Global Fund accuses Govt of financial mismanagement

The Global Fund has accused the Ministry of Health and Social Services of mismanaging grants following the disbursement of over N$7,5 billion to Namibia since 2004.

This has prompted the fund to categorise the country as facing a significant fiduciary and financial risk, which means the ministry is at the risk of losing funds or getting into trouble for how money is handled.

In an audit report published last week, the fund roped in the Office of the Auditor General to go through their 2021 and 2022 financials due to discontent about the way the money was handled.

Auditor general Junias Kandjeke has given an adverse opinion on the 2021 Namibia Global Fund grant financial statement, while executive director of the health ministry Ben Nangombe has not responded to the Global Fund’s claims about grant mismanagement, despite efforts to reach him.

However, during a press conference on Sunday, Nangombe acknowledged the glaring issues plaguing the ministry, such as those stemming from the poor performance of contractors due to cash flow shortages and technical inadequacies.

He said these setbacks have hindered the employment of sufficient manpower and the acquisition of necessary health materials, resulting in sluggish progress.

As a result, Nangombe announced plans to recommend the debarment of problematic contractors from participating in the public procurement system.

“We will recommend to the public policy unit for such a contractor to be debarred so that they do not participate in the public procurement system. This is a motivation for contractors to ensure that they ensure quality, perform as required, and complete projects on time,” Nangombe said.

Nangombe said a comprehensive report outlining the health sector’s challenges had been submitted to Cabinet, along with a substantial financial request of N$16 billion, intended to be allocated over five years.

When approached for comment, the health ministry requested more time before commenting in order to dissect the report, which was released last month.

“I will send your queries to the executive director for a response as I am not in office. Give him adequate time to respond. In fact, these queries are for the country coordinating mechanisms and not for the ministry, but we will provide responses,” health minister Kalumbi Shangula said.

When approached for comment, health executive director Ben Nangombe said the ministry will respond in due course.

AUDIT REPORT

The Global Fund blamed weak financial management capacity at ministerial level.

“While the accounting system could not provide the ‘true’/actual balance of expenditure, the principal recipient (ministry) did not establish a mechanism to monitor the fund balance of each budget line item,” the fund claimed.

This, it said, has resulted in the absence of a mechanism to monitor expenditure in a timely manner.

“Financial month-end close procedures – such as accounts reconciliation, expenditure review, and management account preparation – are not performed at the principal recipient and subrecipient levels,” the fund said.

The report also revealed that the ministry’s project management unit buys items for the fund’s programme, however, the majority (95%) of the reviewed purchases didn’t follow all the necessary steps.

The audit reviewed 36% of the total procurement of N$134,8 million (US$6,8 million) during 2021 and 2022.

The procurement delays impacted programme implementation,” the fund said.

The fund also claims there was a two-year delay in the appointment of the internal auditors.

“This also contributed to these gaps, preventing issues from being identified and resolved earlier,” the report noted.

The Global Fund said the ministry has not been in compliance with all reporting guidelines.

“Inadequate design and non-compliance of some of the existing guidelines are impacting both the transparency and competitiveness of procurement processes, as well as the achievement of value for money.”

The fund said unreliable information was reported due to the omission of financial information.

“Gaps in financial and procurement management have resulted in weak accountability for Global Fund grants,” the report reads.

The Global Fund has been a financial support partner in Namibia’s efforts to fight HIV-AIDS, tuberculosis (TB) and malaria. Since 2004, the Global Fund has disbursed N$7,5 billion (US$372 million) to the country.

According to the report, the government is the main funder to fight HIV, TB, and malaria. Between 2021 and 2023, the government contributed 50% of funding needs, followed by other development partners, including the United States government (41%) and the Global Fund (9%).

The fund said the country’s interventions towards these illnesses is generally adequate, however, it warns that these gains are at risk if certain issues are not addressed.

“These issues include the availability of community health workers, intermittent stock-out of key health commodities, planning and execution of malaria indoor residual spraying, and HIV prevention interventions,” the fund said.

The fund is worried about weak connections between key groups, leading to high drop-off rates (33% to 70%) in HIV services and the lack of coordination between sub-recipients.

The fund said stock-outs of HIV test kits, pre-exposure prophylaxis (PrEP), and condoms occur due to government procurement delays.

EFFECTIVE PUBLIC SERVICE

Political analyst Henning Melber characterised the Global Fund’s assessment as a testament to the inefficiencies plaguing Namibia’s public service.

He said despite substantial budgetary allocations, the health sector is unable to effectively utilise external funds for the benefit of its citizens.

“The inability to make best use of foreign support is embarrassing and speaks not of good governance. Especially during times of fiscal bottlenecks, financial prudence would make sure that the best and most effective use is made by such support,” Melber said.

He said the issue of inadequate and untimely procurement processes remains persistent.

“It points to the general problem of a civil service and public institutions that are more of a liability than an asset, when considering the over-proportional amount spent every year on current expenditure to finance salaries of public servants,” Melber said.
Economist Omu Kakujaha-Matundu said the root cause of inefficiency in the government points to a culture of impunity within the public sector.

“Pertaining to the culture of no consequences and a lack of accountability, the answer lies in the political will to fix the system,” Kakujaha-Matundu said.