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Global Fund Lifts Suspension of Uganda Grants

10 November 2005

The Global Fund has lifted the suspensions of all its five grants to Uganda, following the signing of an Aide Memoire setting out action points for restructured management of the grants. The agreement was signed today in Kampala by the Global Fund's Chief of Operations, the Country Coordinating Mechanism (CCM) and Ministry of Finance of Uganda.

"Over the past two months, the Global Fund has been heartened by the intensive efforts of our partners in Uganda," said Dr. Richard Feachem, Executive Director of the Global Fund. "We are very pleased that the progress made enables us to lift the suspension of Uganda's grants."

Under the terms of the Aide Memoire, measures to consolidate grant management under the Ministry of Finance as Principal Recipient (PR) will strengthen oversight and governance of Global Fund grants to Uganda, in order to ensure effective, accountable and transparent implementation of funded programs.

The portfolio of grants to Uganda is worth US$ 367 million, and includes two grants to combat HIV/AIDS, two grants targeting malaria and one grant for tuberculosis. All five grants were suspended in August this year due to concerns about mismanagement by the Project Management Unit (PMU), an entity within the Ugandan Ministry of Health. Leading up to the suspensions, an independent audit by PricewaterhouseCoopers, Local Fund Agent for Uganda, found incidents of inadequate monitoring and accounting of grant expenditures by the PMU for one of Uganda's grants to combat HIV. These findings led the Global Fund to conclude that payments to all grants which were managed by the PMU needed to be suspended, and new management structures put in place. Funding for life-preserving program activities was maintained throughout the suspension period, however. The PR and CCM were asked to propose a plan for the restructuring of implementation arrangements for all the programs funded under the grant agreements. The signing of the Aide-Memoire today represents the culmination of this process.

Among the actions agreed in the Aide Memoire is the establishment of structures by the PR - the Ministry of Finance - to effectively oversee the implementation of the five grants; a self-assessment leading to a restructuring of the CCM to ensure effective oversight of the Global Fund grants; a continued involvement of the caretaker management firm Ernst & Young over the next six to nine months to evaluate the quality and efficacy of all sub-recipients of grants; and a restructuring process of the grants to streamline implementation, clarify responsibilities, and simplify grant oversight.

Based on the significant steps taken by recipient stakeholders to strengthen grant management, the Global Fund is transferring responsibility for managing grant programs back to Uganda, in order to allow implementation of Uganda's grants to go forward.

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