Two worlds collide… Auditors DO save lives!

28Jan11

As the world kicks off World Economic Forum in Davos 2011, it has been a busy week. Top headlines in the week include Egypt protests and the state cutting off the internet to its citizens, countdown to Will and Kate’s wedding in England, China’s annual human migration to rural villages for Chinese New Year and continued talks to guard financial stability and secure the economy at Davos.

But the headline news of the week for me is the report from the Inspector General’s Office of the Global Fund – where my two worlds collided: global health & accounting.

The Inspector General’s Office is the equivalent of an audit team following upon the $13 B of health support and aid that the Global Fund has distributed since inception in 2002. (total approved funding is more, at $21.7B). This team was heavily reinforced and expanded in 2010 under the leadership of John Parsons. In a short timeframe, the team has undertaken audits or investigations in 33 of the 145 countries where the Global Fund has grants.

I appreciate the fact-based content that the media and press has included in its reports, but I disagree with the headlines that rally a call to arms over the findings:

AP Enterprise: “Fraud plagues global health fund”

Times Online: “Fraud inquiry rocks £4 billion world Aids fund”

MSNBC: “Fraud plagues global health fund backed by celebrities”

The Global Fund has issued an official statement on their website from Executive Director Michel D. Kazatchkine stating that while any loss of financial aid is unacceptable, the current discovered lost amount is 0.3% of the $13 B disbursed so far.

Let’s face it – fraud happens. Fraud, corruption, embezzlement of all sizes small, medium and large happens in international development. I think the reason the world and donor countries are so taken aback by the Associated Press article that originally broke the story is that the Global Fund has openly issued its internal findings to the public.

Every UN agency has an office of internal audit or inspector general – how often do we see those reports? UNDP manages 50% of Global Fund grants and conducts internal reports annually – so “internal” in fact that it is not even fully shared with the Global Fund itself (AP article).  How often do we see a public reporting from WHO? UNICEF? Or for that matter… the performance of grants by the Bill and Melinda Gates Foundation by their internal auditors (or aka management consultants who help chart their portfolio performance in international health development)?

I fully agree with Michel Kazatchkine and John Parsons, who speaking as Inspector General says: “The distinguishing feature of the Global Fund is that it is very open when it uncovers corruption. That is its comparative advantage.”

The most balanced article I read through the lot is by Andrew Daley on Huffington Post. It’s got the facts on the countries listed and the misappropriation of funds and it’s pointed out the fact the story CAME from the Global Fund. And one additional comment – can we not continue to harp on these 5 countries specifically pointed out in the report? The IG office has only done 33/145 country grant audits! If other Global Fund recipient countries are reading the reports in disgust, they too should examine their internal processes, share best practices and stop any leaks they can now!

Fraud and corruption, by nature is covert, hidden, discreet. It is never easy to uncover blatant fraud and I for one, would like to give some KUDOS to John Parsons and his audit team for doing what they have done. I’m sure through the process there were double checks, triple-checks of fact, corroboration as well as evidence-backed discrepancy schedules. These “ordinary auditors” have been quite extraordinary in doing what they do.  It is not easy going into an hostile, covert environment and trying to follow up large amounts of donor funding in resource-poor environments lacking infrastructure.  Thanks for getting the truth out there, so that solutions may develop quickly.

Perhaps this is what the aid world needs – more ACCOUNTABILITY. Less screaming, face the facts and donor countries – please do not freeze your funds – the patients still need you and the Global Fund is doing its best to protect YOUR positive social impact.

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