Fifteenth Board Meeting

Mr. Alexander Konuzin from the Eastern Europe constituency is appointed as Rapporteur for the Fifteenth Board Meeting.

We, the Board of the Global Fund to Fight AIDS, Tuberculosis, and Malaria, wish to express our heartfelt thanks and appreciation to Professor Sir Richard Feachem for his tremendous service as our founding Executive Director. He has helped lead a Secretariat of the Global Fund from vision to reality. There is no greater measure of success than the estimated 1.25 million lives saved because of Global Fund-supported grants. We thank him for his tremendous service and wish him continued success as a global leader committed to improving the health and wellbeing of the world's poorest citizens.

The agenda for the Fifteenth Board Meeting (GF/B15/1, Revision 3), as amended at the Fifteenth Board Meeting, is approved.

The Report of the Fourteenth Board Meeting (GF/B15/2) is approved.

<p>The Board adopts the Resource Mobilization Strategy contained in the Report of the Policy and Strategy Committee (GF/B15/6), Annex 3, which is based on the recommendation of the Task Team on Resource Mobilization, and commits, where possible, to assisting the Secretariat in executing the strategy to achieve the agreed targets. </p><p>The Board requests the Finance and Audit Committee (FAC) to actively monitor the progress against the targets, as stated in the strategy, expected to be achieved as a result of the significant budgetary increase. First year progress against these targets should be fully reviewed by the FAC prior to the Eighteenth Board meeting. Further budget recommendations to support resource mobilization efforts will be presented at the Eighteenth Board meeting dependant on the performance review. </p>

<p>The Board refers to the Framework Document of the Global Fund, which states that the Global Fund will support programs that "address the three diseases in ways that will contribute to strengthening health systems," and "the Fund will support proposals which…support the substantial scaling up and increased coverage of proven and effective interventions, which strengthen systems for working: within the health sector; across government departments; and with communities." The Board reaffirms the importance of strong public and private health systems to accomplishing the Global Fund's mission to mitigate the impact of HIV/AIDS, tuberculosis and malaria in countries in need. The Board also recognizes that health systems capacity constraints have proven to be significant bottlenecks to Global Fund grant implementation, and that the Global Fund has, since its inception, provided significant support to a broad range of activities to strengthen health systems.</p><p>The Board decides that the Global Fund, as a financing instrument, should continue to support the strengthening of public and private health systems, and reaffirms its strategic approach in this regard, which consists of investing in activities to help health systems overcome constraints to the achievement of improved outcomes in reducing the burden of HIV/AIDS, tuberculosis and malaria. The Board also recognizes that the Global Fund is not the sole, or even primary, financier of such activities, and close coordination in strategic direction and implementation at the country level in this area is essential. </p><p>With this approach in mind, the Board asks the Policy and Strategy Committee (PSC) to consider the following issues, and, in coordination with the Portfolio Committee, make recommendations to the Board for decision at its Sixteenth Meeting:</p><ul><li>Whether the Board should continue to fund "Health-Systems Strengthening" (HSS) interventions exclusively within disease components or, in addition, establish a separate HSS component for proposals to the Global Fund;</li></ul><ul><li>The appropriate parameters for allowable HSS activities;</li></ul><ul><li>The possible use and nature of conditionality for applying for HSS funding; and</li></ul><ul><li>The possible use and nature of ceilings for HSS funding.</li></ul><p>The Board requests the World Health Organization to identify or convene a suitable forum before the Sixteenth Board meeting to provide input on HSS as related to the Global Fund and other partners, taking into account the work already done by the Portfolio Committee. </p>

<p>The Board reaffirms its commitment to the principles of alignment and harmonization - in particular to further alignment of the Global Fund with national strategies, systems, and structures, and further harmonization with the procedures of international partners, as a means to achieving increased impact.</p><p>To provide greater support for country programs, the Board decides, in principle, to establish new procedures that will allow applicants to submit national strategies for HIV/AIDS, tuberculosis or malaria for Global Fund financing under conditions that differ in some respects from existing application requirements ("National-Strategy Applications").</p><p>The Board endorses the following principles for National-Strategy Applications¹:</p><ul><li>National-Strategy Applications must be based on inclusive, costed, comprehensive and prioritized national strategies (which include a workplan and budget) that have undergone a rigorous technical certification by an independent review mechanism ("IRM")²;</li></ul><ul><li>National-Strategy Applications shall comprise the certified national strategy and minimal additional information, which should include a specification of financial contributions to the national strategy received from existing sources, the amount of funding requested from the Global Fund, and the results to which this funding is expected to contribute;</li></ul><ul><li>The IRM that certifies national strategies shall meet certain conditions - to be defined and endorsed by the Board at a later stage - such as appropriate technical expertise and the capacity to carry out certifications functions rapidly, efficiently and transparently;</li></ul><ul><li>The IRM shall assess the technical soundness and feasibility of national strategies based on rigorous criteria that will be developed jointly with relevant partners, so the outcome of the certification is useful beyond the Global Fund's own specific needs. The Global Fund shall contribute to the development of the criteria the standards the Board requires for the certification to fulfill the Global Fund's core principles, including but not limited to programmatic and financial accountability; and</li></ul><ul><li>The implementation of National-Strategy Applications should be consistent with the core principles of the Global Fund, including performance-based funding, financial and programmatic accountability, and additionality.</li></ul><p>The Board requests the Policy and Strategy Committee to recommend to the Board for approval at its Sixteenth Meeting a plan and policies for bringing into operation a National-Strategy Applications procedure, based on the principles set forth in this decision. Such recommendations shall also address</p><p>the role of Country Coordinating Mechanisms and the Technical Review Panel, the inclusion of non-governmental entities in the National-Strategy Applications process, and the possibility of more frequent funding decisions for National-Strategy Applications, which the Board believes could provide benefits in terms of alignment and harmonization. The Policy and Strategy Committee shall also identify any modifications to existing Global Fund policies that would be necessary in order to bring into operation the National-Strategy Applications procedure.</p><p>In the spirit of the underlying principles of the Global Task Team and the Paris Declaration, the Board calls upon all partners to develop a shared certification approach for national strategies and to allow, where relevant, the use of certified strategies as the basis for applications for funding.</p>

<p>The Board reaffirms its commitment to the principles of alignment and harmonization - in particular to further alignment of the Global Fund with national strategies, systems, and structures, and further harmonization with the procedures of international partners, as a means to achieving increased impact.</p><p>The Board recognizes that there is much flexibility in the current policy framework of the Global Fund that can and should be further exercised to enable increased alignment and harmonization. Thus, the Board encourages the Secretariat, Country Coordinating Mechanisms (CCMs)¹ and Principal Recipients to communicate and fully exercise - as relevant and appropriate - these existing flexibilities. </p><p>In addition, the Board decides, in principle, to allow CCMs to request greater flexibility, for grants to operate in alignment with the implementation of national programs, in the timing of, and the performance period covered by, the Phase-2 review, for the purpose of enabling greater alignment with national cycles and harmonization with other donors' evaluation efforts. The Secretariat shall only allow this flexibility where relevant and appropriate, based on a set of conditions to be determined and agreed by the Board. The Board shall vote on any requests for bridge funding in cases in which such funding would be necessary to avoid interruption of program activities prior to the beginning of Phase 2. The Board requests the Portfolio Committee to propose appropriate modifications to existing Board policies to enable the Secretariat to exercise this flexibility, including by specifying the conditions under which the Board would allow CCMs to request this flexibility and the specific timing parameters for the Phase-2 review, and to present these to the Board for approval at its Sixteenth Meeting.</p>

<p>The Board requests the Secretariat to provide an analysis of the Global Fund's grant portfolio at the Board's first meeting of each calendar year, as part of the Secretariat's yearly reporting to the Board on the core set of Performance Indicators for the Global Fund.¹</p><p>This analysis shall include, for example, where feasible and available in recipient country systems, elements such as value for money of Global Fund-financed interventions, the quality of treatment, prevention and care interventions provided through Global Fund-supported programs, the balance of interventions within each disease, the integration of relevant scientific innovations, and gender.</p>

The Board approves the amendments to the Global Fund Documents Policy, as presented in the Report of the Policy and Strategy Committee (GF/B15/6), Annex 4.

Mr. Rajat Gupta of the Private Sector constituency is elected as Chair of the Board for the period commencing upon the adjournment of the Fifteenth Board meeting until the adjournment of the first Board meeting of 2009.

Ms Elisabeth Mataka of the Developing Country NGO constituency is elected as Vice Chair of the Board for the period commencing upon the adjournment of the Fifteenth Board meeting until the adjournment of the first Board meeting of 2009.

<p>The Board approves the following amendments to paragraph 6 of the Terms of Reference, Membership and Procedures of the Technical Evaluation Reference Group approved at the Tenth Board Meeting (GF/B10/8, Annex 8):</p> <ol> <li>Each Board member of the Global Fund may nominate candidates who match the profile and qualifications defined in paragraph 7 (up to 4 candidates per board member). The names of candidates will be submitted to the Policy and Strategy Committee with the appropriate information and documentation through the Secretariat. The PS Committee with the support of the Fund Secretariat, will recommend a proposed list of appointees to the selection committee which is comprised of the Chair or Vice Chair of the PS Committee, <u>the Chair of the TERG,</u> the Committee M&amp;E focal point and the Executive Director of the Global Fund <u>or his/her designee</u>. The final proposed list will be forwarded to the Board of the Global Fund for decision. The confirmed appointees will be invited to become members of the TERG by the Executive Director of the Global Fund. The M&amp;E focal point member of the PS committee as well as the chairs of the monitoring and evaluation reference panels of UNAIDS, Roll back Malaria, and Stop TB shall be ex-officio members of the TERG. In addition to the regular TERG membership, additional experts may be invited to participate as the need arises.</li> </ol>

<p>The Board believes that civil society and the private sector can, and should, play a critical role at all levels of the architecture and within every step of the processes of the Global Fund, at both the institutional and country levels. This includes their critical roles in the development of policy and strategy and in resource mobilization at the Global Fund Board level, and in the development of proposals and the implementation and oversight of grants at the country level. The Board further expresses its desire for strengthened and scaled-up civil-society and private-sector involvement at both the country and Board levels, while recognizing the respective strengths and roles of the two sectors.</p><p>With this goal in mind - and also reaffirming the importance of effective Country Coordinating Mechanisms (CCMs)¹ in ensuring strong country-level development of proposals and oversight of grants - the Board recognizes the need to further enable civil society and the private sector to play their critical roles, facilitated by the following:</p><ul><li>The routine inclusion, in proposals for Global Fund financing, of both government and non-government Principal Recipients (PRs) for Global Fund grants ("dual-track financing"). The Board recommends the submission of proposals with both government and non-government PRs. If a proposal does not include both government and non-government PRs, it should contain an explanation of the reason for this;</li></ul><ul><li>The routine inclusion, in proposals for Global Fund financing, of requests for funding of relevant measures to strengthen the community systems necessary for the effective implementation of Global Fund grants;</li></ul><ul><li>The effective representation and meaningful participation of vulnerable groups (as defined in the context of each particular country) on CCMs; and</li></ul><ul><li>Simplified CCM access to funding to support their effective administrative functioning, for the life of a grant that the CCM is overseeing when needed, and increased transparency by CCMs about how they plan to ensure access by civil society to such funding.</li></ul><p>The Board requests the Secretariat to take the necessary actions and collaborate with partners to achieve the above outcomes, working with the relevant Board committee(s), where necessary. </p><p>In particular, the Board requests the Policy and Strategy Committee to agree on a suitable definition of the term "civil society", by building on existing work to that effect. </p><p>In addition, the Board requests the Portfolio Committee (PC) to do the following:</p><ul><li>Modify future proposal forms and guidelines (starting with those for Round 8) to encourage the use of dual-track financing and the inclusion of funding requests for strengthening community systems in proposals;</li><li>Propose means to increase the representation of vulnerable groups on CCMs, such as by revising the relevant, current recommendation on the composition of CCMs;</li><li>Propose guidance to CCMs regarding types of civil-society and private-sector representatives that could be most relevant to the work of CCMs;</li><li>Propose appropriate modifications to the policy or guidance on the funding for CCM activities;</li><li>Propose guidance on increasing the capacity of the Technical Review Panel in the area of civil society and the private sector; and</li><li>Report on progress at the Sixteenth Board Meeting.</li></ul><p>Regarding dual-track financing, the Board notes the following:</p><ul><li>The possible benefits achieved through dual-track financing include increased absorption capacity (from taking full advantage of the implementation capacity of all domestic sectors, both governmental and non-governmental), accelerated implementation and performance of grants, and the strengthening of weaker sectors; and</li><li>CCMs, PRs and the Secretariat should implement dual-track financing according to the following principles:<ul><li>The implementation should be consistent with alignment and harmonization of efforts to fight the three diseases;</li><li>It should be consistent with national strategies to fight the three diseases, or there should be a justification stated when this is not the case;</li><li>It should seek to minimize transaction costs and demands on CCMs, PRs and the Secretariat;</li><li>It should apply equally the same expectations of accountability, transparency and responsibility to government and non-government PRs; and</li><li>It should seek to be consistent with national plans for human resources for health.</li></ul></li></ul>

<p>The Board refers to its decision at the Thirteenth Board Meeting (GF/B14/2, p.13) to approve, in principle, the recommendation that the Global Fund facilitate the provision of voluntary pooled procurement for recipients of grants, subject to the development and Board approval of a suitable feasibility and business plan. It also refers to its decision at the Fourteenth Board Meeting (GF/B14/DP15) that the Global Fund assumes a deliberate and strategic role in improving the impact of grants by influencing market dynamics.</p> <p>The Board adopts the Objective and Guiding Principles for the Global Fund's Market Dynamics Strategy, as set out in the Report of the Policy and Strategy Committee (GF/B15/6), as amended at the Fifteenth Board meeting.</p> <p>The Board decides to endorse the following strategic model ("the Model") for voluntary pooled procurement, as a first element of its strategy on market dynamics, and notes additional elements to this strategy may follow.</p> <ol> <li>The Secretariat shall rapidly strengthen its existing Price Reporting Mechanism ("PRM"), with the objective of enhancing the completeness and quality of self-reported data as an essential foundation of sound market dynamics and procurement practices. In particular, the Secretariat shall more strictly enforce compliance with the existing requirement that recipients report procurement information (including prices paid) for the relevant health products, and subject the data reported in the PRM to periodic audit by an external agent with appropriate qualifications.</li> <li>The Secretariat shall establish a pooled-purchasing service¹ (the "Pooled Service"). <ol type="i"> <li>The Pooled Service shall cover a set of target products and be operated by one or more global or regional procurement agent(s) (the "Procurement Agent") that the Secretariat shall select following a transparent, competitive tender process. The Secretariat shall direct the Procurement Agent to seek to award contracts for a given product to several suppliers, where possible and appropriate in view of considerations of market dynamics.</li> <li>Participants in the Pooled Service must agree to have the Global Fund Trustee make direct payment to the Procurement Agent for purchases. The Procurement Agent will input in the PRM all required information in relation to purchases made through the Pooled Service.</li> <li>Use of the Pooled Service shall be voluntary except for PRs that, in the determination of the Secretariat, have demonstrated inadequate capacity to procure effectively and efficiently, which the Secretariat, if appropriate, may in each case require to procure through the Pooled Service.</li> </ol> </li> <li>The Secretariat shall enter into contracts with global, regional or national providers of procurement capacity-building services and supply-chain-management assistance (the "Capacity-Building Providers"), which it shall select following transparent, competitive tender processes. These services shall be available, on a voluntary basis, to any PR using the Pooled Service. In addition, to further support the development of the national capacity to conduct procurement effectively and efficiently, the Secretariat shall make available the services provided by the Capacity-Building Providers to other relevant entities in those countries with Global Fund grants whose PR procures through the Pooled Service (at their own cost).</li> </ol> <p>Payment for services of the Procurement Agent pertaining to purchases made through the Pooled Service with funds provided by the Global Fund, and payment for services provided to PRs by the Capacity-Building Providers shall, if not otherwise covered by the relevant PRs, be made out of grant funds and not out of the Secretariat's operating budget.</p> <p>The Board delegates authority to the Secretariat to implement the Model, in conformity with the Guiding Principles for market dynamics, in a phased approach that shall initially cover a small number of target product categories, which the Secretariat shall select based on further, careful analysis, taking into account the Global Fund's comparative advantage and the work already done by different partners.</p> <p>The Board expects the Secretariat to refine the operational implementation of the Model based on lessons learned over time and other considerations, and to report back to the Policy and Strategy Committee on possible strategic refinements or revisions to the model (including the possible use of price ceilings and other incentives) that might prove helpful to better achieving the Objective in conformity with the Guiding Principles.</p> <p>The Board also requests the Secretariat to report on progress at the Sixteenth Board Meeting. Noting the limited progress to date on improving the PRM, the Board specifically requests the Secretariat to include in its report an analysis of the status of the current PRM (including rates of, and challenges to, compliance by PRs) and specific measures taken to improve compliance with reporting requirements and the data reliability of the PRM.</p>

<p>The Board notes that UNAIDS, the Stop TB Partnership and Roll Back Malaria have estimated that the global resource needs regarding the three diseases are approximately US$ 28-31 billion per year in 2008-2010.</p><p>The Board recognizes that adequate resources are critical in fighting the three diseases, and that contributions must come from several sources -- national and international, multilateral and bilateral, governmental and non-governmental. The Board believes that, as a major financing mechanism for HIV/AIDS, tuberculosis and malaria, the Global Fund has a critical role to play in this effort. The Board also recognizes that some funders provide significant resources through other channels. </p><p>The Global Fund's 2007 Resource Needs report currently projects a level of demand to the Global Fund of US$ 6 billion per year in 2010, which would represent a tripling in the size of the Global Fund.</p><p>The Board recognizes that, if its partners and stakeholders in developed and developing countries scale up their efforts to strengthen and improve the quality of demand from country partnerships, such demand could potentially reach the level of US$ 8 billion by 2010. Meeting concrete expressions of demand in the above range will require major, additional resource mobilization from public and private sources, and innovative financing mechanisms. The Board, therefore, also calls on its partners, stakeholders and the Secretariat to take concrete steps to encourage demand at these levels, and to work with the Board and Secretariat to mobilize the resources necessary to meet increased demand expressed in the submission of quality proposals to the Global Fund. </p><p>The Board further acknowledges that reaching the target will require continued demonstration of good performance, effectiveness and rapid disbursement by the Global Fund and its grantees.</p>

<p>The Board refers to its decision (GF/B14/DP23) to request the Policy and Strategy Committee (PSC) to work with the Secretariat and the Finance and Audit Committee (FAC) to develop a roadmap for future collaboration with the UNITAID Board and Secretariat, and present it for approval by the Board at its Fifteenth Meeting. The Board notes that it was not possible for the PSC to present such a roadmap at the Fifteenth Board Meeting, for a number of reasons explained in the Report of the PSC (GF/B15/6), and requests the PSC¹ to continue to work with the Secretariat and the FAC to develop the roadmap with UNITAID, with a view to presenting it for approval by the Board at its Sixteenth Meeting.</p>

The Board decides that grants from the fourth and subsequent Rounds that have a term of less than five years shall be ineligible for qualification for the Rolling Continuation Channel. The Board and Secretariat will communicate with Country Coordinating Mechanisms¹ in a timely manner regarding this policy.

<p>The Board has approved the establishment of a funding channel (the "Rolling Continuation Channel" or "RCC")¹ that provides an opportunity for Country Coordinating Mechanisms ("CCMs")² to apply for continued funding for high-performing grants that are reaching the end of their funding terms ("expiring grants") under conditions different from those available for proposals submitted as part of new rounds of financing ("rounds-based channel"). The Board approves the following procedure for the Board to make funding decisions for proposals submitted under the Rolling Continuation Channel that the Secretariat has qualified as eligible for the RCC.</p> <p>1. The Board will consider proposals for RCC funding not more than once every three months, unless the Secretariat determines it is necessary because of exceptional circumstances to present a recommendation to the Board more frequently.</p> <p>2. The Board will make funding decisions for proposals for RCC funding based on the recommendations of the Technical Review Panel ("TRP"), which will take into account performance data provided by the Secretariat. The TRP will make recommendations to the Board for funding of RCC proposals in accordance with the Terms of Reference of the TRP.</p> <p>3. The Secretariat will post the TRP's recommendations and supporting documents on the Global Fund website with password protection, will inform Board constituencies via e-mail when it has posted these recommendations, and will provide to them a voting form that will list the recommendations. Notice to Board constituencies of the vote on the TRP's recommendations will be effective upon the transmission of the voting form. For the purposes of Article 7.6 of the By-laws, all Board members will be deemed to be participating in the vote when such notice becomes effective.</p> <p>4. The Board will vote on the TRP recommendations on RCC funding by e-mail on a "no-objection" basis, in accordance with Section 12 of the Board Operating Procedures and Article 7.6 of the By-laws. Consistent with Board practice for funding decisions made under the rounds-based channel, the Board will consider the totality of the TRP's recommendations.</p> <p>5. However, if a Board member objects to an individual recommendation from the TRP, he or she will provide to the Secretariat a written explanation of the reasons for such objection. The Secretariat will then promptly make available such explanation to all other Board members and the TRP.</p> <p>6. For the purposes of Section 12 of the Board Operating Procedures, the time period within which the Secretariat must receive objections in order for them to be counted is ten (10) calendar days after notice of the vote is effective. </p> <p>7. If the Board approves the TRP recommendations, that decision will constitute an approval of the entire term of each RCC proposal recommended for funding by the TRP, with a financial commitment for the initial three (3) years of the RCC proposal, with funding for the second phase subject to the approval of the Board based on a mid-term performance review. </p> <p>8. If the Board decides not to approve a TRP recommendation, the decision-making process that applies following a Board objection to a TRP recommendation under the Phase-2 Decision-Making Policies and Procedures³, as amended from time to time⁴, will be followed.</p> <p>9. Funding recommendations with respect to RCC proposals that have successfully been appealed, in accordance with the Global Fund's Rules and Procedures for Appeals, will come before the Board for decision, in accordance with such Rules and Procedures for Appeals.</p>

<p>To allow RCC funding decisions to be made on a 'no-objection' basis, the Board amends Section 12 of the Board Operating Procedures as follows:</p><p><i>"<b>12. No-Objection Process</b></i></p><p><i>Notwithstanding Sections 10 and 11, decisions by the Board to provide funding for approved proposals beyond the initial funding commitment or for proposals requesting continued funding for grants that are reaching the end of their funding terms may be made on a no-objection basis under the following process.</i></p><p><i>As directed by the Board, the Secretariat shall issue a request for decision action on each funding commitment for which a Board decision is required, and shall notify the Board accordingly. Unless four Board members of one of the voting groups described in Section 10 object to the requested decision within a time period specified by the Board following the date of notification, the requested decision shall be deemed approved by the Board."</i></p>

<p>During the First Special Board Meeting in February 2007, the Board requested that the Inspector General <i>ad interim</i> conduct an independent analysis of the remaining issues raised by the Inspector General's Report on the Credit Suisse Bank Account and the Management Response to the OIG Report on the Audit of Credit Suisse Bank Account Transactions, and advise the Board whether further action is required. In addition, the Board requested that Deloitte &amp; Touche complete the draft <i>Review of the Office of the Inspector General</i> (the "Deloitte Report"). The Board has received the report of ORNA Corporate Integrity AG, retained by the Inspector General <i>ad interim</i> to conduct the requested independent analysis, and the Deloitte Report. </p><p>The Board notes with approval the conclusions of the ORNA Report that no fraud or misappropriation of funds occurred. It is satisfied that this report provides the review, analysis and conclusions necessary to bring this matter to a close. The Board requests the Inspector General <i>ad interim</i> to prepare a comprehensive account (including, as appropriate, original documents) of the findings and recommendations of the Deloitte Report, the OIG Report, the Management Response, and the ORNA Report. The comprehensive account should be drafted with the expectation that it be released publicly, in consultation with the Chair and Vice Chair of the Board and the Executive Director, not later than May 31, 2007. The Board requests the Secretariat to prepare a response to the recommendations in the ORNA Report and report to the Finance and Audit Committee on its response to, and implementation of, these recommendations. </p>

<p>The Board notes the initial work undertaken by the Finance and Audit Committee (FAC) to develop a policy for disclosure of reports issued by the Inspector General. The Board notes that the FAC has established a sub-group, composed of the World Bank delegate, the United States delegate and the Inspector General <i>ad interim,</i> supported by the Chief Financial Officer and the Legal Counsel, to continue development of the OIG disclosure policy, in consultation with Deloitte. The Board requests that the FAC, after consultation with the Policy and Strategy Committee, to present its recommendations for the OIG disclosure policy to the Board for approval at the Sixteenth Board Meeting.</p><p>The Board decides that, prior to Board approval of such policy, the Chair, the Vice Chair and the Chair of the FAC, after consulting the Inspector General and the Legal Counsel, shall have the authority to determine public disclosure of OIG reports after they have been made available. </p>

The Board notes the work already conducted by the Finance and Audit Committee to develop an overall assurance framework for the Global Fund and acknowledges that such effort involves considerations that extend beyond the OIG. The Board requests that the Finance and Audit Committee continue to develop its recommendation for documenting the overall assurance framework of the Global Fund in consultation with the Policy and Strategy Committee, the Secretariat and the Inspector General for presentation to the Board for its approval at the Sixteenth Board Meeting.

<ol start="1" type="1"><li>The Board takes note of the options for sourcing candidates for the position of the Inspector General as described in the draft Action Plan for Recruitment of a New Inspector General (the "Draft Action Plan") that is appended to the Report of the Finance and Audit Committee (GF/B15/8), Addendum 1, as Attachment 2, and decides to adopt a combination of option 1 and 2 as set out therein.</li></ol><ol start="2" type="1"><li>The Board approves, in principle, the process and responsibilities for selection of the new Inspector General set out in the draft Revised Action Plan, as modified and set forth in Attachment 3 to GF/B15/8 (Addendum 1), and the desired role and personal competencies of the Inspector General that are listed in the draft Action Plan.</li></ol><ol start="3" type="1"><li>The Board decides to establish a Selection Panel to lead the recruitment process. The composition of the Selection Panel shall include two representatives of Board delegations, the Inspector General<i>ad interim </i> and an external advisor,supported by a member of the human resources staff of the Secretariat. The Chair and the Vice Chair of the Board shall appoint the two Board representatives and the external adviser to the Selection Panel. The Inspector General ad interim shall be the chair of the Selection Panel.</li></ol><ol start="4" type="1"><li>The Selection Panel shall be constituted not later than 11 May 2007. The Board requests that the Selection Panel take all necessary steps to agree a final action plan and an expeditious and appropriate timescale for the selection process and transmit them to the Board for information as soon as possible.</li></ol><ol start="5" type="1"><li>The Board decides to establish a special Sub-committee of the Board to interview not more than three candidates recommended as suitable by the Selection Panel and to select the new Inspector General from among these candidates. The Sub-committee shall consist of the Vice Chair of the Board and two other Board Members who have not participated in the Selection Panel. Notwithstanding Article 23 of the Board Operating Procedures, the Chair and the Vice Chair of the Board shall appoint the two Board Members of the Sub-committee. The Sub-committee shall notify the Board of its selection of the new Inspector General promptly after the selection has been made.</li></ol>

<p>The Board takes note of the document entitled "Draft Options for Inspector General's Reporting Lines" that is appended to the Report of the Finance and Audit Committee (GF/B15/8) (Addendum 1) as Attachment 4, and adopts option 2 as set out in such report. The Board clarifies that the Inspector General will report independently and confidentially to the Board, while maintaining the administrative reporting line to the Executive Director.</p> <p>The Board requests that the Inspector General Selection Panel (established by GF/B15/DP24) prepare appropriate revisions to the current Terms of Reference of the Inspector General and the OIG Charter to reflect this decision for presentation to the Finance and Audit Committee not later than 31 May 2007. The Board delegates to the Finance and Audit Committee the authority to approve the revised Terms of Reference of the Inspector General and the Office of the Inspector General Charter and requests that the Finance and Audit Committee notify the Board of the revised Terms of Reference of the Inspector General and the OIG Charter promptly after such approval.</p>

The Board approves the 2006 Financial Statements of the Global Fund which have been audited by Ernst &amp; Young, attached as Annex 3 to the Report of the Finance and Audit Committee (GF/B15/8).

<ol> <li>The Board approves the amendments to the Comprehensive Funding Policy, as amended at the Thirteenth Board Meeting, as presented in Annex 5 to the Report of the Finance and Audit Committee (GF/B15/8).</li> <li>The Board revokes the following decisions: <ol type="a"> <li>The decisions made at the Seventh Board Meeting regarding prioritization of funding in resource-constrained environments (GF/B8/2 p. 13-14);</li> <li>The decision made at the Seventh Board Meeting regarding the criteria for considering promissory notes as assets (GF/B8/2, p. 16, decision point 6); and</li> <li>The decision points 1 and 2 entitled "Phase 2 Funding" made at the Eighth Board Meeting regarding prioritization of Phase 2 funding (GF/B9/2 p. 9-10).</li> </ol> </li> </ol>

<p>1. The Board notes the progress made to date, and authorizes the Secretariat, under the oversight of the Finance and Audit Committee, to proceed with the negotiation and costing of the remaining alternative administrative arrangements as described in detail in the Report of the Finance and Audit Committee to the Fourteenth Board meeting (GF/B14/9).</p><p>2. The Board authorizes the Secretariat to pursue the most beneficial arrangement for providing pension services to the staff. The Board recognizes the need to provide support to these negotiations. </p><p>3. The Board requests the FAC to present the final fully costed implementation plan for decision of the Board at the Sixteenth Board Meeting.</p>

<p><b>1. Guiding Principles</b> </p><p>The Board acknowledges the need to accommodate restricted financial contributions in order to fully realize the Global Fund's mission of mobilizing significant additional resources for the fight against AIDS, tuberculosis and malaria, and authorizes the Secretariat to mobilize and accept such contributions which represent additional new funding in accordance with the following guiding principles:</p><ol type="a"><li> Restricted financial contributions to the Global Fund shall be limited to those from private donors and a limited number of public mechanisms approved in advance by the Board for this purpose; The Global Fund shall not accommodate restrictions on contributions through Official Development Assistance, thereby ensuring that the majority of contributions to the Global Fund remain unrestricted. </li><li> Restricted financial contributions shall be used solely for the purpose of supporting grants approved by the Board and activities of the Secretariat in line with the recipient-driven, Board-determined priorities of the Global Fund; and</li><li> Restricted financial contributions shall not result in unreasonable transaction costs for the Global Fund, substantial changes to Global Fund systems and processes, or the responsibilities of the Trustee, or any deviation from Global Fund rules and procedures. The Secretariat shall maintain the accounting records necessary to record restrictions attached to contributions and to identify the expenditure that satisfies such restrictions.</li></ol><p>For these purposes "restricted financial contributions" (sometimes referred to as "targeted funding" or "earmarked funding") has the meaning assigned by accounting standards applicable to contribution income, i.e. contributions which have been provided by a donor with specific restrictions on how they may be used by a recipient.</p><p><b>2.</b> <b>Restricted Financial Contributions for Grant Activities</b> </p><p>The Board authorizes the Secretariat to mobilize and accept contributions which are restricted to broad categories of expenses such as by disease and region (e.g. AIDS grants in Africa), to specific grants and/or to the procurement of specific goods and services, provided that:</p><ol type="a"><li> such restricted financial contributions comply with the Guiding Principles outlined in paragraph 1 above;</li><li> such restricted financial contributions are made through the Global Fund;</li><li> the total amount of restricted financial contributions is less than the total sum of Global Fund financing committed to any grant or activity receiving restricted financial contributions, ensuring that the programmatic results of such grants or activities are attributable, not just to the restricted financial contributions, but to contributions from all Global Fund donors. </li></ol><p><b>3.</b> <b>Restricted Financial Contributions for Secretariat Activities</b> </p><p>The Board authorizes the Secretariat to mobilize and accept restricted financial contributions for use to pay for Secretariat activities. Such restricted financial contributions may be made either directly to the Global Fund or to third parties in payment for liabilities of the Global Fund, provided that such contributions comply with the Guiding Principles outlined in paragraph 1 above.</p><p><b>4.</b> <b>Oversight</b> </p><p>The Board requests the Secretariat to provide the Finance and Audit Committee with progress updates on the implementation of this Restricted Financial Contributions Policy, including (a) a report on the results of mobilizing restricted financial contributions and (b) identification of new public mechanisms for inclusion in the Policy. </p><p>The Board delegates to the Finance and Audit Committee the authority to approve new public mechanisms proposed by the Secretariat for inclusion in the Restricted Financial Contributions Policy, and acknowledges UNITAID as the first such approved public mechanism. </p><p>The Board further requests the Finance and Audit Committee to consider new developments as they arise and to propose any changes to the Policy deemed appropriate by the Finance and Audit Committee for adoption by the Board.</p>

The Board acknowledges that, in developing a roadmap for future collaboration with UNITAID, the Policy and Strategy Committee, working together with the Secretariat and the Finance and Audit Committee, may consider the possibility of UNITAID providing direct funding to third party procurement mechanisms to support Global Fund grants. The Board notes that the roadmap, including the contribution structure and funds-flow mechanism, will be presented to the Board for its approval.

<p>1. The Board acknowledges the potential for additional resources for the Global Fund from debt conversions and authorizes the Secretariat to implement a two year pilot phase (2007-2009) of the Debt2Health mechanism in up to four beneficiary countries. </p><p>2. The Board authorizes the Secretariat for the purposes of the implementation of Debt2Health to accept restricted contributions from counterpart funds which are attributed at the country level. </p><p>3. The Board requests the Secretariat to implement and monitor the Debt2Health pilot phase and to report on the results and lessons learned to the Finance and Audit Committee on a regular basis. </p>

The Board takes note of the end of year report by the Performance Assessment Committee (PAC) on the Corporate Key Performance Indicators (KPIs) 2006. It is fully satisfied with the indicators for which targets were met or exceeded. While it notes that there is a material shortfall in four KPIs, the Board accepts the reasons given as to why these targets were not met. Overall, the Board regards the results achieved in 2006 as a reflection of the performance based culture of the Global Fund and is pleased with the significant progress achieved in embedding this culture throughout all Global Fund activities.

The Board approves the revised Competency Model and associated behaviors that will be used to assess how the Executive Director has set about achieving the various performance targets as detailed in Attachment 1 to the Report of the Performance Assessment Committee (GF/B15/10).

The Board approves the revised process and responsibilities for the annual performance evaluation of the Executive Director as outlined in the Report of the Performance Assessment Committee (GF/B15/10).

<p>The Board requests the Portfolio Committee to recommend to the Board at the Sixteenth Board meeting changes to the requirements with respect to the eligibility of applicants from upper-middle income economies for HIV/AIDS grants based on the following principles:</p><ol type="a"><li> An applicant would be eligible if:<ol type="i"><li> the epidemic in the country targeted in the proposal is of such magnitude that it has measurable impact on population demographics such as life expectancy and significant additional external resources are required to adequately address the epidemic; or</li><li>. the epidemic in a vulnerable population in the country targeted in the proposal is of such a nature and/or magnitude that there is risk of accelerated spread within that vulnerable population and significant additional external resources are required to adequately address the epidemic.</li></ol></li><li> Applicants with higher income levels should contribute through appropriate levels of counterpart financing and domestic investments.</li><li> Applicants must be included in the list of Official Development Assistance recipients published by the Organization for Economic Cooperation and Development (OECD) Development Assistance Committee.</li></ol>

<p>The Board amends Section II, paragraph 1 of the Documents Policy approved at the Third Board Meeting as follows:</p> <p>"B. Disclosure Categories</p> <ol> <li>Records Posted on the Web Site of the Fund: <ol type="a"> <li>Minutes of each Board meeting, together with the full text of all decisions approved by the Board and accompanying documents.</li> <li>List of current Members of the Board, Alternates, Members of Board delegations, Members of the Technical Review Panel, Membership of all Committees, Expert Committees and other Advisory Panels.</li> <li>Current Rules and Procedures of the Board, Technical Review Panel, Committees, and any other Fund body.</li> <li>Annual Report of the Fund.</li> <li>Approved Budget of the Fund.</li> <li>Proposal Applications for Approved Proposals, and commencing from Round 7, all eligible proposal applications.</li> <li>Core Documents, as defined in the Board Operating Procedures."</li> </ol> </li> </ol>

The Board approves the Terms of Reference of the Technical Review Panel (TRP) as set out in Annex 2 of the Report of the Portfolio Committee (GF/B15/7).

The Board approves as Permanent Members and Alternate Members of the Technical Review Panel (TRP) the list of persons as indicated in Annex 3 the Report of the Portfolio Committee (GF/B15/7) who have been recommended by the Portfolio Committee and the Executive Director from the TRP Support Group approved at the Thirteenth Board meeting, upon consideration of required technical expertise, as well as geographical distribution and gender balance.

<p>The Board decides that the following criteria apply to the Appeal Panel which reviews appeals of funding decisions with respect to the Rounds-based and Rolling Continuation Channels:</p><p>a. the Appeal Panel shall be comprised of five experts, including three nominated by the Stop TB Partnership, Roll Back Malaria Partnership and UNAIDS, in close collaboration with WHO tuberculosis, HIV/AIDS and malaria departments (collectively, the "Independent Members") and two who are TRP members;</p><p>b. the Independent Members may serve on the Appeal Panel for two consecutive years; and</p><p>c. commencing from Round 8, employees of the United Nations and its specialized agencies are ineligible to serve as members of the Appeal Panel.</p>

The Board decides to extend the application of the Phase 2 Decision-Making Policies and Procedures set out in Annex 3b Version 2 to the Report of the Portfolio Committee to the Fourteenth Board Meeting (GF/B14/8) beyond the time-limited trial period that is specified therein and delete the final paragraph of such document.

<p>1. The Board approves the following amendments to the fourth paragraph of Article 7.6 of the Bylaws: </p><p>Notwithstanding the foregoing, the Board may decide to take action on a no-objection basis. On such basis, and subject to procedures set by the Board, a motion shall be deemed approved unless four Board members of one of the voting groups described above objects to the motion<b>.</b>, except that a motion not to renew funding for a proposal beyond the initial funding commitment shall be deemed approved unless four Board members of each of the voting groups described above object to the motion. </p><p>2. The Board approves the following amendments to Article 12 of the Board Operating Procedures:</p><p>"<b>Article 12. No-Objection Process for Approving Funding </b></p><p>Notwithstanding Sections 10 and 11, decisions by the Board to provide funding for approved proposals beyond the initial funding commitment or proposals requesting continued funding for grants that are reaching the end of their funding terms may be made on a no-objection basis under the following process.</p><p>As directed by the Board, the Secretariat shall issue a request for decision on each funding commitment for which a Board decision is required, and shall notify the Board accordingly. Unless four Board members of one of one of the voting groups described in Section 10 object to the requested decision within a time period specified by the Board following the date of notification the requested decision shall be deemed approved by the Board, except that a requested decision not to renew funding of a proposal beyond the initial funding commitment shall be deemed approved by the Board unless four Board members of each of the voting groups described in Section 10 object to the recommendation within a time period specified by the Board following the date of notification."</p>

<p>1. The Board approves the following amendments to the fourth paragraph of Article 7.6 of the Bylaws: </p><p>Notwithstanding the foregoing, the Board may decide to take action on a no-objection basis. On such basis, and subject to procedures set by the Board, a motion shall be deemed approved unless four Board members of one of the voting groups described above objects to the motion, except that a motion not to make a renew funding for a proposal beyond the initial funding commitment shall be deemed approved unless four Board members of each of the voting groups described above object to the motion. </p><p>2. The Board approves the following amendments to Article 12 of the Board Operating Procedures:</p><p>"<b>Article 12. No-Objection Process for Approving Funding </b></p><p>Notwithstanding Sections 10 and 11, decisions by the Board to provide funding for approved proposals beyond the initial funding commitment or proposals requesting continued funding for grants that are reaching the end of their funding terms may be made on a no-objection basis under the following process.</p><p>As directed by the Board, the Secretariat shall issue a request for decision on each funding commitment for which a Board decision is required, and shall notify the Board accordingly. Unless four Board members of one of one of the voting groups described in Section 10 object to the requested decision within a time period specified by the Board following the date of notification the requested decision shall be deemed approved by the Board, except that a requested decision not to make a renew funding of a proposal beyond the initial funding commitment shall be deemed approved by the Board unless four Board members of each of the voting groups described in Section 10 object to the recommendation within a time period specified by the Board following the date of notification."</p>

The Board approves a budget for US$400,000 in 2007 for support services to the Chair and Vice Chair of the Board.

<p>1. The Board requests the incoming Chair and Vice Chair of the Board to review and amend membership of the Portfolio Committee and Finance and Audit Committee in line with the original balance of membership foreseen when the committees were restructured at the Tenth Board Meeting.</p><p>2. The Board adopts the amended Terms of Reference for the Portfolio Committee as detailed in Annex 3 and of the Ethics Committee as detailed in Annex 4 to the Report on Committees (GF/B15/12).</p>

<p>The Board requests the Chair to assign to a committee of the Board the task of investigating the feasibility of an additional mechanism for providing special funding to allow rapid access to new technologies to diagnose, prevent or treat one of the three diseases. This could involve reprogramming or additional funding to existing grantees and /or an extraordinary funding round to allow countries without current grants access to new funding.</p><p>The committee should report back to the Board on the results of this review at the Seventeenth Board meeting. It can, at its discretion, include in that report a recommendation for a specific mechanism for Board consideration and possible approval. </p>

The Board requests the Secretariat to prepare for the Seventeenth Board Meeting, in consultation with its partners, an analysis of those grants that have been discontinued to identify any systemic weaknesses that led to that decision and recommend steps to address those weaknesses.

<p>We thank our Chair, Dr. Carol Jacobs, for her leadership as our Board Chair. She faced many difficult issues and transition during her tenure, and managed them all with compassion and commitment to those the Global Fund serves.</p><p>We thank our Vice Chair, Dr. Lieve Fransen, for her service as our vice chair. She helped as well to manage many challenges, and played a particularly important role in coordinating the work of the Board committees. And finally, we wish to acknowledge and thank Alies Jordan and Enrico Mollica, who supported the Chair and Vice Chair in performing their duties with skill, grace, and good humor.</p>

<p>The Board decides to amend the Phase 2 Decision-Making Policies and Procedures approved at the Fourteenth Board Meeting (Annex 3b Version 2 to the Report of the Portfolio Committee (GF/B14/8)) by:</p><ol type="a"><li>adding the words "or the TRP" after the word "Secretariat" in the first sentence of paragraph 2;</li><li>deleting the words "("Revised Go")" in paragraph 2 and adding the words "Revised Request" after the word "CCM" in the fifth line of the paragraph; </li><li>amending paragraphs 4, 9 and 10 as follows:<br/> "4. A Board decision in favor of a Secretariat or TRP recommendation either: <ul><li>commits additional resources in the amount proposed in the recommendation (in the case of recommendations of "Go,"and"Conditional Go,); or</li><li>does not commit any additional resources (in the case of recommendations of "No Go"), thereby discontinuing the proposal after Phase 1.</li></ul><br/>9. If the Board does not decide in favor of a Secretariat or TRP recommendation of "Go" or, "Conditional Go", the Secretariat or TRP shall reassess its recommendation. To facilitate the reassessment process, those Board constituencies that object to a Secretariat or TRP recommendation shall provide a written explanation that is made available to all Board members and the Secretariat. The Secretariat or TRP will review its recommendation in light of such explanations and will then present a second recommendation on the first day of the subsequent month (unless time-constraints make it necessary to wait to the month thereafter). The Secretariat shall then request the Board to vote on the second Secretariat or TRP recommendation, using the procedures described above. In the event that the Board rejects a second recommendation of "Go", or "Conditional Go", the matter will be referred to the next Board meeting.<br/><br/> 10. If the Board does not decide in favor of a "No Go" recommendation from the Secretariat, the Secretariat shall reassess its recommendation. To facilitate the reassessment process, those Board constituencies that object to such recommendation shall provide a written explanation that is made available to all Board members and the Secretariat. The Secretariat will review its recommendation in light of such explanations and will either: (i) present a revised recommendation of "Go" or "Conditional Go" and then request that the Board vote on the revised recommendation (or in the case of a Revised Go Request submit to the TRP), using the procedures described above; or (ii) if the Secretariat wishes to maintain its recommendation for a "No Go", it shall refer the matter to an Independent Review Panel, which shall assess the specific areas where the Board and the Secretariat differ on their assessment of the grant and report its conclusions to the Board."<br/><br/> and</li><li> adding the following paragraph as paragraph 11 (and renumber the remaining paragraphs accordingly):<br/><br/> "11. If the Board does not decide in favor of a "No Go" recommendation from the TRP, the TRP shall reassess its recommendation. To facilitate the reassessment process, those Board constituencies that object to such recommendation shall provide a written explanation that is made available to all Board members and the TRP. The TRP will review its recommendation in light of such explanations and will either: (i) present a revised recommendation of "Go" or "Conditional Go" and then request that the Board vote on the revised recommendation, using the procedures described above; or (ii) if the TRP wishes to maintain its recommendation for a "No Go", the matter will be referred to the next Board meeting for final decision."</li></ol>

The Board requests the Portfolio Committee to present for approval, no later than the Seventeenth Board Meeting, a procedure for the Board to make funding decisions beyond the initial financial commitment of approved Rolling Continuation Channel proposals. The Board further requests that, in developing such procedure, the Portfolio Committee take into consideration the principles, policies and procedures applicable to Phase-2 funding decisions of rounds-based proposals.

<p>The Board urges the Secretariat to develop and implement a grant-associated risk assessment framework as soon as possible, noting that the Local Fund Agents (LFAs) are an inherent part of the Fund's assurance framework.</p><p>The Board directs the Secretariat to re-tender LFA contracts on a 4-year basis, with contracts subject to the right of the Secretariat to cancel such contracts based on a mid-term performance review of the LFA, to be initiated between month 18 and 24 of the contract. </p><p>The Board provides the following recommendations, as indicated in the Report of the Portfolio Committee (GF/B15/7), on key principles to guide the Secretariat in the process of re-tendering:</p><ol type="i"><li>LFAs should act in a timely, open and reliable manner in order to be responsive to program needs;</li><li>LFAs themselves should be subject to more rigorous performance assessment (including through the use of penalties);</li><li>There needs to be a balance between the requirement for knowledge of local circumstances and the need to avoid potential conflicts of interest;</li><li>LFAs must be able to monitor financial management performance and program performance, and link the two components;</li><li>The Portfolio Committee (PC) cautioned against building up new institutions or architecture in-country;</li><li>The tender process should provide open space to encourage a diversity of participants, including civil society, possibly setting up a process to encourage consortia applications; and</li><li>While recognizing that LFAs need a diversity of skills, there is a need for clear lines of accountability so country program implementers and the Secretariat can deal with a single reporting entity.</li></ol><p>The Board recognizes the urgent need for protocols to be developed to guide LFA communication with CCMs, PRs and technical operations partners in-country.</p><p>The Board also affirms that the PC's recommendation that the re-tendering process proceed in a way that optimizes, to the extent possible, the Global Fund's partnerships, with key technical agencies, such as UNAIDS and WHO.</p><p>The Board recognizes that the primary responsibility for sub-recipient (SR) oversight resides with the Principal Recipient.</p><p>However, the Board directs that the Terms of Reference of LFAs shall include the assessment of the systems and procedures that PRs possess for the oversight of SRs, which shall include both initial capacity assessments and ongoing implementation oversight. The LFA's fulfilment of this function shall be an element in the Secretariat's ongoing evaluation of LFA performance, including at the mid-term review. </p>

<p>As a temporary measure, the Board decides that the two-year limit on funding for Country Coordinating Mechanisms contained in GF/B11/2, p. 12, Decision Point 2 (the "CCM Funding Decision") shall not apply to CCMs whose funding expires prior to 31 December 2007. In such circumstances, the Board authorizes the continued payment of grant funds to the CCM, provided that the funding:</p><p>- complies with the requirements of the CCM Funding Decision, other than the otherwise applicable two-year limit;</p><p>- is disbursed at a similar rate as that at which funding was disbursed during the preceding two-year funding period; and</p><p>- expires not later than (i) the ending date of the proposal term of a grant that the CCM is overseeing; and (ii) 31 December 2007, whichever is earlier.</p>

The Board approves the Annual Report as presented in GF/B15/13.

<p>The Board amends the Policy on Ethics and Conflict of Interest for Global Fund Institutions by inserting the following as section 8, and re-numbering the policy accordingly: </p><p>"8. <b>Uncompensated Involvement of an Associated Person </b></p><p>An Associated Person of any employee of the Secretariat shall not be engaged to carry out work without compensation either on or outside the Global Fund premises." </p>

The Board requests the Office of the Inspector-General to implement an independent, confidential and technically robust reporting hotline to support the Whistle-blowing Policy for Secretariat and Governance Bodies of the Global Fund and In-Country Whistle-blowing Policy, as a matter of urgency.