The Global Fund to Fight AIDS, Tuberculosis and Malaria on Wednesday suspended funds granted to Uganda due to "evidence of serious mismanagement" in distributing the funds.

"The Global Fund has decided to suspend its five grants to Uganda because there is evidence of serious mismanagement by the Project Management Unit (PMU)," the Geneva-based agency said.

The suspension would initially last for two months during which it will ask the Ugandan authorities to set up a fresh system for handling funds that excluded the PMU.

So far Uganda has received some US$45 million out of US$201 million earmarked for the country by the fund over a two-year period.

Meanwhile, Ugandan Minister of Health Jim Muhwezi on Wednesday said that the fund has given Uganda until October 14 to present reforms for all grant-funded programs.

"We received the report yesterday and we said we would study it, make our own findings and reach solutions together," the minister was quoted by a report as saying.

He said the suspension would disrupt the country's hitherto successful anti-AIDS campaign, adding that "but we hope that we can be able to sort out what they want in a short time."

Uganda has been held up as an example to other African states after a government education campaign cut HIV/AIDS infection rates to around 7 percent from as high as 30 percent in the early 1990s.

The east African country is, however, still confronted with a serious HIV/AIDS epidemic and about 1.2 million of its people are living with HIV/AIDS.

(Xinhua News Agency August 25, 2005)