Global Health:

Global Fund to Fight AIDS, TB and Malaria Has Improved Its Documentation of Funding Decisions but Needs Standardized Oversight Expectations and Assessments

GAO-07-627: Published: May 7, 2007. Publicly Released: May 7, 2007.

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The Global Fund to Fight AIDS, Tuberculosis and Malaria has approved about $7 billion in grants to developing countries; the U.S. has contributed $1.9 billion. The State Department's Office of the Global AIDS Coordinator (OGAC) coordinates the U.S. government's overseas AIDS programs, with participation from the Department of Health and Human Services (HHS) and the U.S. Agency for International Development (USAID). In 2003, Congress directed GAO to report on the Global Fund every 2 years. This report assesses the Global Fund's (1) documentation of information used to support performance-based funding decisions, (2) progress in implementing a risk assessment model and early warning system, and (3) oversight of the performance of "local fund agents" (LFAs), which monitor grant progress in recipient countries. GAO reviewed the documentation for funding decisions and interviewed key officials.

Since our 2005 review, the Global Fund has improved its documentation for decisions to disburse funds and renew grants. The Global Fund now requires that fund portfolio managers more consistently document factors, such as grant ratings and contextual information that support disbursement and grant renewal decisions. Our current review of 80 grant disbursements and 45 grant renewal decisions confirmed that Global Fund grant files consistently contained explanations of the information used in its funding decisions. For example, all grant disbursement files in our sample contained a written narrative explaining the ratings that portfolio managers gave the grants, based in part on reports completed by grant recipients. Although we noted that many of the grant recipients' reports lacked some information needed for disbursement and renewal decisions, Global Fund officials said that portfolio managers obtain this information informally from the recipients or other stakeholders. The Global Fund did not implement the risk assessment model that it was developing at the time of our 2005 report, because it determined that the model did not accurately identify grant risk. To identify risks that may affect grant implementation, the organization currently relies on elements of its structures and processes, including its initial technical review, disbursement decision-making form, periodic grant ratings, oversight by country stakeholders, information from technical partners, and LFA oversight. Recognizing the need for a more comprehensive approach to risk management, the Global Fund has begun developing a risk assessment framework for the organization that includes an early alert and response system to address poorly performing grants. The Global Fund has limited access to the information it needs to manage and oversee LFAs because it does not require systematic assessments of LFAs' performance. As a result, the Global Fund has limited ability to determine the quality of LFAs' monitoring and reporting and to identify situations in which more oversight of LFAs' performance may be required. Previously, the Global Fund introduced a tool to assess LFA performance more systematically; however, this effort was unsuccessful, because use of the tool was not mandatory. Numerous sources raise concerns about the quality of grant monitoring and reporting provided by LFAs, particularly their ability to assess and verify recipients' procurement capacity and program implementation.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To enhance Global Fund operations, the Secretaries of State and HHS should work with the Global Fund's Board Chair and Executive Director to require systematic assessments of LFA performance and the collection and analysis of LFA performance data to improve the management and oversight of LFAs.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Implemented

    Comments: The Office of the U.S. Global AIDS Coordinator (OGAC) at the State Department coordinates U.S. government efforts to combat HIV/AIDS overseas, including multilateral assistance to the Global Fund. The Global Fund contracts with Local Fund Agents (LFA) in the field to provide financial and programmatic oversight. OGAC, on behalf of State and HHS, provided information to support closing this recommendation. In October 2010, the U.S. government issued a Call to Action for the comprehensive reform of the Global Fund to improve its impact upon the lives of people affected by HIV, tuberculosis, and malaria. In response, the Chair and Vice-Chair of the Board established the Comprehensive Reform Working Group, which developed a detailed reform agenda approved by the full Board in May 2011. According to OGAC, the United States strongly supports the plan for comprehensive reform developed by the working group and endorsed by the Global Fund Board, especially as it relates to LFA performance and accountability. The comprehensive package of reforms, when implemented, is intended to significantly improve the Global Fund's operations, governance, and fiduciary controls. The Secretariat committed to the implementation of these reforms and is to report back to the Board in November 2011 on progress. The reform package specifically called for an accountability framework for fiduciary control and risk management that clearly delineates the roles, responsibilities, and accountability of the Global Fund and its structures, including LFAs. In addition, according to OGAC, the Secretariat is working to implement a more rigorous and systematic LFA performance management system, including the collection of LFA performance data. The Secretariat also terminated 10 LFA contracts for poor performance.

    Recommendation: To enhance Global Fund operations, the Secretaries of State and HHS should work with the Global Fund's Board Chair and Executive Director to establish standardized expectations for LFA performance.

    Agency Affected: Department of State

    Status: Closed - Implemented

    Comments: The Office of the U.S. Global AIDS Coordinator (OGAC) at the State Department coordinates U.S. government efforts to combat HIV/AIDS overseas, including multilateral assistance to the Global Fund. The Global Fund contracts with Local Fund Agents (LFA) in the field to provide financial and programmatic oversight. OGAC, on behalf of State and HHS, provided information to support closing this recommendation. In October 2010, the U.S. government issued a Call to Action for the comprehensive reform of the Global Fund to improve its impact upon the lives of people affected by HIV, tuberculosis, and malaria. In response, the Chair and Vice-Chair of the Board established the Comprehensive Reform Working Group, which developed a detailed reform agenda approved by the full Board in May 2011. According to OGAC, the United States strongly supports the plan for comprehensive reform developed by the working group and endorsed by the Global Fund Board, especially as it relates to LFA performance and accountability. The comprehensive package of reforms, when implemented, is intended to significantly improve the Global Fund's operations, governance, and fiduciary controls. The Secretariat committed to the implementation of these reforms and is to report back to the Board in November 2011 on progress. Regarding standardized expectations for LFAs, the reform package specifically called for an accountability framework for fiduciary control and risk management that clearly delineates the roles, responsibilities, and accountability of the Global Fund and its structures, including LFAs. It also called for reforms in independent audits and investigation functions and in national accountability structures, such as government ministries, regulators, and civil society.

    Recommendation: To enhance Global Fund operations, the Secretaries of State and HHS should work with the Global Fund's Board Chair and Executive Director to establish standardized expectations for LFA performance.

    Agency Affected: Department of State

    Status: Closed - Implemented

    Comments: The Office of the U.S. Global AIDS Coordinator (OGAC) at the State Department coordinates U.S. government efforts to combat HIV/AIDS overseas, including multilateral assistance to the Global Fund. The Global Fund contracts with Local Fund Agents (LFA) in the field to provide financial and programmatic oversight. OGAC, on behalf of State and HHS, provided information to support closing this recommendation. In October 2010, the U.S. government issued a Call to Action for the comprehensive reform of the Global Fund to improve its impact upon the lives of people affected by HIV, tuberculosis, and malaria. In response, the Chair and Vice-Chair of the Board established the Comprehensive Reform Working Group, which developed a detailed reform agenda approved by the full Board in May 2011. According to OGAC, the United States strongly supports the plan for comprehensive reform developed by the working group and endorsed by the Global Fund Board, especially as it relates to LFA performance and accountability. The comprehensive package of reforms, when implemented, is intended to significantly improve the Global Fund's operations, governance, and fiduciary controls. The Secretariat committed to the implementation of these reforms and is to report back to the Board in November 2011 on progress. Regarding standardized expectations for LFAs, the reform package specifically called for an accountability framework for fiduciary control and risk management that clearly delineates the roles, responsibilities, and accountability of the Global Fund and its structures, including LFAs. It also called for reforms in independent audits and investigation functions and in national accountability structures, such as government ministries, regulators, and civil society.

    Recommendation: To enhance Global Fund operations, the Secretaries of State and HHS should work with the Global Fund's Board Chair and Executive Director to require systematic assessments of LFA performance and the collection and analysis of LFA performance data to improve the management and oversight of LFAs.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Implemented

    Comments: The Office of the U.S. Global AIDS Coordinator (OGAC) at the State Department coordinates U.S. government efforts to combat HIV/AIDS overseas, including multilateral assistance to the Global Fund. The Global Fund contracts with Local Fund Agents (LFA) in the field to provide financial and programmatic oversight. OGAC, on behalf of State and HHS, provided information to support closing this recommendation. In October 2010, the U.S. government issued a Call to Action for the comprehensive reform of the Global Fund to improve its impact upon the lives of people affected by HIV, tuberculosis, and malaria. In response, the Chair and Vice-Chair of the Board established the Comprehensive Reform Working Group, which developed a detailed reform agenda approved by the full Board in May 2011. According to OGAC, the United States strongly supports the plan for comprehensive reform developed by the working group and endorsed by the Global Fund Board, especially as it relates to LFA performance and accountability. The comprehensive package of reforms, when implemented, is intended to significantly improve the Global Fund's operations, governance, and fiduciary controls. The Secretariat committed to the implementation of these reforms and is to report back to the Board in November 2011 on progress. The reform package specifically called for an accountability framework for fiduciary control and risk management that clearly delineates the roles, responsibilities, and accountability of the Global Fund and its structures, including LFAs. In addition, according to OGAC, the Secretariat is working to implement a more rigorous and systematic LFA performance management system, including the collection of LFA performance data. The Secretariat also terminated 10 LFA contracts for poor performance.

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