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Audit (A-04-13-04005)

03-13-2014
The University Teaching Hospital (in Zambia) Generally Managed the President's Emergency Plan for AIDS Relief Funds and Met Program Goals in Accordance With Award Requirements

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Summary

Through its Global HIV/AIDS Program, the Centers for Disease Control and Prevention (CDC) implemented the President's Emergency Plan for AIDS Relief (PEPFAR), working with ministries of health and other in-country partners to combat HIV/AIDS by strengthening health systems and building sustainable HIV/AIDS programs in more than 75 countries. Through a 5-year cooperative agreement, CDC awarded PEPFAR funds totaling $4.9 million to the University Teaching Hospital (the Hospital) enhance Zambia's ability to respond to the HIV/AIDS Epidemic for the budget period September 30, 2010, through September 29, 2011.

5-year cooperative agreement, CDC awarded PEPFAR funds totaling $4.9 million to the University Teaching Hospital (the Hospital) for the budget period September 30, 2010, through September 29, 2011.

The Hospital generally managed PEPFAR funds and met program goals in accordance with award requirements. With respect to financial management, specifically financial transaction testing, $1.054 million of $1.068 million reviewed was allowable, but $14,000 was potentially unallowable because the Hospital paid value-added taxes (VAT) on purchases.

In addition, the Hospital did not always follow its policies and procedures. For 11 of the 39 financial transactions tested, 5 transactions totaling $661,000 were paid without approved payment vouchers, and 6 transactions totaling $61,000 were recorded to the incorrect expense account in the general ledger.

Our program management review showed that the Hospital did not submit an annual progress report to CDC as required by Federal regulations and the Notice of Award. The Hospital did, however, submit an annual program results report covering October 1, 2010, through September 30, 2011, that reported on selected PEPFAR activities as required by the Office of the U.S. Global AIDS Coordinator. However, the program results report did not show progress on 8 of the Hospital's 21 goals included in its approved cooperative agreement. Furthermore, of the 13 goals on which the Hospital reported, 5 were supported by documentation, but 8 were only partially supported.

We recommended that the Hospital (1) work with CDC to resolve whether the $14,000 of VAT was an allowable expenditure under the cooperative agreement, (2) work with the Zambian government for VAT exemption and refund of VAT disbursements; and (3) enhance its internal controls by updating its policies and procedures to include detailed steps to account for and report PEPFAR funds. Hospital officials generally concurred with our recommendations and described the actions they had taken to address them.

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