Archive for January, 2011

Trouble at the Global Fund

News broke that the Global Fund, a $21.7 billion development fund, and one of the single most important financing source for developmental healthcare, has seen a significant portion of its grants misused due to local corruption. As reported by the AP (full article):

…Much of the money is accounted for with forged documents or improper bookkeeping, indicating it was pocketed, investigators for the Global Fund to Fight AIDS, Tuberculosis and Malaria say. Donated prescription drugs wind up being sold on the black market.…The fund is pulling or suspending grants from nations where corruption is found, and demanding recipients return millions of dollars of misspent money.

Mali – halted grants worth $22.6 million, after the fund’s investigative unit found that $4 million was misappropriated. Half of Mali’s TB and malaria grant money went to supposed “training events,” and signatures were forged on receipts for per diem payments, lodging and travel expense claims. The fund says Mali has arrested 15 people suspected of committing fraud, and its health minister resigned without explanation two days before the audit was made public.

Mauritania – “pervasive fraud,” investigators say, with $4.1 million — 67 percent of an anti-HIV grant — lost to faked documents and other fraud. Similarly, 67 percent of $3.5 million in TB and malaria grant money that investigators examined was eaten up by faked invoices and other requests for payment.

Djibouti – Investigators reviewed more than four-fifths of $20 million in grants, and found about 30 percent of what they examined was lost, unaccounted for or misused. About three-fifths of the almost $5.3 million in misappropriated money went to buy cars, motorcycles and other items without receipts. Almost $750,000 was transferred out of the account with no explanation.

I must say, while this news is discouraging, it’s certainly not shocking. As many in the world of development can attest, developing local partnerships can be a risky process. In a talent and resource constrained environment, organizations like the Global Fund often rush to demonstrate results at the cost of establishing a sound protocol to conduct thorough independent due diligence and review of the work that they are funding. Indeed I think the Global Fund is actually taking a significant positive step in disclosing such alarming figures. While in the short term, this might cause some donors to tighten their wallets (i.e. Sweden) this disclosure will encourage other similar organizations to be more transparent in their efforts to address and finance global healthcare project, and ultimately be viewed with more confidence by donors.

“The messenger is being shot to some extent,” fund spokesman Jon Liden said. “We would contend that we do not have any corruption problems that are significantly different in scale or nature to any other international financing institution.” The fund’s inspector general, John Parsons, said donors should be reassured that the fund is serious about uncovering corruption…”It should be viewed as a comparative advantage to anyone who’s thinking about putting funds in here.

Perhaps this is an optimistic view, but indeed the Global Fund at this point has become so critical to the structure of healthcare development that a panicked reaction to this information is the last thing that’s needed in an already financing constrained environment. The global fund in 2008 represented over 10% of total international funding for HIV/AIDS and presumably plays and even greater role in the fight against Malaria and TB.

AIDS Funding Chart - Global Health Council

And yes, I’m back to blogging after a 2 month hiatus.


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