Friday, October 7, 2011

Extensive Fraud: Global Fund May Stop Assistance to Nigeria

Former Nigerian head of state, Yakubu Gowon- Photo credit: Carter Center/ D. Hakes

SaharaReporters is in possession of the full report of the Country Audit of the Global Funds Grants to Nigeria which shows, in extensive detail, how several Nigerian organizations misused the funds they received, and put Nigeria in danger of missing out on the assistance in the future.  Some of the organizations, which are still being probed by the Global Fund, have already been asked to return vast sums of money in foreign exchange.

The existence of the report (GF-OIG-10-008), which was written by the Office of the Inspector-General (OIG) of the Global Fund, first came to light last June, when the ICPC announced that it had been informed of the concerns of the Global Fund, which was so unhappy with the situation it was threatening to terminate assistance to Nigeria. 

The OIG said it embarked on the audit, which covered grants that had been signed in Nigeria by March 31, 2010, in order to assess whether the grants of the Global Fund in the country “had been used wisely to save lives in the Federal Republic of Nigeria.”  Fifteen grants, amounting to $682,149,515 had been provided between 2003 and 2009, and $474,519,260 had been disbursed. 
Some of the organizations involved are as follows:
•    The Yakubu Gowon Centre for International Co-operation (YGC),
•    The National Action Committee on HIV/AIDS in Nigeria (NACA),
•    The Society for Family Health (SFH),
•    The National Malaria Control Program (NMCP),
•    The Association for Reproductive and Family Health (ARFH),
•    The Christian Health Association of Nigeria (CHAN) and

Two of these programmes, NACA and the NMCP, belong to the federal government.  In February 2001, the federal government developed the HIV/AIDS Emergency Action Plan (HEAP) as a response to the ravaging epidemic.  With the Presidential Council on AIDS (PCA) and NACA, which was described as a multi-sectoral and multi-disciplinary response, the Olusegun Obasanjo government declared its readiness to implement a “reasoned and realistic HIV/AIDS program of control and prevention.”

NACA, which was directly located in the Presidency, has not fulfilled any such expectations since then.  Instead, it has come under general notoriety for under-achievement and corruption.

Under Professor Osotimehin, whom the Goodluck Jonathan government sponsored to the leadership of the United Nations Population Fund last year, the work and commitment of NACA to the fight against HIV & AIDS was routinely questioned, as was its deployment of the resources it received.   In a letter to Prof. Osotimehin in February 2005, the Global Fund rebuked the Committee pointing out that "over one year into the implementation of the programs it is clear that programs are falling well short of achieving the projected targets."

The grants received by NACA and other programmes seemed to have been falling elsewhere, rather than into the programmes.  In the current report, the Global Fund said:

•    NACA incurred extra-budgetary expenditures of $71,000, as well as $679,000 in unretired expenditures. 

•    The YGC, which had received four grants totaling $172 million, illegally transferred funds to third party foreign bank accounts amounting to $15.8 million.  It is to refund to the Global Fund $5.2m which could not be properly accounted for, and its financial activities would be further investigated by the OIG. 

•    The SFH, at the end of 2009, had administrative charges of 5% of the budget, amounting to $861,000 that was not accounted for, as well as $68,000 unretired expenditures.

•    The NMCP had $711,000 unretired staff advances and $10,000 underfunded balance of rent grant. It is to refund $132,000 which could not be properly accounted for, or was not in the approved work plan and budget. 

•    The ARFH had $335,000 in management fees which it could not justify, and could provide no accountability for.  It is to refund $504,000 it could not account for, or which was not in the approved work plan and budget. 

•    The CHAN illegally transferred foreign currency amounting to $11.6m to non-programme-related bank accounts abroad; the funds were later refunded into the local Naira bank account.  CHAN grant Sub-Recipients (SRs) had not accounted for $1.4million at the time of the audit, and CHAN is to refund $2.9 million which could not be adequately accounted for or which was not in the approved work plan or budget. 
•    CHAN MEDIPHARM overcharged on distribution of products to the tune of $256,000; with $77,000 as unexpended amount on training.

The audit, which was completed in April 2010, revealed a pattern of mismanagement, procurement loopholes, inefficiency, financial recklessness, administrative lapses, lack of professionalism, poor commitment, bad accounting, or no accounting. 

The YGC, for instance, had a vision and mission, the audit said, but it did not have a strategic plan.  “Without this strategic plan,” the audit observed, “the Centre is unable to articulate the necessary strategies required to meet its vision and mission.”

Neither did a Centre of such magnitude have a manual to guide the operations of its Governing Council.  Indeed, in the seven-year period that was audited, the Council met only 10 times, and in one stretch of 18 months, did not meet at all. 

Similarly, the NMCP did not even maintain a bank account.  Consequently, and curiously, cheques for program activities were written in the names of NMCP staff.  

Not surprisingly, “The audit revealed an unreconciled difference of $711,793 between the amounts disbursed by the Centre and the amount acknowledged as received by the NMCP staff.”
NACA, which disbursed funds for some SRs to personal bank accounts that had yet to be accounted for at the time of the audit, failed to integrate the programmes being supported by the grants of the Global Fund into its existing structures.  Instead, it placed them under the resource mobilization unit. 

What this meant was that program staff reported to their respective functional heads, and also to the resource mobilization unit, a reporting maze that, the audit said, led to “distorted lines of authority and resulted in conflicts among staff, their functional heads, and the resource mobilization unit.” 

The implication of the behavior of Nigeria’s recipients of Global Fund grants is that, as the Inspector General has threatened, Nigeria may lose access to those funds altogether.  That would be a major blow to the millions of Nigerians who are depending on its interventions to manage the penetration of HIV & AIDS in their families and communities. 

Only last week, the Board of the Global Fund Board formally adopted the report of its High-Level Independent Review Panel on Fiduciary Controls and Oversight Mechanisms of the Global Fund.  At its special meeting on 26 September 2012, the Board said that it accepted the report's underlying analysis, and that the report presented “a compelling case for a rapid and urgent transformation of the Global Fund."

The Global Fund established the High-Level Panel following the extensive international media coverage that accompanied publication this year of the Fund's findings regarding misappropriation of Global Fund money by some recipients in certain African countries such as Nigeria. 

Following that development, Nigeria’s ICPC immediately announced it would commence probing seven of the non-governmental organizations involved.  

The Commission expressed concern over potential damage the audit posed to the reputation and image of Nigeria, and the indication by the Global Fund that it could terminate its funding of Nigerian organizations over the massive fraud scandal. 

The ICPC then swore to bring to justice all those involved, but since then, in a country where corrupt officials routinely walk free, nothing has been heard from the ICPC over the matter.  Just last week, even the President of the Senate, Mr. David Mark, complained at the launching of the Senate Committee on Communications about the government’s lack of resolve to do anything about corruption. 

“That is tax payers’ money that has gone down the drain and nobody is doing anything,” he said, reflecting on the telecommunications sector.  “Those who buried NITEL and M-TEL are walking free as if they have not done anything and if anything else, they expect that we should be clapping for them and paying them that they buried an organization that should be yielding billions into the economy."
The Global Fund is traceable to April 2001 when African leaders, in a meeting in Abuja, declared AIDS a continental emergency.  

Pledging to spend 15% of their annual budgets on health, they urged donors to create a $5 billion to $10 billion Global AIDS Fund.

Thereafter, then United Nations Secretary General Kofi called for an international “war chest” of $7 billion to $10 billion per year, to fight HIV/AIDS as well as tuberculosis and malaria.

The following month, in May 2001, President G. W. Bush, speaking at an appearance with Mr. Annan and President Obasanjo, at the White House, announced a “founding donation” by the United States” of $200 million.

That was followed by contributions by some other nations, and by August, the fund, which came to be known as the Global Fund to Fight AIDS, Tuberculosis, and Malaria, had received up to $1.4 billion in one-time contributions.  Although progress slowed down considerably following the September 11, 2001 terrorist attacks, the Global Fund became a key part of Africa’s response to the threat of HIV & AIDS until the Office of the Inspector General issued its reports this year.

In the latest development, the Global Fund last week extended the deadline for submission of Round 11 applications from 15 December 2011 to at least 1 March 2012.  Its estimate of the funding that will be available for Round 11 has dropped by half, from $1.5 billion to $0.8 billion. 

This is as the Global Fund, determined to take significant changes in its work begins to implement the recommendations of the High-Level Independent Review Panel.
One of the casualties may be Nigeria’s already hapless battle against HIV & AIDS.


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