Global Fund Theft – 3 years without resolution

Three years after “about $1.6 million of Global Fund money had been misappropriated or could not be accounted for” the authorities in Uganda may be about to take some action to resolve the case, ” according to the Global Fund Observer (GFO). A whistle blower had informed GFO back in 2005 about the missing and misappropriated money prompting the Global Fund not only to suspend Uganda’s (at the time) 5 grants, but also to create an independent Office of Inspector General. The GF allowed the Uganda grants to resume operation later in 2005 after management reorganization had taken place, but to date the prosecution of the guilty and the return of the money has lagged.

The GFO reported that, “Finally, in April, the Norwegian AIDS Ambassador, who represents Norway and several other European countries on the Global Fund board, wrote to the Global Fund’s Inspector General.” They made it clear that donors would not tolerate further delays in the prosecutions and return of funds. An official visit by the GF made this demand in person last month.

While testimony by 150 people about the case identified multiple ways that funds were spent lavishly or were diverted by the Ugandan authorities, the process also found that the Local Fund Agent (LFA), the supposed independent monitoring watchdog of the GF in each country, was asleep on the job. Such incidents undoubtedly have also led the GF to evaluate the LFA process and recommend improvements that combine both financial as well as technical monitoring in the future.

Donor attention may have led to Parliamentary action in Uganda. The Monitor reported that, “The coordinating agency of the Global Fund funding for HIV/Aids in the country has issued strict disbursement rules, banning politicians from taking part in the running of the funds. Speaking at Parliament on Wednesday, Dr Kihumuro Apuuli, who heads the Uganda Aids Commission, told Public Accounts Committee that under the new stringent guidelines, Global Fund (GF) cash will be given directly to ministries through accounting officers. ‘There is no politician who will touch this money,’ Dr Apuuli said. ‘Any form of [GF] funding will require a suitable work plan approved by the commission,’ he said.”

failed-states-2007.jpgThe Monitor offers a deeper reason for these problems when it reported Uganda’s status among the 20 weakest, most vulnerable states in the world. The Fund for Peace ranks Uganda the 15th most vulnerable of 177 countries in 2007 (see map). The Monitor thinks that one of the major reasons is Factor Number 7, “Criminalization and/or Delegitimization of the State.” Three components of this factor mirror the problems experienced with the Global Fund in Uganda:

  • Massive and endemic corruption or profiteering by ruling elites
  • Resistance of ruling elites to transparency, accountability and political representation
  • Widespread loss of popular confidence in state institutions and processes

Ultimately it is a testament to GFATM processes that more of such incidents of thievery have not occurred.  Ironically in other cases of threats to grant suspension the cause is more often NOT spending the money on time and thus, not achieving results. In either case, accountability is needed. The Monitor again opines that donors not only should demand accountability for their own funds, but also for all public monies.  They fear that ‘creative bookkeeping’ may be used in Uganda to make it appear that the stolen cash has been recovered, while in the process further impoverishing public finances.

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