Structured Abstract
| Document Title: | Global Fund to Fight AIDS, TB and Malaria has advanced in key areas but difficult challenges remain. May 2003. |
| Institution: | United States General Accounting Office (GAO) |
| Authors: | David Gootnick, Director, International Affairs and Trade, Staff: Thomas Melito, Sharla Draemel, Stacy Edwards, Kay Halpern, Reid Lowe, William McKelligott, Mary Moutsos, Tom Zingale |
| Study commissioned by: | the Honorable Jim Kolbe Chairman, Subcommittee on Foreign Operations, Export Financing, and Related Programs, Committee on Appropriations United States House of Representatives |
| Objectives: |
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| Methods: | Review of Fund documents and reports from other partners, interview of key officials from the Fund, UNAIDS, WHO, the UN Development Program, experts on project implementation and procurement. Perspectives on the progress and evolution of the Fund obtained from officials at the Department of State, the US 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. Research was conducted and data reviewed on global spending on HIV/AIDS, TB and malaria. Country field visits were led in Haiti, Honduras, Ethiopia, and Tanzania, including meetings with principle recipients of Fund grants and members of the country coordinating bodies that will be implementing activities supported by Fund grants. In Haiti and Tanzania, the private sector firms that have contracted to serve as local agents for the Fund in these countries were also met. This work was conducted from April 2002 through April 2003. |
| Results: | Authors' main findings are presented and organised according to the four above mentioned areas (see original Results in Brief):
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Summary
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.
