Concerns over fraud in Global Fund projects caused funding crises for some African HIV/AIDS programmes
WASHINGTON (TrustLaw) - Eighteen months after it was rocked by a fraud controversy the Global Fund, the agency at the frontlines of the battle against AIDS, tuberculosis and malaria, has overhauled its top management, doubled its investigation budget and is ramping up funding again.
But some health experts question whether its zeal in cracking down on corruption comes at the expense of fighting three of the world’s major killers.
They say the Global Fund’s shock decision last November to suspend financing has seriously damaged some programmes on the ground.
The Fund was forced to scrap new grants after donor countries froze contributions partly because of the financial crisis but also because of concerns that money was being misused in several countries.
The rupture in financing meant southern Africa missed “a watershed moment” in its fight against HIV/AIDS, the Open Society Foundation said in a report released last week on the impact of the Global Fund crisis.
Countries with high HIV/AIDS rates such as Zimbabwe, Swaziland and Malawi have had to redirect money into essential medical services and cut back on prevention programmes, jeopardising longer term efforts to halt the spread of the virus.
Malawi, for instance, has run short of HIV testing kits, faces a $12 million funding gap for health worker salaries, and cannot afford to roll out the improved HIV treatment programmes recommended by the World Health Organization, the report said. The country is almost totally dependent on the Global Fund for its national treatment programme.
In the Democratic Republic of Congo, funding problems have put out of reach the country’s target to double the number of people receiving HIV/AIDS treatment to 25 percent of the affected population by 2015, said Sharonann Lynch, HIV policy adviser at Medecins Sans Frontieres (MSF).
“They are going backwards. The number of people going into treatment is less than a year ago,” she said on the sidelines of the 19th International AIDS Conference in Washington, where the future of Global Fund financing was a hot topic.
HIGH AND DRY
The storm over fraud proved a particularly harsh blow for the Fund because it had a solid reputation for accountability.
It publishes details on its website of the $22 billion it has invested in 1,000 projects in 150 countries over the last decade. It also publishes full reports on its investigations into programme fraud.
So when the Associated Press reported in January 2011 on some of those investigations, highlighting that in Mauritania 67 percent of money for one anti-AIDS programme was misspent, the uproar was something of a surprise. The Global Fund had been hiding nothing.
But several donors suspended funding while the Fund reviewed internal procedures. Then a lack of donor funds prompted it to cancel its regular round of grants, leaving high and dry many low-income countries and organisations working on the ground.
The Fund announced in May that $1.6 billion would start flowing to projects over the next three years. Christoph Benn, the Fund’s director of resource mobilisation, said the upheaval had caused the agency to examine its procedures.
“There was a real question over whether we were punished for our own transparency. We decided that we would not waiver and would stick to our standards of accountability,” he added.
Benn said he was confident donor concerns had been addressed and that the Fund fully expected to continue, and even increase funding.
The Fund has doubled its budget for reviewing projects and has revamped funding procedures. Instead of regular funding cycles, it has adopted a private equity financing model of investing in carefully designed projects.
It has also appointed a chief risk officer, Cees Klumper, who recently analysed the audits and investigations conducted by the Fund between 2005 and 2012.
He found there was fraud or misuse of monies in 3 percent of projects, accounting for $3.8 billion in misspent money. The report covered 23 percent of disbursements in 27 countries.
By way of comparison, that is half the rate of fraud found in charitable organisations according to a 2006 Harvard University study.
Daniel Kaufmann, senior fellow in global development at the Brookings Institution in Washington and a leading advocate of good governance transparency, has cited the Global Fund for its relatively good track record.
He studied donor patterns over 15 years and found evidence suggesting the Global Fund, along with Norway, the Netherlands, the United Kingdom and the European Union, performed better than the United States, France and the World Bank’s International Development Association in giving to less corrupt nations.
WAKE-UP CALL
The Global Fund’s Benn said it was too early to tell whether its ramped-up investigations office was rooting out even more fraud, but he believed it sent a clear message to countries to clean up their act.
“It is going to take time before we can objectively measure it on the ground. But subjectively, when we publish reports on our investigations, it is a wake-up call in a sense,” he added.
Recipient countries realise that there are consequences for allowing fraudulent diversion of funds from AIDS, TB and malaria projects, and that ministers can and do end up in jail for it, he said.
Yet the message is clearly taking time to get through in some countries. In Bangladesh, one organisation thwarted a Global Fund investigation into the $3.6 million it received for an HIV/AIDS programme between 2004 and 2009.
Accounts were fabricated, invoices falsified and bank statements made up to conceal the diversion of at least 52 percent of the money, the Fund’s investigative office said in a report this month.
“In the end, we believe that transparency is the best answer to address corruption,” Benn said.
For MSF, however, it is difficult to measure combating fraud against the cost in human lives.
Lynch is concerned the Global Fund crisis provided an excuse for budget-constrained Western countries to pull back when bold and ambitious funding remains essential to ending health pandemics.
While individual countries are beginning to discuss ways to plug global funding gaps through special national levies, such as an airport tax, these efforts are at an early stage and inadequate for the poorest countries.
“Risk aversion in funding is starting to become the norm and a priority, when we are still in an emergency on the ground. I don’t want to play it safe in an emergency. I want to play like we are beating the plague,” Lynch said.
“I am tired of hearing we have to move from emergency mode to a model of sustainability in funding when you have people who are still getting infected with HIV and nurses dying who are treating AIDS.”
Our Standards: The Thomson Reuters Trust Principles.
