IG: Afghan fuel records go missing

Introduction

What happened to almost $475 million worth of oil destined for the Afghan National Army – that’s what the Special Investigator General for Afghanistan Reconstruction (SIGAR) would like to know.

Unfortunately, the inspectors may never find out. According to the report released Monday, more than four years of financial records that the Department of Defense was supposed to keep to track this spending are either missing or so poorly kept that even gathering basic information, such as the location and size of fuel sites, was not possible.

The report concludes that the Department of Defense agency in charge of tracking the oil “does not have accurate or supportable information on how much U.S. funds are needed for [Army] fuel, where and how the fuel is actually used, or how much fuel has been lost or stolen.”

Inspectors found that records from October 2006 to March 2011 were shredded improperly, a violation of DOD policies that made it impossible for auditors to track what happened to the hundreds of millions of dollars’ worth of oil. DOD also “could not provide more than half” of the documents requested from March 2011 onward.

“The destruction of records and the unexplained failure to provide other records violate DOD and Department of the Army policies,” wrote SIGAR head John Sopko in a letter to Secretary of Defense Leon Panetta and others that accompanied the report. Sopko, an experienced watchdog appointed in May, noted that he has opened an investigation into the destruction of the older records.

The Combined Security Transition Command, a multi-national agency run out of Kabul, has spent $1.1 billion since 2007 in fuel for the Afghan army. A large chunk of that funding comes from the United States— the 2012 budget alone included $429 million for the program. As with other projects in Afghanistan, the program is slated to be handed over to Afghan control in 2013, but funding would continue with projected spending raises of $555 million in 2014.

As a result of its findings, SIGAR recommended that future oil funding for the Afghan army be kept frozen at current 2012 levels until improvements are made to how DOD is accounting and tracking fuel. SIGAR also recommended that the fuel agency “implement a comprehensive action plan” to improve accountability on fuel deliveries and purchases.

In a response included with the SIGAR report, an official of from DOD’s Combined Security Transition Command-Afghanistan promised to implement a new fuel database, and track invoices better. The response did not directly address the SIGAR charge that documents were improperly shredded, but contained promises that the Army will improve compliance on future reports.

The transition command protested a potential funding freeze, however, arguing that it would impinge on military operations. According to the transition office, the amount spent on fuel needs to keep rising, because Afghani forces are using more fuel every year — the result of increased numbers of vehicles provided by coalition forces. Funding recommendations should be based on military requirements, according to DOD.

However, SIGAR’s report says this response ignores the need to develop a better method and process for creating their cost projections. Because DOD did not provide documentation to back up their claim that oil budgets need to continue to rise, SIGAR stands by their request to cap funding levels.

Commander Bill Speaks, a spokesman for the Office of the Secretary of Defense, said the transition office’s comments “speak for themselves.” He added that the field team provided information requested for the post March 2011 audit and that they will continue to cooperate with SIGAR’s audit. Speaks could not offer a comment on Spoko’s letter by press time.

Although SIGAR’s report didn’t uncover any specific examples of waste, fraud and abuse, investigators said that changes must be made to “mitigate” the risk of fraud. That’s something SIGAR has written about in the past: In May, SIGAR released a report warning of concerns over stolen cash and fuel. “Corruption remains a major threat to the reconstruction effort,” Steven Trent, the acting head of SIGAR at the time, wrote in his introduction to the 176-page report. He added that the problem may worsen as the United States heads for the door: “Afghan reconstruction has reached a critical turning point. The shift in strategy, decline in funding, and persistent violence and corruption underscore the need for aggressive oversight.”

The interim report came from an audit of the overall logistics of the Afghan army, which is due sometime later this year. But the lost data was alarming enough to SIGAR that it merited “immediate attention.”