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SIGAR Inspection of INL Justice Training Transition Program


Bureau of International Narcotics and Law Enforcement Affairs
September 16, 2013

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John F. Sopko
Special Inspector General for Afghanistan Reconstruction (SIGAR)
2530 Crystal Drive
Arlington, Virginia 22202

Re: SIGAR Inspection of INL Justice Training Transition Program

Dear Mr. Sopko:

This is in response to your letter about the U.S. Department of State’s partnership with the International Development Law Organization (IDLO) to implement the Justice Training Transition Program (JTTP) in Afghanistan.

The Department of State respects the role played by the Special Inspector General for Afghanistan Reconstruction (SIGAR) in safeguarding U.S. taxpayer investment, and we share your goals of implementing programs free from waste, fraud, and abuse. The Department of State will continue to work closely with your office to address questions or concerns with any of our assistance programs associated with reconstruction in Afghanistan. Particularly as we heed Congress’ clear interest in seeing the U.S. government move away from the use of private contractors – and as we gradually reduce the military footprint that ensures security for U.S. government employees implementing assistance and development programs on the ground in Afghanistan – we are, of course, intent on finding responsible implementing partners among international organizations and non-profit, non-governmental organizations.

The Department has carefully reviewed your alert letter of July 22, 2013 and the programs that it discussed. We found that the results of JTTP thus far have been impressive, and the robust oversight and monitoring and evaluation requirements we put into place in our agreement with IDLO are fully functioning and have revealed no deficiencies in program performance or management.

As a public international organization with UN Observer Status, IDLO has its own internal auditing procedures agreed to by its member states, which includes the United States Government. In addition, as the current President of the Assembly of Parties of IDLO, the United States sits on the Standing Committee and has played a leading role in ensuring that IDLO continually improves those procedures. It is important to note that there has been no evidence—nor have allegations been made—of fraud, waste, or mismanagement of JTTP. As we would do with any project implemented by any organization, if waste, fraud, or abuse were to be uncovered, or an allegation thereof, the Department of State would promptly investigate and undertake corrective action or terminate the program. IDLO has already agreed to third-party financial auditing of JTTP. We welcome your views on the appropriate timing of such audits and potential auditors.

My staff and I stand ready to help ensure that you and your staff are able to conduct as accurate a review of JTTP as possible. In that spirit, I offer the following comments to address the various items raised in your letter:

JTTP Promotes the Sustainability of U.S. Investments in Afghanistan

The Department appreciates and concurs with the statement in your letter describing justice programs run by the Bureau of International Narcotics and Law Enforcement Affairs (INL) as “central to U.S. efforts to promote the rule of law in Afghanistan.” The Department routinely engages international organizations like IDLO for program implementation in Afghanistan and around the world because they are cost effective, offer unique capabilities and expertise, and enjoy international credibility. As not-for-profit entities that answer not only to us but also to other donors and their own governing structures, they also are subject to multiple layers of oversight.JTTP is a ground-breaking initiative within broader INL justice sector work that is transitioning legal training in Afghanistan from a primarily donor-funded and led effort to a sustainable Afghan government-provided continuing legal education system. Mechanisms like continuing legal education programs help promote stronger rule of law, protect the security of citizens through robust criminal justice capabilities, combat corruption, and create a more welcoming environment for investors in Afghanistan—all contributing to a more stable, prosperous, and secure Afghanistan. JTTP is designed to cement positive changes that have already been made in the justice sector in Afghanistan. The Afghan government has indicated that it both wants and needs the JTTP program, and is strongly vested in IDLO as an organization. As you are likely aware, the Afghan government is also a member state of IDLO.

Why the International Development Law Organization?

The Department of State has been engaged in criminal justice sector training and development projects throughout Afghanistan since 2003. The primary vehicle for training had been the Justice Sector Support Program (JSSP), which began in 2005 and was implemented by for-profit, commercial contractor Pacific Architects and Engineers (PAE). Due to the changing operational and security environment in Afghanistan, INL believed that during and after the security transition, the regional training efforts of JSSP could no longer be adequately implemented by an institutional contract with a private U.S. company. There were two primary reasons. First, during and after military transition, private contractors would no longer be able to utilize regional training centers previously secured by international forces, as these platforms were transferring to Afghan government control. Second, U.S. companies like PAE would not be exempt from President Karzai’s decrees banning private security contractors and creating the Afghan Public Protection Force (APPF), creating an uncertain future for this critical training initiative.

INL examined several options for continuing nationwide justice sector training in Afghanistan. INL ultimately selected IDLO as the best partner, and also the only feasible partner. With eleven years of experience in Afghanistan, IDLO had strong local partnerships and is a respected and known organization to the Government of Afghanistan. IDLO is the only international organization with an exclusive mandate to improve the rule of law in the developing world. As an international organization it enjoys a diplomatic waiver from using APPF for security protection. This factor weighed heavily in IDLO’s favor, as INL recognized the potential to significantly reduce security costs while also increasing freedom of movement in Afghanistan during and after transition. In addition, INL had worked with IDLO on a separate project in Afghanistan since 2010 and was familiar with IDLO’s strong and effective relationships with Afghan government officials, and—as an international organization—IDLO does not generate profit on programs it implements, and accordingly would return unspent funds to the U.S. Government or propose creative ways to use them to advance program objectives.

INL was aware that IDLO was in a period of broad organizational reform and transition when it entered into negotiations regarding JTTP, and thus worked with the organization to stand up a unit within IDLO dedicated solely to the JTTP project. As a result, the implementation unit for JTTP contains special management controls including the establishment of dedicated financial, procurement, human resources, monitoring and evaluation, legal, and program officers to run the program. The Department of State believes that the demonstrated program performance during the first six months of JTTP, including full performance, full reporting, and responsible preparation for future sustainability plans, reinforces the selection of IDLO.

The Nature of the JTTP Agreement

The funding mechanism for this project is a Letter of Agreement with a public international organization. The term used in your letter, “sole source,” is not legally applicable in this circumstance, as the INL agreement with IDLO is not a Federal Acquisition Regulation (FAR) contract—in fact, it is not a contract at all. It is a Letter of Agreement between the U.S. government and a public international organization to which it belongs. According to State Department Circular 175, the Secretary of State has delegated authority to INL to enter into Letters of Agreement with both foreign governments and also public international organizations, although the terms of those two types of agreements differ in some respects given the different status of sovereign countries versus international organizations with multiple member state parties.

Consistent with this authority, INL obligated funds to IDLO for JTTP through a Letter of Agreement that references two binding attachments: a Program Proposal and a budget. When attached to the Letter of Agreement, the 50-page Program Proposal became the official guiding document for project implementation; this document was provided to SIGAR and contains five pages exclusively addressing monitoring and evaluation and program oversight. The 805 line-item budget along with a 34-page budget justification narrative were developed jointly by IDLO and INL. These documents lay out in detail the financial plan of the program, with the budget narrative explaining and justifying each budget line-item and accounting for every dollar of the $47,759,796 project. SIGAR did not specifically ask IDLO or the Department for the JTTP project budget or budget justification. The Department will provide these documents upon SIGAR’s request.

1999 State Department Action Memorandum

In your alert letter, you referenced language from a 1999 State Department action memo regarding Circular 175, and also referenced a template containing “a ‘required’ provision establishing INL’s ‘monitoring and evaluation’ rights under agreements like the one signed with IDLO. This provision states in pertinent part:

A. Each party shall have the right . . . (2) to inspect and audit any records and accounts with respect to funds, property and contract services furnished by that party under this agreement to determine that such funds, services or property are being utilized in accordance with the terms of this agreement.

* * * *

C. Each party will furnish the other with information necessary to evaluate the effectiveness of the project operations under the terms of this agreement. At the termination of the project a completion report shall be issued as an integral part of this process. The completion report will include a summary of United States Government and [the other party’s] project contributions, a record of activities performed, objectives achieved and related basic data.”

Your letter inaccurately characterizes options from the 1999 memo as binding requirements. For example, the 1999 action memorandum states that the template language “could be used for agreements with international organizations” but it is not required. While this language has been used in bilateral agreements with foreign countries, INL has searched its records and found no instance where this language has been used in an agreement with an international organization, including a Letter of Agreement between INL and an international organization signed less than two months after the approval of the 1999 memo you cited.

This precedent suggests that the language proved fundamentally inappropriate for an agreement with an international organization for two reasons: First, the language requires mutual examination of any records relating to funds or services provided by that party. The State Department would not agree to an international organization examining its books or records, should an international organization independently make a monetary or non-monetary contribution to a project; and second, the monitoring and evaluation language cited only requires a completion report. INL went above and beyond the language you cited because we determined that stronger monitoring standards were necessary. INL’s current standard requires quarterly reports in its agreements with all international organizations. Given the importance and cost of the JTTP project, INL set the bar even higher with this IDLO agreement, requiring bi-weekly, monthly, quarterly, mid-project, and end of project reporting. In addition, INL conducts other oversight activities as described below.

Access to IDLO Records

The standard for access to the organizational finances and reports of international organizations is enshrined in U.S. law. Under the International Organizations Immunities Act, 22 U.S.C. § 288, IDLO is a “public international organization” in which the United States participates. Under this status as a public international organization, IDLO has a distinct legal personality and capacity to perform acts required to carry out its core functions. § 288 provides that IDLO “enjoys the same immunity from suit and every form of judicial process as is enjoyed by foreign governments,” and further mandates that IDLO’s property and assets “shall be immune from search, unless such immunity be expressly waived . . .The archives of international organizations shall be inviolable.” The IDLO Program Proposal further elucidates this distinction in the intellectual property section found on page 2 of the document. It states in relevant part that:

The title to intellectual property in relation to all documents and materials which IDLO develops under the terms of this program shall be vested in INL or its assignee. INL shall grant to IDLO a permanent, irrevocable, non-exclusive license to use, reproduce, adapt and otherwise exploit all such documents and materials developed by IDLO under this program. Notwithstanding the above, IDLO shall retain the intellectual property or other proprietary rights of any documents and materials that pre-existed IDLO’s performance under the Letter of Agreement or that IDLO may develop or acquire independently of its performance under the Letter of Agreement.

Under the agreement with IDLO, INL owns what it paid for and has a right to access it. IDLO is required to furnish to the Department any non-confidential records requested concerning the JTTP project specifically, and under the Letter of Agreement, INL owns and licenses to IDLO all intellectual property produced in furtherance of JTTP. IDLO is not required to release proprietary materials prepared prior to, or outside the scope of, the agreement with INL. These include proprietary training materials being used worldwide, but not on the JTTP program in Afghanistan. IDLO and INL may agree on additional safeguards to permit the conditional disclosure of confidential proprietary information used in the JTTP program in Afghanistan. It is our understanding that the only document IDLO refused to disclose in full (and instead provided excerpts of) was the Training of Trainers manual, which was not produced for JTTP training and is therefore outside SIGAR’s mandate. When informed of IDLO’s concerns for its proprietary information, SIGAR did not offer any terms or conditions to safeguard this information. Training materials or curricula prepared for JTTP in Afghanistan would be furnished if requested; SIGAR has not requested these materials.

On the broader issue of auditing IDLO as an institution, member states do not employ their own mechanisms to audit international organizations. Doing so would duplicate the work of those organizations’ own auditors, constitute an inefficient additional burden on organizations, undermine the organizations’ duty of confidentiality that normally exists in voluntary funding agreements between member states and organizations, and result in additional financial burdens to U.S. taxpayers, since a proportionate share of U.S. contributions to international organizations support the organizations’ international auditing staff. To ensure proper financial processes, international organizations conduct external audits of their financial records and make those audit results available to member states. IDLO has its own internal auditing procedures agreed to by its member states, including the U.S. Government. This includes an annual financial audit conducted by an independent firm to international auditing standards. SIGAR has not requested to review these materials.

Upon receipt of your draft alert letter, INL engaged IDLO to discuss your recommendations. As previously conveyed to SIGAR, IDLO agreed to amend the JTTP Letter of Agreement to explicitly reaffirm INL’s right to inspect IDLO records or accounts related to the JTTP program that are not of a confidential nature, which both we and IDLO believe was already assured by the original language of the Letter of Agreement.

Oversight of the JTTP Program

Although JTTP was not implemented through a contract, it was and is vitally important to the State Department that appropriate oversight provisions were included in the funding document, and that appropriate oversight personnel were assigned to manage the project.

The authority to enter into a bilateral arrangement with IDLO does not stem from the general authority to enter into contracts, but from § 481(a)(4) of the Foreign Assistance Act of 1961, as amended, which provides: “Notwithstanding any other provision of law, the President is authorized to furnish assistance to any country or international organization, on such terms and conditions as he may determine, for ... anticrime purposes.” This authority has been delegated by the President to the Secretary of State, and re-delegated to the Assistant Secretary of State for International Narcotics and Law Enforcement Affairs with prior program approval by the Director of Foreign Assistance.

Your reference to “contracting officer” and “contracting officer representative” are not applicable to bilateral international agreements. Contracting officers and contracting officer representatives are specific legal terms applying to the administration of contracts entered into under authority to contract, and as such are governed by the Federal Acquisition Regulations (see FAR Parts 1.602, 1.603, and 1.604 and definitions 2.101).

Nonetheless, the Department recognizes that program oversight is an essential and vital function to ensure appropriated funds are used for their intended purposes and that programs are effectively and efficiently managed regardless of the type of instrument used to establish obligations. Under the framework of a Letter of Agreement, the oversight functions that a contracting officer's representative would perform for contracts are provided by highly skilled and experienced program officers. INL assigned four program officers (a program officer and a Justice Team Lead in Kabul, and a program officer and a Justice Team Lead in Washington) to have primary oversight responsibility. Program officers have responsibility for frequent management meetings with IDLO, site visits, review of all required reporting, review of financial reporting, and verification of program implementation. Should changing environments or circumstances warrant program adjustments, program officers are permitted to negotiate modifications to the project which are then memorialized as amendments to the Letter of Agreement.

As part of its management of the JTTP program, INL conducts continuous communication via daily oversight of the IDLO program through email, phone calls, and site visits. In addition, every week, INL offices in Kabul and Washington conduct a joint phone call with IDLO headquarters in Rome and its field team in Kabul. To date, IDLO has completed all scheduled reporting required under the JTTP agreement, and has worked closely with INL to ensure that the reporting meets INL’s requirements. IDLO is diligently applying a results-based management approach that tracks the outputs of the programs as well as the outcomes and impact demonstrated in the Afghan justice sector. INL takes seriously its mandate to improve the criminal justice system in Afghanistan and requires implementers like IDLO to demonstrate positive change as a result of INL-funded projects.

Conclusion

The Department of State values independent oversight, including from SIGAR, and is working closely with the oversight community to protect taxpayer resources and enhance and improve the return on our investment. The Department is pleased so far with the results of JTTP and with our partnership with IDLO. We are confident that we have adequate and appropriate oversight mechanisms built into our Letter of Agreement with this public international organization. Because of our collective efforts, we believe that the Government of Afghanistan now has the ability to deploy at least a minimally adequate and functioning system that will effectively support continuing reform past the 2014 military transition. JTTP will cement that ability with a permanent training function inside Afghan government justice institutions. In doing so, it will decidedly advance the national interests of both Afghanistan and the United States.

We stand ready to answer any questions or supply any documents that would help SIGAR complete a more accurate review of the JTTP program. As always, members of the Department remain ready to meet at SIGAR’s convenience to clarify any persisting questions.

Sincerely,

James F. Dobbins
Special Representative for
Afghanistan and Pakistan

William R. Brownfield
Assistant Secretary for
International Narcotics and
Law Enforcement Affairs



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