The Global Fund: Recent Developments

1. The Global Fund: Recent Developments The Global Fund’s Regional Meeting for East Asia and the Pacific Bali, September 2007

2. Global Fund Process

3. Recent Developments Health Systems Strengthening Fixed Round dates National Strategy funding Rolling Continuation Dual track financing M&E Strengthening Tool Technical Support Pooled Procurement Procurement QA Grant consolidation Enhanced Financial Reporting Grant closure

4. Recent Developments Fixed Round dates

5. Fixed Round Dates • Fixed Round dates come to address the lack of predictability in timing of rounds • The 14th Board Meeting decided on “fixed dates for the launch and approval of rounds” with a minimum of one call per calendar year • Round 8 will be launched on 1 March 2008 and will be approved at the 18th Board meeting (November 2008)

6. Recent Developments National Strategy funding

7. National Strategy Applications With National Strategy Funding the Global Fund’s Board is considering a new funding mechanism based not on projects or programmes but on national strategies. These strategies will need to be certified through a “rigorous technical certification mechanism”

8. National Strategy Applications Purpose of the Board decision: Enable streamlined applications to the Global Fund Improve Global Fund’s alignment with national strategies and with other donors Allow the country to plan for the long-term

9. National Strategy Applications Issues under discussion: Certification mechanism Content of application (ideally to include the certified national strategy and minimal additional information) Role of CCMs and NGOs Role of the Global Fund’s Technical Review Panel

10. Recent Developments Rolling Continuation

11. Rolling Continuation Channel The Rolling Continuation Channel (RCC) provides for 6 years of additional funding to existing Global Fund grants which are performing highly

12. Rolling Continuation Channel Two Primary Qualification Factors: • Demonstration of strong performance, with at least 50% of “A” ratings over the “Qualification Period” (month 25-42); and • Evidence of potential for measurable impact on the burden of the relevant disease

13. Rolling Continuation Channel Secondary Qualification Factors: Demonstration of program sustainability Extent to which the expiring grant contributes to an inclusive and transparent national plan Exceptional situations (war, tsunami)

14. Rolling Continuation Channel Rolling Continuation provides for: Up to 6 years of funding Simpler Proposal form Prioritised funding Several application dates each year The ability to continue a programme with slightly modified scope and scale (no new programme) The TRP may recommend the approval of only part of a Rolling Continuation Proposal The Board expects that 25% to 30% of all expiring grants will qualify to apply

15. Recent Developments Health Systems Strengthening

16. Health Systems Strengthening (HSS) • The Global Fund should invest in activities that reinforce health systems – for improved achievements in reducing the burden of the three diseases • Round 6: 470 million dollars towards “HSS type” activities

17. Health Systems Strengthening (HSS 2/2) • Current discussions on HSS touch upon: • HSS as a separate Proposal or part of disease components • Definition of “HSS activities” • Conditions for applications (e.g. HSS Plan) • Ceilings (and floor) for HSS funding

18. Recent Developments Dual track financing

19. Dual-Track Financing (DTF) Board decision “The Board recommends the submission of proposals with both government and non-government PRs. If a proposal does not include both government and non-government PRs, it should contain an explanation of the reason for this.”

20. Dual-Track Financing Objectives: • Increased absorption capacity (taking full advantage of the implementation capacity of all domestic sectors, both governmental and non-governmental) • Accelerated implementation and performance of grants • Strengthening of weaker sectors

21. Dual-Track Financing Continued work by the Board Committees • Secretariat to estimate budgetary implications of Dual-Track Financing, for Board consideration • Proposal forms to include language that will encourage the use of dual track in Round 8 proposal application forms • Ideas for better inclusion of vulnerable groups (as determined by country context) • Increasing capacity of TRP in the area of civil society

22. Dual-Track Financing Challenges to effectively leveraging civil society Multiple challenges facing the effective inclusion and strengthening of civil society in the Global Fund’s work at country level, including: • Lack of sufficient resources to build the capacity of local civil society organizations • Dynamics at country level that limit meaningful participation by civil society in the design and implementation of programs • Exclusion of critical voices and marginalized groups

23. Dual-Track Financing Situation • Civil society is a PR in approximately 19% of Global Fund Grants • Civil society is largely involved as sub recipients (30% of Global Fund grants)

24. Dual-Track Financing Performance of civil society PRs • 83% of civil society principal recipients were rated as exceeding expected results • 2% of civil society’s principal recipients were rated as having unacceptable performance

25. Dual-Track Financing Principles guiding the Board decision • Performance based funding • Consistency with National Strategies • Consistency with alignment and harmonisation agenda • Implementation should minimise transaction-costs to CCMs, PRs, and the Global Fund Principles:

26. Recent Developments M&E Strengthening Tool

27. M&E Systems Strengthening tool • Introduced as part of the M&E and Data quality framework to assess and strengthen M&E capacity • The assessments will also be used to guide strategic investment decisions during the grant’s life-cycle (Grant signature, Phase 2, RCC)

28. The tool has been developed as a joint initiative from: • The Global Fund • PEPFAR • USAID • WHO • The Health Metrics Network (HMN) • The Measure EVALUATION Project • Other Partners have joined this initiative, including: • Roll Back Malaria • UNAIDS • World Bank • Stop TB • UNICEF M&E Systems Strengthening tool

29. M&E Systems Strengthening tool • The tool has been implemented for one of the disease components in 32 countries, including 7 in East Asia and the Pacific: • HIV: China, East Timor, Philippines, Vietnam • Malaria: Cambodia, China, Indonesia, Philippines, Vietnam • TB: China, Philippines, Thailand • All disease components are required to implement the tool by end of 2007

30. M&E Systems Strengthening tool • PRs need to use the tool to initiate discussion on M&E system among different stakeholders • The tool can be adapted to the country’s context and needs • The stakeholders’ workshop needs to be carefully prepared • Ideally, the workshop should be facilitated by a disease-specific specialist Implementation

31. M&E Systems Strengthening tool Mobilize Support from technical partners to the M&E assessment process Action Plan as ONE harmonized plan In order to ensure sustainability and building of national M&E systems, the implementation of this Action Plan requires support: Technical expertise Additional financial resources for strengthening measures beyond Global Fund grant capacity Partnership 31

32. M&E Systems Strengthening tool In order to reduce the burden of frequent and overlapping M&E assessments – Multi-agency Technical Working Group on Harmonization of M&E assessments for HIV (Global Fund, World Bank, UNAIDS, Measure EVALUATION and MACRO Intl.) Process underway to refine the tool and come up with one overall M&E assessment tool

33. Recent Developments Grant consolidation

34. Grant Consolidation: Summary • Board-mandated pilot study in 2007 • Combine multiple single-disease grants into one • Streamline grant management for PRs and Secretariat • Increase alignment with national plans • Cambodia, Ghana, Pacific, Perú, Viet Nam

35. Grant Consolidation: Objectives • To assess added value and feasibility of grant consolidation • To identify specific policy and architectural changes needed • To develop strategy and policy recommendations • To draw operational, policy and architectural lessons to facilitate broader roll-out • To identify the criteria for and situations that favor grant consolidation

36. Grant Consolidation: Process • Combining grants into a single grant agreement • Aggregating performance targets • Aggregation and adjusting budgets Optimal time in the lifecycle of grants? • Proposal preparation stage (via the rounds-based channel or the RCC) • Grant negotiation of approved proposal • During implementation

37. Grant Consolidation: Lessons Learnt To Date • Considerable planning precedes “going live” on grant consolidation • Consolidation of existing grants is possible but involves high time input by PR, SRs, and Secretariat • Consolidation at proposal preparation stage has lower transaction costs but requires advance planning • Policy adjustments will be necessary to facilitate broader roll-out of grant consolidation • Preliminary recommendations go to November 2007 Board Meeting • Round 8 likely to be “Consolidation Round”

38. Grant Consolidation: Status Update – 4 countries

39. Recent Developments Technical Support

40. Update on Technical Support Technical Support needs surge at various points of the Grant Life Cycle • Proposal development together with technical agencies; followed by support in TRP Clarifications and Negotiations • Implementation Phase: typical bottleneck areas are governance; procurement; M&E; financial management; management of SRs; annual planning and budgeting; specifically • Preparing for Phase 2 and for RCC • Clearing Conditions Precedent

41. Developments in Technical Support • The Global Fund does not provide technical support to implementation, but can facilitate the access to such support from our partner organisations • The secretariat can provide limited support • to diagnosing the problem (regional contractors) • Country Coordinating Mechanism workshops

42. Partners Providing TS • Various mechanisms for accessing TS exist and funding for this area is increasing • Through UN technical agencies: STB, RBM, WHO/HIV, UNICEF, UNAIDS/WB • Through bilateral mechanisms USG/PEPFAR Global TS mechanism, GTZ Backup Initiative • More details in TS session tomorrow afternoon!

43. Recent Developments Quality Assurance in Procurement

44. Quality Assurance: Background • Global Fund Procurement Principle: To procure quality assured products at the lowest price, in accordance withnational and international law, and in a competitiveand transparent process • Quality Assurance: Set of management activities required to ensure that the medicines (or other health products) that reach patients are safe, effective and acceptable to the patient. • Responsibilities for PSM activities PRs are responsible for ensuring adherence to Global Fund QA/QC requirements.

45. Multi-Source Pharmaceutical Products Single and Limited-Source Pharmaceutical Products The Global Fund QA Policy Must comply with quality standards and requirements of Drug Regulatory Authority in the recipient country. Must procure single or limited source pharmaceutical product that complies with criteria approved by the Global Fund Board.

46. The Global Fund QA Policy (2) • Option A: Products pre-qualified by WHO (UN procurement quality and sourcing project) • Option B:Products authorized for consumption in their country by a Stringent Regulatory Authority • If the PR determines that there is one or no equivalent product meeting standard A or B or if a product is unavailable, then PR may procure products under Option C *

47. Obligations: • PR: • Promptly notify the Global Fund in writing if they plan to procure any products pursuant to Option C1 or C2 • Shall obtain documentation of the application and/or GMP compliance • Shall permit access to storage sites and removal of samples • GF: • Has contracted an independent 3rd party to conduct random quality analysis of products procured under Option C (Note: PR still retains responsibity for random sampling and analysis of products procured under Options A/B and multi-source products).

48. Non-Compliance: • Non-Compliance with the QA Policy Potential risk for patients to get unsafe products as the Global Fund will not be able to conduct random testing of such products. • Corrective measures will be applied to ensure the safety of products procured with Global Fund support • Non-Compliance Level 1: No Notification • 1st Instance: Request and Verify compliance • Issue warning letter to Principal Recipient • 2nd Instance: same as above and direct payment to Procurement Agent or Supplier • Non-Compliance Level 2: No Notification & Non-Compliant Procurement • 1st Instance: Request and Verify compliance • Reimbursement: Amount to be deducted from Grant • Direct payment to Procurement Agent or Supplier

49. Recent Developments Voluntary Pooled Procurement

50. Voluntary Pooled ProcurementBoard decision • GF to implement voluntary pooled procurement: • Rapidly strengthen existing Price Reporting Mechanism (PRM) • Establish a voluntary pooled-purchasing service with the following characteristics: • Covering a set of target products (phased approach: initially a small number of target product categories to be determined) • Operated by one or more procurement agent(s) • Available to PRs on a voluntary basis, with some exceptions • Direct payment to suppliers (via procurement agent) from Trustee account, with agent to enter relevant/required data in PRM • Make available, via contracted providers, procurement capacity-building services and supply-chain-management assistance on an optional basis for all PRs participating in the pooled-purchasing mechanism