THE Government has suspended millions of euro in direct aid to the Ugandan government after €4m in Irish aid funding ended up in an unauthorised account of the office of the country's prime minister, Patrick Amama Mbabazi.
Up to €16m worth of Irish assistance channelled through the government of Uganda for health and education programmes has been put on hold.
A three-member team of Irish officials led by the Department of Foreign Affairs own evaluation and audit unit has also travelled to Kampala to investigate the fraud allegations.
Tanaiste and Foreign Affairs Minister Eamon Gilmore described the apparent misappropriation of funds as "intolerable" and has instructed Ireland's ambassador in Kampala, Anne Webster, to voice government concerns and Irish insistence that the funds are restored "without delay".
A further €15m in Irish aid, which is given directly to relief agencies "working on the ground", is not affected by the government move.
It is the second time in recent years that concerns have been raised about aid funding to Uganda after a leaked US embassy cable revealed that an Irish-funded AIDS prevention project was at the centre of a major corruption scandal.
A cable, sent from the US embassy in Kampala in August 2009, found that complaints of corruption at the UAC surfaced throughout the previous year.
Details of the latest probe emerged following a special investigation by Uganda's own spending watchdog, the auditor general, into the handling of aid funds by the office of the country's prime minister.
The auditor's draft report found "significant financial mismanagement"of the country's Peace Recovery and Development Programme which was set up to rebuild the northern Ugandan region after decades of conflict and which was supported by Ireland and other donors.
Up to €4m of Irish aid donated last year, along with funds from three other countries, was transferred "to an unauthorised account of the office of the prime minister", it said.
"I am deeply concerned by what I have learned today of the findings of the investigation by the Auditor General of Uganda into the management of aid funds," Mr Gilmore said.
At this stage "it seems clear" that funding provided by Ireland, Norway, Sweden and Denmark last year for the rebuilding of northern Uganda was transferred to unauthorised accounts in the Office of the Prime Minister, added Mr Gilmore.
"Pending the satisfactory resolution of this matter, I have instructed that no further aid funding should be provided through Ugandan government systems," he said.
According to the office of the prime minister's official website, Mr Mbabazi (63) played a fundamental role in drafting the 1995 Uganda constitution and successfully negotiated the signing of the Lusaka Ceasefire Agreement that ended the Second Congo War in 2003.
Irish aid agencies welcomed the government move. Trocaire said Irish Aid had made the right decision to suspend funding of the programme.
A spokesman said: "We work with local organisations in northern Uganda to tackle corruption and monitor government spending and we can reassure the Irish public that there is no concern over Trocaire funds in the region."