"Punish the NACA fraudsters”- A rejoinder to the unsubstantiated headline

Your editorial opinion titled “Punish the NACA fraudsters,” which was published on page 43, DAILY TRUST edition of June 3, 2016, is incomprehensible, to say the least. Apart from the very harsh indicting language of the headline, nothing in your write-up reveals or suggests that NACA officials were involved in the fraud uncovered by Global Fund in its audit report on the Nigeria grant.

You correctly reported that “the funds were stolen in four different ways, including 1. Misrepresenting or inflating the amounts paid to hotel venues for meeting facilities and rooms: 2. Inflating and/or falsifying receipts related to Daily Subsistence Allowance entitlements, transportation expense to and from the venue, fuel and stationery; 3. Claiming expenditure for travel not undertaken-that in some instances Department of Planning, Research and Statistics (DPRS) of the Federal Ministry of Health’s (FMoH) staff colluded with and received kickbacks from hotels and suppliers; and 4. Inflating the number of attendees at a meeting or training or its duration.’’

The report said ‘’these frauds sailed through because DPRS, which received the grants failed to implement the systems put in place for internal controls to safeguard grant funds from being stolen. The department’s Project Coordinator and Assistant Accountant, the report said, ‘were complicit in the schemes.’

It is pertinent to state that NACA in performing oversight of the grant managed by DPRS-FMoH had written a number of letters to the Federal Ministry of Health (FMoH-DPRS) regarding lapses observed in the management of Global Fund grants. Specifically, in a letter titled “Management letter for financial monitoring visit to the Department of Planning, Research and Statistics, FMOH (DPRS) dated September 30, 2012, NACA, on observing the manual recording of financial transactions noted that  “There is a lack of efficiency and an increased risk of errors. Transactions are open to manipulations and forgery due to lack of system controls; Lack of backup of transactions in case of loss of documents, fire and mishaps.” The Agency then recommended that “DPRS should automate its financial system so as to reduce the risk of errors. DPRS should acquire an efficient and effective accounting software for Global Fund operations to minimize the risks of errors and misstatements.”

Also in a NACA letter titled: “Management letter for Global Fund Consolidated Grants for the period January – March 2013” of 11th June 2013, addressed to the Hon Minister of Health the Agency recommended that “DPRS should take steps to migrate its financial records and management data to suitable accounting software that will promote effectiveness, guarantee speed, security and safety of transaction” and that “DPRS needs to automate their accounting process to increase versatility and ease of report generation.”

How can anyone – any journalist for that matter, justify your hostile and misleading headline in spite of the facts you quoted above? Or is it because, as you reported, “NACA failed to either recognize or address the indicators and risks of fraud…” that you pilloried the Agency in your premeditated headline, notwithstanding the fact that you traced the source of the fraud to the DPRS-FMoH as clearly stated in the OIG investigation report?

For the avoidance of doubt, a statement from the Inspector General of the Global Fund on page 3 of the report stated that in relation to the Principal Recipients (NACA and NMEP) “The audit found no evidence that misuse of funds or fraud had occurred”. Also, the message from the Executive Director of The Global Fund at page 32 of the Audit report stated that: “The audit identified US$20 million as expenditure for which NACA was unable to provide supporting documentation during the audit. Supporting documentation, from legitimate contracts with a reputable international procurement agent, has now been located after the audit period closed. Certified copies of invoices from the suppliers have now been verified, where invoices were previously not available”. A full copy of the Global Fund Audit Report on Nigeria can be downloaded from the following web link: http://www.theglobalfund.org/en/oig/updates/2016-05-03_Audit_in_Nigeria/

It is important to mention that even weeks before the publication of the findings by Office of the Inspector General, the Economic and Financial Crimes Commission (EFCC) had been notified of the findings of alleged fraud and embezzlement of funds by the Department of Planning Research and Statistics, Federal Ministry of Health and the EFCC had since commenced their investigation.

Despite these challenges, the grant from the Global Fund is making public health impact on people living with HIV and the health system and will continue to do so as the systemic issues raised by Office of the Inspector General requiring policy and strategic actions are receiving urgent attention by the Government of Nigeria.

A lot of improvements have been made at the national level, but inadequate capacity and lack of motivation of staff at health facilities involved in the program has remained a huge challenge to effective grant implementation as a lot of the health workers at the facilities complain of unpaid salaries for months in some states. The Agency and Federal Ministry of Health are working out effective strategies to address these systemic challenges. One of the strategies under consideration is the introduction of electronic medical record (EMR) system in Global Fund supported secondary facilities to improve overall data quality and effectiveness of grant implementation. Other remedial actions taken by NACA include: strengthening of the Procurement Unit with the deployment of a Deputy Director from the Bureau of Public Procurement as Head of Procurement at the Agency; re-organisation of NACA Global Fund Team into  a dedicated unit focused on Global Fund grant management; decentralization of Global Fund commodity storage and management to 8 Zonal Stores renovated with funding from Global Fund; and support to Logistics Management Coordination Unit in 36 states and the Federal Capital Territory.

NACA enjoins governments at state and LGA levels to effectively play their roles especially in the area of human resource and health facilities as the grant is implemented in secondary and primary health facilities owned and managed by them to improve overall quality of the program and other public health programs in Nigeria.

We state categorically that the integrity of National Agency for the Control of AIDS (NACA) is not in doubt – not with the Global Fund nor with the discerning public. DAILY TRUST owes NACA an apology for the misplaced hostile and misleading headline.

Management

National Agency for the Control of AIDS.