Established as a partnership in global health, the Global Fund works closely with a wide diversity of partners –implementing governments, donors, civil society, international development organizations, the private sector and communities living with and affected by the diseases. This partnership model actively supports country-owned approaches that develop and implement effective, evidence-based programs to respond to AIDS, tuberculosis and malaria.
10 July 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:
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.
For more information, please contact:
SETH FAISONDirector of CommunicationsMobile: +41 79 788 1163E-mail:
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