Grant Implementation

STOP TB workshop

Workshop on Grant Negotiation and Implementation of TB grants, Anglo/Lusophone Africa

11-14 December 2007, Geneva

OUTLINE

1 - The grant cycle revisited: Grant Agreement Overview, Conditions Precedent

2 - Progress reporting and disbursement requests

3 - Annual review

4 - Annual audit

Grant process

key dates

Proposals Submitted

1.3 Screening

Eligible Proposals Selected

1.4

TRP Review

TRP Recommend

ations

TRP Chair/Vice Chair Sign-off (Final Board Approval)

1.5

Board Approval

1.6

TRP Clarification

(as required)

Call for Proposals

1.1 Future Round Planning

1.2 Guidelines for Proposal Refinement &

Call for Proposals

Board Approval

I. Proposals Management

Board

Approval

Grant

Start

Grant Renewal

(2 years)

Grant End

(5 years)

The Global Fund grant process

Grant

Signing

2.1 CCM Confirmation

of PR Nomination

PR Nomination Confirmed

Grant Signing & First Disbursement

2.2 LFA Selection

and Contracting

II. Grant Negotiation and First Disbursement

Grant Negotiations

2.4 Review of Budgets, Workplan,

and Indicators

2.5 Negotiation

(including conditions precedent)

2.6 First Disbursement

Preparation

LFA Contracted

2.3 PR Assessments

18 months since first disbursement

3.3 Phase 2 Grant

Renewal Process

Updated Grant

Agreement

3.5 LFA Management

Phase 2 Go/No Go Decision

3.4 Grant Extension

3.6 Grant Support

Performance-based Funding

3.1 Ongoing Reviews &

Disbursements

3.2 Grant Revisions

III. Performance-Based Funding and Grant Support

Performance-based Funding

3.1 Ongoing Reviews &

Disbursements

3.2 Grant Revisions

End of Phase 2 Support

ARCH/300704/3

Grant Agreement

• Grant Agreement: negotiated and signed for initial two years, with a scope of extending it to max. 5 years (i.e. Phase 1 and Phase 2 of the Grant).

• Grant Agreement, like other contractual agreements, provides legal basis for disbursing GF funds at agreed intervals and against proven performance;

• Grant Agreement has terms and conditions, applicable in any country where Global Fund support programmes to fight HIV, TB and Malaria, Conditions Precedent (CP) to disbursing funds, and any other special conditions depending on the country and implementation context;

Grant Agreement cont/d…

• Grant Agreement consists of Face Sheet (portrait of the Grant “at a glance”) with signatures of PR, CCM and Civil Society representatives

• Standard Terms and Conditions (applicable to all grants)

• Annex A - country and programme specific arrangements, and includes reporting timelines, CP and special conditions

• Performance framework (Previously called Attachment 1,2,3,4 and 5 to Grant Agreement) – parameters for disbursement decisions (targets vs. results)

• NEW! Annex B, which is the summary budget per expenditure category, program activity (objective/SDA) and implementing entity

Standard Terms and Conditions

Duties of the Principal Recipient:

� Prudent management of grant funds

� Management of Sub-Recipients

� Keep financial records for audit purposes

� Monitoring and Evaluation (M&E)

� Procurement policies

Grant Agreement, once signed by all parties, is posted and available on the Global Fund website under that country profile.Every manager involved in grant implementation should keep his/her own copy for reference and action.

Performance Based Funding

• Forms the basis for the entire Global Fund

grant management system

• Therefore if you want your grant funds to flow

smoothly, you need to implement

performance-based management systems &

procedures on the ground

• AND, because systems/procedures on the

ground are performance-based, you should

also find that you are able to perform better!

The PR representative from Western Cape

Province, South Africa, early October 2007

3.1 Performance-based Funding and Grant

Support

• The PBF Framework was developed to:

– Monitor and track grant progress and performance

– Link disbursements to achievement of targets

– Provide incentives for grantees/countries to focus on results and timely implementation

– Identify opportunities early in the grant lifecycle and expand efforts and address implementation issues

– Provide a tool for the CCM oversight and monitoring purposes

– Free up committed resources from non-performing grants for re-allocation to programs where results can be achieved

Grant Agreement

GRANT AGREEMENT ALLOWS THE GLOBAL

FUND TO:

�Stop disbursing funds due to lack of

performance (programmatic, financial) even

before the Phase 2 review

�Suspend or terminate the agreement due to

various other breaches, including the

mismanagement of funds (f. ex. no reporting,

non-transparent procurement practices, fraud,

etc.)

Conditions Precedent and Special

Conditions

“CP” = conditions precedent

�A condition which must be fulfilled before something else can occur, usually a disbursement

� “Special Condition” is a condition particular to the programme or PR in addition to those in the Standard Terms and Conditions

(“Until we fulfilled those CPs imposed on our grant, it took us so much time and energy that we ended up with lame walking!”, said a MoH Senior Official from one of the countries present at this workshop)

Conditions Precedent

• So, why are the CPs “imposed” on the PR/country, or

why are they necessary?

• And how are they fulfilled?

CPs address common capacity gaps to implement the

programme – NB! considering the increased volume of

funding (i.e. additional, from the Global Fund). The

implementation capacity gaps are typically established

during the assessment of the PR implementation

arrangements (so called LFA Assessment) and also

during the grant negotiation.

“CP” – Common capacity gaps

Program Management• Qualified staff and training

• Structure and clear lines of responsibility

(organigram)

• Systems for assessing, selecting and

monitoring sub-recipients

Financial Management and Systems• Qualified staff and training

• Systems for monitoring the financial

reporting of the PR and of Sub-Recipients

M&E• Qualified staff and training

• Systems for monitoring programmatic

reporting of SRs

• M&E plan that is not implemented

• Systems for verifying results and data

quality

Procurement and Supply

Management

• Over-cumbersome and slow

procedures

• Forecasting and quantification

• Storage capacity or distribution

systems

• Qualified staff and training

Other types

• Insufficient coordination between the

TB and STI directorate within the

MoH on HIV/TB related activities

• Etc.

“CP” – how are they fulfilled?

• CP either link to disbursement (by 2nd disbursement, PR shall provide evidence of…. for approval by the Global Fund) or they block the activity (procurement of health products)

Good News:

• Once the progress is reported (either attached to disbursement or separately) and there is evidence that the CP is fulfilled, the funding can flow again. LFA recommends lifting, Global Fund substantiates decision.

• If a CP is negatively impacting on the overall program, the PR may request a waiver, temporary or otherwise.

• The CCM and PR have opportunity to argue against a particular CP prior to signing the Grant Agreement!

Bad News:

• Once the CP are fulfilled, there is no time for complacency, and vigilance remains.

• Old, or new CP can be re-introduced at any point of time in the grant life cycle if any of the implementation aspects deteriorate, where the PR will be tasked to address the issues through a formal introduction of CP by means of Implementation Letters amending the Grant Agreement.

Reporting – Background

� PR will submit a DR/PU normally on a quarterly or semi-

annual basis

� The frequency is agreed during initial grant negotiations

and can change during implementation

� The frequency is influenced by:

– Country characteristics

– Grant characteristics

– Partner involvement and grant harmonization

� Funding is provided in advance for the next reporting

period plus a buffer of 1 quarter

Disbursement Request and Progress Update (DR/PU)

Reporting - Progress Updates/

Disbursement Requests

• It is through reporting on progress against

agreed targets, and the grant funds spent to

achieve those targets, that the disbursements

are effected to finance the country program;

• The reporting format used by the Principal Recipient to

report on grant achievements is called Progress

Update/ Disbursement Request (PU/DR);

• The PU/DR “mirrors” the performance framework for the Grant

Agreement in programmatic section, with results and comments

columns added to track performance and/or explain variations.

Grant

start

date

S1

1 year

45 days45 days 45 days

1st DR/PU:

funds

needed

for Q1 - 3

S2 S3

Grant

end

date

S4

2nd DR/PU:

funds

needed

for Q3 - 5

3rd DR/PU:

funds

needed

for Q5 - 7

4th DR/PU:

funds

needed

for Q7 - 8

DR/PU Request Summary: periods covered

Reporting - semi-annual basis

Annual reports

� Annual reports are required as part of programmatic

progress reports (Art 15 b.ii of grant agreement)

� Contain aggregated information on grant progress

Audits: GF Requirements

� SWAps – single audit acceptable but GF funded expenditures should be

clearly identifiable

� UNDP as PR –

• Annual financial statements certified by comptroller

• Biennial financial statements externally audited

� UNDP as PR in additional safeguards country – general rule applies

� GF funding forms a substantial proportion of PR’s source of funding – PR

audit acceptable

General rule: need for annual audit of program financial statementsGeneral rule: need for annual audit of program financial statements

Program financial statement sources and uses of funds statementProgram financial statement sources and uses of funds statement

Note following special situations:

Audits - When due

General rule: coincides with the PR’s fiscal year and not

anniversary of the grant start date. Audit report due within six

months of end of fiscal year. Note:

General rule: coincides with the PR’s fiscal year and not

anniversary of the grant start date. Audit report due within six

months of end of fiscal year. Note:

M6 M12 M18 M24

PR’s Fiscal Year 1

When program starts

before M6, audit is due

by M18

When program starts

after M6, audit is due

after M18

audited accounts may not be available

at the time of Phase 2 renewal

review

audited accounts may not be available

at the time of Phase 2 renewal

review

Audits: Responsibilities

Responsibilities of PR, LFA and FPMs

PRPR

• Engages the services of

the auditor

• Develops audit plan for

SR

• Facilitates performance

of audit

• Submits audit reports

• Responds to and

implements

recommendations

• Engages the services of

the auditor

• Develops audit plan for

SR

• Facilitates performance

of audit

• Submits audit reports

• Responds to and

implements

recommendations

1

LFA LFA

• Reviews acceptability of

auditor, ToR and SR’s

audit plan

• Reviews audit reports

and advises GF

• Reviews PR’s

implementation of audit

recommendations

• Reviews acceptability of

auditor, ToR and SR’s

audit plan

• Reviews audit reports

and advises GF

• Reviews PR’s

implementation of audit

recommendations

2FPMFPM

3

• Decides on the

acceptability of the

auditor, ToR and SR

audit plan

• Decides on appropriate

remedial actions in

response to audit

findings and

recommendation

• Decides on the

acceptability of the

auditor, ToR and SR

audit plan

• Decides on appropriate

remedial actions in

response to audit

findings and

recommendation