Malawi has appointed new principal recipients to administer $574 million allocated to fight HIV, as it seeks to end financial scandal involving the National AIDS Commission.
Malawi has appointed new principal recipients to administer the $574 million it was allocated to fight HIV, as it seeks to turn the page on a financial scandal involving the National AIDS Commission.
The country chose the new fund recipients in time for the Global Fund to Fight AIDS, Tuberculosis and Malaria’s latest window of submission for funding on 30 January. International NGOs ActionAID and WorldVision, as well as the Ministry of Health, were chosen as the new principal recipients, replacing the National AIDS Commission, which has been embroiled in a financial scandal since its former executive director was found to have misappropriated hundreds of thousands of dollars.
Sources within the country coordinating mechanism (CCM) told Aidspan that, during a recent visit a Global Fund delegation expressed continued concerns about the financial management at the Ministry of Health (MoH), but kept the state body as principal recipient because it is the only agency with the facilities to handle the biomedical component of interventions. The choice of MoH, WorldVision and ActionAID preceded the visit by the Global Fund delegation.
Weak financial management of funds
These concerns echoed a March 2014 letter from the Global Fund secretariat, in which it was announced that “the overall performance of the current principal recipients have been downgraded to B2 ‘inadequate’ due mainly to weaknesses in financial management, which led to ineligible or unsupported expenditures and delays in external audit”.
External audits conducted for 2011-2012 found some $1.4 million in ineligible or unsupported expenditures. An audit report for 2012-2013 has yet to be completed; there has been no indication of when an audit for financial year 2013-2014 will even be initiated.
Malawi has, however, begun to implement public financial management reforms as well as measures to strengthen its procurement and supply chain management systems, as well as installing a fiscal agent at the MoH.
Lack of civil society representation
Still, there are other challenges beyond financial management. Civil society representatives meeting with the Global Fund delegation raised a number of concerns about how they were not adequately represented in the country dialogue or in the development of the HIV/TB concept note, and the impact that has had in the note submitted in late January.
Representatives from key population groups also noted that there was little attention in the concept note to addressing the legal and policy environment in which they are operating. Stigma and discrimination have become institutionalized in Malawi, one of 34 countries in sub-Saharan Africa with legislation that makes it a crime to be gay. There are also no anti-discrimination laws in place that offer redress for people living with HIV to report those who would bar them from accessing services.
Budgets allocated to various activities were profoundly imbalanced, they said, with most of the funds going to treatment and very little set aside for prevention and critical enablers; those activities that help ensure that programs actually work effectively. Both prevention and critical enablers are typically the remit of civil society, while government is generally responsible for treatment activities.
Nor does the concept note invest enough resources in community systems strengthening (CSS), according to civil society representatives, slashing the size of the CSS budget from $8 million to under $1 million over the new funding model allocation period from 2015-2017. An increase of $30 million in domestic financing over the next three years could address these gaps.
During its visit the Global Fund team encouraged more work on the note to respond to these concerns, but very little was done to modify the note that was submitted in time for window five. It is likely that these areas of consideration will be flagged during the review, expected in March, by the technical review panel.
This story was originally published by Aidspan and has been edited for the Key Correspondents website
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