The Global Fund is a partnership designed to accelerate the end of AIDS, tuberculosis and malaria as epidemics. As an international organization, the Global Fund mobilizes and invests more than US$4 billion a year to support programs run by local experts in more than 100 countries.
Gavi, the Vaccine Alliance helps vaccinate half the world’s children against some of the deadliest infectious diseases. Since its inception in 2000, Gavi has helped to immunise a whole generation – more than 888 million children – prevented more than 15 million future deaths, and contributed to cutting by half child mortality in 73 lower-income countries. In accordance with the international health partnership UHC2030 principles of national ownership, countries are encouraged to manage Gavi funds using their own country systems.
Both Gavi and The Global Fund have been at the heart of the response to the COVID-19 pandemic, providing emergency funding to the most vulnerable countries. Gavi also established the COVAX Facility, whose aim is to ensure equitable access to COVID vaccines around the globe.
The outbreak of the COVID-19 pandemic has put into the spotlight the need for efficient and impactful health financing, and it has underscored the importance of the health sector in driving the economic progress, at global and country levels. It is now more evident that the effective management of public and private sector health financing is extremely critical to build strong, sustainable, and efficient health systems (and thus resilient economies).
As one of the levers to address this challenge, in June 2021, IFAC signed a Memorandum of Understanding (MoU) with development partners Gavi and the Global Fund. Both organisations invest in public financial management (PFM) and accountancy capacity to maximize the effectiveness and impact in the disbursement of their lifesaving funds and resources, and to mitigate the risks of fraud and misappropriation of funds.
Implementation of the MoU will start in two pilot countries by supporting the local professional accountancy organizations (PAOs). This initiative ultimately aims to build the capacity of PAOs to support resilient and sustainable health sector systems in the lower-income countries.
PFM is a pillar in any public health organization. The operating models of Gavi and the Global Fund rely heavily on country PFM systems to ensure the financial management of their grants. But country capacities vary widely. In jurisdictions with weak PFM infrastructure, donors are forced to invest additional resources to build parallel systems, which is neither sustainable nor efficient. Gavi and The Global Fund therefore favor a donor-harmonized approach to strengthen PFM systems working with other development partners to support and fund reform efforts, with the aim of developing strong and reliable PFM systems that are resilient to crisis and external shocks. Jurisdictions must have strong reporting and accountability frameworks to ensure that development assistance is effective at addressing the health priorities.
Investing in PFM systems ensures better financial performance, more efficient and cost-effective service delivery, stronger governance and accountability, and fiscal sustainability. Better PFM systems also enable a systematic approach and continuity to the necessary control and oversight functions. They ensure better traceability of funds and other assets, enable more opportunities to ensure economic use of budgets and linkages to audited financial performance with programmatic results and service delivery.
Country case study: Rwanda - Rwanda has successfully implemented a national PFM reform strategy and is one of the only countries in the Global Fund’s portfolio where the PFM system can be used end to end for the delivery of their programs. This also enables Rwanda to use a results-based financing approach, that pays for outputs and not for inputs.
The outbreak of the COVID-19 pandemic led to the disbursement of large amounts of additional emergency funding to the countries supported by Gavi and The Global Fund leading to emergent risks. This subsequently increased the need for robust financial and fiduciary oversight, to help manage risk areas such as fraud, procurement, in-country supply chain, human rights, and gender inequality.
Gavi and the Global Fund pooled resources under their stewardship from international donors’ programs both for the emergency response and to also support the continuous implementation of their current programs. The Global Fund also supports countries’ ability to realistically assess their financing gap needs. Also, to mitigate COVID-19 disruptions of progress many countries have made on HIV, tuberculosis and malaria, the Global Fund has provided more than $US 4 billion to various countries in the last 18 months.
Both organizations are required to ensure that the funding they provide is absorbed and properly allocated by countries to address the health needs of the population. The adoption of standards and a strong public financial reporting framework is paramount to building sustainable health systems and demonstrating value for money.
The main financial and fiduciary risks facing the funding provided include:
Building PAO capacity in the areas outlined by the IFAC Statements of Membership Obligations (SMOs) directly contributes to enhanced audit performance, the quality of audit information produced, and the financial information donors utilize in the management of development assistance projects. When PAO programs of audit quality assurance function appropriately to assess audit quality, identify areas of non-compliance with professional and ethical standards, and facilitate remediation they may be relied upon by donors in understanding the local audit environment, determining approved auditors, and managing the associated risks.
Improved production of high-quality financial statements & ensuing audit reports enhances financial management performance and compliance rates, reduces project financial management risks and increases efficiency in the flow of funds arrangements and disbursement rates.
Gavi and the Global Fund have supported PAO capacity-building initiatives in order to improve the quality of public sector financial reporting and enhance transparency and accountability. Collaboration among Gavi, the Global Fund, government representatives and development partners is at the heart of their strategic initiatives. Collaboration with IFAC through the MoU will enable convergence of technical expertise and much-needed financing. It also supports long-term initiatives to strengthen the accountancy profession in countries.
As PAOs facilitate knowledge and skills acquisition through their education, certification and life-long learning programs, it is within their public interest mandate to build their capacity, expand membership to include public sector professionals, and provide offerings which emphasize International Public Sector Accounting Standards (IPSAS) and PFM.
Capacity building programs that enhance PAO involvement in PFM may translate into higher-quality financial information in the public sector, thereby enabling greater assessment of the impact of fiscal and monetary policy decisions. These initiatives will ensure continuous availability of trained and skilled finance professionals to manage Gavi and The Global Fund investments.
Projects that support PAO efforts to properly adopt and implement International Standards on Auditing (ISAs) and ethical standards in partner countries, improve the accessibility of audit reports, and strengthen audit findings and the credibility of audit opinions. Improving the quality of auditor education, certification and continuing professional development leads to the development of competent and capable professionals who can produce high quality audited financial reports.
Gavi and The Global Fund have supported the strengthening of PFM systems to further strengthen public health systems through collaboration with a range of governmental institutions.
Gavi and The Global Fund’s partnership with IFAC and with PAOs at country level aims to provide a sustainable solution to strengthening PFM. It will also build resilient and sustainable in-country health sector systems and health outcomes that improve the lives of millions around the globe and ensure a fairer society and more equal world.