Financial Crime World

Global Fund Grants in Senegal: Phishing Fraud Results in Loss of $481,541

Introduction

A recent investigation by the Office of the Inspector General (OIG) has uncovered a significant phishing fraud scheme that led to the loss of $481,541 in grant funds allocated to the Ministry of Health and Social Action (MHSA) in Senegal. This article summarizes the findings of the investigation and the measures taken to prevent similar frauds in the future.

Background

The OIG report states that the supplier and MHSA both reported the fraud to the Global Fund Secretariat, which subsequently alerted the OIG. An OIG team conducted an on-site investigation in Senegal, interviewing several personnel from the procurement department, the genuine supplier, and analyzing data from computer and mobile devices.

Phishing Fraud Scheme

The main findings of the investigation revealed that the phishing fraud was carried out by individuals who hacked into a Yahoo email account used by the MHSA’s procurement specialist. The hackers assumed the identities of the supplier’s staff and obtained a copy of an approved quote for GeneXpert machines and microscopes, valued at $427,244 and $54,297 respectively.

Investigation Findings

The OIG investigation concluded that a series of control lapses within the MHSA allowed the fraud to succeed, including:

  • Lack of vigilance by the procurement specialist
  • Inadequate notification of the hacking incident
  • No evidence of collusion between the procurement specialist and the fraudsters

Management Actions

In response to the findings, the Global Fund Secretariat has agreed to take several management actions (AMAs) to prevent similar frauds in the future, including:

  • Finalizing a recoverable amount from the fraudulent payment
  • Ensuring that the MHSA provides an action plan to secure its IT systems
  • Raising awareness among staff and sub-recipients about phishing attacks

Recommendations

The OIG also recommended that the Global Fund Secretariat:

  • Formalize its manual of procedures for international procurements
  • Send a letter to all PRs drawing their attention to the report’s findings

Conclusion

The OIG report highlights the importance of robust controls and vigilance in preventing fraud in the global health sector. The Senegalese government has committed a total of $350 million to global health programs through the Global Fund, with over $332 million already disbursed.