Global Fund, an international donor agency, has accused officials of a Nigerian civil society organisation (CSO) of stealing from money meant for their staff salaries.
Global Fund to Fight AIDS, Tuberculosis and Malaria, is an international financing organisation founded by billionaire American couple, Bill and Melinda Gates; recently deceased former United Nations Secretary-General, Kofi Annan; Amir Attaran and Jeffrey Sachs.
Since it started operation in Nigeria in 2003, it has disbursed $1.1 billion in the fight against the three major diseases; HIV/AIDS, Malaria and Tuberculosis, making its investments in Nigeria one of its biggest.
However, the latest report indicted officials of Civil Society for the Eradication of Tuberculosis in Nigeria (TB Network) of misappropriating $51,038 (N18.4 million).
The principal recipients of Global Funds grants on TB in Nigeria are the Institute of Human Virology of Nigeria (IHVN) and the Association for Reproductive and Family Health (ARFH).
TB Network has been a sub-recipient of the grants in Nigeria since 2013.
The CSO currently implements activities on two tuberculosis (TB) grants: NGA-T-ARFH, under the Principal Recipient Association for Reproductive and Family Health (ARFH), working on its active case finding (ACF) programme and NGA-T-IHVN under the Principal Recipient Institute of Human Virology Nigeria (IHVN), working on its multi-drug resistant (MDR) TB programme.
TB Network was also a sub-recipient of the Global Fund HIV grant NGA-H-ARFH for the period January 2013 to December 2017, working on its community systems strengthening (CSS) programme.
Nigeria is classified as one of the 10 highest Tuberculosis and Multiple Drug Resistance-TB countries in the world. Most of the TB interventions in the country are funded by Global Fund and the federal government.
Nigeria's TB burden is estimated at 219 per 100,000 people. About 100,433 TB cases were notified across the country in 2016. The treatment rate for new and relapse cases were 84 per cent, while treatment coverage was 24 per cent.
However, in a report published on its website this month, Global Fund said Management of TB Network "organised a scheme to misappropriate money from salaries and allowances paid to other TB Network employees over a period of 14 months."
The Office of the Inspector-General (OIG) of the Global Fund said it was alerted to the fraud July 2017, a year after it started.
OIG in its report also accused IHVN of wrongdoing because it failed to inform Global Fund about the fraud, despite having knowledge of it.
This, they said breached IHVN's obligations to report back any concerns involving or affecting the integrity of Global Fund resources.
Global Fund, an international donor agency. [PHOTO CREDIT: Official web page of Global Fund]
The OIG said it was informed about the potential mandatory salary and Daily Subsistence Allowance (DSA) deduction scheme operated by the Management of TB Network.
The information given to OIG indicated that the scheme used in misappropriating the fund had been in place since July 1, 2016. The OIG after authenticating the information carried out an investigation which covered July 1, 2016 to September 2017.
It said after its investigation, it found the CSO culpable of non-compliant expenditure totalling $63,580. The OIG proposes recovering the total amount of non-compliant expenditure.
The allegations against TB Network include coercion, collusion, fraud and non-compliance with Grant Agreement.
According to the report of the OIG investigation, between July 2016 and September 30, 2017, 28 employees paid N16, 791,646 ($51,038) from their salaries and or Daily Subsistence Allowance entitlement to the scheme organised TB Network.
This fraud was allegedly perpetuated by the National Coordinator of the CSO, assisted by the former finance manager and a programme internal auditor.
Employees made payments to the personal bank accounts of the former finance manager and later to the programme's internal auditor who, acting on the instructions of the national coordinator, were responsible for collecting and distributing the funds, OIG said.
It was also found that TB Network management also colluded to misappropriate funds paid as salaries to five employees, totalling N3,536,797 ($10, 750).
These employees received salary payment for two months that they were not entitled to and which they were required to pay to the scheme.
The operation of the scheme and the actions of TB Network management breach Global Fund's Code of Conduct for Recipients, OIG said.
OIG found out that TB Network management and its National Secretary benefitted substantially from the funds collected from the staff while misleading Global Fund that the deductions were paid for office support staff and running cost.
However, the national secretary was not found to be involved in the implementation of the scheme and said the employees contributed to it voluntarily.
OIG Investigation Report
OIG found during its investigation that the management of TB Network informed the staff that the deduction in their salaries was to help run the office.
According to the staff, they were told how much to pay by the former finance manager when they joined the organisation and some said they feared they would lose their jobs if they refused.
The employee said they had initially paid their contributions into the personal bank account of TB Network's former finance manager. However this changed in April 2017, when they paid the contribution into the personal account of the MDR programme Internal Auditor who was responsible for collecting and distributing the funds.
Meanwhile, the management of TB Network in their defence told OIG that the staff had voluntarily agreed for the fund to be deducted as a contributory scheme from their salaries and DSA to assist sustain the organisation.
According to TB Network management, employees decided each month how much they wanted to contribute, and all agreed to pay 10 per cent of their DSA to the scheme.
Both the former finance manager and the internal auditor told the OIG that the national coordinator instructed them how much to collect from employees and that he controlled the expenditure of the funds collected.
Though the management of TB Network stated that the contribution was to the scheme and was voluntary, what the staff was unaware of was that almost half of the collected funds were paid to management and the National Secretary.
TB Network management denied any wrongdoing; though they initially did not mention it when interviewed about the scheme.
The national coordinator, programme manager and former finance manager did not tell the OIG that they had received any funds collected from employees.
They only admitted to it once the OIG presented the investigation's findings, including evidence that they received monthly payments from the scheme.
They justified the monthly payments by claiming that grant budgets did not adequately compensate their work and responsibilities which, they said, increased in July 2016 when TB Network became a sub-recipient on the MDR and ACF programmes in addition to the CSS programme.
OIG found that the national coordinator, programme manager and former finance manager received N4, 740,234 ($14,408) or 28 per cent of the total collected from employees during the period investigated.
The national coordinator received N2, 712,398 ($8,244), or 16 per cent, the programme manager received N1, 176,100 ($3,575), or 7 per cent, and the former finance manager received N851, 736 ($2,589), or 5 per cent.
TB Network's national cecretary also received NGN2, 930,000 ($8,906) from the scheme, or 17 per cent of the total collected.
The national secretary said he received a monthly payment from the scheme on the authorisation of the national coordinator.
Although not based at TB Network's Abuja headquarters, and not involved in the day-to-day implementation of the Global Fund programmes, he was considered a member of support staff and was involved in the organisation's administration.
TB Network Reacts
National Secretary TB Network, Obatunde Oladapo, in a telephone conversation with PREMIUM TIMES said the report was accurate but he was not indicted as part of the management involved in the fraud.
Mr Oladapo said the organisation has embarked on restructuring since the report of the investigation was released.
He said The National Steering Committee, which is the executive committee of TB Network, had several meetings after the release of the report.
"In fact, when they accepted the first edition, the National Steering Committee conducted a preliminary investigation and there were some recommendations that were made to the management of the network. This includes national coordinator, the national secretary, programme manager as well as the finance manager.
"Based on our findings, we did not want the national coordinator to continue any more but apparently, he continued for some time. Based on that, after the release of the report by the OIG, we convened a joint meeting of the National Steering Committee and the Board of Trustees of the Network, where we examined the issues and we took some measures sequel to the report," he said.
Mr Oladapo explained that one of the measures they took was appointing one of the members of the National Steering Committee to oversee the project of the Global Funds programmes of the network.
"The programme manager has ceased functioning in that position and we appointed somebody else as the acting programme manager. Beyond that, we also held meetings with the two principal recipients of the two Global Funds projects that were affected, these are IHVN and ARFH."
He said the committee also visited the Executive Secretary of the Country Coordinating Mechanism to Fight AIDS, Tuberculosis and Malaria CCM.
Mr Oladapo said the restructuring measures are still ongoing as they had agreed to talk about other matters at meetings scheduled for Thursday September 13 and Friday September 14.
"The two national steering committees will be meeting tomorrow to resolve the issue and take further steps. We are also holding the meeting on Friday in consultation of principal recipients, National TB and leprosy commission programme, and other for further consultations and final decisions.
"We are also strengthening our organsational policy to forestall such occurrences. So that is basically the step we are taking as an organisation," he said.
The OIG had also recommended that based on the finding of the report, the Global Fund Secretariat will ensure that the principal recipients take appropriate action towards the individuals responsible for the prohibited practices described in the report, notably to ensure they are not involved with the implementation of Global Fund grants to those principal recipients.
"OIG therefore considers that the full amount collected from employees is non-compliant and potentially recoverable," it said
Also, the Global Fund Secretariat was told to finalise and pursue an appropriate recoverable amount.
"This amount will be determined by the Secretariat in accordance with its evaluation of applicable legal rights and obligations and associated determination of recoverability," it said.