US embassy cable - 04LILONGWE497

UNCLAS LILONGWE 000497 
 
SIPDIS 
 
SENSITIVE 
DEPT FOR S/GAC, AF/S, AF/EPS (SDRIANO), OES/IHA 
USAID FOR GH/AA (APETERSON) 
HHS/PHS/OFFICE OF GLOBAL HEALTH AFFAIRS (WSTEIGER) 
HHS ALSO FOR NIH (MDYBUL AND JLEVIN), HRSA (DPARHAM) 
GENEVA FOR DHOHMAN AND MCGREBE 
 
E.O. 12958: N/A 
TAGS: KHIV, EAID, TBIO, SOCI, MI, WHO, HIV/AIDS 
SUBJECT: GLOBAL FUND'S EFFECTIVENESS IN MALAWI STIFLED 
 
 
1. (SBU) The Global Fund's effectiveness in Malawi, the 
largest HIV/AIDS award recipient, has been stifled by 
operational and administrative problems.  The goal of 
"limited oversight" has become unstructured and unwritten 
operational guidelines that are often confusing rather than 
liberating.  The "new way of doing business" has created ever 
changing methods of operation that do not always consider 
constraints on the ground.  The "rapid roll-out" of ARVs has 
caused funding announcements to get ahead of administrative 
support systems, resulting in the impeded movement of funds. 
Clear guidelines and increased communication with the Global 
Fund Secretariat would likely give Malawi's principal 
recipient, the National AIDS Commission (NAC), the confidence 
needed to implement programs quickly and effectively. 
 
2. (SBU) Currently, Malawi has three primary obstacles to 
effectively using Global Fund for AIDS, TB, and Malaria 
(GFATM) money: 
 
-- Changed guidelines have led to NAC's submission of several 
human capacity development and salary supplement components 
in its revised work plan  This new policy may result in 
"top-ups" on some government employees' salaries and a 
scramble by health care professionals to NAC-funded 
institutions, creating even larger staffing gaps in regular 
health care facilities. 
 
-- UNICEF, charged with procurement and distribution of ARV 
drugs, has had serious administrative problems with 
delivering drugs.  From the release of funding for ARVs in 
January 2004, it took five months to procure the first 
shipment of drugs.  Similar delays in the future could 
interrupt patients' treatment regimes. 
 
-- The GFATM has recently called into question the 
sufficiency of NAC and its sub-grantees' financial management 
systems.  According to the GFATM's Local Fund Agent (LFA), 
all grantees, whether receiving funding directly or 
indirectly, must undergo initial and annual audits.  This 
seemingly new requirement makes problematic NAC's original 
plan to funnel funding through community-based and 
faith-based organizations. NAC fears many local organizations 
will legitimately not be able to fulfill audit requirements. 
NAC has thus put all sub-grant funding on hold until the 
issue is resolved. 
 
BACKGROUND 
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3. (SBU) When Malawi submitted its initial proposal to the 
Global Fund in 2002, the GFATM noted that "absorptive 
capacity" of funds, human resources constraints, and health 
system overload would be serious challenges for Malawi to 
overcome.  In mid-2002, the GFATM approved a revised version 
of Malawi's proposal, which reduced funding for technical 
assistance, monitoring, and evaluation, and awarded the 
National AIDS Commission (NAC) USD 196 million over the 
following five years.  A series of miscommunications and 
inadequate work plans, owing to changing information from the 
GFATM and misunderstandings by NAC, delayed the first tranche 
of real money (USD 9.5 million) until early 2004. 
 
COMMENT 
------- 
4. (SBU) While many of these problems will have to be 
resolved by NAC and its local partners, increased 
communication with the Global Fund Secretariat would likely 
lead to smoother operations.  Specific written guidelines 
(yet not concrete policies) and direct communication with 
administrative and technical staff (not filtered through 
portfolio managers) would help NAC understand more clearly 
how it can and cannot implement programs, giving it the 
confidence necessary to lead the Global Fund initiative in 
Malawi.  END COMMENT. 
DOUGHERTY