irrigation structures, and about 160
kilometers of farm to market roads had been rehabilitated. In addition,
nearly 120 market structures such as retail market stalls and grain and
vegetable storage sheds had been constructed.

o 	Rural finance. Over 1,100 loan officers had been trained, and more than
8,000 loans had been disbursed.

o 	Agricultural technology and market development. About 565,000 farmers
were served by extension services; over 4,000 women being trained in
poultry management; over 20,000 chickens had been distributed to women;
and more than 3,675,000 livestock had been treated, vaccinated, or both.

Data provided by Chemonics and U.S. government interagency performance
reports indicated the program generally met or exceeded all of the
Accelerating Success targets established for the sector; however, the
program did not address a key program objective. We found that Chemonics
had not integrated individual activities to achieve project objectives or
focused its efforts on the improvement of market chains. USAID and
Chemonics officials told us in October 2004 that although many activities
had been implemented, most projects were stand-alone agricultural
infrastructure efforts (e.g., road and canal rehabilitation) and did not
focus on improving the marketing of commodities or the integration of
market chain components. Consequently, during its first 15 months, the
project's progress in strengthening Afghanistan's market chain was
limited. An internal evaluation of the Chemonics effort was conducted by
USAID mission staff in Kabul in mid-fiscal year 2004. The evaluation
resulted in the

development of a new strategy and performance monitoring plan in an effort
to refocus RAMP and better integrate program activities.

Figure 8: Democracy and Governance

Source: GAO analysis of USAID and other data.

USAID's democracy and governance program produced notable successes,
particularly its assistance with the creation and ratification of
Afghanistan's constitution and with the presidential elections. However,
some civic education programs were uncoordinated and had limited
distribution. USAID's fiscal 2004 democracy and governance program
comprised three components:21

o 	Strengthening of elections and political process. The Consortium for
Elections and Political Process Strengthening component addressed civic
education and political party building. Under USAID's Accelerating Success
initiative, the consortium's funding ceiling increased from $3.76 million
to $13.36 million. Grantees reported training more than 2,000 district and
village leaders in civic education, registering 46 political parties by
the end of fiscal year 2004, and establishing eight election training and
information centers.

o 	Judicial reform. In May 2004, under the Accelerating Success
initiative, USAID increased its contract with Management Systems
International (MSI) from $14.7 million to $16.8 million. USAID also
revised the scope of work to focus on judicial rehabilitation and added
court administration as an objective. MSI provided technical assistance
and logistical support to the constitutional commission and its
secretariat and to the constitutional loya jirga that took place in
December 2003.22 According to USAID and MSI reports, MSI also built or
rehabilitated 7 of 10 targeted courthouses by September 30, 2004; helped
review, draft, and track the status of legislation; surveyed and compiled
laws and legal texts; mapped courthouse administration functions; and
conducted training for about 300 legal professionals.

o 	Loya jirga and elections logistics. USAID awarded the Asia Foundation a
cooperative agreement to provide operational and logistic support for the
constitutional loya jirga and elections. The award's funding ceiling
increased from $10 million to more than $45 million. The scope expanded to
include assistance to the UN Assistance Mission to Afghanistan to conduct
the loya jirga, register voters, and hold the presidential election. The
foundation filled unforeseen gaps in the UN's

21See Appendix III, Tables 7 and 8 for performance indicators.

22Loya jirga is a grand council or grand assembly used to resolve
political conflicts or other national problems.

efforts, as UN staff faced security restrictions that limited their
ability to register voters and set up polling stations. According to the
UN, more than 10 million people registered to vote, out of a total
population of between 24 and 30 million; about 40 percent of those
registered were women.

Despite these successes, the program faced setbacks, particularly in
public education and courthouse construction. Parts of the civic education
program were poorly timed. According to an evaluation commissioned by a
USAID grantee, a listening device to enhance the public's understanding of
the election process was distributed late, in some cases just 1 week
before elections and with no training, making it difficult for users to
listen to all of the content; the evaluation found that users would have
preferred to have received the device 2 months before the elections. In
addition, there were delays in the project's initiative to draft and pass
legislation, due to shifting responsibility for legislative drafting from
the Judicial Reform Commission, a temporary entity, to the permanent
Ministry of Justice. Finally, despite a goal of building or rehabilitating
10 courthouses by the end of fiscal year 2004, according to USAID and
contractor reporting, only 7 were completed due to late funding.

Figure 9: Economic Governance

Source: GAO analysis of USAID and other data.

Despite many achievements, problems pertaining to the selection of
advisors and sustainability affected the economic governance program. In
December 2002, USAID signed a 3-year, $39 million Sustainable Economic
Policy and Institutional Reform Support program contract with Bearing
Point, Inc., to provide technical assistance and training to the primary
Afghan ministries concerned with economic governance issues. In April
2004, as part of the Accelerating Success initiative, USAID increased
funding for the contract to $95.8 million. Most of the work under the
contract was implemented by advisors and operations staff assigned
primarily to the Ministry of Finance and the Central Bank. As of August
2004, approximately 224 advisors were working within the Ministry of
Finance. Some of the advisors worked directly with the management of the
ministry, others served in operational positions and were responsible for

carrying out the day-to-day functions of the ministry. According to the
USAID mission in Kabul, USAID's Inspector General, and an evaluation
commissioned by the Afghan government, Bearing Point made progress toward
completing the approximately 120 "contractor responsibilities" listed in
the contract.23 Accomplishments included the following:

o 	Fiscal reform. Bearing Point developed a system to estimate government
revenues; introduced a taxpayer identification number system; trained
Afghans to develop and monitor budgets; established a national payments
system; developed a customs broker licensing program, reformed customs
operations and trained customs officials; rehabilitated and equipped
customs houses and border posts; and developed a database of customs
revenues.

o 	Banking reform. The contractor helped the Afghan Central Bank establish
national and international operations via standard banking
telecommunications networks, implement bank licensing policies and
procedures, restructure and equip branch banks, and draft banking laws.

o 	Trade policy. The assistance provided helped the Afghan government
streamline its business license application process, reducing the time to
obtain a license from months to less than 1 day and reducing the number of
required signatures from 58 to 6. In addition, the contractor also
assisted the government in reviewing and drafting commercial decrees and
laws.

o 	Legal and regulatory reform. The contractor assisted Afghan ministries
in drafting key laws and establishing a telecommunications regulatory
body.

o 	Privatization. As of October 2004, little work had been conducted in
the area of privatization, because the Afghan government was not ready to
privatize state-owned enterprises.

Despite these accomplishments and USAID's efforts to adjust the program to
meet the government of Afghanistan's needs, the Ministry of Finance
remained dissatisfied with the cost and quality of the assistance provided
by some of the expatriate advisors hired under the contract and sought to

23See appendix III, tables 9 and 10 for performance indicators.

terminate it. In mid 2004, the Afghan government requested a review of the
program. The first evaluation, completed in September 2004, found that,
among other things, Bearing Point lacked an effective means for
determining ministry needs.24 USAID disagreed with the evaluation's
findings and maintains that Bearing Point worked closely with the
ministries receiving assistance and worked proactively to meet their
needs. According to the Central Bank governor, the bank-the other major
recipient of assistance under the contract-was generally satisfied with
the assistance provided. In November, the Ministry of Finance agreed to
allow the contract to continue until its completion date, December 2005.

In addition, in October 2004, the Minister of Finance and the Governor of
the Central Bank were still concerned that their agencies would not be
able to sustain operations after the program's completion. To address this
concern, USAID and Bearing Point initiated plans to transfer local Afghans
working as their contractors to Afghan civil service. These individuals
would be paid with funds provided by the international community through
the Afghanistan Reconstruction Trust Fund. In addition, the Central Bank
began testing the abilities of its staff on a periodic basis to determine
their ability to work in the absence of international advisors and to
identify areas where additional training was needed prior to the Bearing
Point contract's completion.

24The review resulted in an interim report in September 2004 and a final
report in February 2005. See Mohammad Qayoumi, Monitoring and Evaluation
of Afghanistan Economic Governance Program (Kabul: 2005).

Source: GAO analysis of USAID and other data.

aThe APEP contract was signed in June 2003, but was effective as of
January 2003.

bUSAID managed the school rehabilitation and construction component
through six separate implementing partners.

USAID's Afghanistan Primary Education Program (APEP) provided educational
and teacher-training programs to help improve basic education; however,
under the Accelerating Success initiative, very few schools were
constructed and other components were not integrated into educational
facilities as originally envisioned.

USAID's education program originally focused its efforts in four areas:
textbook production and distribution, radio-based teacher training,
accelerated learning, and school construction. USAID provided the bulk of
its education assistance in Afghanistan through APEP, run by Creative
Associates International, Inc. APEP was designed to ensure that newly
constructed schools were functional centers of learning by providing
textbooks, skilled teachers and opportunities for accelerating the
learning of over-aged students. The Accelerating Success initiative
increased

APEP's funding ceiling from $16.5 million to $87.6 million, but it
decoupled the provision of materials and training from school
construction. The initiative introduced three additional components:
in-country textbook production; educational support services to help
reform policies, systems, and programmatic changes; and enhanced
monitoring and evaluation. Progress under the APEP contract included the
following:25

o 	Textbook production: According to the USAID Regional Inspector General,
USAID exceeded its textbook production goal for 2004, producing about 16.5
million books, but distribution was delayed.

o 	Radio teacher training: According to the targets in the original APEP
contract, the radio teacher training broadcasts aimed to improve the
teaching skills of about 30,000, or about 96 percent of all primary school
teachers by the end of 2004. Under the Accelerating Success initiative,
the goal was reduced to reaching up to 40 percent of Afghan teachers
nationwide. After a mid-2004 survey of, primarily, participants in U.S.
education programs, USAID concluded that 70 to 90 percent of all primary
school teachers were listening to the radio teacher training broadcasts
and the number of listeners was increasing monthly.

o 	Accelerated learning: APEP's goal was to raise the educational levels
of 80,000 over-aged students in 13 provinces and move them into
ageappropriate levels by the end of 2004. Under the Accelerating Success
initiative, the goal was expanded to 170,000 students in 17 provinces.
Under both plans, APEP intended 70 percent of beneficiaries to be female
students. By the end of fiscal year 2004, USAID had met its student
enrollment objective, but less than 60 percent of students enrolled were
girls.

o 	School construction:26 According to contract and grant documentation,
targets for school rehabilitation or construction shifted under the
Accelerating Success initiative from 50 schools to 286 schools by the end
of 2004. By September 2004, implementing partners reported that 77 schools
had been refurbished and 8 were substantially complete.

25See appendix III, tables 11 and 12, for performance indicators.

26Creative Associates was not responsible for school rehabilitation and
construction, although it was an integral part of the original APEP plan.
USAID managed construction and rehabilitation through the infrastructure
contract and a series of other construction grants. For further
discussion, see "Infrastructure" on page 37.

o 	Educational support services: Under the Accelerating Success
initiative, APEP began to provide the Ministries of Education and Higher
Education with advisors to help draft education law, improve planning
capacity, and assess English language instruction needs.

o 	Monitoring and evaluation: Under the original contract, APEP produced
weekly or biweekly updates, quarterly progress reports, and an evaluation
of the radio-based teacher training component. The expanded scope includes
a national study of students trained under the accelerated program.

USAID also instituted several other smaller education-focused projects in
2004. These included a $10 million teacher-training institute and literacy
initiative and an $11 million dormitory to house between 1,100 and 1,500
university women in Kabul.

Source: GAO analysis of USAID and other data.

aIn addition to MSH's contract, USAID made several other health-related
awards. USAID awarded $5.6 million for the social marketing component of
the program to Population Services International, and awarded the health
clinic construction component to 6 separate implementing partners.

Despite some accomplishments, the project's ambitious program made it
difficult to meet targets on many fronts. To address health sector issues,
USAID's Rural Expansion of Afghanistan's Community-based Healthcare
(REACH) program, in conjunction with the Ministry of Public Health,
established a nascent health care system and provided health services and
training for health providers. USAID's REACH program, implemented by
Management Sciences for Health (MSH) under a 3-year contract, was designed
to improve the health of women of reproductive age and children younger
than 5 years. USAID's Accelerating Success initiative increased MSH's
original ceiling of approximately $100 million to $129 million. The
initiative expanded the scope of work to include, among other things,

tertiary care in addition to the project's original focus on rural health
care.27 USAID and MSH noted progress in five health care areas.28 The
progress in these areas as reported by MSH is as follows:

o 	Health care facilities and community outreach. The program reached its
stated target of awarding $53 million in service delivery grants to more
than 250 clinical facilities in 13 provinces. Service in these facilities
covers a population of approximately 4.8 million.

o 	Training for rural health care providers. The REACH program did not
meet its fiscal year 2004 target of training 46 midwives and 2,060
community health workers. By the end of 2004, according to Management
Sciences for Health reports, 75 midwives were in training in Kabul,
although none had finished the course, and almost 1,500 community health
workers had been trained.

o 	Public health education programs. REACH developed a policy on health
education with the Ministry of Public Health and helped the ministry
develop standard health promotion messages. Management Sciences for Health
reporting also indicated that REACH produced seven radio dramas and
trained 21 ministry and radio staff in radio programming.

o 	Ministry of Public Health capacity. REACH developed a national health
management information system and played an advisory role in health sector
reform, financing, and planning, as well as hospital management. The REACH
program helped to create a new human resources department in the health
ministry and to review and update the national human resources policy for
health staff. REACH also contributed to the development of the National
Drug Policy, the National Medicine Agency, and donation guidelines for
drug and equipment donors. According to a midterm evaluation of the
program, REACH's efforts have been sustainable.29

27Tertiary care is specialized consultative care, usually on referral from
primary or secondary medical care personnel, by specialists working in a
center that has personnel and facilities for special investigation and
treatment.

28See Appendix III, Tables 13 and 14 for performance indicators.

29REACH Program midterm evaluation, Kabul (Dec. 2004).

o 	Clinic construction.30 According to contract and grant documentation,
targets for clinic rehabilitation or construction shifted under the
Accelerating Success initiative from 50 clinics to 253 clinics by the end
of 2004. By September 2004, implementing partners reported that 15 clinics
had been substantially constructed and none had been refurbished.

USAID's ambitious health care program stretched the capacity of
contractors, making it difficult to implement many projects
simultaneously. For example, according to the December 2004
USAID-commissioned midterm evaluation, despite targets established in
2003, few clinics had communication materials designed to change the
health-related practices of Afghans and most clinics remained focused on
curative, rather than preventative, care. Further, the evaluation found
that despite a greater need for community midwives than for hospital
midwives, REACH developed the capacity to train equal numbers of hospital
and community midwives. In addition, although the development of a
national infection prevention program was added to the Accelerating
Success initiative, the program's schedule was delayed by 2 to 3 months
owing to a delay in finding a program manager.

30MSH was not responsible for clinic rehabilitation and construction.
USAID managed construction and rehabilitation through the infrastructure
contract and a series of other construction grants. For further
discussion, see "Infrastructure" on page 35.

Source: GAO analysis of USAID and other data.

aAlthough USAID managed the construction of schools and clinics under the
REFS contract, it designated them programmatically as parts of the
education (APEP) and health (REACH) sectors, respectively.

USAID's infrastructure program focused on some of Afghanistan's large
infrastructure needs, including construction of the primary highway and
emergency electricity provision to four cities; however, progress has been
limited. USAID designed the Rehabilitation of Economic Facilities and
Services (REFS) program, to promote economic recovery and political
stability in Afghanistan by repairing selected infrastructure. To ensure
sustainability, USAID also designed REFS to strengthen pertinent
institutions' management capacity, and to strengthen Afghan construction
companies' ability to build according to international standards. The
Louis Berger Group, Inc., implemented most of the infrastructure work
through

2004 under the 3-year REFS contract. Under the Accelerating Success
initiative, USAID increased REFS' funding from $143 million to $665
million and added 12 new awards with a collective funding ceiling of
almost $400 million.

USAID's fiscal year 2004 infrastructure programs included the following:31

o 	Primary roads. USAID completed the first phase of the construction of
the Kabul-Kandahar Ring Road, which decreased travel time between the two
cities from several days to 6 hours. The second phase-adding layers of
asphalt, bridges, culverts, shoulders, and signage-was to be complete by
October 2004, but repair work continued into 2005. USAID also mobilized
contractors and started survey work to begin the next section of the road,
from Kandahar to Herat.

o 	Secondary and urban roads. By fiscal year 2004, work had begun on one
urban road in Kabul, diverting traffic away from the U.S. Embassy, and one
secondary road to provide access between Kabul and a southern city,
Gardez. In addition, according to contractor reports, planning or
construction of nine additional secondary roads began; however, by the end
of fiscal year 2004, four were postponed due to lack of funding.

o 	Power. To increase the power supply around Kandahar in the south, USAID
began rehabilitation of two turbines for the Kajaki Dam. By the end of
fiscal year 2004, USAID was negotiating for construction of a third
turbine as well as seeking a solution to a power shortage in Kabul. In the
meantime, USAID supplied emergency power to Kabul, Kandahar, Lashkar Gah,
and Qalat by providing fuel for generators at the cost of approximately $3
million per month.

o 	Irrigation. USAID began work on several irrigation projects: the
emergency rehabilitation and reconstruction of the Saur-e-haus Dam,
spillway, and diversion channel; rehabilitation of the Zana Khan Dam; the
Sardeh Irrigation System; and three intake systems. By the end of fiscal
year 2004, construction of the Sardeh Irrigation System and two of the
intake systems had been completed.

31See appendix III, tables 13 and 14 for performance indicators.

o 	Water/wastewater. By September 2004, USAID had contracted for water
availability assessments for two planned communities and for water system
assessments and design upgrades for three provincial capitals.

o 	Schools and clinics construction. In the initial infrastructure
contract with the Berger Group, USAID included the construction or
rehabilitation of 40 schools and clinics as an illustrative target to be
achieved by the end of 2003, with an additional 60 buildings to be
completed by the end of 2004. The actual job orders signed in July 2003
show that the Berger Group agreed to complete 55 schools and 78 clinics.
By the end of September 2003, only 1 building was completed. USAID reduced
the Berger Group's responsibility to 105 buildings and in May 2004
provided grants to five additional organizations, with the goal of
rehabilitating or constructing a total of 774 buildings by October 31,
2004. In mid-2004, owing to, among other things, the education and health
ministries' insistence on producing new as opposed to refurbished
buildings and a lack of progress by all implementing partners, USAID,
according to grant and contract documentation, reduced its expectations to
about 530 buildings32 and extended the completion deadline to December
2004.33 By the end of fiscal year 2004, the implementing partners reported
having refurbished 77 buildings and substantially completed new
construction of 23 buildings.

Because the Accelerating Success initiative emphasized visible
construction, in addition to time and funding constraints, USAID largely
abandoned the REFS contract's objective of building Afghan ministry
capacity in 2004. The Berger Group had recruited and hired experts to
supply intellectual capacity at the ministries of Public Works,
Irrigation, Health and Education; however, this project was discontinued
in June 2004.

32Excluding the award to the Berger Group, awards to the implementing
partners for schools and clinics did not specify the number of buildings
to be completed by the end of the award. The USAID contracting office
supplied the original goal (774 buildings) which was confirmed by the
regional Inspector General. However, information provided by the
Afghanistan Interagency Operations Group lists an original goal of 877
buildings. There was no consensus as to the revised goal; however, the
implementing partners and the regional Inspector General reported a
revised goal of about 530 buildings.

33According to USAID, the National Security Council formally reviewed the
fiscal year 2004 school and clinic rehabilitation/construction program and
changed the target to 56 schools and 20 clinics to be constructed or
rehabilitated by the end of fiscal year 2004. The Council noted this
September 30 deadline as a "milestone indicator" towards longer-term
targets.

                 Source: GAO analysis of USAID and other data.

Although U.S. agencies focused on 10 of the 13 women-centered objectives34
legislated by Congress,35 the overall impact of these efforts has not been
measured. (See app. III, table 17 for progress on objectives.) Unlike
programs for most reconstruction sectors, no overarching contract was let
to implement women-centered programs. Instead, U.S.-funded programs
incorporated components that advanced the social, economic, and political
rights and opportunities of women, dedicating about $196 million to such
initiatives. For example, USAID provided more than 90,000 girls with
education equivalent to one or more grade levels through the APEP
accelerated learning program and trained community health care workers and
midwives through REACH. USAID also provided democracy and governance
technical assistance, which helped over 3 million women register for, and
vote in, the 2004 presidential elections. USAID also implemented other
projects, such as reconstructing a women's dormitory to enable more than
1,100 young women to attend university in Kabul, establishing a women's
teacher training institute, and, according to USAID, completing 3 of 17
planned women's resource centers in provincial capitals. Other U.S.
government agencies also incorporated women's issues into their work. For
example, the Department of State granted $75,000 to train four Afghan
woman judges in civil and family law. Likewise, the DOD included
"Principles of non-discrimination: Women in Society" and other pertinent
classes in their curriculum for training the Afghan National Police.

In addition, the U.S.-Afghan Women's Council was created to accelerate
progress by promoting public-private partnerships between U.S. and Afghan
institutions and mobilizing private sector resources to benefit women. The
council raised about $135,000 of private sector funds from entities such
as an America Online women executives group and Daimler-Chrysler. These
funds supplemented various U.S. government projects, including training of
women judges, the Afghan Family Health Book, and community banks and
microfinance loans. Many of the other projects sponsored by the council,
such as the Women's Teacher Training Institute,

34Programs for women and girls against sexual abuse and trafficking,
shelter for women and girls, and programs disseminating information on the
rights of women were not specifically addressed in any U.S. government
project. See appendix III for progress on other objectives.

35The U.S. government legislated assistance to Afghan women under the
Afghanistan Freedom Support Act of 2002 and the Emergency Supplemental of
2004. Additional support, not discussed in this report, was legislated
under the Afghan Women and Children Relief Act of 2001 (Public Law
107-81).

were funded and managed through USAID. Whereas USAID's reconstruction
sector programs tend to target a broad range of women and have a national
scope, many of the council-supported projects impact a small number of
women.

Although U.S. legislation and assistance programs have included efforts to
address the needs of Afghan women, as of the time of this report, no
evaluation had been conducted to determine the overall impact of U.S.
gender-related efforts.

Assistance Management and Interagency Coordination Problems Persisted

Problems associated with the management and coordination of U.S.
assistance to Afghanistan occurred throughout fiscal year 2004. As in
fiscal years 2002-2003, the persistence of project management problems
affected agencies' oversight of reconstruction contracts. U.S. financial
data on assistance to Afghanistan remained fragmented and incomplete, and
USAID continued to operate without a comprehensive operational strategy to
guide its efforts. In addition, USAID did not always enforce required
contract provisions, USAID directives, or a federal acquisition regulation
necessary to hold contractors accountable for their performance. In
addition, comprehensive performance indicators in most sectors were
lacking.36 Consequently, decision makers in Washington did not receive
meaningful information about the results of USAID-implemented projects.
Problems with project monitoring also continued in 2004, and although
USAID has taken steps to improve project monitoring, limited staffing and
security restrictions reduced its ability to provide proper oversight for
much of the fiscal year. Finally, although coordination of U.S. efforts
occurred daily throughout 2004, the evolving roles of U.S. organizations
and the coordination of international assistance were problematic.

Management Problems Impeded Oversight

During fiscal year 2004, a number of management problems negatively
affected the U.S. agencies implementing reconstruction projects and
prevented agency officials from providing project oversight. The tracking
of U.S. financial data for Afghanistan assistance remained fragmented and
incomplete. In addition, USAID continued to operate without a
comprehensive strategy to guide its overall assistance effort. Contract

36Performance indicators are used to observe progress and measure actual
results versus expected results.

management and performance measurement problems also impeded oversight.
Finally, staff turnover and travel restrictions negatively affected
USAID's ability to provide regular on-site monitoring of project
activities.

U.S. Governmentwide Financial In fiscal year 2004, tracking of U.S.
assistance financial data for

Data Still not Readily Available	Afghanistan improved but remained
fragmented and incomplete. In June 2004, we reported that the Coordinator
for U.S. assistance to Afghanistan, as well as others involved in the
management of the assistance effort, lacked complete and accurate
financial data for fiscal years 2002 and 2003. Because of the lack of
accessible and timely financial data, program managers were hampered in
their ability to, among other things, allocate resources and determine
whether strategic goals were being met.37

Although more information on assistance obligations was available in
fiscal year 2004 than in previous years, U.S. agencies remained unable to
readily supply complete and accurate financial data for programs in
Afghanistan. There was no single, consolidated source of fiscal year 2004
obligation and expenditure data for U.S. assistance to Afghanistan.
Consequently, as in 2002 and 2003, the embassy and the coordinator's
office continued to lack complete and accurate financial data to inform
their decisions. According to the Embassy Interagency Planning Group,
numerous organizations with little coordination or oversight track the
U.S. budgetary process for assistance to Afghanistan, including obligation
and expenditure data. To address this problem, the embassy created an
interagency resource office in November 2004 to provide better visibility
over all U.S. assistance financial matters in Afghanistan.38

USAID Strategic Guidance As in previous years, USAID operated in fiscal
year 2004 with an interim,

Still Lacking 	rather than a more complete, standard strategy for its
activities in Afghanistan. USAID directives allow the use of interim
strategic plans in countries experiencing high uncertainty because of
drastic political,

37GAO-04-403.

38Because the office was established after the end of fiscal year 2004, we
did not assess its effectiveness.

military, and/or economic events.39 In June 2004,40 we reported that
although the USAID mission in Afghanistan developed an interim strategy
and action plan in August 2002, these documents did not clearly articulate
measurable goals or provide details on time frames, resources,
responsibilities, objective measures, or the means to evaluate results for
each of the sectors targeted by the strategy, as required by USAID
directives.41 The mission obtained yearly waivers allowing it to postpone
developing a comprehensive strategy until February 2005. According to
USAID officials, the mission did not complete a comprehensive strategy in
fiscal year 2004 because it wanted to wait until the Afghan presidential
elections had been completed and a new government formed. USAID officials
informed us in July 2005 that a more comprehensive strategy had been
completed and approved by USAID management in Washington, D.C. Although a
new strategy was completed prior to the end of fiscal 2005, more than 3
years have passed between the time USAID began providing postconflict
assistance to Afghanistan and the completion of a comprehensive USAID
assistance strategy for Afghanistan. The lack of a comprehensive strategy
impedes USAID's ability to ensure progress toward development goals, make
informed resource allocation decisions, and meet agency and congressional
accountability reporting requirements on the effectiveness of agency
programs.

Contract Management Problems Contract management problems affected most
reconstruction sectors, Reduced Oversight of making it difficult to hold
contractors accountable. Oversight of the USAID Contractors assistance
contracts for Afghanistan was essential owing to the inherent

39According to USAID directives, a strategy should be developed prior to
the implementation of assistance activities. Waivers are available for
countries with special foreign policy interest, are valid for 1 year, and
can be renewed annually. See USAID Guidelines for Strategic Plans
(Washington, D.C.: February 1995); USAID Functional Series 200-Programming
Policy Automated Directives System 201-Planning

(Washington, D.C.: January 2003).

40GAO-04-403.

41USAID's guidelines and directives state that country-level strategies
and plans should address, among other things, strategic objectives; key
country-level problems; programmatic approaches; baseline data and
targets; performance indicators and the means to measure progress;
fundamental assumptions; and resources required to implement the plan.

risks associated with the use of cost-plus-fixed-fee contracts; the
awarding of contracts through bidding procedures that were not fully open
and competitive; the large initial dollar value and scope of the contracts
and large increases in the dollar values and scopes over time; and the
requirement to demonstrate progress quickly.42

Despite the need for strong oversight of USAID assistance contracts, we
found that USAID did not provide adequate contract oversight, including
holding contractors to stipulated requirements and conducting required
annual reviews of contractor performance.

o 	Agriculture. USAID did not hold its primary contractor to the
contract's requirement to conduct five crop subsector assessments that
were to serve as the basis for the contractor's annual work plans and all
future activities. According to the contractor, it did not complete the
assessments because USAID was pressing it to produce visible progress
through the construction of, among other things, irrigation canals and
farm-to-market roads by the Accelerating Success deadline. Although USAID
documented the contractor's lack of performance, as of October 2004, it
had not required the contractor to complete the assessments.

o 	Economic governance. USAID's regional Office of Inspector General
reported in August 2004 that, because the contractor failed to produce
contractually required quarterly work plans and schedules, the Office of
the Inspector General could not determine whether the economic governance
program was on schedule to achieve planned outputs.43 According to the
Inspector General's report, USAID officials did not require the contractor
to produce the plans, in part because mission

42FAR 16.101(b) groups contracts into two broad categories: fixed-price
contracts and costreimbursement contracts. The specific contract types
range from firm-fixed-price, in which the contractor has full
responsibility for the performance costs and resulting profit (or loss),
to cost-plus-fixed-fee, in which the contractor has minimal responsibility
for the performance costs and the negotiated fee (profit) is fixed.
Because the contractor has minimal responsibility for the performance
costs, the latter type of contract requires careful management and
monitoring. With the authority provided by AIDAR 706.302-7(b)(3)(ii),
other than full and open competition contracting procedures were
authorized by USAID management in February 2002 to expedite the delivery
of assistance to Afghanistan.

43USAID Regional Office of the Inspector General, Audit of the Sustainable
Economic Policy and Institutional Reform Support Program at
USAID/Afghanistan, Report Number 5-306-04-005-P, (Manila: Aug. 17, 2004).
At the time of the audit, only two of the six required quarterly work
plans were completed and neither included milestones or expected
accomplishments.

staff in Kabul lacked time to review them. To correct this problem, the
contractor began producing quarterly work plans and schedules in July
2004.

o 	Infrastructure. The use of grants instead of contracts to accelerate
the construction of some schools and clinics in fiscal 2004 made it
difficult for USAID to hold grantees accountable, because no-penalty
causes were included in the grant agreements. Further, neither USAID nor
its initial contractor developed a quality assurance plan for the school
and clinic reconstruction effort. Such a plan could have guided USAID's
oversight efforts and assisted in the identification of problems.
Similarly, although the main infrastructure contractor was required to
develop and submit a comprehensive quality control and assurance program
for the Kabul-Kandahar Road construction project, this was not done.
According to a September 2004 USAID Inspector General report, USAID did
not inspect contract quality control laboratories until 21 months after
road construction began.44 The Regional Office of the Inspector General
also found deficiencies in the contractor's quality control program, such
as untrained personnel and lack of adherence to testing standards.

o 	All sectors. Because of staffing constraints and competing priorities,
USAID did not perform annual contractor performance evaluations in any
sector as required by USAID policy directives in 2004 and federal
regulation.45 The evaluations are intended to document contract quality,
cost control, and timeliness; and inform future award decisions. According
to USAID, five additional contracting staff were hired in early fiscal
2005 and efforts to conduct evaluations subsequently began. In addition,
according to contract provisions, technical and contracting

44USAID Office of the Inspector General, Audit of the Kabul to Kandahar
Highway Reconstruction Activities Financed by USAID/Afghanistan's
Rehabilitation of Economic Facilities and Services Program, Report Number
5-306-04-006-P, (Manila: Sept. 21, 200.)

45According to USAID and federal contracting regulations, contracting
officers must report on contractor performance at least annually. USAID
policy (see USAIDAR 742.1502) states that contracts in excess of $100,000,
including individual task orders under indefinite quantity contracts, must
be evaluated at least annually (for contracts exceeding 1 year in
duration) and upon completion of activities, as required by FAR 42.1502.
More frequent evaluations may be conducted if the Contracting Officer and
Cognizant Technical Officer determine them to be in the best interests of
the activity. Federal Acquisition Regulation 36.201 also requires agency
officials responsible for monitoring contractor performance to prepare
performance evaluation reports for all construction contracts with a value
of $500,000 or more.

Performance Measurement Problems Plagued Programs

officers are to meet quarterly and annually with contractors to discuss
performance and other administrative and technical issues. Although USAID
maintains that staff met frequently with contractors throughout 2004 and
conducted in-house reviews of some of the major programs, most meetings
were ad hoc and records of the discussions were not always formally
documented and reported. The absence of such records makes it difficult to
determine the nature and extent of problems with individual contractors or
across multiple contractors' efforts. Such records would also facilitate
conducting annual contractor performance evaluations.

The USAID mission in Kabul did not develop a performance management plan
for 2004. In addition, performance information in several sectors was
lacking, making it difficult to determine the results of USAID assistance.
Finally, because of-among other problems-weaknesses in contractor
reporting and the lack of a performance management system, the information
reported by USAID to decision makers in Washington, D.C., did not
accurately portray the status of each sector or the overall assistance
effort.

USAID directives state that performance management represents the agency's
commitment to manage programs with greater accountability and that
operating units must prepare a complete performance management plan to
manage the process of assessing and reporting progress toward strategic
objectives.46 However, since the mission in Kabul was operating under a
wavier that permitted it to use an interim strategy rather than a more
comprehensive strategy, it was also allowed to operate without a
comprehensive performance management plan. Although a performance
management plan was not required, USAID directives state that when an
interim strategy is used, program performance should still be measured-
country volatility may require intensive monitoring and measurement of
program implementation.47 USAID officials stated that although a formal
plan was not prepared, goals, indicators, baselines, and targets were
included in major contracts. However, without a performance management
plan that meets the requirements stipulated in USAID directives, USAID

46USAID Functional Series 200 Programming Policy Automated Directive
System 203.3.2 Performance Management Plans.

47USAID Functional Series 200 Programming Policy Automated Directive
System 201.3.4.3, Types of Strategic Plans.

cannot develop a complete and accurate assessment of the status of its
assistance efforts. The United States has pledged to maintain a long-term
presence in Afghanistan, in part by increasing the number and scope of
USAID contracts. Consequently, the need for a comprehensive plan and for
the greater integration of performance measurement into the work of
contractors will continue to be important in future years. Now that a new
overall, longer-term strategy for USAID's efforts in Afghanistan is
approved, USAID has stated that the mission in Kabul will develop a
performance management plan that complies with USAID directives.

Further, USAID directives state that performance data collection should be
integrated with implementing contractors' activities and incorporated into
the contractors' work plans.48 USAID did not stipulate the requirement for
contractors to develop sector-specific performance plans in three of the
six major reconstruction contracts. In two of the three contracts where a
requirement was stipulated, little information on what should be included
in the plans was prescribed. We found problems with performance measures
in the following sectors:

o 	Agriculture. The contractor was required to report to USAID on the
status of 14 performance measures. (See app. III, table 6 for a list of
the measures.) However, the contractor did not collect or report
information for most of the measures, making it difficult for USAID to
accurately determine the extent to which the program was achieving
expected results. Efforts were underway in June 2005 to improve
agriculture-related performance measures.

o 	Democracy and governance. In the grant awarded for civic education and
political party building, USAID did not require the implementing partners
to establish specific targets or develop performance management plans,
making it difficult to assess whether the program was on schedule or
achieving intended results.

o 	Economic governance. For most of fiscal year 2004, the contractor did
not develop performance measures, which would have helped USAID monitor
the sector's results. An Afghan government review of USAID's economic
governance program stated that the contractor had not developed a formal
process for assessing advisors as required in the statement of work.
Consequently, it was unclear how USAID or the

48USAID Functional Series 200 Programming Policy Automated Directive
System 203.

contractor assessed advisors' performance, determined whether the
advisors' knowledge had been transferred to Afghan counterparts (a key
aspect of the program), or monitored the program's progress. USAID
officials stated that the program's progress was tracked through weekly
and monthly progress reports. We found that although these reports
provided information on the status of activities, they did not contain
specific performance indicators to determine the impact of the project. To
correct this weakness, the contractor initiated efforts to produce
periodic performance measures in the last quarter of fiscal year 2004.

o 	Health. According to an evaluation of the health sector, the
contractor's data management system was unable to collate data from
service delivery subgrantees into a comprehensive picture for the overall
service delivery effort, making it difficult for managers and USAID to
judge progress or results.49

Owing to these weaknesses and other problems, the performance measures
that the Kabul mission provided to decision makers in Washington, D.C.,
did not completely portray the status of each sector or the overall
Accelerating Success initiative. For example, we found that the reported
agriculture sector measures, such as kilometers of canal repaired, did not
provide the information necessary to determine whether the program was
meeting the primary objectives stated in the contract- increasing
agricultural productivity and farmers' incomes. Likewise, the only two
measures where reported for the democracy and governance sector, the
number of courthouses constructed, and the number of judicial personnel
trained. Those measures did not capture the performance of the diverse
activities implemented in this sector. Further, the data reported in some
sectors did not always match contractor reports. For example, although
contractor reports indicted that 77 schools were refurbished and 8 were
substantially complete, reports provided to Washington indicated that only
39 schools had been constructed or rehabilitated.

Program managers need accurate operational information, including
performance measures, to determine whether strategic objectives are being
met.50 According to USAID officials in Washington, D.C., only 3 days

49According to USAID, the contractor, USAID, and the Afghan Ministry of
Health began regularly reporting from an improved information system in
December 2004.

50GAO/AIMD-00-21.3.1.

were allowed for the development of the Accelerating Success performance
measures. The measures were selected based on what USAID thought it could
accomplish by the June 2004 target date rather than what was needed to
determine progress and results in each sector. USAID conditioned meeting
the targets on, among other things, the existence of a secure environment
and the receipt of funding by July 2003. Neither of these conditions
existed. USAID does not believe that the performance measures currently
used are an effective way of measuring progress toward program objectives
and plans to introduce more meaningful performance measures in fiscal
2006. The agency maintains that it is crucial to take into account lessons
learned related to the difficulty of the reconstruction environment when
developing future measures. (App. III presents information on the
performance measures that were included in the main contracts for each
sector and the Accelerating Success performance measures provided to
decision makers in Washington, D.C.)

Lack of Staff and Security Throughout fiscal year 2004, staffing problems
and security restrictions

Restrictions Impeded Effective limited on-site project monitoring.
Although the USAID mission in Kabul

On-Site Project Monitoring	had more staff and better working conditions by
late fiscal year 2004 than in previous years, staff levels and turnover
continued to pose a challenge.51 Staff at the USAID mission in Kabul
continued to manage a much larger amount of assistance than their
counterparts at other missions. Specifically, as of June 2004, staff at
the mission in Kabul managed approximately $27.5 million in assistance per
staff member while counterparts at other missions managed $1.2 million per
staff member. This ratio improved by September 2004 after USAID increased
its staff from 41 to 101. In September, the ratio was reduced to about
$11.2 million per staff person while the average across USAID missions
remained about $1.2 million per staff person. Further, staff turnover in
key positions continued in 2004. For example, the mission had three
different directors in fiscal year 2004. Similarly, the agriculture sector
had five different technical officers in 2004, owing to staff performance
problems and delays in finding a permanent officer. According to USAID,
the mission in Kabul also did not have sufficient staff in Afghanistan
with the technical knowledge to monitor reconstruction projects. To
increase technical knowledge, 10 members of the U.S. Army Corps of
Engineers were assigned to the Kabul

51In July 2004, a new compound consisting of prefabricated offices and
housing units was completed across the street from the embassy increasing
available facilities and allowing greater numbers of staff to be hired.
Owing to security and difficult living and working conditions, Afghanistan
is a one-year posting for Department of State and USAID personnel.

mission by September 2004. To increase the recruitment pool for staff
assigned to the USAID mission, in November 2004, USAID's Administrator
requested all staff to consider serving in one of four critical posts
including Afghanistan, Iraq, Pakistan, and Sudan. In addition, in order to
attract and retain more U.S. direct hire staff for extended periods, USAID
has increased pay incentives, such as hazard pay, cost of living, and
overtime remuneration.

Security restrictions limited the travel of U.S. direct-hire personnel to
program sites outside Kabul, making routine program monitoring difficult.
In its April 2004 risk assessment of the USAID mission in Kabul, USAID's
Inspector General cited the inability to travel freely to project sites
because of security concerns as a material weakness and an overriding
constraint to managing assistance activities in Afghanistan. For much of
fiscal year 2004, USAID staff had limited access to project sites and
depended on reporting from its contractors and grantees. To improve
project monitoring, USAID contracted with a nongovernmental organization
to conduct site evaluations; however, the contract was not signed until
May 2004.

Efforts to Improve Coordination of U.S. Activities and International
Assistance Had Varying Results

U.S. Efforts Were Coordinated through Interagency Process, but Initiatives
to Improve Coordination Had Mixed Success

Although coordination of U.S. assistance efforts occurred daily throughout
fiscal year 2004, new initiatives to improve coordination of U.S.
assistance in Afghanistan had mixed results. Also, despite efforts by the
Afghan government to better coordinate international donor assistance,
problems associated with the effectiveness of coordination mechanisms
persisted in 2004.

U.S. assistance to Afghanistan in fiscal year 2004 was coordinated
primarily through daily meetings of the Afghanistan Interagency Operations
Group. The group included representatives from the Department of State's
Office for Afghanistan, USAID, DOD, and other agencies delivering
assistance. According to Department of State officials, this formal,
interagency committee provided a uniform process for making, and informing
the President of, policy-level decisions and for sharing information among
agencies. In Afghanistan, U.S. assistance was coordinated through the U.S.
Embassy country team. (See fig. 14.)

Principals' Committee

Composition: Secretary-level officials from U.S. departments and agencies
involved in Afghanistan Roles: Making decisions on proposals developed by
Deputies' Committee, resolving interagency disputes, providing information
on policy, reporting to the President Chair: National Security Council
Meeting frequency: Monthly and as needed

Deputies' Committee

Composition: Deputy Secretaries from the U.S. departments/agencies
involved in Afghanistan Roles: Making decisions on proposals developed by
the Policy Committee, resolving interagency disputes Chair: National
Security Council Meeting frequency: Weekly

Afghanistan Interagency Operations Group

Composition: Operations-level personnel from executive branch U.S.
departments involved in Afghanistan Roles: Developing policy options on,
among other things, assistance sectors to target, allocation of assistance
funds, strategies for increasing international donor support, and the role
of the PRTs Chair: Coordinator for U.S. Assistance/National Security
Council

                  Meeting frequency: Weekly Working committees

                           U.S. Embassy Country Teamc

Composition: Representatives of U.S. agencies with personnel stationed, or
on temporary duty, in Afghanistan Roles: Daily coordinating U.S. policy
and assistance efforts in Afghanistan Chair: Ambassador

                        Afghanistan Reconstruction Group

1 Chief of staff, 3 sector coordinators
15 Sectoral advisor positions (10 filled as of October 2004)
4 Public affairs officers
1 Secretary

                        Provincial reconstruction teams

Civilian officials from the Departments of State and Agriculture and USAID
work with U.S. and foreign military personnel, provincial offices of the
Afghan national government, and local community leaders to identify and
implement assistance projects

Source: GAO analysis of information provided by the Department of State
(data); Nova Development (clip art).

Note: The interagency coordination structure is based on National Security
Presidential Decision Directive-1 (Feb. 13, 2001).

The United States undertook several initiatives in fiscal year 2004 to
improve coordination of U.S. assistance in Afghanistan. Specifically, the
office of the Commander of the Combined Forces Command-Afghanistan (CFC-A)
was moved to the embassy from Bagram Airbase (27 miles north of Kabul) to
improve coordination between civilian and military efforts in Afghanistan.
Further, according to embassy officials we interviewed and documents we
reviewed, the Ambassador did not believe that the existing embassy
management structure was sufficient to plan, coordinate, and monitor U.S.
operations and did not have confidence in the accuracy of reconstruction
assistance reporting. To improve reconstruction management, planning, and
reporting, the ambassador created the Embassy Interagency Planning Group,
staffed by military officers, to improve reporting on reconstruction
projects, facilitate the development and execution of the Mission
Performance Plan, and act as a liaison between the embassy, CFC-A, the
Afghanistan Interagency Operations Group, and others.

The Departments of State and Defense also created the Afghanistan
Reconstruction Group (ARG) in fiscal year 2004, recruiting private sector
and other experts to serve as strategists to the Ambassador and as sector
advisors to key Afghan government ministries. However, the group's
mandate, mission, roles, and responsibilities were not delineated or
incorporated into the embassy's Mission Performance Plan. In addition,
according to ARG, USAID, and Department of State officials, the ARG
focused its efforts on criticizing USAID programs rather than providing
constructive advice. As a result, animosity developed between the ARG
advisors and some USAID and embassy staff. According to USAID and
Department of State officials we spoke to, some ARG advisors did not
coordinate Afghan ministry meetings with embassy staff or inform them
about the meetings' results. State and USAID officials stated that because
separate meetings were being held, Afghan government ministries sometimes
received conflicting messages about U.S. reconstruction activities.
Further, some USAID contractors became confused by ARG advisors' efforts
to direct the reconstruction effort. For example, ARG advisors responsible
for economic governance issues tried to direct the activities of USAID's
contractor for that sector. To clarify lines of authority, USAID informed
its contractors that they were to take direction from USAID alone. Most
U.S. officials we spoke to in November 2004 stated that coordination with
the ARG had improved; however, the roles and responsibilities of the ARG
remained unclear.

To enhance reconstruction efforts, the U.S. government increased the
presence in the PRTs of civilian personnel from the Department of State,
USAID, and other agencies. By September 2004, about 13 Department of
State, 8 USDA, and 13 USAID representatives were stationed alongside U.S.
military personnel in PRTs across Afghanistan.52 However, in the absence
of a common doctrine or set of best practices for incorporating civilian
personnel, coordination varied depending on each PRT commander's
priorities and personal relationships with civilian agency
representatives. In addition, we found that stationing civilian personnel
in the PRTs did not improve oversight of Kabul-based projects. In general,
USAID personnel at the PRTs focused on identifying, implementing, and
coordinating PRTbased, quick-impact projects. Few USAID technical officers
stationed in Kabul used the USAID PRT staff to help monitor reconstruction
projects. We reported that in fiscal year 2003, neither USAID officers
stationed in Kabul nor at PRTs were able to identify the location of many
Kabul-directed projects in the field.53 This problem persisted in 2004
despite the addition of a Kabul-based USAID-PRT coordinator to facilitate
logistics and communication.

Coordination Problems between Despite some efforts by the Afghan
government to coordinate assistance

Afghan Government and Donors from international donors, problems
associated with the effectiveness of

Persisted	coordination mechanisms persisted throughout 2004. The Afghan
government established the National Development Framework and Budget and
consultative groups to coordinate international assistance. The
development framework and budget established broad national goals and
policy direction for a reconstructed Afghanistan. The consultative groups
were designed to assist in the planning and implementation of the national
budget and to coordinate the international community's independent efforts
and political objectives. (See fig. 15.)

52The Department of State officials stationed at PRTs focus on diplomatic
issues, not reconstruction. USDA PRT staff are to help enable, support,
and foster reconstruction of the agricultural sector, and to help build
the ability of the Afghan central government to support and provide
services to the agricultural sector.

53GAO-04-403.

                                        Disarmament 
                            3.7  demobilization and 
                                      reintegration 

                       Source: Government of Afghanistan.

In June 2004, we reported that the coordination of international
assistance and the consultative groups had not been effective.54 We found,
among other things, that some donors independently pursued development
efforts in Afghanistan; the international community asserted that the
Afghan

54GAO-04-403.

government lacked the capacity and resources to effectively assume the
role of coordinator; the terms of reference for the consultative groups
were unclear and too broad; the groups were too large and lacked strong
leadership; member commitment was uneven; and the overall potential of the
mechanism had not been maximized.

International coordination improved somewhat in 2004. The national
Consultative Group Standing Committee met frequently; the Afghan
government presented a consolidated national budget to focus international
donations at the Afghanistan Development Forum; and more donors
demonstrated increasing commitment to use the national budget to focus
their assistance. However, the then Minister of Finance stated that some
international donors continue to provide assistance based on what they
want to provide rather than on the Afghan government's needs.

However, problems with the consultative groups and USAID's coordination
with the Afghan government persisted in fiscal 2004. According to the then
Minister of Finance, the consultative group mechanism had not matured into
a real decision-making forum. More than 1 year after their creation, most
groups met infrequently and 5 of the 16 groups had not yet developed terms
of reference to guide their efforts. Others that did not produce results,
such as the natural resources consultative group, were effectively
disbanded. Although USAID participated in a number of the consultative
groups, some coordination issues remained. For example, according to USAID
officials there were extensive contacts between USAID, contractors, and
ministry officials, and ministries had to approve building designs and
site locations. However, officials from the Ministries of Education and
Health believed they had been excluded from participating in the
management of the construction of schools and clinics. Further, the lack
of coordination among the Ministry of Health, USAID, and the REACH
contractor to match clinic construction site selection with the location
of health service delivery grant activities caused a significant barrier
to expanding the basic provision of health services. The Minister of
Agriculture stated that he was not regularly informed about the U.S.
agriculture program's progress and was unable to respond to public
inquiries about the program, increasing skepticism as to whether any
assistance was being delivered. Similarly, according to an evaluation
commissioned by the Afghan government, the Minister of Finance and his
department heads had little input into the initial identification and
selection

of some of the USAID contracted advisors and were dissatisfied with their
qualifications and work.55

Lack of Security, In fiscal year 2004 Afghanistan's security situation
remained volatile and, in

some parts of the country, seriously deteriorated. Attacks on
assistanceOpium Cultivation, and projects occurred throughout the year,
resulting in project delays and the Funding Delays deaths of assistance
workers. In addition, dramatic increases in opium Obstructed cultivation
continued to threaten stability in Afghanistan; efforts to reverse

the trend, including the development and implementation of a
U.S.Reconstruction and counternarcotics strategy, began in late 2004.
Further, delayed fundingThreatened continued to hamper the U.S. assistance
effort in Afghanistan. Most of the

funding needed to meet June 2004 Accelerating Success initiative
targetsAchievement of U.S. was not available until February, just 5 months
prior to the target date.Goals

Deteriorating Security Delayed Project Implementation, Fueled Instability

In fiscal year 2004 the security situation in Afghanistan was volatile and
deteriorated in some regions. Attacks against aid workers, Afghan security
forces, and international forces increased. According to U.S. security
data and UN reports in August and November 2004, deteriorating security in
the south and southeast caused large areas to be "effectively out of
bounds to the assistance community"56 (see fig. 16). In the north-an area
commonly viewed as the safest in the country-attacks resulted in the
deaths of foreigners and Afghans. Direct attacks on UN compounds and
convoys occurred in Kandahar, Konduz, and Hirat provinces as well as other
provinces.

55Mohammad Qayoumi, Monitoring and Evaluation of Afghanistan Economic
Governance Program (Kabul: 2005).

56United Nations, The Situation in Afghanistan and Its Implications for
International Peace and Security, Report of the Secretary General,
A/58/868-S/2004/634 (New York: 2004); United Nations, The Situation in
Afghanistan and Its Implications for International Peace and Security,
Report of the Secretary General, A/59/581-S/2004/925 (New York: 2004).

                            Source: United Nations.

Note: As of June 2005, the total area designated as high or medium risk
was approximately the same as in October 2004.

According to USAID, eighty-one people involved in assistance activities
were killed in 2004. During fiscal year 2004, 70 attacks directly affected
USAID programs, causing delays in reconstruction projects. For example,
equipment was damaged, work was delayed, and construction workers were
kidnapped, wounded, or killed by antigovernment forces attacking USAID's
highway construction project. In addition, secondary road projects,
agricultural training programs, the distribution of vaccines and
medicines, and the construction of schools and clinics, among other
reconstruction projects, were delayed or terminated because of attacks.
For example, school construction in Uruzgan, Helmand, Paktiya, and Ghazni
provinces was at a standstill owing to security threats.

Stability across the country in 2004 was threatened by local authorities
and military commanders who acted with impunity and were viewed as
responsible for a wide range of repressive activities, including acts of
intimidation, extortion, arbitrary arrest, illegal detentions, and
extrajudicial killings and torture, according to the Department of State,
the UN, and human rights groups. Factional fighting among warlords in
seven provinces in the north and the west of Afghanistan continued in
2004, resulting in the deaths of at least 100 combatants and civilians.
Although large areas of the country and some warlords remained beyond the
control of the Afghan government in 2004, the Afghan government made some
progress in asserting its authority. For example, the Afghan President
appointed new governors in about half of the country's 34 provinces.
However, according to the Department of State's 2004 human rights report
for Afghanistan, the government or its agents carried out extrajudicial
killings.57 For example, on August 14, 2004, 17 bodies were discovered at
the Shindand market place, with evidence that 6 of the 17 individuals were
tortured and beheaded.

The United States and the international community continued to take steps
to improve security in Afghanistan. Specifically, DOD, coalition, and NATO
forces increased the number of provincial reconstruction teams from 4 to
19 in 2003-2004 to enhance security for reconstruction activities. In
addition, DOD accelerated its effort to train and deploy Afghan National
Army combat troops. As of March 2005, 18,300 troops had been trained and
10,500 troops had been deployed to Kabul central command and 7,800 to four
regional commands. However, efforts to equip troops and build

57State Department Country Reports on Human Rights Practices, Afghanistan
2004, Washington, D.C. (February 28, 2005).

supporting military organizations were behind schedule. Further, the
United States and Germany had trained more than 35,000 police by January
2005, but the lack of infrastructure and equipment at the provincial and
district levels, along with other problems, negatively affected police
effectiveness.58 Finally, as of February 2005, about 40,000 of
Afghanistan's estimated 100,000 official militia forces had been
demobilized;59 however, an estimated 65,000 to 80,000 unofficial militia
fighters were still at large.60 The Department of State views the
demobilization and reintegration of these forces as critical to improving
the country's security and succeeding in the international recovery
effort.

Dramatic Increase in Opium In 2004, dramatic increases in opium
cultivation continued to threaten

Cultivation Threatens Stability	stability, reconstruction, and
state-building in Afghanistan. According to the UN, Afghan drug production
increased by approximately 25 percent between 2002 and 2004, owing to high
returns, a growing market, rural poverty, political fragmentation, weak
law enforcement, and deteriorating security.61 (See app. IV for 2002-2004
production and revenue statistics.) The UN estimated 2004 opium production
at 4,200 metric tons, which represents almost 90 percent of the world's
illicit opium supply. Disease and drought kept the yield low; without
these mitigating environmental factors, the U.S. government estimated that
total production would have been more than 9,700 metric tons.

According to the Department of State, the UN, the Afghan government, and
others, opium cultivation, drug trafficking, and associated financial
gains are having an increasingly harmful influence on Afghanistan society.
Specifically, some national level officials and many district and
provincial government leaders have some criminal connection to the opium
trade. With opium-related revenues equivalent to 50 to 60 percent of its
GDP over

58For more information on Afghan National Army and Police reconstruction,
see Afghanistan Security: Efforts to Establish Army and Police Have Made
Progress, but Future Plans Need to Be Better Defined, GAO-05-575
(Washington, D.C.: June 30, 2005).

59The Japanese government leads demobilization efforts.

60Official militia forces are those forces recognized as Afghan Militia
Forces by Afghanistan's Ministry of Defense. Unofficial forces are
considered independent, illegal armed groups.

61UN Office on Drugs and Crime, Afghanistan Opium Survey 2004 (Vienna:
2004).

the past 3 years, Afghanistan is on the verge of becoming a narco-state.62
The increase in opium production and trafficking is threatening
reconstruction and state-building in Afghanistan, as well as the nation's
longer-term peace. It is undermining legitimate economic activities and
the establishment of the rule of law and is responsible for supporting
factional agendas and antigovernment elements, including warlords, local
commanders, and terrorist organizations. The drug trade is also impeding
the disarmament, demobilization, and reintegration of former combatants,
because those involved in the drug economy are developing and funding
private militias needed to run the drug business. Further, the unchecked
development of an illicit narcotics-based economy, and the funds it
provides to the entrenched interests of antigovernment elements in the
provinces, exacerbates problems associated with the central government's
effort to extend its writ outside Kabul.

The Afghan government and the international community have taken a number
of actions to address the narcotics problem in Afghanistan since the
signing of the Bonn Agreement in December 2001. These actions have
included imposing bans on opium cultivation, drafting counternarcotics
strategies, establishing Afghan counternarcotics police organizations, and
launching limited eradication efforts (see app. IV for more details). U.S.
counternarcotics efforts in 2004 were led by the Department of State's
Bureau for International Narcotics and Law Enforcement (INL) Affairs.
Additional assistance was provided by DOD. INL obligated $36.5 million
primarily to eradicate poppies and provide alternative livelihoods and
spent about $8.9 million, to assist the Afghan Government's central
eradication force. DOD obligated $25.7 million on counternarcotics efforts
by October 2004 and spent about $8.9 million, to train and equip the
Afghan Government Counternarcotics Police, build a public affairs capacity
within the Ministry of Interior, and create a counternarcotics
intelligence organization.63

However, these and other counternarcotics efforts failed to have any
significant impact on the cultivation and processing of opium in 2004
owing

62A narco-state is defined as an area that has been taken over and is
controlled and corrupted by drug cartels and where law enforcement is
effectively nonexistent.

63In addition, INL and DOD obligated, respectively, about $98.1 million
and $47.3 million for national, highway, and border police training,
equipping, and infrastructure construction; each agency spent about $5.7
million by the end of the fiscal year. These monies were not directly
related to the counternarcotics effort.

to limited security and stability across Afghanistan. For example, as of
October 2004, efforts led by the Afghan, UK, and U.S. governments to
manually eradicate poppy fields failed. In 2004, eradication efforts began
after most of the country's opium had been harvested, primarily targeted
producers in only 1 of 34 provinces, and resulted in the eradication of
less than 1 percent of the hectares cultivated. Meanwhile, although a
number of clandestine processing labs were destroyed and limited
quantities of opiates seized, no major narcotics traffickers were
arrested, and piecemeal training and limited funding have impeded the
development of Afghanistan's Counternarcotics Police.

According to the Department of State, counternarcotics is now one of the
top U.S. priorities. Between June and October 2004, a $776.5 million,
fivepillar strategy, implementation plan, and budget for 2005 were
developed. The budget would fund five areas: $299 million for eradication
programs, $180 million for law enforcement, $172.5 million for
interdiction, $120 million to provide legal livelihood alternatives for
poppy farmers, and $5 million for a public information campaign.

The 2005 strategy faces a number of challenges that may limit its success.

o 	The strategy calls for a robust eradication program that includes the
use of aerial methods. However, the Afghan government vetoed the use of
aerial eradication, making it impossible to affect large areas quickly.

o 	During our visit in October 2004, the Governor of the Afghan National
Bank stated that eradicating 30 to 50 percent of the country's opium would
have a destabilizing impact on the economy. He added that the U.S.
government had not consulted the National Bank regarding the economic
impact of eradication.

o 	U.S. officials stated that funding for the overall U.S.-led effort was
needed in January 2005, 4 months before the beginning of the harvest
season, but some of the funding was not available until May 2005.

o 	The interdiction capabilities of the Afghan government are rudimentary
at best, because the government lacks the laws or legal infrastructure
needed to investigate and prosecute drug-related crimes.

Delayed Funding Negatively Impacted Acceleration Efforts

Delayed funding continued to negatively impact the U.S. assistance effort
in Afghanistan in fiscal year 2004. In our previous report, we noted that
delays in fiscal year 2003 funding prevented USAID, in particular, from
undertaking major reconstruction activities.64 As in prior years, most
reconstruction money in fiscal year 2004 was provided through emergency
supplemental appropriations, with smaller amounts in the agencies' regular
appropriations. USAID received reconstruction money through two
appropriations (see fig. 17). In November 2003, Congress appropriated $672
million in emergency supplemental legislation; the Office of Management
and Budget (OMB) apportioned $270 million of this funding to USAID in late
January 2004 and $372 million in early February. In addition, Congress
appropriated $283 million in January 2004 for USAID's fiscal year 2004
budget for Afghanistan reconstruction. However, the first portion of these
funds did not become available for programming by the USAID mission in
Kabul until March 2004 owing to delays introduced by the apportionment
processes within State, OMB, and USAID. All of these funds were for
programs that, under the Accelerating Success initiative, had initial
targets of June 2004, giving the agency approximately 3 to 6 months to
demonstrate progress.65 According to USAID officials, to compensate for
the funding delays USAID was forced to postpone the start or expansion of
programs and move funds between programs to keep faster paced programs
operating.

64GAO-04-403.

65Because the presidential elections were delayed from June to October
2004, some accelerating success targets were adjusted first to a September
deadline, and then extended again to December 2004.

Source: GAO analysis.

a Pub. L. 107-38, Emergency Supplemental Appropriations Act for Recovery
from and Response to Terrorist Attacks on the United States.

bPub. L. 107-115, Foreign Operations, Export Financing, and Related
Programs Appropriations Act.

cPub. L. 107-117, Department of Defense and Emergency Supplemental
Appropriations for Recovery from and Response to Terrorist Attacks on the
United States Act, 2002.

dPub. L. 107-206, 2002 Supplemental Appropriations Act for Further
Recovery From and Response to Terrorist Attacks on the United States.

ePub. L. 108-7, Consolidated Appropriations Resolution, 2003.

fPub. L. 108-11, Emergency Wartime Supplemental Appropriations, 2003.

gPub. L. 108-106, Emergency Supplemental Appropriations Act for Defense
and for the Reconstruction of Iraq and Afghanistan, 2004.

hPub. L. 108-199, Consolidated Appropriations Act, 2004.

USAID continues to face funding delays in fiscal year 2005. In December
2004, Congress passed regular appropriations for the agency, matching
USAID's Afghanistan budget request of $397 million; USAID officials stated
at the time that they would be unable to fully implement programs with the
amount of their regular appropriations and would rely on supplemental
funding to carry out the agency's planned activities. However, the almost
$1.1 billion fiscal 2005 emergency supplemental appropriation was not
passed until May 2005. USAID, Department of State, and Afghan officials
told us that it is difficult to plan and implement large development
programs that depend heavily on the passage of uncertain supplemental
appropriations.

Conclusions	Afghanistan has made progress since the fall of the Taliban in
October 2001. As part of an international effort, U.S. assistance, led by
USAID, helped Afghanistan elect its first president, return millions of
children to school, and repatriate millions of refugees. Despite these
gains, Afghanistan's needs remain great. It ranks as the world's fifth
poorest country; half of all Afghans live below the poverty line and more
than 20 percent cannot meet their daily food requirements. Further,
factional elements remain in control of some areas of the country,
perpetrating crimes against citizens, and insurgents continue to
infiltrate the country. These conditions leave the nation at risk of once
again becoming a threat to itself and others.

The U.S. has pledged to maintain a long-term presence in Afghanistan,
including increasing the number and scope of USAID contracts. In 2004, the
focus of U.S. support to Afghanistan shifted from primarily emergency
assistance to reconstruction programs, with large scopes of work and
costs, in an effort to accelerate progress. Despite its considerable
investment in Afghanistan's reconstruction, USAID struggled with contract

management and project oversight. Although a long-term, country-level
strategy was approved as of July 2005, USAID operated throughout 2004
without a comprehensive strategy. In addition, USAID has not developed a
performance management plan to monitor project performance, nor has it
focused contractors' efforts on developing project-specific performance
plans. Without such plans, the U.S. government cannot accurately assess
the results of its assistance efforts. Consequently, decision makers in
Washington and Kabul cannot effectively target resources to accomplish the
goal of creating a stable Afghan society.

Recommendations for Executive Action

To improve on existing efforts to measure and assess the progress of U.S.
reconstruction projects toward achieving U.S. policy goals, and to provide
a basis for planning future reconstruction projects, we recommend that the
Administrator of USAID take the following three actions (1) establish a
performance management plan that complies with USAID directives, (2)
clearly stipulate in all future reconstruction contracts that contractors
are to develop performance management plans specific to the work they are
conducting, and (3) more completely communicate the performance
information obtained from the performance management plans to executive
branch decision makers in Kabul and Washington.

Agency Comments and Our Evaluation

We provided a draft of this report to the Departments of State and Defense
and to USAID to obtain their comments. The Departments of State and
Defense declined to comment on the report. USAID commented that in general
it found the report to be a comprehensive and detailed assessment of the
U.S. civilian reconstruction efforts in Afghanistan during fiscal year
2004. USAID concurred with the report's recommendations and indicated that
it has made progress in improving its strategic planning and performance
measurement processes. Specifically, USAID completed its first long-term
country-level strategy for Afghanistan to cover the period from 2005
through 2010. The agency also indicated that it has begun developing a
performance management plan. USAID also provided information on more
recent activities and technical comments, which we incorporated where
appropriate.

Copies of this report are being sent to the Secretary of Defense, the
Secretary of State, the Administrator of USAID, relevant congressional
committees, and other interested parties. We will also make copies
available to others upon request. In addition, the report will be made
available at no charge on GAO's Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact
me on (202) 512-3149 or at [email protected]. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on the
last page of this report. Other contacts and major contributors are listed
in appendix V.

Sincerely yours,

David Gootnick, Director International Affairs and Trade

Appendix I

                       Objectives, Scope, and Methodology

The Afghanistan Freedom Support Act of 2002 directs GAO to monitor U.S.
humanitarian and reconstruction assistance to Afghanistan. To meet the
requirements of the directive and provide Congress with a comprehensive
accounting of U.S. assistance to Afghanistan for the fiscal year 2004
period, we analyzed (1) U.S. obligations and expenditures, (2) the
progress and results of U.S. humanitarian and reconstruction efforts, (3)
the management of U.S. assistance and mechanisms to coordinate U.S. and
international assistance, and (4) the major factors that obstructed the
advancement of the assistance effort and the achievement of U.S. policy
goals.

We collected data on fiscal year 2004 obligations and expenditures from
the U.S. departments and agencies responsible for implementing U.S.
government-funded projects in Afghanistan. These include the U.S.
Departments of Agriculture, Defense, Health and Human Services, Labor,
State, and Treasury; the Broadcasting Board of Governors; the U.S. Trade
and Development Agency; and the U.S. Agency for International Development
(USAID). Because no single repository contains financial information for
all U.S. assistance in Afghanistan, we contacted each agency directly. For
the Department of State, we contacted each bureau and office
separately-the Bureau of Population, Refugees, and Migration; the Bureau
for International Narcotics and Law Enforcement Affairs; the Office of
Humanitarian Demining Programs; and the Office to Monitor and Combat
Trafficking In Persons-because the Department of State does not have a
consolidated financial reporting mechanism for programs in Afghanistan
that tracks both obligations and expenditures.

To distinguish funding for humanitarian and quick-impact projects from
longer-term reconstruction funding, we requested the agencies to designate
their funding appropriately. For USAID, we generally relied on the stated
mission of the responsible funding bureau to determine the funds' purpose
unless the agency informed us otherwise. For example, we assumed that
funding for the Office of Foreign Disaster Assistance and the Office of
Transition Initiatives was generally used, in accordance with their
respective missions, to address emergency situations and implement
quickimpact projects; funds for the offices' various long-term projects
were clearly marked in the financial reporting that USAID supplied to us.

To delineate the distribution of funding and projects by province, we
report information that USAID provided from a programmatic, rather than a
financial, database. The financial database did not include data by
location, and the programmatic database included only province-level
obligation

Appendix I
Objectives, Scope, and Methodology

data. Because data on nationwide programs were not included in the
programmatic database, we were unable to compare overall totals between
the financial and programmatic databases to verify consistency. Also,
because the programmatic database tracks only obligations, we were unable
to determine USAID's expenditures by province.

To assess the reliability of the obligations and expenditures data from
U.S. agencies providing assistance to Afghanistan, we (1) interviewed
officials at the Department of Defense (DOD), the Department of State, and
the U.S. Agency for International Development (USAID) regarding their
methods of gathering, management, and use of data; (2) reviewed USAID's
financial audit statement; and (3) compared the data we gathered with
USAID's Congressional Budget Justifications and State's 150 account
documentation, as well as with the governmentwide Afghanistan assistance
compiled by State's Bureau of Resource Management. According to a
Department of State official, the data compiled by the agency's Bureau of
Resource Management are not complete, owing in part to differences in how
the agencies track data, a disconnect between agencies' Washington and
Kabul offices, and variation in the frequency of reporting. However, the
Department of State relies on these data for decision-making purposes and
to report to Congress. Based on our assessment, we concluded that the data
on obligations and expenditures we collected from each agency are
sufficiently reliable for the purpose of showing, in gross numbers, the
levels of U.S. nonsecurity-related assistance to Afghanistan in fiscal
year 2004.

To assess the reliability of data for pledges by international donors, we
(1) interviewed the Department of State official responsible for compiling
these data based on information provided by the government of Afghanistan
and (2) compared the data's reliability with that of other information
sources. We determined that the data are sufficiently reliable for the
purpose of broadly comparing the United States' contributions with those
of other major donors and the combined total for all other donors.
However, we noted several limitations in the data, notably, that they are
self-reported by donor nations to the Afghan government. Furthermore, the
data for larger donors are considered more reliable than the data for
smaller donors, according to the Department of State. Owing to these
limitations and our lack of access to donor nations' financial records, we
were unable to determine the reliability of the dollar amounts reported to
have been pledged by each donor. Nevertheless, we present the reported
pledges in appendix II for the purpose of broadly comparing the U.S.
contributions with those of other major donors.

Appendix I
Objectives, Scope, and Methodology

To examine the results of assistance projects through September 30, 2004,
we focused our efforts on the major USAID reconstruction contracts signed
prior to the start of fiscal year 2004. The contracts account for
approximately 85 percent of the U.S.' reconstruction expenditures for the
fiscal year. We collected and analyzed information from the Departments of
State and Defense, and USAID in Washington, D.C., outlining policy goals,
basic strategies, program objectives, and monitoring efforts. We reviewed
the periodic progress reports provided by both USAID and its implementing
partners for all the major reconstruction projects. To assess the
reliability of these reports, we contacted each of USAID's cognizant
technical officers in Kabul about the reliability of the information
provided in the implementing partners' reports. While they noted that
security restrictions and the large territory in Afghanistan make
monitoring difficult, all of the cognizant technical officers we contacted
consider the data to be generally reliable for the purposes of providing
an overall status of the projects. In October 2004, we traveled to
Afghanistan to examine the implementation of USAID and Defense's
assistance-related operations. While in Afghanistan, we spent 12 days in
the capital city, Kabul, interviewing officials from the Afghan Ministries
of Finance, Health, and Agriculture; the Central Bank; the U.S.
Departments of State and Defense; and USAID. We also met with most of
USAID's primary implementing partners (including the International
Organization for Migration, the Louis Berger Group, Inc., Creative
Associates International Inc., Chemonics, Bearing Point, the International
Republican Institute, the International Foundation for Election Systems,
Management Sciences for Health, Management Systems International,
Population Services International, Technologists Incorporated, and the
Asia Foundation). In addition, we met with the officials from the British
Embassy in Kabul responsible for counternarcotics initiatives. In Kabul,
we inspected the rehabilitation of the Rabia Balkhi Women's hospital. We
also spent 8 days in the Ghazni, Hirat, Kunduz, and Nangahar provinces,
where we reviewed U.S.-funded projects, implemented primarily by USAID's
Office of Transition Initiatives, USAID's PRT-based staff, or Defense's
PRTs. While in these provinces, we met with provincial governors, district
leaders, teachers, healthcare workers, and other community members
involved in, or affected by, U.S. reconstruction projects. Constraints
placed on our movement within Afghanistan by the U.S. Embassy due to
security concerns limited the number of project sites we could visit.

To analyze the assistance coordination mechanisms developed by the U.S.
government and the international community we met with State Department of
State staff responsible for assistance coordination. We also

Appendix I
Objectives, Scope, and Methodology

met with and staff from USAID, and the Departments of Agriculture,
Commerce, Defense, U.S. Trade and Development Agency, and Treasury who
were involved in the provision of assistance, to obtain their views on the
coordination of assistance. In addition, we reviewed the U.S. National
Security Strategy; the State-USAID consolidated strategic plan for fiscal
years 2004-2009; the President's Security Strategy for Afghanistan; the
U.S. Embassy-Kabul Mission Program Plan; and USAID's strategy and action
plan for Afghanistan. Our analysis of international coordination
mechanisms included a review of United Nations (UN) and Afghan government
documents, including the Afghan National Development Framework and Budget,
pertaining to the international coordination mechanisms utilized in
Afghanistan in fiscal year 2004. In addition, we met with officials from
the Afghan Ministries of Agriculture, Finance, and Health, and from the
Central Bank to obtain their views on the evolution and status of the
consultative group mechanism.

To analyze the obstacles that affected the implementation of U.S.
reconstruction assistance we reviewed reports produced by the Departments
of State and Defense, USAID, the UN, the International Crisis Group, and
the Afghanistan Research and Evaluation Unit. To assess the reliability of
the UN data on opium production we reviewed the methodology used by the UN
to estimate levels of opium poppy cultivation and opium production. We
determine that the UN data is sufficiently reliable for the purpose of
this report. Finally, we discussed the obstacles and their impact with
officials from the Afghan ministries of Agriculture, Finance, and Health;
the Afghan Central Bank; the Afghan Counternarcotics Directorate; USAID;
and the Department of State.

We conducted our review from August 2004 to May 2005 in accordance with
generally accepted government auditing standards.

Appendix II

Obligations and Expenditures by U.S. Agencies and International Donor
Pledges, Fiscal Year 2004

Table 3: Obligations and Expenditures for Humanitarian and Reconstruction
Assistance by U.S. Agencies, Fiscal Year 2004

                             (Dollars in millions)

FY 2004 Obligations Expenditures

U.S. Agency for International Development $1,163.62 $586.72 Department of State

          Bureau for Population, Refugees, and Migration    63.89       48.33 
             International Narcotics and Law Enforcement    36.50    
                                             Enforcement             
                                    Other State agencies    14.22       12.91 
                                   Department of Defense    47.07       45.19 
                 Department of Health and Human Services        4.98 
                               Department of Agriculture    30.85    
                                     Department of Labor    6.70a    
                       U.S. Trade and Development Agency        2.54 
                                  Department of Treasury        1.00 
                         Broadcasting Board of Governors    11.77    
                                                   Total  $1,383.14   $720.15 

Source: GAO analysis of U.S. agency data.

aDepartment of Labor obligations are for fiscal years 2002-2004.

Table 4: Major Donors' Reported Pledges for Assistance to Afghanistan as
of November 16, 2004

(Dollars in millions)a
Country Pledge for 2004

Aga Khan $25 Asian Development Bank 205 Australia 14.9 Austria 2.4 Belgium
4.3 Canada 75.2 China 40 Denmark 27.8 European Commission 294 Finland 12

Appendix II Obligations and Expenditures by U.S. Agencies and
International Donor Pledges, Fiscal Year 2004

(Continued From Previous Page)

                             (Dollars in millions)a

                            Country Pledge for 2004

                                  France $37.2

Germany

Greece

India

Iran

Ireland

Islamic Development Bank

Italy

                                   Japan 200

Luxembourg

Netherlands

New Zealand

Norway

Organization of Islamic Conferences

Pakistan

Poland 0.1 Portugal 1.2 Russiab 0 Saudi Arabia 160 South Korea 20 Spain 50
Sweden 39.3 Switzerland 14.8 Turkey 3 United Arab Emirates 21.7 United
Kingdom 215.9 United States 1,383.14 World Bank 285

Total $3,592.94

Source: Department of State.

Note: We were not able to determine the reliability of the specific dollar
figures in this table. Although we determined that the data are
sufficiently reliable for making broad comparisons between the
contributions of the United States to those of major donors, we noted
several limitations, namely (1) that they are affected by differences in
exchange rates, (2) donors both over- and underreport owing to varying
definitions, and (3) the data for larger donors are considered more
reliable than the data for smaller donors.

Appendix II Obligations and Expenditures by U.S. Agencies and
International Donor Pledges, Fiscal Year 2004

aFigures cited relate to humanitarian and reconstruction donations only;
military donor contributions are not included.

bRussian assistance has consisted primarily of in-kind donations.

Appendix III

                      Sector Level Performance Indicators

The Accelerating Success initiative performance measures reported to the
Afghanistan Interagency Operations Group in Fiscal 2004 were initially
developed by USAID during a 3-day period in June 2003. The measures were
modified during that fiscal year with input from other agencies and
represent a subset of the measures reported for each of the major
reconstruction contracts. The development of performance measures for each
major contract varied. In some sectors, such as agriculture, performance
measures were included in the contract. In other sectors, such as health,
the measures were developed in a performance management plan developed by
the contractor after the contract was awarded or, as in the economic
sector, developed late in the project and published in periodic progress
reports. The tables below describe the Accelerating Success performance
measures reported by the Afghanistan Interagency Operations Group and the
more detailed measures developed by individual contractors for the major
reconstruction contracts.

Table 5: Agriculture Sector Measures Reported to the Afghanistan
Interagency Operations Group in Fiscal Year 2004

           Accelerating Success measures tracked                   
            by Chemonics and the U.S. mission in                   Sept. 2004 
                                           Kabul Sept. 2004 target     status 
                     Km. of canal rehabilitateda               320 
            Irrigation structures rehabilitateda               232 
                     Km. of farm to market roads               120 
                                  rehabilitateda                   
                           Loan officers trained             1,150      1,150 
                    Livestock vaccinated/treated         3,000,000  3,679,222 
                    Farmers served by extensiona           520,000    564,566 
                      Market centers constructed               131 

Source: Afghanistan Interagency Operations Group.

aIncluded in the Chemonics' RAMP contract.

The RAMP contract contains 14 performance measures (see table 6),
including program outputs such as the implementation of 615 irrigation
projects and project outcomes such as increasing the average productivity
of approximately 500,000 farm families by more than 100 percent. However,
the contractor did not have systems in place to capture information for
all measures.

                Appendix III Sector Level Performance Indicators

Table 6: Agriculture Sector Performance Measures and Status Reported by
Chemonics International Inc.

No.                 Performance measures                 Sept. 2004 status 
       60 percent increase in total wheat production in       Not measured    
       irrigated and rain fed areas using improved          
                 agricultural inputs (e.g., seed)           
       $250 million increased sales in local and export       Not measured    
       markets from a minimum of 5 commercial               
        sub-sectors (i.e., fruit and vegetable production)  
         No less than 50 percent average increase in net      Not measured    
              profits for approximately 1000 Afghan         
          entrepreneurs (e.g., input dealers, producers,    
                processors) who benefit from RAMP           
                            assistance                      
            More than 100 percent increase in average         Not measured    
           productivity for approximately 500,000 farm      
       families, through use of improved technologies and   
       best practices, improved infrastructure,             
                 and access to profitable markets           
        15 percent annual increase in average gross margin    Not measured    
                returns for 500,000 farmers' labor          
       500 village seed and plant germ plasma nurseries       Not measured    
       established by local entrepreneurs: 80               
       percent operationally viable: 75 percent financially 
                              viable                        

1000 village and regional demonstrations and field trials completed with
80 percent customer 564,566 farmers served by satisfaction extension
services

Mass media programs established in 5 regions, with 50 percent
operationally viable, 80 Not measured percent customer satisfaction

50 percent increase in net profits for approximately 1,000 commercial
enterprises trained Not measured under the program

Approximately 1,000 km of improved roads that will reduce farm-to-market
transaction costs 160 km of roads rehabilitated

by 10 percent; 85 percent operationally viable (annual maintenance
costs)	but transaction costs and viability not measured

Approximately 1000 agricultural market centers constructed, reducing
post-harvest loss or 119 constructed; increase in increasing shelf life
for horticultural commodities and meat and poultry products, resulting in
a productivity not measured 15 percent increase in productivity

Approximately 615 irrigation projects constructed to restore, maintain, or
increase hectares 229 structures rehabilitated.

within irrigation systems by 25 percent and increase agricultural
production by 20 percent in 306,100 hectares receiving

project areas. 	improved irrigation. Percentages increases not calculated.

Up to 1000 km of irrigation canals repaired or cleaned	322 km of canals
repaired or cleaned

Financial services offices established with a total loan portfolio value
outstanding of $20 8400 loans disbursed, with an

million ($5-8 million outstanding in year 1)	outstanding loan portfolio of
$1 million

                      Source: Chemonics International Inc.

                Appendix III Sector Level Performance Indicators

Table 7: Democracy and Governance Sector Measures Reported to the
Afghanistan Interagency Operations Group in Fiscal Year 2004

Sept. 2004 Sept. 2004 target status

Judicial facilities built 10	7 complete; construction underway on 11

Judicial personnel trained (judges, lawyers, 120 311 and court personnel)

Source: Afghanistan Interagency Operations Group.

Of three primary awards for democracy and governance activities, USAID
required only one implementing partner MSI, to develop a performance
monitoring plan containing performance measures (see table 8). The other
two partners, The Consortium for Elections and Political Process
Strengthening and the Asia Foundation, were required to produce quarterly
reports but were not required to develop specific targets or intermediate
results. Consequently, the quarterly reports described activities
undertaken during that time period, rather than progress achieved against
specified targets.

    Table 8: Democracy and Governance Sector Performance Measures and Status
 Reported by Management Systems International Performance indicators Sept. 2004
                                     status

Consultant reports issued detailing assistance with Post-ratification
public education responsibilities were largely transferred from MSI
approach, materials, and training for public to the TAF cooperative
agreement. TAF submitted a work plan for distribution of education
connected with the Constitutional public education materials. Additional
follow-up activities were integrated into Commission judicial sector
reform and public education activities in the MSI contract.

Master plan developed and implemented for Judicial Since the JRC's term
was ending, MSI developed a plan to shift JRC activities to Reform
Commission (JRC) to operate effectively existing permanent institutions of
government, including law reform, legislative and efficiently drafting
training activities, and capacity building.

Number and type of judicial reform products (laws, Project reviewed seven
commercial laws and four additional laws. codes) reviewed

Number and type of judicial reform products forwarded to the Ministry of
Justice and President Laws on corporations, partnerships, foreign entity
recognition, asylum, passport, and tourism were submitted to the Ministry
of Justice. Clear contributions made to shaping a curriculum for training
judicial personnel Training curricula for judges and for court
administration were developed. Basic legal text packets were compiled for
17 basic laws.

Public awareness and education strategy developed	Public education
strategy was revised, targeted, and updated; a survey of citizen knowledge
and opinions of governance of Afghanistan was completed; and 14 grants of
$20,000 each were awarded for public education activities.

                Appendix III Sector Level Performance Indicators

                         (Continued From Previous Page)

                    Performance indicators Sept. 2004 status

Number, frequency, and location of methods used to educate the public on
legal reform and estimated number of people reached Public education film
on justice was completed; distribution has been limited and ad hoc. The
program changed its target from producing radio spots to producing six
radio programs on legal reform; one radio program was developed and aired.
Reports issued detailing system modernization plans, pilots identified and
implemented Justice system modernization plan completed. Program
identified 8 test courts. Flow charts and organization charts were
developed for Kandahar and Parwan provinces.

Number of assessment follow-ups carried out after Follow-up assessments
were completed in 11 sites.
a site (e.g., a court or court department) is identified
for the project's attention by government

Number of building rehabilitation plans developed Six prototype plans were
developed.

Number of justice sector facilities rehabilitated Seven justice sector
facilities were completed, 13 others were under way.

Reports that detail assistance provided on a data Project ceased work in
this area and redirected resources to other areas, owing to system for
case management of human rights substantial funds and technical assistance
that the Afghan Independent Human violations Rights Commission (AIHRC)
received from other sources.

Number of human rights cases entered into data Project determined that the
AIHRC was receiving more financial and technical system support than it
could absorb and redirected its resources.

Source: Management Systems International.

Table 9: Economic Governance Sector Performance Measures Reported to
Afghanistan Interagency Operations Group in Fiscal Year 2004

Metric Target Sept. 2004 status

Approximately $300 million or 49.3 percent of Afghan $150 million by Sept.
2004 $90.7 million received expenditures funded by domestic revenue

Provincial accounting and transfer systems in place in the 34 provinces
Systems active in all 34 provinces provinces

Percentage of revenue collected in provinces transferred to 100 percent of
revenue Not reported central account

Critical infrastructure for supporting customs collection in place No
target established Not reported

Timely monthly revenue reporting from provinces No target established
Reporting sporadic

Industrial parks constructed	3 parks underway by June 3 underway by
September 2004 2004

Source: Afghanistan Interagency Operations Group.

The economic governance contract did not specifically require the
contractor to develop performance measures. Instead, it required the
reporting of "milestones" in quarterly work plans. No quarterly plans were
produced until July 2004; consequently, no measures were reported until
that time. (See table 10.)

                Appendix III Sector Level Performance Indicators

Table 10: Economic Governance Performance Measures and Status Reported by
Bearing Point

                    Performance indicator Sept. 2004 statusa

                             Customs revenue $50.5

                          Total domestic revenue $90.7

Number of border posts

     Number of taxpayer identification numbers issued in Kabul City 10,674

     Number of taxpayer identification numbers issued in Afghanistan 12,347

Rental service tax payments collected

                     Rental services tax proceeds 38.77 AFN

                 Number of international funds transfers 4,307

              Dollar value of international funds transfers $1,350

Independent banks established

Number of existing banks relicensed

Exchange rate (Afghani vs. U.S. dollar)

                         Money in circulation 35,149AFN

Number of domestic funds transfers

               Dollar value of domestic funds transfers 4,349 AFN

                           Issued loan amounts $33.5

Deposit growth $116.6

Capital note transactions - Number of Bids

Dollar value of capital note transactions 600 M (AFN)

Dollar value of foreign exchange cash transactions $524.5

Dollar value of foreign exchange wire transactions $1,273

Number of business licenses issued 5,429

AFN = Afghanis Source: Bearing Point.

aAll monetary indicators measured in dollars or Afghanis are in millions.

                Appendix III Sector Level Performance Indicators

Table 11: Education Sector Measures Reported to Afghanistan Interagency
Operations Group in Fiscal Year 2004

Performance Measure Sept. 30, 2004 Target Sept. 30, 2004 Actual

Schools constructed	Original goal: 517 schools by June 30, 2004; 39
schools constructed/rehabilitated; 230 New goal: 275 additional schools
built or under construction and renovationa renovated, 56 schools
constructed or rehabilitated by September 30.

Site assessments approved by MOE No targets established 274

Construction subcontracts issued No targets established 275

Construction Activity during Reporting period No targets established 230

      Teachers trained through       14,500                7,900              
              distanced                       
             education.                       
                                   15 million     15.5 million Printed / 10.3 
Text books printed/distributed   printed                           million 
                                                        Distributed           

Accelerated learning programs established at 17 Provinces 17 provinces the
provincial level

Students enrolled in accelerated learning 170,000 169,716 program

Radio based teacher training reaches primary school teachers nationwide 80
percent of primary school teachers listen to broadcasts Listenership
estimated at 70-90 percent of all primary school teachers

Source: Afghanistan Interagency Operations Group.

aThe AIOG report lists 39 schools completed; however, USAID verification
visits were cancelled and/or delayed due to travel restriction. USAID
contractor reports show only 15 schools completed.

Table 12: Education Sector Performance Measures and Status Reported by
Creative Associates International, Inc.

Targets Sept. 2004 status

51 master trainers trained in accelerated learning curriculum 64

680 provincial trainers trained in accelerated learning curriculum 680

6800 mentors (village trainers) trained in accelerated learning curriculum
6,800

6,800 accelerated learning classes Not reported

2,000 schools with activities Not reported

1,802 communities with activities Not reported
153 districts with activities Not reported
17 provinces with activities 17 provinces
170,000 students enrolled in accelerated learning 160,690
119,000 female students enrolled in accelerated learning (target 70% of
total enrollment) 55%
340,000 grade-level equivalencies achieved in accelerated learning
(2/year/student) Up to 430,966*
6,256-12,512eachers trained by radio, or 40%-80% of total primary
teachers/province. (est 70%-90% of primary teachers

920/prov)

                Appendix III Sector Level Performance Indicators

                         (Continued From Previous Page)

Targets Sept. 2004 status

At least 175 educational radio programs covering grades 1-6 (50 percent in
Pashtu and 50 percent 92 broadcasts between July and in Dari) produced and
broadcasted September 2004

Of 175 programs, at least 20 radio programs promoting gender-positive
messages and at least 10 Not reported radio programs containing health
messages aimed at decreasing maternal mortality

Teacher certification for radio-based teacher training established	Program
approved by MOE, enrollment begun

15 million primary level textbooks printed 16.5 million

 Textbooks distributed to schools in Kabul province by March 2004 14.2 million
                             textbooks distributed

Nationwide distribution of textbooks completed and documented 14.2 million
                             textbooks distributed

Production and printing of accelerated-learning textbooks completed	More
than 750,000 printed and delivered

Distribution of textbooks to contract accelerated-learning partners
completed	More than 750,000 printed and delivered

Source: Creative Associates International, Inc.

Note: These measures are the APEP contract performance measures as
modified in the March 2004 statement of work.

*The implementer reported achieving 430,966 grade-level equivalencies in
their December 2004 progress report, but did not report on this indicator
in their September 2004 progress report.

Table 13: Health Sector Measures Reported to Afghanistan Interagency Operations
         Group in Fiscal Year 2004 Sept. 2004 target Sept. 2004 status

       MOH-identified site      No target listed              265             
       assessment completed                       
        (number of sites)                         
     Construction subcontract   No target listed              186             
     issued (no. of clinics)                      
Construction activity during No target listed              169             
         reporting period                         
                                 Original goal:                               
       Clinics constructed         360 clinics    
                                   constructed        1 clinic complete.
                                 New goal as of   Construction/rehabilitation 
                                5/12/04 Deputies                  underway on 
                                    Committee                                 
                                  meeting: 219            169 clinics
                                   clinics; 20    
                                 constructed by   
                                  September 30    
      No. of health workers                                                   
             traineda                 5,454                  3,995

Pharmaceuticals and commodities distributed $780,000 $697,000

MOH = Ministry of Health
Source: Afghanistan Interagency Operations Group.

aIncludes community health workers, physicians, nurses, midwives, MOH
staff, and NGO staff.

                Appendix III Sector Level Performance Indicators

USAID required the health contractor, Management Sciences for Health
(MSH), to develop implementation plans and performance monitoring plans.
MSH reports on selected performance indicators in these plans
semiannually. (See Table 14)

Table 14: Health Sector Performance Measures and Status Reported by
Management Sciences for Health

Performance indicators Nov. 2004 status

Total value of grants to NGOs and public institutions to expand basic
package of health services $53 million in grants (BPHS) delivery

Total existing health facilities to provide BPHS in intervention areas	250
clinical facilities in 13 provinces.

Total new health facilities to provide BPHS in intervention areas Not
reported

Total rural population in REACH provinces with improved access to health
services; total women of Total: 4.8 million. Breakdown of

reproductive age; total children under 5	women and children not reported.

Total population in REACH districts provided BPHS directly through
REACH-supported facilities; total Not reported women of reproductive age;
total children younger than 5 years

Percentage of basic health facilities in intervention areas with at least
one female clinical health worker Not reported

Total number of community health workers trained 1,721

Total number of midwives trained with national curriculum 417 enrolled

Total number of community midwives trained as skilled birth attendants
using national curriculum 140 enrolled

Number of health workers who received refresher training-doctors, nurses,
other health workers Curricula developed.

Number of community health workers trained in community mapping 183

Number of shura leaders oriented to BPHS and role of community health
workers Not reported

Total number of provincial hospitals receiving funding to implement
Essential Package of Hospital 4 Services

Number of women qualified to be: trained to be (a) community health
workers, (b) community midwives, Not reported (c) midwives

Percentage increase in household knowledge or use of (a) family planning;
(b) ANC; (c) protected Not reported water source; (d) sanitary waste
disposal

Number of provincial health coordination committees (PHCCs) established in
REACH provinces 13 Number of PHCCs able to produce an annual health
services plan 8 workplans Health facility accreditation system in place
Under way Development and adoption of a National Medicines Policy and Law
Completed Establishment of a health worker certification and registration
system Under waya Total number of policy or strategy documents endorsed by
the Ministry of Health Not reported Health finance policy Under wayb Human
resources policy Under way Hospital policy Completed

                Appendix III Sector Level Performance Indicators

                         (Continued From Previous Page)

Performance indicators Nov. 2004 status

National IEC/Behavior Change Communication policy and strategy Completed

Ministry of health construction protocol developed Not reported

Reproductive health policy developed Not reported

Source: Management Sciences for Health. aStatus as of November 2003
bStatus as of July 2004

Table 15: Infrastructure Sector Measures Reported to the Afghanistan Interagency
                      Operations Group in Fiscal Year 2004

Performance Measure September 30, 2004 Target September 30, 2004 Actual

Major roads  Kandahar-Herat road Kandahar-Herat (U.S. responsible for 329  
constructed   construction under 
                                    km.): Phase-II bid evaluation complete on 
                       way.                                               all 
                                    packages. Recommendation of awards on     
                                          two of three packages posted.       
                                    Kabul-Kandahar (U.S. responsible for 389  
                                    km.): Phase II paving progressing quickly 
                                                                           in 
                                    all sections. Reconstruction of old       
                                    Ghazni                                    
                                            bridge is nearing completion. The 
                                                                   contractor 
                                    has submitted a handover request for five 
                                                 other bridges.               

Secondary roads Work will have begun on all 12       All 12 secondary road 
     constructed                        secondary          projects have been 
                           road projects.         selected, reconstruction    
                                                  contracts have              
                                                  been signed for 9 projects, 
                                                                 and work has 
                                                          begun on 7.         

Source: Afghanistan Interagency Operations Group.

The reported measures also provide detailed narrative about progress on
primary and secondary road projects and ongoing power-generation projects.
Irrigation projects are tracked as part of the agriculture sector, and
school and clinic construction and renovation are tracked as parts of the
education and health sectors, respectively. The measures do not track
water and sanitation projects. See table 16 below.

                Appendix III Sector Level Performance Indicators

  Table 16: Infrastructure Sector Performance Measures and Status Reported by
                            Louis Berger Group, Inc.

              Deliverables               2004 target      Sept. 2004 status   
      Primary and secondary roads            500        117 km primary road   
               completed                                completed, 359 km     
                 (km.)                                    with at least one   
                                                         layer of asphalt; 0  
                                                        secondary roads       
                                                        completed,            
                                                        construction          
                                                           begun on 125 km    
           Bridges completed                 20         6 under construction  
                                                        Pump tests and        
     Wells drilled and operational          1,250       locating sites        
                                                        underway              
     Irrigation dams and diversions          200            Not reported      
                repaired                                
     Irrigation canals cleaned and           500            Not reported      
                repaired                                
        Large irrigation systems       2 completed, 1     3 complete, 4 in    
                                        under design          progress        
           Schools completed                 50                   8           
      Health facilities completed            50                  15           
                                                                  3 emergency 
Electric transmission/distribution        25          generators in place, 
                systems                                            3 turbines 
               completed                                in process of repair  
                                                           or construction    
     Government buildings completed          20             Not reported      
       Wastewater and solid waste             7                               
                projects                                    Not reported
               completed                                
                                      Completed for all                       
                                      waste and               Cancelled
      Institutional strengthening     irrigation        
                                          projects      

REFS = Rehabilitation of Economic Facilities and Services. Source: Louis
Berger Group, Inc.

The Afghanistan Freedom Support Act of 2002 and the 2004 Emergency
Supplemental legislated assistance to Afghan women. USAID implemented and
tracked most of these objectives either as part of their other sector
programs or through individual women-targeted projects (see table 17.)
However, no gender-specific performance measures of sector programs nor
the results of individual women-targeted projects were reported to the
Afghanistan Interagency Operations Group.

                Appendix III Sector Level Performance Indicators

Table 17: Objectives for Assistance to Afghan Women Contained in U.S.
Legislation

2004 Supplemental Appropriation Afghanistan Freedom Support Act Conference
Report Sept. 2004 status

To assist women and girls in Afghanistan in To ensure that programs,
projects and the areas of political and human rights, activities funded in
this Act include the health care, education, training, security,
participation of women and advance the and shelter, with particular
emphasis on social, economic, and political rights and assistance to:
opportunities of women in Afghanistan

Establish or rehabilitate health care facilities Not addressed	Improved
hospital facilities and access (OTI); 15 REFS clinics.

     Expand immunization        Not addressed      Maternal/neonatal tetanus  
           programs                                       elimination         
                                                       program expanded.      
Establish, maintain, and     Not addressed         15 new REFS schools     
        expand primary                                   established.         
    and secondary schools                         
                            Establish technical                               
     Establish vocational   and vocational              training as community 
     training and income-   education.                    health care workers
     generation projects                                 and midwives.        
       Provide special                                                        
education opportunities      Not addressed     Accelerated learning        
             for                                  provided for 98,600
    girls whose schooling                                   girls.            
       was ended by the                           
           Taliban                                
Provide access to higher     Not addressed                                 
          education                               National women's dormitory
                                                        reconstructed.        

Protect women and girls against sexual and Establish programs for women
and girls Not reported
physical abuse, abduction, trafficking, against sexual abuse and
trafficking.
exploitation, and sex discrimination in the
delivery of humanitarian supplies and
services

Provide emergency shelters for women who Provide shelters for women and
girls. Not reported face danger from violence

  Direct humanitarian assistance to widows Provide humanitarian assistance for
                 widows Widow's bakeries supported through WFP

Support the work of women-led and local support for Women-led NGO Grants
to women-focused NGOs. nongovernmental organizations

Disseminate information throughout Establish programs to disseminate
information Not reported Afghanistan on the rights of women about the
rights of women

Provide women's rights and human rights Provide women's rights training to
military, INL granted $75,000 to train Afghan training for military,
police, and legal police, and legal personnel woman judges in civil and
family law; ANP personnel training includes "Principles of non

discrimination: Women in Society" and other pertinent classes; uncertain
if ANA includes similar training.

Support the National Human Rights Not addressed $5 million in support to
the Afghan Commission independent human rights commission

            Source: GAO analysis of public law and USAID documents.

Appendix IV

Opium Production and Counternarcotics Efforts in Afghanistan

              Table 18: Opium Production in Afghanistan, 2002-2004

                                        2002          2003          2004      
     Net opium poppy cultivation      74,000 ha     80,000 ha     131,000 haa 
           Opium production           3,400 mt      3,600 mt        4,200 mtb 
      Farmers cultivating opiumc     1.7 million   1.7 million    2.3 million 
       Percentage of legal GDP           17            50            60       
    Provinces where opium is grown       24            28            34       
     Gross profits to traffickers   $1.3 billion  $1.3 billion   $2.2 billion 
    Farm value of opium production  $1.2 billion  $1.0 billion   $0.6 billion 
                Total               $2.5 billion  $2.3 billion   $2.8 million 

ha = hectare
mt = metric ton

Source: UN Office on Drugs and Crime.
a1 ha equals 2.47 acres. (The United States estimated that 206,700 ha were
cultivated in 2004.)
b mt equals 2,204 pounds.
c Totals do not include at least 480,000 itinerant laborers.

       Table 19: Major Counternarcotics Efforts in Afghanistan, 2001-2005

Event Date

Bonn Agreement signed; Afghanistan asks international community to help
combat illegal narcotics and December 5, 2001 requests alternative
livelihoods assistance.

President Karzai issues decree that the opium-based economy threatens
national security and should be January 2002 fought by all means.

Interim Afghan Government issues decree on eradication of opium, offering
$1750 per hectare April 2002 compensation.

Conference held on Security Sector Reform in Geneva; United Kingdom is
designated lead nation for April 2002 counternarcotics.

Transitional Authority issues new ban on opium cultivation and
trafficking. August 2002 Counternarcotics directorate created within
Afghan National Security Council. October 2002

UN announces afghan opium harvest (3,400 metric tons). October 2002

Bonn II Agreement participants agree that the Afghan government, assisted
by the international community, December 2002 should intensify efforts to
combat illicit production and trafficking of drugs.

Ministry of the Interior Counternarcotics Police of Afghanistan (CNPA) is
created. January 2003

DEA office in U.S. embassy officially opens February 2003

Afghanistan government adopts national drug control strategy. May 2003

National drug law adopted. October 2003

Appendix IV
Opium Production and Counternarcotics
Efforts in Afghanistan

                         (Continued From Previous Page)

Event Date

UN announces afghan opium harvest (3,600 metric tons). October 2003

International Counternarcotics Conference on Afghanistan is held in Kabul.
                                 February 2004

DEA details its Asst. Administrator for Intelligence to Afghanistan to
coordinate U.S. counternarcotics policy. August 2004

Berlin Declaration: Afghanistan and the international community agree do
everything necessary to reduce April 2004 and eventually eliminate threat
of illegal narcotics. President Karzai calls on Afghan farmers to fight
opium as they would a jihad or holy war

Afghan Central Poppy Eradication Force Established April 2004

    U.S. counternarcotics strategy for Afghanistan completed. September 2004

$776.5 million implementation plan for U.S. counternarcotics strategy
completed. October 2004

DEA-trained National Interdiction Unit created under the Afghan
Counternarcotics Police. October 2004

UN announces afghan opium harvest (4,200 metric tons). October 2004

    Position of Deputy Minister for Counternarcotics created in Ministry of
                            Interior. November 2004

President Karzai declares jihad on drugs. Pledges to destroy Afghanistan's poppy
                     fields within two years December 2004

             Afghan counternarcotics ministry formed. December 2004

USAID publishes request for quotes for larger U.S. alternative livelihoods
project to be implemented in December 2004 2005.

United States and United Kingdom establish Counternarcotics Vertical
Prosecution Task Force. The task December 2004
force is to train select judges, prosecutors, and police on
counternarcotics and develop a secure court and
prison for drug offenders.

 USAID Signs 3 Contracts for its Alternative Livelihoods Program February 2005

DEA deploys first Foreign Advisory Support Team to Afghanistan. March 2005

2005 Eradication Program Begins April 2005

Source: UN, Department of State, U.S. Drug Enforcement Agency, and Afghan
Government Documents.

Appendix V

Comments from the U.S. Agency for International Development

Appendix V
Comments from the U.S. Agency for
International Development

Appendix V
Comments from the U.S. Agency for
International Development

Appendix V
Comments from the U.S. Agency for
International Development

Appendix VI

                    GAO Contacts and Staff Acknowledgements

                   GAO Contacts David Gootnick (202) 512-3149

Staff 	John Hutton, David Bruno, Miriam A. Carroll, and Christina Werth
made key contributions to this report. In addition, Martin de Alteriis,
Mark

Acknowledgments	Dowling, Etana Finkler, Reid Lowe and Adam Vodraska
provided technical assistance.

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