Global Fund Observer

NEWSLETTER

Issue 231: 11 November 2013

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CONTENTS OF THIS ISSUE:

Editor’s Note: (1) Several of the articles in this issue relate to the allocation methodology for the new funding model. Readers may wish to consult a new Aidspan paper, “The NFM Allocation Methodology Explained,” which is available on the Aidspan website here. (2) This has been a busy period for news about the Global Fund. In addition to the Board meeting just concluded, and the many papers prepared for that meeting, there has been news about the NFM-related decisions taken by the Strategy, Investment and Impact Committee, the Fourth Replenishment and the latest wave of funding decisions taken by the Board through electronic voting. There was not enough space to cover all of these stories in this issue of the newsletter. We invite readers to consult the “Also Available on GFO Live” section at the end of the newsletter for links to articles on these other stories.

1. NEWS: Main Decisions Made at Board Meeting

This article provides a summary of the main decisions made by the Global Fund Board at its 30th meeting in Geneva on 7–8 November 2013.

2. NEWS: Revised Eligibility Policy Retains the Main Elements of the Old Policy

The revised eligibility policy adopted by the Global Fund Board retains most of the main elements of the old policy. However, under the revised policy, countries that become newly ineligible will benefit from a new transition provision. Further work will be done on the transition modalities.

3. NEWS: SIIC Approves Parameters for the Allocation Formula for 2014–2016

The Strategy, Investment and Impact Committee has determined the indicators for disease burden and ability to pay; the methodology for establishing Band 4 allocations; and maximum and minimum shares for apportioning indicative funding to countries.

4. NEWS: SIIC Takes Decisions on Incentive Funding and Other NFM Matters

The Strategy, Investment and Impact Committee has made decisions in four areas related to the new funding model: awarding of incentive funding, managing unfunded quality demand, health systems strengthening and TB/HIV collaboration.

5. NEWS: Large Influx of NFM Applications Expected in 2014

The Secretariat expects that about half of all applications for the 2014–2016 allocation period will be submitted in 2014.

6. NEWS: Corporate KPI Framework Is Approved

The Board has approved a revised edition of the Global Fund’s Corporate Key Performance Indicator Framework (2014–2016), which has 16 indicators. This edition of the KPI Framework reflects extensive consultations with Board committees and donor and implementer constituencies.

7. NEWS: Global Fund Releases Report on Losses and Recoveries

Twenty percent of the $118 million in losses identified by the Office of the Inspector General has been recovered so far, according to a report released by the Global Fund. The Secretariat is continuing to develop policies and guidelines on the recovery process.

8. NEWS: Replenishment Roundup

This article reports on recent developments concerning the Fourth Replenishment.

See section near the end of this newsletter listing additional articles available on GFO Live.

ARTICLES:

1. NEWS: Main Decisions Made at Board Meeting

On 7–8 November 2013, the Global Fund Board held its 30th meeting in Geneva, Switzerland. GFO was present, with observer status. The main decisions made at the meeting, in chronological order, were as follows. (For precise wording of what the Board agreed, see the decision points document that has been posted here. Background documentation will also, in time, be posted by the Global Fund at the same location.)

Revised whistleblowing policy. The Board approved revised Whistle-Blowing Policy and Procedures. The revised policy contains measures to enhance the protection of whistle-blowers against retaliation. In addition, an item has been added to the list of examples of misconduct that should be reported: violations of human rights in relation to Global Fund–supported programmes. [See Decision Point 4.] See also separate GFO article here.

Revised eligibility criteria. The Board approved a new Eligibility and Counterpart Financing Policy to replace the old Eligibility, Counterpart Financing and Prioritization Policy. In addition to removing the section on prioritisation, which is no longer relevant under the new funding model, the most significant modifications have to do with countries becoming newly eligible or newly ineligible as a result of changes in income level or disease burden. The Board also decided that the Strategy, Investment and Impact Committee will initiate a process that will produce, by the end of 2014, options and recommendations for refining the Global Fund’s approach to transitioning countries. (“Transitioning countries” refers to countries that become newly ineligible.) The Board further decided that this approach will include consideration of public health indicators to measure progress in sustaining and enhancing gains against the three diseases. [See Decision Point 5.] See also Article 2 in this issue.

Operating expenses budget. The Board delegated to the Finance and Operational Performance Committee the authority to approve an operating expense budget for the first quarter of 2014, with the proviso that this budget will not exceed the amount of the first quarter budget for 2013 ($77.4 million). The full 2014 operating expenses budget will be presented to the Board at its next meeting in February 2014. [See Decision Point 6.]

Key Performance indicators. The Board approved revised corporate key performance indicators for 2014–2016. There are 16 indicators in all, covering operational performance, grant performance, systems effects and impact. Acknowledging that further work is required to extend the scope of certain indicators, the Board decided that the Secretariat will submit indicator revisions for approval by the Board, and that a complete KPI framework, including baselines for each measure, will be finalised by June 2014, subject to certain exceptions. In addition, the Board decided that indicator results should be complemented by sex and age disaggregated data where feasible. [See Decision Point 7.] See also Article 6 in this issue.

Committee leadership. The Board approved the following appointments for two-year terms, effective 1 March 2014 – As Chair and Vice-Chair, respectively, of the Finance and Operational Performance Committee: Soltan Mammadov (Eastern Europe and Central Asia constituency) and Jason Lawrence (US constituency); as Chair and Vice-Chair, respectively, of the Strategy, Investment and Impact Committee: David Stevenson (Canada/Switzerland constituency) and Anita Asiimwe (Eastern and Southern Africa constituency); and as Vice-Chair of the Audit and Ethics Committee (AEC): Claude Rubinowicz (France constituency). [See Decision Point 8.]

[This article was first posted on GFO Live on 10 November 2013.]

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2. NEWS: Revised Eligibility Policy Retains the Main Elements of the Old Policy

Countries that become newly ineligible will benefit from transition provision

NGO rule is retained

The Global Fund has adopted a revised Eligibility and Counterpart Financing Policy to replace the old Eligibility, Counterpart Financing and Prioritization Policy. Aside from the fact that the prioritisation section of the policy was dropped – it is no longer relevant in the context of the new funding model (NFM) – the revisions were not particularly extensive.

The revised policy was recommended by the Strategy, Investment and Impact Committee (SIIC).

There were no changes to the main eligibility requirements. High-income countries still cannot apply for funding directly. Lower-middle-income (LMI) and upper-middle-income (UMI) countries still have to meet the same focus of proposal and disease burden requirements. CCM applicants still have to meet certain requirements. There are still limits on the amounts of funding some UMI countries can receive. And the counterpart financing requirements remain the same.

This article provides information on what has changed under the revised policy.

Changes in eligibility status

Newly ineligible

Under the revised policy, eligibility will continue to be determined on an annual basis even though allocation periods last for three years.

Countries that suddenly become ineligible for a given component, because of changes in income level or disease burden, and that are implementing a grant for that component, will remain eligible to receive funding for that component for up to one allocation period immediately following the change in eligibility.

This transition measure is designed to ease the burden on, for example, a country that moves from the LMI classification to UMI and does not have the high, severe or extreme disease burden necessary to maintain eligibility for that disease.

There are limitations to the transition measure. The Global Fund Secretariat will determine the appropriate amount and period of funding based on the country context and other considerations, such as whether there is sufficient time left in the existing grant (e.g. more than 12 months after becoming ineligible) to allow for a clear transition to other sources of funding. The Secretariat may decide to limit the scope of the funding (e.g. fund only activities deemed essential). The Secretariat may require that that the country develop appropriate and measureable time-bound actions for transition to national or other non–Global Fund resources.

Under the revised policy, countries that have become newly ineligible in the middle of an allocation period, and that have not yet touched their funding, will still be able to access the funding. However, the Global Fund said, the Secretariat would discuss with the country what is considered an appropriate level of funding and would establish clear time-bound actions for an eventual and sustainable transition to other sources of funding.

There was considerable discussion before and at the Board meeting about the transition provisions. In a joint statement released just prior to the Board meeting, 67 civil society organisations from 24 countries argued that the transition provisions should be more generous in recognition of the challenges faced by, in particular, middle-income countries with high disease burdens. At the Board meeting itself, there were several side meetings in an attempt to work out a compromise. In the end, the Board decided that the SIIC would initiate a process that will produce, by the end of 2014, options and recommendations for refining the Global Fund’s approach to transitioning countries. The Board further decided that this approach will include consideration of public health indicators to measure progress in sustaining and enhancing gains against the three diseases.

Newly eligible

The revised policy states that if a country appears on the annual eligibility list after not having been on the list previously, the country will not be considered to be “newly eligible” until it has maintained its eligibility for two consecutive years.

If there is a need to allocate money to a newly eligible country in the middle of an allocation period, the money must come from the existing allocation for the relevant band.

The NGO rule

Under the revised policy, the “NGO rule” for HIV is maintained. The transition measure described above for components that become newly ineligible also applies to countries funded for HIV under the NGO rule.

The NGO rule was introduced in May 2011, the last time the eligibility policies were modified. Before that, unless UMI countries were on the OECD-DAC List of ODA Recipients, they were ineligible for funding for HIV. (OECD = Organisation for Economic Cooperation and Development; DAC = Development Assistance Committee; ODA = official development assistance.) Under the NGO rule, such countries could still apply providing the application came from an NGO (and providing the countries met all other eligibility requirements, including disease burden).

Since the NGO rule was adopted, two NGO applications from the Russian Federation benefited from the rule (both under the Transitional Funding Mechanism). According to the Global Fund, based on the 2013 eligibility list, five UMI countries – Bulgaria, Latvia, Lithuania, Romania and the Russian Federation – were technically eligible to apply under the NGO rule in 2013.

In 2013, the Russian Federation was reclassified as high income by the World Bank. Therefore, under the old eligibility policy, the Russian Federation would not be eligible to apply for funding for any disease in 2014. However, based on the NGO rule and the transition measure in the revised policy, the Russian Federation will remain eligible to apply for HIV in 2014. Latvia and Lithuania were also reclassified as high income by the World Bank in 2013. Both countries will not be eligible to apply for funding for any disease, including HIV, in 2014 because they do not currently receive funding for HIV.

Under the revised policy, and using the NGO rule, Bulgaria and Romania will continue to be eligible to apply for HIV if they continue to demonstrate a high, severe or extreme HIV burden. However, the Global Fund said, Bulgaria and Romania will only be able to access funding for HIV if they can demonstrate that there are political barriers to providing key services (one of the criteria under the NGO rule).

Regional proposals

The revised policy retains the provision that for a regional applicant to be eligible for funding, the majority of countries included in the application must be eligible to submit a request for funding for the same disease as a single-country applicant. However, the revised policy states that high-income countries cannot receive funding directly from the Global Fund except in limited circumstances as determined by the Secretariat. Under the old policy, high-income countries that were part of a regional proposal could be funded directly from a regional grant.

The revised policy also states that UMI countries that are not eligible to apply as a single-country applicant and that are part of a regional proposal also cannot receive direct funding from the Global Fund except in limited circumstances as determined by the Secretariat.

Other changes

The revised policy incorporates decisions of the Global Fund Board that affect eligibility and that were made subsequent to May 2011 when the old policy was adopted. One example of this is the decision to remove the one-year grace period for changes in a country’s income classification. Another example was the decision to apply some parts of the eligibility policy to grant renewals.

The revised policy includes a number of housekeeping changes to reflect the fact that the NFM works differently than the rounds-based funding. For example, references to the general and targeted funding pools have been removed because they are no longer relevant under the NFM.

Under the revised policy, decisions on compliance with the counterpart financing requirements will be made by the Secretariat, instead of the Technical Review Panel (as at present). There were no other changes made to the counterpart financing requirements.

The revised policy states that countries that are certified as malaria-free by the World Health Organization (WHO), or that are on a WHO list of countries where malaria never existed or had disappeared, will not be eligible for funding for malaria from the Global Fund. None of these countries has ever applied for malaria funding. But the policy had to be amended because otherwise, under the NFM allocation methodology, these countries would have been entitled to some money for malaria.

Under the revised policy, with respect to small islands or other small countries with total populations of less than one million, the Secretariat may require applications from a common geographical, economic grouping with similar epidemiology in order to facilitate more effective programme management.

Information for this article was taken from Board Decision 5 and Board Document GF-B30-06, “New Funding Model: Eligibility, Counterpart Financing and Prioritization Policy Revision.” Document GF-B30-06 contains the full text of the revised Eligibility and Counterpart Financing Policy. The document containing the decisions from the 30th Board meeting is available at www.theglobalfund.org/en/board/meetings/thirtieth. Document GF-B30-06 should be available shortly on that same site.

[This article was first posted on GFO Live on 9 November 2013.]

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3. NEWS: SIIC Approves Parameters for the Allocation Formula for 2014–2016

Disease burden indicators finalized

Band 4 methodology determined

The Strategy, Investment and Impact Committee (SIIC) has determined the parameters to be used for the allocations formula for 2014–2016. The SIIC approved indicators for disease burden and ability to pay; the methodology for determining Band 4 allocations; and maximum and minimum shares for apportioning indicative funding. This article provides details.

Editor’s Note: The allocation methodology under the new funding model is quite complicated. It is difficult to understand the decisions of the SIIC that are described in this article without knowing how the entire allocations methodology will work. For this reason, Aidspan has prepared a paper entitled “The NFM Allocation Methodology Explained.” The paper is available on the Aidspan website here.)

Indicators for disease burden and ability to pay

The SIIC approved the indicators to be used to calculate disease burden and ability to pay in the allocations formula. See Table 1 for the list of disease burden indicators.

Table 1: Disease burden indicators

Disease Indicators Notes HIV No. of people living with HIV Based on data from 2012 or most recent year. TB No. of HIV-negative incident cases Based on data from 2012. Assumes that + 1.2 * No. of HIV-positive TB incident cases the entire budget for antiretrovirals for + 8 * estimated MDR-TB incidence HIV-positive TB patients is included in + 0.1 * 50% of estimated no. of people with the budget for HIV components. known HIV-positive status Malaria No. of cases Based on data from 2000, indicators + No. of deaths normalised. + 0.05 * incidence rate + 0.05 * mortality rate

The HIV disease burden indicator is unchanged from the one used in the transition phase. The TB and malaria disease burden indicators, however, have been revised slightly.

Applying the disease burden indicators produces a score for each disease.

Figure 1: Ability to pay indicator

The indicator for ability to pay is unchanged from the one used for the transition phase. In the allocations formula, the ability to pay indicator is expressed as a factor by which the disease burden score is multiplied: 0.95 for low-income countries; between 0.95 and 0.4 (sliding scale) for lower- middle-income countries; and between 0.4 and 0.2 (sliding scale) for upper-middle-income countries. This is illustrated in Figure 1, taken from SIIC Document GF-SIIC09-08.

The allocations formula is described in Figure 2, taken from a paper prepared for the SIIC in October 2012.

Figure 2: Income/burden formula for calculating notional country shares

Band 4 methodology

Under the Band 4 methodology approved by the SIIC, indicative funding ceilings are based on population size. The same methodology was used for the transition period. For 2014–2016, however, an additional population size category (fewer than 500,000) has been added to better reflect the range of population sizes in the countries covered by Band 4. The Band 4 methodology is described in Table 2.

Table 2: Band 4 methodology

Population Indicative funding ceiling per disease Fewer than 500,000 No more than $X million Between 500,000 and 1 million No more than 2 * $X million Between 1 million and 5 million No more than 4 * $X million Between 5 million and 10 million No more than 8 * $X million Over 10 million No more than 10 * $X million

The amount represented by “X” in the table cannot be determined until the overall level of resources for 2014–2016 is known and the proportion to be set aside for Band 4 is determined. This proportion was 7% in the transition phase. The proportion for 2014–2016 will not be determined until the composition of the bands is established and the allocations to the bands are made. “X” will be set such that the total allocation for all countries in Band 4 does not exceed the amount of funding allocated to Band 4.

Maximum and minimum shares

As it did for the transition period, the Global Fund has set maximum and minimum shares governing the amount of funding that a country can receive. The parameters for 2014–2016 are the same as those used for the transition.

The maximum share that any one country can receive is 7.5% of the total allocated to countries. In addition, for a given disease a country cannot receive more than 10% of the total allocated for that disease.

For countries in Bands 1–3, the minimum share is the greater of (a) the minimum required level and (b) the amount the country would receive by applying the Band 4 methodology. “Minimum required level,” also referred to “graduated reductions,” is explained in a GFO article here.

Information for this article was taken from Board Document GF-B30-11, “Strategy, Investment and Impact Committee Decisions and Recommendations to the Board; and SIIC Document GF-SIIC09- 08, “Allocation Formula Parameters for the 2014–2016 Allocation Period.” Document GF-B30-11 should be available shortly at www.theglobalfund.org/en/board/meetings/thirtieth. Document GF- SIIC09-08 is not available on the Global Fund website.

See also the next article in this issue.

[This article was first posted on GFO Live on 8 November 2013.]

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4. NEWS: SIIC Takes Decisions on Incentive Funding and Other NFM Matters

Funding requests in the unfunded quality demand register may stay in the register for up to three years

At its meeting on 8–9 October, the Strategy, Investment and Impact Committee (SIIC) made decisions in four areas related to the new funding model (NFM): awarding of incentive funding, managing unfunded quality demand, health systems strengthening and TB/HIV collaboration. This article provides details.

Awarding of incentive funding

Earlier this year, the Global Fund Board decided that for 2014–2016 Band 4 countries will not be eligible for incentive funding. It also determined the proportion of the allocation for Bands 1–3 that will be reserved for incentive funding (see GFO article). The proportion will depend on how much money is available, as follows:

 If the allocation is $11 billion or less, the proportion will be 10%.

 If the allocation is over $11 billion and up to $13.5 billion, the proportion will be 15%.

 If the allocation is over $13.5 billion, the proportion will be 20%.

The SIIC made several decisions concerning the awarding of incentive funding. The SIIC decided that components that are “over-allocated” by more than 50%, even after applying a graduated reduction, will not be eligible for incentive funding. “Over-allocated” refers to components that will receive more funding than what the allocation formula provides. (“Over allocated” and “graduated reduction” are explained in an Aidspan paper, “The New Funding Model Allocation Methodology Explained,” available here; and in a GFO article here.)

The SIIC also decided that the amount of incentive funding available will be apportioned proportionately across each review window and, within each window, by country band according to the proportion of indicative funding for disease components eligible to receive incentive funding.

This is best explained by an example. Allocation periods last for three years. The Global Fund expects that there will be about four review windows each year – i.e. four times each year when the Technical Review Panel (TRP) will review proposals. Say, for example, that $1.5 billion is available for incentive funding for 2014–2016. If a given window is reviewing disease components eligible for incentive funding whose total indicative funding ceilings represent 10% of the total indicative funding allocated to all disease components eligible for incentive funding in 2014–2016, then 10% of the $1.5 billion for incentive funding – $150 million – will be apportioned to that review window. Then, the $150 million will be split among each of Bands 1–3 based on the proportion of indicative funding awarded to each band.

In addition, the SIIC decided that if there is any unused incentive funding left over for a particular band after all awards have been made for that band in a given review window, then the leftover funds may be apportioned to the same band in a subsequent review window and added to the resources for financing unfunded quality demand (UQD) when the resources available for UQD are determined. [Emphasis added]

Editor’s Note: The “and” that is bolded and underscored in the above paragraph is confusing. How can unused incentive funding be handled in two different ways? But that is the way the SIIC decision is worded. Based on the contents of a paper prepared for the SIIC, Aidspan believes that the intent is to apportion leftover incentive funding to subsequent review period in the same year; but to apportion any incentive funding still left over at the end of the year to the UQD register. It is at the end of the year that the amount of resources for the UQD register is determined.

Managing unfunded quality demand

In 2012, the Global Fund Board decided that funding requests which are above the amount that can be financed by indicative and incentive funding, and which the TRP recommends as technically sound and strategically focused, will be added to a register of unfunded quality demand (UQD). The idea is that some of the UQD could be funded as more resources become available. The Board also decided that all UQD funding requests will be prioritised.

Earlier this year, the Board decided that additional resources that become available during the allocation period – including supplementary contributions from donors as well as accelerations in graduated reductions – will be used to fund the UQD; and that all bands will be eligible for funding from this register.

The SIIC made several decisions regarding the management of the UQD register. The SIIC decided that when funding requests are added to the register, they will remain in the register for up to three years. The SIIC also decided that funding requests in register may be financed by Global Fund resources or other sources.

In addition, the SIIC decided that funding requests in the register for disease components that receive funding at levels below their notional shares under the allocation formula will receive higher priority than funding requests for disease components that receive funding at levels above their notional shares. (This is another reference to over-allocated components, which is explained in an Aidspan paper, “The New Funding Model Allocation Methodology Explained,” available here; and in a GFO article here. Because some components will be over-allocated compared to what the allocation formula says they should receive, other components, by necessity, will be under-allocated.)

The SIIC also decided that the amount of resources available to finance UQD will be determined by the Secretariat based on an annual financial assessment, and will be endorsed by the Finance and Operational Performance Committee. The resources will be awarded across the entire grant portfolio based on the priority of funding requests in the register. This means that countries in all four bands will be eligible for UQD resources and that the resources will not be split initially among individual bands.

Further, the SIIC decided that funding requests in the register will be prioritised based on recommendations from the TRP and confirmed by the Secretariat.

Finally, the SIIC decided that the Secretariat will engage the TRP, as appropriate, to validate the continued technical soundness and strategic focus of funding requests in the register over the course of an allocation period.

Health systems strengthening

In the past, countries were given limited guidance concerning what would be considered eligible for funding under “health systems strengthening” (HSS). The SIIC decided that under the new funding model, HSS funding will focus on four specific functions of health systems: procurement and supply chain management, health management information systems, human resources for health, and service delivery.

Countries will be expected to undertake an analysis of their health system bottlenecks and to use this as the basis for prioritising their HSS funding requests.

TB/HIV collaboration

The SIIC decided that countries with high co-infection rates of TB and HIV shall submit a single concept note that presents integrated and joint programming for the two diseases, unless the Secretariat determines that extraordinary circumstances warrant separate concept note submissions; and that the Secretariat will facilitate the development these concept notes through the country dialogue process. (See GFO article on this topic here.)

Information for this article was taken from Board Document GF-B30-11, “Strategy, Investment and Impact Committee Decisions and Recommendations to the Board”; SIIC Document GF-SIIC09-06, “Management of Incentive Funding and Unfunded Quality Demand”; and SIIC Document GF- SIIC09-03, “Optimizing Global Fund Investments in Health Systems Strengthening.” Document GF- B30-11 should be available shortly at www.theglobalfund.org/en/board/meetings/thirtieth. Documents GF-SIIC09-03 and GF-SIIC09-06 are not available on the Global Fund website.

See also the previous article in this issue.

[This article was first posted on GFO Live on 11 November 2013.]

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5. NEWS: Large Influx of NFM Applications Expected in 2014

The Global Fund is expecting a rush of applications in 2014 for the full roll-out of the new funding model. In his report for the Board meeting held on 7–8 November, Executive Director Mark Dybul said that in 2014 the Secretariat expects to sign grants for about half of the disease components for the entire 2014–2016 allocation period.

The Secretariat is gearing up to handle the additional workload. It is seconding some staff from partner organisations, and creating what it calls “temporary surge teams.”

In addition, eight different training modules for Secretariat staff are being rolled out. These include modules on the country dialogue; counterpart financing; investing strategically; the concept note and modular templates; and grant making and implementation.

Dr Dybul said that the grant agreements for the first three early applicants – El Salvador, Myanmar and Zimbabwe – were signed within three weeks of Board approval of the funding. He added that the entire process, from announcement of the funding allocations to grant signing, took just over four months. Dr Dybul cautioned, however, that the Secretariat won’t likely be able to maintain this pace in 2014 when concept notes are submitted in large numbers.

Dr Dybul said that the Secretariat will sign agreements with partner organisations to provide technical support for stakeholders involved in the country dialogue and concept note development processes. “The scope of support currently under discussion includes priority issues such as sub- national and sub-population epidemiological information, reviewing national strategic plans and operationalizing new normative guidance.” He said. “ It will also involve support networks of key affected populations to ensure that those groups play a strong role in country dialogues.”

In his report, Dr Dybul said, “Implementation of the new funding model is the largest, most complex change process the Global Fund has ever undertaken, requiring not just new forms, policies and processes, but also quite significant shifts in our culture, and in what is required of all stakeholders, including implementers, partners and the Secretariat.”

Information for this article was taken from Board Document GF-B30-03, “Report of the Executive Director.” This document should be available shortly at www.theglobalfund.org/en/board/meetings/thirtieth. See additional articles on the ED report here and here. [This article was first posted on GFO Live on 9 November 2013.]

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6. NEWS: Corporate KPI Framework Is Approved

Mid-2013 results released

Following extensive consultations with Board committees and donor and implementer constituencies, the Global Board has approved a revised Corporate KPI Framework. The framework is designed to present indicators to measure the goals, targets and objectives of the Global Fund’s Strategy for 2012–2016. It was developed in response to a finding by an independent review that the existing KPI framework related more to the operational level than the strategic.

To help ensure that the revised KPI framework aligns with the Global Fund’s Strategy 2012–2016, the following five principles were used to guide the development of the framework:

 The indicators should measure the goals, objectives and targets of the Strategy.

 A clear hierarchy of indicators should be developed.

 Reduce the number of KPIs and increase their focus. (It was felt that the number of indicators in the framework [24] were too many and reflected a desire to satisfy many different interest groups. It was also felt that having too many indicators made it hard to focus on the most important ones.)

 Ensure that the indicators are visible and measureable.

 Set the framework for the lifetime of the Strategy.

While the previous KPI Framework (2011) had 24 indicators, the new one has only 16, although several of these are compound indicators with sub-indicators. A total of 32 independent measures are included in this framework, two of which are indices.

The main changes from the version presented at the 29th Board Meeting in June 2013 were that four new indicators were added, a number of revisions were made to several of the other indicators, and two indicators were dropped. (Readers who want to be able to determine what has changed since June should refer the GFO article on the paper presented to the Board at that time. The article provides a link to the relevant Board document.)

The framework provides an overview of each of the 16 indicators. It summarises how each indicator will be measured and the rationale for its selection, and it presents key issues relevant to how the indicators are interpreted.

Performance targets are given for eight indicators. For the remaining eight indicators, targets have yet to be proposed, or are proposed for only some measures within the indicator. For two of these indicators, targets will be set according to the results of the Global Fund’s Fourth Replenishment. The remaining six indicators are new areas of measurement for the Secretariat, so baseline performance will need to be assessed before targets can be set.

The Board directed the Secretariat to “complement indicator results with sex and age disaggregated data where feasible.” The Board also requested that the performance targets be reviewed regularly. The Board did not stipulate how regularly this was necessary.

The following table lists the revised corporate KPIs and the indicators to be used to track performance.

Table: List of proposed corporate KPIs, plus specific indicators

No. KPI Specific indicators 1 Performance against strategic a) Estimated number of lives saved goals b) Estimated number of infections prevented 2 Quality and coverage of a) ARV retention rate at 12 months services b) TB treatment success rate for all new cases c) Proportion of population at risk potentially covered by LLINs distributed d) Percentage of eligible adults and children currently receiving ART e) Percentage of HIV-positive pregnant women who received antiretrovirals to reduce the risk of mother-to-child transmission f) Percentage of HIV-positive TB patients given ART during TB treatment g) Number of countries with validated population size estimates for female sex workers, men who have sex with men and, where applicable, injecting drug users 3 Performance against strategic a) Number of people alive on ARV therapy service delivery targets b) Number of TB cases treated according to the DOTS approach c) Number of LLINs distributed d) Number of HIV-positive pregnant women who received antiretrovirals to reduce the risk of mother-to-child transmission e) Number of indoor residual spraying services delivered f) Number of cases with bacteriologically confirmed drug resistant TB treated with a second line regimen g) Number of people who received HIV testing and counselling and know their results 4 Efficiency of Global Fund Alignment between investment decisions and country “need”; with investment decisions need defined in terms of disease burden and ability to pay 5 Health system strengthening HIV, TB and malaria service availability and readiness rating 6 Alignment of supported Percentage of investments in countries where Global Fund support programs with national is reported on national disease strategy budgets systems 7 Access to funding a) Time from final concept note submission to Grant Approval Committee recommendation b) Time from Grant Approval Committee recommendation to grant signing c) Time from grant signing to first disbursement 8 NFM implementation Amount of grant expenses for the transition to the NFM committed (temporary KPI) to annual schedule of country demands 9 Effective operational risk Portfolio Risk Index management 10 Value for money Savings gained through leveraging of Global Fund purchasing power 11 Grant expenses forecast Percentage of forecast grant expenses made to schedule 12 Human rights protection Percentage of human rights complaints against Global Fund supported programs successfully identified through risk assessment tools; and resolved through Secretariat policies and procedures. 13 Resource mobilisation a) Actual pledges as percent of replenishment target (replenishment years only) b) Pledge conversion rate. Actual contributions as a percentage of forecast contributions 14 Domestic financing for AIDS, Percent of programs accessing funding where government TB and malaria contributions meet minimum counterpart financing thresholds. 15 Efficiency of grant Opex rate as a percent of grants under management benchmarked management operations against comparable organizations 16 Quality of management and Management and Leadership Index leadership

The reporting plan is that these Corporate KPIs will be integrated into a routine dashboard from the first quarter of 2014 onwards, as data become available. Most of the indicators will be monitored annually. The paper proposes that a progress report on KPIs be submitted to Board committees and the Board itself once year, starting in early 2015.

The draft framework of the Corporate KPIs was presented to the Board following extensive consultations and discussions with all constituencies prior to the Geneva meeting.

Information for this article was taken from Board Decision 7 and Board Document GF-B30-07, “The Global Fund Corporate Key Performance Indicator Framework for 2013–2016.” The document containing the decisions from the 30th Board meeting is available at www.theglobalfund.org/en/board/meetings/thirtieth. Document GF-B30-07 should be available shortly on that same site. An annex to this document provides a list of the KPIs in the framework adopted in 2011.

[This article was first posted on GFO Live on 8 November 2013.]

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7. NEWS: Global Fund Releases Report on Losses and Recoveries

Twenty percent of the $118 million in losses has been recovered to date

Policies and guidelines on the recovery process to be developed

As of 19 September 2013, $118 million in losses had been identified by the Office of the Inspector General (OIG), of which $23.8 million (20%) had been recovered. Written commitments to repay a further $10.4 million had been obtained.

This information was contained in a Losses and Recoveries Report prepared for the Global Fund Board meeting on 7–8 November in Geneva.

In all, there have been 44 cases where losses have been identified. The Global Fund said that nine of these cases had been fully resolved, and a further 10 partially resolved.

Of the 44 cases, 21 are either closed or in progress. In the other 23 cases, recovery efforts have not yet started. The Global Fund said that these 23 cases will be presented to the Recoveries Committee by the end of this year.

The 21 cases that are either closed or in progress represent losses of $77.3 million (as identified by the OIG). The Secretariat has adjusted this figure downwards by $13.2 million (17%). As explained below, adjustments are usually made as a result of additional documentation provided by the implementers. Another $1.0 million has been written off. No explanation was provided concerning on how decisions on write-offs were made.

The 23 cases for which recovery efforts have yet to begin represent losses of $40.4 million (as identified by the OIG).

Table 1 provides a summary of the losses and recoveries.

Table 1: Losses and recoveries – Summary (in thousands of dollars)

Category Amount Adjust- Deemed Written Recovered Commit- Balance of Loss ments recover- off ment to able repay Cases closed 10,269 -5,994 4,275 794 3,481 - 0 Cases in progress 67,053 -7,168 59,885 219 20,305 10,444 28,917 SUB-TOTALS 77,322 -13,162 64,160 1,013 23,786 10,444 28,917 Cases pending 40,372 TOTALS 117,694

Table 2 provides details on the nine cases that are closed. The largest amount deemed recoverable was $1,817,000 as a result of an audit in Haiti. A third of this amount, $660,000, was written off. Two countries – Tanzania and Ukraine – show nil amounts deemed recoverable because the original amounts of the losses were reduced to zero following adjustments made by the Secretariat. The report did not provide any explanation for the adjustments made for individual countries. Table 2: Cases closed (all amounts are in thousands of dollars)

Country OIG report Amount Adjust- Deemed Written Re- Commit- Bal- date of Loss ments recover- off covered ment to ance able repay Cambodia 2010-10 1,585 -198 1,387 - 1,387 - 0 Dom. 2011-10 175 - 175 - 175 - 0 Republic Haiti 2010-10 2,478 -661 1,817 660 1,157 - 0 Mozambique 2012-08 500 - 500 - 500 - 0 Philippines 2010-02 2,012 -1,757 255 - 255 - 0 Tajikistan 2013-02 7 - 7 - 7 - 0 Tanzania 2009-06 819 -819 - -- - - 0 Ukraine 2010-06 2,559 -2,559 - - - - 0 Zimbabwe 2009-06 134 - 134 134 - - 0 TOTALS 10,269 -5,994 4,275 794 3,481 - 0

Note: All of the cases in Table 2 were the result of audits.

Table 3 contains information on the 12 cases in progress. The largest amount deemed recoverable was $9,876,000 from an audit in Zambia, followed closely by $9,342,000 from an audit in Ghana, and $8,779,000 from an audit and an investigation in Nigeria. None of the outstanding amounts for Ghana and Nigeria has yet been recovered.

Table 3: Cases in progress (all amounts are in thousands of dollars)

Country OIG Amount Adjust- Deemed Written Recov- Commit- Bal- report of Loss ments recover- off ered ment to ance date able repay Cameroon 2010-10 5,603 -2,199 3,404 - 33 3,371 0 Ethiopia 2012-05 7,027 - 7,027 - 5,204 1,370 453 Ghana 2012-10 10,363 -1,021 9,342 - - - 9,342 India 2011-10 872 -525 347 81 266 - 0 Malawi 2012-08 3,995 - 3,995 - 1,438 1,876 681 Mali 2011-06 5,231 - 5,231 - 304 - 4,927 Mauritania 2012-03 6,748 -150 6,598 - 5,270 - 1,328 Nigeria 2011-10 8,779 - 8,779 - - - 8,779 Rep. of Congo 2013-05 3,656 -1,241 2,415 - 173 2,242 0 Swaziland 2011-10 2,408 -1,137 1,271 138 - 1,133 0 Uganda 2010-02 1,600 - 1,600 - 520 452 628 Zambia 2010-10 10,771 -895 9,876 - 7,097 - 2,779 TOTALS 67,053 -7,168 59,885 219 20,305 10,444 28,917 Note: All of the cases in Table 3 were the result of audits, except India, Mali and Mauritania, which involved investigations; and Nigeria, which involved both an audit and an investigation.

Table 4 provides information on the cases where recovery efforts are not yet underway. The largest amount of loss was $8,915,000 from an audit and investigation in Djibouti. Four of the cases stem from audits for which reports were issued as far back as 2011.

Table 4: Cases pending (where recovery efforts have not yet begun)

Country Type OIG report date Amount of loss ($000s) Bangladesh (PMUK) Investigation 2012-07 3,625 Bangladesh (other) Audit 2012-10 1,597 Burundi Audit 2012-08 31 Central African Rep. Audit 2013-02 938 DRC Audit 2010-03 2,480 DRC Investigation 2013-09 3,600 Djibouti Audit & Inv. 2012-10 8,195 Georgia Investigation 2013-05 878 Guatemala Audit 2013-03 272 India Audit 2013-04 1,140 Kazakhstan Audit 2012-12 390 Kenya Audit 2012-06 3,253 Kyrgyz Republic Audit 2012-10 127 Laos Audit 2012-07 2,016 Madagascar Audit 2011-10 283 Namibia Audit 2012-10 2,238 Papua New Guinea Audit 2013-07 3,093 Papua New Guinea Investigation 2013-08 1,587 Senegal Audit 2012-09 140 South Sudan Audit 2011-10 527 Sri Lanka Audit 2011-10 2,647 Togo Audit 2011-10 865 Zanzibar Audit 2012-10 450 TOTAL 40,372

Note: The report on the investigation into grants in the Democratic Republic of Congo (DRC) has not yet been made public.

The recoveries process

Losses are first identified by the OIG when it conducts an audit or an investigation. The losses consist of expenditures the OIG deems fraudulent, ineligible or unsupported; or recoverable for other reasons (such as income earned through grant activities that was not declared). Then, the Global Fund’s Legal Counsel reviews each case to determine if the Fund is entitled to make a claim for recovery.

The Secretariat is responsible for managing recoveries. As a first step, the Secretariat considers possible adjustments to the amounts identified by the OIG. Usually, the adjustments are based on additional documentation and explanations submitted by grant implementers after the OIG had completed the audit or investigation. For the 21 cases that are closed or in progress, the Secretariat adjusted the amount of losses in 13 of the cases.

The recoveries process is managed by a Recoveries Committee, made up of the Chief Risk Officer (who chairs the committee), the head of the Grant Management Division, the Treasurer and the head of Legal and Compliance. The OIG is invited to each committee meeting as an observer. The Recoveries Committee is supported by a recoveries team, comprising members of the four departments represented in the committee. The recoveries team works with the Secretariat country teams to bring cases to a resolution. Decisions on recovery actions are taken by the Executive Director on the advice of the Recoveries Committee.

The OIG conducted an audit on the effectiveness of the process and controls related to the recovery efforts. A report on the results of the audit was provided to the Secretariat but has not been made public. A brief summary of the results was included in an annex to the OIG Progress Report – June to October 2013.

The Recoveries Committee has agreed, a result of the audit, that by the end of this year it will clear the recoveries case backlog, and develop policies and guidelines which will define the roles and responsibilities of the various players involved in the recovery process. When the report on losses and recoveries was discussed at the Board meeting in Geneva, Cees Klumper, Chief Risk Officer and Chair of the Recoveries Committee, said that the committee is trying to speed things up, and that it hopes in future to be able to start the recoveries process within four weeks of the OIG issuing its report.

The Board decided at its 23rd meeting in May 2011 that a report on losses and recoveries was to be prepared for each Board meeting. However, the report prepared for the latest Board meeting was only the second such report (see GFO article).

Information for this article was taken from and Board Document GF-B30-09, “Losses and Recoveries Report.” This document should be available shortly at www.theglobalfund.org/en/board/meetings/thirtieth. Board Document GF-B30-14, “OIG Progress Report – June to October 2013,” should be available shortly at the same site.

[This article was first posted on GFO Live on 8 November 2013.]

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8. NEWS: Replenishment Roundup

With less than four weeks to go to the replenishment conference in Washington on 2–3 December, the focus is on countries that have not yet announced their pledges for the Fourth Replenishment.

The Communities Delegation on the Global Fund Board has called on Australia to “be in the forefront” with the UK and the US and to substantially increase its previous contribution of $200 million. In a news release issued on 5 November, the delegation said that it strongly supports the call for an Australian contribution of A$375 (US$357 million) which, the delegation said, amounts to a little over A$5 per year from each Australian. The news release was distributed by email. For further information, contact Rachel Ong.

The Global Fund Advocates Network (GFAN) is asking people and organisations to sign on a letter from German advocates calling on Germany to increase its commitment to the Global Fund. Germany pledged $790 million for 2011–2013. The advocates said that with the highest GDP in Europe, Germany “can do more.” The call was distributed by email. For further information, contact Katy Wright.

Three health NGOs have called on the European Commission increase its contribution to the Global Fund to € 450 million ($608 million). The European Commission pledged $431 million for 2011– 2013. The call was made in a news release issued on 6 November by Global Health Advocates, Results UK and the TB Europe Coalition.

In a news release issued on 5 November, ACT-UP Paris called on President François Hollande to increase France’s contribution to the Global Fund. France had announced in July that it was committing € 1.08 billion ($1.4 billion) for 2014–2016, approximately the same amount as it pledged for 2011–2013. On the same day that the ACT-UP Paris news release came out, both France and the Global Fund issued news releases (here and here) reiterating the $1.4 billion pledge.

Some of the other countries that have not announced their pledges yet are Canada, Japan, Italy and Netherlands.

GFAN’s “Here I Am” campaign presented a call-to-action petition with over 2,000 signatures to donor countries at the Global Fund Board at its meeting in Geneva on 7–8 November. The petition calls on donor countries to “fully fund” the Global Fund (meaning at least $15 billion). The Here I Am campaign, launched a year ago, uses ambassadors, real life experiences, websites, blogs, social media and video stories to advocate for an increase in funding for the Global Fund. GFAN will be organising a teleconference for advocates every Tuesday from now until the replenishment conference. For further information, contact Katy Wright.

Some details on the tentative agenda for the replenishment conference in Washington have been released. There will be four main sessions: (1) a partnership symposium featuring a keynote address by John Kerry, US Secretary of State; (2) an evening reception featuring a keynote address by Bill Gates, Co-Chair of the Bill and Melinda Gates Foundation; (3) a high-level leadership session; and (4) a pledging opportunity session.

[This article was first posted on GFO Live on 25 September 2013.] TOP

AVAILABLE ON GFO LIVE:

The following articles have been posted on GFO Live on the Aidspan website. Click on the article heading to view the article. These articles may or may not be reproduced in GFO Newsletter.

NEWS: Vulnerability of Women Not Receiving Enough Attention: Dybul

Issues related to the vulnerability of women, in particular young women, are not receiving adequate attention at the Global Fund, according to Executive Director Mark Dybul. Dr Dybul made the comment in his semi-annual report to the Board.

NEWS: Dybul Calls For an Approach Based on Where Countries Are on the Development Continuum

How the Global Fund supports countries should be based on the epidemiology of the three diseases, Executive Director Mark Dybul says, “as well as the wider realities, challenges and opportunities for each of the stages in the development continuum, including the state of the underlying health system.”

NEWS: OIG Identifies Risk Areas Requiring More Attention

In its progress report for the period June to October 2013, the Office of the Inspector General identified five “key control risk areas” that it says have not been adequately mitigated. This article covers this topic and other items in the report.

NEWS: Revised TOR Approved for Technical Review Panel

Revised terms of reference for the Technical Review Panel reflect the fact that the process for reviewing proposals under the new funding model is different from the process used for the rounds-based system.

NEWS: Whistle-Blowing Policy Is Revised

The Board has approved changes to the Global Fund’s Whistle-Blowing Policy and Procedures. The most important changes involve reporting human rights violations in implementing Global Fund grants; and added protection for whistle-blowers against retaliation.

NEWS: Key Dates Related to the Implementation of the NFM

The Global Fund has released a partial calendar of events related to the new funding model.

NEWS: Country Dialogue in Angola Covers Request for Funding and the National TB Programme

The Global Fund Board recently approved $4.2 million for Phase 2 of an Angola TB grant. The request emanated from a country dialogue process which also covered the National TB Programme.

NEWS: Ghana Will Use New Funding to Scale Up HIV Treatment

As an interim applicant under the new funding model, Ghana recently received $15 million to top up an existing HIV grant. The funds will be used to rapidly scale up the provision of treatment.

NEWS: New Funding for Malawi Will Scale Up ART and PMTCT Coverage

The bulk of the $115 million recently awarded to Malawi as an interim applicant will be used to extend and expand antiretroviral coverage. Some funds will be used to scale up prevention activities for key populations.

NEWS: New Procurement Framework Expected to Produce Savings of $140 million over Two Years for Bed Nets Alone

The Global Fund and its partners have established a new procurement framework that will improve delivery of mosquito nets, anti-HIV drugs and other products and generate substantial savings.

NEWS: Next Period of Thailand Malaria Grant to Focus on Resistance

Funding for the next implementation period of a malaria grant to Thailand will be used for a variety of purposes, but a principal focus will be on artemisinin resistance containment and elimination strategies.

NEWS: Phase 2 of Namibia TB Grant Will Focus on Community-Based Care, MDR-TB and TB/HIV Collaborative Activities

The $13.1 million in renewal funding for a Namibia TB grant will address gaps in treatment success rates, case finding, and coverage of antiretroviral therapy among HIV-positive TB patients. To accomplish this, Phase 2 will focus on community-based care, multiple-drug- resistant TB, and TB/HIV services.

NEWS: Renewal Funding Approved for Six Applicants

Incremental funding in the amount of up to $188.1 million has been approved for the renewal of eight grants from six applicants. The largest awards were for two HIV grants to Cote d’Ivoire and a malaria grant to Thailand.

NEWS: Four Interim Applicants Receive Funding for HIV and Malaria

Funding in the amount of up to $214.1 million has been approved for four interim applicants. This brings to 30 the number of interim applicants for whom funding has been awarded, out of the 48 invited to apply when the transition phase of the new funding model was launched.

NEWS: Global Fund Supports Rwanda’s National HIV/AIDS Survey Rwanda is undertaking an HIV/AIDS survey, funded almost entirely by the Global Fund, to provide estimates on HIV incidence and guide interventions to reduce the risk of transmission.

NEWS: Countries with High TB-HIV Co-infection Rates Will Be Required to Submit Joint Proposals for Treatment

In an effort to boost collaborative TB-HIV programming, the Global Fund has decided that countries with high co-infection rates will be required to submit joint applications if they are seeking funding for treatment.

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