Open Society Foundations Welcome Review of Global Fund Oversight Mechanisms

The Open Society Foundations welcome the report from the High Level Independent Review Panel on Fiduciary Controls and Oversight Mechanisms for the Global Fund to Fight AIDS, Tuberculosis and Malaria and agree strongly with its conclusion that the “[f]ailure of the Global Fund would be a global health catastrophe.”

The Global Fund to Fight AIDS, Tuberculosis and Malaria is among the most innovative, transparent, and effective aid organizations, and in nine short years it has achieved remarkable results. It has prompted change at the country level by opening up space for civil society—particularly people living with and affected by the three diseases—to set priorities and make meaningful decisions about their countries' responses. It has changed policy and practice through its use of an independent, non-political technical review panel to judge whether the programs it supports are the ones likely to have the greatest impact. It has contributed to stronger civil society organizations, stronger community-based responses, and stronger health systems.

Above all, the Global Fund has saved lives. But now, it is at a crossroads. The decisions the Global Fund Board and Secretariat will soon make will determine whether the Global Fund continues to be a high-impact aid organization that is responsive to the needs of communities, or whether it becomes irrelevant.

In its report, the review panel offers a set of broad and far-reaching recommendations that, if adopted, could fundamentally change the way the Global Fund does business. The recommendations range from changing the job description and authority of Fund Portfolio Managers, to reorganizing the board, to creating a more iterative process for proposal development and review. Most of the panel’s recommendations would improve the current work of the Global Fund and should be implemented.

However, the panel’s limited focus on financial risk and oversight leaves other more difficult issues unaddressed, such as how can the Global Fund strengthen civil society, evaluate the appropriateness and quality of the interventions it funds, ensure protections for human rights, and address the legal and policy context in which programs are implemented. These factors can just as easily undermine programs as misappropriation of funds and warrant greater attention by the Board and Secretariat.

We urge the Global Fund not to restrict reforms to the issues addressed by the panel but rather to address these other factors as well, particularly as it adopts and implements its new strategic plan.

The panel also makes a number of broad-stroke recommendations that could have the impact of undermining country-level capacity and country ownership by creating parallel systems. For example, the panel recommends that the Global Fund make pooled procurement of drugs by the Secretariat and the outsourcing of supply-chain management of drugs the default for all countries, bypassing national systems. Such approaches have frequently been described as leading to duplication, introducing inequities, and being resource intensive (at a time when resources are constrained). In addition, because medicine prices and access conditions vary significantly from country to country, not least because of differences in patents and availability of generics, pooled procurement is not necessarily the most cost-effective way forward. It may lead to concentration on a few suppliers, and leave little policy space to support critical capacity building of local manufacturers, or use of TRIPS flexibilities.

At the same time, the panel notes that the Global Fund faces an imperative to “pursue sustainable programs” and increase country ownership, defined as responsibility for accountability and the meaningful and equal participation of all stakeholders in decision-making. The Global Fund cannot do this without significant investments in strengthening country-level systems, institutions, and civil society, including mechanisms to hold governments to account for fulfilling their core responsibility of ensuring that people within their borders have equitable access to quality health care services and medicines.

Whether the high-level panel’s recommendations will result in increasing the efficiency and effectiveness of the Global Fund will depend on the details of how they will be implemented and by whom. In order to create a two-step grant application and negotiation process that has the potential to improve programs and reduce the time it takes to sign grant agreements, the Fund will need to make significant investments to ensure that the Secretariat has the appropriate capacities in place (or a concrete plan to build them). This includes Fund Portfolio Managers and country teams with a deep understanding of the diseases and appropriate programmatic responses, as well as an appreciation of the role that civil society and community-based organizations play in these responses and the human rights environment in which those responses take place, not just the ability to scrutinize budgets.

Finally, there is a culture of risk aversion at the Global Fund that is leading to paralysis in countries. Over the past several months we have heard consistent reports that the Global Fund is micromanaging programs in a way that hinders action and that principal and sub-recipients are afraid to make decisions without sign-off from the Global Fund. The level of risk aversion is also borne out by some of the key statistics by which the Fund tracks its performance: only 10 of the 111 grant agreements in Round 10 have been signed within nine months after board approval, and disbursement rates of the first three quarters are less than half of what was disbursed in the same period in 2010. The recommendations in the report do not offer any immediate solutions to these challenges, but this level of risk aversion is having a serious negative impact on programs and community-based organizations and should be addressed by the Executive Management Team urgently.

The Global Fund’s Board and Secretariat have a real opportunity at this point to take this organization to the next level, increase its effectiveness, and ensure that its funding is really being used to save lives. As it does this, the Global Fund should strive to:

  • Fight fraud while continuing to support risk-taking and innovation (which are often the things that make aid programs effective); 
  • Build in more consistent feedback loops with countries and allow greater flexibility to adjust programs according to changing needs;
  • Ensure greater predictability and more transparency of funding in order to increase accountability; 
  • Strengthen “country ownership” by supporting the real and meaningful participation of all stakeholders in decision-making about the use of Global Fund resources, particularly most-affected and marginalized communities;
  • Give more attention to ensuring program quality and building real capacity in countries;
  • Empower civil society to be able to monitor transparency in drug procurement and ensure technical assistance for the effective use of TRIPS flexibilities, procurement, and supply chain management and quality assurance; and
  • Put human rights front and center to make sure that the Global Fund is truly funding the right things and addressing real barriers to care.

The Global Fund Board and Secretariat should take the opportunity of the report of the High Level Panel and its strategic planning process to reflect on its successes, challenges, and what it must do now to continue to be an innovative and highly effective organization. Above all, it should be careful not to rush into making significant changes to its business model without evaluating the potential impacts of those changes on its ability to deliver on its mission.

Minimizing the loss of funding to corruption and fraud is vitally important. The Global Fund should approach risk management in a way that empowers communities and civil society to hold implementers accountable. It should also stay focused on achieving the long-term objectives of ensuring its funding is strengthening countries’ and communities’ capacities to effectively respond to HIV, TB, and malaria over the long term and saving lives.