Non-compliance and Corrective Measures
There are two possible ways in which a Principal Recipient (PR) can breach the Grant Agreement by not complying with the Global Fund Quality Assurance (QA) Policy:
Level 1 non-compliance (no notification)
A PR has failed to send notifications required for the procurement of ERP-recommended products. However, the products procured complied with the QA policy.
Corrective measures for Level 1 non-compliance
After a Principal Recipient (PR) fails, for the first time, to send a notification for the procurement of a product that does not comply with Category A or Category B for a specific grant, the Global Fund will send the PR a warning letter. If the PR again fails to send notification for the same grant, the Global Fund may only disburse funds for pharmaceutical products directly to a procurement agent or a supplier for the remaining period of the Grant Agreement.
Level 2 non-compliance (non-compliant procurement)
A PR has failed to send notifications required for the procurement of ERP-recommended products, and the products procured do not comply with the QA policy.
Corrective measures for Level 2 non-compliance
If the PR, using grant funds, procures products that do not comply with the QA policy:
- the PR must refund to the Global Fund the amount paid for the non-compliant products, and the Secretariat may deduct the amount from future disbursements under the grant, or from the amount recommended for the next grant, if the PR has applied for continued funding; and
- for the remaining period of the Grant Agreement, the Global Fund will disburse all funds for pharmaceutical products directly to a procurement agent or a supplier.
PRs with a history of Level 2 non-compliance must provide evidence assuring the Global Fund of future compliance in order to obtain approval of the next grant. After a second instance of non-compliance, the Global Fund may stop funding for pharmaceutical products. In severe cases, the grant may be suspended or terminated.