Fraud in Afghanistan: Analysis of Internal Control Failures

Abstract

This thesis examines instances of fuel fraud schemes in U.S.-funded reconstruction projects in Afghanistan, hypothesizing that failures in internal controls enabled these fuel fraud schemes. Applying the Committee of Sponsoring Organizations of the Treadway Commission’s Internal Control Framework, this study analyzes documented cases of prosecuted and convicted military members involved in fuel theft. This research utilizes a case study methodology to identify systemic weaknesses in internal controls and recurring patterns of failure within the fuel management systems. The findings demonstrate that the lack of an effective internal control system contributed to fuel fraud. The results highlight the need for robust internal controls and improvements to enhance accountability and reduce vulnerabilities in the fuel management systems. This study also provides actionable recommendations to strengthen financial governance in conflict areas.