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Global Fund: Progress Report 2010 - unaids

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TABLE 2.12 FUNDING REALLOCATION AT PHASE 2 BY GRANT PERFORMANCE RATING (2005–2009)<br />

GRANT PERFORMANCE<br />

RATING<br />

ORIGINAL PHASE 2 AMOUNT<br />

(US$ MILLIONS)<br />

PERCENTAGE OF “NO GO”<br />

DECISIONS<br />

REDUCTIONS IN GRANT<br />

FUNDING AT PHASE 2<br />

(US$ MILLIONS) 1<br />

PERCENTAGE OF FUNDING<br />

REALLOCATED TO OTHER<br />

GRANTS<br />

A 1,644 0 135 8.2<br />

B1 3,916 0 377 9.6<br />

B2 1,327 5.0 361 27.2<br />

C 108 59.1 82 76.1<br />

OVERALL 6,996 1.9 956 13.7<br />

1 Reductions due to performance and efficiency gains, as well as “No Go” decisions.<br />

Note: Figures have been rounded.<br />

118. Performance in fragile states. According to the<br />

World Bank, the world’s 48 fragile states (62) have<br />

a total population of about 1 billion. By the end of<br />

2009, the <strong>Global</strong> <strong>Fund</strong> had committed US$ 5.9 billion<br />

(41 percent of its overall portfolio) and disbursed<br />

US$ 4 billion to programs in fragile states. Programs<br />

in fragile states have enabled 883,000 people to<br />

access ART, identified and treated 1.9 million new<br />

smear-positive TB cases under DOTS, and distributed<br />

60 million ITNs. This represents 31 to 58 percent of<br />

the total <strong>Global</strong> <strong>Fund</strong> results, which is roughly in line<br />

with the monetary commitment.<br />

119. Grants in fragile states are performing only slightly<br />

less well than grants in other countries – 73 percent<br />

of grants are rated A or B1, compared to 82 percent of<br />

grants in other countries.<br />

120. Learning from poor performance. Countries with<br />

poorly performing grants have usually been able<br />

to respond rapidly to address the problems which led<br />

to poor performance. With a few exceptions, country<br />

programs that have had a “No Go” grant have shown<br />

significant improvements and have since signed new<br />

and more successful grants.<br />

2.5.3 CONTrIBUTIONS OF<br />

PErFOrmANCE-BASEd FUNdING<br />

TO VALUE-FOr-mONEY<br />

122. Improving value-for-money through Phase 2<br />

reviews. Each grant is initially awarded for a two-year<br />

period, the so-called Phase 1 of a grant. The Country<br />

Coordinating Mechanism (CCM) then requests funding<br />

beyond that period, and the <strong>Global</strong> <strong>Fund</strong> Board<br />

approves continued funding for Phase 2 of a grant<br />

based on a detailed assessment of results against<br />

targets and the availability of funds. Phase 2 reviews<br />

also allow for identification of unused funds and<br />

efficiency savings in grants that have underperformed<br />

in the first two years of implementation. This, in turn,<br />

allows for increases in efficiency for subsequent years,<br />

and also for the reallocation of funds that are not<br />

used elsewhere. This process has enabled the reallocation<br />

between grants of more than US$ 950 million<br />

between 2005 and December 2009 (Table 2.12), contributing<br />

to new programs and additional services<br />

for people in need.<br />

121. In many funding systems for development, problems<br />

may lie hidden or difficult decisions can be<br />

delayed for years, preventing corrective action until<br />

a full failure occurs. The advantage of the <strong>Global</strong><br />

<strong>Fund</strong>’s performance-based funding system is that difficult<br />

issues can be discovered and addressed rapidly,<br />

transparently and constructively.

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