The ripples of the financial scandal at the office of the Prime minister have started to get felt in northern Uganda, the biggest beneficiary of the mismanaged donor-funded Peace, Recovery and Development programme (PRDP).

District leaders in Acholi sub-region have challenged the government to recover all PRDP money stolen three weeks. They also want to know the fate of the ongoing PRDP projects in the region now that donors have cancelled their funding.

The chairmen told a news conference on Friday that corruption was inhuman; they threatened to declare that the government lacks the goodwill to help the people who are recovering from the scar of 20 years of a brutal rebellion involving the Lord's Resistance Army rebels. Local authorities, they said, were being threatened with legal action by contractors who have completed their projects but have not been paid.

"In the financial year 2010/2011 we had a shortfall of Shs 99m, which we are supposed to pay to contractors; we cannot do this because the money is not there," Nwoya Chairman Patrick Okello Oryema told a press conference at the Northern Uganda Media Club.

"The revenue base of the district is really very low, we cannot use the locally-raised revenue to pay contractors and contractors have continued to petition the district, as we talk now, some contractors want to drag us to court."

Kitgum boss Luka Nyeko said the district planned to open up roads, construct classrooms, build health units and pay school fees for the unprivileged children but in the face of the OPM scandal, that may not be possible.

"We started sponsoring six students every year in the university but all of the six students that we started with are currently at home because we only paid for one academic year," he said.

"When I went personally to the office of the prime minister, the permanent secretary told me, 'If you go on to pay for these students, you will equally be held liable'," Luka said.

Pader's Alfred Akena also said various plans to build maternity wards in health centres, build classrooms and buy school desks would have to be shelved. Gulu district chairperson Martin Ojara Mapenduzi said up to Shs1.2 billion of the budgeted Shs 5.6 billion was not released in the financial year 2010/2011 and there was no clear explanation given by the government.

"We wondered how such a huge amount is not released when it was approved by the office of the Prime Minister and the district council...," Mapenduzi said. "Donors should not stop helping the people affected by war, this will be double tragedy..." he said.

Key European donors; Denmark, Ireland, Norway, Sweden and, last week, Britain have suspended aid following the OPM scandal, where as much as Shs 50 billion is unaccounted for. Prime Minister Amama Mbabazi was quoted by British media as admitting that donor-funded projects would suffer because of the aid cuts.