Global Fund steps up controls after corruption scandal
The Global Fund Against AIDS, Tuberculosis and Malaria said on Friday it was reinforcing its financial safeguards after donor Germany suspended payments following allegations of corruption.
In December the fund said that its auditors had found that $34 million (25 million euros) had gone missing or been taken in four African countries before it reached the community aid programmes that needed the funding.
The fund said in a statement that it was taking "a number of measures to reinforce its financial safeguards and increase its capacity to prevent and detect fraud and misuse in its grants."
They include greater monitoring of expenditure in destination countries and strengthened financial controls there, and more staff for financial control.
The fund's executive director Michel Kazatchkine, had 10 days ago underlined its "most rigorous" anti-fraud controls and vowed zero tolerance.
"That is why we need to have the strongest possible financial safeguards and fraud-prevention measures in place and are responding aggressively when instances of fraud or misappropriation are detected," he added on Friday.
The Global Fund is the world's biggest single source of funding to tackle three of the world's greatest killer diseases, with an overall budget of $21.7 billion drawn from 150 countries and private donors.
The fund said it was also establishing of an independent panel of as yet unnamed "highly respected international experts" to review its financial control and oversight procedures.
"I am confident that the measures announced today will further enhance the financial integrity and life-saving work of the world's main multilateral health financing institution" said Tedros Adhanom Ghebreyesus, chair of the Global Fund's board and Ethiopia's health minister.
Sweden last month indicated that it would withhold new pledges while its concerns about corruption were addressed, while Germany's development ministry suspended yearly payments of 200 million euros.
Recent media reports said that controls to monitor the flow of funds were non-existent or inadequate, a charge vehemently rejected by Kazatchkine.
The UN-backed agency provides grants for a host of selected local projects in developing nations, allocating money provided by governments and private donors such as the Bill and Melinda Gates Foundation.
Fund spokesman Andrew Hurst told AFP that he was not aware of any other suspension by a government or private donor.
"Not that I'm aware of. We have had very strong support from the Gates Foundation," Hurst said.
"We are very much keen to reassure people," he added.
The Fund says it has recovered $19 million so far in Mali, Mauritania and Zambia after its auditor revealed "grave misuse" of grants for projects in those countries and in Djibouti through last year.
One grant was cancelled in Mauritania and others were suspended or placed under closer scrutiny in the other countries while local authorities investigated.
© 2011 AFP