Management and Development for Health Did Not Always Manage the President's Emergency Plan for AIDS Relief Funds in Accordance With Award Requirements

Congress authorized the President's Emergency Plan for AIDS Relief (PEPFAR) to receive $48 billion in funding for the 5-year period beginning October 1, 2008, to assist foreign countries in combating HIV/AIDS, tuberculosis, and malaria. Congress authorized additional funds to be appropriated through 2018.

CDC awarded PEPFAR funds of $46.6 million for September 30, 2011, through September 29, 2015, to Management and Development for Health (MDH), one of the larger recipients of PEPFAR funds in Tanzania. We reviewed 60 financial transactions totaling $7 million and found 9 unallowable transactions totaling $181,000. These transactions were unallowable because they were not supported by adequate documentation or were expenditures for unreasonable training costs. In addition, MDH used $23,000 of PEPFAR funds to pay value-added taxes (VAT) that Tanzania has not reimbursed, classified transactions in the wrong budget category and moved funds between the budget categories without CDC's approval, and used an accounting system that was not adequate to account for PEPFAR funds.

We recommended that MDH (1) refund to CDC $181,000 for transactions that it could not fully support with adequate documentation and for unallowable PEPFAR expenditures and (2) work with CDC to obtain $23,000 of VAT reimbursement from the Tanzanian Government. We also made procedural recommendations to MDH. In written comments on our draft report, MDH generally concurred with our recommendations.