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Destroyed vehicles sit at the Herat Regional Maintenance Center, a U.S. project in Afghanistan, in 2012.

Foreign Affairs Minister Chrystia Freeland is ordering an internal review of Canadian aid to Afghanistan to determine whether taxpayer money has been wasted on questionable projects and to ensure more oversight.

Ms. Freeland said the review is necessary after The Globe and Mail reported Thursday that a U.S. watchdog agency found billions of dollars of Western foreign aid, including from Canada, had been lost to widespread corruption, waste and mismanagement.

“I think obviously we want to be sure we’re spending our money in the ways that we intended it to be spent, that it has a maximum positive impact," Ms. Freeland told reporters on Thursday at an event in Hamilton. "So I will be looking into the reports that came out today, and I think it’s something that we definitely need to study, need to be thoughtful about.”

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U.S. Special Inspector-General for Afghanistan Reconstruction John Sopko recently told The Globe that his office had found a troubling lack of financial oversight and far-reaching mismanagement of two Western trust funds – the World Bank’s Afghanistan Reconstruction Trust Fund and the United Nations-administered Law and Order Trust Fund for Afghanistan, used to train and equip Afghan security forces.

Unlike the United States, Canada does not independently audit the money it puts into Western trust funds for international aid. But Mr. Sopko said he is certain the problems he identified for U.S. taxpayers are the same for Canada.

Mr. Sopko said aid dollars have gone to build medical clinics without electricity or water, schools without children and buildings that literally melted away in the rain. In addition, local officials who were in charge of paying workers with some of the funds created what the audits called “ghost workers” – civilian bureaucrats, police and soldiers who did not exist – then diverted or kept the money recorded as being paid to those non-existent workers.

The United States is the largest donor to the two funds. According to the Library of Parliament, Canadian contributions include US$763.7-million to Afghanistan reconstruction from 2002-2018, and US$87.2-million to train Afghan police. Another US$212.9-million went to a North Atlantic Treaty Organization fund to train the Afghan army.

Ms. Freeland said her department will examine whether Canada should insist on its own independent audits of the two multibillion dollar funds or whether it should redirect those dollars to Canadian aid to projects it manages directly. Since 2002, Canada has provided more than $3-billion in foreign aid to war-ravaged Afghanistan.

“We need to take every measure to ensure that when we spend money to help other countries, which I think is a really good thing to do, that we’re spending it in ways that are effective, that Canadian money is doing what Canadians want it to do,” she said. “So I think, definitely, we need to look into all ways to be sure that money is being spent as effectively as possible.”

Asked again whether that includes independent audits or Canada leading its own funded projects, she replied: “I said all ways.”

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Ms. Freeland’s communications director, Alex Lawrence, said officials will read the U.S. Special Inspector-General’s reports before deciding next steps. Mr. Lawrence was unable to give a timeline for completion of the review.

Canada’s Department of Global Affairs had previously told The Globe that the World Bank and UN conduct comprehensive monitoring to “ensure that Canadian funds are not wasted in Afghanistan” and noted Canada has seats on the funding boards. The World Bank restricts donors' access to information on how it monitors and accounts for this funding.

Former Canadian diplomat David Mulroney, who was the deputy minister in charge of overseeing all aspects of Canada’s engagement in Afghanistan from 2007-09, said Ottawa was under heavy pressure from the UN and Europe to cut big cheques to the two funds during his tenure. Canada ended up contracting out its management responsibility for spending taxpayers’ money in a country “devastated by three decades of war, and with a system of governance more medieval than modern,” he said.

Glenn Davidson, Canadian ambassador to Afghanistan from 2012-13, said Canada had much more success in smaller projects over which it had direct control, such as working with the World Health Organization on polio eradication, midwife training and initiatives for newborn children, as well as training for farmers.

Mr. Sopko found the World Bank could not monitor US$10-billion meant for reconstruction. The United States also provided more than US$1.3-billion to the UN’s law and order fund to train and equip the Afghan police.

In an April report to the U.S. Congress, Mr. Sopko said a top aide to Afghan President Ashraf Ghani told him the World Bank fund “allows for ill-conceived projects to be funded because there is no repayment obligation and that dysfunctional projects are nearly impossible to eliminate.”

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Neither the World Bank nor the UN could assure Mr. Sopko’s office that much of this money had not gone to fictional or ghost workers. Mr. Sopko said that last month on a trip to Afghanistan, a senior U.S. official asked him to conduct yet another audit of ghost police officers, which he is planning to do.

Ms. Freeland said she would not want to see Canada give up its role in helping the Afghan people.

“Canadians know that we have a role to play there in trying to bring some peace and stability and security in Afghanistan," she said. "And there are some fantastic Canadian men and women who are working really, really hard to do that, and have been for a long.”

One hundred and fifty-eight Canadians died fighting the Taliban before combat troops were pulled out of Afghanistan in July, 2011. The Afghan government is still fighting intense battles with the Taliban across most of the country.

Canada’s foreign aid

to Afghanistan

The first chart shows how much Canada has

contributed in foreign aid to Afghanistan since

2002. The second shows how much of that aid

has gone to three funds that a U.S. report found

have little financial oversight.

Total Canadian international aid to Afghanistan

2002-2017, in millions of U.S. dollars

$350

300

250

200

150

100

50

0

‘02

2004

2006

2008

2010

2012

2014

2016

‘17

Breakdown of aid to three funds with lax oversight

Since 2002, in U.S. dollars

$1.07-billion

Total

Canadian

aid:

$3.037-

billion

Other:

$1.97-

billion

Afghanistan

Reconstruction

Fund:

$763,760,000

Afghan

National

Army:

$212,959,000

Law and Order

Trust Fund for

Afghanistan:

$87,270,942

JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE:

Parliamentary Information and Research

Service Library of Parliament

Canada’s foreign aid to Afghanistan

The first chart shows how much Canada has contributed

in foreign aid to Afghanistan since 2002. The second

shows how much of that aid has gone to three funds that

a U.S. report found have little financial oversight.

Total Canadian international aid to Afghanistan

2002-2017, in millions of U.S. dollars

$350

2017:

$232.9-

million

300

250

200

150

100

50

0

2002

2004

2006

2008

2010

2012

2014

2016

Breakdown of aid to three funds with lax oversight

Since 2002, in U.S. dollars

$1.07-billion

Total

Canadian

aid:

$3.037-

billion

Other:

$1.97-

billion

Afghanistan

Reconstruction

Fund:

$763,760,000

Afghan

National

Army:

$212,959,000

Law and Order

Trust Fund for

Afghanistan:

$87,270,942

JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE:

Parliamentary Information and Research

Service Library of Parliament

Canada’s foreign aid to Afghanistan

The first chart shows how much Canada has contributed in foreign aid to Afghanistan

since 2002. The second shows how much of that aid has gone to three funds that a U.S.

report found have little financial oversight.

Total Canadian international aid to Afghanistan

2002-2017, in millions of U.S. dollars

$350

2017:

$232.9-

million

300

250

200

150

100

50

0

2002

2004

2006

2008

2010

2012

2014

2016

Breakdown of Canadian aid to three funds with lax oversight

Since 2002, in U.S. dollars

$1.07-billion

Total

Canadian

aid:

$3.037-

billion

Other:

$1.97-billion

Afghanistan

Reconstruction

Fund:

$763,760,000

Afghan

National

Army:

$212,959,000

Law and Order

Trust Fund for

Afghanistan:

$87,270,942

JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE: Parliamentary Information

and Research Service Library of Parliament

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