24 February 2016
In this audit, the Office of the Inspector General (OIG) assessed how the Global Fund translates funding requests into grants that are ready to be disbursed to defeat AIDS, tuberculosis and malaria. The OIG concluded that grant-making has significantly improved under the new funding model put in place in 2014. However, the pace is slower than expected, processes are cumbersome, there is little differentiation between big or small grants and identifying key risks is not integrated into other Secretariat risk management activities. The Global Fund is addressing the issues raised by the OIG to further improve grant-making.
The Global Fund replaced the previous rounds-based funding model with a model that allows countries to prepare earlier to ensure more flexible and predictable funding. Central to the new model is the grant-making process which transforms funding requests into disbursement-ready grants for Board approval once they have been reviewed and assessed by technical stakeholders.
Despite faster turnaround under the new model, funding requests, known as “concept notes”, are translated into grants more slowly than was envisaged. One and a half years into the allocation period (June 2015), despite a target of three months, only 37% of anticipated concept notes had been transformed into grants which could affect the implementation of programs. However, by December 2015, this had increased to 64%.
Cumbersome Secretariat processes, duplicated documentation and inadequate systems have created inefficiencies which slowed things down. Although the deliverables under the new funding model and the old rounds system have remained largely the same, there are more processes. For example, on average, 22 documents have to be prepared now compared to the eight core documents that were originally envisaged.
At the time of the audit, the Secretariat was already differentiating the grant-making process in order to reduce the workload for smaller and less risky portfolios. Nevertheless, there has been limited progress in operationalizing this differentiation as the volume of documents required to sign grants has remained the same for all portfolios irrespective of grant size and risk.
The OIG noted that risk management under the grant-making process is a standalone process that has not been integrated with other risk-related Secretariat processes already in place, for example, the completion of the Qualitative Risk Assessment, Action Planning and Tracking tool. There is also no mechanism to ensure that risks identified and proposed mitigation measures during grant-making are followed up once implementation is under way. As different risk management tools do not interface with each other, country teams must manually enter the same information several times.
The Global Fund is putting in place actions including simplifying processes and giving more resources to support larger and riskier portfolios.
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The Office of the Inspector General safeguards the assets, investments, reputation and sustainability of the Global Fund by ensuring that it takes the right action to defeat AIDS, tuberculosis and malaria. Through audits, investigations and consultancy work, it promotes good practice, reduces risk and reports fully and transparently on abuse.
Established in 2005, the Office of the Inspector General is an independent yet integral part of the Global Fund. It is accountable to the Board through its Audit and Ethics Committee and serves the interests of all Global Fund stakeholders. Its work conforms to the International Standards for the Professional Practice of Internal Auditing and the Uniform Guidelines for Investigations of the Conference of International Investigators.
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