Afghanistan Hospital Almost Two Years Late, Auditor Says

A U.S.-funded effort to build a 100-bed civilian hospital in eastern Afghanistan has fallen almost two years behind its planned completion because of poor contractor performance and deficient internal controls, according to an inspector general’s audit.

The deficient internal controls led to overpayments of at least $507,000 to an Afghan construction company that’s since been fired, according to the report released today by the office of the U.S. Special Inspector General for Afghanistan Reconstruction.

John Sopko, a Washington-based lawyer appointed as inspector general by President Barack Obama, has turned out a stream of reports citing waste, fraud and abuse in Afghanistan. He has faulted U.S. military and civilian agencies as lacking a strategy to combat corruption after providing $96 billion in reconstruction aid since 2002.

The Gardez Hospital and several other facilities will support Afghan Ministry of Public Health efforts “to provide urgently needed health service,” the U.S. Agency for International Development says on its website.

The hospital “is significantly behind the original schedule,” Sopko said in the report. The audit recommended that the agency seek reimbursement for the $507,000 and conduct a detailed financial audit to determine if other overpayments occurred.

The overpayments included $300,000 for 600 gallons of diesel fuel, which is about $500 a gallon compared with an average rate of $5 a gallon, the report found. Contract personnel also paid $220,000 for an automatic temperature-control device that should have cost no more than $10,000.

USAID Response

The U.S. aid agency is conducting a review and “if the allegations prove to be true, USAID will take swift action to address any problems and recover funds, as appropriate,” agency spokesman Benjamin Edwards said in an e-mailed statement.

The Gardez Hospital “is part of a larger program to build education and health facilities in Afghanistan,” he said.

“Five of seven health facilities built under this program have already been completed and USAID remains committed to completing the Gardez Hospital as soon as possible,” he said.

Construction has been “slower and more challenging” because the hospital “is located in a remote and conflict-prone part of Afghanistan near the Pakistan border,” he said.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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