VZCZCXYZ0002
RR RUEHWEB

DE RUEHKM #0985/01 2380539
ZNR UUUUU ZZH
R 260539Z AUG 09
FM AMEMBASSY KAMPALA
TO RUEHC/SECSTATE WASHDC 1724
INFO RUEHXR/RWANDA COLLECTIVE

UNCLAS KAMPALA 000985 
 
SENSITIVE 
 
AIDAC 
SIPDIS 
 
USAID/W FOR GH/OHA: ROBERT CLAY AND KRISTA STEWART; GH/AA, 
GLORIA STEELE; AFR/EA, TORINA WAY 
 
E.O. 12958: N/A 
TAGS: EAID KHIV KCOR UG
SUBJECT: FORENSIC AUDIT MAY UNCOVER CORRUPTION AT THE 
UGANDA AIDS COMMISSION 
 
REF: Kampala 00523 
 
SUMMARY 
 
¶1.  (SBU) A forensic audit has been launched at the Uganda 
AIDS Commission (UAC) amid allegations of mismanagement of 
funds.  KPMG Kenya is conducting the audit, which is 
expected to be completed by mid-September.  This audit is 
being funded and led by the donor community, which 
contributes $2-4 million annually to a basket Partnership 
Fund to provide financing to UAC for HIV/AIDS coordination 
activities.  If the audit uncovers serious malfeasance, 
UgandaQs already-shaky reputation as a committed partner in 
the fight against HIV/AIDS will be damaged further. 
 
BACKGROUND 
 
¶2.  (U) The Uganda AIDS Commission was established in 1982 
and is the governmental entity tasked with coordinating the 
national multisectoral HIV/AIDS response in the country. 
UAC sits underneath the Office of the President and is 
headed by the Director General, Dr. David Kihumuro Apuuli. 
The Partnership Fund was established in 2002 and has been 
the major source of funding for the HIV/AIDS coordination 
and management efforts of UAC and other national level 
stakeholders. Major contributors to the Partnership Fund 
include Irish AID, UK Department for International 
Development (DFID), the Danish International Development 
Agency (DANIDA), the Swedish Development Cooperation Agency 
(SIDA), the Italian Development Cooperation and various UN 
Agencies.  The U.S. contributes in-kind technical 
assistance and a USAID Officer currently chairs the AIDS 
Development Partner Group. 
 
HINTS OF CORRUPTION 
 
¶3.  (SBU) Over the last year, rumors of corruption and 
fraud related to the use of funds within UAC have been on 
the increase.  Stories of missing equipment, costly 'ghost' 
projects that never take place, unauthorized interest free 
personal loans and shady procurement deals have become more 
and more prolific.  In response to these rumors, the AIDS 
Development Partner Group began discussions early this year 
concerning the need for a more detailed and thorough review 
of the funds being channeled through UAC.  Regular audits 
had been conducted on an annual basis, but these did not 
provide the depth needed to really address the unofficial 
accusations being made. 
 
ANONYMOUS WHISTLEBLOWER 
 
¶4.  (SBU) On June 30, an anonymous person claiming to be an 
employee of UAC made allegations that closely mirrored the 
rumors mentioned above.  These allegations were made to the 
fraud hotlines of USAID, Irish AID, UNAIDS and DFID.  The 
Development Partners agreed for the need to move quickly 
and a formal request was made to the Uganda Auditor General 
for a 'No Objection For a Forensic Investigation of UAC'. 
Concurrence by the Auditor General was quickly given and 
KPMG Kenya was contracted to carry out the audit.  Bringing 
in auditors from a different country is considered crucial 
in trying to uncover the true nature of the allegations. 
The one Ugandan investigator on the team has already been 
removed due to personal threats.  The team has also found 
certain UAC staff members more willing to talk openly with 
the Kenyans. 
 
COMMENT 
 
¶5.  (SBU) If the forensic audit uncovers serious 
corruption, which many expect it will, UgandaQs reputation 
as a reliable and honest partner in the war against 
HIV/AIDS will be tarnished further, just as the country 
seemed to be getting past the fallout stemming from the 
misappropriation of Global Fund monies in 2006 (reftel). 
If the rumors are confirmed by the audit, the ensuing 
scandal could prove worse in terms of perception since the 
UAC is, after all, the body responsible for leading the 
national response.  It is not a "briefcase NGO," as was the 
case in many of the Global Fund corruption cases. 
Perceptions aside, at a time when the effort against 
HIV/AIDS is slipping in terms of rising prevalence and drug 
shortages, the Government of Uganda needs to do much more 
to ensure that the substantial inflows of donor money are 
protected and used for their intended purposes. 
 
HOOVER