Global Fund Approves Round 8 Grants, But Cuts Budgets and Delays Round 9

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Global Fund Approves Round 8 Grants, But Cuts Budgets and Delays

Round 9

The Global Fund Board yesterday approved 94 Round 8 grants that will

cost up to $2.753 billion over the first two years and $5.840 b. over five years

– a record amount.

The decision was made at the Fund's eighteenth board meeting, held in Delhi,

India,

The Board decision was rendered particularly difficult because the

unusually large average size of the proposals meant that there was not enough

money to pay the full cost of the proposals recommended

for approval by the Technical Review Panel (TRP).

After extensive negotiation, the Board handled this by calling for

various budget cuts, and by delaying by six months the date at which Round 9

grants will be approved.

The budget cuts decided upon were as follows:

• Although the total amount of money requested by applicants for

Phase 1 (i.e. Years 1-2) of the TRP-recommended Round 8 proposals came to $3.059

billion, the Board only agreed to pay 90% of this amount, i.e. a maximum of

$2.753 billion. This means that successful Round 8 applicants will shortly be

asked by the Fund to propose cuts to the budgets in their proposals. Although

these cuts will, on average, need to be at least ten percent, the Fund will not

insist that each proposal's budget is cut by this precise amount.

The Fund is aware that some budgets have more " fat " than others. For instance,

some budgets assume paying higher prices for purchased products, or higher

salaries, than the Fund believes to be reasonable. In such cases, cuts of

greater than 10% will be expected;

in some others, lesser cuts might be tolerated.

• Similarly, when it comes to negotiating Phase 2 for approved Round

8 proposals, the Fund will expect budgets to be cut by an average of 25% from

what was originally proposed –unless the Fund receives sufficient donations that

such cuts turn out not to be necessary.

• When the Fund next sends out invitations to apply for Rolling

Continuation Channel (RCC) extensions of grants that are coming to the end of

Phase 2, applicants will be instructed to limit the funding they request to 140%

of the amount that had previously been approved in Phase 2 of the grant in

question – again, unless the Fund receives sufficient donations that this

restriction turns out not to be necessary.

• When Phase 2 grant agreements are being negotiated for Round 1-7

grants, attempts will be made to cut budgets by at least 10% from what was

specified in the original proposals.

• However, no budget cuts will be imposed on Phase 1 or Phase 2 or

RCC grant agreements that have already been signed.

Regarding Round 9, the Board decided to extend the date by which

applications must be submitted from 21 January 2009 to 31 May 2009, and to make

final grant approvals for these proposals at the November 2009 board meeting

rather than the May 2009 board meeting.

Even with the above cuts, the Fund does not currently have enough

money to pay for all the Round 8 proposals that the TRP recommended for

approval. However, the Fund hopes to have sufficient funding available by some

point in 2009. Accordingly, following a procedure that it first used when a

similar situation arose with Round 5, the Board agreed to a system for

prioritizing when the various Round 8 grants can be formally approved. (For

details, see the next article.)

The Board's decisions as to which proposals to approve was, as

always, entirely based on the advice it received from the TRP, an independent

and non-political body of 34 experts from around the world

who serve in their personal capacities. No Board members or secretariat

employees are members of the TRP.

Some of the highlights of Round 8 approvals were as follows:

• Ninety-four Round 8 proposals were approved, with a total two-year

requested amount of $3.1 billion (at current exchange rates), up from $1.1

billion in Round 7, the previous largest round. (As discussed above, the total

amount that the Board actually approved is less than

the total amount that was requested.)

• The average Round 8 approved proposal has a two-year requested

amount of $33 million, up from $15 million in Round 7, the previous largest

average.

• Fifty-four percent of eligible proposals submitted in Round 8 were

approved, up from 49% in Round 7, the previous highest percentage.

• Malaria proposals in Round 8 were particularly successful. Sixty-

eight percent of them were approved (as against 49% of HIV/AIDS proposals and

51% of TB proposals), with an average two-year requested amount of $56 million

(as against $31 m. for HIV/AIDS proposals and $11 m. for TB proposals). The

total two-year requested amount for approved malaria proposals was $1.57

billion, which for the first time ever was greater than the value of approved

HIV/AIDS plus TB proposals.

• Although HIV/AIDS proposals in Round 8 were less successful than

were malaria proposals, they were still significantly more successful than they

had been in any previous round. The percentage of HIV/AIDS proposals that were

approved in Rounds 4, 5, 6, 7 and 8 respectively

was 38%, 38%, 39%, 41% and 49%.

Further highlights of Round 8 include the following:

• In Round 8, seven approved proposals had five-year requested

amounts (i.e. Phase 1 plus Phase 2) in excess of $250 million. These were from

DR Congo (HIV, $263 m., and malaria,$393 m.), Ethiopia (malaria, $291 m.),

Nigeria (malaria, $600 m.), Tanzania (HIV, $598 m.), Zambia (HIV, $307 m.), and

Zimbabwe (HIV, $297 m.). And two non-

approved proposals had five-year requested amounts in excess of $250 million.

These were from Nigeria (HIV, $832 m.) and South Africa (HIV, $259 m.).

• The Phase 1 budget breakdown of the approved Round 8 proposals was:

health products and health equipment (36%), medicines and pharmaceutical

products (11%), training (9%), human resources (8%), infrastructure and other

equipment (8%), procurement and supply

management costs (6%), M & E (5%), communication materials (4%),

planning and admin (3%), living support to clients and target populations (3%),

technical and management assistance (3%), overheads (3%), and other (1%).

• Of the three proposals submitted by Regional Coordinating

Mechanisms, one was " screened out " by the Secretariat on eligibility grounds

without being forwarded to the TRP, and the remaining two were then rejected by

the TRP. And of the eight proposals submitted by

regional organizations, five were screened out by the Secretariat on

eligibility grounds, and the remaining three were then all rejected by the TRP.

• No proposals submitted by CCMs were screened out by the Secretariat

as ineligible on the grounds that the CCMs of the countries in question were not

in compliance with the Fund's

minimum CCM eligibility requirements.

http://www.aidspan.org/documents/gfo/GFO-Issue-98.pdf