Global Fund money abused again - AG

Monday April 12 2010

By Yasiin Mugerwa

A new investigation into the management of Global Fund money has once again unearthed irregularities that have led to the loss of millions of shillings in money to fight Aids, Tuberculosis and Malaria, Daily Monitor has learnt. The latest revelation puts the future of Global Fund in a vulnerable position and increases the prospect of placing the $426 million funding burden on the government in case of another grants suspension.

In a June 2009 audit report expected to be tabled in Parliament this week, the Auditor General, Mr John Muwanga, points the finger at the Ministry of Health and Finance for not paying serious attention to the alleged mismanagement even as the government officials deny any wrongdoing.

State Minister for Health Richard Nduhuura and the Acting Permanent Secretary in the Ministry of Health, Dr Kenya Mugisha, yesterday defended the government, saying the Global Fund-Geneva was ‘happy’ with the current management.

In reference to the management of the recovered Global Fund money, the AG said: “Management has not sought guidelines, as advised previously from Global Fund-Geneva on how the funds should be put to use and this may expose the funds to the risk of loss of value and misappropriation.”

Some refunded
Shs994.3 million has so far been recovered from unidentified individuals and organisations the Justice James Ogoola Commission found to have abused Global Fund money. In August 2005, the Global Fund suspended its portfolio of five grants worth $367 million to Uganda due to concerns about mismanagement by the Project Management Unit, an entity within the Ministry of Health at the time.

The suspension followed an audit that found about $1.6m had been misappropriated or not accounted for. The new audit also found that officials in the Health Ministry borrowed a sum of $731,027 (about Shs1.46 billion) on claims that they wanted to finance the procurement of an advisor to facilitate procurement activities in the subsequent Round 6 and 7 of the Global Fund grants. “At the time of audit in February 2010, the mount had not been refunded and the (alleged) procurement of both the agent and the advisor could not be confirmed as relating documents were not provided for audit,” the AG noted.

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The Auditor General has recommended that: “The amount should be refunded to the Principal Recipient (Ministry of Finance) and guidance sought from Global Fund headquarters on how to use the funds since their budget for activities couldn’t be undertaken.”

Homapack scandal
The audit also revealed cases of wasteful expenditures of Global Fund money to a tune of Shs297.5 million lost in the procurement of Homapak drugs for the treatment of Malaria. While the ministry had contracted three companies (Kampala Pharmaceutical Industries Ltd, Uganda Pharmaceutical Industries Ltd and Rene Industries Ltd) to supply Homapak drugs, before the execution of the contract, the use of the drug was banned citing its ineffectiveness.

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