An Office of the Inspector General (OIG) investigation in Egypt found evidence of fraud and procurement irregularities between 2008 and 2012 compromising Global Fund contracts worth US$ 668,877.
The irregularities involved the use of hotels and vehicle hire for training activities and related procurements for t-shirts, stationery, catering. These goods and services were bought by a Principal Recipient, the National AIDS Programme (NAP), part of the Egyptian Ministry of Health and Population. NAP has been instructed to cease all non-essential program activities; the Global Fund is taking corrective measures and is seeking to recover the misspent sums.
Specifically, the investigators found fraudulent procurement of t-shirts as demonstrated by similar handwriting on different supplier invoices, multiple irregularities in the dates of quotations, invoices and delivery documentation and close connections between the different bidders. Several irregularities in stationery purchases and catering expenditure were also recorded.
They also found that the main supplier used by NAP for vehicle rentals could not be physically located and that the supplier had not been selected through a competitive bidding process.
The OIG could not check supporting documents relating to hotel expenditures recorded by NAP as it was denied access to the three major hotels used. The investigators received no assistance from NAP to obtain these records.
The OIG concluded that the wrongdoing was largely due to a lack of segregation of duties of NAP staff, inadequate accounting records and a lack of oversight by NAP management personnel. Furthermore, the Local Fund Agent did not flag the irregular procurement practices identified at NAP.
Following instructions from the Global Fund, NAP has ceased all grant activities (training, workshops, seminars, etc.) with the exception of life-saving activities. The Global Fund Executive Director has also invoked the Additional Safeguard Measures on the Egypt portfolio. This allows the Global Fund to continue providing services to people with HIV and tuberculosis while putting in place additional specific fiscal, financial and procurement safeguards to protect grant funds.
For example, a “no cash policy” for all expenses above EGP 2,000 has been put in place and all major procurement have been outsourced to UNICEF. The Global Fund has also asked NAP to ensure that the individuals identified by the OIG report are no longer involved in implementing Global Fund grants.
The OIG has recommended the recovery of USD 668,877 in funds.