GLOBAL FUND OBSERVER (GFO) NEWSLETTER, a service of Aidspan.

 

Issue 51 – 3 October 2005. (For formatted web, Word and PDF versions of this and other issues, see www.aidspan.org/gfo )

 

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CONTENTS

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1.  NEWS: Global Fund Approves Fifth Round of Grants

 

The Global Fund board approved 26 Round 5 grants that will cost $382 million over the first two years, and provisionally approved a further 37 grants that will cost $344 m.  Grants that have only been provisionally approved will be formally approved in 2006 when sufficient donor pledges are received.  However, any such grants for which insufficient pledges have been received by the end of June 2006 will become "un-approved".

 

2.  NEWS: Main Decisions Made at Global Fund Board Meeting

 

The board made a number of decisions at its just-completed board meeting, none of vast significance but all important to the ongoing work of the Fund.

 

3.  NEWS:  Investigation of Global Fund Secretariat

 

Excerpts are provided of two recent statements about the official investigation that is being conducted into certain Secretariat matters.

 

4.  NEWS: Round Five Decisions

 

A detailed listing and analysis is provided of which Round 5 proposals have been approved.

 

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1.  NEWS: Global Fund Approves Fifth Round of Grants

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At its eleventh board meeting in Geneva on September 28-30, the Global Fund board approved 26 Round 5 grants that will cost $382 million over the first two years, and provisionally approved, subject to sufficient funding being received next year, a further 37 grants that will cost $344 m. over the first two years.  In total, these 63 "immediately approved" plus "provisionally approved" proposals will cost $726 m. over the first two years and $1,774 m. over five years.  (For a complete list of approved and non-approved proposals, see “4.  NEWS: Round Five Decisions", below.)

 

The reason that some of the grants were only provisionally approved is that the Fund is short of cash; this in turn is because 2005 is the first year in which substantial amounts of money need to be spent on renewal of grants from earlier Rounds that have reached the end of their first two years.  Grants that have only been provisionally approved will be formally approved in 2006 when sufficient donor pledges are received.  However, any grants provisionally approved for which insufficient pledges have been received by the end of June 2006 will become "un-approved".

 

In Round 5, the two-year cost of all eligible submitted proposals was up 31% from the Round 4 level; but the cost of those actually approved was down 25% from the Round 4 level.  This was partly because only 31% of eligible proposals were regarded as worthy of approved in Round 5 (down from an average of 41% in the three previous Rounds), and partly because fewer proposals involved large scale ARV and malaria program roll-outs.

 

In Round 5, 37% of HIV/AIDS proposals were approved, similar to Round 4.  Only 23% of malaria proposals were approved, down from 46% in Round 4.  46% of TB proposals were approved, up from 38% in Round 4.  Round 5 was the first time that proposals were invited for "Health Systems Strengthening"; but only 3 out of the 30 submitted HSS proposals were successful.

 

The success rates by region ranged from 12% (3 proposals approved out of 25 submitted) in the Eastern Mediterranean, to 59% (10 out of 17) in the Western Pacific.

 

The Board's decisions as to which proposals to approve was, as always, entirely based on the advice it received from the Technical Review Panel (TRP), an independent body of 26 experts from around the world.  No board members or Secretariat employees are members of the TRP.

 

The TRP commented that it "was surprised to find that there has not yet been a noticeable trend improvement in the overall quality of proposals reviewed in Round 5 relative to prior Rounds, despite the effect of cumulative experience of several rounds, improved technical support from WHO, UNAIDS and the other technical partners, and the redesigned Proposal Form and Guidelines. Moreover, a significant number of proposals continue to suffer from clearly avoidable weaknesses."

 

Elaborating on this last point, the TRP added that it "was also concerned by some instances in which countries, for inexplicable reasons, appear to ignore the TRP’s advice, often given consistently in two or more prior Rounds, and submit proposals suffering from precisely the same serious defects which prevented them being funded previously."

 

The board made no decision as to when Round 6 will take place. 

 

The following tables summarize Round 5 results.

 

Table 1: Results by Round

 

 

Table 2: Round 5 results by disease

 

 

Table 3: Round 5 results by region

 

 

Table 4: Round 5 results by applicant type

 

 

 

Other highlights of Round 5 include the following:

 

• According to the TRP, successful implementation of the approved Round 5 grants over five years will mean that approximately 229,000 people will have access to ARVs, 118,500,000 will receive ACT malaria treatment, 17,000,000 will benefit from bed nets, and 1,533,000 will benefit from DOTS and related TB control activities.

 

• In Round 5, two approved proposals had five-year budgets in excess of $100 million.  These were from Ethiopia (malaria, $150 m.) and Nigeria (HIV/AIDS, $181 m.).  And twelve non-approved proposals had five-year budgets in excess of $100 million.  These were from Angola, Democratic Republic of Congo (2 proposals), Ethiopia, India, Mozambique, Nigeria, South Africa, Sudan (2 proposals) and Zambia (2 proposals).  The two most expensive of these were Ethiopia (Health Systems Strengthening, $348 m.) and Zambia (HIV/AIDS, $1,033 m.).

 

• As always, and as required by the Board, the TRP did not take into account availability of funds when it decided which proposals to recommend for approval.

 

• The budget breakdown of the approved Round 5 proposals was: drugs 21% (down from 38% in Round 4); commodities 20%; planning and administration 14%; human resources 12%; infrastructure 10%; training 15% (up from 8% in Round 4); other 8%.

 

• Only five countries managed to submit their proposals using the semi-automated PDF version of the application form, owing to the form's technical shortcomings.  This was even worse than the situation in Round 4, when only 15 out of 96 countries managed to apply using that Round's on-line version of the application form.

 

• Further details are available in "4.  NEWS: Round Five Decisions", below, and at www.theglobalfund.org/en/about/board/eleventh.   

 

The precise wording of the board decisions is available at www.theglobalfund.org/en/about/board/eleventh,  as is the background documentation.

 

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2.  NEWS: Main Decisions Made at Global Fund Board Meeting

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Key decisions made by the Global Fund board at the meeting that ended on Friday were as follows:

 

·         Round 5 grants were approved, as described elsewhere in this issue of GFO.

 

·         The Ethics Committee, working with the forthcoming Office of the Inspector General, will make proposals to the December 2005 board meeting on the implementation of a whistleblowing policy (which enables people to report, anonymously if necessary, inappropriate activities within the Fund or grant recipients).

 

·         The Ethics Committee will make recommendations to the April 2006 board meeting on how to deal with what many board members have felt was inappropriate amounts of lobbying of board members regarding possible "No Go" Phase 2 funding decisions.

 

·         The Policy and Strategy Committee will report to the December 2005 board meeting on its progress thus far in developing a proposed future strategy for the Fund.

 

·         The Portfolio Committee will make proposals to the April 2006 board meeting on:

-                    How to "improve NGO access to the Global Fund resources in Round 6."

-                    Revising the Proposal Form and Guidelines for Proposals for future Rounds.

-                    Improving the process for screening out and clarifying proposals prior to submission to the TRP.

-                    Improving guidelines in future Rounds for proposals dealing with Health Systems Strengthening.

 

·         The Board seat formerly shared by Canada, Germany, Switzerland, UK and Australia was divided into two seats, one for Canada, Germany and Switzerland, and one for UK and Australia.  This evens up the imbalance that was created when the Communities Living with the Three Diseases were given a voting board seat.  There are now ten seats for the "donor group" (eight for governments, plus one each for private sector and foundations), ten seats for the "recipient group" (seven for governments, plus one each for NGOs from developed and developing countries and one for communities living with the diseases), plus four non-voting seats, mostly for UN agencies.

 

·         During the "Phase 2 renewal" process, if the Secretariat believes that a grant should not be renewed, the CCM will now be given a chance to comment before the Secretariat makes its recommendation to the board.  Then, if the Secretariat twice states that the renewal should be made a "No Go" and the board twice disagrees by email, an independent panel shall be asked to review the situation before the Board makes a final decision at a board meeting.  The panel will not make a recommendation; it will merely review and describe the areas in which the Secretariat and the Board have disagreed.

 

·         Agreement was reached on a person who will be offered the position of Inspector General of the Global Fund.  The Office of Inspector General will operate as an independent unit, reporting directly to the Board.  Its primary purpose will be to provide independent and objective oversight to ensure the integrity and effectiveness of the Fund’s programs and operations.  This will involve oversight not just of the Secretariat, but also of grant recipients.

 

·         The Fund will hold its second Partnership Forum before July 2006.  A Steering Committee will be established to propose plans for the event, and subsequently to evaluate the effectiveness of the Forum.

 

·         The Fund will continue to examine the possibility of ending the arrangement whereby WHO provides many administrative services for the Fund, but no decision will be made before the April 2006 board meeting.

 

·         The Fund will continue the South Africa 'loveLife" grant (which the Secretariat had recommended be terminated at the end of Phase 1), but only if (a) the South Africa CCM proposes within one month appropriate ways to address various specific concerns raised by the Fund, and (b) the TRP then agrees that the CCM's proposed modifications make the grant worth continuing, and (c) the Board then agrees at its December meeting to continue the grant.

 

·         The Fund will continue two HIV grants (one to Senegal, the other to Honduras) that the Secretariat had recommended be terminated at the end of Phase 1, but only under certain specific conditions.

 

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3.  NEWS:  Investigation of Global Fund Secretariat

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Statement by Richard Feachem

 

[The following is an excerpt from the Report of Richard Feachem, Executive Director, to the Global Fund Board meeting that took place 28-30 September, as downloaded from the Fund's web site.]

 

In July 2005, I, together with the Chair and Vice Chair of the Board, received a memo from Bernard Rivers, Executive Director of Aidspan, containing allegations with respect to the Secretariat. The allegations related to contracting practices, recruitment, involvement of a family member, and staff turnover and organizational culture.

 

The Board Chair, Vice Chair and I agreed that it was in the best interest of the Global Fund to conduct an independent investigation of the first three allegations. As the Office of the Inspector General (OIG) for the Global Fund had not yet been established, we decided to refer the matter to the WHO Office of Internal Oversight Services (IOS) on July 29. The Chair and Vice Chair requested that the fourth area of staff turn-over and organizational culture be addressed by the Deputy Executive Director. Helen’s report to this Board meeting, referenced above, addresses this area.

 

After developing of Terms of Reference for the investigation, the IOS is now in the process of conducting its review, assisted by Deloitte and Touche. A process update will be provided at this Board meeting and a final report is expected at the end of October.

 

Statement by WHO Lead Investigator

 

[The following is the entire text of a statement made to the Global Fund Board on 29 September by Kenneth Langford, Director of the WHO Office of Internal Oversight Services.]

 

My name is Kenneth Langford and I am the Director of WHO's Office of Internal Oversight Services.  Organizationally, I report directly to the Director-General of WHO and am charged with responsibility for internal audit, investigation of irregular activity and programme evaluation.  I have functional independence to conduct and to report on my work within WHO and its related offices, programmes and organizations.

 

As you are certainly aware, for the time being, WHO provides administrative services to the Fund and the staff of its secretariat are WHO staff members.  Accordingly, the secretariat is obliged to operate within the internal control structure of WHO, of which my office plays a key role in oversight.

 

I understand that the Executive Director of the NGO Aidspan made allegations on 11 July to the Chairman and Vice-Chairman of this Board and the Executive Director of the Fund.  On 29 July, these same Fund officials wrote informing me of the allegations and they requested that I "… review these and any other issues that you consider to be relevant to these allegations…".  I responded on 9 August and agreed to undertake an investigation of the Global Fund's Secretariat and the allegations made by the Executive Director of Aidspan.

 

My Office is leading the investigation and exercises control over the work and will ultimately decide on the content of the report.  However, due to the expected complexity of the investigation and the length of time needed to accomplish the work, it was clear that supplemental manpower would be necessary to complete the investigation without delay.  Accordingly, I issued a request for a proposal to three international public accounting firms which have demonstrated forensic capacity.  The firms of PricewaterhouseCoopers and KPMG declined due to actual or perceived conflicts of interest.  The firm of Deloitte & Touche was selected, justified on a sole source basis, and a contact valued at CHF 114,825 ($89,000) was si