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FILE PHOTO: A South Sudanese refugee boy looks out of a transit tent at the Imvepi refugee settlement camp in Arua District, northern Uganda, August 22, 2017. REUTERS/Goran Tomasevic/File Photo

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By Elias Biryabarema

KAMPALA (Reuters) - Uganda is investigating allegations that its officials defrauded donors by inflating refugee numbers and diverting food aid, the prime minister's office said on Tuesday.

The East African country hosts more than 1 million people who fled war in neighbouring South Sudan and some 400,000 more from Burundi and Democratic Republic of Congo, a massive aid operation that whistleblowers said had become subject to fraud.

"The government took them (allegations from U.N. agencies) seriously and immediately instituted an investigation," Julius Mucunguzi, spokesman for the prime minister's office, which overseas refugee affairs, told Reuters.

The U.N. agencies have demanded from Uganda "a proper audit on the (refugee) numbers because the process for verification ... has not been robust enough."

"And related to that is food, so if the numbers are not right, how much food is going to who?" Mucunguzi said. "They want a value for money audit."

As refugee numbers surged since mid-2016, donors responded to urgent appeals for extra aid.

The European Union, a major donor, said the allegations had been forwarded to its own anti-fraud office for investigation.

"It is indeed of utmost importance to address swiftly and thoroughly any allegations of malfeasance in order not to impair ... public support from the European taxpayers," the EU delegation in Uganda said in a statement.

Corruption is widespread in Uganda and successful prosecutions are rare, with courts usually targeting low ranking officials.

Mucunguzi said although it was too early to say whether the allegations were true: "It's likely that there may be malice, and people wanting to tarnish a good programme."

(Reporting by Elias Biryabarema; Editing by Clement Uwingiyimana and Robin Pomeroy)

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Reuters