Global Fund wrestles with concerns about grant performance and risks in the Nigeria portfolio

6. NEWS and ANALYSIS
27 Apr 2016
Disbursements for HIV and malaria grants temporarily suspended

As happens at many Board meetings, a topic that was not on the official agenda was prominent in corridor discussions. Last meeting it was the allocations methodology. This meeting it was concerns about the performance of grants to Nigeria.

The Office of the Inspector General recently completed an audit on HIV, TB, and malaria grants to Nigeria. A copy of the report was circulated to Board members in late March. Many members requested additional information and further clarification about the audit. Thus, the report has not yet been made public.

However, based on sources within Nigeria, we can report that disbursements for the HIV and malaria grants were suspended a couple of weeks ago, and The Global Fund sent a letter to the President of Nigeria so advising him.

Concerns about the Nigeria grants are not new. As recently as last December, The Global Fund approved $510 million in funding for five TB/HIV grants, including $310 million in new funding. We reported on this in GFO here. In our article, we said that

“Longstanding weaknesses in the areas of financial, supply-chain, non-health product procurement and grant management have led to fraud and misappropriation of grant funds in the past. Nevertheless, the Fund decided that because of the size of the country, its high disease burden, and the importance of the Nigeria grants in the overall portfolio – Nigeria received the largest allocation of any country ($1.1 billion) – not to approve the grants, in the words of the Grant Approvals Committee, is 'not a preferred option at this stage if the Global Fund is to fulfill its mission.'”

In our article, we quoted the GAC as saying that "interim findings from another audit currently being conducted on Nigeria’s grants by the OIG have identified additional weaknesses and concerns. The OIG is also investigating allegations of fraud and misappropriation of grant funds by a government sub-recipient.”

The funding award came with with conditions and gave the Secretariat the flexibility to redistribute funds among the four principal recipients involved.

Historically, grants to Nigeria have faced substantial systematic and operational risks and challenges. Key risks identified by the Secretariat included the following:

  • grants not achieving targets, including for key indicators such as antiretroviral therapy and TB diagnosis;
  • fiduciary risks, including government PRs struggling to oversee countrywide disease responses;
  • insufficient capacity to ensure that basic health services are in line with guidance and national standards;
  • inadequate monitoring and evaluation, poor data quality, and poor quality of electronic health information systems; and
  • systematic weaknesses and risks in procurement and supply chain management systems.
 

Again citing the GAC, GFO reported that measures already taken in 2015 to respond to the OIG’s initial findings include the installation of a fiscal agent to ensure that program funds are spent in strict compliance with Global Fund policies and in line with work plans and budgets; and initiatives to build the financial capacity of the PRs. Additional measures to be implemented in the near future include adjusting the implementation arrangements of supply chain management for the government PRs; and increasing the role of the local fund agent. The Secretariat is also considering fully outsourcing of non-health procurement management.

Finally, we cited the GAC as saying that the federal government will need to be persuaded to take action to ensure that its grants are more effectively managed. “Recognizing that a standard approach to risk mitigation will not be adequate for Nigeria, the Secretariat and OIG will work with the government and development partners to develop a strategic risk management framework tailored to Nigeria’s particular needs. The framework will include laying out a roadmap and milestones for the medium and long term.”

Tunde Akpeji, our correspondent in Nigeria, contributed to the reporting


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