United States Government Accountability Office

GAO Testimony 

Before the Subcommittee on National Security, 

Emerging Threats, and International Relations, 

Committee on Government Reform, House of 

Representatives 

GLOBAL HEALTH 

Spending Requirement 

Presents Challenges for 

Allocating Prevention 

Funding under the 

President’s Emergency Plan 

for AIDS Relief 

Statement of David Gootnick, Director

International Affairs and Trade 

For Release on Delivery

Expected at 1 p.m. EDT/EST 

September 6, 2006

 

GAO-06-1089T 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

 

GLOBAL HEALTH

Spending Requirement Presents 

Challenges for Allocating Prevention 

Funding under the President’s 

Emergency Plan for AIDS Relief 

Highlights of GAO-06-1089T, testimony 

before the Subcommittee on National 

Security, Emerging Threats, and 

International Relations, House Committee 

on Government Reform 

The U.S. Leadership Against

HIV/AIDS, Tuberculosis, and 

Malaria Act of 2003 authorizes the 

President’s Emergency Plan for 

AIDS Relief (PEPFAR). It promotes 

the ABC model (Abstain, be 

faithful, or use Condoms); 

recommends that 20 percent of 

funds appropriated pursuant to the 

act be spent on prevention; and

requires that, starting in fiscal year

2006, 33 percent of prevention 

funds appropriated pursuant to the 

act be spent on abstinence-untilmarriage activities. The Office of

the U.S. Global AIDS Coordinator 

(OGAC) oversees PEPFAR and 

administers the Global HIV/AIDS 

Initiative (GHAI) account, the main 

repository for PEPFAR funds. For 

our April 2006 report, GAO 

reviewed PEPFAR prevention 

funding trends; described the

PEPFAR strategy to prevent sexual 

transmission of HIV; and examined

related challenges. 

The report recommended that the 

Coordinator collect and report

information on the effects of the

abstinence-until-marriage spending 

requirement and use it to, among 

other things, assess whether the 

requirement should apply only to 

the GHAI account. OGAC agreed to

collect information but disagreed 

with applying the requirement only

to certain funds; GAO modified the 

recommendation. GAO also

suggested Congress use the 

information to assess how well the 

requirement supports the 

Leadership Act’s endorsement of

both the ABC model and strong 

abstinence programs. 

As GAO reported in April 2006, PEPFAR prevention funding in 15 focus 

countries increased by 55 percent between fiscal years 2004 and 2006, rising

from about $207 million to $322 million. During this time, the prevention 

share of PEPFAR funding in these countries fell by about one-third, in 

accordance with the Leadership Act’s recommendation that 20 percent of 

funds appropriated pursuant to the act support prevention. 

The PEPFAR strategy for preventing sexual transmission of HIV/AIDS is 

largely shaped by three elements—the ABC model, the abstinence-untilmarriage spending requirement, and local prevention needs. In addition to 

adopting the ABC model, OGAC developed guidance for applying it—for 

instance, that prevention interventions should be integrated and responsive 

to local needs and cultural norms. To meet the 33 percent spending 

requirement, OGAC mandated that country teams (PEPFAR officials in the 

field) spend at least half of prevention funds on sexual prevention and twothirds of those funds on abstinence/faithfulness (AB) activities. OGAC 

permitted certain country teams to seek exemptions from this policy. OGAC 

also applied the spending requirement to all PEPFAR prevention funding as 

a matter of policy, although it determined that as a matter of law it applies 

only to funds appropriated to the Global HIV/AIDS Initiative account. 

GAO also reported in April 2006 that OGAC’s ABC guidance and the 

abstinence-until-marriage spending requirement, while valued by country 

teams, have presented challenges to most teams. First, two-thirds of focus 

country teams told us that ambiguities in some parts of the guidance led to 

uncertainty about implementing the model; OGAC officials commented they 

were clarifying the guidance for country teams. Second, although several 

teams indicated that they value the ABC model and noted the importance of 

AB messages, some teams also reported that the spending requirement can 

limit their ability to design programs that are integrated and responsive to 

local prevention needs. Most country teams reported, either in structured 

interviews or exemption requests, that fulfilling the spending requirement, 

including OGAC’s policies implementing it, presents challenges to their 

ability to respond to local needs. Seven focus country teams—primarily 

those with smaller PEPFAR budgets—received exemptions from the 

requirement, allowing them to dedicate less than 33 percent of prevention 

funds to AB activities. In general, the nonexempted teams are spending more 

than 33 percent of prevention funds on AB activities, and OGAC should just 

meet the overall spending requirement for fiscal year 2006. However, to meet 

the abstinence-until-marriage spending requirement, teams have in some

cases reduced or cut funding for certain prevention programs, such as those 

to deliver comprehensive messages to certain populations. OGAC’s decision 

to apply the spending requirement to all PEPFAR prevention funds may 

further challenge country teams’ ability to address local prevention needs. 

www.gao.gov/cgi-bin/getrpt?GAO-06-1089T 

. 

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact 

Gootnickd@gao.gov. 
Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss HIV prevention efforts funded 

under the President’s Emergency Plan for AIDS Relief (PEPFAR). 

In January 2003, citing the need “to meet a severe and urgent crisis 

abroad,” President Bush announced PEPFAR, a $15 billion, 5-year 

initiative to combat the global HIV/AIDS epidemic through prevention,

treatment, and care interventions. The U.S. Leadership Against HIV/AIDS, 

Tuberculosis, and Malaria Act of 20031

 (Leadership Act), which authorizes 

PEPFAR, endorses using the “ABC model” (Abstain, Be faithful, or use 

Condoms) to prevent the sexual transmission of HIV. The act also provides 

for the establishment of an HIV/AIDS coordinator within the Department 

of State (State) to lead the U.S. response to the HIVAIDS epidemic and 

oversee all U.S. efforts to combat HIV/AIDS abroad, including

administering an account—known as the Global HIV/AIDS Initiative 

(GHAI) account—containing funds appropriated pursuant to the act. The 

act recommends that 20 percent of the appropriated funds be dedicated to 

HIV/AIDS prevention and requires that, beginning in fiscal year 2006, at 

least 33 percent of these prevention funds be spent on abstinence-untilmarriage programs. State’s Office of the U.S. Global AIDS Coordinator 

(OGAC) has defined five HIV/AIDS prevention program areas—

abstinence/faithfulness (AB), “other prevention,” prevention of mother-tochild transmission (PMTCT), safe medical injections, and blood safety—

and defined abstinence-until-marriage programs as AB activities. 

My remarks will focus on three areas, as discussed in our report issued on 

April 4, 2006:

2

 (1) trends and allocation of PEPFAR prevention funding, (2) 

the PEPFAR strategy for preventing the sexual transmission of HIV, and 

(3) key challenges associated with applying this strategy. 

My observations are based on the work of our GAO team over the previous 

year. For this project, our team conducted structured interviews with U.S. 

agency officials responsible for managing PEPFAR in all 15 PEPFAR focus 

 1

Pub. L. No. 108-25. 

2

GAO, Global Health: Spending Requirement Presents Challenges for Allocating 

Prevention Funding under the President’s Emergency Plan for AIDS Relief, GAO-06-395 

(Washington, D.C.: April 4, 2006). 

Page 1 GAO-06-1089T 
countries3

 (focus country teams). This structured interview tool was 

designed, tested, and reviewed in consultation with our methodologist to 

ensure the validity and reliability of our analysis. Our team also reviewed 

key PEPFAR documents, such as country teams’ operational plans, and 

interviewed U.S. based officials from the key agencies responsible for 

implementing PEPFAR—State, the U.S. Agency for International 

Development (USAID), and the Centers for Disease Control and 

Prevention (CDC)—as well as representatives of several nongovernmental

organizations based in Washington, D.C. In July 2005, the team visited four 

PEPFAR focus countries—Botswana, Ethiopia, South Africa, and 

Zambia—that it had selected using a set of objective criteria, such as level

and focus of PEPFAR funding. Finally, the team reviewed information 

from five additional PEPFAR country teams that receive at least $10 

million in U.S. government funding for HIV/AIDS.

4

 We conducted this work 

in accordance with generally accepted government auditing standards. 

As we reported in April 2006, PEPFAR prevention funding5

 in the 15 focus 

countries rose significantly between fiscal years 2004 and 2006, while the 

proportion of total PEPFAR funding dedicated to prevention declined.

PEPFAR funding in these 15 countries rose from $207 million in fiscal year 

2004 to $322 million fiscal year 2006.6

 At the same time, prevention funding

as a share of total PEPFAR funding in the 15 focus countries declined from 

33 to 20 percent, consistent with the Leadership Act’s recommendation 

Summary 

 3

The 15 PEPFAR focus countries are Botswana, Cote d’Ivoire, Ethiopia, Guyana, Haiti, 

Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Vietnam, 

and Zambia. Officials in these countries spoke with us with the understanding that

individual respondents and the countries where they serve would not be named in our 

discussion of the structured interviews. 

4

These countries are Cambodia, India, Malawi, Russia, and Zimbabwe. Each of these teams

is required to submit an operational plan to OGAC each fiscal year, starting in fiscal year 

2006. 

5

For the purposes of this testimony, and in our April 2006 report, PEPFAR prevention 

funding is defined as funding appropriated to four accounts in the 15 PEPFAR focus

countries, as well as bilateral HIV/AIDS funding in the five additional PEPFAR countries.

Funding data for fiscal years 2004 and 2005 are actual, while funding data for fiscal year

2006 are planned funding as of March 15, 2006. 

6

Data that OGAC reported to Congress in April 2006 regarding fiscal year 2006 planned 

PEPFAR prevention funding differ from these figures, primarily because OGAC’s reported

prevention funding included costs not reported in previous fiscal years as program area 

funds. These costs include, in part, certain strategic information and management and 

staffing costs. 

Page 2 GAO-06-1089T 
that 20 percent of funds appropriated pursuant to the act be spent on 

prevention. For fiscal year 2005, focus country teams reported allocating

varying amounts for prevention programs, including those designed to 

prevent sexual transmission of HIV—AB and “other prevention.” We found 

that challenges and inconsistencies in country teams’ categorization of 

funding for certain ABC programs and some broad sexual transmission 

prevention activities, such as programs aimed at reducing stigma 

associated with HIV, result in some limitations in the reliability of reported 

allocations for sexual transmission prevention. 

The PEPFAR strategy for preventing sexual transmission of HIV is largely 

shaped by three elements—the ABC model, endorsed by the Leadership 

Act; the Leadership Act’s abstinence-until-marriage spending requirement; 

and local prevention needs in the PEPFAR countries. 

• ABC model. OGAC adopted the model and identified key principles to 

guide country teams’ implementation of it—stating, for example, that 

prevention interventions should be responsive to characteristics of the 

epidemic of the country. OGAC’s guidance regarding the ABC model also 

outlined the types of activities that can be funded through PEPFAR and 

directed country teams to emphasize different components of the ABC 

model for various target populations.

• Abstinence-until-marriage spending requirement. The PEPFAR sexual 

transmission prevention strategy reflects the Leadership Act’s requirement 

to reserve at least 33 percent of prevention funds appropriated pursuant to 

the act—starting in fiscal year 2006—for abstinence-until-marriage 

programs. To ensure compliance, OGAC established policies in August 

2005 directing 20 PEPFAR country teams7

 to dedicate at least 50 percent of

prevention funding to sexual transmission prevention activities (50 

percent policy) and 66 percent of that amount to AB activities (66 percent 

policy). OGAC also allowed country teams, especially those with smaller 

budgets or more concentrated epidemics, to request exemption from these 

policies. Finally, OGAC applied the spending requirement to all PEPFAR 

prevention funding as a matter of policy, although it determined that, as a 

matter of law, the requirement applies only to funds appropriated to the 

GHAI account. 

 7

These 20 teams are the 15 focus country teams and the 5 additional teams that receive at 

least $10 million annually in U.S. government HIV/AIDS funding. 

Page 3 GAO-06-1089T 
• Local prevention needs. Working within the parameters of the ABC model 

and the abstinence-until-marriage spending requirement, country teams 

design prevention programs that respond to the countries’ prevention 

needs. 

OGAC’s ABC guidance and the Leadership Act’s abstinence-until-marriage 

spending requirement have presented several challenges to country teams. 

• Lack of clarity in the ABC guidance has created challenges for a majority 

of focus country teams. Although a number of teams told us that they 

found the guidance clear or easy to implement, 10 of the 15 focus teams 

cited instances where elements of the guidance were ambiguous and 

confusing, leading to difficulties in its interpretation and implementation. 

We reported in April that OGAC officials told us they were working to 

clarify confusing components of the guidance, including distributing to 

country teams a document to address concerns teams had identified. 

• Satisfying the Leadership Act’s abstinence-until-marriage spending 

requirement presents challenges to most country teams. Several focus 

country teams indicated that they value the ABC model as an HIV/AIDS 

prevention tool and noted the importance of AB messages, particularly for 

certain populations. However, about half of the focus country teams told 

us that meeting the spending requirement can undermine the integration 

of prevention programs. Further, 17 of the 20 PEPFAR teams required to 

meet the requirement, absent exemptions, reported either in structured 

interviews or exemption requests that it presents challenges to their ability 

to respond to local epidemiology and cultural and social norms. Ten of 

these 17 teams (including 7 focus country teams) requested and received 

exemptions, citing a variety of constraints related to meeting the 

requirement, such as reduced PMTCT spending and limited funding for 

prevention messages to high-risk groups. The remaining 7 teams, which 

did not meet OGAC’s proposed criteria for submitting exemption requests, 

also identified specific program constraints related to meeting the 

requirement, such as reduced funding for prevention programs aimed at 

HIV-positive individuals. Having approved 10 requests for exemption, 

OGAC should just meet the Leadership Act’s 33 percent requirement for 

fiscal year 2006 by effectively requiring teams that do not request 

exemptions to, in most cases, spend more than 33 percent of prevention 

funds on AB activities. However, these teams must sometimes reduce or 

cut funding for certain prevention programs, such as programs to deliver 

comprehensive ABC messages to populations at risk of contracting HIV. 

The analysis in our April report showed that nonexempted country teams’ 

allocations of planned prevention funds to “other prevention” declined by

approximately $5 million—from about 23 percent in fiscal year 2005 to 

Page 4 GAO-06-1089T 
about 18 percent in fiscal year 2006. At the same time, exempted country 

teams’ allocations of planned prevention funds to “other prevention” 

increased by approximately $700,000 between fiscal years 2005 and 2006, 

remaining at about 21 percent of their total prevention funding in each 

fiscal year. Finally, OGAC’s decision to apply the spending requirement to 

all PEPFAR prevention funding, rather than only to prevention funding in 

the GHAI account, may further constrain some country teams’ ability to 

respond to local prevention needs. 

In our April 2006 report, we recommended that the Secretary of State 

direct the U.S. Global AIDS Coordinator to collect and report to Congress 

information from the country teams about the spending requirement’s 

effect on their prevention programming and use that information to, 

among other things, consider whether the Leadership Act’s abstinenceuntil-marriage spending requirement should be applied only to funds 

appropriated to the GHAI account. We also suggested that, in light of this

information, Congress should assess the extent to which the spending 

requirement supports the Leadership Act’s endorsement of both the ABC 

model and strong abstinence-until-marriage programs. In responding 

jointly to a draft of our report, State, USAID, and the Department of Health

and Human Services accepted our recommendation to collect information 

from the country teams regarding the spending requirement’s effects on 

their HIV sexual transmission prevention programming. They disagreed 

with our draft recommendation to consider whether the Leadership Act’s 

spending requirement should be applied solely to funds appropriated to 

the GHAI account. We modified the second recommendation to 

recommend that they consider this policy change after collecting 

information on the effect of the spending requirement. 

Each day, an estimated 13,400 people worldwide are newly infected with

HIV; more than 20 million have died from AIDS since 1981. HIV is 

transmitted both sexually (through sexual intercourse with an infected

person) and nonsexually (through the sharing of needles or syringes with 

an infected person; unsafe blood transfusions; or the passing of the virus 

from mother to child through pregnancy, childbirth, or breastfeeding). The 

majority of HIV infections worldwide are transmitted sexually. About twothirds of the estimated 40 million people currently living with HIV/AIDS 

are in sub-Saharan Africa where, according to the Joint United Nations 

Background 

Page 5 GAO-06-1089T 
Programme on HIV/AIDS, adult HIV prevalence averaged 7.4 percent in 

2004.

8

As the entity responsible for developing the U.S. global HIV/AIDS strategy 

and administering PEPFAR, OGAC has defined five prevention program 

areas—abstinence/faithfulness (AB), “other prevention,” prevention of 

mother-to-child transmission (PMTCT), blood safety, and safe medical 

injections. These areas are divided into two groups: those aimed at 

preventing sexual transmission—AB and “other prevention”9

—and those 

aimed at preventing nonsexual transmission—PMTCT, blood safety, and

safe medical injections. (See fig. 1.) 

 8

HIV prevalence represents the percentage of the adult population that is estimated to be

HIV positive. Estimates of HIV prevalence are often based on surveillance of pregnant 

women in prenatal clinics or population-based surveys. 

9

In its Second Annual Report, released to Congress in February 2006, OGAC began 

referring to these activities as “condoms and related prevention activities.” 

Page 6 GAO-06-1089T 
Figure 1: PEPFAR Prevention Program Areas 

AB activities encourage abstinence until marriage, delay of first sexual 

activity, secondary abstinence,10 faithfulness in marriage and monogamous 

relationships, reduction of sexual partners among sexually active 

unmarried persons, and social and community norms related to the above 

practices. “Other prevention” activities include the purchase and 

promotion of condoms, management of sexually transmitted infections (if 

not in a palliative care setting), and messages or programs to reduce 

injection drug use and related risks. 

Sexual transmission prevention programs

Nonsexual transmission prevention programs

Source: GAO analysis of OGAC’s fiscal year 2006 Country Operational Plan Guidance.

AB: activities to 

encourage abstinence 

and fidelity.

Other prevention: 

condom activities, 

management of 

sexually transmitted 

infections, reduction 

of injection drug use.

Blood safety: efforts to 

establish national 

blood collection and 

transfusion services.

Safe medical 

injections: technical 

assistance and 

training to increase 

the use of safe 

injection practices.

PMTCT: activities 

to prevent HIV 

transmission from 

mother to child.

 10According to OGAC, secondary abstinence activities encourage abstinence for youths

who have already engaged in sexual intercourse. 

Page 7 GAO-06-1089T 
In fiscal year 2004, the U.S. Congress appropriated $2.4 billion for global 

HIV/AIDS efforts, directing $865 million of this amount to four accounts:

(1) the GHAI account, which received most of the funding; (2) the Child 

Survival and Health account; (3) the Prevention of Mother to Child 

Transmission account; and (4) CDC’s Global AIDS Program.11 In our April 

2006 report, PEPFAR funding refers to funds appropriated to these four 

accounts12 for the 15 focus countries, as well as bilateral HIV/AIDS funding 

for the five additional countries that receive at least $10 million in U.S. 

government HIV/AIDS funding. Each year, to receive country-level funding

for the coming fiscal year, country teams submit budgets, or “operational 

plans,” to OGAC outlining planned activities and the organizations that will 

implement them (implementing partners). These plans are subject to 

OGAC’s review and approval. Focus country teams also receive central 

funding—multicountry awards that are managed by U.S. agency 

headquarters in Washington, D.C. For fiscal years 2004 and 2005, PEPFAR 

funding figures are central and country-level appropriations allocated by

OGAC. For fiscal year 2006, PEPFAR funding consists of planned 

allocations of central and country-level appropriations.13

The Leadership Act specifies the percentage of PEPFAR funds to be 

allocated for HIV/AIDS prevention, treatment, and care for fiscal years 

2006-2008. The act recommends that 20 percent of funds appropriated 

pursuant to the act be spent on prevention and 15 percent on palliative 

care for those living with the disease. The act also requires that, beginning

in fiscal year 2006, at least 55 percent of funds appropriated pursuant to 

the act be spent on treatment and at least 10 percent on orphans and 

vulnerable children. (See fig. 2). 

 11The remaining $1.5 billion was appropriated for, among other initiatives, the Global Fund 

to Fight HIV/AIDS, Tuberculosis and Malaria—a multilateral public-private mechanism—

and international HIV/AIDS research through the National Institutes of Health. 

12The Prevention of Mother to Child Transmission account expired at the end of fiscal year 

2004, but some country teams carried over funds from this account from fiscal year 2004 to

fiscal year 2005. Therefore, for fiscal year 2006, PEPFAR funding is defined as funds 

appropriated to the remaining three accounts. 

13Fiscal year 2006 funding figures change slightly throughout the fiscal year, as country 

teams make adjustments to their funding allocations. 

Page 8 GAO-06-1089T 
Figure 2: Selected Spending Requirements and Recommendations for Fiscal Years 

2006-2008 Contained in the 2003 Leadership Act 

The Leadership Act further requires that at least one-third of prevention 

funding appropriated pursuant to the act be spent on abstinence-untilmarriage programs, starting in fiscal year 2006. (The act also 

recommended this spending distribution for fiscal years 2004 and 2005.) In

June 2004, OGAC notified Congress that it defines abstinence-untilmarriage activities as programs that address both abstinence and 

faithfulness.14

The Leadership Act states that “behavior change, through the use of the 

ABC model, is a very successful way to prevent the spread of HIV.” The 

model, which the Leadership Act defines as “‘Abstain, Be faithful, and use 

Condoms,’ in order of priority,” is based in part on the experience of 

Uganda, which implemented an ABC campaign in the 1980s and observed 

Treatment

Prevention

Palliative care

Orphans and vulnerable children

10%

15%

20%

55%

Source: GAO analysis of 2003 Leadership Act.

Recommended

Required

 14Office of the U.S. Global AIDS Coordinator, Appendix 2: The Emergency Plan for AIDS 

Relief: Fiscal Year 2004 Prevention Expenditures and Program Classification Criteria 

(Washington, D.C.: U.S. Department of State, 2004). 

Page 9 GAO-06-1089T 
a decline in HIV/AIDS prevalence by 2001.

15 Although substantial debate

exists about the extent to which each component of the model is 

responsible for reducing HIV prevalence in individual countries, there is 

general consensus that using the ABC model can have a positive impact in

combating HIV/AIDS. In November 2004, a key consensus statement 

authored by leading public health experts and endorsed by more than 125 

prominent figures and world leaders observed that “all three elements of 

[the ABC model] are essential to reducing HIV incidence, although the 

emphasis placed on individual elements needs to vary according to the 

target population.”16

The PEPFAR prevention goal is to avert 7 million infections in the 15 focus 

countries by the year 2010. This goal is cumulative; that is, infections 

averted in 2004 through 2009 will count toward the final total of infections

averted by 2010. In addition, this goal is to be reached both through 

PEPFAR activities and through interventions by other donors and host 

nations. OGAC plans, over time, to estimate progress toward this goal by 

using a statistical model of epidemiological trends developed by the U.S. 

Census Bureau. This analysis will compare “expected” HIV incidence rates 

in particular countries with “actual” incidence rates, using those 

comparisons to estimate the number of infections that have been averted 

through PEPFAR and other prevention programs. However, it cannot 

attribute this change to any specific intervention or to the success of 

particular types of programs. The approach involves substantial challenges

and the reliability of the estimates is not known, according to Census 

officials. Key challenges include a lack of data on prevalence rates in many 

developing countries and the fact that impacts of behavioral change 

programs can occur over a period of time. OGAC initially considered using 

a different methodology—the Goals model17—that links estimates of 

 15In 1986, the Ugandan government launched a nationwide information, education, and 

communication tour to encourage Ugandans to abstain from sex until marriage, remain 

faithful to one partner (termed “zero-grazing”), and use condoms when necessary. 

According to the U.S. Census Bureau and UNAIDS, national HIV/AIDS prevalence in 

Uganda fell from about 15 percent in the early 1990s to 5 percent in 2001. 

16Cates, Willard,et.al. “The Time Has Come for Common Ground on Preventing Sexual 

Transmission of HIV,” Lancet, vol. 364 (Nov. 27, 2004). 

17The Goals model is based on published research studies of the effectiveness of various 

prevention strategies and on conversion factors that translate dollars spent on a given 

prevention intervention into the number of infections averted. The model was developed by

the Futures Group—a privately held company that designs and implements public health

and social programs for developing countries. 

Page 10 GAO-06-1089T 
infections averted to specific types of prevention programs carried out 

under PEPFAR and their spending levels. However, OGAC concluded that 

this model could yield misleading results and was not the best method to 

adopt. To acquire information about the effectiveness of specific PEPFAR 

prevention programs, especially in the AB area, OGAC plans to fund 

targeted evaluations on a very limited scale. 

PEPFAR prevention funding increased significantly between fiscal years 

2004 and 2006, while the proportion of total PEPFAR funding dedicated to

prevention declined. Country teams reported varying allocations among 

the five prevention program areas. We found that challenges and 

inconsistencies in country teams’ categorization of funding for certain 

ABC programs and broad sexual transmission prevention activities 

resulted in some limitations in the reliability of reported allocations for 

sexual transmission prevention. 

PEPFAR prevention funding18 in the 15 focus countries increased by more 

than 40 percent, from $207 million in fiscal year 2004 to $294 million in 

fiscal year 2005. It further increased by about 10 percent, to $322 million, 

in fiscal year 2006. (See fig. 3.) 

PEPFAR Prevention 

Funding in the Focus 

Countries Grew 

Significantly during 

First 3 Years 

 18OGAC officials were unable to provide data on PMTCT central funding for prevention. 

While they estimated that $6.5 million in central PMTCT funding went to prevention in 

fiscal years 2004 and 2005, these rough estimates are not included in our funding figures. 

Page 11 GAO-06-1089T 
Figure 3: Total PEPFAR Prevention Funding in the 15 Focus Countries, Fiscal Years 

2004-2006 

Note: Fiscal year 2006 funding is planned funding as of March 15, 2006. Data that OGAC reported to

Congress in April 2006 regarding fiscal year 2006 planned PEPFAR prevention funding differ from 

these figures, primarily because OGAC’s reported prevention funding included costs not reported in

previous fiscal years as program area funds. 

At the same time, the proportion of PEPFAR funding dedicated to 

prevention in the 15 focus countries declined from 33 percent in fiscal year 

2004 to 20 percent in fiscal year 2006, consistent with the Leadership Act’s 

recommendation that one-fifth of funds appropriated pursuant to the act 

be spent on prevention. (See fig. 4.) OGAC’s fiscal year 2004 operational 

plan predicted this decline, noting that the proportion of total PEPFAR 

funding allocated to prevention would likely begin to decrease relative to 

the proportion allocated to care and treatment. 

0

50

100

150

200

250

300

350

Country-level funding

Fiscal year

Central funding

Sources: GAO analysis of fiscal year 2004 budget data provided by OGAC; OGAC’s Country Operational Plan and

Reporting System database; and OGAC Central Awards database.

2004 2005 2006

Dollars in millions

Page 12 GAO-06-1089T 
Figure 4: Share of PEPFAR Funding Dedicated to Prevention in the 15 Focus 

Countries, Fiscal Years 2004-2006

Note: Fiscal year 2006 funding is planned funding as of March 15, 2006. Data that OGAC reported to

Congress in April 2006 regarding fiscal year 2006 planned PEPFAR prevention funding differ from 

these figures, primarily because OGAC’s reported prevention funding included costs not reported in

previous fiscal years as program area funds. 

The total proportion of PEPFAR prevention funding that the 15 focus 

country teams reported allocating to each of the five prevention programs 

varied to some extent across fiscal years 2004-2006. (See fig. 5.) 

Fiscal year

Sources: GAO analysis of fiscal year 2004 budget data provided by OGAC; OGAC’s Country Operational Plan and

Reporting System database; and OGAC Central Awards database.

Percentage

0

5

10

15

20

25

30

35

2004 2005 2006

Page 13 GAO-06-1089T 
Figure 5: Reported PEPFAR Prevention Funding in Focus Countries, by Program 

Area, Fiscal Years 2004-2006

Note: Fiscal year 2006 funding is planned funding as of March 15, 2006. Data that OGAC reported to

Congress in April 2006 regarding fiscal year 2006 planned PEPFAR prevention funding differ from 

these figures, primarily because OGAC’s reported prevention funding included costs not reported in

previous fiscal years as program area funds. 

Challenges and inconsistencies in country teams’ categorization of funding

for certain integrated ABC activities and some broad sexual transmission 

prevention activities cause some limitations in the reliability of the 

allocations reported for AB and “other prevention.” For example, in their 

country operational plans, some teams categorized integrated ABC 

programs entirely as “other prevention,” while others divided some or all 

of these programs between the AB and “other prevention” categories. In 

addition, certain broader components of sexual transmission prevention 

programs that are not clearly defined as AB or “other prevention,” such as 

activities to prevent substance abuse, may appear in either program area 

in the teams’ operational plans. The lack of a standardized method for 

categorizing these programs means that, to some extent, the varied 

Dollars in millions

Source: GAO analysis of fiscal year 2004 budget data provided by OGAC, OGAC’s Country Operational Plan 

and Reporting System database, and OGAC Central Awards database.

Fiscal year

Abstinence/faithfulness

Other prevention

Prevention of mother-to-child transmission

Blood safety

Safe medical injections

0

20

40

60

80

100

120

2004 2005 2006

Page 14 GAO-06-1089T 
numbers of funding reported across fiscal years may reflect the variations 

in categorization methods rather than actual differences. 

The PEPFAR strategy for preventing sexual transmission of HIV is shaped 

largely by three components: the ABC model, the abstinence-untilmarriage spending requirement, and local prevention needs. 

In adopting the ABC model, OGAC identified the following key principles 

that country teams should consider in developing and implementing ABC 

programs: 

• The model should be applied in accordance with local prevention needs. 

• Prevention activities should be integrated. 

• Prevention activities should be coordinated with the HIV/AIDS strategies of host 

governments. 

• Prevention interventions should be driven by best practices. 

PEPFAR Sexual 

Transmission 

Prevention Strategy Is 

Driven by ABC 

Approach, 

Abstinence-UntilMarriage Spending 

Requirement, and 

Local Prevention 

Needs 

OGAC’s guidance to the field states that “the optimal balance of ABC 

activities will vary across countries according to the patterns of disease 

transmission, the identification of core transmitters (i.e., those at highest

risk of transmitting HIV), cultural and social norms, and other contextual 

factors.”19 The ABC guidance also specifies the components of the ABC 

model that should be targeted to certain populations and sets parameters 

on the prevention messages that may be delivered to youths. For example, 

although PEPFAR funds may be used to deliver age-appropriate AB 

information to in-school youths aged 10 to 14 years, the funds may not be 

used to provide information on condoms to these youths. When students 

are identified as being at risk, they may be referred to out-of-school 

programs that provide integrated ABC information and that provide 

condoms. Under these rules, PEPFAR funds may be used to give 

integrated ABC information to youths older than 14. Other rules include 

the following: 

 19Office of the U.S. Global AIDS Coordinator, Guidance to In-Country Staff and

Implementing Partners Applying the ABC Approach to Preventing Sexually-Transmitted

HIV Infections within the President’s Emergency Plan for AIDS Relief (Washington, D.C.: 

U.S. Department of State, March 2005). 

Page 15 GAO-06-1089T 
• PEPFAR funds may not be used in schools for marketing efforts to 

promote condoms to youths. 

• PEPFAR funds may not be used in any setting for marketing campaigns 

that target youths and encourage condom use as the primary intervention

for HIV prevention. 

• PEPFAR funds may be used to target at-risk populations with specific 

outreach, services, comprehensive prevention messages, and condom 

information and provision. At-risk groups include, among others, sexually 

active discordant couples and those who have sex with one whose HIV 

status is unknown. 

To meet the 33 percent abstinence-until-marriage spending requirement, 

OGAC issued policies in late August 2005 instructing each of the 15 focus 

country teams and 5 additional teams to spend at least 50 percent of their 

prevention funding on sexual transmission prevention and at least 66 

percent of that amount on AB activities. To show compliance with the 

spending requirement, country teams’ operational plans must isolate the 

amount of funding dedicated to AB activities. OGAC allows country teams 

to request exemption from its 50 percent and 66 percent policies. 

However, the guidance cautions that, in a generalized epidemic, a very 

strong justification is required for not meeting the 66 percent policy and 

adds that OGAC expects all focus country teams, particularly those with 

total PEPFAR funding exceeding $75 million, to adhere to the policies.20

Finally, OGAC directed country teams to apply the spending requirement 

to all PEPFAR prevention funding (about $357 million in fiscal year 2006), 

although it determined that, as a matter of law, the requirement applies 

only to funds appropriated to the GHAI account (about $322 million in 

fiscal year 2006). 

 20In its fiscal year 2007 Country Operational Plan Guidance, OGAC dropped the language

regarding focus teams, particularly those with total PEPFAR funding exceeding $75 million. 

Page 16 GAO-06-1089T 
As our April 2006 report discusses, country teams face challenges related 

to both the ABC guidance and the Leadership Act’s abstinence-untilmarriage spending requirement. Two-thirds of focus country teams 

reported that a lack of clarity in aspects of the ABC guidance has led to 

interpretation and implementation challenges. About half of the country 

teams indicated that adherence to the spending requirement can 

undermine the integrated nature of HIV/AIDS prevention programs. In 

addition, most country teams required to meet the requirement, absent 

exemptions, reported either in structured interviews or exemption 

requests that the requirement challenges their ability to allocate 

prevention resources in accordance with local HIV/AIDS prevention needs. 

Finally, OGAC’s policy of applying the spending requirement to all 

PEPFAR prevention funding, including funds not appropriated to the 

GHAI account, may further constrain country teams’ ability to address 

local prevention needs. 

We reported in April 2006 that, although many focus country teams told us 

that they generally found the ABC guidance to be clear and several said 

that it did not present implementation challenges, 10 of the 15 focus teams 

cited instances where components of the guidance were ambiguous and 

caused confusion. First, 6 focus country teams expressed uncertainty 

regarding the populations that should be considered at-risk in accordance 

with the guidance, and 5 of these teams expressed concern that certain 

populations that need ABC messages in their countries might not receive 

them because they do not fit the ABC guidance definition of at-risk. 

Second, teams reported that the ABC guidance does not clearly delineate

permissible condom-related activities, causing confusion about proper use 

of PEPFAR funds. For example, 5 focus country teams reported that, in

their understanding, PEPFAR funds may not be used for broad condom 

social marketing, even to adults in a generalized epidemic. Third, the ABC 

guidance does not discuss how the age cutoff for providing condom 

information should be applied to groups that include youths younger and 

older than 15. We reported in April that OGAC officials told us they were 

working to clarify confusing components of the guidance, including 

distributing to country teams a document with some additional 

clarification on how to apply the ABC guidance.

In several of our structured interviews, focus country teams endorsed the 

ABC model and noted the importance of AB messages. For example, one 

team told us that, because of the country’s high HIV/AIDS prevalence rate,

abstinence is an appropriate message for both youths and adults. 

ABC Guidance and 

Abstinence-UntilMarriage Spending 

Requirement Present 

Challenges for 

Country Teams

Challenges Related to ABC 

Guidance 

Challenges Related to 

Abstinence-until-Marriage 

Spending Requirement 

Page 17 GAO-06-1089T 
However, the abstinence-until-marriage spending requirement presented 

challenges to country teams’ ability to implement integrated prevention 

programs. Because the abstinence-until-marriage spending requirement 

requires them to segregate AB funding from funding for “other 

prevention,” 8 of the 15 focus country teams reported that the spending 

requirement can undermine their ability to design and implement 

programs that integrated the components of the ABC model. For example, 

one focus country team told us that artificially splitting programs for the 

military (traditionally considered an at-risk group) between AB and “other 

prevention” disaggregates activities that should be integrated and 

potentially lowers effectiveness. 

In addition, 17 of the 20 PEPFAR country teams required to meet the 

abstinence-until-marriage spending requirement, absent exemptions, 

reported that the requirement presents challenges to their efforts to 

respond to local prevention needs. Ten of these 17 teams requested 

exemptions, citing a variety of concerns, such as reduced spending for 

PMTCT, limited funding to deliver appropriate prevention messaging to 

high-risk groups, lack of responsiveness to cultural and social norms, cuts 

in medical and blood safety activities, and elimination of care programs. 

The remaining 7 teams, which did not meet OGAC’s proposed criteria for 

requesting exemptions, also identified a variety of constraints related to 

meeting the requirement, including difficulty in reaching certain 

populations with comprehensive ABC messages, limited or reduced 

funding for programs targeted at high-risk groups, reduced funding for 

PMTCT services, and difficulty in funding programs for condom 

procurement and condom social marketing. 

The analysis in our April 2006 report showed that, with the approval of all 

10 exemption requests, OGAC should just meet the overall 33 percent 

target for AB activities for fiscal year 2006 by effectively allowing 

exempted teams to spend less than 33 percent on AB programs and 

requiring nonexempted teams to spend more than 33 percent. Our report 

found that all but one of the exempted teams planned to dedicate less than

33 percent of funds to AB activities—about 23 percent on average—while, 

Page 18 GAO-06-1089T 
on average, each of the nonexempted country teams planned to spend 

around 37 percent.21

In allocating funds to meet the spending requirement, country teams are 

primarily limited to shifting resources among three prevention program 

areas—AB, “other prevention,” and PMTCT. (This limitation occurs 

because the overwhelming majority of funds spent on safe medical 

injections and blood safety are centrally awarded funds, over which the 

country teams have no budgetary control.) If, for example, a country 

team’s planned funding has less than a 2-to-1 ratio of AB funds to “other 

prevention” funds, the team can increase AB funding to reach the required 

ratio by reducing funds in “other prevention,” PMTCT, or a combination of 

the two. The team can also consider taking funds from the treatment and 

care program areas and placing them in the AB category. 

Our analysis found that nonexempted country teams’ allocations for “other 

prevention” funding declined between fiscal year 2005 and fiscal year 

2006.

22 For the nonexempted focus country teams, total funding for “other 

prevention” declined by about $5 million from fiscal year 2005 to fiscal 

year 2006, falling from about 23 percent to about 18 percent of total 

prevention funding, while total funding for AB activities increased by 

about $25 million, rising from about 27 percent to about 36 percent of total 

prevention funding. By contrast, in the focus country teams that received

exemptions, total prevention funding for “other prevention” increased 

slightly, by about $700,000, remaining at around 21 percent of total 

prevention funding, and total prevention funding for AB activities 

increased by about $7 million, from about 23 percent to about 28 percent 

of total prevention funding. Figure 6 shows the allocation of prevention 

funds by nonexempted and exempted focus country teams for fiscal years 

2005 (actual funds) and 2006 (planned funds). 

 21Because of challenges and inconsistencies in country teams’ categorization of funding for

certain integrated ABC programs and some broad sexual transmission prevention 

activities, data on prevention allocations may reflect the variation in categorization 

methods rather than actual differences. 

22Some of the decline in “other prevention” funding may be due to varying methods of 

categorizing sexual transmission prevention programs and changes in categorization 

methods across fiscal years. However, the data demonstrate a common trend across the

nonexempted country teams.

Page 19 GAO-06-1089T 
Figure 6: Prevention Allocations for Nonexempted and Exempted Focus Country 

Teams, Fiscal Years 2005 and 2006 

Note: Fiscal year 2006 funding is planned funding as of March 15, 2006. Data that OGAC reported to

Congress in April 2006 regarding fiscal year 2006 planned PEPFAR prevention funding differ from 

these figures, primarily because OGAC’s reported prevention funding included costs not reported in

previous fiscal years as program area funds. These percentages are reliable for understanding

general trends in data rather than for precise percentage differences in program areas, because of 

potential differences in categorization methods. 

As figure 6 shows, overall levels of PMTCT funding stayed relatively 

constant for both nonexempted and exempted focus country teams. 

Overall, the proportion of funding dedicated to PMTCT in the focus 

countries was about 23 percent in fiscal year 2005 and about 22 percent in 

fiscal year 2006. Focus countries’ total PMTCT funding was $66.3 million 

in fiscal year 2005 and $67.5 million in fiscal year 2006. 

Finally, OGAC’s decision to apply the spending requirement to all PEPFAR 

prevention funding—although OGAC had determined that, as a matter of 

law, the requirement applies only to funds appropriated to the GHAI 

account—may further challenge some teams’ ability to address HIV 

prevention needs at the local level. For fiscal year 2006, non-GHAI 

prevention funds amounted to about $35 million (10 percent) of PEPFAR 

prevention funding—that is, about $6 million (2 percent) of the focus 

country teams’ planned PEPFAR prevention funds and about $29 million 

(82) percent of the five additional country teams’ planned PEPFAR 

23% 

($23 M)

21% 

($22 M)

22% 

($22 M)

22% 

($22 M)

13% 

($13 M)

28% 

($30 M)

21% 

($23 M)

20% 

($21 M)

19% 

($21 M)

12% 

($13 M)

Exempted country

teams

Sources: GAO analysis of fiscal year 2005 country operational plans and OGAC’s Country Operational

Plan and Reporting System database. 

Percent

Fiscal year

0 20 40 60 80 100

Safe medical injections

Blood safety

Prevention of mother-to-child transmission

Other prevention

Abstinence/faithfulness

2005

2006

2005

2006

27%

($53 M)

23% 

($44 M)

23% 

($44 M)

16% 

($31 M)

10% 

($20 M)

36% 

($78 M)

18% 

($39 M)

22% 

($46 M)

14% 

($29 M)

10% 

($21 M)

Nonexempted country

teams

Page 20 GAO-06-1089T 
prevention funds. Because of OGAC’s policy, some country teams are 

constrained from allocating non-GHAI funding to meet local needs if the 

allocations do not comply with the spending requirement. 

In conclusion, our analysis of HIV/AIDS prevention efforts funded under 

PEPFAR reported in our April 2006 report showed that, although country 

teams consistently value the ABC model as a useful tool for preventing 

HIV, the Leadership Act’s 33 percent abstinence-until-marriage spending 

requirement has presented challenges to their ability to adhere to the 

PEPFAR sexual transmission prevention strategy. In particular, it has 

challenged their ability to integrate the components of the ABC model and 

respond to local needs, local epidemiology, and distinctive social and

cultural patterns. OGAC’s application of the spending requirement to $35 

million in funds not appropriated to the GHAI account may further hamper 

some country teams’ ability to develop locally responsive prevention 

programs. OGAC may be able to address some of the constraints country 

teams face by reconsidering this policy, but the amount of non-GHAI 

funding is relatively small and the underlying challenges that country 

teams face in having to reserve a specific percentage of their prevention 

funds for abstinence-until-marriage programs would remain. 

Because meeting the 33 percent abstinence-until-marriage spending 

requirement can challenge country teams’ ability to allocate prevention 

resources in a manner consistent with the PEPFAR sexual transmission 

prevention strategy, our April 2006 report recommended that the Secretary 

of State direct the U.S. Global AIDS Coordinator to take the following 

actions: 

Concluding 

Observations 

• Collect information from the country teams each fiscal year on the 

spending requirement’s effects on their HIV sexual transmission 

prevention programming. This information should include, for example, 

the justifications submitted by country teams requesting exemption from 

the spending requirement. 

• Provide this information in an annual report to Congress. 

• Use the information collected to, among other things, assess whether the 

spending requirement should be applied solely to funds appropriated to 

the Global HIV/AIDS Initiative account, in line with OGAC’s legal 

determination that the requirement applies only to these funds. 

Page 21 GAO-06-1089T 
In commenting jointly on a draft of our April 2006 report, the Department 

of State/OGAC, HHS, and USAID reiterated their strong commitment to 

fight HIV/AIDS and also noted the importance of the ABC model in 

preventing sexual transmission of HIV. The agencies agreed with our 

recommendation to collect information regarding the effects of the 

Leadership Act’s abstinence-until-marriage spending requirement. They 

disagreed with a draft recommendation regarding applying the abstinenceuntil-marriage spending requirement only to funds appropriated to the 

GHAI account, citing concerns about the effect on a unified budget 

approach and noting the small amount of non-GHAI funding that the focus 

countries receive. We modified our recommendation to recommend that 

they consider this policy change after collecting information on the effect

of the spending requirement. However, we noted that the five additional 

countries required, absent exemptions, to meet the spending requirement 

received more than 80 percent of their funds through non-GHAI accounts.

Given the challenges that meeting the abstinence-until-marriage spending 

requirement presents to country teams attempting to implement locally 

responsive and integrated HIV/AIDS prevention programs, our April 2006 

report also suggested that Congress, in its ongoing oversight of PEFAR, 

should review and consider the information provided by OGAC regarding 

the spending requirement’s effect on country teams’ efforts to prevent the 

sexual transmission of HIV and use this information to assess the extent to

which the spending requirement supports the Leadership Act’s 

endorsement of both the ABC model and strong abstinence-until-marriage 

programs. 

Mr. Chairman and members of the committee, this concludes my prepared 

statement. I will be happy to answer any questions you may have at this 

time. 

For information on this statement, please contact David Gootnick, 

Director, International Affairs and Trade, at (202) 512-3149. You may also 

reach him by email at gootnickd@gao.gov. Other individuals who made 

key contributions to this testimony include Celia Thomas (Assistant 

Director), Elizabeth Singer, Chad Davenport, and Reid Lowe.

Matters for 

Congressional 

Consideration 

Contacts and 

Acknowledgments 

Page 22 GAO-06-1089T (320448) 
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