Follow up of an Audit of Grant Closure Processes
04 July 2016
In this follow-up review of a 2013 audit, the Office of the Inspector General (OIG) noted significant improvements in the overall design of Global Fund grant closure policies and processes as well as simplified grant closure procedures. However, the auditors identified various gaps in compliance. For example, 65% of grants due for closure between 2013-2015 had still not been closed at the time of writing.
Grant closure is the final stage of the Global Fund grant cycle. It involves evaluating the success of the grant, recovering any outstanding ineligible funds, transferring cash or reallocating assets to other grants for continued use in the fight against AIDS, tuberculosis and malaria.
The OIG noted the following improvements since the previous audit:
New operational policy notes and guidelines have been put in place that have simplified the grant closure process: A new disbursements template will track more effectively cash balances held by Principal Recipients and Sub-Recipients. This should strengthen the controls over final remaining cash balances once they reach the grant closure stage. A newly appointed Recoveries Officer is required to report on all funds that are recoverable from grant recipients. In the past, only recoveries identified by the OIG were required to be reported. Also, the automatic transfer of unused funds from a closed grant to a new grant has now been clarified, which should minimize any leftover funds remaining in grants after the closure date.
However, the audit identified design gaps regarding the policy on asset management. For example, there is no specific guidance over asset management and transfers, which means that the Global Fund cannot ensure that assets are properly used for program purposes for the duration of their useful life. Furthermore, there are inadequate safeguards to prevent duplicate financing of similar assets to the next grant cycle and use of assets beyond approved health-related activities.
In terms of the operational effectiveness of grant closure processes, the OIG found the following problems: significant delays caused by a lack of routine monitoring and accountability for grant closures; grants were administratively closed while cash and recoveries were pending and receivable under those grants; there is no systematic tracking to ensure that the cash refunds or recoveries expected are compared against the actual cash received. There are also weak controls ensuring that all refunds and recoveries have been received before grants are closed. This has resulted in the administrative closure of grants while there were outstanding recoveries.
- Audit Report - Grant Closure Processes Follow-up Review (GF-OIG-16-017 - 4 July 2016)
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For more information:
Thomas Fitzsimons
Email:
Mobile: + 41 (0)79 412 14 61
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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.
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