Independent panel calls for stronger financial safeguards for Global Fund

Sep 20 2011

After a six-month review of the financial systems at the Global Fund to Fight AIDS, Tuberculosis and Malaria, a seven-member independent panel "recommended a substantial overhaul Monday in the grant organization's practices," the Wall Street Journal reports. The panel, led by former U.S. Secretary of Health and Human Services Michael Leavitt and former Botswana President Festus Mogae, "said in a report the fund must improve risk management, simplify grant application processes, and place greater emphasis on results," according to the newspaper.

The Global Fund "formed [the panel] in March amid scrutiny from donors" after it "suspended grants or implemented new safeguards in four countries -- Zambia, Mali, Djibouti and Mauritania -- after uncovering evidence last year of fraudulent invoices for training, payments to suspicious vendors, and other incidents of misuse," the Wall Street Journal writes, noting that the fund "disclosed the fraud itself through reports from its own inspector general" (McKay, 9/19).

In addition to "credit[ing] the fund with saving millions of lives, cutting the death rate from TB in many nations, handing out almost 200 million anti-malarial bed nets, and training hundreds of thousands of health workers around the world," the panel "had six sets of general recommendations, which range from cutting risk and streamlining internal committees to doing away with red tape," the Associated Press/Seattle Post-Intelligencer reports (Heilprin, 9/19). The panel "said the fund has 'inadequate accountability mechanisms' and 'insufficiently rigorous scrutiny of budgets' in grant proposals, allowing for 'padding' of budgets that are then easily exploited," Bloomberg News writes. In addition, "[e]conomic distress in donor nations, combined with corruption in some of the poor ones it helps, 'imperil the sustainability' of the organization, the report said," according to the news agency.

"The Global Fund welcomes the findings and is 'totally committed to making the necessary changes,' it said in a statement," Bloomberg notes (Bennett, 9/19). According to a press release, the Global Fund's "Board will come together for a special meeting on 26 September in Geneva to consider the report's findings and prepare an action plan and will meet again in November for its regular meeting to consider larger changes to the organization's governance structure, strategy and work processes" (9/19).