Office of the Inspector General

Audit of Global Funds in Tanzania

08 February 2016

An audit of Global Fund grants in Tanzania (mainland) found that the supply chain management system was ineffective in delivering health products to patients. Stock-outs of varying magnitudes were noted and differences between stock dispatched by the Global Fund’s Pooled Procurement Mechanism and received at the central medical store were valued at USD 1.55 million. Auditors also identified lapses in key financial controls which partly explain USD 9.6 million in unsupported costs. The case has been referred to the Office of the Inspector General Investigations Unit and the Global Fund is taking preventive action against further mismanagement.

As one of the biggest recipients of Global Fund grants, the Republic of Tanzania (mainland) has received USD 1.4 billion to date. Since 2000, the country has decreased the incidence of AIDS, tuberculosis and malaria by 72%, 31%, and 72% respectively.

As well as the USD 1.55 million discrepancy in health products dispatched and received, the OIG identified a lack of proper records at regional/district medical offices that distribute 50% of all health commodities. There were also unexplained differences ranging between 40-50% between the quantity of malaria and HIV test kits and anti-malaria medicines reported as delivered by the Medical Stores Department and accounted for by the district medical offices/facilities.

Tanzania’s alignment of its antiretroviral policy to the latest guidance from the World Health Organization (WHO) has increased the number of patients resulting in a treatment funding gap of at least USD 232 million by 2017. As a result, the Global Fund is ‘front loading’ commodities planned for 2016/17 to 2015 to address current medicine shortages. If unaddressed, this funding gap will result in treatment disruption and will affect the gains made in the HIV program.

The audit concluded that the financial and fiduciary area of managing the grant is ineffective. The OIG identified lapses in key fiduciary controls over procurement, the management of advances and contract management. The Global Fund investment toward a health system strengthening grant has not been fully optimized in light of significant reductions (an average of 50%) in the scope of planned constructions without a corresponding reduction in budget and the use of program funds to mainly sponsor post graduate courses when the country’s critical human resource gap is at lower levels.

The audit also found the governance, oversight, and management of grant implementation arrangements to be ineffective. The program management units under the Ministries of Finance and Health were not fully executing their terms of reference to manage and oversee programs. The Country Coordinating Mechanism Secretariat had yet to provide effective oversight over Principal Recipients. There were delays in the disbursement of grant funds to implementers (on average 150 days) and in the submission of progress reports to the Global Fund. Controls put in place by the Secretariat to strengthen internal control were overridden.

To address the issues identified by the audit, the Global Fund and key country stakeholders have instituted a review of the Medical Stores Department. They are also examining gaps in funding due to scale-up following the latest normative guidance from the WHO. The Global Fund will also provide specific operational guidance to clarify the requirements for construction projects, including ensuring sustainability following the completion of the infrastructure improvement activity.

Tanzania accounts for 4.63 percent of the global HIV burden, ranking seventh in the world. The country has an estimated 1.5 million people living with HIV, 28% of whom are children aged less than 15 years. It is the fourth largest population at risk of malaria in the world and accounts for 1% of the tuberculosis global burden.

  • Audit of Global Fund Grants to the United Republic of Tanzania (mainland) (GF-OIG-16-002 - 8 February 2016)
    download [ download in English | Français ]

Thomas Fitzsimons
Email:
Mobile: + 41 (0)79 412 14 61

###

The Office of the Inspector General safeguards the assets, investments, reputation and sustainability of the Global Fund by ensuring that it takes the right action to defeat AIDS, tuberculosis and malaria. Through audits, investigations and consultancy work, it promotes good practice, reduces risk and reports fully and transparently on 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 Global Fund 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 speak out to report fraud, abuse and human rights violations that prevent Global Fund resources from reaching those who need them.