NMSA Operational Plan – 2017-2018 – DRAFT · Web viewAdditional warehouses store drugs and...

NATIONAL MEDICAL SUPPLIES AGENCY OF SIERRA LEONE

NPPU Reform Phase IIDraft Operational Plan 2017-2018 24 January 2017

**FOR MOHS AND NMSA STEERING COMMITTEE DISCUSSION**

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Acronyms

Central Government CMS Central Medical StoresDDMS Directorate for Drugs and Medical SuppliesDSS Directorate of Support Services (MoHS)GoSL Government of Sierra LeoneMoD Ministry of DefenceMoFED Ministry of Finance and Economic DevelopmentMoHS Ministry of Health and SanitationMoIA Ministry of Internal AffairsMoLGRD Ministry of Local Government and Rural DevelopmentNMSA National Medical Supplies AgencyNPPU National Pharmaceutical Procurement Unit

District Government DHMTs District Health Management TeamDMS District Medical StoresDMO District Medical Officer

NPPU Steering Committee/NMSA Advisory GroupDFID UK Department for International DevelopmentGF Global Fund to Fight AIDS, TB and MalariaUNICEF --USAID US Agency for International DevelopmentWB World Bank

Other Supply Chain PartnersCAIPA Crown Agents / International Procurement AgencyCHAI Clinton Health Access InitiativeDPSA Delivering Procurement Services for AidJSI John Snow InternationalMSH Management Sciences for HealthPDT Presidential Delivery TeamUNFPA United Nations Population FundWHO World Health Organization

TermsCRMS Continuous Results Monitoring and Support SystemFHC Free HealthcareKPI Key Performance IndicatorMOU Memorandum of UnderstandingPHU Peripheral Health UnitPSM Procurement and Supply Chain ManagementRRIV Report, Requisition and Issues VoucherSOP Standard Operating Procedure

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Table of Contents

Executive Summary..............................................................................................................................4

1. NMSA 2017-2018 Operational Plan Introduction...........................................................................7

2. Cross-Cutting Issues Affecting the NMSA.......................................................................................9

2.1 NMSA Mandate, At Launch and Over Time.................................................................................9

2.2 Relationships with the Government, Donors and Partners.......................................................10

2.3 The Business of NMSA - Insourcing and Outsourcing................................................................13

2.4 Upcoming Transitions................................................................................................................15

3. Financing and Resource Mobilization..........................................................................................17

4. 2017-2018 Operational Plan........................................................................................................19

4.1 Governance Recommendations.................................................................................................20

4.2 Procurement and Supply Chain Management Recommendations............................................23

4.3 Financing, Financial Management and Audit.............................................................................42

5. Transparency and Accountability................................................................................................48

6. The Way Forward – 2019 and Beyond.........................................................................................50

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Executive Summary

NMSA OPERATIONAL PLAN INTRODUCTION (1)Following the announcement of the restructuring of the National Pharmaceutical Procurement Unit (NPPU) in March 2016, the MoHS commissioned a reform effort to restructure the institution. Phase I of the reform concluded with the validation of the Phase 1 report by H.E. President Ernest Bai Koroma in August 2016. Phase II, which began in September 2016, has focused on executing key recommendations relating to governance and developing an operational plan for the National Medical Supplies Agency (NMSA). The Operational Plan is intended as a guide for the Board and the Management team as they establish the operations of the new institution. The plan is informed by the context in Sierra Leone and aims to limit change in the initial period; it also reflects international best practice. 2017 will be a year of considerable transition, and the NMSA will need to move quickly move to implement these recommendations and set up its initial operations.

CROSS-CUTTING ISSUES AFFECTING NMSA’S REFORM (2)In addition to the specific recommendations noted below, the Plan reviews four cross-cutting areas that are critical to the way that NMSA will conduct its business. These are:

NMSA Mandate (2.1): The Task Force recommends the NMSA assume the full extent of its statutory mandate in a phased manner. The immediate priority of the NMSA should be to ensure adequate supply of FHC drugs to the facilities of Sierra Leone. The overall legal mandate includes managing supply chains for other disease programs and Ministries, and these highly complex activities should be adopted by the NMSA over time. For activities that are part of NMSA’s legal mandate but that will not be part of its initial activities, MoUs and regulations should define the relationship between NMSA and the entity currently responsible (e.g. DHMT) for executing that function.

Relationships with Other Stakeholders (2.2): In order to effectively deliver its mandate, NMSA will have to closely coordinate with other key health sector stakeholders – including the Minister of Health and Sanitation, Directorate of Drugs and Medical Supplies (DDMS), Directorate of Support Services, Pharmacy Board, DHMTs, and other donors and partners. The section – as well as the rest of the plan – reflects the client / service provider split between MoHS and NMSA articulated in the Phase I Report.

Decisions on Insourcing and Outsourcing (2.3): Based on the Sierra Leone context and international experience, the Task Force recommends the following mixture of insourcing and outsourcing during the initial period of NMSA’s operations. This may change over time:

- Procurement with government funds is insourced / procurement with donor funds is outsourced

- Warehousing remains insourced- Distribution to the last mile (PHUs) is entirely outsourced, while NMSA retains the ability to

distribute to some number of hospitals through in-house resources

Upcoming Transitions (2.4): Over the course of 2017, NMSA will need to manage two key transitions: 1) from the interim NPPU Caretaker team in DDMS in mid-2017 2) from the DPSA consortium in late-2017.

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FINANCING AND RESOURCE MOBILIZATION (3)The estimated operating budget required for the 2017-2018 Operational Plan is US$21M, of which less than US$1M is currently committed. NMSA operational costs are estimated to be US$1.5M in 2017 and US$4.5M in 2018. Procurement costs are covered by DFID in 2017 and estimated to be US$15M in 2018. Current GoSL commitments to the institution are limited, though a new .5% withholding tax has been established to support the FHC Initiative and may provide sustainable funding. The path forward to allocate and manage this tax must be determined. Donor support will also be needed over the initial period of NMSA’s operations. Funding gaps must be closed prior to the launch of the new institution.

2017-2018 OPERATIONAL PLAN (4)

Governance (4.1): - Board: The Board will be composed of representatives of the GoSL and members selected for

their expertise. The Board will meet on at least a bi-monthly basis, in addition to sub-committee meetings, and will have key responsibilities in validating NMSA plans, budgets and processes.

- Advisory Group: The NMSA Advisory Group, chaired by the Minister and composed of key development partners, will provide additional oversight as NMSA launches operations.

- Management: The Management team will be selected through a transparent and competitive recruitment process. They will be regularly assessed against performance expectations.

- Coordination: The Free Healthcare Operations meeting and a new supply chain TWG will serve as important coordination forums; an annual coordination calendar should be developed.

Procurement and Supply Chain Management (4.2): - National Policies (4.2.1): The full suite of policy documents relating to drugs and medical

supplies should be revised to reflect the epidemiology of Sierra Leone as well as current international recommendations; this should occur with the full participation and agreement of all relevant stakeholders.

- Quantification (4.2.2): The national quantification process should be revisited, clearly defining: 1) roles of key stakeholders 2) timing of process 3) time period covered 4) validation Improvements to data (as defined in other sections) will strengthen the quantification process

- Procurement (4.2.3): NMSA will be responsible for all publicly-funded procurement of drugs and medical supplies, and should develop procurement SOPs based on international best practice. These should be validated and monitored by an active procurement oversight committee. Procurement with donor funds will be conducted by external bodies during NMSA’s initial period of operations. The NMSA Board and Advisory Group should set accountability targets for NMSA’s procurement processes; if targets are met, it would trigger a meeting of the NMSA Board, Advisory Group, and key development partners to assess whether NMSA could conduct some procurement using donor funds or a pooled fund mechanism.

- Central Warehousing and Operations (4.2.4): A purpose-built national warehouse is being planned under the Global Fund Health Systems Strengthening grant; this will become the primary national warehouse. In the interim, leased space will be used. The Task Force strongly recommends that the NMSA staff continue to pick and pack for PHUs at the central warehouse. SOPs for warehouse management should be developed based on international best practice.

- District-Level Warehousing and Operations (4.2.5): Management of DMS should remain under DHMTs for the moment given the numerous other programs using DMS for warehousing; this could be revisited once NMSA is fully operational. DHMTs will be important partners with NMSA, and staff should work closely with them. During the initial period, NMSA should

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maintain the system whereby pre-packed kits are brought to DHMTs to be audited, but over time, they could consider more direct modes of distribution.

- Distribution and reverse logistics (4.2.6): NMSA should outsource the majority of distribution to third-party logistics companies. To do so, it will have to develop very strong capabilities in vendor management. As soon as it is feasible, NMSA management should consider increasing the frequency of distribution, and tailoring distribution frequency to different facility levels. Spot-checks should be conducted to ensure distributions have occurred as indicated. NMSA should plan to provide reverse logistics services as a part of routine distributions.

- Ordering / Allocation (4.2.7): An interim model between “push” and “pull” should be used; this would deliver allocations that are aligned to facilities’ needs without placing too large a burden on facility staff to order accurately. Initial allocations for facilities should be generated based on a robust data collection process working directly with facilities, and these allocations should then be refined on an ongoing basis through the monitoring of facility-level consumption. How this process will be managed will be a key early decision of the new management team.

- Data (4.2.8): Data management should be strengthened at the facility, district, and central levels. This will require multiple coordinated efforts, and will include 1) ongoing support at the facility level 2) support to district staff to improve collection and management of facility data 4) strong central data systems to manage inventory and facility data.

- Stock security (4.2.9): NMSA and MoHS should introduce improvements in security across the supply chain. This would include strengthening physical security at warehouses and facilities.

Financial Management, Internal Audit, and Administration (4.3):- Financing (4.3.1): In order to establish operations, NMSA will require start-up funding for 2017

as well as funding for procurement and operations in 2018. The GoSL and donors are presently discussing resource mobilization.

- Financial Management, Internal Audit and Administration (4.3.2): o Financial management: NMSA should develop strong financial management processes

along with attendant accounting software based on international best practice. o Audit: NMSA should develop strong audit processes and manuals under the close

supervision of the Audit committee of the Board. o Human resources and IT systems: NMSA management should develop HR and IT SOPs and

systems to support the agency’s effective functioning.

TRANSPARENCY AND ACCOUNTABILITY (5)Through both its procurement and supply chain functions as well as the governance of the overall institution, NMSA will have to maintain the highest levels of transparency and accountability to build and sustain trust from all stakeholders. Multiple systems – including validation of processes, data sharing, participation of partners, and physical security – will interact to support accountability throughout the process. The NMSA Board will play a key role in supporting NMSA to achieve these goals.

WAY FORWARD (6)Over the next two years, the NMSA Board and Management team will have to develop long-term plans for the agency beyond what is outlined in the Operational Plan. This will include: defining how the agency will take on additional responsibilities that fall under its mandate, assuming additional operational responsibilities, and developing plans for greater financial sustainability. The NMSA will have to evolve to meet the changing needs of the health sector over time.

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1. NMSA 2017-2018 Operational Plan Introduction

Background on the Reform of the National Pharmaceutical Procurement UnitIn March 2016, the State House of Sierra Leone issued a press release announcing the complete restructuring of the National Pharmaceutical Procurement Unit (NPPU). The NPPU was the institution mandated by the Ministry of Health and Sanitation (MoHS) to be responsible for the management of medical supplies for all public health facilities, and particularly supplies related to the Free Healthcare Initiative (FHC). However, NPPU had been plagued since its inception in 2012 by a series of financial and operational challenges. Given the critical nature of the supply chain to the provision of public health services, as well as its importance to the activities included in the President’s Recovery Priorities, the decision was taken to launch a new health sector supply chain entity – the National Medical Supplies Agency (NMSA) – that could take over the mandate of the NPPU.

As a result of the State House release, the MoHS commissioned a reform effort in May 2016. The Honourable Minister Dr. Abu Bakarr Fofanah convened a Steering Committee to oversee the reform, comprising DFID, USAID, the Global Fund, World Bank and UNICEF; the Honourable Minister also commissioned a Task Force to execute the operational work of the reform, chaired by former Deputy Auditor General Vidal O. Paul-Coker. The initial Task Force included four international consultants with expertise across governance matters, procurement and supply chain management, and the financing and financial management of institutions. The Clinton Health Access Initiative (CHAI) provided Secretariat services to the Task Force.

Phase I of the reform effort took place between May and August 2016, during which time the Task Force executed an assessment of the situation and provided an initial set of recommendations across the areas of governance, procurement and supply chain management, and financing/financial management. These findings were summarized in a Phase I report, which was submitted to the State House for its approval. His Excellency Ernest Bai Koroma signed off on the findings of the report during a meeting with the Honourable Minister and Steering Committee members on 26 August 2016.

Phase II of the reform effort began in September 2016 with the aim of executing some of the initial, largely governance-related reforms described in the Phase I report while also further developing some of the more nascent recommendations related to PSM and financing/financial management. The majority of Phase II to date has focused on the development of a new Act of Parliament (the NMSA Act); the development of a new board structure; preparations for the recruitment of a new management team; planning for the financing of the new agency; and the development of this document – a 2-year operational plan that can be used to guide the Agency through its initial start-up period. Task Force support during Phase II has been provided by DFID, the President’s Delivery Team (PDT) and CHAI.

Purpose of the NMSA 2017-2018 Operational PlanThe passage of the proposed NMSA Act (which has not yet been tabled at Parliament), appointment of the Board and recruitment of the management team is only the first stage of what will be a long journey to cultivate an effective health sector supply chain in Sierra Leone. 2017 will be a year of considerable transition, and the NMSA will need to move quickly move to set up its operations such that it can begin to take on the responsibilities that are currently being managed in the interim by an MoHS Caretaker Team and third-party logistics providers.

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Given this context, the primary purpose of this operational plan is to equip the incoming Board and Management Team with a document to help guide the initial operations of NMSA. We would expect the recommendations of the Task Force contained herein to be acceptable to the Board and NMSA Management Team, as they are widely based on international best practice. However, the plan is not intended to be overly prescriptive. In many ways, the NMSA will have to chart its own course forward to achieve the goals of the institution. The document also aims to provide assurance to the MoHS as well as relevant donors and partners that there is a clear plan in place to ensure the success of the NMSA during the initial period of its operation. The remainder of this document covers the following:

- Section 2: Cross-Cutting Issues Affecting the NMSA: An overview of the broader topics of the NMSA’s mandate, relationships, business model, and upcoming transitions

- Section 3: Financing and Resource Mobilization: Provide initial recommendations on the financing of the Agency as well as its financial sustainability over time

- Section 4: 2017-2018 Operational Plan: Provide a clear and actionable framework of specific recommendations for the first two years of operation of the NMSA.

- Section 5: Transparency and Accountability: A summary of key transparency and accountability recommendations contained in the document

- Section 6: The Way Forward – 2019 and Beyond: Some brief thoughts on future priorities and challenges that the NMSA may face

Finally, this document is not meant to repeat in any great depth the material that was signed off by State House and the NPPU Steering Committee in the Phase I report, nor the statutory mandate described in the draft Act of Parliament. However, the plan does include some relevant historical background drawn from the Phase I report as well as references to the Act where we felt it would be useful to the incoming Board and Management Team as the primary audience for this document.

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2. Cross-Cutting Issues Affecting the NMSA

2.1 NMSA Mandate, At Launch and Over Time

Key Recommendation: The Task Force strongly recommends that the NMSA assume the full extent of its statutory mandate in phased manner. The immediate priority of the NMSA is to effectively manage the supply of FHC drugs. Its broader legal mandate includes managing supply chains for other disease programs and ministries, and these more complex activities should only be adopted by NMSA over time.

The vision of the NMSA is to ensure the transparent, cost-effective and timely availability of medical supplies to every health facility funded by the GoSL. To realize this vision, the Agency’s mandate as set forth in the NMSA Act is broad enough to cover all health sector supply chain activities. The NMSA Act states that the institution will “assume all responsibility for the procurement and supply chain management of all medical supplies for the Ministry [of Health and Sanitation]” and that in addition, “procurement of medical supplies with public funds by any public body must be procured through the Agency.” This is in line with the client / service provider split articulated in the Phase I report.

NPPU had a roughly similar statutory mandate outlined in its Act, but at the time of the State House announcement in March 2016, it had only achieved a portion of its mandate – namely, the management of the FHC supply chain. Despite falling within the mandate of the NPPU, supply chain functions for medical equipment, disease programs outside the FHC, and medical supplies for other line ministries have historically been managed by other government entities. The dissonance between the NPPU’s mandate as described in law and its technical and financial ability to fulfil its responsibilities in reality was a major challenge of the previous system.

To prevent a similar situation from befalling the NMSA, the Task Force strongly recommends that the NMSA Board and Management Team work closely with the MoHS and other stakeholders to ensure that the Agency is able to fulfil its statutory mandate in real terms over time. In practice, this language means the NMSA will be responsible for PSM services in the following areas:

- Free Healthcare Initiative: Includes all medical supplies previously managed by the NPPU.- Vertical disease programs under MoHS: Includes all medical supplies managed by partners and

the MoHS outside of the FHC, including Global Fund (GF)-funded programs.- Medical equipment: Includes all medical equipment historically managed by the Directorate of

Support Services (DSS) within the MoHS.- PSM services at the sub-national level: Includes functions currently managed by DHMTs/DMS.- PSM services for other public agencies: Includes all PSM services for medical supplies by the

Ministries of Local Government and Rural Development (MoLGRD), Ministry of Defense (MoD), and Ministry of Internal Affairs (MoIA).

On a practical level, the immediate uptake of each of these responsibilities by the NMSA would be difficult if not impossible for a fledgling institution. In addition, given the experience with the NPPU, there needs to be some ‘proof of concept’ of the NMSA as a functional, credible institution before it should be able to assume certain responsibilities, such as the management of PSM services for other disease programs that are currently being managed through other means within the MoHS.

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Given these considerations, the Task Force strongly recommends that the NMSA assume the full extent of its mandate in a gradual and phased manner. This was a key principle signed off by the NPPU Steering Committee and State House in the Phase I report, with initial responsibilities primarily focusing on the provision of FHC and Cost Recovery drugs. The management of the FHC supply chain is the most natural fit for the NMSA at launch, continuing the mission of the NPPU. Managing a Cost Recovery program is more complex for a number of reasons, and the Task Force recommends that the Board commission a full review of the costs and benefits of such a program. This is further discussed in Annex A.

In order for the NMSA to assume its mandate in this manner, beginning with FHC supplies, the Task Force recommends that the NMSA work to develop MoUs with organizations currently executing these functions during the early days of their operations. By putting in place a set of legal instruments to clearly define relationships and responsibilities during the NMSA’s start-up period, the new Agency can ensure that it has some oversight across the full range of areas that will eventually fall under its purview once it is able to assume its full statutory mandate. This will help avoid the confusion that surrounded the NPPU’s mandate and scope. MoUs will be required with:

1) The Directorates or programs managing the parallel health supply chains2) The district health management teams 3) The procurement units in other line Ministries that are known to procure medical supplies

The MoUs between the NMSA and these other entities can be renewed annually until the point at which the Management Team and Board of the NMSA are prepared to assume responsibility for these functions (e.g., when NMSA is prepared to assume warehousing and distribution for the HIV, TB and malaria programs).

Figure 1: NMSA Mandate at Launch and Over Time1,2,3

2.2 Relationships with the Government, Donors and Partners

Key Recommendation: The Task Force strongly recommends that the NMSA work to form strong bonds with the other institutions and departments within the Government of Sierra Leone (GoSL); donors within the health sector; and partners that can assist the NMSA Board and NMSA Management team in 1 NMSA will be responsible for procurement with government funds beginning in 20172 The management of district medical stores will likely remain under DHMT management until post - 20183 Responsibility for distribution will include outsourced transporters

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their work.

Overall Reporting Relationships

The Honourable Minister of Health and Sanitation has ultimate responsibility for all activities within the public health sector. However, the various government entities involved in the health sector supply chain have different reporting lines and levels of autonomy. This can lead to a situation of diffuse responsibilities, so it will be critical for NMSA to proactively coordinate with all of the entities below:

Table 1: Government Relationships Relative to the Health Sector Supply Chain

Name Type of entity Reports to:Directorate of Drugs and Medical Supplies (DDMS)

Ministry Directorate Honourable Minister of Health and Sanitation

Directorate of Support Services


Directorate of Policy, Planning, and Information


Pharmaceutical Board of Sierra Leone

Semi-autonomous regulatory body

Pharmacy Board of Directors, currently chaired by Director of Drugs and Medical Supplies

National Medical Supplies Agency

Semi-autonomous agency (body corporate)

NMSA Board of Directors

Ministry of Health and Sanitation – Central Level4

Office of the Minister of Health and Sanitation The Honourable Minister is the health sector lead and retains overall responsibility for the activities of the health sector. The Minister also chairs the NMSA Advisory Group of donors and partners, which includes DFID, USAID, World Bank, the GF and UNICEF. The Minister can help bridge communication among all of the GoSL agencies involved in the health sector supply chain.

Directorate of Drugs and Medical SuppliesThe DDMS is the MoHS directorate with responsibility for setting policy on medicines and consumables, selection of and quantifying national need for health commodities, supporting rational use, building public sector prescriber capacity, and managing information on consumption and use of medicines. A close relationship with a well-functioning Directorate of Drugs and Medical Supplies is essential to the success of the NMSA. The “National Policies” and “Quantification” sections of this document are included because of the interdependencies between DDMS and NMSA.

Pharmacy Board of Sierra Leone The Pharmacy Board of Sierra Leone is a semi-autonomous agency within MoHS responsible for regulating pharmaceutical manufacturers, pharmacy professionals, pharmaceutical products and medical devices and the advertisement thereof to ensure safety, efficacy, and quality. The Pharmacy

4 Activities relevant to the Directorate of Drugs and Medical Supplies and the Pharmacy Board of Sierra Leone appear in this plan, as these three health sector actors are jointly responsible for the entirety of the health sector supply chain.

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Board also issues waivers to procurement agents. The Chairman of the Pharmacy Board is the Director of Drugs and Medical Supplies. The NMSA will have to work with the PBSL to ensure that its suppliers are registered and that its supplies meet the standards outlined in the Pharmacy and Drugs Act.

Directorate of Support ServicesThe DSS has historically been responsible for the procurement of medical equipment. The NMSA management team will have to work with the DSS to understand past quantification efforts and procurement of medical supplies and develop a plan to transition this stream of work to the NMSA. The transition must be complete by the end of 2018, if not earlier.

Ministry of Health and Sanitation – District LevelThe District Health Management Teams (DHMTs) are critical to the success of the supply chain. They have historically been responsible for supporting facility staff in appropriate inventory and data management; working with the central level to develop distribution plans; and managing a warehousing operation in each district at the District Medical Stores (DMS). They previously conducted picking and packing for facilities at the DMS while the NPPU was in place.

More recently, the DHMTs have served more of a supervisory role. They continue to be responsible for working with facilities and participating in the development of distribution plans; however, the more operational work of picking and packing for facilities was shifted from the DMS to the central level to streamline the operations of the FHC program. DHMTs still audit a portion of kits packed for facilities at the central warehouse – a model that was introduced by CAIPA, a third-party logistics provider.

Given some of these changes, there has been a lack of clarity and communication between central and district levels on what DHMT staff can expect moving forward, and what their roles and responsibilities will be within the health sector supply chain under the NMSA. This has led to some frustrations among the district teams, which threatens the success of the overall supply chain. The launch of NMSA will provide an opportunity to reverse this trend.

The Task Force strongly recommends that the NMSA move to establish collaborative and engaged relationships with the individual District Medical Officers (DMOs) and DHMTs, beginning with the MoU arrangements described in the preceding section. The full breakdown of responsibilities between the NMSA and DHMTs will need to be agreed and set down in the above-referenced MoUs. The working arrangement should be developed to yield the best possible collaboration to ensure that facilities receive appropriate support; distribution plans are accurate; and feedback on supply chain functions is regularly provided. Because of the critical role DHMTs play in supporting Peripheral Health Units (PHUs), the Task Force also recommends that NMSA should have dedicated “District Focal Persons” to proactively engage DHMTs in their work.

Other Line Ministries The Ministry of Local Government and Rural Development, Ministry of Defense, and Ministry of Internal Affairs have all historically procured drugs – for local councils, the army and the police, respectively. Under the NMSA Act, the responsibility for procurement of all medical supplies with public funds will fall to NMSA. Similar to the recommendation for the Directorate of Support Services, the NMSA will have to establish relationships with these line ministries and determine processes through which their needs can be served, in line with the NMSA Act.

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Donor Agencies There are a number of donors in the Health Sector, most notably the organizations represented in the NMSA Advisory Group – DFID, USAID, World Bank and the Global Fund. A key lesson learned from the previous NPPU is that relationships with these organizations, including resource mobilization and funding requests, must be coordinated within broader conversations that MoHS has with these same organizations about health sector financing. The MoHS remains the lead relationship holder and must be included in all correspondence with these institutions. The NMSA Advisory Group was arranged in part to ensure that NMSA’s resource mobilization efforts fit into a broader health sector financing vision. Partners and Technical Assistance Agencies There are a number of other supply chain actors who may be able to provide support to the NMSA. This includes UNICEF, which is currently acting as a procurement agent for FHC drugs; Delivering Procurement Services for Aid (DPSA), which is warehousing and distributing these drugs; UNFPA, which supported the NPPU with financial resources for staff, trainings and other matters; WHO, which is in the process of hiring an Essential Medicines Advisor with pharmaceutical expertise; Management Sciences for Health (MSH), which is funded by USAID to provide technical assistance services to the DDMS; and CHAI, which is funded by DFID to provide technical assistance services to the NPPU Caretaker Team. The NMSA Board and NMSA Management team should have introductory meetings with these partners, and determine how and where the NMSA would most benefit from support moving forward.

2.3 The Business of NMSA - Insourcing and Outsourcing

Key Recommendation: The Task Force strongly recommends that the NMSA used a mixed model to outsource some portion of its functions while retaining others in-house.

The topic that received the most attention and discussion during the development of the Phase I report was the matter of insourcing and outsourcing, and specifically how much of NMSA’s mandate should be contracted to the private sector. Opinions among the MoHS and Steering Committee members varied, and after a series of discussions it was agreed that a mixed method was likely best. A table summarizing the advantages and risks of this approach appears below. In brief, the Task Force recommends a mixed approach during the initial period of NMSA’s operation (2017-2018):

Procurement with GoSL funds is insourced / procurement with donor funds is outsourced Warehousing remains insourced Distribution to the last mile (PHUs) is entirely outsourced, while NMSA retains the ability to

distribute to some number of hospitals through insourced transportation

To help inform these recommendations, the Task Force also revisited the analysis of other supply chain agencies that have recently been through similar reforms. The recommendations bridge some of the lessons learned from these other country examples, which often follow a similar pattern – outsourced procurement with donor funds until the supply chain entity has proven itself or a mixed model between donor and public funds; insourced warehousing; and outsourced last-mile transportation.5 In other countries that have recently completed reforms, the business model has also evolved – in some cases

5 For example, the Kenya Medical Supplies Authority (KEMSA) operates a large procurement unit that has taken on the management of some donor funds; KEMSA also has an expansive central warehousing operation with dedicated staff for picking, packing, and loading of goods. However, the organization decided it would not be prudent to become a fleet management company, and outsources the vast majority of its transportation arrangements to third-party firms.

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over many years. We expect that the same would occur within NMSA over time, given the costs and benefits related to accountability, cost, capacity building, national ownership and other concerns.

Table 2: Advantages and Risks of Outsourcing

General Advantages and Risks of Outsourcing

Advantages RisksTransparency, Accountability, Performance

• Would require NMSA to demonstrate acceptable transparency and accountability levels in a given function in order to transition responsibilities

• May address donor concerns regarding risks in certain area

• External firm could bring a private-sector focus and international best practice

• Requires very strong vendor management; contractual arrangements may be complex

• Outsourcing one function and insourcing others would necessitate high level of coordination

• If contract management is not effective, vendor may under perform

Cost and Funding

• Risks of financial loss or fraud in executing the designated function is transferred to private sector

• Can encourage more reliable funding for NMSA given partners are not yet comfortable using NMSA’s systems

• Can lead to lower costs if firm can achieve greater efficiencies and economies of scale

• Can in some cases be more expensive if provider has no clear advantage of scale/efficiency over the public sector

Capacity building and national ownership

• Depending on arrangement, could help grow a small cadre of logistics and supply chain professionals for GoSL

• Depending on arrangement, may not build technical expertise of government in contract management or in procurement/warehousing/distribution

Advantages and Risks of Outsourcing Specific to NMSA’s FunctionsAdvantages Risks

Procurement6 • Limits government exposure to risk in a domain that is particularly prone to challenges

• May increase the timeliness of the procurement process and delivery of goods

• May require waivers from the Pharmacy Board; which can be time-consuming

• While outsourced products would be prequalified, skipping standard processes runs counter to the country’s regulatory framework

Warehousing7 • Any security risks / losses outsourced to private agency

• Firm could have strong data management practices that improve security and understanding of stock availability

• Likely more expensive that insourcing, as GoSL has already secured funding for new central warehouse

• May limit government sight of stock; make distribution planning difficult

Distribution8 • Focuses NMSA’s mission on managing the overall health of the supply chain, as opposed to managing a fleet company - very time and resource intensive

• Scope to mandate certain controls under an outsourced contract, with security risks /

• Limited number of local firms have deep knowledge of PHU and district landscapes

• NMSA would likely need to retain some surge capacity for emergency situations

• Outsourcing to a private firm may make

6 Systems for Improved Access to Pharmaceuticals and Services (SIAPS) Program. 2014. Promising Practices7 Ibid8 Ibid

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losses outsourced to firm• Vendors whose sole focus is transport likely

bring additional expertise• Functionality of trucks often an issue in the

insourced model, which often means deliveries do not occur in a timely fashion. This is greatly reduced in outsourced model; vendors will not be paid without delivery

a vendor managed inventory situation more complicated depending on how responsibilities are allocated across NMSA and contractor

2.4 Upcoming Transitions

Key Recommendation: The Task Force strongly recommends that NMSA work closely with the NPPU Caretaker Team and DPSA to carefully transition current supply chain activities in 2017.

Transition from NPPU Caretaker Team (Mid-2017)The MoHS created an interim NPPU Caretaker Team in March 2016 to ensure the continuity of supply chain-related services for FHC during the reform effort, largely led by the Directorate of Drugs and Medical Supplies (see Annex F for a full list of the NPPU Caretaker Team). The team is focused on the FHC supply chain; the management arrangements for the provision of supply chain services within other health sector areas – such as those for HIV, TB and malaria – have not changed as a result of the NPPU reforms, and continue to be managed in a parallel fashion.

Given resource constraints within the GoSL, the NPPU Caretaker Team has played a managerial and coordinating role since its establishment. Procurement, warehousing and distribution services formerly provided by NPPU have been largely outsourced to external parties. UNICEF is currently providing procurement services for FHC drugs through their supply division in Copenhagen, while the DPSA consortium is providing warehousing and distribution services. DFID has stepped in to fund this arrangement through the end of 2017. Some small amounts of GoSL-funded stocks of FHC drugs remain under the purview of the NPPU Caretaker Team, and these are used to supplement distributions where possible and necessary. Stock that was procured to combat the Ebola epidemic is also being managed by the NPPU Caretaker Team, though the vast majority of this stock is being stored and not distributed.

The Task Force recommends that a handover process begin in Q2/Q3 2017 once the NMSA management team is in place. The new NMSA management team should jointly oversee one distribution of FHC drugs with the NPPU Caretaker Team before considering the handover fully complete. That will allow the management team to fully understand the processes and systems that are currently in place. The incoming Management Team will have to work closely with the NPPU Caretaker Team to hand over:

- Responsibilities: The current responsibilities being executed across the team in regards to management, operations, audit and finance

- Assets: These will largely comprise FHC and Ebola stocks as well as the NPPU bank accounts- Information: This should include documents stretching back to the inception of the NPPU in

2012, including documents from all former management teams

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Transition from the DPSA Consortium (Late 2017)As mentioned above, the NPPU Caretaker Team is currently working closely with UNICEF and the DPSA consortium, funded by DFID, to ensure continuity of services for the FHC supply chain. This funding is currently slated to run through the end of 2017. After working through the first transition described above with the NPPU Caretaker Team, the incoming NMSA management team will also have to prepare for the transition of warehousing and distribution responsibilities currently being managed by DPSA. During Q4 2017, the NMSA management team will have to work with the DPSA team to transition responsibilities, assets and information similar to those outlined above. It is likely that the procurement of FHC supplies using donor funds will continue to be outsourced, so NMSA will not have to manage a transition of procurement services during this time period.

Receipt of Final Batch of MoHS-Procured Medical Supplies (Late 2017)The DHMS recently completed a quantification of FHC and Cost Recovery drugs that was handed over to the DSS to procure. That procurement is currently ongoing, and DDMS staff-members have publicly confirmed with a variety of partners that those drugs will likely arrive towards the end of 2017. The incoming NMSA management team should also work with the DDMS and the Directorate of Support Services to monitor the pipeline for these drugs and prepare to receive and manage them once they arrive in country. This should be the last procurement of medical supplies with MoHS funds that is executed by an entity other than the NMSA, and NMSA will have legal responsibility for these drugs once they enter the country.

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3. Financing and Resource Mobilization

A Note to Reviewers: As there are discussions now ongoing within the government and amongst donors on resourcing the new agency, we hope that this section will be revised substantially before the plan is handed over to the NMSA Board and Management Team. In particular, we have highlighted critical funding gaps in the operational plan for the review of the MoHS and NPPU Steering Committee – these are meant to inform the ongoing discussions on resource mobilization, but will hopefully be resolved to a large extent prior to the finalization of this plan and the appointment of the Board.

Key Recommendation: The Task Force strongly recommends that the GoSL ensure that sufficient resources are made available for the NMSA to conduct its business. The Board and NMSA Management Team should advocate where appropriate for sustained and/or increased government resources, and should keep in close touch with key donors through the NMSA Advisory Group.

Operational Plan CostsThe Task Force estimates that the operational costs for the NMSA over the 2017-2018 period will be approximately US$21M, of which less than US$1M is committed and US$20M remains unfunded9. An additional US$8M in one-time costs is needed, US$7.5 of which has been committed by GF for construction of a new central warehouse. This is an initial estimate, and we fully expect that these costs will need to be adjusted upwards or downwards once the Board and Management Team assume responsibility for the organization and begin to take financial decisions. These costs estimates include the estimated costs of commodity procurement and shipping for FHC as well as their management, warehousing and distribution; staff salaries and administration costs; and the costs associated with the Board. The estimates exclude costs for areas beyond the NMSA’s initial mandate described in Section 2.1, such as the procurement, warehousing and distribution costs for each of the other vertical disease programs, or for medical supplies procured by other ministries.

The costs of technical assistance providers are not included in the budget at present. A discussion amongst the NMSA, MOHS and Advisory Group will be required to take decisions on the appropriate level of TA for NMSA and the manner in which this is provided – by a logistics provider, NGO, consulting firm, or other technical agency.

Committed Funding for Operational Plan

Government of Sierra LeoneThe GoSL has allocated approximately US$90K for NMSA operations in 2017 through the annual government budgeting process. In addition, the GoSL has introduced a 0.5% increase to the withholding tax to support FHC. Some funding has reportedly been collected in 2016, and the language related to the tax is being refined in the 2017 Finance Bill (due to pass Parliament by end January 2017). This tax, if it can be separated into a dedicated fund, could represent a significant and ongoing source of core operational funds for the NMSA. These conversations are ongoing during January 2017.

Donors

9 Note this figure does not include costs for procurement, warehousing and distribution in 2017, which have been committed by DFID

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At present, there are several major donor commitments for the 2017-2018 period. DFID has committed to fund all procurement, warehousing, and distribution through the end of 2017 through UNICEF and DPSA, which helps limit the funding needs in the first year of NMSA’s operations. The Global Fund has committed US$7.5M in capital costs for the construction of a new central warehouse that could cater for all vertical disease programs, along with roughly US$500K in operational costs to support the ongoing operations of NMSA. USAID is also supporting the supply chain system through one of their grantees, MSH, which is currently supporting the DDMS.

Critical Funding Gaps in Operational Plan While these commitments are helpful, a number of gaps remain – most urgently core operational funding without which the NMSA will not be able to launch. This includes basic salary support for the management team, fees for the Board, and other operational and administrative costs required to start a new institution. Donors are unlikely to fund core costs such as these, which suggest that funding will need to be allocated through the GoSL budgets. The most significant gaps and urgent gaps to fill at present that would enable NMSA’s launch are the following:

Commodity Procurement, Warehousing and Distribution in 2018: US$15M for the procurement of FHC medical supplies in 2018, along with US$2.8M for warehousing and distribution

Management and Administration costs in 2017 and 2018:o US$1.2M per year for salary costs during the initial period (or approximately US$900K

for the portion of 2017 when the management team will be in place)o US$250K per year for office rental space and office administration costs

Section 3.3 contains additional detail on recommendations regarding financing and resource mobilization, as well as financial management practices. However, these commitment and gaps are highlighted here to ensure a common understanding of how critical it is to jointly work together NMSA is both funded at launch and sustainable over time. Without a concerted effort to fill the current gaps, the NMSA will not be able to fill its mandate.

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4. 2017-2018 Operational Plan A Note to Reviewers: Please note that this will continue to be refined and updated over the coming days, including work with PBSL to include a standalone section on Regulation.

This Operational Plan is designed to achieve the goal of a fully operational NMSA by end- 2017. Recommendations in the plan are rooted in the Sierra Leone context and guided by international best practice. The timing defined in the operational plan would allow for the NMSA management team to assume responsibility from the NPPU Caretaker Team in mid-2017 and then assume full responsibility of activities being outsourced to DPSA by the end of 2017. The timing put forward in the operational plan assumes a number of milestones are met:

Governance, Transitions and Handovers:- February 2017: NMSA Board is selected and in place - March 2017: NMSA Board will begin its regular bi-monthly meeting schedule, and will meet as

planned in May, July, September and November 2017 to review and validate the work of the Management Team and to assist in resource mobilization and problem-solving

- April 2017: NMSA Management Team is hired - May 2017: NMSA Management Team agrees a transition plan with the NPPU Caretaker Team - June 2017: Initial NMSA staff, at least for Procurement, Operations (warehousing), IT and

Finance are largely in place - July 2017: SOPs and Annual plans for the Departments are approved by the Board - July 2017: NMSA Management formally takes on work of NPPU Caretaker Team - Dec 2017: NMSA Management Team is prepared to take on DPSA warehousing

(in-sourced)/distribution work (likely mixed in-sourced / outsourced) Financing:

- April 2017: Financing for 2017 NMSA Management Team salaries is made available - June 2017: Financing for 2017 NMSA staff salaries and other operations is made available - Q2 2017: Financing for 2018 Procurement (to be executed external to NMSA) is available - Q3 2017: Financing for 2018 Warehousing and Distribution is available

The plan follows the following outline:

4.1 Governance4.2 Procurement and Supply Chain Management

National PoliciesQuantificationProcurementCentral Warehousing and OperationsDistrict-Level Warehousing and OperationsDistribution and Reverse LogisticsOrdering and AllocationDataStock Security

4.3 Financing, Financial Management and AuditFinancingFinancial Management, Internal Audit and Administration

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4.1 Governance Recommendations

4.1.1: GovernanceGovernment Agency Responsible: NMSA

Goal: NMSA governance provides the guidance and accountability the agency needs to become highly functioning and transparent; the NMSA’s business is conducted and shared in a transparent manner.

Current Status:

Previous NPPU Governance Challenges: The previous NPPU faced a significant number of governance challenges that have been considered during the reform process, and these have been largely addressed in the development of the NMSA Act. A full list of these challenges also appears in the Phase I Report. The Board and NMSA Management Team should consider these lessons learned regularly as they work to establish the NMSA. Previous governance-related challenges include:

- Board: The Board of Directors of the NPPU was not established until more than one year after the Unit was formed. Its membership was composed primarily of civil servants and did not include any experts in PSM functions.

- Management: The management team of the NPPU was initially supported by a partnership between external contractors from Crown Agents and local counterparts. There were issues of trust between the two parts of management, and the contracting arrangement ended earlier than planned. Recruitment processes were not conducted in a competitive manner.

- External relationships: NPPU did not have any external oversight body to help provide guidance to the Board and Minister on the functioning of the unit. Relationships with donor and partners were often strained, and resource mobilization suffered as a result.

Current NPPU Governance: At present, NPPU management team functions have been assumed by the NPPU Caretaker Team from DDMS. The FHC Operations meeting is chaired by the NPPU Caretaker Team and includes all key partners involved in the supply chain. This group has responsibility for monitoring procurement, warehousing, and distribution for the FHC program.

Reform Governance: The NPPU Steering Committee, chaired by the Honourable Minister of Health and Sanitation, is the primary governance body for the reform. This group has now been converted into the NMSA Advisory Group. The Task Force on NPPU Reform, chaired by former Deputy Auditor General Vidal O. Paul Coker, was brought together to enact the governance-related recommendations in the Phase I report and to develop the operational plan.

Recommendations:

Board: Given the critical importance of the Board to the functioning of the institution, many provisions relating to the Board of Directors are set forth in the NMSA Act and will not all be covered in detail in this document. Some critical decisions taken or recommendations relating to the Board include:

- Composition and Selection: As defined in the NMSA Act, the Board will include representatives from the GoSL (MoHS, MoFED, and MoLG), civil society, and members selected for their expertise. Government representatives on the Board will be nominated by their institutions.

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Representatives of civil society and Board members selected based on their expertise will be selected through a nomination process. Full detail of the composition can be found in Annex B.

- Board Charter: The NMSA Board should work to develop a charter that governs its operations and business, building on the initial rules laid out in the NMSA Act.

- Board Code of Conduct: The Act stipulates that the Minister shall create and share a Board Code of Conduct which, along with its charter, will help govern its operations and business.

- Board Committees: The NMSA Board should agree and appoint its committees; the one committee mandated in the Act is the Audit committee. The Task Force recommends that the Board also establish committees relative to Procurement; Operations; and Finance. This will require the development of ToRs for these Committees by the Board and its Secretary.

- Meeting Schedule: The Board must hold regular meetings on at least a bi-monthly basis, with a quorum of 6 members. Remuneration for Board participation is determined by the Minister in consultation with the NMSA Advisory Group.

- Reporting Schedule and Framework: The Board is expected to issue regular reports on its progress; this will require the Board to develop a set of Key Performance Indicators (KPIs) for NMSA. Details on the expected reports and their frequency can be found in Section 22 of the Act.

Management team: The effectiveness of the management team will be a critical determinant of the success of the organization. Recommendations include:

- Organizational Structure: The Task Force recommends the Board utilize the org chart below as a guideline for the organizational structure and level of staffing needed during the initial period of NMSA’s operation as it begins the process of hiring the Management Team. Depending on key operational decisions taken, this organization chart will evolve to meet the needs of the system.

- Recruitment of Staff: The NMSA Management Team must be selected through a transparent and competitive process order to recruit individuals with the best available professional qualifications, as stipulated in Sections 16(1) and 17(3) of the NMSA Act. The NMSA Advisory Group will work with the Board to select an external recruiter based outside of Sierra Leone that can lead a rigorous process of soliciting and reviewing applications and interviewing applicants. This is in line with previous recruitment efforts for similar agencies in Sierra Leone (e.g., IHPAU).

- Performance Management: The NMSA Management Team should have clearly defined performance expectations against which they are formally evaluated on a semi-annual basis. Results of these evaluations should be shared with the Board. The Managing Director’s performance must be evaluated by the Board, as stipulated by the NMSA Act.

The recommended organogram can be found in Annex D.

Transitional governance: The NMSA must navigate through several transitional situations during its initial period of operation. Recommendations include:

- Communications: Given previous challenges with the NPPU and CMS, the establishment of the NMSA should be clearly communicated with all stakeholders and the public. Communications should make clear that the new agency is a semi-autonomous body to be managed by well-qualified public servants. Communications should include:

o Press release about the passage of the Act of Parliament, and the absorption of all former NPPU or CMS functions by NMSA

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o Press interviews with the Honourable Minister and the Board Chair once the Chair is appointed

o Communications with PHU staff through DHMTs and other means (e.g. one-page documents explaining the transition)

- MoUs with Key Government Stakeholders: As described in Section 2.1, the NMSA will need to put in place written agreements with other key government bodies – particularly the DHMTs and other vertical disease programs – to agree the relationships and management arrangements that the NMSA can expect at launch and over time.

- Transition Plan with NPPU Caretaker Team: The NMSA will also need to agree on a detailed transition plan with the NPPU Caretaker Team to hand over responsibilities, information and assets in the first months of its operations. The Task Force recommends that a plan is developed within the first month after the management team is hired, and that the transition occurs no later than 2-3 months after that (depending on FHC distribution planning and schedules).

- Handover of assets from NPPU Caretaker Team and DPSA: The NMSA team should work with the NPPU Caretaker Team to conduct a final costed stock-take of all medical supplies and other assets under its purview, which must be finalized to facilitate the handover in July 2017. The same will have to be completed for any assets being handed over by DPSA in December 2017.

Communications and Coordination: The NMSA should support the establishment of good coordination structures with GoSL and partners:

- Communications: NMSA should develop an ongoing communications plan to engage the government, donors, partners, health workers and patients to convey NMSA’s mandate and services

- Coordination forums: Two forums for coordination will be important to the NMSA: o The FHC Operations meeting should continue. The types of information (e.g.

procurement and distribution plans, results of monitoring activities) that will be shared through this forum should be clearly defined and consistently adhered to.

o A new Supply Chain Technical Working Group, bringing together supply chain actors across all vertical supply chains, should be convened.

- Coordination calendar: There should be an annual calendar for quantification, procurement, and distribution that is agreed upon and widely shared among stakeholders.

Way Forward:

Short Term: January-June 2017Activity Responsible Target end date

1 Announce passage of Act of Parliament through press release

Honourable Minister with Task Force support

February 6, 2017

2 Develop Board remuneration package Honourable Minister; NMSA Advisory Group

February 13, 2017

3 Appoint Board Chair and members State House; Honourable Minister of Health and Sanitation; NMSA Advisory Group

February 28, 2017

4 Conduct press interviews about establishment of NMSA

Honourable Minister and Board Chair

March 6, 2017

5 Develop performance expectation and NMSA Board and Task Force April 1, 2017

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review guidelines for NMSA Management Team in advance of their recruitment

6 Recruit NMSA Management Team Honourable Minister of Health and Sanitation; NMSA Board; NMSA Advisory Group

April 30, 2017

7 Agree on detailed transition plan and transition timelines with NPPU Caretaker Team

NMSA Management Team; NPPU Caretaker Team

May 31, 2017

8 Develop communications plan for NMSA NMSA Management Team June 1, 2017Develop Board Charter NMSA Board June 30, 2017

9 Develop Board Code of Conduct Honourable Minister; NMSA Advisory Group

June 30, 2017

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Establish Board Committees NMSA Board June 30, 2017

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Regularly report on the activities of the NMSA as stipulated in the NMSA Act

NMSA Board; NMSA Management Team

Ongoing

Medium Term: July – December 201712

Complete transition from NPPU Caretaker Team

NMSA Management Team; NPPU Caretaker Team

July 31, 2017

13

Complete MoUs with all DHMTs and vertical disease programs stipulating management arrangements


July 31, 2017

14

Develop coordination calendar for all key activities

MoHS – DDMS and NMSA Management Team

August 1, 2017

15

Complete the development of NMSA regulations


Sept 30, 2017

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Convene new supply chain technical working group

MoHS – DDMS and NMSA Management Team

October 31, 2017

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Conduct first performance review for NMSA Management

NMSA Board November 1, 2017

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Communicate with PHUs about transition from DPSA to NMSA

NMSA Management Team December 1, 2017

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Ongoing

Long Term: By End 201820

Conduct regular performance reviews for NMSA Management Team

NMSA Board Ongoing – every 6 months

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Ongoing

4.2 Procurement and Supply Chain Management Recommendations

4.2.1: National Policies Responsible Government Entity: MoHS – DDMS

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Goal: The full suite of policy documents relating to drugs and medical supplies should be revised to reflect the epidemiology of Sierra Leone as well as current international recommendations; this should occur with the full participation and agreement of all relevant stakeholders. The policies to be revised include the Standard Treatment Guidelines, the National Formulary, and the Essential Medicines List.

Current Status:

National Policies in Need of Revision: Sierra Leone’s Standard Treatment Guidelines, last revised 2012), National Formulary, and Essential Medicines List (partially revised 2016) form the basis of the country’s policy environment for medical supplies. A revision of all three documents supported by the WHO is due to begin starting in 2017.

Recommendation:

National Policies in Need of Revision: The MOHS should draw on partner support currently being offered by WHO and MSH to revise the above-mentioned policies. This will help facilitate an environment where all supply chain stakeholders can agree on clear decisions on product selection for the Free Healthcare program as well as other vertical disease programs.

Way Forward:

Short Term: January-June 2017Activity Responsible Proposed End Date

1 Revise Standard Treatment Guidelines MoHS - DDMSWith support from partners

TBD depending on hiring of consultant

Medium Term: July – December 20172 Revise National Formulary MoHS - DDMS

With support from partnersTBD by end of 2017

3 Revise Essential Medicines List MoHS - DDMSWith support from partners

TBD by end of 2017

Long Term: By End 20184 Additional policy revisions (e.g.

National Drug policy)MoHS - DDMSWith support from partners

TBD by end of 2018

4.2.2: QuantificationGovernment Agency Responsible: MoHS – DDMS

Goal: The quantification process is clearly defined in terms of activities and timelines, includes explicitly defined roles for select relevant stakeholders, and is agreed and signed off by all parties. The official quantification is the basis for the vast majority of NMSA’s procurements, with few exceptions. The process is based on an improved set of consumption and epidemiological data.10

Current Status:10 Improvements in epidemiological data are subject to improvements within the broader health sector, and improvements in consumption data will be addressed in the sections covering Data and Allocation / Ordering.

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Process for quantification development: A National Quantification Committee convened by the DDMS meets to define the national need for the FHC program. Quantifications for other programs are generally put together by the individual program in question, with occasional input and support from DDMS. The timelines and process for the quantification are not always clear or adhered to, and the roles of the various stakeholders within the MoHS quantification process are not well-defined.

Validation and adherence: The National Quantification Committee has 70 members in the current ToRs, leading to diffuse responsibility for validation. Historically, the roles of the districts, donors, and NPPU in validating the quantification have not always been clearly defined, causing delay and conflict. There is limited reconciliation of what is procured against what is quantified, and limited accountability when discrepancies are identified. Procurements sometimes do not align to the quantified national need.

Data to improve quantification practice: A key challenge for FHC quantification is insufficient data to estimate the need for commodities – especially a lack of reliable consumption and epidemiological data. Details on the current status of data and recommendations to improve data are in the Data section.

Recommendations:11

Process for quantification development: MoHS and NMSA should work to refine the FHC quantification process through meetings with the National Quantification Committee. This should include:

- Time period: Agree on the time period the quantification documents will cover. The Task Force recommends that quantifications cover a 24-month period, to be revisited every 12 months.

- Timing: Align quantification process with any linked government or key donor budgeting activities. For example, quantifications should be completed by the time government budgeting processes begin such that the budgeting process accurately reflects drug needs

- Roles and responsibilities: Agree on a clear understanding of stakeholder roles and responsibilities in the process. Revise membership of committee to include only those whose contributions are essential to the process.

Validation and adherence: The national quantification should form the basis of all NMSA procurements, and any exceptions to this would have to have strong justification (e.g., emergency procurement). The NMSA Board and NMSA Advisory Group should work with MoHS to define the process that will be followed to validate the quantification. The Task Force recommends that any serious questions or disagreements that NMSA may have on any quantification it is requested to procure will be resolved by a committee chaired by the Minister and including MoHS, NMSA and the NMSA Advisory Group. This is especially important for donor-funded procurements, as donors will need assurance that what they are funding is providing value for money while meeting the medical supply needs of Sierra Leone. Such disagreements should be able to be avoided by implementing a strong technical validation process.

Data to improve quantification practice: Consumption data will be improved as defined in the sections on Data and Allocations / Ordering. Epidemiological data will be strengthened as part of an overall effort to improve MoHS information systems. This data will help improve inputs for quantification process.

Way Forward:

11 Recommendations informed in part by: Systems for Improved Access to Pharmaceuticals and Services (SIAPS) Program. 2014. Promising Practices: Quantification: Forecasting and Supply Planning. Arlington, VA: Management Sciences for Health.

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1 Revise membership of the FHC quantification committee

MoHS - DDMS, NMSA Management Team and key partners

March 31, 2017

2 Define revised FHC quantification process

MoHS - DDMS, NMSA Management Team and National Quantification Committee

May 31, 2017

3 Define validation process for quantification, including framework to resolve disagreements

NMSA Board, NMSA Advisory Group and MoHS – DDMS

May 31, 2017

Medium Term: July – December 20174 Ensure defined process is incorporated

during next national quantification processes for FHC

MoHS –DDMS and NMSA September 30, 2017

Long Term: By End 20185 Review whether new data collected

through the allocation process can be incorporated into the quantification process

MoHS and NMSA with National Quantification Committee

February 28, 2018

4.2.3: Procurement Government Agency Responsible: NMSA

Goal: The NMSA will develop a strong capacity in procurement, grounded on set of regulations which have been agreed by all stakeholders as reflecting the best international practice as well as the local context. The procurement process will have adequate oversight by relevant stakeholders. The procurement department will ably manage all procurement using government funds, as well as a portion of donor procurement as agreed upon by the development partners when accountability targets are met. Any NMSA procurement will be fully harmonized with donor procurements, and vice versa.

Current Status:

FHC procurement responsibilities: The NPPU conducted only one major procurement exercise (in 2014), which resulted in several million dollars of unpaid debts to suppliers. Since the State House release on the restructuring of NPPU, the procurement of most FHC drugs and consumables has been funded by DFID and executed by UNICEF, in support of the caretaker environment. Procurement of medical equipment continues to be managed by the DSS within the MoHS. There have been recent discussions to ensure that any planned GoSL procurements of drugs, and particularly FHC drugs, are fully aligned with donor procurements; the DDMS has agreed that they will align any interim procurement under the caretaker environment with donor-funded efforts.

Procurement process: There is not an existing set of processes that can easily be adopted by NMSA given the transitions in responsibility that have happened. This means a new set of processes needs to be developed and adopted. These processes should be closely aligned to international best practice

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while taking into account local context in order to address challenges that have been faced under the previous iterations of the NPPU – for example, long lead times and slow port clearance.

Procurement oversight: At present, there is no multi-stakeholder oversight group for procurement processes for medical supplies.

Recommendations: 12

FHC procurement responsibilities: NMSA will be responsible for all publicly-funded procurement of drugs, medical supplies, and medical equipment. Once NMSA has set up procurement operations, it should begin to phase in responsibility for procurement of medical supplies with MoHS funds and all procurement of drugs and medical supplies for MoLGRD, MoD, and MoIA. This transition must be complete by the end of 2018, if not earlier.

Procurement process: The NMSA should develop an annual procurement plan based on the work of the National Quantification Committee. NMSA procurements will be fully harmonized with other procurements (e.g. UNICEF), and will be aligned with MoFED in advance to ensure availability of funds. Best practice processes will be followed for all aspects of the procurement process, including supplier selection, validation of products and quantities to be procured, comparison of prices to international reference pricing, and verification of quantities received. NMSA management will work with the Board member selected based on their PSM expertise as they develop processes. Procurements will adhere to clearly fixed timelines that account for budgeting processes and leave lead time for products to arrive.

Procurement oversight: An active procurement oversight committee should be established to ensure the procurement function of NMSA follows best practice processes. This can be a committee of the Board, with representation from government and donors. This committee will play an important role in helping the NMSA Board, NMSA Advisory Group, and key development partners in setting the accountability targets NMSA must meet before taking on additional procurement responsibilities. During the NMSA start-up period, donors will likely choose to utilize external agencies to procure medical supplies for any additional funding commitments, but with the ultimate goal of the NMSA assuming some or all responsibility for donor-funded procurement over time. Twice a year, NMSA procurement processes should be assessed against accountability targets agreed by the Board, MoHS and NMSA Advisory Group. If the agreed upon targets are met consistently over two reviews, this should trigger a meeting of the Board, MoHS and NMSA Advisory Group to discuss a phase-in of some NMSA responsibility for procurement using donor funds.

Way Forward:

Short Term: January-June 2017Activity Responsible Proposed End

Date1 Organize the standing procurement oversight

committeeNMSA Board May 31, 2017

2 Hire procurement staff NMSA Management Team / Procurement

June 30, 2017

12 Recommendations informed in part by: Systems for Improved Access to Pharmaceuticals and Services (SIAPS) Program. 2014. Promising Practices: Procurement. Arlington, VA: Management Sciences for Health.

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Director3 Define procurement SOPs based on

international best practiceNMSA Procurement Department

June 30, 2017

Medium Term: July – December 20174 Validate procurement SOPs based on input

from technical expertsNMSA Board Procurement Committee

July 31, 2017

5 Begin executing any necessary procurements using government funds

NMSA Procurement Team

Sept 30, 2017

6 Define accountability targets NMSA procurement team will have to meet in order to begin procuring with donor funds

NMSA Board and NMSA Advisory Group

Sept 30, 2017

7 Evaluate any NMSA procurements conducted with government funding during Q3/Q4 2017 against the accountability targets; provide feedback

NMSA Advisory Group and NMSA Board

Dec 31, 2017

Long Term: By End 20188 Evaluate previous procurements and adjust

processes as necessaryNMSA Procurement Department

February 1, 2018

Begin to assume responsibility for procurement from DSS, MoLGRD, MoD, and MoIA

NMSA Procurement Department

February 1, 2018 or earlier

9 Evaluate any NMSA procurements conducted with government funding during Q1/Q2 2017 against accountability targets; provide feedback and assess whether NMSA responsibility for procurement with donor funds can phase in


June 30, 2017

10

Continue procurement evaluations every six months as NMSA responsibility for procurement with donor funds phases in


Ongoing

4.2.4: Central Warehousing and OperationsGovernment Agency Responsible: NMSA

Goal: There will be a purpose-built national warehouse for the public sector supply chain, with adequate capacity for FHC drugs and other vertical programs at the outset, with a view to integrating other vertical programs over time. The warehouse will operate efficiently and effectively, with centralized picking and packing for the facility level. The management of the warehouse will adhere to the highest standards of good warehousing practice to ensure the suitable storage and security of commodities.

Current Status :

Location of central storage: Central-level storage for the Free Healthcare Initiative is currently split between Ferry Junction, Kingtom, Wellington, and the Central Medical Stores complex in Freetown. Additional warehouses store drugs and medical supplies for other vertical programs. The primary warehouses used in the FHC program have been improved in recent years with new racks and handling equipment. Some rented warehouses are not fully utilized, while others are overflowing with bulky

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products that were acquired during the Ebola crisis. An effort by the NPPU Caretaker Team to rationalize the stocks and eliminate any unnecessary rentals is presently ongoing. In addition, some of the leased space has gaps in storage, racking, temperature control and security standards.

Picking and packing at the central level: Under CAIPA and DPSA management at the Ferry Junction complex, picking and packing for PHUs happens at the central level. Packages are sealed with branded tape and delivered to facilities utilizing the DMS as waystations. This approach has several advantages:

- Reduces complexity of inventory management in the supply chain network- Improves transparency of stock availability - Improves efficiency, with dedicated central staff managing all pick-packing- Reduces risk of leakage during transport and at the districts

This is a significant change from how the supply chain was operated under the previous NPPU, where bulk deliveries were picked and packed at the central level, and facility-level picking and packing occurred at the District Medical Stores.

Stock management and security: Many international best practices for warehouse management have been introduced over the last several years in the primary warehouses for FHC commodities. In some government-managed warehouses, there have been issues related to the storage of products in suitable conditions as well as several high-profile thefts of drugs from central stores; this is partly a result of the limited resources available to the NPPU team to improve warehouse conditions and physical security.

Recommendations: 13

Location of central storage: A purpose-built national warehouse for the public system is planned under the Global Fund (GF) Health Systems Strengthening grant, provided the MoHS meets certain conditions related to the release of that funding (See Annex E). In the interim period before the warehouse is constructed, leased warehouse space will be used, stock should be consolidated to the extent possible to eliminate any unnecessary and costly leased space.

Picking and packing at the central level14: The Task Force strongly recommends that the NMSA staff continue to pick and pack for PHUs at the central warehouse to continue to benefit from the advantages listed above. The use of identifiable, NMSA-branded tape in the sealing of packages should continue.

Stock Management and Security: NMSA should adhere to international best practice for warehouse management. The Task Force recommends that NMSA develop warehouse management SOPs that can be reviewed by technical experts, including individuals with private sector experience and the Board member selected for PSM expertise. The Board will be required to approve these SOPs before adoption. These SOPs should include but not be limited to guidance on the receipt and storage of goods, proper inventory management practices, temperature control, stock security and other operational matters.

Way Forward:

13 Recommendations informed in part by: Systems for Improved Access to Pharmaceuticals and Services (SIAPS) Program. 2014. Promising Practices: Warehousing and Inventory Management. Arlington, VA: Management Sciences for Health.14 Recommendation informed in part by: Yadav, Prashant. “Health Product Supply Chains in Developing Countries: Diagnosis of the Root Causes of Underperformance and an Agenda for Reform”. Health Systems and Reform, Vol. 1 (2015), No. 2: 142-154.

29

Short Term: January-June 2017Activity Responsible Proposed End

Date1 Rationalize FHC stocks into more limited leased

spaceNPPU Caretaker Team and CHAI

March 31, 2017

2 Improve security in leased space where possible given currently available resources

NPPU Caretaker Team March 31, 2017

3 Support MoHS and consultant on the ongoing process to construct new central warehouse

NMSA Management Team

Ongoing - monthly

4 Hire warehouse staff NMSA Management Team / Operations Director

June 30, 2017

5 Prepare warehouse SOPs based on international best practice

NMSA Operations Team June 30, 2017

6 Develop annual plan for warehousing NMSA Operations Team June 30, 2017Medium Term: July – December 2017

7 Validate warehouse SOPs and annual plan based on input from technical experts

NMSA Board July 31, 2017

8 Assume responsibility for FHC stocks and leased warehouse space under government control


July 31, 2017

9 Work with DPSA to understand DPSA processes and determine which of these will be carried forward

NMSA Operations Team October 31, 2017

10

Assume responsibility for FHC stocks and leased warehouse space under DPSA control


December 31, 2017

11

Check-in with MoHS and consultant for updates on process to construct new central warehouse

NMSA Management team

Ongoing – monthly


Conduct first full warehouse spot-check three months after NMSA assumes responsibility for the warehouse

External entity TBD March 1, 2018

13

Review results of warehouse spot-check, address any issues that are highlighted by the external firm

NMSA Board, NMSA Management Team

April 1, 2018

14

Conduct second full warehouse spot-check nine months after NMSA assumes responsibility for the warehouse

External entity TBD September 1, 2018

15

Review results of warehouse spot-check, address any issues that are highlighted by the external firm

NMSA Board, NMSA Management Team

October 1, 2018

16

Prepare for move to new central warehouse, including procuring any new equipment that will be required


November 1, 2018 (TBC)

30

17

Move stock from leased space to central warehouse; terminate warehouse leases.


December 1, 2018 (TBC)

4.2.5: District-Level Warehousing and OperationsGovernment Agency Responsible: NMSA / MoHS

Goal: District Medical Stores (DMS) staff will be partners with NMSA in ensuring a sufficient and regular supply of commodities to the facilities under their purview.

Current status :

Management of the District Medical Stores: DHMTs are currently responsible for managing their respective DMS. Responsibility for the management of these stores was often a confusing and contentious issue between the previous NPPU and DHMTs, as NPPU believed their mandate included the management of these stores but did not have the resources to do so. Use of the District Medical Stores: The 13 District Medical Stores currently act as waystations for the pre-packed kits that are prepared for the PHUs at the central warehouse (previously by CAIPA; now by DPSA). This is critical so that the DHMTs understand what is coming into their districts and are able to verify stock and accept responsibility once the drugs are transferred to the facility level. DHMTs are able to audit up to 10% of the kits to ensure they contain the quantities defined in the waybill. The stores also hold stock for other programs, for example for programs funded by the Global Fund.

NMSA/DHMT Relationship: At present, the NPPU Caretaker Team maintains strong relationships with the DHMTs; however, the respective roles and responsibilities are not captured in a framework or document and can be unclear in some cases.

Recommendations: 15 Management of the District Medical Stores: NMSA has the statutory mandate to manage all warehousing of medical supplies procured with public funds. As such, the mandate for managing district warehouses would fall under NMSA, which is in line with the clear client / service provider split articulated in the Phase I report. However, district warehouses store products for numerous other programs not covered under NMSA’s proposed initial mandate, and assuming responsibility for these stores during NMSA’s start-up period would introduce significant management complexity that would not be advisable. Given these considerations, the Task Force strongly recommends that NMSA should sign MoUs with the DHMTs to enable them to continue managing the district warehouses on behalf of NMSA (also discussed in the Governance section). The arrangement slightly blurs the line between client and service provider over the first period of the NMSA’s existence, but this can be resolved over time.

Use of the District Medical Stores: The role of the district medical stores in distribution is one that will be determined over time. During the initial period, the Task Force strongly recommends that the current system whereby the districts are used as waystations and audit points for the pre-packed kits continue. Major changes should not be considered until NMSA operations are established and running without

15 Recommendations informed in part by: Systems for Improved Access to Pharmaceuticals and Services (SIAPS) Program. 2014. Promising Practices: Distribution. Arlington, VA: Management Sciences for Health.

31

major disruption. The NMSA Management Team will also have to assess whether the warehouses require any further physical upgrades to fulfill this role as waystation (e.g. improved temperature control). The NMSA Management Team will also have to decide over time whether to:

- Use more direct modes of distribution that do not require all kits to be brought to the district warehouses. This may have advantages in terms of transport costs and speed of distribution.

- Manage different delivery systems for BeMONCs and District Hospitals or integrate the systems.- Hold buffer stock at DMS’ to address low stock situations in facilities

NMSA/DHMT Relationship: Regardless of these management questions, it is essential that the DHMTs continue to be active participants in distributions occurring in their districts, and be partners in ensuring the entire system – from patient, to healthcare worker, to supply chain – functions smoothly. NMSA management will need to work closely with MoHS and the DHMTs to ensure this happens. Because of the critical role DHMTs play in supporting PHUs, NMSA should have dedicated district focal persons. Two different models could be considered: one where 3-4 District Focal Liaisons sit at the central level and coordinate with 3-4 districts each, and one where NMSA maintains one staff person in each district. The model selected will depend on other operational decisions made and the needs of the DHMTs; it may evolve over time. Regardless of the model selected, these staff would proactively reach out to DHMTs to inform them about distribution activities, determine additional ways to engage DHMTs, and be available to respond to questions and concerns.

Way Forward:


1 Assess whether any further upgrades to District Medical Stores are required


June 30, 2017

2 Develop model for NMSA role in districts, including level of staffing required.


June 30, 2017

Medium Term: July – December 20173 Validate proposed model for NMSA role in

districtsNMSA Board July 31, 2017

4 Develop MoUs for the roles and responsibilities of DHMT and NMSA as they relate to the management of the DMS

NMSA Management Team with DHMTs

August 31, 2017

5 Recruit and hire NMSA district staff and District Liaisons


Sept 30, 2017

Long Term: By End 20186 Make a decision about whether to shift to a

more direct delivery model during 2H 2018 based on technical advice


April 1, 2018

4.2.6: Distribution and Reverse LogisticsGovernment Agency Responsible: NMSA

Goal: Distribution will be managed efficiently and consistently. Deliveries will occur with a frequency

32

that meets facilities’ needs, but is also cost-effective. Facilities will have a clear expectation for when distributions are going to take place, and will verify that deliveries have occurred and were complete. A reverse logistics system will be in place to manage return and destruction of expired or spoiled drugs.

Current status:

Insourcing vs. outsourcing: First-mile transport has been managed both in-house and through outsourced contractors under previous management teams. Last-mile transport has historically been outsourced to third party logistics companies – this function was not insourced by NPPU or the former CMS. There are 13 new trucks in the country that were funded by Global Fund to be used by the NPPU, in addition to a few trucks the institution held previously.

Vendor management: Historically, there have been occasional issues with outsourced vendors managing distributions in a haphazard manner, with kits being delivered very late in the day, or without a full stock check taking place.

Frequency: Distribution has occurred on a quarterly basis, or less frequently during periods with operational challenges. Infrequent distributions are associated with several challenges. It is more difficult to accurately forecast facility need for a longer time period, and distributions of larger volumes of commodities can overwhelm facilities’ limited storage space and increase the risk of leakage. Less-frequent touchpoints between facilities and the supply chain provider can also reduce accountability and trust across the system.16

Distribution spot-checks: CAIPA / DPSA audit 35% of PHUs (and 40% of goods) to ensure that deliveries have occurred as intended and that facilities have received the stock they were allocated. Audit reports are submitted to the MoHS and DFID. Signed proof of delivery reports and RapidPro are also used to verify that deliveries have occurred.

Reverse logistics: MSH and CAIPA supported DDMS to conduct a reverse logistics exercise in 2016. This exercise covered 10 districts (3 chose not to participate) and was validated by MoFED and MoHS. The previous NPPU also managed reverse logistics exercises.

Recommendations:

Insourcing vs. outsourcing17: The Task Force strongly recommends NMSA outsource the majority of distribution to third-party logistics companies – and especially last mile distribution. While in-sourcing transport may in some cases be less expensive, it would introduce significant complexity to NMSA’s remit. Outsourcing distribution confers several benefits, largely by focusing NMSA’s operations on strategic management of the supply chain as opposed to the particulars of fleet management. Outsourcing can help by eliminating day-to-day responsibility for ensuring the availability of vehicles as well as managing vehicle maintenance and logistical planning. Turning NMSA into a fleet management company would require significant resource and effort not covered in this plan, and would also focus the limited available resources on the costs of employment, vehicle maintenance, etc.

16 Yadav, Prashant. “Health Product Supply Chains in Developing Countries: Diagnosis of the Root Causes of Underperformance and an Agenda for Reform”. Health Systems and Reform, Vol. 1 (2015), No. 2: 142-15417 Recommendation informed in part by: Systems for Improved Access to Pharmaceuticals and Services (SIAPS) Program. 2014. Promising Practices: Distribution. Arlington, VA: Management Sciences for Health.

33

However, NMSA management could decide to insource certain types of distribution; for instance, distribution to Western Area Hospitals. In making such a decision, the NMSA should consider the cost as well as the managerial and logistical complexity that will be required, as well as the use of the GF sponsored trucks currently in country. Any decision to insource would need to be monitored by the Board to ensure that NMSA is meeting targets for accountability, effectiveness, and efficiency.

Vendor management: Outsourcing distribution will require NMSA to develop very strong vendor management capabilities. The NMSA Management Team must define for the Board the procurement process it will use for transporters, and then the contract management processes they will follow. Management should set KPIs for its vendors, and regularly meet with them to assess their performance. Financial processes must be clearly defined to ensure vendors are paid in a timely fashion. Recent experience would suggest operational considerations should include (non-exhaustive):

1. Distributors will call PHU staff 24 hours before the delivery is to occur to ensure staff are present at the facility and prepared to receive commodities

2. The contents of the kits distributed to PHUs will be validated by facility in-charges; thus, distributions must occur during facility working hours

3. Payment for services rendered will be given when signed waybills are returned to NMSA4. Vehicles used for distributions of medical supplies will be tracked by NMSA using GPS trackers5. Any drivers should be vetted for past criminal offenses with the Sierra Leone Police

Frequency: After NMSA establishes operations and meets initial operational targets, the Task Force strongly recommends it begin to deliver more frequently in order to address the challenges associated with infrequent deliveries and to improve responsiveness to facilities. The frequency for PHUs should initially be increased from four to six distributions per year. The NMSA Management Team can consider whether to distribute to other facility levels – such as BEmONCs, district hospitals and Western Area hospitals – on a more frequent or rolling basis. These considerations will depend on available budget, but given the potential benefits we recommend that increasing the frequency of distribution be strongly considered.

Distribution spot-checks: The verification of the contents of the delivery by the facility in-charge and the signing of the waybill is a critical step to ensure facilities are receiving their intended allocations. In addition, the Task Force recommends that at least 10%18 of facilities be visited after every distribution to identify any issues. At least during the initial period, an external organization should be contracted to conduct these spot-checks. Supportive supervision and RapidPro are also tools that can be used to validate that deliveries have occurred.

Reverse logistics: DDMS is in the process of developing a policy on reverse logistics with support from MSH. Based on the DDMS policy that is developed, NMSA should develop reverse logistics SOPs. Management of reverse logistics should be done in conjunction with distribution; this will require that any contracts with outsourced logistics providers include a provision for reverse logistics. As part of its reverse logistics SOPs, NMSA will need to determine an appropriate system for destroying expired drugs collected. This would likely involve maintaining destruction capacity at the warehouse.

Way Forward:

18 For development partners supporting the system, an audit that covers 1/3 of facilities will likely be required 34


1 Accompany a distribution under the caretaker environment to understand current system

All members of NMSA Management Team

May 30, 2017

2 Define reverse logistics policy MoHS - DDMS May 30, 2017Medium Term: July – December 2017

3 Hire limited distribution staff; new staff will shadow DPSA distribution process, accompanying distributions executed by DPSA contractors

NMSA Management Team / Operations Director

August 31, 2017

4 Prepare distribution SOPs based on international best practice

NMSA Operations Team August 31, 2017

5 Develop reverse logistics SOPs NMSA Operations Team August 31, 20176 Develop annual plan for distribution NMSA Operations Team August 31, 20177 Define process for contracting third-party

logistics companies; define contractual requirements and key performance indicators for vendors based on international best practice.


August 31, 2017

8 Validate distribution SOPs and annual plan based on input from technical experts

NMSA Board September 30, 2017

9 Validate selection process, contractual requirements, and KPIs for distribution vendors

NMSA Board September 30, 2017

10

Select and contract vendors for 2018 NMSA Management Team

November 30, 2017


Begin first distribution after transition from DPSA


January 15, 2018

12

Assess vendor performance and decide whether to renew contracts at the end of the year.

NMSA Management Team, NMSA Board

October 1, 2018

4.2.7: Ordering and AllocationGovernment Agency Responsible: MoHS with NMSA support

Goal: Facilities receive allocations of commodities that are aligned to the needs of their patients. Any significant over- and under-stocking are reduced and eliminated over time. Facility staff believe that the allocations they receive are responsive to their needs.

Current status:

Existing system: District Pharmacists and District Logistics Officers are responsible for submitting allocation requests to the interim NPPU team for each facility type in their district. Hospital Pharmacists working in District Hospitals and Western Area Hospitals submit their own requests separately for their individual facilities. These requests are made on the basis of an available list of products. The quality of these requests varies widely, and they generally aggregate to more than the product quantities available

35

at the central level. The central level works with all available information – estimations of need, district requests, stock-out information and other contextual factors – to develop distribution plans in collaboration with the district and hospital pharmacists.

Challenges within the system: Many facilities report that what they receive does not reflect their needs, and stock outs are reported frequently.19 This is attributable to a number of factors that need to be addressed, including inadequate overall levels of stock in the system; long lead times for distribution from central to facility level; variable prescribing practices; allocations that are informed by poor information; and stock wastage and pilferage at the facility level that must be curbed. In an analysis of a sample of stock cards, some facilities run out of stock in less than one month for two fast-moving items20. These challenges are caused by a number of reasons:

- Facility staff do not have adequate time or training to generate accurate consumption data (as described in the Data section below), which would more accurately inform both quantification (to ensure sufficient supply) and allocation (to allocate that supply appropriately)

- There have historically been regular gaps in financial resources to execute timely distributions - District pharmacists and DLOs do not always have resources (transport, airtime) to understand

and forecast facilities’ commodity needs. The quantities allocated by district pharmacists are often the same for each facility type in a district, despite significant variations in the number of patients treated in different facilities of the same type (e.g. in two different CHPs).

- Storage management practices and physical security at the facility level is often poor and leads to misuse or loss of commodities.

It is worth noting that district and facility staff, based on their experience working in the health sector, often do not expect that what is ordered will actually be delivered and so either do not focus on preparing more accurate plans or over-request with the expectation that products will be rationed.

Recommendations: 21

Multiple stakeholders across government and the partner community have suggested that Sierra Leone should shift to a ‘pull-based’ system – in which facilities make orders for themselves – in order to address the issues of over-and under-stocking. However, any immediate move to such a system would present two primary challenges. First, it would put a large burden on facility staff, who would need to accurately record past consumption and estimate future needs across a large number of drugs. Given inaccuracies and uneven submission rates of Report, Requisition and Issues Voucher (RRIV) forms, this would require an intense skill building program. Second, the experience of other countries suggests it would likely lead to over-ordering, as facility staff who are accustomed to late or incomplete deliveries might increase the quantity they order so as to have a large buffer for error.22

The Task Force recommends an interim solution that combines the most effective elements of the push and pull systems, in which facility staff, district staff, and the central team would work closely together to arrive at the best possible allocations given available data. Such a system would tailor allocations of 19 PDT M&E Exercise 2016, CRMS Exercise 2016 in Bo and Bombali districts20 PDT M&E Exercise 201621 Recommendations informed in part by: Systems for Improved Access to Pharmaceuticals and Services (SIAPS) Program. 2014. Promising Practices: Human Resources. Arlington, VA: Management Sciences for Health.22 Yadav, Prashant. “Health Product Supply Chains in Developing Countries: Diagnosis of the Root Causes of Underperformance and an Agenda for Reform”. Health Systems and Reform, Vol. 1 (2015), No. 2: 142-154.

36

drugs and medical supplies to meet facilities’ needs, but would not place an excessive burden on facility staff to accurately forecast and report consumption needs. There is more than one potential interim solution, but any solution would require generating an initial allocation for each facility, and adjusting allocations on an ongoing basis.

Initial allocations: Before NMSA fully begins operations, a process should be undertaken to generate initial allocations for all PHUs. Allocations will be based on information from paper-based LMIS tools, stock cards, and interviews with facility staff. For some facilities, there may be sufficient information available from The Continuous Results Monitoring and Support System (CRMS) and other data collection exercises to determine an allocation without visiting the facilities; for many, visits will be required. Responsibility for developing the proposed allocations will fall to NMSA given this is ultimately an exercise in understanding their market and responsibilities in the sector as the service provider. The process should be conducted in close collaboration with DHMTs and DDMS. Sign-off on the proposed allocations from the client side within the MoHS should be routed through the office of the Chief Medical Officer, as is the normal practice with any distribution plans in the health sector. TA support will be important to generate the allocations. The NMSA can determine how the process will be coordinated in collaboration with the MoHS and NMSA Advisory Group.

Ongoing allocations: Once initial allocations are generated, it will be important to assess the accuracy of the allocations against facilities’ needs. Regardless of the way this is done, the updated Treatment Registers and RRIV forms will provide critical input. There are several approaches that could be taken to generate allocations on an ongoing basis, and it may be possible to combine approaches:

- During deliveries to facilities, a “delivery agent” accompanying the distribution could work with facility staff to count stock and assess whether the previous allocation met, exceeded, or did not meet the facilities’ needs. Similar models have been used successfully in Zimbabwe, Senegal, and a number of other countries.23

- NMSA staff at the district level could conduct periodic visits that do not take place at the same time as distribution. During these visits, they would count stock and assess the adequacy of the allocation. A similar model was used very effectively in Zambia.24

- NMSA staff at districts could contact facility staff by phone to monitor stock levels remotely

Way Forward:


1 Determine way forward for generating initial allocations for facilities

MoHS, in collaboration with NMSA and partners

April 30, 2017

2 Pilot process for generating initial allocations MoHS, in collaboration with NMSA and partners

June 30, 2017

Medium Term: July – December 20173 Generate initial allocations for all facilities MoHS, in collaboration

with NMSA and partnersAugust 31, 2017

23 Systems for Improved Access to Pharmaceuticals and Services (SIAPS) Program. 2014. Promising Practices: Distribution. Arlington, VA: Management Sciences for Health.24 World Bank. 2012. World Bank policy note: enhancing public supply chain management in Zambia. Washington, DC: World Bank. http://documents.worldbank.org/curated/en/570681468170683435/World-Bank-policy-note-enhancing-public-supply-chain-management-in-Zambia

37

4 Determine approach that will be used to revise allocations on an ongoing basis

MoHS and NMSA Management Team

October 1, 2017

Long Term: By End 20185 Scale up the model that will be used to

determine allocations on an ongoing basisMoHS and NMSA Management team

Ongoing; model in place for all facilities by March 1, 2017

4.2.8: DataGovernment Agency Responsible: MoHS – DDMS, and NMSA

Goal: Data on drug consumption and stock levels is accurate and accessible in a timely manner. Epidemiological data is improved and maintained at high quality. Data is presented in a user-friendly manner, and is widely used by MoHS staff at central and district levels as well as partners.

Current Status:

Data collection relating to the supply chain is managed in four ways; through DDMS systems, through inventory management systems, through DPPI systems and through systems that partners manage in support of the MoHS. Collection and management of each of these types of data involves staff at the facility, district, and central level.

- DDMS-managed data collection tools: Forming the core of data on the use and consumption of products, these tools include the Report, Requisition, and Issues Vouchers (RRIV), Daily Dispensing Register, Inventory Control Cards, and Treatment Registers. CRMS is also managed by DDMS with support from MHS

- Stock data: Data on inventory of drugs and medical supplies at central and district level was previously managed through the CHANNEL system. This is now transitioning to mSupply, which is currently in use at central level; GF has provided funding for district roll-out.

- Department of Policy Planning and Information (DPPI)-managed data collection: the DPPI collects data through the HMIS system that relates to both epidemiology and the supply chain system.

- Partner-managed data collection: Partners support the MoHS to undertake a number of monitoring activities relating to the supply chain. These activities include existing efforts supported by the WHO and PDT as well as nascent efforts by JSI, which has been engaged as a partner in auditing deliveries of DPSA-distributed stock in 2017. In addition, UNICEF supports the RapidPro system, an SMS-based tool that assesses whether facilities have received distributions, and checks for availability of a set of tracer drugs.

There are issues with the completeness and accuracy of data available from all sources. For example, in a 2016 analysis of RRIV use, the monthly average of facilities submitting this form ranged from 14% to 86% across districts. Roughly 30% of completed lines contained errors25. There are numerous reasons for challenges with data quality at each level of the system.

Facility-level: Among the reasons for challenges with data collected in facilities include:

25 2016 CHAI Analysis 38

- Facility staff have many responsibilities and may not have adequate time or training to generate accurate consumption data

- Submitting data is not always a priority as facilities do not see the link between the data they submit and the allocations of drugs and medical supplies they receive

- Forms are not always available, and there is no systematic way for PHUs to send them to DHMTs

District-level: Districts manage data for all facilities they support. They are responsible for collecting RRIV and HMIS forms from all facilities in the district and submitting these forms to central MoHS. Districts face several challenges relating to data:

- Staff often do not have airtime to call facilities for information on consumption or stock issues, or may not have resources to visit facilities to support them on inventory and data management

- Not all data generated by partners is shared in real-time with districts

National-level: MoHS manages data from all districts and facilities at the national level. The national level faces several challenges relating to data:

- Systems are not consistently in place for aggregating information collected for each facility to develop an overall view of each facility

- Data generated through partner systems is not always shared in real-time with the MoHS

Recommendations: 26

The Task Force recommends efforts to improve data happen at each level of the system. Strong data systems will be essential to the high functioning of the NMSA, and will be a key tool for strengthening transparency and accountability. The information systems manager and associate will play key roles in developing systems to manage the various types of information NMSA requires; however, effective data management will be essential across every directorate.

Facility-level: A range of activities can help strengthen data management in facilities. These include: - Roll out modified forms: Revised, more user-friendly treatment registers and RRIV forms are

currently being introduced throughout the country. These should help make the process of managing and reporting data simpler for facilities.

- Introduce ongoing support linked to allocation process: As described in the Ordering / Allocation section, Delivery Agents accompanying distributions, NMSA district staff or other partners can work to help set allocations and support to facilities on an ongoing basis (e.g., helping them organize stock, fill in stock cards). Providing this support could also incentivize facility staff to more accurately track consumption.

- Decide additional ways to support facilities on inventory management: In some facilities, serious issues may be identified during ongoing support (e.g. facilities not using stock cards, not maintaining organized stock rooms). In these cases, targeted intensive support led by MoHS may be needed. This could include purchasing shelving or other renovations for store rooms; if significant improvements were required, this would have substantial resource mobilization implications. Numerous approaches could be considered for providing support on inventory management.

26 Recommendations informed in part by: Systems for Improved Access to Pharmaceuticals and Services (SIAPS) Program. 2014. Promising Practices: Data Management. Arlington, VA: Management Sciences for Health.

39

District-level: Defining the exact role of the DHMTs is not within the remit of the NMSA, but there are a number of ways DHMTs’ work could be modified to provide additional support to the supply chain:

- Provide resources and clarify mandate to provide facilities more support on supply chain: DHMTs’ role in supporting facilities should be clarified. Any responsibilities should be accompanied by MOHS-organized funding to ensure activities can take place (e.g. if DHMTs must call each facility every month, they should receive airtime).

- Introduce incentive-based systems: Performance-based systems were previously used to encourage District Staff to work with facilities and ensure timely and complete submission of supply chain forms such as RRIV; a similar system could be re-introduced. The accuracy of data submitted would need to be assessed periodically to ensure incentives are linked to actual data delivered.

Central-level: DDMS and NMSA will be key partners in the effort to improve the quality of supply chain data available in the system.

- Develop NMSA inventory management systems: It will be critical for NMSA to maintain a strong inventory management system; mSupply is presently being rolled out with Global Fund support. NMSA management could consider introducing more advanced inventory management technology, such as barcoding, if that is deemed to be appropriate at a later date.

- Develop a central database of facility-level supply chain data: NMSA should work with DDMS to develop a database of relevant data generated for each facility. This would include data generated in the course of NMSA operations, as well as data collected through DDMS systems. This should initially focus on DDMS- and NMSA-managed data, as this will be most important for generating allocations. The database would show KPIs by facilities, districts, and at the national level. Over time, this would also contain data collected by partners on facilities. Modify use of RapidPro: While RapidPro currently provides helpful data verifying that distributions have occurred, the system could be modified to provide additional data points. For example, it could be used to track availability of a limited number of tracer drugs on a bi-monthly basis.

Way Forward:


1 Continue roll out of modified forms for data collection

MoHS – DDMS with partner support

March 30, 2017

2 Modify use of RapidPro to generate more actionable data

MoHS - DDMS with UNICEF and other partner support

March 30, 2017

3 Define mandate of DHMTs regarding support to the supply chain through a new set of SOPs; provide targeted, intensive support to enable DHMTs to execute responsibilities

NMSA Management Team and MoHS - DDMS with partner support

June 30, 2017

4 Develop comprehensive plan for supporting facilities to strengthen data management

MoHS with NMSA Management Team and Partner support

June 30, 2017

5 Hire information systems staff NMSA Management Team June 30, 20176 Prepare eLMIS SOPs based on international best

practice (overlaps with inventory management NMSA Operations Team June 30, 2017

40

portion of warehouse SOPs)7 Develop annual plan for NMSA inventory data

management systems and other core IT systemsNMSA IT department June 30, 2017

Medium Term: July – December 20178 Validate eLMIS SOPs and plan based on input

from technical experts (overlaps with inventory management portion of warehouse SOPs)


9 Decide whether to introduce incentive-based systems for data management for DHMTs and / or district staff

NMSA Management Team November 1, 2017

10

Develop prototype database of facility data using initial allocation information

NMSA IT department with partner support

December 1, 2017


Complete development of database of facility data that will be maintained and regularly updated

NMSA IT department with partner support

February 1, 2017

4.2.9: Stock SecurityGovernment Agency Responsible: NMSA and MoHS

Goal: High levels of security are maintained for stock throughout the system. If any issues arise relating to stock security, responsibility can be traced to the accountable party. A high baseline level of security and assurance will be required to obtain donor support for the institution.

Current status:

Two recent thefts in Kambia and Kailahun have brought attention to issues relating to stock security. Some improvements in security are already in progress, though significant gaps remain:

- Central warehouse: Contracts for guards at the central warehouses have been extended (previously supported by UNICEF); MoHS has recommended access to the facility be limited.

- Distribution: Government vehicles used for distribution do not have GPS trackers- District Medical Stores: Contracts for guards at the district warehouses have been extended

(previously supported by UNICEF)- Facilities: Some facilities have a locked store room; facilities maintain varying levels of control

over access. Most facilities do not have guards, and there have been instances of facility staff and volunteers working in facilities selling drugs that are part of the FHC program.

Recommendations:

Central warehouses: - Physical security: After an assessment of the performance of existing security providers, NMSA

should extend current contracts or put new contracts in place. The requirements for providers should be more robust, including requiring reporting on unusual occurrences or behavior, noting major dispensations (e.g., loading of trucks) and maintaining an independent visitor’s log with ID checks. NMSA should also install CCTV video cameras.

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- Stock labeling: To ensure facility staff do not sell drugs intended for the FHC program, NMSA Management Team should consider whether any additional labeling of drugs as free could help prevent theft. A barcoding system could also be considered.

Distribution: - GPS trackers: NMSA should ensure that GPS trackers are installed on any vehicles carrying

medical supplies. Vendors should be required to maintain distribution plans that track which drivers are responsible for which vehicles.

- Review of waybills: Kits distributed to facilities should be accompanied by waybills. The person responsible for distribution should do a 100% check of the kit against the waybill with the facility in-charge. Payments for distribution should only be made when waybills match kits, and each facility should be given a number to call (likely of their District NMSA representative) in case there are any discrepancies.

District Medical Store Renovations and Security Improvements: The EU recently sponsored UNICEF to renovate the district medical stores; the vast majority of these renovations have been completed, which will improve stock security and suitability. NMSA management should assess whether any additional gaps exist now that the UNICEF renovations are complete. Security contracts for DMS should be reviewed and made more robust, as with central warehouses. Where appropriate, CCTV video cameras should be installed.

Hospital Store Renovations and Security Improvements: The EU also sponsored UNICEF to renovate the hospital stores; the vast majority of these renovations have been completed, which will improve stock security and suitability. While the hospital stores do not come under the NMSA’s purview, the Agency should remain involved in this area given the large percentage of all stock held at hospitals. Given hospitals are a source of pilferage – as seen in the recent Kailahun thefts – the NMSA Management Team should work with MoHS to ensure that the following improvements are made:

- Guarding services: The MoHS should make guards available to the hospital stores - Stores access: Hospital management should make available a list of which individuals have

access to the stores should be drawn up and share this information with NMSA and MOHS.- Physical security: NMSA should help assess the quality of existing physical security (e.g., door

locks), and support other upgrades as appropriate, such as CCTV video cameras - Communications: MoHS should introduce new posters in facilities to make clear that drugs for

pregnant and lactating women and children under 5 are part of the FHC program. MoHS can also engage civil society and community groups can be asked to assist in monitoring.

PHUs: DHMTs should work with facilities in their districts to reduce the risk of theft. The measures required will vary by facility level. For each facility, several improvements should take place:

- Physical security: The DHMTs should assess the quality of existing physical security (e.g., door locks) and support upgrades as appropriate

- Communications: DHMTs should introduce new posters in facilities to make clear that drugs for pregnant and lactating women and children under 5 are part of the FHC program. MoHS can also engage civil society and community groups can be asked to assist in monitoring.

4.3 Financing, Financial Management and Audit

4.3.1: Financing

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Government Agency Responsible: NMSA, with support from MoHS and MoFED

Goal: Funding commitments are made well in advance of when disbursements are needed, and disbursements are made on schedule. Over time, allocations of funding from the GoSL constitute an increasing part of the funding pool; and the NMSA begins to generate funds for its own operations.

Current status:

DFID is largely funding the procurement, warehousing and distribution of FHC commodities during 2017. The GoSL is also procuring some FHC commodities. Funding for other commodities (e.g. malaria, family planning) is provided by a number of other donors. The NMSA itself, however, is largely unfunded, with roughly USD $90K allocated from the GoSL consolidated fund and $USD500K allocated by the Global Fund. While other opportunities exist, such as the .5% tax referenced in Section 3, the Agency does not yet have sufficient funding to begin operations.

Recommendations:

Resource Mobilization from GoSL: The GoSL is ultimately responsible for demonstrating their commitment to the NMSA and ensuring that the NMSA has funding to execute its activities. The GoSL should increase its commitment over the initial years of NMSA’s operation until such a time as NMSA has its own income streams that can ease the burden on the GoSL consolidated Fund. However, while it is the GoSL which must ultimately allocate budget to NMSA, the NMSA Board and NMSA Management Team must actively advocate within the government system from for the resources that are required to conduct its business. This will require the development of a sound and realistic annual budget by the NMSA Management Team. There are two main avenues for GoSL funding:

- 0.5% FHC Tax: The 0.5% tax increase on all payments for the supply of goods and services, which was first enacted under the 2016 Finance Bill and later revised in the 2017 Bill, provides the best opportunity for the NMSA to receive a significant and consistent amount of core operational funding over time. Preliminary estimates suggest this tax could yield several million USD per year. The Honourable Minister is presently in discussion with the NRA Commissioner and Minister of Finance to understand the best way to work out the modalities to put funds generated into a separate bank account.

- Annual Budgeting Process: The NMSA Board and NMSA Management Team should work to engage in the annual GoSL budgeting process and agitate for increases in its yearly subventions from the consolidated fund. These subventions can come from different parts of the budget – within code 304 (MoHS) for drugs; within code 307 (NMSA) for operational costs; and potentially from district budgets depending on the evolution of NMSA’s responsibilities toward and relationships with the DHMTs and local councils.

Resource Mobilization from Donors: Donors will continue to play an important role in financing NMSA over the initial years of its operation. This will be especially true in regards to commodities and any requisite capital expenditures. As noted above, the Task Force strongly recommends that the NMSA should maintain regular interactions with the key donors in the health sector in order to advocate for and help direct how this support is prioritized and through what channels.

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- Development Bank Loan or Donor Funds: Through a loan that supplies NMSA with seed capital, similar to the KEMSA start-up, and is absorbed by the GoSL so NMSA has no starting debt

- Direct GoSL Funding: Through contributions to government structures such as a pooled fund, IHPAU or NMSA’s own financial structures

- Through a Pooled Fund management structure with donors: Through a fund that multiple donors and the GoSL could contribute to and that could create more harmonized and flexible funding structures

- Through Service Providers: Through direct funding from donors of outsourced agencies or technical assistance providers supporting the NMSA

The Task Force is having initial conversations – with donors, MoHS and MoFED – on the feasibility of setting up a pooled fund that could be used both as a transparent way of managing and allocating funds, as well as a tool to enhance resource mobilization and commitments. A concept note on how such a fund would work along with its advantages and risks will be prepared as an annex to this draft operational plan in the coming weeks for the consideration of the Board.

Resource Generation over Time: The Task Force strongly recommends that the NMSA does not pursue resource generation activities within the first 1-2 years of its operation so that it can focus on building its systems and processes and focus on its core mandate. However, after the NMSA establishes operation, it may be able to generate some of its own funding in several different ways.

- Fee for Service Charges: The NMSA can generate resources by providing services to programs outside the FHC Initiative. In a number of other countries reviewed, supply chain institutions have been able to support a portion of their operations by charging fees to programs (e.g. GF-funded programs) using the institutions’ procurement, warehousing, and/or distribution services.

- Cost Recovery Program: As noted above in Section 2.1 on NMSA’s mandate, previous iterations of the NPPU and CMS have attempted to run cost recovery programs. This could present an avenue for resource mobilization, once NMSA has conducted or commissioned a full analysis on the market and whether it could expect to generate funds from this effort, and at what point it would be sensible to introduce such a program. See Annex A for further detail.

Way Forward:


1 Agree on how to cover needs for immediate NMSA 2017 financing (e.g., funding NMSA salaries and administrative costs)

MoHS, NMSA Advisory Group

February 28, 2017

2 Work with MoFED to ensure 0.5% tax on goods and services is being collected and advocate for the collection of this tax to a dedicated account to ensure it is used for FHC procurement


April 30, 2017

3 Facilitate discussion among multiple donors to determine what sources of funding could be accessed to fund NMSA procurement and operations, and through what channels


April 30, 2017

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4 Assess viability of creating a pooled fund for operations


April 30, 2017

5 Assess viability of resource generation activities, such as fee for service and cost recovery


June 30, 2017

Medium Term: July – December 20176 Confirm financing commitments from donors

and GoSL for procurement for 2018NMSA Board, NMSA Advisory Group, and NMSA Management Team

July 31, 2017

7 Advocate to ensure GoSL 2018 budget allocation for NMSA is dramatically increased from previous allocations

NMSA Board and MoHS leadership

August 31, 2017

8 If deemed appropriate, launch the NMSA pooled fund

NMSA Board and NMSA Advisory Group, MoFED

October 1, 2017

Long Term: By End 20189 Follow same processes as in 2018 to ensure

allocation of funding are made in sufficient time to not delay procurements

NMSA Board and NMSA Advisory Group Ongoing

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Continue efforts to increase funding from GoSL NMSA Board and NMSA Advisory Group

Ongoing

4.3.2: Financial Management, Internal Audit and Administration Government Agency Responsible: NMSA

Goal: NMSA financial management, HR management and internal audit processes are effective, transparent and adhere to international best practice. A high baseline level of financial management and audit practice will be required to obtain any donor support for the institution.

Current status

The previous NPPU experienced significant challenges in these areas. Few financial management protocols existed, with a heavy reliance on paper records and Excel. No accounting software was used. An auditor was seconded to the NPPU from MoFED, but the organization did not have its own senior audit staff. The management team had developed but not launched an HR policy.

At present, financial management for the Caretaker Team is under the purview of the Directorate of Financial Resources within the MoHS. Audit is the responsibility of the Internal Audit Unit of MoHS, and HR management falls under the Directorate of Human Resources within MoHS, since the caretaker staff are civil servants.

Recommendations:

Financial management: The NMSA finance function will be led by a Finance Director, who will be a member of the NMSA Management Team and report to the Managing Director:

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- Financial processes and manual: The NMSA Finance team will have to work to develop a finance manual that clearly outlines its processes across a range of areas, including bank account signatories, separation of powers, stores accounting, receivables management, treasury management, fixed assets managements, expenditure management, payroll processing, general ledger accounting and budget planning, among other such standard items. The Task Force recommends that the Finance team work closely with the Board member recruited for financial expertise to achieve this. On the advice of this Board member and additional technical experts, the Board will need to validate this manual.

- Payment discipline: Any development of processes above must consider payment discipline issues across the GoSL. It is not sufficient for NMSA to employ good practice in its own systems; it must fully understand and take into account the processes of MoFED, the Accountant General, the Bank of Sierra Leone and other entities that may play a role in the Finances of the NMSA, especially as it relates to the release and availability of funds.

- Accounting software: The previous NPPU existed for 3 years without ever using accounting software, which damaged its reputation as a transparent institution. This should be rectified immediately after launch with the procurement of software to manage the NMSA’s finances

- Payment of debts: As noted in the Phase I report, the previous NPPU had roughly $3M USD in outstanding debts. As of now, the cheques for suppliers have not yet been released by the Accountant General. While the Act stipulates that these debts will not transfer to NMSA, it is extremely unlikely that any of the suppliers previously contracted by the NPPU would be willing to respond to future tenders until the matter is resolved. The NMSA Board should continue to apply pressure to ensure these debts are paid.

Audit: The Audit function will be led by the new management team position of Chief Audit Executive. As stipulated in the Act, the Chief Audit Executive will report directly to the Audit Committee of the Board, which will be chaired by an external individual.

- Audit processes and manuals: The Audit Executive will have to develop the audit processes and manual for the department, and establish a good working relationship with the Audit Committee Chair. The Chief Audit Executive will also need to provide the Auditor General with the materials needed to conduct an annual external audit that will be separate from the audit of the MoHS.

Administration - Human resources management: The NMSA Management Team will need to develop SOPs for recruitment and HR management based on international best practice.

- Initial recruitment and staffing plans: the NMSA management will need to work quickly to recruit a highly-qualified staff to meet operational targets. Within one month of appointment, NMSA directors should develop a staffing plan for their departments as well as a recruitment plan. The Board should approve staffing and recruitment plans at the next meeting held after their development so that recruitment of new staff can proceed and meet targets. Recruitment should follow a transparent and well-publicized process

- Ongoing recruitment and HR plans: When staff members depart or new needs arise, the same transparent process used for initial recruitment should be used to recruit new staff. Employee benefits and other staff needs should be managed by the human resources department in line with comparable organizations. SOPs for HR – both recruitment and general – should be created by management and validated by the Board with expert input.

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Administration - IT management: In addition to developing information systems to manage NMSA’s core operations (e.g. developing a database of all facilities), NMSA management will need to ensure IT systems are in place to support the agency’s effective operations. To do so, management will need to define the hardware and software needs of the institution, how hardware repair and maintenance will be managed and how basic staff IT needs will be supported.

Way Forward:


1 Finalize budget need for operations for 2017 and ensure donor and GoSL allocations will meet budget needs

NMSA Board, NMSA Task Force

April 30, 2017

2 Develop staffing plans for departments NMSA Management Team May 15, 20173 Develop recruitment plan for non-

Management staffNMSA Management Team and HR Staff

May 15, 2017

4 Validate staffing and recruitment plans NMSA Board May 30, 20175 Hire finance, audit, HR and IT staff NMSA Management Team

/ Finance Director / Chief Audit Executive

June 30, 2017

6 Prepare finance and audit manuals and HR SOPs based on international best practice

NMSA Finance Team / Audit Team / HR Team

June 30, 2017

7 Develop annual budget and annual audit plan for 2018

NMSA Finance Team June 30, 2017

8 Follow-up with MOHS, MOFED and Accountant General to ensure NPPU debts are paid

NMSA Management Team Ongoing until paid

Medium Term: July – December 20179 Validate finance and audit manuals, HR SOPs,

2018 budget and audit plan with input from technical experts


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Procure accounting software NMSA Finance team July 31, 2017

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Complete final costed stock-take of all supplies and assets being handed over by NPPU Caretaker Team

NMSA Management Team, NPPU Caretaker Team

July 31,2017

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Complete final costed stock-take of all supplies and assets being handed over by the DPSA team

NMSA Management Team, DPSA team

Dec 31,2017


Review finance and audit manuals and HR SOPs; update as necessary

NMSA Management Team Jan 31, 2018

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5. Transparency and Accountability

Area: Transparency and AccountabilityGovernment Agency Responsible: NMSA and MoHS

Goal: All partners have a high level of trust in the effectiveness of the system and key information is regularly shared with all parties. Stakeholders at facility, district, and central level are held accountable for maintaining high levels of security and preventing theft. A high baseline level of transparency and accountability will be required to obtain donor support for the institution.

Throughout the Operational Plan, we have highlighted some of the most critical steps that must be taken to ensure high levels of transparency and accountability are maintained as the NMSA works to assume responsibility for the FHC and other supply chains. We have summarized these recommendations below:

Transparency and accountability in PSM processes: - Procurement will follow international best practice processes. A procurement oversight

committee, including representatives from government and donors, will verify that correct processes have been followed (4.2.3)

- When commodities arrive in-country, they will be stored in warehouses that follow international best practice protocols. Warehouses will have video monitoring systems and adequate physical security. Warehouse spot-checks will verify that warehouse processes are being adhered to, and that stock levels reported match stock levels observed. (4.2.4)

- Picking and packing for PHUs will happen at the central warehouse, which will help reduce the risk of leakage during distribution. (4.2.4)

- Commodities will be distributed in vehicles monitored with a GPS tracking system. The chain of possession of goods will be actively monitored. (4.2.5)

- When kits are delivered to facilities, they will be accompanied by waybills, and facility in-charges will conduct a full verification of contents with a delivery agent. Should there be any discrepancies between what is listed on the waybill and what is delivered, the facility should have a number to call (e.g., the NMSA district representative) to address the issue. (4.2.5)

- In Hospitals and PHUs, drugs will be stored in secure locations with adequate physical security. Limited staff will have access to store rooms. There will be clear communications, including posters and labeling of drugs, to help prevent the sale of FHC drugs (4.2.9)

- A portion of facilities will be audited to ensure that distributions have occurred in line with what was reported by the distribution agent. (4.3.2)

- Data visibility will be strengthened so that government and partners will be more easily able to access real-time data on distributions, central stock data, and information collected on facilities (4.2.8)

Transparency and accountability in governance and finance: - The NMSA Board will serve a key oversight function, including 1) validating key processes (e.g.

warehousing, procurement) with support from technical experts 2) reviewing results of NMSA audits and taking action based on the results 3) serving on the procurement oversight committee (4.1)

- Board reporting will help ensure that minutes of Board meetings and annual reports for the NMSA are shared with key stakeholders and the public where appropriate. (4.1)

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- The NMSA Advisory Group will support the Honourable Minister provide additional oversight, including attending Board meetings, reviewing results of Audits, and reviewing processes where required. (4.1)

- The Free Healthcare Ops meeting will continue to be an important forum for accountability as it brings together all stakeholders to share information and plans. The Supply Chain TWG will be an additional forum representing multiple supply chains. (4.1)

- Internal audit systems will verify that processes (e.g. for procurement, contract management) are being adhered to and that NMSA financial management is robust and accurate. The Chief Audit Executive will report to the independent Chair of the Audit Committee (4.3.2)

- The Auditor General will serve as an additional check by conducting an external audit at least annually, separate from the audit of the Ministry of Health and Sanitation (4.3.2)

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6. The Way Forward – 2019 and Beyond

The Task Force hopes this document will be a helpful guide for the incoming Board and NMSA Management Team. Given the frequent changes that take place in the health context in Sierra Leone, regular communication with the MoHS and the NMSA Advisory Group and flexibility in the pathway to achieve the goals laid out above will be critical. The Task Force will support the NMSA on revisions to this document and other key tasks during the first half of 2017, through to the handover from the NPPU Caretaker Team.

As mentioned throughout this document, the activities described in this plan are a first step in the establishment of a strong NMSA, and a strong broader health sector supply chain in Sierra Leone. By the end of 2018, NMSA Board and NMSA Management Team should have:

- Fulfilled the governance obligations captured in the Act- Developed strong operational processes to execute PSM functions- Developed robust financial management and audit processes that can give confidence to the

government and donors alikeThese successes should help the organization achieve its initial mandate of a well-executed FHC program that will help improve health outcomes for women and children in Sierra Leone.

These steps will represent only the beginning. Before the end of 2018, NMSA will need to have put in place longer-term plans. This will include: 1) developing a longer-term vision of its evolving mandate, 2) taking on additional operational responsibilities and 3) developing plans for financial sustainability. NMSA’s long-term planning should also take into account the changing directions of the public, private and social sectors in Sierra Leone.

The NMSA should expect other changes to the landscape as well. The Sierra Leone Social Health Insurance fund, currently managed under the Ministry of Labour, may play a growing role in the government’s commitment to FHC and other programs over the coming years. The private pharmaceutical sector will continue to evolve, and may change in ways that will impact NMSA’s activities. Communities will continue to develop new and innovative ways of engaging with and providing oversight to the delivery of government health services.

NMSA will have to evolve with these changes – and others that are not yet on the horizon – in order to fulfil its mandate and become a successful and stable institution in Sierra Leone for years to come.

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