Office of the Inspector General

© UNDP Guinea-Bissau / Gwenn Dubourthoumieu

Supplier Wrongdoing and Global Fund Non-Compliance with Procurement Regulations

15 December 2016

An OIG investigation found that a Zimbabwean consulting firm charged the Global Fund for work in 2013 and 2015 that was plagiarized. The firm, called the Mutambara Foundation, and its director, fraudulently obtained payment of consultancy fees as well as non-compliant travel costs totaling US$191,000. The OIG also found that the Global Fund's Sourcing Department did not comply with the organization's procurement regulations by improperly awarding two contracts through non-competitive processes. As a result, the Global Fund is taking corrective actions including pursuing an appropriate recoverable amount, clarifying its procurement framework and taking disciplinary action where necessary.

In November 2015, the Sourcing Department alerted the OIG to an anonymous email that alleged past wrongdoing on the part of the Mutambara Foundation. As a result, the OIG launched an investigation into the award of the two consultancy contracts. The first was awarded to the Mutambara Foundation in December 2013 with a total value of US$155,000 including US$40,000 in travel expenses; the second was awarded to the Director of the Mutambara Foundation personally in June 2015 for a total value of US$36,000. The contracts were for information and analysis regarding counterfeit medicines in Global Fund-financed African supply chains. The OIG determined that a substantial portion of the written work from contract 1, and a quarter of the work of contract 2, were not the original work of the Mutambara Foundation and that the original sources of the work had not been credited.

The OIG found the fees paid to be non-compliant as the supplier fraudulently obtained payment from the Global Fund by misrepresenting plagiarized work as its own. The travel advance of US$40,000 under contract 1 was also identified as non-compliant because the Mutambara Foundation failed to provide access to relevant staff and receipts as required by the Supplier Code of Conduct.

Furthermore, the total values of both contracts 1 and 2 were identified as non-compliant with Global Fund Procurement Regulations, which stipulate that contracts have to be awarded competitively and transparently unless there are exceptional circumstances. The investigators did not find any valid exceptional circumstances to justify the non-competitive award of the contract 1 to the Mutambara Foundation. The OIG investigators also found that a manager steered the second contract in a non-competitive manner to the Director of the Mutambara Foundation in order to create a conflict of interest.

The OIG concluded that failure to comply with the Global Fund's own internal controls and regulations for the procurement of services allowed for the improper non-competitive award of contracts to the Mutambara Foundation and its director.

The Global Fund Secretariat and the OIG have agreed on specific actions to address the governance, oversight, management issues and the risks identified. These include pursuing an appropriate recoverable amount; addressing the supplier misconduct in accordance with the Code of Conduct for Suppliers and the Sanctions Procedures; disciplinary measures for Global Fund Employees where appropriate for violations of the staff Code of Conduct; and a review of the Global Fund's current procurement framework to ensure better alignment, clarity and guidance.

  • Investigation Report - Supplier Wrongdoing and Global Fund Non-Compliance with Procurement Regulations - The Mutambara Foundation and the Global Fund Sourcing Department (GF-OIG-16-026 - 15 December 2016)
    download [ download in English | Français ]

###

For more information:

Thomas Fitzsimons
Email:
Mobile: + 41 (0)79 412 1461

###

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.