The Citizen (Dar es Salaam)
Mkinga Mkinga
10 August 2009
There is serious bureaucracy, mismanagement and lack of capacity to utilise Global Fund (GF) grants to Tanzania, according to a GF audit report.
The report issued by the GF Office of the Inspector General (OIG) on June 10 points to serious shortcomings in the way the grants are managed and monitored in the country.
It particularly raises concerns about the supply chain, financial and programme management and reporting.
The highly publicised loss of $819,000 (Sh1.1 billion) worth of drugs mentioned in the report seems minor compared to damning revelations which have yet again put the country in the spot light over the management of donor funds.
The Government has acknowledged the shortcomings, saying it was studying them as part of efforts to rectify the situation.
Chief Medical Officer Deo Mtasiwa told The Citizen yesterday that the Government had received the report and was currently working on problematic areas.
"We are aware of areas noted in the report, and are currently working with some recipients of Global Fund assistance to address the concerns of the donor," he said.
According to the 110-page document made available to The Citizen, the overall objective of the audit carried out by the Global Fund was to provide assurance that the procurement, supply management, service delivery and financial management of GF grant programmes for HIV/Aids, tuberculosis and malaria were undertaken efficiently and effectively.
It was meant to ensure that adequate controls exist to account for grant resources and that there is effective programme oversight of GF grants both within Tanzania and by the GF secretariat.
The OIG deployed a multi-skill team comprising a public health specialist, a procurement and supply management specialist and audit specialists.
Quoting the Controller and Auditor General's report, the OIG says resources in the country as at risk unless corrective measures are taken to enhance the control environment and internal controls, particularly within the Medical Stores Department (MSD).
"For supply chain management, it is important that MSD's management and its board ensure that controls needed to safeguard medicines and health products are in place, are effective and are working at all levels of the supply chain," notes part of the report.
The audit has established that there are serious weaknesses in the MSD from receipt of goods to storage and eventual distribution down the supply chain to district stores and health facilities.
The OIG says in its recommendations that Round 8 of grants to Tanzania should depend on the country addressing all serious issues in supply chain management.
The OIG also notes in its report that there is a lack of coordination, information sharing and complex disbursement processes which eventually lead to delays in sending grant funds to implementing organisations, resulting in delayed implementation of programmes.
"There is a need for the principle recipients (PR) and lead sub-recipients (SRs) to monitor bottlenecks in the flow of funds to implementing organisations," the report suggests.
Some implementing organisations are incurring unnecessary exchange rate losses in converting local currency into foreign currency to pay both local and foreign suppliers.
Foreign currency payments to local suppliers should be discouraged, and funds earmarked for approved procurement payable in foreign currency should be disbursed to lead SRs in foreign currency, the report further recommends.
The OIG also found many internal control weaknesses in its review of grant receipts and expenditures at all grant-implementing entities.
These weaknesses, the report notes, can be attributed to inadequate supervision of accounting staff, workload issues, high staff turnover and lack of relevant qualified and experienced finance or accounting staff to undertake routine financial control duties.
On institutional arrangements and oversight, the GF notes that there are multiple players involved in grant oversight in Tanzania with overlapping responsibilities and inadequately defined roles and responsibilities that invariably leave gaps in ownership and fulfilment of grant oversight responsibilities.
The OIG notes that the large influx of funds from donor-funded health programme initiatives has overwhelmed the complex bureaucratic processes and procedures of public health sector implementing organisations such as the ministry of Health and Social Welfare.
"This has resulted in delays in procurement of goods and services for grant implementation that led to Tanzania forfeiting $7.6 million (Sh9.9 billion) of unspent funds at the end of phase 1 for two grants, namely HIV/TB Round 3 and HIV/Aids Round 4."
The report also puts the Tanzania Commission for Aids (Tacaids) on the spot, saying its role as the substantive PR needs to be assessed by the local fund agent (LFA) and corrective measures need to be identified and implemented to address its capacity gaps.
"Given the size and complexity of the grant portfolio in Tanzania, there is scope for making the LFA's oversight work more "hands on" instead of being ad hoc and reacting to negative incidents or event."
The oversight work of the LFA should be informed by a risk assessment of the grant portfolio, covering key implementing SRs and high-risk areas of grant implementation.
But Dr Mtasiwa noted that most of the issues related to bureaucracy, as cited by the donor in the report, could be attributed to the way the Government conducted its operations.
He said there a number of issues that needed to be reviewed to streamline the channelling of funds to the targeted recipients.
Dr Mtasiwa said, for example, that donors were to some extent responsible for delays in funds disbursements as they channelled the money through the Bank of Tanzania.
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