Local Fund Agents

In keeping with its aim to promote country ownership and to maintain a lean organizational structure, the Global Fund does not have offices in the countries, regions or territories that receive Global Fund financing. Instead, it relies on contracted entities, selected through a competitive bidding process, to serve as Local Fund Agents (LFAs). The LFA is a crucial part of the Global Fund’s system of oversight and risk management, providing independent, professional information and recommendations that enable the Global Fund to make informed funding decisions at each stage of the grant life cycle. Typically, the Global Fund contracts with one LFA per country receiving Global Fund resources.

During grant making, the LFA assesses the financial management, procurement, monitoring and evaluation (M&E) and administrative capacities of the nominated Principal Recipient (PR) using the PR Capacity Assessment Tool.

The Grant Agreement specifies that the PR is required to cooperate with the LFA to permit it to carry out its function. It also specifies the following obligations of the PR with respect to the LFA:

• channel all reports (including periodic and SR audit reports, Disbursement Requests and required communications) to the Global Fund through the LFA;
• permit the LFA to make ‘ad hoc’ site visits; and
• cooperate with the LFA in any way the Global Fund might specify (e.g. in relation to financial management, review of internal controls, systems and processes, risk assessment; review of implementation arrangements and other technical aspects related to grant implementation). The Global Fund website provides additional information about LFAs.