Maturity and systems theme of 33rd Board meeting

1. NEWS
8 Apr 2015
Governance reform and eliminating the funding gap remain elusive

The Global Fund used its 33rd Board meeting on 31 March - 1 April to demonstrate its continued maturation as an organization and show that the systems it has put in place are working.

The meeting was long on discussion points -- strategy development, refinement of the new funding model, investments in health systems strengthening, better integration of community, rights and gender -- and short on major decisions. It was down to the business of administering grants -- some $2.5 billion in 2014 -- in more than 110 countries, as senior Secretariat officials noted in comments to Aidspan, and less about tinkering with formulas and methodologies.

Stronger and differentiated systems

Some constituencies, however, were keen on more tinkering. Health systems strengthening was the byword of many discussions of how to ensure impact at country level and to ensure more is done by recipients of Global Fund assistance to transition away from needing those grants to sustain disease programming.

In his presentation to the Board, executive director Mark Dybul noted that 35% of the investments approved thus far under the new funding model were designed to assist with HSS, at the national and community levels. How that has been derived, however, has been unclear. Aidspan anticipates deeper analysis of the HSS component of the NFM once a greater number of concept notes is made public.

The experience of Ebola in three west African states was a reminder that the poorest countries have the weakest systems, many constituencies noted, and that investments in personnel, in equipment and in training might be the best way to ensure a Global Fund legacy. Others demurred, noting that the Fund was strongest when it was doing what it was supposed to: raising and disbursing money to fight AIDS, TB and malaria.

The Fund is not a humanitarian organization nor or a development one, it was said during one particularly lengthy discussion: a discussion likely to feed further debate at the core of the Development Continuum Working Group's work going forward into 2017. Differentiated approaches to different countries (and within the largest countries) that take into consideration the operating and disease burden environments, the 'fragility' of a state and its own internal resources are likely to be the modus operandi for the Global Fund -- as long as a set of core principles and commitments to rights, gender equity and equitable access are adhered to.

“The Global Fund is determined to play a robust role in strengthening health systems during the post-2015 development era,” outgoing Board chair Dr. Nafsiah Mboi said. Mboi and vice-chair Mireille Guigaz, were replaced in the Board leadership by Norbert Hauser of the German delegation and Aida Kurtovic, a longtime civil society activist in Eastern Europe and Central Asia who hails from the developing countries NGO delegation.

Prioritization of interventions beyond scaled-up treatment to ensure protection for human rights, differentiated approaches for women, girls and young people, as well as migrants and refugees, was also given full-throated support. One delegation member told Aidspan that while ensuring a gender balance in activities was important, for malaria especially it was also important to note the urban/rural divide as socio-economics are often more relevant to access to treatment than sex. Still another constituency noted that key affected populations are not just identified groups -- they're part of the communal fabric of a nation, able to contribute to economic development when they are healthy, included members of society.

Being a healthy included member of society also means not being at risk of being criminalized for being yourself, which drove a number of constituencies to speak out strongly against the plan to host the first Partnership Forum in Addis Ababa, Ethiopia: one of 34 countries on the African continent where it is a crime to be gay.

The cost of prioritization

All of this prioritization and impact and strengthening bears a price tag, of course -- which Secretariat representatives took pains to remind Board constituencies of during their interventions and responses to constituent questions. Although the Fund has a healthy bank balance for now, and does not anticipate running deficits that could compromise programs, the need to find $1.1 billion to respond to the decision to shorten some grants under the NFM to front-load them with as much resource as possible remains. Nor is it likely that the register of unfunded quality demand -- currently standing just under $2 billion -- of programs across the spectrum of prevention, care, treatment and outreach will be funded.

For some constituencies, this carries a risk going into the 5th replenishment, for which Japan has offered to host a kick-off meeting in December 2015 ahead of the official launch in mid-2016. If the full expression of demand is not voiced, their argument goes, and the full scale-up of treatment not requested, will it have a downward effect on the amounts pledged by donors going forward?

What is likely to have a larger impact on donors is how well countries are managing the funds they are given -- and the risks to which donor money, as well as donor-supported programs, are exposed. Whether it is financial mismanagement or fraud, problems in the supply chain or hiccups at any point in operations or program implementation, there is always the fear that money is not going to be spent the way it is supposed to.

The new risk management policy implemented iteratively since 2014 was the topic of two pre-meeting trainings for Board constituencies and observers, as well as a session during the Board meeting. The reality of mitigating risk beyond the corporate level was brought home by several commentators who want more progress made on identifying risk and enabling recipients to mitigate it at the country-level. The current Risk Management Policy is focused at the Corporate level. The next stage, according to the risk team at the Secretariat is to widen this scope.

At corporate level, another element of risk mitigation will come from the integration of a new ethics and integrity initiative into the day-to-day operations of the Fund. Declarations of conflicts of interest will be signed annually by a complement of senior officials within the Secretariat as well as members of Board delegations. Equally, the recruitment of a new ethics officer to replace the acting ethics officer, whose terms of reference are currently under development, will assist in monitoring areas where ethical compliance, or non-compliance, could expose programs to risk.

Governance

Risk doesn't only come from change; it also comes from stagnation. And here it appeared that it was governance of the Global Fund that is at greatest risk. Despite the enthusiasm with which a transitional governance working group was formed in 2014, there was a curious lack of reported progress by that working group during this Board meeting. Discussions around strategy development and how to position the Global Fund's relationships with different countries along the development continuum also neglected to include an element of governance reform as part of the strategy discussions.

This may account for the "3" rating that governance was given in a first annual opinion by the Office of the Inspector General, on a maturity scale of 1-6 (explained in further detail here), that said that while "internal controls, governance and risk management processes have been defined through institutional policies approved by executive management and/or the Board... they are not applied consistently and are not fully embedded in everyday management practice. They are unlikely to ensure that the organization’s operational and strategic objectives will be fully met."  


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