BURMA GETS FIRST PIECE OF GLOBAL FUND PIE

C O N F I D E N T I A L SECTION 01 OF 02 RANGOON 001030 SIPDIS BANGKOK FOR MATTHEW FRIEDMAN/USAID AND BANGKOK ESTH E.O. 12958: DECL: 08/09/2014 TAGS: TBIO SOCI PGOV EAID PHUM PREL BM NGO SUBJECT: BURMA GETS FIRST PIECE OF GLOBAL FUND PIE REF: A. RANGOON 0369 ¶B. RANGOON 0945 Classified By: CDA a.i. Ronald McMullen for Reasons 1.4 (B,D) ¶1. (U) Summary: On August 4 the GOB Ministry of Health facilitated a signing ceremony in Rangoon which initiated the tuberculosis (TB) component of a Global Fund (GF) grant to Burma, the country's first tranche of funding from the GF. The first two-year phase of the TB component is for $6.9 million, part of a $98.4 million grant package to combat TB, HIV/AIDS, and malaria in Burma. The grant structure designates the UNDP as the Principle Recipient (PR) of the funding, KPMG as the auditor, and five local and international health NGOs as grant sub-recipients. Several of the sub-recipients are GOB-affiliated and, to ensure transparency, all recipients, including UNDP, will be subject to stringent financial and technical auditing. Any attempt by the GOB to manipulate this initial TB tranche would be risky business, given that over $90 million in remaining GF resources hang in the balance. End Summary. ¶2. (U) At an August 4 signing ceremony to initiate Burma's first tranche of an anticipated five-year, $98.4 in Global Fund resources to fight TB, HIV/AIDS and malaria, Minister of Health Dr. Kyaw Myint stated that a $6.9 million grant agreement to fight tuberculosis was "groundbreaking" as it marked the first time Burma has received Global Fund assistance. He noted that the TB funding would allow for improved treatment and detection of the disease, hopefully increasing recovery rates between 70 and 85 percent. UNDP resident representative (and UN resident coordinator) Charles Petrie also spoke and emphasized the "watershed" nature of the TB component given that Burma was the first Global Fund recipient country to put into place all GF requirements and that future components (HIV/AIDS and malaria) will be modeled on this first program. In his remarks, Petrie also cautioned that there are several steps that still need to be taken with the TB component, such as finalizing a procurement plan and completing capacity assessment of the sub-recipients. ¶3. (U) The TB component consists of a $4.2 million grant over one-year and a total of $6.9 million over the next two years. The UNDP will be the Principal Recipient (PR) and administrator of all Global Fund resources and a Local Fund Agent (LFA),KPMG, will audit both financial and technical aspects of the grant. The TB sub-recipients include Population Services International (PSI;$570,748),the Myanmar Red Cross Society ($20,000),the Myanmar Medical Association ($27,000),the Myanmar Maternal and Child Welfare Association ($230,000),and the National TB Control Programme ($6,149,379). ¶4. (C) P/E officers met separately with UNDP rep Petrie subsequent to the signing ceremony to discuss details of the grant. Petrie related that the Health Minister had "gone out on a limb" for the program, having relinquished considerable financial and programmatic control to the UNDP, and had been extremely nervous that the grant would fall through at the last minute. Petrie was pleased that he had been able to get what he described as "almost" concessions from the Health Minister in order to satisfy all the GF requirements, but he noted that there were further issues to resolve regarding tax exemption status and exchange rate issues. The Auditor: Big Brother is Watching ¶5. (SBU) Petrie emphasized the role of the outside auditor in the grant, stating that KMPG would be privy to everything UNDP does, to the point of being intrusive. KMPG will review and evaluate every UNDP report before it goes to Geneva, and will be responsible for both financial and technical reviews--audits that Petrie said were far more substantial than in other GF recipient countries. Petrie stated that in Burma complete transparency was the goal. There will be such a degree of operational scrutiny that, for example, the independent auditor will monitor the chain of drug distribution all the way from distributor to patient. Sub-Recipients: Under a Watchful Eye ¶6. (SBU) According to Petrie, the sub-recipient organizations were selected after a thorough technical review and would all be subject to the same accounting procedures. Other than small payments for travel and per diem to community volunteers, no funds will flow directly to government organizations. UNDP will pay all fees for services directly, and provide procurement of all goods, equipment, and commodities on behalf of the sub-recipients. Monitoring and evaluation of program performance will be conducted by "technical sub-groups" including UN agency partners (WHO and UNAIDS),NGOs, and national representatives. For the TB component, the World Health Program (WHO) will lead the technical sub-groups in implementing monitoring and evaluation processes as well as technical support. ¶7. (C) Comment: Burma's first Global Fund tranche arrives after several years of difficult negotiations and a series of rejected GOB applications. GF managers sought to keep funds out of Government of Burma control and the resulting compromise grants UNDP sole responsibility for program results and financial accountability. The reality, however, is hard to ignore. The GOB "owns" Burma's efforts to tackle tuberculosis, a fact that GF managers clearly realized when accepting an arrangement to collaborate with the GOB's National TB Control Program and several local NGOs that have close ties with the regime. Any attempt by the GOB to manipulate the initial TB tranche, however, would be risky business given that over $90 million in remaining GF resources hang in the balance. End Comment. McMullen