Decision Making
Performance-based funding is a management approach that links resource allocation to a transparent assessment of performance, through a set of explicit rules and processes based on reviews of performance.
At the Global Fund, performance-based funding supports decisions based on a comprehensive and transparent assessment of program performance which relies primarily on programmatic results, but also includes grant management, system wide effects and program effectiveness, and, ultimately, impact on AIDS, tuberculosis and malaria:
Outcomes/impact – the achievement of long-term outcome and impact results related to the Millennium Development Goals (for example, percentage of people infected with HIV, TB case detection and treatment success rates, mortality rates among children younger than five years, etc.).
Program effectiveness - the degree in which the program provides good value for money and delivers aid in an economic, efficient and effective manner to populations in need
Programmatic results – the achievement of output indicator results vs. targets (for example, the number of people on antiretroviral treatment, the number of people on DOTS, the number of long lasting insecticide-treated bed nets distributed), in the context of financial performance (i.e. expenditure vs. budget per program area and overall contribution of the Global Fund to results, if these are national).
Operational Performance – the overall management of the grant, including challenges, if any, in the areas of: (1) monitoring and evaluation, (2) procurement of health commodities, (3) financial management, and (4) program management (introducing management of Sub Recipient, leadership and technical expertise).
Additionally, contextual factors – whether, in exceptional cases, severe and unexpected changes in the external environment (e.g. natural disaster, civil unrest, etc.) have had a material negative impact on program implementation – are also taken into account in any PBF decision.
In the Global Fund’s performance-based funding model, financing is therefore not only (nor automatically) linked to the achievement of indicator results. Performance-based funding supports decisions based on a comprehensive and transparent assessment of program performance which also includes grant management, contextual challenges and, ultimately, impact on AIDS, tuberculosis and malaria.
Performance-based funding aims to promote results-based decisions at all levels (Global Fund Secretariat, Country Coordinating Mechanism, program implementers): to accelerate implementation, continue or revise programs, invest in capacity strengthening, identify efficiencies, or to reallocate funds not used.
Using indicators in performance-based funding
Programs supported by the Global Fund are required to report on a small set of indicators related to service delivery areas illustrated in the figure below. Performance-based funding at the Global Fund typically focuses on ten to 15 output indicators, as well as on impact and outcome indicators with baselines and targets. Outcome and impact data is increasingly important to the Global Fund in its decisions to renew grant funding after the first phase of implementation of a program.
