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Transcript for audio podcast:
PEPFAR Funds Spending Oversight

From the Office of Inspector General of Department of Health and Human Services

http://oig.hhs.gov

[Lori Pilcher] I'm Lori Pilcher, Regional Inspector General for Audit Services in Atlanta. And, today, I'm speaking with Audit Manager Mark Wimple. Mark, your audit team recently led the OIG Office of Audit Services first international audits. Why did OIG do these audits?

[Mark Wimple] We conducted audits of the President's Emergency Plan for AIDS Relief funds awarded to ministries of health and other public health partners in three countries including Namibia, South Africa and Vietnam. This program is referred to as PEPFAR. We audited funds awarded by the Centers for Disease Control and Prevention, or the CDC.

[Lori Pilcher] And can you provide more information about CDC's PEPFAR program?

[Mark Wimple] Sure. Through its Global HIV/AIDS Program, CDC implements PEPFAR, working with ministries of health and other public health partners to combat HIV/AIDS by strengthening health systems and building sustainable HIV/AIDS programs in more than 75 countries in Africa, Asia, Central and South America, and the Caribbean.

[Lori Pilcher] Did CDC award these funds through grants?

[Mark Wimple] No, CDC awarded these funds through cooperative agreements, which are similar to grants but usually involve the Federal Government's assistance to meet the goals laid out in the agreement. The regulations that apply to Federal grants also apply to cooperative agreements.

[Lori Pilcher] How large is the PEPFAR program?

[Mark Wimple] Congress has authorized the PEPFAR program about $78 billion dollars from 2003 through 2014. For fiscal year 2009, CDC obligated PEPFAR funds totaling $1.2 billion dollars.

[Lori Pilcher] Okay and what were the objectives of these audits?

[Mark Wimple] We went to the CDC's offices in Namibia, South Africa and Vietnam. We tried to determine whether CDC monitored the use of PEPFAR funds in accordance with HHS and other Federal requirements.

[Lori Pilcher] What did you find at the CDC offices you audited?

[Mark Wimple] We found that the CDC offices did not always monitor the use of PEPFAR funds in accordance with HHS and other Federal requirements. In both Namibia and South Africa, we found that CDC performed some monitoring of PEPFAR funds. However, many offices did not have the required documents to show that CDC monitored all cooperative agreements.

[Lori Pilcher] Were you able to figure out why the offices lacked this important documentation ?

[Mark Wimple] Yes. These CDC offices did not have written policies and procedures to ensure that they comply with Federal monitoring requirements. As a result, these CDC offices did not have assurance that PEPFAR funds were used properly.

[Lori Pilcher] What type of recommendations did you make to CDC?

[Mark Wimple] We recommended that they employ standard operating procedures for monitoring recipients' use of PEPFAR funds. We noted that after our audit, both offices drafted standard operating procedures for managing cooperative agreements, including monitoring. However, we haven't tested these procedures and cannot comment on their effectiveness.

[Lori Pilcher] What other types of issues did your audits find?

[Mark Wimple] At grantees, we reviewed both financial and program management. Some of the areas for improvement included better documentation for allowable expenses, accurately reporting costs on financial status reports, submitting timely progress reports and including only items related to the cooperative agreements that it could fully support.

[Lori Pilcher] Well what impact did this have on the communities at risk?

[Mark Wimple] While we did not find a large amount of unallowable costs, a grantee who misused funds may have prevented an entire community from receiving thousands of shots or condoms. which prevents hundreds of people, including infants, from getting HIV in the first place. So any misuse of funds can waste resources and harm people and communities.

[Lori Pilcher] Now that you have completed the Office of Audit Services first international audits, are you conducting audits in additional countries this fiscal year?

[Mark Wimple] Yes. We recently completed audit field work on audits at the ministry of health and other recipients of PEPFAR funds in Zambia and plan to conduct additional PEPFAR audits in Ethiopia later this fiscal year.

[Lori Pilcher] Thank you, Mark, for sharing this very important work.

[Mark Wimple] Thank you.

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