TERG recommends the continuation of multi-country grants and strategic initiatives, albeit with improvements

4. NEWS
3 Nov 2021
It believes that both types of investments add value in their own ways

The Technical Evaluation and Reference Group (TERG) has recommended that the Global Fund continue investing in the multi-country grants (MCGs) and Strategic Initiatives (SIs) as both add value in their own ways, as noted in two recent independent evaluations (one for each type of catalytic investment). It also noted that there is merit in merging these two types of catalytic investments to potentially streamline oversight and management while facilitating the adoption of successful innovations employed by either the SIs or MCGs. This is according to a joint position paper on the SIs’ and MCGs’ evaluations presented by TERG to the Strategy Committee (SC) during the committee meeting held in October.

In this joint position paper, the TERG broadly endorsed each of the key findings, high-level conclusions, and recommendations from the two independent evaluations. In addition, it commended the Global Fund for applying lessons learned on SI and MCG grants in the 2017-2019 cycle to improve the design and implementation of these catalytic investments.

This article describes the TERG’s position on the SI and MCG evaluations. The information comes from the position paper submitted by the TERG to the Strategy Committee in October 2021. The Global Fund Observer (GFO) has also published two other articles in this issue describing the findings, high-level conclusions, and recommendations from the two independent evaluations commissioned by TERG (Multi-country grants face multiple challenges but there seems to be a consensus in what they should address and Strategic Initiatives align with Global Fund objectives but only cover some of the challenges affecting the achievement of the Fund’s goals). Although these were two separate evaluation reports, the TERG opted for a joint position paper for the two evaluations, highlighting several key themes.

TERG highlights several key themes that need attention moving forward

TERG highlighted several key themes that arose from the independent evaluations that need attention in the design of the catalytic investments.

Continuation of the catalytic investments

The TERG agrees with the evaluation recommendations to continue with the catalytic investments as they add value in their own ways. It identified some key issues that the Global Fund needs to consider to enhance the impact of these investments, including improvements in the selection, design, implementation, and review processes as recommended by the two evaluation reports.

Need for a clearer understanding and definition of ‘catalytic’

The TERG noted the concern from the two evaluation reports regarding the lack of a shared understanding by various Global Fund stakeholders of what a ‘catalytic effect’ means. This confusion about the definition has created challenges in selecting and prioritizing areas to be covered for both types of funding. It reiterated the evaluations’ conclusions that there needs to be a much clearer understanding and definition of ‘catalytic’ for the Global Fund. The SI evaluation attempted to define ‘catalytic’ as leading to one or more of the following criteria:

  • More: the investments leverage additional funding from other sources and/or additional activities are implemented.
  • Improved: activities that were conducted previously are now appreciably more efficient and/or strategic.
  • Unique, new, or innovative: Activities or contributions that are exclusive or exceptional to catalytic funding and/or those that are entirely new, original, or initiated because of catalytic funding.
  • Faster: Activities that were implemented previously but are now being implemented at an accelerated pace.

The TERG noted that the last three criteria (improved, innovative, and faster) have greater potential for fostering a transformative effect.

Strengthening performance measurement and management

The TERG also agreed with both evaluations’ recommendation that each SI and MCG needs an associated Theory of Change that indicates how each investment’s processes, outputs, and outcomes will produce a catalytic effect. Both types of funding should then ensure that SIs and MCGs have a robust performance framework and evaluation plan aligned to the Theory of Change.

Ensuring greater coherence of catalytic investments with country grants

The two evaluations had found missed opportunities to harmonize the MCGs and SIs with other types of Global Fund support, for instance, matching funds and country grants. However, the TERG noted that resolving these harmonization and coordination challenges would partially address the design and implementation challenges identified by the evaluations. It agreed with the assessment that the Secretariat needs to provide a more holistic mapping of which types of catalytic investment would provide the most appropriate means of implementing Strategy Committee or Board-determined priorities for transformational change. Lastly, TERG called for greater attention to what is covered in country grants and other partners for those countries that also benefit from catalytic investments.

Designing for higher relevance and sustainability

The SI evaluation noted that SI designs have suffered from a lack of country stakeholder engagement, poorly defined performance frameworks, and limited planning for sustainability. The evaluation findings reiterate a concern from the Strategic Review 2017 that catalytic funding may undermine country ownership and shift the Country Teams’ attention from the overall grant implementation process, to its detriment.

The TERG agreed that the Secretariat and Global Fund partners should continue to strengthen the SI design process through the theory of change mentioned above, improvements to performance management and measurement, also noted above, and by ensuring consultation with stakeholders at the country level during the design stage. The SIs also need to have an exit strategy or sustainability plan in place.

Implementation and risk management

The new cycle of catalytic investments will need to consider key areas related to implementing the SIs and MCGs: who implements the work financed under SI and MCG funds, how they are contracted, and how they are implemented.

  • Who implements: According to the position paper, having greater clarity on the definition of catalytic and what areas most need to be covered under the ‘catalytic’ umbrella will be crucial in selecting the most appropriate implementing partner for individual MCGs and SIs. MCGs grants have successfully worked with a larger pool of partners and more innovative partner arrangements. In contrast, there has been little open competition for implementing partners for SI. The existing set of partners has been very influential in determining what areas are covered by catalytic funding. TERG called for more opportunities for inviting a wider range of partners to support the implementation of SIs and MCGs going forward and stronger performance measures where the Global Fund would also be in a better position to hold implementing partners to account.
  • How are they contracted: The TERG called for a return to a more purely results-based contracting of implementing partners, rather than the recently re-introduced elements of input-based contracting where the Global Fund reimburse based on expenditure reporting. The TERG is worried that the latter will potentially detract from focusing on producing outcomes and lower incentives away from achieving results. The SI evaluation also warned that the input-based approach would increase partner costs and intensify tensions between Global Fund and its UN partners.  
  • Implementation arrangements: The Global Fund will need to streamline the coordination, communications, and approvals for MCGs. The TERG notes for consideration the suggestion that applying the same business model used for country grants to MCG (e.g., Principal Recipient, Sub-Recipient, Sub-Sub-Recipient in multiple countries) may not be appropriate and should be rethought and simplified. For SIs, issues of lack of transparency in the 2017- 2019 cycle are being resolved through more rigorous reporting requirements.

The MCG evaluation noted that MCGs did not receive sufficient attention as the teams managing them were also responsible for the country’s grant portfolios. TERG noted that there might be merit in merging the SIs and MCGs into a single pool of funds, leveraging the SI Program Management Office. TERG also called for more explicit guidance on sufficient CCM and country partner engagement in both design and implementation of these investments, which were found to be lacking by both evaluations. Lastly, both types of investments should include robust due diligence and identification of potential risks and risk mitigation, given the complexities of both implementation and governance arrangements, together with mitigation strategies.

What next

TERG presented this position paper to the Strategy Committee to submit its recommendations based on the results of the thematic evaluation of the SIs and multi-country catalytic investment grants. TERG has presented the findings of the two evaluations in a report to the Board, alongside other recent evaluations. GFO will publish an article in Issue 406 detailing the TERG’s report to the Board.

Secretariat response on Joint TERG Position Paper

The Secretariat welcomed the Joint TERG Position Paper. It noted that since the evaluations primarily focused on the 2017-19 cycle, many of the lessons had already been integrated in the 2020-22 cycle.

Concerning the Joint TERG Position Paper in general, the Secretariat:

  • Agreed with the TERG’s recommendation on maintaining the two catalytic investments in the next cycle and strengthening the selection, design and implementation, and review processes;
  • Agreed on the need to measure the outcomes and impact of both SIs and MCGs. It noted that it had already made significant progress in the current cycle 2020-22 cycle, such as introducing theories of change and performance metrics for SIs;
  • Acknowledged the need to harmonize catalytic investments at the country level. It noted that countries have to demonstrate how the MCG grants will avoid duplication with the country grants and seek endorsement from CCMs or national authorities of participating countries. However, coordination and harmonization do not necessarily materialize during implementation;
  • Acknowledged that some SIs are more closely-linked to grants while others are more challenging to harmonize, partly due to the timelines and modalities. It explained that country grants are on a fixed schedule while SIs start later. In addition, the high number of SIs hinders the effective harmonization of the grants. For instance, it noted that some countries have numerous SIs running concurrently – for instance, Mozambique currently has 14. As such, the Secretariat welcomed one of the recommendations from the SI evaluation on having fewer but more strategically focused SIs.

 

Concerning the TERG’s joint recommendations, the Secretariat:

  • Preferred leveraging the existing definition of catalytic instead of facilitating discussions to coin a new definition. It noted that having a catalytic effect was an important criterion in the 2020-22 cycle; and will be in the 2023-25 cycle. It further noted that it had proposed some refinements to the criteria to the Strategy Committee in the allocation methodology review;
  • Disagreed with the TERG’s recommendation of merging the two catalytic investment modalities as the two are different in nature, even if there is a regional or multi-country aspect with some SIs. It explained that it manages the MCGs within the Grant Management Division as grant portfolios and within the region they support, facilitating harmonization and coordination with national grants. A merger would only work if the Secretariat completely outsourced a third party to manage it. In this case, the Board would need to accept that these types of investments are not like country grants and therefore assume a different level of oversight.

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