The Office of
the Inspector General says that 1,291 new health centres were constructed as
part of the Rounds 4 and 7 HIV grants in Ethiopia, even though this activity
was not part of the approved workplan and budget. These findings were part of
the audit on Global Fund grants in Ethiopia published in April.
Says funds taken from other services to
cover cost of centres
PR and CCM dispute the findings
The Office of the Inspector General (OIG)
says that 1,291 new health centres were constructed as part of the Rounds 4 and
7 HIV grants in Ethiopia, even though this activity was not part of the
approved workplan and budget. The OIG also states that the Global Fund
Secretariat knew about the construction, but did not follow proper procedures
for what the OIG says constituted material changes to the grants.
The OIG said that the health centres were
constructed as part of a strategy to expand entry points to antiretroviral
therapy (ART) and other services. According to the OIG, the budgets for the
Rounds 4 and 7 grants included funds to renovate existing health facilities,
and to construct and renovate “health posts” (small satellites of health
centres) in the regions, but did not include funds to build new health centres.
The total budget for renovation and
construction was $107 million. The OIG said that when the costs of 1,291 new
health centres were charged to this budget line, the result was a budget
overrun of $58 million.
The OIG said that monies intended to
finance other services, such as ART, and drugs for opportunistic infections
(OI), were used to cover this over-expenditure. The OIG reported that there was
significant under-spending on these services, which impacted programme results.
For example, the OIG said, “the indicator for ‘Number of patients who received
prophylaxis and treatment for OI’ was reported as just 74% of target. Many of
the planned OI drugs had not been procured.”
HAPCO and the CCM disputed the OIG’s
findings (see below).
The OIG said
that there was no formal approval from the Global Fund to add the construction
of the health centres to the programme. In addition, the OIG said, the
Technical Review Panel (TRP) did not review and approve the change to the scope
and scale of the proposal originally approved – which would normally have been
required – and the performance frameworks for the grants were not revised to
reflect this significant reallocation of funds.
According to
the OIG, the Global Fund Secretariat was aware of the nature and extent of the
health centre construction activities. In fact, the OIG said, in 2009 and 2010
the Secretariat arranged for reviews to evaluate the construction.
The OIG also
stated that a proposal containing health centre construction activities had
been reviewed by the TRP in both Rounds 5 and 6, but was not recommended for
approval “for a number of programmatic and budget reasons.”
Finally, the OIG said that it had visited 77 of the health centres
and had observed significant deficiencies (e.g., 71% had no access to water;
32% had no functioning toilet facilities).
Reaction to the OIG findings
In a section of
the OIG report on how the Secretariat, the country coordinating mechanism (CCM)
and the PRs responded to the OIG’s recommendations, the Secretariat said that
it was aware of the “reclassification of health center construction activities
and agrees that the documentation should have been better formalized.” The
Secretariat added that it was following up with the Federal Ministry of Health
(FMOH) to ensure that all health centres were completed in accordance with the
ministry’s minimum standards. It also said that, in March 2012, the Secretariat
was told that 73 of the 77 centres visited by the OIG were provisionally
accepted as having met the standards. The Secretariat added that the local fund
agent (LFA) had been requested to verify this information; and that the
Secretariat will ask the CCM to ensure that all defects are rectified.
HAPCO said that prior to October 2010,
there was no limit on the extent to which PRs could make changes to the
workplans of a grant. HAPCO also repeated some of the same comments that the
Secretariat made above concerning the current state of the health centres.
When asked to comment on a draft of this
article, HAPCO and the CCM told GFO that construction of health centres
was part of the workplans and budgets for Phase 2 of the Round 4 HIV grant, and
also for Phase 2 of a Round 2 HIV grant (not included in the audit). However, GFO
was unable to find any reference to the construction of new health centres in
the Phase 2 workplans and budgets for these two grants.
HAPCO and the CCM denied that there was an
overrun of $58 million and that money had to be taken from other services
funded by the grant to cover the costs of the health centre construction. They
said that evidence had been submitted to the OIG team showing that funds were
taken from non-Global Fund sources to fill any gaps in the budget. The OIG told GFO that it has not received any such evidence.
“The critical point here is how we have
covered the cost of construction,” HAPCO and the CCM said. “We didn’t
compromise the delivery of planned services; rather we harmonized the other
external aids we got from the World Bank Protection of Basic Services Program,
the GAVI Alliance’s Health Systems Strengthening initiative, the Millennium
Development Goals Performance Fund and the (US) President’s Emergency Plan for
AIDS Relief (PEPFAR) in implementing some of the activities. The expenditure
figures in the OIG report are reflecting expenses from Global Fund grants
only.” The OIG told GFO that it stands by its assertion that funds were
taken from other services covered by the Rounds 4 and 7 HIV grants in order to
pay for the cost overruns to the renovations budget caused by the construction
of new health centres.
Regarding the OIG’s statement that a
proposal containing health centre construction activities had been reviewed by
the TRP in Rounds 5 and 6 and had not been recommended for approval, HAPCO and
the CCM told GFO that the Round 6 proposal was not about health centre
construction. GFO has verified that this statement by HAPCO and the CCM
is incorrect.
