Uganda's auditor general has accused the office of Amama Mbabazi, the country's prime minister, of fraud.
According to the Norwegian ministry of Foreign Affairs, Euro 10 million in aid intended for reconstruction efforts in northern Uganda has been misappropriated.
"This amounts to no less than stealing from the impoverished people of northern Uganda who have been subjected to conflict and misrule for years. We have a policy of zero tolerance for corruption and other misuse of funds, and we intend to get to the bottom of this," said Norway's minister of International Development Heikki Holmås.
The UK, Norway, Sweden, Ireland and Denmark have provided a Euro 20.77 million for reconstruction efforts in northern Uganda. The report from the auditor general suggests "widespread irregularities and fraud" involving Euro 10 million of which Euro 3.6 million provided by Norway has been "misused".
"We are now carrying out a full investigation into the extent of the fraud. Together with other donor countries, we will make sure that we have all the facts on the table. When we have a more accurate picture of what has happened and how it could have happened, we will decide on an appropriate response. Funds that cannot be accounted for or funds reported as misused must be returned," Holmås declared.
Norway says it withdrew funds for reconstruction in 2011 and general budget support for Uganda in 2010 because of the country's "failure to adequately follow up cases of corruption".