Global Fund adopts restructuring recommendations and close to 50% funding shortfall for next round of grants

A high level panel established six months ago by the Board of the Global Fund after widespread media publicity about corruption among some grant implementers released its report on 19 September 2011.

The panel, led by former President Mogae of Botswana and former US Secretary of Health and Human Services Michael Leavitt, was given a broad remit to look into the Global Fund’s problems and what should be done about them. Much is riding on the report as several donors delayed making, or implementing, their funding commitments for 2011 and later until they the report was published and the Global Fund responded.

While identifying many areas for improvement, the Fund was recognised as a vital part of what makes health care function in many countries. Its failure would bring serious, dramatic and tragic consequences. Many of the recommendations related to changing the organisations role from providing an emergency response to sustainability with heightened public responsibility.

It is clearly important that the majority of recommendations, including major structural changes, were accepted by the Fund when the report was formally accepted the following week.

However, perhaps more significantly, the Global Fund looks likely to have significantly less funding for new grants in Round 11 – barely more than half – than the estimate published in May 2011. The Global Fund Observers reported that “the panel found this situation a cause for deep concern”.

At the Global Fund Board meeting on 26 September 2011, the Fund revealed that its forecast of $1.5 billion for Round 11 has been lowered to “not more than” $0.8 billion, and that even this amount might not be available until the fourth quarter of 2013.

The previous forecast was based on the assumption that all donors would honour their pledges, and that donors that traditionally do not make pledges would provide funding at a level similar to what they had provided before. However, the global economic insecurity and other factors have shown these assumptions appear to be overly optimistic.

This has already resulted in an extended deadline for applications to at least March 2012 and a statement that given the financial restraints it will “consider options for reallocation of existing commitments? in order ?to prioritize high-impact interventions.”

The need to pressure donor countries to follow through and expand on their commitments has never been stronger or more important.