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Aurum Institute for Health Research Did Not Always Manage President's Emergency Plan for AIDS Relief Funds or Meet Program Goals in Accordance With Award Requirements

Through its Global HIV/AIDS Program, CDC implemented the President's Emergency Plan for AIDS Relief (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. Through a 5-year cooperative agreement, CDC awarded PEPFAR funds totaling $19.5 million to Aurum Institute for Health Research (Aurum) in South Africa for the budget period September 29, 2009, through September 28, 2010.

Our audit found that Aurum did not always manage PEPFAR funds or meet program goals in accordance with award requirements. With respect to financial transaction testing, $869,000 of $2.6 million reviewed was allowable and $1.7 million was unallowable. Additionally, Aurum inappropriately requested and received cash advances in excess of its immediate needs, did not maintain cash advances in interest bearing accounts, and did not accurately report PEPFAR expenditures for this cooperative agreement on its financial status report (FSR) submitted to CDC.

Our program management review showed that, of the 30 goals and objectives sampled from the application for the cooperative agreement, Aurum did not report accomplishments related to 16 goals and objectives on the annual progress report. Of the 14 objectives that were addressed in the progress report, 2 were completed, and 12 were only partially completed. Of the 16 objectives that the progress report did not address, 4 were accomplished, but 12 were only partially accomplished.

We recommended that Aurum (1) refund to CDC $1.7 million of unallowable expenditures; (2) file an amended FSR for the budget period of the cooperative agreement reviewed; (3) develop and implement policies and procedures for reconciling the FSR to the accounting records prior to submission, ensuring that it reports only allowable expenditures under the cooperative agreement and accurate costs on its FSR, ensuring that cash advances are made only for its immediate cash requirements, and ensuring that cash advances are maintained in interest-bearing accounts; (4) use the exchange rate in effect at the time it prepares the FSR; and (5) develop and implement policies and procedures for creating an annual progress report that addresses all goals and objectives related to the cooperative agreement and ensuring that the annual progress report contains reasons and pertinent information about why it did not meet an established goal or objective. Aurum concurred with our findings and generally concurred with our recommendations.

Filed under: Centers for Disease Control and Prevention