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Joint Press Statement by the Global Fund and the Government of Uganda on developments relating to the Global Fund grants

31 August 2005

A high-level Global Fund mission has traveled to Uganda and has worked closely with the government of Uganda with the purpose of jointly exploring the required next steps following the recent suspension of the Global Fund grants. This has focused on both the immediate actions and the longer-term plan. The parties involved in these talks believe that very significant and positive decisions have been made which will hopefully see these grants properly reestablished within a short space of time.

Commenting on behalf of the Global Fund, Chief of Operations Brad Herbert stated that "The Global Fund took action to temporarily suspend the grants, when more severe measures such as termination could have been pursued. This was because we have confidence that the governance mechanisms will address the problems." He went on to say that the Global Fund team "is pleased to note that the government and the Principal Recipient have both acted quickly and decisively in the steps that it has taken to date and in the actions that it has proposed".

  • The government of Uganda has taken the following immediate remedial measures. The government has:

  • Named a Commission of Inquiry to investigate the operation of the management of the project. The Commission will be headed by the Principal Judge Justice Ogoola. The other members of the Commission are the Governor of the Bank of Uganda, Mr. E. Tumusiime Mutebile, Mr. Gerald Mbalire Kasanya and Ms. Lydia Obonyo Labwor. Mr. Andrew Kasirye will be Secretary to the Commission. The Commission will begin its work next week and is expected to report its findings within a month.

  • Ordered a full audit of the project, to be carried out by the Auditor General in accordance with the Public Finance Act.

  • Suspended all the staff of the Project Management Unit (PMU) pending the outcome of the audit.

  • Stopped all payments from the Global Fund accounts until further notice.

  • In the interim, to avoid interruption of the critical lifesaving activities funded by the Global Fund, a reputable management and accounting firm (Ernst & Young) is being appointed caretaker to carry out the activities previously undertaken by the PMU. The said firm will report directly to the Principle Recipient, which is the Ministry of Finance, Planning and Economic Development (MoFPED).

The Global Fund will evaluate these new implementation arrangements, including the appointment of the caretaker firm, prior to the return of the grants to full management under the MoFPED as Principal Recipient.

While not committing to a time frame Brad Herbert stated that "We are hopeful that the Principal Recipient can establish management control of the grants well within the time frame of the end of October that we had signaled".

In the meantime, The Global Fund, the MoFPED as Principal Recipient and the Ministry of Health have recognized the need for the uninterrupted continuation of lifesaving treatment and prevention activities and any related activities for delivery of these services. Therefore during this interim period while the grants remain suspended the Global Fund will work with the Country Coordinating Mechanism(CCM), the MoFPED and the Ministry of Health to ensure continuity of essential services and procurements. The Global Fund will have a team present in Kampala over the next few weeks to work closely with the MoFPED, the Ministry of Health and the CCM to facilitate this. "The procurement of artemisinin-combination therapy drugs for malaria, antiretrovirals and condoms, for example, will not be interrupted" said Brad Herbert. Both the Global Fund and the government of Uganda note that it is important to respond to the many reports in the press about the disruption of services and to assure the public that the proposed measures fully recognize the need for continuity.

The interim period is also an opportunity for all stakeholders to re-examine the grant structures and objectives and to seek to realign some activities so as to harmonize with other programs in the country. The CCM, which is to be strengthened by measures including personal representation by the Permanent Secretary of the MoFPED, is expected to play a lead role in this. "We believe that the programs can emerge from this process much stronger" said Herbert, also noting that it was now important for all stakeholders including the CCM, the Principal Recipient and implementing agencies to cooperate and build for the future.

The Global Fund strongly supports the quick actions that government of Uganda has taken to address the problem. The Global Fund has been encouraged by these measures and is confident that once they are fully implemented, suspension will be lifted.

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