The Washington PostDemocracy Dies in Darkness

U.S. taxpayers paid millions for Afghan payroll system that doesn’t work as intended, DOD audit says

The project is the latest example of public funds spent unwisely in the conflict, a watchdog group says.

Afghan soldiers attend their graduation ceremony in Herat, Afghanistan, last month. (Jalil Rezayee/EPA-EFE/REX/Shutterstock)

In 2016 the Defense Department began paying a Kabul-based tech company millions of dollars to create a new payroll system for the Afghan government, part of an ambitious effort to prevent fraud by tracking the flow of funds down to individual soldiers and police officers.

But in visits to Afghanistan last year, Defense Department auditors found problems: The system didn’t connect to other Afghan government computer systems. It relied too much on the same manual data-entry process it was supposed to get rid of, and it hadn’t implemented a required biometric tracking system, according to the newly released audit from the Defense Department inspector general.

In a mark of how efforts to build a sustainable bureaucracy in Afghanistan are still floundering 17 years into the U.S. military’s presence there, officials admitted that a planned transfer of oversight to the Afghan government would not be completed on time. The government of Afghanistan is now scheduled to take over full oversight of the program in 2020, a delay from the earlier timeline.

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Netlinks, the Kabul-based tech company the Defense Department paid to build the system, did not immediately respond to a request for comment from The Washington Post. The Afghan Embassy in Washington also did not comment.

Until the system is handed off to the Afghan government, it will be overseen by a NATO-funded, Kabul-based office called the Combined Security Transition Command-Afghanistan (CSTC-A). A spokesman for Resolute Support, the NATO organization that trains and advises Afghan security forces, said CSTC-A has already implemented the inspector general’s recommendations.

“Since the [inspector general] concluded the audit in July 2018, CSTC-A has implemented the recommendations and we continue to work to improve the Afghan Personnel and Pay System,” Lt. Col. Josh Jacques said in an email. “While the APPS does have its challenges, it is a useful tool in our efforts towards accountability, stewardship and counter corruption.”

After the audit, CSTC-A took numerous efforts to remedy the problems raised by the inspector general, including creating a new human resources branch, standardizing data-entry processes and retiring its older human resources system. Other recommendations included developing and implementing a specific plan to fully transfer the system to Afghan control. The inspector general noted in the audit that all of its recommendations had been resolved.

The system was created after four audit reports between 2014 and 2017 concluded that a disorganized payroll system for Afghan security forces was failing to adequately protect hundreds of millions in U.S.-funded payments from fraud and abuse. There were concerns that U.S.-funded paychecks were going to “ghost soldiers” ― fake identities set up so that money could be fraudulently diverted elsewhere. As a result, the Afghan government had a limited ability to keep track of its own personnel.

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In 2015 the U.S. Army started drawing up plans for what became the Afghan Personnel and Pay System. It awarded a three-year contract with an estimated value of $22.2 million in March 2016.

The contract later ballooned to an estimated value of $38 million as the time frame was extended and support services were added. The inspector general concluded that as of December 2015, about $15.2 million had been billed to the government for tasks that did not meet the government’s requirements. And Afghan government agencies weren’t using the system to generate payroll data, even though U.S. officials said they would fund only salaries that used that system, auditors found.

“The [Defense Department] does not have definitive assurance that APPS personnel records are bio-metrically linked and is still at risk of funding payroll for fraudulent personnel records,” the inspector general concluded.

National security analysts said the payroll episode highlights how Afghan institutions are still closely dependent on U.S. funding and support, at a time when the U.S. presence there is being drawn down.

“This is just another example of the U.S. trying to graft American solutions onto Afghanistan problems,” said Dan Grazier, a Marine Corps captain who now works at the Project on Government Oversight, a watchdog group. “That really doesn’t work. I virtually guarantee you that as soon as [the U.S. military] leaves, this system is going to be abandoned anyway.”

There are many other examples of defense spending gone awry in Afghanistan.

The Special Inspector General for Afghan Reconstruction (SIGAR) has reported finding more than $400 million in “questioned costs” since it was established in 2008. That includes about $2.7 million in the past three months.

In one case described in SIGAR’s July 30 quarterly report, the Army Corps of Engineers paid a construction firm $6.7 million to build a compound for women in Afghanistan’s Nangahar province, complete with barracks, classrooms, a day care and a medical clinic. The facility was completed in 2017 but has never been used because of fire safety concerns.