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					                     COUNTRY CASE STUDIES:


  MAPPING OF PROCUREMENT AND SUPPLY MANAGEMENT
      (PSM) BOTTLENECKS IN GLOBAL FUND GRANT
    IMPLEMENTATION RELATED TO DELAYS IN GRANT
                   DISBURSEMENT




       DEMOCRATIC REPUBLIC OF CONGO


                           APRIL 2012




Francois Jouberton
Catherine Adegoke




                                                 1
                                                                      TABLE OF CONTENTS




ACRONYMS ............................................................................................................................................ 3
ACKNOWLEDGEMENTS ................................................................................................................... 6
EXECUTIVE SUMMARY .................................................................................................................... 7
1.      INTRODUCTION ........................................................................................................................ 11
     1.0 Background ............................................................................................................................................ 11
        Summary of the Standard Global Fund Process from Grant Application to Implementation.............. 13
        Performance-based Funding ..................................................................................................................................... 14
        PSM process................................................................................................................................................................... 15
        Disbursement practices ............................................................................................................................................... 17
     1.2. Purpose and Objectives of the Study ................................................................................................... 17
     1.3 Methodology................................................................................................................................................ 18
2:        COUNTRY CONTEXT –DEMOCRATIC REPUBLIC OF CONGO ........................... 20
     2.1 Country Background ................................................................................................................................ 20
     2.2 Gross Domestic Product ........................................................................................................................... 20
     2.3 Malaria Epidemiology. ............................................................................................................................. 21
     2.4 Country Policy and Regulatory environment (Malaria, PSM) ...................................................... 22
        2.4.1. Malaria policy................................................................................................................................................... 22
        2.4.2 Pharmaceutical Policy ................................................................................................................................... 24
     2.5 Country Malaria Intervention Financing Mechanisms .................................................................... 28
     2.6 History of Global Fund in country and Current Grants/Phases ............................................. 29
        1. Round 3 ...................................................................................................................................................................... 29
        2. Round 8 ...................................................................................................................................................................... 29
        3. Round 8 Phase 2, Round 10, Consolidation ................................................................................................ 30
3:        GRANT PROCESSES: COUNTRY EXPERIENCE.......................................................... 31
     3.1 Proposal and PSM Plan Development.............................................................................................. 31
       3.1.1. Stakeholders ..................................................................................................................................................... 31
       3.1.2. PSM capacity building and technical assistance received ............................................................. 32
     3.2 Grant Negotiations/Signing/Conditions Precedent ................................................................... 33
       a. Grant negotiation process and impact on PSM planning ................................................................. 33
       b. Current Conditions Precedents (PSM-Related) ................................................................................... 33
     3.3 Challenges/Lessons Learnt in Grant Development and Negotiation ................................... 34
4:        COUNTRY PSM GRANT IMPLEMENTATION: COUNTRY EXPERIENCE ........ 35
     4.1 Adapting PSM Plans................................................................................................................................ 35
       4.1.1. PSM planning accuracy ................................................................................................................................ 35
       4.1.2. PSM plan changes and updates................................................................................................................. 36
       4.1.3. PSM plans and GF ‘efficiency gains’ ........................................................................................................ 36
       4.1.4. Grant consolidation summary................................................................................................................... 37
     4.2 PSM Reporting Structures .................................................................................................................... 37
       4.2.1 Brief description of country’s supply chain.......................................................................................... 37
       4.2.2 Commodity tracking within supply chain ............................................................................................. 39
       4.2.3 Supply chain reporting .................................................................................................................................. 39
     4.3 Contingency Planning ............................................................................................................................ 40

                                                                                                                                                                                          2
         4.3.1 Malaria medicine and health commodity security mechanisms.................................................. 40
         4.3.2 History of GF emergency procurements ................................................................................................ 40
         4.3.3 Challenges/Lessons learnt in Grant Implementation Processes ................................................. 40
5:       GF DISBURSEMENT REQUEST PROCEDURES-COUNTRY EXPERIENCE ...... 41
     5.1 Disbursement requests ......................................................................................................................... 41
       5.1.1. Understanding Disbursement Request triggers ................................................................................ 41
       5.1.2. Conditions precedent influence in Disbursement Request and Approval .............................. 41
     5.2 Disbursement Receipts and Management ..................................................................................... 42
       5.2.1. Timelines of processing and receiving disbursement ..................................................................... 42
       5.2.2. Authority/responsibility for disbursed resources ........................................................................... 44
       5.2.3. Allocating disbursed resources ................................................................................................................ 45
     5.3 Challenges/Lessons learnt in requesting/receiving/allocating disbursements ............. 45
6:       PSM (MALARIA) MANAGEMENT: COUNTRY EXPERIENCE ............................... 45
     6.1 Procurement Processes ........................................................................................................................ 46
       6.1.1 Procurement determinants ......................................................................................................................... 46
       6.1.2 Procurement funding ..................................................................................................................................... 46
       6.1.3 Procurement capacity building ................................................................................................................. 47
     6.2 In-Country Commodity Receipt ......................................................................................................... 47
       6.2.1 Planning for receipt of commodities in country ................................................................................. 47
       6.2.2 History of Receipt of commodities in country ..................................................................................... 48
     6.3 In-country Commodity Management ............................................................................................... 48
       6.3.1 Commodity distribution plans ................................................................................................................... 48
       6.3.2 Integration of malaria commodities with other essential drugs ................................................. 50
       6.3.3 Value and input of technical assistance provided .............................................................................. 50
     6.4 Challenges/ Lessons learned in Procurement and Supply Management ........................... 50
7:       KEY FINDINGS: MAPPING OF PSM BOTTLENECKS ............................................... 52
     7.1 Key bottlenecks to keeping PSM plans on target ......................................................................... 52
     7.2 Scope /Impact of GF PSM delays on malaria medicine and commodity security ............ 53
     7.3 Mechanisms adopted to resolve Global Fund PSM delays ........................................................ 54
8:       CONCLUSIONS AND RECOMMENDATIONS ................................................................ 57
     8.1. Recommendations: ................................................................................................................................ 57
       8.1.1. Strengthening GF grant and PSM plan processes ......................................................................... 57
       8.1.2. Implementing Success Stories across countries .......................................................................... 58
     8.2. Conclusions: ......................................................................................................................................... 58
REFERENCES...................................................................................................................................... 60
ANNEXES:............................................................................................................................................. 61
     Annex 1: People Consulted or Interviewed during the Case Study in Tanzania...................... 61
     ANNEX 2: GF GRANT DISBURSEMENT HISTORY .................................................................................. 64
     ANNEX 3: GF/LFA-PSM RELATED CONDITIONS PRECEDENT/FULFILLMENT HISTORY ........ 73
     ANNEX 4: HISTORY OF GF EMERGENCY PROCUREMENTS ............................................................... 85




ACRONYMS
ACT                    Artemisinin based combination Therapy
AMFm                   Affordable Medicines Facility – malaria
AS                     Artesunate (malaria)
                                                                                                                                                                       3
ASAQ       Artesunate Amodiaquine
ASF        Association de Sante Familiale (PSI affiliate)
ASRAMES    Association Regionale d’Approvisionnement en Médicaments Essentiels
CRS        Catholic Relief Services
CAG        Cellule d’appui et de gestion de financement du secteur santé
CCISD      Centre de coopération international en santé développement
CDR        Centre de Distribution Régional
CEMUBAC    Centre scientifique et médical de l'Université libre de Bruxelles pour ses activités de
           coopération
CP         Condition Precedent
CDF        Congolese Francs
CTB        Coopération Technique Belge
CCM        Country Coordination Mechanism
DRC        Democratic Republic of Congo
DFID       Department for International Development
DPM        Direction de la Pharmacie et du Médicament
DPM        Direction de la Pharmacie et du Médicament
DPL        Direction des Laboratoires
EFR        Enhanced Financial Report
ECC        Environnemental Consultants Contractors Eglise du Christ au Congo
FEDECAME   Fédération des Centrales d’Approvisionnement en Médicaments Essentiels
FEDECAME   Fédération des Centrales d'Achat en Médicaments Essentiels
GTZ        German Agency for Technical Cooperation
GMS        Grant Management Services
GDP        Gross Domestic Product
HMIS       Health Management Information System
IRS        Indoor Residual
IPTp       Intermittent preventive treatment (of malaria) in pregnancy
IRC        International Rescue Committee
JSI        John Snow, Inc
KPI        Key Performance Indicator
OCC        l’Office Congolais du Contrôle
LFA        Local Fund Agent
LMIS       Logistic Management Information System
LLIN       Long Lasting Impregnated Net
MSH        Management Science of Health
DCMP       Medical pharmaceutical Central Warehouse
MMB        Mercedarian Missionaries of Berriz
MoH        Ministry of Health
NDRA       National Drug Regulation Authority
NMCP       National Malaria Control Program
NGO        Non Governmental Organization
ASBL       Non-profit organisation
OMNIS      Organizational Modeling of Information Systems
PSI        Population Service International
PR         Principal Recipient
PSM        Procurement and Supply Management
                                                                                                     4
PSO        Procurement Support Office
PNAME      Programme National d'Approvisionnement en Médicaments Essentiels
PNLP       Programme National de Lutte contre le Paludisme
PRONANUT   Programme National de Nutrition
PU/DR      progress update and disbursement request
RDT        Rapid Diagnostic Test
RPM        Rational Pharmaceutical Management
RPM+       Rational Pharmaceutical Management Plus
RBM        Roll Back Malaria
SANRU      Santé Rurale
STG        Standard Treatment Guidelines
SR         Sub Recipient
SRN        Sub Regional Network
SNAME      Système National d'Approvisionnement en Médicaments Essentiels
TRP        Technical Review Panel
CORDAID    The Catholic Organisation for Relief and Development
PSMWG      The Procurement & Supply Chain Management Working Group
PURUS      The Urgent Project for Urban and Social Rehabilitation
UCOP       Projects Coordination Unit
UNDP       United Nations Development Programme
UNOPS      United Nations Office for Project Services
UNFPA      United Nations Population Fund
VPP        Voluntary Pooled Procurement
WHO        World Health Organization




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ACKNOWLEDGEMENTS

The authors wish to express his thanks to Lisa Hare from JSI and Dr. Mariatou Tala Jallow from
The Global Funds to Fights AIDS, Tuberculosis and Malaria, Co- chairs of the Roll Back
Malaria PSM Work stream, who made this study possible, as well as to Katherine Wolf (JSI-
Arlington Office), who coordinated the technical and administrative processes of this mission.

Thanks to all the key informants in DRC for the immense amounts of time they spent providing
details for this report. The authors thank also go to the Roll Back Malaria Partnership Secretariat,
particularly Dr. Jan Van Erps, RBM Coordinator Supply Chain Support, and Dr. José Nkuni,
RBM Central Africa Regional Focal Point and Dr. Joachim Da Silva, RBM Eastern Africa
Regional Focal Point for the help they provided us with during our mission.




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EXECUTIVE SUMMARY
Commitment of the Global Fund in the Fight against malaria in DRC began on January 2005
through Round 3, then through Round 8 Phase 1, and is going to continue through the
consolidation of Round 8 Phase 2 and Round 10 Phase 1.

Round 3 has been implemented with UNDP as PR. The change of DRC Standard Treatment
Guideline and the change of UNDP PSM strategy are the main explanations to the deep
modifications arisen during this grant.

Round 8 Phase 1 has been implemented with PSI, SANRU and UNDP as PRs. PSM activities
have been handled by SANRU for ACTs, RDT’s and LLINs (routine distribution) and PSI for
LLINs massive distribution campaign.

PSI met huge logistics problems while transporting LLINs to both Kasaï provinces. A solution
has been found with the approval of the Global Funds, but the whole process took too much time.
This issue has been amplified by Global Fund’s decision to freeze several grants, of which
UNDP grant was one. Trainings before distribution were planed and budgeted under the UNDP
grant, and PSI has had to wait before beginning the distribution campaign.

PSM bottlenecks have been identified in delays of delivery by manufacturers, delays in customs
clearance, logistics issues associated with a large country, and in the area of LMIS, which
impacted forecasting and quantification.

There is no evidence of a direct link between PSM delays and Global Funds disbursement delays.

Implementation of these grants took place in a context characterized by:

   -   Weaknesses of the policy and regulatory authorities

The DPM is not strong enough to play its role efficiently. Non-registered antimalarials are
available in the country; gifts of drugs enter into DRC without any control.

The National PSM system is managed through the FEDECAME for procurement and CDR
(Centrales de Distribution Regionales) for distribution. Nevertheless, none of the PRs use this
system in the context of the fight against malaria. PRs arrange their own procurement and may
use CDR for storage and distribution. Going through the national strategy would be an asset in
order to coordinate all the technical assistance provided by funders in order to strengthen the
health system.

There is no regulatory measure related to LMIS. The consequence is the impossibility for the
PNLP to have a clear picture of how things are really running in the field.

   -   A general lack of coordination

On a broad scale, because DRC is one of the most significant countries in the world in terms of
malaria burden, there is a competition between funders in order to obtain the greatest impact

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possible in the fight against malaria. This fact should be an asset, but with regards to the
weaknesses identified in policy and regulatory steps, this race for performance between funders
is not channeled into the existing tools of the public health system, and the health system is not
strengthened. Worse, existing tools are weakened. PNLP is not informed about the actions
undertaken by some partners, and FEDECAME faced problems with the arrival of commodities
for free without any solution for their existing stocks.

At the Global Fund level, the three grants designed for Round 8 Phase 1 have not been signed on
the same date, and the first disbursements have staggered start. The lack of synchronization
created coordination issues, and has become a real bottleneck after the freeze of several grants. In
terms of PSM delays, this problem affected mainly the LLINs’ massive distribution campaign.
LLINs were available, but trainings cannot be done, creating delays for distribution. This lack of
synchronization problem impacted the PU/DR of each PR, at least for rating. If these problems
created delays in the PSM process, there is no clear evidence that they generate delays in
disbursement.

Custom clearance issues, integration of the supply chain, and strengthening of Direction de la
Pharmacie et du Médicament (DPM), should be resolved with a stronger high-level political
commitment. The choice of Cellule d’appui et de gestion de financement du secteur santé (CAG)
as governmental PR in Round 10 may be a step towards reaching such a commitment.

As a CP for Round 8 Phase 2, the setup of an efficient LMIS should be considered as a priority.
This will contribute to resolve issues associated with forecasting and quantification. Such an
LMIS should be conceived and implemented not only in view to compliance with requests from
the Global Fund, but also as a tool of harmonization of all stakeholder’s efforts in order to
provide the PNLP with a unique system of reporting allowing the PNLP to have a clear picture of
the level of stocks and consumptions at the health facilities level. With such a tool, PNLP will be
in position to avoid stockouts or overstocks. By gathering all malaria stakeholders around
problems met by the PNLP, the RBM Partnership may have a crucial role as facilitator for
reaching this objective in time.


Recommendations

To the Ministry of Health

   -   Improving the RBM’s commitment to support Central Africa, combined with the
       technical assistance provided to DPM by MSH and CTB can maximize the CAG’s
       potential as a PR.
   -   To harmonize procurement through FEDECAME.
   -   To set up the LMIS for antimalarials.
   -   To improve storage conditions at the peripheral level (Health Zones and Health Facilities)


To all stakeholders

   -   To improve their level of coordination and to lead that effort first for the benefit of the
       PNLP.


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   -   To act without losing of view that, if fight against malaria can be considered as a vertical
       program, the provision of commodities on an enough large scale to impact strongly the
       burden will not be possible or sustainable without strengthening of the whole PSM
       system.
   -   All programs should make efforts to stick as closely as possible to the existing supply
       chains and wherever possible reinforce them.

To the Global Fund

   -   To promote good synchronization between grants within the consolidation of Round 8
       Phase 2 and Round 10 Phase 1.
   -   Process of negotiations should be eased through dedicated workshops.
   -   Design of the Global Fund proposal might be eased and rationalized, in order to devote
       adequate attention to the PSM process, which will be one of the most important topics at
       the stage of implementation. It should shorten the whole process, avoid too many changes
       of basis on which the proposal is written, assumptions, in-country environment, and thus
       limit adaptations.
   -   Malaria PSM-related CPs should be conceived not only for reaching targets of one grant,
       but as a necessity to strengthen the health system, indispensable to ensure efficiency and
       sustainability of the efforts made in the context of the fight against malaria.
   -   To apply the performance based philosophy with discernment, taking into account
       elements not relevant to PR’s level of performance.
   -   To increase the level of harmonization of actions with other stakeholders.
   -   To involve as much as possible the existing elements of the National Procurement and
       Supply Chain into the malaria commodities PSM.
   -   With regards to the weak human resources and taking into account the high staff turnover,
       importance of training activities should be highlighted.
   -   Buffer stocks should be calculated by the monthly average consumption multiplied by the
       lead-time in months.

To the Roll Back Malaria Partnership

   -   To continue the current effort provided in Central African Countries.
   -   Following its mandate, to contribute to a better coordination between stakeholders in
       view to strengthen the PNLP, and, on a larger scale, the DRC health system.
   -   To launch, in close cooperation with the PNLP, a brainstorming exercise focused on what
       should be an efficient malaria LMIS in DRC. It could be undertaken as a workshop
       involving other stakeholders. This process should be launched as soon as possible, in
       order to provide the Global Fund with an adequate answer to the CP n°1 of Round 8
       Phase 2 (SANRU).
   -   To update malaria commodity “Sources and Prices”, in order to provide PRs with a unit
       prices referential.




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10
1. INTRODUCTION

1.0    Background

Since its creation in 2002, the Global Fund has become the main financier of programs to fight
AIDS, TB and malaria, with approved funding of US$ 22.6 billion for more than 1,000 programs
in 150 countries.

About 3.3 billion people – half the world’s population – are at risk of malaria, which is endemic
in 106 countries. In 2009, there were an estimated 225 million cases and some 800,000 people
dead globally. The vast majority of them were children in sub-Saharan Africa and Asia. Malaria
costs Africa an estimated US $12 billion every year in lost GDP, even though it could be
controlled for a fraction of that sum.

Major progress has been made in just the last few years, financed by the consistent rise in
international investments for malaria control between 2004 and 2009. An increasing number of
countries are reporting impressive declines in malaria cases and deaths – down by more than 50
percent in 11 African countries and 32 countries in other regions. More and more countries are in
a position to target the elimination of malaria from their territories.

Since 2008, nearly 300 (289) million insecticide-treated nets to protect sleeping areas from the
mosquito carrier have been delivered to sub-Saharan Africa, alongside a near six-fold increase in
the number of people protected by indoor residual spraying of insecticides. Mean coverage of
these key prevention measures now stands at an estimated 70 percent for the countries most
affected by malaria – providing close to universal access, which is defined as 80 percent
coverage.

Availability of the most effective antimalarial drugs – artemisinin-based combination therapies
(ACTs) – has also risen dramatically. Worldwide, the number of treatment courses procured
increased from just over 11 million in 2005 to 158 million in 2009.

Global Fund investments have played a critical role in introducing and expanding coverage of
ACTs in many countries where resistance to older drugs is high. As well as financing treatment
for 170 million cases of malaria by the end of 2010, the Global Fund is piloting a pioneering
financing mechanism to improve access to ACTs by making them more affordable.

While these costly drugs are free of charge in public health clinics, more than 60 percent of
malaria patients in sub-Saharan Africa buy their antimalarial treatment from the private sector.
Early signs suggest that the Affordable Medicines Facility – malaria (AMFm) is working. In
Kenya, for example, some outlets are selling ACTs for the equivalent of about US$ 0.60, ten
times less than the pre-AMFm average price.

If the momentum of the last decade is maintained, malaria could be eliminated as a significant
public health problem in most endemic countries. But funding – while substantial – remains 60


                                                                                              11
percent below what is needed for malaria control, and the steady increase of resources in recent
years leveled off in 2010.

More nets are needed to protect all households at risk of malaria and funds must be found for
replacements. Even a long-lasting net has a limited lifespan, estimated at three years. Coverage
with intermittent preventive treatment for pregnant women – who are especially vulnerable to
malaria – is far from target levels. While many children in need still lack access to ACTs, many
others receive them without a test. Only 35 percent of reported malaria cases are confirmed with
a diagnostic test before treatment, which fosters the spread of drug resistance. Distribution of the
cheap and reliable rapid diagnostic tests now available must be scaled up.

Despite these huge efforts deployed, grant recipients find it difficult to effectively conduct
procurement and appropriate supply chain management to get the products to the service delivery
points.

In late 2006, the Global Fund and the Roll Back Malaria Partnership Secretariat supported the
Rational Pharmaceutical Management (RPM) Plus Program to conduct case study assessments in
Ghana, Guinea-Bissau, and Nigeria to document the process of implementing malaria grants, to
identify bottlenecks that the countries experienced, and to show steps taken to address these
bottlenecks1. Five years later, countries still struggle with conducting effective procurement and
supply chain management, and issues around Global Fund grant disbursement continue to impact
program performance.

The Procurement & Supply Chain Management Working Group (PSMWG) coordinates the
efforts of RBM partners and countries to resolve all challenges in the procurement and along the
supply chains of malaria commodities. In accordance with the Operating Framework of the Roll
Back Malaria (RBM) Partnership, the Procurement and Supply Management Working Group
(PSMWG) has been established by the Board in April 2007 to convene and coordinate partners to
address Procurement and Supply Chain issues related to malaria control. The Working Group is
guided by the overall commitment of the RBM partners to:

    (i) The Global Malaria Action Plan
    (ii) Partnership and capacity building
    (iii) Harmonization, accountability and transparency in scaling-up actions; and
    (iv) Bridging the gaps between technical and programmatic support needs at country.

The PSMWG is accountable for reporting to the RBM Board on progress in PSM
implementation support. PSM activities are implemented by National Malaria Control
Programmes, national structures responsible for PSM and their partners. If requested by the
relevant SRN, the PSMWG coordinates the response to all requests from countries for PSM
implementation support.

The PSMWG focuses on the following four PSM challenges:




1




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   -    Technical assistance to countries; forecasting and quantification of commodities for
        prevention and treatment, and raw materials;
   -    The implementation of quality assurance/quality control policies, in particular with regard
        to product selection and supply chain management;
   -    Dissemination of tools, best practices, information;
   -    Advocacy for resource mobilization for in-country operations.


In 2010, the Malaria Health Products PSM Workshop held in Accra, Ghana, from 28 to 30
September provided a forum for procurement, malaria program managers and Principal
Recipients from twenty African countries to deliberate on their bottlenecks in the areas of
procuring and delivering Malaria Health Products. The workshop provided information, updates
and lessons learned on supply chain management through presentations and peer discussions in
plenary or in groups of two to three countries. DRC attended this workshop, discussed the PSM
bottlenecks identified by the PNLP and defined actions to undertake as next steps to solve these
bottlenecks.

At the beginning of 2012, countries still struggle to conduct effective procurement and supply
chain management, and issues around Global Fund grant disbursement continue to impact
program performance.

The purpose of this study is to map country level information on the key procurement and supply
management bottlenecks, in particular, those related to grant disbursement delays.

Global Fund Key Performance Indicator (KPI) at the end of 2010 shows the Speed of
Disbursement Processing was 23 calendar days*, and the Speed of Grant signing (average time
between Proposal approval and first disbursement) was 11.2 months (Round 9).

Summary of the Standard Global Fund Process from Grant Application to Implementation
Even the process of application has experienced dramatic changes at the end of 2011 and even if
the Global Fund knows at the present time a process of deep changes, the subject of the study is
retrospective and the process from Grant Application to Implementation for the grants concerned
can be summarized as follow:

   1. The Secretariat contracts with one LFA per country. The LFA certifies the financial
      management and administrative capacity of the nominated PR(s). Based on LFA
      assessment, the PR may require technical assistance to strengthen capacities.
      Development partners may provide or participate in such capacity-building activities. The
      strengthening of identified capacity gaps may be included as conditions precedent to
      disbursement of funds in the grant agreement between the Global Fund and the PR. In
      addition, the LFA makes an assessment of the procurement capacity and M&E capacity.

   2. The Secretariat and PR negotiate a grant agreement for the first two years of the grant
      (Phase 1), which identifies specific, measurable results to be tracked using a set of key
      indicators.


   * Median time between receipt of LFA-verified PU/DR and date of disbursement (A and B1-rated Grants only)


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   3. The grant agreement between the Global Fund and the PR is signed. Based on a request
       from the Secretariat, the World Bank makes initial disbursement to the PR. The PR
       makes disbursements to SRs for implementation, as called for in the proposal.


   4. Program and services begin. As the coordinating body at the country level, the CCM
       oversees and monitors progress during implementation.

   5. The PR submits periodic disbursement requests with updates on programmatic and
      financial progress. The LFA verifies information submitted and recommends
      disbursements based on demonstrated progress. Lack of progress triggers a request by
      Secretariat for corrective action.

   6. The PR submits a fiscal year progress report and annual audit of program financial
      statements to the Secretariat through the LFA.

   7. Regular disbursement requests and program updates continue, with future disbursements
       tied to ongoing progress.

   8. The CCM requests funding beyond the initially approved two-year period (Phase 1). The
       Global Fund approves continued funding based on progress and availability of funds
       (thus beginning Phase 2).


Performance-based Funding

Global Fund’s performance-based funding ensures that funding decisions are based on a
transparent assessment of results against time-bound targets.

As a financing method, performance-based funding promotes accountability and provides
incentives for recipients to use funds efficiently to achieve results.
    - The Global Fund continually raises funds to dramatically increase resources to fight three
        of the world's most devastating diseases.
    - The money received from donors is channeled to program implementers for grants
        operating in 140 countries around the world.
    - The achievements of grant activities are measured against performance indicators and the
        results are used for ongoing funding decisions. The proven performance of Global Fund
        grants is critical to raising additional funding from donors.

Global Fund programs are provided with initial funding based on the quality of their applications.
In order to receive subsequent financing, they must demonstrate results against defined
performance targets. These targets are proposed by the country (for approval by the Global
Fund), thereby ensuring they are appropriate to the national context and local program realities.
Performance-based funding at the Global Fund provides a platform for grants to demonstrate that
they can convert financing into results, enabling further funds to be committed to the programs
achieving results and impact in fighting AIDS, tuberculosis (TB) and malaria.

The Global Fund's system of performance-based funding was developed to:


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   -   Link funding to the achievement of country-owned objectives and targets
   -   Ensure that money is spent on delivering services for people in need
   -   Provide incentives for grantees to focus on programmatic results and timely
       implementation
   -   Encourage learning to strengthen capacities and improve program implementation
   -   Invest in measurement systems and promote the use of evidence for decision-making
   -   Provide a tool for grant oversight and monitoring within countries and by the Global
       Fund Secretariat
   -   Free up committed resources from non-performing grants for re-allocation to programs
       where results can be achieved.
PSM process

An estimated 39% of Global Fund grants have been used on procurement of pharmaceuticals and
other health products. The Global Fund’s role in procurement and supply management is
primarily focused on policy approach and assistance to countries with policy requirements when
procuring products with Global Fund resources for prevention, treatment and care of HIV/AIDS,
tuberculosis and malaria. Although the Global Fund is not engaged in direct procurement
activities, which are managed and conducted under the full responsibility of grant recipients, it
provides the following mechanisms to promote safe and cost-effective procurement of health
products:

  Procurement and Supply Management Plan: The objective of the PSM plan for health
        products is to outline how the PR will adhere to the Global Fund’s procurement and
        supply management policies.

  Quality Assurance Policy: The Global Fund's Quality Assurance Policy for Pharmaceutical
         Products (amended and restated on 14 December 2010) and Quality Assurance Policy
         for Diagnostics Products (issued on 14 December 2010) defines the requirements
         which must be met for finished pharmaceutical products (FPP) and diagnostic products
         purchased with Global Fund resources.

  Price and Quality Reporting database (formerly PRM) offers information on procurement of
         selected health products, including prices and results of quality control testing.

  Procurement Support Services (VPP, CBS/SCMA): Voluntary Pooled Procurement and
        Capacity Building Services / Supply Chain Management Assistance programs for
        Principal Recipients have been established since January 2009.

In order to improve access to effective and affordable pharmaceutical and other health products,
the Global Fund has adopted a set of policies and principles on procurement and supply
management that aim to support the timely procurement of quality assured pharmaceutical and
other health products in sufficient quantities, reduce cost inefficiencies, ensure the reliability and
security of the distribution system, encourage appropriate use of health products and
continuously monitor all procurement and supply management activities. Procurement and
supply management activities are fundamental to program performance. To avoid stock-outs and
treatment disruption, it is of paramount importance to carefully plan all such activities early
enough and to react promptly to any problems that may arise.

                                                                                                   15
Procurement must be conducted in a competitive and transparent manner and in accordance with
international pharmaceutical procurement guidelines as outlined in the interagency guidelines
Operational Principles for Good Pharmaceutical Procurement.1 In addition, the Principal
Recipient shall ensure that the procurement and supply management complies with the principles
set out in the interagency guidelines A Model Quality Assurance System for Procurement
Agencies.

Principal Recipients are responsible for ensuring that all procurement and supply management
activities conducted under their grants – including those conducted by other entities such as sub-
recipients and procurement agents – conform to Global Fund requirements as stipulated in the
grant agreement. Principal Recipients are required to have systems in place to monitor the
performance of other actors conducting procurement or supply management activities under their
grants.

Once a proposal has been approved by the Global Fund Board and before grant disbursement for
procurement and supply management activities is initiated, the Principal Recipient must submit
for assessment and subsequent approval procurement and supply management plan. The
Principal Recipient should obtain a full understanding of the Global Fund’s policies on
procurement and supply management before preparing the plan.

The procurement and supply management plan should provide information on the health
products required by the program that will be funded under the new grant. It should describe (a)
how the Principal Recipient will adhere to the Global Fund procurement and supply management
policies and related provisions of the grant agreement; and (b) the systems and structures that
will be used for managing these products for that grant. The Principal Recipient shall ensure that
procurement under the program is carried out in accordance with the procurement and supply
management plan. The procurement and supply management plan will also be used to review and
monitor grant implementation.

Once the Principal Recipient has completed the procurement and supply management plan, the
Local Fund Agent will conduct a comprehensive assessment of the plan and of the recipient’s
overall capacity for health product management.

The objective of these assessments is to verify whether the plan is adequate and whether the
Principal Recipient has the minimum required capacity to handle health product management
activities and/or oversee the management of such activities carried out by sub-recipients in
accordance with Global Fund requirements.

The Principal Recipient or the entity being assessed should note that:

   -   If the Local Fund Agent finds that the procurement and supply management plan is
       adequate and that the requirements for adequate capacity are met as well, the Global Fund
       Secretariat will be in a position to start disbursing funds for health product procurement;
   -   However if the Local Fund Agent determines that the procurement and supply
       management plan and/or associated capacities are inadequate, the Global Fund may
       request that the Principal Recipient revise the plan and/or associated implementation
       arrangements;
   -   In the event that a procurement and supply management plan is still not of acceptable
       quality after two reviews by the Local Fund Agent, the Global Fund may request that the
                                                                                               16
       Principal Recipient contract technical assistance in preparing the plan. Grant funds may
       be used by the Principal Recipient to pay for technical assistance from specialized
       entities.

The recipient shall ensure that procurement and supply management under the program is carried
out in accordance with the approved procurement and supply management plan.


Disbursement practices

During the lifetime of a grant, the Global Fund periodically disburses funds to the Principal
Recipient (PR) based on demonstrated program performance and financial needs for the
following period of implementation. The PR’s ongoing progress update and disbursement request
(PU/DR) is both a progress report on the latest completed period of program implementation and
a request for funds for the following period of implementation. Its purpose is to provide an
update of the programmatic and financial progress of a Global Fund-financed grant, as well as an
update on fulfillment of conditions precedent, management actions and other requirements. The
PU/DR, alongside the Local Fund Agent (LFA) ongoing progress review and disbursement
recommendation (short-form: LFA-verified PU/DR), forms the basis for the Global Fund’s
disbursement decision by linking historical and expected program performance with the level of
financing to be provided to the PR.

The PU/DR should be completed by the PR of a Global Fund grant for every period in which a
progress update is required, usually either on a quarterly, semiannual or annual basis, regardless
of whether or not a disbursement is being requested. Once a year, the PR is expected to submit
the Enhanced Financial Report (EFR) as part of the PU/DR.

The PR is required to submit the PU/DR to the LFA within 45 calendar days from the closing
date of the relevant progress update period when the report does not contain the EFR (as
indicated in the performance framework of Annex A of the grant agreement) and within 60
calendar days when the report contains the EFR (once a year).

The LFA should complete and submit a signed copy of the LFA-verified PU/DR to the Global
Fund within ten working days after receiving the final signed version of the PU/DR from the PR
and within 13 working days when the PU/DR report contains the EFR (once a year), unless
agreed otherwise with the FPM (The LFA does not need to submit original/hard copies of each
PU/DR reports. However, these documents should be available at the LFA’s offices for any
audit/reviews. Also, the LFA should be ready at all times to submit these originals to the
Secretariat upon request). In this report the LFA should provide an analysis and comments based
on verification of the PR reported information, document grant risks and recommendations for
improving program implementation, and finally, provide a performance rating to the grant and
disbursement recommendation for the Global Fund’s consideration. In defining the performance
rating and recommending a disbursement amount, the LFA should use the Grant Rating
Methodology of the Global Fund.


1.2. Purpose and Objectives of the Study


                                                                                               17
          The purpose of this study is to map country level information on the key procurement and supply
          management (PSM) bottlenecks, in particular, those related to grant disbursement delays.

          The study objectives are to:

             -   Describe the implementation of the Global Fund malaria grants in two Global Fund
                 malaria countries in sub-Saharan Africa (Tanzania and DR Congo);
             -   Identify the bottlenecks in the implementation processes that contributed to delays;
             -   Describe the steps taken to address these bottlenecks;
             -   Draw key lessons learned.

          Deliverables are:

             -   Separate assessments for DRC and Tanzania that will contain detailed study findings. The
                 case studies from each country will be descriptive and focused on the procurement,
                 supply, and distribution aspects of implementing Global Fund grants for malaria.
             -   A main report will summarize the findings of the authors’ assessments, present the
                 similarities and differences among the countries, and discuss the key lessons learned and
                 their implications for future programming.


          1.3 Methodology

           The PSM Bottleneck work stream of the PSM Working Group undertook this study through an
          assessment team organized by JSI between March and April 2012. The assessment team
          reviewed documents and conducted in-depth interviews in the field with key stakeholders in the
          case study countries of Tanzania and DR Congo. In addition, discussions were held with Global
          Fund portfolio managers and other partners involved with the pharmaceutical procurement
          processes.

        A questionnaire has been built in order to lead in depth interviews with main in country
        stakeholders, such as PNLP, PRs, LFA, national authorities involved in PSM activities as
        NDRA, Central Medical stores, and private sector representative. This questionnaire has been
        designed as follow:
SECTIONS                              CHAPTERS                                   SUB-CHAPTERS
SECTION 1: COUNTRY CONTEXT            I.   Operating Environment: (Policy)
SECTION 2: COUNTRY GRANT              II.   Proposal and PSM Plan
PROCESSES                             Development
                                      III.   Grant Negotiations/Signing (Phase
                                      I, Phase II, Rolling Continuation
                                      Channel) - Current PSM plan

SECTION 3: COUNTRY PSM GRANT  IV.    Adapting PSM Plans
IMPLEMENTATION MECHANISMS     V. PSM Reporting Structures
                              VI.    Contingency Planning
SECTION 4: MAPPING OF COUNTRY VII. Expected Timelines
PSM                           VIII: Mapping of                      A. Disbursement
IMPLEMENTATION/DISBURSEMENT disbursement/Implementation bottlenecks requests
                                                                                                       18
BOTTLENECKS/OUTCOMES                                                           B. Disbursement
                                                                               Received
                                                                               C. Procurement
                                                                               Processes:
                                                                               D. In-Country
                                                                               Malaria Medicine and
                                                                               Commodity Receipt
                                                                               E. In-country Malaria
                                                                               Medicine/Commodity
                                                                               Management
SECTION 5: ANALYSES OF               IX. PSM Related Issues/Challenges-
COUNTRY PSM                          Significance and Resolutions
IMPLEMENTATION/DISBURSEMENT          X. PSM Related Issues/
OUTCOMES                             Challenges--Lessons learned


       JSI, UNICEF, RBM SNR focal points and consultants have been involved in its conception.




                                                                                                 19
2:     COUNTRY CONTEXT –DEMOCRATIC REPUBLIC OF CONGO
2.1 Country Background




Source: http://geology.com/world/democratic-republic-of-the-congo-satellite-image.shtml


2.2 Gross Domestic Product

By 2008 estimates, DRC has a Gross Domestic Product (GDP) of US$ 15.106 billion,
comprising of agriculture (37,5%), industry (27,6%), and services (35%)-by 2011 estimates and a
GDP per capita of US$ 208 (1983 estimates).


                                                                                            20
 2.3 Malaria Epidemiology

 Malaria is a major health problem in the Democratic Republic of the Congo, and nearly 70
 percent of the population is at risk for malaria. It accounts for an estimated 40 percent of
 outpatient visits and deaths among children under five.


   Malaria indicators         Estimate      Year                      Source

 Reported malaria             7,839,435      2009 WHO-World Malaria report 2010
 cases (suspected)

 Reported malaria             6,749,112      2009 WHO-World Malaria report 2010
 cases (probable and
 confirmed)

 Reported malaria               21,168       2009 WHO-World Malaria report 2010
 deaths

 Estimated malaria              96,113       2006 WHO-World Malaria report 2008
 deaths

 DALY's ('000),                  3,681       2004 WHO
 Malaria                                          (http://www.who.int/healthinfo/global_burd
                                                  en_disease/gbddeathdalycountryestimates2
                                                  004.xls)
                                                  accessed on 05 April 2012




 RBM Road map 2011

 Interventions Need to          Already       Funded and to be Commodity Financial Gap
               end 2011         covered       distributed before Gap        (USD)
                                              end 2011           (Quantity)
LLINs
 Mass             21,276,049 19,292,092 21,276,049                0
 Campaign
 Routine          3,379,471     5,338,473     2,598,991           780,480       5,463,363
 distribution
 Total            24,655,520 24,630,565 23,875,040                780,480       5,463,363
ACTs
 Public           19,210,033
 Private          0
 Total            19,210,033 14,773,525 0                         4,436,508     6,654,762
Diagnostics
 RDTs             48,025,083 36,933,813 0                         11,091,270    14,418,651
                                                                                               21
 Microscopy      1,030        752        0                    278                  2,780
 Total           48,026,113 36,934,565 0                      11,091,548           14,421,431
IRS (Cost per structure: USD)
 Structures to 19,967                    19,967               -19,967              0
 be sprayed
Intermittent preventive treatment (of malaria) in pregnancy (IPTp)
 Number of       3,821,910 1,058,130 1,563,000                1,200,780            60,748
 doses


 2.4 Country Policy and Regulatory environment (Malaria, PSM)


 2.4.1. Malaria Policy

 a. Plan National de développement Sanitaire

 The fight against Malaria is based on the National Health Sector Development/Strategic Plan
 (2011-2015). That strategy aims to insure quality primary health care to all of the population, in
 particular the vulnerable groups with the aim of fighting the big endemic diseases such as HIV /
 AIDS, malaria, tuberculosis, onchocerciasis, human trypanosomiasis, non-contagious diseases,
 etc.

 This document notes that while international assistance dedicated to health increased since 2001,
 it is largely designated for vertical programs (Global Fund for the fight against Malaria, HIV /
 AIDS and Tuberculosis). Given that vertical resources dominated health sector financing, health
 sector strategy was often not based on the primary health care and the health zone as key
 operational units. Thus, this model propagated health services development based on the
 indicators of the specialized programs instead of integrated health services based on human
 development.

 Target 3 of this Strategic Plan is: By 2015, to stop the spreading of HIV / AIDS, to control
 malaria and other big diseases and begin to invert the current trend.

 Target 8 is: The rate of children under 5 years old who sleep under LLINs increases from 6 % to
 40 %, , and that of those who receive a correct treatment for malaria / fever increases respectively
 by 25 %.

 The strategy is based on primary health; the operational level of that strategy is the Health Zone.

 b. Strategic Plan “Roll Back Malaria” 2009-2013

 The frame of the fight of malaria is the Strategic Plan “Roll Back Malaria” 2009-2013.

 The Programme National de Lutte contre le Paludisme, (PNLP), is a specialized department
 of the Ministry of Health, endowed with a financial and administrative autonomy, placed under
 the hierarchical authority of the Minister of Health. It has been created by the ministerial decree
 N 1250 / CAB / MIN / postal area / 008 / 1998 of July 22nd, 1998.


                                                                                                  22
Its mandate consists in defining the general policy of the fight against malaria, in facilitating the
partnership with other public and private sectors, in planning and coordinating the activities of
fight against malaria, in insuring the plea "Roll Back Malaria" for approval by the various
partners and the mobilization of the necessary resources for the implementation.

Its mission is "to elaborate and to apply strategies guaranteeing to the inhabitants of the DRC,
particularly children under 5 and pregnant women, life with a lesser risk of contracting or of
dying from malaria and of contributing to the reduction of the socioeconomic losses attributable
to this endemic disease".

The objectives are the following ones:
   i. To reduce the morbidity and the mortality due to malaria within the community and in
           particular among children under 5 years of age;
   ii. To reduce the morbidity and the mortality due to malaria among pregnant women;
   iii. To contribute to the reduction of the socioeconomic burden due to malaria.

The fight against malaria is an integral part of primary healthcare. The Direction of the
Development of Primary Healthcare is responsible for the strengthening of human resources in
health zones through in-service training, supervision, monitoring and review of the National
Health Information System and operational research. The PNLP relies on it for the integration of
its basic strategies and the follow-up of its indicators.

A national framework of the partnership is operational at the central level through a Malaria Task
Force. Partners with activities linked to malaria control and the potential partners meet regularly
allowing for the exchange of views and the convergence of the efforts.

In 2008, the review of the Programme raised the following weaknesses:

   -   Lack of an efficient reporting system
   -   Lack of LLINs monitoring system
   -   Weak ITP coverage is spite of a high rate of using pre natal consultation and of assisted
       childbirths
   -   Absence of IRS strategy
   -   Health zone staff not yet trained on the management of the epidemics
   -   Absence of plan financed by preparation and retort of malaria epidemics and of a
       technical guide in case of epidemic
   -   Low rate of correct case management (according to the national policy in both simple and
       severe malaria in health structures)
   -   Weakness in material, logistic and financial resources
   -   Weakness in qualified and experimented human resources
   -   Weakness of coordination in the interventions of the partners
   -   Trainings insufficient and uncoordinated
   -   Absence of an integrated plan for communication for the social mobilization
   -   Weak availability of medicines and other commodities at the operational level
   -   Weak diffusion of the national policy and normative documents
   -   Data base incomplete and not up-to-date
   -   Current PNLP infrastructures not adapted and insufficient.



                                                                                                  23
The Strategic plan of 2009-2013 aims to reduce morbidity and mortality due to malaria by 50%
through:

   -   Strengthening prevention activities (LLINs and other related activities)
   -   Increasing IPT
   -   Improvement of case management at all levels of the health system
   -   Strengthening management of epidemics.


2.4.2 Pharmaceutical Policy

The Ministry of Health made a first assessment of the pharmaceutical sector in 1996. Outcomes
were:

   -   Non-existent, or old-fashioned, incomplete legislation and regulations
   -   Lack of system of registration
   -   Supply system completely disordered
   -   Very high cost of medicines and non-existent of price Policy
   -   Circulation of poor quality, counterfeit medicines and lack of a national laboratory of
       quality control
   -   Irrational drug use
   -   Weakness of the health product financing
   -   Lack of skilled human resources
   -   Lack of organization of the traditional medicine
   -   Lack of information system.

Some answers have been provided through the creation of a national system of essential drugs
supply (SNAME), the strengthening of the capacities of the Pharmacists of the NDRA (DPM)
and the setting-up of the National Center of Pharmacovigilance.

The actual law focused on pharmaceutical exercise dates from 1933. A new text has been
elaborated, but its adoption by the National Assembly is still pending.

The NDRA (DPM)

Created in 1982, it is hosted by the Ministry of Health as an administrative direction.
It undertakes all the statutory functions, in particular the granting of the authorizations for
opening or exercising of the pharmacy, the granting of the import licenses of medicines,
registration of medicines, pharmaceutical inspection, quality control of medicines, control of
narcotics and psychotropic substances and precursors, the post marketing surveillance, the
pharmacovigilance, the control of publicity over medicines and modern medicine and healing
plants.

The DPM receives technical assistance from WHO, MSH and CTB, in order to strengthen the
registration process, inspections and supply system.


Registration


                                                                                            24
Established in 1987, revised and adopted in 2008, the National Pharmaceutical Policy (PPN)
ensures a sufficient supply and a rational use of good quality, safe, effective generic essential
medicines and affordable prices for the majority of the population.

Regarding registration, the decree n°1250/CAB/MIN/SAJ/MS/013/2001 considers a
pharmaceutical product “any substance or composition used for the diagnosis, the cure, the
treatment and the prevention of the disease of a man or animal and being able to affect the
structure or any function of the human body. This pharmaceutical product must be used under
the advice or control of the Doctor and the Pharmacist.”

This decree stipulates that ” No pharmaceutical product imported or made locally (brand or
generic medicine without exception) can be authorized to circulate or to be consumed on the
Congolese national territory if it was not beforehand recorded and not benefited from a
marketing authorization of the Director Department, head of the Direction of the Pharmacy, the
medicines and the laboratories.”

The decree indicated clearly the documents the manufacturer should provide and the registration
fees.

With the technical assistance of MSH/CTB, Standard Operational procedures for registration
have been set up. A commission takes quarterly meeting, and around 1000 pharmaceuticals have
been registered. All ACT’s, LLIN’s and RDT’s provided by the institutional funders are
currently registered. ASAQ and LLIN’s have been registered in 2009.

However, in 2011 more or less 3.560 patent medicines and 1.680 generic medicines were
available in the country.

With regards to anti-malarials, no one knows how many different kinds of products are available
in the country, particularly since some are manufactured locally.

DPM provides registrations for LLINs and RDTs but not for insecticides.

Main issues met by DPM, and by MSH/CTB Technical Assistance are:

   -   Lack of financial resources with regards to needs,
   -   Lack of skilled human resources
   -   Motivation of staff

Quality Assurance

DRC does not have a national quality control laboratory under the authority of the Ministry of
Health. The Ministry of Health is subcontracting laboratories which it approved, in particular the
LACOMEDA, the LAPHAKI, the laboratory of the Congolese Office of Control (OCC) and the
Laboratory of quality control of Kinshasa (LACOKIN). The three first ones belong to the
Departments of the State, whereas the last one is private. Regrettably, all of these laboratories are
characterized by a lack of adequate equipment; except the OCC, which is making an effort to
reach the level 1 as expected by WHO. It is the only laboratory of the OCC that is in process of
system ISO accreditation: a documentary and a technical review have been held.


                                                                                                  25
Private sector

Deregulation is deep. The country is facing a huge illegal drug business, increased by the
weakness of the public health sector. Except in big cities, there are few private pharmacies.
As a second step of the technical assistance provided by MSH in the update of the
pharmaceutical law, training will be held at the end of April 2012 for 30 inspectors by WHO,
CTB and MSH. But the concept of inspection is not fully disclosed.

Through the Global Fund grant, or through other initiatives, the provision of quality ACTs with
an affordable price in the private sector remains a hopeful strategy for the fight against malaria.
Other country experiences, such as Tanzania, show that the distribution of ACTs through the
private sector increase dramatically the availability. It seems an efficient way to reach the target
of universal coverage, but it cannot be done without a strong National Drug Regulation
Authority.

Drug financing

Availability of generics remains low: In 2007, 48.5% in faith sector, 55.6% in public sector, and
65.4% in private sector.

Except vaccines, TB drugs, trypanocides, ivermectine, ARVs and LLINs, patients pay almost all
drugs in a context of cost recovery. The legislation does not mention pricing for malaria
commodities. This free distribution of malaria commodities is only the consequence of the
funders’ policy.

Import tax rates are the same for generic and brand name drugs.

Procurement in the public sector

The National Pharmaceutical Policy had held as strategy for the supply the centralization of
purchases and the decentralization of the distribution of effective, good quality, safe medicines
and affordable prices with the majority of the population. For that purpose, in 2002, the Ministry
of health created the National System of Supply in Essential Medicines (SNAME).

In order to coordinate, oversee and undertake the monitoring evaluation of the implementation of
the SNAME, the Ministry of Health created the National Program of Supply in Essential
Medicines (PNAME).

The operational implementer of public sector supply chain is FEDECAME (see section 4.2.1)

A study on the Pharmaceutical profile undertaken by the Ministry of Health in 2011 underlined
the following recommendations:

   -   Take sensitive the political Authority on the importance of drugs in the health system of
       the Country, the medicine has to stop being an instrument of political propaganda;
   -   Strengthen administrative capacities and institutional of the DPM;
   -   Update the law on the exercise of the Pharmacy;
   -   Make sensitive all the health workers at every level on the rational use
   -   Enlarge the scope of work of the SNAME, especially by integrating the private sector;
                                                                                                 26
   -   Make respect the distribution network of medicines,
   -   Spread quickly the pharmacovigilance through all the Country.

Malaria Commodity Procurement

With regards to the fight against malaria, the most important issue is the lack of harmonization of
general planning of all stakeholders, even the major ones, as World Bank, PMI, and the Global
Fund. The way of work is too vertical.

The largest challenge is to get rid of the notion of a "supply chain for malaria commodities".
DRC needs one or more supply chains for all its pharmaceutical commodities, and not one per
product.

Due to the size of the Country, another one of the greater challenges is the decentralized nature
of the PSM system. But this decentralization may also be considered as an opportunity. At the
provincial level, when a CDR and a provincial medicines committee exist, there is a good basis
for collaboration and opportunities to use the regular supply lines to the health zones. In all cases,
all programs should make every effort to stick as closely as possible to the existing supply chains
and where possible reinforce them. At provincial level there is a good follow-up and good checks
and balances as the "distance" between the clients (health zones) and the suppliers (programs,
CDRs etc.) is relatively small.

An assessment of the national needs, a state of available external and internal funds available,
should be undertaken in order to set up a united national planning.

Procurement operation should be gathered through a single entity, such as FEDECAME. This
structure has solid experience in international tenders, and benefits from several years of a strong
and continuous support from AEDES. Procurement through FEDECAME was initially planned
for Round 10, but given the consolidation of Round 8 Phase 2, the Global Fund suggested
keeping the same system as in Round 8, or to use VPP services or an agreed procurement agency.

 LLINs, RDTs, ASAQ, Quinine tablets and injectables, SP, paracetamol tablets and diazepam
injectables are procured under Global Fund Grants.

PNLP is currently not associated with the tender process. PNLP should be, as a technical
observer, involved in this process until the award of the tender, in a way that would avoid any
conflict of interest. But a law on public tender published in 2010, requires that the beneficiary
(PNLP here) has only to provide technical specifications. The beneficiary has to participate in
analysis from a technical point of view, and he has to send one representative into the awarding
commission. In order to avoid conflict of interest, this representative has only a consultative role.

This law seems not to be yet entering in application. The CAG have planned trainings for all
partners in order to explain this law and their role in awarding tenders.

Not all partners pay attention to the following points:

   -   To be sure that selection of commodities meets national specifications,
   -   To be sure that procured items meet the PNLP agreement,


                                                                                                   27
   -   To respect the national administrative rules, through DPM. Some organizations, with the
       help of political contacts, don’t respect the normal process, and make it difficult to have a
       clear picture about what and where commodities are distributed;

For instance, a recent gift of antimalarials provide by an Italian Cooperation has just been
documented at the DPM with only a press communication, without any details regarding nature
of drugs, manufacturers and so on. The shelf life of this gift was less than 6 months.

The Korean Cooperation supplies directly to the health facilities.

USAID has just made the commitment to supply through the FEDECAME/CDR system. USAID
is currently assessing CDR to set up that new policy.

STG are not always followed, mainly in the most peripheral areas, near the borders.

Obviously, setting up a reliable HMIS and LMIS would be an indispensable first step. A
normative frame exists for the health management information system, but not for the logistical
management information system. Such a frame should oblige stakeholders and partners to report
following a standardized format. Currently, partners have no obligation to report.

From one level to the other the data information can be obtained. At provincial level, what has
been supplied from the national level can be checked. At the health zone level, data on the
supplies from the provincial level are available. However, having all the consumption and supply
information available at the national level, and preferably in real time, might appear as a utopia.

These bottlenecks had already been identified by the DRC delegation in Workshop on
Procurement and Supply chain Management on Malaria Health Products held in Accra on
September 2010. In order to solve them, the decision has been made to create within the
Ministry of Health a structure to centralize all PSM activities undertaken by stakeholders. This
structure is the CAG (Cellule d’appui et de gestion de financement du secteur santé). It is
currently running and has been involved in Round 10 proposal redaction.

With regards to LMIS, the Ministry of Health has decided to use “Channel” software”. Its
implementation is in process.



2.5 Country Malaria Intervention Financing Mechanisms

DRC targets to meet the Millennium Development Goals, which means:

   -   To reduce of ¾ the maternal mortality before 2015,
   -   To reduce of 2/3 children under 5 mortality before 2015
   -   To stop and reverse the trends of HIV/AIDS spreading before 2015

Commitment of the Government was translated by the allowance of the important resources for
the healthcare sector. Since 2004 and 2005, the credits relative to the expenses of the fight
against poverty in the social sector represented 31 % of the total budget estimated at 528 billion
Congolese Francs (CDF). On this amount 5.6 %, 29.7 billion CDF, was allocated to the
healthcare sector, which represents 1.2 % of the NOMINAL GDP of 2004. In order to finance
                                                                                                28
the fight against malaria, the government had to appeal to the bilateral and multilateral
cooperation as well as the community participation.

In spite of its financial autonomy according to the order n°1250 / CAB / MIN / postal area / 008 /
1998 of July 22nd, 1998 including PNLP creation, organization and functioning, the financial
management is governed by the financial law, the general regulation on the public accounting
and the budgetary instructions emanating from the Ministry of the Budget.

The budget of the Strategic Plan 2009-2013 is 961,462,861 USD. The expected contribution of
the government is 10 million USD, 2 million each year.



2.6 History of Global Fund in country and Current Grants/Phases

1. Round 3

The grant number is ZAR-304-G03-M. PR is UNDP. The grant amount is 53,936,609.00 USD

The purpose of the Round 3 grant was to contribute to the reduction of malaria-related morbidity
and mortality in the DRC, with a special focus on children less than five years old and pregnant
women.

The specific objectives aimed by this component were to:

   -   Promote insecticide bed nets
   -   Improve care for malaria patients in health structures
   -   Improve care for fever/malaria patients in the community
   -   Employ Intermittent Preventive Treatment (IPT) for pregnant women; and
   -   Strengthen technical and managerial skills of the national malaria program (PNLP).

Phase 1 started on 2005 January 1st, and ended on December 30th 2006. Total amount of phase 1
was 31,846,676 USD.
Phase 2 started on 2007 January 1st, and ended on June 30th 2009. Total amount of Phase 2 was
22,089,933 USD.


2. Round 8

DRC submitted one proposal for a global amount of 262,911,091 USD for malaria.

In continuity with Round 3, the purpose of Round 8 proposal was to reduce the morbidity and
mortality related to malaria between now and 2013. In particular, the DRC plans to reach the
scale necessary for impact (SUFI) through national distribution of LLIN’s (across all 515 health
zones) and continue Round 3 activities with higher goals in the 119 health zones.

The specific goals to be attained through this proposal are the following:

• Reach a rate of at least 80% of the general population sleeping under LLIN’s nationwide


                                                                                               29
• Reach a rate of at least 80% of children < 1 and pregnant women sleeping under LLIN’s in the
119 health zones
• Reach a rate of at least 80% of pregnant women who receive intermittent preventative treatment
according to the national directives in the 119 health zones
• Reach a treatment rate of at least 80% in accordance with national directives in the 119 health
zones.

Three grants have been signed to cover this proposal.

Grant number ZAR-810-G09-M: PR is UNDP. The grant amount is 25,027,374 USD

Phase 1 started on March 1st 2010, and ended on February 29th 2012. Whole amount of phase 1
was 25,027,374 USD.

There is no procurement activity in this Grant.

Grant number ZAR-809-G07-M: PR is PSI. The grant amount is 77,863,857 USD.

Phase 1 started on January 1st 2010, and ended on March 31st 2012. Whole amount of phase 1
was 77,863,857 USD.

PSI is in charge of LLINs massive distribution campaigns.

Grant number ZAR-810-G08-M: PR is “Eglise du Christ au Congo”. The grant amount is
37,690,725 USD

Phase 1 started on 2010 January 1st, and ended on 2012 March 31st. Whole amount of phase 1
was 37,690,725 USD.

ECC/SANRU is responsible for procurement of ACTs, RDTs, and LLIN’s for routine
distribution.


3. Round 8 Phase 2, Round 10, Consolidation

DRC has submitted a proposal for Round 10. This submission has been successful; the proposal
received the agreement of the TRP.

Round 8 Phase 2 has been submitted to the Global Fund in October 2011 and agreed upon in
January 2012.

Currently, Round 8 Phase 2 is in a consolidation process with Round 10 Phase 1. PRs will be
SANRU, PSI, and Ministry of Health (through CAG: Cellule d’appui et de gestion de
financement du secteur santé).

In order to allow the process of consolidation a period of 6 months non-extension cost has been
set up. All the process has to be ended before June 30th 2012.



                                                                                              30
3:       GRANT PROCESSES: COUNTRY EXPERIENCE
3.1 Proposal and PSM Plan Development

3.1.1. Stakeholders

The Country Coordination Mechanism coordinates the efforts of proposal development. Civil
Society and University have representatives within the CCM. Main stakeholders committed in
proposal development are PRs and PNLP. They take into account activities leaded by NGOs or
other funders, mainly through geographical areas of intervention.

     -   Partners identified in Rd 3 were: UNDP, as PR, NMCP, ECC, AS, HORIZON SANTE,
         CARE BDOM, OXFAM, IRC, CCISD, CEMUBAC, CORDAID, ASRAMES, CTB,
         MMB, MALTESER, GTZ, OMNIS, ALISEI, SANRU, CRS, LOUVAIN DEV, PSI.

     -   Partners identified in Round 8 phase 1 were: UNDP, ASF/PSI, MoH, SANRU(PRs),
         PRONANUT, the World Bank through UCOP/UNOPS/PURUS; DFID; USAID; the US
         Department of Defense; UNDP Pooled Funds; the UNICEF AMEX project and UNFPA
         as Pooled Funds sub-recipient, Ministry of Health (DPM, NMCP) Université de
         Kinshasa, University and Public Health School, l’Office Congolais du Contrôle (OCC),
         FEDECAME and CDR identified), RBM partners : WHO, UNICEF, USAID, World
         Bank, MSH/RPM+, PSI, CTB, etc.

     -   Partners identified in Round 8 phase 2 are: PRs and SRs, World Bank, PMI, DFID,
         UNDP, SANRU, PSI, CRD, FEDECAME, private pharmacies, faith based drug
         warehouses.

     -   For Phase 2 negotiations, role of PRs increases because they provide other CCM
         members with the assessment of Phase 1. This assessment is going to serve in designing
         Phase 2 activities, work plan, performance indicators and budget.

     -   Development of PSM plans are mainly undertaken by PR’s, within consultations with
         PNLP. Other entities, as PNAME, DPM, DPL (Direction of Laboratories), FEDECAME
         and WHO, may be involved in the process. CAG, as a governmental body, see its role
         increased, as a PR for Rd 8 Phase 2.

     -   PSM plans have been developed as annexes of Global Fund application, after the
         agreement of the proposals. There is no formal national PSM plan.

     -   A country profile has been designed for DRC.

     -   Quantification principles used in PSM plans building were based on morbidity data for
         ACT’s and RDT’s.

     -   That data was available at the time of writing of the proposal, either for Round 3 or for
         Round 8.

     -   UNDP, in the context of Round 3 Phase 2 has quantified on the basis of requests for
         stocks renewal.

                                                                                               31
   -   For Round 8 Phase 2, PSI quantified LLIN’s on the basis of data provided during a
       meeting focused on childhood immunization in 2007 in Goma. The last census has been
       held in 1984 and official data is based on projections. Results of these projections are
       lower than the extrapolation obtained with children immunization data. This problem has
       been submitted to the Global Fund. As confirmed by UNICEF experience, when
       quantification is based on SNIS data, most of the time there is a gap between quantities
       coming from quantification and quantities needed at the time of distribution.
           - Ratio used for Rd 8 Phase 1 was 1 LLIN for 2 persons, and for Phase 2 1 LLIN
               for 1.8 persons.

   -   PSM plan Rd 8 Phase 1 of SANRU has been approved on December, 22nd 2009. It has
       been submitted on January 2009. That delay may be explained by the change of PR, by
       the change of area of services provided by the new set of PR. Procurement operations
       have been redistributed, with SANRU taking charge of all the malaria commodities
       supply, except LLINs for massive distribution campaigns.

   -   With regards to these changes, the writing of the SANRU PSM plan took around 6
       months. The last version has been submitted on June 2009.

   -   UNDP redacts its Round 3 PSM plans through workshops. The drafting needs one week.

   -   As a new PR, no PSM plan has been already approved for CAG.

   -   PSM plan Rd 8 Phase 1 of PSI has been approved in December 2009. It has been
       submitted in November 2009. It seems a PSM consultant hired by the LFA made some
       difficulties because from his point of view, this PSM plan was not enough linked to the
       M&E plan. But it has not been a real issue.

Thoughts about PSM plans are the followings:

   -   It is not a real working document; it is not operational, too much text, too much academic.
       It is more a guide as a plan. For instance, for LLINs distribution, it doesn’t take into
       account training process.
   -   It has been difficult to provide a reliable PSM plan because of the lack of reliable data
       (consumption, real size of the population)
   -   This plan should be include within the proposal. This one is too focused on epidemiology,
       and not enough on implementation. Such an inclusion might also shorten delays between
       the approval of the proposal and the beginning of implementation, and lengthen the
       weight of work of PRs.
   -   There is a lack of up-to-date referential regarding unit prices.

3.1.2. PSM capacity building and technical assistance received

   -   PSI and UNDP have not received any external technical assistance in that process. In-
       country UNDP office benefits from the assistance of PSO, in Copenhagen (Procurement
       Support Office).

   -   SANRU and CAG have received such a technical assistance, both in proposal and PSM
       plans development. It has been provided by Grant Management Services, RBM, WHO.

                                                                                               32
         Format of that technical assistance is important, with 20 consultants working an all
         aspects for SANRU.

     -   Such a technical assistance contributed to finalize documents drafted by PRs.

     -   SANRU has organized training sessions on PSM, in the context of integrated training
         including also finance and M&E topics. These trainings have been provided only to SR
         teams at the central level, and should be extended to provincial SR teams. With regards to
         PSM, main topics of these trainings were Quality Assurance principles and stock
         management. These trainings were planned in the grant budget.

     -   CAG didn’t received or provided any training in order to strengthen PSM.

     -   Through Round 3, UNDP provided a lot of training sessions, joint to the setting up of
         PSM management tools. These training sessions were focused on SRs, PNLP staff,
         sometimes Health Zone staff, and pharmaceutical inspectors. Mains topics were stock
         management, Quality Assurance principles, LMIS, and procurement. They were
         conceived as national capacities strengthening. They were not planed in the initial budget
         of the grant, but have been financed through budget reallocations. These trainings
         integrated the three components when possible.

     -   It seems all these efforts have been lost because of the high staff turnover either in public
         sector or in NGO’s.

     -   PSI has strengthened the capacities of its in-country partner, ASF, in terms of
         procurement, logistics, and stock management. It was planned in the proposal budget.


3.2 Grant Negotiations/Signing/Conditions Precedent

a.       Grant negotiation process and impact on PSM planning

     -   All PR’s have been assessed during grant negotiation on PSM component.
     -   Except for SANRU, that assessment doesn’t have any influence on negotiation process or
         on PSM plan.
     -   With regards to SANRU, the LFA assessment allowed to identify and to include activities
         not planed in the proposal. It allowed a strengthening of the PR capacities.

b.       Current Conditions Precedents (PSM-Related)

     -   PSM-related CPs for Grant 3 and 8 Phase 1 (all PRs) are in Annex 3.

     -   Referring to grant disbursement reports, the non-fulfillment of a PSM related CP is never
         raised as a reason for a delay in disbursement.

     -   Other CPs are involved in such delays, for Round 8 Phase 1 UNDP and SANRU. These
         CPs are related to:

                    -   SRs budgets;
                    -   Top-ups based on performances;
                                                                                                   33
                  -   Renovation activities;
                  -   Selection of additional M&E focal points.
                  -   These CPs have been fulfilled in 1 or 2 months.

   -   Within Round 3, UNDP faced deep strategic changes (introduction of ASAQ and RDT).
       The initial PSM system chosen was not efficient. UNDP elected to set up a supply chain
       covering all aspects, from acquisition of products to delivery to end points – all to be
       done by one supplier – this system took a long time to set up and was not in place until
       the end of Y1 of the grant. This issue has been the occasion of deep thinking inside of
       UNDP, involving Copenhagen and New York offices. In the end, it has been decided that
       UNDP staff will handle procurement and supply activities. This new system is having
       problems becoming fully operational and managing the supply chain as to ensure that no
       disruption of drugs and medical products occur. In such a context, CPs related to PSM for
       Phase 2 has been more difficult to reach than in a smooth context.
           - UNDP is no longer involved in malaria commodity procurement in Rd 8.

   -   For Round 8 Phase 1, SANRU raised the CPs linked to the feasibility of the pilot project
       on the distribution of artemisinin combination therapy through private pharmacies in
       selected health zones as a good example of a useful CP with regards to the risk
       management.

   -   PSI raised CP related to its procurement process, argued that documents have already
       been transmitted several times. That CP appears a little bit curious in a context in which
       the Global Fund has contracted PSI Supply division for the procurement of LLINs
       through VPP.

   -   With regards to Round 8 Phase 2, CAG CPs are not yet available.

   -   The most challenging PSM related CP for Round 8 Phase 2 is the following one: The PR
       must engage technical assistance to review reporting needs and tools as well as the
       reporting circuit and must submit a plan on strengthening the HMIS/LIMS system, in
       form and substance satisfactory to the Global Fund and developed in conjunction with
       other relevant stakeholders (including the National Program and other PRs). It should be
       filled within the 6 months of grant signing.

   -   SANRU do not understand why the Global Fund requests that the procurement of Health
       Products with the use of Grant funds shall be done through the Voluntary Pooled
       Procurement (VPP) mechanism or a suitably qualified Procurement Agent. It seems that
       SANRU didn’t meet problems in procurement process in Phase 1. The few delays met
       were due to manufacturers’ delays; SANRU succeeded to manage as well as possible and
       obtained penalties from the manufacturers. Problems are not even at procurement level
       (there is plenty of procurement capacity at national level, in the east and the west) but
       rather at storage, supply and information system level.

   -   PSI raised the same points that for Phase 1 CPs.

3.3 Challenges/Lessons Learned in Grant Development and Negotiation

Thoughts about grant negotiations may be summarized as follow:

                                                                                              34
   -   Negotiations through a flow of hundreds of emails are not comfortable, and may not be as
       efficient as expected. Negotiations workshops should be envisaged.
   -   Design of the Global Fund proposal might lighten and be rationalized, in order to make
       more place for the PSM process, which will be one of the most important topics at the
       stage of implementation.
   -   Design of the Global Fund proposal should not be changed at each round.
   -   The whole process is too long. The basis on which the proposal is written, the
       assumptions, the in-country environment may have changed at the time of
       implementation, which creates a continuous process of change and increase of the
       administrative weight.
   -   Deadlines given by the Global Fund are generally short and make every step an
       emergency.
   -   The questionings are too numerous and may change, add or delete activities. At the end of
       the day, the contract is not felt as reliable, until the disbursement is made.
   -   CPs are mainly felt as a constructive process, but sometimes they may appear as
       administrative redundancy, or not clearly justified, as the CP for SANRU to undertake
       procurement through VPP or an international procurement agency.
   -   CPs are most of the time technically justified, but are not conceived in-context. For
       instance, the strengthening of the LMIS appears to all stakeholders as possibly the major
       problem to solve, but what will be the added value if all partners design their own
       solution in their areas of activities? Such a CP should be conceived not only for the data
       for one grant, but as a necessity to strengthen the health system, at least by providing the
       PNLP with a LMIS system which would make it able to track the commodity flows at all
       levels and in the whole country.




4:  COUNTRY PSM GRANT IMPLEMENTATION: COUNTRY
EXPERIENCE
4.1 Adapting PSM Plans

4.1.1. PSM planning accuracy

Round 3:

   -   Publication of new Standards Treatment Guidelines with introduction of ASAQ and
       RDTs and changing of UNDP PSM strategy (see above) are the two main reasons of
       evolutions in PSM plans.

   -   The change in the Standard Treatment Guidelines resulted in a reprogramming exercise to
       be carried out during Phase 1 to cover the unanticipated increase in the cost of drugs
       compared to the budget in TRP-approved proposal.

                                                                                                35
   -   In October 2006, this grant underwent the Phase 2 panel review. The decision was made
       to give a Revised Go. The Revised Go was recommended due to the concern with the
       impact of the switch from chloroquine to ACTs on the program's Phase 2 targets, the
       Principal Recipient's ability to purchase sufficient drugs to enable it to reach targets and
       the CCM’s proposal in the Phase 2 request to reduce the program's timeline from 5 to 4
       years.

   -   Due to anticipated additional time it would take for the TRP to come back with a
       decision, the Phase 1 period was extended by 6 months to end on June 30, 2007. Bridge
       funding was approved in the amount of USD 5,184,339 to ensure continuity of activities
       while awaiting the TRP decision. Because there were sufficient undisbursed funds from
       Phase 1, no additional funds were brought forward from Phase 2 to cover the bridge
       funding.

   -   The introduction of ASAQ met problems of acceptability due to side effects of
       Amodiaquine. In fact, that problem is not documented, but overstocks have been
       identified during monitoring visits. It is difficult to decide if these overstocks were linked
       to the weakness of data used for quantification, real problem of acceptability, a lower rate
       of frequentation of health structures than expected, or duplication of activities between
       stakeholders.

Round 8 Phase 1

   -   Lack of accuracy of PSM plans is mainly due to the lack of reliable data for building
       quantification.

          -   LLINs: In the context of massive distribution campaigns led by PSI, population
              data used in building quantification was not in accordance with the pre delivery
              enumeration data. In some area, quantification was underestimated, in other areas,
              it was over estimated. At the end of Phase 1, around 10% of the whole quantity of
              LLINs remained undistributed. (See section 3.1.1)

          -   ACTs: Child formulation of ASAQ has been overestimated in quantification. The
              assumption was of 4 malaria episodes a year in the population of children from 0
              to 59 months. In fact, it seems that for children between 0 and 11 months, the
              correct assumption would be 1 episode treated a year. That has created overstock.
              This has been taking into account within quantification for Phase 2.

4.1.2. PSM plan changes and updates

   -   Except for Round 3 Phase 2, PSM plans have not been updated after signature of the
       subvention. The process of agreement of the revised PSM plan has been the same as for
       the previous one.

   -   For all commodities except for Quinine, it appears that unit prices have decreased
       between the periods of writing the PSM plan and now, which allows savings and
       reallocations.

4.1.3. PSM plans and GF ‘efficiency gains’

                                                                                                  36
Except PSI, all PR’s have taken into account GF “efficiency gains”. But consequences have been
different for each PRs. UNDP has to cancel some scheduled activities, and felt that process as
painful. It has been easier for SANRU, which benefited from lower prices as expected for LLINs
and proceeded to reallocations of savings.

4.1.4. Grant consolidation summary

   -   A process of consolidation is currently being undertaken between Round 8 Phase 2 and
       Round 10 Phase one.
   -   Round 8 covers 119 health zones, and round 10 plans to cover 100 health zones more.
       Health zones focused by each grant are different.
   -   With regards to commodities, the consolidation process can be summarized as an addition
       of quantities planed in both grand, with taking into account stocks on hand at the end of
       Round 8 Phase 1.
   -   This process mainly concerns SANRU. PSI is not committed in Round 10; data of Round
       8 Phase 2 has just to be included in Round 10. UNDP is not committed in Rd 8 Phase 2 or
       in Round 10. The process is mainly a transfer of information to new PRs.
   -   SANRU benefits from external technical assistance for consolidation. That technical
       assistance has been provided by RBM and GMS, and finalizes draft documents written by
       PR.
   -   This process has to be completed before June 30th 2012.

4.2 PSM Reporting Structures

4.2.1 Brief description of country’s supply chain

FEDECAME is a Federation of Essential drug procurement agencies. It is a Non-profit
organization (ASBL) of Congolese right. In 2002, FEDECAME signed the agreement with the
Congolese State. It was created within the framework of a private public partnership to mitigate
the absence of a National System of Supply in Medicines following the bankruptcy and the
liquidation of the ex--DCMP (Medical pharmaceutical Central Warehouse)). The FEDECAME’s
statutes were signed on October 30th, 2003. The Ministry of Health granted to the FEDECAME
the Certificate of Recording in conformance with Non-profit organization of sanitary
development on January 15th, 2004. The FEDECAME signed an agreement on in March 9th
2005 with the Government of the Democratic Republic of the Congo, which entrusts a mission of
public service and general interest; the FEDECAME acquired on December 31st, 2005, the legal
entity by Ministerial decree N 937 / CAB / MIN / J / 2005 of Minister of Justice.

The FEDECAME leans at present on two pools of procurement, namely: the BCAF on the West
and the Asrames in the East.

The BCAF covers the areas of Kinshasa, Bas Congo, Bandundu, Kasai Occidental, Kasaï
Oriental, Sankuru; Equateur, Province Orientale (Kisangani).

Asrames covers the areas of North Kivu, South Kivu, Maniema; province Orientale, Tanganyika.

They publish calls for tender according to their procedures. There is then pre selection of the
tenderers, the pre-qualification of the couple product-manufacturer, a selection of the suppliers
and awarding of the market. Calls for tender are often international.

                                                                                              37
Supply structures are Regional Distribution Centers (CDR). They don’t have procurement
functions, except Asrames. These CDR are:

                                 Areas       CDR and secondary
                                                 warehouses
                             Kinshasa        CAMESKIN
                             Bas-Congo       CAAMEKI
                                             CAAMEBO
                             Bandundu        CAMEBASU
                                             Dépôt Kenge
                                             CAMEBAND

                             Kasaï Occ       CADIMEK
                                             CEDIMET
                             Kasaï Or        CADMEKO
                             Sankuru         Lodja
                             Katanga         CEDIMEK
                                             CAMELU
                                             CADMETA
                             Maniema         Kindu
                             South Kivu      BDOM Bukavu
                             North Kivu      ASRAMES
                                             Dépôt Musienene
                             Province        CAMEKIS
                             Orientale       CADIMEBU
                                             Dépôt Isiro
                                             CAAMENIHU
                             Equateur        CAMENE
                                             Dépôt Gbadoite


The mapping of drug procurement and supply system undertaken by WHO in 2009 underlines
that in spite of the existence of the SNAME, the detailed analysis of the mapping raised the
extreme complexity of the supply chain and the distribution in DRC, articulated around 19
procurement agencies and 99 distribution networks which mobilize 54 different partners. This
fragmentation weakens the efficiency of the system in all the levels of the cycle of supply
(selection, quantification, procurement, information management) and in the financing, creates
strong disparities in the accessibility of medicines to the populations, and slows down the
empowerment of the actors of the national system of health.

85% of the financial partners use their own procurement agencies (17 all in all) for the purchase
/ import of drugs and other products of health in DRC, and only 2 use the national procurement
agencies of the SNAME. The choice of the partners to use substitution structures is against the
concept of pooled procurement adopted by the Ministry of Health of DRC through the
FEDECAME, goes against the strengthening of the national capacities which plans the article 2
of the Declaration of Dakar elaborated by the ACAME in 2006, and establish a major risk of
ineffectiveness, and is at the origin of the complexity of the system.


                                                                                              38
The DPM has no guarantee that products bought and imported by the procurement agencies for
use by these partners are registered in DRC, that these agencies follow the pharmaceutical
regulations in DRC, or that the WHO certification standards are applied to drug donations are
adhered to.

Two main lessons of that study concern the empowerment and the coordination:

The complexity of the system of supply is a brake in the one as in the other one. The Ministry of
Health, as the partners operating in DRC, have to make a commitment to implement the
international and regional recommendations of instruments relative to the strengthening of the
national capacities. The joint support of these two parties for the simplification of the system is
the security of its orientation towards more efficiency.

4.2.2 Commodity tracking within supply chain

   -   There is no national Logistic Management Information System. If the HMIS is based on
       national regulatory measures within SNIS, it is not the case for LMIS. No text of legal
       disposition obliges stakeholders to report. They report in order to comply with
       requirements of funders, following selected performance indicators, which may be
       different between stakeholders.

   -   LMIS data is not gathered on a country scale, and PNLP doesn’t have any means to track
       what is in the pipeline.

   -   The main weakness of the system is the lack of standardization of process and tools used
       by the different stakeholders.

4.2.3 Supply chain reporting
   - Without consumption data coming from Health facilities, the reporting system is based
       mainly on CDRs’ reports. PRs may have data on what is distributed by SRs through
       CDRs, but not on what is available in the health facilities. Stock outs or overstocks are
       identified during monitoring missions.

   -   UNDP in Round 3 and SANRU in Round 8 set up a system to track commodities until the
       CDR level. CDRs provided PR with quarterly reports, which indicate the receptions, the
       deliveries and the stocks on hand. SRs are supposed to provide CDRs and PRs with a
       monthly activity report.

   -   The PR PSM manager is in charge to receipt and compile stock data, which is used in
       PU/DR.

   -   With regards to LLINs mass distribution campaigns, PSI enters data on LLINs when they
       enter into the country and follow up through a completely vertical information system,
       used only for these kinds of operations. Reports are published at each campaign, for each
       health district. Monitoring and Evaluation team is in charge of reception and compilation
       of data. These reports are used for setting up PU/DR.




                                                                                                39
4.3 Contingency Planning

4.3.1 Malaria medicine and health commodity security mechanisms

   -   There is no national commodity security mechanism. Health Zones are supplied within
       the rhythm of each project, each grant, and each stakeholder. Stakeholders may have their
       own commodity security mechanisms for the Health Zones they cover.

   -   Most of the time, buffer stocks kept under Global Fund grants are 10% for drugs, 5% for
       RDT’s and LLIN’s. These quantities are more considered as margin of error than as real
       buffer stock, which should be calculated by the monthly average consumption multiplied
       by the lead-time in months. This has been the case for Round 8 Phase 2, in that buffer
       stocks have been calculated with regards to consumption during Phase 1.


4.3.2 History of GF emergency procurements

   -   Within the last two years, PSI and UNDP didn’t launch any emergency procurement
       process. UNDP was not committed in procurement activities.

   -   With regards to PSI, LLINs for mass distribution campaigns have been delivered in one
       process, and all LLINs have not been distributed because of the difference between
       quantification assumptions and pre campaign enumeration.

   -   SANRU mentioned two emergency procurements. (see annex 5)

   -   Because of delay for delivery at the level of the LLINs manufacturer who awarded the
       normal tender, SANRU requested an agreement to place an emergency order with the
       most competitive tender offeror as a part of the whole quantity to be able to cover the
       demand.

   -   In order to avoid risks of stock out during the current no cost extension period, SANRU
       proceeded to do a RDTs procurement with the agreement of the Global Fund. That
       procurement should be considered more as the result of a pro-active management than as
       an answer to an emergency situation.


4.3.3 Challenges/Lessons learned in Grant Implementation Processes

Main challenges are:

       -   Lack of reliable population data for quantification;
       -   Inaccurate assumptions used for quantification;
       -   PSM planned adaptation and consolidation processes may be long and may require,
           especially for consolidation process, external technical assistance;
       -   The procurement and supply chain is not integrated in a national system, mainly
           because of a lack of empowerment of the existing procurement and distribution
           system by the Ministry of Health;
       -   PSM activities of stakeholders are not coordinated in order to ensure commodity
           security at a national scale;
                                                                                             40
       -   LMIS is incomplete, not harmonized between stakeholders, or conceived in order to
           follow up grants’ performance framework, without systematic compilation at a
           national scale.

Lessons learned:

       -   The HMIS/LMIS should be strengthened. This is one of the CPs written for Round 8
           Phase 2.
       -   In order to increase the commodity security, this strengthening should allow gathering
           all data of all stakeholders at the level of PNLP. The setting up of regular malaria task
           force meeting chaired by the PNLP may be a first step to reach this objective.
       -   The Ministry of Health should appropriate the supply chain system, in order to
           channel the efforts of stakeholders. The Ministry should also try to coordinate the
           improvement of LMIS in order to provide PNLP with reliable data on country scale.


5:  GF DISBURSEMENT REQUEST PROCEDURES-COUNTRY
EXPERIENCE
5.1 Disbursement requests

5.1.1. Understanding Disbursement Request triggers

PR undertakes disbursement requests within PU/DR. PU/DR and requests are provided on a
quarterly basis for Round 3 and on a semester basis for Round 8. Requests are sent to the LFA
who checks, asks for clarification, and sent its recommendation to the Global Fund within a delay
of 15 days. The Global Fund needs around a month to give its agreement to the request.


5.1.2. Conditions precedent influence in Disbursement Request and Approval

Round 3

No disbursement delay is justified by the non-compliance to a CP in this grant.


Round 8

       -   Grant ZAR-810-G09-M (UNDP)

The first disbursement requested by the PR was reduced from USD 14,896,632 USD to
1,971,928.77, due to four Conditions Precedent relevant to this disbursement still being "In
Progress" (i.e. not fulfilled):

   -   Condition Precedent number 1 concerning sub-recipient budgets;
   -   Condition Precedent number 4 concerning salary "Top-ups based on performance;”
   -   Condition Precedent number 5 concerning the disbursement of funds for renovation
       activities;
   -   Condition Precedent number 8 concerning the selection of additional M&E focal points.

                                                                                                 41
One month later, three of these CPs were filled, and the Global Fund completed its first
disbursement.

       -   Grant ZAR-809-G07-M (ASF/PSI)

No disbursement delay is justified by the non-compliance to a CP in this grant.

       -   Grant ZAR-810-G08-M (SANRU)

The first disbursement (12 February 2010) received by the PR has been lower than expected due
to Condition Precedent n°1 not being satisfied. The CP in question requires the PR to provide the
Global Fund with a sub-recipient detailed budget prior to disbursement of funds to these
organizations. Consequently, 2,732,190 USD that was earmarked for the sub-recipients during
this disbursement period was deducted from the disbursement request.

This difference has been disbursed 2 months later (15 April 2010), after fulfillment of the CP.

5.2 Disbursement Receipts and Management

5.2.1. Timelines of processing and receiving disbursement

Round 3

The average delay between the disbursement and the beginning of the period to cover is 4.84
months. This average delay takes into account the possible delay in submission of PU/DR /
Requests and the delay took by the LFA and the Global Fund to act on the request.

The most important delay came between Phase 1 and 2. UNDP faced important delays in
procurement in Phase 1 and a change in STG with introduction of ACTs. In October 2006, Phase
2 panel review decided to give a Revised Go, because of the concern with the impact of the
switch from chloroquine to ACTs on the program's Phase 2 targets, the Principal Recipient's
ability to purchase sufficient drugs to enable it to reach targets and the CCM’s proposal in the
Phase 2 request to reduce the program's timeline from 5 to 4 years.

In order to set up all changes created with the new situation, the Phase 1 period was extended by
6 months to end on June 30, 2007. Bridge funding was approved in the amount of USD
5,184,339 to ensure continuity of activities while awaiting the TRP decision. Because there were
sufficient undisbursed funds from Phase 1, no additional funds were brought forward from Phase
2 to cover the bridge funding.

Round 8

       -   Grant ZAR-810-G09-M (UNDP)

The average delay between the disbursement and the beginning of the period to cover is 2.58
months.

Process runs without any major problem during year 1.

                                                                                                  42
Following the OIG country audit report of March 2010, weak management and oversight of Sub-
Recipients and SSRs has been identified as one of the key areas which exposes Global Fund
funds to risks and require to be strengthened to ensure the effective and efficient use of much
needed resources in the DRC. Spot checks of SR expenditures and internal control mechanisms
of SRs managed by different PRs in DRC have identified serious irregularities, which have led to
a freeze of disbursements and payments at all levels as a precautionary measure under 7 active
grants to allow for a more in-depth analysis of expenditures and control mechanisms at PR and
SR level. UNDP has been requested to provide a detailed analysis of existing measures put in
place to safeguard GF resources and assets and to report back to the Global Fund.

Due to the freeze, UNDP has to define essential activities, which have been approved in July
2011. Mainly to high cash balance, and to the cost of case-by-case approved activities financed
during the freeze, the second disbursement has been done only at the end of December 2011.

       -   Grant ZAR-809-G07-M (ASF/PSI)

The average delay between the disbursement and the beginning of the period to cover is 3.875
months.

PSI has waited for the LLIN’s for 9 months, but it seems such a delivery time was expected.
Then PSI met huge logistical issues to transfer LLIN’s until Kasaï. The delay in transportation to
the health district level was largely caused by local train transport delays and limited transport
capacity of the Societé National de Chemins de fers du Congo (SNCC).

PSI/ASF explored with MONUSCO the possibility of using UN planes to move the LLIN stock
in Lubumbashi to Kasai Occidental and Kasai Oriental, which was not possible due to election
activities. PSI/ASF then published an open, public tender for air transport on 4 February 2011
requesting quotes for air transport from Lubumbashi to Kananga and Mbuji Mayi and air and
land transport to the other Kasai Occidental and Kasai Oriental Health Districts, PSI/ASF
requested approval from Global Fund to move forward with contracting a selected air
transporters.

Following negotiations with PSI, the GF provided its conditional approval end of April to move
forward with the shipment of nets by air. Air transport of LLINs began on 15 May 2011 and the
last LLIN left Lubumbashi on 4 June 2011. The inability of SNCC to deliver the LLINs in the
agreed upon timeframe and the lengthy bid process and negotiations with The Global Fund for
air transport contributed to the delays PSI/ASFs had already encountered with the initial delivery
of the LLINs in country.

All LLINs received for Kasai Occidental (3,479,588 LLINs) and Bas Congo (1,592,837 LLINs)
had been transported to the health zone level by June 21st 2011 in preparation for distribution by
June 30th 2011. Plans to transport Kasai Oriental LLIN from Health District to health zone level
were stalled on June 9th 2011 after funding and payments for UNDP with its main SR, the
PNLP, responsible for the household census training in Kasai Oriental, had been frozen. As a
result, the community health worker training in Kasai Oriental was postponed. Preparatory
activities leading up to the LLIN distribution campaign include household census training,
household census, household census date validation, PSI/ASF only transfers household census
funds after verification and confirmation from the Medecin Inspecteur Provincial, and the
UNDP/PNLP and PSI, that the Financial reconciliation by the health zones and the province for
                                                                                               43
the training is in order.

These delays in procurement of LLINs have changed the timing of disbursement for a number of
categories of expenses.

        -   Grant ZAR-810-G08-M (SANRU)

The average delay between the disbursement and the beginning of the period to cover is 3.68
months.

Delays regarding the procurement of health products in Phase 1 were mainly due to selected
manufacturers not being able to deliver products as per the agreed timelines. The PR has
canceled contract signed with these manufacturers and the PR consequently reopened the tender
process to manufacturers that were shortlisted during the first call for proposals.

As already explained above, an LFA spot check of SR expenditures and internal control
mechanisms identified serious irregularities and internal control weaknesses across grants
managed by different PRs in May 2011. SANRU also actively identified problems with SR
Amocongo and ECC Dom (for the ECC Round 8 HIV grant). Strengthening of financial
management and oversight over Sub-Recipients at the PR level has been the priority since. The
Global Funds as a precautionary measure took the following actions:

        -   Disbursements and payments for grants managed by ECC/SANRU were frozen end of
            May while existing risks and control measures were reviewed.
        -   Only key activities under the grants were approved to be continued with
            corresponding measures to safeguard Global Fund resources introduced.

One of the main challenges identified in Phase 1 by ECC SANRU has been the lack of budget for
PR M&E activities that were approved under the Round 8 Malaria UNDP grant and due to
limited funds available in Phase 1 under Round 8 not included in the SANRU grant. SANRU was
dependent on the effectiveness of the M&E activities undertaken by the PNLP with oversight by
the UNDP. As this grant had a late start and many performance problems, the SANRU grant was
also affected. Supervision conducted by the PNLP was not systematically conducted due to
problems of payments of primes that were withheld by the GF under the UNDP grant until there
was clarity on what was paid to whom.

5.2.2. Authority/responsibility for disbursed resources

UNDP
It is about three weeks Between the notification of disbursement and the reception of the funds.
Funds are sent to UNDP HQ who sends them to UNDP in-country office. Internal procedures are
then followed for disbursements to SRs. The malaria program manager is responsible for
disbursed resources.

SANRU

Director of operations is responsible for disbursed funds.

PSI
                                                                                             44
Disbursements are received in PSI HQ, in Washington DC. ASF/PSI in country office addresses
its requests to PSI HQ, following their procedures guideline. In country ASF/PSI Kinshasa
Office undertakes accounting.

5.2.3. Allocating disbursed resources

UNDP
Internal procedures are followed for disbursements to SRs. These disbursements are dependent
on the timely reception of SR’s reports and of their quality. Disbursements are under malaria
head of program responsibility. The program manager takes into account M&E team advices.

SANRU

Requests of SRs are linked to their reports. Financial services checks requests with regards to
budget, PSM services provide advice, and the director of operation agrees after checking
conformity with the contract.

PSI

There is no SR.

5.3 Challenges/Lessons learnt in requesting/receiving/allocating disbursements

          -   CPs seems not having a big impact on disbursement delay. There are only few
              examples of disbursements delayed or not completely agreed, and the CPs have
              been in these examples filled in less than two months.
          -   Delays in PSM doesn’t appear as linked to disbursement delays.
          -   Requests are linked to PU/DR. The PU/DR LFA review is an in-depth bi-annual
              audit, which required too much work.
          -   With regards to Round 8, if the work plan of the three PRs was synchronized,
              signature of each grant, starting dates, first disbursement dates are not the same.
              So it became difficult to keep activities synchronized.
          -   When one PR meets a delay, the three grants may be impacted. Best example is
              the case of the freeze of UNDP grants, which impacted PSI LLINs’ mass
              distribution campaign because training could not be undertaken.
          -   Even if the whole process requires a lot of work, the average delays in process are
              relatively low, and could probably not explain issues in the implementation
              process.



6:     PSM (MALARIA) MANAGEMENT: COUNTRY EXPERIENCE




                                                                                              45
6.1 Procurement Processes

6.1.1 Procurement determinants

UNDP

Within the Round 3 implementation, UNDP changed the procurement system. First, UNDP
elected to set up a supply chain covering all aspects, from acquisition of products to delivery to
end points – all to be done by one supplier. Commodities were packed as kits for the different
health facilities. This system took a long time to set up and was not in place until the end of Y1
of the grant. It also generated debates within UNDP, involving Copenhagen and New York
offices, on the most adequate way for UNDP to ensure procurement activities.

At the beginning of Phase 2, UNDP informed the Global Fund Secretariat of changes to
procurement arrangements that will have a bearing on program implementation in Phase 2. A
change in procurement arrangements for this grant came into effect on July 1st 2007. The
contract of the entity formerly overseeing all procurement elements of the Global Fund Malaria
and HIV/AIDS Program ended on June 30, 2007. The PR has replaced this entity with UNDP
staff.

Whilst the PR is taking over the acquisition element of the supply chain, it has identified a new
entity to ensure distribution of products.

The procurement process is handled by UNDP PSM staff. UNDP country office has a
procurement team responsible for validation of quantities to order, for the tender process and
orders.

SANRU

      -   Process of procurement begins before funds reception.
      -   The tender is awarded once funds are concretely available.
      -   Quantities to order are validated by the malaria project manager on proposal of PSM
          manager.
      -   An awarding committee is in charge of obtaining quotations and ordering.

PSI

      -   Procurement process began during one month before receiving first disbursement.
      -   Quantities to order have been validated by the PNLP.
      -   Procurement process has been handled by the PSI head quarter in Washington DC, from
          quotations obtaining until tender awarding.

6.1.2 Procurement funding

UNDP

Payment is made by in-country office.

SANRU

                                                                                               46
The PR currently makes payment. During Round 8 Phase 1, level of funds was adequate with
regards to identified needs.

PSI

Payment is made by PSI Headquarters.


6.1.3 Procurement capacity building

UNDP

      -   UNDP country office didn’t receive any external technical assistance on matter of
          procurement. It may benefit from expertise and the support of Procurement Services
          Office, in UNDP Copenhagen.
      -   UNDP didn’t organize training or capacity building focused on procurement.

SANRU

      -   SANRU didn’t receive any external assistance focused on procurement, and didn’t
          organize any training or capacity building in that matter.

PSI

      -   PSI has provided ASF, its in-country partner, and PNLP with training on procurement
          and supply topics.
      -   Has trained logistical and M&E staff.
      -   That training was made necessary in order to face huge challenges linked to LLINs
          massive distribution campaign.


6.2 In-Country Commodity Receipt


6.2.1 Planning for receipt of commodities in country

UNDP

UNDP was not involved in malaria procurement activities for Round 8.

SANRU

      -   ACTs, RDTs and LLINs for routine distribution have been ordered in Round 8 Phase 1.

      -   Expected delay between the signature of the grant and the first reception was 4.5 months.
          Such a delay has been respected only for RDTs.

      -   ACTs have been delivered with three months’ additional delay. The PR received
          notification with regards that delay from the manufacturer. The justification given was
          issues of production on the manufacturing site.

                                                                                                47
      -   LLINs have been delivered with 5 months of delay. Manufacturer informed the PR of
          that delay. In order to shorter it, PR obtained the agreement of the awarded manufacturer
          and from the Global Fund to order a part of the initial order to the best loser of the tender.
          The unit price was higher, and this second manufacturer took two months delay more.

PSI

      -   The procurement process has been initiated one month before the grant agreement.

      -   Expected delays were 9 months. It has been respected.

      -   The first truck crossed the border in August 2010 and the last one in January 2011. PSI
          estimates to have been delivered in time.

6.2.2 History of Receipt of commodities in country

      -   PRs undertake the reception of goods. There is no reception commission with
          representatives of DPM, MoH, PNLP, etc.

      -   Throughout Round 3 UNDP met issues with regards to customs clearance. In Round 8,
          SANRU faced the same kind of custom clearance delay. These problems were mainly
          administrative, linked to the fees and taxes exonerations provided by the authorities at
          each delivery. That administrative weight may create delay until 2-3 months. SANRU
          tried to go through an emergency procedure, but it takes more than one month. Customs
          clearance process may be initiated as soon as the PR receives the right documentation, but
          the real process only begins when goods arrive in the country.

      -   PSI spent one week for each truck at the eastern border, on the road of Lubumbashi used
          as enter point for LLINs dedicated to both Kasaï. LLINs planned for Bas Congo have
          been delivered in Matadi, and PSI met the same kind of problems than the other PRs for
          custom clearances.

      -   The legal Quality Assurance requirements didn’t add more delay. Sampling has been
          undertaken by OCC while PRs made its own sampling in order to meet the Global Fund
          Quality Assurance requirements. PRs were not obliged to wait until OCC results before
          beginning distribution process. OCC provides PRs with results in around one month.

      -   To avoid these delays, impact on the performance rate, SANRU tried to borrow other
          stakeholders’ products which comply with the Global Fund Assurance Quality principles.

6.3 In-country Commodity Management


6.3.1 Commodity distribution plans

UNDP

      -   UNDP PSM team, on the basis of the macro planning designed with PNLP, undertakes
          distribution plans. UNDP malaria manager signs grants with SRs. In these contracts
                                                                                                     48
          objectives are fixed, with quantities to distribute in each health zone and health facilities.
          The PNLP is being kept informed of all distribution under contracted to SRs.

      -   Distribution plans are well followed, but change can be made with regards to reports sent
          by SRs.

      -   Distribution process is under the responsibility of SRs. From the central level to SR,
          distribution is undertake when commodities arrives in country. Then, SRs distribute to
          health zones and/or health facilities on a quarterly basis. The system was completely
          “push” at the beginning of the grant and became partially “pull” later, when an
          improvement of SR data reporting allowed it.

      -   Distribution process used an active way all along the health pyramid.

      -   At the central level, Agetraf undertakes storage. Agetraf is a broker and a distribution
          agent. Storage conditions are acceptable. At intermediate level, SRs, who may have a
          contract with CDR, ensures storage. Storage conditions are different in each CDR, but
          can be sometimes adequate. At the most peripheral level, storage conditions are generally
          not satisfactory.

      -   UNDP was the only stakeholder in the Health Zones concerned by Round 3, so it does not
          have to be taken into account distributions from other partners.

SANRU

      -   The malaria program manager is responsible of the distribution plan. As for UNDP, the
          distribution plan is undertaken on the basis of the macro planning designed with PNLP.

      -   In the first phase of Round 8, the distribution has been followed, and didn’t take into
          account commodities delivered by other stakeholders.

      -   Distribution activities are under the responsibility of PR, SR’s and CDR. Commodities
          are sent to CDR when they arrived in the country. CDR provides Health Zones following
          their needs. It is a “Push” system from the central level until CDR level, then a “pull”
          system. Distribution process follows an active way.

      -   At delivery, commodities are stored into Agetraf warehouse until custom clearances are
          obtained. Then SANRU benefits from a warehouse in Kinshasa from where commodities
          are sent to CDR. The storage conditions become unacceptable after the CDR level.

PSI

      -   The distribution plan has been set up by PSI and PNLP. It has been followed, and didn’t
          take into account other stakeholders’ commodities. PSI is the only partner in LLINs’
          massive distribution campaign in Bas Congo or both Kasaï.

      -   Within this particular process of massive campaign, storage has been handle by PSI until
          the district level, by renting warehouse where is possible, if needed.


                                                                                                     49
      -   Distribution has been made following a “Push” and active system.

6.3.2 Integration of malaria commodities with other essential drugs

UNDP & SANRU

Outside health facilities, the only point where malaria drugs are integrated with other essential
drugs is intermediate storage level, when SRs go through CDR, and it is limited to storage and
drug management activities.

PSI

The massive distribution campaign is not integrated in the circuit of other essential commodities.


6.3.3 Value and input of technical assistance provided

UNDP

      -   UNDP provided training and capacity building in matter of distribution, stock
          management and storage to SR and national health facility staff.
      -   But the benefit of such training process has been mainly lost to a high level of staff
          turnover.

SANRU

      -   SANRU didn’t benefit from or provide any training or capacity building focused on
          storage, drug management or distribution.
      -   SANRU didn’t meet any stock out problems at the central level. After the freeze of the
          grants, SANRU identified some stocks out in health facilities. SANRU explains these
          stock outs as consequences of the freeze on the distribution activities.

PSI

      -   ASF/PSI didn’t benefit from any external technical assistance, but provided trainings to
          the Health Zone staffs as an indispensable condition to succeed in distribution.
      -   These trainings have been focused on Health Zone medical officers and administrators.

6.4 Challenges/ Lessons learned in Procurement and Supply Management

Challenges

      -   The main challenge met by SANRU during procurement and distribution process in
          Round 8 Phase 1 has been delays from manufacturers, customs clearances and the
          logistical challenges linked to the distribution from CDR to health Zones.

      -   Main challenges identified by UNDP are logistics issues, peripheral storage and high
          costs of distribution.



                                                                                                     50
   -   Main challenge met by PSI is the logistical issue to transfer LLINs to Kasaï. The delay in
       transportation to the health district level was largely caused by local train transport delays
       and limited transport capacity of the Societé National de Chemins de fers du Congo
       (SNCC). See above section 5.2.1. It needed 9 months of negotiation to solve that issue.

   -   LLINs distribution has also been delayed by the freeze of the other PR’s grant, which
       stopped the training process before distribution.

Lessons learned

   -   To improve the reliability of the procurement process, SANRU set up three committees
       (administrative, tender analysis and awarding). Chairman of the awarding commission is
       the General Secretary of the Ministry of Health. SANRU ensures the secretariat of that
       commission. SANRU experience shows the importance to sign contracts with safety
       clauses.

   -   UNDP experience shows that a completely vertical procurement and supply chain system
       is not a solution addressing challenges to ensure an adequate supply system in such a
       country. By using CDR system, the second approach, also used by SANRU, is a little bit
       more integrated in the national supply chain system.




                                                                                                  51
7:       KEY FINDINGS: MAPPING OF PSM BOTTLENECKS

7.1 Key bottlenecks to keeping PSM plans on target

1°) Weaknesses of the policy and regulatory authorities

     -   The DPM is not strong enough to play efficiently its role. Non-registered antimalarials
         are available in the country; donated drugs enter into DRC without any control.

     -   The current national procurement and supply chain system is not handled by the Ministry
         of Health. There is no clear national PSM strategy. Such a strategy would be an asset in
         order to lead all the technical assistance provided by funders in order to strengthen the
         health system.

     -   There is no regulatory measure related to LMIS. The consequence is the impossibility for
         the PNLP to have a clear picture of how things are really running on the field.

2°) Coordination

     -   On a broad scale, because DRC is one of the most important countries of the world in
         terms of the malaria burden, there is a competition between funders in order to obtain the
         best impact as possible in the fight against malaria. This fact should be an asset, but with
         regards to the weaknesses identified on policy and the regulatory step, this race for
         performance between funders is not channeled into the existing tools of the public health
         system, and there is no strengthening of the health system. Worse, existing tools are
         weakened. PNLP is not informed on the actions undertaken by some partners,
         FEDECAME faced problems with the arrival of donated commodities without any
         solution for their existing stocks.

     -   At the Global Fund level, the three grants designed for Round 8 Phase 1 have not been
         signed on the same date, and the first disbursements have staggered start. Such a lack of
         synchronization created coordination issues, and becomes a real bottleneck after the
         freeze of several grants. This problem affected mainly the LLINs massive distribution
         campaign. LLINs were available, but trainings cannot be done, that’s created delays for
         distribution.

     -   This poor synchronization problem impacted the PU/DR of each PR, at least for rating. If
         that problem created delay in PSM process, there is no clear evidence it generated delays
         in disbursement.

3°) Manufacturer’s delays

     -   Such delays impacted mainly SANRU in procurement of ACTs and LLINs, but penalties
         have been paid.

4°) Custom Clearance
                                                                                                  52
   -   With delays up to 3 months, that bottleneck impacted all grants.

5°) Logistic

   -   With less than half of the country easily accessible, logistics issues impacted all grants.

   -   Of course, LLINs’ massive distribution campaigns are particularly sensitive to such
       bottlenecks.

6°) Quantification

   -   Based on morbidity data, the uncertainty on the exact figure of the population doesn’t
       allow obtaining reliable quantities.

7°) LMIS

   -   The weakness of LMIS doesn’t allow proceeding forecasting and quantification with
       other basis than morbidity data.

   -   There is no clear picture of the situation at the level of health facilities, and no way to
       prevent or correct stock outs or overstocks.

7.2 Scope /Impact of GF PSM delays on malaria medicine and commodity security

1°) Weaknesses of the policy and regulatory authorities

   -   Mono-therapies, sub standards and probably fake commodities are available in the
       country.

   -   The lack of coordination between stakeholders induced from this weakness makes it
       difficult to set up a national strategy to secure malaria commodities.

   -   It doesn’t allow for the optimization of available resources for health sector
       strengthening.

2°) Coordination

   -   The lack of coordination between stakeholders may create duplication of activities on
       some areas while others receive no support.

   -   The PNLP is not provided with all data of all stakeholders and cannot have a complete a
       clear picture of the situation of the fight against malaria.

   -   There is no national system to secure the availability of malaria commodities.


3°) Manufacturer’s delays


                                                                                                     53
   -   It seems these delays didn’t create stock out situations. But the weakness of LMIS doesn’t
       allow stating clear evidence.

   -   Manufacturers acted in each case in a proactive way through communication with PRs in
       order to smooth as much as possible the consequences of delays.

4°) Custom Clearance

   -   It seems these delays didn’t create a stock out situation. But the weakness of LMIS
       doesn’t allow stating clear evidence.

5°) Logistics

   -   Logistics issued impacted the implementation of grants with delays.

6°) Quantification

   -   The weakness of the LMIS doesn’t allow reliable quantification exercise, and makes it
       difficult to measure with accuracy the consequences of the way of quantification on
       availability of the commodities in the health facilities.

7.3 Mechanisms adopted to resolve Global Fund PSM delays

1°) Weaknesses of the policy and regulatory authorities

   -   The PNLP set up a malaria task force, which gathered all stakeholders.

   -   The CAG has been set up with regards to national PSM issues. CAG will be PR in Round
       10.

   -   The RBM Partnership has strengthened its efforts in Central Africa for more than a year.
       DRC is of course concerned.

   -   MSH and CTB provide DPM with a rational plan of capacity building

   -   FEDECAME benefits from the support of European Commission, CTB and USAID.

   -   The Ministry of Health could use all these tools in order to strengthen the fight against
       malaria and the PSM system. Other country experiences, such as Tanzania’s, show that
       the distribution of ACTs through the private sector increases the availability dramatically.
       It seems an efficient way to reach targets of universal coverage. But it cannot be done
       without a strong National Drug Regulation Authority.

2°) Coordination

   -   The RBM Partnership has been strengthening its efforts in Central Africa for more than a
       year.



                                                                                                54
   -   The CAG has been set up with regards to national PSM issues. CAG will be PR in Round
       10.

   -   The next few years will show the efficiency of these tools with regards to coordination.

   -   On a Global Fund’s limited point of view, no solution has been found to resolve the lack
       of synchronization problem during Round 8 Phase 1. PNLP took the initiative to set up a
       Malaria task force, but it was too late to solve that issue in Phase 1.

   -   PR’s are trying within the negotiations of Phase 2, and for consolidation between Round
       8 Phase 2 and Round 10 Phase 1, to take into account lessons learned during Round 8
       Phase 1 and to avoid a repeat. But it could be a challenge to split the activities of the fight
       against malaria in such a manner that, if a PR fails, the other can stay in position to carry
       out its task.

3°) Manufacturer’s delays

   -   This kind of issue could be anticipated by increasing the communication between PR and
       purchasers. It needs also to sign contracts with detailed and strong safety clauses and to
       make them applied.
   -   Using VPP or other agreed procurement agencies will not protect against that kind of
       delay.


4°) Custom Clearance

   -   SANRU tried to negotiate with the Government a tax exoneration, which would cover all
       the deliveries made under the Global Fund grant, but was unsuccessful due to a change of
       Ministers. Maybe the coming of CAG as a new PR from the Government part will help to
       obtain a MoU on that matter.

   -   CAG has initiated a change with including the Ministry of Health as the consignee. It
       may shorten the process.

   -   There is a hope that the nomination of CAG as governmental PR may help to resolve
       such issues.


5°) Logistic

   -   PSI tried to solve the logistic issue met in transportation of LLIN’s from Lubumbashi to
       both Kasaïs through negotiations with the Global Fund, but this process took several
       months.


6°) Quantification/LMIS

   -   CAG have bought “Channel” software. Its implementation should be undertaken in the
       next few months.
                                                                                                   55
-   PNLP has initiated pilot project with SMS4Life in several districts, but it will need some
    time to have results form that experience.




                                                                                           56
8:       CONCLUSIONS AND RECOMMENDATIONS
8.1. Recommendations:

8.1.1. Strengthening GF grant and PSM plan processes

To the Ministry of Health

     -   To take the opportunities offered by the nomination of CAG as a PR, the improvement of
         the RBM partnership commitment in Central Africa and the technical assistance provided
         to DPM by MSH and CTB to reach a complete appropriation of the malaria and the PSM
         policies.
     -   To harmonize procurement through FEDECAME.
     -   To set up the LMIS for antimalarials.
     -   To improve storage conditions at the peripheral level (Health Zones and Health Facilities)

To all stakeholders

     -   To improve their level of coordination and to lead that effort first for the benefit of the
         PNLP.
     -   To act without losing of sight of the importance of strengthening of the entire PSM
         system to support large scale commodity provision needed for malaria programming.
     -   All programs should make efforts to stick as closely as possible to the existing supply
         chains and where possible reinforce them.

To the Global Fund

     -   To promote good synchronization between grants within the consolidation of Round 8
         Phase 2 and Round 10 Phase 1.
     -   Process of negotiations should be lightened through dedicated workshops.
     -   Design of the Global Fund proposal might be lightened and rationalized, in order to make
         more space for the PSM process, which will be one of the most important topics at the
         stage of implementation. It should shorten the whole process, avoid too many changes on
         the basis on which the proposal is written, assumptions, in-country environment, and thus
         limit adaptations.
     -   Malaria PSM related CPs should be conceived not only for reaching targets of one grant,
         but as a necessity to strengthen the health system, indispensable to ensure efficiency and
         sustainability of the efforts made in the context of the fight against malaria.
     -   To apply the performance based philosophy with discernment, taking into account
         elements not relevant of PR’s level of performance.
     -   To increase the level of harmonization of actions with other stakeholders
     -   To involve as much as possible the existing elements of the National Procurement and
         Supply Chain into the malaria commodities PSM.
     -   With regards to the weak human resources and taking into account the high staff turnover,
         importance of training activities should be highlighted.
     -   Buffer stocks should be calculated by the monthly average consumption multiplied by the
         lead-time in months.
                                                                                                 57
To the Roll Back Malaria Partnership

   -   To continue the current effort provided in Central African Countries.
   -   Following its mandate, to contribute to better coordination between stakeholders with the
       intent to strengthen the PNLP, and, on a larger scale, the DRC health system.
   -   To launch, in close cooperation with the PNLP, a plan on what should be an efficient
       malaria LMIS in DRC. It could be undertaken as a workshop involving other
       stakeholders. This process should be launched as soon as possible, in order to provide the
       Global Fund with an adequate answer to the CP n°1 of Round 8 Phase 2 (SANRU)
   -   To update the malaria commodity “Sources and Prices”, in order to provide PRs with a
       unit price referential.

8.1.2. Implementing Success Stories across countries

Main ways identified to disseminate experiences and lesson learned through other countries are
the following:

   -   Publication into scientific journals
   -   Publication into international newspapers
   -   International, regional or sub regional meetings or workshops designed as Accra
       Workshops. These meetings should be focused on the exchange of country experiences
   -   Exchanges through a dedicated web site forum
   -   South-South missions, in order to share success stories and to help on specific bottlenecks
       resolving
   -   The Global Fund should set up a mechanism allowing the sharing of success stories on
       the basis of PU/DR data

8.2.   Conclusions:

Most of PSM delays don’t appear to be directly linked to disbursement delays. These bottlenecks
are linked to delays of deliveries, customs clearance, logistical issues due to the size of the
country, and the lack of an efficient LMIS, which impacts forecasting and quantification.

It should also be mentioned the lack of coordination between main stakeholders, and within the
Global Fund, the strong interdependence between grants.

Weaknesses in the policy and regulatory authorities don’t institutionalize optimizing efforts made
and resources available for the health system strengthening.

Customs clearance issues, integration of the supply chain and strengthening of DPM, should be
resolved with a stronger high-level political commitment. The choice of CAG as governmental
PR in Round 10 may be a step to reach such a commitment.

As a CP for Round 8 Phase 2, the set-up of an efficient LMIS should be considered a priority.
This will contribute to resolve issues of forecasting and quantification. Such a LMIS should be
conceived and implemented not only in view to comply with requests of the Global Fund, but
also as a tool of harmonization of all stakeholders’ efforts in order to provide the PNLP with a
unique system of reporting allowing the PNLP to have a clear picture of level of stocks and
consumptions at the health facilities level. With such a tool, PNLP will be in position to avoid
                                                                                              58
stock outs or overstocks. By gathering all malaria stakeholders around problems met by the
PNLP, the RBM Partnership may have a crucial role as facilitator for reaching this objective in
time.

Even if the Global Fund’s business model is perceived as administratively very heavy, the
performance-based philosophy is generally well accepted. This philosophy is felt to be dynamic,
improving the global efficiency. Nevertheless, the implementation of that principle is perceived
as too strict and not taking into account the context which takes place the activities. For instance,
issues of transportation of nets were not linked to PSI performance, as the freeze of UNDP grant.
But these problems created delays, which have impacted PSI performance and rating. That
creates misunderstanding and unrest.




                                                                                                  59
REFERENCES
 -   The Global Fund Web Site
 -   Global Fund Grants for Malaria: Lessons Learned in the Implementation of ACT Policies
     in Ghana, Nigeria, and Guinea-Bissau (R. Shretta, C. Adgoke, P. Segbor, Melissa
     Thumb) 2007
 -   Global Fund Grants for Malaria: Lessons Learned in the Implementation of ACT Policies
     in Ghana (R. Shretta, C. Adgoke, P. Segbor) 2007
 -   Global Fund Grants for Malaria: Lessons Learned in the Implementation of ACT Policies
     in Nigeria (R. Shretta, C. Adgoke, P. Segbor) 2007
 -   Guide to the Global Fund’s Policies on Procurement and Supply Management (November
     2009)
 -   The Global Fund's Quality Assurance Policy for Pharmaceutical Products (December
     2010)
 -   Quality Assurance Policy for Diagnostics Products (December 2010)
 -   RBM Web Site
 -   Workshop on Procurement and Supply chain Management on Malaria Health Products
     (Accra, Ghana) - 28-30 September 2010 - Workshop report
 -   WHO-World malaria report 2010
 -   The Democratic Republic of Congo GDP Data & Country Report/Global Finance
 -   PLAN NATIONAL DE DEVELOPPEMENT SANITAIRE (PNDS 2011-2015) Ministère
     de la Santé Publique, Mars 2010
 -   “Faire reculer le Paludisme”, Plan Stratégique 2009-2013, Ministère de la Santé Publique,
     Programme National de Lutte contre le Paludisme
 -   RAPPORT NARRATIF: PROFIL PHARMACEUTIQUE DE LA REPUBLIQUE
     DEMOCRATIQUE DU CONGO 2011, Ministère de la Santé Publique, Juin 2011
 -   CARTOGRAPHIE DES SYSTEMES D’APPROVISIONNEMENT ET DE
     DISTRIBUTION DES MEDICAMENTS ET AUTRES PRODUITS DE SANTE EN
     RDC, Ministère de la Santé Publique, Juin 2009
 -   FEDECAME Web Site




                                                                                           60
ANNEXES:

Annex 1: People Consulted or Interviewed during the Case Study in Tanzania


S/N    Name of Key Informant         Title                Organization/Affiliation

1      Dr Benjamin Atua              Coordinator          PNLP

2      Dr Jean Angbalu Egbango       Coordinator          PNLP
                                     adjoint

3      Dr Kaseya                     Head of division     PNLP
                                     Monitoring &
                                     Evaluation
4      Dr Jean Claude Deka Lundu     Executive director   FEDECAME

5      Dr Arthur Katavali            Head pharmacist      ASRAMES

6      Dr Jean Pierre Umba           Head of technical    BCAF
                                     services
7      Dr Sandrine Cloez             Consultant           AEDES

8      Dr Donat Kabamis Kabey        Acting head of       DPM
                                     office

9      Dr Céline Feza Nsumbu         head of inspection, DPM
                                     homologation,
                                     législation
                                     division
10     Dr Laurent Patern Tshimpaka   registration head of DPM
                                     office
11     Dr Franck Biayi               National PSM         CAG (Ministry of Health)
                                     head of office

12     Mr Karl Friedrich Stahl       Health Logistics     UNICEF
                                     Specialist

13     Dr Jean Bosco Hulute          Malaria specialist   UNICEF

14     Dr Léonard Kouadio            Health specialist    UNICEF
                                     Malaria

15     Mr Maximilien Nkiesolo        General Secretary,   CIELS
       Luaka                         Focal Point
                                     AIDS/Global Fund

                                                                                     61
16   Dr Yacouba Zina          Malaria Program     UNDP
                              Manager

17   Tobie Djokoto-Ayite      PSM manager         UNDP

18   Dr Joachim LUBIBA        Malaria Program     SANRU
                              Manager



19   Hubert Betamona Lwanba   PSM Manager         SANRU

20   Georges Louis LEVARD     LFA Head of         PWC
                              office

21   Dr Robert Chana          PSM expert          PWC


22   Dr Ed Vreeke             PSM expert          PWC


23   Philippe S.K. Tshiteta   Country Project     MSH
                              Director

24   Ruphin Mulongo           Senior Program      MSH
                              Associate

25   Odon Mulangu             Senior Program      MSH
                              Associate

26   Jamie Ciesla             Malaria Program     ASF/PSI
                              Manager

27   Freddy Lokossa           Health Logistics    ASF/PSI
                              Specialist

28   Hery L. Ramangalahy      Finances director   ASF/PSI




                                                            62
63
ANNEX 2: GF GRANT DISBURSEMENT HISTORY

Grant Grant     Total Grant       DR DATE           AMOUNT         PR REQUEST DR PERIOD COVERED Reasons for variance
Round Number/PR Amount                                                                          between PR Request and
                                                                                                Disbursement
Rd 3   ZAR-304-   53 936 609,00    1    1-oct-04    1 441 186,00    1 441 186,00 1-Oct-04 to 31-Mar-05
       G03-M                       2    8-avr-05    4 314 812,00    6 617 969,00 1-Apr-05 to 30-Sept-05   Amount disbursed
                                                                                                          corresponds to budget for
       UNDP                                                                                               ITN and ACT. Other funds
                                                                                                          have been
                                                                                                          withheld as the PR holds a
                                                                                                          cash balance from the
                                                                                                          previous disbursement and
                                                                                                          planned
                                                                                                          targets for Q1 are not yet
                                                                                                          reached. PSM plan is
                                                                                                          partially approved.
                                   3   15-nov-05 14 264 419,00     14 988 059,00 1-Jul-05 to 30-Sept-05   Modified HR budget not yet
                                                                                                          approved, minor amount on
                                                                                                          training cost not approved
                                   4   19-juil-06   2 728 442,00    3 640 478,00 1-Oct-05 to 30-Dec-05    Non allowed costs for
                                                                                                          management unit staff cost
                                                                                                          deducted
                                     N/A                    0,00            0,00
                                     N/A                    0,00            0,00
                                   5 21-déc-06      3 743 078,00    9 097 817,00 1-Oct-06 to 01-Apr-07    Main targets not achieved.
                                                                                                          Some expenditures are made
                                                                                                          before approval of the
                                                                                                          related
                                                                                                          budget. No comment
                                                                                                          provided for budget variance
                                   6    4-mai-07    3 781 521,00    3 781 521,00 1-Jan-07 to 01-Jul-07    N/A

                                                                                                                                 64
6.1   25-mai-07    1 402 818,00    1 402 818,00 1-Jan-07 to 01-Jul-07    Split disbursement

    N/A                 0,00               0,00
    N/A                 0,00               0,00
  7 26-févr-08 15 774 662,00      15 774 662,00 1-Oct-07 to 30-Mar-08    No Variance


  8   16-mai-08    1 041 103,00    1 041 103,00 1-Jan-08 to 30-Jun-08    No Variance

  9   16-juil-08   1 372 587,00    1 782 363,00 1-Apr-08 to 30-Sept-08   The target achievement of
                                                                         the grant was good. The
                                                                         quantitative indicator rating
                                                                         is B1.
                                                                         However, we note
                                                                         significant delays in training
                                                                         activities. Accordingly , we
                                                                         have reduced
                                                                         from the disbursement
                                                                         amount requested the portion
                                                                         attributed to training in Q14
                                                                         and
                                                                         Q15, amounting to US$
                                                                         409,776.
11 N/A                     0,00            0,00 1-Jul-08 to 29-Dec-08    Zero disbursement request.
                                                                         The PR holds a high cash
                                                                         balance
12                                               1-Oct-08 to 31-Dec-08   Zero disbursement request.




                                                                                                 65
                                    13 15-juin-09   4 071 980,00   5 727 341,00 1-Jan-09 to 31-Mar-09   The reduction in the PR’s
                                                                                                        requested amount has taken
                                                                                                        into account the fact that the
                                                                                                        PR’s
                                                                                                        request exceeded the amount
                                                                                                        of funds undisbursed by the
                                                                                                        Global fund to the PR.
                                                                                                        Additionally, an accounting
                                                                                                        error in which expenditure
                                                                                                        on TB drugs entered as
                                                                                                        malaria
                                                                                                        drugs resulting in a wrong
                                                                                                        cash balance (USD
                                                                                                        379,757.39) was also noted
                                                                                                        and taken into
                                                                                                        account. The recommended
                                                                                                        disbursement amount
                                                                                                        corresponds to the
                                                                                                        commitments of
                                                                                                        the PR and is consistent with
                                                                                                        the PR’s budgets and work
                                                                                                        plans.
                                    14 N/A                  0,00          0,00 1-Avr-09 to 31-Jun-09




Grant   Grant      Total Grant   DR DATE     AMOUNT       PR             DR PERIOD     Comments
Roun    Number/P   Amount                                 REQUEST        COVERED
d       R


                                                                                                                                66
Rd 8   ZAR-810-   25 027 374,0     1   16-mars-   1 971 929,00   14 896 632,00 1-Mar-10 to   The amount requested by the PR was reduced
Ph 1   G09-M                 0              10                                 31-Oct-10     from USD 14,896,632 USD to 1,971,928.77, due
                                                                                             to four Conditions Precedent relevant to this
       UNDP                                                                                  disbursement still being "In Progress" (i.e. not
                                                                                             fulfilled):
                                                                                             1) Condition Precedent number 1 concerning sub-
                                                                                             recipient budgets;
                                                                                             2) Condition Precedent number 4 concerning
                                                                                             salary "Top-ups based on performance";
                                                                                             3) Condition Precedent number 5 concerning the
                                                                                             disbursement of funds for renovation activities;
                                                                                             4) Condition Precedent number 8 concerning the
                                                                                             selection of additional M&E focal points.
                                 1.1    15-avr-   12 324 703,0   14 896 632,00 1-Mar-10 to   The disbursement is due a number of conditions
                                            10               0                 31-Oct-10     have being fulfilled by the PR, thus allowing the
                                                                                             release of additional resources:
                                                                                             1) Condition Precedent number 1 concerning sub-
                                                                                             recipient budgets;
                                                                                             2) Condition Precedent number 4 concerning
                                                                                             salary "Top-ups based on performance";
                                                                                             3) Condition Precedent number 8 concerning the
                                                                                             selection of additional M&E focal points.
                                                                                             Condition Precedent number 5 (related to
                                                                                             renovation activities for 600,000.23 USD) remains
                                                                                             unfulfilled. As a result, relevant funding has been
                                                                                             withheld from this disbursement request.
                                   3 N/A                  0,00    8 422 850,00 1-Jul-10 to   The zero disbursement decision is due to the weak
                                                                               31-Mar-11     programmatic performance and a high cash
                                                                                             balance at the end of the period under review.
                                   4 N/A                  0,00    5 712 652,00 1-Jan-11 to   N/A - The Global Fund concurs with the LFA’s
                                                                               30-Jun-11     recommendation to not disburse any additional
                                                                                             funds. The zero disbursement decision is due the
                                                                                             existing high cash balance, limited programmatic

                                                                                                                                         67
                                                        performance and insufficient details to justify the
                                                        amount forecasted by the Principal Recipient.



5   23-déc-   2 106 190,00   9 900 685,00 1-Jul-11 to   Disbursement context: As a temporary measure,
         11                               31-Dec-11     all disbursements and payments under 7 grants in
                                                        the portfolio, including the UNDP grants were
                                                        frozen. Key activities related to the provision of
                                                        health
                                                        services are since approved on a case by case
                                                        basis, with additional risk mitigation and
                                                        safeguards introduced by the PR. For Q8, the
                                                        approved budget is USD 2, 628,834. Activities
                                                        financed during Q8 include:
                                                        1. payment of salary supplements which payment
                                                        resumed from October 2011 until February 2012;
                                                        2. financing of a survey on ACT drug resistance;
                                                        3. functioning costs for the PNLP at central and
                                                        provincial level;
                                                        4. supervision activities at all levels,
                                                        5. UNDP PMU costs and GMS;
                                                        6. capacity building activities. This explains the
                                                        variance between the PR requested amount, the
                                                        LFA recommended amount, and the Global
                                                        Fund’s disbursement decision.




                                                                                                     68
Grant Grant     Total Grant       DR DATE         AMOUNT        PR REQUEST DR PERIOD COVERED Reasons for variance between
Round Number/PR Amount                                                                       PR Request and Actual
                                                                                             Disbursement

Rd 8   ZAR-809-   77 863 857,00    1  8-déc-09 66 872 873,00    66 872 873,00 1-Dec-09 to 30-Jun-10   No Variance
Ph 1   G07-M                       2 N/A                0,00     8 162 442,00 1-Jul-10 to 29-Mar-11   No disbursement was made. The
       ASF/PSI                                                                                        PR is awaiting the arrival of the
                                                                                                      LLINS.
                                   3 N/A                 0,00           0,00 1-Jan-11 to 30-Jun-11    N/A. The PR did not request
                                                                                                      any funding and no funds were
                                                                                                      recommended for disbursement
                                                                                                      by the LFA.
                                   4 15-févr-12    484 457,00    6 264 333,00 1-Jul-11 to 20-Mar-12   Disbursement will follow based
                                                                                                      on final clarifications to be
                                                                                                      obtained from the LFA and PR.
                                                                                                      It should be noted that delays in
                                                                                                      procurement of
                                                                                                      LLINs have changed the timing
                                                                                                      of disbursement for a number of
                                                                                                      category of expenses
                                                                                                      The PR was requested to
                                                                                                      increase controls around the
                                                                                                      campaign preparation and
                                                                                                      execution activities.
                                                                                                      A modification in the type of
                                                                                                      communication and
                                                                                                      communication materials
                                                                                                      impacted the budget.




                                                                                                                                 69
Grant Grant     Total Grant       DR DATE         AMOUNT        PR REQUEST DR PERIOD COVERED Reasons for variance between
Round Number/PR Amount                                                                               PR Request and
                                                                                                     Disbursement
Rd 8   ZAR-810-   37 690 725,00    1   12-févr-10 12 509 488,00 15 241 678,00 01-Jan-10 to 30-Jun-10 The Regional Team
Ph 1   G08-M                                                                                         recommends the disbursement
       SANRU                                                                                         of 12,509,488 USD, which
                                                                                                     corresponds to 11,489,026 USD
                                                                                                     for the first period and a
                                                                                                     buffer amount of 1,020,462
                                                                                                     USD for the third Quarter. The
                                                                                                     recommended disbursement
                                                                                                     total is lower than the PR
                                                                                                     request and LFA recommended
                                                                                                     amount due to Condition
                                                                                                     Precedent #1 not being
                                                                                                     satisfied. The CP in question
                                                                                                     requires the PR to provide the
                                                                                                     Global Fund with a sub-
                                                                                                     recipient detailed budget prior
                                                                                                     to disbursement of
                                                                                                     funds to these organizations.
                                                                                                     Consequently, 2,732,190 USD
                                                                                                     that was earmarked for the sub-
                                                                                                     recipients during this
                                                                                                     disbursement period was
                                                                                                     deducted from the disbursement
                                                                                                     request (1,608,222 USD for

                                                                                                                               70
                                                                        Period 1 and 1,123,968 USD
                                                                        for Q3).




1.1   15-avr-10   2 732 190,00   15 241 678,00 01-Jan-10 to 30-Jun-10    The EAIO team recommends
                                                                        the disbursement 1.1 of USD
                                                                        2,732,190. Disbursement 1 in
                                                                        the amount of USD 12,509,488
                                                                        took place on 12Feb10 against a
                                                                        PR request of USD 15,241,678.
                                                                        The USD
                                                                        2,732,190 that was withheld
                                                                        from disbursement 1 was the
                                                                        result of Condition Precedent 1
                                                                        - concerning a detailed sub
                                                                        recipient budget -
                                                                        not having been satisfied. The
                                                                        PR has subsequently provided
                                                                        to the Global Fund a detailed
                                                                        sub-recipient budget and sub-
                                                                        recipient performance
                                                                        framework. Consequently, the
                                                                        EAIO team recommends the
                                                                        disbursement of those funds
                                                                        that were withheld in
                                                                        disbursement 1,i.e., USD
                                                                        2,732,190.

                                                                                                 71
3   21-sept-10 14 785 199,00   14 851 095,00 01-Jul-10 to 29-Mar-11    The PR only spent USD 1.8m
                                                                      against 13,097,248 resulting in
                                                                      a high cash balance of USD
                                                                      13.4m, however, contracts and
                                                                      commitments for
                                                                      procurement (including USD
                                                                      8.7m for health products -
                                                                      ACTs and LLINs) and activities
                                                                      from Q1 and Q2 to be finalised
                                                                      in Q3 bridge the
                                                                      total variance of USD
                                                                      11,301,289 in total expenditure
                                                                      against budget for P1. The
                                                                      EAIO team therefore concurred
                                                                      with the LFA recommendation
                                                                      to disburse USD 14,785,199 to
                                                                      allow the PR to pay
                                                                      for its outstanding P1
                                                                      commitments with its cash
                                                                      balance and implement the
                                                                      activities as scheduled for P2
                                                                      (with budget forecast of USD
                                                                      3,231,763) while approving the
                                                                      USD 13,749,952 Q5 buffer.
                                                                      Forecasted amounts slightly
                                                                      differ from the budgeted
                                                                      amounts due to a difference
                                                                      between the PR original
                                                                      budgeted amount for SRs and
                                                                      actual contracts signed with
                                                                      SRs. For Q1-5 this comes down
                                                                      to a net saving of USD 59,097.
                                                                      The recommended amount to be

                                                                                               72
                                                                                               disbursed
                                                                                               differs slightly from the
                                                                                               requested USD 14,851,095 by
                                                                                               the PR, which is explained by
                                                                                               rejected expenses of USD
                                                                                               65,885 by the LFA.




                           4 N/A                  0,00   3 924 529,00 01-Jan-11 to 30-Jun-11   N/A - Considering the high
                                                                                               cash balance at the end of the
                                                                                               reporting period (USD
                                                                                               19’619’016), lack of visibility
                                                                                               regarding the uptake and use of
                                                                                               grant funds at Sub-Recipient
                                                                                               level, no additional funding will
                                                                                               be released by the Global Fund
                                                                                               at this point in time.
                           5 31-janv-12   7 663 848,00   3 855 160,00 01-Jul-11 to 29-Mar-12




ANNEX 3: GF/LFA-PSM RELATED CONDITIONS PRECEDENT/FULFILLMENT HISTORY



Round 3 (UNDP)
                                                                                                                          73
S/N     PSM-RELATED CONDITIONS                DATE       TIMELINE FOR         DATE           COMMENTS   COMMENTS
              PRECEDENT                     IMPOSED      FULFILLMENT       FULFILLED            (PR)      (LFA)
           AND OTHER SPECIAL                                                    -IF
              CONDITIONS                                                    ALREADY
                                                                           FULFILLED
                                                                           Addition as
                                                                           above

                                          CONDITIONS PRECEDENT TO DISBURSEMENT
1     Before second disbursement under the        7-Sept-2004 1-Dec-2004   Before 8-Avr-   No comment   N/A
      Grant, the Principal Recipient will, except                          2005
      as the Global Fund and the Principal
      Recipient may otherwise agree in writing,
      furnish to the Global Fund, in form and
      substance satisfactory to the Global Fund,
      a. Evidence that the Principal Recipient
      has appointed, under terms of reference
      acceptable to the Global Fund, one person
      with appropriate experience and expertise
      to fill each of the following positions:
      I. Procurement Coordinator with
      responsibility for Global Fund grants;
2     Before disbursement or use of Grant funds 7-Sept-2004   1-May-2005   Before 1-Oct-   No Comment   N/A
      to finance the procurement of health                                 2004
      products as defined in Article 18, the
      Principal Recipient shall
      a. receive in writing from the Global Fund
      its approval of the Principal Recipient’s
      procurement plan.
7     The disbursement or use of Grant funds to Sept 2007     31-Mar-2008  First version   No Comment   N/A
      finance the procurement of Health                                    submitted on
      Products (as defined in Article 18 of the                            January
      Standard Terms and Conditions) in Phase
                                                                           2008, second
      2 is subject to the following conditions:
      a. the delivery by the Principal Recipient                           version
      to the Global Fund of a plan for the                                 submitted on


                                                                                                                   74
     procurement, use and supply management                               July 2008
     of the Health Products for the Program as
     described in Article 18 of the Standard
     Terms and
     Conditions of this Agreement (the “PSM
     Plan”); and
     b. the written approval of the Global Fund
     of the PSM Plan.

                                   SPECIAL TERMS AND CONDITIONS FOR THIS AGREEMENT
8    All procurement of Health Products (as      7-Sept-2004 Phase 1       Fulfilled   No Comment   N/A
     defined in Article 18 of this Agreement),
     vehicles, computers, office equipment,
     furniture and other material expenditure of
     Grant funds shall be effected by the
     Principal Recipient. No such procurement
     shall be delegated by the Principal
     Recipient to Sub- Recipients without prior
     authorization in writing from the Global
     Fund.
12   The Principal Recipient shall recruit a     Sept 2007   Phase 2       Fulfilled   No Comment   N/A
     person with appropriate qualifications and
     experience in pharmaceutical and health
     product management to lead the Principal
     Recipient’s procurement and supply
     management team (the “PSM Team
     Leader”).
     In the absence of a PSM Team Leader, the
     Principal Recipient shall ensure that the
     role and responsibilities of the PSM Team
     Leader are performed through continuous
     in-country support offered by a limited
     number of selected Principal Recipient’s
     appropriately qualified pharmaceutical
     and health product management experts.
     For the period(s) that the PSM Team
     Leader’s role and responsibilities are
     covered by the Principal
     Recipient’s appropriately qualified
     pharmaceutical and health product

                                                                                                          75
     management experts, the Principal
     Recipient shall provide a brief monthly
     update on the arrangements to the Global
     Fund.
13   Not later than 45 days from the signature      Sept 2007   Phase 2   Fulfilled   No Comment             N/A
     of the Amendment to the Grant
     Agreement, the
     Principal Recipient shall deliver to the
     Global Fund a detailed procedural manual,
     in form and substance acceptable to the
     Global Fund - as assessed by the LFA -
     unless otherwise agreed between the
     Global Fund and the Principal Recipient,
     setting forth the tasks and responsibilities
     of the different entities involved in the
     procurement and supply management
     chain of the Program.
14   Not later than 45 days from the signature      Sept 2007   Phase 2               Introduction of        N/A
     of the Amendment to the Grant                                                    RDTs required a
     Agreement, the                                                                   change of national
     Principal Recipient shall deliver to the
                                                                                      policy, which took
     Global
     Fund a detailed plan, in form and                                                time and was not
     substance acceptable to the Global Fund –                                        depending only of
     as assessed by the LFA - unless otherwise                                        the PR. It has had a
     agreed between the Global Fund and the                                           serious on the Phase
     Principal                                                                        2, and made
     Recipient, for the distribution of                                               conditions harder to
     pharmaceutical and health products to the
                                                                                      meet.
     health zones of the Program (the
     “Distribution
     Plan”). The Distribution Plan shall include
     a forecast of the quantities, volume,
     weight and cost of the distribution of
     pharmaceutical and health products by air.
15   Not later than six months after the            Sept 2007   Phase 2               A LLIMS system         N/A
     signature of the Amendment to the Grant                                          has been set up to
     Agreement, the Principal Recipient shall                                         track deliveries
     deliver to the
                                                                                      from CDR to SRs.
     Global Fund the following, in form and

                                                                                                                   76
             substance acceptable to the Global Fund,                                                A consultant has
             unless otherwise agreed between the                                                     been hired to assist
             Global Fund and the Principal Recipient:                                                in improving the
             a. a report demonstrating that an adequate
                                                                                                     existing system.
             Logistic Management Information System
             (the                                                                                    Introduction of
             “LMIS”) is fully operational and has been                                               RDTs required a
             found acceptable as assessed by the Local                                               change of national
             Fund Agent; and                                                                         policy, which took
             b. a revised forecast and quantification for                                            time and was not
             the remaining period of the Program                                                     depending only of
             taking into account information on patient
                                                                                                     the PR. It has had a
             numbers and existing stock levels as
             generated by the                                                                        serious on the Phase
             LMIS.                                                                                   2, and made
                                                                                                     conditions harder to
                                                                                                     meet.
16           Until the Global Fund and the Principal        Sept 2007     Phase 2                    No comment             N/A
             Recipient agree otherwise, the Principal
             Recipient shall procure pharmaceuticals
             only
             if pre-packed at supplier/Procurement
             Agent level based on Sub-Recipient needs
             for the purpose of in transit storage
             pending further distribution to the health
             zones of the Program.




Round 8 (UNDP)

S/N     PSM-RELATED CONDITIONS                            DATE          TIMELINE FOR      DATE        COMMENTS              COMMENTS
              PRECEDENT                                 IMPOSED         FULFILLMENT    FULFILLED         (PR)                 (LFA)
      AND OTHER SPECIAL CONDITIONS                                                          -IF
                                                                                        ALREADY
                                                                                       FULFILLED
                                                                                       Addition as

                                                                                                                                       77
                                                                                above
      N/A



Round 8 (SANRU)

S/N           PSM-RELATED CONDITIONS                 DATE        TIMELINE FOR          DATE          COMMENTS              COMMENTS
                    PRECEDENT                      IMPOSED       FULFILLMENT        FULFILLED           (PR)                 (LFA)
            AND OTHER SPECIAL CONDITIONS                                                 -IF
                                                                                     ALREADY
                                                                                    FULFILLED
                                                                                    Addition as
                                                                                    above
                                            SPECIAL TERMS AND CONDITIONS FOR THIS AGREEMENT
4           No later than 3 months after the Phase 1      14-Jan-2010 1-Apr-2010    22-Mar-2010   Based on the report      N/A
            Starting Date, and in any event no later than                                         findings, a decision
            the date on which the Principal Recipient                                             was made not to
            signs a contract with a supplier for Health                                           insure health products
            Products, the Principal Recipient shall                                               purchased under this
            deliver to the Global Fund a credit and                                               grant through
            performance risk analysis of the insurance                                            SONAS as SONAS is
            company that will be providing risk                                                   deemed insolvent. By
            coverage for the Program activities, in form                                          law, however,
            and substance acceptable to the Global                                                SONAS has a
            Fund                                                                                  monopoly. This is
                                                                                                  under review by the
                                                                                                  parliament to allow
                                                                                                  the market to open for
                                                                                                  other insurers.
                                                                                                  Insurance for
                                                                                                  distribution and
                                                                                                  storage of the health
                                                                                                  products is included
                                                                                                  in the agreements
                                                                                                  with contractors
                                                                                                  selected for these
                                                                                                  activities.


                                                                                                                                      78
6    The following conditions apply to the           14-Jan-2010   Phase 1        This report     The PR feels to have     N/A
     prices and distribution of Health Products                                   was submitted   adequately filled this
     (as defined in Article 19 of the Standard                                    on 5 May to     condition, and do not
     Terms and Conditions):                                                       the Global
                                                                                                  understand the
     (a) no later than 30 days from the                                           Fund. Updates
     conclusion of a contract with the selected                                   have been       preference of the
     supplier of                                                                  provided with   Global Fund for using
     Health Products, the Principal Recipient                                     each PUDR       VPP during Phase 2.
     shall submit to the Global Fund a report, in
     form and substance acceptable to the
     Global Fund, on the prices of all Health
     Products to be purchased;
     (b) no later than 6 months from the Phase 1
     Starting Date, and every 6 months
     thereafter, the Principal Recipient shall
     submit to the Global Fund a report, in form
     and substance acceptable to the Global
     Fund, on the distribution costs of Health
     Products, if any;
     (c) the Principal Recipient acknowledges
     and understands that any savings identified
     resulting from Special Term and Condition
     5a and 5b above may be reduced from the
     available amount of Grant funds as
     reflected in block 8 of the Face Sheet of
     this
     Agreement.

11   No later than 6 months from the Phase 1         14-Jan-2010   30-Jun-2010    4-Nov-10        Report accepted by       N/A
     Starting Date , the Principal Recipient shall                                                the Global Fund
     submit to the Global Fund a report, in form
     and substance acceptable to the Global
     Fund, detailing the feasibility of the pilot
     project on the distribution of artemisinin
     combination therapy through private
     pharmacies in selected health zones.
12   If applicable, and no later than 9 months       14-Jan-2010   30-Sept-2010   4-Nov-10        Report accepted by       N/A
     from the Phase 1 Starting Date, the                                                          the Global Fund
     Principal
     Recipient shall submit to the Global Fund,

                                                                                                                                 79
            in form and substance satisfactory to the
            Global
            Fund, the following:
            (a) no later than 9 months from the Phase 1
            Starting Date, an implementation plan for
            the pilot project on the distribution of
            artemisinin combination therapy through
            private pharmacies as mentioned under
            Special Term and Condition 9 above;
13          (b) no later than 9 months from the Phase 1     14-Jan-2010   30-Sept-2010    4-Nov-10      Pilot project approved   N/A
            Starting Date, a description of the intended                                                by the Global Fund
            use of the Recovered Funds under the pilot
            project mentioned above, consistent with
            the
            objectives and activities of the Program;
            and
14          (c) on a quarterly basis, a statement, of the   14-Jan-2010   Phase 1         In progress   The study above          N/A
            amount of funds recovered from the sale of                                                  stated that the
            artemisinin combination therapy drugs                                                       implementation of
            purchased using Grant funds (the
                                                                                                        this project will not
            “Recovered Funds”) during implementation
            of the above mentioned pilot project.                                                       lead to recovery of
                                                                                                        funds. Study is
                                                                                                        expected to be
                                                                                                        finalized end of
                                                                                                        January 2012.




Round 8 Phase 1 (ASF/PSI)

S/N               PSM-RELATED CONDITIONS                        DATE       TIMELINE FOR       DATE          COMMENTS              COMMENTS
                        PRECEDENT                             IMPOSED      FULFILLMENT     FULFILLED           (PR)                 (LFA)
                     AND OTHER SPECIAL                                                         -IF
                        CONDITIONS                                                          ALREADY
                                                                                           FULFILLED


                                                                                                                                             80
                                                                          Addition as
                                                                          above
                                  SPECIAL TERMS AND CONDITIONS FOR THIS AGREEMENT
1   The Principal Recipient acknowledges and 26-Nov-2009                  Fulfilled        Discussions between      N/A
    agrees that the rates used to budget for the                                           the
    headquarter management fees of 10% on                                                  Global Fund and PSI
    non-procurement costs and 3% on                                                        Washington DC were
    procurement costs are to be reviewed by                                                finalized. The Global
    the Global Fund and PSI and may be                                                     Fund has introduced
    reduced. This revision shall then be                                                   guidelines for INGOs
    applied on the budget retroactively from                                               management fees.
    the beginning of the grant.                                                            Phase 1 of this grant
                                                                                           was not necessary to
                                                                                           change.
2   No later than 3 months after the Phase 1     26-Nov-2009   30-Mar-2010   22-Mars-      Based on the report      N/A
    Starting Date, and in any event no later                                 2010          findings, a decision
    than the date on which the Principal                                                   was made not to
    Recipient signs a contract with a supplier                                             insure health products
    for Health Products, the Principal                                                     purchased under this
    Recipient shall deliver to the Global Fund                                             grant through
    a credit and performance risk analysis of                                              SONAS as SONAS is
    the insurance company that will be                                                     deemed insolvent. By
    providing risk coverage for the Program                                                law, however,
    activities, in form and substance                                                      SONAS has a
    acceptable to the Global Fund.                                                         monopoly. This is
                                                                                           under review by the
                                                                                           parliament to allow
                                                                                           the market to open
                                                                                           for other insurers.
                                                                                           Insurance for
                                                                                           distribution and
                                                                                           storage of the health
                                                                                           products is included
                                                                                           in the agreements
                                                                                           with contractors
                                                                                           selected for these
                                                                                           activities.

4   The following conditions apply to the        26-Nov-2009                 12-Feb-2010   4(a) Vendor contract     N/A


                                                                                                                          81
prices and distribution of Health Products   signed 12 February
(as defined in Article 19 of the Standard    2010.
Terms and                                    Report transmitted on
Conditions):                                 12
(a) no later than 30 days from the           March.
conclusion of a contract with the selected   4(b) The transport
supplier of Health Products, the Principal   tender for DDU
Recipient shall submit to the Global Fund    international
a report, in form and substance acceptable   transport of
to the Global Fund, on the prices of all     9,455,086 LLIN from
Health Products to be purchased;             port of origin to ports
(b) no later than 6 months from the Phase    of entry (Matadi &
1 Starting Date, and every 6 months          Lubumbashi) was
thereafter, the Principal Recipient shall    awarded to Scan
submit to the                                Global Logistics and
Global Fund a report, in form and            World Customs (port
substance acceptable to the Global Fund,     of entry to Tshikapa).
on the distribution costs of Health          The contract was
Products, if any; and                        signed by PSI and
(c) the Principal Recipient acknowledges     SGL 4 October 2010
and understands that any savings             and PSI and WCG on
identified resulting from Special Term and   29
Condition 4a and 4b above may be             September 2010.
reduced from the available amount of         Total contract value
Grant funds as reflected in block 8 of the   is $ 8,801,580 ($0,93
Face Sheet of this Agreement.                unit).
                                             4(c) the Principal
                                             Recipient has
                                             acknowledged that
                                             any savings resulting
                                             from
                                             Special Term and
                                             Condition 4a and 4b
                                             above may reduce the
                                             amount of grant
                                             funds available.
                                             A realigned budget
                                             indicating the cost
                                             savings was
                                             submitted to the GF.

                                                                       82
Round 8 Phase 2 (SANRU)

S/N        PSM-RELATED CONDITIONS                            DATE       TIMELINE FOR            DATE           COMMENTS              COMMENTS
                 PRECEDENT                                 IMPOSED      FULFILLMENT          FULFILLED            (PR)                 (LFA)
         AND OTHER SPECIAL CONDITIONS                                                             -IF
                                                                                              ALREADY
                                                                                             FULFILLED
                                                                                             Addition as
                                                                                             above
      The PR must engage technical assistance to          25-Jan-2012   Within 6 months of                                          N/A
      review reporting needs and tools as well as the                   grant signing
      reporting circuit and must submit a plan on
      strengthening the HMIS/LIMS system, in form
      and substance satisfactory to the Global Fund and
      developed in conjunction with other relevant
      stakeholders (including the National Program and
      other PRs)
      The PR acknowledges and agrees that the             25-Jan-2012   Prior to                           Taken into account       N/A
      procurement of Health Products with the use of                    disbursements for                  that in Phase 1 delays
      Grant funds shall be done through the Voluntary                   health products                    in procurement were
      Pooled Procurement (VPP) mechanism or a                                                              not very important
      suitably qualified Procurement Agent (as                                                             and all due to
      assessed by the Local Fund Agent and approved                                                        manufactures’ delays,
      by the Global Fund in writing) until the Global                                                      the reason of such a
      Fund has agreed in writing, upon relevant                                                            condition is not
      assessment by the LFA, that such procurement                                                         understood.
      can be properly managed by the PR.
      The PR must implement adequate measures to          25-Jan-2012   Within 6 months of                 No Comment               N/A
      ensure that health products are stored in                         Phase 2 start date
      appropriate conditions, review and development


                                                                                                                                                83
      of SOPs and upgrades of infrastructures and
      equipment. In addition the PR must ensure that
      storage capacity is sufficient to absorb the
      increased volumes of pharmaceutical and health
      products
      The PR must provide documented evidence, in            25-Jan-2012   31-Mar-2012                         No Comment            N/A
      form and substance satisfactory to the Global
      Fund, to support the fee charged by the Regional
      Distribution Center (CDR) for storage and
      distribution of health products. Justification shall
      include reference to historical costs, planned
      budget and overall volume planned to be
      managed in each CDR.
      The PR must work will all stakeholders to discuss      25-Jan-2012   Prior to signing of                 No Comment            N/A
      the findings of the Drug Theft Assessment                            Phase 2 agreement
      conducted by the LFA and agree on actions to
      identify key risks in a Country Action Plan, in
      form and substance satisfactory to the Global
      Fund



Round 8 Phase 2 ASF/PSI

S/N        PSM-RELATED CONDITIONS                               DATE        TIMELINE FOR            DATE           COMMENTS           COMMENTS
                 PRECEDENT                                    IMPOSED       FULFILLMENT          FULFILLED            (PR)              (LFA)
         AND OTHER SPECIAL CONDITIONS                                                                 -IF
                                                                                                  ALREADY
                                                                                                 FULFILLED
                                                                                                 Addition as
                                                                                                 above
      Prior to signature of the Phase 2 agreement, a         30-Jan-2012   Prior to signing of                 Taken into account    N/A
      review of the expenditures for LLIN procurement                      Phase 2 agreement                   documents regarding
      shall be conducted by the Global Fund. The                                                               LLINs’ procurement
      Principal Recipient shall therefore submit by 1                                                          have already been


                                                                                                                                                 84
     March 2012 all required documentation for the                                          transmitted, audited by
     Global Fund to conduct such review.                                                    the LFA, and also the
                                                                                            fact that PSI is the
                                                                                            LLINs’ purchase of
                                                                                            VPP, this request is not
                                                                                            understood.
     The PR must submit to the Global Fund for           30-Jan-2012   Until otherwise      Taken into account         N/A
     review and approval all tender-related                            communicated by      documents regarding
     documentation prior to awarding any supplier                      the Global Fund      LLINs’ procurement
     contracts. The PR shall cooperate with the Global                                      have already been
     Fund review and plan the procurement process in                                        transmitted, audited by
     line with this requirement.                                                            the LFA, and also the
                                                                                            fact that PSI is the
                                                                                            LLINs’ purchase of
                                                                                            VPP, this request is not
                                                                                            understood.
     The PR must submit a concrete, detailed LLIN        30-Jan-2012   Within 6 months of                              N/A
     distribution plan, in form and substance                          grant signing
     satisfactory to the Global Fund, for the two
     provinces to be covered in Phase 2, taking into
     account the lessons learned from the distribution
     campaigns in Phase 1



Round 8 Phase 2 (CAG)

Not Available




ANNEX 4: HISTORY OF GF EMERGENCY PROCUREMENTS



                                                                                                                             85
S/N   MEDICINE/         EXPLAIN                   DATE               DATE            QUANTITY    DATE           FUNDING          ANY ON-GOING
      COMMODITY         REASON (S)                PROCUREMENT        PROCUREMENT     PROCURE     PROCURE        MECHANISM        PROCUREMENT
      PROCURED AS       FOR                       INITIATED          AWARDED         D           MENT                            AT SAME TIME?
      EMERGENCY         EMERGENCY                                                                RECEIVED                        (NON-
      (DESCRIBE ITEM)   PROCUREMENT                                                              IN                              EMERGENCY)??
                                                                                                 COUNTRY
1     LLINs             Delay for delivery at     July 2011          August 2011     200 000     January 2012   Global Fund Rd   Yes.
                        the level of the                                             LLINs                      8
                        manufacturer who
                        awarded the tender.
                        SANRU requested an
                        agreement to buy in
                        emergency at the best
                        tender looser a part of
                        the whole quantity to
                        be able to cover the
                        demand.
2     RDTs              Risk of stock out         15 February 2012   28 March 2012   1 250 000   30 August      Global Fund      Yes.
                        during the non-cost                                          RDTs        2012           (No cost
                        extension of Rd 8                                                        (expected)     extension
                        Phase 1 (1 January                                                                      Round 8 Phase
                        2012-30 June 2012)
                                                                                                                1)




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