Maravi

MoH doesn’t have capacity to manage Global Fund grants

MoH doesn’t have capacity to manage Global Fund grants
By George Chellah
Thu 14 Oct. 2010, 04:00 CAT

THE Ministry of Health (MoH) does not have capacity to effectively manage Global Fund grants, the latest Global Fund report has revealed. The Global Fund's Office of the Inspector General (OIG) disclosed its findings in the recent country audit report of Global Fund grants to Zambia issued on October 5, 2010.

"By way of background, from 2003 through 2006, Global Fund grants to Zambia were initially channeled through the Central Board of Health until it was absorbed by the Ministry of Health in 2006. In August 2006, the Country Coordinating Mechanism (CCM) appointed the MOH the Principal Recipient (PR), and in June, 2007, the MoH and the Global Fund formally signed a Grant Agreement.

During its tenure, the MoH accomplished some notable achievements with the government and other cooperating partners, including successful treatment of close to 90 percent of tuberculosis cases; providing ART to approximately 245,000 people; and providing at least 70 percent of households with at least one insecticidal treated bed net (ITN)," the report stated.

"Unfortunately, however, the audit exercise identified a number of major systematic problems that impacted upon the quality of health care, including inadequate human resources at the facility level and the lack of adequate funding of the District Health Management Teams (DHMTs) to execute its functions. In that regard, the requisite quota of quarterly visits to health facilities was found not to have been met.

"As a result of these deficiencies, the OIG has concluded that the Ministry of Health, as the lead in country-PR, does not have the capacity to effectively manage Global Fund grants. This conclusion is reached principally on the basis of serious shortcomings in financial management and the identification of episodes of fraud and losses of funds; misuse of grant funds; poor management of Sub Recipients (SRs) and procurement; and a significantly weak control environment that expose these entities to significant financial misappropriation risk that has materialized."

The report stated that in connection with MoH's financial management systems, the OIG identified serious weaknesses, including significant financial losses and significant financial mismanagement.

"In particular, the OIG auditors identified over ZMK20 billion (US $4,365,000) arising from unsupported costs i.e. unsupported expenditure, unretired advances, with some outstanding since 2007, unsupported procurements etc. The OIG also noted ineglible expenditure amounting to ZMK5.8 billion (US $1,659,000) arising from expenditure outside of the approved budget, overpayment of etc. In addition, instances of suspected fraud were identified," the report stated.

"In March, 2009, a whistle-blower reported a suspected fraud at the MoH involving grant funds and the Expanded Basket Fund - into which most donor health funding is channeled which triggered a forensic audit carried out by the Office of the Auditor General (OAG). In July, 2009 the OAG reported that over ZMK36 billion could not be accounted for, of which ZMK1.9 billion (US $413,000) was from Global Fund grant disbursements. As a result, a number of officials at the MoH were suspended, and a prosecution was recommended by the OAG.

"Separately, the Global Fund's OIG's Investigations Unit conducted in country investigation missions between July and September 2009 that identified instances of fraud in per diem allowances and other financial misappropriation by some senior MOH officials. Seeking to further these cases through referral to national law enforcement authorities, the OIG sought to engage with the Zambian Anti-Corruption Commission (ACC), with disappointing results."

The report stated that to date, the national authorities have not taken action on these matters, nor charged individuals with violations of the relevant national criminal laws, nor sought to recover losses.

"As such, the OIG is unable to report that the Zambian national authorities have the will to conduct timely and appropriate investigations of financial fraud in the government ministries that handled Global Fund grant monies, and who are entrusted in fiduciary capacities with implementing the grants. This fact further adds to the in-country risk to grant funds in that misappropriated funds, even when identified, may not be sought to be recovered by the responsible officials and the responsible individuals prosecuted. Thus, there is little deterrent to future financial misconduct. The OIG investigation is continuing nonetheless on these matters," the report further stated.

"Similarly, the OIG audit identified significant instances of the MoH's lack of compliance with grant agreement. The OIG audit noted several instances of expenditures made outside of the work-plan; the continuation of expenditures on expired grants after the closure date; undeclared and unaccounted for income from other sources; the use by some Provincial Health Offices (PHOs) and DHMTs of Global Fund grant funds to pay VAT; and the failure of MOH to collect and remit PAYE from Global Fund paid employees working at MOH."

The report also stated that significant deficiencies were also identified in the MoH's capacity assessment and management of Sub Recipients SRs.

"The MoH did not undertake comprehensive reviews of the SRs prior to selection, and the OIG noted that several provinces and districts expended funds on activities that were not in the work plan, and that some imprest payments to staff were not retired," the report stated.

"The MoH was found not to have a system for tracking advances made to SRs, and could not identify which SRs had, and had not, accounted for funds entrusted to it. Further, in many decisions concerning disbursements, documented criteria for disbursement determinations was absent, disbursements were not supported, and many appeared to have been made in an ad hoc manner i.e. they were not made against a work plan."

The audit also identified that the MoH lacks procurement and supply management capacity (PSM).

"This deficiency was noted through the lack of purchases of health products despite the fact that the MOH had attempted numerous interventions to strengthen the PSM function," stated the report.

Labels: DONORS, GRANTS, HEALTHCARE, MINISTRY OF HEALTH

posted by MrK @ 3:05 PM