Transition between Allocation Utilization Periods

The grant allocation can be used for activities that were budgeted, approved and completed during the grant implementation period associated with the country’s allocation – regardless of whether the payment for such activities has occurred. The following principles apply:

a. Financial commitments are current contractual obligations to pay a specified amount of cash against goods and services already received, but for which the related payment has not yet been made (all or partial). Financial commitments existing at the end of a grant implementation period can be paid from that period’s allocation (via available cash balance or a disbursement from the Global Fund) and must be liquidated no later than six months after the end of the grant Implementation Period (unless otherwise approved in writing by the Global Fund).

b. Financial obligations are current contractual obligations to pay an agreed amount of cash (i.e., as per signed contract and/or purchase order) to a third party for the provision of goods/services at a certain point of time in the future, i.e., the goods or services are yet to be received. Financial obligations existing at the end of an implementation period cannot be paid from that period’s allocation and must be transferred and included in the budget of a new grant or an extension, to be covered by funds from the next allocation.

Therefore, all financial commitments existing at the end of the current Allocation Utilization Period will be paid from the current allocation, while financial obligations existing at the end of the current Allocation Utilization Period will be funded from the next implementation period allocation. These amounts will need to be considered in the negotiation of the next grant and included in the budgeting and programmatic planning for the next allocation utilization period.

In certain cases, payments relating to goods and/or services delivered after the end of an Allocation Utilization Period may be considered financial commitments to be funded from that Allocation Utilization Period, where the following three criteria are met:

• the implementing entity has placed the order(s) for the goods or services at issue with adequate consideration for relevant lead times [1] such that the goods or services were expected to be delivered before the end of the allocation utilization period; and
• the delivery of the goods or services is delayed for reasons beyond the implementing entity’s control; and
• the delivery of the goods or services is completed within a maximum of 90 days of the Allocation Utilization Period end date.

Six months after the start of the new Implementation Period [2], Principal Recipients will be required to report [3] the final available cash balance from the previous allocation period (after all financial commitments are fully paid). Any unliquidated commitment remaining at the end of the six-month period will be considered closed by the Global Fund unless otherwise approved in writing by the Global Fund.

Upon the signing or modification of grant confirmation, final in-country cash balance amounts may be deducted from the grant funds amount of the new grant as stipulated in the grant confirmation. Consequently, in-country cash balances from the previous Implementation Period may be deducted from the future funding (disbursement) decisions of the Global Fund.

For grants in closure or already closed prior to the allocation period, the Principal Recipient is required to reimburse the cash balance directly to the Global Fund, unless otherwise approved in writing by the Global Fund.

Detailed guidance on transition from the old to the new allocation funding and relevant budgeting and reporting requirements is available in Global Fund Guidelines for Grant Budgeting, Global Fund Operational Guidance for Grant Budgeting and in Global Fund Operational Policy Manual (Section 3: Implementation Period Reconciliation and Grant Closure).

[1] See the Global Fund Category and Product-level Procurement and Delivery Planning Guide for indicative lead times for key HIV and Malaria health products procured via the Global Fund’s Pooled Procurement Mechanism. See the Stop TB Partnership’s Category and Product-level Procurement and Delivery Planning Guide for indicative lead times for key TB health products procured via the Global Drug Facility.

[2] Or extension, if applicable.

[3] The report is due 7.5 months after the end of the previous Implementation Period