NEW ANP PAY DISTRIBUTION SYSTEM A POSITIVE STEP

UNCLAS SECTION 01 OF 03 KABUL 005566 SIPDIS SIPDIS STATE FOR SCA/FO DAS GASTRIGHT, SCA/A, S/CRS, S/CT, EUR/RPM STATE PASS TO USAID FOR AID/ANE, AID/DCHA/DG NSC FOR AHARRIMAN OSD FOR KIMMITT CENTCOM FOR CFC-A, CG CJTF-76, POLAD E.O. 12958: N/A TAGS: PGOV SNAR MARR AF SUBJECT: NEW ANP PAY DISTRIBUTION SYSTEM A POSITIVE STEP REF: KABUL 5499 ¶1. Summary: A recent reform of the pay distribution system in Afghanistan makes it possible for Afghan National Police employees in the provinces to receive their pay directly from a branch of the central bank or one of several commercial banks. Previously, pay was distributed by means of middlemen and much of it was pocketed by corrupt officials at all levels of the administrative chain. By the end of November the new system will be operational in 27 provinces, and it will reach 31 out of 34 provinces by the end of December. While remote districts cannot be covered under the new plan due to lack of banking infrastructure, a majority of ANP employees are now able to receive their salaries directly from a bank teller. This should prove a positive impetus for recruitment and retention in the ANP, as well as mitigating a prevalent cause of administrative corruption. End summary. ¶2. Reliable payment of salaries for the Afghan National Police (ANP) is a critical element in building a reliable police force. Traditionally, money for police salaries was transferred from the Ministry of Finance (MOF) to the Ministry of Interior (MOI),and then physically carried to the various districts within each province where it was distributed to patrolmen by a representative of the provincial police chief or governor. There were plenty of opportunities for middlemen and senior officials to take a cut before the money ever reached the hands of individual employees. Afghan Interagency Cooperation -------------- ¶3. In June 2006, Combined Security and Transition Command - Afghanistan (CSTC-A) began to develop a new payroll distribution system that would as much as possible eliminate the middlemen and tighten controls over distribution. CSTC-A Finance Transition Team officers began by obtaining Government of Afghanistan interagency cooperation through a series of meetings with representatives of MOF, MOI, Da Afghanistan Bank (DAB - the central bank),UNDP, and the INL contractor Dyncorp, which provides mentors to oversee the set up and pay process. The German Police Program Office (GPPO) was kept fully informed and has been very supportive of this initiative. ¶4. Logar province was chosen as a pilot, for a number of reasons: it is close to Kabul (within easy driving distance),there are mentors in place, it has a relatively small police population, and there had already been some registration of patrolmen (unlike in other areas, where the actual number of policemen has not been verified). The first payment under the new system was made in Logar in July. More provinces were brought on line every month thereafter. By the end of November, 27 of 34 provinces will have converted to the new system; by the end of December the number will have increased to 31, with only Day Kundi, Nimroz, and Nuristan excluded. Funds Distributed to Individual ANP Employees -------------- ¶5. Under the new distribution system, payroll is wired to provincial branches of Da Afghanistan Bank and then distributed directly to the patrolmen at KABUL 00005566 002 OF 003 the provincial bank branch (or in the case of Herat also in several district centers). The first time the payroll is distributed in this manner, a verification process takes place consisting of a personnel officer (representing the police chief), an MOI finance officer, and an MOF Mustofiat (Finance Office) officer. Having representation from the three offices minimizes opportunities for non-patrolmen to claim they are on the force when they are not. At the same time as their employment is verified, patrolmen sign up for national ID cards, a process that includes digital photos and fingerprinting. ¶6. A second stage of the program is the gradual transition from DAB to commercial banks. Four banks (Kabul Commercial Bank, Azizi Bank, Afghan International Bank, and Milli Bank) have been chartered to handle ANP payroll. Two have begun offering the service in Kabul and Nangarhar. In Kabul, an electronic funds transfer program has been established that is being used by 4,000 ANP employees. The commercial banks charge a nominal fee of 25 afghanis (50 cents) per transaction. In Kabul that expense is paid out of the internationally-funded Law and Order Trust Fund Afghanistan (LOTFA) account; in the provinces it is paid by the MOF. The commercial banks have indicated that they may eventually drop the fee, particularly if the new program results in ANP employees opening individual bank accounts. Challenges Remain -------------- ¶7. While the program is very much on track, some challenges remain. CSTC-A program designers estimate that it will take at least six months of monitoring in order for the systems to really take hold. INL mentors have been asked to take on this duty for the three days per month during which payroll is distributed. A larger problem is getting out to remote districts. ANP employees within approximately 30 miles of the provincial center are now expected to come into the capital to collect their money, and this number is estimated to constitute 80 percent of the work force within most provinces. However police in the most isolated areas are not able to participate due to a lack of banking facilities - and these are often the areas that have the highest security threat. Lack of a DAB branch in three provinces has also made it impossible to extend the program there. Another serious issue in the field is that the program makes no explicit provision for back pay: patrolmen are paid after the month they actually worked (as in the U.S. civil service),and previous irregularities in salary payments have to be addressed separately. Kickbacks remain a problem as well, even at Chief of Police level, as police in many areas are pressured to make payments to benefactors deemed responsible for getting them their jobs. Finally, there have been reports of threats and night letters against central and provincial government officials involved in implementing the new program, probably emanating from those who had been able to take a cut of the profits under the old system. Auxiliary Police Also Included -------------- ¶8. The Afghan National Auxiliary Police (ANAP) also come under this new payroll distribution plan. The delay in receiving the first paycheck due to the KABUL 00005566 003 OF 003 need to formally enroll in the system, however, together with unfulfilled claims to back pay for those transferring from the disbanded highway police, has in some cases given rise to erroneous concerns that new recruits were not going to be paid, e.g. in Zabol (reftel). This appears to have been resolved for the first 41 graduates of police training in Zabol Province, who were paid during the week of November 15-19. CSTC-A has agreed to do everything possible to speed up the paperwork so that ANAP recruits can be paid as soon as possible after their training is complete. Comment -------------- ¶9. Like everything else in Afghanistan, bringing a new, transparent payroll distribution system on line has required a tremendous amount of work, including countless hours of negotiations with all the parties. It may take some time to work out all the kinks in the program, so we will probably continue to hear of irregularities over the short term. Within a few months, however, this new plan should go far to address one of the most basic complaints associated with the ANP: that patrolmen often only receive half of their already low salary due to skimming along the way. In an environment where police reform is a major challenge, CSTC-A,s Finance Transition Team should be commended for designing and implementing this important positive change. NEUMANN