14 Oct 2014

Two principal recipients of malaria grants in Nigeria have been implicated in fraud and financial irregularities, following an investigation by the Office of the Inspector General (OIG), and have committed to returning some $350,000 to the Fund.

Multiple irregularities were uncovered in a 2010 audit of Nigerian principal and sub-recipients of Global Fund malaria grants; this investigation, the results of which were published in early october, was a follow-up to that audit to delve more deeply into the financial mismanagement. The investigation was one of the legacy cases opened prior to 2012 and is part of the backlog the OIG aims to clear prior to the anticipated January 2015 departure of Martin O'Malley, the current inspector general.

The Society For Family Health (SFH) and the National Malaria Control Program (NMCP) were found to have committed violations in four key areas, according to the audit.

SFH was implicated in a self-procurement scheme that accrued a profit of more than $300,000 after it marked up a shipment of long-lasting insecticide-treated nets (LLIN). Those funds have since been refunded to the Global Fund.

Self-procurement is a fairly standard practice; it entails charging against a Global Fund grant the price of an asset that was already purchased and held as inventory. Where SFH erred, however, was in raising the price by some $0.71 per LLIN, rather than charging the Fund at the original purchase price for the more than 426,000 nets in the inventory.

To improve transparency going forward, the local fund agent will be expected to certify that any products that were self-procured were purchased and charged at the same price. Additionally, future purchases of LLINs in Nigeria will be done through the Fund's own pooled procurement mechanism, in an effort to reduce any risk of additional charges or costs.

Enrollment in the pooled procurement mechanism has become standard procedure for most countries that have been found to have procurement irregularities through OIG or other investigations.

The NMCP, meanwhile, submitted claims for a number of fictitious airline tickets and was found to have improperly procured six vehicles and information technology equipment. Those funds, amounting to roughly $50,000, are to be reimbursed shortly, according to the OIG.

NMCP employees will now be required to submit boarding passes along with expense claims in order to be reimbursed for flights.

Nigeria is one of the largest recipients of Global Fund support under the new funding model (NFM).  In March 2014, the country was allocated some $499.5 million for malaria activities, for the period 2014-2017.

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