Board Decisions

GF/B15/DP29

Approved by the Board on: 27 April 2007

Global Fund Policy for Restricted Financial Contributions

1. Guiding Principles

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:

1. 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.
2. 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
3. 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.

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.

2. Restricted Financial Contributions for Grant Activities

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:

1. such restricted financial contributions comply with the Guiding Principles outlined in paragraph 1 above;
2. such restricted financial contributions are made through the Global Fund;
3. 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.

3. Restricted Financial Contributions for Secretariat Activities

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.

4. Oversight

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.

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.

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.