• Local Fund Agents

    The Global Fund does not have a country-level presence outside of its offices in Geneva, Switzerland. Instead, it hires Local Fund Agents to oversee, verify and report on grant performance. Local Fund Agents are selected through a competitive bidding process.

    The Global Fund normally has one Local Fund Agent in each country

    where it has approved a grant. This gives the Global Fund access to local knowledge that may be relevant to grant performance. There are some cases, however, where it is not possible to have a Local Fund Agent in the country. In these cases, the Local Fund Agent is based in a nearby country and flies in from time to time to verify grant implementation.

    The Role of the Local Fund Agent

    The role of the Local Fund Agent is described in a comprehensive reference guide, the LFA Manual.

    The Global Fund follows the principles of performance-based funding in making funding decisions. The aim is to ensure that investments are made only where grant funding is managed and spent effectively on programs that achieve impact in the fight against HIV/AIDS, tuberculosis and malaria.

    The Global Fund funding is disbursed to the implementers incrementally throughout the grant's lifespan, and each disbursement is based on performance. Local Fund Agents play an important role in verifying the performance of grant-funded programs each time recipients report results.

    The Local Fund Agent works closely with the Global Fund and in particular with the relevant Fund Portfolio Manager and the Country Team to provide the following services:

    • Work performed before the Global Fund signs a grant agreement with the Principal Recipient. This includes assessing the implementer’s capacity and track record and the effectiveness of internal controls and systems, as well as reviewing the proposed detailed budget, work plan and other grant related documents.
    • Work performed during the ongoing grant management. The Local Fund Agent is contracted to independently review the implementers’ progress in achieving the performance targets and appropriate use of funds in accordance with the grant agreement. This includes reviewing the Principal Recipient's periodic requests for funds, undertaking site visits to verify results and performing other tasks at the request of the Global Fund.
    • Work performed with respect to grant closure. When a grant ends, the Local Fund Agent may be required to review the activities relating to the closing of the grant and advise the Global Fund on issues and risks related to grant closure.

    The Local Fund Agent is an important part of the Global Fund's fiduciary arrangements. However, it is not an "agent" in the true sense of the word and is not empowered to represent the Global Fund's views or make decisions regarding grants.

    The Local Fund Agent is also not permitted to undertake a number of activities with respect to any grants that it oversees. For example, the Local Fund Agent:

    • May not participate in the design of the grant-funded program;
    • May not participate in the implementation of the program;
    • May not provide technical assistance / capacity building to the Principal Recipient or sub-recipients;
    • May not make decisions on the grant (all decisions are made by the Global Fund);
    • May not audit financial statements of the program implementer for which it is the Local Fund Agent.

    Selection Process

    The Global Fund usually contracts one Local Fund Agent for each country where grants are being implemented. LFAs are selected through a competitive process.

    A Request for Proposal is used to select the Local Fund Agent for a given country. In certain exceptional circumstances, an interim Local Fund Agent may be appointed without a formal Request for Proposal, but this is usually for a short defined period of time. The final appointment is processed through a Request for Proposal.

    The following circumstances, among other factors, may serve as a trigger for re-tendering a Local Fund Agent for a country:

    • The Local Fund Agent develops an irresolvable conflict of interest that prevents it from continuing to fulfill its functions in country;
    • The Local Fund Agent is not able to provide the scope and quality of the services required by the Global Fund in the country concerned;
    • The Local Fund Agent contract (which is for a limited duration) expires.

    Each Local Fund Agent firm holds a Framework Contract which is usually signed for a period of four years. The Global Fund and the Local Fund Agent enter into an agreement for Local Fund Agent Services on a per-country basis, annually, by agreeing on a Work Plan for that country.