UNDP Statement on SIGAR claims

The United Nations Development Programme (UNDP) remains committed to continuing close cooperation
with both the Office of the Special Inspector General for Afghanistan Reconstruction (SIGAR) and other
international partners to improve the transparency and accountability of the Law and Order Trust Fund for
Afghanistan (LOTFA).

UNDP stresses the importance it places on accountability and oversight of funds entrusted to it, and in
particular in the case of LOTFA, in overseeing the transfer of payroll funds to the Ministry of Finance for
salary disbursements to the Afghanistan National Police.

With this in mind, UNDP has taken measures to mitigate and improve accountability, for example by
establishing a technical working group that brings all partners together to resolve issues related to the
payroll process. This working group has enabled partners to better understand actions needed to improve
the system. Furthermore, UNDP is in the process of contracting an international company, planned to start
in October 2014, to conduct a scoping study of the payroll process and provide recommendations to all
partners that will guide the preparation of LOTFA Phase VII, scheduled to start in January 2015.

It should be noted that UNDPs responsibility with regards to LOTFA is restricted to realization of the
outputs outlined in the project document, which has been agreed with our partners. UNDP has in fact gone
beyond that responsibility by bringing to the attention of the Government of the Islamic Republic of
Afghanistan and international partners issues related to the LOTFA payroll process that lie beyond the
parameters of UNDPs responsibility.

Preparation of the next phase of LOTFA presents an excellent opportunity for UNDP and all partners to
reach a common understanding of accountabilities and to set common expectations. UNDP is committed to
working with all our partners to improve the payroll process and to strengthen oversight of LOTFA as it
transitions to a new phase.