Grantees of the Global Fund to Fight AIDS, Tuberculosis (TB) and Malaria who allegedly committed fraud or misused funds unwittingly did a lot of damage to the Fund – and, many say, global health - as donors withdrew and the beleaguered organization faced a "crisis of confidence" in recent years. But the Fund has responded and is undergoing an extensive restructuring process. IRIN/PlusNews takes a look at some of the alleged fraudsters and the progress of the investigations.
2009 - Mali
Alleged culprits: Malian Ministry of Health, National Control Programme against TB, National Council for the Fight Against AIDS, and the National Programme for the Fight Against Malaria.
Allegations: In December 2010 the Global Fund announced that it had suspended two malaria grants with immediate effect, and had terminated a third TB grant after it found evidence of misappropriation and unjustified expenditure.
The Fund found that at least US$5.2 million in disbursements related to HIV, TB and malaria had been misappropriated and little money was dedicated to purchasing medicines. Organizations pilfered funds using fraudulent invoices, per diem payments and training events. The Fund’s investigation revealed that organizations often colluded with the Ministry of Health and national TB and malaria control programmes to falsify invoices, signatures, bank statements and official stamps, which were discovered buried in someone's garden.
By December 2010, the Malian authorities had arrested 15 people in connection with the allegations and the Ministry of Health had repaid $304,000. Due to possible threats against Global Fund staff, the US government provided them with protection.
The investigation into the mismanagement of HIV funds was still ongoing in July 2011.
2009 - Mauritania
Alleged culprits: The national AIDS committee, the national TB programme, two NGO networks, ROMATUB and RNLPV, the National Institute for Public Health.
Allegations: In July 2009 the Global Fund suspended funding to the executive secretariat of the national AIDS committee after finding evidence of fraudulent and unjustified expenditures. The Fund demanded the reimbursement of $1.7 million within three months, and immediate removal of the people identified as being responsible.
Fake receipts, invoices and companies had been used to defraud the Fund since 2004. According to audits by the Fund's Office of the Inspector General (OIG), various local oversight bodies had failed to bring this to the Global Fund's attention.
Officials of the national AIDS committee also instituted a kickback scheme that required payments of up to 50 percent of a grant from the NGO sub-recipient as a pre-condition for participation in Global Fund programmes. Sub-recipients were also forced to issue invoices for bogus training or expenses and then return this money to the national AIDS committee. Witnesses said this was a long-running practice at the national body and pre-dated Global Fund support.
The NGO network, ROMATUB, was an implementing partner in Global Fund tuberculosis programmes. The Fund found that the network charged for work never completed. It submitted photographs of the same people in the same locations as proof of nationwide community outreach work supposedly carried out in different villages.
The Mauritanian government cooperated in the investigations, refunding $1.7 million and arresting four national AIDS committee officials. The executive director of the national AIDS committee and all employees working on Global Fund grants were removed.
As of March 2012, the Fund did not know whether those arrested had been brought to trial, as prosecutions had not yet commenced by July 2011. According to the OIG, national law enforcement agents had not communicated with the Fund since 2009.
The OIG has recommended that any further disbursements to Mauritania be conditional upon the completion of all related criminal inquiries, and those convicted serving sentences.
Mauritania, Cote d'Ivoire, Djibouti, Mali and Papua New Guinea have been placed on an "Additional Safeguards Policy" list. Countries on this list are subjected to closer scrutiny and restrictions on financial transactions relating to grants.
2009 - Zambia
Alleged culprits: Zambian Ministry of Health and Ministry of Finance, Zambian National AIDS Network (ZNAN).
Allegations: After reports by a whistle-blower of fraud in Zambia's Ministry of Health (MoH) in 2009, the Global Fund - with help from Zambia's Office of the Auditor General - found that the ministry had misspent $6.7 million. The Ministry of Finance and National Planning had similarly misspent about $3 million and one of its accountants had defrauded the Global Fund of about $104,000.
The Fund also allegedly uncovered fraud and misuse in the Zambian National AIDS Network, then headed by former UN Special Envoy for AIDS in Africa Elizabeth Mataka. The Global Fund audit of ZNAN highlighted financial mismanagement that included the purchase of cars for personal use by ZNAN management, exorbitant salaries that were sometimes more than double the local sector standard, and the disbursement of funds to sub-recipients who could not provide auditors with financial records, as in the case of disbursements to the Maureen Mwanawasa Community Initiative, headed by Zambia's former First Lady.
The Global Fund subsequently suspended grants to all these organizations and stripped the MoH of its Principal Recipient status, transferring this responsibility to the Zambia country office of the UNDP. The change in Principle Recipient led to major delays in the distribution of funds and stock-outs of antiretroviral (ARV) and TB drugs for treating this common co-infection.
In August 2011 Zambian HIV activists delivered a petition to the national AIDS council, demanding that government seize some of ZNAN's assets in order to repay the money, and that government move to pay back some of the money on the organization's behalf - as it had done for the Ministry of Health.
2010 - Nigeria
Alleged culprits: Yakubu Gowon Centre for National Unity and International Cooperation, Christian Health Association of Nigeria.
Allegations: The Global Fund alleges that the Yakubu Gowon Centre misappropriated funds and exchanged $22 million of Global Fund money for Naira, the Nigerian currency, on the black market. At least one party involved in the transactions allegedly had previous links to money laundering, fraud and conflict diamonds. The Christian Health Association of Nigeria also engaged in black market currency trading.
As a result of the Yakubu Gowon Centre's transactions between 2005 and 2009, about $825,000 in Global Fund money for malaria programming was lost, according to a Global Fund OIG investigation report, which recommended that the Fund immediately terminate the Centre as a Principle Recipient for its grants and bar it from any future participation in Global Fund programmes.
When asked, the Yakubu Gowon Centre could not account for missing funds. In a written response to the Global Fund's investigation report, the Centre said the allegedly missing funds had gone to operational expenses, management fees, maintenance and salaries. Despite documentation demonstrating the contrary, the centre denied allegations that it had used the black market to exchange currency.
In June 2011 the Yakubu Gowon Centre was replaced as a Principle Recipient. Accounting firm KMPG, which was supposed to provide in-country financial oversight, was also relieved of its position with the Global Fund.