Courtesy Photo | 1st Lt. Adam Marquis from Buffalo, N.Y., assigned to Task Force Pathfinder, meets with...... read more read more
By Capt. Randy J. Michael
CONTINGENCY OPERATING BASE ADDER, Iraq - Iraq may not be ready for Paypal, but with the help of the U.S. Army, the southern Iraqi provinces of Dhi Qar, Maysan and Al Muthanna are moving closer to a cashless system in order to deal with the mounting costs of dealing with cash.
Task Force Pathfinder is increasing its use of electronic funds transfer as a way to pay local contractors and vendors instead of stacks of Iraqi dinar. The transactions are part of the unit's role aiding the State Department's Provincial Reconstruction Teams as they build-up the Iraqi civilian infrastructure.
The benefits of this change have been immediate. The Army saves money, Soldiers eliminate the security risks associated with transporting funds and confidence in the Iraqi banking system gets an added boost with every deposit.
Today, the U.S. Army brings an estimated $42 million in currency into Iraq and Afghanistan monthly, down from $192 million per month the previous year and as much as $400 million a month in 2003. With the development of new banks, including one nearing completion at Contingency Operating Base Adder's Iraqi-Based Industrial Zone, EFT is becoming the preferred method of payment.
When paying for reconstruction projects with hard currency, the cost to the Army is an estimated $32 per payment due to the additional security costs. By contrast, EFTs costs a scant $2.50 per transaction and could save the Army an estimated $20 million annually.
Task Force Pathfinder's paying agents have handled more than $14 million in both dinar and EFT disbursements with local contractors and vendors in Maysan, Al Muthanna and Dhi Qar provinces over eight months. Another $21 million is approved and pending future payments for local humanitarian assistance projects. Most of this will be paid via EFT.
So what is the Army's delay in including this into reconstruction contracts? It isn't easy convincing Iraqi businessmen that an electronic receipt is going to pay them when for years they have received bundles of cash. Contractors need reassurance that the process works. This means both Soldiers and program managers must be well versed in the process and understand everyone's responsibility to ensure efficiency.
1st Lt. Andrew King, disbursing agent, of the 33rd Finance Management Company, deployed to COB Adder, explained the EFT process.
"We process the EFT request and send it up within the first 24 to 48 hours. Then, Baghdad releases a voucher number. At this point, it takes 5 to 7 days for the payment to reach the contractor's account," he said.
Not only is the finance company a resource, but there is also the EFT Assistance Center. The center was established and funded by the taskforce to serve as a help-desk to all the stakeholders in Iraq's newly introduced EFT payments system.
Since Oct. 2008, the assistance center has resolved over 150 EFT payment problems totaling more than $15 million. Also, they provide monthly statistical analysis of the most common EFT payment issues within Iraq, and communicate the root causes of these issues to Joint Contracting Command-Iraq, Defense Finance and Accounting Service, Department of Defense, and all other applicable government agencies.
Brig. Gen. Phillip E. McGhee, director of resource management for U.S. Army Central Command, said the Army will go cashless in theater at the beginning of the 2010 fiscal year when writing contracts with local vendors.
As the Soldiers of Task Force Pathfinder continue their efforts to build civil capacity in southern Iraq, "the transition to electronic funds transfers is a welcomed sign of progress that has the added benefit of saving the U.S. government money," added Lt. Col. Mike Eastman, commander, Task Force Pathfinder.
| Date Taken: | 01.11.2010 |
| Date Posted: | 01.11.2010 01:04 |
| Story ID: | 43639 |
| Location: | TALLIL AIR BASE, IQ |
| Web Views: | 5,942 |
| Downloads: | 5,728 |
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