An official with the Global Fund to Fight AIDS, Tuberculosis and Malaria said that its has been forced to cease giving new grants until 2014 because of global economic woes brought on by debt crises in the U.S. and Europe.
An independent panel recommended in September that the fund must adopt tougher financial safeguards after it weathered a storm of criticism and doubts among some of its biggest donors.
The fund created the panel - chaired by former U.S. Health and Human Services Secretary Michael Leavitt and ex Botswana President Festus Mogae - in March to address concern among donors after Associated Press articles in January about the loss of tens of millions of dollars in grant money because of mismanagement and alleged fraud.
The Geneva-based fund was set up in 2002 as a new way to coordinate world efforts against the diseases and to speed up emergency funds from wealthy nations and donors to the places hardest hit. Outside of its donor nations and celebrity backers, the biggest private donor is the Bill & Melinda Gates Foundation that has pledged $1.15 billion and provided it with $650 million so far.
Since its creation, the fund, which is strictly a financing tool, has disbursed some $15 billion for programs - $2.8 billion this year alone, including to pay for treatment for around half the developing world's AIDS sufferers.
With donations now harder to come by, the fund says it can only afford to keep existing AIDS programs going, but not expand its services or add new patients