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Report to Congressional Committees: 

July 2005: 

Afghanistan Reconstruction: 

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

GAO-05-742: 

GAO Highlights: 

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

Why GAO Did This Study: 

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.

What GAO Found: 

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 
quick-impact 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.

[See PDF for image]

[End of figure]

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.

What GAO Recommends: 

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 Gootnickd@gao.gov.

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

U.S. Spending in 2004 Focused on Reconstruction: 

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

Lack of Security, Opium Cultivation, and Funding Delays Obstructed 
Reconstruction and Threatened Achievement of U.S. Goals: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Objectives, Scope, and Methodology: 

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

Appendix III: Sector Level Performance Indicators: 

Appendix IV: Opium Production and Counternarcotics Efforts in 
Afghanistan: 

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

Appendix VI: GAO Contacts and Staff Acknowledgements: 

Tables: 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Table 18: Opium Production in Afghanistan, Fiscal Year 2002-2004: 

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

Figures: 

Figure 1: Map of Afghanistan Including Provinces and Major Roads: 

Figure 2: Political History of Afghanistan, 1749-2005: 

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

Figure 4: Nonsecurity-Related U.S. Agency Expenditures in Afghanistan, 
Fiscal Year 2004: 

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

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

Figure 7: Agriculture: 

Figure 8: Democracy and Governance: 

Figure 9: Economic Governance: 

Figure 10: Education: 

Figure 11: Health: 

Figure 12: Infrastructure: 

Figure 13: Women's Initiatives: 

Figure 14: Major U.S. Interagency Afghan Assistance Coordination 
Mechanisms Used in Fiscal Year 2004: 

Figure 15: Consultative Group Structure 2004: 

Figure 16: UN Security Risk Maps, June 2003 and October 2004: 

Figure 17: Timeline for Funding of Reconstruction in Afghanistan: 

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: 

Letter 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.[Footnote 
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, and counternarcotics assistance to 
Afghanistan.[Footnote 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,[Footnote 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.[Footnote 4] In addition, we traveled to Afghanistan in 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 quick-impact 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.[Footnote 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 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: 

[See PDF for image] 

[End of figure] 

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: 

Indicator: Infant mortality; 
Afghanistan[A]: 115 per 1000 live births; 
Average for low-income countries[B]: 82 per 1000 live births; 
United States: 7 per 1000 live births. 

Indicator: Under 5 mortality; 
Afghanistan[A]: 172 per 1000 live births; 
Average for low-income countries[B]: 126 per 1000 live births; 
United States: 8 per 1000 live births. 

Indicator: Maternal mortality; 
Afghanistan[A]: 1,600 per 100,000 live births; 
Average for low-income countries[B]: 671 per 100,000 live births; 
United States: 17 per 100,000 live births. 

Indicator: Life expectancy (years); 
Afghanistan[A]: 45 males/44 females; 
Average for low-income countries[B]: 57 males/59 females; 
United States: 75 males/80 females. 

Indicator: Percentage of children 12-23 months immunized against 
diphtheria; 
Afghanistan[A]: 30 percent; 
Average for low-income countries[B]: 64 percent; 
United States: 93 percent. 

Indicator: Percentage of population undernourished; 
Afghanistan[A]: 70 percent; 
Average for low-income countries[B]: 25 percent; 
United States: N/A. 

Indicator: Percentage of population with access to safe water; 
Afghanistan[A]: 23 percent; 
Average for low-income countries[B]: 75 percent; 
United States: 100 percent. 

Indicator: Percentage of population with access to adequate sanitation; 
Afghanistan[A]: 12 percent; 
Average for low-income countries[B]: 41 percent; 
United States: 100 percent. 

Indicator: Literacy--age 15 and over; 
Afghanistan[A]: 43 percent males/14 percent females; 
Average for low-income countries[B]: 68 percent males/48 percent 
females; 
United States: 97 percent males/97 percent females. 

Sources: The World Bank and UN. 

[A] Data as of most recent year available. 

[B] Low-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.)

[End of table]

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: 

[See PDF for image] 

[A] The Durrani tribe ruled most of present-day Afghanistan from 1749 
through 1978. 

[End of figure] 

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.[Footnote 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.[Footnote 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 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.[Footnote 8]

The U.S. Agency for International Development (USAID)[Footnote 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.[Footnote 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 
PRTs[Footnote 11] 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 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 Longer-Term Reconstruction: 

The focus of U.S. spending in Afghanistan in fiscal year 2004 shifted 
from humanitarian and quick-impact assistance, such as building wells, 
to larger-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.[Footnote 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: 

[See PDF for image] 

[End of figure] 

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.)

Figure 4: Nonsecurity-Related U.S. Agency Expenditures in Afghanistan, 
Fiscal Year 2004: 

[See PDF for image] 

[A] The $242 million for infrastructure includes major infrastructure, 
such as roads, as well as schools and clinics. 

[End of figure] 

About half--$497 million--of USAID's fiscal year 2004 obligations for 
reconstruction in Afghanistan supported the rebuilding of 
infrastructure. This amount includes $448 million obligated for large 
infrastructure projects, such as roads, of which USAID spent 
approximately $236 million. To build schools and clinics, USAID 
obligated $49 million, of which it spent 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 obligations[Footnote 13] 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.[Footnote 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. 

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

[See PDF for image] 

[End of figure] 

United States Remained Largest International Donor: 

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

[See PDF for image] 

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. 

[End of figure] 

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

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.[Footnote 15] Further, the United States 
accelerated its major reconstruction 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.[Footnote 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,[Footnote 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 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 small-scale, 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 
$25,000[Footnote 18] 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. 

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

Agency: DOD; 
Goal of implementing projects: 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; 
Program: OHDACA; 
Estimated total project cost: $25,344,192; 
Estimated average project cost: $61,515; 
Projects begun: 412; 
Projects completed: 355. 

Goal of implementing projects: To enable U.S. military commanders in 
Afghanistan to address humanitarian relief and reconstruction by 
carrying out programs that will immediately assist the Afghan people; 
Program: CERP; 
Estimated total project cost: $39,707,370; 
Estimated average project cost: $17,152; 
Projects begun: 2,315; 
Projects completed: Not tracked. 

Agency: USAID; 
Goal of implementing projects: To support the rehabilitation and 
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; 
Program: OTI; 
Estimated total project cost: $41,876,468; 
Estimated average project cost: $65,844; 
Projects begun: 636; 
Projects completed: 451. 

Goal of implementing projects: To link communities with district, 
provincial, and central governments by conceptualizing, planning, and 
implementing projects. Projects include water systems, road-related 
activities, rehabilitation and construction of government and public 
buildings; 
Program: QIP; 
Estimated total project cost: $28,968,217; 
Estimated average project cost: $137,944; 
Projects begun: 210; 
Projects completed: 58. 

Total; 
Estimated total project cost: $135,896,247; 
Estimated average project cost: $38,034; 
Projects begun: 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. 

[End of table]

Progress in Accelerated Reconstruction Projects Varied by Sector: 

Efforts to accelerate existing USAID programs in each reconstruction 
sector--agriculture, democracy and governance, economic governance, 
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: 

[See PDF for image] 

[End of figure] 

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.[Footnote 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.[Footnote 20] USAID signed the 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: 

* 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. 

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

* 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: 

[See PDF for image] 

[End of figure] 

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:[Footnote 21]

* 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. 

* 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.[Footnote 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. 

* 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 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: 

[See PDF for image] 

[End of figure] 

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.[Footnote 23] 
Accomplishments included the following: 

* 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. 

* 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. 

* 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. 

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

* 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 terminate it. In mid 2004, the Afghan government 
requested a reviewof the program. The first evaluation, completed in 
September 2004, found that, among other things, Bearing Point lacked an 
effective means for determining ministry needs.[Footnote 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. 

Figure 10: Education: 

[See PDF for image] 

[A] The APEP contract was signed in June 2003, but was effective as of 
January 2003. 

[B] USAID managed the school rehabilitation and construction component 
through six separate implementing partners. 

[End of figure] 

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:[Footnote 25]

* 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. 

* 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. 

* Accelerated learning: APEP's goal was to raise the educational levels 
of 80,000 over-aged students in 13 provinces and move them into age- 
appropriate 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. 

* School construction:[Footnote 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. 

* 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. 

* 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. 

Figure 11: Health: 

[See PDF for image] 

[A] In 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. 

[End of figure] 

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.[Footnote 27] USAID and MSH noted 
progress in five health care areas.[Footnote 28] The progress in these 
areas as reported by MSH is as follows: 

* 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. 

* 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. 

* 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. 

* 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.[Footnote 29]

* Clinic construction.[Footnote 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. 

Figure 12: Infrastructure: 

[See PDF for image] 

[A] Although 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. 

[End of figure] 

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:[Footnote 31]

* 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. 

* 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. 

* 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. 

* 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. 

* 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. 

* 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 buildings[Footnote 32] and extended the 
completion deadline to December 2004.[Footnote 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. 

Figure 13: Women's Initiatives: 

[See PDF for image] 

[End of figure] 

Although U.S. agencies focused on 10 of the 13 women-centered 
objectives[Footnote 34] legislated by Congress,[Footnote 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, 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.[Footnote 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 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 Data Still not Readily Available: 

In fiscal year 2004, tracking of U.S. assistance financial data for 
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.[Footnote 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.[Footnote 38]

USAID Strategic Guidance Still Lacking: 

As in previous years, USAID operated in fiscal year 2004 with an 
interim, 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, military, and/or economic events.[Footnote 39] In 
June 2004,[Footnote 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.[Footnote 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 Reduced Oversight of Contractors: 

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

* 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. 

* 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.[Footnote 
43] According to the Inspector General's report, USAID officials did 
not require the contractor to produce the plans, in part because 
mission staff in Kabul lacked time to review them. To correct this 
problem, the contractor began producing quarterly work plans and 
schedules in July 2004. 

* 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.[Footnote 
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. 

* 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.[Footnote 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 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. 

Performance Measurement Problems Plagued Programs: 

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.[Footnote 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.[Footnote 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 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.[Footnote 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: 

* 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. 

* 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. 

* 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 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. 

* 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.[Footnote 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.[Footnote 50] According to USAID officials in Washington, 
D.C., only 3 days 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 Restrictions Impeded Effective On-Site 
Project Monitoring: 

Throughout fiscal year 2004, staffing problems and security 
restrictions limited on-site project monitoring. Although the USAID 
mission in Kabul 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.[Footnote 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 
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: 

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

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.)

Figure 14: Major U.S. Interagency Afghan Assistance Coordination 
Mechanisms Used in Fiscal Year 2004: 

[See PDF for image] 

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

[End of figure] 

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.[Footnote 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 PRT-based, 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.[Footnote 53] 
This problem persisted in 2004 despite the addition of a Kabul-based 
USAID-PRT coordinator to facilitate logistics and communication. 

Coordination Problems between Afghan Government and Donors Persisted: 

Despite some efforts by the Afghan government to coordinate assistance 
from international donors, problems associated with the effectiveness 
of 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.)

Figure 15: Consultative Group Structure 2004: 

[See PDF for image] 

[End of figure] 

In June 2004, we reported that the coordination of international 
assistance and the consultative groups had not been effective.[Footnote 
54] We found, among other things, that some donors independently 
pursued development efforts in Afghanistan; the international community 
asserted that the Afghan 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.[Footnote 55]

Lack of Security, Opium Cultivation, and Funding Delays Obstructed 
Reconstruction and Threatened Achievement of U.S. Goals: 

In fiscal year 2004 Afghanistan's security situation remained volatile 
and, in some parts of the country, seriously deteriorated. Attacks on 
assistance projects occurred throughout the year, resulting in project 
delays and the deaths of assistance workers. In addition, dramatic 
increases in opium cultivation continued to threaten stability in 
Afghanistan; efforts to reverse the trend, including the development 
and implementation of a U.S. counternarcotics strategy, began in late 
2004. Further, delayed funding continued to hamper the U.S. assistance 
effort in Afghanistan. Most of the funding needed to meet June 2004 
Accelerating Success initiative targets was not available until 
February, just 5 months prior to the target date. 

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"[Footnote 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. 

Figure 16: UN Security Risk Maps, June 2003 and October 2004: 

[See PDF for image] 

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

[End of figure] 

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.[Footnote 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 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.[Footnote 58] 
Finally, as of February 2005, about 40,000 of Afghanistan's estimated 
100,000 official militia forces had been demobilized;[Footnote 59] 
however, an estimated 65,000 to 80,000 unofficial militia fighters were 
still at large.[Footnote 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 Cultivation Threatens Stability: 

In 2004, dramatic increases in opium cultivation continued to threaten 
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.[Footnote 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 the past 3 years, Afghanistan is on 
the verge of becoming a narco- state.[Footnote 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.[Footnote 63]

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

* 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. 

* 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. 

* 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. 

* 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.[Footnote 
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.[Footnote 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. 

Figure 17: Timeline for Funding of Reconstruction in Afghanistan: 

[See PDF for image] 

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

[B] Pub. L. 107-115, Foreign Operations, Export Financing, and Related 
Programs Appropriations Act. 

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

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

[E] Pub. L. 108-7, Consolidated Appropriations Resolution, 2003. 

[F] Pub. L. 108-11, Emergency Wartime Supplemental Appropriations, 
2003. 

[G] Pub. L. 108-106, Emergency Supplemental Appropriations Act for 
Defense and for the Reconstruction of Iraq and Afghanistan, 2004. 

[H] Pub. L. 108-199, Consolidated Appropriations Act, 2004. 

[End of figure] 

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 gootnickd@gao.gov. 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,

Signed by: 

David Gootnick, Director: 
International Affairs and Trade: 

[End of section]

Appendixes: 

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 quick-impact 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 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. 

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 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. 

[End of section]

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). 

U.S. Agency for International Development; 
FY 2004: Obligations: $1,163.62; 
FY 2004: Expenditures: $586.72. 

Department of State: Bureau for Population, Refugees, and Migration; 
FY 2004: Obligations: $63.89; 
FY 2004: Expenditures: $48.33. 

Department of State: International Narcotics and Law Enforcement 
Enforcement; 
FY 2004: Obligations: $36.50; 
FY 2004: Expenditures: $8.86. 

Department of State: Other State agencies; 
FY 2004: Obligations: $14.22; 
FY 2004: Expenditures: $12.91. 

Department of Defense; 
FY 2004: Obligations: $47.07; 
FY 2004: Expenditures: $45.19. 

Department of Health and Human Services; 
FY 2004: Obligations: $4.98; 
FY 2004: Expenditures: $1.80. 

Department of Agriculture; 
FY 2004: Obligations: $30.85; 
FY 2004: Expenditures: $5.15. 

Department of Labor; 
FY 2004: Obligations: $6.70[A]; 
FY 2004: Expenditures: $2.54. 

U.S. Trade and Development Agency; 
FY 2004: Obligations: $2.54; 
FY 2004: Expenditures: $0.66. 

Department of Treasury; 
FY 2004: Obligations: $1.00; 
FY 2004: Expenditures: $0.48. 

Broadcasting Board of Governors; 
FY 2004: Obligations: $11.77; 
FY 2004: Expenditures: $7.51. 

Total; 
FY 2004: Obligations: $1,383.14; 
FY 2004: Expenditures: $720.15. 

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

[A] Department of Labor obligations are for fiscal years 2002-2004. 

[End of table]

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

(Dollars in millions)[A]. 

Aga Khan; 
Pledge for 2004: $25. 

Asian Development Bank; 
Pledge for 2004: $205. 

Australia; 
Pledge for 2004: $14.9. 

Austria; 
Pledge for 2004: $2.4. 

Belgium; 
Pledge for 2004: $4.3. 

Canada; 
Pledge for 2004: $75.2. 

China; 
Pledge for 2004: $40. 

Denmark; 
Pledge for 2004: $27.8. 

European Commission; 
Pledge for 2004: $294. 

Finland; 
Pledge for 2004: $12. 

France; 
Pledge for 2004: $37.2. 

Germany; 
Pledge for 2004: $96. 

Greece; 
Pledge for 2004: $3.6. 

India; 
Pledge for 2004: $90. 

Iran; 
Pledge for 2004: $54. 

Ireland; 
Pledge for 2004: $6.9. 

Islamic Development Bank; 
Pledge for 2004: $40. 

Italy; 
Pledge for 2004: $56. 

Japan; 
Pledge for 2004: $200. 

Luxembourg; 
Pledge for 2004: $1.2. 

Netherlands; 
Pledge for 2004: $42. 

New Zealand; 
Pledge for 2004: $3.3. 

Norway; 
Pledge for 2004: $43. 

Organization of Islamic Conferences; 
Pledge for 2004: $15. 

Pakistan; 
Pledge for 2004: $10. 

Poland; 
Pledge for 2004: $0.1. 

Portugal; 
Pledge for 2004: $1.2. 

Russia[B]; 
Pledge for 2004: $0. 

Saudi Arabia; 
Pledge for 2004: $160. 

South Korea; 
Pledge for 2004: $20. 

Spain; 
Pledge for 2004: $50. 

Sweden; 
Pledge for 2004: $39.3. 

Switzerland; 
Pledge for 2004: $14.8. 

Turkey; 
Pledge for 2004: $3. 

United Arab Emirates; 
Pledge for 2004: $21.7. 

United Kingdom; 
Pledge for 2004: $215.9. 

United States; 
Pledge for 2004: $1,383.14. 

World Bank; 
Pledge for 2004: $285. 

Total; 
Pledge for 2004: $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. 

[A] Figures cited relate to humanitarian and reconstruction donations 
only; military donor contributions are not included. 

[B] Russian assistance has consisted primarily of in-kind donations. 

[End of table]

[End of section]

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 Kabul: Km. of canal rehabilitated[A]; 
Sept. 2004 target: 320; 
Sept. 2004 status: 322. 

Accelerating Success measures tracked by Chemonics and the U.S. mission 
in Kabul: Irrigation structures rehabilitated[A]; 
Sept. 2004 target: 232; 
Sept. 2004 status: 229. 

Accelerating Success measures tracked by Chemonics and the U.S. mission 
in Kabul: Km. of farm to market roads rehabilitated[A]; 
Sept. 2004 target: 120; 
Sept. 2004 status: 160. 

Accelerating Success measures tracked by Chemonics and the U.S. mission 
in Kabul: Loan officers trained; 
Sept. 2004 target: 1,150; 
Sept. 2004 status: 1,150. 

Accelerating Success measures tracked by Chemonics and the U.S. mission 
in Kabul: Livestock vaccinated/treated; 
Sept. 2004 target: 3,000,000; 
Sept. 2004 status: 3,679,222. 

Accelerating Success measures tracked by Chemonics and the U.S. mission 
in Kabul: Farmers served by extension[A]; 
Sept. 2004 target: 520,000; 
Sept. 2004 status: 564,566. 

Accelerating Success measures tracked by Chemonics and the U.S. mission 
in Kabul: Market centers constructed; 
Sept. 2004 target: 131; 
Sept. 2004 status: 119. 

Source: Afghanistan Interagency Operations Group. 

[A] Included in the Chemonics' RAMP contract. 

[End of table]

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. 

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

No.: 1; 
Performance measures: 60 percent increase in total wheat production in 
irrigated and rain fed areas using improved agricultural inputs (e.g., 
seed); 
Sept. 2004 status: Not measured. 

No.: 2; 
Performance measures: $250 million increased sales in local and export 
markets from a minimum of 5 commercial sub-sectors (i.e., fruit and 
vegetable production); 
Sept. 2004 status: Not measured. 

No.: 3; 
Performance measures: No less than 50 percent average increase in net 
profits for approximately 1000 Afghan entrepreneurs (e.g., input 
dealers, producers, processors) who benefit from RAMP assistance; 
Sept. 2004 status: Not measured. 

No.: 4; 
Performance measures: More than 100 percent increase in average 
productivity for approximately 500,000 farm families, through use of 
improved technologies and best practices, improved infrastructure, and 
access to profitable markets; 
Sept. 2004 status: Not measured. 

No.: 5; 
Performance measures: 15 percent annual increase in average gross 
margin returns for 500,000 farmers' labor; 
Sept. 2004 status: Not measured. 

No.: 6; 
Performance measures: 500 village seed and plant germ plasma nurseries 
established by local entrepreneurs: 80 percent operationally viable: 75 
percent financially viable; 
Sept. 2004 status: Not measured. 

No.: 7; 
Performance measures: 1000 village and regional demonstrations and 
field trials completed with 80 percent customer satisfaction; 
Sept. 2004 status: 564,566 farmers served by extension services. 

No.: 8; 
Performance measures: Mass media programs established in 5 regions, 
with 50 percent operationally viable, 80 percent customer satisfaction; 
Sept. 2004 status: Not measured. 

No.: 9; 
Performance measures: 50 percent increase in net profits for 
approximately 1,000 commercial enterprises trained under the program; 
Sept. 2004 status: Not measured. 

No.: 10; 
Performance measures: Approximately 1,000 km of improved roads that 
will reduce farm-to-market transaction costs by 10 percent; 85 percent 
operationally viable (annual maintenance costs); 
Sept. 2004 status: 160 km of roads rehabilitated but transaction costs 
and viability not measured. 

No.: 11; 
Performance measures: Approximately 1000 agricultural market centers 
constructed, reducing post-harvest loss or increasing shelf life for 
horticultural commodities and meat and poultry products, resulting in a 
15 percent increase in productivity; 
Sept. 2004 status: 119 constructed; increase in productivity not 
measured. 

No.: 12; 
Performance measures: Approximately 615 irrigation projects constructed 
to restore, maintain, or increase hectares within irrigation systems by 
25 percent and increase agricultural production by 20 percent in 
project areas; 
Sept. 2004 status: 229 structures rehabilitated. 306,100 hectares 
receiving improved irrigation. Percentages increases not calculated. 

No.: 13; 
Performance measures: Up to 1000 km of irrigation canals repaired or 
cleaned; 
Sept. 2004 status: 322 km of canals repaired or cleaned. 

No.: 14; 
Performance measures: Financial services offices established with a 
total loan portfolio value outstanding of $20 million ($5-8 million 
outstanding in year 1); 
Sept. 2004 status: 8400 loans disbursed, with an outstanding loan 
portfolio of $1 million. 

Source: Chemonics International Inc. 

[End of table]

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

Judicial facilities built; 
Sept. 2004 target: 10; 
Sept. 2004 status: 7 complete; construction underway on 11. 

Judicial personnel trained (judges, lawyers, and court personnel); 
Sept. 2004 target: 120; 
Sept. 2004 status: 311. 

Source: Afghanistan Interagency Operations Group. 

[End of table]

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: Consultant reports issued detailing assistance 
with approach, materials, and training for public education connected 
with the Constitutional Commission; 
Sept. 2004 status: Post- ratification public education responsibilities 
were largely transferred from MSI to the TAF cooperative agreement. TAF 
submitted a work plan for distribution of public education materials. 
Additional follow-up activities were integrated into judicial sector 
reform and public education activities in the MSI contract. 

Performance indicators: Master plan developed and implemented for 
Judicial Reform Commission (JRC) to operate effectively and 
efficiently; 
Sept. 2004 status: Since the JRC's term was ending, MSI developed a 
plan to shift JRC activities to existing permanent institutions of 
government, including law reform, legislative drafting training 
activities, and capacity building. 

Performance indicators: Number and type of judicial reform products 
(laws, codes) reviewed; 
Sept. 2004 status: Project reviewed seven commercial laws and four 
additional laws. 

Performance indicators: Number and type of judicial reform products 
forwarded to the Ministry of Justice and President; 
Sept. 2004 status: Laws on corporations, partnerships, foreign entity 
recognition, asylum, passport, and tourism were submitted to the 
Ministry of Justice. 

Performance indicators: Clear contributions made to shaping a 
curriculum for training judicial personnel; 
Sept. 2004 status: Training curricula for judges and for court 
administration were developed. Basic legal text packets were compiled 
for 17 basic laws. 

Performance indicators: Public awareness and education strategy 
developed; 
Sept. 2004 status: 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. 

Performance indicators: Number, frequency, and location of methods used 
to educate the public on legal reform and estimated number of people 
reached; 
Sept. 2004 status: 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. 

Performance indicators: Reports issued detailing system modernization 
plans, pilots identified and implemented; 
Sept. 2004 status: Justice system modernization plan completed. Program 
identified 8 test courts. Flow charts and organization charts were 
developed for Kandahar and Parwan provinces. 

Performance indicators: Number of assessment follow-ups carried out 
after a site (e.g., a court or court department) is identified for the 
project's attention by government; 
Sept. 2004 status: Follow-up assessments were completed in 11 sites. 

Performance indicators: Number of building rehabilitation plans 
developed; 
Sept. 2004 status: Six prototype plans were developed. 

Performance indicators: Number of justice sector facilities 
rehabilitated; 
Sept. 2004 status: Seven justice sector facilities were completed, 13 
others were under way. 

Performance indicators: Reports that detail assistance provided on a 
data system for case management of human rights violations; 
Sept. 2004 status: Project ceased work in this area and redirected 
resources to other areas, owing to substantial funds and technical 
assistance that the Afghan Independent Human Rights Commission (AIHRC) 
received from other sources. 

Performance indicators: Number of human rights cases entered into data 
system; 
Sept. 2004 status: Project determined that the AIHRC was receiving more 
financial and technical support than it could absorb and redirected its 
resources. 

Source: Management Systems International. 

[End of table]

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

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

Metric: Provincial accounting and transfer systems in place in the 
provinces; 
Target: 34 provinces; 
Sept. 2004 status: Systems active in all 34 provinces. 

Metric: Percentage of revenue collected in provinces transferred to 
central account; 
Target: 100 percent of revenue; 
Sept. 2004 status: Not reported. 

Metric: Critical infrastructure for supporting customs collection in 
place; 
Target: No target established; 
Sept. 2004 status: Not reported. 

Metric: Timely monthly revenue reporting from provinces; 
Target: No target established; 
Sept. 2004 status: Reporting sporadic. 

Metric: Industrial parks constructed; 
Target: 3 parks underway by June 2004; 
Sept. 2004 status: 3 underway by September 2004. 

Source: Afghanistan Interagency Operations Group. 

[End of table]

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.)

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

Performance indicator: Customs revenue; 
Sept. 2004 status[A]: $50.5. 

Performance indicator: Total domestic revenue; 
Sept. 2004 status[A]: $90.7. 

Performance indicator: Number of border posts; 
Sept. 2004 status[A]: 6. 

Performance indicator: Number of taxpayer identification numbers issued 
in Kabul City; 
Sept. 2004 status[A]: 10,674. 

Performance indicator: Number of taxpayer identification numbers issued 
in Afghanistan; 
Sept. 2004 status[A]: 12,347. 

Performance indicator: Rental service tax payments collected; 
Sept. 2004 status[A]: 452. 

Performance indicator: Rental services tax proceeds; 
Sept. 2004 status[A]: 38.77 AFN. 

Performance indicator: Number of international funds transfers; 
Sept. 2004 status[A]: 4,307. 

Performance indicator: Dollar value of international funds transfers; 
Sept. 2004 status[A]: $1,350. 

Performance indicator: Independent banks established; 
Sept. 2004 status[A]: 6. 

Performance indicator: Number of existing banks relicensed; 
Sept. 2004 status[A]: 2. 

Performance indicator: Exchange rate (Afghani vs. U.S. dollar); 
Sept. 2004 status[A]: 45.3. 

Performance indicator: Money in circulation; 
Sept. 2004 status[A]: 35,149AFN. 

Performance indicator: Number of domestic funds transfers; 
Sept. 2004 status[A]: 391. 

Performance indicator: Dollar value of domestic funds transfers; 
Sept. 2004 status[A]: 4,349 AFN. 

Performance indicator: Issued loan amounts; 
Sept. 2004 status[A]: $33.5. 

Performance indicator: Deposit growth; 
Sept. 2004 status[A]: $116.6. 

Performance indicator: Capital note transactions - Number of Bids; 
Sept. 2004 status[A]: 11. 

Performance indicator: Dollar value of capital note transactions; 
Sept. 2004 status[A]: 600 M (AFN). 

Performance indicator: Dollar value of foreign exchange cash 
transactions; 
Sept. 2004 status[A]: $524.5. 

Performance indicator: Dollar value of foreign exchange wire 
transactions; 
Sept. 2004 status[A]: $1,273. 

Performance indicator: Number of business licenses issued; 
Sept. 2004 status[A]: 5,429. 

AFN = Afghanis: 

Source: Bearing Point. 

[A] All monetary indicators measured in dollars or Afghanis are in 
millions. 

[End of table]

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

Performance Measure: Schools constructed; Sept. 30, 2004 Target: 
Original goal: 517 schools by June 30, 2004; New goal: 275 additional 
schools built or renovated, 56 schools constructed or rehabilitated by 
September 30; 
Sept. 30, 2004 Actual: 39 schools constructed/rehabilitated; 230 under 
construction and renovation[A]. 

Performance Measure: Site assessments approved by MOE; Sept. 30, 2004 
Target: No targets established; 
Sept. 30, 2004 Actual: 274. 

Performance Measure: Construction subcontracts issued; Sept. 30, 2004 
Target: No targets established; 
Sept. 30, 2004 Actual: 275. 

Performance Measure: Construction Activity during Reporting period; 
Sept. 30, 2004 Target: No targets established; 
Sept. 30, 2004 Actual: 230. 

Performance Measure: Teachers trained through distanced education; 
Sept. 30, 2004 Target: 14,500; 
Sept. 30, 2004 Actual: 7,900. 

Performance Measure: Text books printed/distributed; Sept. 30, 2004 
Target: 15 million printed; 
Sept. 30, 2004 Actual: 15.5 million Printed /10.3 million Distributed. 

Performance Measure: Accelerated learning programs established at the 
provincial level; Sept. 30, 2004 Target: 17 Provinces; 
Sept. 30, 2004 Actual: 17 provinces. 

Performance Measure: Students enrolled in accelerated learning program; 
Sept. 30, 2004 Target: 170,000; 
Sept. 30, 2004 Actual: 169,716. 

Performance Measure: Radio based teacher training reaches primary 
school teachers nationwide; Sept. 30, 2004 Target: 80 percent of 
primary school teachers listen to broadcasts; 
Sept. 30, 2004 Actual: Listenership estimated at 70-90 percent of all 
primary school teachers. 

Source: Afghanistan Interagency Operations Group. 

[A] The 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. 

[End of table]

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

Targets: 51 master trainers trained in accelerated learning curriculum; 
Sept. 2004 status: 64. 

Targets: 680 provincial trainers trained in accelerated learning 
curriculum; 
Sept. 2004 status: 680. 

Targets: 6800 mentors (village trainers) trained in accelerated 
learning curriculum; 
Sept. 2004 status: 6,800. 

Targets: 6,800 accelerated learning classes; 
Sept. 2004 status: Not reported. 

Targets: 2,000 schools with activities; 
Sept. 2004 status: Not reported. 

Targets: 1,802 communities with activities; 
Sept. 2004 status: Not reported. 

Targets: 153 districts with activities; 
Sept. 2004 status: Not reported. 

Targets: 17 provinces with activities; 
Sept. 2004 status: 17 provinces. 

Targets: 170,000 students enrolled in accelerated learning; 
Sept. 2004 status: 160,690. 

Targets: 119,000 female students enrolled in accelerated learning 
(target 70% of total enrollment); 
Sept. 2004 status: 55%. 

Targets: 340,000 grade-level equivalencies achieved in accelerated 
learning (2/year/student); 
Sept. 2004 status: Up to 430,966*. 

Targets: 6,256-12,512eachers trained by radio, or 40%-80% of total 
primary teachers/province. (est 920/prov); 
Sept. 2004 status: 70%-90% of primary teachers. 

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

Targets: Of 175 programs, at least 20 radio programs promoting gender- 
positive messages and at least 10 radio programs containing health 
messages aimed at decreasing maternal mortality; 
Sept. 2004 status: Not reported. 

Targets: Teacher certification for radio-based teacher training 
established; 
Sept. 2004 status: Program approved by MOE, enrollment begun. 

Targets: 15 million primary level textbooks printed; 
Sept. 2004 status: 16.5 million. 

Targets: Textbooks distributed to schools in Kabul province by March 
2004; 
Sept. 2004 status: 14.2 million textbooks distributed. 

Targets: Nationwide distribution of textbooks completed and documented; 
Sept. 2004 status: 14.2 million textbooks distributed. 

Targets: Production and printing of accelerated-learning textbooks 
completed; 
Sept. 2004 status: More than 750,000 printed and delivered. 

Targets: Distribution of textbooks to contract accelerated-learning 
partners completed; 
Sept. 2004 status: 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. 

[End of table]

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

MOH-identified site assessment completed (number of sites); 
Sept. 2004 target: No target listed; 
Sept. 2004 status: 265. 

Construction subcontract issued (no. of clinics); 
Sept. 2004 target: No target listed; 
Sept. 2004 status: 186. 

Construction activity during reporting period; 
Sept. 2004 target: No target listed; 
Sept. 2004 status: 169. 

Clinics constructed; 
Sept. 2004 target: Original goal: 360 clinics constructed; New goal as 
of 5/12/04 Deputies Committee meeting: 219 clinics; 20 constructed by 
September 30; 
Sept. 2004 status: 1 clinic complete. Construction/rehabilitation 
underway on 169 clinics. 

No. of health workers trained[A]; 
Sept. 2004 target: 5,454; 
Sept. 2004 status: 3,995. 

Pharmaceuticals and commodities distributed; 
Sept. 2004 target: $780,000; 
Sept. 2004 status: $697,000. 

MOH = Ministry of Health: 

Source: Afghanistan Interagency Operations Group. 

[A] Includes community health workers, physicians, nurses, midwives, 
MOH staff, and NGO staff. 

[End of table]

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: Total value of grants to NGOs and public 
institutions to expand basic package of health services (BPHS) 
delivery; 
Nov. 2004 status: $53 million in grants. 

Performance indicators: Total existing health facilities to provide 
BPHS in intervention areas; 
Nov. 2004 status: 250 clinical facilities in 13 provinces. 

Performance indicators: Total new health facilities to provide BPHS in 
intervention areas; 
Nov. 2004 status: Not reported. 

Performance indicators: Total rural population in REACH provinces with 
improved access to health services; total women of reproductive age; 
total children under 5; 
Nov. 2004 status: Total: 4.8 million. Breakdown of women and children 
not reported. 

Performance indicators: Total population in REACH districts provided 
BPHS directly through REACH-supported facilities; total women of 
reproductive age; total children younger than 5 years; 
Nov. 2004 status: Not reported. 

Performance indicators: Percentage of basic health facilities in 
intervention areas with at least one female clinical health worker; 
Nov. 2004 status: Not reported. 

Performance indicators: Total number of community health workers 
trained; 
Nov. 2004 status: 1,721. 

Performance indicators: Total number of midwives trained with national 
curriculum; 
Nov. 2004 status: 417 enrolled. 

Performance indicators: Total number of community midwives trained as 
skilled birth attendants using national curriculum; 
Nov. 2004 status: 140 enrolled. 

Performance indicators: Number of health workers who received refresher 
training--doctors, nurses, other health workers; 
Nov. 2004 status: Curricula developed. 

Performance indicators: Number of community health workers trained in 
community mapping; 
Nov. 2004 status: 183. 

Performance indicators: Number of shura leaders oriented to BPHS and 
role of community health workers; 
Nov. 2004 status: Not reported. 

Performance indicators: Total number of provincial hospitals receiving 
funding to implement Essential Package of Hospital Services; 
Nov. 2004 status: 4. 

Performance indicators: Number of women qualified to be: trained to be 
(a) community health workers, (b) community midwives, (c) midwives; 
Nov. 2004 status: Not reported. 

Performance indicators: Percentage increase in household knowledge or 
use of (a) family planning; (b) ANC; (c) protected water source; (d) 
sanitary waste disposal; 
Nov. 2004 status: Not reported. 

Performance indicators: Number of provincial health coordination 
committees (PHCCs) established in REACH provinces; 
Nov. 2004 status: 13. 

Performance indicators: Number of PHCCs able to produce an annual 
health services plan; 
Nov. 2004 status: 8 workplans. 

Performance indicators: Health facility accreditation system in place; 
Nov. 2004 status: Under way. 

Performance indicators: Development and adoption of a National 
Medicines Policy and Law; 
Nov. 2004 status: Completed. 

Performance indicators: Establishment of a health worker certification 
and registration system; 
Nov. 2004 status: Under way[A]. 

Performance indicators: Total number of policy or strategy documents 
endorsed by the Ministry of Health; 
Nov. 2004 status: Not reported. 

Performance indicators: Health finance policy; 
Nov. 2004 status: Under way[B]. 

Performance indicators: Human resources policy; 
Nov. 2004 status: Under way. 

Performance indicators: Hospital policy; 
Nov. 2004 status: Completed. 

Performance indicators: National IEC/Behavior Change Communication 
policy and strategy; 
Nov. 2004 status: Completed. 

Performance indicators: Ministry of health construction protocol 
developed; 
Nov. 2004 status: Not reported. 

Performance indicators: Reproductive health policy developed; 
Nov. 2004 status: Not reported. 

Source: Management Sciences for Health. 

[A] Status as of November 2003: 

[B] Status as of July 2004: 

[End of table]

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

Performance Measure: Major roads constructed; 
September 30, 2004 Target: Kandahar-Herat road construction under way; 
September 30, 2004 Actual: Kandahar-Herat (U.S. responsible for 329 
km.) Phase-II bid evaluation complete on 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. 

Performance Measure: Secondary roads constructed; 
September 30, 2004 Target: Work will have begun on all 12 secondary 
road projects; 
September 30, 2004 Actual: All 12 secondary road projects have been 
selected, reconstruction contracts have been signed for 9 projects, and 
work has begun on 7. 

Source: Afghanistan Interagency Operations Group. 

[End of table]

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. 

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

Deliverables: Primary and secondary roads completed (km.); 
2004 target: 500; 
Sept. 2004 status: 117 km primary road completed, 359 km with at least 
one layer of asphalt; 0 secondary roads completed, construction begun 
on 125 km. 

Deliverables: Bridges completed; 
2004 target: 20; 
Sept. 2004 status: 6 under construction. 

Deliverables: Wells drilled and operational; 
2004 target: 1,250; 
Sept. 2004 status: Pump tests and locating sites underway. 

Deliverables: Irrigation dams and diversions repaired; 
2004 target: 200; 
Sept. 2004 status: Not reported. 

Deliverables: Irrigation canals cleaned and repaired; 
2004 target: 500; 
Sept. 2004 status: Not reported. 

Deliverables: Large irrigation systems; 
2004 target: 2 completed, 1 under design; 
Sept. 2004 status: 3 complete, 4 in progress. 

Deliverables: Schools completed; 
2004 target: 50; 
Sept. 2004 status: 8. 

Deliverables: Health facilities completed; 
2004 target: 50; 
Sept. 2004 status: 15. 

Deliverables: Electric transmission/distribution systems completed; 
2004 target: 25; 
Sept. 2004 status: 3 emergency generators in place, 3 turbines in 
process of repair or construction. 

Deliverables: Government buildings completed; 
2004 target: 20; 
Sept. 2004 status: Not reported. 

Deliverables: Wastewater and solid waste projects completed; 
2004 target: 7; 
Sept. 2004 status: Not reported . 

Deliverables: Institutional strengthening; 
2004 target: Completed for all waste and irrigation projects; 
Sept. 2004 status: Cancelled. 

REFS = Rehabilitation of Economic Facilities and Services. 

Source: Louis Berger Group, Inc. 

[End of table]

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. 

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

Afghanistan Freedom Support Act: To assist women and girls in 
Afghanistan in the areas of political and human rights, health care, 
education, training, security, and shelter, with particular emphasis on 
assistance to: 2004 Supplemental Appropriation Conference Report: To 
ensure that programs, projects and activities funded in this Act 
include the participation of women and advance the social, economic, 
and political rights and opportunities of women in Afghanistan. 

Afghanistan Freedom Support Act: Establish or rehabilitate health care 
facilities; 
2004 Supplemental Appropriation Conference Report: Not addressed; 
Sept. 2004 status: Improved hospital facilities and access (OTI); 15 
REFS clinics. 

Afghanistan Freedom Support Act: Expand immunization programs; 
2004 Supplemental Appropriation Conference Report: Not addressed; 
Sept. 2004 status: Maternal/neonatal tetanus elimination program 
expanded. 

Afghanistan Freedom Support Act: Establish, maintain, and expand 
primary and secondary schools; 
2004 Supplemental Appropriation Conference Report: Not addressed; 
Sept. 2004 status: 15 new REFS schools established. 

Afghanistan Freedom Support Act: Establish vocational training and 
income-generation projects; 
2004 Supplemental Appropriation Conference Report: Establish technical 
and vocational education; 
Sept. 2004 status: training as community health care workers and 
midwives. 

Afghanistan Freedom Support Act: Provide special education 
opportunities for girls whose schooling was ended by the Taliban; 
2004 Supplemental Appropriation Conference Report: Not addressed; 
Sept. 2004 status: Accelerated learning provided for 98,600 girls. 

Afghanistan Freedom Support Act: Provide access to higher education; 
2004 Supplemental Appropriation Conference Report: Not addressed; 
Sept. 2004 status: National women's dormitory reconstructed. 

Afghanistan Freedom Support Act: Protect women and girls against sexual 
and physical abuse, abduction, trafficking, exploitation, and sex 
discrimination in the delivery of humanitarian supplies and services; 
2004 Supplemental Appropriation Conference Report: Establish programs 
for women and girls against sexual abuse and trafficking; 
Sept. 2004 status: Not reported. 

Afghanistan Freedom Support Act: Provide emergency shelters for women 
who face danger from violence; 
2004 Supplemental Appropriation Conference Report: Provide shelters for 
women and girls; 
Sept. 2004 status: Not reported. 

Afghanistan Freedom Support Act: Direct humanitarian assistance to 
widows; 
2004 Supplemental Appropriation Conference Report: Provide humanitarian 
assistance for widows; 
Sept. 2004 status: Widow's bakeries supported through WFP. 

Afghanistan Freedom Support Act: Support the work of women-led and 
local nongovernmental organizations; 
2004 Supplemental Appropriation Conference Report: support for Women-
led NGO; 
Sept. 2004 status: Grants to women-focused NGOs. 

Afghanistan Freedom Support Act: Disseminate information throughout 
Afghanistan on the rights of women; 
2004 Supplemental Appropriation Conference Report: Establish programs 
to disseminate information about the rights of women; 
Sept. 2004 status: Not reported. 

Afghanistan Freedom Support Act: Provide women's rights and human 
rights training for military, police, and legal personnel; 
2004 Supplemental Appropriation Conference Report: Provide women's 
rights training to military, police, and legal personnel; 
Sept. 2004 status: INL granted $75,000 to train Afghan woman judges in 
civil and family law; ANP training includes "Principles of non-
discrimination: Women in Society" and other pertinent classes; 
uncertain if ANA includes similar training. 

Afghanistan Freedom Support Act: Support the National Human Rights 
Commission; 
2004 Supplemental Appropriation Conference Report: Not addressed; 
Sept. 2004 status: $5 million in support to the Afghan independent 
human rights commission. 

Source: GAO analysis of public law and USAID documents. 

[End of table]

[End of section]

Appendix IV: Opium Production and Counternarcotics Efforts in 
Afghanistan: 

Table 18: Opium Production in Afghanistan, 2002-2004: 

Net opium poppy cultivation; 
2002: 74,000 ha; 
2003: 80,000 ha; 
2004: 131,000 ha[A]. 

Opium production; 
2002: 3,400 mt; 
2003: 3,600 mt; 
2004: 4,200 mt[B]. 

Farmers cultivating opium[C]; 
2002: 1.7 million; 
2003: 1.7 million; 
2004: 2.3 million. 

Percentage of legal GDP; 
2002: 17; 
2003: 50; 
2004: 60. 

Provinces where opium is grown; 
2002: 24; 
2003: 28; 
2004: 34. 

Gross profits to traffickers; 
2002: $1.3 billion; 
2003: $1.3 billion; 
2004: $2.2 billion. 

Farm value of opium production; 
2002: $1.2 billion; 
2003: $1.0 billion; 
2004: $0.6 billion. 

Total; 
2002: $2.5 billion; 
2003: $2.3 billion; 
2004: $2.8 million. 

ha = hectare: 

mt = metric ton: 

Source: UN Office on Drugs and Crime. 

[A] 1 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. 

[End of table]

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

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

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

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

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

Event: Transitional Authority issues new ban on opium cultivation and 
trafficking; 
Date: August 2002. 

Event: Counternarcotics directorate created within Afghan National 
Security Council; 
Date: October 2002. 

Event: UN announces afghan opium harvest (3,400 metric tons); 
Date: October 2002. 

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

Event: Ministry of the Interior Counternarcotics Police of Afghanistan 
(CNPA) is created; 
Date: January 2003. 

Event: DEA office in U.S. embassy officially opens; 
Date: February 2003. 

Event: Afghanistan government adopts national drug control strategy; 
Date: May 2003. 

Event: National drug law adopted; 
Date: October 2003. 

Event: UN announces afghan opium harvest (3,600 metric tons); 
Date: October 2003. 

Event: International Counternarcotics Conference on Afghanistan is held 
in Kabul; 
Date: February 2004. 

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

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

Event: Afghan Central Poppy Eradication Force Established; 
Date: April 2004. 

Event: U.S. counternarcotics strategy for Afghanistan completed; 
Date: September 2004. 

Event: $776.5 million implementation plan for U.S. counternarcotics 
strategy completed; 
Date: October 2004. 

Event: DEA-trained National Interdiction Unit created under the Afghan 
Counternarcotics Police; 
Date: October 2004. 

Event: UN announces afghan opium harvest (4,200 metric tons); 
Date: October 2004. 

Event: Position of Deputy Minister for Counternarcotics created in 
Ministry of Interior; 
Date: November 2004. 

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

Event: Afghan counternarcotics ministry formed; 
Date: December 2004. 

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

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

Event: USAID Signs 3 Contracts for its Alternative Livelihoods Program; 
Date: February 2005. 

Event: DEA deploys first Foreign Advisory Support Team to Afghanistan; 
Date: March 2005. 

Event: 2005 Eradication Program Begins; 
Date: April 2005. 

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

[End of table]

[End of section]

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

USAID: 

FROM THE AMERICAN PEOPLE: 

JUL 20 2005: 

Mr. David Gootnick, Director: 
International Affairs and Trade: 
Government Accountability Office: 
441 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Gootnick: 

USAID appreciates the opportunity to review and respond to your draft 
audit report, "AFGHANISTAN Reconstruction: Despite Some Progress, 
Deteriorating Security and Increased Opium Production Continue to 
Threaten Achievement of U.S. Goals," GAO-05-742. On the whole we found 
the report to be a comprehensive and detailed assessment of U.S. 
civilian reconstruction efforts in Afghanistan during fiscal year 2004, 
when USAID began implementing some of its largest projects and more 
than doubled the number of contracts it was managing compared to the 
previous year. 

In general, we concur with your recommendations and are pleased to 
inform you that since September 2004, we have made great progress in 
implementing the suggested measures of strategic planning and 
performance indicators. This letter updates you on this progress, as 
well as on our overall programmatic achievements. 

* First, we now have in place a long-term, country-level strategy for 
Afghanistan: "The USAID /Afghanistan Strategic Plan 2005-2010." As you 
are aware, the initial urgency and the multifaceted challenges we faced 
in Afghanistan forced us to operate under an interim strategy until 
now. The comprehensive new country strategy will cover the next five 
years. 

* Second, our Mission in Kabul is now drafting a Performance Management 
Plan (PMP). While operating under an interim strategy, USAID's 
strategic planning directive "Functional Series 200 - Programming 
Policy; ADS 201" did not require us to prepare a comprehensive PMP. As 
the new performance plan is put into place, we will also embed similar 
detailed and rigorous evaluation criteria in our contract instruments. 

* Third, please note that we track the results of our most visible 
projects every other week for the Deputies' Committee chaired by the 
Deputy National Security Advisor. These "metrics" are now being updated 
by an interagency team in Kabul. The updated metrics should reflect the 
lesson learned in the initial phases of our work in Afghanistan; the 
reconstruction process in Afghanistan was much more difficult than 
anticipated. 

* Finally, while most of the reporting on our activities is done on a 
sectoral basis and on particular projects, we also have in place annual 
tracking mechanisms for reporting on country level indicators. This 
allows us to monitor progress at the strategic level and make 
appropriate changes as needed. 

On the programmatic level, we are also proud to share with you in the 
enclosure some of our achievements as of June 2005. 

In summary, fiscal year 2004 has been a year of accelerated efforts 
programmatically, but also with regard to our efforts to formalize long-
term strategic and measurement plans. We are very proud of our 
successes and contributions to date and look forward to sharing many 
more accomplishments with you in the coming months. 

Sincerely,

Signed by: 

John Streufert: 

Acting Assistant Administrator: 
Bureau for Management: 

Enclosure: a/s: 

USAID FROM THE AMERICAN PEOPLE: 

ATTACHMENT: 

Programmatic Achievements as of June 2005: 

In the agricultural sector, USAID's projects have improved irrigation 
on over 840,000 acres of land; trained 588,000 farmers through live 
demonstrations, seed and fertilizer supply projects; vaccinated 2.3 
million livestock per quarter; provided more than 9,500 loans to micro- 
enterprises and produced an estimated 4.3 million MT yield of cereal 
crops for 2005. As of last fall, these efforts at rebuilding 
agricultural markets were being integrated into a market-chain 
approach. 

* Our original agriculture program is now being complemented with a new 
$475 million Alternative Livelihoods Program, USAIID's contribution to 
our Government's overall counter-narcotics effort. To date, projects 
under this program have helped clean 1,044 km of irrigation and 
drainage canals; launched economic safety net programs for women and 
other vulnerable groups; and paid $5.7 million in salaries. 

* USAIID's support was critical to the success of the Constitutional 
Loya Jirga and to the celebrated presidential elections last October. 
We assisted with the registration of more than 11 million Afghan-born 
voters in and out of the country; hiring and training 120,000 poll 
workers; and setting up 22,000 polling stations and 5,000 poling 
centers. We are playing a similarly vital role organizing the upcoming 
national assembly and provincial elections, scheduled for September 
2005. 

* Our democracy and governance program is also helping increase the 
capacity of the formal justice sector. To date we have constructed some 
20 judicial facilities and trained 579 judges, while codifying, 
compiling, printing and disseminating 1,000 copies of Afghanistan's 
basic laws throughout the country. 

* Thanks to USAID's assistance in the customs sector, customs revenues 
exceeded their budget target by 20 percent in the last Afghan fiscal 
year, constituting about half of overall domestic revenues. 

* Our other efforts at strengthening the Afghan economy focused on 
privatizing the state-owned enterprises (SOE). USAID completed all the 
necessary changes to the existing law on SOEs and in May 2005 the 
Baghlan Sugar plant was the first company to be privatized, at a sale 
price of E15.5m. 

Our education program has also enjoyed great success. To date we have 
printed and distributed 35.7 million textbooks for grades 1-12 in both 
Dari and Pashto. Our contractors have trained 6,800 teachers and 
enrolled some 170,138 students, of which 58% are girls, in the 
Accelerated Learning program which has expanded to all 17 provinces. 
The radio-based Teacher Training that was launched in 2003 in three 
pilot provinces has now expanded to all provinces, reaching 65,000 
teachers by radio and 7,479 additional teachers through face-to-face 
training. USAID has built or refurbished 315 schools, primarily in 
remote areas, and an additional 184 are under construction. This year, 
we also established the American University of Afghanistan, and 
rehabilitated the Kabul Women's Dormitory to accommodate some 1,100 
women from mainly rural areas who will attend university in Kabul. 

* As a result of our health projects, 7.1 million Afghans now have 
better access to quality health services; $1.8 million worth of 
essential drugs have been distributed; 3,200 community health care 
workers have been trained; and 287 health clinics have been constructed 
since 2002, with an additional 43 clinics under contract for 
construction. 

* The Kabul-Kandahar road was completed ahead of schedule, servicing 35 
percent of the country's population, who live within 50 kilometers of 
this highway. The project was crucial to extending the influence of the 
new government, increasing the pace of economic development, and 
helping ensure unity and long-term security in the country. Work is 
underway on the other section of the ring road that connects Kandahar 
and Herat. USAID contractors, who are responsible for 326 km of the 
total 557 km of the road, have completed the de-mining operations, and 
begun laying the first and second layers of asphalt in large sections. 

We would also like to update you on the commitments we made in last 
year's report: Nearly 75% of our regular FY 2005 appropriations have 
already been obligated. 

* Our staff in Afghanistan has continued to grow from 101 reported in 
your audit report to nearly 185 today (including 26 assigned to 
Provincial Reconstruction Teams (PRT) around the country). 

* We have moved our staff to the CAFE compound in Kabul. While we still 
face difficulties with space, we have nevertheless created a workable 
environment for our staff. 

[End of section]

Appendix VI: GAO Contacts and Staff Acknowledgements: 

GAO Contacts: 

David Gootnick (202) 512-3149: 

Staff Acknowledgments: 

John Hutton, David Bruno, Miriam A. Carroll, and Christina Werth made 
key contributions to this report. In addition, Martin de Alteriis, Mark 
Dowling, Etana Finkler, Reid Lowe and Adam Vodraska provided technical 
assistance. 

(320291): 

FOOTNOTES

[1] GAO, 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). 

[2] Title 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. Quick-impact 
projects refer to short-term assistance that helps Afghanistan 
transition from humanitarian to development assistance--that is, to 
longer-term reconstruction projects. 

[3] In 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. 

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

[5] Donors 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. 

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

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

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

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

[10] The 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. 

[11] As 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. 

[12] For 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. 

[13] USAID does not maintain expenditure data by province. 

[14] The U.S.-funded Kabul-Kandahar highway passes through multiple 
provinces. 

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

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

[17] WFP 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. 

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

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

[20] In 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. 

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

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

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

[24] The 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). 

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

[26] Creative 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. 

[27] Tertiary 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. 

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

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

[30] MSH 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. 

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

[32] Excluding 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. 

[33] According 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. 

[34] Programs 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. 

[35] The 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). 

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

[37] GAO-04-403. 

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

[39] According 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). 

[40] GAO-04-403. 

[41] USAID'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. 

[42] FAR 16.101(b) groups contracts into two broad categories: fixed- 
price contracts and cost-reimbursement 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. 

[43] USAID 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. 

[44] USAID 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.)

[45] According 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. 

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

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

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

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

[50] GAO/AIMD-00-21.3.1. 

[51] In 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. 

[52] The 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. 

[53] GAO-04-403. 

[54] GAO-04-403. 

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

[56] United 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). 

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

[58] For 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). 

[59] The Japanese government leads demobilization efforts. 

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

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

[62] A 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. 

[63] In 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. 

[64] GAO-04-403. 

[65] Because 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. 

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