An Office of the Inspector General (OIG) investigation found evidence of systematic embezzlement, fraudulent practices and collusion between 2010 and 2014 by a sub-recipient of Global Fund grants. The investigators concluded that a total of US$3,816,766 in expenditure by the Nigerian Government’s Department of Health Planning, Research and Statistics (DPRS) was non-compliant and is proposed for recovery. The expenditure was mainly related to training for a web-based health information system.
The Global Fund Secretariat has discontinued its relationship with DPRS and barred any individuals identified by the OIG investigation from implementing Global Fund grants. An external fiscal agent is now in place to validate all travel and training-related expenditure and ensure that all vendors are paid by bank transfer rather than cash.
With more than US$1.4 billion invested since 2003, Nigeria represents the Global Fund’s largest portfolio. Programs to date have contributed to 750,000 people living with HIV/AIDS currently on antiretroviral therapy, 310,000 tuberculosis cases detected and treated and 93.4 million insecticide-treated mosquito nets distributed to prevent the spread of malaria.
The OIG started investigating DPRS, a sub-recipient of the National Agency for the Control of AIDS (NACA), the Principal Recipient for HIV/AIDS grants, in late 2014 after a spot check from the Global Fund’s Local Fund Agent had identified forged and missing expenditure documents. DPRS spent a total of US$4.03 million from 2010 to 2014, representing about 1.2% of the US$330.8 million grant NACA received from the Global Fund.
The OIG investigation confirmed the Local Fund Agent’s initial findings and found seven out of ten DPRS staff and three consultants were linked to the misappropriation of funds.
The investigators found that DPRS staff embezzled funds in many different ways including, inflating the amounts paid to hotel venues for meeting facilities and rooms; falsifying receipts related to Daily Subsistence Allowance entitlements, transportation expenses to and from venues, fuel and stationery; claiming expenditures for travel not taken, colluding with and receiving kickbacks from hotels and suppliers; and inflating the number of attendees at a meeting or training or its duration.
The OIG found direct evidence that supporting documents for items such as airline tickets, boarding passes, hotel invoices, and fuel and stationery receipts were forged. Reimbursements were also made to staff and consultants with little or no supporting documentation. Additionally, the investigators found money transfers between DPRS staff members within the program, including payments to the program coordinator.
The OIG concluded that DPRS did not have an effective system of internal controls to safeguard grant funds. Nor did NACA, as the Principal Recipient of the grant, effectively monitor its sub-recipient’s implementation and use of program funds.
Although NACA conducted spot-checks in 2012 and 2014, the oversight was limited and proved ineffective in preventing or detecting the fraud. In spite of the relatively low amounts of funds disbursed to DPRS, the Global Fund Secretariat was also responsible for assessing NACA’s oversight over DPRS and evaluating the increased risks presented by the recipient’s weak oversight.
Investigation Report - Global Fund Grants to Nigeria (GF-OIG-16-015 - 3 May 2016)
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The Office of the Inspector General safeguards the assets, investments, reputation and sustainability of the Global Fund by ensuring that it takes the right action to defeat AIDS, tuberculosis and malaria. Through audits, investigations and consultancy work, it promotes good practice, reduces risk and reports fully and transparently on abuse.
Established in 2005, the Office of the Inspector General is an independent yet integral part of the Global Fund. It is accountable to the Board through its Audit and Ethics Committee and serves the interests of all Global Fund stakeholders. Its work conforms to the International Standards for the Professional Practice of Internal Auditing and the Uniform Guidelines for Investigations of the Conference of International Investigators.
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