Uganda Appoints Panel to Investigate Global Fund's Allegations of Grant Mismanagement; Outside Auditors to Manage Funds

The Ugandan government has appointed a four-member commission to investigate alleged mismanagement that prompted the Global Fund to Fight AIDS, Tuberculosis and Malaria to temporarily suspend its grants to the country, Uganda's Monitor reports (Walulya/Mulondo, Monitor, 8/30). The Global Fund last week announced its suspension of five grants worth more than $200 million after an audit of one of the grants by PricewaterhouseCoopers found evidence of "serious mismanagement" by the Ugandan Ministry of Health's Project Management Unit, which was established to implement the grants. The audit showed discrepancies in exchange rates when grants in dollar amounts were converted into Ugandan shillings, according to news reports. In addition, funds were not properly accounted for and invoices or receipts were missing for some expenditures. The audit found no firm evidence of corruption or fraud, and the Global Fund said it has not yet begun a full investigation, which will require a review of bank records and other personal information. The fund has requested that the Ministry of Finance, Planning and Economic Development, which serves as the principal recipient for the five grants, implement a new method of effectively managing the grants by the end of October (Kaiser Daily HIV/AIDS Report, 8/26). The government also has announced plans to have the international accounting and auditing firm Ernst & Young temporarily take over management of the country's AIDS funding from the PMU (BBC News, 8/31). Ernst & Young primarily will be in charge of the procurement of drugs and condoms, Mike Mukula, the state minister of health, said. He added that Global Fund officials have said they "still have a lot of confidence and expect to lift the suspension very soon" (Nyakairu, Reuters, 8/30).

MPs Question Need for Commission
Some Ugandan members of Parliament expressed skepticism about the need for the commission, saying there is nothing to investigate. "Why do you appoint a commission of inquiry yet a professionally qualified firm has revealed the information?" MP Aggrey Awori asked, adding, "It is clear that the money was misused." MP Martin Wandera said that the commission "will only serve public relations value" (Monitor, 8/30).

Suspension Implications
Officials from the health ministry on Monday met to discuss the implications of the Global Fund suspension. According to an internal memo from the ministry, the country's supply of antiretroviral drugs for children has run out, medication for TB is expected to be depleted by September and medication to treat malaria among children younger than age five is expected to run out in the next two months. In addition, a government program to procure two million insecticide-treated bednets to distribute at no cost to children, pregnant women and displaced persons has been affected by the suspension, and a program to buy three hundred motorcycles to help widen the community-based management of TB also could be put on hold, according to news reports (Xinhua News Agency, 8/30).

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