Global Fund finds $11M fraud in malaria programme

- data falsified on bed nets

An investigation of the Global Fund’s malaria grant in Guyana covering two and half years up to June 2015, has unearthed irregularities including falsification of data and fraudulent expenditures amounting to over $11 million which the international organisation will seek to recover.

“The investigation found a series of irregularities relating to the inflation of programmatic data, the fabrication of underlying programmatic documentation, and anomalies in fuel consumption and ‘per diem’ claims. These irregularities affected expenditures totaling US$72,973 which the OIG considers to be non-compliant, and therefore potentially recoverable,” the report by the Global Fund’s Office of the Inspector General (OIG) says.

The OIG said that these irregularities were facilitated by the inadequate management of the Global Fund malaria programme by the Vector Control Services (VCS) of the Ministry of Health, which included poor record-keeping and a failure to respond to Global Fund Secretariat Management Actions.

“The overall management of the Global Fund malaria program by the ex-director of VCS and the standard of oversight exercised by an ex-VCS senior Monitoring & Evaluation (M&E) technician were inadequate. The OIG considers that this poor oversight facilitated the fraudulent misrepresentation and other irregularities identified in the investigation,” the report, seen by Stabroek News, says.

The investigation covered the period January 1, 2013 to June 30, 2015. During this period the Director of the VCS was Dr Reyaud Rahman. He resigned in December last year.

The investigation was sparked by a complaint from a whistleblower to the OIG in March 2015 who alleged irregularities in the Global Fund malaria grant in Guyana. In July 2015, the Global Fund Secretariat also reported to the OIG a series of complaints it had received in relation to the same grant.  The Global Fund to Fight AIDS, Tuberculosis and Malaria is an international financing organisation founded in 2002.

Former director of the Vector Control Services Dr Reyaud Rahman
Former director of the Vector Control Services Dr Reyaud Rahman

The complaints centred on the fabrication of data relating to the distribution of bed nets, malaria surveillance activities and associated fraudulent expenditures, including ‘per diems’ and fuel for programmatic work that allegedly did not take place, the report said.

The Guyana malaria grant commenced on September 1, 2011 and is scheduled to end at the end of December this year. The Ministry of Health is the recipient of the grant. The amount committed by the Global Fund under this grant is US$1.2 million and disbursements to date total US$1.1 million, the report said. It noted that malaria surveillance activities and the distribution of bed nets under the Global Fund malaria grant in Guyana are implemented by the VCS.

The report noted that the irregularities were reported to have taken place while VCS was under the management of Rahman, who resigned and left VCS on December 9, 2015. The OIG therefore initiated an investigation which focused on the malaria surveillance activities of VCS during the period in which Rahman was responsible for the Global Fund malaria program. This encompassed five six-month periods between January 2013 and June 2015. Global Fund grant activities in Guyana operate across four regions namely Regions 1, 7, 8 and 9. As a result, the OIG investigation focused on these regions.

 

Mission

The report said as part of its investigation, the OIG undertook a mission to Guyana in August 2015. The OIG interviewed employees of the Global Fund malaria program, VCS and the Ministry of Health, and collected and reviewed programmatic, administrative and financial documentation.

“The OIG investigation found evidence that VCS employees had inflated the number of long-lasting insecticide impregnated mosquito nets (bed nets) reported as distributed and had fabricated underlying bed net distribution documents to support the inflated figures. VCS employees also fabricated documentation for another surveillance activity relating to the operation of malaria committees,” the report said.

“Due to inaccurate record keeping by VCS and the Ministry of Health, the OIG was unable to establish how many bed nets financed by the Global Fund had been distributed by VCS. As a result of this fraudulent misrepresentation of information and inadequate procurement and supply management, the OIG finds that the sum of US$41,789, corresponding to the value of the bed nets, is noncompliant expenditure and therefore should be recovered,” the report declared.

The report said that two VCS malaria supervisors responsible for distributing bed nets in the regions told the OIG that they had inflated bed net distribution figures in the Semester Reports and that they had fabricated underlying documentation to support the figures. The two malaria supervisors also told the OIG that a VCS administrative employee had instructed them to inflate the figures to meet targets.

“When interviewed, the VCS administrative employee denied asking anyone to inflate figures in the Semester Reports or to fabricate underlying documents. The ex-director of VCS also told the OIG that he had never given instructions to inflate figures or fabricate documents. As the OIG did not find any other evidence to corroborate the statements of the VCS malaria supervisors, it was unable to conclude who was responsible for orchestrating the misrepresentation of bed net distribution information,” the report said.

The report noted that the OIG analysed over 46,000 individual names and signatures on the bed net distribution activity sheets to assess if the activity sheets contained indicators that bed nets had not been distributed to beneficiaries and upon completion of this exercise, it found that it could not obtain reasonable assurance that 20,981 bed nets, representing 45.2% of the total reviewed, had been delivered to beneficiaries on the basis of anomalies found in the bed net distribution activity sheets.

This figure did not include bed nets where it appeared that a single individual, such as a community health worker, mining camp leader or a family member, had signed legitimately on behalf of a group of individuals.

 

Systematic

“The OIG’s analysis also found that the average incidence of signature anomalies across the regions and periods under review was similar, indicating that the fabrication of underlying bed net distribution documentation was systematic,” the report said.

The report said that the Global Fund Secretariat has agreed to ask the Ministry of Health to implement an improved process for recording the distribution of bed nets to beneficiaries which includes identification and contact information to facilitate beneficiary verification.

The report noted too that the OIG also found that VCS employees fabricated supporting documentation for a malaria surveillance activity relating to “the number and percentage of localities with community involvement in malaria prevention and control.” It said that the same two VCS malaria supervisors who had reported fabricating bed net distribution documentation, also described fabricating documents relating to malaria committees. They claimed they did not have enough time in the regions to undertake all the programmatic activity that they were required to perform.

The OIG performed an initial analysis of over 3,000 pages of malaria committee minutes for Regions 1, 7, 8 and 9 in and found that over 40% of all malaria committee minutes reviewed were identical photocopies with only the date, school name, or participants’ names changed. The OIG also analyzed in detail almost 800 pages of malaria committee minutes for regions 1, 7, 8 and 9 for one period. “The analysis found that almost 90% of the malaria committee minutes exhibited evidence of having been fabricated,” the report said.

The OIR urged the Global Fund Secretariat to ask the Ministry of Health to implement a system for recording malaria surveillance programme activity which makes use of Global Positioning System or similar technology to record the date and the location where the activity takes place.

Meantime, the report said that the investigation also found that a substantial proportion of the fuel purchased by VCS in the periods under review was misappropriated. These irregularities affected fuel purchases totaling US$11,290 which the OIG found to be non-compliant and therefore potentially recoverable expenditures.

The report said that the VCS has a fleet of 4×4 vehicles, small all-terrain vehicles (ATVs), and boats for undertaking malaria surveillance work in the regions. The VCS maintains vehicle log books to record the name of the driver, the locations, distance travelled and fuel purchases made for the vehicles and boats but some documents were not provided to the OIG.

The OIG analysed the fuel purchased for two periods with the distance travelled information recorded in the vehicle log books for the same periods and found discrepancies. “Due to the absence of any documentary evidence to confirm that this fuel was used by VCS and had not been misappropriated, the OIG finds that these fuel purchases are non-compliant expenditures and therefore potentially recoverable,” the report said.

Further, the investigation also found that some claims for ‘per diem’ expenses by VCS drivers in certain periods were inconsistent with entries in vehicle log books. This amounted to US$3,887. VCS staff are entitled to claim per diems for each day they travel and perform work outside of Georgetown. The per diem claims submitted by VCS employees have to show the dates and the locations that they visit.

Following its mission to Guyana, the OIG compared the locations and dates of per diems claimed by VCS employees in two periods with the locations and dates recorded in the VCS vehicle log books. The OIG’s analysis identified discrepancies between the locations and dates for which per diems were claimed and the information recorded in the vehicle log books relating to five VCS drivers totaling $840,000 (US$3,887).

“The OIG considers that the discrepancies identified could have arisen from the inaccurate completion of the vehicle log books, or the missing data may have been recorded in the vehicle log books that were not provided to the OIG. However, in the absence of other means to verify the drivers’ whereabouts, the OIG finds that driver ‘per diem’ claims totaling GY$ 840,000 (approximately US$ 3,887) are non-compliant expenditures and therefore potentially recoverable,” the report said.

The report said that the Global Fund Secretariat will request the Ministry of Health to develop and implement an improved process for recording and reporting the use of VCS vehicles and fuel purchases to enable the Global Fund to obtain assurance that fuel financed by the Fund is being used appropriately.

 

Recovery

Further, it said, the Global Fund Secretariat will finalise and pursue, from all entities responsible, an appropriate recoverable amount. “This amount will be determined by the Secretariat in accordance with its evaluation of applicable legal rights and obligations and associated determination of recovery,” the report said.

Among other findings, the investigation also found that there was inadequate bed net procurement and supply management by VCS and the Ministry of Health. The OIG found significant variances between the numbers of bed nets recorded as procured and distributed by VCS, the records maintained by the Ministry of Health and the Global Fund’s own records, the report said.

“The OIG was unable to verify the source and total number of the bed nets ordered, received and distributed by VCS for the periods covered by the OIG’s investigation. This was due to inadequate and inaccurate records keeping by VCS and the Ministry of Health. For the same reason, the OIG was also unable to establish how many bed nets financed by the Global Fund had been distributed by VCS,” the report said.

It said that the Global Fund Secretariat will request the Ministry of Health to develop and implement an improved procurement and supply management plan which will address the shortcomings in the ordering, inventory management and distribution of Global Fund financed health products identified by the investigation.

Additionally, the OIG found that the overall management of the Global Fund malaria programme by the ex-director of VCS and the standard of oversight exercised by the ex-senior VCS M&E technician were inadequate. “The OIG considers that this facilitated the fraudulent misrepresentation and other irregularities identified in its investigation,” the report said.

The OIG also noted that the standard of record-keeping within VCS was poor while the ex-director of VCS had competing professional responsibilities. Further, the VCS failed to respond to Global Fund Secretariat Management Letters which made repeated requests to the Ministry of Health to improve its performance in relation to areas that were investigated. The OIG also found that the individual appointed as the senior managing M&E technician in VCS in January 2014 had no relevant qualifications or prior M&E experience. The individual is no longer attached to the unit.

The report has noted that the Ministry of Health has appointed a new interim director of VCS and two new interim deputy directors, one with responsibility for the malaria programme. It also noted that the Global Fund Secretariat has agreed to implement six management actions to mitigate the risk that the irregularities identified by the investigation will reoccur.

The report noted that as of March 1, 2016, the Global Fund has made commitments to Guyana under seven grants totaling US$44.1 million of which US$42.1 million has been disbursed.

 

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