At issue are some $7.5 billion dollars of new U.S. aid to Pakistan, as granted by the Kerry-Lugar aid bill, $1.5 billion of which will be dispersed this year.

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The senators’ letter echoes many of the points made in a dissent memo published in October by USA Today from a USAID official to State’s Policy Planning chief Anne-Marie Slaughter, criticizing Holbrooke for wanting to approve (and often disapprove) every USAID contract involving Pakistan.

“We are saying to the State Department and others that they really need to step back and take a close look at how that process could work most effectively,” said Frederick Jones, spokesman for the committee.

Lugar and Kerry’s letter also calls on Clinton and Shah to slow down the transition of funds away from USAID to Pakistani organizations, a policy Holbrooke has been pushing on the grounds that this could help them build capacity faster and avoid the perceived waste associated with sending funds through U.S. organizations and contractors.

“This is a very delicate balance, and some people have expressed concerns about this, but we have a very clear image of speeding up the flow of American taxpayer dollars to the people and the governments of the two countries,” Holbrooke said in October, referring to Afghanistan and Pakistan. “So if it’s a government contract, we want to speed it up.”

ARTICLE SOURCE: ForeignPolicy.com

The Regional Inspector General/Manila conducted this audit to determine whether the program is achieving its main goals of improving the capacity of FATA governmental institutions to govern and increasing the capacity of FATA NGOs to promote good governance (page 6). Although the program has provided training, taken initial steps to automate FATA institutions, and completed some media activities, little has yet been achieved in building the capacity of FATA governmental institutions and NGOs. As of October 31, 2009, the capacity building program had been in place for 22 months of a 36-month program but had achieved little with regard to the program’s two main goals. Additional time may be needed, as many planned activities are scheduled to be completed over 3 years, and most capacity building activities began after October 2008—10 months into the 3-year performance period.

Regarding the first main goal, the program has not yet achieved the goal of improving the capacity of FATA governmental institutions to govern. The audit found that little progress had been achieved to build the capacity of the FATA Secretariat and the FATA Development Authority, in part because the program got off to such a slow start. During the first year, the contractor focused its resources on working out best approaches to designing and implementing activities, building up relationships with FATA institutions, and developing work plans. Also, the deteriorating security situation in Peshawar and the assassination in November 2008 of the chief of party of another USAID program delayed progress in the FATA capacity building program. However, some progress has been made in certain activities. For example, in its second year the program focused on training in project management, development planning, and financial management. As of September 30, 2009, 74 training events had been completed for 1,224 FATA governmental institution staff members (page 7).

Regarding the second main goal, the program did not increase the capacity of these NGOs to promote good governance, although some progress was made. For example, the program had implemented a few activities to address weaknesses of FATA NGOs, such as providing formal training classes and purchasing office equipment for 42 NGOs working in FATA. However, the few FATA-based NGOs that exist lack the human and financial resources to promote good governance effectively. In most instances, FATA NGOs needed first to strengthen their proposal preparation skills, financial management practices, and monitoring and evaluation capabilities before they could start to promote good governance (page 8).

Because of a high-level change of emphasis in U.S. Government strategy toward greater involvement of Pakistani organizations in implementing assistance programs, the mission began to rethink its strategy of providing the bulk of its program assistance through U.S.-based implementers such as DAI. As a result, in June 2009 the mission refrained from fully funding a DAI incremental funding request of $15.3 million and, 4 months later, approved only $4.7 million in additional funds. In October 2009, the mission asked DAI to consider preparing a 90-day demobilization plan. However, as of November 2009, no final decision had been made as to whether the DAI contract would be terminated or, if terminated, what program implementation mechanisms would replace the U.S.-based contractor (page 5).
In summary, although little real progress had been made to date to build capacity of either FATA governmental entities or FATA NGOs, the audit discusses three areas in which program accomplishments have been delayed and improvements can be made:

* The transition to a new implementation strategy has impeded the program’s progress (page 9).
* Capacity building in automation has had little success, and most of the computer hardware purchased for the program has remained boxed up and unused (page 11).
* Monitoring and reporting systems for managing development projects—such as a geographic information system that enables project information to be represented on maps and a database system to document the life cycle of development projects— have not been completed, and they may not be completed until June 2010 (page 16).

This report contains four recommendations to address these issues and to help improve implementation of the program (pages 11, 15, and 18). We recommend that USAID/Pakistan:

* Provide immediate written guidance to the contractor and to the FATA governmental institutions to identify contractual arrangements that would be in force to implement the Capacity Building for the Federally Administered Tribal Areas Development Program as the mission transitions to USAID’s new implementation strategy.
* Develop and issue implementation plans, following best practices, to (1) assign 260 computers (and related equipment) to the FATA governmental institutions and (2) transfer 140 laptop computers to the North-West Frontier Province and to ensure that the computer equipment will be used for intended purposes and that maximum benefits will be derived from this equipment.
* Take immediate steps to confirm the existence of 72 laptop computers. If the laptop computers cannot be produced, the mission should issue a bill of collection to the contractor for $1,400 for each missing laptop.
* Require the contractor to develop and put into use detailed implementation plans for both the geographic information system and the planning commission database under development for use by the Federally Administered Tribal Areas Secretariat. The plans should identify roles and responsibilities to be carried out by the contractor and others and should contain best practices of systems development, such as obtaining approval by stakeholders, establishing target dates for completing user manuals, training users and administrators, and preparing for the final handover of day-to-day operations and maintenance to the Secretariat.

On the basis of an evaluation of the mission’s response to the draft report, the Office of Inspector General determined that final action has been taken on recommendation 1, and management decisions have been reached on recommendations 2, 3, and 4. The mission’s written comments on the draft report are included in their entirety, without attachments, as appendix II to this report (see page 22).

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