Office of the Inspector General

© UNDP Guinea-Bissau / Gwenn Dubourthoumieu

Procurement Irregularities Found in Madagascar

03 January 2014

In line with its commitment to transparency and accountability, the Office of the Inspector General has released its latest investigation report which examines procurement irregularities by grant recipients in Madagascar.

Two of the recipients concerned were government agencies, Unité de Gestion des Projets d’Appui au Secteur de Santé (UGP) and Centrale d’Achats de Médicaments et de Matériel Médical (SALAMA).

The report contains findings following a review of US$ 12.2 million in grants and identifies overpricing of goods partly by vendors and partly by SALAMA amounting to a total of US$ 462,670.

In a UGP tender, supplies for an indoor anti mosquito spraying campaign were charged in excess of market prices by US$ 329,609 by vendors in contracts worth US$ 640,146. In another UGP tender, contracts worth US$ 203,454 were compromised resulting in US$ 53,328 charged in excess of the market average.

The investigators found that vendors had colluded among themselves and submitted bids that had not been prepared independently. They further concluded that the UGP’s Procurement Unit Official was aware of the practice and had not declared that one of the bidding companies belonged to a family member.

The Office of the Inspector General also demonstrated that SALAMA had overpriced another grant recipient, Pact by US$ 74,464 in contracts worth US$ 299,762 for the purchase of health products. However, Pact took fast corrective action and recovered the partial amount of US$ 64,038 from SALAMA.

The Global Fund is seeking to recover the misused funds as soon as possible and has suspended phase 2 of UGP’s grant. The majority of health products will be bought through a pooled procurement process which reduces the risk of procurement irregularities along the supply chain. SALAMA is currently no longer a principal recipient of Global Fund grants.

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Investigation Report Procurement Activities of the Principal Recipients of the Global Fund’s National Strategy Application Grant for Malaria to Madagascar

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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.