International Guardian – HOUSTON, TX – The Global Fund, a Geneva-based financing institution, providing support to countries in the response to the three diseases; AIDS, Tuberculosis and Malaria has suspended its Nigeria’s operation after it uncovered a high-scale fraud by the recipient body.
Prompted by evidence of forged or missing supporting documentation, The Office of the Inspector General (OIG) of The Global Fund had initiated an investigation into the expenditures of the Nigerian Government’s Department of Health Planning, Research & Statistics (DPRS), a sub-recipient of the National Agency for the Control of AIDS (NACA), and the Principal Recipient for HIV/AIDS grants.
The OIG investigation confirmed the Local Fund Agent’s initial findings and found extensive evidence of systematic embezzlement of program funds, fraudulent practices and collusion by DPRS staff and consultants assigned to the Global Fund-financed program. The OIG found some form of irregularity or fraud in most vouchers reviewed (from 2010 to 2014). Seven of the ten staff and three consultants assigned to the program were involved or linked to the misappropriation of funds.
According to a detailed report by the OIG, the DPRS staff embezzled funds through a variety of means including, primarily:
1. misrepresenting or inflating the amounts paid to hotel venues for meeting facilities and rooms;
2. inflating and/or falsifying receipts related to Daily Subsistence Allowance entitlements, transportation expense to and from the venue, fuel and stationery;
3. claiming expenditures for travel not taken. In some instances, DPRS staff colluded with and received kickbacks from hotels and suppliers;
4. inflating the number of attendees at a meeting or training or its duration.
The OIG also found direct evidence, that supporting documents for items such as airline tickets, boarding passes, hotel invoices, and fuel and stationery receipts were forged. For many expenses, DPRS staff also systematically fabricated supporting documentation by creating a system to replace documents that appeared too “fake.” Reimbursements were also made to staff and consultants with little or no supporting documentation. Additionally, there is evidence that shows that there were transfers between two key DPRS staff and four other DPRS staff within the program, including payments to the Program Coordinator.
The Global Fund operates with a high degree of transparency in all of its work, including applications for funding, funding decisions, grant performance, results, governance, and oversight. All audits and investigations by the Office of the Inspector General are openly published.
To date, the Global Fund has signed 24 grants and disbursed approximately US$1.4 billion to defeat the three diseases in Nigeria. The OIG’s inspection found that DPRS staff had fabricated or inflated more than half of the receipts. The OIG’s deeper review of 202 payment vouchers, representing 57% of the total number of 355 and 77% of the total funds expended on service deliveries of US$3,816,766, found some form of irregularity or fraud in most of them.
The OIG found evidence that seven of the ten Global Fund implementing team members employed at DPRS and three consultants were involved in the embezzlement of program funds. This included both Project Coordinators, the Program Officer, Monitoring & Evaluation Officer, the NHMIS Officer, the Project Secretary, and the Assistant Accountant.
■ Read the Audit Report of Global Fund Grants to the Federal Republic of Nigeria
The individuals provided falsified, fictitious and inflated invoices and receipts for the reimbursement of service delivery expenses for hotels, Daily Subsistence Allowance, transportation, fuel and stationery. More than half of the receipts analyzed had some form of irregularity or fraud. The individuals also misrepresented the number of days spent at the events and claimed expenses for trips or modes of travel not taken (e.g., air versus ground). Reimbursements were also made for unsupported and unaccounted for expenditures.
Furthermore, The OIG discovered that the DPRS Director approved expenses knowing that supporting documents contained information that was untrue and that DPRS consultants were overpaid Daily Subsistence Allowance.
To address wider issues across the portfolio, the Secretariat had in May 2015, recruited and installed an external fiscal agent requiring all vendors, to be paid by bank transfer rather than cash via cash advances to staff. Training-related expenditures are now validated, red flags are reported, and compliance with more rigid procedures is monitored by the agent across the grant portfolio.
Global Fund’s suspension of aid may intensify Nigeria’s health concerns. For instance, Nigeria, with an estimated 3.3 million people living with HIV, ranks second in global HIV burden behind South Africa; it represents one-fourth of malaria cases and one-third of malaria deaths in Africa; and is one of the 22 countries that shoulder 85% of the global tuberculosis burden.
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