E-DRUG: Global Fund Audit Analysis
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Dear All
The Global Fund has released a press statement (below) analysing past audits and investigations. It found that less than 5% of money had been misspent and only 0.5% involved fraud. I wonder how other donor programs would measure up against this.
Regards
Douglas
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Douglas Ball
Pharmaceutical consultant
Public Health and Development
E-mail: douglasball[AT]yahoo.co.uk
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http://www.theglobalfund.org/en/mediacenter/newsreleases/2012-07-10_Global_Fund_Releases_an_Analysis_of_Audits_and_Investigations_2012/
Global Fund Releases an Analysis of Audits and Investigations - 2012
GENEVA: The Global Fund to Fight AIDS, Tuberculosis and Malaria
reported today that an analysis of audits and investigations by the
Office of the Inspector General showed that 3.0 percent of funding
audited or investigated between 2005 and 2012 had been misspent,
fraudulently misappropriated or inadequately accounted for.
As part of the Global Fund's efforts to effectively prevent and treat
disease, serious efforts are made to ensure that all funding is properly
handled, disbursed and managed. Wherever impropriety is discovered, it
is reported. When funds are misappropriated or improperly spent, they
are recovered as fully as possible.
"We do not tolerate any misuse of funds, no matter how minor," said Cees
Klumper, Chief Risk Officer at the Global Fund, who conducted the
analysis. "Although some of these funds were misspent, and are just
ineligible expenses, a small percentage of funds are misappropriated
through fraud. We actively pursue and expose all such cases."
The Office of the Inspector General, which is fully independent and
reports directly to the Board, plays an indispensable role in helping
achieve the mission of the Global Fund by diligently pursuing audits and
investigations. Since it was established in 2005, the Office of the
Inspector General has compiled 28 reports on audits and investigations
that it has carried out in 27 countries, where a total of $3.8 billion
has been disbursed, approximately 23 percent of all disbursements that
the Global Fund has made to date.
The analysis of the Inspector General's findings shows that,
cumulatively, 3 percent of the funding that was investigated was not
spent in compliance with the grant agreements, as follows:
1. Ineligible expenses - or activities not covered by the grant
agreements - 1.1 percent
2. Inadequately substantiated due to poor or missing documentation -
1.1 percent
3. Fraud - 0.5 percent
4. Failed to report funds as required - 0.3 percent
Mr. Klumper cautioned that his analysis did not represent a
comprehensive accounting of all misspent funds. Instead, the analysis is
a factual rendering of the percentages of funding that had been
determined by Global Fund audits and investigations to be ineligible,
fraudulently misappropriated or inadequately accounted for.
John Parsons, the Inspector General, further cautioned that audits and
investigations conducted by his office tend to focus on high-risk areas
and on grants where specific risks have been identified.
"It is not possible to extrapolate to say that this reflects an accurate
picture of misused funds," said Mr. Parsons. "Our audits and
investigations are not a representative sampling of all Global Fund grants."
Mr. Klumper added that as the Office of the Inspector General completes
further audits and investigations, the above percentages are likely to
change.
"We are in the process of strengthening preventive measures," added Mr.
Klumper, whose position was created this year to better manage risk at
the Global Fund. "Our aim is to further reduce the percentages."
Mr. Klumper's analysis includes an investigative report on a
sub-recipient in Bangladesh and audit reports of grants in Lao and Papua
New Guinea, which were made public today.
Mr. Klumper's analysis was prompted by concerns that when specific
audits and investigations report misused funds, the sharp contrast
between an individual problematic case and the broader reality of
well-managed grants could lead to misinterpretations or misimpressions.
The policy of the Global Fund is to be highly transparent and to report
all cases of misused funds.
All audit and investigation reports are publicly available on the Global
Fund website.
The Global Fund Secretariat is constantly improving its oversight of
grants. At the beginning of every grant application, a country applying
for funds must demonstrate the effectiveness of programs and the real
need for additional funding. Global Fund staff and independent technical
experts review every application carefully, and award grants to those
that demonstrate serious purpose and effective impact.
The Global Fund is currently refining and strengthening the overall
model of grant management to implement the Global Fund's new strategy.
The redesign is applying an improved approach to risk management, which
itself is built on findings made by audits and investigative reports by
the Office of the Inspector General.
Mr. Klumper said that every financial institution is obliged to ensure
the safe handling of its funds. At the Global Fund, most funding comes
from taxpayers in donor countries, and the organization is acutely aware
of its responsibility to donors and the importance of ensuring that all
monies are properly accounted for.