Global Fund suspends two malaria grants, terminates TB grant to Mali

07 December 2010

Action taken to ensure new Principal Recipients are found and that full grant activities resume quickly

Grants to five countries put under closer Global Fund control

GENEVA – The Global Fund to Fight AIDS, Tuberculosis and Malaria has suspended funding of two malaria grants in Mali with immediate effect and has terminated a third grant for tuberculosis (TB) after it found evidence of misappropriation and unjustified expenditure. Management of the two suspended grants will be transferred to a new Principal Recipient.

The government of Mali has condemned the embezzlement of funds and is working with the Global Fund to solve problems and ensure that grant activities can resume as soon as possible.

In addition to the Mali grant suspension, the Global Fund is placing grants in five countries on an “Additional Safeguards Policy” list. Grants in countries on this list are subject to closer scrutiny of their grant activities by The Global Fund and have certain restrictions on cash movements. The five countries are Cote d’Ivoire, Djibouti, Mali, Mauritania and Papua New Guinea.

The Global Fund is also putting in place a number of actions to prevent and detect possible misuse of money for training in grants across all the 144 countries that receive funding, as well as drug theft in grants in specific countries. These actions have been taken in response to evidence that training expenses and drug supplies are particularly at risk of misappropriation in health sector financing from international donors.

“The Global Fund tolerates no fraud, and we take public action to stop it, recover lost money and establish new and trustworthy channels for resources so they can reach those in need,” said Michel Kazatchkine, the Global Fund’s Executive Director. “Suspensions are the Global Fund’s way of making this clear to all concerned. They are a structured way to work with a country so that together we can put problems behind us and focus on saving lives. I also acknowledge the strong stand adopted by Mali’s President Amadou Toumani Toure in fighting corruption”.

The decision to suspend the grants in Mali follows an on-going investigation by the Global Fund’s Inspector General which has found that approximately $4 million in grant funds has been misappropriated. The investigation uncovered fraud by senior officials working for grant implementers, through submission of false invoices, creation of fake bid documents and overcharging for goods and services, particularly in relation to training activities.

The three grants in Mali affected by the decision are: a $14.8 million malaria grant to buy and distribute insecticide-treated nets for the benefit of pregnant women and children under the age of five; a $3.3 million grant for anti-malaria drugs; and a $4.5 million TB grant targeting, among others, prisoners and people in mining communities and patients with multidrug resistant (MDR) strains of TB. Other grants to Mali are also under investigation and further action may be taken at a later date.

All necessary steps have been taken to ensure that life-saving treatment financed by the Global Fund will not be disrupted.

Total grant funds approved by the Global Fund board for Mali to date amount to $128.55 million, of which $79.22 million have been disbursed.

Implementation of the $14.85 million grant for bed nets, whose suspended Principal Recipient is Groupe Pivot Santé Population, will be transferred to a new Principal Recipient, as will the smaller malaria grant, which is mainly for delivering artemisinin-based combination therapy (ACT) drugs. The Global Fund will also ensure that essential services funded by the TB grant, including drugs for patients with MDR TB, will be maintained after that grant is terminated.

The Global Fund’s Inspector General has been working in close cooperation with the Malian authorities. The authorities have arrested and imprisoned 15 people in connection with the fraud after an investigating judge was assigned to the case by the President of Mali.

In cases of fraud, The Global Fund as a rule demands reimbursement of stolen funds.

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