LFA Frequently Asked Questions
Download the LFA Frequently Asked Questions 
- What is a Local Fund Agent?
- How are Local Funds Agents selected?
- Once a Local Fund Agent has been selected, can it ever be changed?
- What does a Local Fund Agent do?
- What does a Local Fund Agent not do?
- Does a Local Fund Agent provide technical assistance or capacity building?
- Who does the Local Fund Agent work for?
- How does a Local Fund Agent interact with a Country Coordinating Mechanism?
- How does the LFA interact with other stakeholders at country level?
- How does a Local Fund Agent interact with the Global Fund?
- How does a Local Fund Agent interact with a Principal Recipient?
- Are Local Fund Agents based in the country where the grant is being implemented?
- What skills/core competencies does a Local Fund Agent need?
1. What is a Local Fund Agent?
Local Fund Agents (LFAs) are firms or entities, usually based in countries receiving Global Fund grants, which provide a range of oversight services to the Global Fund. The Global Fund is based in Geneva, Switzerland. It does not have a presence in countries where grants have been made. Instead, it relies on LFAs to oversee, verify and report on the progress on the grants and make recommendations for future funding.
2. How are Local Funds Agents selected?
LFAs are selected through a competitive bidding process. The existing LFAs were selected in a two-step process. First, entities/firms were pre-qualified as potential LFAs. This was done through a global Request for Proposals, and the selection was based on criteria including the capacity to perform the services, the quality of the proposal and cost.
The second step was to select LFAs from among the pre-qualified entities for specific countries. This was done again through a competitive process, on a country-by-country basis. One LFA is selected per country and deals with all grants in that country.
As the term of the current LFA contracts expire this year, the Global Fund will issue a Request for Proposals in July 2007 to invite bids from suitable organizations and entities to pre-qualify as LFA service providers. By mid-November 2007 the pre-qualification process will be completed and pre-qualified LFAs will then be invited to compete to be selected as LFA service providers in each country.
3. Once a Local Fund Agent has been selected, can it ever be changed?
Yes. The LFA for a country can be changed in a variety of circumstances. These include, but are not limited to:
- Where an LFA develops a conflict of interest that cannot be resolved and therefore cannot continue to fulfill its LFA function;
- Where an LFA is not able to provide the scope and quality of the services required by the Global Fund in the country concerned;
- When the LFA contract, which is for a limited duration, expires.
4. What does a Local Fund Agent do?
The LFA is contracted to provide independent and professional advice on grant progress, requests for funding and local circumstances. In particular, the LFA performs the following services for the Global Fund:
Before a grant agreement is signed with a Principal Recipient (PR), the LFA assesses the capacity of the PR to implement the grant as described in the approved grant proposal. The assessment looks at four specific areas:
- Financial Management and Systems
- Institutional and Programmatic Capacity (also known as Program Management Capacity)
- Procurement and Supply Management and
- Monitoring and Evaluation capacity.
During program implementation, the PR submits regular progress updates and requests for the disbursement of funds. The LFA reviews these, verifies that targets have been reached and expenses incurred as reported and makes a recommendation to the Global Fund on how much to disburse to the PR. The LFA also advises the Global Fund of any issues it becomes aware of that may affect performance of the grant.
Towards the end of Phase 1 (the first two years of the grant), the Global Fund asks the Country Coordinating Mechanism (CCM) to submit a Request for Continued Funding. This is the start of the Phase 2 process. This document assesses performance on the grant so far and requests that the grant be renewed into Phase 2. The LFA plays a critical role in reviewing the CCM's request and making recommendations as to whether the Global Fund should continue to fund the grant, and if so what funding to approve for Phase 2.
At the end of the grant, the LFA is involved in assisting the Global Fund with closure of the grant.
In addition, the Global Fund may at any time ask the LFA to perform ad hoc services such as undertake investigations into the suspected misuse of funds.
5. What does a Local Fund Agent not do?
The LFA is part of the Global Fund's fiduciary arrangements. This means that it is limited in what it can do with respect to the grants it oversees. For example, LFAs:
- Shall not participate in the design of a grant program;
- Shall not participate in implementation of a program, or assist the PR or sub-recipients to implement a program;
- Shall not provide technical assistance to a PR or sub-recipient;
- Shall not provide capacity building to a PR or sub-recipient;
- Shall not make decisions concerning a grant;
- Shall not audit a PR for which it is the LFA.
6. Does a Local Fund Agent provide technical assistance or capacity building?
No. As part of the Global Fund's fiduciary arrangements, the LFA cannot assist the PR or sub-recipients to implement the grant. Principal Recipients, sub-recipients or CCMs who believe that a grant could benefit from technical assistance or capacity building should contact the Fund Portfolio Manager or the Global OPCS team for guidance on possible sources for this assistance.
7. Who does the Local Fund Agent work for?
The LFA is contracted by and works for the Global Fund. The LFA does not work for the CCM or the Principal Recipient or sub-recipients.
All of the LFA's reports are submitted to the Global Fund and are confidential unless the Global Fund makes them public.
The Global Fund will only make reports public with the consent of the LFA concerned. However, conclusions or findings of the LFA reports will be shared with the PR in a synthesized form. The LFA does not represent the views of the Global Fund and is not empowered to make decisions concerning the grant or speak on behalf of the Global Fund. However, the LFA does act for the Global Fund in verifying information, requesting clarifications on certain aspects of the grant and making recommendations for continued funding, which assist the Global Fund in making decisions concerning the grant.
8. How does a Local Fund Agent interact with a Country Coordinating Mechanism?
The LFA may be asked to interact with a CCM, for example, by attending CCM meetings. This is encouraged because it means that the LFA is involved in discussions concerning the grant and its performance at the country level. However, the LFA cannot provide advice or guidance to CCMs on anything to do with the grant. The LFA also does not represent the Global Fund in discussions with the CCM. Please refer to the LFA in-country communications protocol.
9. How does the LFA interact with other stakeholders at country level?
The LFA is required to engage with in-country stakeholders to obtain contextual and grant-related information. For more details, please refer to the LFA in-country communications protocol.
10. How does a Local Fund Agent interact with the Global Fund?
The Global Fund appoints one LFA per country. This LFA is responsible for oversight of all the Global Fund grants in that country. The in-country LFA provides services at the request of the Global Fund, usually through the relevant Fund Portfolio Manager.
11. How does a Local Fund Agent interact with a Principal Recipient?
The LFA interacts closely with the PR and sometimes also with sub-recipients. The LFA may need to have frequent meetings with the PR, visit sites to verify performance and be in close contact to clarify disbursement requests and requests for continued funding. It must be stressed, however, that the LFA's contractual relationship is with the Global Fund. The LFA cannot assist the PR with grant implementation or make decisions concerning the grant. The PR should revert to the Fund Portfolio Manager for guidance on issues arising in the grant. Please refer to the LFA in-country communications protocol.
12. Are Local Fund Agents based in the country where the grant is being implemented?
In most countries, the LFA is locally based. This is the ideal situation, as it gives the Global Fund access to local knowledge and insight into local conditions. However, it has not always been possible to have agents based in the country. In a few cases, an LFA has been appointed in a nearby country and flies in to visit the grant recipients regularly.
13. What skills/core competencies does a Local Fund Agent need?
Given the functions that they undertake, LFAs should have or be able to access the following skills and core competencies:
- Financial expertise, including the ability to review and analyse budgets, financial statements (including income and expenditure statements and cash reconciliation statements) and audit reports;
- Programmatic expertise, including an ability to interpret performance results, their implications in the country context, an understanding of health and/or development aspects, an understanding of public health and related monitoring and evaluation systems);
- The ability to monitor and link financial management performance and program performance;
- Knowledge of issues relating to the procurement and supply management of health products, including regulatory issues related to national drug registration requirements, drug importation and applicable quality assurance standards and protocols, ;
In addition, depending on particular needs in-country or activities on the grant the LFAs may need to be able to access additional specialist expertise from time to time, including legal, complex financial management (including forensic audit when appropriate), disease control program strategies, monitoring and evaluation, quantitative analysis and evaluation expertise, as well as specialist skills in alternative program funding modalities.
