Tuesday, November 20, 2012

Why Did the Global Fund Fire its Inspector General?

The Global Fund to Fight AIDS, Tuberculosis, and Malaria continues to struggle with the issue of health care corruption, an issue we noted here and here in 2011. 

Now as a news story in Nature put it,

It has been a rough couple of years for the Global Fund to Fight AIDS, Tuberculosis and Malaria, the world’s largest funder of international health programmes. Since its creation in 2002, the organization, based in Geneva, Switzerland, has channelled US$24.7 billion to delivering disease-control measures such as drugs, diagnostics and bed nets, saving millions of lives. But the global financial crisis has hit the fund hard, and its troubles mounted in 2011 when allegations of corruption among its grant recipients tarnished its reputation and alarmed donors.

Last week, the Global Fund tried to move on, announcing a new leader and unveiling major changes to its funding programme.
The Nature news story suggested that the troubles of the Fund all seemed so unfair.  After all,
the fraud allegations, ... [were] largely rehashed audits already made public by the fund itself. A retrospective audit published in July this year suggests that the allegations may have been overblown. It found that, in a sample of grants worth $3.8 billion that were awarded from 2005 to 2012 in 27 countries, just 0.5% of grant funding was lost to outright fraud. Experts say that figure is not exceptional for funding programmes in poor nations that often struggle with corruption.
Yet the Nature story suggested that the Fund's intrepid new later "could signal a fresh start, and has been broadly welcomed," leaving the impression that all things may turn out well.

Firing the Inspector General

However, the Nature story left out one nagging detail.  At the same time the Fund board announced the appointment of Dr Mark Dybul as its new director, it also announced that it had fired the Fund's Inspector General.  A report in the Financial Times only included,

It also dismissed John Parsons, its inspector general. Some directors believed Mr Parsons had been too outspoken in conducting public audits that sparked criticism of relatively small amounts of mismanagement and corruption.
The impression left was that Mr Parson was mainly guilty of rocking the boat.

The New York Times version, which started by recounting the hiring of Dr Dybul, also made it sound that Mr Parsons was generating too much bad publicity,

The fund also dismissed its inspector general, John Parsons, on Thursday, citing unsatisfactory work.

Mr. Parsons and Dr. Kazatchkine had privately clashed. Mr. Parsons’s teams aggressively pursued theft and fraud, and found it in Mali, Mauritania and elsewhere. But the total amount stolen — $10 million to $20 million — was relatively small, and aides to Dr. Kazatchkine said the fund cut off those countries and sought to retrieve the money. The aides claimed that Mr. Parsons, who reported only to the board, went to news outlets and left the impression that the fund was covering up rampant theft.

The fuss scared off some donor countries....
The AP version also cited the Board's accusation that Mr Parson's performance was "unsatisfactory," but included,

The inspector general's office is supposed to function independently. It was created in 2005 at the urging of the fund's biggest donor, the United States, which has contributed $7.3 billion to date.

The board held a contentious closed-door session with Parsons on Wednesday then deliberated into the night after he stormed out.

The board chairman, Simon Bland, and the head of its audit committee, Graham Joscelyne, each said they were unconcerned whether U.S. lawmakers might perceive the firing as an infringement on the office. Joscelyne would not elaborate on what Parsons did wrong but cited several reviews of him that were not disclosed.

In its latest 6-month progress report, Parsons' office said it had a growing caseload of 142 active investigations, up more than 70 percent from just two years ago.

Summary and Comment

We posted about the allegations of corruption at the Global Fund here and here in 2011.  At that time the scope of the problem was  unclear.  Now, at least according to the latest news report, it still is not clear.  On one hand, maybe no more than 0.5% of the budget was compromised.  On the other hand, would that caseload of 142 active investigations reveal more? 

Even less clear is the reason that Investigator General Parsons was fired.  The Board did not clarify what about his performance was unsatisfactory.  The AP report implies that doing too little was not the issue.  Most disturbing is lack of any mention of a possible replacement.

As we mentioned previously, the authoritative 2006 Global Corruption Report from Transparency International stated that corruption is a major global health problem.  Furthermore, Transparency International's IACC (International Anti-Corruption Conference) in Brasilia just wrapped up.  It's final declaration included,

We call on leaders everywhere to embrace not only transparency in public life but a culture of transparency leading to a participatory society in which leaders are accountable.

We call on the anti-corruption movement to support and protect the activists, whistleblowers and journalists who speak out against corruption, often at great risk.

It is up to all of us in government, business and society to embrace transparency so that it ensures full participation of all people, bringing us together to send a clear message: We are watching those who act with impunity and we will not let them get away with it.

Yet, corruption as a global health problem is still mostly ignored. In particular, global health aid programs almost never include pro-active measures to address corruption. In this case, the Global Fund, the world's largest source of such aid, was initially pushed into defensively addressing corruption, but now seems not to be so transparent about the problem. In my humble opinion, unless more transparency soon becomes evident, donors may continue to find reasons not to support the fund.

So the leaders of the Global Fund might want to consider becoming more transparent, and making some assurances that they are not out to get whistleblowers, including their own internal watchdogs.  At this point a more pro-active approach might be too much to ask for. 


Afraid said...

Yep, stand up for right and get canned, lie cheat and steal - no penalty oh so typical.

Anonymous said...

The fact that just about a year ago, the High Level Panel report praised OIG for being the only organ of the organization that worked as it was intended to. This obviously led OIG to believe that it had to carry on with its work. Now, a year later, to say that your performance was not up to the mark is contradictory. This practically means that the period for which Inspector General's performance that was under review was only for the past one year. But in my view the Board could not and should not have taken that decision citing poor performance as a result of internal and external review. The review itself is questionable. The board needs to explain basis of its decision by clearly identifying instances of underperformance if there was any. The decision is not justifiable only based on an external review report which was not at all so severely critical and did not warrant such response from the board. The Inspector General headed two units, under performance of just one unit should not have led to this decision, even if that was the case.

This is a setback for community promoting global transparency, the board created something which it could not handle.

Anonymous said...

Thank you for your efforts Dr Poser.
Today Ive read this blog, one by you from 2007 on the relationships between orthopods and prosthesis suppliers and another article on the, my interpretation, likely increase in physician burnout secondary to commercial factors in practice.
Ive a bleak outlook.
Have a good day.

Steve Lucas said...

This is becoming the norm for charities of all types, everyone looking after their piece of the pie while no one is responsible for anything, including mismanagement. A number of years ago I became the center of a conflict at out church with a staff member who would later be professionally diagnosed with serious issues impacting his family and work. As a number of people worked to resolve these issues the denomination had no system in place to deal with a failing minister.

The denomination has since lost half its membership and is working hard to loose half of those left.

We left another church in the same denomination when it was obvious the new minister was nothing more than a salesman, working the people for all the money he could, while setting himself up in a situation where he was not responsible for the church’s success. He eliminated the supervising board’s monthly meetings and is supervised via Facebook and email.

Returning to our old family church after a break we found a massive loss of members and a minister whose only skill seems to be pandering to the choir. Interestingly the chair of the Finance Committee is in the choir and this is the same person who chaired the committee that hired this minister. The denomination’s area supervisor has received funds from this church, so keeping this minister in place has a financial incentive for this person.

Contacting the denomination I am told I am the problem, that if I would only donate more and be positive everything would work out, after all these people are superior to me, the lowly member. Why claim the emperor has no cloths?

When churches and charities become nothing more than another non-profit intended to make the leadership wealthy corruption will follow. We have seen the growth of the stand alone church in response to the desire for accountability.

We have also seen the rise of the private charity funded with billions of dollars for the same reason.

As we knock the pillars of trust and charity from under our society we can expect corruption to follow. Medicine, the church, and large charities are leading the charge, becoming nothing more than private banks for a lucky few.

Steve Lucas

Unknown said...

Thanks for posting this Roy. I am deeply troubled by this turn of events at the Global Fund. I know Parsons was considered overzealous and Bernard Rivers gives an alternative view (http://bit.ly/T4O6zk) which shows a reasonable perspective on why this dismissal might be justified. But I'm not convinced. The entire pressure in aid agencies is to disburse funds and the possibility that an expenditure was appropriate even if it wasn't documented correctly is regularly used as an excuse not to demand repayment. At a minimum, the new GF Board should be more specific about what they mean by "unsatisfactory performance".

Anonymous said...

Question: "Why Did the Global Fund Fire its Inspector General? "
Answer: Better question is "Why not?"

khairul044 said...

Thank you for your efforts Dr Poser.This is a setback for community promoting global transparency, the board created something which it could not handle.