Delays mar implementation of EU aid package in Uganda

Abstract

NGOs working to improve sexual health in Uganda have been plunged into financial difficulty by delays that held up millions of euros of EU aid money. To make matters worse, the EU now wants some of the money back, citing wilful violations of its strict spending rules. Emily Bass reports. While current EU president Tony Blair, prime minister of the UK, calls for increased aid to African countries, the fate of a major EU grant for Uganda's war-torn northern region is highlighting how procedural requirements can stand in the way of donors' good intentions. The project at issue is the Improving Sexual and Reproductive Health in Uganda (ISRH) initiative, launched in 2000 as a 5-year, €8 million programme to serve northern Uganda. Devastated by the ongoing war waged by the Lord's Resistance Army rebel group, the region has some of the highest HIV prevalence rates in the country. By many measures, the project has been a great success. Despite the area's chronic volatility, demand for services—including HIV testing and counselling, family planning, and care for HIV-infected individuals—far exceeded initial projections. One partner, the AIDS Information Center (AIC), anticipated administering 60 000 HIV tests per year; the actual figure in 2004 exceeded 130 000. 6 months after establishing an HIV/AIDS care centre in Gulu, a major northern town in early 2005, another partner, The AIDS Service Organization (TASO), was serving seven times more clients than anticipated. However, there have also been problems, particularly with release of funds. Although the project was scheduled to start in January, 2001, grantees did not receive funds until July, 2001. Since then, there have been further delays, which according to Maxwell Abok, Financial Manager for IRSH, are partly a result of the many links in the chain of command—including the Ugandan Ministry of Finance, the Ugandan office of the EU delegation, and the Brussels headquarters. As of July 2005, the EU had released funds for just 35–40 months of the 60-month project, despite the fact that partners operated their services continuously. To maintain operations during the unfunded months, the implementing agencies scaled back activities, and borrowed from other donors or their general budgets. After 16 AIC employees working on the IRSH project went unpaid for several months, AIC asked another donor to permanently cover their salaries, says AIC executive director Charles Hitimana. As IRSH enters its final months, some of the grantees fear they will lose many thousands of euros in un-recovered operating expenses, since current EU regulations do not allow for retrospective reimbursements. To date, TASO and AIC have not received any funds at all for 2005. Marie Stopes Uganda did not receive its funds until April, 2005. €3 million—roughly 40% of the budget—remains unspent, Abok says. In addition, some of the partners have been asked to refund money to the EU. While the EU says that that a portion of the funds at issue are “unjustified” expenses, Geoffrey Byamugisha, IRSH's independent auditor at Ernst & Young, says that most of the money was spent to meet the overwhelming demand for services. TASO, for example, has been asked to repay more than €50 000 spent on stocking and running its Gulu centre. AIC faced questions about transport outlays when it opted for air travel rather than ground transport due to safety concerns. EU regulations require that grant recipients obtain advance approval for over-spending on specific budget lines, says Byamugisha. By their own admission, the organisations did not always comply, maintaining that the approval process was slow, and a rapid response was needed. “We agree we didn't follow procedures”, says Hitimana of AIC. But he nonetheless argues that the EU should be flexible and recognise that “we didn't misuse the money”. Other IRSH partners agree that their experience is an object lesson in how strict adherence to the fine print can undermine the ambitious plans for aid to Africa laid out by Blair and other world leaders. “They're talking about aid efficiency, and they're talking about corruption, but what could be worse than a work programme that starts in January, and doesn't get funded until July?” asks Mark Blackett, former Marie Stopes Uganda programme director, who oversaw much of its participation in IRSH.