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entitled 'Global Health: Global Fund to Fight AIDS, TB and Malaria Has
Advanced in Key Areas, but Difficult Challenges Remain' which was
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Report to the Honorable Jim Kolbe Chairman, Subcommittee on Foreign
Operations, Export Financing, and Related Programs, Committee on
Appropriations, House of Representatives:
May 2003:
Global Health:
Global Fund to Fight AIDS, TB and Malaria Has Advanced in Key Areas,
but Difficult Challenges Remain:
GAO-03-601:
Letter:
Results in Brief:
Background:
The Fund Has Established Key Governance Structures, but Implementation
Challenges Impede Ability to Rapidly Disburse Funds:
The Fund Developed Comprehensive Oversight Systems and Issued
Procurement Guidance, but Systems Face Challenges, and Guidance Is
Still Evolving:
Lack of Resources Threatens Fund's Ability to Continue to Approve and
Finance Grants:
Improvements in Grant-Making Processes Enhance Fund's Ability to
Achieve Key Objectives, but Challenges Remain:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Status of Round 1 Grants:
Appendix III: Drug Procurement Cycle:
Appendix IV: Indicators of Need for Recipient Countries:
Appendix V: Comments from the Global Fund to Fight AIDS, TB and
Malaria:
Appendix VI: Joint Comments from the Departments of Health and Human
Services and State, and the U.S. Agency for International
Development:
Appendix VII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Staff Acknowledgments:
Tables:
Table 1: The Secretariat's Budget for 2003:
Table 2: Signed Grant Agreements--Funds Committed and Disbursed:
Table 3: Grant Agreements in the Pipeline:
Table 4: Grant Agreements Pending, but Less Far Along in the Process:
Figures :
Figure 1: Timeline of the Fund's First Year:
Figure 2: Approved Grants, by Disease and by Region:
Figure 3: Governance Structure of the Fund as of April 1, 2003:
Figure 4: The Structure of the Fund's Board as of April 1, 2003:
Figure 5: Anticipated Grant Expenditures for Drugs and Health Products:
Figure 6: Anticipated Expansion in Approved Proposal Dollars through
2004 (actual and estimated 2-year commitments):
Figure 7: Pledges Made, Amount Received, and Grant Proposals Approved:
Figure 8: Global Fund Proposal Review Process:
Figure 9: Grant Money by Country Income Level:
CCM: Country Coordinating Mechanism:
HIV/AIDS: Human immunodeficiency virus/acquired immunodeficiency
syndrome:
LFA: Local Fund Agent:
NGO: Nongovernmental organization:
OECD: Organization for Economic Cooperation and Development :
TB: Tuberculosis:
TRP: Technical Review Panel:
UN: United Nations:
UNAIDS: Joint U.N. Program on HIV/AIDS:
UNDP: U.N. Development Program:
UNOPS: U.N. Office for Project Services:
USAID: U.S. Agency for International Development:
WHO: World Health Organization:
Letter May 7, 2003:
The Honorable Jim Kolbe
Chairman, Subcommittee on Foreign Operations,
Export Financing, and Related Programs
Committee on Appropriations
House of Representatives:
Dear Mr. Chairman:
By the end of 2002, more than 40 million people worldwide were living
with human immunodeficiency virus/acquired immunodeficiency syndrome
(HIV/AIDS), with 5 million newly infected that year. HIV/AIDS, along
with tuberculosis (TB) and malaria, causes nearly 6 million deaths per
year and untold human suffering. In addition, these diseases, if
unchecked, are increasingly seen as a threat to economic growth, with
the potential to worsen conflict and political instability in many
parts of the world. According to the United Nations (U.N.), about $10
billion will be needed in 2005, increasing to $15 billion in 2007, to
fight AIDS alone; malaria and tuberculosis will require billions more.
In January 2002, the Global Fund to Fight AIDS, Tuberculosis and
Malaria ("the Fund") was established in Geneva, Switzerland. The Fund
aims to rapidly disburse grants to augment existing spending on the
prevention and treatment of these three diseases in developing
countries while maintaining sufficient oversight of financial
transactions and program effectiveness.
As of April 1, 2003, the United States had pledged $1.65 billion to the
Fund[Footnote 1] and is the single largest donor. Because of this
significant commitment of U.S. resources, you requested that we report
on the Fund's progress during its first full year of operation. This
report assesses (1) the Fund's progress in developing governance
structures; (2) the systems that the Fund has developed for ensuring
financial accountability, monitoring and evaluating grant projects, and
procuring goods and services; (3) the Fund's efforts to mobilize
resources; and (4) the Fund's grant-making processes.
:
As part of our review, we analyzed documents and interviewed key
officials from the Fund; the Joint U.N. Program on HIV/AIDS (UNAIDS);
the World Health Organization (WHO); the U.N. Development Program; and
experts on project implementation and procurement. We obtained
perspectives on the progress and evolution of the Fund from officials
at the Department of State, the U.S. Agency for International
Development, and the Department of Health and Human Services, as well
as the directors of the Global Business Coalition on HIV/AIDS, the
Earth Institute of Columbia University, the Gates Foundation HIV/AIDS
and TB Program, and the Global AIDS Alliance. We also conducted
research and reviewed data on global spending on HIV/AIDS, TB, and
malaria. In addition, we visited Haiti, Honduras, Ethiopia, and
Tanzania to meet with principle recipients of Fund grants and members
of the country coordinating bodies that will be implementing activities
supported by Fund grants.[Footnote 2] In Haiti and Tanzania, we also
met with the private sector firms that have contracted to serve as
local agents for the Fund in these countries. (App. I provides a more
detailed description of our objectives, scope, and methodology.):
Results in Brief:
The Fund has made noteworthy progress in establishing essential
governance and other supporting structures and is responding to
challenges that have impeded its ability to quickly disburse grants. In
its first year of operation, the Fund successfully established a board
of directors, a permanent secretariat, and a grant review process. It
called on countries to establish governance structures to develop,
implement, and oversee grants. The principal country-level governance
structure, the Country Coordinating Mechanism (CCM), is designed to
provide a forum for all stakeholders to (1) review and submit proposals
and (2) follow the progress of Fund-supported programs. However, as of
late 2002, in three of the four countries we visited there was limited
communication between the secretariat and the CCM and between CCM
leadership and other members. These communication problems and the
evolving nature of the country-level structures resulted in key
participants being unsure of their roles in the proposal process and
unprepared to support grant implementation. In one country, the CCM was
better prepared largely because it had received a high level of support
from Fund staff and strong leadership from the CCM chair; however, the
Fund does not have sufficient resources to provide this level of
support to all CCMs. The Fund has acknowledged the difficulties
experienced by CCMs and is addressing them by clarifying its guidance
to CCMs through regional workshops and working with local partners such
as bilateral and multilateral donors. At the headquarters level, to
benefit from some of the tax and employment advantages of an
international organization, the secretariat of the Fund has relied on
the regulations and systems governing the U.N. WHO. However, this
administrative relationship has contributed to delays in disbursing
grants and uncertainties for Fund staff concerning responsibility and
accountability. The Fund is exploring the possibility of gaining
additional concessions from Swiss authorities that would eliminate the
need for this relationship.
The Fund has developed comprehensive oversight systems for monitoring
and evaluating grant performance and ensuring financial accountability
and has issued guidance for procurement; however, the oversight systems
face challenges at the country level and some procurement issues have
not been finalized. The Fund has recognized these challenges and is
working to address them. The Fund's principal oversight entity at the
country level, the Local Fund Agent (LFA), is a Fund contractor that is
responsible for ensuring that grant recipients account for the money
they spend and measure progress they make in fighting disease. The LFA
is also responsible for assessing recipients' ability to procure goods
and services. However, the introduction of this new mechanism has been
marked by controversy and misconceptions regarding its oversight role.
These problems have delayed the designation of LFAs in some countries,
slowing the implementation of grants. For example, several government
officials in one of the countries we visited believed, incorrectly,
that a government ministry would be permitted to perform the LFA
functions. Moreover, in countries with a limited number of qualified
personnel and organizations, LFAs will face the challenge of
maintaining the independence necessary to avoid real or perceived
conflicts of interest. Regarding procurement, the Fund has provided
requirements in the agreements that each grant recipient must sign.
These requirements are focused primarily on procurement of drugs and
public health products in an effort to ensure quality, safety, and the
lowest possible prices. The agreements also contain general but less
extensive requirements on procuring goods and services, including
nonmedical items such as vehicles and office equipment. The Fund
encourages recipients to abide by national laws and international
obligations but does not explicitly address this issue in the grant
agreements.
A lack of sufficient resources threatens the Fund's ability to approve
and finance additional grants. Although the Fund has announced plans to
award new grants in its third round of proposals in October 2003,
pledges made through this year as of April 1, 2003, are insufficient to
cover more than a small number of additional grants. The Fund has less
than $300 million to support commitments in round 3--significantly less
than the $608 million in 2-year grants approved by the board of
directors in the first round and the $884 million approved in the
second round. On the basis of the number of technically sound proposals
it expects to receive and approve in future rounds, and the amount
pledged as of April 1, 2003, the Fund projects that it will require
$1.6 billion in new pledges in 2003 and $3.3 billion in 2004. In
addition, without significant new pledges, the Fund will be unable to
support all of the already approved grants beyond the initial 2-year
agreements. If all currently approved grants demonstrate acceptable
performance after 2 years, the Fund will require $2.2 billion more to
assist these programs for an additional 1 to 3 years. These grants seek
to provide, among other things, AIDS medications to 500,000 people and
care and support to 500,000 AIDS orphans and other vulnerable children.
Improvements in the Fund's grant-making processes have enhanced its
ability to achieve its key objectives, but challenges remain. Grant
decisions are made by the board, based primarily on a technical
evaluation of submitted proposals. Between the first and second
proposal rounds, the Fund made several improvements and adjustments to
its proposal review and decision-making process. These include revising
the application materials, altering eligibility criteria to focus on
the most needy countries, and adding additional members to the
technical evaluation panel to increase its overall knowledge base and
better prepare it to evaluate nonmedical, development-related issues.
However, ongoing challenges to the grant decision process have been
identified by the Fund and stakeholders, including ensuring that grants
augment existing spending on HIV/AIDS, TB, and malaria and that
recipients have sufficient capacity to effectively use the grants. The
Fund has recognized these challenges, but its efforts to address them
are still evolving.
In responding to our draft report, the Fund, the Department of Health
and Human Services, the Department of State, and the U.S. Agency for
International Development (USAID) agreed with our findings. The Fund
discussed steps it is taking to address the challenges identified in
our report and identified several additional challenges.
Background:
HIV/AIDS, TB, and malaria, three of the world's deadliest infectious
diseases, cause tremendous human suffering, economic loss, and
political instability. According to UNAIDS, in 2002 AIDS caused 3
million deaths, and 5 million people became infected. More than 70
percent, or 28.5 million, of the 40 million people with HIV/AIDS
worldwide live in sub-Saharan Africa. However, according to a report by
the National Intelligence Council, HIV infections in just five populous
countries--China, India, Nigeria, Russia, and Ethiopia--will surpass
total infections in central and southern Africa by the end of the
decade. In addition, Thailand, a developing country that had
successfully countered the growth of AIDS in the 1990s, is now facing a
resurgent epidemic. According to WHO, after HIV/AIDS, TB is the world's
leading infectious cause of adult mortality, resulting in as many as 2
million deaths per year. Like HIV/AIDS, tuberculosis primarily affects
the most economically active segment of the population, with 75 percent
of the annual deaths occurring in those between the ages 15 and 54.
Conversely, malaria, which causes more than 1 million deaths and at
least 300 million cases of acute illness each year, is a leading cause
of death in young children. The disease exerts its heaviest toll in
Africa, where about 90 percent of malaria deaths occur.
The Fund was formally launched in January 2002. The Fund is a grant-
making organization with the purpose of attracting, managing, and
disbursing funds that will increase existing resources and make a
sustainable and significant contribution to the reduction of
infections, illness, and death. The Fund aims for an integrated and
balanced approach, covering prevention, treatment, care, and support,
and seeks to establish efficient and effective disbursement mechanisms.
During its first full year of operation, the Fund successfully
completed two proposal rounds and began distributing grant money.
Figure 1: Timeline of the Fund's First Year:
[See PDF for image]
[End of figure]
Over the course of these two proposal rounds, the Fund approved grants
to 153 proposals in 81 countries across the major regions of the world
(see fig. 2).[Footnote 3] These grants total nearly $3.7 billion ($1.5
billion over the first 2 years) and cover all three diseases.
Figure 2: Approved Grants, by Disease and by RegionA:
[See PDF for image]
[A] Based on maximum allowable grant money for the full length of
board-approved programs.
[End of figure]
The Fund Has Established Key Governance Structures, but Implementation
Challenges Impede Ability to Rapidly Disburse Funds:
In its first year, the Fund developed and established key governance
and other supporting structures, including a board of directors, a
permanent secretariat, a grant review process, and country-level
structures required to develop, implement, and oversee grants. However,
limited communication, administrative complications, and the evolving
nature of these new structures, especially at the country level, led to
a lack of clarity over roles and responsibilities and slowed the Fund's
ability to sign the initial grant agreements. The Fund has recognized
these problems and is taking steps at both the country and headquarters
levels to address them.
Key Governance and Other Supporting Structures Established:
The Fund has made noteworthy progress in establishing key headquarters
and country-level governance structures. Figure 3 illustrates the
governance structure of the Fund.
Figure 3: Governance Structure of the Fund as of April 1, 2003:
[See PDF for image]
Notes: WHO and UNAIDS assist the technical review panel with data and
other expertise. The Fund has entered into an agreement with WHO for
the provision of administrative services at the headquarters level.
The arrows denote relationships but do not specify their nature, e.g.,
information or money flow vs. accountability. The relationships among
the components of this governance structure are detailed below in the
paragraphs on each component.
[End of figure]:
At the headquarters level, governance structures include a board of
directors, a permanent secretariat, a Technical Review Panel (TRP), and
the World Bank as its trustee.
* The board is the governing body of the Fund, consisting of 18 voting
members and 5 nonvoting members. The voting members consist of seven
government representatives from developing countries, seven government
representatives from donor countries, and one representative each from
a developing country nongovernmental organization (NGO), a developed
country NGO, the private sector, and private foundations. The five
nonvoting members consist of a representative from WHO, the World Bank
(as trustee, see below), UNAIDS, a person representing communities
living with HIV/AIDS, TB, or malaria, and one Swiss citizen appointed
by the board.[Footnote 4] The board makes all funding decisions; sets
Fund policies, strategies, and operational guidelines; and selects the
executive director of the secretariat. The board chair and vice chair
rotate between beneficiary and donor country representatives. In
January 2003, the U.S. Secretary of Health and Human Services was
elected to serve as chairman, replacing the outgoing chairman from
Uganda. Figure 4 illustrates the current structure of the Fund's board.
Figure 4: The Structure of the Fund's Board as of April 1, 2003:
[See PDF for image]
Note: Board members from beneficiary countries represent a region,
which is identified after each country listed. Membership on the board
as a donor is based on contributions, and members can represent an
individual country or a group of countries. (Countries may be grouped
on the basis of common interests or geographic proximity.):
[End of figure]
The board plans to meet three times per year and strives to make
decisions by consensus. When consensus cannot be reached, any voting
member can call for a vote. Successful motions require approval from a
two-thirds majority of those present, representing both donor and
recipient voting groups, which means that the current voting structure
may make it difficult to reach a decision. For example, the only time
the board brought an issue to a vote a decision was not reached because
the members could not get a sufficient number of affirmative votes.
The board has established four committees: (1) Governance and
Partnership, (2) Resource Mobilization and Communications, (3)
Portfolio Management and Procurement, and (4) Monitoring and
Evaluation, Finance, and Audit. The committees respond to issues raised
by the board and identify options for addressing them. For example, the
Portfolio Management and Procurement Committee has developed a proposal
appeals process. The United States has representatives on three of the
four committees (Governance and Partnership; Portfolio Management and
Procurement; and Monitoring and Evaluation, Finance, and Audit).
The secretariat has hired 63 staff as of April 1, 2003, to run the day-
to-day operations of the Fund.[Footnote 5] As the Fund's only full-time
body, the secretariat receives and screens grant applications, studies
and recommends strategies to the board, communicates board decisions to
stakeholders, manages and oversees regional grant portfolios, receives
and reviews program and financial reports submitted by grant recipients
through the LFA, and performs all administrative functions for the
Fund. The board reviews and approves the secretariat's business plan
and budget. In January 2003, the board approved a $38.7 million budget
for 2003 for the secretariat (see table 1).
Table 1: The Secretariat's Budget for 2003:
Dollars in millons.
Local Fund Agent fees; Description: Based on
estimates for the assessment of principal recipients and annual
oversight work per grant; Cost: $16.4; Percentage of budget: 42%.
Staff; Description: Includes salaries and benefits;
Cost: 11.0; Percentage of budget: 28.
Professional; services; Description: Includes $2
million in fees to the World Bank as trustee and $725,000 to WHO for
administrative services; Cost: 5.0; Percentage of budget: 13.
Travel; Description: Includes secretariat and board
travel; Cost: 2.1; Percentage
of budget: 5.
Other; Description: Includes facilities,
communication materials, information technology infrastructure,
meetings, fixed assets, and other items; Cost: 4.3;
Percentage of budget: 11.
Total; Description: [Empty];
Cost: $38.7[A]; Percentage of budget: 100%[A].
Source: GAO analysis of Fund documents.
[A] Figures may not add up due to rounding:
[End of table]
* The Technical Review Panel (TRP) reviews and evaluates eligible
proposals submitted to the Fund. It currently consists of 22
independent experts: 7 members with cross-cutting expertise in
development, including health systems development, economics, public
policy, and finance; 7 members with expertise in HIV/AIDS; 4 members
with expertise in malaria; and 4 members with expertise in TB.[Footnote
6] There are two U.S. members on the TRP, an expert on TB and an expert
with cross-cutting expertise in health and development issues. The TRP
is supported by a WHO/UNAIDS[Footnote 7] working group that reviews the
accuracy of baseline data on disease prevalence, poverty, and other
indicators provided in the proposals. The working group also reviews
the accuracy and relevance of the information provided by applicants on
their ability to effectively use additional funds. The TRP makes
recommendations to the board for final decisions on proposal selection.
According to officials at the Department of Health and Human Services,
health and development experts at the Centers for Disease Control and
Prevention and USAID conducted an informal review of approved proposals
and largely concurred with the TRP's recommendations.
* As the Fund's trustee, the World Bank receives money from donors,
holds the money in an interest-bearing account, and disburses it
according to the Fund's written instructions.
At the country level, governance and oversight structures include a
Country Coordinating Mechanism, a principal recipient, subrecipients,
and a Local Fund Agent.[Footnote 8]
* The country coordinating mechanism (CCM) is meant to provide a forum
for stakeholders to work together to identify needs and develop and
submit proposals to the Fund and follow the progress of grant projects
during implementation. According to the Fund, CCM membership should
include high-level government representatives as well as
representatives of NGOs, civil society, multilateral and bilateral
agencies, and the private sector. Further, all eligible partners in the
CCM should be entitled to receive Fund money based on their stated role
in implementing the proposal.
* The principal recipient, which is a member of the CCM, is responsible
for receiving and implementing the grant. A principal recipient can be
a government agency, an NGO, a private organization, or, if
alternatives are not available, a multilateral development
organization. Of the 69 grant agreements resulting from the first round
of proposals approved by the Fund, 41 (59 percent) are with principal
recipients that are government agencies, 17 (25 percent) are with NGOs,
and 9 (13 percent) are with the U.N. Development Program.[Footnote 9]
(See app. II for more detailed information.) The principal recipient is
responsible for making sure that funds are properly accounted for as
well as for monitoring and evaluating the grant's effectiveness in
accordance with indicators mutually agreed to by the Fund and the
grantee. In some cases, there may be multiple principal recipients for
a single grant. The principal recipient typically works with other
entities, or subrecipients, to carry out grant activities.
* Subrecipients are entities, such as NGOs, with the expertise
necessary to perform the work and can be other CCM members. The
principal recipient is responsible for supervising any subrecipients
and distributing Fund money to them.
* The local fund agent (LFA) is the Fund's representative in each
recipient country and is responsible for financial and program
oversight of grant recipients. This oversight role includes an
assessment of recipients prior to their receiving money from the Fund.
The assessment covers recipients' ability to maintain adequate
financial controls, procure goods and services, and carry out program
activities. The Fund selects one LFA in each country. As of April 1,
2003, the Fund has contracted with four organizations to fill this
role: two private sector firms, KPMG and PricewaterhouseCoopers; one
private foundation that was formerly a public corporation, Crown
Agents; and one multilateral entity, the U.N. Office for Project
Services (UNOPS).[Footnote 10] The Fund may contract with additional
organizations as the need arises and expects to receive bids from
potential LFAs by August 2003.
Challenges at Country Level Slow Disbursement of Grants; Fund Taking
Steps to Respond:
Limited Communication, Lack of Clarity over Roles and Responsibilities
at Country Level:
As of late 2002, in three of the four countries we visited, country
coordinating mechanisms were not operating at levels envisioned by the
Fund, owing in part to insufficient communication between the Fund and
the CCM as well as between the CCM's chair and members. This has
resulted in confusion over the intended structure and purpose of the
CCM. While our sample of only four countries is not necessarily
representative of all grant recipients, several NGOs reported similar
observations to the board. The Fund has posted general guidelines for
CCMs on its Web site as well as in its calls for proposals. These
guidelines encourage CCMs to hold regular meetings; engage all relevant
participants, including representatives of civil society, in
substantive discussions; ensure that information is disseminated to all
interested parties; and be involved in the implementation of projects
after proposals are developed and submitted to the Fund. However, many
CCMs had difficulties following these guidelines.
The role of the CCM in developing proposals and participating in their
implementation after approval is not clear, according to a report by an
international HIV/AIDS organization that assessed the participation of
NGOs in the CCM process[Footnote 11] and according to CCM members in
several countries. For example, many NGOs are not aware that they can
participate in both the development and implementation of proposals.
Furthermore, they are demanding clearer information on the selection of
CCM members and the entities to which CCMs are accountable. An NGO
participant told us that after a meeting in March 2002, the CCM did not
convene again for about 6 months because it had received no guidance
from the Fund on how to proceed. A number of members of another CCM
said that they did not get a chance to vet or, in some cases, read
proposals before endorsing them. In addition, after the proposals were
submitted, members of this CCM were not informed of important events in
a timely manner. A donor participating in this CCM stated that, with
regard to a grant proposal for more than $200 million that was
submitted in the second round and has since been approved, no one knows
who will be responsible for implementing it when the money arrives.
A number of the CCM members with whom we met were concerned over the
level of involvement of all relevant parties. According to information
compiled by the Fund's Governance and Partnership Committee for the
board's January 2003 meeting, all CCMs that submitted second-round
proposals[Footnote 12] are chaired by a government official (79 percent
from the health ministry). In addition, at least a quarter of the CCMs
lack representation from one or more of the following groups: people
living with one of the three diseases, the private sector, academic
institutions, or religious organizations. In one country, for example,
donors said that NGOs need to develop a stronger and more active voice
on the CCM. An update on the Fund for nongovernmental organizations and
civil society, prepared by the International Council of AIDS Service
Organizations,[Footnote 13] expressed similar views regarding CCMs in
countries that we did not visit. However, the update also included
evidence that CCMs are enhancing the involvement of NGOs in national
health policies in some countries. In addition to members of civil
society, key government ministries and donors are often not included as
members in current CCMs. The Governance and Partnership Committee
recognized this point in the document prepared for the January 2003
board meeting, stating, "Of concern is the relatively low participation
from Ministries of Finance (37 percent), given the need to ensure
consistency with Global Fund grant processes and overall fiscal and
monetary policies of recipient countries." The committee also noted
that although the World Bank is a significant source of resources for
many recipients, it is a member of only 14 percent of CCMs. In one
country we visited, for example, where neither the Ministry of Finance
nor the World Bank were members of the CCM, a dispute over where the
Fund money should be deposited delayed the signing of the country's
first grant agreement.
:
Dissemination of information is also a problem, according to the
international HIV/AIDS organization report and CCM members with whom we
met. The report stated that many NGOs are not receiving essential
information from the Fund because the CCM chairs receiving this
information are not passing it on to all stakeholders. In one country,
several CCM members told us that the CCM is not functioning well
because the flow of information is tightly controlled by the chair.
Many members of this CCM, for example, were unaware that a
nongovernmental organization had also submitted a proposal to the
Fund.[Footnote 14] As of April 1, 2003, more than 1 year after the
proposal was submitted, the CCM had yet to review and endorse or reject
it, as required by the Fund. As a result, the Fund has dropped this
proposal from its list of those approved in the first round.
Of the four countries we visited, even the country with the most
functional CCM experienced some difficulties. This country had received
substantial support from a Fund staff member, who spent 6 weeks in the
country helping the CCM clarify the Fund's principles regarding CCMs
and how its proposal will be implemented. This support, together with
the active leadership of the CCM chair, was widely credited with the
relative success of the CCM. Members of this CCM said it had become a
transparent, multisectoral, participatory, and consensus-driven forum
that has held frequent meetings. However, CCM members were still
unclear as to their role after the grant is disbursed.
The Fund Is Taking Steps to Address Problems Associated with CCMs:
According to the Fund, it does not have sufficient resources to provide
the same level of support for every country as it did in the country
cited above. Nevertheless, it is currently attempting to enhance
communication with and within country coordinating mechanisms in order
to improve their functioning. While trying to remain flexible and
attentive to differing situations in each country and avoid an overly
prescriptive, "cookie-cutter" approach, the Fund's Governance and
Partnership Committee proposed to the board in January 2003 specific
guidelines for CCMs that address many
of the issues raised above.[Footnote 15] The committee also proposed
that the secretariat work with it to develop a handbook for CCMs that
contains these principles. Although the board did not reach a decision
on this proposal in January 2003, as of April 1, 2003, the agreements
between the Fund and grant recipients contained language describing the
nature and duties of CCMs. This language states that CCMs are to have a
role in monitoring the implementation of Fund grants; that they should
promote "participation of multiple constituencies, including Host
Country governmental entities, donors, nongovernmental organizations,
faith-based organizations and the private sector"; and that they should
meet regularly to develop plans and share information. According to
U.S. government officials who were involved in setting up the Fund and
who attended the January 2003 board meeting, the Fund may also consider
other options to enhance the functioning of CCMs, such as having those
CCMs that have been working relatively well share best practices with
others or having a member of the secretariat hold regional workshops
for CCMs from several countries. Starting in December 2002 through the
spring of 2003, the Fund held a series of regional workshops for CCM
members and other stakeholders in the Philippines, Myanmar, Senegal,
and Cuba.[Footnote 16] Additional workshops are scheduled to take place
in South Africa, Ukraine, and Latin America. According to the Fund,
these workshops are providing a forum for "open dialogue," whereby the
Fund can disseminate and clarify information and receive feedback. In
addition, the Fund is considering expanding the secretariat to allow
its staff to devote more time to advising individual CCMs and to
working with local partners, such as bilateral and multilateral donors,
that are assisting with grant implementation.
Administrative Arrangement with WHO Causing Delays; Fund Considering
Alternate Arrangements:
The Fund established an administrative services agreement with the WHO,
an agency of the United Nations, to benefit from some of the tax and
employment advantages of an international organization,[Footnote 17]
but this relationship is causing delays and other problems, and the
Fund is considering alternate arrangements.[Footnote 18] The agreement
with WHO requires that the Fund apply certain WHO regulations and
systems governing personnel and contractual issues. According to WHO
and Fund staff, while this agreement gives the staff of the secretariat
important privileges in Switzerland and allowed the Fund to begin
operating quickly, it has contributed to administrative delays,
frustration, and uncertainties concerning responsibility and
accountability.
Regarding delays, once the Fund makes certain administrative decisions,
it must wait until it obtains clearance from officials at WHO before it
can act. According to secretariat officials and one of the local fund
agents we met with, this dual approval process has delayed the approval
of LFA contracts by up to 8 weeks. The officials stated that this is
significant because it has lengthened the time required to get grant
agreements completed and signed by recipient countries. The WHO
official responsible for approving the Fund's administrative decisions
said that it takes several weeks to vet key actions, such as the LFA
contracts, when they are added to his unit's existing workload.
In addition to creating delays, the relationship between the Fund and
WHO has led to frustration and uncertainties for Fund staff concerning
the scope of their responsibility and the authorities to whom they are
accountable. For example, although the board granted the executive
director of the Fund the authority to sign contracts with vendors and
grantees, WHO must be a party to all contracts since the executive
director is technically a WHO employee. According to officials from
both the Fund and WHO, removing the dual approval process would lessen
delays and uncertainties over roles and responsibilities.
:
The board asked the secretariat to look into pursuing enhanced legal
benefits for the Fund from Swiss authorities.[Footnote 19] An important
objective for this change is to allow the Fund to withdraw from the
administrative services agreement with the WHO while retaining tax and
other advantages. However, according to the Fund, there are important
considerations to be resolved before the board would approve and the
Swiss government would authorize a change in recognition. The board
expects to address this issue at its next meeting in June 2003.
The Fund Developed Comprehensive Oversight Systems and Issued
Procurement Guidance, but Systems Face Challenges, and Guidance Is
Still Evolving:
The Fund has developed systems for financial accountability and for
monitoring and evaluating grant activities and has issued guidance on
procurement. However, in the Fund's first year of operation, these
systems faced challenges at the country level that the Fund is working
to address, and procurement guidance is still evolving.
Oversight Systems Established but Face Challenges:
The Fund, through the local fund agent, has established a comprehensive
system for overseeing grant recipients, but the introduction of the LFA
has been marked by controversy and misconceptions regarding its role.
These problems may impede the implementation of grants. The Fund
recognizes these issues and is developing additional guidance for LFAs
and principal recipients.
:
The Fund Has Established a Comprehensive System for Ensuring
Recipients' Financial Accountability:
The Fund has established a system for ensuring that principal
recipients rigorously account for the money they spend. This system
requires them to demonstrate adequate finance and management systems
for disbursing money, maintaining internal controls, recording
information, managing and organizing personnel, and undergoing periodic
audits. The secretariat, the LFA, and the principal recipient each has
a role in this system. The secretariat selects the LFAs, exercises
quality control over their work, and draws up grant agreements. Prior
to selecting LFAs, the secretariat considers their independence from
principal recipients and other CCM members in an effort to avoid
potential conflicts of interest. It also considers their expertise in
overseeing financial management, disease mitigation programs, and
procurement, as well as their experience with similar assignments. The
LFAs, in turn, assess principal recipients for the same capabilities.
To ensure that the disbursement of funds will be carefully controlled,
the secretariat provides principal recipients with limited amounts of
money at a time, based on their documentation of project results. In an
effort to ensure clear definition of roles, responsibilities and
accountability, it developed guidelines for LFAs that define their
duties to assess and oversee principal recipients. For example, the
LFA's financial assessment of the principal recipient is to be
completed before the grant agreement is signed, and the secretariat is
to receive and validate a preliminary assessment before the LFA
proceeds with the full assessment. To minimize inefficiency, the
preliminary assessment is to draw on existing records of the principal
recipient's performance with other donors.
The Fund has established requirements for principal recipients in the
grant agreement. Specifically, the agreement requires principal
recipients to maintain records of all costs they incur, and these
records must be in accordance with generally accepted accounting
standards in their country or as agreed to by the Fund. Principal
recipients are to have an independent auditor separate from the LFA and
acceptable to the Fund that conducts annual financial audits of project
expenditures. The principal recipient is also to ensure that the
expenditures of subrecipients are audited. The LFA or another entity
approved by the Fund is authorized to make site visits "at all
reasonable times" to inspect the principal recipient's records, grant
activities, and utilization of goods and services financed by the
grant. The principal recipient is required to submit quarterly and
annual reports to the Fund through the LFA on its financial activity
and progress in achieving project results. For example, the annual
financial reports are to include the cost per unit of public health
products procured and the portion of funds supporting various
activities such as prevention, treatment, care, administering the
project, and enhancing local skills and infrastructure through training
and other activities. The reports are also to specify the portion of
funds used by local NGOs, international NGOs, government agencies and
other public sector organizations (e.g., U.N. agencies), the private
sector, and educational institutions. Failure to abide by these and
other requirements in the grant agreement can result in the Fund
terminating the grant or requiring the principal recipient to refund
selected disbursements.
The Fund Has Established a Detailed System for Monitoring and
Evaluating Grant Performance:
The Fund has established a detailed system for monitoring, evaluating,
and reporting at regular intervals on the performance of grants that
identifies specific roles for the LFA, principal recipient,
subrecipients, and CCM. Prior to the signing of each grant agreement
between the Fund and the principal recipient, the LFA conducts an
assessment of the principal recipient that includes an evaluation of
its capacity to monitor and evaluate grant projects. Within 90 days
after the agreement enters into force, the principal recipient is
required to submit a detailed plan for monitoring and evaluation. The
principal recipient and the subrecipients are responsible for selecting
the appropriate indicators, establishing baselines, gathering data,
measuring progress, and preparing quarterly and annual reports. The LFA
is charged with making sure that the principal recipient monitors and
evaluates its projects and with reviewing the reports. If the LFA
identifies concerns, it is to discuss them with the principal recipient
and the CCM and may forward information to the Secretariat in Geneva.
According to the Fund, the CCM should work closely with the principal
recipient in establishing the monitoring and evaluation processes and
should review the reports along with the LFA.
Building on the existing body of knowledge and contributions of
evaluation specialists from organizations such as the U.S. Agency for
International Development (USAID), UNAIDS, WHO, and the Centers for
Disease Control and Prevention, the Fund has identified indicators for
recipients to use in tracking the progress of grant-supported projects.
The indicators that the principal recipient will use to track the
progress of individual grants are expected to measure processes,
outcomes, and impact. During the first 2 years of 5-year projects, the
quarterly and annual reports submitted by the principal recipient to
the LFA track steps taken in the project implementation process. For
example, a process indicator for HIV/AIDS prevention activities could
measure the dissemination of information, such as the number of
prevention brochures developed and distributed to teenagers or other
at-risk groups. Starting in the third year, the principal recipient is
expected to report on program outcomes. Following the HIV/AIDS
prevention example, this would entail measuring whether the information
had any effect on the behavior of the targeted population. In this
example, the principal recipient would report on the percentage of the
young people or others receiving the brochures who correctly identified
ways of preventing HIV transmission and stated that they had changed
their behavior accordingly. Near the end of the project, the principal
recipient would report on its epidemiological impact by measuring
whether there has been a reduction in the incidence of disease in the
target group.
Funds will be released to the principal recipient at intervals based on
its performance according to these indicators. The exact amounts to be
released will be calculated using its anticipated expenditures. In
cases where repeated reports demonstrate that progress is not being
made, the Fund, after consultation with the LFA and CCM, may choose to
make adjustments, including replacing the principal recipient or
nonperforming subrecipients. The key evaluation for the majority of the
grants[Footnote 20] comes after 2 years, when the Fund expects to begin
seeing evidence that grant-supported activities are leading to desired
outcomes. At that point, the Fund will decide whether to continue to
disburse money to grant recipients.
The board has agreed in principle that there should also be an
independent evaluation of the Fund's overall progress in meeting its
key objective of reducing the impact of HIV/AIDS, TB, and malaria by
mobilizing and leveraging additional resources. According to the Fund,
this evaluation will include an assessment of the performance of the
board and the secretariat. The focus of the evaluation will be on the
board's and secretariat's performance in governing and implementing
processes that enable Fund grants to relieve the burden of disease,
improve public heath, and contribute to the achievement of the U.N.'s
millennium goals.[Footnote 21] As of April 1, 2003, the board had not
made a final decision on what entity will conduct the independent
evaluation or how or when the evaluation will be conducted. In
addition, the board had not yet determined what portion of its
resources should be budgeted for this evaluation.
LFAs Face Several Challenges:
In certain countries, the introduction of the local fund agent has been
marked by controversy and misconceptions, partly due to its newness,
that may delay the designation of LFAs and make it difficult for them
to oversee the implementation of grants. For example, the chair of the
CCM in one of the countries we visited, where the principal recipient
is the Ministry of Health, believed that another government ministry
could serve as the LFA, despite the Fund's explicit instructions that
the LFA must be independent from the grant recipient. In another
country, key government and some donor officials were upset over the
Fund's decision to bypass existing systems for handling donor funds.
This situation contributed to resentment of the LFA as the Fund's local
representative and oversight mechanism.[Footnote 22] A number of
stakeholders with whom we met assumed incorrectly that the LFA was
charging an exorbitant fee and deducting it from the grant. In fact,
LFA fees are funded through the secretariat, not deducted from each
grant. Payment for LFA services constitutes the single largest item in
the secretariat's budget, accounting for $16.4 million, or 42 percent
of its proposed 2003 budget. Overall, however, these fees represent
only about 2 percent of estimated grant disbursements for the year,
according to secretariat officials.[Footnote 23] Moreover,
representatives from KPMG, one of the entities designated by the Fund
as an LFA, told us that they are charging the Fund 50 percent less than
they are charging other clients for similar services.
The Fund is aware of these problems and is attempting to address them.
According to a January 2003 report of the board's Monitoring,
Evaluation, Finance and Audit Committee, the oversight role of the LFA
can create resentment in a country if it is carried out without local
participation in problem analysis and resolution. The report cites the
same example we observed, stating that recent experience in that
country showed that existing local systems should be used as much as
possible to avoid new and unnecessary requirements that distract from,
rather than support, the Fund's goal of helping countries improve their
capacity to fight disease. On January 12, 2003, the Fund drew up
guidelines on financial management arrangements for principal
recipients that offer several options, including the use of credible,
existing local systems.
Finally, despite the Fund's having designated independence as a key
factor in the selection of LFAs, the limited number of trained
personnel and organizations in many recipient countries may impair
independence, resulting in potential conflicts of interest. Given the
small pool of qualified disease experts available for hire in some poor
countries, subrecipients recruited to implement grant activities will
be competing with subcontractors to the LFA for monitoring these
disease-mitigation projects. It is unclear whether there is sufficient
expertise available to provide staff for both of these functions. For
example, in one of the countries we visited, the NGO the LFA had hired
to assess the the principal recipient's capacity to carry out its grant
activities will also be implementing a Fund project for this principal
recipient. Since effective evaluation assumes that the monitor is
independent of the implementer, achieving such independence may be a
challenge in such circumstances. Conceivably, there also may be
situations in which one U.N. organization, the U.N. Office for Project
Services--one of the entities contracted by the Fund to serve as an
LFA--may be overseeing another, the U.N. Development Program, serving
as the principal recipient. Fund officials have stated that they would
try to avoid this situation. The board's Monitoring, Evaluation,
Finance and Audit Committee is developing a conflict of interest policy
for LFAs. In the meantime, the Fund has required one LFA with a
potential conflict of interest to include in its contract conflict of
interest mitigation policies and procedures to minimize this
possibility. The Fund has included conflict-of-interest and
anticorruption provisions for principal recipients in the grant
agreement document.
Board Developed Procurement Requirements, but Certain Issues Have Not
Been Finalized:
The Fund, through the grant agreements, has developed detailed
procurement requirements for medical supplies and a brief list of
requirements for procuring nonmedical items, but certain issues have
not been finalized. Establishing procurement requirements is important
to ensure that grant recipients use Fund money efficiently as they
purchase medicines, vehicles, office equipment, and other items;
contract services; and hire personnel.
Board Analyzed Issues and Developed Options for Procuring Drugs and
Health-Related Items:
The Fund's procurement provisions have focused primarily on drugs and
health products[Footnote 24] because a significant amount of Fund money
will be spent on these items and because drug procurement is complex.
For example, the Fund anticipates that $194 million of grant money will
be spent on drugs in the first 2 years of second-round grants, based on
the proposals approved in that round.[Footnote 25] When other health
products are included, the total comes to $267 million, or almost half
of anticipated expenditures, for the first 2 years of round-1 grants,
and $415 million, representing a similar percentage of anticipated
expenditures, for the first 2 years of round-2 grants (see fig. 5).
Drugs and health products for round-2 grants are expected to grow to
$1.17 billion over the full life of these grants.[Footnote 26]
Figure 5: [Empty]Anticipated Grant Expenditures for Drugs and Health
Products:
[See PDF for image]
[A] The totals for each round are board-approved ceilings for approved
proposals; actual grant totals may be less.
[B] Drugs and health products include educational materials and possibly
other items, based on information provided in the proposals for this
category.
[C] Other includes expenses associated with infrastructure and equipment
(e.g., vehicles), training, human resources, information systems,
administrative costs, and monitoring and evaluation.
[End of figure]
Drug procurement is complex, as it requires strict standards for
ensuring and monitoring quality, controlling transport and storage, and
tracking how the products are used. For example, many grant recipients
have plans to purchase antiretrovirals, which block the replication of
HIV and are indispensable for treating patients living with the
disease. These drugs have strict dosing regimens, and patients must be
closely monitored to ensure that they are adhering to these regimens
and do not develop adverse reactions or resistant strains of the virus.
The Fund estimates that close to 200,000 people will be treated with
antiretrovirals during the first 2 years of grants resulting from the
first 2 proposal rounds and that close to 500,000
will be treated over the life of these grants.[Footnote 27] (See app.
III for more detailed information.):
In April 2002, the board established a procurement and supply
management task force, made up of technical experts from U.N. agencies,
the private sector, and civil society, to analyze issues related to
procuring drugs and health products and develop options and
recommendations for grant recipients on how to procure them. In October
2002, the task force provided a list of issues to the board that
included:
* drug selection and the use of preventive, diagnostic, and related
health products;
* monitoring drug quality and compliance with country drug registration
processes for marketing and distribution;
* procurement principles and responsibilities, including supplier
performance, obtaining the lowest price for quality goods, compliance
with national laws and international obligations, and domestic
production;
* managing and assessing the chain of supply, including forecasting
demand, ensuring proper shipping and storage, and preventing drug
diversion;
* payment issues, including direct payment and exemption from duties,
tariffs and taxes; and:
* ensuring that patients adhere to treatment while monitoring drug
resistance and adverse drug reactions.
In the grant agreements, the Fund provides specific requirements for
principal recipients regarding many of these issues. The requirements
are meant to ensure the continuous availability of safe and effective
drugs and other health products at the lowest possible prices and to
provide a standard for the LFA to use in evaluating the procurement
activities of the principal recipient. For example, the requirements
state that recipients must comply with established quality standards
when purchasing medicines. The requirements also stipulate that no Fund
money may be used for procuring drugs or other health products until
the Fund, through the LFA, has verified that the principal recipient
has the capacity to manage (or oversee subrecipients' management of)
procurement tasks, such as purchasing, storing, and distributing these
products in accordance with Fund guidance, unless the Fund agrees
otherwise. In one country, the Fund issued additional procurement
requirements to complement the grant agreement, based on an assessment
of the principal recipient's ability to procure drugs and other goods.
The Fund anticipates that all grant recipients that have plans to
purchase medicines with Fund money will be assessed within 6 months
after signing the grant agreement.
The Fund Provided General Requirements for Procuring Goods and
Services:
In addition to providing specific requirements for procuring drugs and
other health-related products, the grant agreement includes a brief
list of general requirements that also apply to services and nonmedical
items such as vehicles or office equipment. These requirements
establish a series of minimum standards that recipients must observe
when purchasing goods or executing contracts. For example, recipients
are to award contracts on a competitive basis to the extent possible
and must clearly describe the goods they are requesting when they ask
for bids. They must pay no more than a reasonable price for goods and
services, keep records of all transactions, and contract only with
responsible suppliers who can successfully deliver the goods and
services and otherwise fulfill the contract.
The Fund encourages recipients to use international and regional
procurement mechanisms if doing so results in lower prices for quality
products. For example, in one country, the U.N. Development Program
will purchase vehicles for subrecipients because it has extensive
experience with the import process. Similarly, the health ministry of
another country--the entity that will implement the grant--may purchase
antiretrovirals through the Pan American Health Organization. The Fund
also encourages recipients with procurement experience to use their
existing procedures, provided these procedures meet the requirements
set forth in the grant agreement. For example, a principal recipient in
one country will use its own procedures to purchase nonmedical items
because these procedures are familiar and are based on generally
accepted management practices.
:
The Fund Has Not Finalized Some Procurement Issues:
The Fund has not finalized certain procurement issues, including (1)
the consequences of noncompliance with national laws regarding patent
rights and other intellectual property obligations, (2) the acceptance
of waivers that would permit recipients to pay higher prices for
domestically produced goods, and (3) solicitation and acceptance of in-
kind donations. The board amended its policy on a fourth issue, payment
of taxes and duties on products purchased with Fund money, and has
asked the secretariat to monitor the impact of this change.
Board documents and the Fund's guidelines for submitting proposals
encourage grant recipients to comply with national laws and applicable
international obligations, including those pertaining to patents and
other intellectual property rights. This issue is significant because
these laws and obligations have rules and procedures that affect the
procurement of drugs.[Footnote 28] The board has yet to reach a
decision regarding the consequences of noncompliance, that is, whether
failure to comply would automatically be considered a breach of the
grant agreement and cause for termination of the grant. As of April 1,
2003, the Fund has not included any language concerning compliance with
national laws and international obligations in the grant agreement. In
the interim, however, Fund officials stated that the Fund retains the
option of using the more general termination clause in the grant
agreement in the event that a recipient is found by the appropriate
authorities to be in violation of national law or international
obligations.
Another issue on which no formal decision has been made is whether the
Fund, like the World Bank, should allow aid recipients to pay higher
prices for domestically produced medicines and other goods to develop
local manufacturing capacity. Documents prepared for the fourth board
meeting note that the benefits of paying higher prices for domestically
produced items are not clear and that it could be difficult for
recipients to administer such a pricing scheme. The documents also note
that it may be beyond the mandate of the Fund to support domestic
efforts by approving higher prices for them. This was the only issue
that board members brought to a vote, at the January 2003 meeting, and
were unable to obtain the votes necessary to reach a decision.
According to the Fund, the fact that no decision was reached means that
the status quo--that recipients are encouraged to pay the lowest
possible price for products of assured quality--remains. This policy is
also likely to remain for the foreseeable future, since, according to
Fund officials, it is no longer on the agenda of the Portfolio
Management and Procurement Committee or the Procurement and Supply
Management Advisory Panel, the two bodies that report to the board on
issues pertaining to procurement.
The board deferred to its June 2003 meeting the question of whether the
Fund should solicit or accept in-kind donations such as drugs on behalf
of grant recipients. The Portfolio Management and Procurement Committee
cautioned that the Fund needs to consider methods for ensuring the
quality of these products.
While the Fund states in the grant agreements that Fund resources shall
not be used to pay taxes and duties on products purchased in the
recipient country, the Portfolio Management and Procurement Committee
revisited this issue in its report to the January 2003 board
meeting.[Footnote 29] Specifically, the committee noted that this
policy may be difficult for NGO recipients to follow, as they have
neither the authority to guarantee exemption nor the cash reserves to
cover costs when exemptions are not possible. The committee implied
that given these weaknesses, NGOs may be reluctant to serve as
principal recipients and indicated in its report that making sure NGOs
are included as principal recipients is more important than trying to
ensure that grant recipients don't pay taxes and duties. The committee
also raised a practical issue, noting that the Fund's current reporting
requirements do not provide it with the information necessary to
determine whether grantees are in fact using Fund money to pay these
levies. At the January 2003 board meeting, the Fund amended its policy
on exempting grant recipients from duties, tariffs, and taxes. The
amended policy allows, but does not encourage, Fund resources to be
used to pay these costs. The board asked the secretariat to monitor the
impact of this revision and report back when sufficient information is
available.
Lack of Resources Threatens Fund's Ability to Continue to Approve and
Finance Grants:
The Fund's ability to approve and finance additional grants is
threatened by a lack of sufficient resources. The Fund does not
currently have enough pledges to allow it to approve more than a small
number of additional proposals in 2003. In addition, without
significant new pledges, the Fund will be unable to support all of the
already approved grants beyond their initial 2-year agreements.
The Fund Requires Additional Pledges to Continue Approving Grants:
Because the Fund approves grant proposals on the basis of amounts that
have been pledged, it will require additional pledges if it is to
continue approving grants. According to the Fund, it will approve
proposals on the basis of actual contributions to the trustee or
pledges that will be converted to contributions soon after approval, so
that proposals can be financed in a timely manner.[Footnote 30] As a
result, the Fund has only a limited amount of money available for its
third proposal round, currently planned for late 2003. In addition, the
Fund will require significant additional pledges in order to continue
holding proposal rounds beyond the planned third round. The Fund has
less than $300 million available to support commitments in round 3,
which would be significantly less than the $608 million in 2-year
grants approved in the first round[Footnote 31] and the $884 million
approved in the second round. These available resources are
substantially less than the $1.6 billion in eligible proposals that the
Fund expects to be able to approve in round 3. The Fund's resource
needs are based on expected increases in eligible proposals over the
next two rounds (rounds 3 and 4) due to a concerted effort on the part
of local partners to prepare significantly expanded responses to AIDS,
TB, and malaria (see fig. 6). Based on the number of technically sound
proposals it expects to receive and approve in future rounds, and the
amount pledged as of April 1, 2003, the Fund projects that it will
require $1.6 billion in new pledges in 2003 and $3.3 billion in 2004.
:
Figure 6: Anticipated Expansion in Approved Proposal Dollars through
2004 (actual and estimated 2-year commitments):
[See PDF for image]
Note: Round 3 has been announced and decisions will be made in October
2003. Dates for rounds 4 and 5 are tentative.
[A] Actual data from receipt and approval of proposals (2-year grant
commitments).
[B] Global Fund estimate of expected 2-year grant commitments.
[End of figure]
The Fund Requires Significantly Greater Contributions to Finance
Approved Grants for Duration of Programs:
The Fund will require significantly greater contributions to finance
approved grants beyond initial 2-year commitments of money. By January
2003, the Fund had made 2-year grant commitments equaling nearly $1.5
billion in the first two proposal rounds.[Footnote 32] Among other
things, these grants seek to provide 500,000 people with AIDS
medications and 500,000 AIDS orphans and other vulnerable children with
care and support. Although the Fund approves grants that can be covered
by pledges received, these pledges need only be sufficient to finance
the initial 2-year period of the grant. Since the typical Fund-
supported project lasts five years, this could result in the Fund's
inability to fulfill its longer-term obligation to programs that are
deemed successful at the 2-year evaluation. If all currently approved
proposals demonstrate acceptable performance after 2 years, the Fund
will require $2.2 billion more to assist these programs for an
additional 1 to 3 years. Currently, the Fund has $3.4 billion in total
pledges and nearly $3.7 billion in potential obligations from the first
two proposal rounds (see fig. 7). The Fund will only sign grant
agreements based on money received by the trustee, as opposed to
pledges received. Thus, continued support beyond the 2-year point
requires that a significant amount of pledges be turned into actual
contributions. However, not all pledges are contributed in a timely
manner. For example, as of January 15, 2003, more than $90 million
pledged through 2002 had still not been contributed, including $25
million pledged by the United States. The Fund is providing numerous
grants that will be used to procure antiretroviral drugs for people
living with HIV/AIDS. Interruption or early termination of funding for
such projects due to insufficient resources could have serious health
implications, although Board documents suggest that special
consideration for people undergoing treatment may be given during the
evaluation process. The Fund currently has potential obligations
lasting at least until 2007, and each additional proposal round will
incur further long-term obligations for the Fund.
Figure 7: Pledges Made, Amount Received, and Grant Proposals Approved:
[See PDF for image]
Note: A shortfall in the funding of already approved grants is evident
when one compares 5-year commitments with total pledges over this time
frame. The small amount of resources available for funding new grants
is evident when comparing 2-year commitments with pledges through 2003.
[A] The pledges expected through 2008 include $173 million that has no
specified arrival date.
[B] These numbers represent the maximum amount approved by the board.
Final budgets may be reduced during grant agreement negotiations. Five-
year figures are potential, rather than guaranteed, commitments.
[End of figure]:
:
The Fund has estimated that it will need at least $6.3 billion in
pledges for 2003-2004 to continue approving new proposals and finance
the grants already approved in rounds 1 and 2.[Footnote 33] The Fund is
looking to raise these resources from both public and private sources,
with $2.5 billion needed in 2003 alone. As of April 1, 2003, only $834
million had been pledged for 2003, 6 percent of which came from the
private sector.[Footnote 34]
Improvements in Grant-Making Processes Enhance Fund's Ability to
Achieve Key Objectives, but Challenges Remain:
The Fund has established detailed objectives, criteria and procedures
for its grant decision process and is making enhancements to the
process in response to concerns raised by participants and
stakeholders. Several improvements were made to the proposal review
process between the first and second proposal rounds, and the Fund has
committed to further improvement. These efforts will seek to address
ongoing challenges, including ensuring that the money from the Fund
supplements existing spending for HIV/AIDS, TB, and malaria and that
recipients are able to use the new aid effectively. The Fund has
recognized these challenges, but its efforts to address them are still
evolving.
Improvements in Proposal Review and Grant-Making Process Support Key
Objectives:
The Fund has made improvements in its proposal review and grant-making
process to support key objectives, but assessment criteria and
procedures are still evolving. According to the Fund, criteria for
successful proposals include (1) technical soundness of approach, (2)
functioning relationships with local stakeholders, (3) feasible plans
for implementation and management, (4) potential for sustainability,
and (5) appropriate plans for monitoring and evaluation. In addition,
the Fund states that successful proposals will address the abilities of
recipients to absorb the grant money. Using these criteria, the Fund
established a grant approval process, based primarily on an independent
evaluation of proposals by the TRP (see fig. 8).
:
Figure 8: Global Fund Proposal Review Process:
[See PDF for image]
[End of figure]
Between the first and second proposal rounds, the Fund made several
improvements to the process, based on feedback from participants and
the work of one of the Board's committees. These improvements included
revising the proposal forms and instructions to make them more
comprehensive and better support the criteria for successful proposals
as determined by the Fund. The Fund also added additional members with
cross-cutting expertise to the Technical Review Panel to allow it to
better evaluate nonmedical development-related aspects of the proposal,
and lengthened the proposal application period from 1 month in round 1
to 3 months in round 2 to give applicants more time to develop their
proposals. According to Fund and other officials, these improvements
helped increase the overall quality of grant proposals submitted in the
second proposal round. The Fund also made all successful proposals from
the second round publicly available on its Web site, increasing the
amount of information available to all interested parties regarding
Fund-supported programs.
Some board members expressed concerns between the first and second
proposal rounds regarding the way the Fund was addressing its objective
of giving due priority to the countries with the greatest need. In
particular, the board members were concerned that countries with the
greatest need, as determined by poverty and disease burden, might be
least able to submit high-quality proposals, resulting in their
systematic exclusion. In the first two proposal rounds, the Fund
excluded only the highest income countries
from grant eligibility.[Footnote 35] However, the Fund stated that
priority would be given to proposals from the neediest countries. Most
of the grants approved in rounds 1 and 2 did in fact go to recipients
in countries defined by the World Bank as low income, demonstrating
that the poorest countries were not being excluded. No money was
awarded in countries defined as high income, and only 3 percent of the
money was awarded in countries defined as upper-middle income (see fig.
9). Similarly, sub-Saharan Africa, the region that suffers from the
highest burden of disease for HIV/AIDS, received 61 percent of the
money for HIV/AIDS programs. (See app. IV for more detailed
information.):
Figure 9: Grant Money by Country Income LevelA:
[See PDF for image]
[A] Based on maximum allowable grant money for full length of Board
approved programs.
[End of figure]
However, to further ensure that this key objective is supported,
particularly in the face of increasingly scarce resources, the Fund has
altered its eligibility criteria for round 3 to focus more clearly on
need. All high-income countries are now excluded from eligibility for
Fund money,[Footnote 36] and upper-middle and lower-middle income
countries must meet additional criteria such as having cofinancing
arrangements and a focus on poor or vulnerable populations. Low-income
countries remain fully eligible to request support from the Fund.
Beginning in the fourth round, WHO and UNAIDS will be asked to provide
matrices categorizing countries by disease-related need[Footnote 37]
and poverty.
Challenges to Grant-Making Process Remain:
The Fund and other stakeholders note that meeting key grant-making
criteria will be a challenge, and the Fund's efforts to address these
criteria are still evolving. According to Fund guidelines, proposals
should demonstrate how grants complement and augment existing programs
and how these additional resources can be effectively absorbed and
used.[Footnote 38]
Ensuring that Grants Complement and Add to Existing Spending:
The Fund's policy is that both the pledges the Fund receives and the
grants it awards must complement and add to existing spending on the
three diseases. However, ensuring adherence to this policy is
difficult. According to the secretariat, it monitors the sources of new
pledges to assess whether the pledges represent additional spending.
Monitoring pledges is problematic, however, because it can be difficult
to determine how much money was spent by a donor or multilateral
institution specifically on AIDS, TB, or malaria-related programs.
According to a UNAIDS report, pledges to the Fund from most of the G-7
countries,[Footnote 39] as well as from eight:
of the Development Assistance Committee[Footnote 40] governments, have
thus far been determined to add to baseline HIV/AIDS funding.
Nonetheless, despite its monitoring efforts, the Fund can only
encourage, rather than require, donors to contribute new spending
rather than simply transfer funds from related programs.
It is also difficult for the Fund to ensure that the grants it awards
will augment existing spending at the country level. It has identified
several situations to be avoided, including allowing grants to replace
budgetary resources or other "official development assistance," and it
has taken certain steps to ensure that the grants will in fact
represent new and added spending in the country. For example, the Fund
has required all applicants to include information in their proposals
on how the funds requested would complement and supplement existing
spending and programs. In addition, the Fund has reserved the right to
terminate grants if it discovers that they are substituting for, rather
than supplementing, other resources.[Footnote 41] However, the Fund
does not have the ability to formally monitor whether grants constitute
additional spending once disbursed, and we anticipate that doing so
would be difficult. Even if the Fund succeeded in documenting that all
grant money was spent appropriately on the approved project and that no
previously allocated money for AIDS, TB, or malaria was supplanted in
the process, it still could not document the level of spending on these
diseases that would have occurred without the grant. Thus, it could not
show whether the grant in fact substituted for money that would have
been otherwise allocated. A report presented at the Fund's October 2002
board meeting proposed the development of a policy for monitoring
additionality.
At present, lacking any formal system, the Fund may be unaware of, or
unprepared to address, situations in which its grants do not represent
additional, complementary spending. For example, an official from a
development agency that currently funds much of one country's TB
program stated that he believes the country lacks the capacity to
increase its program for TB, despite having received a TB grant in the
first round. The development agency therefore planned to transfer its
current TB funding to other health assistance projects in response to
the Fund's TB grant, raising questions of whether the grant will
fulfill its purpose of providing additional funding for TB. Similar
concerns have been expressed by other officials representing both Fund
recipients and donors.
Ensuring that Recipients Have the Capacity to Absorb New Funding:
Although the Fund has stated that proposals will be assessed based on
whether they have demonstrated how grants could be effectively absorbed
and used, Fund officials, donors, and others have raised concerns
regarding the actual capacity of recipients to absorb new aid.[Footnote
42] While some countries may have surplus labor and institutional
capacity within their health sectors, other countries may have
difficulty rapidly expanding their health sectors due to a shortage of
skilled health workers or insufficient infrastructure to deliver health
services. While such capacity constraints can be relieved over time
with additional training and investment, in the short run they could
limit the effectiveness of expanded health spending. For example,
officials in one country told us that it has been slow in disbursing
its World Bank HIV/AIDS money because of difficulties in establishing
the necessary institutions to identify and distribute funds to
effective projects. In another country, government and NGO officials
cited a lack of administrative capacity in NGOs as a likely challenge
to their ability to absorb the Fund grant. The Fund is aware of these
concerns and is addressing them in a number of ways. Proposal
applications must describe the current national capacity--the state of
systems and services--available to respond to HIV/AIDS, TB, and
malaria. After the first round, the Fund also added more members to the
TRP to evaluate these issues in proposals. In addition, the Fund
requires LFAs to preassess principal recipients to ensure that they are
prepared to receive, disburse, and monitor the money. On at least one
occasion, the Fund decided to reduce its initial grant disbursement to
a recipient, based on concerns raised by the LFA in the preassessment.
:
The LFA preassessment does not address all potential constraints on a
country's ability to absorb new funds, notably across sectors or at the
macroeconomic level. While these capacity constraints could hinder the
effectiveness of the grant, they could also generate unintended side
effects beyond the scope of the funded project. Introducing more money
into a sector with insufficient capacity to utilize it could draw
scarce resources from other vital sectors, such as agriculture or
education. For example, one way to reduce temporary shortages of
skilled health workers would be to raise the salaries of those
positions, relative to the rest of the economy. Over time, this wage
disparity will provide an incentive to increase the number of graduates
trained in the health field. However, in the short term, it may
encourage already skilled workers in other sectors to pursue higher
wages in the health sector, adversely affecting the sectors they leave.
To the extent that these other sectors are also priorities in economic
development, this could adversely affect a country's pursuit of poverty
reduction. The country coordinating mechanism model of proposal
development is intended to help avoid such problems by ensuring that
those with the most knowledge of a country's needs and capacities are
directly responsible for developing proposals. However, as discussed
earlier, many CCMs are facing challenges in operating effectively.
The provision of large amounts of new foreign aid to countries from all
sources, including the Global Fund and bilateral and multilateral
initiatives, may also have unintended, detrimental macroeconomic
implications. Large increases in development assistance are considered
critical to the successful fight of the three diseases, as well as the
achievement of long-term poverty reduction goals. Moreover, increasing
the number of healthy people in a country, such as through successful
treatment, may increase its productive capacity. However, increasing
spending beyond a country's productive capacity could result in
problems, such as increased domestic:
inflation, that are not conducive to growth or poverty
reduction.[Footnote 43] While a substantial share of Global Fund grant
money is expected to fund imports such as medicines--which likely have
no adverse macroeconomic implications--a significant amount will also
be spent domestically on nontraded items, such as salaries and
construction expenses. Concerns over potential macroeconomic
difficulties prompted one government to initially propose offsetting
its Global Fund grant with reductions in other health spending;
however, upon further assessment the government reconsidered and will
not reduce other health spending. An International Monetary Fund
official stated that he believed that the Global Fund grants are not
generally large enough, as a share of a country's Gross Domestic
Product, to cause significant macroeconomic effects. He added, however,
that country authorities should nonetheless monitor these grants in
case they do become significant and possibly destabilizing. The Global
Fund expects that the amount of money that it disburses will rise
substantially in the future, which--along with large increases in other
proposed development assistance, such as through the U. S. Millennium
Challenge Account[Footnote 44]---could substantially increase total
aid flows to certain countries in a relatively short period of time.
Available research on the macroeconomic effects of large increases in
overall grant aid is thus far inconclusive, providing little guidance
on the magnitude of assistance that may trigger these negative
macroeconomic impacts.
Agency Comments and Our Evaluation:
We requested comments on a draft of this report from the Executive
Director of the Fund, the Secretary of Health and Human Services, the
Secretary of State, and the Administrator of USAID, or their designees.
We received formal comments from the Fund as well as a combined formal
response from the Department of Health and Human Services, the
Department of State, and USAID (see apps. V and VI). Both the Fund and
the U.S. agencies agreed with the information and analysis presented in
this report. The Fund's Executive Director concluded that this report
accurately describes the challenges faced by the Fund in responding to
the three diseases. The Fund outlined measures it is taking to address
these challenges and identified several additional challenges. The U.S.
agencies stressed that they and other donor agencies should work with
the Fund to address the challenges. Both the Fund and the U.S. agencies
also submitted informal, technical comments, which we have incorporated
into this report as appropriate.
We are sending copies of this report to the Executive Director of the
Fund, the Secretary of Health and Human Services, the Secretary of
State, the Administrator of USAID, and interested congressional
committees. Copies of this report will also be made available to other
interested parties on request. In addition, this report will be made
available at no charge on the GAO Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please
contact me at (202) 512-3149. Other GAO contacts and staff
acknowledgments are listed in appendix V.
Sincerely yours,
David Gootnick, Director
International Affairs and Trade:
Signed by David Gootnick:
[End of section]
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
At the request of the Chairman of the House Committee on
Appropriations, Subcommittee on Foreign Operations, Export Financing
and Related Programs, we assessed (1) the Fund's progress in developing
governance structures; (2) the systems that the Fund has developed for
ensuring financial accountability, monitoring and evaluating grant
projects, and procuring goods and services; (3) the Fund's efforts to
mobilize resources; and (4) the Fund's grant decision-making process.
To assess how the Fund has progressed in establishing structures needed
for governance, we reviewed Fund documents and reports from
nongovernmental organizations involved in the country coordinating
mechanism (CCM) process. We also interviewed Fund officials in Geneva
and U.S. government officials from the Departments of State and Health
and Human Services and the U.S. Agency for International Development.
In addition, we traveled to Haiti and Tanzania, two "fast-track"
countries where grant agreements were about to be signed, and two
countries less far along in the process, Ethiopia and Honduras. In
these four countries, we met with a wide variety of CCM members,
including high-level and other government officials, multilateral and
bilateral donors, faith-based and other nongovernmental organizations,
professional associations, and private sector groups. In all four
countries, we met with organizations designated as the principal
recipient in grant proposals. We also met with a Fund official who was
working with the CCM in Haiti. To understand the Fund's administrative
services agreement with the World Health Organization (WHO) and its
impact on the Fund's ability to quickly disburse grants, we reviewed
Fund documents pertaining to the agreement, met with WHO and Fund
officials in Geneva and spoke with a U.S. government legal expert in
Washington, D.C. We also met with a WHO official while he was traveling
in San Francisco.
To assess the Fund's development of oversight systems to ensure
financial and program accountability, we reviewed Fund documents
prepared for the second, third, and fourth board meetings; requirements
contained in the grant agreements; and Fund working papers prepared
after the fourth board meeting that propose further clarifications and
guidelines for principal recipients and Local Fund Agents (LFAs). We
also reviewed the U.S. Agency for International Development's (USAID)
Handbook of indicators for programs on human immunodeficiency virus/
acquired immunodeficiency syndrome (HIV/AIDS) and sexually transmitted
infections, Joint United Nations HIV/AIDS Program publications for
monitoring and evaluating national AIDS programs, and WHO coordinates
for charting progress against HIV/AIDS, tuberculosis and malaria. We
held discussions with the secretariat in Geneva on fiduciary and
financial accountability and monitoring and evaluation of grant
programs and received presentations on these topics from the
secretariat. In addition, we discussed these issues with U.S.
government officials from the Departments of State and Health and Human
Services and USAID, and with officials from the World Bank. During our
fieldwork in Haiti and Tanzania, we met with representatives of the
entities serving as local fund agents in those countries (KPMG in Haiti
and PricewaterhouseCoopers in Tanzania); we also met with
representatives from KPMG's Global Grants Program in San Francisco. To
further our understanding of the Fund's oversight systems and the
challenges to implementing them in recipient countries, we met with the
following groups in all four of the countries we visited: government
officials, multilateral and bilateral donors, nongovernmental
organizations, and others who will be involved in implementing Fund
grants or who had observations on the Fund's oversight systems.
To assess the Fund's procurement guidelines, we reviewed the grant
agreements and data prepared by the Fund showing anticipated spending
on drugs and other items and met with Fund officials in Geneva. We also
interviewed a U.S. legal expert serving on the procurement and supply
management task force and reviewed documents prepared by taskforce and
the Portfolio Management and Procurement Committee at the request of
the board. To learn about the ability of grant recipients to procure
goods and services, we met with local fund agent representatives, a
principal recipient, and subrecipients. We asked the principal
recipient and subrecipient representatives about their procurement
practices, their understanding of Fund guidance and their plans to
procure medicines, goods and services. In Washington, D.C., we met with
staff from a public health consulting firm who assessed one of the
principal recipients. To further our understanding of the procurement
process, we also interviewed representatives from several other
consulting firms that assist developing country governments and
nongovernmental organizations with procurement.
To assess Fund efforts to mobilize resources, we analyzed pledges made
to the Fund from public and private sources as well as the Fund's
commitments to grants. We reviewed their expected future financial
needs to make new grants and finance already approved grants. In
addition, we contacted officials from the Fund to discuss their
resource mobilization efforts and strategies for dealing with a
resource shortfall.
:
To assess the Fund's grant-making process, we reviewed the objectives
and processes of their proposal review and approval processes. We
reviewed Fund documents, including proposal applications and guidelines
from the first and second proposal rounds. Additionally we tracked the
Fund's efforts at improving the grant-making process by reviewing
documents prepared for the Fund's first four board meetings. We also
interviewed representatives from the Fund and the technical review
panel in Geneva and Washington, D.C., and we asked government, donor,
and nongovernmental organization officials in the four recipient
countries we visited for their assessment of the proposal process and
its challenges. To assess the nature of the challenges identified and
any efforts made by the Fund to address them, we interviewed officials
at the World Bank and International Monetary Fund, and we conducted a
review of relevant economic literature. We also conducted research and
reviewed data available on global spending on HIV/AIDS, TB, and
malaria.
For general background and additional perspectives on the Fund, we
spoke with representatives from the Gates Foundation, the Global AIDS
Alliance, and the Earth Institute at Columbia University.
We conducted our work in Washington, D.C.; San Francisco; Geneva,
Switzerland; Ethiopia; Haiti; Honduras; and Tanzania, from April 2002
through April 2003, in accordance with generally accepted government
auditing standards.
:
[End of section]
Appendix II: Status of Round 1 Grants:
Table 2: Signed Grant Agreements--Funds Committed and Disbursed:
No: 1; Country: Argentina; Program: HIV/AIDS; Principal recipient: U.N.
Development Program (UNDP); Local Fund Agent: PricewaterhouseCoopers
(PWC); Date of signed agreement: 29-Jan-03; Total funds committed
(in U.S. dollars)[A]: $12,177,200; Latest
disbursement date[B]: 21-Mar-03; Total funds disbursed as of April 22,
2003 (in U.S. dollars): $1,500,000.
No: 2; Country: Benin; Program: Malaria; Principal recipient: UNDP;
Local Fund Agent: PWC; Date of signed agreement: 20-Mar-03; Total funds
committed
(in U.S. dollars)[A]: 2,389,185; Latest
disbursement date[B]: 14-Apr-03; Total funds disbursed as of April 22,
2003 (in U.S. dollars): 341,021.
No: 3; Country: Burundi; Program: HIV/AIDS; Principal recipient:
Minsitry of Health; Local Fund Agent: PWC; Date of signed agreement:
04-Apr-03; Total funds committed
(in U.S. dollars)[A]: 4,877,000; Latest
disbursement date[B]: 17-Apr-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 554,100.
No: 4; Country: Cambodia; Program: HIV/AIDS; Principal recipient:
Ministry of Health, Kingdom of Cambodia; Local Fund Agent: KPMG; Date
of signed agreement: 27-Jan-03; Total funds committed
(in U.S. dollars)[A]: 11,242,538; Latest
disbursement date[B]: 17-Apr-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 95,919.
No: 5; Country: China; Program: TB; Principal recipient: Chinese Center
for Disease Control and Prevention, Ministry of Health; Local Fund
Agent: U.N. Office for Project Services (UNOPS); Date of signed
agreement: 30-Jan-03; Total funds committed
(in U.S. dollars)[A]: 25,370,000; Latest
disbursement date[B]: 10-Apr-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 1,200,000.
No: 6; Country: China; Program: Malaria; Principal recipient: Chinese
Center for Disease Control and Prevention, Ministry of Health; Local
Fund Agent: UNOPS; Date of signed agreement: 30-Jan-03; Total funds
committed
(in U.S. dollars)[A]: 3,523,662; Latest
disbursement date[B]: 10-Apr-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 542,800.
No: 7; Country: Ethiopia; Program: TB; Principal recipient: Ministry of
Health; Local Fund Agent: KPMG; Date of signed agreement: 18-Mar-03;
Total funds committed
(in U.S. dollars)[A]: 10,962,600; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22, 2003
(in U.S. dollars): [Empty].
No: 8; Country: Ghana; Program: HIV/AIDS; Principal recipient: The
Ministry of Health of the Republic of Ghana; Local Fund Agent: PWC;
Date of signed agreement: 12-Dec-02; Total funds committed
(in U.S. dollars)[A]: 4,965,478; Latest
disbursement date[B]: 18-Dec-02; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 429,599.
No: 9; Country: Ghana; Program: TB; Principal recipient: The Ministry
of Health of the Republic of Ghana; Local Fund Agent: PWC; Date of
signed agreement: 12-Dec-02; Total funds committed
(in U.S. dollars)[A]: 2,336,940; Latest
disbursement date[B]: 18-Dec-02; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 468,270.
No: 10; Country: Haiti; Program: HIV/AIDS; Principal recipient:
Fondation SOGEBANK; Local Fund Agent: Mérové-Pierre - Cabinet
d'Experts-Comptables[C]; Date of signed agreement: 12-Dec-02; Total
funds committed
(in U.S. dollars)[A]: 17,945,067; Latest
disbursement date[B]: 10-Feb-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 2,690,782.
No: 11; Country: Haiti; Program: HIV/AIDS; Principal recipient: UNDP;
Local Fund Agent: Mérové-Pierre - Cabinet d'Experts-Comptables[C]; Date
of signed agreement: 12-Dec-02; Total funds committed
(in U.S. dollars)[A]: 6,754,697; Latest
disbursement date[B]: 10-Feb-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 926,762.
No: 12; Country: Honduras; Program: HIV/AIDS; Principal recipient:
UNDP; Local Fund Agent: PricewaterhouseCoopers Interamerica S. de R.L.;
Date of signed agreement: 29-Jan-03; Total funds committed
(in U.S. dollars)[A]: 12,583,466; Latest
disbursement date[B]: 2-Apr-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 685,735.
No: 13; Country: Honduras; Program: TB; Principal recipient: UNDP;
Local Fund Agent: PricewaterhouseCoopers Interamerica S. de R.L.; Date
of signed agreement: 29-Jan-03; Total funds committed
(in U.S. dollars)[A]: 3,790,500; Latest
disbursement date[B]: 2-Apr-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 514,731.
No: 14; Country: Honduras; Program: Malaria; Principal recipient: UNDP;
Local Fund Agent: PricewaterhouseCoopers Interamerica S. de R.L.; Date
of signed agreement: 29-Jan-03; Total funds committed
(in U.S. dollars)[A]: 4,096,050; Latest
disbursement date[B]: 2-Apr-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 379,889.
No: 15; Country: India; Program: TB; Principal recipient: Ministry of
Health; Local Fund Agent: World Bank (in process of being finalized);
Date of signed agreement: 30-Jan-03; Total funds committed
(in U.S. dollars)[A]: 5,650,999; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003 (in U.S. dollars): [Empty].
No: 16; Country: Indonesia; Program: TB; Principal recipient: Ministry
of Health; Local Fund Agent: PWC; Date of signed agreement: 27-Jan-03;
Total funds committed
(in U.S. dollars)[A]: 21,612,265; Latest
disbursement date[B]: 13-Mar-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 750,000.
No: 17; Country: Kenya; Program: HIV/AIDS; Principal recipient: Sanaa
Art Promotions; Local Fund Agent: PWC; Date of signed agreement: 30-
Mar-03; Total funds committed
(in U.S. dollars)[A]: 2,650,813; Latest
disbursement date[B]: 15-Apr-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 137,270.
No: 18; Country: Kenya; Program: HIV/AIDS; Principal recipient: KENWA;
Local Fund Agent: PWC; Date of signed agreement: 30-Mar-03; Total funds
committed
(in U.S. dollars)[A]: 220,875; Latest
disbursement date[B]: 15-Apr-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 8,500.
No: 19; Country: Lao People's Democratic Republic; Program: HIV/AIDS;
Principal recipient: Ministry of Health, Department of Hygiene &
Prevention; Local Fund Agent: KPMG; Date of signed agreement: 05-Feb-
03; Total funds committed
(in U.S. dollars)[A]: 1,307,664; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 20; Country: Lao People's Democratic Republic; Program: Malaria;
Principal recipient: Ministry of Health, Department of Hygiene &
Prevention; Local Fund Agent: KPMG; Date of signed agreement: 05-Feb-
03; Total funds committed
(in U.S. dollars)[A]: 3,155,152; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 21; Country: Madagascar; Program: Malaria; Principal recipient:
Population Services International; Local Fund Agent: PWC; Date of
signed agreement: 05-Feb-03; Total funds committed
(in U.S. dollars)[A]: 1,482,576; Latest
disbursement date[B]: 12-Mar-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 591,931.
No: 22; Country: Malawi; Program: HIV/AIDS; Principal recipient:
National Aids Committee; Local Fund Agent: PWC; Date of signed
agreement: 10-Feb-03; Total funds committed
(in U.S. dollars)[A]: 41,751,500; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 23; Country: Moldova; Program: HIV/AIDS-TB; Principal recipient:
Ministry of Health; Local Fund Agent: PWC; Date of signed agreement:
20-Mar-03; Total funds committed
(in U.S. dollars)[A]: 5,257,941; Latest
disbursement date[B]: 22-Apr-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 880,000.
No: 24; Country: Mongolia; Program: TB; Principal recipient: Ministry
of Health; Local Fund Agent: UNOPS; Date of signed agreement: 05-Feb-
03; Total funds committed
(in U.S. dollars)[A]: 644,000; Latest
disbursement date[B]: 9-Apr-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 42,960.
No: 25; Country: Morocco; Program: HIV/AIDS; Principal recipient:
Ministry of Health; Local Fund Agent: PWC; Date of signed agreement:
29-Jan-03; Total funds committed
(in U.S. dollars)[A]: 4,738,806; Latest
disbursement date[B]: 21-Feb-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 420,000.
No: 26; Country: Panama; Program: TB; Principal recipient: UNDP; Local
Fund Agent: PWC; Date of signed agreement: 10-Feb-03; Total funds
committed
(in U.S. dollars)[A]: 440,000; Latest
disbursement date[B]: 20-Mar-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 112,000.
No: 27; Country: Rwanda; Program: HIV/AIDS-TB; Principal recipient:
Ministry of Health; Local Fund Agent: Crown Agents; Date of signed
agreement: 10-Apr-03; Total funds committed
(in U.S. dollars)[A]: 8,409,268; Latest
disbursement date[B]: 17-Apr-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 790,854.
No: 28; Country: Senegal; Program: HIV/AIDS; Principal recipient:
National AIDS Council of Senegal; Local Fund Agent: KPMG; Date of
signed agreement: 10-Feb-03; Total funds committed
(in U.S. dollars)[A]: 6,000,000; Latest
disbursement date[B]: 28-Feb-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 600,000.
No: 29; Country: Senegal; Program: Malaria; Principal recipient:
National Strategic Plan to Fight Malaria, Ministry of Health; Local
Fund Agent: KPMG; Date of signed agreement: 10-Feb-03; Total funds
committed
(in U.S. dollars)[A]: 4,285,714; Latest
disbursement date[B]: 28-Feb-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 350,000.
No: 30; Country: Serbia; Program: HIV/AIDS; Principal recipient:
Economics Institute; Local Fund Agent: UNOPS; Date of signed agreement:
16-Apr-03; Total funds committed
(in U.S. dollars)[A]: 2,718,714; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 31; Country: Sri Lanka; Program: Malaria; Principal recipient:
Ministry of Health of Sri Lanka; Local Fund Agent: PWC; Date of signed
agreement: 19-Dec-02; Total funds committed
(in U.S. dollars)[A]: 730,140; Latest
disbursement date[B]: 11-Feb-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 176,573.
No: 32; Country: Sri Lanka; Program: Malaria; Principal recipient:
Lanka Jatika Sarvodaya Shramadana Sangamaya; Local Fund Agent: PWC;
Date of signed agreement: 19-Dec-02; Total funds committed
(in U.S. dollars)[A]: 4,467,480; Latest
disbursement date[B]: 11-Feb-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 752,893.
No: 33; Country: Sri Lanka; Program: TB; Principal recipient: Ministry
of Health of Sri Lanka; Local Fund Agent: PWC; Date of signed
agreement: 19-Dec-02; Total funds committed
(in U.S. dollars)[A]: 2,384,980; Latest
disbursement date[B]: 11-Feb-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 478,073.
No: 34; Country: Sri Lanka; Program: TB; Principal recipient: Lanka
Jatika Sarvodaya Shramadana Sangamaya; Local Fund Agent: PWC; Date of
signed agreement: 19-Dec-02; Total funds committed
(in U.S. dollars)[A]: 475,020; Latest
disbursement date[B]: 11-Feb-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 75,260.
No: 35; Country: Tajikistan; Program: HIV/AIDS; Principal recipient:
UNDP; Local Fund Agent: PWC; Date of signed agreement: 31-Mar-03; Total
funds committed
(in U.S. dollars)[A]: 1,474,520; Latest
disbursement date[B]: 22-Apr-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 206,702.
No: 36; Country: Tanzania; Program: Malaria; Principal recipient: The
Ministry of Health of the Government of the United Republic of
Tanzania; Local Fund Agent: PricewaterhouseCoopers Limited; Date of
signed agreement: 11-Dec-02; Total funds committed
(in U.S. dollars)[A]: 11,959,076; Latest
disbursement date[B]: 4-Feb-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 489,478.
No: 37; Country: Uganda; Program: HIV/AIDS; Principal recipient:
Ministry Of Finance, Planning And Economic Development Of The
Government Of Uganda; Local Fund Agent: PWC; Date of signed agreement:
06-Mar-03; Total funds committed
(in U.S. dollars)[A]: 36,314,892; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 38; Country: Ukraine; Program: HIV/AIDS; Principal recipient:
National AIDS Foundation; Local Fund Agent: PWC; Date of signed
agreement: 19-Mar-03; Total funds committed
(in U.S. dollars)[A]: 6,150,000; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 39; Country: Ukraine; Program: HIV/AIDS; Principal recipient:
Ministry of Health; Local Fund Agent: PWC; Date of signed agreement:
29-Jan-03; Total funds committed
(in U.S. dollars)[A]: 16,925,200; Latest
disbursement date[B]: 17-Apr-03; Total funds disbursed as of April 22,
2003
(in U.S. dollars): 481,926.
No: 40; Country: Ukraine; Program: HIV/AIDS; Principal recipient: UNDP;
Local Fund Agent: PWC; Date of signed agreement: 17-Feb-03; Total funds
committed
(in U.S. dollars)[A]: 1,895,011; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 41; Country: Worldwide regions; Program: HIV/AIDS; Principal
recipient: World Lutheran Federation; Local Fund Agent: KPMG-Geneva;
Date of signed agreement: 29-Jan-03; Total funds committed
(in U.S. dollars)[A]: 485,000; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 42; Country: Zambia; Program: HIV/AIDS; Principal recipient:
Central Board of Health; Local Fund Agent: PWC; Date of signed
agreement: 30-Mar-03; Total funds committed
(in U.S. dollars)[A]: 21,214,271; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 43; Country: Zambia; Program: TB; Principal recipient: Central
Board of Health; Local Fund Agent: PWC; Date of signed agreement: 30-
Mar-03; Total funds committed
(in U.S. dollars)[A]: 12,447,294; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 44; Country: Zambia; Program: HIV/AIDS; Principal recipient:
Churches Health Association; Local Fund Agent: PWC; Date of signed
agreement: 30-Mar-03; Total funds committed
(in U.S. dollars)[A]: 6,614,958; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 45; Country: Zambia; Program: TB; Principal recipient: Churches
Health Association; Local Fund Agent: PWC; Date of signed agreement:
30-Mar-03; Total funds committed
(in U.S. dollars)[A]: 2,307,962; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 46; Country: Zanzibar; Program: Malaria; Principal recipient:
Ministry of Health; Local Fund Agent: PWC; Date of signed agreement:
06-Mar-03; Total funds committed
(in U.S. dollars)[A]: 781,220; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 47; Country: Zimbabwe; Program: Malaria; Principal recipient:
Ministry of Health; Local Fund Agent: PWC; Date of signed agreement:
05-Feb-03; Total funds committed
(in U.S. dollars)[A]: 6,716,250; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: Total signed agreements as of April 22, 2003; Total funds committed
(in U.S. dollars)[A]: $366,683,944; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): $17,674,028.
Source: The Fund.
Note: blank cells indicate that no disbursement had been made as of
April 22, 2003.
[A] Amounts may differ from grant ceilings approved by the board
because budgets may be reduced during grant agreement negotiations.
[B] Date disbursement request was sent from the Fund to the World Bank.
[C] Affiliated with KPMG.
[End of table]
Table 3: Grant Agreements in the Pipeline:
No: 48; Country: South Africa; Program: HIV/AIDS-TB; Principal
recipient: National Treasury (Soul City); Local Fund Agent: PWC; Date
of signed agreement: Not yet signed; [Empty]; Total funds committed
(in U.S. dollars)[A]: $2,354,000; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 49; Country: South Africa; Program: HIV/AIDS-TB; Principal
recipient: National Treasury (Love Life); Local Fund Agent: PWC; Date
of signed agreement: Not yet signed; [Empty]; Total funds committed
(in U.S. dollars)[A]: 12,000,000; [Empty]; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 50; Country: South Africa; Program: HIV/AIDS-TB; Principal
recipient: National Treasury (Kwazulu Natal Sub-CCM); Local Fund Agent:
PWC; Date of signed agreement: Not yet signed; [Empty]; Total funds
committed
(in U.S. dollars)[A]: 26,741,529; [Empty]; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 51; Country: Tanzania; Program: HIV/AIDS; Principal recipient:
President's Office of Regional Administration & Local Government
(PORALG); Local Fund Agent: PWC; Date of signed agreement: Not yet
signed; [Empty]; Total funds committed
(in U.S. dollars)[A]: 5,400,000; [Empty]; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 52; Country: Zambia; Program: Malaria; Principal recipient: Central
Board of Health[C]; Local Fund Agent: PWC; Date of signed agreement:
Not yet signed; [Empty]; Total funds committed
(in U.S. dollars)[A]: 17,892,000; [Empty]; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 53; Country: Zambia; Program: Malaria; Principal recipient:
Churches Health Association[C]; Local Fund Agent: PWC; Date of signed
agreement: Not yet signed; [Empty]; Total funds committed
(in U.S. dollars)[A]: [Empty]; [Empty]; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 54; Country: Zambia; Program: HIV/AIDS; Principal recipient:
Minsitry of Finance & National Planning[C]; Local Fund Agent: PWC; Date
of signed agreement: Not yet signed; [Empty]; Total funds committed
(in U.S. dollars)[A]: 14,468,771; [Empty]; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 55; Country: Zambia; Program: HIV/AIDS; Principal recipient: Zambia
National AIDS Network[C]; Local Fund Agent: PWC; Date of signed
agreement: Not yet signed; [Empty]; Total funds committed
(in U.S. dollars)[A]: [Empty]; [Empty]; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 56; Country: Zambia; Program: TB; Principal recipient: Zambia
National AIDS Network; Local Fund Agent: PWC; Date of signed agreement:
Not yet signed; [Empty]; Total funds committed
(in U.S. dollars)[A]: 1,644,744; [Empty]; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 57; Country: Zimbabwe; Program: HIV/AIDS; Principal recipient:
National Aids Council; Local Fund Agent: PWC; Date of signed agreement:
Not yet signed; [Empty]; Total funds committed
(in U.S. dollars)[A]: 10,300,000; [Empty]; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: Total agreements in the pipeline as of April 22, 2003; Date of
signed agreement: [Empty]; [Empty]; Total funds committed
(in U.S. dollars)[A]: $90,801,044; [Empty]; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
Source: The Fund.
Note: blank cells indicate that no disbursement had been made as of
April 22, 2003.
[A] Amounts may differ from grant ceilings approved by the board because
budgets may be reduced during grant agreement negotiations.
[B] Date disbursement request was sent from the Fund to the World Bank.
[C] the exact amounts to be disbursed to principal recipients have not yet
been decided.
[End of table]:
Table 4: Grant Agreements Pending, but Less Far Along in the Process:
No: 58; Country: Chile; Program: HIV/AIDS; Principal recipient:
nongovernmental organization (specifics to be determined); Local Fund
Agent: To be determined; Date agreement expected to be signed: [Empty];
Total funds committed
(in U.S. dollars)[A]: $13,574,098; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003 (in U.S. dollars): [Empty].
No: 59; Country: Democratic People's Republic of Korea; Program: TB;
Principal recipient: To be determined; Local Fund Agent: Global Fund
secretariat; Date agreement expected to be signed: [Empty]; Total funds
committed
(in U.S. dollars)[A]: 2,294,000; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003 (in U.S. dollars): [Empty].
No: 60; Country: Indonesia; Program: HIV/AIDS; Principal recipient:
Ministry of Health; Local Fund Agent: PWC; Date agreement expected to
be signed: Being negotiated; Total funds committed
(in U.S. dollars)[A]: 6,924,971; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 61; Country: Indonesia; Program: Malaria; Principal recipient:
Ministry of Health; Local Fund Agent: PWC; Date agreement expected to
be signed: Being negotiated; Total funds committed
(in U.S. dollars)[A]: 16,018,800; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 62; Country: Mali; Program: Malaria; Principal recipient: Ministry
of Health; Local Fund Agent: KPMG; Date agreement expected to be
signed: [Empty]; Total funds committed
(in U.S. dollars)[A]: 2,023,424; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 63; Country: Nigeria; Program: HIV/AIDS; Principal recipient:
Yakubu Gown Center; Local Fund Agent: KPMG; Date agreement expected to
be signed: Being negotiated; Total funds committed
(in U.S. dollars)[A]: 17,722,103; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 64; Country: Nigeria; Program: HIV/AIDS; Principal recipient:
Yakubu Gown Center; Local Fund Agent: KPMG; Date agreement expected to
be signed: Being negotiated; Total funds committed
(in U.S. dollars)[A]: 8,708,684; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 65; Country: Nigeria; Program: HIV/AIDS; Principal recipient:
Yakubu Gown Center; Local Fund Agent: KPMG; Date agreement expected to
be signed: Being negotiated; Total funds committed
(in U.S. dollars)[A]: 1,687,599; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 66; Country: Thailand; Program: TB; Principal recipient: Ministry
of Health; Local Fund Agent: PWC; Date agreement expected to be signed:
Being negotiated; Total funds committed
(in U.S. dollars)[A]: 6,999,350; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 67; Country: Thailand; Program: HIV/AIDS; Principal recipient:
Ministry of Health; Local Fund Agent: PWC; Date agreement expected to
be signed: Being negotiated; Total funds committed
(in U.S. dollars)[A]: 30,933,204; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 68; Country: Vietnam; Program: HIV/AIDS; Principal recipient:
Ministry of Health; Local Fund Agent: KPMG; Date agreement expected to
be signed: [Empty]; Total funds committed
(in U.S. dollars)[A]: 7,500,00; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: 69; Country: Vietnam; Program: TB; Principal recipient: Ministry of
Health; Local Fund Agent: KPMG; Date agreement expected to be signed:
; Total funds committed
(in U.S. dollars)[A]: 2,500,000; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: Total pending agreements as of April 22, 2003; Total funds
committed
(in U.S. dollars)[A]: $109,386,233; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
No: Total agreements (signed, in pipeline, and pending) as of April 22,
2003; Total funds committed
(in U.S. dollars)[A]: $566,871,221; Latest
disbursement date[B]: [Empty]; Total funds disbursed as of April 22,
2003
(in U.S. dollars): [Empty].
Source: The Fund.
Note: blank cells indicate that no disbursement had been made as of
April 22, 2003, or that negotiations for signing the grant agreement
had not yet begun as of that date.
[A] Amounts may differ from grant ceilings approved by the board because
budgets may be reduced during grant agreement negotiations.
[B] Date disbursement request was sent from the Fund to the World Bank.
[End of table]:
[End of section]
Appendix III: Drug Procurement Cycle:
The drug procurement cycle includes most of the decisions and actions
that health officials and caregivers must take to determine the
specific drug quantities obtained, prices paid, and quality of drugs
received. The process generally requires that those responsible for
procurement (1) decide which drugs to procure; (2) determine what
amount of each medicine can be procured, given the funds available; (3)
select the method they will use for procuring, such as open or
restricted tenders; (4) identify suppliers capable of delivering
medicines; (5) specify the conditions to be included in the contract;
(6) check the status of each order; (7) receive and inspect the
medicine once it arrives; (8) pay the suppliers; (9) distribute the
drugs, making sure they reach all patients; (10) collect information on
how patients use the medicine; and (11) review drug selections. Because
these steps are interrelated, those responsible for drug procurement
need reliable information to make informed decisions.
[See PDF for image]
Note: the adaptation is from Managing Drug Supply, 2ND edition, revised
and expanded, Hartford, CT, Kumarian Press, 1997.
[End of figure]
[End of section]
Appendix IV: Indicators of Need for Recipient Countries:
Country[A]: Low Income; Diseases being addressed by Fund grants: [Empty];
Amount requested by approved grants for full length of programs: [Empty];
HIV/AIDS rate (%), Adults (15-49): [Empty]; Malaria (Cases/
100,000): [Empty]; TB (Cases/
100,000): [Empty]; Human Development Index[B]: [Empty]; Gross National
Income per capita: (in U.S. dollars)[C]: [Empty].
Country[A]: Afghanistan; Diseases being addressed by Fund grants: HIV/
AIDS, Malaria, TB; Amount requested by approved grants for full length
of programs: $3,125,605; HIV/AIDS rate (%), Adults (15-49): NA; Malaria
(Cases/
100,000): 1,825; TB (Cases/
100,000): 325; Human Development Index[B]: NA; Gross National Income
per capita: (in U.S. dollars)[C]: NA.
Country[A]: Armenia; Diseases being addressed by Fund grants: HIV/AIDS;
Amount requested by approved grants for full length of programs:
7,249,981; HIV/AIDS rate (%), Adults (15-49): 0.2; Malaria (Cases/
100,000): NA; TB (Cases/
100,000): 58; Human Development Index[B]: 76; Gross National Income per
capita: (in U.S. dollars)[C]: $2,580.
Country[A]: Bangladesh; Diseases being addressed by Fund grants: HIV/
AIDS; Amount requested by approved grants for full length of programs:
19,961,030; HIV/AIDS rate (%), Adults (15-49): <.1; Malaria (Cases/
100,000): 47; TB (Cases/
100,000): 241; Human Development Index[B]: 145; Gross National Income
per capita: (in U.S. dollars)[C]: 1,590.
Country[A]: Benin; Diseases being addressed by Fund grants: HIV/AIDS,
TB, Malaria; Amount requested by approved grants for full length of
programs: 23,803,254; HIV/AIDS rate (%), Adults (15-49): 3.6; Malaria
(Cases/
100,000): 11,845; TB (Cases/
100,000): 266; Human Development Index[B]: 158; Gross National Income
per capita: (in U.S. dollars)[C]: 980.
Country[A]: Burkina Faso; Diseases being addressed by Fund grants: HIV/
AIDS, Malaria; Amount requested by approved grants for full length of
programs: 26,776,825; HIV/AIDS rate (%), Adults (15-49): 6.5; Malaria
(Cases/
100,000): 5,852; TB (Cases/
100,000): 319; Human Development Index[B]: 169; Gross National Income
per capita: (in U.S. dollars)[C]: 970.
Country[A]: Burundi; Diseases being addressed by Fund grants: HIV/AIDS,
Malaria; Amount requested by approved grants for full length of
programs: 26,423,125; HIV/AIDS rate (%), Adults (15-49): 8.3; Malaria
(Cases/
100,000): 28,031; TB (Cases/
100,000): 382; Human Development Index[B]: 171; Gross National Income
per capita: (in U.S. dollars)[C]: 580.
Country[A]: Cambodia; Diseases being addressed by Fund grants: HIV/
AIDS, TB, Malaria; Amount requested by approved grants for full length
of programs: 47,460,470; HIV/AIDS rate (%), Adults (15-49): 2.7;
Malaria (Cases/
100,000): 473; TB (Cases/
100,000): 560; Human Development Index[B]: 130; Gross National Income
per capita: (in U.S. dollars)[C]: 1,440.
Country[A]: Central African Republic; Diseases being addressed by Fund
grants: HIV/AIDS; Amount requested by approved grants for full length
of programs: 25,090,588; HIV/AIDS rate (%), Adults (15-49): 12.9;
Malaria (Cases/
100,000): 2,485; TB (Cases/
100,000): 415; Human Development Index[B]: 165; Gross National Income
per capita: (in U.S. dollars)[C]: 1,160.
Country[A]: Chad; Diseases being addressed by Fund grants: TB; Amount
requested by approved grants for full length of programs: 3,039,327;
HIV/AIDS rate (%), Adults (15-49): 3.6; Malaria (Cases/
100,000): 190; TB (Cases/
100,000): 270; Human Development Index[B]: 166; Gross National Income
per capita: (in U.S. dollars)[C]: 870.
Country[A]: Comores; Diseases being addressed by Fund grants: Malaria;
Amount requested by approved grants for full length of programs:
2,485,878; HIV/AIDS rate (%), Adults (15-49): NA; Malaria (Cases/
100,000): 2,286; TB (Cases/
100,000): NA; Human Development Index[B]: 137; Gross National Income
per capita: (in U.S. dollars)[C]: 1,590.
Country[A]: Congo, (Democratic Republic of); Diseases being addressed
by Fund grants: TB; Amount requested by approved grants for full length
of programs: 7,973,002; HIV/AIDS rate (%), Adults (15-49): 4.9; Malaria
(Cases/
100,000): 2,963; TB (Cases/
100,000): 301; Human Development Index[B]: 155; Gross National Income
per capita: (in U.S. dollars)[C]: 680.
Country[A]: Cote d'Ivoire; Diseases being addressed by Fund grants:
HIV/AIDS; Amount requested by approved grants for full length of
programs: 91,203,150; HIV/AIDS rate (%), Adults (15-49): 9.7; Malaria
(Cases/
100,000): 6,874; TB (Cases/
100,000): 375; Human Development Index[B]: 156; Gross National Income
per capita: (in U.S. dollars)[C]: 1,500.
Country[A]: East Timor; Diseases being addressed by Fund grants:
Malaria; Amount requested by approved grants for full length of
programs: 2,963,723; HIV/AIDS rate (%), Adults (15-49): NA; Malaria
(Cases/
100,000): NA; TB (Cases/
100,000): NA; Human Development Index[B]: NA; Gross National Income per
capita: (in U.S. dollars)[C]: NA.
Country[A]: Eritrea; Diseases being addressed by Fund grants: Malaria;
Amount requested by approved grants for full length of programs:
7,911,425; HIV/AIDS rate (%), Adults (15-49): 2.8; Malaria (Cases/
100,000): 7,405; TB (Cases/
100,000): 272; Human Development Index[B]: 157; Gross National Income
per capita: (in U.S. dollars)[C]: 960.
Country[A]: Ethiopia; Diseases being addressed by Fund grants: HIV/
AIDS, TB, Malaria; Amount requested by approved grants for full length
of programs: 237,568,925; HIV/AIDS rate (%), Adults (15-49): 6.4;
Malaria (Cases/
100,000): 618; TB (Cases/
100,000): 373; Human Development Index[B]: 168; Gross National Income
per capita: (in U.S. dollars)[C]: 660.
Country[A]: Georgia; Diseases being addressed by Fund grants: HIV/AIDS;
Amount requested by approved grants for full length of programs:
12,125,644; HIV/AIDS rate (%), Adults (15-49): <.1; Malaria (Cases/
100,000): NA; TB (Cases/
100,000): 72; Human Development Index[B]: 81; Gross National Income per
capita: (in U.S. dollars)[C]: 2,680.
Country[A]: Ghana; Diseases being addressed by Fund grants: HIV/AIDS,
TB, Malaria; Amount requested by approved grants for full length of
programs: 29,214,210; HIV/AIDS rate (%), Adults (15-49): 3; Malaria
(Cases/
100,000): 8,874; TB (Cases/
100,000): 281; Human Development Index[B]: 129; Gross National Income
per capita: (in U.S. dollars)[C]: 1,910.
Country[A]: Guinea; Diseases being addressed by Fund grants: HIV/AIDS,
Malaria; Amount requested by approved grants for full length of
programs: 22,029,110; HIV/AIDS rate (%), Adults (15-49): NA; Malaria
(Cases/
100,000): 6,469; TB (Cases/
100,000): 255; Human Development Index[B]: 159; Gross National Income
per capita: (in U.S. dollars)[C]: 1,930.
Country[A]: Haiti; Diseases being addressed by Fund grants: HIV/AIDS;
Amount requested by approved grants for full length of programs:
66,905,477; HIV/AIDS rate (%), Adults (15-49): 6.1; Malaria (Cases/
100,000): 12; TB (Cases/
100,000): 361; Human Development Index[B]: 146; Gross National Income
per capita: (in U.S. dollars)[C]: 1,470.
Country[A]: India; Diseases being addressed by Fund grants: HIV/
AIDS,TB; Amount requested by approved grants for full length of
programs: 137,975,999; HIV/AIDS rate (%), Adults (15-49): 0.8; Malaria
(Cases/
100,000): 226; TB (Cases/
100,000): 185; Human Development Index[B]: 124; Gross National Income
per capita: (in U.S. dollars)[C]: 2,340.
Country[A]: Indonesia; Diseases being addressed by Fund grants: HIV/
AIDS, TB, Malaria; Amount requested by approved grants for full length
of programs: 130,574,740; HIV/AIDS rate (%), Adults (15-49): 0.1;
Malaria (Cases/
100,000): 82; TB (Cases/
100,000): 282; Human Development Index[B]: 110; Gross National Income
per capita: (in U.S. dollars)[C]: 2,830.
Country[A]: Kenya; Diseases being addressed by Fund grants: HIV/AIDS,
TB, Malaria; Amount requested by approved grants for full length of
programs: 176,745,326; HIV/AIDS rate (%), Adults (15-49): 15; Malaria
(Cases/
100,000): 1,000; TB (Cases/
100,000): 417; Human Development Index[B]: 134; Gross National Income
per capita: (in U.S. dollars)[C]: 1,010.
Country[A]: Korea, (Democratic Republic of); Diseases being addressed
by Fund grants: TB; Amount requested by approved grants for full length
of programs: 4,891,000; HIV/AIDS rate (%), Adults (15-49): NA; Malaria
(Cases/
100,000): 448; TB (Cases/
100,000): 176; Human Development Index[B]: NA; Gross National Income
per capita: (in U.S. dollars)[C]: NA.
Country[A]: Kyrgyz Republic; Diseases being addressed by Fund grants:
HIV/AIDS, TB; Amount requested by approved grants for full length of
programs: 19,844,373; HIV/AIDS rate (%), Adults (15-49): <.1; Malaria
(Cases/
100,000): NA; TB (Cases/
100,000): 130; Human Development Index[B]: 102; Gross National Income
per capita: (in U.S. dollars)[C]: 2,540.
Country[A]: Lao People's Democratic Republic; Diseases being addressed
by Fund grants: HIV/AIDS, TB, Malaria; Amount requested by approved
grants for full length of programs: 19,507,845; HIV/AIDS rate (%),
Adults (15-49): <.1; Malaria (Cases/
100,000): 755; TB (Cases/
100,000): 171; Human Development Index[B]: 143; Gross National Income
per capita: (in U.S. dollars)[C]: 1,540.
Country[A]: Lesotho; Diseases being addressed by Fund grants: HIV/AIDS,
TB; Amount requested by approved grants for full length of programs:
34,312,000; HIV/AIDS rate (%), Adults (15-49): 31; Malaria (Cases/
100,000): NA; TB (Cases/
100,000): 542; Human Development Index[B]: 132; Gross National Income
per capita: (in U.S. dollars)[C]: 2,590.
Country[A]: Liberia; Diseases being addressed by Fund grants: HIV/AIDS,
TB; Amount requested by approved grants for full length of programs:
12,192,274; HIV/AIDS rate (%), Adults (15-49): NA; Malaria (Cases/
100,000): 26,828; TB (Cases/
100,000): 271; Human Development Index[B]: NA; Gross National Income
per capita: (in U.S. dollars)[C]: NA.
Country[A]: Madagascar; Diseases being addressed by Fund grants: HIV/
AIDS, Malaria; Amount requested by approved grants for full length of
programs: 8,335,149; HIV/AIDS rate (%), Adults (15-49): 0.3; Malaria
(Cases/
100,000): 2,360; TB (Cases/
100,000): 236; Human Development Index[B]: 147; Gross National Income
per capita: (in U.S. dollars)[C]: 820.
Country[A]: Malawi; Diseases being addressed by Fund grants: HIV/AIDS,
Malaria; Amount requested by approved grants for full length of
programs: 323,798,722; HIV/AIDS rate (%), Adults (15-49): 15; Malaria
(Cases/
100,000): 58,139; TB (Cases/
100,000): 443; Human Development Index[B]: 163; Gross National Income
per capita: (in U.S. dollars)[C]: 600.
Country[A]: Mali; Diseases being addressed by Fund grants: Malaria;
Amount requested by approved grants for full length of programs:
2,592,991; HIV/AIDS rate (%), Adults (15-49): 1.7; Malaria (Cases/
100,000): 4,213; TB (Cases/
100,000): 261; Human Development Index[B]: 164; Gross National Income
per capita: (in U.S. dollars)[C]: 780.
Country[A]: Mauritania; Diseases being addressed by Fund grants: TB,
Malaria; Amount requested by approved grants for full length of
programs: 5,627,299; HIV/AIDS rate (%), Adults (15-49): NA; Malaria
(Cases/
100,000): 11,000; TB (Cases/
100,000): 241; Human Development Index[B]: 152; Gross National Income
per capita: (in U.S. dollars)[C]: 1,630.
Country[A]: Moldova; Diseases being addressed by Fund grants: HIV/AIDS,
TB; Amount requested by approved grants for full length of programs:
11,719,047; HIV/AIDS rate (%), Adults (15-49): 0.2; Malaria (Cases/
100,000): NA; TB (Cases/
100,000): 130; Human Development Index[B]: 105; Gross National Income
per capita: (in U.S. dollars)[C]: 2,230.
Country[A]: Mongolia; Diseases being addressed by Fund grants: HIV/
AIDS, TB; Amount requested by approved grants for full length of
programs: 4,727,103; HIV/AIDS rate (%), Adults (15-49): <.1; Malaria
(Cases/
100,000): NA; TB (Cases/
100,000): 205; Human Development Index[B]: 113; Gross National Income
per capita: (in U.S. dollars)[C]: 1,760.
Country[A]: Mozambique; Diseases being addressed by Fund grants: HIV/
AIDS, TB, Malaria; Amount requested by approved grants for full length
of programs: 155,735,362; HIV/AIDS rate (%), Adults (15-49): 13;
Malaria (Cases/
100,000): 4,120; TB (Cases/
100,000): 407; Human Development Index[B]: 170; Gross National Income
per capita: (in U.S. dollars)[C]: 800.
Country[A]: Myanmar; Diseases being addressed by Fund grants: TB;
Amount requested by approved grants for full length of programs:
17,121,370; HIV/AIDS rate (%), Adults (15-49): NA; Malaria (Cases/
100,000): 254; TB (Cases/
100,000): 169; Human Development Index[B]: 127; Gross National Income
per capita: (in U.S. dollars)[C]: NA.
Country[A]: Nepal; Diseases being addressed by Fund grants: HIV/AIDS,
Malaria; Amount requested by approved grants for full length of
programs: 18,840,210; HIV/AIDS rate (%), Adults (15-49): 0.5; Malaria
(Cases/
100,000): 39; TB (Cases/
100,000): 209; Human Development Index[B]: 142; Gross National Income
per capita: (in U.S. dollars)[C]: 1,370.
Country[A]: Nicaragua; Diseases being addressed by Fund grants: HIV/
AIDS, TB, Malaria; Amount requested by approved grants for full length
of programs: 18,865,903; HIV/AIDS rate (%), Adults (15-49): 0.2;
Malaria (Cases/
100,000): 392; TB (Cases/
100,000): 88; Human Development Index[B]: 118; Gross National Income
per capita: (in U.S. dollars)[C]: 2,080.
Country[A]: Nigeria; Diseases being addressed by Fund grants: HIV/AIDS,
TB, Malaria; Amount requested by approved grants for full length of
programs: 137,655,309; HIV/AIDS rate (%), Adults (15-49): 5.8; Malaria
(Cases/
100,000): 541; TB (Cases/
100,000): 301; Human Development Index[B]: 148; Gross National Income
per capita: (in U.S. dollars)[C]: 800.
Country[A]: Pakistan; Diseases being addressed by Fund grants: HIV/
AIDS, TB, Malaria; Amount requested by approved grants for full length
of programs: 21,619,750; HIV/AIDS rate (%), Adults (15-49): 0.1;
Malaria (Cases/
100,000): 74; TB (Cases/
100,000): 177; Human Development Index[B]: 138; Gross National Income
per capita: (in U.S. dollars)[C]: 1,860.
Country[A]: Rwanda; Diseases being addressed by Fund grants: HIV/AIDS,
TB; Amount requested by approved grants for full length of programs:
14,641,046; HIV/AIDS rate (%), Adults (15-49): 8.9; Malaria (Cases/
100,000): 13,237; TB (Cases/
100,000): 381; Human Development Index[B]: 162; Gross National Income
per capita: (in U.S. dollars)[C]: 930.
Country[A]: Senegal; Diseases being addressed by Fund grants: HIV/AIDS,
Malaria; Amount requested by approved grants for full length of
programs: 18,857,142; HIV/AIDS rate (%), Adults (15-49): 0.5; Malaria
(Cases/
100,000): 553; TB (Cases/
100,000): 258; Human Development Index[B]: 154; Gross National Income
per capita: (in U.S. dollars)[C]: 1,480.
Country[A]: Sierra Leone; Diseases being addressed by Fund grants: TB;
Amount requested by approved grants for full length of programs:
5,698,557; HIV/AIDS rate (%), Adults (15-49): 7; Malaria (Cases/
100,000): 9,318; TB (Cases/
100,000): 274; Human Development Index[B]: 173; Gross National Income
per capita: (in U.S. dollars)[C]: 480.
Country[A]: Somalia; Diseases being addressed by Fund grants: Malaria;
Amount requested by approved grants for full length of programs:
12,886,413; HIV/AIDS rate (%), Adults (15-49): 1; Malaria (Cases/
100,000): 102; TB (Cases/
100,000): 365; Human Development Index[B]: NA; Gross National Income
per capita: (in U.S. dollars)[C]: NA.
Country[A]: Sudan; Diseases being addressed by Fund grants: TB,
Malaria; Amount requested by approved grants for full length of
programs: 76,319,734; HIV/AIDS rate (%), Adults (15-49): 2.6; Malaria
(Cases/
100,000): 13,553; TB (Cases/
100,000): 195; Human Development Index[B]: 139; Gross National Income
per capita: (in U.S. dollars)[C]: 1,520.
Country[A]: Tajikistan; Diseases being addressed by Fund grants: HIV;
Amount requested by approved grants for full length of programs:
2,425,245; HIV/AIDS rate (%), Adults (15-49): <.1; Malaria (Cases/
100,000): 295; TB (Cases/
100,000): 105; Human Development Index[B]: 112; Gross National Income
per capita: (in U.S. dollars)[C]: 1,090.
Country[A]: Tanzania; Diseases being addressed by Fund grants: HIV/
AIDS, Malaria; Amount requested by approved grants for full length of
programs: 28,683,718; HIV/AIDS rate (%), Adults (15-49): 7.8; Malaria
(Cases/
100,000): 1,293; TB (Cases/
100,000): 340; Human Development Index[B]: 151; Gross National Income
per capita: (in U.S. dollars)[C]: 520.
Country[A]: Togo; Diseases being addressed by Fund grants: HIV/AIDS;
Amount requested by approved grants for full length of programs:
19,882,903; HIV/AIDS rate (%), Adults (15-49): 6; Malaria (Cases/
100,000): 8,512; TB (Cases/
100,000): 313; Human Development Index[B]: 141; Gross National Income
per capita: (in U.S. dollars)[C]: 1,410.
Country[A]: Uganda; Diseases being addressed by Fund grants: HIV/AIDS,
TB, Malaria; Amount requested by approved grants for full length of
programs: 96,719,638; HIV/AIDS rate (%), Adults (15-49): 5; Malaria
(Cases/
100,000): 9,305; TB (Cases/
100,000): 343; Human Development Index[B]: 150; Gross National Income
per capita: (in U.S. dollars)[C]: 1,210.
Country[A]: Ukraine; Diseases being addressed by Fund grants: HIV/AIDS;
Amount requested by approved grants for full length of programs:
92,152,744; HIV/AIDS rate (%), Adults (15-49): 1; Malaria (Cases/
100,000): NA; TB (Cases/
100,000): 73; Human Development Index[B]: 80; Gross National Income per
capita: (in U.S. dollars)[C]: 3,700.
Country[A]: Vietnam; Diseases being addressed by Fund grants: HIV/AIDS,
TB; Amount requested by approved grants for full length of programs:
22,000,000; HIV/AIDS rate (%), Adults (15-49): 0.3; Malaria (Cases/
100,000): 95; TB (Cases/
100,000): 189; Human Development Index[B]: 109; Gross National Income
per capita: (in U.S. dollars)[C]: 2,000.
Country[A]: Yemen; Diseases being addressed by Fund grants: Malaria;
Amount requested by approved grants for full length of programs:
11,878,206; HIV/AIDS rate (%), Adults (15-49): 0.1; Malaria (Cases/
100,000): 15,202; TB (Cases/
100,000): NA; Human Development Index[B]: 144; Gross National Income
per capita: (in U.S. dollars)[C]: 770.
Country[A]: Zambia; Diseases being addressed by Fund grants: HIV/AIDS,
TB, Malaria; Amount requested by approved grants for full length of
programs: 191,967,000; HIV/AIDS rate (%), Adults (15-49): 21.5; Malaria
(Cases/
100,000): 26,260; TB (Cases/
100,000): 495; Human Development Index[B]: 153; Gross National Income
per capita: (in U.S. dollars)[C]: 750.
Country[A]: Zimbabwe; Diseases being addressed by Fund grants: HIV/
AIDS, Malaria; Amount requested by approved grants for full length of
programs: 22,977,500; HIV/AIDS rate (%), Adults (15-49): 33.7; Malaria
(Cases/
100,000): 9,429; TB (Cases/
100,000): 562; Human Development Index[B]: 128; Gross National Income
per capita: (in U.S. dollars)[C]: 2,550.
Country[A]: Lower middle income ; Amount requested by approved grants
for full length of programs: [Empty]; HIV/AIDS rate (%), Adults (15-49): [Empty];
Malaria (Cases/
100,000): [Empty]; TB (Cases/
100,000): [Empty]; Human Development Index[B]: [Empty]; Gross National
Income per capita: (in U.S. dollars)[C]: [Empty].
Country[A]: Bulgaria; Diseases being addressed by Fund grants: HIV/
AIDS; Amount requested by approved grants for full length of programs:
15,711,885; HIV/AIDS rate (%), Adults (15-49): <.1; Malaria (Cases/
100,000): NA; TB (Cases/
100,000): 46; Human Development Index[B]: 62; Gross National Income per
capita: (in U.S. dollars)[C]: 5,560.
Country[A]: China; Diseases being addressed by Fund grants: TB,
Malaria; Amount requested by approved grants for full length of
programs: 54,476,659; HIV/AIDS rate (%), Adults (15-49): 0.1; Malaria
(Cases/
100,000): 1; TB (Cases/
100,000): 103; Human Development Index[B]: 96; Gross National Income
per capita: (in U.S. dollars)[C]: 3,920.
Country[A]: Cuba; Diseases being addressed by Fund grants: HIV/AIDS;
Amount requested by approved grants for full length of programs:
26,152,827; HIV/AIDS rate (%), Adults (15-49): <.1; Malaria (Cases/
100,000): NA; TB (Cases/
100,000): 15; Human Development Index[B]: 55; Gross National Income per
capita: (in U.S. dollars)[C]: NA.
Country[A]: Dominican Republic; Diseases being addressed by Fund
grants: HIV/AIDS; Amount requested by approved grants for full length
of programs: 48,484,482; HIV/AIDS rate (%), Adults (15-49): 2.5;
Malaria (Cases/
100,000): 12; TB (Cases/
100,000): 135; Human Development Index[B]: 94; Gross National Income
per capita: (in U.S. dollars)[C]: 5,710.
Country[A]: Ecuador; Diseases being addressed by Fund grants: HIV/AIDS;
Amount requested by approved grants for full length of programs:
14,104,108; HIV/AIDS rate (%), Adults (15-49): 0.3; Malaria (Cases/
100,000): 683; TB (Cases/
100,000): 172; Human Development Index[B]: 93; Gross National Income
per capita: (in U.S. dollars)[C]: 2,910.
Country[A]: Egypt, (Arab Republic of); Diseases being addressed by Fund
grants: TB; Amount requested by approved grants for full length of
programs: 4,032,014; HIV/AIDS rate (%), Adults (15-49): <.1; Malaria
(Cases/
100,000): NA; TB (Cases/
100,000): 39; Human Development Index[B]: 115; Gross National Income
per capita: (in U.S. dollars)[C]: 3,670.
Country[A]: El Salvador; Diseases being addressed by Fund grants: HIV/
AIDS, TB; Amount requested by approved grants for full length of
programs: 26,912,923; HIV/AIDS rate (%), Adults (15-49): 0.6; Malaria
(Cases/
100,000): NA; TB (Cases/
100,000): 67; Human Development Index[B]: 104; Gross National Income
per capita: (in U.S. dollars)[C]: 4,410.
Country[A]: Honduras; Diseases being addressed by Fund grants: ALL;
Amount requested by approved grants for full length of programs:
41,119,903; HIV/AIDS rate (%), Adults (15-49): 1.6; Malaria (Cases/
100,000): 547; TB (Cases/
100,000): 92; Human Development Index[B]: 116; Gross National Income
per capita: (in U.S. dollars)[C]: 2,400.
Country[A]: Iran, (Islamic Republic of); Diseases being addressed by
Fund grants: HIV/AIDS; Amount requested by approved grants for full
length of programs: 15,922,855; HIV/AIDS rate (%), Adults (15-49): <.1;
Malaria (Cases/
100,000): 33; TB (Cases/
100,000): 54; Human Development Index[B]: 98; Gross National Income per
capita: (in U.S. dollars)[C]: 5,910.
Country[A]: Jordan; Diseases being addressed by Fund grants: HIV/AIDS;
Amount requested by approved grants for full length of programs:
2,483,900; HIV/AIDS rate (%), Adults (15-49): <.1; Malaria (Cases/
100,000): NA; TB (Cases/
100,000): 11; Human Development Index[B]: 99; Gross National Income per
capita: (in U.S. dollars)[C]: 3,950.
Country[A]: Kazakhstan; Diseases being addressed by Fund grants: HIV/
AIDS; Amount requested by approved grants for full length of programs:
22,360,000; HIV/AIDS rate (%), Adults (15-49): 0.1; Malaria (Cases/
100,000): NA; TB (Cases/
100,000): 130; Human Development Index[B]: 79; Gross National Income
per capita: (in U.S. dollars)[C]: 5,490.
Country[A]: Morocco; Diseases being addressed by Fund grants: HIV/AIDS;
Amount requested by approved grants for full length of programs:
9,238,754; HIV/AIDS rate (%), Adults (15-49): 0.1; Malaria (Cases/
100,000): NA; TB (Cases/
100,000): 119; Human Development Index[B]: 123; Gross National Income
per capita: (in U.S. dollars)[C]: 3,450.
Country[A]: Namibia; Diseases being addressed by Fund grants: HIV/AIDS,
TB, Malaria; Amount requested by approved grants for full length of
programs: 113,157,021; HIV/AIDS rate (%), Adults (15-49): 22.5; Malaria
(Cases/
100,000): 2,556; TB (Cases/
100,000): 490; Human Development Index[B]: 122; Gross National Income
per capita: (in U.S. dollars)[C]: 6,410.
Country[A]: Peru; Diseases being addressed by Fund grants: HIV/AIDS,
TB; Amount requested by approved grants for full length of programs:
50,177,054; HIV/AIDS rate (%), Adults (15-49): 0.4; Malaria (Cases/
100,000): 257; TB (Cases/
100,000): 228; Human Development Index[B]: 82; Gross National Income
per capita: (in U.S. dollars)[C]: 4,660.
Country[A]: Philippines; Diseases being addressed by Fund grants: TB,
Malaria; Amount requested by approved grants for full length of
programs: 23,267,609; HIV/AIDS rate (%), Adults (15-49): <.1; Malaria
(Cases/
100,000): 15; TB (Cases/
100,000): 314; Human Development Index[B]: 77; Gross National Income
per capita: (in U.S. dollars)[C]: 4,220.
Country[A]: Romania; Diseases being addressed by Fund grants: HIV/AIDS,
TB; Amount requested by approved grants for full length of programs:
48,360,586; HIV/AIDS rate (%), Adults (15-49): <.1; Malaria (Cases/
100,000): NA; TB (Cases/
100,000): 130; Human Development Index[B]: 63; Gross National Income
per capita: (in U.S. dollars)[C]: 6,360.
Country[A]: Serbia (Yugoslavia); Diseases being addressed by Fund
grants: HIV; Amount requested by approved grants for full length of
programs: 3,575,512; HIV/AIDS rate (%), Adults (15-49): NA; Malaria
(Cases/
100,000): NA; TB (Cases/
100,000): NA; Human Development Index[B]: NA; Gross National Income per
capita: (in U.S. dollars)[C]: NA.
Country[A]: South Africa; Diseases being addressed by Fund grants: HIV/
AIDS, TB; Amount requested by approved grants for full length of
programs: 190,388,018; HIV/AIDS rate (%), Adults (15-49): 20.1; Malaria
(Cases/
100,000): 83; TB (Cases/
100,000): 495; Human Development Index[B]: 107; Gross National Income
per capita: (in U.S. dollars)[C]: 9,160.
Country[A]: Sri Lanka; Diseases being addressed by Fund grants: TB,
Malaria; Amount requested by approved grants for full length of
programs: 14,505,200; HIV/AIDS rate (%), Adults (15-49): <.1; Malaria
(Cases/
100,000): 1,402; TB (Cases/
100,000): 59; Human Development Index[B]: 89; Gross National Income per
capita: (in U.S. dollars)[C]: 3,460.
Country[A]: Swaziland; Diseases being addressed by Fund grants: HIV/
AIDS, Malaria; Amount requested by approved grants for full length of
programs: 56,736,900; HIV/AIDS rate (%), Adults (15-49): 33.4; Malaria
(Cases/
100,000): 300; TB (Cases/
100,000): 564; Human Development Index[B]: 125; Gross National Income
per capita: (in U.S. dollars)[C]: 4,600.
Country[A]: Thailand; Diseases being addressed by Fund grants: HIV/
AIDS, TB, Malaria; Amount requested by approved grants for full length
of programs: 209,635,201; HIV/AIDS rate (%), Adults (15-49): 1.8;
Malaria (Cases/
100,000): 199; TB (Cases/
100,000): 141; Human Development Index[B]: 70; Gross National Income
per capita: (in U.S. dollars)[C]: 6,320.
Country[A]: Upper middle income ; Amount requested by approved grants
for full length of programs: [Empty]; HIV/AIDS rate (%), Adults (15-49): [Empty];
Malaria (Cases/
100,000): [Empty]; TB (Cases/
100,000): [Empty]; Human Development Index[B]: [Empty]; Gross National
Income per
capita: (in U.S. dollars)[C]: [Empty].
Country[A]: Argentina; Diseases being addressed by Fund grants: HIV/
AIDS; Amount requested by approved grants for full length of programs:
28,756,200; HIV/AIDS rate (%), Adults (15-49): 0.7; Malaria (Cases/
100,000): NA; TB (Cases/
100,000): 55; Human Development Index[B]: 34; Gross National Income per
capita: (in U.S. dollars)[C]: 12,050.
Country[A]: Botswana; Diseases being addressed by Fund grants: HIV/
AIDS; Amount requested by approved grants for full length of programs:
18,580,414; HIV/AIDS rate (%), Adults (15-49): 38.8; Malaria (Cases/
100,000): 4,467; TB (Cases/
100,000): 702; Human Development Index[B]: 126; Gross National Income
per capita: (in U.S. dollars)[C]: 7,170.
Country[A]: Chile; Diseases being addressed by Fund grants: HIV/AIDS;
Amount requested by approved grants for full length of programs:
38,151,562; HIV/AIDS rate (%), Adults (15-49): 0.3; Malaria (Cases/
100,000): NA; TB (Cases/
100,000): 26; Human Development Index[B]: 38; Gross National Income per
capita: (in U.S. dollars)[C]: 9,100.
Country[A]: Costa Rica; Diseases being addressed by Fund grants: HIV/
AIDS; Amount requested by approved grants for full length of programs:
4,202,362; HIV/AIDS rate (%), Adults (15-49): 0.6; Malaria (Cases/
100,000): 50; TB (Cases/
100,000): 17; Human Development Index[B]: 43; Gross National Income per
capita: (in U.S. dollars)[C]: 7,980.
Country[A]: Croatia; Diseases being addressed by Fund grants: HIV/AIDS;
Amount requested by approved grants for full length of programs:
4,945,192; HIV/AIDS rate (%), Adults (15-49): <.1; Malaria (Cases/
100,000): NA; TB (Cases/
100,000): 61; Human Development Index[B]: 48; Gross National Income per
capita: (in U.S. dollars)[C]: 7,960.
Country[A]: Estonia; Diseases being addressed by Fund grants: HIV/AIDS;
Amount requested by approved grants for full length of programs:
10,246,580; HIV/AIDS rate (%), Adults (15-49): 1; Malaria (Cases/
100,000): NA; TB (Cases/
100,000): 61; Human Development Index[B]: 42; Gross National Income per
capita: (in U.S. dollars)[C]: 9,340.
Country[A]: Panama; Diseases being addressed by Fund grants: TB; Amount
requested by approved grants for full length of programs: 570,000; HIV/
AIDS rate (%), Adults (15-49): 1.5; Malaria (Cases/
100,000): 34; TB (Cases/
100,000): 54; Human Development Index[B]: 57; Gross National Income per
capita: (in U.S. dollars)[C]: 5,680.
Sources: the Fund; Joint U.N. Program on HIV/AIDS, Report of the Global
HIV/AIDS Epidemic, 2002; World Health Organization data on malaria
cases (data from varying years, based on latest year for which
information available); World Bank, World Development Indicators, 2002;
U.N. Development Program, Human Development Report, 2002.
Note: "NA" indicates that the information is not available.
[A] Although each country is listed only once, many countries received
multiple grants. All grants received have been accounted for when
noting disease programs addressed and dollar amount requested by
approved programs. This table includes only grants for individual
countries. Multicountry grants are not included.
[B] The Human Development Index is reported by the U.N. Development
Program. It measures a country's achievements in terms of life
expectancy, education level attained and adjusted real income.
[C] Purchasing Power Parity method.
[End of table]
[End of section]
Appendix V: Comments from the Global Fund to Fight AIDS, TB and Malaria:
THE GLOBAL FUND to Fight AIDS, Tuberculosis and Malaria:
28 April 2003:
David Gootnick:
Director, International Affairs and Trade United States General
Accounting Office Washington, DC 20548:
United States of America:
Dear Mr. Gootnick,
Thank you for sharing the draft report on the Global Fund: Global Fund
to Fight AIDS, TB and Malaria Has Advanced In KeyAreas but Difficult
Challenges Remain. The GAO report is a constructive, forward-looking
analysis that will contribute to improved near-term performance of the
Global Fund as well as the sustained success of the programs it
supports.
Your findings reflect both the substantial progress and the growing
pains inherent in the start up of a new organization. In its first
year, the Global Fund balanced the imperative to demonstrate results
with the necessity of putting in place basic:
policies, physical and human infrastructure, and systems to move money.
The analysis also reflects the challenge of resolving some underlying
tensions in the principles of a more effective response to AIDS, TB and
malaria: finding the right mix of accountability and efficiency in
disbursement mechanisms; being innovative while building on proven
existing efforts and models; and moving quickly while assuring quality
and due diligence.
The Global Fund represents an opportunity to reconcile these apparent
dualities and, in so doing, to contribute dramatically to improved
health outcomes for the world's most disadvantaged. The partners who
constitute the Global Fund have therefore embraced its mandate, aware
of the obstacles, but committed to rapid solutions and ongoing course
corrections. In that spirit, I provide below information on how the
Global Fund is responding to the challenges identified and highlight an
additional challenge that your report does not emphasize related to the
Fund's monitoring and evaluation efforts.
Governance structures and related challenges to fund disbursement:
In this section of the report, you assert the need to improve the
effectiveness of CCMs through more clearly defined roles, broader
composition and improved processes. While I agree with this assertion,
it is important to acknowledge that the current performance of CCMs
already represents significant progress in broadening and strengthening
local ownership of public health and development programs.
Based on an analysis of 91 CCMs that submitted proposals in Round 2,
the average portion of CCM composition drawing from "civil society"
(including non-governmental organizations, faith-based organizations,
academic institutions, communities living with the diseases and the
private sector) was 44%. Of all CCMs submitting in Round 2, 99%
included at least one representative of NGOs and community-based
organizations. And 46% of funds approved in Round 2 is allocated to
civil society for expenditure during program implementation.
Such figures are unprecedented, and they are coupled with anecdotal
evidence of better CCM performance over time. This has been the natural
consequence of increased interaction with the Global Fund to negotiate
Grant Agreements, the mobilization of CCMs to develop new proposals to
the Global Fund, support from bilateral and multilateral partners in
building capacity, the sharing of good practices among CCMs at regional
workshops held by the Global Fund, and pressure from civil society
demanding that CCMs live up to responsibilities for inclusiveness and
transparency.
Notwithstanding this notable progress, the Global Fund must continue to
encourage still better CCM performance as quickly as possible. Local
partnerships, which CCMs represent, are at the heart of the Global
Fund's success and they are the ultimate "owners" of approved programs.
The Global Fund is pursuing at least three strategies to strengthen
CCMs:
* Transparent communications and critique. Correspondence from the
Global Fund to CCMs is increasingly copied to all members of CCMs, as
the Secretariat confirms the necessary contact information. The Global
Fund is considering mechanisms which would ensure that the full
membership of CCMs has the opportunity to review documentation produced
by PRs. Such documentation, including disbursement requests and
progress reports, certainly will be posted publicly on our website, for
all members of CCMs to access. Also to be posted are independent,
evidence-based critiques of CCMs, such as those mentioned in the GAO
report. The Secretariat has commissioned additional studies of this
type. I also intend that our website will become a forum for the
sharing of best practices.
* Supportive partnerships. While the Global Fund cannot invest its own
staff or funds to assist CCMs directly, our partners can make such
investments. Multilateral agencies, particularly UNAIDS and the World
Health Organization (WHO), are well represented on CCMs and provide
financial assistance specifically for outreach to NGOs. Bilateral
agencies also provide support, and USAID alone participated in 26% of
CCMs submitting to Round 2. Gesellschaft fur Technische Zusammenarbeit
GmbH (GTZ), the German agency for international cooperation, has
committed 25 million towards strengthening the ability of local partners
to access the Global Fund; this includes a dedicated bilateral channel
to fund support of CCMs. From the private sector, the Glaser Progress
Foundation has made grants to Columbia University's Access Project,
which provides similar direct support in selected countries. Other
examples exist and are in development.
* Affirmation of ongoing responsibilities. As referenced in the report,
the Global Fund has noted explicitly in Grant Agreements the expected
role of CCMs throughout the duration of proposal implementation. This
includes integrating Global Fund-financed programs into national
strategies, encouraging accountability through broad scrutiny of
progress, and leveraging existing and incipient monitoring and
evaluation systems to support data collection and systematic
surveillance. Continued clarity of these roles - and, if possible,
evaluation of CCM performance vis-a-vis the functions specified - will
be pursued further in future Board discussions on CCM policies.
This section of the report also correctly characterizes the procedural
delays and uncertainties concerning accountabilities and
responsibilities resulting from the Global Fund's administrative
relationship with the WHO. While this relationship has been important
to the Global Fund in its first year of operation and improvements are
being made, important near-term and longer-term issues concerning the
autonomy and legal status of the Global Fund remain to be resolved.
Oversight systems, procurement guidance and monitoring & evaluation of
grants:
In this section, you fairly describe the initial debate associated with
the LFA model. The controversy associated with the introduction of
LFAs, particularly private ones, was an outcome of both the pace of
implementation and degree of innovation of the Global Fund's oversight
architecture. The role of LFAs has since been clarified to the greater
comfort of both recipients and donors. We now see improved
understanding of the indigenous nature of the LFAs selected. For
example, PriceWaterhouseCoopers in Tanzania is staffed entirely by East
Africans and does indeed contribute to the local private sector. In
addition, greater trust in the process of selecting LFAs has been
engendered by the announcement of an international request for
proposals or tender to select the most qualified organizations.
Evidence of growing credibility with existing LFAs is seen with Round 2
recipients agreeing to move PR assessments forward with the originally
selected LFAs while the international tender proceeds. Moreover, the
LFAs themselves are improving the quality of services they offer by
applying lessons learnt from their experiences and hiring the relevant
expertise necessary (for example, in drug procurement) to perform
agreed functions. Having said this, I recognize that the LFA role and
the organizations that perform it need to evolve further in the light
of experience.
On the issue of procurement, also discussed in this section, I would
like to clarify the status of topics that the report states are
outstanding. The Global Fund's Framework Document and supporting
procurement policies specify Board-agreed principles on procurement and
modalities for their operationalization. They state clearly that only
proposals that are consistent with international law and agreements
(such as TRIPS) should be supported by the Global Fund. The Global Fund
will be taking further measures to prevent or report any violations of
this principle.
The GAO raises three other important issues related to procurement. The
solicitation and acceptance of in-kind donations requires process-
related policies on how the Global Fund would channel and value such
resources; these will only be pursued after the Board is
satisfied that the potential financial worth of these donations
outweighs the costs of
administering them. This analysis is being coordinated by two of our
Board committees, assisted by a pro bono team of consultants
commissioned by the Private Sector Board Delegation. Secondly, the
issue of price premiums to encourage domestic production of medications
is resolved. Consistent with the decisions of the last Board Meeting,
the Board has sanctioned no such premiums. The last issue of taxes and
duties has also been resolved and is not outstanding. The last Board
Meeting adopted a revised policy on this subject stating that, "The
Global Fund strongly encourages the relevant national authorities in
recipient countries to exempt from duties and taxes all products
financed by Global Fund grants and procured by NGOs or any other
Principal Recipient or sub-recipient." This provides flexibility in
cases where the PR is a non-government entity. That said, the
Secretariat is negotiating on a case-by-case basis with governments in
recipient countries to declare Global Fund-financed purchases exempt of
such taxes.
The progress in adopting these policies has, for me, demonstrated an
important ingredient in the Global Fund's success: that debates on
critical issues are based on the active engagement of experts from
donors, recipients, NGOs and the private sector and that agreement is
reached quickly in almost all cases. The full range of stakeholders has
expressed confidence in this process. More importantly, the market has
responded to both the policies and the volumes of purchases approved,
with deeper discounts on drugs and broadened eligibility for such
discounts. Moreover, quality assurance measures by partners are
expanding to meet the need of the Global Fund's recipients, as are
regional and global procurement cooperatives, which enable competitive
pricing and expanded access. While _ great challenges remain to expand
access, I believe substantial strides forward have been made.
A final topic raised in this section of your report is the Global
Fund's system of monitoring and evaluation. I appreciate that the GAO
concludes that the system developed is detailed and responsible, but I
am not satisfied with our performance thus far. It is true that:
we have made progress in designing our monitoring and evaluation
systems. But this means little if it cannot be effectively implemented
at the country level. I would add two significant challenges to those
you have listed:
Requiring regular yet light reporting. The commitment of the Global
Fund to performance-based disbursement requires regular reporting by
grantees of their progress. At the same time, the Global Fund faces an
imperative not to over-burden recipients with the administration of
such requirements. Recipients are required to report progress in
regular disbursement requests, which are simple, streamlined documents
that provide essential information on outputs achieved - primarily
against "process" and "coverage" (referred to in your report as
"outcome") indicators and associated expenditure - to justify the need
for further disbursements from the Global Fund. These will be verified
by the LFA. Less frequent and more substantive reports on progress will
be required also. Performance measures, whether reported frequently for
disbursement or annually for evaluation, will align with other donor
reporting requirements and longer-term international monitoring and
evaluation frameworks, including those of the Millennium Development
Goals and the UN General Assembly Special Session on HIV/AIDS, which
require more systematic surveillance of particular indicators.
* Turning off the tap. The Global Fund will soon be required to
interrupt the flow of funds to those recipients whose disbursement
requests do not show adequate progress. This is far from a
straightforward process. To do so fairly requires a transparent
calculus of what is "adequate", an ability to discern when performance
is strong even when milestones are not fully met, and a mechanism to
not penalize parts of a broad program that are successful when others
are not. The Global Fund will not be able to do this perfectly at the
start, but it quickly must initiate a system that is regarded as fair
by recipients and accountable by donors. The overriding principle of
performance-based disbursement will again guide us in this task. In
such cases that performance is inadequate, the Global Fund will require
compelling corrective action following decisions to suspend
disbursements. Monies will not flow until the Fund receives evidence of
such actions. Grantees will have every incentive to correct
deficiencies knowing that swift recommencement of funding will occur
once performance has improved.
While the concept of performance-based grant making is not new, the
Global Fund is pioneering practical systems to implement it. As most
grant making only commenced in 2003, these systems for performance
measurement and disbursement are yet to be tested. The lessons learned
in the near term will guide not only the continued design and
implementation of our operations but also those of other foundations
and development finance institutions that aspire to fund on the basis
of results.
Resource mobilization:
You have represented well the enormous task ahead for the Global Fund
to raise money to meet its current and future commitments. This is our
single most important challenge. While the Fund's current commitments
are a contribution towards the global resource gap for AIDS, TB and
malaria (in 2003, the commitments of the Fund may close 10% of this
divide), we are a long way from having raised the resources required.
These diseases rage out of control, causing devastation and
destabilization in many African countries and threatening to do the
same in China, India and Russia. Immediate, courageous and large-scale
action is required and this costs a lot of money. It will also save
money down the line, as investment now avoids the magnitude of cost in
the future that will otherwise be associated with worsened epidemics.
While my colleagues at the Global Fund work to get money to grantees
and assure that it is effectively used, I - along with many tireless
advocates - am on a relentless path to find new money.
To date, the United States has led the way in giving, acting as a
beacon for others. I am grateful for such leadership and support.
However, relative to need, current pledges are insufficient to enable
the Global Fund to respond adequately to the scope of this crisis.
According to current projections - which will be revised consistently
on the basis of what the Fund actually receives and approves - donors
have pledged 33% of the need for calendar years 2002-2004, with the US
pledge amounting to add at least 12% (assuming minimum contribution for
FY2004 is US$ 200 million). Thankfully, our most able donors, the G8,
meet in one months time to discuss how they can continue to address
this challenge, along with the Global Fund's many other supporters and
donors. I hope and expect that the US will continue to ensure that its
contribution represents a "fair share" relative to the total
commitments to the Fund, potentially through a "challenge grant"
mechanism as we await the new and renewed pledges of other donors.
I am convinced that sufficient resources will be raised to allow the
Global Fund's financial assistance to reach a level that significantly
contributes to stemming the tide of devastation which we are
witnessing. In your report, you draw attention to the fact that each
proposal round creates long-term obligations. While the amount of those
obligations, which will renew two year grants, will vary as operational
plans are revised after initial implementation and any unexpended funds
reduce the amount requested for subsequent years, we recognize the risk
associated with commencing programs for which indefinite financing is
not immediately guaranteed. It is a necessary risk, however, to meet
the upfront and urgent need in affected communities. The faster and
more effectively we fight this fire, the sooner it will burn out. It is
imperative to understand that underinvestment today only prolongs and
expands funding demands tomorrow. These diseases are fueled by neglect
and denial. They are doused by bold, quick, large-scale and
comprehensive action.
Grant-making and effective resource use:
This section usefully highlights the grant making process and
underscores the challenges of ensuring effective resource use. Here, I
emphasize the Global Fund principles concerning additionality and
absorptive capacity.
Additionality is important to assure at both donor and recipient
levels. On the donor side, this affirms the need, in our resource
mobilization efforts, to pursue sources of finance beyond existing ODA
budgets and is why the Global Fund is actively supporting efforts
including the UK International Finance Facility, the Italian De-Tax
Programme and unblocking of part of the European Development Fund. Also
important to donors is the need to ensure additionality among allocated
funds, which is why coordination among investments is critical as the
Global Fund is joined by other major initiatives. Of particular note is
the President's Emergency Plan for AIDS Relief which will invest in 14
highly affected countries, 13 of which have been approved in the Global
Fund's first two proposal rounds for US$ 400 million over 2 years (up
to $1.1 billion over 5 years) to fight AIDS alone.
On the recipient side, I reaffirm that the Global Fund is committed to
ensuring additionality. As you note, in one approved country in Africa,
an official stated forthrightly that the Global Fund's dollars would
not be additional to the overall health budget, and the Secretariat
halted its grant agreement negotiations until the government of that
country committed to ensuring additionality. More procedurally, the
Global Fund negotiates agreements with a view to ensuring financial
flows and accounting that do not enable the grants to be counted
against national budgets. In at least two countries, this has resulted
in adapting the proposed fiscal mechanisms. While catching these cases
is a challenge, we are prepared to act robustly when aware of threats
to additionality.
Further, grant expenditures and recipients' progress reports will be
available publicly through our website, which will encourage
stakeholders within recipient countries to hold CCMs and governments
accountable for the money granted and the additionality promised.
Moreover, our international partners, especially UNAIDS in the case of
HIV/AIDS, are
making substantial efforts to track resource flows in these countries,
so there can be objective third-party analysis to assess additionality
over time.
This section also raises the challenge of absorptive capacity, which
will surely be a challenge for all stakeholders committed to fighting
these diseases in the years to come. Developing countries clearly have
today substantially more capacity to fight AIDS, TB and malaria than is
being effectively utilized by local and international finance. That
said, they do have human and physical capacity shortages that challenge
program implementations. Countries themselves recognize this, as
illustrated by the fact that nearly 50% of the funds approved by the
Global Fund are for physical and human infrastructure, with half of
that share being specifically for the recruitment, compensation and
training of personnel.
The Global Fund is looking at multiple ways to avoid overwhelming
country capacity. For example, the TRP will include as a factor in its
adjudication of proposals the track record of the applicant in spending
money awarded in previous grants from the Global Fund. The Global Fund
is also encouraging approved applicants to adopt structures that will
enable expenditure, such as the use of both public and private PRs for
public and private spending in country. More importantly, we are
working with our partners - bilateral and multilateral agencies, NGOs,
foundations and corporations - to ensure the availability of relevant
capacity: including technical assistance, management expertise,
training, and procurement services. Their ability to provide this
direct support to implementation is a critical element to the success
of grantees being able to maximize the use of their resources.
In conclusion, I am impressed with your team's ability, to capture our
successes and specify our challenges. You have provided those who
should judge us with accurate information. Your report describes well
the work of the Global Fund and provides sobering data on the
challenges faced by all of us in responding more effectively to AIDS,
TB and malaria.
We have no option other than to mount a response to these three
pandemics that is far larger, bolder and more comprehensive than
anything attempted hitherto. The Global Fund was established to be
major part of this response. Together we must succeed.
With kind regards,
Professor Richard G.A. Feachem, CBE, FREng, DSc(Med) Executive
Director:
The Global Fund to Fight AIDS, Tuberculosis and Malaria:
Signed by Richard G.A. Feachem
[End of section]
Appendix VI: Joint Comments from the Departments of Health and Human
Services and State, and the U.S. Agency for International Development:
April 28, 2003:
Dear Mr. Gootnick:
We appreciate the opportunity to comment on the draft General
Accounting Office (GAO) report, Global Fund to Fight AIDS, TB and
Malaria Has Advanced in Key Areas but Difficult Challenges Remain, GAO
Code 320120.
The Department of State, the Department of Health and Human Services
and the United States Agency for International Development concur with
the overall conclusion reflected in the report's title. The Fund has
made remarkable progress in establishing key structures based on the
principles of partnership and coordination at global and country
levels, designing new mechanisms to assure accountability and
transparency, and independently vetting and approving proposals in a
very short period of time. Of particular note is the Fund's emphasis on
balancing donor/recipient, and public/non-governmental interests.
However, much remains to be done. Over the coming year, the Fund must
put its principles into practice as implementation begins and money
flows to recipients. The Fund will be challenged to strike a balance
between awarding grants quickly, while still ensuring accountability,
and strengthening the systems necessary to document results achieved.
The Fund must take advantage of all opportunities to explain, clarify,
and clearly communicate the respective roles and responsibilities,
particularly at the country level, of the new structures developed.
We note that some of the described challenges, such as demonstrating
that pledges to the Fund and the grants the Fund gives out are
additional to existing resource flows and effectively dealing with
issues of absorptive capacity, affect many donor and national programs,
and are not unique to the Global Fund. These challenges are at the
heart of the establishment of the Fund as a public-private partnership
with the mandate to mobilize additional resources and strengthen the
relationships necessary to better coordinate programs.
The need to build capacity to be able to take advantage of increased
resources from many sources, requires the combined efforts of bilateral
and multilateral agencies to do more in their own programs to support
the Fund. All parties associated with the Fund agree that it is not in
a position itself to provide technical assistance and training,
particularly if the Secretariat is to remain limited in size.
The Fund remains a center of great interest and comment in public fora,
and within the donor and health development communities. The three
agencies believe that this report will be useful not only to the Fund
Secretariat but also to the Fund's Board, the U.S. delegation, and the
general public.
Sincerely,
Christopher Burnham,
Assistant Secretary for Resource Management and Chief Financial Officer
U.S. Department of State:
Signed by Christopher Burnham
Janet Rehnquist
Inspector General Department of Health and Human Services*:
Signed for Janet Rehnquist
John Marshall
Assistant Administrator Bureau for Management U.S. Agency
for International Development:
Signed by John Marshall
Mr. David Gootnick, Director, International Affairs and Trade,
U.S. General Accounting Office:
*The Office of Inspector General (OIG) is transmitting the department's
response to this draft report in our capacity as the department's
designated focal point and coordinator for General Accounting Office
reports. The OIG has not conducted an independent assessment of these
comments and therefore expresses no opinion on them.
[End of section]
Appendix VII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Thomas Melito, (202) 512-9601:
Staff Acknowledgments:
In addition to the persons named above, Sharla Draemel, Stacy Edwards,
Kay Halpern, Reid Lowe, William McKelligott, Mary Moutsos, and Tom
Zingale made key contributions to this report.
:
(320120):
FOOTNOTES
[1] Through fiscal year 2003 the United States had appropriated up to
$650 million to the Fund and has pledged an additional $1 billion over
5 years, beginning in 2004.
[2] We do not name individual countries in the text of this report,
given the early stages of Fund activities in these countries. Of these
four countries, Haiti and Tanzania were selected as two of the "fast
track" countries that were close to having signed grant agreements
during our field visits. Ethiopia and Honduras were less far along in
the process and therefore represent most of the remaining countries
that had proposals approved in the first round vetted by the Fund.
[3] This country total does not include one global grant and grants to
two regions.
[4] According to the Fund, Swiss authorities generally require that a
Swiss citizen with his or her domicile in Switzerland sit on the board
of directors of a foundation registered in Switzerland. The Fund is a
foundation registered in Switzerland.
[5] About half of these staff have been hired for 2-year terms; five
have been seconded from other organizations; and the rest have been
hired for shorter lengths of time. The secretariat has budgeted for 73
full-time staff.
[6] TRP members generally agree to serve for 2 years; members rotate at
different times to ensure continuity.
[7] UNAIDS consists of eight cosponsors: U.N. Children's Fund, U.N.
Development Program, U.N. Population Fund, U.N. International Drug
Control Program, International Labor Organization, U.N. Educational,
Scientific, and Cultural Organization, WHO, and the World Bank.
[8] An additional component of the governance structure, the
Partnership Forum, will be made up of stakeholders concerned about the
prevention, care, treatment and eventual eradication of HIV/AIDS,
tuberculosis and malaria. It will meet every 2 years to provide views
on the Fund's policies and strategies.
[9] In addition, one grant agreement is with a private sector entity
and the principal recipient for another has yet to be determined.
[10] According to World Bank and Fund officials, the Bank is serving as
the local fund agent for a TB project in India due to unique
circumstances pertaining to this project.
[11] NGO Participation in the Global Fund, a Review Paper,
International HIV/AIDS Alliance, October 2002.
[12] The Fund notes that the information provided by CCMs during the
first proposal round was not detailed enough to extract this data and
that most CCMs from round one resubmitted proposals in the second
round. Two CCMs from areas experiencing long-running conflict were
excluded from this analysis.
[13] Global Fund Update for NGOs and Civil Society, June 2002.
[14] The Fund has approved a few proposals from NGOs that were
submitted outside the CCM process. According to Fund guidance, NGOs are
currently allowed to apply outside the CCM process in exceptional
circumstances, for example, in countries or regions where conflict has
incapacitated local government and other structures or where no CCM
existed.
[15] These guidelines include, among others, making sure that certain
sectors and institutions are represented on the CCM, including the
ministry of finance, multilateral development banks, religious
organizations, academic entities, and the private sector. In addition,
no more than half the CCM's membership should consist of members of
public sector institutions (e.g., host country government officials and
officials from bilateral or multilateral agencies). The guidelines also
specify that the chair and other key posts should alternate between
public sector officials and representatives of civil society or the
private sector; that participating entities should choose their own
representatives; that correspondence between the Fund and the CCM
should be copied to all members; and that fiduciary arrangements as
grants are implemented should include the monitoring of CCM performance
as one of the indicators of proposal sustainability.
[16] The Cuba meeting was convened at a larger forum on HIV/AIDS and
sexually transmitted diseases in Latin America and the Caribbean.
[17] The Fund, established as a foundation under Swiss law, is a
private entity in Switzerland. As such, it lacks the privileges and
immunities granted to international organizations.
[18] This administrative services agreement also enabled the Fund to
begin operating without having to create its own administrative and
management structure. Members of the board recognized the expediency of
this solution and its risks, and directed the Fund to explore
alternatives.
[19] The Fund has discussed with the Swiss government the possibility
of receiving the benefits of quasi-intergovernmental status, such as
certain tax benefits, and is also discussing the possibility of gaining
a more enhanced package of privileges and immunities comparable to
those given to international organizations. Private organizations that
have received such privileges and immunities from the Swiss government
include the International Federation of Red Cross and Red Crescent
Societies.
[20] Most grants last for 5 years.
[21] In September 2000, world leaders at the U.N. Millennium Summit
agreed to a set of time-bound, measurable goals for combating poverty,
hunger, disease, illiteracy, environmental degradation, and
discrimination against women.
[22] Representatives from one LFA, however, stated that it was their
understanding that the principal recipient, along with the CCM, chooses
the LFA in each country. According to Fund documents, the Fund makes
this decision, taking into consideration input from the CCM.
[23] These officials said that they expect to disburse about $750
million in 2003 but cautioned that this figure is not certain.
[24] The term "health products," as defined by the Fund in the grant
agreement, includes pharmaceutical products; diagnostic technologies
and supplies (e.g., HIV test kits); bed nets; insecticides; aerial
sprays against mosquitoes; other products for prevention (e.g.,
condoms); and laboratory equipment and supportive products (e.g.,
microscopes and reagents).
[25] Data on anticipated expenditures for drugs are not available for
first-round proposals.
[26] The Fund has not provided a breakdown of anticipated expenditures
for the full life of grants approved in the first round.
[27] The Fund cautions that the actual number of patients treated may
vary depending on prices, recipients' ability to procure and deliver
the drugs, and other factors related to the implementation of the
grants.
[28] As of April 1, 2003, the World Trade Organization has not been
able to resolve a dispute concerning a clarification of its Trade
Related Intellectual Property Agreement that would allow the
importation of generic drugs under patent by developing countries that
do not have the capacity to manufacture them domestically. The dispute
concerns which drugs, diseases, and countries will be covered. The
United States has pushed for limited coverage, whereas other countries
favor broader coverage. The World Trade Organization was established in
1995 to administer rules for international trade and provide a forum
for resolving trade disputes and conducting trade negotiations. Based
in Geneva, Switzerland, it is composed of 145 member states.
[29] While USAID generally does not finance customs duties associated
with procurement of imported items, it will finance duties under
certain circumstances. For example, it will finance duties for NGOs
that do not have tax exempt status.
[30] Pledges to the Fund may be multiyear, and thus some pledged money
may not be contributed to the trustee in the same year the pledge was
made.
[31] The Board originally granted up to $613 million over 2 years to 58
proposals. Three of these proposals have since been dropped due to
their inability to address a follow-up request by the Fund. The maximum
approved by the Board is thus $608 million for round 1.
[32] The board approves grant proposals based on budgets submitted, but
recipients are not guaranteed this amount. The amount approved is a
ceiling, and the Fund may slightly decrease the grant amount on closer
inspection of the recipient's needs.
[33] This resource needs estimate is reduced from an earlier one made
at the October 2002 board meeting, which called for three proposal
rounds in 2003 (rather than the currently planned two rounds), and
projected a need of $7.9 billion through 2004.
[34] In addition to seeking direct monetary contributions, the Fund is
also trying to encourage in-kind contributions, such as equipment or
drugs, as well as skills and services, directly to recipients. While
some in-kind donations have been made at the country level, the Fund
itself cannot accept them directly at a global level since it is only a
financing mechanism.
[35] Members of the Organization for Economic Cooperation and
Development's (OECD) Development Assistance Committee are ineligible.
These countries are Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg,
Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland,
the United Kingdom, the United States, and the Commission of the
European Communities.
[36] Previously, only high-income countries included in the OECD's
Development Assistance Committee were excluded. See footnote 35 for
membership. Country income categories are based on World Bank
documents.
[37] According to Fund documents, disease-related need encompasses both
current and potential burden of disease.
[38] The capacity to absorb new aid hinges on a country's ability to
effectively combine its domestic resources, such as labor and
managerial capacity, with the additional foreign assistance.
[39] The United States, Canada, Japan, France, Germany, Italy, and the
United Kingdom.
[40] See footnote 35 for Development Assistance Committee membership.
[41] Grant Agreement, Article 9: "In accordance with the criteria
governing the selection and award of this Grant, the Global Fund has
awarded the Grant to the Principal Recipient on the condition that the
Grant is in addition to the normal and expected resources that the Host
Country usually receives or budgets from external or domestic sources.
In the event such other resources are reduced to an extent that it
appears, in the sole judgment of the Global Fund, that the Grant is
being used to substitute for such other resources, the Global Fund may
terminate this Agreement in whole or in part under Article 21 of this
Agreement."
[42] In this report, "absorptive capacity" refers to the ability of a
country to effectively use development assistance. Absorptive capacity
is affected by resource constraints at various levels, including
institutional capacity within the health sector and the capacity of the
larger economy to absorb an influx of foreign exchange.
[43] Increases in grant assistance contribute to a rising domestic
money supply as the government exchanges the hard currency grant
assistance for local currency at the central bank. The resulting rise
in the domestic money supply increases aggregate demand, contributing
to higher inflation if the economy is at or near its short-run
productive capacity. The increase in foreign exchange is also likely to
lead to an appreciation of the real exchange rate under a fixed
exchange rate regime, which is common in poor countries. Under a fixed
system, maintenance of the nominal rate in the presence of inflation
results in real currency appreciation. Real currency appreciation
increases a country's export prices, rendering it less competitive
internationally, reducing its export earnings and weakening its trade
balance.
[44] On March 14, 2002, President Bush announced that the United States
planned to increase its core assistance to developing countries by 50
percent over the next 3 years, resulting in a $5 billion annual
increase over current levels by fiscal year 2006. The Millennium
Challenge Account will receive the increased aid to fund initiatives to
improve the economies and standards of living in qualified developing
countries. The President submitted his plan for the Millennium
Challenge Account to Congress in February 2003.
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