The provision of debt relief to HeavilyIndebted Poor Country (HIPCs) commencing in the late 1990s,and the growing interest among donors in providing directbudget support, increased donor focus on national budgetsystems. Given that debt relief and aid resources arefungible, donors were concerned that such debt relief beverifiably used to benefit the poor in the recipientcountry. In effect, the World Bank and the InternationalMonetary Fund (IMF), acting on behalf of donors, asked thatHIPC governments put in place systems to track the use ofresources freed up by debt relief and show that these werein fact used to finance pro-poor programs. This requiredgovernments to have the capacity to identify policies andprograms that would benefit the poor and to effectivelychannel and track resources to such programs. This noteconsiders the Uganda Virtual Poverty Fund (VPF) tounderstand how well it served to allocate resources topro-poor programs and what weaknesses were observed that mayneed to be corrected as other countries employ mechanismssimilar to the VPF.