A grant of $51m (sh137b) meant to support the distribution of mosquito nets in Uganda has been mismanaged, according to the Global Fund.

The grant from the Geneva-based donors to fight AIDS, malaria and tuberculosis provided the funds for the procurement and distribution of over seven million insecticide-treated nets to pregnant women and mothers with children under the age of five.

The organisation, said that it told the Ministry of Finance, the principal recipient, to discontinue the transfer of funds meant for the programme to personal bank accounts.

The director of Criminal Intelligence and Investigations Department, Grace Akullo, on Dec 3 confirmed that investigations were ongoing.

"We have started investigations on the mismanagement of the malaria funds and other Global Fund programmes," she said

Okullo's statement follows a review of malaria funding by PriceWaterhouseCoopers Limited Uganda commissioned by the Global Fund.

As a result of the audit findings, the Global Fund has asked the government to immediately follow up accountability of funds amounting to about $500,000(sh1.4b). The Global Fund has also asked PriceWaterhouseCoopers to further expand its review.

The Global Fund and Uganda's Ministry of Health have come up with a solution of implementing a plan to safeguard fund disbursements in the country according to the Global Fund Observer newsletter.

The Fund said options to strengthen financial oversight and management to mitigate the risk of fraud were also being discussed.

This is the second time the Global Fund is raising a red flag on Uganda.

The organisation has also warned Uganda that "it will seek a refund of all improper payments" related to the $51m (sh132b) grant and will insist on appropriate disciplinary action against anyone found involved.