- Associated Press - Monday, September 19, 2011

GENEVA (AP) - A $22 billion global health fund that’s been criticized by donors and skeptics since disclosing alleged fraud in its grants must adopt tougher financial safeguards, an independent panel recommended Monday.

After a six-month review, the panel reported that it found that a number of health ministers and other senior government officials view grants from The Global Fund to Fight AIDS, Tuberculosis and Malaria “as someone else’s responsibility.” The panel’s report said it also found that the fund’s secretariat “has bred a culture of passivity in grant management.”

The fund created the panel in March to address concern among donors after Associated Press articles in January about the loss of tens of millions of dollars in grant money because of mismanagement and alleged fraud.

Germany, the European Commission and Denmark withheld hundreds of millions of euros in funding pending reviews of the fund’s internal controls. Germany has since restored half of its funding.

Former U.S. Health and Human Services Secretary Michael Leavitt, who co-chaired the panel along with former Botswana President Festus Mogae, called the report “sobering and optimistic.”

“It makes clear that the Global Fund has to shift now from an organization that was responding to an emergency to one that is capable of a sustained response. And it lays out a road map for that change,” he told The Associated Press.

The fund was set up as a new way to coordinate the world’s efforts against the three killer diseases and to speed up emergency funds from wealthy nations and donors to the places hardest hit.

Since then, the fund _ which is strictly a financing tool _ has approved more than 600 programs in 150 nations, growing to become what the panel called the largest and most important anti-poverty program created so far this century.

The panel credited the fund with saving millions of lives, cutting the death rate from TB in many nations, handing out almost 200 million anti-malarial bed nets, and training hundreds of thousands of health workers around the world.

The panel had six sets of general recommendations, which range from cutting risk and streamlining internal committees to doing away with red tape.

The steps taken by the Global Fund have broad implications for development programs everywhere since the fund has more aggressively pursued corruption and mismanagement than others, and more openly reported what it found.

But that makes it hard to compare the levels of losses at the Global Fund with those in other development agencies, and the panel steered clear of any such comparisons.

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