Board Decisions

GF/B18/DP23

Approved by the Board on: 08 November 2008

Policy on Grant Signature where there are Pending OIG Investigations

The Board strongly affirms in principle the following decision point and requests the Finance and Audit Committee (FAC) to review this text, in particular to ensure that this policy is limited to circumstances in which the Inspector General has determined that there is prima facie evidence of fraud, abuse, misappropriation or corruption. The FAC should report back to the Board at its Nineteenth Meeting with a final decision point, or confirmation that the policy has been incorporated into the Global Fund's risk management framework.

1. Consistent with the principles of transparency and performance-based funding, the Board decides that grant signature of a Board-approved grant proposal that nominates a Principal Recipient of a grant that is currently under investigation by the Office of the Inspector General of the Global Fund ("OIG") in relation to a grant in the same country shall not proceed until such time as the investigation is completed and the investigation findings either demonstrate that risks of continued Global Fund financing through such Principal Recipient are manageable, or all material investigation recommendations have been certified as resolved by the Inspector General of the Global Fund, or the CCM appoints a new Principal Recipient that does not raise issues of concern with respect to effective and transparent management of the proposal. Investigations in this circumstance are those related to potential fraud, abuse, misappropriation, corruption or mismanagement of funds.
2. Where the Principal Recipient under investigation is different from the Principal Recipient that is nominated under the newly-approved proposal, but the Board, the OIG, or the Secretariat is concerned that there could be a significant link between the Principal Recipients, or a material connection between the nominated Principal Recipient and the facts that are being investigated, the provisions of paragraph one, above, shall apply until such concerns are resolved. The OIG shall seek to clarify factual issues giving rise to such concerns as promptly as possible.
3. Should a Sub-Recipient be under investigation by the OIG, the Secretariat will place similar limits on further engagement with the Sub-recipient during grant signature with the Principal Recipient, pending the outcome of the OIG's investigation and recommendations.
4. If investigation findings do not demonstrate that risks of continued Global Fund financing through such Principal Recipient are manageable or the investigation recommendations cannot be certified as fully resolved by the Inspector General of the Global Fund in accordance with the policy on the timeframe for signature of grant agreements, the approval of the grant will be considered terminated without the possibility of a time extension. 
5. If the grant under investigation is terminated, a new grant proposal to the same Principal Recipient, or to a new Principal Recipient where concerns arising under paragraph two, above, remain unresolved, may proceed to grant signature only if the following conditions are met:
   1. The Additional Safeguards Policy (ASP) is applied and specific conditions are developed addressing relevant aspects of the OIG's investigation; and
   2. The OIG certifies that the conditions that led to termination in the previous grant are adequately addressed in the new grant agreement.
6. If the grant under investigation is not terminated, but the Board, OIG or Secretariat determines that material risks remain, in addition to addressing conditions for continuation of the existing grant, the ASP shall be applied to new grants to the same Principal Recipient, or to a new Principal Recipient where concerns arising under paragraph two, above, remain unresolved.