1. Grant implementation STOP TB workshop December 2005

2. OUTLINE 1- The grant cycle revisited 2- Progress reporting and disbursement requests 3- Budget revision 4- Annual reports 5- Annual audit

3. Grant process key dates Proposals Submitted 1.3 Screening Eligible Proposals Selected 1.4 TRP Review TRP Recommend ations TRP Chair/Vice Chair Sign-off (Final Board Approval) 1.5 Board Approval 1.6 TRP Clarification (as required) Call for Proposals 1.1 Future Round Planning 1.2 Guidelines for Proposal Refinement & Call for Proposals Board Approval I. Proposals Management Board Approval Grant Start Grant Renewal (2 years) Grant End (up to 5 years) The Global Fund grant process Grant Signing 2.1 CCM Confirmation of PR Nomination PR Nomination Confirmed Grant Signing & First Disbursement 2.2 LFA Selection and Contracting II. Grant Negotiation and First Disbursement Grant Negotiations 2.4 Review of Budgets, Workplan, and Indicators 2.5 Negotiation (including conditions precedent) 2.6 First Disbursement Preparation LFA Contracted 2.3 PR Assessments 18 months since first disbursement 3.3 Phase 2 Grant Renewal Process Updated Grant Agreement 3.5 LFA Management Phase 2 Go/No Go Decision 3.4 Grant Extension 3.6 Grant Support Performance-based Funding 3.1 Ongoing Reviews & Disbursements 3.2 Grant Revisions III. Performance-Based Funding and Grant Support Performance-based Funding 3.1 Ongoing Reviews & Disbursements 3.2 Grant Revisions End of Phase 2 Support ARCH/300704/3

4. Reporting – Background  PR will submit a DR/PU normally on a quarterly or semi- annual basis  The frequency is agreed during initial grant negotiations and can change during implementation  The frequency is influenced by: –Country characteristics –Grant characteristics –Partner involvement and grant harmonization  Funding is provided in advance for the next reporting period plus a buffer of 1 quarter Disbursement Request and Progress Update (DR/PU)

5. Reporting - semi-annual basis

6. Reporting – Program Expenditures

7. Reporting – Cash Reconciliation

8. Reporting – Example  Program start date: 1 January 2005  Year 1 budget: Q1:$210k; Q2:$450k; Q3:$290k; Q4:$600k  Frequency of reporting: semi annual  1 st Disbursement (9 months): US$950k  Cash balance on 30 June 2005: US$400k consisting of: –US$ 50k savings –US$10k interest earned –US$50k delayed activities –US$290k buffer  Revised budget for period 1 July to 31 December 2005 is US$700k; and for period 1 January 2006 to 31 March 2006 is US$250k  What is PR’s next disbursement?

9. Budget Revision – Change in Scope  A change in scope arises when PR wants to: –Add a goal, objective or service delivery area; –Drop a goal, objective or service delivery area; –Alter the balance between two or more goals, objectives or service delivery areas Where a change in scope occurs special procedures apply

10. Budget Revision – Change in Scope Recommendation CCM must approve change LFA reviews and makes recommendation GF will make decision (may consult TRP) CCM Justify change PR New workplan, targets & budget LFA Review FPM GF Process Special procedures for a change in scope

11. Budget Revision – Practical Considerations Changes in:Assess impact on:Review/recommendation by: Demand for services; Treatment regimen; Input prices; Input mix and usage rates; Taxation; Currency exchange rates; Inflation rates; etc Goals Objectives Service Delivery Areas Activities Tasks Practical Budgetary Considerations Notes:  Currency fluctuation can be a reason for Phase 2 acceleration  Document decisions  LFA review during periodic verification of implementation GF,LFA,CCM, PR PR

12. Budget Revision – Example  TB drug cost savings of US$150k due to: – A reduction in unit price by 25%;  PR intends to spend US$150k savings on training of microscopists  Is this a change in scope or not?  How should this change be dealt with?

13. Budget Revision – Example 2  Cost of identification of infectious cases has increased by US$94k due to: –50% appreciation of local currency against US$; –the fact that all cost in the SDA are local currency denominated;  PR intends to pay for this by reducing budget for training. This implies that 35% less people will be trained.  Is this a change in scope or not?  How should this change be dealt with?

14. Annual reports  Annual reports are required as part of programmatic progress reports (Art 15 b.ii of grant agreement)  Contain aggregated information on grant progress

15. Audits: GF Requirements  SWAps – single audit acceptable but GF funded expenditures should be clearly identifiable  UNDP as PR – Annual financial statements certified by comptroller Biennial financial statements externally audited  UNDP as PR in additional safeguards country – general rule applies  GF funding forms a substantial proportion of PR’s source of funding – PR audit acceptable General rule: need for annual audit of program financial statements Program financial statement sources and uses of funds statement Note following special situations:

16. Audits - When due General rule: coincides with the PR’s fiscal year and not anniversary of the grant start date. Audit report due within six months of end of fiscal year. Note: M6 M12 M18 M24 PR’s Fiscal Year 1 When program starts before M6, audit is due by M18 When program starts after M6, audit is due after M18 audited accounts may not be available at the time of Phase 2 renewal review

17. Audits: Responsibilities Responsibilities of PR, LFA and FPMs PR Engages the services of the auditor Develops audit plan for SR Facilitates performance of audit Submits audit reports Responds to and implements recommendations Engages the services of the auditor Develops audit plan for SR Facilitates performance of audit Submits audit reports Responds to and implements recommendations 1 LFA Reviews acceptability of auditor, ToR and SR’s audit plan Reviews audit reports and advises GF Reviews PR’s implementation of audit recommendations Reviews acceptability of auditor, ToR and SR’s audit plan Reviews audit reports and advises GF Reviews PR’s implementation of audit recommendations 2 FPM 3 Decides on the acceptability of the auditor, ToR and SR audit plan Decides on appropriate remedial actions in response to audit findings and recommendation Decides on the acceptability of the auditor, ToR and SR audit plan Decides on appropriate remedial actions in response to audit findings and recommendation