Fraud at malaria centre: Global Fund report uncovers ‘systematic’ double billing, nepotism

Source: Phnom Penh Post

A motorist travels past the National Centre for Parasitology, Entomology and Malaria Control in Phnom Penh’s Sen Sok district. Pha Lina

A report by the Global Fund’s Office of the Inspector General (OIG) has confirmed evidence of corruption and nepotism at Cambodia’s National Malaria Centre (CNM), first revealed by The Post last year, calling the centre’s oversight “dysfunctional and unauditable”.

The report was released quietly in March, but passed to The Post this week. It found “systematic” double billing of donors for field missions conducted by the same staff in different areas during overlapping time periods, and the practice of senior staff members hiring unqualified family members.

Moreover, it was staff with family connections that went on the most field trips, the report found, despite some lacking relevant experience in anti-malarial activities.

The OIG singled out CNM Director Huy Rekol as the individual ultimately responsible for donors’ cash, but also noted “limited” oversight by the United Nations Office for Project Services, which acts as the principal recipient of Global Fund funds delivered to the CNM .

The investigation, initiated in October 2015, analysed 654 mission orders between June 2014 and May 2016 by 156 CNM staff members. Among these, the OIG found 197 days of per diem payments were billed to the Global Fund and another donor simultaneously, chalking up $3,940 in “fraudulent claims” filed by 21 members of the centre’s staff.

The Global Fund has requested the money back by December this year, according to the report. In response, a senior CNM manager requested all staff, even those not responsible for the fraudulent travel claims, to contribute personally to repaying some of the amount, a directive the OIG labelled an “abuse” of authority.

Reached yesterday, CNM Director Huy Rekol claimed he was in a meeting and hung up. He did not respond to further requests for comment.

According to the report, when confronted with the findings Rekol had claimed the overlapping trips were due to undocumented cancellations. The OIG, however, found evidence refuting this.

The abuse of per diems was first brought to light by The Post last May in a report based on documents and extensive interviews with insiders from the Health Ministry, whose spokesman could not be reached yesterday.

The Post investigation found that mid-level managers at the CNM had doled out contractor jobs to unqualified relatives, who then billed the Global Fund and NGO FHI 360, another donor, for trips taken at the same time in provinces hours apart.

The revelations raised doubts about efforts to increase accountability following a previous CNM corruption scandal in 2013, in which senior managers received some $410,000 in kickbacks in exchange for handing out lucrative procurement contracts.

Though noting hiring family members was not illegal, the OIG report stated many senior managers hired relatives without a transparent process, while also criticising the centre’s “dysfunctional and unauditable” systems which failed to detect the fraud.

It noted some CNM staff members were “not qualified to fill technical roles assigned on field missions” and recommended the development of a “code of conduct” and “conflict of interest policy” as the family connections across the CNM’s hierarchy “increased the opportunity for improper financial gain”.

According to the report, two CNM deputy chiefs are related to six lower-level staff, while the head of the dengue programme, who is also chief of research, has a brother-in-law working as an assistant.

Head of the administration bureau, Math Imran, and head of the technical bureau, Siv Sovannaroth, also have relatives working at the centre.

According to The Post’s research, Imran’s son, Math Safari, featured prominently on travel expense forms, despite insiders saying last year he had no medical experience.

In the OIG report, an individual called “CNM Staff A” – an apparent reference to Safari – is recorded as taking the third highest number of field trips in the organisation, claiming per diems 250 times to the tune of $5,000.

In March 2015, CNM Staff A is listed as being on a mission for 33 days. Contracted as an “assistant”, he was switched from the administration bureau to the epidemiology unit after consultants working with the centre noted the high number of administrative staff conducting technical trips.

Confronted with evidence of 13 overlapping trips, he said he “could not recall any field missions undertaken and did not receive any money from per diems”, according to the report.

The OIG also lists the brother of Technical Bureau Chief Siv Sovannaorth, Chea Sokun, as being on a 40-day mission during the month of October 2014.

“This exceeds the total number of days available in the month,” the report notes. In 2015, the Global Fund demanded CNM staff file receipts as proof of travel, though the centre refused and the disagreement stalled anti-malarial activities for five months.

The Fund ultimately backed down, but introduced stricter oversight, including requiring travel plans prior to trips and spot checks in the field by consultants in Cambodia.

Though the measures reduced the fraudulent expense claims, the report notes, problems still persisted with CNM staff not complying with travel verification procedures.

Between February and August last year, 123 spot checks found that 33 percent of missions were cancelled without a timely notification, 14 percent had either staff missing or an unapproved change to the team, and on 8 percent of the missions, staff refused to sign documents confirming their names and attendance.

As a result of the spot checks, Global Fund withheld per diems to 76 percent of field missions which could not be properly verified, amounting to $64,958. In this regard, the report criticises the UNOPS, saying it “did not provide the appropriate level of oversight or timely information to ensure adherence”, though it notes the agency has committed to closer cooperation with CNM to address the issues.
Reached yesterday, Anti-Corruption Unit President Om Yentieng questioned the timing of the report, claiming that “Global Fund aways does like this when we are near elections”.

“This is not the first time the Global Fund has talked to journalists before telling us so it is complicated for the ACU to investigate,” he said. Nonetheless, Yentieng said the unit would be “happy” to accept the findings and “work further” on the case.

However, in the 2013 kickback scandal, no prosecutions were ever undertaken, despite the identities of the officials involved being widely known.Transparency International Director Preap Kol yesterday called for accountability.

“Those involved in malpractice and corruption must be punished according to the anti-corruption laws,” he said, via email. “Asking corrupt officials to return money and letting them walk free of any charge or punishment sends the wrong message.”

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