A special U.S. Inspector General has charged that the United Nations Development Program (UNDP) is ducking responsibility concerning some $200 million that the Afghan government may have siphoned out of a politically sensitive, multi-billion-dollar trust fund that the U.N. agency dispenses to pay the country’s 145,000-member national police force.

Officials for the inspector general’s office told Fox News that a meeting last week between the two sides failed to answer the watchdog’s concerns about what it has called “severe problems” with the fund and UNDP’s oversight role.

Moreover, Fox News has learned, European Union donors withheld some $100 million in contributions while they expressed their own concerns about the “prudent financial management” of the fund.

A UNDP spokesman says that the payouts were resumed in July, after UNDP “shared with the EU a detailed plan ofaction outlining measures already in place and additional measures being put in place to increase oversight” over the salary payments.

Just how many police Afghanistan is actually fielding is a major part of that oversight issue.

The U.N.’s flagship anti-poverty agency claims it has been raising alarms since late last year with the Afghan government and donors to the trust fund—including the U.S.--about the payroll “deductions,” along with other issues including “ghost” salary payments to police and senior officers who are not on official rosters and the discovery of some 50,000 invalid biometric ID cards for police officers in Afghan government records.

But dealing with all such problems, a UNDP spokesman told Fox News, are “outside UNDP’s current areas of responsibility”—even though the agency has also declared to U.S. officials that some of the egregious violations, notably including the Afghan government’s “deductions” and other payroll “taxes” would no longer be taken.

The welter of finger-pointing, countercharges, and ongoing bureaucratic tension is just the latest round in an 3-and-a-half-year U.S.-U.N. wresting match over how to deal with the huge pot of money known as the Law and Order Trust Fund for Afghanistan, or LOTFA.

The pile of cash—some $3.17 billion spent since 2002, with $1.2 billion coming from the U.S. --is a lynchpin in the strategy of both sides to support stability and civil order along with an Afghan government that has frequently proved to be disorganized and massively corrupt.

The project is especially sensitive at the moment, since LOTFA, which has gone through six “phases” since 2002, is up for renewal once again at the end of the year.

In the wake of November’s U.S. mid-term elections, the Obama Administration is likely to face tougher questioning than ever about how it is spending money on reinforcing civilian institutions in a country where it is eager to draw down military forces.

LOTFA is also a prime example of the much-touted U.N. practice known as “national execution,” in which Western donors funnel cash via UNDP and other U.N. agencies to governments in developing countries for purposes ranging from anti-poverty programs and electoral support to programs supporting health care, education and “climate change.”

Under “national execution,” the U.N. agency involved raises and hands over the cash and provides “capacity building” support to local governments, which actually manage the money. But, as UNDP claims in the LOTFA case, and frequently does elsewhere, strict oversight over how the funds are actually spent is the responsibility of the government itself.

According to John Sopko, the U.S. Special Inspector General for Afghanistan Reconstruction (known as SIGAR), that explanation is not good enough.

In an exchange of letters with UNDP’s top administrator, Helen Clark, in early September, Sopko cites a Clark argument that LOTFA has no “institutional mandate to conduct auditing and investigation of [Afghan government] internal processes including tax deductions and pension payment” and rebuts that “the U.S. and other donors never intended that UNDP and LOTFA simply act as a conduit for billions of dollars of unconditional spending.”

“I am disturbed by the apparent assertion in your letter that UNDP is not responsible for ensuring that LOTFA funds are only used for legitimate purposes,” he said.


What Sopko, who was sworn into office in July 2012, does not say is that this is hardly the first time that the SIGAR’s office has tried to hold UNDP to account for the vast sums pouring through LOTFA, and possibly vanishing into thin air.

In April, 2011, Sopko’s acting predecessor, Herbert Richardson, also signed off on a review of LTOFA that took place before the start of the current Phase VI of the project. The review noted that the UNDP-supervised fund had by then spent $1.26 billion on police payroll support (the U.S. share: $441 million) and revealed that even then the Afghan government wasn’t able to disclose who was actually on the police payroll.

Richardson declared that “UNDP, as the LOTFA administrator, has overall responsibility for oversight and monitoring of LOTFA funds,” but added that the “value” of that oversight “continued to be an issue.”

He called for “additional procedures” to “improve the oversight and monitoring of [Afghan National Police] payroll costs and LOTFA funds.”

“Until these oversight and monitoring issues are addressed,” he said, “there will continue to be concerns about the value of UNDP’s services needed to provide the expected quantity, quality, and timeliness of progress in establishing and maintaining a viable police force.”


Nearly $2 billion later, the concerns are evidently still there.

How they may be fixed in any upcoming Phase VII of the police program is still a mystery. In response to questions from Fox News, UNDP said that “exact details of the project document including its budget are still under discussion between partners.”

It will, however, “build upon lessons learned from the past, including from the various internal and external LOTFA assessments and audits.” A UNDP spokesman did disclose that ”UNDP is proposing a strengthened governance and oversight system for the new program.”

The project document will be made public, he said, “once it is has been agreed upon by all partners.”

George Russell is editor-at-large of Fox News and can be found on Twitter: @GeorgeRussell or on Facebook.com/George Russell