NEWS: First Concept Notes Are Approved

NEWS: First Concept Notes Are Approved

/ Global Fund Observer
Newsletter
Issue 219: 17 June 2013
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CONTENTS OF THIS ISSUE:
Editor’s Note: This very long issue of Global Fund Observer is devoted primarily to coverage of the new funding model (NFM). We report on decisions announced over the weekend to award funding to three early applicant countries and four interim applicant countries. We summarise the comments of the Technical Review Panel on the first wave of concept notes. We provide an analysis of the NFM allocation methodology. Finally, we report on the results of an investigation by the Office of the Inspector General into grants to Georgia. We did not have space in this newsletter to report on additional funding decisions taken over the weekend. Please see the section near the end of this newsletter with links to GFO Live articles on renewal and extension funding, and on a No-Go decision concerning two malaria grants to the Republic of Congo. See also the links to two articles describing the Global Fund’s risk management approach.
1. NEWS: First Concept Notes Are Approved
The Global Fund Board has approved funding for three concept notes submitted by Myanmar, one from El Salvador and one from Zimbabwe. A total of up to $449.8 million in indicative and incentive funding was awarded.
2. NEWS: TRP Observations and Lessons Learned on First Wave of Concept Notes
The Technical Review Panel has issued a report providing feedback on the first wave of concept notes. This article provides a summary.
3. NEWS: Funding Approved for Four More Interim Applicants
The Global Fund Board has approved a total of up to $40.5 million to extend a malaria grant in Chad, a TB grant in Papua New Guinea, two TB grants in Kenya, and two malaria grants in Mozambique. All four were interim applicants under the new funding model.
4. ANALYSIS: The NFM Allocation Methodology Explained
With only several months left before the full rollout of the new funding model, the methodology that will be used to determine how much money is allocated to each applicant is still not very well known. In fact, some of the details have yet to be worked out. In this article, David Garmaise explains the methodology based on the information currently available, and identifies which aspects are not yet decided.
5. NEWS: TRP and GAC Comments on the Funding Awarded to Myanmar
This article provides a summary of the comments of the Technical Review Panel and the Grant Approvals Committee on new and renewal funding recently approved for Myanmar.
6. NEWS: Early Applicant Funding for Zimbabwe to Be Combined with Funding from a Round 8 HIV Grant
As reported in the first article in this issue, the Global Fund has awarded up to $278.9 million in new funding to Zimbabwe, an early applicant. The new funding will be combined with existing funding for HIV. During grant making $31 million in unfunded quality demand was identified.
7. NEWS: Comments on the Funding Awarded to El Salvador
This article provides a summary of the comments of the Technical Review Panel and the Grant Approvals Committee on new and renewal funding recently approved for El Salvador.
8. NEWS: OIG Investigation in Georgia Reveals That Two Suppliers Conspired to Obtain Contracts
The Office of the Inspector General has uncovered what it calls “credible and substantial evidence” that two suppliers for programmes supported by Global Fund grants in Georgia worked together to steer contracts to each other, and that they were assisted in this effort by several staff members of the principal recipient. The PR denies the allegations and says that it is arranging for an “independent” audit.
See section near the end of this newsletter listing additional articles available on GFO Live.
ARTICLES:
  1. NEWS: First Concept Notes are Approved
Board awards funding to Myanmar, El Salvador and Zimbabwe
The Global Fund Board has approved funding for five concept notes submitted by three early applicants in the transition phase of the new funding model (NFM). The three countries involved are Myanmar, El Salvador and Zimbabwe. Total approved funding was up to $449.8 million. The Board approved the funding by electronic vote. The decision was made public on 15 June. These constitute the first funding approvals for early applicants.
The Board also approved funding for interim applicants from three countries; see the third article in this newsletter.
The following table provides details on the amounts of funding that were approved.
Table: Funding approved for three early applicant countries
Country / Disease / Approved funding ceilings ($ million)
Indicative funding / Incentive funding / Total funding
Myanmar / HIV / 39.5 / 30.0 / 69.5
TB / 26.3 / 14.0 / 40.3
Malaria / 26.0 / 12.0 / 38.0
El Salvador / HIV / 20.2 / 2.9 / 23.1
Zimbabwe / HIV / 278.9 / NIL / 278.9
Total / 390.9 / 58.9 / 449.8
As indicated in the above table, the amounts approved are ceilings. The final amounts determined during grant negotiations could be less.
In all cases, the ceilings approved by the Board are different from the amounts announced for these countries when the NFM was launched on 28 February. For Myanmar, the amounts of indicative funding approved for the HIV, TB and malaria components were, respectively, $39.5 million, $26.3 million and $26.0 million. The amounts originally announced were, respectively, $32.0 million, $24.0 million and $21.0 million.
For El Salvador (HIV), the indicative funding ceiling approved was $20.2 million; the amount originally announced was $17.0 million. For Zimbabwe (HIV), the indicative funding ceiling approved was $279.0 million; the amount original announced was $245.0 million.
When the original amounts of indicative funding for early and interim applicants were announced, the Global Fund said that the final approved amounts will differ. For early applicants, the amounts of funding have been adjusted during the country dialogues. Another factor that could cause the final amounts to differ is that the overall amount of funds available for the transition can be adjusted over time; the Finance and Operational Performance Committee reviews this amount on a quarterly basis.
With respect to incentive funding, when the NFM was launched, the Global Fund estimated that $87 million would be available for all early applicants combined. For Myanmar, El Salvador and Zimbabwe combined, the Board has awarded up to $58.7 million. In theory, this leaves $28.3 million for the remaining three early CCM applicants – Democratic Republic of Congo (HIV), Kazakhstan (TB) and Philippines (TB). However, the total amount of incentive funding available may be revised over time.
The concept notes were reviewed by the Technical Review Panel (TRP). In all cases, the TRP found the notes to be technically sound. It rated each note as Category 2. In the rating system that the TRP is using for the transition phase, a Category 2 rating means: “The concept note is technically sound, with issues to be clarified by the TRP, with or without issues to be clarified by the Secretariat, and is recommended to proceed to grant-making.” (The next article in this issue summarises the report of the TRP on early applicants.)
The concept notes were also reviewed by the Grant Approvals Committee (GAC). For Myanmar and El Salvador, the notes were reviewed in conjunction with requests for renewal of funding for existing grants.
The GAC provided narrative comments on the concept notes. See separate articles in this issue on the comments of the GAC for Myanmar, El Salvador and Zimbabwe.
Information for this article was taken from Board Decision B28-EDP-24 and from Board Document GF-B28-ER18, the Report of the Secretariat Funding Recommendations for June 2013. The latter document is not available on the Global Fund website. The text of the Board decision will be included in an electronic decisions document to be released after the Board meeting in Sri Lanka (18–19 June).
[This article was first posted on GFO Live on 15 June 2013.]
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2. NEWS: TRP Observations and Lessons Learned
on First Wave of Concept Notes
“The notes were technically sound and strategically focused”
Problems encountered with how indicative and above indicative amounts were presented
The Technical Review Panel (TRP) has provided feedback on its review of the first wave of concept notes. This article provides a summary of what the TRP said.
The TRP reviewed three concept notes from Myanmar, one for each disease, and HIV concept notes from El Salvador and Zimbabwe. The TRP panel consisted of 16 people, including four HIV experts, three TB experts, three malaria experts and six cross-cutters. The TRP report did not include the TRP’s funding recommendations; these were provided separately to the Grant Approvals Committee.
The TRP said that all concept notes presented a consolidated funding request which included existing grant funds. It said that $1 billion was requested in the five concept notes combined. This included $205 million of existing grant funds, $391 million of indicative funding and $419 million of “above indicative” funding. (“Above indicative” refers to any amount that is above the indicative funding ceiling provided to applicants.)
The TRP said that Myanmar’s total above indicative funding request represented 53% of its full need, according to its financial gap analysis table.
The TRP said that all five concept notes were technically sound, strategically focused, and aligned with national strategies. The TRP said that this applied to both the indicative and above indicative funding requests. However, the TRP said, not all concept notes provided a breakdown between requests for indicative and above indicative funding. It said that this made it challenging for the TRP because it was requested to make recommendations on the indicative and above indicative funding separately. (This topic is further discussed below.)
Issues concerning the concept note process
The TRP said that this was the first time it has been involved in “early engagement” with applicants prior to the submission of concept notes. This early engagement was done via the Secretariat. The TRP said that this process was useful for the subsequent formal TRP review of the concept notes, but that it was not without its challenges. The challenges included the following:
  • Some of the comments provided to applicants were not taken into consideration when the final concept note was submitted.
  • The confidentiality of the TRP reviewers was not always maintained.
  • Due to the short timeline for early engagement, there was limited time to allow for wide consultation among TRP members.
The TRP said that given the fact that country teams were intimately involved in the concept note development process, the TRP deliberately delegated more actions to the Secretariat for follow-up than had typically been done during rounds-based reviews. The TRP added that the country teams and technical partners will face huge demands when the NFM is fully rolled out. The TRP identified three areas where this demand would manifest itself: (a) scaling up support for concept note development; (b) stewarding the requested clarifications and translating the outcomes into disbursement-ready grants; and (c) managing incentive funding and unfunded quality demand.
Issues concerning the content of the concept notes
The TRP said that the concept notes provided the right level of detail in terms of providing a strategic description of the funding request. However, the TRP said that the level of budgetary information, and the way that information was presented in the modular template, made it difficult for the TRP to undertake the level of budget scrutiny that occurred in the past. This might be okay if further scrutiny of budgets takes place during the grant-making process, the TRP said. However, it added, this problem prevented the TRP from “giving a firm financial figure for the indicative amount, and it was even more difficult to do so for the above indicative amounts.”
The TRP said that although it was able to prioritise interventions within a concept note, it was not able to assign firm cost ranges to the interventions as they were prioritised. “The lack of a firm cost estimate of interventions makes it even more difficult to rank interventions across concept notes and across countries,” the TRP said.
With regards to the information provided in the concept notes, the TRP made several recommendations, including the following:
  • that guidance be provided to applicants on how to provide references to annexes and how to avoid inconsistencies of information between different annexes;
  • that the overall funding landscape (not just Global Fund investments) should be clearly described in the narrative of the concept note or in the country team memorandum attached to the concept note;
  • that an additional narrative question on health systems and community systems strengthening be included in the concept note;
  • and that the concept note elicit information regarding the overall Global Fund investments in a country.
The TRP also recommended that guidance on health systems and community systems, as well as on human rights and gender programming, be developed – ideally for the next wave of early applicants, but definitely before the full roll-out – and that this guidance be made publically available on the Global Fund website.
The TRP recommended that the concept notes be updated to incorporate responses to all clarifications before the notes are posted on the Fund’s website. The TRP said that it recognises that this may require some additional effort on the part of the applicants, but that it would avoid having original concept notes in the public domain that are significantly different from what has been agreed to through the clarification process.
The TRP said that one of the requests it reviewed included a plan to implement the new antiretroviral (ARV) treatment guidelines which will be rolled out in mid-2013. The new guidelines recommend initiating treatment at a 500 CD4 count instead of the current recommendation of 350 CD4 count. The implementation of these new guidelines, the TRP said, will have a substantial impact on current coverage rates and the amount of resources needed. Therefore, the TRP said, the Global Fund needs to prepare guidance on how to invest Global Fund resources for this highly desirable change without undermining other programmes. The TRP recommended that the Board discuss the financial and policy implications of implementing the new ARV guidelines.
The TRP noted that there were a number of ambitious concept notes requesting significant scale-up, but that the feasibility of implementing these programmes was not always clear. The TRP recommended that there be a mechanism for an annual check-in on progress in scale-up.
The TRP said that, in general, the concept notes lacked reliable and appropriate size estimates for most-at-risk populations (MARPs); and that this was particularly evident in the HIV concept notes. The TRP recommended that there be more serious investment and monitoring by the Global Fund and partners in the area of reliable and appropriate size estimates for MARPs.
The TRP also said that there was some evidence that MARPs and human rights were relegated to the “above indicative” funding requests. The TRP recommended that the Global Fund and technical partners emphasise that quality programming for MARPS and for addressing human rights barriers to accessing services are essential; and that these interventions should not receive secondary priority, but rather should be included in the indicative funding request.
The TRP said that it observed two cases where human rights policy changes were cited as critical enabling factors, but: (a) the requested investments to address this were minimal; and (b) there was little evidence in the concept notes of progress in this area from prior Global Fund investments. The TRP said that it also noted one case where prior government commitments to cover recurrent human
resource costs had not been met, and where such costs represented a large share of the indicative request, and were also included in the above indicative request.
The TRP said that these cases suggest that the Global Fund has missed opportunities to leverage its considerable influence to advance policy issues that are critical for programme success and sustainability.
The TRP recommended that the Secretariat develop a proactive and structured strategy to work with countries and partners to promote progress in human rights and broader policy issues.
Comments on the new funding model
The TRP said that two aspects of the NFM require further discussion: (1) how indicative and above indicative amounts are presented; and (2) how unfunded quality demand is handled.