20 February 2015
The Office of the Inspector General (OIG) has called for USD 785,906 to be recovered after investigators discovered significant irregularities in a renovation project of medical stores between 2011 and 2013. Although the renovation of the stores was completed, the investigators found that a Principal Recipient, the Nigeria National Agency for the Control of AIDS (NACA), mismanaged the project and that the quality of the work was sub-standard.
The OIG proposes to recover funds that correspond to undelivered services, excessive and unjustified payments to contractors during the renovation process, unreimbursed advances and non-compliance with the bill of quantities, a contractual document that itemizes the quantity and costs of building materials.
NACA’s internal controls lacked proper monitoring and a transparent paper trail. Vaguely worded contract documents allowed for the manipulation and the misinterpretation of the required work, deliverables and contractor fees. The scope of the renovation work was poorly defined leading to budget overrun and overpayments. NACA did not comply with the relevant procurement regulations in the selection of the contractors and the OIG discovered falsified documents submitted by the bidders during the tender process. NACA has acknowledged some of the investigation findings and has committed to take appropriate measures to rectify and avoid recurrence of the irregularities.
Going forward, the Global Fund Secretariat has committed to strengthen oversight of the entire Nigeria grant portfolio with a number of controls and actions, including the appointment of a Fiduciary Agent. Since 2012, the Global Fund’s Grant Management Division has been significantly strengthened, leading to improved guidance on budgeting and better use of the Local Fund Agent services by targeting high-risk areas in the grants.
To avoid future budget overruns and lack of clarity in renovation and construction projects, the Global Fund, in September 2014, issued new guidelines for grant budgeting and annual financial reporting. The guidelines include instructions for budgeting rehabilitation, renovation, and health infrastructure enhancements. More importantly, the guidelines require the establishment of a detailed cost estimate certified by a qualified professional before the commencement of renovation or construction activities. The guidelines also require Principal Recipients to demonstrate prudent contract management and provide guidance on the types of renovation or construction activities which are permitted under the Global Fund grant programs.
To date, the Global Fund has disbursed USD 1.27 billion to Nigeria. There are 670, 000 people currently on antiretroviral treatment, 387,000 people have been tested and treated for tuberculosis and 60 million bed nets have been distributed to protect children and families from malaria.
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.