$12 Million Lost, But Has Anything Changed for the Global Fund in Uganda?

November 14, 2008

Last week Uganda lost $12 million from their Round 1 and 2 Global Fund grants ($10m for HIV/AIDS and $2m for Malaria), representing the latest episode in a "mismanagement of funds" drama that has been unfolding in Uganda since 2005 (read more about this from the UK Guardian, the Uganda New Vision, Science, and the Uganda Monitor. As far as we know from public information available from the Global Fund (see paragraph 54 on page 28), this loss of funds is due to Uganda running out of time to use funds from these two rounds, rather than action by the GFATM to hold people accountable for the mismanagement of funds in 2005, which has to date gone unprosecuted.A brief background for those who haven’t been following the issue: In August 2005, Global Fund disbursements in Uganda were halted after a whistleblower’s report led to a GFATM investigation which uncovered widespread misuse of funds. In October 2005, the President of Uganda initiated a commission of inquiry, and in November the GFATM resumed funding under an interim agreement. After six months the inquiry found that at least $1.6 million had been stolen from GFATM grants. Based on that report President Museveni issued a white paper saying those responsible should be held accountable, and the $1.6 million should be paid back. Two years later, though there have been some arrests recently, there have been no prosecutions. What was “a temporary delay of funds” for Round 1 and 2 grants has turned into the grants becoming “time barred” and now closed. Running out of time on funds may appear benign on the surface, but if we dig a bit deeper we see that what is currently playing out in Uganda is a worrisome symptom of continued systemic dysfunctions that have yet to be effectively addressed. According to a colleague in Uganda, Dr. Sam Okuonzi, Director of Makerere University Regional Centre for Quality of Health Care, there has been a lack of real commitment to prosecute those responsible for the mismanagement of funds, and it is as yet unclear if there are effective mechanisms in place to prevent similar mismanagement from happening in the future. More than that, there is fear of collapse in the health system, with little faith that money put in will produce results. This of course leaves everyone wondering what might happen with Round 3 and 7 Grants. Commendably, the GFATM Office of the Inspector General (IG) has provided a very open account of these issues and the steps the GF has been taking to address them. An impressive report from the IG reviews the suspension/termination processes for GF grants across all countries, including Uganda (pages 28-45). The IG visited Uganda in May and August 2008 to investigate 1) why there has been no follow through to prosecute culprits and recover misappropriated GF monies, 2) whether existing grants are being well managed, and 3) whether the Long Term Institutional Arrangements (LTIA) would safeguard future GF investments. On the first point, the IG had found little progress on the commitments made by the Ugandan government to prosecute those responsible and recover misused funds. The government though has recommitted to take care of this, with technical assistance from European anti-fraud specialists. Court proceedings will begin in December. On the second point, the IG has found the interim arrangement, which had been planned for one year but was extended to three, was not adequate for protecting GF investments due to inadequate follow through on many institutional arrangements agreed for the interim period. And finally the LTIA has only laid out a broad architecture, with no details about how this will be operationalized, and the OIG could not provide assurances that existing arrangements would safeguard future GF investments. Among the many issues the IG identified inadequacies regarding conflicts of interest, financial management systems, procurement systems, monitoring and evaluation systems, delegation of responsibilities, etc, So in summary, the GFATM has had a rough time in Uganda. They are still trying to ensure accountability for past wrong doing, are stuck in a messy extended interim period, and lack an effective new structure to make future progress. It is no surprise then when Dr. Okuonzi expressed that most Ugandans view the recent loss of $12million with indifference, even when they know the direct negative effect is an inadequate supply of condoms, ARVs and anti-malaria commodities. He says Ugandans know the system is rife with corruption, even or especially at high levels, and mostly they are astonished the donors continue to trust the government with so much money.


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.