Liberia: MoH Rejects Global Fund’s Claims of 'Systematic Fraud'

Health Minister Dr. Jallah.  

Authorities of the Ministry of Health have rejected claims by the Global Fund watchdog that the ministry wasted and misused US$0.99 million meant to fight AIDS, Tuberculosis, and Malaria in Liberia.

The investigation by the Office of the Inspector General (OIG), a body charged with safeguarding the Global Fund’s assets, investments, reputation, and sustainability uncovered that the Global fund lost US$0.19 million in systemic procurement fraud, and US$0.52 million in grant funds were wasted or misused for the mother peer program and travel-related costs; while MoH concealed improper payments of fuel taxes of at least US$0.16 million.

However, the Ministry in a statement, while acknowledging the OIG report, noted that it is impossible to engage in massive corruption without being detected over a long period as has been portrayed by the OIG report.

The MOH added that they do not agree with everything in the report and that the claims of no assurance that services were delivered as outlined in the OIG, cast general aspersion on the achievements of the project in Liberia — which among others things include significant progress toward HIV interventions over the years — with prevalence among the sexually active population (age 15-49) has been declining yearly — from the peak of 2.8 in 1996 to 1.2 in 2018 and 1.1 in 2020 (Prevalence of HIV, total (% of population ages 15-49). 

“We believe the vigorous system of check and balance the Global Fund Grant management system has in place at the Ministry of Health along with our robust financial management system and many years of managing grants we can safely say it’s impossible to engage in massive corruptions without being detected over a long period as it has been portrayed by the OIG report,” authorities of the Ministry of Health said in a statement under the signature of Felicia Gbesioh, the Communication Director. “OIG findings declared an aggregate expenditure summing up to US$990,000 non-compliant and recommended restitution.” 

“Though we do not agree with everything in the report, the Ministry wishes to assure the public that the OIG investigation was triggered by the Ministry when it discovered irregularities at one of its programs, the National AIDS Control Program (NACP) by an internal audit unit of the Ministry in 2020 after which Global Fund was alerted in keeping with the grant agreement,” the statement added. 

It further stated that “We also like to inform the public that for the period under review in keeping with the Global Fund grant management and procedure, the fiduciary responsibilities such as procurement, financial management (including co-signing of checks, local purchase orders, and vouchers), internal audit and external audit functions were all being jointly executed by many international firms.”

The OIG report, which was released earlier this month, disclosed that it uncovered systemic fraud and misappropriation by the staff of the MoH, a principal recipient of Global Fund grants in Liberia.

“Our investigation found non-compliant expenditures and/or various types of wrongdoing in 91% of the expenditures reviewed. Non-compliant expenditures totaled US$1.1 million, of which we recommend recovery of US$0.99 million," OIG said. "Staff of the National AIDS Control Program (NACP) conducted fraudulent procurements of vehicle repairs and advertising services. No assurance could be provided over program delivery in 75% of MoH field activities that we reviewed, and the MoH overcharged for daily subsistence allowances and misused grant funds by providing incorrect allowances and catering expenses."

“This investigation found prohibited practices and/or no reasonable assurance of program delivery in 91% of expenditures reviewed. Our findings implicate over 200 MoH staff members. This includes staff who were directly responsible for fraud and other wrongdoing in procurements and program activities, as well as the staff who benefitted from this wrongdoing by receiving DSA for more days than the permitted number of days, or receiving DSA for activities that did not take place,” it added. 

The report noted that the findings indicate that fraud and wrongdoing at the MoH are systemic, and raise concerns concerning all expenditures incurred by MoH and its national programs (representing US$47.8 million of grant funding between January 2018 and June 2021).

But the Ministry said while it is giving significant attention to the allegations of fraud and misappropriation, procurement, financial management of the funds in question were carried out by Cardno International Development, an American based financial management firm; Swiss Centre for International Health; and The Moore Stevens International Auditing Firm based in the UK.

According to the Ministry, Cardno was contracted by Global fund as its fiscal agent (FA) and was stationed at the MOH with the fiduciary responsibility of reviewing all procurement and financial transactions as well as providing pre-audit and post-audit functions on global fund transactions. 

“If the LFA is dissatisfied with a particular transaction or transactions, it doesn’t get processed until it's corrected and signed on by the FA. The FA has the right to also declare a transaction as illegible even after it has occurred," MoH noted in a release.  "Cardno served the Ministry in this capacity from 2015-2021 and has now been replaced by GFA Consulting Group, another Internal Financial and Procurement management firm as of January 2022.” 

For the Swiss Centre for International Health, MoH authorities noted that the firm was also under contract by the Global Fund as the local fund agent (LFA), overseeing the review and certification of all quarterly transactions submitted to the Global Fund along with their supporting documents.

“They also provide assurances of all quarterly reports submitted to the Global Fund periodically. The LFA performed a post-audit of all transactions every quarter and reported to the Global any irregularities. The LFA has the right to also declare expenditures stated in the quarterly report as illegible after it has reviewed the transactions. In which case, the MOH will have to reimburse the Global Fund for such expenditures deemed illegible.   Since 2015 the Swiss Center for International Health has played the role of local fund agent," MoH added.

And for the Moore Stevens International auditing firm, according to MoH, was hired by the Global for the period of the OIG report, to provide assurances of all transactions carried out by the Ministry during the period 2015-2020. 

“These very transactions, which were reviewed by the FA, and LFA were also authenticated by the external auditors through the provision of an unqualified opinion (clean opinion)," the health authorities disclosed. "The Moore Stevens five years contract has ended and has been replaced by Ernst & Young, another international Auditing firm that is currently conducting an Audit of the Global transactions for the fiscal year ended December 31, 2021.” 

The ministry's latest clarification comes after it had submitted a written response to OIG — noting that they had removed the previously NACP’s Finance Manager from his position and that OIG’s report will be used as a basis for its investigation to assist the MoH in its decisions against persons found liable or culpable for the fraud and misappropriation identified in this report.

“The [MOH] Investigation Committee’s findings of MoH could result in suspension, restitution, dismissal, or possible criminal prosecution," the MOH response noted. "However, the Committee’s findings will not impact OIG’s investigation findings or the subsequent actions taken by the Global Fund as a consequence of OIG’s investigation findings.” 

Meanwhile, the Ministry submits that it has so many dedicated employees who are committed to providing required HIV/AIDS, TB, and Malaria services and without some of those staff, Liberia could not achieve the feats in the fight against these diseases. 

“However, like in all societies, few bad actors tend to derail the effort of the many good ones. This seems to be the case here where a few unacceptable behaviors are casting doubt on the progress of our dedicated staff, some of whom have committed most of their productive lives to the fight against HIV, TB, and Malaria," MoH said. "Personnel accused of fraud and misappropriation are being investigated further, and plans are underway to ensure the termination of employment in some cases, restitution of funds in others, and the involvement of the LACC as needed.”

The Ministry however noted that it intends to keep the public informed of the progress towards administrative actions taken to reduce the recurrence of prohibited practices identified and remains committed to full transparency adherence to our Public Financial Management and Procurement Laws.

“As a Principal Recipient, the Ministry of Health remains committed to the fight against AIDS, TB, and Malaria and shall not compromise the health and security of those within and without the borders of Liberia, for the contrary will not only violate the Grant Agreements with the Global Fund, but it will also be a dereliction of the statutory duties of the Ministry of Health,” it added.