Review of Law and Order Trust Fund for Afghanistan

Table of Contents

List of Acronyms 2

Executive Summary 4

1. Background 62. The Review 63. The Fund 74. Relative to the investment intent (i.e. ANDSF sustainment), are outcomes as

expected at this point?8

4.1 Support for Payroll Management 94.2 MOIA and Police Development 104.3. Donor conditions for transition 11

5. How well is the UNDP managing the Fund and engaging partners? 136. Is UNDP’s monitoring and evaluation and related reporting sufficient for DFAT’s

requirements?16

6.1 SPM Component 166.2. MPD Component 17

7. Does UNDP’s M&E reporting allow for an adequate assessment of risk and their management, and allow for effective and timely decision making

18

8. Is DFAT’s engagement with Afghan Government/UNDP/LOTFA effective and efficient, and can it be improved

19

9. What are DFAT’s options to advocate for gender equality through LOTFA? 2310. How might donors and the UNDP use conditionality to recognise and reward

improved police conduct or encourage the incremental transfer of responsibility for financing salaries and other operational costs to government>

26

11. Other issues for consideration 2911.1 Disbursement challenges 2911.2 Sustainment 3011.3 Restructuring the Trust Fund 31

11.3.1 Security 3211.3.2 Justice 3311.3.3 Anti-corruption 34

11.4 Police civilianisation and professionalization 34

Attachment 1 – Summary of key recommendations 38Attachment 2 – Review Terms of Reference 40Attachment 3 – Persons/Organisations consulted 44Attachment 4 – Summary of component progress 45Attachment 5 – Gender – commentary on progress 49Attachment 6 – Donor Conditions Management Framework 51

1

List of Acronyms

AHRIMS Afghanistan Human Resource Management Information System

AIP Aid Investment Plan

ANCOP Afghanistan National Civil Order Police

ANDSF Afghanistan National Defence and Security Forces

ANP Afghan National Police

APPS

ANATF

Afghanistan Personnel and Pay System

Afghanistan National Army Trust Fund

ARTF Afghanistan Reconstruction Trust Fund

BP Border Police

CSTC-A Combined Security Transition Command — Afghanistan

DCMF Donor Conditions Monitoring Framework

DFAT Australian Department of Foreign Affairs and Trade

MoD Ministry of Defence

DRR Disaster Risk Reduction

EVAW Ending Violence Against Women

FTE Full-time equivalent

GIROA Government of the Islamic Republic of Afghanistan

GDPDC General Directorate of Prisons and Detention Centres

LOTFA Law and Order Trust Fund for Afghanistan

MA Monitoring Agent

M&E Monitoring and evaluation

MCA Micro-capacity Assessment

MOF Ministry of Finance

MOIA Ministry of Interior Affairs

MPD Ministry and Police Development Project

NATO North Atlantic Treaty Organisations

NORAD Norwegian Agency for Development Cooperation

ODA Official Development Assistance

2

OIG Office of the Inspector General

PAI Personnel Asset Inventory

PFO Provincial Finance Officers

PHRO Provincial Human Resource Officers

ROL Rule of Law

SPM Support to Payroll Management Project

TA Trusted Agents

TOR Terms of Reference

UNDP United Nations Development Program

WEPS Web-based Electronic Payment System

3

Executive Summary

Australia has been a significant partner in Afghanistan’s development providing in excess of A$1.26 billion in Official Development Assistance since 2001. Australia contributes US$20 million annually to the Law and Order Trust Fund for Afghanistan which, together with a commitment of US$80 million each year by the Australian Department of Defence, supports the sustainment of the Afghanistan National Defence and Security Forces. This commitment achieves two primary objectives: (1) it supports the capacity of the Afghanistan Government to maintain the security required for economic and social development and (2), it honours Australia’s commitment to provide at least 50% of its development assistance ‘on budget’.

This desk review was commissioned in response to concerns about the underutilisation of Australia’s financial contribution and a need to assess the potential impact that a deteriorating security environment might have on Fund operations and on DFAT’s capacity to engage.

It must be acknowledged that the shift in LOTFA’s objective from simply a funding channel for salaries to support for core institutional development only occurred in July 2015. Given this belated change in focus, progress in relation to the first project component - Support for Payroll Management (SPD) - has been generally satisfactory. It is anticipated that most donor conditions established for the transfer of payroll management to the MOIA will not be met by December 2017 as currently scheduled but could be achieved by July 2018.

Some donors remain concerned that MOIA has failed to show sufficient commitment to taking administrative, disciplinary or legal action, in response to detected payment anomalies (Condition B12). However, the likely completion of the roll out of electronic funds transfer and the finalisation of the biometric identification of officers against staff establishment is and will continue to reduce opportunities to manipulate the payroll for personal financial gain. This progress, together with a significant increase in the level of monitoring being performed by the independent monitoring agent, that will continue after transition, should provide sufficient assurances to donors for agreement to transition to be secured. However, differing donor positions on the importance of MOIA’s commitment to instituting necessary accountability processes may result in failure to agree that compliance with conditions has been sufficient for transfer to proceed.

The financially smaller second, but arguably more challenging project - MOIA and Police Development (MPD) – that aims to build the capacity of the ministry, civilianise administrative functions and professionalise the police force has not progressed as well.

The legacy of the largely militarised response to Afghanistan’s security that resulted in general policing being trumped by the need to counter insurgency has created a police force ill-equipped to deliver community policing that is effective and respectful of the human rights of the citizenry. To date this project has struggled to gain traction and it is anticipated that progress will remain slow as it challenges long standing power structures in its efforts to reform institutional processes.

Success in this critical area will require much better understanding of the political economy drivers that incentivise political and administrative behaviour in the Ministry and the actions of the police. If sustainable progress is to be made, institutional strengthening and reform efforts will need sensitive finessing informed by quality research and astute political engagement.

4

Progress on the gender front has been poor. There has been very limited progress in pursuing gender-related reforms. Despite minimal targets, female recruitment continues to challenge with less than 2% of the force comprising women and most of these confined to lower ranks.

The legacy of discrimination in educational opportunity and entrenched cultural barriers to women’s employment remain a significant barrier to progress more broadly in Afghanistan. Of particularly concern is evidence that police continue to be major perpetrators of gender-based violence outside the family.

DFAT’s current focus on the SPM component of LOTFA will do little to support Australia’s aims to support gender equality and women’s empowerment. Progress will only occur to any extent through the pursuit of the professionalization objectives of the MPD project. Even there, without sustained efforts to support attitudinal and behavioural change across Afghan society, only very modest progress can be expected.

In response to donor concerns about the effectiveness of UNDP as the Fund’s manager, consultations confirm that there have been significant improvements in the effectiveness of UNDP’s management. Most donors report satisfaction with current management performance noting that recent senior staffing changes in particular have improved relationships between the Fund, government and donors.

LOTFA is on the cusp of major changes to its objectives and operations. Beyond the imminent transfer of the payroll function to the MOIA, the recent agreement to move 36,000 police to the Ministry of Defense will reduce substantially the salaries bill and support more focussed institutional strengthening efforts.

Moves to transition LOTFA to a more standard pooled fund operation committed to a wider agenda that includes support to anti-corruption and justice institutions is mooted. This is a logical progression given the importance of these institutional foundations for effective and sound governance. However, some donors believe that there is insufficient knowledge about these areas to make properly informed programming decisions and have questioned LOTFA’s capacity to take on such a challenging remit.

Should DFAT wish to maintain current funding levels against a definition of sustainment that limits funds allocation to payroll, DFAT will likely continue to experience disbursement challenges. With significant diminution in the size of the payroll arising from the Defense transfers and finalisation of the reconciliation of the payroll, disbursement rates may even worsen unless other donors significantly reduce their contributions to this component.

Allocating funds to the MPD project component and consideration of support to the wider program being proposed for LOTFA would align closely to the principal Aid Investment Plan objective of Supporting the Afghan Government to maintain economic growth and institute more effective and accountable governance. However, this would shift aid funding to largely project-based operations making adherence to Australia’s commitment to ‘on budget’ support more challenging to maintain.

While giving DFAT greater influence over fundamental institutional reform, engagement in this wider program would present management challenges given DFAT’s constrained in-country presence. Efforts to deploy a more explicit division of labour in relation to Fund engagement amongst donor partners should be explored as a means to optimise the value of DFAT’s limited management resources.

5

A consolidated summary of recommendations is provided at Attachment 1.

6

1. Background

Australia has been a significant partner in Afghanistan’s development as it emerges from decades of conflict. Since 2001, Australia has provided more than A$1.26 billion in Official Development Assistance (ODA) to Afghanistan and expects to expend around A$80 million in development assistance in 2017-18.

Australia, with other donors, has committed to help strengthen and align with government systems by providing at least 50 per cent of development assistance as 'on-budget' support, and align at least 80 per cent of assistance with Afghanistan's National Priority Programs.

A key element of this support is focused on maintaining national security as a fundamental pre-condition for Afghanistan’s broader and sustained development. The 2015-2018 Aid Investment Plan guiding Australian aid to Afghanistan includes Afghanistan National Defence and Security Forces (ANDSF) sustainment under Objective 1 noting: Supporting the Afghan Government to maintain economic growth and institute more effective and accountable governance:- Security remains critical to Afghanistan’s economic and social development. Australia’s

commitment to ANDSF sustainment is helping to develop a professional police force that is capable of providing security to all Afghans.

At the NATO conferences in Chicago (2012) and Warsaw (2016), the Australian Government committed to support ANDSF sustainment to 2020. This support comprises an annual non-ODA commitment by the Australian Department of Defence of US$80 million to the Afghan National Army Trust Fund (ANATF) and an annual aid contribution of US$20 million to the Law and Order Trust Fund for Afghanistan (LOTFA) by the Australian Department of Foreign Affairs and Trade (DFAT).

For some time, DFAT has been concerned about the inability of LOTFA to disburse the funds advanced to it by Australia for ANP sustainment. Since 2015, disbursement rates have been around 10%, resulting in deferrals of tranche payments and creating challenges for the management of the overall program budget.

DFAT has commissioned this independent review to assess the effectiveness of LOTFA as the primary mechanism for its on-budget contribution to ANDSF sustainment.

2. The Review

Underpinned by concerns surrounding the underutilisation of Australia’s financial contribution to LOTFA mentioned above, this rapid desk review aims to explore fund performance and the effectiveness of DFAT’s engagement by answering the following primary questions:1. Relative to the investment intent (i.e. ANDSF sustainment), are outcomes as expected at this

point?2. How well is the UNDP managing the Fund and engaging with partners?3. Is UNDP’s monitoring and evaluation (M&E) and related reporting sufficient to DFAT’s

requirements? 4. Does UNDP’s M&E reporting allow for an adequate assessment of risks and their management,

and allow for effective and timely program decision making?5. Is DFAT’s engagement with Afghan Government/UNDP/LOTFA effective and efficient, and how

can it be improved?6. What are DFAT’s options to advocate for gender equality through LOTFA?

7

7. How might donors and the UNDP use conditionality to recognise and reward improved police conduct or encourage the incremental transfer of responsibility for financing salaries and other operational costs to government?

Commencing with an examination of LOTFA design, monitoring, evaluation and performance reporting and relevant independent reviews and assessments, consultations were conducted with UNDP LOTFA management, DFAT management at Post and in Canberra, other donor contributors and a range of other agencies working in the security space1. The Review Terms of Reference (TOR) are provided at Attachment 2 and a list of those consulted at Attachment 3.

This review focusses on LOTFA operations since July 2015, the date from which LOTFA moved more deliberately towards transferring payroll management responsibility to Ministry of Interior Affairs (MOIA) at the request of President Ghani and from when the MOIA and Police Development (MPD) component was introduced. It is principally a forward-looking review that aims to inform Australian engagement with LOTFA from 2018 onwards.

3. The Fund

Since 2002, LOTFA has been the primary vehicle by which donors have financed police and corrections operations and supported the development of the Afghan National Police (ANP), General Directorate of Prisons and Detention Centres (GDPDC) and the MOIA.

Originally established as a mechanism to pay police and correctional officer salaries, LOTFA shifted to a wider institutional strengthening mission including the establishment of payroll and human resources (HR) systems in 2011. At that time, it was anticipated that the task of transformation to a functional and increasingly fiscally-sustainable ministry would be completed by 2014. However, successive annual renewals of the Fund’s mandate illustrate the continuing and shifting challenges faced by the Government of the Islamic Republic of Afghanistan (GIROA) and its international partners in achieving that goal.

Under pressure from the Ghani-led government elected in 2014 to transfer payroll responsibility to the MOIA, and in line with the principles outlined in the Self-reliance through Mutual Accountability Framework2 established in September 2015 to guide Afghanistan’s post-conflict transition, LOTFA was reconfigured in 2015.

Under the objective of ‘developing national capacity for self-sustained reform and improvement of the MOIA as an institution, and the police services as instruments for citizen safety and maintenance of the Rule of Law3’, two separate but interrelated components were established:

1. Support to Payroll Management (SPM) - focused on financing the ANP and GDPDC payroll and managing the MOIA payroll and building the capacity required for transition to MOIA administration; and

2. MOIA and Police Development (MPD) - focussed on developing national capacity for self-sustained reform and improvement of the MOIA as an institution as well as supporting police professionalization and civilianisation.

1 While Post requested interviews with senior representatives from the MOIA, there had been no response to DFAT requests for meetings before the finalisation of this report.

2 Self-reliance through Mutual Accountability Framework, Afghanistan Ministry of Finance, 5 September 20153 Law and Order Trust Fund - 1 July 2016 –December 2016, UNDP

8

Separating assistance for payroll management from the broader professionalization of police allows the transition of payroll responsibility to proceed relatively independently from the more complex and long-term efforts associated with institutional development and reform.

At the present time, the UNDP-administered fund remains the primary source of finance for the salaries of around 150,000 police and 6,000 correctional staff and supports a number of policy and technical specialist positions in the MOIA, as well as financing necessary infrastructure including IT systems development and some facilities construction and rehabilitation. A separate but important accountability element of the SPM component involves the deployment of a monitoring agent (MA) to track and confirm the eligibility of the significant levels of donor funds directed through the MOIA and Ministry of Finance (MoF) for salaries and procurement.

DFAT funding is applied to the SPM project component – the only element of ANDSF sustainment currently considered ODA-eligible.

4. Relative to the investment intent (i.e. ANDSF sustainment), are outcomes as expected at this point?

This report views sustainment as: ‘the provision of personnel, logistical and other support required to maintain and prolong operations until successful accomplishment of the mission or national objective4.’

LOTFA was established in 2002 ‘to support the establishment, payment, equipment and training of the police force in Afghanistan’5. To the extent that it has sustained police operations over the ensuing 15 years, the Fund has achieved its purpose.

Acknowledging that the original focus on using LOTFA principally as a funding channel for salaries hindered institutional development efforts, capacity development of MOIA and Police started in earnest in 2015. Given this belated shift in focus, progress towards building capacity to enable the transition of payroll management to MOIA is largely on track while progress to build Ministry capacity and the professionalization of Police under the MPD component remains patchy. In the case of MPD, the ambitious timelines set for these elements are unlikely to be achieved.

It must be recognised that LOTFA is not, and cannot be, the sole instrument to ensure the effective operations of the police and correctional elements of Afghanistan’s security forces. Together with UNDP and LOTFA, responsibility for sustainment outcomes over the long term lies with the MOIA, Ministry of Finance (MOF) and other elements of the international assistance mission, including the Combined Security Transition Command - Afghanistan (CSTC-A).

Discussions with donors indicate a level of concern that overall, UNDP reporting of LOTFA progress may be too positive. Discussions also suggest that UNDP monitoring, including that associated with the micro-capacity assessments (MCA) of MOIA payroll management, is focussed on process-related progress and does not consider the political economy drivers that shape institutional behaviour, the effectiveness of institutional strengthening and capacity development approaches, and the sustainability of the institutional capability of MOIA and the supported law and justice agencies.

4 Adapted definition based on the Dictionary of Military and Associated Terms, US Department of Defense 2005.

5 UNDP LOTFA Terms of Reference, 2002

9

4.1 Support for Payroll Management From an assessment of LOTFA performance reporting, and from discussions with other donors, overall progress of this element of LOTFA is considered satisfactory. It is clear that the priority given by donors, UNDP and the Government on transitioning payroll management to the MOIA has resulted in significant progress.

Based on the latest LOTFA quarterly report6, 4 of the 5 outputs being delivered under SPM are considered by LOTFA management to be on track to achieve agreed targets by December 2017.

In reviewing the most recent LOTFA reporting and consultations, the key issues to note are: The move to integrate electronic funds transfer into payroll management is well advanced

with 91% of salaries paid electronically. However, resistance by some provincial police commanders to the introduction some administrative processes is inhibiting efforts to reconcile personnel records and move away from cash payments under the Trusted Agent (TA) arrangements.

System challenges involving the lack of telecommunications infrastructure continue to prevent connection of some General Directorate of Prisons and Detention Centres to the MOIA Intranet and the expansion in the use of mobile money to replace the use of TAs in remote areas.

MOIA’s decision to place a hold on the procurement process for the establishment of a Disaster Resilience and Recovery site, raises risks around data protection.

While the verification of personnel records is on track (74% as at June 2017), until the Personnel Asset Inventory (PAI) - involving the biometric identification of officers - is completed, and records in all systems are reconciled, the integrity of LOTFA payroll data cannot be assured.

An assessment of the payroll structure and sustainability strategy7 has highlighted the challenges faced in developing a pay structure that incentivises desired behaviours, rewards performance, ensures fiscal sustainability, supports transparency and accountability and encourages female recruitment and retention. The report highlighted that the current pay structure reflects ANP’s military foundations and is likely to be unsuitable for a civilianised police force. Decisions around payroll reform remain on hold until the Afghanistan Personnel and Pay System (APPS) is introduced and is considered stable. However, this area of work is likely to grow in importance and could potentially be a very contentious element of the program in a post-transition phase.

In June-July 2016, in cooperation with CSTC-A, the SPM team performed a check of 1928 police who had previously not made themselves available for physical verification. This second check failed to identify 1323 officers. After blocking salary payments to these officers in February 2017, only 269 came forward for subsequent verification. Just this small sample of the 144,000 staff currently being paid through the Web-based Electronic Payroll System (WEPS)8 resulted in an estimated saving of $US1 million between February and June. This limited exercise indicates that significant levels of funds misappropriation are likely to be occurring and points to the need for further strengthening of systems controls. In response, LOTFA plans to notify all staff without biometric identification in November that their pay will be blocked from February/March 2018 until their identification has been physically verified.

6 LOTFA SPM Quarterly Progress Report April-June 20177 Final Report on Payroll Structure and Sustainability Strategy, UNDP, 18 December 2016 8 Telcon - Jud Kraft, CSTC-A, 18 August 2017

10

Attachment 4 provides a more detailed summary of progress against the outputs being delivered by the Support to Payroll Management Project.

4.2 MOIA and Police Development

While DFAT does not financially contribute to the MPD component, its institutional development mandate is fundamental to the sustainability of police and prison operations and thus is a key contributor to sustainment. Various government and UNDP assessments have identified four areas of fundamental weakness within the MOIA and the ANP: (1) endemic corruption, (2) inadequate administrative processes and capacity, (3) the lack of civilianisation of administrative functions in the Ministry and the Police, and (4) the failure to shift the ANP from a highly militarised operation to one based on community-focussed policing.

In comparison to the SPM component, MPD has not progressed satisfactorily.

Of the two LOTFA components, the MPD program remains the more challenging to implement. This is understandable given its institutional strengthening mandate which, in challenging long standing power structures and institutional processes, has encountered significant and sustained resistance and corporate inertia.

While a number of outputs are reported as ‘on track’, many of these did not have performance targets set for Quarter 2, 20179 so it cannot be asserted with any certainty that these are progressing satisfactorily at this point.

In reviewing the most recent reporting10 and informed by consultations, the key performance issues of note are:

3 of 7 outputs are off track or largely off track – Component 2 (Professionalization) Output 1 - legislative, regulatory and policy framework; Output 3 - community partnerships; and Component 3 (Construction).

128 of 191 civilian positions have been filled (no gender disaggregation provided in reporting) – 29 currently vacant positions will be filled by LOTFA payroll administrators following transition.

Efforts to reform the Police Law that regulates police conduct were approved. Work should now commence on the legislative amendment to reflect the approved changes.

Efforts to develop accredited training increased with recognition of the ANP Bachelor’s degree program by Ministry of Higher Education and the formalisation of a partnership between the MOIA and the American University to implement a Masters of Arts in Education and Law Enforcement.

250 female police have completed the Sivas training with earmarked funding from Japan. A potential further round of admissions is proposed, noting that some donors have queried the effectiveness and sustainability of this model, preferring investment in the Afghan Police College to deliver such training.

Some internal auditors within the Office of the Inspector General trained under LOTFA have started performing audits with LOTFA support. However, processes to establish the

9 12 of 31 MPD output indicators were not required to achieve a target result in Q2, 201710 MOIA and Police Development Q1 Progress Report, UNDP 2017. Note Q2 reporting was not available as at

September 2017

11

Monitoring and Evaluation Directorate, which will track and assess the quality of implementation of the Ministry’s strategic plans, continue to lag.

Efforts to improve community engagement with the police, including the establishment of information desks and the implementation of Police-e-Mardumi11 Units, which engage with communities and Women’s Police Councils that provide peer support and representation for female police, continue to lag.

It is not clear how effectively LOTFA’s MPD component is engaging with the various Afghan institutions in establishing the institutional foundations needed to support effective and accountable policing. The complex cultural and political dynamics that inevitably colour these development efforts do not lend themselves well to standard progress reporting.

This component would benefit from the conduct of more detailed and nuanced assessments such as the regular micro-capacity assessments undertaken for the SPM component. Such an exercise would be more challenging in the context of wider institutional functions but donors may need to support such an exercise in order to unpack the political economy incentives/disincentives and other drivers of progress (or lack thereof) to ensure that interventions are designed to achieve the development aims of this component. A review of MPD foreshadowed by LOTFA in 201812 presents a good opportunity to undertake a more in-depth assessment of progress and could be used as a vehicle to advocate for a wider range of MCAs focussed on key areas of institutional development.

Unlike SPM, other bilateral and multilateral development programs operate in the space occupied by MPD. LOTFA-focussed progress reporting is inadequate to evaluate the coherence and relative success of these various initiatives and consultations highlight continuing donor concerns about the adequacy of MOIA’s aid coordination capacity. A cooperative assessment that maps all relevant activity, evaluates initiative effectiveness and identifies gaps and overlaps should be undertaken if those delivering assistance in this space, including LOTFA, are to make informed adjustments to their programming to maximise combined effectiveness.

Attachment 4 provides a more detailed summary of recent progress against the outputs being delivered by the MOIA and Police Development Project.

4.3 Donor conditions for transition

As mentioned above, the decision to transfer responsibility for payroll management to MOIA will depend on donor agreement that the 23 conditions outlined in the LOTFA Donor Conditions Monitoring Framework (DCMF) have been fulfilled (see Attachment 6). LOTFA management has emphasised that, while transition has significant symbolic value, its impact on the ability to maintain the integrity of operations would be minimal. Agreement will result in the transfer of current payroll administrators from LOTFA to MOIA’s establishment. Responsibility for ongoing training, systems support, compliance and oversight will remain with LOTFA for at least a further 18 months.

While a briefing on progress towards fulfilling the DCMF was provided to donors on 15 August 2017, at the date of writing this review, a report on progress had not been circulated.

Consensus does not currently exist around the level of DCMF compliance required for transition. Some donors are likely to take a hard line, while others believe that further deferral of transition may damage relationships with the government, to the detriment of wider engagement.

11 Police and Community12 LOTFA’s MPD manager advised that review ToRs are currently be drafted for consideration by partners.

12

Discussions with donor representatives indicated that, while progress against most conditions has been satisfactory, failure to fulfil the requirements for conditions B.11 (MOIA monitoring of payroll and personal data) and B.12 (MOIA taking actions in response to payment anomalies) are likely to remain an impediment to reaching agreement on transition.

Donors expressed concern that MOIA was not sufficiently proactive in establishing the auditing functions of the Office of the Inspector General necessary to ensure that discrepancies that might indicate fraud, waste and abuse would be detected, and that errors and deficiencies would be corrected within the 60 days specified in the DCMF. Despite LOTFA support, MOIA still relies on the external Monitoring Agent to verify the legitimacy of its operations. OIG passiveness in taking responsibility for auditing MOIA operations and investigating evidence of maladministration remains a significant concern to the donors consulted.

Critically, donors were disappointed by statements made by senior GIROA representatives at the update that appear to dismiss the need to take disciplinary action against those found to have acted fraudulently. Donors view the MOIA’s failure to consider such actions as an issue of consequence and a significant impediment to transition.

For one donor, condition A.7 (Installation and use of the APPS) could become a sticking point for agreement to transition by end 2017. Noting that the APPS is unlikely to be fully operational until mid 2018, a literal interpretation of that condition would mean that transition cannot occur in December 2017, regardless of the achievement of process targets using the current systems.

The 2016 decision to implement a fully-integrated payroll/HR system13 has been welcomed by all stakeholders, given that it will reduce the opportunity for corruption. CSTC-A considered that successful APPS trials currently being undertaken within the MOIA using test data sets may provide sufficient surety for donors to agree to compliance with this condition.

It is clear from donor consultations that the question of payroll transition in December 2017 will largely depend on judgements around conditions B.11 and 12. Without greater elaboration of those donor conditions to more clearly articulate what constitutes a ‘discrepancy’ and what correctional/disciplinary actions might be considered appropriate, stakeholders may find it very challenging to defend their judgement as to whether or not those conditions have been fulfilled.

Given the lack of consensus about the level of compliance, it is unlikely that transition will occur in December 2017 and is more likely to be achieved by July 2018.

Most donors agreed that if there is to be further deferral, then the parties are duty bound to work with the government to provide greater clarity around expectations and a more specific road map for actions to comply with any outstanding conditions.

Key Observations To the extent that it has sustained police operations, LOTFA has achieved its purpose. Progress towards building capacity to enable the transition of payroll management to MOIA

under the SPM component is largely on track while progress to build Ministry capacity and the professionalization of Police under the MPD component remains patchy.

13 CSTC-A advise that they hope the APPS will be in place by Q2, 2018. Some donors consider this timeframe optimistic.

13

There is a lack of consensus among donors that the conditions established for the transfer of payroll management to the MOIA are on track to be fulfilled and it is unlikely that payroll management will transition to MOIA in December 2017 as currently scheduled. It may be achieved by July 2018.

There is insufficient attention being paid by project managers to the political economy drivers that shape institutional behaviour. This presents a risk to the effectiveness of performance monitoring particularly for the MPD component.

The MPD component would benefit from the conduct of more detailed and nuanced assessments along the lines of the regular micro-capacity assessments undertaken for the SPM component. The planned review of MPD in 2018 presents an opportunity to look more closely at the effectiveness of support and is an exercise in which DFAT should engage.

LOTFA-focussed progress reporting is inadequate to evaluate the coherence and relative success of other institutional strengthening initiatives being delivered in the security space and donor remain concern about the adequacy of MOIA’s aid coordination capacity.

5. How well is the UNDP managing the Fund and engaging with partners?

UNDP’s management of the Fund has improved markedly in recent years. Earlier donor criticism and equivocal performance assessments14 prompted senior management changes and resulted in increased compliance monitoring.

Current fund management, including engagement with donors, is considered effective. As government stakeholders were not available for consultation, it is not possible to ascertain MOIA or broader GIROA views on the quality of UNDP’s management or their engagement with government officials.

With a corruption score of 15 out of 100, Afghanistan comes in at 169 out of 176 countries evaluated by Transparency International in its corruption perception survey15. This endemic corruption is reflected in the reputation that MOIA and the Police have within the local and international community for corruption as well as abuse of power.

Against this backdrop, LOTFA was always going to face very complex management challenges as it sought to balance the need to bring transparency, accountability and effectiveness to Ministry, Police and Correctional operations while avoiding becoming a catalyst for resistance and instability. The change process inevitably challenges existing political and institutional arrangements long structured to extract rent and influence.

In this environment, it was inevitable that reform efforts would be contested and, over the 15 years of Fund operation, donors have expressed varying degrees of concern about the effectiveness of UNDP’s management. Similarly, UNDP’s relationship with the Government has been rocky at times with calls in 2014 from President Ghani to have UNDP removed as the Fund’s manager, owing to a failure to agree to the transition of payroll management to MOIA by the end of 2015.

An evaluation by UNDP’s Independent Evaluation Office16 was critical of aspects of UNDP 14 For instance, reviews by SIGAR, EU and UNDP’s Independent Evaluation Office15 Corruption Perceptions Index 2016, Transparency International16 Assessment of Development Results – Afghanistan, UNDP 2014

14

management oversight and the effectiveness of its capacity building efforts, noting that current efforts were too diverse and modest. It recommended support for a more systemic reorientation and suggested that a ‘re-tooling’ of the police force may be in order.

Together with evidence of procurement fraud and the payment of salaries to ‘ghost police’, the constant challenge to ensure that funds provided to the Ministry are expended appropriately remains a major concern for donors.

There has been wide recognition that in order to maintain stability in the security sector, any move to clean up corrupt practices must be done incrementally and with significant sensitivity to avoid pushback from MOIA and police leadership which might destabilise critical police operations.

However, some donors have questioned whether LOTFA has been ‘too incremental’ in its approach with insufficient pressure applied to MOIA to clean up its act. The challenge for LOTFA and other stakeholders remains the need to accelerate the reform process to provide assurances to stakeholders of the integrity of payroll processes while not unduly straining the organisation’s absorptive capacity, destabilising police operations and resulting in a breakdown in the relationship between LOTFA and MOIA leadership.

Regular evaluations of LOTFA undertaken for each phase have not uncovered significant internal management deficiencies but note that significant problems remain in relation to Ministry processes and practice. A recent Norwegian evaluation concluded that donors were sufficiently satisfied with new safeguards introduced by UNDP to continue their support17.

Donor consultations identified consistent themes in relation to the efficacy of UNDP management.

There appeared to be general satisfaction with the responsiveness of the administrators to donors. While highly critical of past performance, there was universal acknowledgement that recent changes in senior management positions, particularly the appointment of a new Chief of the Rule of Law and Human Security Unit and the appointment of a Chief Financial Officer, had added significant management capacity. Most donors noted much improved communications and operational transparency. Concerns remain as to whether these recent appointments will result in improvements in performance at lower management levels but it was acknowledged that there are few, if any, alternative management options available.

The recent renegotiation of the Monitoring Agent’s contract that intensifies the level of ministry oversight and the progression of payroll systems development to a point that makes the blocking of salaries to unverified officers feasible, has further improved the level of confidence in the quality of UNDP/LOTFA management.

Key Messages

Donors consider current Fund management effective noting sound senior management appointments, improved communications, operational transparency and donor engagement.

Regular evaluations of LOTFA have not uncovered significant internal management deficiencies but note that significant problems remain in relation to Ministry processes and practice. Procurement fraud and the payment of salaries to ‘ghost police’ remain significant concerns for donors.

17 Afghanistan Country Evaluation Brief 7/2016, NORAD, November, 2016

15

LOTFA faces very complex management challenges - balancing the need to bring transparency, accountability and effectiveness to Ministry, Police and Correctional operations while avoiding becoming a catalyst for resistance and instability as change processes challenge existing political and institutional arrangements long structured to extract rent and influence.

The need to accelerate the reform process and maintain the integrity of payroll processes while not unduly straining absorptive capacity or destabilising police operations remains a significant challenge for stakeholders.

6. Is UNDP’s monitoring and evaluation and related reporting sufficient for DFAT’s requirements?

Commentary in this section should be considered in conjunction with suggestions around supplementary assessments proposed in Section 4.2.

6.1 SPM Component

To the extent that DFAT is focussed on the SPM component of LOTFA, the reporting on progress against most outputs is clear and well-targeted. The outputs in the SPM component are well-suited to quantitative reporting.

The critical elements of SPM—such as progress towards full electronic funds transfer of salaries, the progressive verification and reconciliation of staff records, the tracking of funds transferred to MoF and the analysis of the eligibility of expenditures—are easy to present and provide a good vehicle for assessing progress towards well defined end targets both within the program’s results framework and the DCMF.

Monitoring of payroll expenditures is a key issue for donors. The Monitoring Agent’s contract was recently varied to require 75% expenditure and physical verification of random sample of payments across all 34 provinces - an increase from the previous 60%. While this intensity of monitoring provides strong assurances that payment processing is accountable, its adequacy as a protection against misappropriation can only be properly assessed if the staff establishment records are correct.

LOTFA’s and CSTC-A’s combined efforts to complete biometric identification of officers and the necessary database updates remains a critical exercise. Until such time as salary payments are only made to police with valid biometric ID cards, and have been matched in both the WEPS and AHRMIS (currently around 51% complete) or later, in an integrated APPS, LOTFA cannot claim that there is no abuse of the payroll.

It has recently been agreed that, following the issuing of warnings in November to police who have not made themselves available for biometric identification, salaries of police whose personal and biometric details have not been verified will not automatically receive payment from January/February 201818. This is a significant development that will help to assure donors of the integrity of the system.

18 Note there is system capability to release payment with 72 hours of verification.

16

Leaving to one side questions around the integrity of staff payroll records, ineligible expenditure claims appear to be running at well below 0.5%19. While low, a continuing concern of donors is the 6 to 8-month lag between the time of funds advance to MoF and the verification of expenditures.

Despite the Monitoring Agent applying additional resources to the task, to date LOTFA has had little success in reducing this time lag. Unless LOTFA moves incrementally from payment advances to ex-post reimbursement (an approach used in the ARTF but acknowledged as being much more difficult to apply in the area of salaries), donors will need to accept this lag.

Quarterly progress reporting generally provides only a snapshot of progress and is insufficient for informing donors, government and fund managers of the effectiveness of supported activity and for generating evidence to inform future implementation. Deeper and more targeted evaluations are needed to meet these management requirements.

In the last year, two such reports have been undertaken for the SPM component: Report on the Results of Follow up of Micro Capacity Assessment (MCA) for Payroll of the

Ministry of Internal Affairs – October 2016 Final Report on Payroll Structure and Sustainability Strategy - December 2016.

While these reports provide valuable insights into particular areas of operation, some donors expressed concern (in the case of the MCA) that, in not drawing out clearly the consequences of underperformance, these reports were insufficiently critical and provided insufficient guidance on future actions. Further, concerns were expressed that advice from LOTFA management confirming what changes are being introduced in response to the findings and recommendations appear cursory20.

Despite concerns expressed in consultations about their adequacy, as well as being of critical utility to project managers, these exercises do generate useful insights into overall performance, and their continued generation should be encouraged and more widely used for monitoring and evaluation purposes by DFAT.

LOTFA should be encouraged to provide greater detail of the management response to findings and recommendations arising from these exercises to give greater assurance that efforts to maintain the effectiveness of program interventions are being maximised.

6.2 MPD Component

The MPD component is generally underachieving against agreed performance targets.

While reporting on SPM is clear and well-targeted, more challenging is the reporting of those elements of program activity that are not process-based and thus are not so easy to quantify. Most of these reside in the MPD component.

Using regular reporting to assess the quality of efforts to strengthen the legislative, policy and regulatory framework, the efficiency and appropriateness of new business processes, the utility and sustainability of the capacity development and institutional strengthening efforts directed at MOIA,

19 Q2, 2017 reporting indicates that expenditures of $US970,000 from $US328,869,067 advanced between January and October 2016 were found to be ineligible. 20 The 2016 annual report notes (p34) that curriculum and training plan adjustment were informed by these assessments however the recommendations in these reports go beyond the requirements for training plan adjustment.

17

ANP and GDPDC remains challenging. As with SPM reporting, many donors felt that reporting was insufficiently critical of performance. Concerns remain that progress reporting is too process- and output-focussed and deeper analysis and reporting of institutional capacity is required to provide confidence that sustainable institutional development is occurring.

While acknowledged as not being necessarily representative, independent investigations by donors have identified unanticipated actions that have eroded benefit (such as the co-option of facilities constructed for policewomen by their male counterparts or their loss of positions upon return from training).

Recognising that capacity building efforts supported under the MPD component do not fit well with the aim and frequency of quarterly progress reporting, LOTFA management and other Fund partners should be encouraged to commission less frequent but more in-depth qualitative assessments and evaluations (see further sub-section 4.2). These should focus on the most critical areas of engagement for achieving the overall reform objectives, take account of the political and structural incentives (or disincentives) to reform, seek to confirm the effectiveness of approaches applied in context and, where necessary, propose adjustments to minimise/mitigate the risk to achieving a desired outcome.

LOTFA managers should be required to produce detailed advice of actions taken to strengthen operations in response to findings and recommendations arising from these more intensive exercises.

Unlike SPM, where LOTFA and CSTC-A remain closely engaged partners in a much more transactional element of capacity building, the institutional development and police professionalization work under MPD remains much more complex and contested. A wider assessment is needed to fully evaluate the effectiveness of LOTFA’s contribution. Such an assessment could partner with other donors such as Germany who are engaged bilaterally in efforts at police civilianization and professionalization would be useful. Such an exercise would contribute valuable insights to inform decisions around the level and focus of resourcing that should be applied to MPD operations in a reconfigured LOTFA.

The more critical interrogation of national, bilateral and multilateral actions would inform wider government and international stakeholder dialogue and provide greater assurance to donors and government that the MOIA, with the support of LOTFA and others, is progressing necessary security and justice sector reform.

Key Messages

While SPM progress is satisfactory, the MPD component is generally underachieving against agreed performance targets.

Ineligible expenditure claims are running at well below 0.5% however a continuing concern of donors is the 6 to 8-month lag between the time of funds advance to MoF and the verification of expenditures.

While the intensification of monitoring by the independent agent provides strong assurances that payment processing is accountable, until salaries are only paid to those police whose biometric IDs have been matched in the HR and payroll systems, LOTFA cannot claim that there is no abuse of the payroll system.

Current progress reporting is too process- and output-focussed. Deeper analyses of institutional capacity, taking into account the political and structural incentives/

18

disincentives for reform are needed to provide confidence that sustainable institutional development is occurring.

LOTFA should provide greater detail of the management response to findings and recommendations arising from performance evaluations to provide assurance that the effectiveness of program interventions is being maximised.

7. Does UNDP’s M&E reporting allow for an adequate assessment of risks and their management, and allow for effective and timely program decision making?

From the risk documentation and reporting available, it is difficult to ascertain the effectiveness of UNDP’s risk management processes. On the basis of that observation, UNDP’s M&E reporting is considered an inadequate source for DFAT to assess the risks associated with its LOTFA investments.

The risk frameworks produced at the time of design were comprehensive, though the proposed mitigation measures are often formulaic. These do not appear to have been updated since 2015, and thus are unlikely to adequately reflect the consequences for program management of the impact of more recently emergent issues such as the introduction of the APPS, increasing levels of insecurity, changes in government policy such as that around the transfer of police units to MoD, or changes in the level of international security support.

LOTFA progress reporting identifies and comments on those risks identified in the framework that program managers have assessed as either increasing or decreasing in likelihood. The risk commentary included in quarterly reporting cannot be assumed to be a comprehensive assessment of the current risk levels.

The comprehensiveness of this approach relies heavily on the assumption that program managers are reviewing all risks in a systematic manner. The most recent SPM quarterly report narrative referred to problems with progressing mobile banking registration due to a lack of cooperation from Provincial Police Commanders. This did not appear as an elevated risk in the risk section, which might confirm a view that ongoing risk assessment (or at least the reporting of it) is cursory.

Discussions with donors confirm that LOTFA is, and will remain, a very high-risk program (even in the context of the overall high risk of working in Afghanistan). Many donors expressed concerns about whether the risk assessment and identified treatments were adequate to capture the political and structural impediments to the reforms that LOTFA is seeking to support. For instance, some donors were concerned that requirements such as the need to ensure proper ethnic representation in recruitment and other human resource management policies or some of the political economy issues that drive reform resistance do not appear in the risk assessments.

In relation to the SPM component, given the importance of fulfilling the donor conditions for payroll transition, it may have been useful to prepare a more focussed risk assessment against the achievement of those conditions. Consultations confirmed that there is evidence of malfeasance by provincial police commanders and finance officers in some provinces. The LOTFA risk framework does not address the issue of corruption with sufficient granularity to guide a programming response. In the absence of a more targeted risk assessment in the conditions framework, there is little to assure stakeholders that the issue is being managed in a manner that informs actions or impresses on government the seriousness with which failure to address ‘anomalous’ behaviour is taken, to minimise further delays in achieving transition.

19

Whether or not the development of a DCMF-specific risk assessment can be justified at this stage would depend on views on how imminent transition might be.

In viewing critical risks beyond those associated with transition, the recent decision to transfer 36,000 Afghan Border Police (ABP) and Afghan National Civil Order Police (ANCOP) to the MoD represents a major shift in LOTFA operations that will likely alter the risk environment significantly.

Donor consultations indicated differing assessments of risks associated with this decision. On one hand, many saw the transfer as making efforts to progress the civilianisation (the recruitment of civilians to perform non-police functions) and professionalization (capacity development to ensure that the police carry out their duties in a manner that accords with internationally-accepted policing and human rights standards) agendas easier, given that ABP and ANCOP are ‘fighting units’ with an elevated risk profile. On the other hand, one donor expressed concern that the transfer of ANCOP makes military intervention in domestic political demonstrations more likely - raising the potential for human rights abuse. Others were concerned that, with those transferred likely to move to higher military pay scales, there was potential for increased disaffection amongst their former ANP colleagues, again potentially raising risk levels.

These examples demonstrate the dynamism and complexity of the risk management associated with LOTFA and highlights the need for regular, proactive risk review to ensure that risk identification and the development of minimisation and mitigation strategies adequately reflects the current operational environment.

Failure to properly map risks and propose practical mitigation/minimisation strategies will inhibit the capacity of managers and their counterparts to take timely corrective action to keep implementation on track. As considered in Section 6, the complex nature of the program and its challenging implementation environment may justify more detailed risk assessments in areas of particular vulnerability. At the very least, an in-depth biannual or annual review of the risk frameworks would ensure that they reflect the current implementation environment.

Key Messages Risk assessments do not appear to have been updated since 2015 with risk reporting largely

dependent on the pro-action of individual project managers. The dynamism and complexity of the implementation environment requires regular,

proactive risk review to ensure that the development of risk minimisation and mitigation strategies adequately reflect current operational challenges.

Progress reporting does not reflect the program management consequences of emergent issues such as the introduction of the APPS, increasing levels of insecurity, changes in government policy such as that around the transfer of police units to MoD, or changes in the level of international security support.

An in-depth biannual or annual review of the risk frameworks would ensure that they reflect the current implementation environment.

8. Is DFAT’s engagement with Afghan Government/UNDP/LOTFA effective and efficient, and how can it be improved?

20

Constrained program resourcing and the insecure operational environment has challenged effective stakeholder engagement. DFAT representation at major donor/government forums has been high quality, well supported by Desk and cabled reporting and analyses of discussions and decisions arising from these events has been comprehensive. LOTFA stakeholders consulted expressed appreciation for Australia’s support and the constructive contribution DFAT makes in these events.

Monitoring of LOTFA operations has been limited largely to the SPM component. As this is where Australian Aid funding is directed, this makes operational sense. However, this focus, while efficient, is at the cost of a deeper understanding of LOTFA operations. It is not possible to obtain a sound understanding of LOTFA performance through this single lens and, to that extent, DFAT’s engagement must be considered insufficient to be truly effective.

When considering the survival functions of the state21 - the political settlement, security, justice and the rule of law, and basic administrative and fiscal capacity - and reflecting on the institutional effectiveness, accountability and equality agenda that underpins Australia’s aid engagement22, LOTFA must be a core focus for DFAT engagement.

As with the management of the entire Afghanistan Aid Program, the challenge for DFAT is to maintain engagement with stakeholders in a highly insecure environment that severely inhibits movement and determines an A-based posting arrangement that results in a high-turnover of representation.

When taking into account the necessity for decompression leave, each A-based posting is cumulatively of 9-month duration. Compounding this, the recent deterioration in the level of security has resulted in further contraction of A-based staffing to 2 full time equivalent (FTE) staff. The program is highly reliant on good quality O-based staff who provide important continuity in program management and the maintenance of national relationships. However, activity in the security space is very sensitive and there will always be, no matter their capacity, limits to the ability of O-based staff to pursue an Australian foreign policy and aid agenda.

Given the complexities and sensitivities of Australia’s aid program in Afghanistan, these restrictions require an engagement strategy focussed on only policy and programming priorities fundamental to Australia’s core aid objectives of promoting prosperity, reducing poverty and enhancing security23.

Consultations with both posted DFAT officers and other donors highlighted that the nature of LOTFA required significant, on-the-ground donor caucusing and engagement with Fund management and the GIROA. All donors consulted confirmed that LOTFA was a high maintenance management commitment requiring regular, sensitive and technically complex engagement most of which is conducted in-country.

While capitals can take the load in consolidating intelligence into reporting and providing technical and policy advice to support in-country engagement, the general consensus among donors was that a program of this nature cannot be remotely managed.

Considering Australia’s aid program to Afghanistan and DFAT’s operational limitations, the two areas that present the greatest risk for achieving Australia’s aid objectives and managing its reputational risk are:

21 Building the State and Securing the Peace, DFID 200922 DFAT Aid Investment Plan- Afghanistan Program 2015-16 to 2017-1823 Australian Aid: Promoting prosperity, reducing poverty, enhancing stability, Australian Government, 2014

21

the direct bilateral investments (principally that focussed on ending violence against women) which afford Australia a profile in the country; and

LOTFA which, in seeking to support development of an effective and accountable civilian policing apparatus, engages with the most critical of the survival functions of government - ensuring the country’s domestic security.

Both investments support actions designed to protect civilian populations and ensure adherence to fundamental human rights principles. Failure could result in significant reputational damage to Australian Aid.

LOTFA engagement to date has focussed largely on the SPM element given the direction of Australian funding. Discussions with posted officers confirm that, while the importance of LOTFA’s broader remit is recognised, successive reductions in management resources have made wider engagement impractical.

If DFAT’s overarching good governance objectives are to be pursued there is need to elevate engagement both at Post and Desk beyond the narrow focus on SPM. ANP and the GDPDC effectiveness and sustainability lie largely with the success of the MPD component (in concert with the reform efforts of others working in the domestic security sector).

While the direction of funds to payroll will necessitate continued vigilance over SPM operations, several factors will necessitate a step change in the focus of program management. These factors include:

the likely transition of payroll management to MOIA; a possible 25% reduction in payroll resulting from ABP and ANCOP transfers to MoD; completion of the Personnel Asset Inventory; and the potential establishment of windows to finance broader justice and anti-corruption

investments.

The first three factors suggest a reduced focus on SPM operations while the last will demand greater attention particularly if DFAT decides to direct some investment to these program elements.

These foreshadowed changes in LOTFA operations offer an opportunity to recalibrate DFAT’s engagement strategy. Under draft TORs for future LOTFA programming, it is possible that, following transition, future payroll capacity building will be merged with the wider capacity building remit currently delivered under the MPD component. Under such a restructure, SPM would focus solely on on-budget financing, audit and compliance.

Recognising these potential changes to LOTFA, the overarching objectives of aid to Afghanistan and the likelihood that program management resources will remain constrained, DFAT should:

Place greater reliance on its larger, like-minded donor partners, particular its ‘five eyes’ partners Canada, the UK and US, to monitor the adequacy of payroll funds management.

Engage more directly in a few foundational elements associated with institutional strengthening and reform. In particular, the professionalization of police specifically the shift in operational focus to community-based policing (which would also benefit Australia’s EVAW investments) and the internal control and accountability capability of MOIA; and

promote active dialogue between donors and government on a more explicit sustainability agenda that critically examines issues such as the size of the force, the civilianisation of non-police functions, the fiscal realism of pay and conditions and the need to commence a

22

process, no matter how incremental, of shifting the recurrent cost burden from donors to the GIROA.

This paper recognises that even this limited agenda is ambitious in light of resources.

DFAT will need to access expert technical support if it is to be an engaged and informed player in discussions around police reform and if it chooses to invest in the wider investment opportunities presented by an expanded LOTFA. The development agendas proposed here are likely to draw DFAT into specialised areas associated with the political economy and operational requirements of police reform and the interdependencies that will inevitably arise in conjunction with broader efforts to reform the justice sector.

DFAT should engage expertise on justice sector reform (with a focus principally on police) to support more substantive engagement. The Australian Aid program has a long history of engagement in police reform. While this has been largely in the Pacific, the principles of effective, community-focussed policing are universal and DFAT should be able to identify and contract the necessary expertise to support its engagement.

A further approach that may offer management efficiencies would be to encourage a more explicit division of labour amongst donors in terms of sharing the monitoring burden. Most donors are faced with similar challenges and there appears to be a general willingness to more explicitly share monitoring responsibilities to enable deeper and wider coverage of the issues.

It is acknowledged that shared information may be restricted by national security considerations or be coloured by the views and policies of the lead donor on that issue, but in such a restrictive environment, such a compromise may be justified when the alternative is to allow some elements to go unmonitored.

As with the recommendations made in the recent ARTF review24, DFAT should establish a Policy Dialogue and Partnership Engagement Strategy that supports focussed, coherent and influential engagement with LOTFA stakeholders. Such a plan would not only identify those areas that DFAT might focus its engagement, but might also provide a vehicle for mapping the allocation of monitoring responsibilities across partners. The plan would also support a more rigorous and systematic handover between outgoing and incoming A-based officers – an important issue given the frequency of turnover in the Afghanistan Program context.

Key Messages DFAT engagement in high level forums is comprehensive, well supported by Desk and

respected by other stakeholders. However, operational monitoring is limited to SPM and is likely to be inadequate for assessing whole-of-fund performance effectively.

LOTFA is a high maintenance investment requiring regular, sensitive and technically complex engagement. On-the-ground donor caucusing and engagement with Fund management and the GIROA is critical and is not well suited to remote management.

Given restrictions on Post operations, the use of a Policy Dialogue and Partnership Engagement Strategy to support, coherent and influential engagement focussed on core priorities is needed.

DFAT should promote a division of labour amongst donors to share the monitoring burden.

24 Review of the Afghanistan Reconstruction Trust Fund, DFAT, February 2017

23

Changes in Fund focus following payroll transition will necessitate a step change in program management. To achieve overarching good governance objectives there is need to elevate engagement both at Post and Desk beyond the narrow focus on SPM.

Given program management constraints, DFAT should:o Place greater reliance on larger, like-minded donor partners, to monitor the

continued adequacy of payroll funds oversight.o Engage more directly on issues such as the professionalization of police and the

internal control and accountability capacity of MOIA; ando promote a more active dialogue between donors and government around issues

critical to long term sustainability including force size, the civilianisation of non-police functions, the fiscal realism of pay and conditions and the need to shift the recurrent cost burden incrementally from donors to the GIROA.

The contracting of expertise in justice sector reform (with a focus principally on police operations) would support more substantive engagement.

9. What are DFAT’s options to advocate for gender equality through LOTFA?

LOTFA is performing poorly in relation to advancing gender equality and women’s empowerment. The focus of the SPM component is not conducive to a substantive engagement on gender and DFAT will need to engage more directly with the MPD component given its institutional strengthening objectives if it wishes to advocate more substantively on the issue.

Even with such a shift in engagement, progress within LOTFA’s remit will likely be modest at best and long-term engagement in activity (such as that associated with DFAT’s EVAW investments) that promotes attitudinal and behavioural change across Afghan society is essential if significant and sustained improvement is to be achieved.

MOIA’s 10-year vision statement calls for the ANP to enforce the rule of law, maintain public order and security; detect and fight crimes; control borders; protect the rights, assets and freedoms of both Afghans and foreigners according to national laws and operate without ethnic, gender, language or religious discrimination. To achieve this vision the ANP and GDPCD must have an adequate and properly supported establishment of female officers.

LOTFA’s entry point for promoting women’s participation in policing are founded in its responsibility to support MOIA efforts in line with its 5-year Strategy to increase the participation and improve the working conditions for women in the Ministry of Interior and improve human rights including child protection and prevention of gender-based violence25.

Even more than in other areas of development assistance to Afghanistan, efforts to support a gender empowerment agenda are challenging in the security sector.

A review of recent progress reports reveals limited progress in pursuing the gender-related reforms identified in the project design documentation. Despite a minimal target of 5,000 female police by 2014, currently less than 2% of police are female (2756 out of the 143,983 on the payroll 26),

25 Goal 3, Objective 3, Ministry of Interior Five-year Strategy 1394-139826 SPM Progress Report - Quarter 2, 2017, UNDP

24

representing only a 17% increase on the 2014 establishment27. Those that are recruited are mostly confined to lower ranks.

The reasons for this imbalance are many. A legacy of discrimination in educational opportunity, entrenched cultural barriers to women’s employment both broadly and particularly in the security forces, well documented evidence of mistreatment by male colleagues coupled with a lack of infrastructure supportive of women’s employment, all act to supress women’s engagement and retention.

In the SPM component, the key contribution to advancements in gender equality has been the systems developments that have enabled gender disaggregation of pay and human resource management data. This transparency is a foundational but minimal requirement for informing debate and monitoring progress towards achieving a better gender balance within the Ministry and its police and correctional services.

Performance in the MPD component, which has more explicit responsibilities for mainstreaming gender, has been patchy at best. Donors noted that civilian recruitment remains predominantly male, and the gender/human rights elements of the professionalization agenda remain off track. 250 female recruits trained through the Sivas program28 have been deployed but support for those deployed both in terms of management and working conditions remain inadequate. Outside these efforts to support new female recruits, little is done for women who are already in the police force.

Where direct efforts have been made to reduce the barriers to female engagement, donors reported that these have often failed, been co-opted or resulted in pushback. Donors and program managers noted that women police returning from Sivas training have found their positions abolished or taken by male recruits, and the toilet and dressing facilities constructed for women have often been taken over by male officers.

Similarly, the drive to achieve these modest gender targets runs the risk of encouraging the recruitment of poorly educated women (the reviewer was advised that most female applicants were functionally illiterate), fuelling discontent amongst the ranks of their male counterparts and reinforcing perceptions that women cannot fulfil policing functions.

In considering DFAT’s options for advocating gender equality under LOTFA, a focus solely on the SPM component will achieve little. While the systems enhancements supported under SPM provide the gender-disaggregated data needed to support advocacy, they will not, of themselves, accelerate female recruitment or deliver greater gender equality in operations and management.

At the current stage of institutional development, LOTFA should not be driven to focus on achieving specific recruitment targets but should rather work to establish the conditions that make policing a viable career for women. Some donors considered that LOTFA has not undertaken sufficient research on the cultural and institutional drivers that shape how women police are viewed and how the operational environment could be modified to make it more conducive to an expanded and influential female presence29. Without that foundational work, most donors believed that female recruitment will remain tokenistic and unsustainable.

27 DFAT Cable KB5028L28 This program provides basic police training to female recruits and is conducted in Sivas, Turkey 29 MPD has commissioned an institutional self-assessment on gender that it hopes will inform the direction

and content of future programming.

25

As outlined in Section 8, progress in this area will necessitate deeper engagement in the MPD component. Particular areas of LOTFA-supported activity that are likely to be the most influential to the successful recruitment and retention of female police and ensuring that police respect human rights and perform their duties in a non-discriminatory manner include:

Review, reform and socialisation of the legal and regulatory frameworks that provide the statutory basis for law enforcement operations to ensure that operations conform to human rights and professional policing principles;

Assessment of MOIA’s technical capacity for gender strategy implementation, results monitoring and coordination and participation of relevant directorates to fulfil MOIA’s gender obligations;

The continued construction of facilities for female officers (acknowledging the challenges involved in ensuring their reservation for female police officers);

The development and implementation of human resource policies and capacity development programs that support and reward behaviours in senior management and amongst male police officers that are supportive of women colleagues and which help bridge the education/competency gaps that inhibit the recruitment of women with the capacity to perform police functions.

DFAT should recognise explicitly the crossover of this work with work being supported through its EVAW programming. The EVAW program currently supports the development of Family Response Units within the ANP’s Criminal Investigation Department to respond to incidents of gender based violence and will be delivering an expanded program of training to police on EVAW and interactions with survivors in its next phase commencing in July 2018. The partnerships supported under this bilateral program provide an avenue to triangulate the evidence that police reforms in the gender space are being received positively by the wider Afghan community.

It may also be worth working more closely with Canada to progress this agenda noting that Canada is currently Co-chair of the International Police Coordination Board and is in a strong position to influence policy directions in this area.

Again, given the limited resources available to DFAT, hard decisions will need to be made about which areas of engagement best fulfil Australia’s gender empowerment objectives. Close cooperation between DFAT’s LOTFA and EVAW programs, and partnership with other LOTFA donors with similar gender objectives is likely to be the most resource-effective way to approach its advocacy in this area.

A more detailed commentary on LOTFA’s support of gender mainstreaming is provided at Attachment 5.

Key Messages LOTFA is performing poorly in relation to advancing gender equality and women’s

empowerment within the Police and Correctional Services. Management support and working conditions for female officers remain inadequate.

DFAT needs to engage more directly with the MPD component if it wishes to advocate more substantively on this issue within LOTFA.

A focus on recruitment will likely continue to be ineffective and a reorientation of priorities on establishing the conditions that make policing a viable career for women should be advocated.

26

More research on the cultural and institutional drivers that shape how women police are viewed and how the operational environment could be modified to make the security services more conducive to an expanded and influential female presence would help inform more effective program interventions.

Beyond LOTFA, a focus on attitudinal and behavioural change across Afghan society is needed for sustained progress. DFAT should recognise explicitly the crossover of this investment with work being supported through its EVAW programming. The partnerships supported under this bilateral program are engaging in the change process in the ANP and can triangulate the evidence that police reforms in the gender space are being received positively by the wider Afghan community.

Coordination with Canada as the Co-chair of the International Police Coordination Board may improve policy engagement with government.

10. How might donors and the UNDP use conditionality to recognise and reward improved police conduct or encourage the incremental transfer of responsibility for financing salaries and other operational costs to government?

The SPM component of LOTFA is already largely structured around a set of donor conditions that must be met before agreement to the transfer of the payroll function to MOIA. The most recent briefing to donors30 indicates that progress towards fulfilling most of these conditions is on track for transition by end 2017 or mid 2018.

Current donor conditions need to shift from functional capacity development to establishing the foundations of a sustainable and effective police force. While maintaining a focus on transparency and accountability, future conditionality should revolve around the need to shift recurrent costs to the domestic budget, albeit incrementally, and encourage a reduction in force numbers more appropriate to meeting community policing demands and incentivise the much needed but currently lacklustre progress on professionalization.

As examined earlier, potential challenges to that trajectory include an apparent reluctance on the part of the Ministry to institute disciplinary action against officers known to have acted corruptly in relation to the manipulation of the payroll for personal financial gain (Condition B.12) and delays in implementing the APPS. Some donors believe that failure to meet these conditions may be deal breakers for a December transition and that to accede to transition in the absence of compliance (particularly with Condition B.12) will remove the leverage donors have to press for substantive action on corruption. Others consider that the vague articulation of some conditions makes compliance problematic, and that further delays in transition will sour relationships between the donors, UNDP and the Afghanistan Government making progress on other reform priorities more difficult.

The potentially imminent transition of payroll management responsibilities to MOIA, together with the significant reductions in salary costs resulting from the transfer of ABP and ANCOP personnel are driving changes to LOTFA that include its reshaping as a more standard pooled financing instrument with the capacity to support a wider justice and anti-corruption agenda.

This restructuring presents a good opportunity to review conditionality with a view to shifting the donor/government partnership from one less driven by the need to address specific administrative 30 UNDP briefing 15 August 2017 – meeting notes not available at time of drafting

27

capacities associated with payroll management towards conditions that reflect a desire to move to more normalised State governance.

Regardless of when this review of conditionality occurs, the key to this normalisation should be a more explicit and incremental shift towards government financing its own recurrent and development expenditures from domestic revenues.

Reflecting on its weak economy, with 70% of the Afghan budget funded by the international community of which 60% is allocated to the security sector, it is clear that domestic financing for its security is beyond the fiscal capacity GIROA even into the medium term. However, steps should be taken to get the government to more explicitly acknowledge its responsibilities for security and accelerate the process of moving law enforcement to more normalised and sustainable foundations. This must include starting the process of shifting the financing burden from donors to government.

While recognising the appropriateness and long-term inevitability of such fiscal responsibilities being ‘normalised’, any move to progressively transfer responsibility will require careful calibration to ensure that any conditions established are not achieved at the expense of other core government budget obligations in areas such as health and education.

Again, donor discussions confirmed an appetite for focused discussions on conditionality in policy dialogue. However, views on the depth of engagement varied. While all donors recognised that current conditionality was reaching its ‘use by date’, some believed that it would not be possible to engage in radical revisions until the lead up to the next pledging conference in 2020.

In these discussions, five potential areas were identified as appropriate candidates for conditionality:1. The introduction of line items for the basic recurrent expenditures of the domestic security

agencies into the Afghanistan Budget. Even if no funds are allocated against these items at this point, it ensures that, at the very least, the budget is shaped around heads of expenditure considered essential to a functional State budget.

2. The articulation of a financing plan that sees incremental albeit small steps to fund a progressively a larger proportion of the recurrent costs of police and correctional operations from domestic revenues.

3. Noting that many commentators have challenged the sustainability and effectiveness of a force likely to be around 100,000 at transition31, the establishment of conditions around an incremental reduction in the overall size of the police force based on an informed and independent assessment of community policing requirements.

4. Exploration of shifting donor financing from ex-anti advance to ex-post reimbursement of some areas of expenditure to give greater incentive to government to minimise the level of ineligible expenditure claims and take greater ownership for payment verification. While it is possibly unfeasible to apply this to salary payments given their time-sensitive nature, it may be possible to do this in other areas of support noting that the World Bank deploys such a financing modality to operations and maintenance budgets in the ARTF.

5. Making funding of non-critical but high priority elements of the Afghanistan Security Road Map conditional on the development and successful implementation of policies critical to the professionalization agenda including the possible force reductions proposed at point 3.

31 In Cops and Robbers: the struggle to reform the Afghan Police, Afghanistan Research and Evaluation Unit, 2007, Andrew Wilder questioned the sustainability of ANP expansion from 62,000 to 83,000 in 2007

28

In progressing the negotiation of a new set of conditions governing donor support in a reconfigured LOTFA, it is important to note the chequered history of other attempts to apply conditionality. The World Bank32 suggests that for conditionality to be effective, the program to which conditions are applied must:

be based on shared objectives and ownership; provide the means (both resources and capacities) and the policy framework necessary to

make compliance practicable; specify outcomes that can be realistically monitored; and be associated with resource needs that are urgently required in order to incentivise

compliance.

An overarching observation based on the experience associated with the donor conditions applying to SPM, is that conditions must be drafted in a manner that ensures clarity of donor and government expectations, particularly in relation to what constitutes compliance, in order to avoid uncertainty and disputation during implementation.

Some donors emphasised that conditions designed to establish the foundations for exit in the long term cannot be concluded with MOIA. These donors maintain that negotiations must involve the President’s Office if they are to be successfully established and adhered to.

Donors need to speak with one voice if negotiations with government around conditions are to be successful. Consultations highlighted that a lack of donor coherence and consistency on the conditions for engagement to date have been a barrier to the successful application of conditions.

MOIA has successfully avoided donor conditionality in the past by engaging donors individually to garner bilateral support thus avoiding the need to comply with more onerous conditionality. Such lack of solidarity within the donor community has eroded the utility of donor assistance as a means to incentivise good governance reform both through LOTFA and more broadly across development programming in Afghanistan.

Key Messages Progress towards meeting most conditions for transition of payroll are mostly on track.

Though donor concerns about MOIA disciplinary actions in relation to payment anomalies and delays in implementing the APPS may result in deferral of transition from end 2017 to mid 2018.

Donor conditions need to shift in the next phase from a focus on functional capacity development to establishing the foundations of a sustainable and effective police force.

o New conditions could include requirements to start shifting some recurrent costs to the domestic budget, rationalising force numbers and reinvigorating the much needed, but currently lacklustre, progress on professionalization.

In order to avoid uncertainty and disputation during implementation, new conditions must be drafted in a manner that ensures clarity of donor and government expectations particularly in relation to what constitutes compliance.

To be successfully negotiated, donors need to speak with one voice. To date, a lack of donor coherence around conditions has been a barrier to progress with MOIA engaging donors individually to garner bilateral support to avoid compliance with more onerous conditionality.

32 Conditionality Revisited: Concepts, Experiences and Lessons – World Bank, 2005

29

11. Other issues for consideration

In undertaking the research and consultations required to produce this report, a range of other issues have been identified that go beyond the questions proposed in the ToRs but are likely to be important areas for consideration as DFAT moves to review its funding commitments and the form and focus of its engagement with LOTFA.

11.1 Disbursement challenges

A key concern for DFAT has been the inability of LOTFA to disburse the funds advanced to it by Australia for ANP sustainment. Since 2015, disbursement rates have been around 10%, resulting in deferrals of tranche payments and creating challenges for the management of the overall program budget. At the end of August 2017, LOTFA reported to DFAT that the balance of Australian funds was $US12 million.

LOTFA’s difficulties in disbursing funds appears to stem from four factors: (1) the genesis of the fund in 2002 as simply a mechanism, renewed annually, for channelling funds for police and correctional salaries and thus not designed along typical trust fund lines, (2) a lack of discipline in pledging by donors which saw funding commitments greatly in excess of requirements, (3) the requirement by some donors (Japan and the US in particular) that funds provided must be spent in the financial year of allocation which has necessitated the preferencing of funds utilisation and (4) the significant and continuing depreciation of the Afghan against the US dollar.

Discussions with UNDP indicated that the potential balance at the end of 2017 will be between $US100 – $US200 million though others consulted anticipate the balance could be between $US300 – $US400 million.

Anticipating continuing reductions in payroll consequent of the ongoing efforts to ‘clean’ the establishment and the imminent transfer of 36,000 police to MoD, the problem of having surplus funds for payroll is likely to continue. Some consulted have suggested that mooted increases in salaries may absorb a portion of this surplus. However, mindful of the need to maintain fiscal discipline across the Afghan budget, it is likely that such pay rises will be modest and certainly insufficient to absorb the projected surplus. Major expansion of funding in other elements of the current program, including construction, risks endeavours to match spend with absorptive capacity and establish long-term, fiscally-sustainable operations.

UNDP is currently moving to restructure LOTFA to expand the ToRs for the Fund to allow it to engage across the wider justice sector and support anti-corruption efforts. These funding windows will offer new disbursement opportunities and allow for greater pooling of funds ensuring that the level of disbursement is equalised across donor contributors.

Noting that the SPM component of LOTFA will not be moved to a pooled operation, should Australia continue to finance SPM, it will need to do so knowing that the disbursement problems experienced to date may continue. Improvement will only occur if donors decide to drastically reduce their financing in this area.

Recognising that the payroll will inevitably shrink upon finalisation of the Personal Asset Inventory and the transfer of ANCOP and ABP members to MoD, most donors indicated that they are considering reductions in their contributions. The size of these reductions cannot be quantified at this time.

30

Alternatively, Australia could shift some or most funds out of SPM to an expanded MPD component (see further Section 11.4) if it wishes to maintain the focus on ANP sustainment, or participate in the wider pooled elements of LOTFA. This would necessitate a change in policy to shift the focus of Australian aid to broader justice sector and anti-corruption reform. Such a move would broaden the scope of Australia’s aid program in Afghanistan and bring with it new and possibly unsustainable program management responsibilities.

Whether DFAT allocates its funding across the wider pooled fund or earmarks funding to MPD, it should be noted that these activities will be project-based and, unlike payroll, which has a significant recurrent cost component (police salaries), are likely to have ‘lumpy’ disbursement patterns.

Given weak national capacity and continued concerns about the integrity of MOIA procurement processes, these projects may need to be managed by LOTFA and thus will be ‘off-budget’ challenging Australia’s pledge to commit at least 50% of its aid funding ‘on budget’. Under a project-based arrangement, UNDP/LOTFA management will likely improve but not eliminate the existing disbursement problems.

11.2 Sustainment

To date, it appears that the Australian Government has viewed sustainment narrowly - equating sustainment with financing for payroll. This has resulted in only the SPM element of LOTFA being considered an appropriate investment vehicle for meeting its commitment to fund sustainment.

A search of documentation associated with the initial Australian Government financing approval, including relevant Cabinet documents, failed to identify a clear definitional basis for this position and consultations with other donors confirm that most apply a wider definition of sustainment - encompassing all operational resourcing. This definition allows for the inclusion of funding directed to building the institutional capacity needed to manage an effective security force. The reviewer considers that this position is not inconsistent with the US Defence Department’s definition of sustainment as reproduced in Section 4.

As identified in Section 11.1, a continued focus on payroll will either require DFAT to accept continuing and possibly worsening disbursement rates or significantly reduce the financial commitment directed to LOTFA.

The acceptance of a broader definition of sustainment would allow DFAT to commit funds to the MPD component and likely result in an accelerated disbursement rate. Alternatively, current efforts by NATO to negotiate a broader definition of ODA eligibility for security sector expenditures with the OECD may offer new avenues for investment but that outcome is by no means certain and clarity may take some time to emerge33.

Over the longer term, particularly with the mooted expansion of LOTFA’s scope, it might be appropriate to reconsider the value of the commitment to ANP sustainment. An investment program that engages more widely across the justice sector will align more strongly with the commitment to support Afghanistan’s broader national development priorities.

One further issue to be considered is the potential problem created by maintaining the sustainment terminology with reference to the ANP. Sustainment is very much military terminology - its use reflects the history of international engagement that has remained largely military focussed and led.

33 Cable KB5125L – 11/6/17

31

Many assessments and indeed the GIRoA’s own vision for Afghanistan have identified the need to ‘demilitarise’ police operations in favour of a more community-based approach. The use of ranks, pay terms and conditions and operational terminology derived from its military antecedents serves to reinforce a militarised culture and creates a significant cultural barrier to the civilianisation and professionalization objectives of the MOIA Strategic Plan.

In that same vein, the application of sustainment contributes to the sense that efforts to reform the MOIA and ANP remain militarised. It would reinforce the commitment to normalise policing if the term sustainment was not applied in the context of police operational resourcing.

11.3 Restructuring of the Trust Fund

Largely driven by the excess funds, both pledged and committed to LOTFA, UNDP has embarked on a restructure of the Fund which could see the establishment of a three-component structure – a security component essentially covering LOTFA’s current remit, and two new investment windows on justice sector reform and support for anti-corruption efforts.

This move to expand the Fund’s remit as a ‘whole of Rule of Law Sector’ instrument was supported by President Ghani at the Kabul Friends of Chicago Meeting on 15 July 201734.

The donors consulted were generally supportive of this development but there were varying degrees of uncertainty about the capacity of UNDP to deliver this wider and quite ambitious program.

While most expected a push to reduce LOTFA management fees following the transition of the payroll management component35, donors anticipated that UNDP would seek to maintain the current fee structures in light of additional imposts imposed as a consequence of managing the expanding program. Most donors believed that, whether that demand for maintaining existing fee levels could be justified would depend on UNDP’s ability to demonstrate that it can attract high calibre managers with the technical and political capacity to successfully manage an increasingly complex operation. As the payroll reduces and LOTFA expands its project delivery, LOTFA’s funding will increasingly be off-budget. This will require DFAT to explore other financing avenues should it wish to maintain its commitment that 50% of aid funding will be on-budget.

Depending on the extent to which DFAT wishes to engage in this broader program, the following observations are provided against the 3 components proposed.

11.3.1 Security

The proposed restructuring of the security component is predicated on transition and would see four sub-elements based on:

Provision and monitoring of financial resources required to meet the police and corrections payrolls (largely the residual SPM responsibilities).

Institutional strengthening for improved security service delivery. Establishment and rehabilitation of critical infrastructure.

34 Cable KB5148L - 24/7/1735 One donor advised that UNDP had foreshadowed a fee reduction for the SPM component from 4% to 1%

32

Strengthening police accountability and the establishment of mechanisms for citizens’ voice for improved public trust.

This structure is logical in light of progress to date and assuming transition occurs as planned. As mentioned earlier, the Fund is likely to be restructured to allow donors to pool or earmark funding (noting that disbursement preferencing will likely remain a reality in the area of salary financing).

In considering future program content, the following priorities have been identified from the documentary review and the stakeholder consultations:

LOTFA and its monitoring agent will need to closely monitor the payroll function, particularly to develop and sustain the capability of MOIA to maintain the integrity of personnel data and reconcile transactions between the APPS and the MOF payment system.

The capacity of the OIG to undertake high quality, independent investigations and audits, and the ability and demonstrated willingness to respond to findings and implement audit recommendations.

The continued development and effective implementation of policies that incentivise professional conduct that adheres to accepted human rights standards (including importantly, the rights of women) both internally and towards the general population.

The progress on civilianisation of non-policing functions and the professionalization of the police with a particular focus on shifting policing from a militarised operation to community-based policing.

A sound and proactive focus on risk assessment and management to ensure that the effectiveness of project implementation is maximised at all times.

In the area of professionalization, some donors and researchers considered that the current reliance on traditional approaches to police capacity building based around the promulgation of policies and procedures and training will fail to embed the deep cultural change needed (both within the police and the broader community’s view of what ‘normal’ policing is). Some suggested that, in order to intensify efforts, UNDP should more actively draw from global experience in police reform and bring in advisers with well-developed expertise in reforming dysfunctional police operations. It was noted that this would be politically challenging to implement and that a more interventionist stance must be carefully calibrated to the Afghanistan context (noting a high degree of variability in police capability and in regard to the community expectation that exists at the provincial level) and noting that Germany also has a bilateral program focused in this area.

The release and implementation of the ANDSF Road Map is likely to have a significant impact on the direction of programming. According to the limited documentation available, the roadmap ‘will produce enhancements in leadership selection and management, grow Afghan Special Security Force’s and Afghan Air Force’s combat power, improve resource management, create unity of command and effort and reduce corruption. It will also shift the Afghan National Police away from combat operations to civil policing. This will in turn improve the rule of law’36.

This plan has been tightly held by a senior group of officials within Government and NATO’s Resolute Support Mission and was not accessible to this review. Noting that inputs for the development of the roadmap were largely confined to the military, many donors expressed concern that, when released, it may prove of limited value for informing future reform of the MOIA and police despite their central role in maintaining law and order. Regardless of predicted shortcomings, some donors

36 ANDSF Roadmap Information Note, NATO Resolute Support, August 2017

33

anticipate that it will be the primary government directive guiding sector reform and thus LOTFA and its partners will need to engage with it.

Depending on its influence in areas of LOTFA operation, the Roadmap may require significant engagement by donors in support of effected national agencies to ensure that’s its prescriptions are constructive for the non-military elements of Afghanistan’s security apparatus.

11.3.2 Justice

It has long been acknowledged that the administration of justice and the protection of the rule of law can only be successful if all elements of the formal justice system are functional and that its relationship with informal/traditional justice is constructive and complementary. The sector includes: police, courts, the Attorney General’s Office and its public defenders and prosecutors, remand and prison operations and ancillary programs such as legal aid, alternate dispute resolution and non-custodial diversionary initiatives.

Consultations confirmed universal acknowledgement of the value of expanding development programming to the wider justice sector. Donors however expressed some concern about the breadth of the agenda proposed. There was concern that there is currently insufficient knowledge to make informed decisions about what should be supported, how and who is best placed to provide that support in what everyone acknowledged is one of the most challenging sectors to effect change.

Noting that there are many players already operating in this space, most donors agreed that there needed to be an independent assessment of the sector which identified and prioritised the most critical reforms, mapped current initiatives and identified the partnership capabilities required to deliver support that was technically sound, contextually appropriate, and implementable given the delivery environment. Some donors emphasised that while the LOTFA funding might support this exercise, independence from multilateral, bilateral and national interests would be important. Given inevitable political dynamics, these donors believed that, in order to contribute meaningfully to planning, the assessment had to be impartial. Such an exercise could engage with and report to a government and donor reference group(s) but independence from these groups was seen as critical to avoid challenges based on partisan interests.

It was acknowledged that such mapping would take some time if done properly and that LOTFA would need to support an interim program in order to maintain government engagement and to provide the foundations for a better-informed program to be introduced over time.

11.3.3 Anti-corruption

Given acknowledgement of wide-spread and debilitating corruption in Afghanistan that is reflected in its poor global ranking, engagement in this area was seen as important by those consulted.

Even more so than other areas of justice, tackling endemic corruption requires not only structural reforms and the introduction of new capacities, but critically it requires a change in broad community perceptions of corruption, consensus around what actions constitute corrupt behaviour and acceptance of the negative impact corruption has on the development of the legitimate State and its capacity to create an environment that allows its citizens to fulfil their aspirations. These realities reinforce the challenging and very long term engagement necessary to achieve progress in this space.

34

Donors emphasised that external prescriptions for an anti-corruption agenda almost always fail. While true of much development, international assistance needs to support indigenously driven anti-corruption initiatives for any chance of success.

Most donors thought that support of the Anti-Corruption Justice Centre presented the best existing candidate for assistance but warned that activities that sought behavioural and cultural change, while important for sustainable, long-term improvement needed to proceed with great humility and care. It was also recognised that, as with other sector reforms, to be successful, anti-corruption initiatives require engagement with a capable, transparent and accountable justice system and a supportive Executive.

One area for potential support raised in consultations, bridges the anti-corruption and police professionalization agendas. The establishment of more transparent complaints mechanisms including the creation of a Police Ombudsman’s Office was seen as a potential vehicle for improving community trust in the ANP. Always acknowledging the caveat to not press for externally driven prescriptions, if there was indigenous demand, the positioning of international investigators on such a body could support national champions by providing an avenue to deflect the political pressure applied to national representatives that often undermines such anti-corruption initiatives.

It must however be acknowledged that such a proposal would challenge national sovereignty and that, to be successful, its negotiation would require sensitive, skilled negotiation between very senior and respected officials on both sides.

11.4 Police civilianization and professionalization

The importance of security sector reform has long been recognised as an essential pre-requisite for development.

Security is fundamental to people’s livelihoods, reducing poverty... it relates to personal and state safety, access to social services and political processes. It is a core government responsibility, necessary for economic and social development and vital for the protection of human rights. Security matters to the poor and other vulnerable groups, especially women and children, because bad policing, weak justice and penal systems and corrupt militaries mean that they suffer disproportionately from crime, insecurity and fear. They are consequently less likely to be able to access government services, invest in improving their own futures and escape from poverty. Security is important for improved governance. Inappropriate security structures and mechanisms can contribute to weak governance and to instability and violent conflict, which impact negatively on poverty reduction. DAC guidance on Security Sector Reform37

As discussed earlier, engagement on the reform of the payroll system, while important, is only one element of the civilianisation and professionalization of the ANP and GDPDC.

In his 2007 evaluation of the Afghan police, Andrew Wilder quoted Brigadier General Gary O’Brien, former Deputy Commander of CSTC-A, ‘There are some parts of Afghanistan where the last thing people want to see is the police showing up… The police (in some areas) are corrupt. They are part of the problem. They do not provide security for the people — they are the robbers of the people38.

37 Security System Reform and Governance, OECD 2005

38 Ibid Cops and Robbers, 2007

35

Discussions with those donors and LOTFA management engaged in the MPD component identified that, while the MPD project has been able to initiate some reform since 2015, there have been insufficient resources applied to these efforts to date and their impact beyond the central ministry and Kabul police command remains extremely limited.

The transition of SPM to MOIA provides an opportunity for UNDP and its partners to reassess the resources and the approach taken to civilianisation and professionalization within MPD.

While noting that weakness existed across MOIA and police operations, discussants particularly identified a need to prioritise greater support in areas such as:

The effective implementation and socialisation of the reforms being introduced in the Police Law, particularly at the zone and provincial levels.

Greater effort to replace uniformed police with skilled civilians in many areas of administration.

Internal audit, where challenges continue in relation to recruiting and retaining skilled auditors and ensuring senior administrative and political support for implementation of audit recommendations particularly where disciplinary action has been recommended.

Development of national capacity to develop and deliver ongoing training to police. Of particular concern is the current reliance on the Sivas training in Turkey for women officers which is considered particularly unsustainable given that in-country training facilities developed with German support are reportedly underutilised.

The reform of internal complaints and grievance mechanisms including reform of the Police Women’s Council as part of wider efforts to establish work conditions that would allow the ANP to attract and retain educated female recruits.

Review and revitalisation of police-e-mardumi (police/community initiatives) including further reform of the Community Policing Directorates and the Gender and Human Rights and Family Response Units.

Donors identified that the lack of focus on police reform was very much a legacy of the largely militarized response to Afghanistan’s security challenges with counterinsurgency continually trumping community-focussed policing for attention. The international voice for civilian policing in deliberations regarding the future of Afghan security and development has been largely silent. Those consulted noted that, unlike the military, the police did not have a powerful champion in either the national or international community. This asymmetry of influence means that police reform remains ‘the poor cousin’ when considering security sector investment.

As observed earlier in this paper, DFAT should review its singular focus on payroll management and consider broadening its support and advocacy to encourage greater investment in MPD - recognising that current levels of support are inadequate for meaningful reform. Failure to move the police from ‘militia in uniforms’ to an effective and accountable force that respects and upholds the rule of law will undermine efforts to transition Afghanistan to a stable society founded on sound democratic governance principles.

An internal review of LOTFA in early 2017 identified the critically low spend rate of the MPD Project in 2016 (just over 50% against a reduced budget of US$ 21.2 million). With the start of a new four-year phase of the MPD Project, the proposed expanded scope of LOTFA, and plans to expand the MPD Project into the regions of Afghanistan, UNDP is about to commence an independent review of all substantive and operational aspects of the project.

Engagement with this exercise provides a good opportunity for DFAT to communicate Australian Government views on the importance of police reform for the broader development of Afghanistan

36

and to influence the extent and direction of that reform and the level of resourcing, both in financial and management terms, within LOTFA.

As with the recommendations made in the recent ARTF review39, DFAT should establish a Policy Dialogue and Partnership Engagement Strategy which could support focussed, coherent and influential engagement with LOTFA stakeholders. Such a plan would not only identify those areas that DFAT might focus its engagement but also provide a means to map the possible allocation of monitoring responsibilities across donor partners for wider discussion.

Key Messages

Proposed pooled funding windows offer new disbursement opportunities. However, LOTFA’s problems with managing a funding surplus are likely to continue unless donors decide to drastically reduce funding commitments overall.

Insufficient resources have been applied to MPD to date and reform beyond the central ministry and Kabul police command has been extremely limited. By applying a broader definition of sustainment, DFAT could shift funding out of the SPM into an expanded MPD component if it wishes to maintain focus on ANP sustainment.

o Alternatively, it could participate in the new pooled elements but this would broaden its engagement across justice and anti-corruption reform increasing the program management burden.

The use of terminology, including the term sustainment, that reinforces its militarised antecedents creates a significant cultural barrier to civilianisation and professionalization objectives. It would reinforce the commitment to normalisation if these terms were not applied in the context of police operations.

The proposed move to restructure the Fund along ‘whole-of-ROL’ lines is generally supported, though donors are uncertain about the capacity of UNDP to deliver this more ambitious program.

There is insufficient knowledge available about the needs in the broader law and justice sector. Future programming decisions would benefit from an independent assessment that identified and prioritised the most critical reforms, mapped current initiatives and identified the partnerships needed to deliver technically sound, contextually appropriate and implementable programming.

Regardless of future DFAT positioning, at its most minimal, priorities for LOTFA operations post-payroll transition include:

o Continued close monitoring of the payroll function, particularly around maintaining the integrity of the APPS and its interface with the MOF payment system.

o The capacity of the OIG to undertake audits and action recommendations.o Implementation of policy that incentivises professional police conduct.o The civilianisation of non-policing functions.

UNDP should more actively draw from global experience in police reform and bring in advisers with well-developed expertise in reforming dysfunctional police operations.

While there is concern about the military-led nature of ANDSF Road Map development, its release and implementation is likely to have a significant impact on future program directions.

39 Review of the Afghanistan Reconstruction Trust Fund, DFAT, February 2017

37

o Donors may need to support national agencies to ensure that Roadmap prescriptions are constructive for the non-military elements of the security apparatus.

UNDP is about to commence an independent review of all substantive and operational aspects of the MPD component.

o DFAT should engage with this exercise and communicate Australian Government views on the importance of police reform for the broader development of Afghanistan and seek to influence the direction of reform and the level of resourcing to achieve that goal.

38

Attachment 1

Summary of key recommendations

Payroll transfer DFAT should work with donors to agree to the transfer of the management of the payroll to

MOIA by end June 2018 provided that payment of all staff not verified by the biometric audit has ceased, systems reconciliations are complete and that close monitoring of the continued integrity of the payment systems (hopefully the integrated APPS) is guaranteed by LOTFA.

If agreement to payroll transfer is not secured, UNDP should prepare a more focussed risk assessment of those conditions necessary for transfer and propose specific actions to achieve transfer as soon as practicable.

Future LOTFA management LOTFA needs to institute more regular, proactive reviews of all program risks to ensure that

risk identification and the update of minimisation and mitigation strategies adequately reflects the current operational environment.

o Given evidence of malfeasance by provincial police commanders and finance officers in some provinces, and concerns around the level of commitment to sound audit practices, a more granular assessment of the effectiveness of MOIA’s accountability mechanisms is needed to inform downstream government engagement.

UNDP should supplement standard quarterly reporting with regular, though less frequent, micro-capacity assessments of institutional performance in all areas of MOIA and Police and Correctional Services that LOTFA supports to inform adjustments to institutional strengthening and reform programming.

LOTFA should provide greater detail of the management response to findings and recommendations arising from performance evaluations and risk assessments to provide assurance that the effectiveness of program interventions is being maximised.

In preparation for imminent changes to the structure of LOTFA, UNDP should be supported to evaluate the effectiveness of the Fund’s contribution to broader non-military security sector reform. Such an exercise would contribute valuable insights into the size and focus of future MPD operations within a restructured Fund.

Future DFAT engagement with LOTFA

In preparation for the imminent transfer of payroll management to MOIA, and in light of proposed changes to the structure of LOTFA, DFAT should:

o Apply a broader definition of sustainment that allows the inclusion of investments targeting institutional strengthening and reform.

o Review the continued validity of a singular focus on financing the payroll and its management.

o Move funds into an expanded MPD component to support the professionalization of police specifically the shift in operational focus to community-based policing and the strengthening of internal control and accountability capability within MOIA.

o Work with LOTFA management, other donor contributors and government to restructure the DCMF in a manner that clearly incentivises reform, offers greater clarity around performance expectations and provides a more detailed roadmap for achieving compliance.

o Encourage a more explicit division of labour amongst donors to share the monitoring burden. In particular, seek to place greater reliance on larger, like-minded donors to monitor the adequacy of post-transfer payroll management.

39

o Promote discussions between donors and government on a more explicit sustainability agenda that critically examines issues such as the size of the force, the civilianisation of non-police functions, the fiscal realism of pay and conditions and the need to commence a process, no matter how incremental, of shifting the recurrent cost burden from donors to the GIROA. This shift should be reflected in future conditionality revisions.

DFAT should actively engage in the forthcoming review of MPD and promote Australian Government views on the importance of the contribution made by effective community policing in support of broader development of Afghanistan and influence the focus of reform efforts and the level of resourcing, both in financial and management terms, within LOTFA to that end.

DFAT should critically assess UNDP’s proposal to establish new funding windows in LOTFA to support justice and anti-corruption reform efforts against Australia’s aid objectives for Afghanistan to determine the relevance and feasibility of any future investment in the Rule of Law space. In doing so DFAT should:

o Consider UNDP’s capacity to deliver an expanded suite of investments in pursuit of a set of challenging and politically sensitive reforms.

o Consider the sustainability of the program management load for Post associated with the inclusion of a Rule of Law component.

DFAT should join with other donors to request an independent assessment of the sector to inform future LOTFA programming. The assessment should identify and prioritise the most critical reforms, map current initiatives and identify the partnership capabilities required to deliver support that is technically sound, contextually appropriate, and implementable.

Gender equality LOTFA should be encouraged to shift its approach to progressing gender equity principles

from achieving specific recruitment targets to establishing the conditions that make policing a viable career for women.

o An enhanced research agenda for LOTFA should include an examination of the cultural and institutional drivers that shape how women police are viewed with the aim of recommending how the operational environment could be modified to make the Services more accepting of an expanded and influential female presence.

DFAT’s LOTFA program management should work cooperatively with its bilateral EVAW investments to maximise synergies and triangulate views on the adherence of police to agreed human rights standards.

Internal DFAT management Regardless of the focus and level of future investment, DFAT should monitor more actively

the performance of the MPD project given the foundational contribution professional, community-focussed policing makes to long-term development.

DFAT should engage expertise in justice sector reform (with a focus principally on police) to support more substantive engagement around institutional strengthening and reform.

DFAT should establish a Policy Dialogue and Partnership Engagement Strategy that supports focussed, coherent and influential engagement with LOTFA stakeholders and a more rigorous and systematic handover between outgoing and incoming A-based officers.

40

Attachment 2

Review of UNDP-managed Law and Order Trust Fund for Afghanistan

Terms of Reference

1. Background and ContextAustralia’s CommitmentsSustainment of the Afghan National Defense and Security Forces (ANDSF) is a core priority for Australia, from both a political and development cooperation perspective.

At the NATO Chicago Summit in 2012, Australia committed to providing US$100 million per year as part of an international contribution to the sustainment of the ANDSF from 2015-2017. Responsibility for this commitment was split between the Department of Defence (US$80 million to the Afghan National Army Trust Fund) and DFAT (US$20 million from the bilateral aid program to support the Afghan National Police and General Directorate for Prison and Detention Centres).

At the NATO Warsaw Summit in July 2016, Australia announced it would continue this US$100 million commitment from 2018-2020, retaining the financial responsibility split between the two Departments. This outcome followed consideration in early 2016, by Australia’s Prime Minister, Foreign and Defence Ministers, that continuing support for the Afghan police at current levels would be a prudent investment in Afghanistan’s stability and development.

Aid Investment PlanThe 2015-2018 AIP includes ANDSF sustainment under Objective 1: Supporting the Afghan Government to maintain economic growth and institute more effective and accountable governance:

- Security remains critical to Afghanistan’s economic and social development. Australia’s commitment to ANDSF sustainment is helping to develop a professional police force that is capable of providing security to all Afghans. Australia is meeting this commitment through on-budget support provided to the UNDP-managed Law and Order Trust Fund for Afghanistan (LOTFA).

LOTFAThe Law and Order Trust Fund for Afghanistan (LOTFA) was established in 2002, as the primary funding mechanism for support to the Afghan National Police (ANP). Through LOTFA, the UNDP, in conjunction with the Afghan Ministries of Finance (MoF) and Internal Affairs (MoIA), administers the payment of police salaries under a broader program of police professionalism and institutional reform.

The Investment Design Summary prepared for LOTFA in early 2015 noted LOTFA to be the only option open to DFAT for programming its ANDSF commitments. Three key considerations determining this were:

LOTFA was one of four channels40 identified at the Chicago Summit for ANDSF Sustainment, and the only channel within DFAT’s direct remit. In October 2014, the Combined Security Transition Command-Afghanistan (CSTC-A) further specified that Pillar 1 (police salary

40 The other two active funding streams used by the International Community to channel its financial support to Afghanistan’s security forces and institutions are 1) the NATO-run Afghanistan National Army (ANA) Trust Fund, 2) the United States Afghanistan Security Forces Fund (ASFF). A 4th channel (the NATO-Russia Council Helicopter Maintenance Trust Fund Project for Afghanistan) is no longer active as a result of developments in Eastern Europe.

41

payments and associated payroll reforms – further details on other pillars are below) was the only aspect of LOTFA eligible for ANDSF Sustainment funding.

2012 Tokyo Mutual Accountability Framework (TMAF). As part of the TMAF, Australia committed to strengthening national systems by providing 50 per cent of development assistance through ‘on-budget’ support (ie, through Afghan Government systems). This is an ongoing priority for the Afghan Government and reinforced in the TMAF’s successor – the Self- Reliance Mutual Accountability Framework (SMAF). Programming ANDSF Sustainment funding ‘off-budget’, while continuing to meet the 50 per cent commitment, may require deep additional cuts to existing bilateral programs.

ODA Eligibility. Security expenditure is tightly defined under OECD DAC criteria. UNDP has assured donors that funding for LOTFA will continue to be reportable as ODA. The three other ANDSF sustainment channels have a military focus and hence may not qualify as ODA.

LOTFA had four pillars - (1) support to payroll transition; (2) institutional development; (3) ANP/Central Prison Staff professionalisation; and (4) improved police service delivery. The first pillar was the ‘sustainment’ pillar and focused on assisting Afghanistan to meet its basic security requirements. The other three were ‘sustainability’ pillars focused on institutional strengthening.

In December 2014, then newly elected President Ghani instructed UNDP to accelerate and make effective a transition of the LOTFA payroll functions to the Afghan Government and to develop national capacity for its efficient and accountable management. The new LOTFA commenced in July 2015 and now consists of two projects: (1) Support to Payroll Management Project (SPM) provides payroll management support to the MOIA and UNDP; and (2) MOIA and Police Development (MPD) Project, which is centred on developing MOIA as an institution by improving national capacity for self-sustained reform, of both it and the police services, as instruments for citizen safety and maintenance of the rule of law. These two projects were developed by the Afghan Government, MOIA, UNDP, donors and other partners.

Australia contributes to the SPM project – the only part of LOTFA considered by the US to be ODA-eligible Sustainment.41

UNDP PerformanceIn 2012, the Australian Government undertook an organisational review of the UNDP which was supplemented in 2014 by the Multilateral Effectiveness Update. Its findings indicate that the UNDP is a suitable partner for administering the payment of police salaries through LOTFA. Relevant findings include: Costs and value consciousness (Satisfactory); Partnership behaviour (Strong); Transparency and accountability (Strong); Strategic management and performance (Satisfactory).42

In December 2016, UNDP notified its donors that it held a surplus of USD302 million. UNDP further advised that Australian funds were especially underutilised with only 20 per cent of Australia’s USD40 million of funding since 2015 having been disbursed. The underspend was partly caused by the unexpectedly large quantum of donor pledges to LOTFA at Warsaw in mid-2016. However, UNDP’s poor administrative arrangements were also seen to be a problem, and were noted in DFAT’s 2017 Aid Quality Check. The underspend was seen as particularly problematic as other areas of policing, including front-line policing services, continue to suffer from insufficient resourcing.

41 DFAT AQC for Investment INK702 (LOTFA) approved in May 2016.42 DFAT’s 2015 LOTFA Investment Design Summary dated 20 May 2015.

42

UNDP has acknowledged and committed to LOTFA reform to improve administrative arrangements. In light of LOTFA’s recent performance, DFAT is currently exploring how it can best maintain its commitment to ANDSF sustainment, and is considering all eligible alternatives. Australia’s payment of the 2017 contribution is still outstanding but must be made before December 31 in order to meet its sustainment commitment.

2. Purpose The purpose of this internal DFAT review is to assess the effectiveness and appropriateness of LOTFA as the primary mechanism for Australia’s on-budget contribution to ANDSF sustainment. The review will focus on progress of LOTFA activities against designed intent and expectations; the effectiveness of UNDP’s management of LOTFA’s implementation; and the effectiveness of DFAT’s engagement as a partner with the UNDP/LOTFA.

3. Key Questions Relative to the investment intent (ie, ANDSF sustainment), are outcomes as expected at this

point? How well is the UNDP managing the Fund and engaging with partners? Is UNDP’s monitoring and evaluation (M&E) and related reporting to meet DFAT’s

requirements? Does UNDP’s M&E reporting allow for an adequate assessment of risks and their

management, and allow for effective and timely program decision making? Is DFAT’s engagement with Afghan Government/UNDP/LOTFA effective and efficient, and

how can it be improved? What are DFAT’s options to advocate for gender equality through LOTFA? Is it feasible for DFAT to introduce ‘conditionality’ to LOTFA payments around ANP on-the-

ground behaviour?

4. TimingThis internal review will take place over a three-month period commencing in July 2017 and conclude before the end of October 2017. The components and proposed time allocations are outlined below:

Activity Timing Location ResponsibilityInitial briefing 0.5 day DFAT-Barton GE , Desk &

PostDesk-based assessment of documentation 3 days DFAT-Barton

for classified documentation

GE

Preparation of discussion paper 2 days Off-site GE Following review of paper by DFAT - meeting to finalise consultation schedule

0.5 day DFAT-B GE with Desk

Stakeholder Consultations 3 days DFAT-B GE with Desk Further analysis and report drafting with first draft to be submitted to DFAT Desk

4 days Off-site GE

DFAT to review and provide feedback Afghanistan Desk and Post

Revise and submit final report to DFAT 2 days Off-site GEFinal briefing 0.5 days DFAT-B GE,

43

Afghanistan Desk and Post

Total Up to 20 days

5. ReportA brief (up to 15 pages) report, presenting findings of the consultations and assessment, with recommendations for DFAT’s ongoing management of its investment in LOTFA, as well as other investment options for meeting Australia’s sustainment commitments, including actions and timeframes where relevant.

6. Key documentsThe key documents to inform this review include:

Afghanistan AIP and Performance Framework Internal DFAT documents including Design Investment Summary, AQCs and PPAs Any political/development policy minutes/decisions/reviews which may influence

downstream investment in Afghanistan Relevant agreements with UNDP for LOTFA Key UNDP design documents for LOTFA Reports including independent evaluations, and progress reports, annual workplans, and

performance reports produced by the TF managers Any relevant reviews of the TFs previously undertaken by DFAT or other donors Any documentation that outlines the M&E framework deployed for the TF Any documentation that outlines forward planning for the TFs. Relevant Cables

44

Attachment 3

Persons/Organisations consulted43

Name Title Organisation

Zia Ahmadzae Senior Program Manager DFAT, KabulSainey Ceesay Project Manager Support for Payroll Management,

LOTFA, KabulSarah Chayes Senior Fellow Democracy and Rule of Law Program,

Carnegie Endowment, WashingtonAlan Collins Senior Corrections

AdviserUS Embassy, Kabul

Kunal Dar Chief Rule of Law and Human Security Unit, UNDP Kabul

George DuSoe US Embassy, KabulAdriaan IJsseltein Second Secretary Netherlands Embassy, KabulYunei Kim Second Secretary DFAT, KabulSu King Team Leader Security Sector Reform, DFID, KabulJustin Kraft Senior Financial Adviser CSTC-A, KabulMalcolm Leggett Counsellor DFAT. KabulStephen Leslie Senior Policy Adviser LOTFA, KabulPhilip Lupol Counsellor, Political Canadian Embassy, KabulStephen Moore Project Manager MoIA and Police Development

Project. LOTFA, KabulBen Power Director DFAT, Afghanistan DevelopmentNaeemuyllah

Samsoor Program Manager EU, Security Sector/Police Reform

Freidrich Schroder German Ministry for Economic Cooperation and Development, Berlin

Julia Schulte First Secretary German Embassy, KabulDaniel Schuurman Program Officer DFAT, Afghanistan DevelopmentMohammad Seyam Senior Program Manager DFAT, KabulZabilhullah Shinwari Development Adviser Norwegian Embassy, KabulDerek Taylor Program Manager DFAT, Afghanistan DevelopmentCarolien van Embden

AndresHumanitarian Department

Ministry of Foreign Affairs, The Hague

Valentijn Wortelboer Technical Specialist Rule of Law and Human Security Unit, UNDP Kabul

43 Post requested interviews with Deputy Minister Masood Azizi and Mr Yosufi of the MOIA, however no response had been received by the deadline for the finalisation of this report.

45

Attachment 4

Support to Payroll Management - Summary of progress44

Output 1 - MOIA Policy development and implementation – largely on track A review of the draft Payroll Procedures and Performance manual to ensure alignment with

laws and regulations was completed though Ministry endorsement was not secured as planned in the quarter. Once endorsed, the manual will be finalised for release to staff and incorporation in future training.

65% of HR policy covering recruitment, performance management, training and development, motivation and benefits and staff separation terms and conditions has been completed. The final product forms a critical element of the policy base needed for police operations and is a key foundational requirement for work the police professionalization agenda being prosecuted under the MPD Project.

Progress on implementing a communications plan to inform ANP and GPDPC staff in the provinces of benefit, entitlements and complaint procedures (largely via radio broadcasts) is off track due to procurement process delays.

Output 2 - Capacity building for payroll management – largely on track

Training for 304 PFOs/PHROs, Subject matter experts and computer operators delivered on various elements of payroll management and WEPS orientation was provided to 9 new civilian auditors in the Office of the Inspector General.

MOIA staff twinned with the LOTFA payroll team achieved required competencies and were actively involved in the WEPS ID cleansing effort.

Training levels remain off track however due to MOIA recruitment delays, deferment of some sessions and delays in finalising accounting courses with the American University of Afghanistan.

Only 15 out of 34 Provincial Police Headquarters submitted required personnel reporting using the new PERSTAT template. The reconciliation of personnel data is fundamental to ensuring the integrity of the payroll system. The fact that less than half of the provincial HQs are complying must be an issue of significant concern.

Output 3 – Systems integration and interface – largely on track

74% of WEPS records have been verified and validated with valid ID numbers a critical exercise in preparation for migration to the APPS in 2018 (December 17 target - 100%). LOTFA management notes continuing challenges with provincial FOs and HROs not using IDs when preparing payroll. Systems enhancements to be introduced in Q3 will tighten validity checks.

91% of all salaries now being paid by EFT (89%) and Mobile Money (2%) leaving 9% being paid in cash by Trusted Agents – the process most easily corrupted. This exceeds the December 2017 target of 90%.

44 Derived principally form Q2, 2017 SPM Progress Report

46

Mobile Money registration has stalled mainly due to a lack of cooperation from Provincial Police Commanders and poor coordination between the commercial banks and the company contracted to provide the service inhibiting efforts to further reduce reliance on trusted agents. It may also indicate that corrupt practices are still occurring within some provincial commands.

Output 4 – Systems infrastructure development - off track

Delays experience in connecting GDPDC offices to the MOIA Intranet which is hampering the roll out of WEPS in 20 provinces. Problems arising from limitations associated with MOIAs contract with its communications service provider appears to be at the heart of the problem and is proving challenging to resolve.

The establishment of a disaster risk reduction site has been halted following communication with MOIA which does not consider it necessary given a proposed joint solution with MOD. This however poses a threat to data protection in the interim. Further, reduced resourcing of CSTC-A means that there will no longer be the capacity to mobilise military transport assets to deliver pays to remote regions following an escalation in insurgency.

Output 5 – Funds transfer to MOF for police pay – on track

$US210,503,882 was advanced from January to June 2017 with $US200,388,806 expended leaving a balance of $US10,115,076.

The expenditure verification exercise performed by the monitoring agent identified $US970,000 in potentially ineligible expenditures for funds advanced from January to October 2016 (representing 0.3% of expenditure).

While the level of ineligible expenditure appears low, it must be noted that this does not capture invalid payments to ‘ghost’ police. Until the Personnel Asset Inventory involving the bio-metric identification of officers is completed, potentially many ghost staff remain on the payroll.

An exercise undertaken in June-July 2016 in cooperation with CSTC-A to undertake a secondary check of 1928 police who had previously not made themselves available for physical verification failed to identify 1323 officers. Following blocking of salary payments in February, only 269 came forward for subsequent verification. Just this small sample exercise resulted in an estimated saving of $US1 million and highlights that significant levels of funds misappropriation are still occurring and points to the need for further strengthening of systems controls.

In November, LOTFA plans to notify all staff without biometric identification that their pays will be blocked from February/March 2018 until they have been physically verified.

47

MOIA and Police Development - Summary of progress45

Component 1 – Institutional Development

Output 1 - MOIA Capacity to lead and reform – largely on track 128 of 191 civilian positions have been filled (no gender disaggregation provided) – 29

vacant positions will be filled by current SPM staff following transition. Assessment of the alignment of MOIA’s strategic planning, program budgeting, aid

coordination and M&E functions was completed. The new program structure is designed to support more efficient budget allocation and execution.

With the assistance of the aid management database introduced to assist MOIA to better align aid projects and other external support with the Strategic Plan, an aid effectiveness strategy identifying gaps and duplication in technical support was approved by the Deputy Minister of Policy.

The implementation of a functional M&E system is off track due to delays in staff recruitment.

Output 2 - MOIA administrative and police services – largely on track

Systems platforms and required IT infrastructure being progressively introduced to support enterprise resource planning. To date, systems have been introduced to support the management of health services, project monitoring and document management.

A monitoring and evaluation framework and associated questionnaire developed to evaluate Gender mainstreaming efforts by MOIA directorates as specified in their annual work plans.

MOIA supported to develop a recruitment outreach campaign to encourage women to join the ANP.

Output 3 – Internal control and accountability – largely on track

Development of a training workbook on compliance and expenditure audits. Four live audits (Finance and Procurement Departments, Afghan Border Police and Police

Headquarters) conducted by OIG staff. Assessment of internal audit capability yet to occur. Evaluation of the acceptance of the internal complaints mechanism yet to occur.

Component 2 Police Professionalization

Output 1 – Police legislative, regulatory and policy framework – off track

25 of 31 recommendations of the Police Law Reform Working Group relating to revisions of the Police Law that regulates police conduct were approved. Recommendations relate to police mandates, sub-national structure and governance, relations and linkages with other justice institutions, qualification and skills of police, transparency and gender and human rights.

Delayed consultant recruitment is inhibiting progress on efforts to introduce a stronger human rights focus to ministry and police operations.

45 derived principally from Q2, 2017 MPD Progress Report.

48

Output 2 – MOIA training and leadership development – largely on track

The ANP Bachelor’s degree program was recognised by the Ministry of Higher Education. A partnership between the MOIA and the American University to implement a Masters of

Arts in Education and Law Enforcement was formalised. A two-month follow up course was completed for 250 female trainees of the Sivas Training

Program. A Training and Refurbishment Needs Report covering the central and two regional training

centres was completed. Inclusion of gender and human rights training curriculum for the Masters and Leadership

Programs is off track - awaiting MOIA approval.

Output 3 – ANP community partnership approaches – off track

Preparations finalised for the roll out of a District Security Monitoring Baseline Survey to measure ANP performance and community satisfaction with police service delivery.

Police-e-Mardumi (Community Oriented Policing) Policy was revised to reflect provincial variation based on the level of security and cultural/tribal differences.

Establishment of Police Women’s Councils, information desks and Family Response Units off track due to approval delays and the need to reformulate plans and interventions for FRUs and PWCs46.

Component 3 – Construction – partially off track

Due to delays in securing National Procurement Committee approval, a number of contract terminations and amendments are stalled.

Construction commenced on female toilets and dressing rooms in six locations in Nangarhar and 14 locations in Herat. Overall target of 50-60 facilities across the country.

Site assessment completed for the refurbishment of training centres in Kandahar and Parwan.

46 Noted in Q1 Progress reporting but not referenced in Q2 report.

49

Attachment 5

Gender – commentary on progress47

To support the implementation of MOIA’s Ten-Year Vision UNDP has adopted a two-pronged strategy: 1) advancement of enabling organisational culture and capacity to change discriminatory attitudes of police personnel; and 2) advancement of effective gender-sensitive policing services through support for women's entry into the police service and capacity building of female police officers to carry out their respective roles and responsibilities.

The SPM has updated systems and human resource processes to enable the capture of gender-disaggregated data. As at June 2017, Women account for 2756 out of the 143,983 on the payroll. Those employed are mostly confined to lower ranks.

With regard to policy and legislative foundations for gender-focussed operations, LOTFA has supported the development of specific recommendations of the Police Law and regulations and policies related to the rights of women in the police service and the inclusion of gender perspective into the Roadmap for Civilianization and the MOIA Education Policy. It does not appear that these reforms are yet to progress to implementation so their effectiveness in changing the institutional culture in a manner supportive of women in the service cannot be evaluated at this time.

Information campaigns in support of community outreach and safety and the training of female police involving community initiatives such as the Police e-Mardumi and Family Response Units have been supported however these efforts will need to be reviewed in due course to establish their effectiveness in both tackling gender-based violence and improving the relationship between police and women within the community. Intelligence gathered by donors and identified in the review of DFAT’s EVAW investment would indicate continuing dysfunction in these areas particularly for operations at the provincial level.

Current efforts to ensure gender-sensitive community focussed policing is adequately informing police operations are considered by donors consulted as insufficient. Reform in this area is acknowledged as being challenging and highly incremental, necessitating changing attitudes in both the police and the broader community.

In relation to the civilianisation agenda, recruitment to administrative roles is still predominantly male (only 6 of 105 positions targeted have been filled by female candidates 48). Policy reforms designed to support active gender mainstreaming have been stalled awaiting the implementation of a participation assessment to identify the processes and structural barriers to female participation within the Ministry.

In the area of police professionalization, particularly the extent to which police operations respect human rights, progress appears largely off track due to stalled legislative reforms and delays in specialist recruitment in the MPD component. The 250 female participants in the Japanese-funded Sivas training program have been deployed and UNDP is working actively with the Ministry to develop a protection strategy for these officers – this strategy seeks to ensure that there are no

47 Data derived principally from LOTFA 2016 Annual Progress Report, MPD Progress Report Qtr 1 and SPM Progress Report - Qtr 2, 2017, UNDP

48 MPD Reporting Qtr 1, 2017, UNDP

50

single officer deployments to police commands and identifies provinces where women police cannot be deployed. The need for such a strategy reinforces the challenges faced by women in the Force.

The provision of toilets and dressing facilities for women under LOTFA in some police stations is contributing to improving work conditions. However, to date only 6 of 40 projects have been commenced and it can be anticipated that even when these are completed, significant deficits in facilities will likely remain. There is evidence that, upon completion, these facilities have been taken over by their male colleagues in some commands, undermining the capacity of the police service to offer a safe and appropriate working environment for female officers.

In relation to police engagement with women and girls in the community, the lack of progress is stark. As described in the recently completed design for Phase 2 of DFAT’s Ending Violence Against Women Program. The police often fail to protect women and are sometimes perpetrators. In a 2013 report, the Afghanistan Independent Human Rights Commission (AIHRC) found that police had engaged in 15 percent of honour killings and sexual assaults carried out against women. Given this reputation, and in a country where there is only approximately one female police officer for every 10,000 Afghan women, in the absence of directly accessible FRUs or visible women police officers, VAW survivors may not approach police stations willingly, fearing they will be arrested, their reputations compromised or worse, experience further violence49.

The most recently available MPD Progress reports indicate that efforts to improve the function of Family Response Units and Police Women’s Councils remain off track with reform plans and associated interventions being reformulated.

49 Ending Violence Against Women in Afghanistan – Phase 2 Program Design Document, September 2017

51

Attachment 6

LOTFA Donor Conditions Monitoring Framework (DCMF)

52