19 Oct 2015
Weaknesses identified in managing programs and health services and products, and in governance and oversight

An audit by the Office of the Inspector General on grants to South Sudan concluded that while financial and fiduciary controls are at the level of the principal recipients were effective, there are weaknesses in the management of programs and health services and products, and in governance and oversight. A report on the audit was released on 5 October.

Four active grants were audited, three of which were managed by the UNDP. The PR for the fourth grants was Population Services International.

The OIG noted that South Sudan is a challenging environment in which to operate. Service delivery in the health sector is complicated by security issues, poor infrastructure, weak capacity (especially human resources) and inadequate health systems after decades of conflicts. According to the OIG, this situation is aggravated by the absence of functional transport infrastructure, especially during the rainy season, as well as challenges related to increased numbers of refugees and internally displaced persons.

The OIG said that illiteracy is a key challenge in South Sudan and that only 10% of health facility staff are qualified to serve in their positions. The health sector is heavily dependent on international funding; only 4% of the government’s budget allocated to the sector.

The scope of the OIG’s audit was severely limited because UN agencies an only be audited by the UN’s own oversight bodies. The OIG noted that the UNDP’s Office of Audit and Investigations report issued in February 2015 assessed the UNDP South Sudan Country Office as partially satisfactory, which means, ‘‘internal controls, governance and risk management processes were generally established and functioning, but needed improvement.”

The OIG said that in spite of the difficult environment, the Global Fund and other development partners have made notable contributions to the fight against the three diseases in South Sudan. However, challenges remain due to the environment, inadequate funding and inadequate oversight of funded programs. For example, the number of clients on antiretroviral treatment (8,500 clients at June 2014) represents only 12% of the 72,000 people eligible for treatment; only 35% of TB/HIV co-infected clients are receiving treatment; and contrary to the World Health Organization’s recommended “test, treat and track” strategy, most malaria cases did not have confirmatory tests undertaken before treatment, which raises the risk of developing drug-resistant malaria.

The OIG said that 26 of the 46 buildings constructed under a health systems strengthening grant have defects or are not in use. This is largely because the buildings are located in insecure areas or far from townships, have design flaws, or lack basic utilities. The OIG said that this raises the question of whether activities of a development nature should be prioritized in such challenging operating environments over service delivery (e.g. putting more people on treatment).

The OIG said that the country coordinating mechanism has limited capacity to effectively fulfill its roles in prioritizing and coordinating available resources, and ensuring effective utilization of available resources. The Global Fund has proposed measures to reform the CCM, but they have yet to yield the desired results.

The OIG said that the findings of this audit raise questions about the suitability of applying standard grant operational processes to challenging operating environments like South Sudan. The OIG added that it is imperative to continuously assess the risks and to review the effectiveness of mitigation measures in addressing the risks. This has not always happened, the OIG said, and as a result, it found major risks which had not been effectively managed. This included program commodities and assets that remained unaccounted for, inaccuracies in the data reported to the Secretariat, and buildings and equipment paid for by the Global Fund that were not being used.

The OIG said that while the PRs generally have adequate controls to mitigate the financial and fiduciary risks at their level, such risks at the sub-recipients’ levels have not always been adequately managed. The OIG identified transactions amounting to $935,138 incurred by one sub-recipient with inadequate financial or programmatic supporting documentation. In response, the OIG said, the Secretariat has increased the local fund agent oversight and instituted a zero cash policy.

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