13 December 2013
The Office of the Inspector General has released a report that found misappropriation and misuse of Global Fund grants in 2012 by a principal recipient in Kazakhstan.
This report is the seventh investigation case published by the Office of the Inspector General this year in line with its commitment to reporting transparently on its activities and holding accountable those who misuse grant money.
The investigation found that employees from the Republican Center for Prophylactics and Control of AIDS (RCAIDS) concealed from the Global Fund a bank transfer of US$ 105,227. The money was a partial reimbursement from a pharmaceutical company following a worldwide recall of an antiretroviral drug due to a possible contamination in 2007. The principal recipient had bought the drug in 2006 from the local distributor of the company using funding from the Global Fund.
Following the return of a majority of the contaminated drugs, the company reimbursed the money to RCAIDS, who failed to inform the Global Fund. The money was then earmarked for an anti-HIV/AIDS information campaign by the Director General of the RCAIDS. This campaign was not part of the activities authorized under the Global Fund grant agreement.
To implement the un-authorized campaign, the RCAIDS conducted a tender process which was found to be non-competitive, with evidence of collusion between three bidding companies and RCAIDS staff.
As soon as the findings were confirmed, the Global Fund took strong remedial action. As a condition for receiving more grants, RCAIDS will have to reimburse the full amount of misused grant funds (US$ 105,227) and propose an alternative solution to working with the RCAIDS staff implicated by the investigation.
The OIG has also recommended clearer reporting procedures between recipients and the Global Fund to better identify income, refunds or outstanding payments.
Investigation of the Misappropriation of Funds by the Republican Center for Prophylactics and Control of AIDS of the Republic of Kazakhstan (GF-OIG-13-051)
The Office of the Inspector General works to ensure that the Global Fund invests the world’s money in the most effective way possible in the fight against AIDS, tuberculosis and malaria. Through audits, investigations, oversight and consultancy work, it makes objective and transparent recommendations to promote good practice, reduce risk and condemn abuse.
Established in 2005, the Office of the Inspector General is an independent yet integral part of the Global Fund. It is accountable to the Board through its Audit and Ethics Committee and serves the interests of all Global Fund stakeholders. Its work conforms to the International Standards for the Professional Practice of Internal Auditing and the Uniform Guidelines for Investigations of the Conference of International Investigators.
The Office of the Inspector General believes that every dollar counts and has zero tolerance for fraud, corruption and waste. Through its whistle-blowing channels, the Office of the Inspector General encourages all to come forward to point out any irregularities that prevent Global Fund resources from reaching those who need them.