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How Nigerian AIDS Control Agency Concealed Records Of Donor Funds – Audit Report

Even as Nigerians ponder the implications of the crisis in the National Health Insurance Scheme (NHIS), the latest audit report of federal agencies has accused yet another agency in the health sector of refusing to shed light on management of a significant portion of its funds.


In the report for the year ended December 2016, the Auditor-General of the Federation (AuGF), Anthony Ayine, rebuked the National Agency for the Control AIDS (NACA) for its failure to release for scrutiny records of Global Fund with the agency.


This, he said, is in flagrant violation of Section 85(2) of the Constitution of the Federal Republic of Nigeria, (1999) and Financial Regulation 110 which expressly provide that the office of the AuGF be given “unfettered access to all required documents, accounts and other records.”


But the agency said although federal auditors have no “rights of access to the books and records” of assistance provided to the agency by Global Fund, it started providing such access “from 2017 onwards.”


NACA, an agency under the Federal Ministry of Health, manages issues concerning HIV/AIDS in Nigeria while Global Fund is an International health donor agency helping Nigeria in the fight against HIV/AIDS, Malaria and Tuberculosis.


Global Fund to Fight AIDS, Tuberculosis and Malaria is an international financing organisation founded by billionaire American couple, Bill and Melinda Gates; recently deceased former United Nations Secretary-General, Kofi Annan; Amir Attaran and Jeffrey Sachs.


Since it started operation in Nigeria in 2003, the Fund has disbursed over $1.4 billion in the fight against the three major diseases, making its investments in Nigeria one of its biggest.


Mr Ayine said NACA lacks transparency in management of donor funds generally. The report, which is the most recent by the AuGF, was released in July.


“The records of Global Fund with the Agency were not released for audit examination despite repeated demands,” Mr Ayine stated in the audit report.


“As a result, it was not possible to ascertain the total amount received from the Fund during the year to form an objective opinion on the judicious utilization of the money. All efforts to obtain the records, including explanations, were not successful.


“Similarly, the financial activities of the Global Fund such as amount received from the Fund and its utilization were not incorporated into the 2015 Financial Statements of the Agency, to form part of the Agency’s Incomes and Expenditures for the year.


“The Financial Statements of the Agency are expected to disclose not only funds from the Federal Government of Nigeria, but also incomes from other sources such as the Global Fund, World Bank, etc. Details of the utilization of the funds should also be disclosed, to give complete information regarding the financial position of the Agency and to avoid misleading the public.


“The Director-General did not respond to my report dated 29th August, 2017. He should therefore be compelled to explain the incomplete financial statements,” the AuGF stated in the report statutorily presented to the National Assembly.


Mr Ayine noted that assistance from some of these donors were recently suspended due to unsatisfactory reports emanating from Nigerian health agencies.


“These reports border on lack of transparency in the management of funds released by the donors, failure to keep to signed agreements between the donors and Nigerian government and non-adherence to standards and procedures in procurements and execution of contracts,” the report stated.


An ongoing review of the audit report by PREMIUM TIMES shows that NACA did not provide evidence of various contracts it awarded during the year 2015.


The auditor noted that the said contracts were for HIV counseling and testing outreach and campaign at the community level across the states and the Federal Capital Territory (FCT).


“All efforts made to obtain the contract files for audit scrutiny were not successful. This was a violation of Section 85(2) of the Constitution of the Federal Republic of Nigeria, (1999) and Financial Regulation 110 which expressly provide that my Office will have unfettered access to all required documents, accounts and other records.”


The report revealed that the agency did not maintain its General Ledger, Inventory Board, Imprest Cash Book and Advances Ledger in 2015.


“The Director-General should forward evidence that all the aforementioned documents have now been introduced into the Agency’s accounting system,” the auditor directed.


The audit report also indicted NACA of irregularities in its distribution of some equipment donated by the Global Fund.


It said the installation of the machines also predates the receipt.


“The examination of store records revealed that some 50 Gen Expert Machines were donated to the Agency by the Global Fund in 2016 at a unit cost of $17,000.00 totalling $850,000.00 (Eight hundred and fifty thousand dollars).


“The store records show that these machines were received into the Agency’s store on 6th December, 2016 and issued out en-bloc that same day. However, verifications conducted by my officers revealed that the machines were installed at various locations across the country between 15th October, 2016 and 30th November, 2016.


“The fact that the installation of the machines predated their receipt into the store raised doubts as to whether these were actually the same machines, especially in consideration of the fact that this same equipment had also been donated to the Agency in the past.


“On audit inquiry, the Schedule Officer explained that the items were actually received much earlier and sent directly to the various hospitals for timely installation while the store records of 6th December. 2016 were completed later.


“This is quite irregular and not in consonance with Government procurement procedures.


“Under the circumstances, I recommend that the Director-General, National Agency for the Control of AIDS (NACA) should offer some explanation to confirm that all the 50 machines were actually received, duly distributed to the indicated hospitals and fully accounted for,” the AuGF stated.



In a report published on its website in 2016, Global Fund had accused NACA of fraud and mismanagement of funds.


The fraud was discovered by the Office of the Inspector-General (OIG) audit of Global Fund grants in Nigeria.


The report stated that there are significant problems in procurement, supply chain, financial and program management.


The auditors found discrepancies of over $4 million between drugs ordered and delivered; $20 million paid to suppliers without confirmation of delivery; stock-outs of eight months for critical medicines; and a total of $7.65 million in unsupported expenditures.


Regarding procurement, the OIG said the agency does not monitor the delivery of drugs, resulting in discrepancies in antiretroviral drugs deliveries of $3.7 million from 2013 to September 2015 and $0.5 million


Despite these past mismanagement, Global Fund pledged to continue to support Nigeria with funds, drugs, research and strategies development in the fight against AIDS, Tuberculosis and Malaria.


NACA Reacts

In a lengthy response to the allegations, the Director-General of NACA, Sani Aliyu, said his is “possibly the most audited agency of government and gladly receives auditors because of the commitment of the Management to ensure sound financial management and operational best practices.”


He said “On the published report of the Auditor General, we would like to comment on the allegations in the report as follows: All grants or credits have agreements governing the management of their funds. This specifies who has rights of access to their books and records and how those rights are to be exercised.


“For the Global Fund, Article 13g specifies that access of third parties to the books and records of the Global Funds operations under any recipient must be pre-authorized by them.


“In the light the above, we requested that the Audit team send an email to the Country Coordinating Mechanism in Nigeria and the Country team in Geneva but we never heard anything again from them only to find it as an exception in the Auditor General’s report.


“The Global Fund grant has various layers of assurance mechanisms in place:


Global fund work plans and budgets are preapproved by the Global Fund and all expenditure must be in line with the approvals.

The Global Fund maintains within the offices of the recipients of their funds staff of GFA, a German Consulting Firm, that carries out prepayment audit of all payment vouchers and no payment can be made unless they have endorsed the payment voucher.

The Fund also retains PWC as the Local Fund Agents (LFA) with responsibility to carry out budget reviews and semester post-payment audits.


The External Auditors of the Global Fund are M/S Delloitte & Touche and they carry out mid-year and annual review of the financial records of the Grant.


The Office of the Inspector General (OIG) carries out annual operations and financial audits of all Global Fund grants.


“The Management of NACA has no issues with the review of the records of any grants under its watch by anyone but such persons must submit to the terms of the grant. All Agencies of government including the Office of the Auditor General for the Federation must commit to honouring agreements and keeping to terms and conditions of grants in all circumstances.


“Every fund provider that NACA works with appoints their own external auditors who submit reports in respect of receipt and disbursement of such funds to them. The GON funds are audited and there is a Financial Statement audited by the government appointed external auditors.


“However, upon receipt of the recommendation, we took an extra step of engaging the external auditor of the Government of Nigeria funds to consolidate the Audited Financial Reports of all funding sources as Consolidated Financial Statement of NACA from 2016.


“It should be noted that NACA is only a coordinating Agency and for most expenditures of the Global Funds the funds just pass through NACA to Sub-recipients who submitted initial budgets and work plans which were approved by the LFA and the CCM and finally by the Global Fund in Geneva.


“That the Director-General did not respond to my report dated 29th August, 2017:


“We believe that there is a mix-up within the organization of the Office of the Auditor General for the Federation as we actually did respond to the Auditor General’s Query. We have an acknowledged copy of our submission.


Please note that “subsequent FG audit teams from 2017 onwards have been able to secure access to GF accounts under our care,” Mr Aliyu stated.



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