Follow-up Audit of Grant-Making Processes
30 May 2017
The OIG concluded that the Secretariat has addressed many of the issues identified in a 2015 audit (GF-OIG-16-003) of Global Fund grant-making processes. Processes have been simplified and differentiated according to the country context, policies have been updated, paperwork reduced. However, the auditors noted that new initiatives to improve grant-making processes have been delayed.
Grant making processes are critical to the achievement of the Global Fund’s mission to end the AIDS, tuberculosis and malaria epidemics. Processes translate country funding requests into grants ready for disbursement after the Global Fund’s Board approval. Prior to approval, the funding request is assessed for technical and strategic soundness taking into account the country’s epidemiological needs, funding amounts, performance ratings and risk. The OIG conducted this follow-up audit of grant-making processes as part of its 2017 annual audit plan due to significant deficiencies identified in the 2015 audit.
Since 2015, the Secretariat has made many improvements to differentiate and simplify the grant application process. For example, documents required in the grant-making process have been simplified and reduced from 22 to ten. Also, the Risk Management Department has clearly defined risk management in grant-making processes and formalized this in a revised operational policy note.
However, despite better processes and tools, there are still challenges with the underlying systems to support grant-making. Implementation of improvements has been delayed and may negatively affect grant-making in the 2017-2019 funding cycle. Although, the 22 grant management standalone IT systems are being integrated into one grant operating system thanks to a project known as ‘Accelerated Integration Management’, there have been delays in implementation of some the functions. These are still under active development and most of them are expected to be released in May 2017. This will be concomitant with 41% (93/228) of the start of grant-making activities, which does not leave sufficient room for additional project delays or the operationalization of systems.
Furthermore, operational processes for the new initiatives of the 2017-2019 funding cycle are still ongoing. For example, policies, procedures and appropriate guidance for certain components of ‘catalytic investments’ (funding requests for strategic initiatives that are not accounted for in country allocations) have not yet been defined. Similarly, despite Secretariat efforts to develop materials and guidance notes in a short timeframe, tight deadlines between funding requests and Board approval have potentially reduced the ability of countries to apply for catalytic investments.
The above challenges are complicated by the volume of funding requests received in March 2017 for the first review period for the 2017-2019 funding cycle. A total of 93 out of 228 expected funding requests, representing approximately US$5 billion or 47% of the Global Fund’s allocation over 2017 – 2019, were received in March 2017. This is almost two and half times more than the number of requests received at the same time in the 2014 – 2016 funding cycle.
The Secretariat has formed a coordination group to monitor the ongoing system enhancement and development of key policies, procedures, guidance, tools and templates for grant-making. The Secretariat is proactively considering mitigating actions through the country dialogue process, which include grant extensions to avoid treatment disruptions. The Secretariat is also developing a three-year plan for the implementation of key grant management business process and system improvements. This will ensure such enhancements are started and completed on time.