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