Office of the Inspector General

© UNDP Guinea-Bissau / Gwenn Dubourthoumieu

Fraud and bidding collusion in the Democratic Republic of Congo

24 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.

OIG investigators identified fraud and bidding collusion in the Democratic Republic of Congo (DRC) between 2007 and 2010 from sub-recipients of grant funds. The Global Fund is seeking to recover a total of US$ 1.4 million from UNDP, the Principal Recipient at the time, who oversaw the activities of the sub-recipients. The Global Fund has also strengthened significantly its DRC country team with an increased focus on mitigating financial risks.

The Programme National de Lutte contre la Tuberculose (PNLT), a grant sub-recipient, was unable to provide supporting documents to the OIG to justify US$ 1.3 million of procurement expenses, originally identified as unsupported by a Local Fund Agent verification in 2011. The investigators also found evidence of collusion between PNLT staff and suppliers who overcharged US$ 319,000 for the air transportation of drugs and other medical products. Thanks to corrective actions from UNDP, US$ 180,000 has already been recovered by reducing amounts payable to the suppliers. The remaining balance has yet to be recovered.

In another case of bidding collusion, a sub sub-recipient of funds, la Direction Provinciale de Santé de Kinshasa, colluded with suppliers in a contract worth US$ 104,000 involving lodging, boarding and room rental services for a training workshop. Whilst the OIG noted that the services were provided and there was no evidence to suggest the procurement was overpriced, had the proper procurement processes been followed, there could have been benefits from economies of scale.

From 2003 to 30 June 2014, the Global Fund made commitments through 20 grants to DRC totaling US$ 896.1 million of which US$ 804.7 million has been disbursed. Currently 67,000 people are on antiretroviral treatment, 421,000 new smear-positive tuberculosis cases have been detected and treated and 16 million bed nets have been distributed in DRC.

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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.