Ambassador Eric Goosby, a medical doctor, took over as the US global AIDS coordinator in June 2009. He talked with GlobalPost’s John Donnelly about why the US global AIDS program accumulated more than $1.4 billion in a financial pipeline of money that hasn’t been spent by developing countries.
Q: Please explain how you can have such aspiration statements, such as Secretary of State Hillary Clinton calling for an “AIDS-free generation,” and yet the administration is asking for $550 million less in fiscal year 2013 than the previous year?
A: If you had a clinic, you need to rent the building, put in the electrical wires, put in the gas. You’d have to have human resources, put a lab in place, build a procurement distribution system that can get reagents for the lab and drugs for treatment, you’d have to have medical information system, some referral component for patients who need in patient care, you’d have to have a testing component that feeds HIV positive people into the clinic. All of that is to take care of one person. That same system can also take care of 5000 people without having to expand any one of those components. You have the plateau of expansion. We have taken full advantage of that; that is the biggest savings we are realizing.
Then we just did common sense things around looking at what is duplicative, what can be collapsed … We saved big bucks with those types of relatively simple decisions.
Switching to generic drugs saved gobs of money. Going from air travel to just ground travel saved hundreds of millions of dollars. All those common-sense type of routine business … has resulted in huge savings that we will still realize for probably another year. I think the next big savings will be as we plan and implement with the Global Fund. Right now, they are in a separate planning and implementation effort in many of the countries that we are in. You would think we were completely aligned but we’re not. Indeed, it was competitive in the beginning when Global Fund first started. PEPFAR was competitive, a kind of, ‘We’re going to do better and show you how.’ And I think that the willingness to do that on part of the Global Fund and on the part of PEPFAR is now in place and we will now realize those savings as we move into the next phase.
Q: But how much of the $550 million reduction was due to that countries weren’t spending the money, and you have a backed-up pipeline of nearly $1.5 billion in unspent money?
A: To be frank, all of that raised the question of how much money is in each country, and where’s the money? Our ability to understand that is quite complicated because (the money goes from) OGAC (Office of the Global AIDS Coordinator) to an implementing agency, USAID and CDC are the big ones. They either subcontract with a NGO, local or multinational, or contract out with the government. Our ability to look at and understand how that money moved from appropriations to OGAC to implementing agency to subcontractors was not something that was visible to OGAC, and we had to force the agencies to tell us what they are doing as the money moved down to programs. That was a change in the way business was done and required a robust dialogue with the agencies around wanting to see their indirect (spending), wanting to understanding how it moves down to program, and because some of this work required building of clinics, hospitals, building of new systems, adding time to when the money was obligated and actually spent.
There were pipeline issues, small ones in every country, but in a few countries that was large. That was something revealed to us in the last two years. It was because of that due diligence that we became aware of it. The need in programs that delivery life-sustaining or life-saving services is that you want to have a redundancy in the flow of money so if the money isn’t there — or if the appropriation is delayed, as you’ve seen over and over by months — the service doesn’t stop. We had built in as a policy a 12- to-18 month period, which means you can keep a 12- to 18-month pipeline. I feel comfortable with that, it’s responsible. Any more than that, it’s not; any less than that, I’m worried that you are vulnerable.
…Working through all of that in hundreds of sites in each of these countries was a painful process. We are still finishing that up, and we realized there is approximately $1.4 billion that was potentially reprogrammable. We’re still not exactly sure how much of that that ultimately won’t be needed as originally planned and could be put to some other effort. We feel we are close, and that is the ballpark that we will be able to reprogram the funds. The other moneys are going to be spent, will be spent, in a timely fashion, and we’re comfortable to the explanation of why they haven’t been spent. Now we’re in a position, quite frankly, for over a year and almost a year and a half we’ve taken corrective action to make sure the pipeline is considered before you ask OGAC for next year’s money.
Q: That wasn’t considered before?
A: It was not. That’s why it accumulated. We have had a no-year funding up until this last year (which means there is no time limit to spend the money). Now we have four or five years to spend it.
Q: Of this more than $1.4 billion, will you be taking money from countries and moving it elsewhere?
A: Yeah, what we’re doing is defining what money is available, and what’s left are our resources that we will put back into AIDS-free generation type activities. Things that will not require continued year funding, could be a one-time funding effort. Within a couple of years, we will be in the 12-18 month (pipeline) everywhere, and this will not be a continuing source, it’s a one-time source. It allowed us to pivot with considerations around the Global Fund and bilateral PEPFAR to look at how those resources were available to move to the Global Fund this year. That’s won’t be a continuous opportunity as we eliminate the pipeline as a resource.
Q: When you looked at the budget for fiscal year 2013, the one with a $550 million cut, was a major consideration not asking for more money because you had so much that wasn’t being spent?
A: Yes, that’s right. We take (a look at) each country. We know what we are already committed to – numbers of people taking antiretroviral drugs, numbers of orphans and vulnerable children, people we’re care for, and the care and treatment enabling services, and the prevention services – and in the partnership framework discussion, understand what the country’s care and services continuum is that the country wants to support. That becomes the blueprint we are trying to complete.
Q: Why has the backup of money stayed so large in a few countries such as Ethiopia, Kenya, and Mozambique? What have been the issues?
A: So the two ministries (in Kenya) definitely slowed things down. The fact we were giving money to countries that had a lower prevalence than the money warranted really didn’t slow anything down, but actually was a problem. We have aggressively tried to re-equilibrate more appropriate allocations to prevalence rates. You got opportunity that factors in to where you put your money. You may be ready to (spend money) in Tanzania, and not ready to do it in Uganda, so I’m not going to have it hover there, I’m going to move it to where it can be deployed. We are much more nimble at that now. We can move money around. Our hope with the resources that we have is we feel the countries through the country operating budgets are mostly covered with Global Fund and country resources coming in more explicitly and more aggressively, and they will expand without PEPFAR expansion.