The Global Fund’s 34rd Board Meeting – Geneva, Switzerland, November 16-17, 2015

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Introduction

The Global Fund to Fight AIDS, Tuberculosis and Malaria held its 34th Board Meeting on November 16-17, 2015, in Geneva, Switzerland. Norbert Hauser of Germany and Aida Kurtovic of Bosnia and Herzegovina, the Chair and Vice Chair of the Board, respectively, presided over the meeting. The Board deliberated on a number of important issues including the strategic framework for 2017-2022 and the methodology framework for the 2017-2019 allocation period. The Board agreed to the following key decision points during the 34th Board Meeting:

  • Approval of a revised Strategic Framework for 2017-2022.
  • Approval of a 2016 Operating Expenses budget and Corporate Workplan.
  • Approval of a revised Market Shaping Strategy.
  • Approval of a plan to slightly revise the Global Fund’s Governance Structure.
  • Acknowledgement of the results and recommendations of the Strategic Review 2015 as commissioned by the Technical Evaluation Reference Group.

Executive Director’s Report

Dr. Mark Dybul, Executive Director of the Global Fund, focused his report to the Board on the progress of the Global Fund and the challenges and opportunities moving forward, with a huge emphasis on the HIV burden facing adolescent girls and young women. The Global Fund, along with its partners globally, is responsible for more than 17 million lives saved as of the end of 2014. Dr. Dybul applauded the achievements of the past decade to address a great global need and achieve remarkable impact in the fight against HIV/AIDS, tuberculosis and malaria. However, ending these epidemics by 2030 poses a greater challenge, and will require dealing with deep-seated socio-cultural issues and focusing Global Fund investments to be more cross-cutting.

Dr. Dybul highlighted the fact that we are only beginning to fully acknowledge that fundamental inequality and discrimination against women and girls is the key driver of HIV infection in many parts of sub-Saharan Africa. However, he emphasized that the Global Fund and its partners have committed to support high-burden countries to reduce HIV by 40 percent among adolescent girls and young women. There are multiple efforts underway, such as the following: empowering girls through education and health; using the grant-making process to address challenges to women and girls; focusing on reproductive, maternal, neonatal, child and adolescent health; addressing gender-based violence; improving community engagement and preventing child-brides, empowering gender advocates; and focusing on the impact of malaria on children, especially girls.

Wrapping up, Dr. Dybul highlighted the strategy for the Global Fund going forward will involve programmatic and financial sustainability to lead to successful country transitions; continued domestic resource mobilization; and managing for impact through better coordination across departments, as well as data collection and monitoring to achieve the greatest impact in-country. In order to increase its impact the Global Fund will focus on key populations, investing in sustainable systems for health, working with partners to ensure implementation of quality programs globally, and improving procurement.

New Strategy Framework

Over the past year, the Global Fund organized numerous opportunities for discussions on the new strategy development process, including an e-consultation and three in-person Partnership Fora to solicit input from a range of stakeholders. The first, held in Addis Ababa, Ethiopia, took place on May 7-8 and included 132 participants from 51 countries. The second, held in Bangkok, Thailand, took place on June 24-25 and included 111 participants from 40 countries. The final meeting, held in Buenos Aires, Argentina, took place on September 3-4 and included 111 participants from 47 countries. Some of the common themes that came out of the e-consultation and the Partnership Fora include: progress in the fight against the three diseases has been remarkable but there is potential to backslide if investments don’t continue; partnering with countries on sustainability early on is key to supporting successful transitions from Global Fund support; and there is a need to address gender inequality and strengthening programs addressing HIV among women and girls.

In fall 2014, the Global Fund Board began discussions on the new strategy framework and identified the following priorities for further development: ending the three epidemics; sustainable impact and domestic funding; key populations and human rights; health systems strengthening; partnership; challenging operating environments; and differentiation. By June 2015, the framework had evolved to include four primary strategic objectives: i) Differentiate for Impact across the Development Continuum; ii) Build Resilient and Sustainable Systems for Health; iii) Respect and Promote Human Rights and Gender Equality; and iv) Expand Access and Public Goods for Health. This updated framework, titled Investing to End Epidemics, is illustrated below.

34th Board Photo1

The strategic framework also proposes a revision to the mission of the Global Fund to the following: Attracting, leveraging and investing additional resources to end the epidemics of HIV, tuberculosis and malaria and to support attainment of the Sustainable Development Goals (SDGs). The Board unanimously approved the draft framework, and the narrative strategy will be developed and submitted to the Board for approval during the first Board meeting in 2016. Draft key performance indicators will also be presented to the Board at that meeting, and plans for operationalization will continue throughout 2016.

Focus on Women and Girls

Just prior to the 34th Board Meeting, the Global Fund released a paper outlining the challenges and opportunities to address the disproportionate impact that HIV has on women and girls, particularly in sub-Saharan Africa. The statistics are staggering – 7,000 women and girls aged 15-24 are infected with HIV every week, and the disease is the global leading cause of death among this population. The Global Fund aims to focus investments on programs aimed at decreasing incidence of HIV for women and girls by addressing the following key issues areas: gender equality, gender-based violence, maternal and child health, keeping girls in school, and promoting women’s rights and representation. Additionally in all grants, the Global Fund now requires countries to report sex- and age-disaggregated data. Currently, the Global Fund invests an estimated 55-60 percent of its resources in programs and services that reach women and children.

In order to support countries in advancing gender equality, the Global Fund works with countries to develop appropriate approaches in concept notes and grants to address gender-related barriers to services, and support the development and implementation of gender-responsive national health strategies. The Global Fund also invests in programs to prevent gender-based violence and provide care to survivors. To target maternal and child health, the Global Fund encourages countries to link reproductive, maternal, newborn, child and adolescent health interventions with HIV, tuberculosis and malaria programs, and improve overall health for women and girls. Additionally, keeping girls in school has been scientifically proven to reduce the risk of HIV for women and girls, thus the Global Fund has made this is a key priority among their strategic objectives. Finally, the Global Fund is addressing women’s rights and representation by eliminating human rights barriers to services and promoting more women to take part in the design and implementation of programs in their communities. Going forward, the Board emphasized that women and girls are a key priority for them and collaboration with key partners to optimize investments will be crucial in the coming years.

2015 Financial Performance: End of 2015 Results and the 2016 Budget

The Chief Financial Officer (CFO) of the Global Fund updated the Board on a range of 2015 financial performance issues, including disbursements, foreign exchange losses and the operating budget for 2016. The Global Fund disbursed $3.0 billion in 2015, and the CFO noted that the Fund is planning to ramp up disbursements in 2016 to $4.07 billion.

There has been a 15 percent average fall in the value of non-U.S. dollar pledge currencies since replenishment. Foreign exchange impact arises in two ways: i) from the difference in valuation between the rate at which the pledge is signed and the rate at which the contribution is booked on the Global Fund’s balance sheet; and ii) from the difference between the rate at which the contribution is booked on the balance sheet and the rate at which it is encashed.

Finally, the operating budget for 2016 is $305 million, compared to $296 million in 2015 and $286 million in 2014. The CFO announced that overhead was underspent by the Secretariat in 2014 and 2015, which has created flexibility to invest in critical projects in 2016 while remaining within the 2014-2016 OPEX allocation of $900 million. The 2016 budget consolidates the gains in efficiency captured over the current replenishment period. The figure below illustrates the Global Fund’s management and stabilization of its operating budget from 2013 to 2016.

34th Board Photo2

Update on the E-Marketplace Initiative

An update on the e-marketplace was presented to the Board members. The objective of the e-marketplace is to simplify and modernize procurement operations in order to sustainably increase the value for money and impact health programs. The project has two phases. The first phase will tentatively last until mid-2017 and involves the Global Fund providing its Principle Recipients (PRs) in targeted countries with the tools to streamline procurement of products for Global Fund-supported HIV/AIDS, tuberculosis and malaria programs. The second phase will occur presumably when the e-marketplace is launched and it will then have the potential to become a veritable “global public good,” available to the broader global public health community beyond Global Fund PRs. The projected financial benefits for the e-marketplace would be remarkable, with an estimated cumulated net savings of $250 million between 2015 and 2019 and annual projected gross savings of $125 million from 2019 onward. Other benefits of the e-marketplace include country ownership, visibility over procurement processes, reduced transaction time and costs, and greater access to market for new and regional suppliers and manufacturers.

Collaboration with Partners, including Gavi, the Vaccine Alliance

During the 34th Board Meeting, an interactive discussion with representatives from Gavi, the Vaccine Alliance, Roll Back Malaria, the Stop TB Partnership, UNAIDS, UNITAID and the World Health Organization provided the Board with a presentation on how they are collaborating with the Global Fund in the fight against HIV/AIDS, tuberculosis and malaria. Dr. Seth Berkley, CEO of Gavi, the Vaccine Alliance spoke to how Gavi and the Global Fund are working together to achieve more operational and programmatic efficiencies and to effectively work together on issues that add value to both organizations. Dr. Berkley identified a number of key ways that the two organizations are working together, including: aligning health systems strengthening investments in Ebola affected countries; harmonizing views on the development of a malaria vaccine; sharing infrastructure, risk analysis and intelligence on the country-level; coordinating investments in strengthening data collection; and lastly, establishing efficiencies in operations at the headquarters-level by creating a “heath campus” that will lead to sharing office space and other services in Geneva.

Office of the Inspector General (OIG) Update

Building off of the findings of the first OIG Annual Opinion on Governance, Risk Management and Internal Controls of the Global Fund, published after 33rd Board Meeting, the OIG continues to make significant improvements to ensure that audits and investigations are conducted with the highest regard to professionalism and independence. The OIG reported to the Board that its revised 2014 Audit Work Plan has been completed, and that the 2015 Audit Work Plan is on track with four reports finalized to date. The OIG’s Investigations Unit completed the final case in its backlog of legacy pre-2013 investigations in Q1 of 2015, and there has been steady progress completing investigations from 2013-2015. As of August 31, 2015, out of the 71 investigations planned for 2015, 32 have been closed and 39 remain active. The Investigations Unit will publish a total of 14 reports in 2015, an increase of three reports compared to 2014.

A number of operational improvements are in progress at the OIG. These include the strengthening of audit methodology, processes and procedures; developing a core training curriculum for OIG staff; reviewing and reorganizing the OIG’s IT infrastructure to increase efficiency and mitigate vulnerabilities; and developing tracking and monitoring processes and tools to enhance accountability for resource and budget utilization. This year, the OIG also launched the Speak Out campaign, a three-country pilot program designed to improve the quality of information that the OIG receives, both internally and from external sources, so that it can act more swiftly to disrupt fraud and corruption. Finally, as of the end of August 2015, the OIG was 22 percent below its approved operating budget for 2015. This discrepancy is primarily due to salary variances, timing differences, and an increase in management efficiencies. The OIG currently has 45 staff members and three vacancies – recruitment efforts continue to fill the remaining positions.

Of note, a number of the Board constituencies lauded the OIG for its great work; a few, however, expressed concern about the slow recovery of funds due in part to a vacant recoveries officer position and the need for the OIG and the Global Fund Secretariat to more quickly implement pending Agreed Management Actions to be taken as a result of OIG audits and investigations.

Conclusion

Board Chair Norbert Hauser closed the meeting by thanking the Board members for their work during the 34th Board Meeting. The next key milestone is a Global Fund Pre-Replenishment meeting on December 17, 2015 in Tokyo, Japan. This will be followed by the 35th Board Meeting, being planned for April 27-28, 2016, and the Global Fund’s Fifth Replenishment Pledging Conference to be held sometime in Q2 or Q3 of 2016.