efforts in fighting against AIDS, tuberculosis and malaria may be under threat
following the decision by the Global Fund to suspend funding to the health
ministry citing strong evidence of fraudulent activities.
was made at its 21st Board Meeting in Geneva held between April 28 and 30,
The Global Fund
has stated that it will not proceed with signing any new grants with the Ministry
of Health until it is satisfied that the situation is
under control and that adequate measures are in place to allow for a return to normal
Furthermore, any activity and spending linked to the
grants under the management of the Ministry of Health – such as funds for the
continuation of treatment – have to be verified and recommended by the local
fund agent (LFA) and approved by the Global Fund secretariat.
has stated that arrangements are being made to transfer management of the grants
to the United Nation Development Programme (UNDP).
The Ministry of Health
has been the principal recipient (PR) for several grants.
Fund's Office of the Inspector General (OIG) has concluded that there was fraud
in connection with one or more of the grants.
However, disbursements are
being allowed for life-saving interventions (drugs and other directly related
costs), but these disbursements are being made directly to procurement agents or
suppliers, not to the Ministry of Health.
According to the Fund,
arrangements are now being made to transfer the Ministry of Health grants to a
new PR, the UNDP, on an interim basis.
The report stated that the OIG
conducted investigation missions to Zambia in July and September 2009 in order
to initially gain a fuller understanding of allegations of theft the Ministry of
Health and a clearer indication of the level of risk to grant funds.
OIG had sought to engage with the national authorities Anti
Corruption Commission (ACC) and police in relation to the scope of their
investigations and possible expert assistance from the Global Fund and other
The Fund stated that the response received was very
"The national authorities have failed thus far to provide
assurances of appropriate action regarding fraud against Global Fund grant
programs. In October 2009, during the audit of all grants within Zambia, the OIG
audit team uncovered further evidence of fraud and other irregularities within
the Global Fund grant programs in the MoH, in particular multiple apparently
fraudulent allowance claims by senior members of the MoH staff. An OIG
investigation team was deployed to the country and, in November 2009, referred
comprehensive evidence to the Zambian ACC," stated the Fund.
remains in the dark regarding the scope of any investigations being conducted by
the ACC or police, which stem from the original whistleblower allegations.
Neither does it have information about whether the investigations extend beyond
those persons originally named as suspects. Similarly, despite numerous
requests, the OIG has not received any feedback on the clear evidence of fraud
against the Global Fund that was formally referred in November 2009 for criminal
In both cases, the OIG is unable to report with any
confidence on the capacity, will or efforts of the national authorities in
conducting timely and appropriate investigations.
"The OIG is therefore
unable to provide assurance as to the safety of investing further funds through
the Ministry of Health while the issues surrounding the investigations by
national authorities remain unresolved," it stated.
According to the
report, in May 2009, as a result of a whistleblower allegation, the Anti
Corruption Commission (ACC) launched an investigation into fraudulent practices
within the Ministry of Health.
Most of the reported fraud related to
funds that were part of the expanded health basket in Zambia, in which the
Global Fund does not participate. However, the investigation also included one
fraudulent transaction relating to a Global Fund grant. The ACC searched the
offices of the Ministry of Health, resulting in the suspension of 30 staff
The report stated that the ACC requested assistance from the OIG
to strengthen its capacity to undertake a potentially large-scale
In light of this, the OIG contacted a number of other
agencies to make arrangements for a series of joint capacity.