Press Release

4 February 2011

THE GLOBAL FUND ANNOUNCES MEASURES TO ENHANCE FINANCIAL SAFEGUARDS AND STRENGTHEN FRAUD PREVENTION

GENEVA, 4 February 2011 – The Global Fund to Fight AIDS, Tuberculosis and Malaria today announced a number of measures to reinforce its financial safeguards and increase its capacity to prevent and detect fraud and misuse in its grants. The organization is also setting up a high-profile panel of international experts to review its systems and ensure that its approaches to fraud prevention are among the strongest in the world.

The Global Fund has now disbursed US$ 13 billion to programs in 145 countries. “Programs supported by the Fund have saved seven million lives and are turning back the three disease pandemics around the world”, said Michel Kazatchkine, Executive Director of The Global Fund.

Professor Kazatchkine stressed that although financing life-saving interventions in the poorest countries does involve risks, the Global Fund has zero tolerance for fraud and corruption in its grants. “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”.

In December 2010, the Global Fund suspended or terminated grants as a result of misappropriation reported by its Inspector General in four countries. Additional safeguards were implemented in two other countries where funds were considered vulnerable to misuse because of weak financial management systems, and extra security measures to prevent drug theft were imposed in five countries. A freeze on training activities was imposed in all Global Fund grants until detailed training plans could be approved. The Global Fund is demanding the recovery of US$ 34 million unaccounted for in several countries.

The measures to strengthen financial safeguards announced today include:

  Expanding the mandate of firms that monitor expenditure in countries in order to enhance fraud prevention and detection

  Strengthening the role of country coordinating bodies in grant oversight

  Additional scrutiny of activities considered at higher risk of fraud, such as training

  Redirecting a proportion of all grants to assess and strengthen financial controls at country level

  Increasing the number of the Fund’s staff responsible for financial management

  Doubling the budget of the Fund’s independent Inspector General.

Professor Kazatchkine said that many of these measures were in the course of being implemented and he expected them all to be in place by June of this year.

PANEL OF INTERNATIONAL EXPERTS

In parallel, the Global Fund is establishing an independent, panel of highly-respected international experts to review its financial control and oversight procedures, evaluate that they are of the highest standard and, if necessary, suggest further improvements.

“Our donors and the public should be confident that our systems and procedures to prevent, detect and respond to misuse are among the strongest in the world. Having an independent panel of experts conduct such a review is the best way to provide that assurance. It will also provide us with valuable advice and ideas for raising our standards even higher”, Professor Kazatchkine said.

The panel will deliver its report to the Global Fund Board in May. As with all Global Fund reports, the findings will be made public.

“Transparency and accountability are core principles of the Global Fund because they are essential to ensuring that every donor dollar is spent effectively and that the interest of our beneficiaries are protected,” said Tedros Adhanom Ghebreyesus, the Chair of the Global Fund Board and Minister of Health of Ethiopia. “The Global Fund provides two thirds of all international funding to fight malaria and tuberculosis worldwide, and supports more than half of the five million people on AIDS-treatment. 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”, he said.