Global AIDS funding to Uganda suspended

Aug 24, 2005

The Geneva-based Global Fund to fight Aids, tuberculosis and malaria has suspended its grants to Uganda after an investigation uncovered evidence of “serious mismanagement” of funds.

Anne Mugisa
and Agencies

The Geneva-based Global Fund to fight Aids, tuberculosis and malaria has suspended its grants to Uganda after an investigation uncovered evidence of “serious mismanagement” of funds.

The investigation by the organisation’s “local fund agent” (LFA), the business services firm PwC, found a string of problems with the grants, the Financial Times of London reported yesterday.

The article also reported by Reuters news agency said the Fund had disbursed about $45m of the US$201m earmarked for Uganda for two years.

It reported that the Fund stressed that the suspension would not affect the supply of drugs and other vital assistance to AIDS patients that could be monitored directly from Geneva.

But state minister for health Mike Mukula said yesterday Uganda had not been told about any discrepancies and it was operating normally. He said PwC only handed their audit report to the ministry’s Under Secretary, the day before yesterday and by yesterday morning, the ministry had not yet studied it.

The report found that when dollar grants were converted into Ugandan shillings, discrepancies between the exchange rate quoted and actual market exchange rates meant that there was a shortfall of some $280,000, Financial Times and Reuters reported.

Other problems involved a lack of proper accounting for funds, with some expenditures not covered by invoices or receipts, the report said. The grants were administered by a special Programme Management Unit (PMU) set up within Uganda’s health ministry.

Financial Times quoted a letter by the Fund to the Ministry of Finance as; “Based on the LFA’s findings, the Global Fund believes that the PMU and certain sub-recipients are responsible for serious mismanagement of grant funds.”

“The Global Fund is gravely concerned that this mismanagement has reduced the effectiveness of the program.”

It said the Ugandan government must reorganise its mechanism for receiving and distributing the money to exclude the PMU.

Mukula, however, said the implementation and utilisation of the funds was done according to the procedure jointly set up by Uganda and the Fund and that if there was any query, the Government would be willing to take corrective measures.

He said the PMU as well as the monitoring CCM plan were approved by the Global Fund.

“If they want us to redesign midway, we are prepared to discuss and do so… We will continue discussions with the Global Fund and if there are any corrective measures to be taken, we will take them. We welcome reports from donors and where there are queries, we will attend to them,” he said.

About the discrepancies in exchange rates, Mukula said the Ministry of Health cannot answer that because the rate is controlled by the Bank of Uganda.

He said since economic liberalisation, each bank sets its own rates. “That is what it means to have a floating currency,” Mukula said.

He said the project was doing very well and that on HIV/AIDS, Uganda is providing ARVs for 62,000 people, beating the current target of 60,000.

He said on malaria, the country had also done well, distributing treated nets in line with the Abuja agreement. He said Uganda has also tremendously reduced TB.

The Director of the Uganda AIDS Commission, Dr. Kihumuro Apuuli, was not available for comment. He was in a meeting at State House.

The Global Fund admitted that, in spite of the report, Uganda’s programmes had successfully treated thousands of sufferers and said it would try to ensure that such programmes were not disrupted.

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