Sixth Board Meeting

<p>Lennarth Hjelmåker was designated as Rapporteur for the Sixth Board Meeting.</p><ul type="disc"></ul>

<p>The agenda for the Sixth Board Meeting was approved.</p>

<p>The report of the Fifth Board Meeting was approved with the following changes:</p> <ul> <li>Page 5 - The Board asks the Governance and Partnership Committee …</li> </ul> <p>For the Board 6 meeting, that the constituencies of the Chair and Vice Chair be permitted to designate two Alternate Members, based on the condition that the delegate from those constituencies sitting as Chair or Vice Chair recuse themselves from all votes.</p>

<p>The Board approved the following decisions:</p> <p>Decision Point 1</p> <p>Resource-mobilization should use a periodic replenishment model on a voluntary basis for all public donors, complemented by additional ad hoc contributions for all donors, including new public donors, the private sector, and individuals.</p> <p>Decision Point 2</p> <p>TRP-recommended proposals should be approved up to the total of resources available.</p> <p>Decision Point 3</p> <p>Proposals are approved for the entire term of the proposal (up to five years) with a financial commitment for the initial two years with the possibility of renewal for up to an additional three years, with the following conditions: </p> <p>a. The Board may approve proposals and commit funds for two years up to the cumulative uncommitted amount pledged through the calendar year of the Board decision;</p> <p>b. A sufficient amount of assets to meet the full cost of two years of implementation of approved grants must be deposited with the Trustee or readily available on demand prior to the Secretariat signing a grant agreement;</p> <p>c.    Based on successful implementation of a grant, funding beyond its first 2 years receives priority over the funding of new proposals;</p> <p>d. No funds for appeals should be reserved. Successful appeals should be funded immediately if resources are available or as soon as new resources become available. </p> <p>Decision Point 4</p> <p>Both cash and demand public promissory notes should be considered as assets. </p> <p>Decision Point 5</p> <p>The Board will announce a minimum of one Call for Proposals per calendar year.</p> <p>The Board can adjust this based on need and on resources available. </p> <p>A forecast of the resources available for the Round will be announced at the time that the Call for Proposals is issued. </p> <p>Decision Point 6</p> <p>At the final Board meeting of each year, beginning with the 2004 budget, the Global Fund will forecast resources and estimate demand for the next year. </p> <p>This estimate will show clearly the funds available for commitment. </p> <p>This estimate should be attached to the annual budget.</p> <p>This estimate should be updated at each Board meeting. </p> <p>Decision Point 7</p> <p>Technical merit will be the criteria used to determine proposal approval.</p> <p>The Technical Review Panel should refine its recommendations in category 2 in a way that will facilitate the Board's prioritization of proposals for approval. </p> <p>If it is necessary to further prioritize within these sub-categories, the following additional criteria will be used by the Board: poverty, disease burden, repeated failures for the same component and other criteria which the Board deems appropriate. </p> <p>Decision Point 8</p> <p>The Board will not partially approve components. </p> <p>Decision Point 9</p> <p>The Secretariat will work with the Trustee, the MEFA Committee, and other partners such as WHO and UNAIDS to develop financial models that provide regular estimates of resources available for commitment and of demand for Global Fund financing, to be presented to the Board at its seventh meeting. </p> <p>Decision Point 10</p> <p>The Secretariat will work with the Trustee and the MEFA Committee to determine the specific criteria on promissory notes to be considered as assets, to be presented to the Board at its seventh meeting.</p> <p>Decision Point 11</p> <p>The Secretariat will work with the MEFA Committee and with PMPC to determine the process for the extension of two-year grants, to be presented to the Board at its seventh meeting. </p> <p>Decision Point 12</p> <p>The Secretariat will work with PMPC to operationalize the principles for prioritization among TRP-recommended proposals, to be presented to the Board at its seventh meeting. </p> <p>Decision Point 13</p> <p>The Secretariat will work with the MEFA Committee to identify a set of indicators for assessing the performance of the Global Fund's financial policies, to be presented to the Board at its seventh meeting. </p>

<ol> <li>The Board approves for funding the Round 3 categories 1 and 2A today, (15 October) subject to the completion of TRP clarifications.</li> <li>The Board approves proposals in TRP category 2B, subject to the completion of TRP clarifications. This decision would become effective upon Board confirmation by email in January 2004. Meanwhile the Secretariat can proceed with resolving TRP clarifications for these proposals.</li> <li>The completion of TRP clarifications in Category 1 should be completed within 4 weeks of the applicant's receipt of the initial decision of the Board, and given final approval by the TRP Chair and/or Vice Chair.</li> <li>The initial reply to TRP clarifications for proposals in Category 2 should be received within 6 weeks of the applicant's receipt of the initial decision of the Board, and any further clarifications should be completed within 4 months from the receipt of the initial reply from the applicant. The TRP Chair and/or Vice Chair shall give final approval based on consultations with the primary and secondary reviewers.</li> <li>Proposals in Category 3 are not recommended in their current form but are encouraged to resubmit.</li> <li>Proposals in Category 4 are not recommended for funding.</li> <li>The Board requests the PMPC and GPC to examine the issue of non-CCM proposals that have been approved by the Board and that may be against the criteria for non-CCM proposals, and report to the Seventh Board Meeting.</li> <li>The Board requests the PMPC and GPC to review the applicability of the eligibility criteria to future non-CCM applications.</li> <li>The Board requests the GPC todevelop with reference to the Framework Document guidelinesrecommendations for alternative funding mechanisms where particular constraints exist about funding the proposed Principal Recipients and sub recipients. These recommendations should reflect the humanitarian spirit of the Global Fund and the desire to direct funds quickly and accountably to affected populations. These modalities, subject to approval by the Board, should also apply to all approved proposals in Round 3.</li> <li>The Board requests the GPC to examine the possible conflicts of interest between the Chairs of CCMs and the Principal Recipients, particularly in the process of selecting Principal Recipients.</li> <li>The Board requests the GPC to examine the eligibility of CCM applications when the composition of CCMs lacks representation of communities affected by the three diseases and civil society.</li> </ol>

<ol><li>The Board requests the PMPC, with the support of the Secretariat, WHO, and UNAIDS to revise the Guidelines for Proposals for the Fourth Round and subsequent Rounds as needed, including taking account of the principles of harmonization.</li><li>The Secretariat should track in their financial projections the pledges as defined by the donor.</li><li>The Fourth Call for Proposal will be launched onJanuary 10, 2004.</li><li>The Board will approve Round 4 proposals at its June Board Meeting.</li><li>The Board reasserts the principles of the governing policy of the Global Fund, asks each stakeholder of the Global Fund to deploy every possible effort to increase the resources available for 2004, and subsequent years and requests that donors specify before the end of 2003 their contributions for 2004.</li><li>The PMPC will revise the guidelines for proposals by January 1 with input from all Board Members.</li></ol>

<ol> <li>The Board endorses the Global Fund's Monitoring and Evaluation strategy as described by the MEFA Committee [the Monitoring and Evaluation Strategy document GF/B6/1 and annex 1 GF/B6/11.1 which describes the management arrangements for the Fund's M&amp;E].</li> <li>The Board approves the correction of the Round 1 grant amounts previously recorded as approved by the Board, in these cases, to reflect the Board's overall decision to approve the first two years of each proposal, thus endorsing the amounts agreed to in the grant agreements.</li> </ol>

<p>The Board approves the recommendations of the Governance and Partnership Committee as follows: </p> <ol> <li>To adopt the Revised Bylaws and Revised Board Operating Procedures as proposed by the Governance and Partnership Committee.</li> <li>To approve the Committee Rules and Procedures as proposed by the Governance and Partnership Committee.</li> <li>Mandate the Board Chair to convene the Ethics Committee and approve the Ethics Committee and its terms of reference.</li> </ol> <p>Partnership Forum</p> <ol> <li>To adopt the approach to the Partnership Forum process and event as proposed by the Governance and Partnership Committee;</li> <li>To agree specifically to hold the 2004 Partnership Forum event contiguous with the IAC AIDS 2004 Conference inBangkok;</li> <li>To agree to hold the Second Board meeting of 2004 in Geneva and not in connection with the Partnership Forum event;</li> <li>To mandate the Board Chair to convene the Steering Committee immediately to begin planning the Partnership Forum process and event; and</li> <li>To approve the Steering Committee and its Terms of Reference as proposed.</li> </ol>

<ol> <li>The Board approved that the RMCC and the PMPC form a joint working group to develop proposals on the issue of in-kind donations.</li> <li>The RMCC will urgently develop a resource mobilization strategy, in full consultation with other partners, consistent with the comprehensive funding policy to raise funds sufficient to meet future needs. This strategy will include the sustainable mechanism for the agreed voluntary replenishment process.</li> <li>The Secretariat working closely with the RMCC will develop a workplan to implement this strategy.</li> <li>The RMCC and Secretariat will call upon outside experts to advise and assist them in the design and implementation of this strategy and workplan.</li> <li>The RMCC will report by one month before each Board Meeting on the Global Fund's progress in implementing this strategy.</li> </ol>

<p>The Board adopts the following decisions:</p> <p>Decision 1</p> <ol type="a"> <li>Following TRP renewal, approximately one-quarter of the TRP members will be rotated each Round.</li> <li>Members appointed from 2003 onwards will be appointed to serve a term of up to four Rounds.</li> <li>After each Round, the Chair and Vice Chair of the TRP will recommend with specific explanation to the selection panel the members whom should be asked to remain on the TRP (up to a maximum of four Rounds' service for each TRP member).</li> <li>The selection panel will select replacement TRP members from among the TRP Support Pool.</li> </ol> <p>Decision 2</p> <p>For the Fourth and subsequent rounds of applications to the Global Fund:</p> <ol type="a"> <li>Countries classified as "Low Income" by the World Bank are fully eligible to apply for support from the Global Fund.</li> <li>Countries classified as "Lower-Middle Income" by the World Bank are eligible to apply for support from the Global Fund but must meet additional requirements, including co-financing, focusing on poor or vulnerable populations and moving over time towards greater reliance on domestic resources.</li> <li>Countries classified as "High Income" by the World Bank are not eligible to apply for support from the Global Fund.</li> <li>Regional proposals that include a majority of eligible countries may submit applications to the Global Fund.</li> </ol> <p>Decision 3:</p> <p>The Board approves Option One for Round Four.</p> <ol type="a"> <li>Option 1:Countries classified as "Upper-Middle Income" by the World Bank are eligible to apply forsupportfrom the Global Fund only if they face very high current disease burden. This is defined (based on technical input from WHO and UNAIDS) for each disease as follows:<br /> <ol type="i"> <li>HIV/AIDS: if the country's ratio of adult HIV seroprevalence (as reported by UNAIDS, multiplied by 1000) to GNI per capita (Atlas method, as reported by the World Bank) exceeds 5;</li> <li>Tuberculosis: if the country is included on the WHO list of 22 high-burden countries, or on the WHO list of the 36 countries that account for 95% of all new TB cases attributable to HIV/AIDS;</li> <li>Malaria: if the country experiences more than 1 death due to malaria per 1000 people (as reported by WHO).</li> </ol> </li> <li>Eligible countries must meet additional requirements, including co-financing, focusing on poor or vulnerable populations, and moving over time towards greater reliance on domestic resources.</li> <li>The Board requests that the PMPC review the issue of future applications focusing exclusively on vulnerable populations that do not receive significant funding from domestic or external sources from Upper-Middle Income countries ineligible under Option 1.</li> <li>The PMPC will present recommendations to the Board for consideration at the Seventh Board Meeting.</li> </ol> <p>PROCUREMENT AND SUPPLY MANAGEMENT</p> <p>Decision 4:</p> <p>National Drug Regulatory Authorities (NDRA) laboratories or laboratories recognized by the NDRA should be used for quality monitoring by the PR. To ensure the respective laboratories have adequate capacity for full pharmacopoeial testing, they must meet one of the following criteria:</p> <ol type="a"> <li>Acceptance for collaboration with WHO pre-qualification project;</li> <li>Accredited in accordance with ISO17025 and/or EN45002;</li> <li>Accepted by a stringent authority. For the purposes of this policy a stringent drug regulatory authority is defined as a regulatory authority in one of the 28 countries which is either a Pharmaceutical Inspection Cooperation Scheme and/or International Conference on Harmonization.</li> </ol> <p>Decision 5:</p> <ol type="a"> <li>The principles for procurement and quality assurance of pharmaceuticals that were adopted during the Third Board meeting of the Global Fund apply to diagnostics and other non-pharmaceuticals: namely that a Principal Recipient (PR) is responsible for procurement, and is required to conduct competitive purchasing in order to obtain the lowest possible price for products of assured quality:</li> <li>For non-durable products, the same principles as for pharmaceuticals should be followed, namely that a PR is required to select from lists of pre-qualified products, where they exist, or products accepted by stringent regulatory agencies or products accepted by national standards.</li> <li>For durable products the lowest possible price should take into account the Total Cost of Ownership (TCO), including the cost of reagents and other consumables as well as costs for annual maintenance.</li> <li>Procurement methods for durable products may include either lease or purchase. The PR must provide a plan for service and maintenance of the products.</li> <li>The Secretariat will work with technical partners such as WHO, UNAIDS and bilateral agencies to ensure availability of information to recipients in regards to quality assurance and procurement systems related to high priority consumables and durables such as condoms, HIV rapid testing kits, CD4+ T cell monitoring, bed nets, microscopes, etc.</li> </ol> <p>Decision 6</p> <ol type="a"> <li>The Board recognizes the potential role of in-kind donations in significantly expanding the impact of the GF and in making a significant contribution to resource mobilization efforts through providing leverage for cash resources. In-kind donations also constitute a significant means by which the private sector may be involved with the Global Fund and contribute to achieving its goals, thus reflecting the public - private partnership principles upon which the Global Fund is based.</li> <li>The Board recognizes the considerable challenges to be confronted in operationalizing in-kind donations. There are different issues involved in managing in-kind donations in the form of services, non-health products, or health products, particularly pharmaceuticals, at both the global and country level.</li> <li>The Board requests that the PMPC, on the basis of input from the PSM-AP, and working jointly with other Committees, particularly with the Resource Mobilization Committee, to consider further the different operational and other issues surrounding in-kind donations of services, non-health, and health products. These general issues include, inter alia: <ul> <li>Guarding against conflicts of interest;</li> <li>Potential legal liabilities;</li> <li>Long term sustainability;</li> <li>Valuation of contribution.</li> </ul> </li> <li>The Board requests that, on the basis of work done by the private sector and others, the PSMAP will propose strategic options, capturing issues relating to the diversity of products and services, the managerial capacity of the Global Fund Secretariat and Principal Recipients, and the advantages/costs of channeling donations through the Global Fund vis-à-vis other existing mechanisms.</li> </ol> <p>Decision 7: Board refers to the Governance and Partnership Committee the issue of potential conflict of interests when products are manufactured in a state-owned laboratory and the Principal Recipient is a public entity and when products are manufactured or purchased in a state-owned structure and the state is responsible for quality.</p>

<ol> <li>The Board requested the GPC to address all outstanding issues of the Conflict of Interest Policy for submission to the Board.</li> <li>The Board endorsed the Memorandum of Understanding between the Fund and the Inter-American Development Bank and delegated the Stop TB and Roll Back Malaria Memoranda of Understanding to the GPC, after which they will both be presented for ratification by the Board at its subsequent meeting in 2004.</li> <li>The Board mandated the GPC to work further on the legal status of the Global Fund.</li> <li>The Board delegated authority to execute agreements on its behalf to the Chair, Vice Chair and Executive Director. As necessary and appropriate to maintain continuity of Secretariat operations, in the event the Executive Director is unavailable to exercise such authority the Chief Operating Officer or the Chief Fund Portfolio Director may do so.</li> <li>The Board requested the GPC to address the conditions under which the communities delegation can become a voting member without affecting the existing voting mechanism, and report back to the Seventh Board Meeting.</li> </ol>

<ol><li>The Board directs the MEFA Committee in its December 2003 meeting to finalize its review and recommendations of the 2004 budget, including comments made by the Board and to bring its final recommendation to the Board at its next meeting in 2004.</li><li>The Board authorizes the Secretariat to continue to operate with the ceiling of the 2003 budget until the 2004 budget can be adopted by the Board. During this interim period, in the event the Secretariat must incur specific expenses not included in the 2003 budget (e.g. Partnership forum venue costs), it shall do so with the understanding that the expense will be covered within the finally adopted 2004 budget. The Secretariat will present a report of its first quarter expenses to the Board in March.</li><li>The Board directs the MEFA Committee to finalize the review of the budget for 2005 and report to the Board for their decision in 2004.</li></ol>

<p>The Board adopted the attached Calendar for Board Meetings for 2004 and 2005, with the understanding that the dates will be confirmed at the beginning of each year.</p>

<p>During the 6^thBoard meeting, the Board took the following decision:</p> <p>"The Board approves proposals in TRP category 2B, subject to the completion of TRP clarifications. This decision would become effective upon Board confirmation by email in January 2004. Meanwhile the Secretariat can proceed with resolving TRP clarifications for these proposals." </p> <p>The Board reviewed and confirmed its approval of the decision on category 2B proposals for a total amount of US$138,463,324.</p> <p>The Board noted that as of january 2004, US$604 million is forecastto be available for the Fourth Call for Proposals.</p> <p>The Board noted that this amount will be reducedby the aggregate amount of successful appeals of Third round decisions.</p> <p>The Board noted that the total amount of funds requested in proposals submitted to the AppealsPanel following round 3 and deemed eligible for review is US$101.5million.</p>

<p>The Board:</p> <ol> <li>Notes that the two-year term of the current Board Members began on 28 January 2002 (the appointment of Board Members is recorded in the minutes of the First Board Meeting), the current term of office of Board Members appointed to the first Board of the Global Fund to Fight AIDS, Tuberculosis and Malaria will expire this week. Therefore, Board membership must be confirmed by 28 January 2004.<br /><br /></li> <li><span></span>The final nominations for Board membership were received on 27 January 2004, by the Secretariat and are therefore proposed to the Board for approval in accordance with Article 7.4 of the Bylaws namely:<br /><br /><u>7.4 Functions</u><br /><br />Appoint Board Members selected in accordance with Article 7.2.<br /><br /></li> <li>Notes that Article 7.2 states:<br /><br /><u>7.2 Appointment of Foundation Board Members</u><br /><br />Each group mentioned in Article 7.1 of these Bylaws will determine a process for selecting its Foundation Board representation. Board Members will serve as representatives of their constituencies. Foundation Board members will serve on the Foundation Board for two years or such other term that the Foundation Board may determine.<br /><br />Board members shall be deemed to act in their capacity as representatives of their respective governments, organizations, constituencies and other entities.<br /><br /></li> <li>Approves the new Global Fund Board as listed in the attached document.</li> </ol>

<p>The Board:</p> <ol> <li>Having read the following message from the Board Chair dated 30 January 2004: <br /><br />"I have been asked by several Board Members to resolve certain issues related to the renewal of Board memberships. There appear to be ambiguities in our By-Laws and Board Operating Procedures related to the terms of Board Members. Specifically, the length of the terms of Board Members is not clearly defined. In the absence of clear guidelines, the Global Fund Secretariat determined that Board membership commenced on January 28. While reasonable, this interpretation has created a significant gap in leadership positions, in particular in the position of Vice Chair. Dr. Lieve Fransen, Chair of the Governance and Partnership Committee, as well as other Committee members, which met this week in Geneva, have suggested that a better interpretation is that new Board Members terms commence at the first Board meeting of the calendar year. I am inclined to agree with this interpretation. I would to ask the Committee to develop language to amend the Board Operating Procedures to resolve this ambiguity for Board review at the March meeting. <br /><br />To resolve the immediate issue, I would like the Board to agree by resolution that new Board members will take their seat on the morning of March 18, the first day of our first Board meeting of the year. Such a solution would allow our current leadership to continue its work in the weeks leading up to the March Board meeting. The terms of office of our new Board Members would therefore extend to the first Board meeting of calendar year 2006, so that incoming Board Members would not lose any net time of service. <br /><br />(...)<br /><br />Sincerely, <br />Tommy G. Thompson <br />Chair, Global Fund Board of Directors" <br /><br /></li> <li>The Board approves that: <br /><br /> <ol> <li>New Board members will take their seat at the start of the first Board Meeting of 2004. <br /><br /></li> <li>The terms of office of new Board Members will extend to the first Board meeting of calendar year 2006.</li> </ol> </li> </ol>