Big health donors defraud patients by ignoring corruption

Papua New Guinea’s health system is in crisis. Tuberculosis is at epidemic levels, polio has re-emerged, maternal and child mortality rates are among the worst in the world, malaria infections have increased nine-fold in just three years, no radiology treatment is available for cancer patients, rural health clinics lie empty and abandoned… the list goes on and on.

Yet this is a health system that for decades has been financially and technically supported by some of the word’s largest multilateral agencies, the World Bank, the United Nations, the World Health Organisation, DFAT and many others. Why is their assistance so manifestly failing?

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This year Australia will provide $572 million in overseas direct aid to PNG, 18% or $103m is being targeted at the health sector.

In addition, Australia has just announced an extra K24 million in funding to combat vaccine preventable diseases, starting with Polio.

Australian Minister-Counsellor based in Port Moresby, Benedict David says, “under the leadership of Minister Temu and the Department of Health, this additional support will help protect PNG’s children from polio and other childhood illnesses”.

It is a worthy aspiration but about as far from reality as it is possible to get. Benedict David is either incredibly ignorant, which we doubt, or he is simply misinforming the public.

Australia and other overseas donors have poured billions of dollars into PNG’s health sector over the past decade. Yet under the ‘leadership’ of Minister Puka Temu and Health Secretary Pascoe Kase, the National Department of Health (NDoH) has overseen a steady decline in health outcomes and the re-emergence of diseases such as Polio and an impending Tuberculous crisis.

The reasons for this decline in the public health service is not hard to find. PNGi has previously reported on numerous independent and government reports that expose  chronic corruption and mismanagement within the health department. Just last week, PNGi revealed a GAVI investigation that found NDoH staff engaged in sophisticated and widespread financial fraud.

Now, another report has emerged from the same global vaccine alliance. It is a program audit of the government’s Expanded Programme of Immunisations (EPI).

The EPI is managed by a unit within the National Department of Health (NDoH). It was established in 1977. It is considered by the national government to be “an important, cost-effective intervention for reducing the morbidity and mortality of children from communicable diseases”.

The GAVI audit strongly disputes this assessment, labelling the programs overall performance ‘unsatisfactory’ [the lowest possible rating] and concluding its objectives are unlikely to ever be met.

The unsatisfactory rating applies across the whole spectrum of the program’s operations.

Every aspect of the Expanded Programme on Immunisations operations was given the lowest possible grading in the Gavi audit

The majority of issues identified in the audit as contributing to the unsatisfactory ratings were deemed to be “critical risk” [the highest possible grading], meaning a failure to take remedial action could result in ‘major consequences’ affecting ‘overall activities and output’.

The GAVI audit found that over a two-year period (2014/15) more than 25% (US$720,000) of GAVI funded expenditure by the EPI was misused or wasted and over 250,000 doses of vaccine (worth a further $50,000) were rendered useless through shelf expiry or inadequate temperature controls.

But what is even more shocking is that the audit ONLY examined expenditure funded by GAVI. The Expanded Programme of Immunisations (EPI) unit is also supported, “technically and financially”, by donors including the Australian Department of Foreign  Affairs and Trade (DFAT), World Bank (WB), World Health Organisation (WHO), United Nations Children’s Fund (UNICEF) and Rotary International.

How much funding from DFAT, the WB, WHO, UNICEF and Rotary International has similarly been poured into the EPI unit and then been misused? According to the the National Health Plan for 2011-2015, it could be as much as $18 million. That was the funding gap expected to be met by “donor partners”.

Given the fundamental nature of the management failures identified in the GAVI audit, there is every reason to expect that at least 25% of funds from all the EPI “donor partners” was similarly misused. Among the high priority issues the audit identifies, some of the most significant are:

Vaccine supply management
Inaccurate record keeping and significant errors in stock levels, no timely updating, records adjusted with no supporting paperwork, differences not investigated, errors and misunderstandings, no tracking of expiry dates to ensure ‘early-expiry-first-out’ and expired stocks. Inaccurate forecasting leading to over-ordering including 753,000 doses at risk of shelf-expiry.

Financial management
Significant overspending due to poor planning. Reporting was incomplete, inaccurate and untimely. Delays not reflected in revised workplans. Fund balances were inaccurate.

Accounting records not maintained in accordance with guidelines. Acquittals were not transparent.

Regulations not followed. Systemic control weaknesses. Spending over budget. A further investigation revealed numerous corrupt practices including forged tender documents, bribery and contracts awarded to uncompetitive bidders, some of whom were related to staff members.

All these high priority issues were found to exist despite the ‘proactive’ support provided by international donors. This support includes:

  • A dedicated WHO staff member assigned to NDoH to advise on vaccine campaigns and country-wide implementation;
  • UNICEF support for outreach and vaccine distribution, ‘both strategically and operationally’; and
  • DFAT providing NDOH with health service provider services, “including a Finance and Accounting team, overseen by a Financial Controller, and a Finance and Audit Advisory unit“.

Such support is not surprising given a 2013 Joint International Review of the EPI unit carried out by NDoH, WHO, UNICEF, GAVI and others, reportedly found “a lack of leadership at all levels, appears to be preventing (the achievement) of effective programme outcomes.”

That 2013 review had specifically identified many of the same problems in vaccine supply management that the GAVI audit found were still plaguing the system in 2014 and 2015. This again calls into question the effectiveness of the substantial international support and its ability to cut through the endemic corruption and mismanagement, especially given that GAVI’s audit concludes ‘the EPI unit’s capacity and ability to proactively review and manage its budgetary and financial management commitments was inadequate’.

Some of the mismanagement and misreporting revealed in the audit is almost farcical in nature. The EPI unit produces its own annual reports. The GAVI audit team examined the reports for 2014 and 2015:

The 2014 report contained select references to activities and events which did not occur in 2014 … The 2015 Annual Report was an exact copy of the 2014 Annual Report except in title and footer which had been relabelled 2015.

Much more worryingly, given the importance of keeping vaccines at the correct temperature to maintain their effectiveness:

It was noted that the EPI unit had not distributed any thermometers or fridge tags to the sub-National levels since at least 2013. As a result, no temperature chart readings occurred at multiple points in the cold chain beneath National level, except where thermometers supplied prior to 2013 were still available.

What is going wrong here? Why is a heavily donor supported and essential health program in such a state of disarray?

One would hope that DFAT, WHO, UNICEF, and the WB etc might be able to offer some explanations. Nothing could be further from the truth, these organisations seem to have their heads buried deeply in the sand.

A recent, December 2017, Independent Evaluation of DFATS Multilateral Partnerships in the Health Sector of PNG provides a perfect example of the syndrome.

The report looks at Australia’s collaboration with six major ‘Multilateral Development Partners’; the Asian Development Bank; the Global Fund to Fight AIDS, TB and Malaria (“The Global Fund”); United Nations Population Fund; UNICEF; the World Bank; and the WHO.

Despite the copious evidence of untreated corruption in the NDoH, as repeatedly highlighted by PNGi and in audit reports from international organisations involved in the sector, like the Global Fund, GAVI and Burnet Institute, and from the PNG government, the word “corruption” only appears once in the 101-page report for the Australian Department of Foreign Affairs and Trade (DFAT).

That single use of the word “corruption” is in the context of a reference to the Transparency International “corruption” perception index that ranks PNG a lowly 136 out of 176 countries According to the report though, this corruption does not affect the health sector in PNG as the ‘development partners’ “have strong and actively managed procedures for managing fiduciary risk of their own, and DFAT, funds”. [page 40]


Such indifference and arrogance speaks volumes and is all the more surprising as the report goes onto reveal the same ‘development partners’ give “scant attention” to “how they have improved efficiency in their own operations or achieved value for money”.

The report [page 41] holds up the 2013 joint review of the EPI program by WHO, UNICEF, GAVI and other, as an example of the development partners working well together in PNG. The report notably fails though to document the devastating findings of the review and how they point to the failures of the international groups (as revealed above).

The report does accept immunisation rates are low in PNG, and “have stagnated” and routine measles coverage has fallen, despite immunisation coverage rates being “a critical part of improving health outcomes and equity in PNG” and these rates being “a key indicator of overall health system performance”. [page 33] Yet the report fails to deliver critical insight into the causes.

Seventeenth century English writer and politician Henry Wootton famously described an ambassador as being “an honest gentlemen sent abroad to lie for the good of his country” and, of course, there are many times when a diplomat must bite their tongue for the sake of good relations. But the suspicion in Papua New Guinea is that when it comes to public health, overseas donors and aid agencies are more interested in fulfilling their mandate to spend the considerable sums of money at their disposal rather than ensuring effective outcomes.

While there are undoubtedly many good and dedicated people people working in the ranks of WHO, UNICEF, DFAT etc, the failure of the organisations they work for to call out the corruption and mismanagement in NDoH is defrauding the public of any hope of decent health services in the foreseeable future.