OIG Investigation of Global Grants in Nigeria
09 October 2014
This investigation report is part of a backlog of cases relating to investigations started before 2012 (so-called ‘legacy cases’) that the Office of the Inspector General is now able to finalize and publish thanks to increased staff headcount.
A legacy investigation by the Office of the Inspector General found evidence of fraud and procurement irregularities amounting to US$354,680 by two principal recipients, the Society for Family Health and the National Malaria Control Program in Nigeria between 2008 and 2010. The recipients have either already paid back the misused funds or committed to full repayment.
The Society for Family Health was the Principal Recipient of a Global Fund malaria grant that focused on the needs of children and pregnant women. The investigation determined that the recipient made a profit of US$300,982 by procuring 426,000 mosquito nets from existing stockpiles and then charging the Global Fund a marked-up price of US$0.71 per net. The Society for Family Health cooperated fully with the investigation and repaid the full sum to the Global Fund in November 2013.
The investigation also found evidence of non-compliant spending at the National Malaria Control Program where staff submitted fictitious expenses of US$11,189 for airline tickets; six vehicles were procured on a non-competitive basis resulting in over-charging of US$29,300; and collusion in the procurement of IT equipment led to a price paid of US$13,209 in excess of market prices. The National Malaria Control Program also fully cooperated throughout the course of the investigation and has formally committed to reimbursing a total of US$53,698 to the Global Fund.
Since the Global Fund re-structuring in 2012, which resulted in an increased focus on operational risk management, the management of the Nigeria portfolio has become substantially more rigorous. For example, both recipients now procure all bed nets through the Global Fund’s Pooled Procurement Mechanism, which reduces the risk of fraud or bid rigging. The Global Fund now receives confirmation from the recipient that the price charged to the grant corresponds to the price paid originally. Also, in the future, the National Malaria Control Program will require staff to submit original boarding passes to obtain reimbursement for flights.
The Global Fund has been supporting health programs in Nigeria since 2004. Nigeria has a severe disease burden for HIV and malaria. Currently there are six active Global Fund malaria grants. To date, US$1,230 million has been disbursed to Nigeria of which malaria health programs make up approximately US$623 million. 640,000 people are currently on anti-retroviral therapy, 336,000 new smear-positive tuberculosis cases have detected and treated and 55 million bed nets have been distributed.
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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.