UN Aids fund frozen

A United Nations fund to fight Aids and other infectious diseases has been forced to freeze its spending for three years because of the economic downturn and widespread corruption claims.

By Damien McElroy, Foreign Affairs Correspondent

9:51PM GMT 24 Nov 2011

The Global Fund to Fight Aids, Tuberculosis and Malaria said that it could no longer afford to pay for new programmes to meet an international drive to prevent new infections.

The UN-backed fund has been beset by allegations of mismanagement and accusations that it has failed to detect corruption among local officials. An internal investigation found grave misuse of its resources had resulted in $73 million worth of fraud.

That prompted several donor states, including Germany, Sweden and Denmark, as well as the European Union, to suspend their contributions and demand reform of its practices. Meanwhile, other states such as Italy have failed to make payments they had pledged because of their own financial problems.

Now the fund has been forced to announce a freeze in its spending until 2014, meaning no new projects to tackle diseases in the most vulnerable parts of the world will receive funding before then.

Publicly, the fund blamed the economic downturn, rather than corruption, for the freeze. It said it faced a double blow of slower donations and lower interest rates reducing its income from its investments.

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Andrew Mitchell - says Helen Clark is up to no good!

1. UNDP’s partnership with the World Bank needs to be more effective, particularly in fragile and crisis-affected countries. 2. UNDP’s near universal mandate means its technical resources are spread very thinly. The Board does not provide strategic direction. HR management is weak. It has a weak results chain. 3. There is limited evidence of active senior management consideration of cost control. Country evidence points to mixed progress on demonstrating cost-efficiency. 4. The Executive Board is politicised and there is a lack of consensus on the key areas for reform. It is not clear that current plans for change will deliver the required depth and breadth of reform. 5. Evidence gathered at country level was highly critical of UNDP’s ability to deliver results. Its delivery can be undermined by staffing issues and bureaucratic processes. 6. Its performance in fragile states is mixed. It has reasonable training and a range of guidance and analytical tools but struggles to fill posts. 7. There is no evidence that the Climate Strategy was directly guiding resource allocation decisions

H.E. Dirk Niebel - German Development Minister

"I take the accusations made in the media concerning corruption and breach of fiduciary duty at the Global Fund very seriously and I am sure that the Fund will clarify the matter without delay. Germany is one of the biggest donors to the Global Fund. I have therefore seen to it that a special review will be held. I have frozen all further disbursements to the Fund until matters have been fully clarified, and I will ask a representative of the Fund to come to the BMZ to discuss the matter."

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