The three lines of defense through which the Global Fund delivers its Risk Management Framework are:
- Grant Management Division
- Risk Department
- OIG and external auditor
IG Mouhamadou Diagne presented on OIG Matters including:
- 2015 Annual Report on the Activities of the OIG
- OIG 2015 Annual Opinion on Governance, Risk Management, and Internal Controls of the Global Fund
- 2015 Progress Update on Status of Agreed Management Actions (AMAs)
The 2015 Annual Report describes the past and current years:
- 2014 as “about stabilizing the OIG and rebuilding relationships with stakeholders”
- 2015 as the “year of execution, delivering reports that have impact, leveraging improved relationships, putting in place internal improvements and being proactive”
- 2016 as “raising the game”
The OIG has launched the anticorruption campaign I Speak Out Now!
The first phase is an e-learning platform in four languages (ISpeakOutNow.org).
The second phase is specific messaging and community outreach campaigns in Ukraine, Malawi, and Côte d’Ivoire
The dual purpose of the Annual Opinion is to “provide Board members with an independent perspective on the maturity of the Global Fund’s internal controls, governance and risk management processes” and “highlight important challenges and opportunities for the organization to move up along the maturity curve.”
This second Annual Opinion is that the Global Fund has demonstrated a “steady and progressive improvement in organizational maturity over time” from the “initiated stage” to the “embedded” stage.
New Chief Risk Officer (CRO) Rahul Singhal presented the Risk Management Report and Annual Assurance Statement on Risk Management.
The Risk Management Report describes the Global Fund as “now poised to evolve towards a more mature, actively managed risk management approach.”
Executive Director Mark Dybul stressed that all Secretariat staff see themselves as risk managers.
Mark describe the role of Rahul as risk oversight rather than risk management.
The Secretariat agreed that the organizational maturity of the Global Fund is between the “initiated” and “embedded” stages.
The vision of the Secretariat is to reach the “actively managed and formalized” stage in three years.
The Secretariat has introduced an Enterprise Risk Committee (ERC) to replace the previous Risk and Assurance Committee (RAC) and integrate with the Operational Risk Committee (ORC).
The CRO and the Chief of State chair the ERC.
The OIG and the Secretariat agreed on the five areas critical for the Global Fund to move up the maturity scale in 2016:
- Optimizing partnerships
- Balancing country ownership and accountability for results
- Tackling procurement and supply-chain challenges in holistic manner
- Strengthening health systems in cost-effective manner
- Risk Management and Assurance framework
Grant Management Division Head Mark Edington responded to questions from the Board.
Mark announced that the Secretariat is interviewing candidates for a new Supply Chain Director who will report to him and have between 10 and 20 staff.
Developed Country NGO Alternate Board Member Annemarie Meyer commended the Global Fund for being one of the five most transparent organizations as per the Publish What You Fund Aid Transparency Index.
Annemarie recognized that the Global Fund operates in many high-risk countries and the Board needs to have a high risk tolerance.
She described how the Developed Country NGO Board delegation takes a public health approach to mismanagement and fraud in terms of prevention, detection, and response.
She stated that we have seen the detection by the OIG and the response by the Secretariat.
She asked how the Global Fund partnership could continue to improve prevention.
The Private Sector Board Delegation introduced a decision point entitled Response to OIG 2015 Annual Risk Opinion and Risk Management Report and Assurance Statement.
The U.K. Board Delegation originally submitted the decision point, and the Donor Group amended it.
The context for the decision point were recent OIG audit reports on Tanzania and Uganda and forthcoming OIG audit and investigation reports on Nigeria.
In the decision point, the Board:
- Acknowledges that “in-country partnerships are in place and significant initiatives and measures have been implemented and measures have been implemented to improve programmatic, fiduciary and risk-management processes
- States that “immediate and heightened efforts are needed to accelerate progress and advance risk management systems and processes”
- Requests the Secretariat to present a detailed action plan to advance risk management and internal controls, with measurable and time-bound targets, and a report on progress to the Board in June 2016 through the Standing Committees
- Requests the Secretariat to review the business model in high-risk countries in the context of the differentiation initiative and present possible options to the Board after review by the Standing Committees at their second meetings in 2016
The Board unanimously approved the decision point.