Project Finance Officer used money for loan business
Instead of using the money for what it was designated for, the Project Finance Officer is alleged to have used the money to start up a loan business.
The report states that some of the funds which the officer transferred to his personal mobile money account were used to extend personal loans to the Project Finance Officer’s colleagues and friends.
“Among the FLAS staff members who received loans were the Youth Affairs Manager, Senior Nursing Officer and a Project Officer,” states part of the report.
In total, the investigations unearthed that E4 990 (US
$360) in personal loans were improperly extended using grant funds.
Further, the OIG considered all transfers made to Community Facilitators, Outreach Workers, Trainers and other beneficiaries who had no formal contracts with FLAS, to non-FLAS individuals and to the Project Finance Officer for personal use, totalling E63 668 (US$ 4 590), to have been made outside the grant programme activities and therefore to be noncompliant.
Finally, of the transfers made directly to FLAS employees involved in grant activities from the FLAS mobile money account (E128 528 (US $9 267)), the OIG was not provided with supporting documents to substantiate E 20 676 (US$ 1 491) of transfers, which are therefore considered to be non-compliant. The total value of unsupported, unauthorised, and therefore fraudulent, diversion of grant funds by the Project Finance Officer is E370 330 (US$ 26 701). Explaining about the decision to use mobile money to transfer funds, the report states that Mobile Money technology was first introduced in 2016 during a mass bed net distribution campaign in Africa, with successful results.
The Global Fund indicated that it supports increasing the usage of this technology, recognising its value in improving financial management and decreasing theft, fraud and corruption. It is said in September 2017, the Global Fund launched a list of pre-qualified mobile money suppliers, though this technology has not yet been consistently integrated in Global Fund operations.
The report states that FLAS had adopted the mobile money system on instructions from CANGO with the understanding that it was an easy, convenient and secure way to transfer money.
It is said the mobile money system in FLAS was solely managed and operated by the Project Finance Officer with little or no supervision and oversight from his superiors.
The project finance officer was accused of exploiting this position by bypassing control mechanisms within the mobile money system and manipulating financial records.
Upon the discovery of such misappropriation of funds, the OIG took the necessary action and the officer involved was dismissed.
The Global Fund Secretariat devised a strategy in which it aimed to pursue an appropriate recoverable amount of the money.
It was said that this amount was going to be determined by the Secretariat in accordance with its evaluation of applicable legal rights and obligations and associated determination of recoverability. The deadline for the recovery mission was slated for November 30, 2018. It was also agreed that the Global Fund Secretariat will work with the Principal Recipient, CANGO, to ensure that it develops Standard Operating Procedures to guide in the management
The Office of the Inspector General (OIG) safeguards the assets, investments, reputation and sustainability of the Global Fund by ensuring that it takes the right action to end the epidemics of AIDS, tuberculosis and malaria.
Through audits, investigations and advisory work, it promotes good practice, reduces risk and reports fully and transparently on abuse. Established in 2005, the OIG is an independent yet integral part of the Global Fund. It is accountable to the Board through its Audit and Finance Committee and serves the interests of all Global Fund stakeholders. Its work conforms to the International Standards for the Professional Practice of Internal Auditing and the Uniform Guidelines for Investigations of the Conference of International Investigators.