GLOBAL FUND INVESTIGATION IN MAURITANIA: FUNDS GO

C O N F I D E N T I A L NOUAKCHOTT 000577

SIPDIS

ACCRA FOR USAID/W

E.O. 12958: DECL: 09/13/2014
TAGS: PGOV EAID TBIO SOCI MR
SUBJECT: GLOBAL FUND INVESTIGATION IN MAURITANIA: FUNDS GO
MISSING

Classified By: CDA Dennis Hankins for reasons 1.4 (b and d)


1. (C) Summary: After widespread reports of mismanagement of
aid granted to Mauritania through the Global Fund to fight
AIDS, tuberculosis and malaria, a Global Fund financial
investigation uncovered that nearly 74% of all aid funds to
Mauritania were either spent improperly, or were not
sufficiently documented as legitimate expenses. Effective
September 3, 2009, Mauritania is in suspended status with the
Global Fund until USD 1.73 million are reimbursed and USD
2.69 million are properly accounted for, or repaid to the
Global Fund. A senior delegation of Global Fund
administrators visited Mauritania to meet with the Prime
Minister, Minister of Heath and Minister of Economy and
Development to explain the results and repercussions of their
financial investigation. End Summary.


2. (SBU) In April 2009, after the detection of a number of
financial irregularities of Global Fund payments in
Mauritania, an in-depth financial investigation was conducted
into the distribution of funds to Mauritania through the
Global Fund to fight AIDS, tuberculosis and malaria in
Mauritania. The Office of the Inspector General of the
Global Fund released the results of their investigation last
week, which confirmed that between October 2006 and September
2008, USD 1.73 million were used for fraudulent purposes and
an additional USD 2.69 million remain insufficiently
justified. (Comment: The period of the audit covers the end
of the Transitional Authorities under Col. Ely Ould Mohamed
Vall and the democratically elected government of President
Abdallahi. Only one month of the period relates to the
post-August 2008 military regime headed by then-General Aziz
-- subsequently elected President in July 2009 elections.
End Comment)


3. (SBU) As a result of the investigation, a team of Global
Fund staff visited Mauritania September 9-11 to meet with
GIRM officials, including the Prime Minister, the Minister of
Health and the Minister of Economy and Development.
Effective September 3, 2009, the Global Fund grant to
Mauritania was suspended.


4. (SBU) The Global Fund is asking that the National
Executive Secretary for HIV/AIDS, the primary recipient of
funds, cease all activity and expenditure using Global Fund
resources. The Global Fund is also demanding the removal of
those individuals found to be responsible for fraudulent
reimbursements.

The grant will remain in suspension until:

-- The Global Fund is reimbursed USD 1.73 million by November
30, 2009

-- The missing USD 2.69 have been properly justified (by
September 16, 2009). If not properly justified, these funds
must all be reimbursed to the Global Fund.

-- An investigation must be undertaken by the GIRM,
commencing no later than September 30, 2009.

--A fully functional Country Coordinating Mechanism (CCM)
must be in place to manage Global Fund activities in
Mauritania no later than March 30, 2009.


5. (C) The visiting Global Fund team held a meeting with the
donor community to discuss their visit and the status of
Global Fund operations in Mauritania. They indicated that the
corruption was widespread, stretching over a period of two
years, with over 74% of Global Fund payments being spent
fraudulently or improperly documented; the highest percentage
of misused Global Funds in any recipient country to date. It
was not possible to direct blame on one individual or
government administration as the corruption was so pervasive.
While defensive, the GIRM recognized the severity of the
problem, stating that they intend to reimburse the USD 1.73
million, but they also criticized the Global Fund for working
with members of the NGO community, placing blame on these
organizations for the missing funds.


6. (C) The visiting team also met with the Country
Coordinating Mechanism (CCM) while in Nouakchott. The meeting
was highly disorganized, highlighting the problems facing the
Mauritanian CCM. Reactions of members ranged from tearful
shame to anger toward the Global Fund and the President of
the CCM. The Global Fund team was particularly strong in
their condemnation of the fraud and made it clear that the
stage of negotiating a response to the fraudulent charges had
long passed. The four steps outlined above must be met in
their entirety before the Global Fund will consider
re-instating Mauritania's agreement. In the meanwhile,
distribution of life-saving AIDS/HIV medications will
continue uninterrupted through cooperation with the French
Red Cross using Global Fund resources.


7. (C) Embassy Nouakchott has long encouraged, with support
from other donor partners, and to a certain extent, Global
Fund management, to reorganize the highly politicized CCM in
Mauritania. The CCM has been under the direction of the
Secretary General of the Ministry of Health, meaning that the
coordinator of the program was also the largest beneficiary
of program funds. While civil society groups are represented
on the CCM, they have not had the authority of the GIRM
representatives on the CCM. There remains a great deal of
hesitancy on the part of the GIRM representatives on the
board to relinquish the role of the presidency and to reform
the board. This will be the greatest challenge for the coming
months. Embassy Nouakchott plans to have the USAID Global
Fund Liaison for West Africa visit Mauritania for meetings
with CCM members to discuss best practices and ways to
reorganize the CCM according to Global Fund recommendations.


8. (C) The visit of the Global Fund team received coverage in
the local press. A number of commentators mentioned that the
principal recipient of funds in Mauritania, the Executive
Secretary for HIV/AIDS (SENLS) was chaired by Dr. Abdallah
Horma, the brother-in-law of the Prime Minister and the
brother of the Minister of Health. While not publicly named
in the investigation, he has complete oversight of the grant
and there have been calls for him to be questioned about this
situation. President Aziz ran his presidential campaign with
claims to fight corruption. The GIRM's response to this
current situation will be an opportunity to demonstrate a
willingness to follow through on such promises. (Comment:
Press is reporting that Horma resigned on September 13. End
Comment)
HANKINS