WASHINGTON (Reuters) -- The anticorruption body formed by Afghan President Hamid Karzai suffers from "serious shortcomings" and lack of independence, with its top staff also serving as advisers to Karzai, a U.S. audit says.
The audit by the Special Inspector General for Afghanistan Reconstruction, was harshly critical of the High Office of Oversight, or HOO, established in July 2008 by Karzai to oversee and coordinate efforts to fight corruption, which is seen by Washington as fueling the insurgency in Afghanistan.
The report said the anticorruption institution was hugely understaffed and lacked the organizational and budgetary independence to be an effective oversight body.
"The HOO suffers from serious shortcomings as an institution both in terms of its operational capacity and the legislative framework on which it is based," said the report."
Corruption is seen as pervasive and entrenched in Afghanistan, which the watchdog group Transparency International ranked as 179th out of 180 on its annual corruption index this year.
Washington has made clear that fighting corruption must be a priority for Karzai in his new term and has cautioned him against putting "cronies" in important posts.
But the audit said the "personal independence" of both HOO's director-general and deputy were impaired because they also served as advisers to Karzai, who was reelected following a fraud-marred August election.
"I believe that holding two government positions simultaneously, compromises the independence of the HOO and can, and in this case does, create a conflict of interest," said Arnold Fields, the Special Inspector General for Afghanistan Reconstruction, or SIGAR, whose role is to oversee U.S. taxpayer funds spent in Afghanistan.
The report said both officials should resign either their HOO posts or their advisory positions for Karzai, whom they met with frequently before the election.
"HOO leadership may have been distracted because of the 2009 election," said the report, adding that one "knowledgeable" official noted the deputy director-general had often acted as Karzai's speechwriter.
So far, the Afghan anticorruption oversight body had received about $1 million in U.S. funds to cover start-up costs, said the report. It is also set to get a further $7.3 million from the United Nations Development Program.
"With this money, the HOO has undertaken anticorruption efforts with varying degrees of progress," said the report.
Citing other impairments to the HOO's independence, the report said its operating budget was administered by the Afghan government.
Another problem was staff shortages. Of the 500 employees in the body's organizational chart, only 20 percent -- or 100 -- of those positions were filled.
In addition, its oversight department had filled only 10 out of an authorized 52 positions and the complaints department did not have a proper database.