Investigation in Ukraine
25 August 2015
In April 2015, the Office of the Inspector General (the OIG) began an investigation into allegations of misconduct by the Finance Director of the Alliance Ukraine, a Principal Recipient of Global Fund grants in Ukraine. The OIG investigation confirmed that there had been a conflict of interest and procurement irregularities. The Finance Director has since been dismissed and the Alliance Ukraine has taken other remedial steps, including reinforcing its conflicts of interest policy.
From January 2013 to February 2015, the Alliance Ukraine called on Veselka, a local events management supplier owned by the Finance Director’s brother-in-law. Contravening the Alliance’s conflict of interest policy, the Finance Director did not declare this family connection nor his regular communications with Veselka both during and after the selection process.
OIG investigators also found that on one occasion the Finance Director intervened during an internal bidding process to select one of three events management suppliers and used his official position to influence its outcome in favor of Veselka. The OIG found that on multiple occasions the Finance Director provided Veselka with information about the bids of the other two competitors after the process.
However, the OIG concluded that Veselka delivered and did not overcharge for its services. As a result, the OIG does not recommend the recovery of the value of the contracts awarded to Veselka.
The OIG investigation also identified that the Alliance Ukraine did not comply with the Standard Terms and Conditions of the Grant Agreement with the Global Fund when it did not immediately report the complaint received in December 2014 to the Global Fund. It was four months later that the Global Fund was informed of the conflict of interest.
This delay in reporting put at risk evidence of the wrongdoing and meant that the Global Fund and OIG were not able to intervene earlier to disrupt it. Reporting the conflict of interest earlier would have led to a more efficient and timely closure of the issue.
Ukraine has the second-highest HIV prevalence rate in Eastern Europe and also carries a high burden of multi-drug resistant tuberculosis. Ukraine is also facing significant political and financial challenges amid armed conflict within its borders and a fragile economic backdrop. Despite this, the country is working hard to reduce the prevalence of HIV and tuberculosis.
- Investigation Report of Global Fund Grants in Ukraine - The International Charitable Foundation “International HIV/AIDS Alliance in Ukraine” (GF-OIG-15-012 - 25 August 2015)
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