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More questions are raised after flawed fund audits

More questions are raised after flawed fund audits

Investigations carried out by the Global Fund’s external auditors were flawed to such a degree that it might have affected the integrity of its reports, the group admitted in a recent review.

Inexperienced auditors, possible conflicts of interest and significant delays are among the problems uncovered in an inquiry into the Global Fund’s Southeast Asia external audits – which are used to determine how well grants are being carried out.

While the report isn’t broken down to the country level, Cambodia – where the fund has provided hundreds of millions of dollars in grants to fight AIDS, malaria and tuberculosis – is one of just three countries used in the sample pool.

There was "no process in place to obtain a conflict of interest declaration from the external auditor on an annual basis,” reads the 12-page document dated August 20 and posted on its website. “There was no defined mechanism to ensure or evaluate the performance of external audit.”

Noting that several audit reports were missing key documents, the authors state that “the Global Fund may not receive reasonable assurance that the funds disbursed to [sub-recipients] were used for the intended purposes in accordance with the grant agreement”.

An investigation by the Global Fund’s Office of the Inspector General into Cambodia’s programs started more than two years ago, and was slated for release as early as October 2012. Since then, it has been repeatedly delayed, with the lag variously attributed to legal reasons and unspecified issues with the “due process” policies.

At the end of last year, amid mounting pressure from the media, the fund admitted the ongoing audit had uncovered “substantive evidence of serious financial wrongdoing, on procurement and other issues”.

Much of that evidence is believed to have been centred on the malaria program, which was subsequently ordered to switch financial management to an outside actor. Instead of the government, the UNDP now controls the malaria grants. The HIV/AIDS program, meanwhile, has struggled to manage its supplies, with health officials early this year admitting that expired or nearly expired anti-retrovirals had been distributed.

Though the report has yet to be made public, funding remains unaffected. Nearly $27.5 million has been delivered since the latest round of disbursements began in June, based on Global Fund figures. Another $57.7 million was approved in July for a single HIV grant, according to watchdog Aidspan.

The Fund could not be reached for comment, but in July, a spokesman told the Post there was no plan to halt disbursements in light of the forthcoming investigation report.

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