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Global Fund (GFATM)

Global Fund: Aid corruption report watered down

Burgess COMMENTARY
Some of the observations in this report are deeply troubling, but I am not at all surprised. My own experience with the flagship international development institutions makes it clear that accountability and transparency have a very low priority ... and accounting of any sort is considered by much of the staff simply to get in the way of development. They seem unaware of the role accounting plays in stopping corruption and the misallocation of funds.
Peter Burgess

Global Fund: Aid corruption report watered down

A report on corruption involving UK aid money has been watered down and another delayed, Panorama has discovered. A leaked report shows alleged corruption - involving tens of thousands of dollars - was discovered by investigators working for the Global Fund. When the final report on the case was published, all but one of the allegations had been removed.

The Global Fund says it is 'transparent and has zero tolerance of corruption'. The Global Fund is one of the biggest providers of international aid and fights malaria, Aids and tuberculosis in the developing world. In 10 years the fund spent £13.5bn and saved millions of lives. The UK government recently announced it was giving the Global Fund £1bn.

One official report looking at corruption in projects funded by the Global Fund in Cambodia was published two weeks ago. But Panorama has obtained a leaked copy of an original internal investigation report from inside the fund. There are significant differences between what the investigators wrote in the initial, leaked report and what the official one says. Some of the allegations relate to money sent to a non-profit health organisation called Medicam by a British charity working for the UK government. In the internal draft seen by Panorama they were accused of double billing for staff and computers, charging more than £61,000 for consultants who were never employed and charging thousands for hotels that were never used.

The leaked report also detailed how investigators found allegedly falsified documents on the office computer of the director of Medicam, Dr Sin Sumony. In the final report, just one of the four allegations remains. Bea Edwards, from the Government Accountability Project in Washington, said: 'The fact that a report is suppressed for almost a year and then is somewhat less detailed than the original version, that is a cover-up.' The Global Fund said that 'procedural due process made this report take longer than usual' and that only 'evidence that can be confirmed as fact is included in the final version'. The scope of Global Fund investigation reports 'should be limited to Global Fund grants', they said.

Panorama spoke to the director of Medicam, Dr Sumony, who sits on the Global Fund committee that oversees its projects in Cambodia. 'Number one, we did not commit that corruption, number two, through the Global Fund support, their financial management system has improved,' he said. Dr Sumony confirmed they were about to receive more money from the Global Fund: 'This year it is over $720,000.'

Panorama also obtained an unpublished Global Fund report into corruption in Burkina Faso. It details an alleged scam involving an £8.3m contract that might have left two million people more vulnerable to malaria. The BBC's leaked copy reveals how a company with apparently no experience of supplying mosquito nets won a contract to provide two million of them. The company took the £8.3m but bought cheaper nets from China that had not been properly treated with insecticide to kill mosquitoes. The Global Fund announced it was replacing the nets last year and stressed that the nets 'while untreated, still give protection'. The fund said it had 'since distributed replacement nets to replace all untreated bed nets'. It said the investigation would be published when it was complete. The leaked report shows that the investigation was completed a year ago but still has not been published.

Panorama has seen details of a series of investigations that were started more than a year ago but which have not been published. They reveal potential fraud of £16.5m. The countries investigated are Niger, Ghana, Burundi and the Democratic Republic of Congo. The Global Fund says it doesn't comment on open investigations and it expects to report on its findings. It says the fund is transparent and has zero tolerance of corruption: 'Twenty-seven reports have been published in the last 12 months. Standards of disclosure remain exceptionally high.'

Many of the investigations were initiated by the fund's former inspector general. In November 2012, John Parsons was sacked for 'unsatisfactory' performance. A year earlier his department had been described in an independent report as 'the only risk-mitigation strategy within the Global Fund that has worked'. Panorama can reveal that before he was dismissed, Mr Parsons wrote to his bosses complaining about 'harassment, intimidation and retaliation'. 'Your true intention is to weaken the function, simply because you don't like what we find and report upon,' he wrote. Documents from inside the fund show the inspectors felt they were being undermined, saying they were repeatedly told 'not to look so deep'. One said: 'The organisation, while parading 'transparency' and openness, in practice views disclosure of results as negative, harmful and unwanted.' The Global Fund says it is 'committed to a strong and effective office of the inspector general, and has not tried to weaken it at all'. The fund denies it put pressure on inspectors to water down reports. 'If the Global Fund saw disclosure as harmful, it could have stopped openly publishing reports. But it did not stop.'

Source: http://www.bbc.co.uk/news/uk-25141586