Medical Access Uganda Limited Generally Managed the President's Emergency Plan for AIDS Relief Funds in Accordance With Award Requirements

The President's Emergency Plan for AIDS Relief (PEPFAR) was authorized to receive $48 billion in funding for the 5-year period beginning October 1, 2008, to assist foreign countries in combating HIV/AIDS, tuberculosis, and malaria. Additional funds were authorized to be appropriated through 2018.

The act that implemented PEPFAR requires the Department of Health and Human Services (HHS), Office of Inspector General, among others, to provide oversight of PEPFAR. To meet this requirement, we have conducted a series of audits of organizations receiving PEPFAR funds from HHS, Centers for Disease Control and Prevention (CDC). We selected Medical Access Uganda Limited (Medical Access) for review.

Medical Access managed PEPFAR funds in accordance with award requirements except that it used these funds to pay $751,000 in value-added tax (VAT) that the Ugandan Government has not reimbursed. This payment of VAT and lack of reimbursement occurred because of a disagreement over the interpretation of a provision of a bilateral agreement in effect between the United States and the Government of Uganda. CDC believed that grantees were exempt from the payment of VAT and that the exemption would occur through reimbursement. However, the Government of Uganda recognized only State Department purchases as exempt or reimbursable of VAT under the bilateral agreement.

We recommended that Medical Access work with CDC to obtain $751,000 in VAT reimbursement from the Ugandan Government. Medical Access officials concurred with our recommendation and described the corrective actions they had taken or planned to take to address it.