The Global Fund is supporting an implementing country through a tuberculosis grant. An international Non-Governmental Organization is the Principal Recipient of the funds. One component of the grant consists of a food voucher program. In order to encourage patients to take what can be a long and heavy drug regimen, they receive a food voucher each week if they comply. The vouchers are valid in supermarkets across the country. The food voucher system is administered by a local company which receives a commission on each voucher.

A whistle-blower contacted the Office of the Inspector General through its confidential channels to signal that there was a problem with the voucher scheme. The Office of the Inspector General investigated and found the following: Every year, the Principal Recipient publishes a request for proposals concerning the food voucher scheme which the same company has won for the last 4 years. This company was also founded 4 years ago. Every year, the company’s commission increases but the workload stays the same. Supermarkets that send the vouchers to the company for payment complain that payment is always late, sometimes incomplete and that the service of the company is declining sharply. The investigators also find that other qualified companies refrain from bidding. A background check reveals that the Director of the voucher company was the uncle of the Principal Recipient’s Procurement Officer. The officer had not disclosed this family connection.

During the course of the investigation, the Procurement Officer admitted that he had made a secret arrangement to gain an unfair advantage. He promised his uncle that he would eliminate qualified bidders on false grounds. In exchange, his uncle would pay his children’s school fees. This act of collusion reduced the impact of the grant as less money was available to encourage people with tuberculosis to continue their treatment.

The Global Fund recovered the funds lost in the collusion scheme and asked the Principal Recipient to replace the Procurement Officer. The voucher company was banned from any future activities financed by the Global Fund.