Blurred lines in contingency codes; billions of afghanis ill-spent
The Supreme Audit Office

Blurred lines in contingency codes; billions of afghanis ill-spent

Government documents obtained by Kabul Now shows that billions of afghanis allocated to contingency funds have been ill-spent in the 1398 Fiscal Year. According to the Supreme Audit Office (SAO), an audit of national budget plan finds that a large amount of money allocated to contingency funds has been ill-spent due to absence of an overseeing mechanism. This finding suggests a large amount of money has been transferred from one contingency code to another one even out of the capacity of the code.  In accordance with SAO’s inspection, amendment of contingency funds were deliberately delayed in the mid-year review of national budget plan, therefore it missed Parliament approval.  

Unnecessary transitions      

A total of 2,600,000,000 afghanis have been transferred from one contingency code to another—which was allocated to the country’s regular budget—over 1398 Fiscal Year. The SAO has described such transactions or depositions as “misrouted” funds, and contrary to the expenditure plan developed for the country’s national budget.

For instance, more than 1,830,000,000 afghanis was poured into the account for the 91 contingency fund, officially known as 91 policy code, while the highest amount of money for the contingency fund was set one billion afghanis. With the transacted amount from other emergency contingency codes, the total budget for the 91 policy code has increased to more than 2,830,000,000 afghanis. Of that amount, nearly 2,770,000,000 afghanis was spent during the fiscal year and more than 61,330,000 afghanis are still kept in the budgetary code.

Millions of afghanis have been spent for purposes other than planed ones. A total of 380,000,000 afghanis was transacted from 900052—a contingency code for elections—to the 92 emergency and 900003—a contingency fund for debts—codes. A sum of 60,000,000 afghanis have been transacted from emergency contingency funds to code 9000050, which is a contingency code for maintenance expenditure. A total of 336,000,000 afghanis have been transacted from three emergency contingency funds to four different emergency contingency codes.

Budget outflowed in some codes spent in irrelevant areas  

The audit conducted by the SAO suggests that nearly 2,450,000,000 afghanis has outflowed from some emergency codes, which contrary to the national budget plan, has been spent in irrelevant areas. Upon requests made by different government agencies and approval of the Ministry of Finance (MoF) and Presidential Palace, some contingency budgets have been spent in areas other than allocated for. The areas where funds have been spent are Afghanistan Embassy in Washington DC, paying debts of some companies, executing salaries, purchasing goods and etc.

Table of transactions made in emergency contingency codes

More than 15,906,000 afghanis has been withdrawn from funds allocated for membership of ministries in international organization and sent to Afghanistan Embassy in Washington. Over 28,470,000 afghanis has been deducted from contingency funds of security forces and paid to clear debts of Baktash Moblat – apparently a furniture company. More than 97,860,000 afghanis has been deducted from security contingency funds to finish what the Ministry of Interior describes as “transactions of 1394, 1395” upon request of the ministry. Purposes of the transactions are not, however, detailed clearly. In a response, the MoF said that the amount was deducted from 1398 security contingency funds to cover “huge debts” of the interior ministry, adding that it was done in line with the budget expenditure plan. Upon request made by the Attorney General’s Office, a sum of 20,000,000 afghanis was withdrawn from security contingency codes to purchase “required equipment” of the Office, though the needs and purchase process of the materials is not clearly explained. A total of 421,403,000 afghanis was transacted from election contingency funds to cover salary payments upon request of the Ministry of Education.

“Misrouted” contingency funds of development projects

As highlighted in the SAO’s audit report, more than 2,800,000,000 afghanis and a sum of 2,160,000 USD have also been misrouted, better to say ill-spent, from contingency funds appropriated to the country’s development budget. According to the report, these debits are also in defiant to the national budget expenditure plan.

The finance ministry has made a withdrawal of 1,175,000,000 from the 910049 code, a contingency fund for development budget of province, to purchase biometric devices for the Independent Election Commission. This comes while more than 1,790,000,000 afghanis has been transacted from contingency funds appropriated for elections to other budgetary codes.

Responding to SAO’s audit report, the finance ministry has said that all contingency budget amendments are made in line with authority of the ministry and approved by presidential decrees.

To avoid further violation of the national budget expenditure plan, SAO recommends applying more spending restrictions in the national budget expenditure plan. It also asks for accurate and realistic appropriations in the country’s contingency and non-contingency budgets.

The government’s annual finance statements—officially known as Qatia accounts—has yet to be approved by the country’s Parliament. Changes applied to the amounts of budgetary codes, particularly in contingency funds, became a matter of controversy between the Parliament and the government last fiscal year. This year’s annual budget expenditure report is also expected to become a matter of controversial debate in the Parliament which has the authority to approve or reject the report after an assessment.

Table of figures spent from emergency contingency codes for purposes other than planed

In an investigative report issued on December 18, 2019, Kabul Now found that the Afghan leaders – then the incumbent President Ashraf Ghani and then Chief Executive Abdullah Abdullah – misappropriated billions of Afghanis from the 91 Code in 1397 fiscal year. The two leaders authorized the huge debits under numerous justifications such as house and office building rents, medical treatment expenses, travel expenditures, flight ticket payments, purchase of cars, travel expenditures of government officials and expenditures of other private organizations.

Audit report of 1398 fiscal year also suggests that the amount of money allocated to the 91 policy code has been spent 14 times by eight different agencies. In 1398, the money deducted from the contingency code has been used to cover operative expenditures, expenses of political parties, house rents, purchase of armored vehicles, celebrations of Afghanistan Independence Day, consultative loya Jirga, travel costs of religious scholars, salaries, financial assistance, and etc. According to expenditure figure of the 91 policy code, more than 100 million afghanis were allocated for expenses of Hezb-e-Islami.

The full details on money withdrawal from the 91 code is not, however, available. Though Kabul Now has already asked the MoF to provide details of withdrawals from the 91 policy code, the ministry has not provided it yet.

There are a huge gap existing between the amounts of money initially approved for contingency codes—over11, 730,000,000 afghanis—and the amount of money spent from these codes—over 20,230,000,000 afghanis, and in between there are nearly 8,500,000,000 afghanis gap.  More than 19,270,000,000 has been spent out of the 20,230,000,000 afghanis.

This report has been developed by Etilaat-e-Roz’s Liyaqat Layeeq and translated into English by Mokhtar Yasa.