Global Fund Temporarily Suspends Five Grants to Uganda Citing Evidence of Mismanagement

The Global Fund To Fight AIDS, Tuberculosis and Malaria on Wednesday announced it has temporarily suspended its five grants to Uganda citing evidence of mismanagement, Reuters reports (Waddington, Reuters, 8/24). The organization made the decision after an investigation of one of the grants by PricewaterhouseCoopers found evidence of "serious mismanagement" by the Project Management Unit in the Ugandan Ministry of Health, a unit that was established to implement the grants. The five grants -- two for HIV/AIDS, two for malaria and one for tuberculosis -- total more than $200 million, of which the Global Fund so far had disbursed $45.4 million. The Global 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. As part of the request, the finance ministry must dissolve the health ministry's PMU (Global Fund release, 8/24). "We no longer have confidence in the Ugandan program management unit," Jon Liden, a spokesperson for the Global Fund, said. But he added that the fund will make arrangements to provide some payments as needed during the suspension. The fund will restore the grants "as soon as Uganda comes up with a proper plan to rectify the issues of mismanagement," Liden said. Fund officials said the action to suspend the grants in Uganda was taken to stress the importance that Global Fund grants to all countries need to be managed properly (Altman, New York Times, 8/25).

Investigation Details
The investigation was launched after the Global Fund in June "was given information indicating mismanagement of grant funding," according to the Global Fund (Global Fund Questions on the Suspension of Grants in Uganda, 8/23). The audit showed discrepancies in exchange rates when grants in dollar amounts were converted into Ugandan shillings, the Financial Times reports. In addition, funds were not properly accounted for and invoices or receipts were missing for some expenditures (Beattie, Financial Times, 8/24). "Some expenses were inappropriate, unexplained or improperly documented," the Global Fund said, adding that some "criteria set out for the vetting of sub-recipients" also were not properly followed. For example, grants were awarded to some groups that did not provide evidence of their legal status in the country, the fund said (AFP/Yahoo! News, 8/24). The audit found "no concrete evidence" of corruption or fraud, and the fund said it has not yet begun a full investigation, which will require review of bank records and other personal information (Vasagar, Guardian, 8/25). The Global Fund said that the suspension of the grants will not affect Uganda's supply of antiretroviral drugs and other HIV/AIDS-related services (Reuters, 8/24). "All necessary measures will be taken to ensure that lifesaving treatment as well as prevention activities, such as condom procurement and distribution, financed by the Global Fund will not be disrupted" during the suspension, the fund said (Global Fund release, 8/24).

Reaction
Ugandan Deputy Secretary to the Treasury in the finance ministry Keith Muhakanizi said on Wednesday, "I do not know if there is mismanagement of this fund or not, but we have received the communication from the Global Fund, and we shall in the short term take corrective measures" (Nyakairu, Monitor, 8/25). Ugandan Health Minister Jim Muhwezi said the investigation was based on a portion of missing paperwork from nongovernmental organizations operating health programs in rural parts of the country. "When you suspend all grants because there is no document from some small group, it is really not fair on the country or the people who gave the money," he said (Reuters, 8/24). Muhwezi will be holding talks with the Global Fund about the suspension, a government spokesperson said (BBC News, 8/24). Ugandan AIDS advocate Rubaramira Ruranga, who is executive director of the National Guidance and Empowerment Network of People Living with HIV/AIDS, said he believed civil sector groups could administer the grants better than the government. "With this corrupt Uganda as we know it, a lot is really desired in the management of such resources," he said, adding, "But I do believe the Global Fund will not punish individual Ugandans because of this failure" (Reuters, 8/24).