South Africa: Government has “Likely” Misappropriated 51% of US “AIDS Help” Aid Money

The South African government’s Department of Health appears to have “likely” misappropriated more than half of the US taxpayer-funded $5.8 million “President’s Emergency Plan for AIDS Relief” (PEPFAR) cash given to that country to “combat HIV/AIDS, tuberculosis, and malaria.”

News of the misappropriation is contained in a newly-released official report issued by the US’s Department of Health and Human Services’ Office of Inspector General (OIG), titled “The South African National Department of Health Did Not Always Manage and Expend the President’s Emergency Plan for AIDS Relief Funds in Accordance With Award Requirements.”

The OIG report said that PEPFAR “was authorized to receive $48 billion in funding for the 5-year period beginning October 1, 2008, to assist foreign countries in combating HIV/AIDS, tuberculosis, and malaria. Additional funds were authorized to be appropriated through 2018.”

The act that implemented PEPFAR required the Department of Health and Human Services (HHS), and the OIG to provide oversight of the program, the report continued, and in that light, a “series of audits of organizations receiving PEPFAR funds from HHS, Centers for Disease Control and Prevention (CDC).”

The objective of the audits were to “determine whether the South African National Department of Health (the Ministry) (1) managed and expended PEPFAR funds in accordance with award requirements and

(2) implemented recommendations from our prior audit,” the report continued,

The audit covered the budget periods from April 1, 2014, through March 31, 2016, a period during which the South African government expended $2.6 million of the total $5.8 million allocated to it from US taxpayer funds.

The OIG selected what they said was a “judgmental sample of 50 financial transactions totaling $670,030” to try and determine to what extent the rules and regulations had been followed.

The report found that the South Africans “did not always manage and expend PEPFAR funds in accordance with award requirements.

“Of the 50 financial transactions in our judgmental sample, 46 transactions totaling $655,374 were allowable, but 4 transactions totaling $14,656 were not.

“These transactions were unallowable because either the Ministry did not provide adequate supporting documentation, such as invoices or attendance rosters, or it paid unallowable value-added taxes (VAT) with PEPFAR funds.

“Additionally, the Ministry did not accurately identify expenses between cooperative agreements in its financial management reporting system, did not submit an accurate Federal Financial Report (FFR), and filed one of its FFRs more than 5 months late.

“Furthermore, the Ministry did not implement corrective actions for one of the nine recommendations from our prior audit.”

This means that of the $670,030 in grant money which the OIG reviewed, at least $343,930 was “unauthorized” and had been misappropriated.

This means that 51 percent of the funding was used for unauthorized” purposes or had not traceable record of where it had gone—a figure which can be extrapolated out to cover the entire grant amount on account of the representative nature of the OIG sampling procedure.

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