Theft at MoH-Millions of donors’ money abused
Millions of donors’ money particularly Global Fund grants have disappeared at the Ministry of Health (MoH) through systemic theft and abusive practices by health officials, the Fund’s investigative report has revealed.
The report which was released on April 8, 2022, and covers activities from 2018 thru 2022, says health authorities under the watchful eyes of Health Minister Dr. Wilhelmina Jallah used procurement fraud, concealed payments of fuel taxes and wasted or misused grants fund meant for the Liberian health sector through fraudulent and abusive practices.
Investigators about US$1.1 million of the expenditures were non-compliant and have recommended that Dr. Jallah and team recover US$0.99 million of the amount.
“There was systemic fraud and misappropriation by staff of the Ministry of Health (MoH), a Principal Recipient for 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 totalled US$1.1 million, of which we recommend recovery of US$0.99 million.
Staff of the National AIDS Control Program conducted fraudulent procurements of both vehicle repairs and advertising services, for which there is no reasonable assurance of delivery. No assurance could be provided over program delivery in 75% of MoH field activities that we reviewed.
The MoH also overcharged the Global Fund for daily subsistence allowances and misused grant funds by providing incorrect allowances and catering expenses. The Global Fund’s US$0.25 million investment into the mother peer program for early infant diagnosis produced a small number of inadequate reports that were not used.
Contrary to Grant Regulations, the MoH used grant funds to pay taxes on fuel, and knowingly misrepresented the grants’ tax-exempt status to the Global Fund.”
The report continued that the Ministry of Health controls, policies, and oversight to mitigate fraud and misappropriation were either insufficient or did not exist. It said where they existed, they were overridden.
The Global Fund noted that it has implemented several internal controls to address this issue, and further controls will be implemented as a result of this investigation.
The Fund explained that its Fiscal Agent became aware of the wrongdoing identified in this investigation in 2015 but continued to approve MoH expenditures and did not adequately mitigate the risk of fraud.
It further acknowledged that the Fund’s Fiscal Agent also engaged in conflicts of interest and misappropriation, including accepting grant funds for DSA and fuel coupons for activities that did not take place. A new Fiscal Agent was appointed in 2022.
The investigative report noted that Global Fund Secretariat was aware of fraud red flags and other wrongdoing in MoH-managed grants from 2015, but did not report the matters at issue in this investigation to the Office of the Inspector General.
Genesis and Scope
Investigators said in January 2020, Global Fund Office of the Inspector General (OIG) received reports of suspected fraud and other wrongdoing at the National AIDS Control Program (NACP), a Global Fund grant implementer under the Ministry of Health.
Investigators continue that in response, the OIG opened an investigation, undertaking a field mission to Liberia in November 2020.
“The OIG obtained digital copies of payment vouchers and other records and verified vendors. Due to pandemic-related travel restrictions, the OIG conducted interviews with MoH staff by videoconference. During the investigation, the Global Fund’s Liberia Country Team and the MoH reported additional suspicions of fraudulent documents identified by the fiscal Agent. The scope of the OIG’s investigation was expanded to include a review of these documents.
The report explained that investigators identified prohibited practices and inadequate controls, including:
• Procurement fraud totalling US$0.19 million for vehicle repairs and advertising services
• No assurance of program delivery in 75% of cases reviewed
• US$0.52 million in grant funds were wasted2 or misused for the mother peer program and travel- related costs
• MoH concealed improper payments of fuel taxes of at least US$0.16 million
• The former Fiscal Agent’s oversight was ineffective, and its personnel engaged in conflicts of interest and misappropriation of grant funds
Liberia is classified by the World Bank as a low income country.
In the last decade, civil war and a major Ebola outbreak have caused major loss of life and socioeconomic disruption. Since 2004, the Global Fund has signed grants of US$309 million and disbursed over US$248 million to the country.
The Ministry of Health is the Principal Recipient for the HIV/TB and Malaria grants. The HIV/AIDS program is implemented by the National Aids Control Program and the malaria program by the National Malaria Control Program. A Program Coordination Unit within MoH is responsible for monitoring program implementation, ensuring compliance with Global Fund policies and guidelines, and managing grant funds. Between 1 January 2018 and 30 June 2021, MoH expenditures for the HIV/TB grant totaled US$25.8 million. Between 1 July 2018 and 30 June 2021, expenditures Malaria grant totaled US$22.0 million.
The Global Fund has invested heavily to strengthen MoH’s financial management capacity:
• In 2014, a Fiscal Agent, Cardno Emerging Markets USA Ltd., was put in place to provide additional fiduciary controls. After OIG’s 2019 Audit of Global Fund Grants in Liberia found that Fiscal Agent oversight was inadequate, a new Fiscal Agent Team Leader was assigned in 2020.
• In 2017 the MoH issued new policy regulations for transactions under Global Fund grants. The regulations increased the national programs’ transaction spending limit to US$10,000, with the Fiscal Agent only reviewing national program expenditures after they had been made. In 2019, the MoH assigned Compliance Officers to the national programs to review program expenditures against financial and procurement policies. Expenditures by the national programs were also reviewed by the Program Coordination Unit (PCU). See full report on site.