Small percentage of Global Fund money mispent, audit finds

A total of 3% of money from The Global Fund to Fight AIDS, Malaria and Tuberculosis between 2005 and 2012 had been misspent, fraudulently misappropriated or inadequately accounted for.

According to a press release made available by The Global Fund’s Director of Communications Seth Faison, audits carried out by the chief risk officer Cees Klumper show that a small percentage of funds have been misappropriated through fraud.

“We do not tolerate any misuse of funds, no matter how minor. Although some of these funds were misspent, and are just ineligible expenses, a small percentage of funds are misappropriated through fraud; we actively pursue and expose all such cases,” Klumper said.

Klumper added that as further audits and investigations are completed, the above percentages are likely to change.

“Wherever impropriety is discovered, it is reported. When funds are misappropriated or improperly spent, they are recovered as fully as possible,” Klumper stated.

Since it was established in 2005, the Global Fund’s Office of the Inspector General has compiled 28 reports on audits and investigations in 27 countries, where a total of US$3.8 billion has been disbursed; approximately 23% of all disbursements that the Global Fund has made to date.

The analysis of the Inspector General’s findings shows that, cumulatively, 3% of the funding that was investigated was not spent in compliance with the grant agreements, as follows:

• Ineligible expenses or activities not covered by the grant agreements 1.1%
• Iinadequately substantiated due to poor or missing documentation 1.1%
• Fraud 0.5 per cent and failed to report funds as required 0.3%

John Parsons, the inspector general, further cautioned that audits and investigations conducted tend to focus on high-risk areas and on grants where specific risks have been identified. Since its creation in 2002, the Global Fund has become the main financier of programs to fight AIDS, TB and malaria, with approved funding of US$ 22.6 billion for more than 1,000 programs in 150 countries as of December 1, 2011.