The Global Fund to Fight AIDS, Tuberculosis, and Malaria (Global Fund, or the Fund) was established in January 2002 as a public-private partnership to provide significant financial support for global responses to HIV/AIDS, tuberculosis (TB), and malaria. At that time, health experts and advocates were particularly concerned about the rapid spread of HIV/AIDS around the world, the massive numbers of deaths that resulted from HIV infection, and limited access to treatments against the three diseases, particularly HIV/AIDS. Health specialists also noted that co-infection seemed to hasten the rate at which people succumbed to any of the three diseases. Despite expanded access to care and treatment over the past decade, HIV/AIDS, TB, and malaria continue to be three of the world's leading causes of morbidity and mortality around the world. The Global Fund was developed to be an innovative financing mechanism that would attract additional financial resources for the global fight against the three diseases in developing countries. It was never intended to directly implement related programs. Several distinguishing characteristics purported to make this new entity a unique one, including with no implementation mandate, the Global Fund would have relatively low overhead expenses; rigorous monitoring and evaluation requirements could ensure performance-based funding; transparency in decision making, including grant funding, could support accountability; and partnerships among governments, the private sector, and civil society would be created and expanded, due in part to the grant development process. The Fund's board meets at least twice annually to discuss governance issues, such as grant approval. Nineteen board seats are rotated among seven donor countries, seven developing countries, and five representatives from civil society and the private sector, including one representative of a non-governmental organization (NGO) from a developing country, one representative of an NGO from a developed country, one representative of the private sector, one representative of a private foundation, and one representative of an NGO who is a person living with HIV/AIDS or from a community living with TB or malaria. The United States holds a permanent board seat. In 2001 and 2002, donors pledged $947.2 million to launch the Global Fund. In its first round of considering grants, the Global Fund committed to support 58 programs in 43 countries, amounting to $616 million for the first two years of implementation. In December 2010, the Global Fund Board announced that it would support the 10 th round of grant proposals, valued at more than $1.7 billion for the first two years of project implementation. Over five years, the Global Fund could expend some $4.7 billion on these grants if performance requirements are met and resources are available. By the end of 2011, the Global Fund had approved roughly $22.6 billion to help 150 countries fight HIV/AIDS, TB, and malaria. As of mid-February, 2012, almost 70% of all approved funding had been disbursed, amounting to over $15 billion. Since its establishment, the Global Fund has become one of the world's largest donors supporting HIV/AIDS, TB, and malaria programs in developing countries. In 2009, the Fund accounted for 21% of global spending on HIV/AIDS, 65% of spending on TB in the 22 high-burden countries, and 65% of global malaria funding. The Global Fund estimated that by the end of 2011, the programs it supports had saved over 7.7 million lives. Grants supported by the Global Fund have reportedly provided AIDS treatment for 3.3 million HIV-positive people, anti-tuberculosis treatment for 8.6 million people, and 230 million insecticide-treated nets for the prevention of malaria. In November 2011, the Global Fund Board announced that due inadequate resources from donors, it would cancel its 11 th round of funding. The Global Fund expects to offer new funding for grants in 2014. Until then, in order to avoid any disruptions in ongoing services, the board has instituted a Transitional Funding Mechanism for programs that face disruption of essential services, currently supported by the Global Fund, and for which no alternative sources of funding can be secured. At the November 2011 board meeting, the Global Fund Board adopted a new five-year strategy for 2012-2016, which supports more aggressive management and oversight of grants, encourages more flexibility in tailoring activities to specific country's needs, and embraces more country ownership of programs through increased involvement of country governments (see Text Box). The board also approved the Global Fund's "Consolidated Transformation Plan," developed to improve Global Fund governance, operations, and fiduciary controls, as recommended by a report released in September 2011 by the High-Level Independent Review Panel on Fiduciary Controls and Oversight Mechanisms of the Global Fund. In January 2012, the Executive Director of the Global Fund announced his decision to step down. In response, the Global Fund created a new position of General Manager, charged with overseeing the implementation of the Consolidated Transformation Plan. The Global Fund was established to extend life-saving measures to the world's poorest. In many of these countries, including post-conflict and fragile states, implementing organizations have weak programmatic and oversight capacity. In light of these conditions, the Global Fund developed a performance-based system that has served as a cornerstone of its operations since the effort was launched. The system relies on seven main actors, including the Country Coordinating Mechanism (CCM) , a country-level partnership of stakeholders, responsible for developing and submitting grant proposals, nominating Principal Recipients, and providing oversight to grant implementation. Principal Recipient , the designated in-country organizations chosen by the CCM to receive funding from the Fund, implement programs, and distribute funds to sub-recipients. Sub-Recipient , an organization contracted by the Principal Recipient of the grant to assist in implementing program activities. Local Fund Agent , a contracted entity that provides independent and routine monitoring and financial audits of the Global Fund disbursements and activities. Secretariat , responsible for day-to-day operations, including mobilizing resources, overseeing grant implementation, providing support to the board, and reporting on the Fund's activities to the board and the public. Technical Review Board , an independent panel of experts in health and development who review eligible grants proposals for technical merit. The Global Fund Board , responsible for overall governance of the Fund. Through the performance-based system, the Global Fund has integrated grant oversight at various levels, including internal control mechanisms instituted by Principal Recipients; independent in-country verification and oversight mechanisms established by Local Fund Agents; annual audits of principal and sub-recipients by an external, independent body; monitoring of grant implementation by the Secretariat; audits and investigations conducted by the Office of the Inspector General; and oversight provided by Global Fund Board and its committees. Upon approving grant proposals, the Global Fund commits to providing sufficient resources to finance the first two years of the program. In order to receive subsequent financing, programs must demonstrate results against performance targets that are spelled out in the grant proposals ( Figure 1 ). Over the lifetime of a grant, performance-based indicators are developed and monitored in four key stages: 1. Proposal development. Applicants develop and submit proposals to the Global Fund Secretariat that include output, outcome and impact indicators, and targets defined by the countries themselves. If the proposal is approved, these form the basis for measuring the performance of a grant. 2. Grant negotiation. Upon approval, the Global Fund negotiates the terms of grant agreements, legally binding contracts that clearly indicate time-bound targets to measure the performance of the grants. At this stage, monitoring and evaluation systems are also assessed. The Global Fund recommends that 5%-10% of grant budgets are used for monitoring and evaluation. 3. Performance-based disbursements. Over the course of a grant's life cycle, the Principal Recipient reports regularly to the Global Fund on results, expenditures, and any deviations from or corrective actions to program activities. The Local Fund Agent, an independent contractor based in the country, verifies the Principal Recipient's programmatic and financial reports and makes recommendations to the Global Fund on the amount to be disbursed for the next period of implementation. The Secretariat evaluates the overall performance of the grant, assigns a rating, and decides on the next disbursement amount. Lack of progress triggers a request by the Secretariat for corrective action and may also result in reduced disbursements. 4. Grant renewal. Toward the end of Phase 1 (first two years of implementation), the Global Fund evaluates each grant to ensure that funding is managed and spent efficiently and programs are achieving expected results. At this point, the Fund decides whether to continue funding grants, reduce funding, direct investments in systems strengthening, or stop funding altogether. Grants demonstrating potential for significant and sustainable impact can receive additional funding for up to six years through the "Rolling Continuation Channel." Consistent with its performance-based model, the Global Fund reports that it has terminated, suspended, or discontinued grants or replaced principal recipients in cases of uncorrected inadequate performance. Since the Global Fund was established, the United States has been a strong supporter of the organization. Officials from the Department of State, the United States Agency for International Development (USAID), and the United States Department of Health and Human Services (HHS) were all engaged in the creation of the Global Fund, and former Secretary of HHS Tommy Thompson was later elected as the second Chair of the Global Fund's Board. At present, U.S. officials from various agencies sit on several Global Fund boards. The Obama Administration has signaled its intention to maintain that support. In a March 2011 statement and at a House hearing, the U.S. Global AIDS Coordinator, Ambassador Eric Goosby, linked the success of U.S. bilateral HIV/AIDS programs under the President's Emergency Plan for AIDS Relief (PEPFAR) to the continuance of the Global Fund: Our dependency on the Global Fund is a real one.... The Global Fund creates a platform and conduit for other countries who do not have bilateral programs to contribute to the care and prevention and treatment dollars for HIV/AIDS as well as TB and malaria.... We plan together and look at how we can converge in any given country to where Global Fund is doing one thing, we're doing something that is complementary or expansive or other than they are doing so our programmatic imprint is amplified in our ability to impact the diseases that both the Global Fund focuses on as well as the HIV/AIDS and TB. Without them, our footprint and impact would diminish. In the Fund's first budget period, U.S. donations accounted for 33% of all contributions to the Fund, with the United States having provided $300 million of the $894.3 million contributed in the 2001-2002 budget period. Since then, the United States has remained a key contributor to the Fund ( Table 1 ). On October 4, 2010, when Global Fund donors met to make 2011-2013 pledges, the United States made its first multiyear pledge to the Fund of $4 billion. Congress has historically appropriated U.S. contributions to the Global Fund through two appropriations bills: State, Foreign Operations; and Labor, Health and Human Services, and Education. The conference reports ( H.Rept. 112-331 ) accompanying the FY2012 Consolidated Appropriations Act ( P.L. 112-74 ) specified that appropriations for the Global Fund would be funded in whole through Division I (Department of State, Foreign Operations, and Related Programs). During the Bush Administration, Congress consistently exceeded budgetary requests for the Global Fund and appropriated roughly $3.6 billion for the Fund from FY2001 to FY2008. Congressional support for the Global Fund has continued through the Obama Administration, with appropriations exceeding requested levels each year, except in FY2012 ( Table 2 ). Despite this support, appropriations for the Global Fund have remained constant since FY2010. In FY2011 and FY2012, appropriations for the Fund remained at $1.05 billion. In order to meet his multiyear pledge to the Fund, made in 2010, as part of the FY2013 budget request, President Obama requests that the Fund receive an addition $250 million in FY2012 through a transfer of funds from the State Department's bilateral HIV/AIDS funding from that year. Likewise, despite proposing reductions for most bilateral global health programs, the Administration requests $1.65 billion for the Global Fund in FY2013, some 57% higher than FY2012-enacted levels, and 27% higher than FY2012 estimated levels, which take into account the $250 million transfer. A founding principle of the Global Fund is to consistently evaluate and adapt its operations, architecture, and grants according to changing needs and circumstances. The section below highlights key developments within the Global Fund that have followed independent evaluations, feedback from various stakeholders, and discussions about misuse of Global Fund resources. The Global Fund's Board decided at its sixth meeting in October 2003 to hire an independent team of experts to conduct a five-year evaluation of its grants. The purpose was to ascertain the extent to which the Global Fund had reached its performance goals and adhered to its founding principles. In November 2006, the board approved the launch of the five-year evaluation, which was overseen by board-appointed public health experts, known as the Technical Evaluation Reference Group (TERG), and conducted between April 2007 and October 2008 by a separate team of independent consultants who assessed three key areas: the efficiency and effectiveness of the Global Fund's structure, the effectiveness and impact of the Global Fund's partnership system, and the impact of Global Fund grants on the three diseases. It is important to note that independent expert teams have conducted eight different evaluations since the Fund was established, all of which have inspired reforms. However, the five-year evaluation provided the first comprehensive assessment of the Global Fund. In March 2009, the team of evaluators published its overall assessments and recommendations, which focused on improving the sustainability of Global Fund grants; sustaining spending by recipient countries on HIV/AIDS, TB, and malaria in light of increased donor spending; strengthening health systems; improving monitoring and evaluation indicators; and enhancing donor coordination. Since the release of the five-year evaluation report in 2009, the Global Fund has instituted several changes based on its recommendations, and other recommendations made following additional external reviews and internal assessments. In September 2010, the Secretariat consolidated those and previously launched initiatives into a reform agenda for a more efficient and effective Global Fund. At the Global Fund's 22 nd board meeting in December 2010, the board approved the reform agenda and established a Comprehensive Reform Working Group (CRWG) to further develop ongoing efforts and define a more comprehensive plan for Global Fund reform. At the Global Fund Board's 23 rd meeting, held in May 2011, the board approved a series of measures recommended by the reform working group, including strengthening the accountability framework —enhancing fiduciary control and risk management, improving the tailoring of risk management approaches to local contexts, and applying stronger standards for implementers; strengthening partnerships —at the country level, introducing formal agreements on technical and management assistance and at the global level, better clarifying partnership roles; enhancing value for money —leveraging the Global Fund's market-shaping role to improve price, quality, and availability of key health products, and encourage reprogramming of funding toward more cost-effective interventions; improving governance —reviewing the Global Fund Board's governance structures and operating procedures to ensure more efficient and effective decision making; and adapting the Global Fund business model —moving from one-size-fits-all solutions to better take into account the grant performance record, implementation risks, and the extent of Global Fund support in countries relative to other health financing. These reforms are each reaffirmed in the 2012-2016 Global Fund Strategy. Since 2009, the Global Fund has also been developing a common platform for funding and planning programs that strengthen health systems with the Global Alliance for Vaccines and Immunization (GAVI) and World Bank. The purpose of this new platform is to develop (1) common funding policies for health systems strengthening, (2) common country eligibility criteria, (3) joint review mechanisms for proposals and program oversight, (4) harmonization of technical support, and (5) a common framework for measuring performance. Some of the expected benefits of the joint platform include reduced transaction costs, increased global focus on health systems strengthening, enhanced predictability of donor funding, and improved harmonization and alignment of funding and programming for health systems strengthening. This platform will be implemented starting in 2014. On January 23, 2011, the Associated Press released an article that discussed instances of corruption discovered by the Global Fund's Inspector General's Office. The article focused on allegations of corruption and fraud in 4 of the 145 countries that receive Global Fund grants: Mali, Djibouti, Mauritania, and Zambia. Shortly thereafter, both critics and supporters of the Global Fund released statements about corruption in foreign aid in general and the Global Fund's response to corruption in particular. Although this is not the first time the Global Fund has uncovered misuse of funds, these recent examples may have increased scrutiny of U.S. support to the Fund, especially in an austere budget environment. According to the Global Fund, it has a zero-tolerance policy for corruption and has taken several actions to address instances of fraud, including freezing disbursements, expenditures, and activities until measures are taken to account for funds; recovering misused funds; and changing principal recipients. When the situation merits it, grants are terminated, suspended, or placed under the Global Fund's Additional Safeguard policies. On February 4, 2011, the Global Fund announced that it had instituted several measures "to reinforce its financial safeguards and increase its capacity to prevent and detect fraud and misuse in its grants, many of which are already underway." These measures included expanding the mandate of firms that monitor expenditure in countries in order to enhance fraud prevention and detection; strengthening the role of country coordinating bodies in grant oversight; heightening scrutiny of activities at higher risk of fraud, such as training; redirecting a proportion of all grants to assess and strengthen financial controls at country levels; increasing the number of the Fund's staff responsible for financial management; and doubling the budget of the Fund's independent Inspector General. In April 2011, the Senate Foreign Relations Committee released a minority report offering background information on the Global Fund and a discussion of responses taken by the Global Fund to address general corruption issues as well as this specific case. The report included a number of recommendations to strengthen the oversight of Global Fund procurement procedures (see " Transparency, Monitoring, and Evaluation "). The report also noted several steps that the Fund has taken toward preventing financial mismanagement, including increasing the staffing and budgetary support for the Office of the Inspector General from 19 staff with a 2009 budget of $6.67 million to 30 staff positions with a proposed budget of $19.79 million for 2011; and establishing the Global Fund Comprehensive Reform Working Group, which is tasked with writing a report that recommends financial reforms. The Working Group consists of the Chair and Vice Chair of the Board of the Global Fund, the Executive Director of the Secretariat, three donor representatives (including the United States), and three representatives from recipient countries. Also in April 2011, the Global Fund released a report that outlined the steps the Global Fund has taken to safeguard against misuse of funds. According to the report, the Global Fund uncovered the misuse of funds in 11 countries totaling $44.2 million. About 63% of these misused funds were identified in four countries: Djibouti, Mali, Mauritania, and Zambia. An October 2011 report from the Office of the Inspector General found evidence of further misuse of funds in Nigeria. The Global Fund is reportedly seeking restitution of misused funds and has submitted evidence in support of criminal investigations in Mali, Mauritania, and Zambia. At the Global Fund's May 2011 board meeting, the Fund's Office of the Inspector General (OIG) raised a number of issues the board might consider, including the following: Reconsidering the relevance of the Global Fund's model, given the environment in which the Global Fund is often operating. The OIG proposed that the Fund reconsider whether to remain just a financing institution, reliant upon national ownership. If the board decides to retain that model, the OIG recommends identifying other options to mitigate the risks of fraud and financial misappropriation that are currently inadequately addressed. Making risk management part and parcel of the grant making process.Reevaluating the Key Performance Indicator (KPI) structure. The OIG asserted that the KPI structure's emphasis on speed and quantity of disbursements often compromises quality and adequate consideration of risks. Further, the OIG recommended that the board revisit the concept as an appropriate mechanism for measuring the performance of Fund Portfolio Managers and Secretariat staff. At the same time, the OIC urged the board to consider developing tools to measure the delivery of quality products and the effective use of resources. Establishing minimum acceptable capacity standards to assess Principal Recipients and develop a system to hold Principal Recipients accountable when things go wrong. Enforcing the policies and guidelines that have not been implemented at country level. Making the Country Coordinating Mechanisms more effective in their oversight duties and ensuring that they are without conflicts of interest. Further, on June 23, 2011, the Global Fund announced that it had signed an agreement with the International Aid Transparency Initiative, a multilateral effort (including donors, countries, and civil society organizations) to publicly disclose aid data in a standardized, timely approach. In September 2011, the High-Level Independent Review Panel on Fiduciary Controls and Oversight Mechanisms of the Global Fund released a report that recommends improving financial and board oversight, simplifying the grant application process, and putting in place better mitigation strategies to identify, assess, and manage risk. In November 2011, the Global Fund Board adopted the report and its recommendations, and released the "Consolidated Transformation Plan," which outlines steps toward implementing the recommended reforms, including improved investment of Global Fund resources toward the highest-impact countries, interventions, and populations; increased efficiency and value for money in the use of Global Fund resources; more effective identification and management of risks; more efficient and flexible management of grants in a consistent, quality-assured manner; enhanced structure and management of the secretariat and the board for optimal performance; enhanced engagement of partners at global, regional and country levels, to support grant performance; and increased predictability and sustainability of funding. At the May 2011 board meeting, the board approved the new Eligibility Counterpart Financing and Prioritization Policy , which affects the way Global Fund resources are provided. By implementing this new policy, the board agreed to divide Fund resources into two accounts: the General Funding Pool and the Targeted Funding Pool. Broadly speaking, the General Funding Pool is intended for countries with large disease burdens and limited domestic resources. Roughly 90% of Global Fund resources are available through the General Funding Pool. The Targeted Funding Pool builds on the dedicated reserve for most-at-risk populations (MARPs) created in round 10, and now applies to all three diseases (but not for cross-cutting HSS proposals). Proposals in the Targeted Funding Pool will also have a predefined budget ceiling: $5 million for the first two years and $12.5 million for a five-year proposal. When submitting a grant proposal, countries must clearly indicate for which funding pool they are applying. Upper middle-income countries must be able to demonstrate an extreme disease burden to be eligible for both pools, and the programs must be focused on MARPs and/or highest impact interventions; those with a high disease burden are restricted to the Targeted Funding Pool. In addition, the new policy provides Counterpart Financing requirements that replace the old Cost Sharing Policy, which applied only to middle-income countries. This new policy requires all recipient countries, regardless of income level, to show that the government contribution to relevant national disease programs and to overall health is increasing each year, and to report on these contributions annually. The minimum contribution each country must provide toward addressing the related disease follows the following income criteria, with lower middle-income countries split into two groups: low-income countries: 5% lower lower-middle-income countries: 20% upper lower-middle-income countries: 40% upper middle-income countries: 60% The Global Fund Strategy 2012-2016 further articulated the Fund's intention to focus on the highest-impact countries. The Strategy states that "funding decisions are guided by considerations of potential for impact, including the global distribution of disease and key specifics of individual country situations ... for the relevant disease." In November 2011, the Global Fund Board also mandated a revised application and approval process for grant renewals whereby any G-20 upper middle-income country with less than an extreme disease burden would no longer be eligible for renewal of grants. In 2008, at its 18 th meeting, the Global Fund Board decided to revise its funding architecture to simplify its business model and harmonize its grants with those supported by recipient countries and other donors. One strategy that the board approved was to begin funding grants through a Single Stream Agreement (SSA), whereby principal recipients will report on its activities by disease rather than by round. In other words, if a PR has multiple grant agreements for a disease, the grants will be consolidated into a single agreement and the PR will report on its progress through one submission. The Fund hopes that the strategy will reduce the reporting burden on grant recipients and allow countries to more easily align work plans, budgets, and targets. Adherence to the new funding architecture is voluntary for round 10 and required for future rounds. The implementation of SSA will discontinue the use of the Rolling Continuation Channel (RCC) for funding. The board also decided at its 18 th meeting to pilot a new grant proposal process known as the National Strategy Application (NSA). The NSA was funded in a limited number of countries and designed to more closely align Global Fund grant proposals with national health strategies and fiscal cycles; reduce transaction costs and paperwork for recipient countries; improve harmonization with other donors who have agreed to use the process; and encourage broad-based use and support of harmonized funding structures and processes. Countries participating in the "second wave" of NSA funding are also subject to the Transitional Funding Mechanism criteria, although these countries will be able to use the jointly assessed strategy, produced for the NSA, as the basis for their funding request for continuation of essential services. In 2007, the board approved the routine use of dual-track financing, which enables grants to be managed by two primary recipients, one representing national governments and the other civil society organizations (CSOs) or the private sector. Dual-track financing is not required, though any application with one primary recipient must include a justification for not using the method. The TERG and other health experts have long asserted that CSOs fill key roles in advancing global health. Such functions include advocacy, demand creation, service delivery, policy-setting, and accountability. In the long run, many observers maintain that civil society engagement facilitates sustainability of outcomes, health system strengthening, and country ownership. According to the Global Fund, by the end of 2009, 84% of grants managed by CSOs either met or exceeded expectations. Dual-track financing was used in 28 or the 79 proposals approved by the Technical Review Panel in the 10 th funding round. In 2007, the Global Fund launched an initiative called Debt2Health, through which creditors allow countries to substitute the interest payments on their debt for public health spending via the Global Fund. By June 2011, the Global Fund had signed four agreements with two creditor countries and three beneficiary countries. The Fund anticipates that these agreements will channel $107 million to efforts to fight the three diseases. The Affordable Medicines Facility–malaria (AMFm) initiative, launched in April 2009, was originally proposed in a 2004 report by the U.S. Institute of Medicine and developed in consultation with the Roll Back Malaria (RBM) Partnership. The initiative aims to improve access to artemisinin-based combination therapy (ACT) by negotiating lower treatment prices with drug manufacturers and supporting the proper use of the anti-malarial drug. AMFm subsidizes a significant portion of the drug, dropping the purchase price from $11 per course to less than $1. Although the AMFm initiative is managed by the Global Fund, UNITAID, Britain's Department for International Development (DFID), and other donors finance and implement the initiative separately. Through AMFm, the Global Fund anticipates ACTs supplanting cheaper, commonly used anti-malarial drugs that have high drug resistance rates. Some observers warn, however, that people could take ACTs with the onset of symptoms like fever without being diagnosed with malaria. In light of decreased efficacy of ACTs along the Thai-Cambodia border and that ACTs are the only anti-malarial drugs without widespread resistance, several health experts urge the Fund to finance rapid diagnostic tests to complement AMFm activites and prevent drug resistance to ACTs. In June 2009, the Global Fund launched the Voluntary Pooled Procurement (VPP) Initiative, which encourages collective procurement of drugs and related commodities to decrease prices, expand access to quality medicines, and improve the reliability of drug supplies. The initiative focuses on four product categories: first-line antiretroviral treatment (ART), second-line ART, ACT drugs, and long-lasting insecticide treated nets (LLINs). By monitoring prices, cost savings, and market shares, the Global Fund hopes to strengthen national procurement systems and supply chain management. Between June 2009 and December 2010, the Global Fund procured goods in over 40 countries worth more than $500 million through this mechanism. The Global Fund reports that additional consultations are underway in 10 more countries that have expressed interest in receiving capacity-building and supply chain management assistance. Since making a founding pledge to the Fund in 2001, the United States has strongly supported the Fund: U.S. contributions have remained higher than any other country, U.S. officials have served on various Global Fund boards, and Congress has steadily raised appropriations to the Fund. At the same time, Congress has passed laws that limit U.S. spending on the Fund, such as a stipulation that prohibits U.S. contributions from exceeding one-third of all contributions. Despite strong support by past Congresses for global health programs, including the Global Fund, some Members of Congress have begun to question U.S. spending on non-security foreign aid and argue for reducing or eliminating development and health aid. Although some Members of Congress argue that cuts to these programs could yield important savings, others contend that the cuts would have little impact on the federal deficit, while significantly imperiling the lives of vulnerable populations reliant on U.S. assistance. The section below discusses issues the 112 th Congress might consider as it debates spending levels for the Global Fund. The FY2013 budget request included $1.65 billion for the Global Fund, a significant increase from previous years in contrast to some proposed cuts in bilateral global health programs. Key questions are whether the 112 th Congress will approve the proposed increase while congressional debate continues to focus on limiting government spending overall, or whether it will agree with the Administration's proportional focus on the Global Fund. Although appropriations for the Global Fund have mostly climbed, spending for the Fund has become a declining share of total U.S. spending on international HIV/AIDS, TB, and malaria programs, particularly from FY2007 through FY2011 ( Table 3 ). In FY2012, a slightly larger share of global HIV/AIDS, TB, and malaria resources went toward the Global Fund. Should Congress meet the President's request, the Fund will become an even greater share of U.S. global HIV/AIDS, TB, and malaria spending in FY2013. Debate about supporting the Global Fund has often focused on HIV/AIDS. Nonetheless, some global health experts urge Congress to consider the impact of the Global Fund on the other two diseases. The Global Fund estimates that by the end of 2010, it had committed some $12 billion to HIV/AIDS programs, less than half of U.S. spending levels on related bilateral projects during the same time period. The Fund outspent the United States during this time, however, on global TB and malaria projects. The Global Fund committed over three times as much funding to TB and malaria activities than the United States. The Global Fund estimates that the $3.6 billion that it committed to TB programs accounted for 65% of all donor spending in 2009, far exceeding the $1.1 billion in U.S. bilateral spending. Advocates assert that U.S. support for the Global Fund enables the United States to invest in TB programs, an area in which the United States has a relatively limited presence. Proponents of greater spending on TB point to the dire impact of HIV/TB co-infection, particularly in sub-Saharan Africa, which has complicated efforts to control the spread of tuberculosis and accelerated the rate at which people die from either disease. Supporters for a diversified U.S. global health portfolio also point to the role that the Global Fund plays in eliminating malaria. According to the Fund, it has committed roughly $6.1 billion to malaria programs since its inauguration, accounting for some 65% of total donor spending through the end of 2009. Since the launch of the President's Malaria Initiative, U.S. investments in global malaria programs has increased substantially, though U.S. spending on malaria from FY2001 through FY2010 amounted to about one-third as much as Global Fund commitments. Congress may also consider potential advantages of the Global Fund over U.S. bilateral health programs. Some experts argue that the Fund's grant process allows for greater country ownership of programs, more flexibility in tailoring programs to specific country priorities, and supports interventions that are better integrated with existing national and civil society activities. These experts argue that these attributes may make these programs more sustainable in the future and less dependent on U.S. assistance. Some also argue that the fund allows donors to pool and leverage their resources, reduces overlaps in programming, and has fewer overhead costs. Alternatively, others argue that the Global Fund model is more unpredictable than bilateral programs, does not allow for adequate oversight of funds, and is more difficult to track and measure. The United States spends more on combating HIV/AIDS than any other country and is a key donor for international malaria and TB programs. Experts continue to debate whether the United States should maintain that leadership, including, in particular, the level to which the United States should be a leader in supporting the Global Fund. Many urge Congress to increase appropriations to the Fund, in large part because donors have begun to follow the lead of the United States in setting their annual contributions. However, U.S. contributions to the Fund cannot exceed 33% of all contributions, a condition first set through the U.S. Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act ( P.L. 108-25 ). The law that extended the authorization of U.S. support to the Fund, the Tom Lantos and Henry J. Hyde United States Global Leadership Against HIV/AIDS, Tuberculosis, and Malaria Reauthorization Act of 2008 ( P.L. 110-293 ), maintained this requirement. Many observers speculate that Congress instituted the contribution limit to encourage greater global support for the Fund. For this reason, some argue that U.S. ceiling should remain. As of yet, it does not look like the FY2013 request, if approved, would exceed this spending ceiling. Advocates of the Fund argue that U.S. support for the Fund has become even more important since the global financial crisis. The Global Fund announced in November 2009 that it would reduce the budgets of grants approved in round 9 by 10% for the first two years, and by 25% for the subsequent years. In 2010, the Global Fund published a report that outlined various resource scenarios and the Fund's resulting ability to approve new grants. The Fund estimated that it would need between $13 billion and $20 billion from 2011 to 2013 to maintain programs, and upwards of $20 billion to scale-up efforts. Donors met for two days starting on October 4, 2010, at the United Nations headquarters in New York City to pledge their support for the next three years of the Global Fund. The Global Fund announced on October 5, 2010, that the international community had pledged to provide some $11.7 billion to the Global Fund over the next three years, roughly $1 billion less than the Global Fund's most conservative funding request. The U.S. pledge accounted for roughly 34% ($4 billion) of that amount. Subsequent pledges totaling $11.8 million by Luxembourg ($10.8 million) and Rwanda ($1 million) were made following the pledging conference. In November 2011, the Global Fund announced that, due to inadequate resources from donors, it would cancel its 11 th round of funding and would not be supporting any new grants until 2014. Some experts argue that the lack of new funding from the Global Fund during this time period could have dire consequences. As the largest donor in the world for TB and malaria efforts, and a key player in the fight against HIV/AIDS, many believe that a reduction in Global Fund grants could significantly undercut the potential for progress against these three diseases. Despite concerns about the Global Fund's ability to finance qualified grants from developing countries, some observers would like the Global Fund to address its own capacity before urging Congress to increase support for the organization. Since the Global Fund was launched, the United States has sought to better coordinate Global Fund and related bilateral programs. Through the Global Health Initiative (GHI), the Obama Administration has affirmed its intention to increase cooperation with the Fund, indicating that one of the seven basic principles of GHI is to "strengthen and leverage key multilateral organizations, global health partnerships and private sector engagement" with the purpose of implementing a coordinated strategy across other major donors and national governments. In its Five-Year Strategy report, the Office of the Global AIDS Coordinator (OGAC) emphasized its partnership with the Global Fund and outlined several steps to ensure the Fund's long-term sustainability, including transferring some PEPFAR programs to the Global Fund and coordinating and aligning activities related to the funding, monitoring, and evaluation of PEPFAR, Global Fund, and UNAIDS programs. Many observers question the strength of the U.S. commitment to donor coordination. For example, though U.S. representatives have advocated better alignment of project implementation, a common framework for such a notion has yet to be formalized. The Global Fund has begun to develop a joint funding platform for health systems strengthening with other groups, however, like GAVI, the World Bank, and WHO. Though the United States is not party to the platform, OGAC has expressed limited support for the undertaking. Despite OGAC's support for increased coordination among donors of health system strengthening efforts, it also contended that each donor has a unique mandate and role to play in strengthening health systems. WHO and other health experts urge key donors, including the United States, to align reporting and auditing requirements, the frequency and type of data collected and reported, and fiscal cycles in an effort to reduce the transaction costs and staffing requirements of recipient countries. Some critics of the Fund contend that the Fund's oversight mechanisms are not strong enough to protect against wasteful spending, particularly in countries that have a well-documented history of corruption and poor financial management. Fund supporters counter that the release of evaluations and findings on the Global Fund's website reflect the Fund's commitment to reporting and monitoring its projects. Specifically, the Fund has uploaded onto its website an abundance of information on grant proposals and budgets, grant spending trends, and results of board meetings, which include decisions regarding the suspension of grants. Fund advocates also argue that the Fund's decisions to suspend temporarily and, in some cases, discontinue poor performing grants demonstrate the effectiveness of the Fund's oversight and funding mechanisms. Some in Congress have long advocated for stronger oversight of Global Fund spending. Supporters of this idea have welcomed language included in FY2006 and FY2008 foreign operations appropriations measures, which required the Secretary of State to withhold up to 20% of the U.S. contribution to the Global Fund until she determined the Fund had adhered to U.S. reporting and monitoring standards. In FY2009, the withholding was reduced to 10%. Beginning in the FY2010 foreign operations appropriations, the Lantos-Hyde Act ( P.L. 110-293 ), which authorized the extension of PEPFAR programs and funding for U.S. bilateral TB and malaria programs, required the Secretary of State to withhold 20% of the U.S. contribution to the Global Fund until she certified that the Fund had met requirements pertaining to the Local Fund Agent (LFA) performance, a policy of transparency, an independent Office of the Inspector General, and several other policy and procedural provisions. Most recently, the FY2012 foreign operations appropriations included language requiring the Secretary of State to withhold up to 10% of Global Fund support until she determined that the Fund was implementing a policy of transparency, supporting an independent Office of the Inspector General, and maintaining an effective whistleblower policy to protect whistleblowers from retaliation. To date, the U.S. government has not withheld funds on the basis of any of the above provisions. The Global AIDS Coordinator has signed this certification, on behalf of the Secretary of State under delegated authority, in past years. The State Department will report to Congress on the FY2012 provision after the fiscal year reporting period has ended in September 2012. Some Global Fund supporters contend, however, that such action is unnecessary in light of the consistent release of information by the Global Fund on grant performance and funding. Global Fund advocates point to actions by the Global Fund to release information on discoveries of fraud despite the negative press reports that surfaced in early 2011, as well as subsequent steps taken to suspend or transfer management of relevant grants. Some experts applaud the Global Fund's efforts in this area and urge the United States to release similar information on the performance and funding of its bilateral health programs. In light of the vigorous debate regarding responses by the Global Fund to corruption, a number of recommendations made by the Senate Foreign Relations Committee's minority staff to strengthen the oversight of Global Fund grants in particular and U.S. global health spending in general may receive attention in the 112 th Congress. These included calls to: 1. Make U.S. contributions to the Global Fund contingent upon the Global Fund Boards' adoption of reforms laid out by the U.S. Department of State. The Department of State would be required to certify to Congress that the reforms were in place before funds could be released. 2. Withhold all funding to UNDP until it certifies that its internal rules and procedures have been sufficiently modified to allow the Inspector General of the Global Fund, the Inspector General of the World Bank, and any investigative arm of any multilateral organization to which the United States contributes funds full access to their audits, investigations, records, and personnel. 3. Withhold U.S. contributions from the Global Fund to the UNDP until the United States receives confirmation of such certification. 4. Instruct the Government Accountability Office to conduct a study regarding the coordination of the Office of Inspectors General (or equivalent offices) of all U.S. government entities and multilateral organizations receiving U.S. taxpayer funds that oversee the integrity of global health programs. 5. Have the U.S. Representative to the Global Fund reiterate in the strongest terms to the board of the Global Fund that the United States has no tolerance for fraud and abuse and that the Office of the Inspector General needs to acquire adequate resources and personnel to audit and investigate programs on the ground. 6. Have the Global Fund take any steps necessary to ensure that Local Fund Agents and CCMs are capable of managing grants and are properly trained on how to spot and mitigate suspected fraudulent activities. 7. Have the U.S. government conduct a top-to-bottom analysis of U.S. investment and contributions to international organizations and funds, similar to that conducted by Britain. On March 1, 2011, the United Kingdom Department for International Development issued a Multilateral Review, which evaluated the 43 international funds and organizations that the United Kingdom contributes with respect to value for the money and each fund's and organization's effectiveness in combating poverty, taking in account transparency and accountability. 8. Have the U.S. government work more closely with host governments on establishing or increasing the country's commitment to making its own investments in health programs. When possible, the countries must demonstrate some commitment in moving toward sustainability and cease complete reliance on the donor community for the indefinite future. Since the release of this report, the Global Fund has announced several plans to increase transparency, monitoring, and evaluation of its programs, particularly through the Consolidated Transformation Plan. To date, the Global Fund has approved funding for over 1,000 projects in 150 countries. Through its treatment, prevention, and care efforts, the Fund estimates that it has saved approximately 7.7 million lives. Despite these achievements, observers raise several issues that could influence U.S. support for the Fund: The appropriate balance between U.S. support for the Global Fund and bilateral HIV/AIDS, TB, and malaria programs —Since the Global Fund was created, some have weighed U.S. contributions to the Global Fund against U.S. spending on bilateral HIV/AIDS, TB, and malaria efforts. The Office of the Global AIDS Coordinator rejects this notion and presents the Global Fund as a complement to U.S. bilateral programs. Nonetheless, the 112 th Congress will likely debate the distribution of U.S. support between the Global Fund and related bilateral programs, especially PEPFAR. The President's FY2013 budget request may contribute to this debate, as it proposes decreased funding for bilateral HIV/AIDS, TB, and malaria programs while proposing increased funding for the Global Fund. Some experts argue that this reflects the relative efficient and flexible nature of multilateral programs. Others argue that increasing funding for the Fund while decreasing funding for bilateral programs undercuts the success of more predictable and sustainable U.S. programs. How to coordinate Global Fund and bilateral HIV/AIDS, TB, and malaria programs —When President Obama announced GHI, he expressed his intent to reshape U.S. global health policy so that global health efforts were better integrated and coordinated. Despite references throughout the GHI Implementation Plan to stronger collaboration with the Global Fund, the extent to which such an effort will occur is not yet clear. While several official U.S. documents support calls from the Global Fund to enhance donor coordination, the United States has expressed limited support for a joint funding platform for health systems strengthening. U.S. officials maintain each donor has a unique mandate and role to play. Growing emphasis on improving health systems —Despite calls by the Global Fund for more financial support, the team of experts who conducted a five-year evaluation of the Fund warned that recipient countries might not be able to continue receiving assistance at current scale without significant investments in health systems. The Global Fund and other donors have increased spending on improving global health systems, nonetheless challenges in this area persist. One of the goals of the Global Health Initiative is to improve health systems through several strategies, such as addressing health system bottlenecks, strengthening data collection systems, improving human resources for health, and donor coordination. Several global health experts recommend that the Global Fund and other donors support national health plans and address the major gaps in basic health service availability and readiness as part of HIV/AIDS, TB, and malaria efforts. Whether Global Fund resources should be used in middle - income countries —Several observers question the use of Global Fund resources in middle-income countries. In 2010, 11 countries were considered both donors and recipients: China, India, Malaysia, Namibia, Nigeria, Romania, Rwanda, Russia, South Africa, Thailand, and Tunisia. China has received the most attention from all of these countries, due to both the substantial amount of grants it has received from the Fund and the rapid growth of its economy. The Global Fund awards grants to lower middle-income countries, but expects them to contribute up to program costs. For example, as a middle-income country with a per capita income of $3,650 China is eligible for Global Fund grants and pays roughly 80% of total program costs. The Senate Foreign Relations Committee's minority report recommends that as China becomes an upper middle-income country, it should no longer receive Global Fund resources. In May 2011, the Global Fund approved a new Eligibility, Counterpart Financing and Prioritization Policy that limits how much funding middle-income countries could receive through the Fund and requires all countries to contribute to national disease and health strategies and demonstrate increased funding for these activities annually. At the November 2011 board meeting, the Global Fund also implemented a policy whereby G-20 upper middle-income countries will no longer be eligible for grant renewals unless they have an extreme disease burden, as defined by the Fund. The Fund's responses to allegations of corruption —The Global Fund's announcement that funds from some its grants were misspent has opened a rigorous debate in the foreign aid community. Some observers applauded the Global Fund for its transparency and encouraged others to release similar information, arguing that the Global Fund is not alone in facing these problems. Advocates also note efforts by the Fund to reform its fiduciary practices and reduce corruption. On the other hand, some have called for governments to withhold support for the Global Fund until adequate safeguards are established. The Global Fund's release of information on misused funds by its grant recipients raises several questions. If the Global Fund is penalized for being honest in its shortcomings, will others hesitate to do so? When allegations of corruption and malfeasance are discovered, what is the appropriate response? What impact might reduced funding have on those relying on aid programs for life-saving treatments? 

Summary: The Global Fund to Fight AIDS, Tuberculosis, and Malaria (Global Fund, or the Fund) was established in 2002 as a public-private partnership that could provide significant financial support for global responses to HIV/AIDS, tuberculosis (TB), and malaria. By the end of 2011, the Global Fund had approved roughly $22.6 billion to help 150 countries fight these three diseases. According to the Global Fund, from 2002 through 2011, it had supported AIDS treatment for 3.3 million HIV-positive people, anti-tuberculosis treatment for 8.6 million people, and 230 million insecticide-treated nets for the prevention of malaria, saving about 7.7 million lives. In November 2011, the Global Fund Board announced that due to inadequate resources from donors, it would cancel its 11th round of funding, but would maintain support for existing activities to avoid disruptions in ongoing services. The Fund also announced that it expected to offer new funding for grants in 2014. The United States has demonstrated strong support for the Global Fund since making a founding pledge in 2001. U.S. officials have served on several Global Fund boards, U.S. contributions to the Fund have surpassed those of any other country, and U.S. global HIV/AIDS, TB, and malaria programs have been increasingly coordinated with Global Fund activities. Donors last met on October 4, 2010, to make their pledges for the Global Fund over the next three years. There, the United States made its first multiyear pledge to the Fund of $4 billion. Despite rigorous debate on the overall budget and the role of foreign aid in particular, the 112th Congress has maintained support for the Global Fund. In both FY2011 and FY2012, Congress appropriated $1.05 billion for the Global Fund, excluding rescissions. In order to meet the $4 billion multiyear pledge made in 2010, the President's FY2013 budget request included $1.65 billion for the Global Fund, a significant increase from previous years. As part of the budget request, the Administration requested a transfer of $250 million from the State Department's FY2012 bilateral HIV/AIDS funding to the Global Fund, bringing the estimated FY2012 funding level to $1.3 billion. Global health advocates urge Congress to meet the President's FY2013 request for the Fund in order to support the sustainability of its activities and to encourage continued contributions from other donors. Although Congress has traditionally been a strong supporter of the Fund, several issues may affect congressional views about the Fund in the future. Such factors include the following: Fiscal austerity. Proposals to reduce federal spending continue to dominate foreign aid debates, with some Members of Congress aiming to target foreign aid accounts, including those for global health, in an attempt to balance the budget. At the same time, others argue that cutting back on the relatively small size of foreign aid (about 1% of total budget authority) will do little to cut the deficit, but could imperil the lives of millions. Oversight and transparency. In early 2011, reports about misuse of Global Fund resources in some grants ignited a debate about corruption in foreign aid in general, and in the Global Fund in particular. Some have called for donors to withhold support for the Fund until better safeguards are established. Others argue the Fund should not be penalized for oversight shortcomings, which are familiar to many aid programs. Role of the Global Fund in U.S. global health policy. When the Global Fund was established, U.S. bilateral investments in HIV/AIDS, malaria, and TB were relatively small. Since then, U.S. bilateral investments in fighting these diseases have grown significantly, particularly since the President's Emergency Plan for AIDS Relief (PEPFAR) and the President's Malaria Initiative (PMI) were launched in 2003 and 2005, respectively. Some observers advocate allocating the majority of U.S. funds for global HIV/AIDS and malaria to bilateral programs to ensure sufficient control and oversight of funds. On the other hand, other analysts argue that the Global Fund represents a more efficient and flexible funding mechanism than bilateral programs and offers the United States the ability to pool funds and share risk with other donors, which some believe is particularly important given the challenges of the current fiscal environment. This report provides background information on the Global Fund, outlines U.S. funding for the Fund, discusses changes the Global Fund has made to improve the efficiency of its programs and address allegations of corruption, and analyzes issues Congress might consider as it debates the appropriate level of U.S support to provide the Fund.