MODULE 1

An Introduction to the New Global Fund Financing

Architecture1

REGIONAL GLOBAL FUND GRANT CONSOLIDATION WORKSHOP

DATE

MODULE OVERVIEW SESSION I: Context & Rationale

o Similarities and differences between old and new architecture

SESSION II: Key features of the new architectureo Single Stream of Funding (SSF)o Periodic Reviewo Access to Fundingo Expected benefits and challenges

SESSION III: Grant Consolidationo Recapo Grant Consolidation Scenarioso Group Work

o Flexibilities in the transition period

o Key success factorso Key messages

2

SESSION I: GRANT ARCHITECTURE REVIEW CONTEXT

Old Grant Architecture:

The old architecture was designed at the GF’s inception in 2002 and has been added to over time.

GF was conceived to: Scale-up without duplicating funding or effort. Fund holistic, nationally owned programs. Fund accountable and performing programs.

GF has achieved powerful results but as it matures it is increasingly funding program scale up & extension.

In this context old architecture became overly complex and not scalable

3

NEW GRANT ARCHITECTURE: OBJECTIVES

Shift from project to programme based funding

Simplify the funding architecture

Contribute to improved alignment and harmonization.

Support and effectively manage growth and transaction cost

4

SIMILARITIES : OLD & NEW ARCHITECTURE

5

DUAL TRACK FINANCING

Recommendation that countries propose at least one government and at least one non-government PR remains

PERFORMANCE BASED FUNDING

Maintains key mechanisms of PBF of grants e.g. PU/DR; LFA assessment; financial evaluation and reporting; site visits

Periodic Performance Reviews maintain core aspects of Phase 2 reviews

CORE ASPECTS OF CURRENT PROPOSAL SUBMISSION PROCESS

Calls for proposals

Clear guidelines and proposal forms

CCM coordination of proposal development

Consolidated grants

Streamlined proposal application system

Increased applicant- GF collaboration

Intention is to give everyone (CCMs, PRs, TRP, the Secretariat) an holistic picture of GF-financed part of the national program and further streamline

systems

SESSION II: KEY FEATURES OF NEW ARCHITECTURE

1. Single Stream Funding per PR: One funding agreement per PR per disease. Shifts from project to programme based funding.

2. Periodic Reviews: Shift to programme-based evaluations and reviews (every 3 years for all PRs in the same disease at the same time) in alignment to national cycles.

3. Access to New Funds: Mandatory consolidation with new proposals and periodic reviews; then maintenance and further funding of a single grant agreement for any PR for the same disease in the long term. 6

KEY FEATURE 1: SINGLE STREAM FUNDING

7

Example: Government of Tanzania MOFEA (PR)- Global Fund Grant Agreements

Before Consolidation(7 Separate Grant Agreements)

After Consolidation(3 Single Stream Fund Grant

Agreements)

Round 6 TB Grant AgreementSingle Stream Funding Agreement

for TBRound 9 TB Grant Agreement

Round 7 Malaria Grant Agreement

Single Stream Funding Agreement for Malaria

Round 8 Malaria Grant Agreement

Round 9 Malaria Grant Agreement

Round 8 HIV Grant Agreement Single Stream Funding Agreement for HIV

Round 9 HIV Grant Agreement

KEY FEATURE 2: PERIODIC REVIEWS

Long-term 3-Year Model for the Periodic Review

… …

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 … …

IP 3…Implementation Period 1 Implementation Period 2

Year 7Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

Cut off date (month 24)

CCM request(month 27)

Board decision (month 30)

SSF extension signing

Periodic Review Process # 1

Periodic Review Process # 2

Cut off date (month 60)

CCM request(month 63)

Board decision (month 66)

SSF extension signing

8

Review of 36 months of performanceReview of 24 months of performance

Grant Closure

COMPLEXITY UNDER THE OLD ARCHITECTURE: SENEGAL HIV AND AIDS GRANTS

Round 9

Round 6

CNLS

Phase 2

Phase 1Grant

ClosurePhase 2

DLSI

Round 9

Round 6 Phase 2Grant

Closure

Phase 1 Grant Closure

ANCS

Phase 1 Phase 2 Grant ClosureRound 9

Key features before consolidation:• About 25 grant activities in 2 years: different budgets,

workplans, indicators etc• Misalignment with national reporting and fiscal cycles• Multiple Audits and Financial Reports• Burden on PRs and CCM

2010 2011 2012 2013 2014 2015 2016

Progress Update / Disbursement

Phase 2 Review

Phase 2

9

AFTER SINGLE STREAM FUNDING…..

CNLS SSF1st implementation

period

DLSI SSF

Key Features After Consolidation: • 1 SSF grant per PR: one budget, work plan, performance framework• Rationalised 3 yearly Periodic reviews covering all PRs for disease• Reporting and financing now program-based; 5 activities bi-annually• Simpler implementation, proposal coordination, and grant oversight

by CCM

These + 50 other SSF agreements globally reduced GF Portfolio size by 10%

2010

2011

2012

2013

2014

2015

2016

1st implementation period

2nd implementation period

Progress Update / Disbursement

Periodic Review

ANCS SSF1st implementation

period

2nd implementation period

2nd implementation period

10

KEY FEATURE 3: ACCESS TO FUNDING (CONSOLIDATED DISEASE PROPOSALS)

Phase 1 Phase 2

Phase 1 Phase 2

Phase 1 Phase 2

R6

R7

R8

Consolidated Application

Program Expansion

All previous and proposed Global Fund support is shown in the proposal for all PRs in that disease. Expected benefits include: Holistic, national program-based resource planning and gap analysis CCMs coordinate development of proposals based on wider

programmatic view Facilitates rethinking of the program and implementation

arrangements Gives TRP a wider programmatic picture

11

EXPECTED BENEFITS OF NEW ARCHITECTURE

Improved alignment and harmonization

• Better fit with in-country planning cycles, Three Ones and IHP through new grant start & periodic review dates

• SSF promotes program-based approach & better harmonization of donors

• Country CCMs choose timing of funding commitment and review cycles

Increased funding predictability

• More predictable cycle replaces unpredictable proposal Rounds• Simplified and streamlined application process linked to Reviews• Up to 3-year implementation periods • More time between review and start of next funding cycle

Strengthened performance-based funding model; and increased impact

• More program-based periodic reviews - simultaneous review of all PRs

• Longer review periods allow more rigorous review of outcome and impact information

• Larger, focused funds can achieve results faster and with more confidence

12

EXPECTED BENEFITS OF NEW ARCHITECTURE (2)

Enhanced roleof CCM & sector bodies (CSOs, national health

system)

• More meaningful engagement of CCMs and national partners during proposal submission, gap analysis, periodic reviews – enhances CCM governance role

Decreased transaction costs for

implementers and Secretariat

• Reduced No. of grants less disbursement and reporting needs• Reduced No. & frequency of reviews & need for extensions or

bridge funding• Eliminates RCC-related processes and administration

Increased national ownership

• Can strengthen reliance on national plans & involvement of national systems and varied stakeholders: shifts from projects to resemble the national programme more

13

GENERAL CHALLENGES

In the beginning requires effort and team work

May require substantial technical support in some countries

Places more responsibilities on health sector coordination to function optimally and be more results-oriented

Challenges related to periodic reviews e.g. additional info requirements on program effectiveness and impact

Greater oversight required of CCMs

14

SESSION III: RECAP – MOVING TOWARDS SSF

Grant consolidation

Alignment through Periodic Reviews

New modalities for Access to funding

Also

Reprogramming: Move same disease grants to one PR, merging activities and targets, etc Mainly at times of proposal submission and periodic review, but

also others subject to GF policies and procedures on material reprogramming

National Strategy Applications : Apply for funding against national disease strategy, to streamline funding and align GF to national cycles and strategies.

15

GRANT CONSOLIDATIONQUICK FACTS

Grants can be consolidated during or separate from a GF proposal process

From Round 11, consolidated disease proposals are mandatory

Consolidation can be initiated through PR or CCM

Implementation period of up to 3 years

Consolidation of grants that have less than 12 months from planned start date is not encouraged; efforts outweigh benefits

Gives an opportunity to review conditions precedent and other aspects in grant documents

Consolidating at a time just following Phase 2 renewal has advantages16

TRANSITION TO SSFQUICK FACTS (2)

Future approved proposals for an existing PR will be added to the single grant agreement with that PR

Secretariat shall recommend continuation funding based on performance after periodic reviews “Phase 2” process replaced by one periodic review every 3

years

Rolling Continuation Channel (RCC) application is being discontinued

TRP terms of reference and Proposal Guidelines will be reviewed before R11 to cover new architecture requirement 17

GRANT CONSOLIDATIONSCENARIOS

Scenario 1: Many grants, 1 PR

e.g. Country has 2 HIV grants, both of PR A. They can consolidate into 1 grant under PR A.

Scenario 2: Multiple grants for a disease with multiple PRs

e.g. Country has 3 HIV grants, 2 being managed by PR A and one by PR B

The 2 grants under PR A can be consolidated into 1 grant. Only same-PR grants are consolidated. The PR B grant remains as-

is.

Scenario 3: A country negotiating a Round 10 grant Can addresses alignment issues and sign a SSF grant.

Scenario 4: A country writing a proposal. Can consolidate all grants under the same or even different PRs.

18

GROUP EXERCISE AND QUESTIONS

Group Exercises Tanzania Grant Consolidation decision Exercise

Lesotho Exercise

True or False/ FAQ Exercise

Further questions to participants In your opinion, what would be the potential benefits of the new

architecture to your country or one that you have worked in?

What do you think may be some of the challenges or disadvantages of SSF?

19

FLEXIBILITIES DURING GC TRANSITION PERIOD

GF Board has approved certain flexibilities to facilitate GC transitions

Alignment: Able to set grant start date and review period to align with in-country cycles

Initial implementation period(s): Allows reasonable adjustments to length of the first funding implementation period

Borrowing from Phase 2: Can “borrow” up to 12 months of uncommitted Phase 2 funds to consolidate grants and align to country cycles

Reinvestment of efficiencies found: Able to reinvest efficiencies found in grant consolidation to scale up program activities and increase targets

Potential for reprogramming within GFATM guidelines and boundaries e.g. as part of rounds based proposal process

20

KEY SUCCESS FACTORS FROM PREVIOUS GC EXPERIENCE

Early preparation by countries and partners

Clear guidance on transition scenario from the Global Fund

Using board-granted transition flexibilities such as drawing year 3 funding early or re-scheduling targets.

Early engagement of LFA in the process

Open communication channels involving all major stakeholders e.g. CCM; PR; LFA; Ministries of Finance, planning etc;

health sector committees; others.21

KEY MESSAGES

New architecture: SSF, Periodic Reviews & Access to funding

Grant Consolidation mandatory for R11 proposals.

Use Consolidation to promote program-based approach and optimise contribution of grants to national priorities

Benefits of the new architecture outweigh its challenges

Involve the GF and LFA early for clear guidance on transition scenarios, a critical factor

The GF board allows useful transition flexibilities Advanced and careful planning is critical for success Identify and address national capacity and TA issues

early22

USEFUL RESOURCES

GF Architecture Review - Transition Provisions.pdf GF :New Global Fund Grant Architecture Frequently

Asked Questions Aidspan Q&A Grant Consolidation and SSF.pdf

Further information available from: Architecture webpage:

For communications, guidance materials & morewww.theglobalfund.org/en/grantarchitecture

For further questions: FPMs Architecture inbox: ARCinbox@theglobalfund.org

23

ACKNOWLEDGEMENTS

The Global Fund Secretariat UNAIDS Technical Support Facility Grant Management Solutions AIDSPAN The AIDS Alliance

24