Funding ceiling and treatment of in-country cash balances

Please note that the guidance below is currently being revised to reflect changes in light of new Global Fund guidelines. 

Following the approval of a funding request that integrates the existing grant pipeline from rounds-based grants, the formal closure of the rounds-based grant(s) is not required under the normal grant closure provisions, although audit reports and other reporting obligations due under those grants must still be complied with for the period starting from the end of the previous reporting period and ending with the start date of the new Funding Model grant. The indicative upper ceiling available for each disease component at grant-making can be calculated as described in Global Fund Guidelines for Grant Budgeting and Annual Financial Reporting - Table 1.b Funds recommended by GAC2 for grant making (Illustrative amounts).

The maximum amount for grant-making as calculated above may be increased by available in-country cash balances from existing grants with the pre-approval of the Global Fund. In the event that such in-country cash balances (at the principal recipients or sub-recipients level) increases the allocation of the country, the prior approval of the Grant Approvals Committee/Board is required, taking into account the impact of such funds on resources available for Unfunded Quality Demand and above-allocation funding requests for the portfolio. The indicative upper ceiling available for each grant at Board Approval can be calculated as described in Global Fund Guidelines for Grant Budgeting and Annual Financial Reporting - Table 1.c Funds recommended by Grants Approval Committee (GAC) for Board approval (disbursement-ready grant) (illustrative amounts).

The PR should communicate in advance the projected cash balance(s) of the existing grants at the new funding model grant start date and whether it (a) is required for the clearance of past liabilities arising from expenditures for approved activities, or (b) available for interventions under the new funding model grant. Any available cash balance at the new funding model start date will be available to fund the new approved budget, assuming that these are derived from the existing grants pipeline of the total allocation. Such in-country cash balances may increase the initial allocation communicated to the country by the Global Fund and will have to be approved by the GAC/Board.

If it can be established that the cash balance was intended to pay off existing liabilities from the existing grant(s), such funds may be accounted for, and reported on, in the existing grant. All liabilities must be fully paid by the implementers prior to the new funding model start date. If this may not be the case, it is strongly recommended to anticipate any ongoing or long-term liabilities and incorporate them in the consolidated grant-making budget as part of the new funding model grant.

Disbursements forecast up to new funding model start date:

• Forecast disbursements from the Global Fund to UNDP between now and the new funding model start date.
• These should be realistic and whatever is disbursed should be fully spent by new funding model start date.
• To be conservative /underestimate spending up to NFM start date, which would result in a high estimated available funds for NFM (upper budget limit). It may not be possible to increase the budget (upper budget limit) at grant-making stage with the 3 unaccounted for cash i.e. due to savings /variance between forecast and actual expenditure. These funds could be lost as any increase in the budget will require going back to the Board for approval.

In-country uncommitted cash balances as of NFM start date:

• At this stage when establishing the budget upper limit, the disbursement forecast for the remaining period of the existing grants should be done with the assumption of a “zero cash balance”, unless there is an expected uncommitted cash balance from funds already disbursed.