Saving Lives Through Honest Accounting

Roger Bate | 12 Feb 2007

The Global Fund is in trouble. Weighty accusations in the Boston Globe newspaper of inappropriate spending by its Director, the newly knighted Sir Richard Feacham; evidence of widespread procurement delays for treatment of the sick; an appropriations bill amendment by Senator Tom Coburn (R-Oklahoma) calling for greater transparency and accountability at the Fund; and the appointment of a well-liked but not particularly effectual insider, Michel Kazatchkine, to take over from Dr. Feacham, made last week a bad one for the Fund.

The Global Fund should be a very useful instrument to direct funds towards the purchase of life-saving interventions for the big killer diseases of poor nations. With over $5 billion paid in so far (over a third by the U.S. - $1.898 billion) to buy treatments and other interventions (such as bed nets and condoms) for the poor sick of the world, the Fund has saved many lives. The Fund publishes a spreadsheet showing contributions made by each country.

But today Senator Coburn will push an amendment on Congress to require the Global Fund "to post on a publicly available website all internally and externally commissioned audits, program reviews, evaluations, and inspector general reports and findings."

As he did for USAID disease control funding, Senator Coburn is now hoping to expose the Global Fund to much needed "sunlight" as well. This is a harder job than it was with USAID, because Congress has less oversight for an operation based out of Geneva. There is no General Accountability Office for UN bodies like the Global Fund; and one doesn't have to think of oil-for-food to know that if the UN is running your expense account, there could be problems.

What most upsets Coburn is that there are no consequences for waste, fraud, or abuse, primarily because the Fund is allowed to hide them. Even when the Global Fund's Inspector General (IG) issues a report, the report is not available to the entire board of Directors (and as the U.S. has only one seat it is not always entitled to see IG reports).

According to the Boston Globe, the IG has issued a strong attack on the spending of the outgoing Executive Director Richard Feacham, on items such as limousines, yachts and entertainment. These expenses may have been legitimate but one has to be skeptical—the Global Fund's secretariat established a bank account with Credit Suisse to bypass the normal expense reimbursement processes of the UN. And the U.S. Congress, including Senator Coburn, has not been able to see the IG report on this expenditure—even though the U.S. has given close to $2 billion of taxpayer funding to it, and plans to increase this to over $2.7 billion by the end of this year.

The IG report on the Credit Suisse slush fund was prompted after a report by Deloitte declared that it may be inappropriate. The IG that made the report has now resigned, citing 'health concerns'.

Further details of this sorry affair can be found on Senator Coburn's web site. Previous Coburn campaigns are not vindictive and usually work. USAID's malaria activities have vastly improved since he demanded transparency and accountability, and there is no animosity between him and the political appointees or staff today. We can only hope that this will be the case with the Global Fund.

But the appointment of Professor Michel Kazatchkine to take over from Dr. Feacham is worrying because, although a competent manager and HIV expert from France, he is unlikely to improve the transparency of the organization, being very much an insider. He was the first chair of the Global Fund's Technical Review Panel, which assesses the quality of grant proposals, and he is not likely to rock the boat.

And it's not just expense accounts that require oversight. The Global Fund is also falling down on the job of getting drugs into the hands of those who need them. It is not entirely the Global Fund's fault that Ministries of Health often sit on drugs and are slow to distribute them, although the Fund could be more proactive in pushing for distribution with donor funds and with NGOs. But it is the fault of the Fund if its financing becomes stuck in a Ministry of Finance for months with no treatments even being procured for the sick—this has recently happened in Tanzania, Nigeria, Uganda and elsewhere. The Fund can bypass Finance Ministries and give the money directly to manufacturers of drugs for delivery to another government ministry or NGOs in the field. Yet it has often failed to do this where corrupt politicians in the field make personal gain from funds designated to save the lives of the sick. More transparency would obviously help. The fate of the sick depends on better oversight.

It is easy to admire the Global Fund for the good work that it has achieved. But its early successes may be forgotten if it becomes just another corrupt UN scheme. The Global Fund may not like it, but Senator Coburn's transparency initiative may save its reputation along with the lives of millions.