GLOBAL FUND OBSERVER (GFO), an independent newsletter about the Global Fund provided by Aidspan to nearly 10,000 subscribers in 170 countries.

Issue 176: 20 February 2012. (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: Delayed Disbursements Related to Global Fund Grant Threaten Future of South Africa's Treatment Action Campaign

The Treatment Action Campaign, a sub-recipient for a Round 6 HIV grant in South Africa, has experienced significant delays in receiving disbursements, which, TAC says, have resulted in the organization coming perilously close to having to shut its doors. Other SRs are also adversely affected by the delays.

2. NEWS: Urgent Action Required to Address Funding Crisis at the Global Fund, Report Says

The International HIV/AIDS Alliance says that as a result of the funding crisis at the Global Fund, the scale-up of the worldwide HIV response will be seriously affected and important existing services will be reduced or eliminated - unless urgent measures are taken.

3. NEWS: Number of Malaria Deaths Much Higher Than Previously Believed, Study Says

Researchers from the Institute for Health Metrics and Evaluation have published a study which they say shows that malaria kills twice as many people every year as formerly believed, and that many deaths occur not only among babies but also among older children and adults.

4. NEWS: Grant Implementation Has Become More Complex, Says Major Technical Support Provider

Grant Management Solutions say that the growth of the Global Fund's grant portfolio over the past decade, the transition to single-stream-of-funding grants, and issues raised by the work of the Office of the Inspector General have contributed to a growing complexity in Global Fund grants. This article reports on the work GMS has done with grant implementers and CCMs.

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1. NEWS: Delayed Disbursements Related to Global Fund Grant Threaten Future of South Africa's Treatment Action Campaign

Other implementers are similarly affected

The Treatment Action Campaign (TAC), a sub-recipient (SR) for a Round 6 HIV grant in South Africa, has experienced significant delays in receiving disbursements. TAC says that because of these delays, the organisation is perilously close to having to shut its doors. TAC is known world-wide for its pioneering advocacy work in South Africa on HIV treatment.

The South Africa National Department of Health (NDOH) is the principal recipient (PR) for the HIV grant. Under its contract with the NDOH, TAC was due to receive 6.5 million rand (about $833,000 at current exchange rates) by the start of July 2011 to cover expenses between then and the end of 2011. TAC has still not received any of this funding.

On 1 January 2012, TAC was due to receive a further disbursement of 2.7 million rand (about $346,000) to cover expenses for January to March 2012. That funding has also not yet been received, increasing the shortfall to 9.2 million rand (about $1.2 million).

On 23 November 2011, TAC issued a statement in which it said that the organisation faced possible closure in January 2012 because of the lack of funds. The statement said that TAC depended on the Global Fund grant for a large portion of its work. TAC said that if the funds were not received by the first week of January, the organisation would be in an unsustainable deficit position by February. "As a grant-funded organisation we just cannot afford to run a deficit," TAC said. It added that the delays were primarily due to poor administration by the NDOH.

In response to the TAC statement, the NDOH said that TAC was not in compliance with its contractual obligations. On 25 November 2011, TAC received an email from the NDOH, describing several administrative items that it said TAC had to address before funds could be released. TAC told GFO that that this was the first indication from the NDOH that these administrative issues were holding up the disbursement process; and, further, that TAC understood that all of these issues had been resolved in previous communication with the NDOH. In January 2012, TAC re-confirmed to GFO that all outstanding issues with the NDOH had indeed been resolved, but said that there had been further delays affecting disbursements from the Global Fund to the NDOH.

The situation is complicated (or potentially complicated) by several factors. First, the South Africa CCM submitted an HIV proposal in Round 10, for which the NDOH was nominated as PR. The proposal was approved. In the proposal, the CCM (of which TAC is a member) indicated that it wished to consolidate its Round 10 proposal with its Round 6 grant and its Round 9 grant, both of which were being managed by the NDOH. As a result, a single-stream-of-funding (SSF) agreement was negotiated between the NDOH and the Global Fund. These negotiations took longer than expected; the SSF agreement was not signed until 15 December 2011.

Second, in December 2010, TAC had been the victim of fraud by one of its employees. About $40,000 of Global Fund money was stolen. TAC was able to recover the stolen funds. The employee was dismissed and accounting procedures were tightened. TAC informed the NDOH, the South African police and the Global Fund of the incident, and also issued a public statement. (See GFO article.)

Third, the Office of the Inspector General conducted a diagnostic review of South African grants in August 2011. However, no findings have yet been published, so we do not know if the diagnostic review was a factor in the delayed disbursements.

While the disbursements were being held up, the NDOH provided TAC with "bridge funding" in the amount of 500,000 rand (about $64,000). TAC said that this was not enough to keep the organisation from going into a deficit position.

In January 2012, as a result of a contribution received in late 2011 from another donor, TAC said that it had sufficient funds to keep the organisation going until the end of February 2012, but not beyond. In an email to the Global Fund Secretariat sent on 18 January 2012, Nathan Geffen, Treasurer of TAC, said:

"I have dealt with funders for 12 years. The Global Fund has been the most difficult I have had to work with. In our history, no other donor has defaulted on a payment to us. The GF has consistently defaulted its tranches to our Principal Recipient and our current tranche is now in default for more than half-a-year. This is not the way to run an organisation of such profound importance."

Mr Geffen went on to say that despite promises and offers of assistance from the Global Fund to resolve this situation, TAC has not seen any results. "No doubt you will respond by saying the fault lies with the Principal Recipient or that our contract is with the PR not the GF, but this no longer washes," Geffen said. "You have implemented an impossibly complicated system that neither you nor your principal recipients are capable of implementing effectively."

Mr Geffen said that he hoped that the Global Fund would proceed to rectify this situation urgently. "The consequences of failing to do so will be dire for both the South African and global response to AIDS."

Several times during the last few months, staff from the Global Fund Secretariat have told TAC that disbursements to the NDOH for the newly consolidated SSF agreement were imminent, but, according to TAC, the disbursements never materialised.

TAC is not the only SR affected by the delays in disbursements. In early February 2012, a group of South African SRs sent a letter to the South African Minister of Health, Dr Aaron Motsoaledi, pleading with him to intervene. In addition to TAC, the signatories of the letter were Community Media Trust, Humana People to People, Mindset, Redpeg, Society for Family Health and Soul City.

In the letter, as reported in the newspaper The Star, the group told the Minister that the HIV grant funds life-saving programmes that the SRs implement. The group added:

"These payments are late. Some of us have continued to implement our Global Fund-sponsored programmes using reserve funds and other income, but we can no longer continue to do this. The consequence is that our programmes will have to close and many people will have to be retrenched... Each of us has made a great effort to meet the demands of the principal recipient and the Global Fund. It is unfortunate that the Global Fund has failed to make contingency plans and defaulted its payment. The situation is now dire."

On 7 February, Eyewitness News, a South African news agency, reported that TAC had already started to lay off staff because of the funding delays. A day later, Eyewitness News reported that the NDOH said that the delays in funding were "out of its control." The news agency quoted NDOH spokesperson Fidel Hadebe as saying that the Department was taking the matter very seriously, but that much of the blame lay with the Global Fund Secretariat in Geneva.

As we went to press, GFO learned that NDOH has just received its first Global Fund disbursement since March 2011. TAC informed us that SRs have been told that they may receive some of that money this week. It appears that only about 2.4 million rand (about $300,000 will go to TAC; this represents 25% of the $1.2 million that TAC was owed as of the start of 2012. This money is designed to cover human resource costs only; various technical issues are holding up disbursements for programme costs. TAC estimates that it will be at least April 2012 before it receives a disbursement for programme costs.

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2. NEWS: Urgent Action Required to Address Funding Crisis at the Global Fund, Report Says

The International HIV/AIDS Alliance says that progress on many fronts is in danger of being reversed

Bilateral donors urged to fill service gaps

As a result of the funding crisis at the Global Fund, the scale-up of the worldwide HIV response will be seriously affected and important existing services will be reduced or eliminated - unless urgent measures are taken. This is the central message of a well-written and plain-speaking report issued on 24 January 2012 by the International HIV/AIDS Alliance.

The report, entitled "Don't Stop Now: How Underfunding the Global Fund to Fight AIDS, Tuberculosis and Malaria Impacts on the HIV Response," is available on the Alliance website here. The report is based on data from countries where the Alliance operates, including data from in-depth impact studies in five countries: Bangladesh, Bolivia, South Sudan, Zambia and Zimbabwe.

In November 2011, the Global Fund cancelled Round 11 and said that no new grants could be funded until 2014. The report from the Alliance said that this news hit just as major scientific breakthroughs and signs of real progress were starting to generate the most widespread optimism in the history of the AIDS epidemic. "Now," the report said, "all hopes of entering a new phase of the HIV response are effectively put on hold until at least 2014, and progress on many fronts may actually be reversed. The effects on individuals and communities will be devastating."

The Global Fund, which has made direct investments in 150 countries, provides about two-thirds of total international funding for TB and malaria services, and one-fifth for HIV services. The report said that the Global Fund plays a crucial role in linking health systems and community systems; and that the Fund has been a powerful force in advancing human rights and placing people infected with, and affected by, HIV on country coordinating mechanisms. The report said that these principles and approaches are embodied in the "widely welcomed" new Global Fund Strategy 2012-2016, which aims to save 10 million lives by 2016.

However, the report said, the cancellation of Round 11, combined with other measures taken by the Global Fund - such as stricter rules for grant renewals - means that the Fund will not be able to support any new HIV, TB or malaria services. In addition, the report said, basic programmes, such as HIV care and support, will be interrupted because they have not been deemed "essential" under the rules for the Fund's Transitional Funding Mechanism (TFM). For the same reason, the report said, important advocacy and legal work to combat stigma and discrimination and to enable people to access services will probably also go unfunded; and efforts to address many of the drivers of the pandemic - such as interventions focusing on social protection, education, and gender equality - "will fall by the wayside."

The report described the impact of the funding crisis on individual countries. In Bolivia, for example, prevention activities will be disrupted for key populations such as MSM and lesbian, gay, bisexual, transgender and intersex (LGBTI) populations, which are at the centre of the HIV epidemic in that country. Also, the opportunity to expand this type of outreach work to other populations that do not currently access formal health establishments - such as prisoners, people living on the streets, young adolescents and indigenous people - will be lost. Finally, important investigations planned to provide insight into the HIV epidemic will be cancelled.

"For donors and other stakeholders to reduce funding for the HIV response in difficult economic times is short-sighted and counterproductive," the report said. "While trillions of dollars have been found by governments to bail out the reckless financial sector, donors have left the Global Fund short of the funds it needs to save millions of lives. The Global Fund is the best mechanism the world has for realising the possibility of a world without AIDS, but it can only do so with sufficient investment."

The Alliance called on donors to honour their existing pledges and to increase their contributions so as to provide the Global Fund with about $2 billion that could be used to create a new funding opportunity in 2012. Specifically, the Alliance said, donors must speed up the delivery of their contributions; donors that have not made pledges, particularly G20 countries, should do so; donors should host an emergency replenishment meeting prior to the International AIDS Conference in July 2012; and donors should consider increasing the sources of funding through measures such as the financial transaction tax that is being contemplated by several countries.

The Alliance also said that national governments must invest more in their own HIV responses; and that bilateral donors must take immediate steps to fill critical HIV service gaps created by the funding crisis at the Global Fund.

Alliance Executive Director Alvaro Bermejo said in the report,

"We urgently need donors to replenish the Global Fund and for national governments to step up and deliver funding for their HIV/AIDS response or we face a collective responsibility of failing the weakest in our society and betraying the promises that were made to the families and people affected by HIV around the world."

In the report, the Alliance also said that the Global Fund must have more effective financial early warning systems in place to ensure they can raise the alarm bell when donor commitments are not being met. "Never again must we be in a position where life-saving programmes are cancelled or delayed, without contingency planning and support for affected countries."

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3. NEWS: Number of Malaria Deaths Much Higher Than Previously Believed, Study Says

The WHO disputes the findings

Results show that donors must re-commit to the Global Fund, say the editors of The Lancet

According to researchers from the Institute for Health Metrics and Evaluation (IHME), which is based in the United States, malaria kills twice as many people every year as formerly believed. In a study published in The Lancet on 3 February 2012, the researchers said that malaria takes 1.2 million lives each year, and that the deaths occur not only among babies but also among older children and adults.

Writing about the findings in The Guardian, Sarah Boseley said that the research "overturns decades of assumptions about one of the world's most lethal diseases." The conventional wisdom had been that almost all malaria deaths occur among babies and children under five. The figure of 1.2 million deaths per year is nearly double the 655,000 estimated by the World Health Organization (WHO) and published in the World Malaria Report 2010.

The IHME researchers said that malaria deaths were on a downward trend as a result of efforts by donors, aid organisations and governments to tackle the disease, but that the decline comes from a much higher peak than had previously been estimated. "That means the interventions such as better treatment and bed nets are working, but there is much further to go than everybody had assumed," Ms Boseley said.

The researchers said that malaria needs a higher priority if the millennium development goal of cutting child mortality by two-thirds between 1990 and 2015 is to be achieved. They also said that there is a need to pay more attention to the risks malaria poses to adults. The researchers said that they support the recently adopted strategy to hand out insecticide-treated bed nets to protect all members of a household against mosquitoes carrying malaria parasites, instead of insisting that the nets are only for babies and pregnant women, as was the norm previously.

More than two-thirds of global funding for efforts to fight malaria comes from the Global Fund. "The announcement by the Fund that Round 11 would be cancelled raises enormous doubts as to whether the gains in malaria mortality reduction can be built on or even sustained," the researchers said.

Professor Rifat Atun, then Director of Strategy, Performance and Evaluation at the Global Fund, told The Guardian more than $2.5 billion had been disbursed for malaria control between 2009 and 2011 and that, by the end of 2011, 235 million bed nets had been distributed. Money that had been pledged was still coming in, Dr Atun said, which means that the Fund will be able to invest substantially in malaria programmes in 2012 and 2013. However, Dr Atun said, recent reductions in the Global Fund's estimates of future revenues mean that the Fund will not be able to maintain the rate of increase in investment that it was able to achieve over the last few years.

As with any research study, the methodology, the findings and the implications of the findings will be debated among researchers and others. Already, the WHO has issued a statement disputing the researchers' claims that the number of malaria deaths are double current estimates. The WHO said that its estimates and those reported in The Lancet study are statistically the same except with respect to children over five and adults in Africa. The WHO said that the IHME researchers and the WHO used different methodologies and different sources of data in arriving at their estimates, and that more scrutiny of the quality of the IHME data was required before reaching any conclusions.

In the same issue of The Lancet that reported on the results of the study, the editors of The Lancet said that the study findings have substantial implications for child survival programmes, and that malaria control and elimination programmes should be paying far greater attention to adults than is currently the case. The editors added that "Although we can be grateful for these new estimates of malaria mortality, one important lesson from the science of estimation is that the urgency to revitalise health information systems has never been greater. We need reliable primary cause of death data to ensure that trends in malaria mortality are readily and reliably monitored - and acted upon."

The editors said that one aspect of the findings that is unlikely to raise objections is the implication that interventions scaled up since 2004 have been phenomenally successful in reducing the number of malaria deaths. "Much of this success can be attributed to the work of the Global Fund. With the recent and untimely resignation of its Executive Director, Michel Kazatchkine, the Global Fund is facing an unprecedented emergency. The results we report today show how essential it is for donors to recommit to the Global Fund, as they did last summer for the Global Alliance for Vaccines and Immunisation."

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4. NEWS: Grant Implementation Has Become More Complex, Says Major Technical Support Provider

Grant Management Solutions says requests for support from CCMs have never been higher

GMS has provided assistance to CCMs and PRs in 73 countries

Issues confronting Global Fund grant implementers are becoming more complex. The growth of the grant portfolio over the past decade, the transition to single-stream-of-funding grants, and issues raised by the work of the Office of the Inspector General (OIG) have contributed to this complexity, as have the global economic crisis and political events in some countries.

These are some of the statements contained in the 2011 annual report of Grant Management Solutions (GMS), covering the fiscal year ending 30 September 2011. GMS is a major provider of technical support for Global Fund grant implementation, governance and related processes and structures.

In its 2011 annual report, GMS said that the governance and oversight challenges facing country coordinating mechanisms (CCMs) have become acute, and that this calls for "a more energetic commitment to, and capacity for, country ownership, transparency and accountability." GMS said that the requests from CCMs for technical support have never been higher.

The primary mission of GMS is to provide urgent, short-term technical support to CCMs, principal recipients (PRs) and sub-recipients (SRs). GMS is funded by the U.S. President's Emergency Plan for AIDS (PEPFAR) and the U.S. Agency for International Development (USAID).

GMS provides support in four technical areas: (1) CCM governance and oversight; (2) grant and financial management by PRs; (3) pharmaceutical and supply management; and (4) reporting, and monitoring and evaluation. The GMS project is nearing the end of its five-year cycle, which started in 2007. However, a similar multi-year project is expected to be launched early this year.

When the U.S. Congress approved funding for the Global Fund, it decreed that up to 5% of this funding could be used to provide Global Fund-related technical support. The GMS project is funded through this appropriation. (This appropriation also provides some funding for the UNAIDS Technical Support Facilities, Roll Back Malaria, the Stop TB Partnership - TB Team, and the Green Light Committee.). The budget for GMS' current five-year project is $61 million.

GMS support is available to all countries that receive Global Fund grants, except those on the U.S. Department of State's list of state sponsors of terrorism. GMS provides short-term support through teams of 2-4 national, regional and international consultants. For each project, GMS can assign national consultants for up to 50 days. GMS can send regional and international consultants to a country for up to 90 days. These ceilings require GMS to focus its interventions on the most urgent priorities and to hand over medium-term support to other technical support agencies and consultants whenever possible. CCMs and PRs seeking support submit requests to the Office of the U.S. Global AIDS Coordinator.

In its fourth year, CCM governance and oversight accounted for more than 40% of the GMS projects. Governance assignments focused primarily on helping CCMs strengthen their structures and procedures. Oversight assignments focused mainly on building the capacity of CCMs to be proactive, using timely information on performance, including grant dashboards. (Dashboard templates are available here.) Other assignments in GMS' fourth year involved preparation for signature and start-up for new grants; preparation for Phase 2 review; grant consolidation; and alleviating bottlenecks to grant implementation.

The volume of the work done by GMS is staggering. By the end of its fourth year, on 30 September 2011, GMS had started or completed 227 assignments in 73 countries, affecting 333 grants with approved funding of $4.75 billion (which is more than a quarter of all funding approved by the Global Fund). In its fourth year alone, the GMS project fielded 60 teams to respond to new requests, involving 245 consultants.

The following table, which lists the countries that received support from GMS in the period 2007-2011, is taken from the GMS 2011 annual report.

Table: Countries receiving GMS support 2007-2011

(number of assignments in parentheses, if more than one)

Latin America & Caribbean

Eastern Europe, Central Asia & Middle East

Anglophone Africa

Francophone, Lusophone Africa

Asia, Southwest Asia

Colombia

COPRECOS (2 countries)

Ecuador

Guatemala (3)

Haiti (2)

Honduras (6)

Mexico (6)

Nicaragua (2)

Peru (2)

Uruguay (2)

Albania (2)

Armenia (5)

Azerbaijan

Burkina Faso (3)

Djibouti (4)

Jordan

Kazakhstan

Kyrgyz Rep. (2)

Mauritania (4)

Macedonia

Mali (3)

Moldova

Morocco (4)

Niger

Serbia

Tunisia

Ukraine

Yemen

Ghana (5)

Lesotho (2)

Liberia (2)

Malawi (3)

Namibia (3)

Nigeria (5)

Sierra Leone (5)

South Sudan (2)

Swaziland (3)

Uganda (4)

West Africa Corridor

(5 countries)

Zambia (2)

Zimbabwe (3)

Angola (4)

Benin (2)

Burundi

Cameroun (5)

Central African Republic (9)

Comoros (2)

Cote d'Ivoire (3)

Democratic Republic of

Congo (10)

Gabon (2)

Guinea

Guinea Bissau

Madagascar

Mozambique (3)

Congo (4)

Sao Tome y Principe

Senegal (5)

Togo (3)

Afghanistan (3)

Bangladesh (2)

Bhutan (4)

Cambodia (3)

Fiji (3)

India (4)

Indonesia (5)

Lao PDR (3)

Maldives

Mongolia

Nepal (7)

Pakistan (6)

Papua New Guinea

Philippines (5)

Sri Lanka

Timor Leste (2)

When providing technical support, GMS teams frequently make several visits to a country. Usually, the first visit starts off with a diagnostic assessment of the problem(s). Often, on the basis of the findings from the assessment, GMS has to make adjustments to the technical support that was planned.

Examples of support provided

One example of technical support provided by GMS in 2010-2011 involved the Guatemala CCM, which sought assistance to improve its understanding of the Global Fund's grant architecture, processes and procedures; to clarify the Fund's expectations concerning the roles and responsibilities of CCMs; and to ensure compliance with the Global Fund's updated CCM eligibility criteria. The CCM also requested support to review its existing conflict-of-interest policy, to develop an effective oversight system, and to improve communication within the CCM. Following an initial diagnostic assessment, the CCM and the GMS team worked together to develop a new version of the CCM's bylaws, including a new approach for selection of CCM members; a conflict-of-interest policy; an operations manual; a work plan and budget; an oversight plan; a dashboard for Guatemala's Round 6 TB grant; and a management dashboard for the CCM. In September 2011, the CCM revised its membership using the new selection guidelines.

In 2010, GMS provided assistance to the CCM in Mauritania to enable the CCM to respond to the findings of the OIG concerning the implementation of Global Fund grants and the functioning of the CCM (GFO wrote about the OIG findings here). GMS also worked with the CCM to develop a plan for reimbursing the losses identified by the OIG.

Some assignments are more challenging than others. In the third year of its project, in collaboration with several other organisations, GMS began providing support to the Democratic Republic of Congo (DRC) on preparations for signing the DRC's ambitious Round 9 tuberculosis and health systems strengthening (HSS) grants, involving two PRs, the Ministry of Health (MOH) and CARITAS DRC. According to the 2011 annual report, this proposal was so complex - virtually three projects in one document - that the Global Fund granted two exceptional extensions before the grants were finally signed in May 2011. (GMS collaborated with four other agencies on this assignment.)

One factor that contributed to the delay was that the MOH's project management unit, which was already administering grants from the World Bank and the GAVI Alliance, had to be strengthened to enable it to take on the Global Fund PR role. Since the funding rules of the three donors are quite different, budgeting the shared management functions was complicated.

In addition, the HSS component required extensive supplementary planning to develop a unified personnel remuneration policy for the MOH, agreeable to all donors and to the Government of the DRC, to be used for performance-based payment and to target the geographic areas for Phase 1 of the grant. According to the 2011 annual report, this was undoubtedly the most complex pre-signature assignment that GMS has ever worked on, "in large part because crucial policy decisions had not been made during the design of the proposal."

GMS operates in a very participatory fashion, working with CCMs and PRs to identify problems and explore options for solutions (as opposed to GMS telling PRs and CCMs what GMS thinks they should do.) In addition to its work at country level, in collaboration with the Global Fund's CCM Unit, GMS has conducted a series of training sessions on the use of grant dashboards for CCM oversight. GMS has also conducted numerous train-the-trainer sessions on civil society strengthening.

In May 2011, GMS initiated a formal process to document, polish, publish and share best practices, tools, and models developed by GMS consultants and staff. This initiative will be completed in 2012.

Because it is nearing the end of its current five-year project, GMS is no longer accepting technical assistance requests for this project. However, in a note on its website, GMS explains that a new project is expected to begin early this year and that applicants may submit a request for assistance under that project. There is a section of the website that explains how to initiate a technical support request.

GMS operates as a partnership among five companies: Management Sciences for Health (MSH), Abt Associates, Futures Group, Inc., International Program Assistance, and MIDEGO, Inc. The GMS offices are in Arlington, Virginia. GMS maintains an ever-expanding consultant roster that currently includes nearly 420 technical experts and local consulting groups. See the GMS website for more information. The 2011 annual report can be downloaded directly on the GMS website here. The report contains numerous examples of the technical support provided by GMS. Also available are annual reports for each of the first three years of the GMS project.


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This is an issue of the GLOBAL FUND OBSERVER (GFO) Newsletter.

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Author: All of the articles in this issue were written by David Garmaise (david.garmaise@aidspan.org), Aidspan's Senior Analyst.

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