Office of the Inspector General

Investigation in Panama

04 January 2016

An investigation of Global Fund grants in Panama found that a local supplier fabricated quotations for promotional material in over 100 tenders using the names of other suppliers without their knowledge. These fraudulent practices compromised US$ 104,911 worth of transactions between 2012 and 2014 involving four grant sub-recipients of grants. The Global Fund is seeking to recover the non-compliant expenditures from the Principal Recipient and is taking corrective actions to prevent future abuses in tenders in Panama.

In February 2015, the Global Fund Secretariat notified the Office of the Inspector General (OIG) of irregularities in the marketing expenditures of four out of its six sub-recipients under an HIV grant with Principal Recipient, Cicatelli Associates Inc. The transactions involved a local supplier called Conceptos Advertising that provided goods including educational videos, leaflets, banners and clothing.

The OIG investigation revealed that the owner of Conceptos Advertising fabricated quotations in the names of other suppliers creating the impression that tenders won by her company were competitive. This also breached the Global Fund's Code of Conduct for Suppliers. Cicatelli Associates Inc., did not respond appropriately when it identified similarities among the quotations. Additionally, employees of two sub-recipients, GPP+ and Emessar, shared budget limits for some procurements with Conceptos Advertising.

Limited guidance from the Principal Recipient to its sub-recipients on procurements for non-health products contributed to their failure to conduct fair, transparent, well-documented and competitive tenders.

As well as pursuing the recovery of the non-compliant funds, the Global Fund Secretariat will ensure that all future grant recipients receive training on the codes of conduct and managing competitive tenders fairly and transparently.

Panama has a concentrated HIV epidemic especially among transgender people, men who have sex with men and female sex workers. The Global Fund has disbursed US$ 6.8 million in Panama to date focusing on HIV prevention and human rights, as well as improving the quality of care of people who are HIV-TB co-infected.