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    BACKGROUND PAPER

    September 1, 2005
    By Professor Brook K. Baker
    Northeastern U. School of Law, Policy Analyst Health GAP (Global Access Project)

    For further information, please contact:
    B.Baker@neu.edu

    GLOBAL FUND'S GRANTING SYSTEM:
    Laissez-Faire Granting System is Delivering Planned Failure

    As several other commentators have noted, the Global Fund's granting and grant management system is experiencing meltdown Ð millions of dollars sit in bank accounts in Geneva and in nations' capitols while thousands of people die needlessly. Moreover, initial proposals focusing on how to improve "disbursements" miss most of the really important issues, including:

      (1) lack of capacity in principal recipients to assess their own capacity to perform essential functions, to contract quickly with sub-recipients and suppliers, to get money out the door, and to manage/monitor/evaluate/report-on grant performance;

      (2) lack of coordination and communication between PRs and CCMs on grant disbursement, performance, and emerging needs;

      (3) a total lack of supervisory capacity by CCMs to monitor grant disbursements and performance by PRs and sub-recipients;

      (4) poor communication and management review between PRs and sub-recipients and documentation requests on sub-recipients that most are incapable of performing;

      (5) a laissez-faire approach to small-scale thinking and persistent pilot-project proposals from undemocratic and non-participatory CCMs instead of mandating more robust proposals for scale-up within existing capacity and for investment in health care capacity building for future delivery;

      (6) a local funding agent system that reduces fraud and audits the books, but does little else to ensure efficient programming;

      (7) the huge costs, in lives lost, of a GF management system that closely monitors fiscal accountability (avoidance of embezzlement) and that hopes without reason that performance will emerge from the end of the free-for-all sausage-making machine donors have constructed, but which provides no real regulatory control over the entire dysfunctional system.

    The major solution under consideration is to tinker with the local funding agent mechanism whereby it performs a better initial assessment of PR capacity and whereby it contracts more expertise on procurement and supply.

    What is needed is a technical partner that can help countries prioritize treatment and health care capacity building and that can simultaneously help them build capacity to manage the congruence of resources arriving both from the Global Fund and bilateral donors, e.g., PEPFAR, as well as new resources being committed by national governments. The only trusted partner competent to provide these services is the WHO (and even it is not good enough yet).

    The GF needs to put some teeth into the PR process - it has to demand and fund a minimum amount of management/delivery capacity and pay the WHO directly to provide services necessary to the creation of that capacity. At this point, if the LFA assesses PR capacity and finds it lacking, what happens? The GF tell the PR to shape up (with no additional resources to do so) or it scales back the programming to meet the limited capacity of the PR which persists thereafter in under-performing. In addition to capacity issues, what happens if the PR and sub-recipients are not performing? Against very little, though there is a new "early warning system" that allows for some input before the inevitable non-renewal decision is made.

    The health management and health delivery system in most developing countries is broken. The GF thinks that by auditing a broken system, you can make it work. In the real world, fixing a broken system has to be forced by policy and supported by financing. Technical partners that can help with the strengthening need to be paid. If the LFAs are not going to really make things happen and if CCMs and PRs, as presently constituted, are incapable of doing so, activists need to argue that there has to a mechanism that simultaneously ensures that programming occurs at the same time that the health care system and its management/systems infrastructures are being repaired and consolidated.

    In this regard, issues of sustainability and local capacity building are still crucial - for every WHO expert who is seconded to a MOH, there has to be additional local resources that are being concurrently mentored and trained.

    It should be possible to shoe-horn these kinds of issues into the Global Fund agenda. Richard Stern has been trying to force them in with data and stories from the front lines, but activists need to continue arguing that the Global Fund management system, its fund portfolio managers, its local funding agent, its principal recipients, and its CCMs, is wearing no clothes. The donors have saddled us with this ridiculous system and Global Fund leadership corruptly acquiesces. We are at risk of losing the Global Fund and being stuck with ideological and highly conditional bilateral programs unless we make the Global Fund be more than a hands-off, what-you-want-is-good-enough-for-me granting agency.


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