Sub-recipient Management in Grant LifecycleDownload Section [PDF]
Sub-recipients in the country dialogue process
During the country dialogue process, the stakeholders discuss and agree on strategies to address the health priorities identified in the national strategic plan (NSP) and activities the country will ask the Global Fund to support. In most cases, at this stage, the Principal Recipient (PR) has not yet been selected. Despite not being nominated as PR at this stage, UNDP, as a development agency, might provide support by facilitating inclusion of all relevant parties in the process, which often include organizations representing key populations or other underrepresented stakeholders. Some of these organizations may be Sub-recipients (SRs) of currently active grants (in cases when UNDP is currently implementing a Global Fund grant) or future SRs. It is always advisable to include SRs of existing grants in the country dialogue, since these organizations have acquired experience through their work in the field. During the country dialogue, they will have the opportunity to share their practical knowledge on successful and unsuccessful implementation strategies, bottlenecks to address, weaknesses in the health system and adequacy of community systems. SRs’ input is valuable and might influence funding request priorities and implementation approach.
Sub-recipients in funding request development
During funding request development, the stakeholders work together to provide targets and a high-level budget for activities detailed in the grant application. The Country Coordinating Mechanism (CCM) will typically nominate the PR at this stage. Once the PR is nominated, some activities related to SR management can begin, in preparation for SR identification and contracting. The most important preparatory activity at this stage is mapping organizations that can implement activities envisaged in the funding request in specific regions of the country. Other preparatory activities can include collection and analysis of historical information on SR coverage with services in specific regions and realistic budgets used for this purpose. This information will facilitate identification of potential SRs and planning realistic targets and budgets. Such preparatory activities will greatly assist in ensuring the timely start of grant activities shortly after grant signing and reaching targets set for the first reporting period.
Mentioning SRs in the funding request
UNDP Country Offices (COs) can use the Proposal Defined Engagement modality for SRs named in the grant proposal submitted by the CCM to the Global Fund. The UNDP Global Fund Project Management Unit (PMU) might take advantage of this modality by identifying the SRs early and working with the CCM to have them named in the grant proposal. This is particularly useful in situations where SR choice is limited due to the country context and/or nature of the activities. However, the fact that specific organizations are mentioned in the grant proposal as SRs does not make it mandatory for UNDP to contract them. Please see here for more information on other modalities for identification and contracting of SRs.
Implementation arrangements mapping
During grant-making, PRs are required to prepare an implementation arrangements map. This is a visual depiction of who is doing what with what portion of a grant. It is, in essence, an organogram of a grant and will include all SRs known at the time or a placeholder for SRs that are yet to be identified. The implementation arrangements map includes:
- all entities receiving grant funds and/or playing a role in program implementation;
- each entity’s role in program implementation;
- the flow of funds, commodities and data;
- the beneficiaries of program activities; and
- any unknowns.
Please refer to the Global Fund Implementation Arrangements Mapping Guidelines for more information.
SR capacity assessment and capacity development
Capacity assessments should start early, ideally during grant-making for the SRs already identified at that stage (per the grant proposal). The PR should strive to finalize capacity assessments before grant signing so that key activities can commence as the grant agreement is signed. The capacity assessment will determine whether finance (including asset management), monitoring and evaluation, health product management and programme management capacities are adequate. In case of significant capacity gaps, the PR and SR can agree on a capacity building plan to address major implementation gaps and risks, or the PR should consider engaging a different organization as SR. Understanding the available capacities and the required support and monitoring of SRs may also help understand the workload and inform the staffing of the PMU. When agreeing on capacity development activities, available resources for such activities should also be taken into account. Non-priority activities can be excluded from initial plans. During grant implementation, should resources become available through savings, these can be used for initially unfunded capacity development activities.
Detailed budget and performance framework
The core work of the grant-making phase is the development and finalization of the grant performance framework (PF), detailed budget, and list of health products. Although the final SR budgets and targets will be agreed on at the stage of SR agreement signing, during grant-making it is important that the PR works in close cooperation with already identified SRs on the detailed cost of their programmatic and management operations. SRs’ input is also important while preparing the grant’s PF. The PR’s role is to review SRs’ past performance and discuss challenges during implementation in order to set realistic targets and identify bottlenecks early. During these discussions, the PR may inquire about the SRs’ reporting system, including:
- the tools they use to collect data;
- the flow of data in case of Sub-sub-recipients (SSRs);
- link with the national disease programme; and
- existence of any electronic data management systems and other factors which could impact data management under the future grant.
When an SR has not yet been identified, the PR should collect information about realistic grant targets and reasonable budgets at the sub-national level, if this information is not already included in the national disease programme. The information can be obtained from different sources:
- SRs in current or previous grants, either when UNDP was the PR or from another PR or SRs themselves.
- Historical data such as cost per beneficiary for the same or similar activities will facilitate the preparation of realistic budgets and setting realistic targets.
- Any evaluations, population size estimations and similar sources available for the sub-national level.
- Organizations implementing similar activities funded by other donors, or in other regions of the country, or in neighbouring countries.
Any changes in key budget drivers (such as rent prices, salary rates, currency fluctuations and inflation rate for payments which will be made in local currency) should be taken into account while planning detailed SR budgets, which will be reflected in the detailed budget submitted to the Global Fund. For more information, please refer to guidance on budget preparation in the financial management section of the Manual.
Finally, during grant-making, the PR needs to submit to the Global Fund a list of pharmaceuticals and health products and plan procurement and supply management (PSM) costs. In relation to SRs, it is important to understand their stock management system, storage capacity, distribution channels (if relevant) and similar factors that may affect the budget or require capacity-building.
The detailed grant budget, list of health products and finalized performance framework is submitted to the Global Fund for its approval. It may sometimes be necessary to revisit the targets and/or budgets agreed with the identified SRs if the Global Fund requests changes to the grant PF or detailed budget.
Other steps of the grant management cycle
The next chapters contain more information on the other steps of the grant management cycle. These steps are:
- Grant implementation that includes contracting the SRs, and monitoring financial and programmatic performance of the SRs approved projects; and
- Grant reporting.
 In Additional Safeguard Policy Countries, the GF may request that it pre-approves the implementation arrangement including PR selection. Although this is done in close consultation with the CCM and other development partners, the ultimate decision lies with the GF as part of additional safeguard measures for a country.
 In ASP Countries, selection of SRs may be subject to Global Fund approval based on the assessment of risks.