How NGOs took World Bank for a ride

MUMBAI: The review committee of the World Bank has exposed the glaring discrepancies in the Aids control programme in Mumbai and Maharashtra.

The review has shown how lack of financial control can lead to widespread indicators of potentially corrupt activity. The Detailed Implementation Review (DIR) of the World Bank checked 40 NGOs worth Rs10.5 crore in Maharashtra out of which 20, worth Rs8.3 crore, were in Mumbai.

For test kits and blood bank equipment, the DIR reviewed Nasik, Nagpur, and Pune regional circles in the Maharashtra State Aids Control Society (MSacs). At the Mumbai District Aids Control Society, the DIR found that funds were being provided to 20 NGOs, but MDacs did not have any expenditure documentation for eight of them. Audit reports for MSacs were missing despite the guidelines of the National Aids Control Organisation (Naco).

The DIR says the financial records showed outstanding advances of US$ 2.2 million, of which $690,000 were outstanding for over a year. The report says MSacs got funds from sources other than Naco, like UNDP, Unicef, and WHO, and the office clubbed all funds into one account, making it difficult to monitor their use by the donor.

Naco’s procedures for selection of NGOs were not followed by the Sacs. Instead, the DIR found that officials demanded and took bribes in exchange for awarding contracts and disbursing funds to NGOs that were non-existent, performed no services, or had no experience of handling HIV/Aids prevention.

Out of 40 NGOs reviewed in Maharashtra, 16 were improperly selected, four had fraudulent accounting, six had weak financial control, two had had no proof of work done, one reportedly paid bribe, and four were terminated by the Sacs for fraud or non-performance.

MDacs and MSacs also violated Naco guidelines for NGO participation. In MSacs, eight out of 40 NGOs were selected but not registered, eight were selected without submitting proper proposals, one does not exist, and five were paid without contract.

In MDacs, two NGOs were selected without request for proposal, seven were not even registered, 19 had no appraisals, seven had no audit report, and one was paid though serious anomalies were found.

Staff of at least three NGOs, who got funds from MDacs, could not describe or discuss anything related to the project despite receiving huge funds for it. In another case, MSacs gave grants to an NGO though its contracting and performance documents showed that it had not conducted any activity related to HIV/Aids prevention. Instead it conducted activities like tree planting, rural development, distribution of school dresses, and craft education. In Maharashtra, the DIR visited the supposed address of an NGO and found nothing of that sort.

Instead a large residential setup was found and the owner of the house said it had never been used by any NGO.

In Maharashtra, one NGO showed Rs5,000 as the salary of each employee  in the account books while they were paid only Rs3,500. Another NGO, which had been awarded seven contracts from MSacs, could not provide any statement of expenditure or utilisation certificate for a large portion of the funds it received. A third claimed condom distribution and mobile clinics, which too turned out to be false.

“Substandard quality of test kits provided poor quality of tests, yielding invalid and unusually high false positive results, or discordant results.

At blood banks that screen and store blood for transfusion, false negative results carry the risk of transfusion-transmitted infection. While false positive results resulted in wastage of blood. These performance problems were mainly due to the kits supplied by Monozyme India, Span Diagnostic and Zhongshan Biotech,” the report said.
At the KEM Hospital, out of 19,331 samples tested with Enzaids Elisa over a period of two years, 57.14 per cent showed discrepancies. More than half, 2,640 (57.14%), of the initially positive samples (4,620) actually turned out to be negative, leaving only 1,980 (10.24%) actually positive.

Mumbai’s Red Cross reported false positive results for Zhongshan kits. But despite regular complains since 2003 by the Tata Memorial Hospital, Indian Red Cross Society, and Rajawadi Hospital blood banks, MDacs did not report it to Naco. Naturally, no action was taken. The matter was finally reported to Naco in 2006 after the latter applied  pressure.

Discrepancies in stock registration were found in Nasik region. While 48 kits were listed for the HCV Elisa test, only 32 were actually found in stock, indicating fraud. Faulty equipments in the Amravati Civil Hospital, Jankalyan Blood Bank, and NPFC in Mumbai were found.