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23% of Global Fund drugs vanish

Global Fund says an estimated 23 percent of medicines it purchases to fight HIV and Aids, tuberculosis (TB) and malaria in Malawi vanish at district health office (DHO) and health facility levels.

A Global Fund Office of the Inspector General (OIG) audit report released on December 9 2019 in Geneva, Switzerland, further identifies financial fraud, corruption, and theft and provision of inaccurate data as some of the gaps in the performance indicators while multiple errors in the reported results limit the ability to measure the programme’s achievements.

However, Ministry of Health has played down the fears, saying government was aware of the issues raised by the Global Fund as they were presented to all three recipients for the fund.

Security officers dispay a banner during an HIV and Aids event

In the report, the fund also points out a weak procurement oversight that resulted in irregularities where over K3 billion mis-procurements were noted.

Since 2003, Global Fund has granted Malawi a total $1.6 billion (about K1.2 trillion) to aid the fight against HIV and Aids, TB and malaria—through three principal recipients, namely Ministry of Health, ActionAid International and World Vision Malawi—which resulted in significantly reduced death rates from the three diseases.

However, while the audit found no material stock-outs of medicines at service delivery points and that all medicines financed by the Global Fund were fully reconciled at central level, it observed that traceability challenges at the DHO and health facility levels remained.

The report notes that about 32 percent of TB medicine commodities, 24 percent of HIV medicine commodities and 14 percent of malaria medicine commodities could not be traced at the DHO and health facility levels at 24 out of the 25 health facilities visited.

The report further says since 2016, the Drug Theft Investigation Unit (DTIU) has audited 156 health facilities and 182 different cases have been presented to the court of law. So far, there have been 76 convictions, with 42 cases outstanding as of May 2019.

“At central level, all sampled commodities procured by the Global Fund in 2017-18 were successfully traced to electronic and manual records at the Central Medical Stores Trust [CMST] and private warehouses. However, there is limited visibility and accountability of medicines at district and health facility levels.

 “DHOs do not maintain adequate records of TB medicines received and distributed to health facilities. For instance, the DHO in Blantyre, that supposedly delivered TB medicines to 42 health facilities in the district, has no evidence that the health facilities received the medicines,” reads the report. 

The Global Fund report also reveals that data reported by the National Malaria Control Programme was inaccurate due to poor record-keeping and limited supervision, leading to overstating the reported results by 27 percent.

It discovered malaria cases were 28 percent higher than the underlying records, treated malaria cases reported to the Global Fund were overstated by 29 percent and that suspected malaria cases tested were overstated by 13 percent. 

It observed that the OIG assessed the risk as high due to weak internal controls for high-volume transactions related to travel and in-country procurement, saying there was inadequate oversight of procurement and contract management at the Ministry of Health and ActionAid, which together represent 86 percent of in-country disbursements. 

Some of the irregularities pointed out in the report include lowest bidders not being selected despite meeting all the technical requirements, material sole sourcing contracts without justification, bids received on time from potential service providers were not reviewed and considered in the selection process, limiting the pool of potential suppliers that could have been considered for the service. 

“For instance, the Ministry of Health made total advance payments of $1.3 million [more than 40 percent of the contract sum] to three service providers without performance guarantees. The services have been delayed by more than six months and no action has been taken by the Ministry of Health at the time of the audit. 

“Action Aid advanced 50 percent of a contract signed in October 2017 to the service provider without a performance guarantee, contrary to its procedures. The contract was expected to be completed within five months, but the activity had not commenced as of August 2019. The principal recipient had not taken any action on this at the time of the audit,” reads the report.

Action Aid Malawi executive director Assan Golowa said despite signing the contract in 2017, funds were transferred to the service provider in 2018. 

He said the service provider was to conduct a study on a specific key population and the survey could not start as there was another study taking place.  

“This necessitated for a change in study protocol which also led to a delay in getting ethical approval. The service provider had procured part of the requirements for the study and at the time of audit, the service provider was awaiting approval to start conducting field work,” said Golowa.

Ministry of Health spokesperson Joshua Malango told The Nation that what was important to note was that there was progress to address the issues raised.

“We had a Global Fund team in the country two weeks ago [which] appreciated and verified the progress. In fact, in that mission, our Auditor General participated so that we can do similar audits more regularly,” he said.

At the time of the audit, Malawi had $464 million (about K348 billion) in current active grants with Global Fund.

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