Global Fund Investigating Karachi Private Hospital For US$ 4.2 Million In Misallocations Of TB Funds TB, Malaria & Neglected Diseases 26/02/2021 • Rahul Basharat Rajput & Muhammed Nadeem Chaudhry Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) A Pakistani healthcare worker listens to a child’s lungs for signs of pulmonary tuberculosis; Pakistan ranks fifth worldwide in TB burden. ISLAMABAD, PAKISTAN – EXCLUSIVE – The Global Fund to fight HIV/AIDS, Tuberculosis and Malaria and Pakistan’s Health Ministry are investigating a private sector hospital in Karachi for alleged mismanagement of some US$ 4.2 million in Global Fund funds allocated to the country for tuberculosis elimination (TB) activities. The Indus Hospital (TIH), the principal recipient of the Global Fund’s TB grant to Pakistan, is alleged to have mis-spent US$ 4,196,938 of the country’s TB programme grant of US$ 39.7 million for the years 2016-2018 in “fraudulent” awards to a service provider. The funds provided to TIH were intended to be used to provide TB outreach services in Karachi and the surrounding rural areas of Sindh province – both of which are high-TB burden areas in Pakistan. The Indus Hospital, Karachi, Pakistan The hospital was accused of embezzling the money in the December 2020 draft of a report by the Global Fund’s Geneva Office of Inspector General (OIG), obtained by this team from a Pakistani source in the Ministry of National Health Services – Regulations & Coordination (NHSR&C). The same allegations were repeated in an official NHSR&C committee report – subsequently obtained by these reporters. According to the World Health Organization (WHO), Pakistan is ranked fifth amongst high-burden countries of TB worldwide and it accounts 61 percent of the communicable disease in WHO’s Eastern Mediterranean Region (EMRO). The GF’s OIG report covers the period of two years i.e January 01,2016 to December 31, 2018. It found that some 4,196,938 USD in non-compliant expenses – related to “irregular payments” to suppliers or related conflicts of interests. Out of the total amount of mis-spent funds, some US$ 1,172689 USD is ‘potentially’ recoverable, the OIG report states. TIH Failed To Conduct Competitive Tender For Services – And Was Overcharged The report says that the TIH pre-selected a firm called Interactive Research and Development (IRD) as a long-term technical assistance supplier in connection to the GF grant, instead of conducting a competitive tender. Then, IRD significantly overcharged for its services. “The Indus Hospital fraudulently awarded four projects to IRD. IRD then overcharged the Global Fund for these projects through non-delivery, fabricating and inflating programmatic achievements, and through unsupported expenses,” said the early investigation draft of the OIG. An IT provider on the project, also misrepresented and overcharged for its services to the Indus Hospital, the OIG report states. The Indus Hospital engaged Interactive Health Solutions Private Limited (IHS) to provide IT services, but paid out double what IHS actually spent to delivering the services. Unmitigated conflicts of interest between the hospital and its providers were enablers for the alleged fraud, the OIG report states. But the Global Fund Pakistan Country Team also failed to provide adequate oversight, the OIG report concludes. The country team breached budget procedures in the process of approving The Indus Hospital’s selection of IRD and IHS. “Conflicts of interest and irregular procurements contributed to US$4,196,9381 of non-compliant expenses, of which US$1,172,6892 is potentially recoverable,” states the OIG report. The report also contains a detailed diagram illustrating the complex conflict of interest patterns that emerged between TIH and its suppliers – as well as the failed oversight channels between the country’s Global Fund programme management team and the hospital. That diagram, published in the original online version of the Health Policy Watch story, was later removed at the request of Global Fund’s OIG, pending the Global Fund’s publication of it’s full and final report on the investigation, scheduled for mid-March. Global Fund Responses The Global Fund’s OIG Office in Geneva confirmed, however, to us the authenticity of the report, saying that an “early draft version” had been leaked. GF Communications Specialist Dougal Thomson said that a detailed report will be released around 16 March. The Global Fund Pakistan Country Team, approached by us for comment, through the Global Fund local funding agent, Amir Chaudry, declined to respond. The Global Fund has invested US$697 million in Pakistan since 2003; the GF is the country’s biggest donor for programmes related to HIV/AIDS and TB. Pakistan’s Health Ministry Formed Inquiry Committee Following their receipt of the draft GF report on 1 December 2020, Pakistan’s Ministry of NHSR&C formed an inquiry committee to probe the charges against TIH. A committee report issued on 14 December 2020, validated the financial allegations leveled by the GF’s OIG against the Karachi hospital. The four-member inquiry committee concluded that the wrongdoing occurred because individuals violated health ministry and GF Standard Operating Procedures (SOPs), causing ‘triple damage’ to the cause of ending TB efforts in the country. The committee also reported that the wrongdoing resulted had damaged donor trust – as well as causing national dishonor. As a result of the episode, the Global Fund has now applied an Additional Safeguard Policy (ASP) to Pakistan, to monitor future GF investments more closely. The Health Ministry committee also concluded that it agrees with the OIG findings that the GF portfolio manager in charge of the monies, had failed to provide adequate oversight, and when conflicts of interest became apparent, had not adequately flagged the issues to the Senior Recoveries Officer which is the GF standard procedure. The Health Ministry committee report further added that “TIH responses are too generic and not responding satisfactorily to the documented facts and figures of OIG report.”The The Indus Hospital (TIH) Responds To Charges TIH Chief Executive Officer (CEO), Dr. Abdul Bari Khan, when asked by our team about the GF’s allegations on TIH, said that “we have submitted our reply and are waiting for the final version of the report.” A subsequent TIH media statement, signed by Khan, stated, “the OIG carries out audits to ensure compliance in relation to good practices. At times there are certain procedures and related expenses which may require necessary explanation based on ground realities.” The statement added that these observations about procedures or expenses are ‘not to be interpreted as fraud’. Pakistan Committed To Battling TB – A Major Public Health Challenge WHO Global Tubercullosis Report, 2020 According to the National Program Manager of TB Control Program Pakistan, Dr. Naseem Akhtar, TB is one of the major public health problems in Pakistan, with the country ranking fifth among 30 TB high-burden countries worldwide. She said that the estimated burden is 570,000 TB cases and 25,000 DRTB cases annually while 42000 people die of TB every year. “In 2020, 330,000 TB cases were put on treatment and 93% of those were successfully treated while 3004 cases of DR TB [drug resistant TB] were also enrolled,” said Dr. Naseem. In a response to queries by our team, Dr. Faisal Sultan, special assistant to the Prime Minister on National Health Services (NHS) stressed that TIH was contracted directly by the Global Fund – and not through Pakistan’s national ministry. He said that the inquiry, as well, was conducted by GF inspectors. Irregardless of the issues that have emerged in relation to the GF, he pledged that the TB elimination remains a high national priority: “Our own [government] TB programme will continue, and we plan to fund it much better this coming year.” ___________________________________________________ Rahul Basharat Rajput is a Pakistan based journalist and a US Education Foundation – International Center for Journalist fellow. Muhammad Nadeem Chaudhry is a Pakistan based journalist reporting on health, social and poltical issues. Updated on 3 March 2021 Image Credits: Rahul Basharat Rajput , Stop TB Partnership, WHO . Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) Combat the infodemic in health information and support health policy reporting from the global South. 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