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Foreign Donors Fund 90 Percent of Afghan Expenses, GAO Says

Sept. 20 (Bloomberg) -- Afghanistan remains dependent on foreign donors to finance its public services, with the U.S. funding 62 percent of all Afghan public expenses, including 90 percent of its security costs over the last five years, U.S. federal auditors found.

The U.S. has allocated more than $72 billion to secure and rebuild Afghanistan since 2002, the Government Accountability Office, the investigative arm of Congress, said in a report issued today. President Barack Obama has requested more than $18 billion for that effort in the fiscal year that begins on Oct. 1, the GAO said.

The Afghan government’s domestic revenue was $1.66 billion in 2010 and its total expenses that year were $14.3 billion. The U.S. paid almost $9 billion, with other nations covering the remaining gap, the report said.

“We have also raised concerns about Afghanistan’s inability to fund planned government expenditures without foreign assistance and raised questions about the sustainability of U.S.-funded efforts to build and enhance Afghanistan’s road, agriculture, and water infrastructures,” the GAO report said.

The auditors found public expenses in Afghanistan rising from $5.5 billion in 2006 to $14.3 billion in 2010, an increase of 160 percent.

The GAO presented its data in Afghan solar years, which usually begin on March 21 and end on March 20 of the following year, the GAO said.

Management Shortfall

The GAO, in a separate report, also took aim at the U.S. Agency for International Development for not doing enough to measure the progress of the Afghan government’s financial management capacity.

The lack of performance targets and data means the effectiveness of U.S. efforts to improve Afghanistan’s financial management “cannot be fully determined,” the GAO said.

Improving the Afghanistan’s financial management is critical because the U.S. and other international donors have pledged to provide at least 50 percent of their development aid through the Afghan government’s budget by next year, the report said.

USAID, in written comments, said it agreed with the GAO and pledged to improve its performance measurements.

To contact the reporter on this story: David Lerman in Washington at dlerman1@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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