Global Fund ObserverIssue 138

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GLOBL FUND OBSERVER (GFO), an independent newsletter

about the Global Fund provided by Aidspan to over 8,000 subscribers in 170

countries.

Issue

138: 24 January 2011. (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: Second Wave of National Strategy Applications Launched

The Global Fund has issued an open call for

expressions of interest in participating in the Second Wave of NSAs. This is

the first stage of a rather lengthy process. The deadline for expressing

interest is 23 February 2011.

2. NEWS: Disbursements to Côte d'Ivoire Halted

Political instability has been cited as the reason

for the Global Fund's temporary suspension of disbursements to HIV, TB and

malaria grants in Côte

d'Ivoire. Distribution of life-saving drugs

are not affected by the suspension.

3. NEWS AND ANALYSIS: TRP Removed Parts of 14 Round 10 Proposals

Recommended for Funding

In Round 10, the Technical Review Panel (TRP) removed

elements from 14 proposals, resulting in cuts ranging from 1% to 91% of the

budgets of these proposals. On average, the budgets were cut by 12%.

4. NEWS: Global Fund's Efforts to Address Problem of Stolen

Malaria Drugs " Too Little, Too Late, " says one observer

In an article in Foreign Policy magazine, Bate, of

the American Enterprise Institute, said that as many as 30 million donated

malaria treatments are stolen every year, most of which are financed by the

Global Fund, and that the Fund has failed to deal adequately with the issue. In

a rebuttal from the Global Fund, Michel Kazatchkine, Executive Director, and

Parsons, Inspector General, state that Bate " told only half the

story. "

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1. NEWS: Second

Wave of National Strategy Applications Launched

Open call for expressions of interest, but number of

applications will be limited

First deadline in the process is 23 February 2011

The

Global Fund has launched the Second Wave of national strategy applications

(NSAs). The deadline for filing expressions of interest is 23 February 2011.

This is just the first stage of the process; the number of countries that will

eventually be invited to submit applications in the Second Wave will be limited

to 12. Lessons learned from this wave will be used to guide a broader roll-out

of NSAs in the future.

NSAs

involve country coordinating mechanisms (CCMs) submitting a national disease

strategy as the primary basis of the application for Global Fund financing,

together with a proposal form that is lighter than the one used in the

rounds-based channel.

The

First Wave of NSAs was launched in 2009. In the First Wave (unlike the Second

Wave), the Global Fund issued selective invitations to countries to

participate. Twenty-two countries were invited to express interest, of which

eight were then invited to submit applications. Six CCMs did so, submitting

seven applications (one CCM submitted for two diseases). Five proposals were

approved for funding at a total two-year cost of $434 million (prior to

" efficiency cuts " ).

For

the Second Wave, the Global Fund has issued an open call for expressions of

interest. The Fund has sent an email to all CCM members in countries that were

eligible to apply to the Global Fund for Round 10, drawing their attention to

information on the call on the newly created NSA section of the Fund's website

at www.theglobalfund.org/en/nsa.

To express interest in the Second Wave, CCMs have to meet the following four

conditions:

the national

disease strategy does not end before June 2015;

the national disease strategy

documentation is complete or nearly complete;

country stakeholders are confident the national

disease strategy documentation is able to meet the attributes defined

in the joint assessment of national strategies (JANS) tool developed by

the International Health Partnership (IHP+); and

the country is willing and able to plan and

coordinate an independent in-country joint assessment of

the national disease strategy.

Countries

that have an approved Round 10 proposal for a given disease are not allowed to

express interest in the Second Wave for the same disease. In addition,

countries cannot submit both a Second Wave NSA funding request and a Round 11

application for the same disease.

The

following table summarises the process and the key dates for the Second Wave:

Table: NSA Second

Wave process and dates

Steps

Timing

Countries

submit expressions of interest and national disease strategy documentation

by

23 February 2011

Global

Fund announces list of participating countries

by

31 March 2011

Application

materials are made available

on

15 August 2011

Participating

countries organise joint assessments of their national disease strategy

by

16 September 2011

CCMs

develop and submit applications

by

15 December 2011

TRP

reviews applications

March/April

2012

Global

Fund Board makes funding decisions

2nd

quarter of 2012

The

Global Fund says that the decision to participate must be made jointly by CCM members

and officials in the national disease authority or relevant ministry (or

ministries).

The

national strategy documentation submitted with the expression of interest will

be reviewed by a team of independent experts to determine whether it is

" ready " for a joint assessment. The Global Fund refers to this as a

" technical screening. " The screening is based on nine criteria

related to the completeness and the consistency of the documentation.

If,

after the screening, there are more than 12 countries still " in the

running, " the Global Fund will apply what it calls " additional

considerations " to reduce the number and to ensure that the pool of

applicants will be diverse (so as to yield useful information for future NSA

planning). The Fund says that these considerations could include geographic

mix; disease mix; including a few countries that are supported by multiple

donors; including one country that has conducted or plans to conduct a joint

assessment of their national health sector strategy supported by the IHP+; and,

if necessary, limiting participation in the Second Wave to one disease per

country.

The

Global Fund says that the joint assessments will include an examination of the

extent to which civil society, people living with or affected by the three diseases,

the private sector and other constituencies central to an effective response

have participated (and are participating) in disease strategy development and

implementation. In addition, the Global Fund will apply to NSAs the same

standards for multi-stakeholder involvement as it applies to rounds-based

proposals, including the " dual track financing " recommendation which

stipulates that proposals for funding should routinely include both government

and non-government principal recipients.

To

submit an NSA, the CCM must meet the same eligibility requirements that apply

to applicants in the rounds-based channel. The Global Fund Board will be

reviewing the existing eligibility requirements in May 2011. If the criteria

are revised, the new criteria will apply to NSAs submitted in the Second Wave,

even though the process for the Second Wave started well before the May 2011

date. The Global Fund encourages countries to consider eligibility before

expressing interest, using the eligibility list established for Round 10

(available in the Fund's Round 10 Guidelines for Proposals).

There

is a lot of information on the NSA Second Wave at www.theglobalfund.org/en/nsa,

including a detailed description of the process, a suggested list of documents

to be submitted with the expression of interest, a form to be used to express

interest, and a list of the criteria that will be used to assess the national

strategy documentation.

Deciding whether or not to express interest

In

addition to determining whether they meet the conditions listed above, CCMs and

their countries should consider a number of factors when deciding whether or

not to express interest. Participating in the NSA process will require a

significant amount of time and effort. This is particularly true for the joint

assessment of the national strategy, which has to be organised by the country.

The Global Fund says that countries should carefully consider the desirability,

feasibility and resourcing implications of conducting this assessment. In

addition, the Fund encourages countries to assess whether or not the joint

assessment timing would fit within existing national timeframes.

Finally,

if the joint assessment reveals that there are limitations to the extent to

which multiple stakeholders are involved in the development of the national

strategy and operational plans emanating from the strategy, countries will be

asked to lay out measures to address these weaknesses.

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2. NEWS:

Disbursements to Côte

d'Ivoire Halted

Political instability cited

The

Global Fund has temporarily halted disbursements of funds to principal

recipients of grants in Côte

d'Ivoire due to political instability in the

country. The Fund is also taking measures to safeguard stocks of medicines and

other supplies funded through these grants.

Côte d'Ivoire plunged

into a tense political crisis after the incumbent president, t Gbagbo,

refused to concede electoral defeat to his challenger, Alassane Ouattara,

following a presidential run-off poll held on 28 November 2010. The United

Nations said that more than 200 people have been killed in violence. According

to the news agency Reuters, the World Bank and International Monetary Fund have

cut off all funding to incumbent leader t Gbagbo for refusing to step

down.

The

Global Fund said that stocks of 8.6 million insecticide-treated mosquito nets

in the country will not be distributed for now due to fears of vandalism or

misuse. However, the Global Fund is allowing procurement and distribution of

life-saving drugs to continue, providing the agencies distributing the drugs

obtain prior authorisation from the Fund.

Côte d'Ivoire has active

grants for all three diseases, representing investments of about $217 million

over the life of the grants.

Information for this article was taken from " Global

Fund freezes some Ivory

Coast aid, " Reuters, 11 January 2011,

at http://af.reuters.com/article/topNews/idAFJOE70A0BT20110111.

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3. NEWS AND

ANALYSIS: TRP Removed Parts of 14 Round 10 Proposals Recommended for Funding

For one proposal, the elements removed represented 91% of

the budget

TRP cuts cannot be appealed

In

Round 10, the Technical Review Panel (TRP) removed elements from 14 proposals

that it recommended for funding, resulting in cuts ranging from 1% to 91% of

the budgets for these proposals. On average, the budgets were cut by 12%. The

total amount removed from the budgets of all 14 proposals was in excess of $96

million.

In

Round 10, the TRP had greater flexibility than it previously had to recommend a

proposal on the condition that specific elements of the proposal be removed. In

the decision authorising this, the Global Fund Board said that the TRP could

" recommend relevant proposals for funding conditional upon the removal of

a limited set of specific elements from the disease proposal (which removal is

not subject to a right of appeal). "

Sometimes,

the TRP removed specific activities and the amounts budgeted for these

activities; other times, the TRP just removed parts of the budget. The table

below provides a list of the countries involved and shows how much was cut from

the budgets.

Table: List of Round 10 proposals recommended for funding,

for which the TRP removed one or more elements of the proposal

Applicant (disease)

Budget for Years 1-2

Budget for all five years

Amount requested

Amount removed

% removed

Amount requested

Amount removed

% removed

APN+

(HIV)

$12.0 m.

$10.8 m.

90%

$33.4 m.

$30.4 m.

91%

Armenia (TB)

$4.4 m.

$0.1 m.

2%

$11.8 m.

$0.1 m.

1%

Eritrea (H)

$14.9 m.

$0.2 m.

1%

$47.3 m.

$0.8 m.

2%

Eritrea (TB)

$7.8 m.

$0.5 m.

6%

$23.3 m.

$0.5 m.

2%

Ghana (TB)

$35.0 m.

$3.1 m.

9%

$91.9 m.

$14.5 m.

16%

MENAHRA

(HIV MARPS)

$5.0 m.

$1.8 m.

36%

$12.4 m.

$4.0 m.

33%

Pakistan (M)

$25.1 m.

$1.7 m.

7%

$56.1 m.

$4.6 m.

8%

PNG

(HIV part)

$21.0 m.

$0.8 m.

4%

$44.2 m.

$2.8 m.

6%

PNG

(HSS part)

$3.6 m.

$0.2 m.

5%

$5.7 m.

$0.4 m.

7%

Senegal (TB)

$9.1 m.

$0.8 m.

9%

$23.6 m.

$0.8 m.

3%

Somalia (TB)

$15.7 m.

$1.5 m.

9%

$60.3 m.

$1.8 m.

3%

Syria (HIV

MARPS)

$5.0 m.

$3.3 m.

65%

$11.0 m.

$7.6 m.

69%

Thailand (M)

$42.0 m.

$9.5 m.

23%

$101.0 m.

$22.6 m.

22%

Timor-Leste

(M)

$7.6 m.

$0.4 m.

5%

$23.0 m.

$0.7 m.

3%

Zambia (H)

$105.3 m.

$2.5 m.

2%

$264.1 m.

$4.9 m.

2%

TOTAL

$313.4 m.

$37.1 m.

12%

$809.1 m.

$96.5 m.

12%

Note: For PNG (Papua New Guinea), the HIV and HSS

parts were submitted together in one proposal.

What was removed?

In the case of the HIV proposal from

APN+ (Asia-Pacific Network of People Living with HIV/AIDS), for which the

budget was slashed by 91%, it is more a question of what was not

removed. The TRP considered that most of what APN+ was proposing was not

suitable for a regional proposal. The TRP cut all of the activities related to

service delivery (Objective 1), and all of the activities related to

strengthening national networks of people living with HIV (Objective 2). The

TRP said that most of the budget for Objective 2 was to support the operating

costs of the national networks. The TRP cut about half of the budget of the

third and final objective, which involved strengthening the AIDS response by

expanding at a regional level information management, documentation, and

advocacy. (The ANP+ proposal is discussed in more detail below.)

In

the case of the Syria HIV MARPs proposal, for which the budget was cut by 69%,

the amounts removed all related to the third objective in the proposal, which

involved prevention activities for most-at-risk populations, including

injection drug users. The TRP said: " The budget should be reduced to

include only Objectives 1 and 2 which are recommended for funding. The TRP

believes that only after progress in these objectives has been made will the

country be able to more clearly identify the preventive activities and services

needed for the most-at-risk populations. "

(Objective

1 involved strengthening the availability, sharing and utilisation of strategic

information to guide the development and implementation of evidence-informed

policies and programmes for MARP groups. Objective 2 involved promoting

supportive legal and policy environments, and strengthening institutional

capacity for HIV-prevention programmes among MARP groups.)

The

TRP also said of Syria's

proposal: " While, the need for appropriate civil society organizations and

peer-to-peer education and services is recognized, most of the budget is

consumed by activities directed at building government capacity, structures and

facilities with no clear indication of how these will be utilized to address

the most-at-risk-populations. More innovative strategies need to be

adopted. "

The

HIV MARPS regional proposal from MENHARA (Middle East & North Africa Harm

Reduction Association) had its budget cut by 33%. The amounts removed were for

activities involving service delivery, which the TRP considers inappropriate

for a regional proposal.

For

the Thailand

malaria proposal, the TRP, citing numerous problems with the budget, made a

large number of cuts, some minor and some moderate, but adding up to more than

20% of the total budget. The TRP said, among other things, that incentive

schemes for patients were not justified; that some activities were redundant;

that the number of staff to be employed was not justified; that costs for

technical assistance were excessive; and that there was no justification for

the number of vehicles to be purchased. In reducing the budget, the TRP made

comments such as: " Please reduce the 32 person-months proposed to 12

person-months [for] technical advisors fees for the first year of the

grant " ; and, " In view of the past and existing investment in this BCC

[behaviour change communication] activity through previous grants and via other

donor funded programs, remove 40 percent of the total budget for this line

item. "

Among

the reasons cited by the TRP for removing elements from the other 10 proposals

were the following:

the

activity was not justified;

overhead costs for a government entity are not

justified;

there were mistakes in the budgeting;

the projected rate of inflation was too high;

the proposed operational studies were not a

priority; and

the proposed activities duplicated activities in

another grant.

In

its report on Round 10, the TRP stated that it was " not always practical

or constructive to remove specific elements without the benefit of

clarifications from the applicant. " It is possible, therefore, that in

future rounds there may be a different process in place for the removal of

elements of a proposal that the TRP considers problematic.

APN+ proposal

In

cutting the budget of the APN+ proposal by 91%, the TRP removed all of the

activities related to strengthening national networks of people living with

HIV, which was the second of three objectives included in the proposal. The

budget for the activities under this objective was $6.8 million, representing

about 20% of the budget for the entire proposal.

According

to the APN+ proposal, one of the core aspects of the proposed programme was

" to strengthen and support networks of people living with HIV in Bangladesh, Indonesia,

Lao, Nepal,

Pakistan, Philippines, and Vietnam to deliver essential services

not already provided through national AIDS programs. " [Emphasis in the

original.] The proposal states that instead of developing a standard package of

activities, " each member national network developed their own plans based

on their national responses and the strengths and weaknesses of their networks.

Some networks were already effective and efficient in their service delivery

and advocacy work and other networks chose to build their own institutions

before scaling up service delivery work. "

The

APN+ developed what it thought was a solid rationale for adopting a regional

approach. It said that it would be " difficult and expensive to conduct

separate programmes to improve the skills of people living with HIV and to

provide community system strengthening support to different networks in the

seven countries. With the regional approach, it is easier to organize the

activities out of the regional office for all seven countries and more

economical to produce generic information, education and communication

materials. " It also said that the regional approach " allows

activities and policies to be standardized. "

However,

the activities listed in the proposal read more like a series of separate

activities in each country than a regional approach using regionally-developed

tools to strengthen national networks. As the TRP pointed out, most of the

budget for Objective 2 was devoted to paying the salaries and operating costs

of the national networks.

The

Global Fund provided Round 10 applicants with guidance on regional proposals in

(a) an information note, and ( the " Guidelines for Proposals - Round 10:

Multi-Country Applicant. " Both documents state that the applicant must

explain why the activities in the proposal are most effectively managed through

a multi-country approach rather than a single-country approach. However,

neither document explains what this means, and neither document provides

examples of the types of activities that the TRP considers inappropriate for

regional proposals. It is clear that the TRP does not consider delivering

services directly in-country and paying for the salaries and operating costs of

national organisations to be appropriate activities for a regional proposal.

APN+

based its proposal on the Global Fund's " Community Systems Strengthening

Framework, " which encourages applicants to include in their proposals,

where appropriate, operational and core funding for community-based

organisations. This includes staff salaries, capacity building and overhead

costs. This applies equally to national and regional community-based

organisations. However there is nothing in the framework to suggest that the

Global Fund would respond favourably to a proposal in which operational and

core funding for national networks of people living with HIV would be funnelled

through a regional network.

APN+

says that it decided to include operational and core funding for national

networks of people living with HIV in its proposal because country coordinating

mechanisms (CCMs) in the region are not including funding for this in their

national proposals.

(Editor's note: The guidance produced by Aidspan for

regional proposals in Round 10 exhibits the same shortcomings as the materials

produced by the Global Fund. This will be corrected in the guidance produced for

Round 11.)

Some of the information for this article was taken from the

" Report of the Technical Review Panel and the Secretariat on Round 10

Proposals, " at www.theglobalfund.org/en/trp/reports/?lang=en.

Some of the information also came from the TRP comments on individual

proposals. Copies of all Round 10 proposals, both approved and not approved,

are at www.theglobalfund.org/en/fundingdecisions/?lang=en.

The text of the Board decision point referred to in this article (Decision

Point GF/B18/DP19) is at www.theglobalfund.org/en/board/meetings/eighteenth.

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4. NEWS:

Global Fund's Efforts to Address Problem of Stolen Malaria Drugs " Too

Little, Too Late, " Says One Observer

We are at the

" forefront of the international community " in addressing drug theft,

Global Fund responds

According to Bate, of the

American Enterprise Institute, as many as 30 million donated malaria treatments

are stolen every year. Bate said that most of these treatments are financed by

the Global Fund, and that the Fund's recent efforts to combat the problem

amount to " too little, too late. " He added, " The Global Fund has

always had the power to oversee the distribution of its funds, but it has

chronically failed to act on that responsibility. "

Bates

was writing on 11 January 2011 in the online edition of the magazine Foreign Policy. Nine days later, the

magazine published a rebuttal from the Global Fund, in which Michel

Kazatchkine, Executive Director, and Parsons, Inspector General, state

that Bate " told only half the story. "

Bate's claims

Bate

said that the Global Fund's accountability standards " don't nearly "

measure up to its hefty budget and vast influence. " Recipient governments

are responsible for managing the funds they receive, and often their local

institutions are simply not up to the task. The Global Fund gets a third of its

donations from the United

States, but more than U.S. dollars, it needs

American oversight. "

Bate

claimed that the Global Fund doesn't have the resources to both administer and

audit medicinal grants. Bate cited the example of Togo where, he said, over

half a million malaria treatments, well over a quarter of the treatments

purchased with Global Fund monies, were stolen from government stores and then

sold at street markets across the country. Bate said that officials from CAMEG,

the Togolese national procurement agency that was responsible for the

procurement, storage and distribution of the medicines, are suspected of being

involved in the thefts. According to Bate, the Global Fund took too long before

sending investigators to Togo

- " The trail had gone cold well before they arrived. "

Bate

said that despite the fact that stolen medicines is a serious and growing

problem, " the Global Fund grant system continues unchanged and unaffected

by the evident corruption in the states that receive funding. Currently, the

organization only temporarily cuts the flow of funds from Geneva before again turning the funding tap

back on. "

Bate

said that the Global Fund should follow the lead of the U.S. medicinal aid system, which,

he said, controls its own drug purchases for the developing world far more

tightly. Unlike the Global Fund, Bate said, the U.S. government doesn't simply

provide funds to recipient countries. " Rather, it comes to an individual

agreement with each country regarding which drugs the country wants; then it

buys the drugs and has U.S.

contractors deliver the products to the government distributors. "

The Global Fund's response

Kazatchkine

and Parsons said that the Global Fund has zero tolerance for theft or fraud,

and that, " contrary to Mr Bate's claims, the Fund is acknowledged (by the U.S.

and other governments) to have one of the most rigorous mechanisms to uncover

and tackle fraud and to recover stolen funds. " Kazatchkine and Parsons

said that the Global Fund's Office of the Inspector General (OIG) " is at

the forefront of the international community " in addressing drug theft,

diversion and counterfeiting.

Concerning

Togo, Kazatchkine and Parsons said that the Deputy Director of CAMEG " and

his accomplices " were involved in the misappropriation of malaria drugs

worth $849,832 and that when alerted to suspicions of this theft, the Togolese

Country Coordinating Mechanism (CCM) took swift action. In addition, the

government of Togo

promised to compensate the Global Fund for the missing drugs, and has already

repaid most of the amounts involved. " It is ultimately the Togolese tax

payer who will pay for this theft, not international donors, " said

Kazatchkine and Parsons. " While the theft is despicable, it is not a

reason to withdraw continued support for the country's efforts to fight

malaria, since the entire population should not be punished for the actions of

a handful of bad people. "

Just

as important, Kazatchkine and Parsons said, the thefts have spurred the

Togolese government to analyse weaknesses in its drug distribution system and

to strengthen the system, such that the risk of theft in future has been

greatly diminished.

Kazatchkine

and Parsons said that the solution to drug theft in developing countries is to

work with countries and their partners to ensure that existing systems include

appropriate safeguards. " To imply, as Mr Bate does, that only foreign

oversight can secure drug distribution is an affront to the vast majority of

honest, hardworking pharmacists, doctors and nurses who are successfully and

conscientiously delivering drugs to patients in many countries around the

world. "

In

its latest progress report to the Global Fund Board, reported on in GFO 137, the OIG said that it had also

received reports of organised thefts of anti-malarial drugs in Malawi, Tanzania,

Kenya, Nigeria, Uganda

and Côte d'Ivoire.

Several

months ago, Bate wrote an article on this topic in the journal Research and Reports in Tropical Medicines,

in which he said that the problem also affects aid programmes at the United

States Agency for International Development (USAID). See " Report

Renews Concerns About Stolen Malaria Medicines " in GFO 131.

Editor's note: The Global Fund is planning to convene a

meeting in the near future bringing together major international funders of

drug supplies to developing countries, technical and law enforcement agencies

and implementers of health programmes to intensify joint efforts to prevent

theft of medicines.

The article by Bate ( " Africa's

Epidemic of Disappearing Medicine " ) and the response from the Global Fund

( " A Half Truth on Drug Theft " ) are at www.foreignpolicy.com/articles/2011/01/11/africas_epidemic_of_disappearing_medicine?page=0,1.

" Reproduced from the Global Fund

Observer Newsletter (www.aidspan.org/gfo), a service of Aidspan. "

Forwarded by:

---------------------------

Yours in Global Concern,

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Executive

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Vice Chairman -Initiatives of Health Net (IHN)

Founder and General Secretary - Confederation of Indian

Civil Society Organisation’s (CICSO)

National Convener- National Alliance for Health,

Environment and Rights ( NAFHER)

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TUTICORIN-628

008, TN, INDIA

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91 461 2310151; Mobile: 91 94431 48599: www.empowerindia.org

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