Myanmar is not the only country that has had a Global Fund grant suspension. Recently a Philippines nongovernmental organisation PR made a wrong decision on carrying a mortgage or reducing morbidity.
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Global Fund suspends grants to the Philippines and Mauritania
from GFO 107
http://www.aidspan.org/index.php?page=gfomostrecent
The Global Fund has temporarily suspended five grants to the Philippines, citing unauthorized expenditure by the principal recipient (PR) ... citing fraud. These are the Fund's first grant suspensions since it suspended grants to Chad three years ago and Uganda four years ago.
Press releases announcing the suspensions were posted by the Fund at www.theglobalfund.org/en/pressreleases on September 24.
The Global Fund has temporarily suspended all five of its currently active grants to the main Philippines PR, the Tropical Disease Foundation (TDF), a non-profit science foundation that performs research, service, and training projects in infectious diseases. These suspended grants represent 90% of the approved value of all grants to the Philippines; the remaining 10% goes to two other PRs that are not affected.
The Fund says that it suspended the grants because it found evidence of "unauthorized expenditure" by TDF. It adds that an investigation by the Fund's Inspector General found that around $1 million out of the $85 million that has been sent thus far to TDF has been spent on "activities beyond the terms of the grant agreement." The Fund has demanded repayment of this money.
GFO understands, after interviewing people in several countries, that the transactions to which the Global Fund has objected involved a complex series of financial transfers by TDF that ended up using about $1 million in Global Fund money to accelerate the paying down of a mortgage on TDF's head office, even though the payments were not documented as being for that purpose and were not permitted to be used for that purpose. Apparently, no evidence was found of anyone personally benefiting from these transfers. This scheme was first reported to the Fund by a whistle-blower. The Fund's Inspector General sent in a forensic audit team within three weeks of receiving the allegations, all of which were confirmed.
TDF responded to the suspension with a press release stating that it "has at all times acted in good faith." TDF complained, in effect, that after the Fund and TDF signed a grant agreement and the TDF incurred some expenditures that were within the terms of that grant agreement and were audited, the Fund introduced new policies which caused these already-made expenditures to become "unauthorized". TDF Executive Director Dr. Thelma Tupasi, when contacted by GFO, declined to discuss the matter on the grounds that the investigation is still ongoing.
Until the suspensions, over $110 million in contractually-approved funding was still due to go to TDF in its capacity as PR. TDF grants have generally performed well. Since the start of 2008, TDF has received seven A, A1 and A2 ratings from the Global Fund, three B1 ratings, and no B2 or C ratings. The Fund says that it continues to value TDF's technical expertise, particularly in multi-drug resistant tuberculosis.
Despite TDF's technical competence, the Global Fund says that it is not willing to permit TDF to continue as PR. Instead, the Fund will transfer the grants to one or more new PRs based on recommendations from the CCM. The Fund "expects that normal grant activities can resume quickly," and says that "all necessary measures" will be taken to ensure that there are no treatment interruptions for the 636 people receiving ARV treatment and the 811 people being treated for multi-drug resistant TB.
Over 80% of TDF's funding apparently comes from the Global Fund, so the impact on the organisation of a true termination could be very severe. However, the Fund's public statement on this matter does not rule out the possibility that TDF will be permitted to resume some of its activities through being chosen as a sub-recipient (SR) by the new PR(s).
