14 Jan 2013
Global Fund implements measures to safeguard its investments

An investigation by the Global Fund's independent Office of the Inspector General (OIG) into grants in Cambodia has uncovered credible and substantive evidence of “serious financial wrongdoing” on procurement and other issues, the Fund said in a statement issued on 14 November 2012. The statement did not provide details on the alleged irregularities.

As a result of the OIG’s findings, the Global Fund said that it has adopted safeguards in procurement, finance and management to protect its investments in Cambodia. The statement did not describe the protective measures.

The irregularities relate to malaria grants. The Global Fund and country stakeholders are said to be considering potential changes in arrangements with grant implementers. The current principal recipient (PR) is the National Malaria Centre. Phnom Penh Post, a Cambodian newspaper, reported on 15 November that a $46.9 million malaria grant that is expected to go into effect on 1 April 2013 will go ahead only if its finances are no longer managed by the National Malaria Centre. Tia Phalla, Chair of the CCM and Vice-Chair of the government’s National AIDS Authority, told the newspaper that the Global Fund had requested a change of PR.

According to the statement from the Global Fund, the evidence of wrongdoing does not diminish the impact that the grants have helped achieve through its programmes. Recently completed programme reviews show an 80% decline in malaria deaths over the last decade, and a 43% fall in TB prevalence over the same period, it said.

The French news agency, Agence France-Presse (AFP), reported in November that the “mismanaged” money involved is under $1 million and was meant to be spent on anti-malaria programmes. Phnom Penh Post quoted a source with knowledge of the Global Fund’s investigation saying the Fund found evidence that malaria centre staff insisted on kickbacks in exchange for the procurement of mosquito nets from Sumitomo Chemical Singapore. According to figures from Sumitomo, the company provided an average of 300,000 nets per year to Cambodia between 2007 and 2010 at a cost of $1.6 million a year.

According to AFP, quoting sources in the diplomatic and health care communities in Phnom Penh, a second probe is understood to be under way into the possible use of counterfeit drugs in health programmes. However, the Global Fund said that the OIG report, which will be released soon, does not deal with these allegations.

In commenting on this story, a source at the Global Fund confirmed to GFO that the investigation report is limited to malaria grants and that there is indeed a $46.9 million malaria grant expected to start later this year. However, the source said, it is premature to discuss possible changes to the PR for the grant until the report, “whose publication has been delayed,” is published.

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