Grant Closure

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Grant Closure
LFA training sessions
Prepared by E. Michaud, Legal Services Unit,
October 2008
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Types of Closure

• Refer to Sections A.4.6 and C.4.3 in the LFA
  Manual
• Anticipated
• Expiration / end of term of a program
• Unanticipated
• Termination
• No Go decision at Phase 2
• Both must be done in a timely manner
• Culminates with the termination of the Grant
  Agreement

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Close-Out

• It is all about the Close-Out Plan and Budget
• It is our exit strategy
• Same format as the workplans and budgets
• They are
• prepared by the PR
• endorsed by the CCM
• submitted to the Global Fund
• reviewed by the LFA
• They can take the form of Transfer Plans

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Principles
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1.Same rigor and oversight as implementation
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Principles
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2.Straddles the program ending date
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Principles
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3.The length depends on the activities necessary
and on whether the closure was anticipated or
unanticipated
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Principles
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4.Grant funds may be used to finance grant
closure activities
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Principles
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5.Grant closure activities are not driven by the
amount of grant funding remaining
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Principles
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6.Recover funds and ensure an orderly and
ethically responsible winding down
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Principles
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7. Minimize the costs
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Principles
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• Evaluate each case on its own merits

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Principles
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9. The Secretariat will determine final closure
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Principles
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10.The Secretariat will provide clear and
up-to-date communication to the Board, the
Principal Recipient, CCM, LFAs and the public
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LFA Deliverables

• The LFA reviews and verifies
• the cash balance of the grant,
• the list of inventory and assets.
• the Close-Out Plan
• the Close-Out Budget for completeness and
  reasonableness
• the financial and programmatic reports compiled
  by the Principal Recipient
• The LFA verifies the proper implementation of the
  Close-Out plan

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Closure process 3 letters

• Guidance for Grant Closure
• Information on the process
• IL to Approve Grant Closure Plan
• Formal incorporation of the Closure Plan into the
  Grant Agreement
• Grant closure letter
• Confirmation, adjustment of grant amount

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Case Study (part 1)
Consider the following questionAs an LFA, what
actions by the PR would you consider reasonable
at this time? A. Request confirmation from GF
that it will allow grant funds to be used to pay
for the second shipment if there is a No-go B.
Scale-up the Program to raise the consumption
rate of ACTs C. Review procurement process to
contest the manufacturers position

• A PR puts out an order for ACTs, to be delivered
  in two batches.
• Equal batches were scheduled 8 months apart.
• Shipment of the first batch was received late
  because of delays in procurement process, but has
  been paid by the PR.
• PR got a No-go intention letter for Phase 2
  before the shipment of the second batch.
• Second batch would cover 12 months of Program
  needs at current use rate.
• First batch will still last for more than 6
  months after delivery of the second batch
  according to approved budgets and work plans.
• The manufacturer refuses to delay the shipment.

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Case Study (part 2)
Discuss the following question The Program
receives a No-go in the following weeks. What
expenses can the Global Fund pay for?

• A PR puts out an order for ACTs, to be delivered
  in two batches.
• Equal batches were scheduled 8 months apart.
• Shipment of the first batch was received late
  because of delays in procurement process, but has
  been paid by the PR.
• PR got a No-go intention letter for Phase 2
  before the shipment of the second batch.
• Second batch would cover 12 months of Program
  needs at current use rate.
• First batch will still last for more than 6
  months after delivery of the second batch
  according to approved budgets and work plans.
• The manufacturer refuses to delay the shipment.

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Wrap-up
Each program must have a close-out plan in
advance of its end date Unanticipated
terminations are to be dealt within a timely
manner, with regards to an ethical and orderly
close-out. Closure is not meant as a bridge
mechanism between programs. The policies are the
main guide in evaluating the reasonableness of a
close-out plan. The LFAs role is crucial in
assessing the workplans and budgets in order to
acheive proper closure in a timely, orderly and
ethical manner.
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Thank you!
Please contact your FPMs or myself if you have
any questions about grant closure. Etienne
Michaud etienne.michaud_at_theglobalfund.org