Donor Conditions in HIV/AIDS Programs’ funding. Lessons for the Poor Recipient Countries

Donor Conditions in HIV/AIDS Programs’ funding: Lessons for the Poor Recipient Countries

By

Kibs Boaz Muhanguzi¹

Abstract

Management of HIV/AIDS scourge worldwide attracts financial resources from different donor agencies often with conditions and specific requirements attached. Despite of huge flow of HIV/AIDS funds into poor countries, AIDS related problems remain a menace. Stringent fund conditions and requirements are perceived to impede the struggle against the pandemic. This paper investigates lessons recipient organizations need to learn from donor conditions, if the struggle against HIV/AIDS is to be fully tenable. Guided by existing literature, the study uses a mixed paradigm approach (quantitative and qualitative) with a cross sectional data from both donor and implementing agencies. The study finds an average 29.9% level of non compliance to the 9 investigated donor conditions. Given the implied effects of non compliance to donor conditions and supported with literature review, the study points to two categorical lessons: first, need to invest more on capacity building-particularly, HR training-so as to reduce overreliance on foreign manpower; and second, the need to ensure coordinated programming of funds for harmonious solicitation and funding of HIV/AIDS project activities.

Key words: donor funding, donor conditions, HIV/AIDS programs, recipient countries

Introduction

Donor funding often goes with strings attached. For example, some bilateral donors offer grants to specific organizations with which they have relations. Most multilateral donors channel their funds through specific country’s line Ministry. Other donations like those by the GHIs are part of the country’s central budget. Some grants are conditioned solely to specific activities/programs. Some donors require recipient countries/organization to present technical papers (proposal, budget, M&E reports …) before receiving the first or further funding. When such conditions are not met, funds are withheld. In relation to multifaceted HIV/AIDS programs, this study aims at investigating the level of compliance by recipient countries/organizations and how this influences the struggle to eliminate the pandemic disease. It is from this that lessons are drawn to further the struggle in the fight against the disease.

Since 2000, the global AIDS debate has been dominated by two major issues: first, the rising prevalence levels in some regions (Southern Africa, China, India and the Russian Federation) and second, the claims of the Ugandan miracle-possible causes and lessons for others. Since early 1980’s, a number of multi donor agencies have come up to join hands in the fight against HIV/AIDS pandemic in Africa (including musicians).² These agencies give conditions on which HIV/AIDS funds are to be accessed. Each donor specializes on a particular activity: some specialize in funding HIV/AIDS prevention through donating condoms; others fund health care, treatment, while others fund campaigns to sensitize the public. The HIV/AIDS funding has been so important internationally, though it has rarely been subjected to careful scrutiny, especially in matters related to aid conditions.

As HIV/AIDS epidemic matured, expenditure requirements were spreading to include not only prevention and social mobilization, but care and support (Whelan, 2001). This mandated the role of international partnerships against the disease and international financial commitments were doubled in Africa in the year 2000. Barnet et al. (2001) observes that in many developing countries, NGOs have taken a lead in responding to HIV/AIDS crisis. As international funding has increased, donors and government officials are looking for effective ways to distribute new funding to maximize impact. Contracting was found to be one of the more effective ways of introducing performance-based systems into HIV/AIDS program. However, challenges include the need for resources to plan and implement a contracting program, political resistance and lack of capacity among NGOs.

There are three main categorical sources of HIV/AIDS funding: first is the ‘the Global Health Initiatives GHIs’ with key organizations like; The Global Fund for Aids, Tuberculosis and Malaria ATM; USAID’s President’s Emergency Plan for AIDS Relief PEPFAR; and the World Bank’s Multi-country AIDS Program (MAP). Second is ‘multilateral agencies’ like the World Health Organization (WHO), the United Nations Children’s Fund (UNICEF), the Joint United Nations Program on HIV/AIDS (UNAIDS) and the World Bank. And third is ‘bilateral agencies’ like Japan International Cooperation Agency, the Norwegian Agency for Development (NORAD), and the United States Agency for International Development (USAID), and the United Kingdom’s Department for International Development (DFID), the Swedish International Development Cooperation Agency (SIDA) and the Danish International Development Agency (DANIDA). Some Health Development Partners indirectly fund HIV/AIDS through their direct support to the general budget like the Belgian Technical Cooperation (BTC), the Netherlands, and the German Technical Agency for Development (GTZ).

Following Nabyonga et al (2009) article, the following issues were raised about aid funds: Predictability: Donors provide project budget figures at the beginning of the budget cycle and efforts are made as much as possible to discuss priorities to be funded between the donors and the Ministry of Health. Channeling of donor funds: We note that funds are channeled through both public and private entities. Although private entities play a role in service delivery, they must be regulated and supervised to ensure that they are contributing to sector objectives. Alignment to priorities: Donor funds must be properly aligned to HIV/AIDS program priorities to ensure maximum benefits. Fiscal sustainability: As developing countries continue to receive donor aid for health, they should also ensure mobilization of domestic resources.

Tracking the flow of funding for HIV/AIDS programs in poor countries proves challenging for several reasons: none of the donors publicly discloses all of the funding data that would be required to truly trace monies from source to ultimate use; HIV/AIDS monies are used in a broad range of sectors, from health to education to transportation and mining, complicating the task of sorting out both amounts and uses; the funding flows through a diverse set of channels - some within the public accounting system in-country and some outside of it - making it hard to account for all funds; and finally, the in-country researchers encounter difficulties in gaining access to and information from some government and donor officials. Nevertheless, research into donor conditions, level of compliance to these conditions, and the implied effect on HIV/AIDS program effectiveness is partly made possible using survey of related literature as this paper delves into. For example, figure 1.1 shows a 4-year proportion of donor funding in HIV/AIDS programs in Uganda.

In Uganda, various donors contribute huge resources directly to the HIV/AIDS programs. These include USAID, DFID, DANIDA, CIDA, SIDA and IBRD. Most NGOs get their share of funding directly from donors and then do accountability for the funds to the respective donors. Conditions for access and accountability are made known to the grantee before release of funds. This is the reason HIV/AIDS programs tap into different sources of funds to implement their activities (Riddell, 2002).

Figure 1.1 Major donors in HIV/AIDS project activities in Uganda (2003/04 -2006/07)

illustration not visible in this excerpt

Source: Lake, sector-based assessment of HIV/AIDS spending in Uganda, 2006

Donor funding demands accountability (Harshmat, 2004) which lies at the core of NGOs function because of the nature of their relations with diverse stakeholders. The government provides legal cover while donors provide finance to NGOs to work with communities. Hence, NGOs are faced with the diverse requirements of accountability in trends of reporting financial situation and progress to each stakeholder, thereby making accountability mechanisms more complex. Multi-donor funded programs find it costly to hire auditors to express an opinion on different sets of fund accountability statements. For example, TASO Uganda must have a minimum of 4 audited statements: USAID, EU, CDC and general purpose accounts for general assembly. This arrangement takes a lot of time in preparation attending to auditors and has increased costs. TASO has tried to minimize on time taken by appointing one audit firm to carry out external audit of all fund accountability statements, but some donor agencies like EU prefer to hire their own auditors as a condition for funding. According to TASO (1994) memorandum and articles of association (Article 8 section 7), BOT members are only empowered to recommend auditors to the general assembly for appointment (TASO, 2001)

Though the ultimate goal of recipient countries and donors is to efficiently and effectively utilize the available resources for prevention and reduction of the spread of HIV/AIDS, some donor requirements inhibit this noble purpose (Mosisilli, 2001). In Uganda, HIV/AIDS implementing agencies deal in a variety of activities for example; prevention, treatment, palliative care, sensitization, and research.

It is believed that the conditions and requirements set by the donors for implementing agencies before they access funds, often make it so hard for implementing agencies to make good use of these funds save so much exorbitant expenses they make on hiring external technicians: auditors, accountants, monitoring and evaluation officers, procurement and contracting officers. Often times, the donors dictate who to run what, by sending their own personnel experts who are paid a very big fraction of the funds donated.

Study Purpose

The purpose of this study is to identify lessons recipient countries should learn from the effect of donor conditions on HIV/AIDS funding towards program implementation.

Related literature

For donor aid to be effective several prerequisites must be in place, including fiscal sustainability of the wider reform program, sustainability of aided development projects, predictability, fungibility, and absorptive capacity (Nabyonga etal, 2009). Other preconditions that must be in place include local ownership of development strategies and effective stewardship of governments, improved donor coordination, stronger partnerships, results-based approach, capacity building, and engaging civil society. Equally important is the commitment from donors to align to government plans and use government structures. Although NGOs and CSOs are important providers of health care and significant proportions of donor funds are channeled through them, effective regulatory mechanisms must be in place to ensure that these contribute towards agreed health sector strategies. There is need for partnerships between donors and the NGOs/CBOs and government so as to ensure: sustainability, capacity building and training within the organization, including training of staff and volunteers; training in monitoring and evaluation skills; office space and infrastructure (including telephone lines) from which to manage growing operations; building linkages between organizations.

Key donors in HIV/AIDS programs

1. The US Presidential Emergence Program For Aids Response PEPFAR³

PEPFAR Funding is largely allocated based on requirements set by the U.S. Congress for the treatment, prevention, and care of patients as well as orphans and vulnerable children. The recipient organizations are chosen largely by their ability to meet targets, and have few capacity constraints. They fund mainly internationally non-governmental entities based in the US. Some money is transferred to recipient governments, and funding is managed and overseen by U.S. government personnel. The annual process for preparing the country operational plan is very time-consuming, requiring the full attention of PEPFAR staff as well as substantial time from the staff in the recipient organizations.

2. The Global Fund Aids Tuberculosis and Malaria ATM

Recognized stakeholders in recipient countries determine which programs get Global Fund money. The money is usually disbursed to the national government. It is spent according to country-designed procedures and by country-selected recipients. Common bottlenecks of this fund emanate primarily from lack of capacity to manage funds by the recipient organizations.

3. The World Bank MAP

MAP funding uniquely focuses on strengthening the national AIDS response by allocating its money to particular types of recipients, such as National AIDS Councils; it also places priority on capacity building and institutional strengthening rather than particular programmatic areas, such as prevention, treatment, or care. All MAP funding is disbursed first to the national government, but money is spent according to MAP-specific procedures aimed at ensuring the proper use of funds.

[...]

¹ Kibs Muhanguzi is currently a Lecturer in the Department of Economics and Statistics, Kampala International University

² Also see appendix 3-a song by Philly Lutaaya

³ Following the funding for HIV/AIDS: A comparative analysis the of funding practices of PEPFAR, the Global fund and World Bank’s MAP in Uganda, Zambia and Mozambique, October 10, 2007 by Oomman Nandini, BernStein Micheal, Rosenzweing Steven.