Early Lessons Learned about Transitioning to MOH - I-TECH
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Transcript Early Lessons Learned about Transitioning to MOH - I-TECH
HARVARD TRANSITION PANEL:
Early Lessons Learned & Promising
Practices-Transitioning to NGOs
Wednesday, August 11, 2010
3:00-4:00PM
8th Annual Track 1.0 ART Program Meeting
Agenda
Introduction: Two NGO Models: Lessons and Challenges
o John Lichten, PI/Executive Director, Harvard PEPFAR Program
Transition in Nigeria: Independent NGO Model
o Prosper Okonkwo, CEO, APIN, Ltd.
Transition in Botswana: Linked to Track 1.0 Partner Model
o Ria Madison, COO, BHP, Ltd.
Elements of Successful NGO & Challenges of the NGO Model
o John Lichten, PI/Executive Director, Harvard PEPFAR Program
Challenges of Transition
o Mark Barnes, Chair, Harvard PEPFAR Oversight Committee
Introduction: Two NGO Models-Lessons
and Challenges
Harvard has two models: Fully Independent NGO, and NGO
with Harvard Presence
Fully Independent:
Governance includes no Harvard representatives
PEPFAR is primary program and primary source of revenue (i.e.
Nigeria)
Harvard Presence:
Governance includes Harvard representatives
PEPFAR is only one of several active programs/projects
Harvard has longstanding activities in-country prior to PEPFAR (i.e.
Botswana and Tanzania)
Transition in Nigeria: Independent
NGO Model: APIN
APIN slides
Botswana Harvard AIDS Institute
BHP
Ria Madison, Chief Operating Officer
August 11, 2010
8th Annual Track 1.0 ART Partners Meeting
Agenda
Development of BHP
Introduction
Governance
Phases of Transition
Management Systems
Current Status
Future Steps
Introduction and History
BHP – Botswana Harvard Partnership formed in 1996
between Harvard School of Public Health and the
government of Botswana to conduct scientific research and
provide technical assistance in the area of HIV/AIDS
Africa’s first national program to provide free ARV therapy to
HIV/AIDS patients started in 2002
BHP, LLC established in 2008
BHP, LLC officially started operations September, 2009
Annual Operating Budget:
o 20% from PEPFAR
o 80% from sponsored research
Governance
Board of Members and Board of Directors
Majority from Harvard
Representation from MoH
PEPFAR Management Sub-Committee
HRSA/CDC Review of Governance
Next steps – develop agreement on model
Transition Workplan
Work plan development by:
- Activity
- Status
- Responsible Person
- Deadline for completion
• Categories of Activities
-
Finance
- Human Resources
- Administration - Reporting
- IT
- Grant Administration
- Governance
BHP Management Systems
Review of Accounting/Financial Softward systems
Review Laboratory and asset inventory/management systems
Review of automated payroll system
Review of internal controls
Review workflow and reporting structures –develop new
organizational design
Review time & effort and expense allocation methodology
BHP Status
HRSA ClASS Assessment February, 2010
Revised and updated workplan with corrective action for:
Financial Systems
Grant administration and management
Governance
Finalize sub-contracting and migration of financial operations
to BHP from Harvard
BHP Future Actions
Follow-up HRSA Assessment findings
Recruit key staff positions
Complete remaining transition workplan tasks
Finalize BHP Long range plan
HRSA Readiness Re-Assessment, Spring, 2011
Summary Elements of Building a
Successful NGO and Challenges of the
NGO Model
Five Comparative Advantages for NGO success (Macro-Level)
Capacity to reach those most in need – focused service provision
Promote local participation and implement projects in direct collaboration
with target beneficiary groups
Operate at low costs
Able to be innovative, experimental, adaptive and flexible
Promote strengthening local institutions, organizations and empower
marginal groups
(Henrik Secher Marussen, “NGOs, the State and Civil Society,” Review of African
Political Economy, 1996: 408).
Elements & Challenges for
Successful NGO
Common Elements for Success (Micro-Level)
Dynamic, strong, experienced, committed:
o CEO, COO, CFO, CIO
o Senior Staff
o Engaged Board of Directors
Mission and scope must be clear
Short and long range plans must be developed
Elements & Challenges for
Successful NGO
Organizational Structure via Strategic Management Theory
Organic structure/Loose Strategic Planning (great flexibility that permits
innovation and creativity, adapting to change, greater stakeholder
involvement, redefine actions to best align with goals/mission)
Mechanistic structure /Tight Strategic Planning(defined rules, procedures,
objectives and goals – management by objectives/outcomes)
Organic vs. Mechanistic: “indigenous” NGOs will likely depend on
mechanistic but need organic structures to achieve sustainable development;
need to distinguish mechanistic at the costs organic
(Irene M. Herremans et al., “Ch. 16: International New Ventures, Organization
Structure, and IC Management”, 2010)
Elements & Challenges for
Successful NGO
Challenges:
Start-up expenses (e.g., local attorneys, local accountants, filing fees, bank
accounts, office rentals, office equipment, telecom, etc…)
Human Resources (e.g., recruitment and retention, “poaching,” maintaining
morale in uncertain times)
Developing Organization Structures (e.g., policies and procedures,
communications, MOUs, compliance environment, IT environment, grant
administration capacity, insurance)
Solve Basic Operational Challenges (e.g., needs for operating/working
capital, need for unrestricted funds, economies of scale and future funding,
diversify business)
Elements & Challenges for
Successful NGO
Recommendation: Track 1.0 Transition offers a great
opportunity to assess optimum model/approach: NGO,
FBO, Governmental Authority, and Direct Funding of Service
Provider
Future Research Question: Is one model better than another in
terms of providing highest quality care and continuity of services to
those in need, and in terms of costs and sustainability?
Challenges of Transition
CDC Country Plans and Transition RFAs
Primary objective must be to assure continuity and quality of
clinical services
“Ownership” of sites by partners, governments and local NGOs
must take a back seat to assuring services to clients
Uncertainty in countries about CDC transitional plans
“Regionalization” during and after transition
Possible CDC direct funding of local clinics, bypassing governments and
local NGOs
Are Track 1.0 partners to compete with local NGOs in the RFA process?
Track 1.0 partners and local NGOs need clarity, consistency, and
predictability in transition planning in each country
HRSA and CDC in-country offices need to work together in the
development of RFAs, for consistency of approach and message
Challenges of Transition
“Gap” Period
HRSA vs. CDC fiscal year for grant funding
“Gap” unfunded period from March 1-July 31
Carryforward funding can no longer sustain this
funding shortfall
Consequences of a truly unfunded “gap” (e.g., MDH in
Tanzania, APIN in Nigeria)
Challenges of Transition
Indirect Cost Disallowance for Non-U.S. Partners
Local partners have no ability to recover expenses through
indirect cost recovery
Leads to great implications for impaired capital flow capacity
(no cash “cushion”)
“Eliminating all Harvard ‘indirect costs’ in the process of
transition will save money, with no loss to local clinical
programs” –WRONG!
The costs still exist for the local NGOs, and failure to fund them will
prevent effective NGO functioning
Either an indirect cost recovery mechanism for NGOs must be
developed, or all “indirect” costs must be included as
direct costs in NGO budgets
Challenges of Transition
Operating Capital for the Local Partners
Cash flow challenges –operational demands vs. USG
funding “lags”
Downside of local partner’s establishing line of credit
with a local bank is extremely high cost (exorbitant
interest rates)
Few alternatives – in many cases, lines of credit may
not be available at all
Consequences of failing to provide operating capital
are potentially disastrous for the NGO
Challenges of Transition
Management and Disposition of Equipment and Drugs
Drugs and supplies need to be co-mingled between Track 1.0
partner and local partner during transition period
Undesirable alternative is to keep two sets of books, and two
separate supply inventories, which is increasingly complicated as
site transitions accelerate
Goal is to keep costs low and supply chain logistics manageable
Forbearance needed by CDC and HRSA toward A110
requirements to achieve “sharing” mechanism.
CDC and HRSA should formally sanction this approach.
HRSA and CDC need to specify process and timetable for
approving these transfers of ownership of supplies
Challenges of Transition
“Indigenous control” of local entities
There is a need for greater flexibility to the requirement for local majority
control of local partners
Local NGOs are answerable to many funders and regulatory requirements,
not just PEPFAR:
EU, Gulf States foreign aid assistance, corporate funders, national
requirements
Example of Botswana and BHP: PEPFAR represents only ~20% of BHP’s
activities and funding
Harvard currently plans the BHP transition to local control to have a longer
timeline than the transition of PEPFAR to BHP
If forced to adhere to strict local control requirements, the alternative is to
establish a second NGO solely to satisfy PEPFAR requirements, at high
financial cost and diluted staff attention
Challenges of Transition
Grants Administration Issues in Transition Planning and
Execution
Occasional lack of understanding by some USG staff of our
serious concerns about grants management issues
Harvard staff sometimes perceived to be “making up” problems
or inventing obstacles
Harvard’s goal is to discharge fiduciary obligations under
cooperative agreement
We are answerable to OIG and GAO, not just HRSA and CDC
When grants administration issues are raised, it is
because we see them as real problems
Challenges of Transition
Close-out Funding
Partners will need some decent interval (perhaps 9-12
months of funding) to support required close-out
activities
This assumes that “no cost” extensions will not be
permitted
Challenges of Transition
Reporting
Need to clarify which organization (Track 1.0 partner
or transition entity) reports data elements during
transition
HRSA, CDC, and government entities need to clarify
how targets will be reported during “gap” period,
along with adjusted targets
Thank You!