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Wednesday, November 9, 2011

Crisis between AIDS Donors and recipients

A CRISIS of confidence is brewing between foreign grant donors and recipient organisations in Nigeria over alleged misappropriation of funds meant to combat a set of pandemic diseases in the country.

One of such donors, the Global Funds for AIDS, TB and Malaria, has alleged that individuals, organisations and government establishments in the country may have diverted money meant for the control and management of Human Immuno-deficiency Virus (HIV)/Acquired Immune Deficiency Syndrome (AIDS), tuberculosis (TB) and malaria for other purposes.
Global Funds for AIDS, TB and Malaria is funded by several countries across the world, including Nigeria, which has contributed about N30 billion to the funds.
There are allegations that the management of donor grants for AIDS, TB and malaria in Nigeria has become a “big business” choked with poor accountability, misappropriation and fraud. It was gathered that a syndicate involving high-ranking Nigerians regarded as the ‘untouchables’ is allegedly providing cover for “a grand grants graft” in the country.
The most recent of these claims is the alleged misuse of over N1.643 billion ($10.6 million) donor funds, which came to light in the country audit report of the Global Funds Grants to Nigeria by the Office of the Inspector-General (OIG) of the Fund.
According to the audit report on Nigeria, some of the organisations probed by the Global Fund were asked to return about N1.643 billion ($10.6 million). The audit report showed how several Nigerian organisations misused the funds they received, and put the country in danger of missing out on such assistance in the future.
The fear of a possible suspension of the grants to Nigeria became real with a recent withdrawal of $13.91 million HIV/AIDS grant to Mali. The decision to suspend the grant came after evidence gathered revealed alleged gross misuse in that country.
The Guardian learnt that the OIG initiated the audit, which covered grants signed in Nigeria by March 31, 2010 in order to determine whether the Global Fund grants made available in the country “had been used wisely to save lives in the Federal Republic of Nigeria.”
The Guardian investigation revealed that 15 grants, amounting to $682,149,515, were provided between 2003 and 2009, out of which $474,519,260 had been disbursed.
The Principal Recipients (PRs) of the Global Fund grants in Nigeria include: Yakubu Gowon Centre for International Co-operation (YGC); National Action Committee on HIV/AIDS in Nigeria (NACA); Society for Family Health (SFH); National Malaria Control Programme (NMCP); Association for Reproductive and Family Health (ARFH); Christian Health Association of Nigeria (CHAN); and CHAN-MEDIPHARM (MEDIPHARM).
The current report of the Global Fund audit on Nigeria made available to The Guardian by a reliable source and confirmed by some of the PRs alleged that:
• NACA incurred extra-budgetary expenditures of $71,000 as well as $679,000 in unretired expenditures;
• the YGC, which had received four grants totalling $172 million, is to refund to the Global Fund $5.2 million that could not be properly accounted for;
• the SFH, at the end of 2009, had administrative charges of five per cent of the budget, amounting to $861,000 that was not accounted for. It also has a $68,000 unretired expenditure budget;
• the NMCP had $711,000 unretired staff advances and $10,000 under-funded balance of rent grant. It is to refund $132,000, which could not be properly accounted for, or was not in the approved work plan and budget;
• the ARFH had $335,000 in management fees, which it could not justify, and could provide no accountability for. It is to refund $504,000 it could not account for, or which was not in the approved work plan and budget;
• the CHAN illegally transferred foreign currency amounting to $11.6 million to non-programme-related bank accounts abroad; the funds were later refunded into the local naira bank account. CHAN grant Sub-Recipients (SRs) had not accounted for $1.4 million at the time of the audit, and CHAN is to refund $2.9 million which could not be adequately accounted for or which was not in the approved work plan or budget;
• CHAN MEDIPHARM overcharged on distribution of products to the tune of $256,000; with $77,000 as unexpended amount on training.
However, a more recent final audit report on Nigeria released by the Global Fund on Monday, October 31, 2011 indicted the YGC of allegedly misappropriating N130 million ($824, 626) missing fund, among other allegations of financial “abuse or fraud”.
The OIG’s investigation of the Global Fund’s grant to Nigeria noted: “The OIG has found credible and substantial evidence that YGC has misappropriated the missing and diverted funds.”
The report on YGC, contained in part one of the OIG report, No. GF-OIG-11-011, noted that the centre conducted “foreign currency exchange transactions between 2005 and 2009 on Nigeria’s parallel currency market in order to exchange transactions, exchanging approximately $22 million in grant fund disbursements with 35 different companies and four individuals.”
The Guardian learnt that some of the organisations have returned part of the misappropriated funds while others are yet to account for theirs. It was also reliably gathered that the Global Fund has given the country a deadline to retire the funds or face suspension or outright withdrawal of the grants.
The Guardian also learnt that the Nigerian organisations involved are having problems retiring the money because the programme was initiated in 2003 but the OIG was set up in 2006. The organisations involved have also not been keeping handy data on their operations.
The organisations, however, accused the Global Fund of changing the rules in the middle of the game. They claimed that a large chunk of the money the Global Fund asked them to refund were used as management cost, including paying workers’ salaries but which the OIG labelled “personal cost.”
Reacting to the report, Chief Executive Officer, YGC, Ambassador Akporode Clark, told The Guardian: “We have received an earlier report from the Global Fund. They asked for our comments, which we have sent to them. The comments we made seek to clarify the issues raised. The report was truncated and we say that it was not done properly.
“As regarding the $824,626 they alleged was misappropriated, we challenged them on the figures. The project took place between 2004 and 2008. Part of the money was regarded as management fee and payment of salaries of Global Fund staff, but they say we used it as personal cost. We cannot refund money used to execute projects. The management cost was negotiated and they are asking for receipt and we are providing it for them.”
A reliable source at the Country Co-ordinating Mechanism (CCM) that preferred anonymity said: “The ARFH, SFH and NMCP do not have any issues with the Fund; they have cleared them. The CHAN, NACA and YGC are finalising documents to clear themselves with the OIG. Most of the issues with NACA happened when Prof. Babatunde Osotimehin was the director-general, not Prof. John Idoko.”
First Vice Chair, Global Fund CCM, Prof. Omotayo Obong, said: “We have been communicating with Global Fund and the PRs. The first publication on the audit report by the Global Fund was done in error because the pattern is that the Global Fund will say ‘you owe us’ and we say ‘no we are not owing you.’ It is when we agree on the amount that it becomes authentic. Many of the PRs have defended their position and have been cleared. We have been communicating with the Global Fund and the final report will be out soon.”
On the threat of possible suspension or withdrawal of grants to Nigeria, Obong said: “They cannot suspend the fund. Communication is ongoing and if anybody is found wanting, there are agencies in Nigeria to handle that.”
 Source; The Nation

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