Global Fund Challenging Operating Environments

In 2016 the Global Fund Board endorsed the Challenging Operating Environments Policy. Challenging Operating Environments (COEs) are countries or regions characterized by weak governance, poor access to health services, and man-made or natural crises. The policy classifies COEs based on countries with the highest External Risk Index (ERI) level in the Global Fund portfolio, and allows for ad hoc classification to enable rapid responses to emergency situations.  Due to increased risks in COE territories, the Global Fund often introduces additional risk management measures such as Additional Safeguards. The portfolio categorization to focused, core and high impact countries is independent from COE, i.e. COE countries exist in all portfolio categories.

Once a country (or part of it) is categorized as a COE, the Global Fund can tailor the flexibilities that would apply. The flexibilities may relate to the following:

• Access to funding: The Global Fund can allow the extension of existing grants, non-Country Coordinating Mechanism (CCM) applications, and extended allocation where a COE country is no longer eligible for funding.
• Implementing entities: While the CCM nomination of the Principal Recipient (PR) is preferred, in COE countries the Global Fund may assume the responsibility for selecting the PR.
• Grant implementation: Where relevant and possible, goals, targets, activities and budgets can be adjusted, and implementation arrangements changed to reach target populations.
• Procurement and supply chain: Where existing in-country supply chain systems are dysfunctional, disrupted or at risk of disruption, third-party providers may be selected for part or all of the supply chain management functions. In emergency situations, PRs with strong procurement and supply chain capacity may be selected.
• Monitoring and evaluation: The Global Fund recognizes the risks associated with data collection and data quality in COEs due to weak health data systems. It addresses these risks by 1) insisting on strengthening of health management information systems (HMIS) and using different types of data (surveys, evaluations, quantitative and qualitative sources) and 2) when necessary having a performance framework with focus on output measures rather than outcome and impact.
• Financial management: The flexibilities on key financial processes include, among others: ease of reprogramming process with a high level budget based on past grant assumptions, reliance on implementers’ own assurance mechanism where deemed strong, outsourcing of accounting and/or fiduciary function, and extension of audit and reporting due dates.