Global Fund releases analysis of audits and investigations

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The Global Fund released an analysis of audits and investigations by its Office of the Inspector General which showed “that 3.0 percent of funding audited or investigated between 2005 and 2012 had been misspent, fraudulently misappropriated or inadequately accounted for.” Cees Klumper, Chief Risk Officer at the Global Fund who conducted the analysis, said, “We do not tolerate any misuse of funds, no matter how minor. Although some of these funds were misspent, and are just ineligible expenses, a small percentage of funds are misappropriated through fraud. We actively pursue and expose all such cases.” The Office of the Inspector General is “fully independent and reports directly to the Board” and, since it was established in 2005, has compiled 28 reports on audits and investigations that it has carried out in 27 countries, where a total of $3.8 billion has been disbursed, approximately 23 percent of all disbursements that the Global Fund has made to date.

The analysis showed that, cumulatively, the 3 percent of the funding that not spent in compliance with the grant agreements included:

– Ineligible expenses – or activities not covered by the grant agreements – 1.1 percent

– Inadequately substantiated due to poor or missing documentation – 1.1 percent

– Fraud – 0.5 percent

– Failed to report funds as required – 0.3 percent

The Global Fund noted that the analysis “…did not represent a comprehensive accounting of all misspent funds. Instead, the analysis is a factual rendering of the percentages of funding that had been determined by Global Fund audits and investigations to be ineligible, fraudulently misappropriated or inadequately accounted for.” Further, the release “cautioned that audits and investigations conducted…tend to focus on high-risk areas and on grants where specific risks have been identified, and that it was “…not possible to extrapolate to say that this reflects an accurate picture of misused funds…Our audits and investigations are not a representative sampling of all Global Fund grants.”

http://www.theglobalfund.org/en/mediacenter/newsreleases/2012-07-10_Global_Fund_Releases_an_Analysis_of_Audits_and_Investigations_2012/