UNDP statement on the new Report of SIGAR

Jan 12, 2015

UNDP AFGHANISTAN / LOTFA: UNDP’s Law and Order Trust Fund for Afghanistan supports initiatives to bring the police closer to the citizens.

New York City, 12 January 2015 – The United Nations Development Programme (UNDP) welcomes a new report from the US Special Inspector General for Afghanistan Reconstruction (SIGAR) on collecting and verifying the accuracy of Afghan National Police (ANP) personnel and payroll data.
 
UNDP agrees with the report’s analysis of the challenges faced by national and international partners when implementing personnel and payroll processes for administration of the ANP.
 
The Afghan national police – who significantly contribute to stability and security in Afghanistan – are being paid despite the challenges presented by the post-conflict environment.
 
UNDP has conducted several internal and external audits aimed at increasing the Law and Order Trust Fund of Afghanistan’s (LOTFA) ability to ensure that salary payments are correctly and transparently processed and sent to legitimate end-users -- Afghan national police and prison guards.
 
UNDP does not agree with the assertion that a large portion of the US government funding for ANP salaries will be wasted or abused. In 2013, UNDP and its partners detected US$ 8 million of ineligible expenses incurred by the Afghan Government, of the US$ 524 million payroll budget. UNDP has recovered these resources.

In response to the preceding audits, UNDP has already undertaken measures to achieve the recommendations that the Special Inspector General for Afghanistan Reconstruction John F. Sopko names in the new report:
 
1.      UNDP is working to improve oversight of the ANP personnel and payroll data collection processes:   
 
·    Reviewed its oversight of the Monitoring Agent, revised the Terms of Reference, and launched an international solicitation for a new Monitoring Agent;
·    Redesigned its regional management and oversight team so that it can provide better oversight of UNDP operations in Afghanistan.
 
2.      UNDP put in place measures to ensure that ANP incentive payments and salaries are accurate:
 
·    Developed a poster series in local languages informing police of their salary rights which will be distributed to police stations in 2015;
·    Launched a two-month end-to-end review of the entire payroll process including:
·    A full assessment of the Electronic Payroll System, human resource management, and the salary disbursement mechanism, and;
·    Strategic recommendations to establish a centralized payroll system;
·    Supported the establishment of networks of emergency call centers and information help desks where ANP and Central Prison Department personnel can report salary payment issues.
 
3.      UNDP supports the effort to improve oversight of US and other donor funding for the ANP provided through LOTFA:
 
·    UNDP is updating on a weekly basis the US and other donor representatives on the review of expenses and deductions, through meetings of a payroll technical working group and the Steering Committee;
·    UNDP has held, and continues to hold, a series of briefings for the US and other donor representatives in Kabul and in New York.
 
UNDP is aware that more can to be done to further improve LOTFA’s oversight, accountability and transparency to protect public funding from misuse. To that end, UNDP will continue to cooperate with national and international partners, including the SIGAR, on improving oversight, transparency and accountability of the LOTFA.
 
 
Background on the Law and Order Trust Fund for Afghanistan
 
The LOTFA was launched in 2002 to help build an Afghan National Police force capable of enforcing the rule of law, containing crime and protecting the Afghan population.
 
At the core of LOTFA is a payroll recording system that enables the Afghan Ministry of Finance and Ministry of Interior Affairs to provide regular payment of salaries to Afghan National Police and Central Prison Department personnel.
 
Every month LOTFA transfers to the Afghan Ministry of Finance funds for salaries of over 140,000 Afghan National Police and over 5,000 Central Prison Department staff. The Ministry of Finance distributes the funds to three categories of disbursing agents: commercial banks, M-PAISA (mobile-money) and Trusted Agents. The disbursing agents then pay the salaries to policemen, policewomen and prison guards throughout Afghanistan.
 
The Afghan Ministry of Interior Affairs provides payroll records and supporting documents (such as attendance sheets) to verify salary disbursements, to LOTFA which regularly reviews sample records and documents.
 
While LOTFA is a large project with a budget over US$ 500 million per year, its performance is dependent on human resources management, record keeping and accounting capabilities of the Afghan Government, including in inaccessible locations. UNDP has repeatedly highlighted the related external deficiencies to its donors and partners as they impact LOTFA’s operations.

UNDP has agreed with the Government of Afghanistan on an inception phase of LOTFA VII. The project was approved on 29 December 2014 and is effective 1 January 2015. It is publicly available here.  
 
As the top-ranked development agency in the global 2014 Independent Aid Transparency Index UNDP is committed to keep partners and the public informed of progress in its intensified efforts to improve LOTFA’s oversight, transparency and accountability

Contact information

In New York City, Stanislav Saling, Communications Specialist, UNDP Regional Bureau for Asia and the Pacific, 212 906 6575 or stanislav.saling@undp.org

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