AIDS Groups’ Handling of Funds Attacked

The financial management systems at the National AIDS Auth­ority and the Ministry of Educa­tion’s School Health Department are unfit to handle a $22 million grant from Britain, according to an assessment by a private fi­nan­cial consultancy firm.

KPMG Cambodia Ltd awarded “C” grades to the authority and the School Health De­partment, the lowest grade that the firm could allocate, according to Heang Hang Visal, senior ac­count­ant at the National Center for HIV/AIDS, Dermatology and STDs, which was also assessed.

The authority controls the gov­ern­ment’s re­sponse to the HIV/AIDS epidemic. The School Health De­partment educates children about HIV/AIDS, said de­part­ment Director Pen Saroeun.

Both government bodies need an “excessive” amount of reinforcement to their financial systems before they can be entrusted with a $22 million HIV/AIDS grant from Britain, KPMG Cam­bodia wrote. The firm is a mem­ber of KPMG International, a Swiss consultancy association.

Money from the grant should not be given to the two bodies “un­til key areas of [their] financial man­­agement system[s] have been put in place or strengthened,” KPMG Cambodia recommended.

The two agencies will re­­ceive no grant money until serious im­prove­ments are made, said Eliza­beth Smith, health and population adviser to Britain’s De­part­ment for International De­vel­op­ment Fund, the the pro­ject’s funder.

A large proportion of the funds will be handled by the center, which received a glowing KPMG re­­­port and an “A” grade.

“We recommend that advances can be disbursed immediately,” to the center, wrote KPMG Cambo­dia.

David King, KPMG di­rector, would not discuss the re­­­­sults in a re­cent telephone interview. “We don’t comment on cli­ent matters,” he said.

National AIDS Authority Sec­re­tary-General Tia Phal­la confirmed in a recent interview that the NAA received a “C” grade. He and Ly Po, authority dep­uty director, could not be reached by telephone Wednes­day.

Ministry of Education Secretary of State Pok Than distanced himself from the ministry’s School Health Department in a telephone in­terview Wednesday. “We give different people different responsibilities,” he said.

The School Health Depart­ment’s “C” grade was due to inexperience in financial management, not corruption, Pen Sar­oeun said. The department has “no skills or background,” in financial management, he said. “Most of­­­ficials in my department have no background in corruption,” he added.

“I don’t know yet how much money we will get,” he said. “We had hoped to get funds in July this year, but they have been held up until now.”

The UN Development Program has sent a consultant to discuss the grant project with the department, he said. The Education Min­is­try is planning to train de­part­ment officials in computer science and development policy, he said.

NCHADS’ grade “A” is partly due to international support, said Dr Mean Chhi Vun, the center’s di­rector, on Tuesday.

Its partners include, the Asian Devel­op­­ment Bank, the World Bank and the European Union. “If they are not satisfied, they ask [NCHADS] to improve,” he said.

The center has strengthened its financial management since 2001, he said, training accountants and developing an accounting data­base. NCHADS have begun re­ceiving installments of the grant.

The KPMG assessment was com­missioned in June by DFID, in preparation for the grant—to be directed through the three organizations over five years, Smith said.

He stressed that the two organizations will not receive any funds from the project until their financial systems have improved.

DFID is searching for two long-­­term technical advisers to try and to im­prove the financial management of the two organizations. In­­terviews will not take place until mid-November, Smith said.

“We will work with them to en­sure the financial mechanisms are in place,” said John Mitchell, the Brit­­ish Embassy’s deputy head of mis­sion.

The assessment “is not a criticism…. It just highlights the problems,” he said.

The center will handle the majority of the $22 million grant, Smith and Mitchell said.


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