Contesting the Global Fund audit

On the heels of a decision by the Global Fund to Fight AIDS, Tuberculosis (TB) and Malaria to cancel its next round of funding, the Swazi government is calling on donors to come to the impoverished country's aid. However, there are fears that the result of a recent Global Fund audit may dissuade donors even as HIV organizations contest its findings.

Economic constraints forced the Global Fund to cancel Round 11 grants at its board meeting in late November in Ghana's capital, Accra. HIV activists in Swaziland say the cancellation has jeopardised the scale-up of HIV programmes. The country is also contesting a recently released Global Fund audit that alleges nearly US$6 million in aid was misused.

With an HIV prevalence of about 26 percent, Swaziland cannot afford to fund HIV treatment domestically - an estimated 90,000 Swazis are in need of antiretroviral (ARV) drugs, according to international medical humanitarian organization Médecins Sans Frontières.

In early 2010, the Swazi government announced it would take over funding for all ARVs, excluding paediatric drugs, from the Global Fund, but a lack of money led to ARV shortages in 2011. Swaziland recently received stopgap funding from the US President’s Emergency Plan for AIDS Relief (PEPFAR) to help supply first-line ARVs until the end of April 2012.

HIV organizations contest audit findings

The audit report released on 31 October by the Global Fund's Office of the Inspector General (OIG) recommended that Swaziland pay back $5.8 million of around $100 million in grants it had received between 2003 and 2010.

The report says the money due for repayment has been misspent as part of budget overruns, or unbudgeted or unapproved expenses, and the situation has been compounded by a dearth of supporting documentation and oversight.

Swaziland's Country Coordinating Mechanism (CCM), which handles the disbursement of Global Fund grant money, denied any corruption, theft or fraud in a statement.

"We are completely transparent," said Derek von Wissell, director of the government's National Emergency Response Council on HIV and AIDS (NERCHA). "There is a lack of understanding about the way things work in Swaziland.”

NERCHA has joined the CCM in insisting that no money was misspent. Both bodies say inadequate local accounting practices were largely to blame for the appearance of financial discrepancies that in fact did not exist.

Among the audit's findings were poor controls in terms of unbudgeted expenditure, such as the purchase of vehicles used to support feeding schemes but not included in original work plans. In its report, the OIG does not question the need for the vehicles, but has asked NERCHA to provide evidence that the nearly 40 vehicles purchased were used in line with Global Fund grant objectives.

Without this evidence, the OIG has recommended that the roughly $1.8 million used to purchase the cars be refunded.

The money went to vehicles that you can plainly see are transporting food to neighbourhood care points," said Alicia Dlamini, a systems manager with a HIV testing and counseling NGO that depends on international donations. "This is not money that disappeared into someone’s overseas bank account.”

Unapproved expenditure was also found in the construction of rural centres built for the care of orphaned and vulnerable children, where costs ran about $1 million over budget, despite fewer than the projected number of centres being built.

Keeping up with the times

Dlamini maintains that the Global Fund Secretariat approved the expenditure, but the audit disagrees, highlighting the need for better guidance from the Secretariat to Fund recipients in order to avoid similar situations in future.

Von Wissell says these situations are historically rooted. "The original plan of the Global Fund was, ‘Let’s get the money out there and get the results’. We were told go buy the drugs we need and get vehicles if they are needed," he told IRIN/PlusNews.

"At the Global Fund now, such flexibility is gone. We started getting money in 2003 and the Global Fund was just starting up, so monitoring systems were just starting up for both of us. You can’t apply 2010 rules to what was done in 2003," Von Wissell said.

Since its inception in 2002, the Fund has tried to implement increasingly tighter financial controls, most notably after the Fund discovered fraud in several countries in 2010. The Fund subsequently instituted a high-level panel to review financial management.

The OIG conceded that financial reporting guidelines had changed over the years but urged NERCHA to improve its financial oversight, and produce missing supporting documentation.

"We order a big batch of drugs on behalf of the Global Fund, to be sent to government’s Central Delivery Stores, which then may lose an order or an invoice - this is Swaziland, and it happens," von Wissell said.

"We go back to the suppliers for a certifiable invoice, but this is not accepted by the Global Fund. The drugs are there. The money was legitimately spent, but the OIG says there is no proof - 60 000 people are alive today because of those drugs,” he added.

The UN recommends that the principal recipients of Global Fund monies, such as NERCHA, should use 14 percent of the annual grants received for programme monitoring and evaluation.

According to von Wissell, NERCHA has never received more than about 2 percent of annual grants for evaluating Global Fund expenditures.

In its audit, the OIG recommended a commitment of Global Fund money and expertise to improve the monitoring and evaluation capabilities of the Fund’s recipients in Swaziland.

Wooing the donors?

Prime Minister Sibusiso Dlamini has called on the international donor community to come to Swaziland’s assistance “in this hour of need”, but his call may encounter some resistance if donors are alarmed by the findings of the Global Fund’s audit report.

HIV organizations and government maintain that the audit has created false impressions, which may jeopardise future funding for a country that has already seen shortages of HIV treatment, testing kits and related laboratory tests, according to Alicia Dlamini, a systems manager at an HIV testing and counselling NGO that depends on international donations.

“If donors think monies were squandered in Swaziland, they will write off the country," she told IRIN/PlusNews.

Thembi Nkambule, director of the Swaziland Network of People Living with HIV and AIDS, an umbrella body, said the cancellation of Round 11 may already have jeopardised the government's commitments to scale up HIV treatment and prevention of mother-to-child HIV transmission.

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