GLOBAL FUND ALLEGES FRAUD AND MISMANAGEMENT IN MAURITANIA

UNCLAS NOUAKCHOTT 000199


DEPT FOR AF
ACCRA FOR USAID/W

E.O. 12958: N/A
TAGS: EAID PGOV UNDP KHIV MR
SUBJECT: GLOBAL FUND ALLEGES FRAUD AND MISMANAGEMENT IN MAURITANIA

SENSITIVE BUT UNCLASSIFIED - PROTECT ACCORDINGLY


1. (SBU) Summary: The Geneva-based Global Fund issued a formal
complaint letter to its Mauritania Country Coordinating Mechanism
(CCM) February 13 alleging fraud and mismanagement of the country's
$32 million Global Fund aid package for malaria, tuberculosis and
HIV/AIDS. All funding has been frozen in Mauritania until the
underlying problems can be addressed. While the Global Fund
criticized the CCM for lack of oversight, its allegations of fraud
and mismanagement are directed at the two principal beneficiaries:
UNDP and the National Executive Secretariat for the Fight Against
AIDS (SENLS). The Global Fund's formal complaint follows the CCM's
recent trimestrial progress report submission and a December 2008
Global Fund technical verification visit to Mauritania. The two
principal recipients have both responded to the allegations. While
the response and action plan from UNDP were generally considered
adequate, SENLS has not provided a sufficient response and there are
still many concerns about problems within it. The CCM has yet to
respond to the Global Fund, although it is expected to do so
shortly. Criticism of the CCM for lack of oversight is not
surprising given the disorganization and chaos that have existed
within it for quite some time. The CCM is now moving forward with
restructuring plans intended to address some of the most serious
issues. The Global Fund is planning a follow-up investigation of
the program in Mauritania and is looking at ways to improve
management, such as employing Grant Management Solutions. End
summary.

The Global Fund and Mauritania's CCM
--------------

2. (U) The Global Fund is an international financing institution,
which has committed $14.9 billion to date in 140 countries to
support large-scale prevention, treatment and care programs for
tuberculosis, malaria and HIV/AIDS. The United States is the
largest donor, with pledges totaling over $4 billion between 2001
and 2008, and a recent pledge of $500 million for 2009. The Global
Fund uses a performance-funding approach, meaning that funding is
transferred to principal recipients upon completion of certain
performance indicators. At the country-level, the Country
Coordinating Mechanism (CCM) is responsible for programmatic
oversight and achievement of these performance indicators. The CCM
comprises all key stakeholders, including representatives from the
Ministry of Health, technical partners, the private sector, civil
society, principal recipients, and donors. While the CCM does not
have direct financial responsibilities, it is responsible for
submitting proposals, nominating the entities accountable for
administering the funding, and overseeing grant implementation.
There are two principal recipients in Mauritania: UNDP which
oversees the malaria and tuberculosis portfolio and SENLS (National
Executive Secretariat for the Fight Against AIDS) which oversees the
HIV/AIDS portfolio. The principal recipients receive the money
directly from the Global Fund and are charged with implementing the
programs. They are also charged with writing the trimestrial
progress reports. UNDP and SENLS both have several sub- and
sub-sub-recipients.

The Global Fund's Accusations
--------------

3. (SBU) In its February 13 letter, the Global Fund accused UNDP of
a lack of sub-recipient financial management transparency; a lack of
supervision of sub- and sub-sub-recipients; difficulty
reconstituting and justifying data (financial and programmatic)
previously transmitted to the Global Fund; and inadequate human
resource capacity to manage key functions of the program. The
Global Fund accused SENLS of fraudulent practices and a lack of
transparency. It noted SENLS' lack of an archiving system that
would allow reconstitution of data (financial and programmatic) and
justification of expenses; lack of supervision of sub- and
sub-sub-recipients; and inadequate human resource capacity to manage
key functions of the program. The more serious of the allegations
are directed at SENLS. Recipient NGOs have also made accusations of
fraud against SENLS, complaining most often that they have to pay
SENLS employees in order to be reimbursed. Post has shared these
accusations with Global Fund Portfolio Manager for Mauritania
Vanessa Rousselle.


4. (SBU) The Global Fund criticized the CCM for a lack of oversight,
but did not accuse it of fraud or mismanagement. The CCM has only
received $43,000 from the Global Fund for its oversight activities.
The program funds are given directly to the principal recipients;
they are not channeled through the CCM. The principal recipients
are required to maintain data and provide trimestrial reports to the
Global Fund, which they submit via the CCM. The CCM does not
actually write the reports, it only reviews them.

UNDP Response
--------------

5. (SBU) UNDP Resident Representative Maria do Valle Ribeiro
responded to the allegations in a letter dated February 27. In the
letter, Ribeiro summarized UNDP's action plan, which is designed to
correct the deficiencies identified by the Global Fund. Similarly,
Ribeiro sent a February 18 letter to the President of the CCM
requesting his assistance in responding to the allegations and
implementing UNDP's action plan. Moreover, she requested that he
improve CCM oversight of the Global Fund sub-recipients' financial
and programmatic activities, which UNDP infers are at the root of
the problem. The CCM president responded in writing to Ribeiro's
February 18 letter and stated that the Ministry is considering these
allegations very seriously and that the anticipated CCM
restructuring should help correct the CCM deficiencies identified by
the Global Fund.

SENLS Response
--------------

6. (SBU) In its February 26 response to Global Fund, SENLS Executive
Secretary Dr. Abdallah Ould Horma attempted to respond to the Global
Fund's accusations. While Horma responded to many of the technical
aspects raised by the Global Fund, his response to other aspects of
the letter was insufficient. The SENLS did not address all of the
Global Fund's concerns nor did it present a detailed action plan on
par with the one the UNDP presented. While SENLS said in its letter
that it welcomes further investigation by the Global Fund, there are
still serious concerns about fraud and mismanagement within the
SENLS that have yet to be addressed.

The Ministry of Health/CCM's Non-Response
--------------

7. (SBU) While UNDP and SENLS have both responded to the Global
Fund's letter, the CCM has yet to respond. The reasons for the
delay are not clear. It may be due to the current political crisis
and the fact that the CCM is barely functioning and has not been
organized enough to prepare a response. However, French Cooperation
representative Michel Treutenaere suggested that there is more than
meets the eye. He suggested that the Ministry of Health is trying
to maintain control of the situation by: 1) waiting to see to what
extent the primary recipients (UNDP and SENLS) implicate the
Ministry in the fraud and general mismanagement charges; 2) planning
for a "house cleaning" within the Ministry of Health, which would
allow the Ministry to save face in light of allegations because they
will get rid of the culprits; 3) waiting to pass the buck - and the
blame - on to the next CCM President, once the group is restructured
and a new President is named; and 4) avoiding the confession that
the Ministry is part of the problem, and attempting to stay "clean."


Turmoil within the CCM and Ministry of Health
--------------

8. (SBU) During the past two years there have been five ministers of
health, two of whom have been very political. This has led some to
conclude that health policy has been politicized, although others
disagree with this assessment. In any case, the rapid turnover of
ministers and other top officials within the Ministry of Health has
created a lack of stability and continuity within the Ministry,
affecting the implementation of many programs. The latest
junta-appointed minister, Mohamed Abdallahi Ould Syam is a public
law specialist trained in international relations. Likewise, the
Secretary General Dr. Mohamed Abderrahmane Ould Ahmed Sidatt is from
a non-health background, but politically astute and with a good
reputation as a man of action by most stakeholders. Sidatt is a
long-standing government civil servant and known organizational "fix
it" man.


9. (SBU) Mauritania's 23-member CCM has been fraught with problems
since its creation. There have been discussions since early 2008
about restructuring the CCM to make it a more effective oversight
body. Until recently the meetings were disorganized to the point of
being chaotic. While the CCM reports to the Global Fund, not the
Ministry of Health, it has been affected by the rapid turnover and
lack of continuity within the Ministry of Health. The Secretary
General of the Ministry of Health is also the President of the CCM.
With each new Minister, there has usually been a new secretary
general. The constant change in leadership of the CCM has meant a
lack of continuity and stability. Thus the Global Fund's criticism
of the CCM for negligence and lack of oversight is not surprising.
Since his appointment, Sidatt has improved the functioning of the
CCM, but it remains far from perfect. There are significant
internal communication and organizational problems which continue to
impede its effectiveness. CCM members such as Treutenaere and World
Health Organization representative Dr. Lamine Ciss-Sarr are
convinced that CCM President Sidatt will indeed improve CCM
functioning and transparency, but it will take time.


10. (SBU) Donors have long complained that their calls for better
oversight on the part of the CCM are not being heard. On March 2,
the donor's group collectively presented a letter to the
junta-appointed Minister of Health urging him to recognize that
there is a management problem within the CCM and within the Global
Fund Mauritania portfolio, and to respond to the Geneva letter. To
date, the Ministry has responded neither to the Global Fund's letter
nor to the donor's letter.

CCM Restructuring
--------------

11. (SBU) There are already preliminary efforts underway to
restructure the CCM. At the last CCM meeting February 19, the
president announced that members would receive a draft restructuring
proposal. One of the main concerns is membership, especially the
role of the sub- and sub-sub-recipients in the decision making
process. Because the Ministry of Health is both a sub- and a
sub-sub-recipient, there is concern about a potential conflict of
interest if the Secretary General of the Ministry of Health presides
over the CCM. For example, the CCM determined at its February 19
meeting that the vast majority of goods purchased under the Fund's
Round Two, a $2.4 million USD tuberculosis and malaria program,
would be turned over to the Ministry of Health, including all five
vehicles.


12. (SBU) There are questions as to whether the Secretary General of
the Ministry of Health should continue to preside over the CCM. In
most countries, the Ministry of Health is a principal recipient.
When the Global Fund began programs in Mauritania, it determined
that the Ministry of Health did not have sufficient capacity and
thus gave the malaria and tuberculosis portfolio to UNDP rather than
the Ministry of Health. The Ministry of Health has expressed its
interest in becoming the principal recipient for the tuberculosis
and malaria programs for well over a year. The Global Fund has
given no indication that it is prepared to accept this change at the
current time. If it ever were to, there would be serious questions
about oversight and whether the Ministry of Health should directly
manage several million dollars in donor funds given the current
political situation.

Conclusion - unanswered questions
--------------

13. (SBU) There are many unanswered questions about the future of
the current CCM, its possible restructuring, the role of the
Ministry of Health, and even the continuation of Global Fund funding
due to these recent allegations. The CCM response to Geneva's
allegation letter will likely be forthcoming once Geneva provides an
initial reaction to UNDP's and SENLS' responses. It is not clear if
the Ministry of Health will also respond as the Global Fund letter
was addressed specifically to the CCM. Rousselle informed the donor
group that she anticipates a follow-up investigation in early 2009,
but is unsure of exact timing. She told EconOff and LES March 8
that she is tentatively planning a trip to Mauritania March 18-19 to
meet with the CCM and donors. She also discussed the likelihood of
employing Grant Management Solutions, a USAID-funded program to
provide urgent technical support to countries receiving Global Fund
funding. In the meantime, the allegations stand, and the HIV-AIDS
Global Fund funding for HIV-AIDS programming remains frozen.

HANKINS