WHO spent millions wrongly on BCG management consultants, audit finds
The world’s leading health organization, WHO, has repeatedly broken its own rules and spent millions of dollars on expensive management consultants, according to a new independent audit – even as the United Nations agency has struggled to pay for life-saving equipment and vaccines in its global response to Covid-19.
A public limited company, which Vox identified himself as BCG, has billed the World Health Organization $ 11.72 million since the start of the pandemic for questionable contracts assigned, according to the audit.
The revelations, which one expert described as “disturbing” in an interview with Vox, came after a Vox investigation showed how management consulting firms such as BCG and McKinsey have become ubiquitous in global organizations. public health, despite the concerns of many health care practitioners about dollar price tags, potential conflicts of interest, and the opaque nature of advisory work.
WHO researchers told Vox that the auditor’s report raised questions about the agency’s ability to responsibly and transparently spend the public funds of the 194 member countries that fund it. In recent months, WHO has donations requested from its members and the general public, citing a funding gap of more than $ 1 billion for its response to the pandemic.
Given that WHO’s 2020-2021 budget is $ 5.84 billion, $ 12 million may not seem like huge – “but $ 12 million for a health care system in a low-income country would be a big deal. important part of their funding “, says Adam Kamradt-Scott, the new chair in global health at the Florence School of Transnational Governance, which studies WHO. This amount could pay about 600,000 Doses of Pfizer / BioNTech or Moderna Covid-19 vaccine. (WHO is part of Covax, which aims to ensure equitable access to vaccines for all countries.) “If it’s wasted money, it’s a lot of vaccines that could have been bought.” , added Kamradt-Scott.
The audit, which examines a sample of WHO’s largest contracts, analyzed the agency’s work with BCG, known as “Consulting Firm A” in the report, and uncovered multiple violations of WHO policies. Auditors say WHO staff sought to circumvent the organization’s public procurement rules in order to help BCG win a contract. Agency staff also broke WHO rules by repeatedly starting to work with the company before seeking formal approval to do so, according to the report.
Prior to the pandemic, Vox revealed that the WHO had hired at least $ 12 million in consultants to support the agency’s reform, about a quarter of which was paid directly by the Bill and Melinda Gates Foundation. At the time, a WHO spokesperson said the agency praised the work of the consultants. “The [consulting] companies have supported WHO in areas where we lack in-house expertise or where we want to leverage the best current standards. ”
But controversy has surrounded expensive consultants in an area dedicated to improving the health of the world’s poorest people. McKinsey Consulting Firm advised the Trump administration on how to cut spending on food and health care for migrants and played a role in sales increase prescription opioids, which have been linked to the death of hundreds of thousands of people around the world. Vox also documented how BCG helped boost sales of sugary drinks in India, although the WHO has called for reduce the consumption of sugary drinks and supports tax products.
The audit findings were recently accepted by WHO Member States at the annual World Health Assembly. In a statement, the WHO said it “takes seriously the recommendations of our oversight bodies and uses constructive feedback to address any weaknesses identified in our oversight environment – we are a learning organization, and these reports provide us with feedback. help us to continuously improve in all identified areas. ”
The international agency said the contracts were awarded in the context of an unprecedented health emergency, but added that the agency takes the report’s recommendations seriously and has “already started implementing many of those. related to procurement “.
In a statement, BCG said: “As the global pandemic unfolded last year, BCG quickly mobilized teams to support global efforts to combat the spread of the virus. We are extremely proud of our work which has helped save lives in this unprecedented time and remain committed to providing our best spirits and efforts to support advancements in public health. ”
It is possible that “the high stress and insufficient human resources at the onset of the pandemic made matters worse and made the WHO even more in need of consultant support and more vulnerable to their conditions,” said Gian Luca Burci, former WHO legal adviser.
But “that appears to have been a misuse of funds,” Kamradt-Scott said. ” It’s worrying. At least on the surface, it would appear that due diligence checks on how external agencies are engaged do not appear to have been followed. ”
“The auditor’s report raises a red flag, and the issue of WHO’s contracts with management consulting firms merits further consideration,” said Moon sweat lodge, co-director of the Global Health Center of the University Institute of Geneva. Ultimately, said Kamradt-Scott, the WHO has “a moral obligation to ensure that every penny is spent appropriately.”
How the WHO broke its rules for working with BCG
Publicly funded agencies, including those that are part of the United Nations system like the WHO, are expected to follow strict rules when hiring external contractors such as management consultants. According to WHO policy, staff must “get the best value for money” when hiring external subcontractors, allow “transparent competition between potential suppliers” and treat subcontractors on an equal footing.
According to the audit, BCG won eight contracts with the WHO in 2020 for a total value of $ 11.72 million, and the auditors took a close look at the two most important contracts, for which the WHO paid. $ 5.4 million.
1) The auditors found that WHO staff had changed the criteria to help BCG get work in the agency. For a contract that ran from December 2020 to May 2021, the organization asked consultants for competitive proposals to “support WHO’s long-term supply chain vision and build capacity to execute the vision long-term supply chain “. Of the four consultants who submitted bids, BCG was one of the two who were found to be technically qualified. But another company got the highest score and should have won the contract, according to the audit. “WHO changed the evaluation criteria and re-evaluated the bids based on consultant A [BCG] got a higher score and got the board, ”the report says.
“The findings of the independent auditor suggest that this does not appear to be a case of negligence where protocols were not followed because someone did not know what to do,” Kamradt-Scott told Vox. “It appears that WHO staff knowingly sought to bend the rules in order to hire a preferred supplier. ”
2) BCG started working for WHO before formal approval, according to the report. For the second contract, which ran from March to October 2020, BCG was hired to help WHO purchase personal protective equipment and other essential supplies during the pandemic. Here too, the auditors discovered multiple irregularities.
WHO started work with BCG “without proper approval from the competent authority, despite the fact that this resulted in the payment of $ 2.53 million by WHO,” wrote listeners. WHO staff did not seek formal approval until four months after BCG started working for the agency and three of the four phases of their contract were completed, according to the audit.
In the report, the WHO says it did not have the human resources to go through the proper purchasing processes, but auditors rejected this reasoning. “We are of the opinion that the formal approval process should have been adopted before accepting the offer of [BCG] and the commitment of the company. The delay in obtaining approval from the competent authority was not justified.
3) The auditors questioned whether BCG offered good value for money. In one of the nine purchase orders that BCG negotiated on behalf of WHO, the consultants obtained a 20% reduction on the price of protective gowns. WHO and the consultants placed the order and approved the quality of the gowns. But an external supplier of PPE, which supported the WHO, deemed the gowns to be poor quality and canceled the order. In another instance, auditors reported a missed opportunity to save money. The consultants negotiated a 0.08% discount on N95 masks, for a savings of $ 9,750. That same month, the same supplier filled another order for masks with a discount of $ 303,200. “We noted that [BCG] did not negotiate this price, which had better savings potential, ”the auditors wrote.
4) WHO has paid millions of dollars for “pro bono” work. Another revealing finding from the audit is that BCG characterized its PPE procurement work as ‘pro bono’, even though a seven-month contract cost $ 7.3 million, of which $ 2.53 million was dollars were paid by WHO. Only the cost of the first of three phases and a transition period was borne by the consulting firm. “We are of the opinion that calling this commitment pro bono is not correct,” the report said.
The report comes at a time when the WHO is trying to strengthen its finances and compete for more flexibility on how it spends money. The agency is asking for more support from the countries that fund it – known as “assessed contributions” – which can be spent on various expenses. WHO is also funded by donors, such as the Gates Foundation, but this money tends to be earmarked for specific purposes.
As troubled as Moon is by the findings of the audit report, she suggested that the scrutiny of the auditors is a step towards a stronger World Health Organization. “You can’t have fewer assignments if they are followed by more accountability and transparency,” she said. “A careful review of contracts with management consulting firms is a starting point. ”