Gono diverted AIDS funds

Central bank governor Gideon Gono diverted US$8 million that was meant for HIV/Aids programmes of the Zimbabwe Association of Church Hospitals and nongovernmental sub-grantees but it was not clear what the money was used for.

Gono admitted to United States ambassador James McGhee that the funds from the Global Fund had been diverted.

An audit was ordered and was to be led by Inspector General John Parsons.

Full cable:

Viewing cable 08HARARE945, ZIMBABWE GLOBAL FUND AUDIT

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VZCZCXRO0339

OO RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN

DE RUEHSB #0945/01 2951044

ZNR UUUUU ZZH

O 211044Z OCT 08

FM AMEMBASSY HARARE

TO RUEHC/SECSTATE WASHDC IMMEDIATE 3590

INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

RUEHDS/AMEMBASSY ADDIS ABABA 2485

RUEAIIA/CIA WASHDC

RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK

RHMFISS/EUCOM POLAD VAIHINGEN GE

RHEFDIA/DIA WASHDC

RUEHGV/USMISSION GENEVA 1634

RHEHAAA/NSC WASHDC

UNCLAS SECTION 01 OF 02 HARARE 000945

SENSITIVE

SIPDIS

USAID/W FOR KENT HILL, GH/AA; HOPE SUKIN, AFR/SD;

GH/HIV-AIDS, MARK DYBUL, S/DAC; HHS/NIH/FIC;

SADENIYI-JONES, HHS/OS/OGHA

E.O. 12958: N/A

TAGS: EAID KHIV KSCA OSCI PGOV PREL TBIO TSPL ZI

SUBJECT: ZIMBABWE GLOBAL FUND AUDIT

REF: HARARE 579

——-

SUMMARY

——-

¶1. (SBU) Late last year, the Global Fund (GF) deposited

approximately USD 8 million in the Reserve Bank of Zimbabwe

(RBZ) to fund HIV/AIDS programs through nongovernmental

partners in Zimbabwe. Post became aware in the ensuing

months that these funds were not being disbursed. In July,

RBZ governor Gideon Gono told the Ambassador that the funds

had been diverted for other purposes. The Office of the

Global AIDS Coordinator (OGAC) subsequently urged GF to

conduct an audit. This audit is now being conducted.

Zimbabwe’s Round 8 application has been provisionally

approved after technical review and will now go the GF Board

for review. Post suggests that OGAC carefully monitor the

Round 8 process and oppose approval until after the audit has

been completed and mechanisms put in place for is proper

disbursement of funds and accountability. END SUMMARY.

—————-

Growing Concerns

—————-

¶2. (SBU) Subsequent to the deposit last year by GF of

approximately USD 8 million in the RBZ for HIV/AIDS programs

to be administered by the Zimbabwe Association of Church

Hospitals and nongovernmental sub-grantees, the USG PEPFAR

team and other donor representatives became aware that the

RBZ was not disbursing GF monies for these programs. In a

July 1 meeting with the Ambassador, Gono admitted that GF

monies had been diverted for other purposes. (COMMENT: The

period from January until July was politically turbulent.

Elections took place in March and June, and in the period

between elections, ZANU-PF spent large amounts of money both

in electioneering and in orchestrating violence against the

opposition. It is logical to conclude that GF monies were

used for these purposes. END COMMENT.)

¶3. (SBU) In July, Post brought this information to the

attention of OGAC and the DHHS Office of Global Health

Affairs (OGHA). OGAC and OGHA wrote to GF on July 21

expressing concern about the GOZ’s processing of GF funds and

requesting an immediate audit.

—————————————–

The Audit and Donor Concerns Regarding GF

—————————————–

¶4. (SBU) On September 25, OIG/GF conducted a preparatory

video conference with U.S., DFID, and EC representatives in

Harare. The audit will be led by Inspector General John

Parsons; inspector Anne Rwego arrived in Harare a week after

the videoconference. Field work was anticipated to last

three weeks. The audit report will likely be released in

early November.

¶5. (SBU) At an October 7 meeting with Rwego, donors

expressed concerns about GF processes and results:

a) Poor communication–PEPFAR team and other donor

representatives sit on the Zimbabwean Country Coordinating

Mechanism (CCM). The CCM Secretariat has been an ineffective

conduit of information between the GF Portfolio Manager in

Geneva and CCM members. Donor representatives have

repeatedly requested that the Portfolio Manager communicate

directly with them, but this has not occurred. As a result,

donors have limited financial information about GF activities

in Zimbabwe.

b) Ineffective and misguided financial disbursement

process–Hyperinflation, regulations for currency exchange,

and limitations imposed on NGOs’ access to foreign currency

have made Zimbabwe an extremely difficult operating

environment. The Portfolio Manager has not accepted

suggestions by donors to improve management of GF monies in

this environment.

HARARE 00000945 002 OF 002

c) Delayed Implementation for Rounds 1 and 5–Because of the

economic situation in Zimbabwe and a several-month government

ban on NGO activities, the implementation of GF programs,

particularly for TB and Round 5, has been delayed. Not only

are the Zimbabwean people not being served, but benchmarks

are not being achieved. This negatively affects future

programming which depends on demonstration of past progress.

¶6. (SBU) Rwego indicated concern about areas described by

donors and lack of transparency. She was particularly

concerned about reports that funds were diverted for “other

national priorities.”

—————————————

Concerns about Round 8…and Suggestions

—————————————

¶7. (SBU) Zimbabwe’s Round 8 application for USD 500 million

funding over five years has received technical approval and

will now go to the GF Board for review. Post and other

donors are concerned that without transparent and

well-structured GOZ mechanisms for the distribution of funds,

funds will be misused and NGOs will have difficulty in

accessing and using funds. We suggest urging GF not to make

any decisions on Round 8 until after the release of the

ongoing audit and further discussion with donors. If a

decision is ultimately made to award additional funds, we

suggest urging GF to place a resident manager in Harare to

monitor the disbursal of funds and to ensure accountability.

The Ambassador made this suggestion to the Portfolio Manager

in a recent meeting.

MCGEE

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