From the U.S. Government Accountability Office, www.gao.gov

Transcript for: US Efforts to Improve Afghanistan's Financial Management

Audio interview by GAO staff with Charles Johnson, Director,
International Affairs and Trade

Related GAO Work: GAO-11-907: Afghanistan Governance: Performance-Data
Gaps Hinder Overall Assessment of U.S. Efforts to Build Financial
Management Capacity

Released on: September 20, 2011

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[ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and
information from the Government Accountability Office. It's September
20th, 2011. Since 2002 the U.S. government has allocated $72 billion to
Afghanistan. Now, as leadership transitions to the Afghan government,
sound public financial management will be critical to Afghanistan's
future. A group led by Charles Johnson, a Director in GAO's
International Affairs and Trade team, recently reviewed the U.S.
government's efforts to improve Afghanistan's public financial
management capacity. GAO's Jeremy Cluchey sat down with Charles to learn
more.

[ Jeremy Cluchey: ] What sorts of public financial management activities
is the U.S. government currently supporting in Afghanistan?

[ Charles Johnson: ] In terms of public financial management activities,
the U.S. is involved in a variety of things, and I'd like to first note
that we have various agencies involved in that. U.S. Agency of
International Development is one of the lead players here, along with
our State Department, our U.S. Treasury Department, and our Department
of Defense. In particular our U.S. Agency of International Development
is engaged in helping the Afghan civilian servant being able to formally
budget and also execute that budget as well as we have Treasury folks
who are working actually on the ground with the Afghan Minister of
Finance and doing budget executions, budget formulation as well. And our
Department of Defense in particular is involved in helping the Afghan
ministries, security ministries, Minister of Defense, and the Minister
of Interior manage their finances with respect to their Afghan security
forces.

[ Jeremy Cluchey: ] Your report notes that sound public financial
management encouraged by activities like these is a crucial part of
transitioning leadership in Afghanistan over to the Afghan government.
To what extent did you find that these efforts you mentioned are
supporting that goal?

[ Charles Johnson: ] Jeremy, what we did find was that the U.S. efforts
are in alignment with what was developed in 2010. There was a public
financial road map that the United States government along with the
Afghan government and the international community developed that laid
out specific goals and objectives to enhance the Afghan governments
capacity to manage its finances. We did find, as I noted earlier, that
many agencies that were involved in this, and their efforts are
specifically in alignment with budget formulation and budget execution,
which is two of the key areas that are vital to transitioning and leave
responsibility to the Afghan government.

[ Jeremy Cluchey: ] And how did your team go about collecting
information and conducting this work?

[ Charles Johnson: ] Well, the first step we do here at GAO is we look
at what criteria exist, we look at what the U.S. goals are in
particular, and in doing so we went back and we review what the U.S.
government's strategy is for enhancing the Afghan government's public
financial management capacity. Also what we do is we meet with the
various agencies. As I mentioned, we met with the U.S. Agency of
International Development, State Department, Treasury Department,
Defense officials, not only here in Washington ,D.C., but also in Kabul
in Afghanistan. We did that in February and March of 2011. But in
addition we met with various international organizations, the World Bank
in particular, who are key players involved in helping to build Afghan's
public financial capacity. We also met with the United Kingdom's
Department for International Development, which is called DFID, as well
and more importantly, we did take the time out to meet with the Afghan
ministries themselves, the Ministry of Finance as well as the Ministry
of Defense.

[ Jeremy Cluchey: ] You mentioned alignment of the U.S. government's
efforts with the road map and its goals in Afghanistan. What is GAO
recommending be done to help improve this alignment?

[ Charles Johnson: ] We didn't really find any problems with the
alignment. We did find the goals were aligned. What we do recommend is
that the U.S. Agency of International Development enhance its efforts to
measure progress, which is one of the reasons why we could not tell you
the actual overall progress of the efforts in terms of building Afghan
ultimate financial management capacity. Some of the challenges there is
that the U.S. Agency of International Development in particular had not
developed baselines in all cases or approved baselines of its
implementing partners, or in particular and more importantly, there were
no performance targets in all situations, which is always required when
you have specific performance indicators. There's a requirement that you
have performance targets aligned with those indicators, and we did not
always find that to be the case. This is something I'd like to point out
too that we found historically as a problem with the U.S. Agency of
International Development is something I think in our recent comments we
received them in, they were committed to working on.

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