Funds mismanagement forces Red Cross into financial crisis
Uganda Red Cross Mbale branch has had to scale back most of its activities in order to cope with a dramatic funding crisis that came as a result of a cut in financial support by donors.
According to the Red Cross Mbale district chairman Samuel Wabilo, the organization faced challenges in its routine activities such as mobilizing for blood donation and responding to natural disasters.
Red Cross Mbale’s General Treasurer Geoffrey Nambafu told the organization’s Annual General Meeting held in Mbale town over the weekend that the organization suffered more than a 50% drop in donor funding from UGX209m to UGX100.
Nambafu attributed the dramatic fall in donor support to diversion of funds to other projects other than those agreed to by the donors when they are sending the money.
“This problem is due to misappropriate handling of resources because the donors want to see their funds doing purposeful work. If they don’t see [that happening] that’s why they are reducing,” Nambafu said adding that the fall in funding could be a result of donor fatigue associated with funding of same projects every year.
Samuel Wabilo, the Chairman of the Governing Board of Red Cross Mbale told The Sunrise that donors were sending money with conditions attached but management would divert it to other purposes, which angered them.
“The headquarters used to send us salaries of employees but they recently told us to begin collecting it locally, yet this is where we spend most of the income,” he said.
Wabilo further noted that the corruption scandal that rocked the headquarters of Red Cross a few years ago, forced some of the funders to quit, which had an adverse impact on the activities of branches including Mbale.
As a result of the funding shortfall, Wabilo noted that Mbale Red Cross was forced to mobilize funds locally as a way to reduce the impact of donor fatigue.
The 2017 financial report reveals that Mbale Red Cross collected UGX77m locally, a slight improvement from previous years; UGX60m in 2016, and UGX59m in 2015.
Despite the improvement in local revenues, the branch has had challenges paying salaries of its workers. As a result, they’ve had to fall back on donor funding, meant for projects in order to meet the UGX81m annual wage bill.
Chairman Wabilo however expressed optimism that they said that the society hopes to reduce reliance on donors when they complete their Disaster Management Centre, a building they hope to rent out and collect about UGX100m every year.
“We have assets like houses which we rent and get money in Maluku,here in town among others. We also get money through subscription of members,” Wabilo said.