Office of the Inspector General

Pakistan: prohibited practices in a tuberculosis program

01 April 2021

The Indus Hospital, a Principal Recipient of Global Fund grants, engaged in anti-competitive and collusive practices and failed to properly mitigate actual or apparent conflicts of interest in the selection of IRD as a supplier for four projects to be funded as part of the grant. This resulted in a non-compliant amount of US$1,062,076 and potentially recoverable amount of US$341,791.

Subsequently, following a procurement process compromised by anti-competitive, fraudulent and collusive practices, the Indus Hospital engaged Interactive Health Solutions (IHS), an entity majority-owned by an executive manager and owner of IRD and his wife, to provide IT services. This resulted in a non-compliant amount of US$1,070,085 and potentially recoverable amount of US$519,624.

The Indus Hospital selected Interactive Research and Development (IRD) as a long-term technical assistance supplier without conducting a competitive tender, with the agreement of the Secretariat. The safeguards proposed to mitigate the related conflicts of interest proved not to be effective. The costs of this contract to the grant were materially higher than the costs of delivery by IRD and that those costs did not reflect the true nature of the amounts invoiced. In some instances, costs invoiced could not be supported. This resulted in a non-compliant and potentially recoverable amount of US$310,174.

These events involved non-compliance with the Grant Agreement by the Principal Recipient, including non-compliance by a Principal Recipient’s supplier with the Code of Conduct for Suppliers. As the costs for managing the grant, as well as the cost of the contracts with the suppliers were paid with grant funds, this results in ineligible use of grant funds. In instances where these compliance issues resulted in losses, the OIG is proposing these amounts to the Secretariat for recovery.