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HIV/AIDS: Falling foul of the Fund

JOHANNESBURG, 31 January 2011 (IRIN) - A recent flurry of news reports on fraud in grants made by the Global Fund to Fight AIDS, Tuberculosis and Malaria has thrown the spotlight on the extent to which graft in recipient countries plagues the funding body.

Since then, Germany has suspended its US$250 million pledge pending a full investigation into the corruption; Ireland is stalling on its pledge, and Sweden has warned that it will not pay its contribution to the Fund unless more is done to prevent the misuse of money by recipient countries.

The Fund issued a statement that the alarming press reports referred "to well-known incidents that have been reported by the Global Fund and acted on last year [2010]" and that there were "no new revelations".

In November 2009, IRIN/PlusNews listed of some of the countries that had fallen foul of the Global Fund's strict accounting procedures; here is an updated version.

Mali: In December 2010 the Global Fund announced that it had suspended two grants for anti-malaria projects with immediate effect, and had terminated a third grant, to combat tuberculosis (TB), after it found evidence of misappropriation and unjustified expenditure. Management of the two suspended grants was transferred to a new principal recipient.

The grants were suspended after an investigation by the Fund’s Inspector General found that about $4 million had been misappropriated. Fraud was being committed by senior officials working for grant implementers who were submitting false invoices, creating fake bid documents and overcharging for goods and services, particularly training activities.

Other grants to Mali are also being investigated. Total grant funds approved by the Global Fund board for Mali to date amount to $128.55 million, of which $79.22 million have been disbursed.

Zambia: In June 2010, the Fund confirmed that it had not disbursed any money to Zambia's Ministry of Health since August 2009, after it found evidence of expenditures that could not be accounted for.

Disbursements were frozen after Zambian authorities uncovered fraud in the Ministry of Health. Further investigations by the Fund showed that the ministry could not safely manage grants. The Fund demanded that the ministry return $8 million in unspent funds, and that action be taken against individuals involved in the unexplained expenditures.

Philippines: In December 2009, the Fund resumed funding of all four its suspended grants for HIV/AIDS and malaria programmes after they were transferred to new principal recipients.

These grants had been administered by the Tropical Disease Foundation
(TDF) and were suspended by the Fund in September 2009 after evidence of unauthorized expenditure was discovered.

The Global Fund then signed new agreements transferring grants for anti-malaria programmes worth $31.4 million to the Pilipinas Shell Foundation, and grants of up to $1.9 million to combat HIV/AIDS were transferred to the Philippines Department of Health.

The Fund also announced that five countries - Cote d’Ivoire, Djibouti, Mali, Mauritania and Papua New Guinea – would be placed on an “Additional Safeguards Policy” list, where grant activities would be closely monitored and cash movements would be restricted.

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Theme (s): HIV/AIDS (PlusNews),

[This report does not necessarily reflect the views of the United Nations]

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