Outside auditor to manage Uganda HIV/AIDS funds

An international firm of auditors will temporarily take over management of AIDS funding in Uganda from a local firm accused of mismanaging aid money, a senior Ugandan official said on Tuesday.

The decision was reached after a two-hour meeting between Health Minister Jim Muhwezi and three officials from the Global Fund to Fight AIDS, Tuberculosis and Malaria, which halted millions of dollars in funding last week.

The Geneva-based fund said its auditors had serious concerns about the operations of the now-disbanded Project Management Unit (PMU), a special agency set up by the Ugandan government to handle cash disbursed by the fund.

"We have agreed that (auditing firm) Ernst & Young acts as the PMU to be able to go through the transition period," State Minister for Health Mike Mukula told reporters.

"The officials (from Global Fund) said they still have a lot of confidence and expect to lift the suspension very soon."

Although there was no clear indication of corruption or fraud, the fund said there was evidence of "inappropriate expenditure and improper accounting".

It asked the Ugandan finance ministry to set up a new organization to ensure the effective management of the grants.

Uganda's health minister Muhwezi has said the problem lay with a small amount of missing paperwork from local charities running operations in remote parts of the country.

President Yoweri Museveni vowed last week to personally investigate why the aid was being suspended.

He assured Ugandans the cuts would not end the fight against HIV/AIDS in the east African country, often praised for leading the continent's most effective campaign against the pandemic.

The fund said the suspension would not affect the supply of drugs and other vital assistance to AIDS patients.

Ernst & Young will mainly monitor the procurement of drugs and condoms, Mukula said.

Uganda has succeeded in slashing HIV infection rates to about 6 percent today, from 30 percent in the early 1990s. But its emphasis on abstinence-only programmes - favored by U.S. President George W. Bush's administration - has caused concern among health officials and AIDS activists.

Stephen Lewis, the U.N. secretary-general's special envoy for HIV/AIDS in Africa, said on Monday that U.S.-promoted abstinence-only programmes had created a "condom crisis" - a charge dismissed by the Ugandan government.