OFFICE OF INSPECTOR GENERAL
U.S. Agency for International Development
Audit Report 4-936-22-001-P
December 13, 2021
PEPFAR in Africa: USAID
Expanded the Use of Local
Partners but Should Reassess
Local Partner Capacity to
Meet Funding Goals
Africa Regional Office
USAID Office of Inspector General
Pretoria, South Africa
oig.usaid.gov
TO: USAID Bureau for Global Health, Acting Assistant Administrator, Jennifer Adams
FROM: USAID OIG Africa Regional Office, Audit Director, Robert Mason /s/
SUBJECT: PEPFAR in Africa: USAID Expanded the Use of Local Partners but Should
Reassess Local Partner Capacity to Meet Funding Goals
This memorandum transmits the final report on our audit of local partner participation in
USAID’s U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) programs in Africa. Our
audit objectives, focusing on missions in Africa, were to assess to what extent (1) USAID’s
PEPFAR budgets were on track to meet goals for local partner funding and (2) selected USAID
missions in Africa followed Agency guidance in preparing local partner funding strategies and
met mission-level goals while addressing risks. In finalizing the report, we considered your
comments on the draft and included them in their entirety, excluding attachments, in Appendix
B.
The report contains our audit findings and two recommendations to reassess local partner
capacity to meet funding goals. After reviewing information you provided in response to the
draft report, we acknowledge management decisions on both recommendations and consider
them resolved but open pending completion of planned actions.
For both recommendations, please provide evidence of final action to the Audit Performance
and Compliance Division.
We appreciate the assistance you and your staff provided to us during this audit.
USAID Office of Inspector General
Contents
Introduction ....................................................................................................................................................... 1
Summary ............................................................................................................................................................. 2
Background ........................................................................................................................................................ 3
USAID’s PEPFAR Budgets Were Not on Track to Meet Local Partner Funding Goals Largely
Due to Aggressive Time Frames Driven by OGAC and Low Baselines Some Missions Started
From .................................................................................................................................................................... 5
Missions Generally Followed Guidance to Prepare Funding Strategies, but Most Critical
Missions Faced Challenges Balancing the Risks of Using Local Partners With Meeting PEPFAR
Targets and Could Be Hindered by COVID-19 Limitations ................................................................... 7
Most USAID Mission Strategies in Africa Aligned with Agency Guidance to Increase Local
Partner Funding and Address Risks .......................................................................................................... 8
Most Critical Missions Prioritized Meeting PEPFAR Targets Given the Limited Pool of Local
Partners, While Some Cited the Need to Provide Capacity Building and Minimize Fraud Risks
.......................................................................................................................................................................... 8
COVID-19 Has Changed USAID’s Operating Environment in Terms of Working With Local
Partners ....................................................................................................................................................... 10
Conclusion ...................................................................................................................................................... 10
Recommendations ......................................................................................................................................... 10
OIG Response to Agency Comments ...................................................................................................... 11
Appendix A. Scope and Methodology ....................................................................................................... 12
Appendix B. Agency Comments ................................................................................................................ 16
Appendix C. Major Contributors to This Report .................................................................................. 24
USAID Office of Inspector General 1
Introduction
Since its establishment in 2003, PEPFAR has been a cornerstone of U.S. global health policy.
Established to save lives and alleviate the suffering caused by AIDS and the human
immunodeficiency virus (HIV), PEPFAR has strong congressional support, enhances the global
image of the United States and, even in the wake of COVID-19, represents a significant portion
of USAID’s health spending. The U.S. government has spent nearly $100 billion on PEPFAR
from 2003 to 2021, mostly channeled through large, international nongovernmental
organizations.
In April 2018, the Office of the U.S. Global AIDS Coordinator and Health Diplomacy (OGAC)
1
tasked U.S. agencies involved in PEPFAR with channeling 70 percent of their PEPFAR funding to
local partners (host country governments or local organizations) by September 2020.
According to OGAC, the purpose of the transition to local partners was to increase direct HIV
services and establish sufficient capacity, capability, and durability of local partners.
When the 70 percent goal was announced, only around 34 percent of USAID’s PEPFAR funding
was channeled through local partners. In response, USAID developed its HIV/AIDS Local
Partner Transition Corporate Strategy (Local Partner Strategy) in June 2018 with a focus on the
23 countries
2
considered key to PEPFAR’s drive for epidemic control—which is the point at
which new HIV infections fall below the total number of deaths from all causes among HIV-
infected individuals. Within this group, USAID identified eight countries which comprise almost
three-fourths of USAID’s PEPFAR budget and, therefore, were critical to achieving the local
partner goal: Kenya, Mozambique, Nigeria, South Africa, Tanzania, Uganda, Zambia, and
Zimbabwe.
The transition to local partners raised concerns among USAID officials and development
experts regarding the organizational capacity of local partners to meet PEPFAR targets in key
areas, such as HIV prevention and treatment, while responsibly handling U.S. government funds.
These risks were amplified by the short time frame for achieving the 70 percent goal.
We conducted this audit, focusing on countries in Africa, to assess to what extent (1) USAID’s
PEPFAR budgets were on track to meet goals for local partner funding and (2) selected USAID
missions in Africa followed Agency guidance in preparing local partner funding strategies and
met mission-level goals while addressing risks.
To conduct our work, we reviewed the Agency’s Local Partner Strategy; the mission-level
strategies completed by 19 of the 20 judgmentally selected countries from the universe of 23;
OGAC planning guidance for 2019 and 2020; and PEPFAR Annual Reports to Congress for
1
PEPFAR is led by the Office of the U.S. Global AIDS Coordinator and Health Diplomacy (S/GAC or OGAC). The
U.S. Global AIDS Coordinator oversees implementation of the U.S. government’s international HIV/AIDS efforts
and ensures program and policy coordination among relevant agencies and departments. The coordinator is
appointed by the President, confirmed by the Senate, and reports directly to the Secretary of State.
2
Twenty of the 23 countries are in Africa: Botswana, Burundi, Cameroon, Côte d’Ivoire, Democratic Republic of
the Congo, eSwatini, Ethiopia, Kenya, Lesotho, Malawi, Mozambique, Namibia, Nigeria, Rwanda, South Africa,
South Sudan, Tanzania, Uganda, Zambia, and Zimbabwe. The 3 non-African countries (Haiti, Ukraine, and Vietnam)
total roughly 3 percent of PEPFAR funding to the 23 countries and are not part of the audit scope.
USAID Office of Inspector General 2
2017, 2018, and 2019. We also met with officials from the eight critical USAID PEPFAR
missions, OGAC, and USAID’s Office of HIV/AIDS (OHA). We conducted our work in
accordance with generally accepted government auditing standards. Appendix A provides more
detail on our scope and methodology.
Summary
USAID’s PEPFAR budgets were not on track to meet local partner funding goals
largely due to aggressive time frames driven by OGAC and the low baselines that
some missions started from. According to July 2020 projections of budget data for the 23
countries in USAID’s Local Partner Strategy, USAID’s PEPFAR budgets were not on track to
meet local partner funding goals for the Country Operational Plan (COP) of 2020.
3
These
projections indicated that USAID’s allocation of PEPFAR funding to local partners would
increase to 51 percent—short of the Agency goal of 70 percent. At the critical mission level,
these projections ranged from an increase of 21 percent to 29 percent in Nigeria and 58
percent to 96 percent in Kenya. Despite most critical missions making progress in increasing
local partner funding since COP18, the relatively low baselines that some missions started from
made achieving the goals by COP20 difficult, with seven of eight critical missions falling short.
The shortfalls and low baselines suggest that the COP20 goals were not feasible within such a
short time frame.
Missions generally followed guidance to prepare funding strategies, but most
critical missions faced challenges balancing the risks of using local partners with
meeting PEPFAR targets and could be hindered by COVID-19 limitations. USAID
missions in Africa generally adhered to Agency instruction for preparing local partner funding
strategies, although most of the critical missions encountered challenges balancing the risks
associated with increased use of local partners with meeting PEPFAR programmatic targets.
Five of eight critical missions explained they prioritized meeting PEPFAR programmatic targets
due to challenges in identifying and developing capable local partners. This meant delaying new
awards to local partners and extending existing international partner awards to mitigate risks to
PEPFAR targets. The insufficient pool of capable local partners hindered USAID’s attempts to
reach the 70 percent goal and contributed to missions prioritizing the achievement of PEPFAR
targets, with a few missions citing the risk of fraud as a concern. Moreover, the COVID-19
pandemic changed USAID’s operating environment regarding local partners, and USAID
personnel might have less time for capacity-building efforts as they devote more time to
COVID-19 response efforts.
Recommendations: We made two recommendations to enhance USAID’s efforts to
responsibly increase the use of local partners in PEPFAR while considering circumstances such
as the COVID-19 pandemic. USAID agreed with both of our recommendations.
3
OGAC provides guidance for annual COPs, which link government funding to specific results in the global fight
against HIV and AIDS. The COP serves as an annual strategic plan for U.S. government-funded global HIV/AIDS
activities, a source for informing Congress of those plans, and a tool for allocation and tracking of budget and
targets.
USAID Office of Inspector General 3
Background
PEPFAR Priorities and Targets
PEPFAR has matured since its inception from an emergency response to a sustained public
health intervention. Initially focused on saving lives, PEPFAR now aims to achieve epidemic
control.
PEPFAR’s drive for epidemic control includes focusing HIV prevention in those
program areas with the greatest potential impact—such as preventing new infections in women
and adolescent girls and offering voluntary circumcision to young men—and accelerating access
to antiretroviral treatment to reduce the morbidity and mortality of HIV and ultimately prevent
its transmission. PEPFAR is also working to increase the impact and cost-effectiveness of every
dollar invested and leveraging partnerships for sustainability.
PEPFAR uses progress against targets to assess advancement toward epidemic control while
holding USAID, its overseas missions, and its implementers accountable for their performance
and stewardship of taxpayer funds. PEPFAR sets targets for numerous performance indicators,
which measure outputs and outcomes resulting from PEPFAR activities. According to officials in
OHA,
4
examples of key performance indicators measuring HIV prevention and treatment
include:
• Number of individuals who received HIV testing services and received a positive test result.
• Number of adults and children newly enrolled on antiretroviral therapy.
• Number of key populations reached with individual and/or small-group-level HIV prevention
interventions designed for the target population that was offered HIV testing services.
A 2013 U.S. government-supported evaluation of PEPFAR found that the emphasis on showing
results led agencies to focus on interventions for which impact could be measured quickly.
5
OGAC provides guidance for annual COPs, which link government funding to specific results in
the global fight against HIV and AIDS. The COP serves as an annual strategic plan for U.S.
government-funded global HIV/AIDS activities, a source for informing Congress of those plans,
and a tool for allocation and tracking of budget and targets.
6
Further emphasizing the linkage
between targets, resources, and goals, OGAC proposed a funding cut in one major PEPFAR
country in 2019 specifically because "progress ha[d] been grossly suboptimal and insufficient to
reach epidemic control.”
7
The Local Partner Transition
In COP19 and COP20 guidance, OGAC further explains that the transition to local partners is
critical to sustaining epidemic control and is deemed a priority. A local partner is defined as an
4
OHA drives the Agency’s efforts under PEPFAR to control the HIV/AIDS epidemic by providing technical
leadership, monitoring impact, ensuring program integrity, and supporting the transition to local partners.
5
Institute of Medicine, “Evaluation of PEPFAR,” The National Academies Press, 2013.
6
The COP is typically developed from January-March for implementation the following fiscal year. COP18, for
example, was implemented in fiscal year 2019. COP20 would be implemented in fiscal year 2021.
7
Devex, “What’s behind PEPFAR’s funding cut threats?” accessed March 3, 2021.
USAID Office of Inspector General 4
individual, sole proprietorship, or entity owned by a citizen or permanent resident of the
country and/or incorporated in the country as the principal place of business; 75 percent locally
owned or at least 75 percent of senior staff are citizens or permanent residents of the country;
and if there is a board, 51 percent should be citizens or permanent residents of the country.
Partner government ministries (e.g., Ministry of Health), subunits of government ministries, and
state-owned organizations in the country are also considered local partners.
8
To reach the goal of channeling 70 percent of PEPFAR funding to local partners by COP20,
USAID estimated that an additional $459 million in local partner funding—nearly double the
COP18 local partner budget of $491 million—would be needed.
9
When the 70 percent goal
was announced, only 34 percent of USAID’s PEPFAR funding was channeled through local
partners. Figure 1 depicts the planned local partner funding from the COP18 baseline through
COP20 for the countries included in the Local Partner Strategy.
Figure 1. USAID Planned Allocation of PEPFAR Funding to Local
Partners in 23 PEPFAR Long-Term Strategy Countries, COP18-COP20
Source: USAID HIV/AIDS, Local Partner Transition Corporate Strategy, October 2018-September 2021.
The Local Partner Strategy also identified methods that missions could employ to increase local
partner funding. These included increasing funding for government-to-government awards,
finding new local partners, and transitioning existing local subpartners to become prime
8
Starting in COP20 guidance, regional entities qualify as local partners, although the guidance does not provide the
definition or boundaries of regions.
9
For the calculation of local partner percentage according to USAID, the numerator includes any direct (prime)
funding to local organizations and government partners for 23 key PEPFAR country program budgets. This means
funding to local subpartners is not included. The denominator includes the 23 key PEPFAR USAID country
program budgets, except for management and operations, centrally funded commodities, central initiatives, and
headquarters funding.
$491
$631
$950
$0
$250
$500
$750
$1,000
COP18 COP19 COP20
LP Funding (In Millions)
Delta =
$140
million
Delta =
$319
million
34%
44%
70%
USAID Office of Inspector General 5
partners.
10
The Local Partner Strategy also announced the Agency’s plans to initiate new
training efforts for local partners regarding PEPFAR requirements.
The strategy, however, did not specify mission-level goals. USAID said missions were to
develop their own goals and the plans for achieving them. While missions were not told that
each mission needed to increase local partner funding to 70 percent, missions with the largest
PEPFAR budgets were informed that they would need to contribute significantly for the Agency
to achieve the 70 percent goal. In December 2018, the Agency provided an orientation on risk
management to missions. This orientation also included missions in the discussions to identify
factors that could prevent USAID from reaching the 70 percent goal.
USAID’s PEPFAR Budgets Were Not on Track to Meet
Local Partner Funding Goals Largely Due to Aggressive
Time Frames Driven by OGAC and Low Baselines
Some Missions Started From
Although most critical missions are projected to increase funding to local partners, some of the
critical missions began at very low baselines for local partner funding in COP18, and the overall
increase did not reach the 70 percent Agency goal. In July 2020, OHA projected that USAID
would allocate only 51 percent of PEPFAR funding to local partners across the 23 countries in
the Local Partner Strategy. Those 23 missions initially developed mission-level local partner
funding goals for COP20, which resulted in an estimated overall Agency local partner funding
level over 70 percent. Based on the mission-level goals each mission set, the overall 70 percent
goal would be achieved if each mission achieved their goal. However, the overall COP20 70
percent goal was generally not feasible within such a short time frame given low baselines of
some of the critical missions.
Although USAID developed the Local Partner Strategy, mission plans, and the initial mission-
level goals to reach the 70 percent Agency goal established by OGAC, the assessments to
determine what was feasible within USAID were done after the overall goal was set by OGAC.
The spreadsheet consolidating the mission-level goals stated that the goals were based on “best-
case scenarios with optimistic timelines.” OHA officials said that at some point during the
process, USAID informed OGAC that the 70 percent Agency goal was not likely to be reached
within the time frame. OHA officials said the goal then became “aspirational,” and USAID
would continue to move toward the goal.
Our analysis showed that of the eight critical missions, only Kenya was on track to meet
mission-level goals established in September 2018. According to OHA officials, this is in part
because the mission was already increasing funding to local partners before OGAC set the 70
percent goal, as reflected in its high baseline of 58 percent. According to USAID officials, Kenya
also had a large preexisting commodities award with a state corporation. According to the
mission, this entity had recently received negative publicity concerning corruption allegations
10
Government-to-government agreements are when USAID programs are implemented by a government ministry
in the country in which the program is being implemented.
USAID Office of Inspector General 6
that highlighted significant risk for the mission. USAID/Kenya officials said the award ended in
December 2020, but this would not impact the local partners goal since there are new local
partners.
Further, our analysis showed that shortfalls at the remaining 7 missions were projected to
range from 3 percent in Mozambique to 36 percent in Nigeria. Mozambique was the only one
of the 8 critical missions that set a local partner goal below 60 percent. Table 1 displays the
goals and projections for all eight critical missions.
Table 1. Comparison of COP20 Mission Projections Versus COP20
Goals
Missions
COP20 Mission Goals
(Sept. 2018)
COP20 Projections
(July 2020)
COP20 Projections vs.
COP20 Mission Goals
Nigeria
65%
29%
-36%
Uganda
66%
34%
-32%
Tanzania
62%
36%
-26%
Zambia
70%
44%
-26%
Zimbabwe
67%
43%
-24%
South Africa
91%
76%
-15%
Mozambique
37%
34%
-3%
Kenya
93%
96%
+3%
Source: USAID Office of HIV/AIDS.
Despite the shortfalls, our analysis comparing COP20 projections to the COP18 baselines
showed that seven of the eight missions made progress increasing funding to local partners, as
shown in Table 2. These projected increases to local partners ranged from 6 percent in
Zimbabwe to 38 percent in Kenya. South Africa was the only mission that did not increase
PEPFAR funding to local partners, although it started from a higher baseline. Mission officials in
South Africa explained that certain planned awards for local partners were not entered into
because of capacity-building concerns. Moreover, budget cuts and shifts also played a role,
according to OHA and mission officials.
Table 2. COP20 Mission Projections Compared to COP18 Baselines
Missions
COP18 Local Partner
Funding Baselines
COP20 Projections
(July 2020)
COP20 Projections
vs. COP18 Baselines
South Africa
76%
76%
0%
Zimbabwe
37%
43%
6%
Nigeria
21%
29%
8%
Mozambique
5%
34%
29%
Zambia
15%
44%
29%
Uganda
3%
34%
31%
Tanzania
3%
36%
33%
Kenya
58%
96%
38%
Source: USAID Office of HIV/AIDS.
As Table 2 shows, most missions made significant progress in increasing local partner funding
over the COP18 baselines. Yet, some of these critical missions began at very low baselines—
Tanzania and Uganda at 3 percent, Zambia at 15 percent, and Nigeria at 21 percent—making
the initial mission goals of over 60 percent unlikely to be achieved within the relatively short
USAID Office of Inspector General 7
time stated by OGAC. Other missions in Africa aside from the critical eight fell significantly
short of their initial goals as well. The scale of these shortfalls indicates that the COP20 goals
were generally not feasible within such a short time frame.
Since the 70 percent overall goal for USAID is an aggregate of what the missions can achieve,
the 8 critical missions—comprising nearly three-fourths of USAID’s COP20 budget—would
have to reach close to 70 percent for the Agency to reach its goal. In September 2018, 7 of the
8 critical missions initially set goals exceeding 60 percent.
The importance of setting realistic performance targets has been well established. Automated
Directives System (ADS) 201 states that indicator targets should be “ambitious but achievable”
for a given level of resources. In a 1995 report on government reform, the U.S. Government
Accountability Office (GAO) stated that while “successful organizations typically create
ambitious performance goals,” such “goals should be realistically achievable to avoid negative
consequences,” and noted the importance of “establishing realistic, attainable goals at the
onset.”
11
Numerous business publications advise that targets should be achievable and
attainable.
12
Management uses targets to help define its objectives in specific and measurable terms. Risk
tolerance, in turn, is defined for those objectives. Targets that are unrealistic or unattainable,
therefore, might not provide a suitable yardstick when assessing progress toward those
objectives in the event the organization fails to meet those objectives, or for gauging acceptable
risk. The targets’ lack of utility can lead some staff to diminish them, as in the case of USAID
officials describing the 70 percent goal as “aspirational.” Conversely, the aggressive nature of
such goals could lead others to take unwarranted risks to achieve them.
In effect, USAID’s slower than desired progress toward the 70 percent goal means the intended
benefits of the transition to local partners—which includes reaching epidemic control and
sufficient capacity, capability, and durability of local partners to deliver critical HIV services to
the most vulnerable populations—were delayed.
Missions Generally Followed Guidance to Prepare
Funding Strategies, but Most Critical Missions Faced
Challenges Balancing the Risks of Using Local Partners
With Meeting PEPFAR Targets and Could Be Hindered
by COVID-19 Limitations
Our review of all 20 African countries in the Local Partner Strategy showed that 17 mission
strategies aligned with the OHA template and the Local Partner Strategy. In addition to
11
U.S. Government Accountability Office, “Government Reform: Goal Setting and Performance”
(GAO/AIMD/GGD-95-130-R), March 27, 1995.
12
For instance, George T. Doran in “There’s a S.M.A.R.T. Way to Write Management’s Goals and Objectives”
(1981) argued that for goals to be meaningful, they should also be specific, measurable, assignable, realistic, and
time-related (SMART). The Corporate Finance Institute includes similar elements for goal setting, with achievable
and realistic being key attributes of a well-formulated goal.
USAID Office of Inspector General 8
reviewing the strategies, we also sent the eight critical missions a questionnaire and followed up
with interviews about the local partner transition, including reasons for not meeting mission-
level local partner goals. Mission officials from five of the eight critical missions said they
prioritized meeting PEPFAR targets in major program areas because of challenges in identifying
and developing capable local partners. In addition, the Agency’s focus on responding to the
COVID-19 pandemic may draw resources away from addressing the risks to PEPFAR
programming.
Most USAID Mission Strategies in Africa Aligned with Agency
Guidance to Increase Local Partner Funding and Address
Risks
To help implement the Local Partner Strategy, OHA provided a template for missions to use in
tailoring strategies suited to their circumstances. The template asked missions to prepare a
narrative mission strategy to provide country context, set mission-level objectives, determine
possible approaches to increase funding to local partners, and identify pertinent risks and
associated mitigation measures. OHA also provided missions with a procurement plan template
to update during the local partner transition. All eight critical missions indicated that the
instructions provided by OHA were generally useful.
While 17 of the 20 African missions we reviewed had strategies that aligned with the OHA
template and the Local Partner Strategy, the remaining 3 missions did not fully follow the OHA
strategy template and the Local Partner Strategy. In particular, South Africa did not prepare a
strategy because the mission was already at a high local partner percentage; the Democratic
Republic of Congo did not complete sections on country context and risks and mitigations; and
Ethiopia did not include risk and mitigations for the different funding approaches, although it
specifically included local partner transition risks and mitigation measures in another
spreadsheet. On the other hand, 3 of the 17 missions with strategies that aligned with the OHA
template and the Local Partner Strategy—Uganda, Burundi, and Zimbabwe—prepared
strategies that included thorough discussions of the country context, risk mitigation, and
funding approaches. These discussions provided a well-documented explanation of the missions’
plans, situations, and realities at a particular moment in time.
Most Critical Missions Prioritized Meeting PEPFAR Targets
Given the Limited Pool of Local Partners, While Some Cited
the Need to Provide Capacity Building and Minimize Fraud
Risks
Despite the prominence of local partner goals in OGAC policy, responses from five of the eight
critical missions indicated that those missions prioritized meeting PEPFAR targets in major
program areas such as treatment over expanding use of local partners, especially given the
challenges in identifying and developing capable local partners. Some missions mitigated the
risks to achieving PEPFAR results by delaying new awards to local partners and extending
existing international partner awards. For example:
USAID Office of Inspector General 9
• Zimbabwe mission officials said their market research showed there was a limited number
of local partners capable of implementing PEPFAR programs and achieving targets while
responsibly managing more funding. Mission officials concluded that they could not reach
the local partner funding goal without putting PEPFAR results at risk.
• Nigeria mission officials said it was challenging to reach local partner goals within the
stipulated time frame and prepare new local partners while maintaining PEPFAR results.
Most tellingly, mission officials stated that there is a risk they will lose PEPFAR program
funds to other U.S. government agencies implementing PEPFAR if results suffer.
• Zambia mission officials said their COP20 planning letter outlined an increase in funding
coupled with specific program targets. To meet those results, the mission decided to retain
international partner awards that were slated to be transitioned to local partners.
• Tanzania mission officials said that a limited pool of local partners and restrictions on
multiple U.S. agencies funding the same partner means there is a smaller pool of adequately
capable local partners eligible for direct funding from USAID. The officials said they
prioritized achieving PEPFAR results over increasing local partner participation.
Although OHA and mission officials indicated that some capacity-building training had taken
place under the Local Partner Strategy, they said that these efforts were hampered by a lack of
time and resources. For example:
• Officials from five missions that did not meet their goals—Nigeria, Tanzania, Uganda,
Zambia, and Zimbabwe—said more time was needed to prepare additional local partners
given the limited number of existing local partners with capacity to manage PEPFAR awards
and deliver results.
• Officials from missions in Mozambique, Nigeria, Uganda, and Zambia explained that local
partners needed more training in management, administration, and finance as opposed to
training in technical health areas. While this need was identified and addressed by USAID
early on, OHA and mission officials said that more time and funding were needed to build
the operational capacity of local partners.
• Officials from missions in Zambia and Zimbabwe said that PEPFAR budgets did not include a
dedicated line item for capacity building.
Minimizing fraud risks was also a factor in some missions’ uncertainty about meeting local
partner goals within a short period as early as June 2018. For example:
• In Tanzania, suspicions that an implementer was fraudulently reporting PEPFAR program
results heightened officials’ caution about the risks involved in local partner awards. The
mission explained that the pressure of achieving PEPFAR targets coupled with the likelihood
that local partners are often considered for community-based services made it wary of
making high-dollar-value awards with their inherently high targets to newly recruited local
partners.
• In Uganda, mission officials said the approach toward local partners changed following the
termination of a local health award due to fraud, waste, and abuse in June 2018 and multiple
fraud reports from international partners about local subpartners. The mission chose to
USAID Office of Inspector General 10
focus on risk analysis and mitigation, including hiring additional staff to implement a risk
management framework and working with local partners to ensure they minimize the risk
of fraud. This helped inform the mission’s local partners strategy.
COVID-19 Has Changed USAID’s Operating Environment in
Terms of Working With Local Partners
The rapid emergence of COVID-19, coupled with projected increases in local partner funding,
has created change in USAID’s operating environment regarding planning for local partners,
which USAID did not have to respond to when the Local Partner Strategy was prepared in
2018. Federal internal control standards require managers to analyze and respond to identified
changes and related risks as part of a risk assessment or similar process to maintain effective
controls.
13
According to OHA officials, local partner funding goals may be negatively impacted
as USAID staff devote more time to COVID-19 response efforts and have less time for
capacity-building efforts. As a result, OHA officials said that existing awards to international
partners could be extended, which may delay new local partner awards. These significant
changes in the planned local partner operating environment could inhibit the achievement of
funding goals for local partners.
Conclusion
USAID’s efforts to increase PEPFAR funding to local partners were part of a broader OGAC
initiative intended to promote long-term impact and sustainably reach epidemic control through
strengthening local actors. Yet the limited pool of capable local partners, coupled with USAID
missions prioritizing achievement of PEPFAR targets in areas such as prevention and treatment,
slowed USAID’s progress toward OGAC’s 70 percent goal. In addition, external events, such as
the COVID-19 pandemic, have changed the operating environment and might impact local
partner funding goals. As USAID looks to responsibly increase the use of local partners, the
Agency will need to factor in existing circumstances as it considers the capacity of
implementers to meet local partner funding goals.
Recommendations
We recommend that USAID’s Bureau for Global Health:
1. Assess country-specific capacity needs for local partners and develop a plan to address
critical capacity gaps to inform an updated analysis of risks and mission-level local partner
funding goals for the U.S. President's Emergency Plan for AIDS Relief.
2. Develop and implement a plan to update mission-level local partner funding goals for future
U.S. President's Emergency Plan for AIDS Relief funding at its critical missions considering
the Agency’s current progress, the COVID-19 operating environment, and the Office of the
13
GAO, Standards for Internal Control in the Federal Government, “Risk Assessment,” Principle 9, “Management
Should Identify, Analyze, and Respond to Significant Changes That Could Impact the Internal Control System,”
September 2014.
USAID Office of Inspector General 11
U.S. Global AIDS Coordinator and Health Diplomacy’s intentions for the local partner
initiative.
OIG Response to Agency Comments
We provided our draft report to USAID on November 2, 2021. On November 30, 2021, we
received the Agency’s response, which is included as Appendix B of this report. The Agency
also provided technical comments, which we considered and incorporated as appropriate.
The report included two recommendations. We consider both resolved but open pending
completion of planned actions.
We acknowledge management decisions for both recommendations.
USAID Office of Inspector General 12
Appendix A. Scope and Methodology
We conducted our work from January 2020 through November 2021 in accordance with
generally accepted government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for
our findings and conclusions based on our audit objectives. We believe that the evidence
obtained provides a reasonable basis for our findings and conclusions based on our audit
objectives.
We conducted this audit, focusing on missions in Africa, to assess to what extent (1) USAID’s
PEPFAR budgets were on track to meet goals for local partner funding and (2) selected USAID
missions in Africa followed Agency guidance in preparing local partner funding strategies and
met mission-level goals while addressing risks.
Our audit is centered on USAID’s Bureau for Global Health (GH) and the Office of HIV/AIDS
(OHA) within that bureau and its involvement with and strategic response to the U.S. Global
AIDS Coordinator and Health Diplomacy (OGAC) directive to PEPFAR agencies, including
USAID, to increase PEPFAR funding to local partners. The audit focused on the period from the
April 2018 OGAC announcement of the PEPFAR local funding goals until July 2020, when we
received Country Operational Plan (COP) of 2020 budget information. We reviewed additional
information after this date as necessary to determine the extent to which observations were
still valid.
To perform audit procedures, we made two judgmental sample selections:
• Sample selection 1: We judgmentally selected a sample of 20 countries from the 23
PEPFAR Long Term Strategy (LTS) countries USAID focused on in the HIV/AIDS Local
Partner Transition Corporate Strategy (Local Partner Strategy) because they are in Africa
and represent 90.27 percent of total USAID COP20 PEPFAR funding. The 20 selected
countries were:
- Botswana
- Burundi
- Cameroon
- Democratic Republic of Congo
- eSwatini
- Ethiopia
- Cote d’Ivoire
- Kenya
- Lesotho
- Malawi
- Mozambique
USAID Office of Inspector General 13
- Namibia
- Nigeria
- Rwanda
- South Africa
- South Sudan
- Tanzania
- Uganda
- Zambia
- Zimbabwe
Although USAID expends PEPFAR funding in countries other than the 23 PEPFAR LTS
countries, using COP20 budget data we found the budgets of the countries receiving USAID
PEPFAR funding other than the 23 countries in the Local Partner Strategy represented only
6.5 percent of total PEPFAR funding. The budgets of the remaining African countries
receiving USAID PEPFAR funding, other than the 20 PEPFAR LTS countries in Africa,
represent 2 percent of the total. Therefore, our sample selection of 20 African PEPFAR LTS
countries represents 98 percent of PEPFAR funding in Africa and 90 percent globally. While
we cannot project the results of testing conducted on our sample selection 1 to the
population of PEPFAR countries, we determined that our method for selecting these 20
countries was appropriate for our audit objectives and that the selection would generate
valid, reliable evidence to support our findings and conclusions.
• Sample selection 2: We judgmentally selected the eight missions that were deemed
critical by USAID's Local Partner Strategy in June 2018 and September 2019. We did so not
only because USAID deemed these 8 missions critical to achieve the 70 percent goal, but
also because our analysis led us to consider these 8 missions as key based on additional
factors such as their PEPFAR budget and Transparency International’s corruption index
ranking. For example, while South Africa was not considered a critical mission in the June
2018 Local Partner Strategy (although it eventually was in September 2019), we included
the mission in our selection given its large USAID PEPFAR budget and because South Africa
is one of the most important countries in Africa economically, according to the World
Bank. Similarly, while Nigeria was no longer considered critical when the Local Partner
Strategy was updated in September 2019, we included it in our sample given Nigeria’s large
population, mission PEPFAR budget, and corruption index ranking. The eight selected
missions were:
- Kenya
- Mozambique
- Nigeria
- South Africa
- Tanzania
- Uganda
USAID Office of Inspector General 14
- Zambia
- Zimbabwe
Furthermore, our sample selection of the 8 critical missions represents over 70 percent of
PEPFAR funding globally using COP20 budget data. Although we cannot project the results
of testing conducted on sample selection 2 to the population of PEPFAR missions, we
determined that our method for selecting these missions was appropriate for our audit
objectives and that the selection would generate valid, reliable evidence to support our
findings and conclusions.
To address the first audit objective, we collected COP20 budget information from OGAC in
the PEPFAR Country Operational Plan Approval 2020 memos to identify all USAID missions
with PEPFAR budgets from which to select a judgmental sample of missions with local partner
transition goals. We relied on the computer-processed data contained in the Foreign Assistance
Coordination and Tracking System/Next Generation (FACTS INFO/NEXTGEN) maintained by
USAID to determine the USAID PEPFAR funding percentage to local partners. We performed a
data reliability assessment for the percentage of PEPFAR local partner funding by selecting the
partners identified as local in a FACTS INFO/NEXTGEN database report for USAID/Ethiopia
and USAID/South Africa and verifying that the universe of identified local partners (12 for each
mission) had their physical address in the respective country.
To conduct the data reliability assessment of FACTS INFO/NEXTGEN, we judgmentally
selected the Ethiopia and South Africa missions based on budget, location, and the projected
increase in local partners. For the purposes of the data reliability assessment, two missions
were deemed sufficient with one from southern Africa and another from eastern Africa. While
the results of this verification cannot be projected to population of missions in FACTS
INFO/NEXTGEN as we found no discrepancies, the results of these tests led us to conclude
that data are sufficiently reliable for our use.
Furthermore, we reviewed OHA’s July 2020 projections for COP20 of USAID PEPFAR local
partner funding to determine the extent to which USAID’s PEPFAR budgets are on track to
meet the Agency goal for local partner funding. Similarly, we reviewed the July 2020 projections
for the eight critical missions to determine the extent to which these missions with large
PEPFAR budgets are on track to meet mission-level percentage goals. We interviewed OGAC
and OHA officials to confirm the projections determined.
To address the second audit objective, we reviewed the Local Partner Strategy and interviewed
OHA and OGAC officials to obtain an understanding of the local partner transition. Audit team
members also attended 2 days of a 5-day conference held by OHA and various USAID missions
in Johannesburg, South Africa on USAID’s Local Partner Transition on November 4-5, 2019.
We determined that USAID focused on the 23 PEPFAR Long Term Strategy countries in the
local partner transition. We reviewed, analyzed, and summarized criteria and background
information including COP guidance for 2019 and 2020; PEPFAR Annual Reports to Congress
for 2017, 2018, and 2019; U.S. government websites; media articles; and various reports related
to the local partner transition.
USAID Office of Inspector General 15
In addition, we performed testing regarding the eight missions from sample selection 2. The
testing included inquiries sent via email to these missions to corroborate evidence regarding the
local partner transition, including the risks and process for mitigating risks. We also included
inquiries on the additional risks to the local partner transition from COVID-19. After reviewing
the responses, we had subsequent discussions with the eight missions to inquire about the
responses received. We did so in order to corroborate interviews with OHA to determine to
what extent USAID focused more on the eight missions deemed critical to achieving the
Agency 70 percent goal.
We asked to review mission-level strategies for the sample selection 1 missions to determine if
strategies were prepared according to the instructions and standardized templates provided by
GH. We reviewed 19 mission strategies that were prepared as one mission from sample
selection 1 did not prepare a mission-level strategy. We sought to understand to what extent
risks and associated mitigation measures were identified and how consistently this was
documented. We then analyzed the review results to determine the extent to which missions’
plans and strategies aligned with OHA instructions and standardized templates, as well as
USAID’s Local Partner Strategy.
We performed further testing for sample selection 2 missions. In particular, the testing included
inquiries sent via email to these missions after the review of their strategies regarding the local
partner transition. We asked those missions projected to fall short of their initial goals for local
partner funding percentages the reasons this was the case. We also included inquiries on the
impact COVID-19 might have on the local partner transition. After reviewing the responses, we
had subsequent discussions with the eight missions to inquire about the responses received.
In planning and performing the audit, we gained an understanding and assessed the internal
controls deemed significant to the audit objectives. In particular, we designed and conducted
procedures under all five components of internal control as defined by the U.S. Government
Accountability Office (GAO).
14
These included the Control Environment, Risk Assessment,
Control Activities, Information and Communication, and Monitoring. Furthermore, we assessed
controls that were significant in the context of our audit objectives. Specifically, we designed
and conducted procedures to test the internal controls OHA relied on to ensure the 23
PEPFAR Long Term Strategy missions were working toward the local partner transition and
provide sufficient support to these 23 missions, which included a review of USAID’s Local
Partner Strategy, OHA instructions to the 23 missions for a mission-level strategy to set
mission-level goals and identify and mitigate risks, and OHA monitoring and support during the
local partner transition.
In addressing these objectives, our audit techniques included interviews and review and analysis
of USAID reports, processes, and strategies. We did not seek to determine whether USAID’s
implementation of PEPFAR program activities was successful. Likewise, we did not seek to
determine whether USAID’s COVID-19 response efforts were successful. We relied on
documentary evidence along with testimonial evidence from USAID officials to support our
findings, results, and conclusions.
14
GAO, Standards for Internal Control in the Federal Government (GAO-14-704G), September 2014.
USAID Office of Inspector General 16
Appendix B. Agency Comments
MEMORANDUM
TO: Office of the Inspector General for the U.S. Agency for International
Development (USAID), Africa Regional Office, Director for Audit, Robert
Mason
FROM: USAID/Bureau for Global Health, Acting Assistant Administrator, Jennifer
Adams /s/
DATE: December 2, 2021
SUBJECT: Management Comments to Respond to the Draft Audit Report Produced by the
Office of Inspector General (OIG) titled,“PEPFAR in Africa: USAID Expanded
the Use of Local Partners but Should Reassess Local Partner Capacity to Meet
Funding Goals” (4-936-22-00X-P). Prepared by the Office of the USAID
Inspector General (OIG)
_____________________________________________________________________
The U.S. Agency for International Development (USAID) would like to thank the Office of
Inspector General (OIG) for the opportunity to provide comments on the subject draft report.
The Agency agrees with the recommendations, and herein provides plans for implementing them
and reporting on significant progress already made.
Over the last three years, USAID’s HIV programs have made tremendous progress in
establishing direct awards with local organizations to implement HIV programs. Direct
partnerships with local organizations are a crucial means to better achieve and sustain
epidemiological control of HIV/AIDS. State/Global AIDS Coordinator (S/GAC) has continued
to emphasize the importance of working with local organizations by including a focus on
“Building Enduring Capabilities of Country Health Systems, Communities and Local Partners”
as a Goal in their 2025 Draft Vision Statement, currently available on the State Department
website. Additionally as many countries reach epidemic control, the next phase of PEPFAR will
focus on sustaining the gains made and will prioritize strengthening the local organizations and
government systems to implement national HIV responses beyond PEPFAR.
While the USAID HIV program has not reached the 70% funding global goal set by S/GAC and
originally projected to be achieved by USAID in 2018; in the last three years the Agency has
shifted more than $200 million dollars in annual funding to local organizations and initiated
USAID Office of Inspector General 17
nearly 100 new awards with local government and non-profit partners. In addition, nearly every
country-level USAID HIV program has made progress in increasing annual funding to local
organizations, and several USAID HIV programs have significantly ‘localized’ their
programming. For example, Mozambique went from 5% in 2018 Country Operational Plan
(COP18) and is now projected at 34% in COP21. Kenya started with 55% funding levels in
COP18 and as of July 2021 has projected over 95% of their program implemented by local
organizations in COP21. Similarly, Rwanda started with 41% funding in COP18 and now has
over 80% local funding projected in COP21. Despite the large number of new partners and shift
in funds, USAID HIV programs have been able to maintain HIV program service delivery
targets and deliver quality programming through local and government partners, while
responding to a global COVID-19 pandemic. Although USAID local partner funding
achievements were lower than 2018 projections, the programs have made transitions in a
thoughtful way to ensure continuity of HIV programs and quality services for patients and
beneficiaries, while also ensuring capacity of local implementing partners.
Three years into USAID HIV Local Partner Transition efforts, the Bureau for Global Health’s
Office of HIV/AIDS (GH/OHA) recognizes the program is at an inflection point in the transition
process. While the original 2018 funding goals have continued to be updated annually, it is
important to step back and assess the strategic plan for the next three years and the lessons
learned that will improve our approach and support the success of continued efforts going
forward. The OIG Recommendations arrive at the ideal time to inform GH/OHA’s thinking on
the FY22-FY24 phase of the transition and help the USAID HIV program support broader
localization efforts happening across the agency. Currently USAID HIV local partner portfolio
represents the largest local partner ‘funding footprint’ across any USAID program. Recently the
USAID Administrator announced a new Agency wide goal of increasing direct funding to local
organizations to 25% by 2025. USAID HIV programs have significant experience and lessons
learned to share with the rest of the Agency on direct partnerships with local organizations.
USAID has been working to institutionalize local partnerships within Agency processes and
broaden transition efforts beyond HIV to other health sectors and development areas.
Between May 2021 and April 2022 GH/OHA has and will continue to work with USAID
PEPFAR Operating Units to reflect on lessons learned over the last three years and create new
global and country specific Local Partner funding goals for FY22- FY24. The consultation
process outlined below will result in: #1) country specific Risk and Capacity Analysis for the
Local Partner Transition and #2) updated country specific local funding goals. Each of these
deliverables will apply to 20 African Operating Units (OUs) for FY22-24. This process has
already begun but will be ongoing through April 2022.
USAID Office of Inspector General 18
MANAGEMENT COMMENTS BY THE U.S. AGENCY FOR INTERNATIONAL
DEVELOPMENT (USAID) ON THE REPORT RELEASED BY THE USAID OFFICE
OF THE INSPECTOR GENERAL (OIG) TITLED, “PEPFAR in Africa: USAID Expanded
the Use of Local Partners but Should Reassess Local Partner Capacity to Meet Funding Goals”
(4-936-22-00X-P) (Task No. 441P0219)
Please find below the management comments from the U.S. Agency for International
Development (USAID) on the draft report produced by the Office of the USAID Inspector
General (OIG), which contains two recommendations for USAID.
USAID agrees with both of the OIG recommendations, and has already begun to implement
steps to address both. The processes to update country specific funding targets, capacity analysis
and response plans, and the risk analysis are interconnected and complimentary in scope. Steps
described below are similar for both recommendations and in practice will be implemented
together across recommendations. The consultation process outlined below will result in: #1)
country specific Risk and Capacity Analysis for the Local Partner Transition and #2) updated
country specific local funding goals. Each of these deliverables will apply to 20 Operating
Units (OUs) in Africa for FY22-24. This process has already begun but will be ongoing through
April 2022.
USAID Office of Inspector General 19
Recommendation 1. Assess country-specific capacity needs for local partners and develop
a plan to address critical capacity gaps to inform an updated analysis of risks and mission-
level local partner funding goals for PEPFAR.
USAID agrees with this recommendation. The process outlined within this Recommendation #1
will lead to updated country specific Risk and Capacity Analysis for the Local Partner Transition
for 20 OUs in Africa.
Consultation on Future of PEPFAR Local Partner Transition (May - July 2021)
USAID/Global Health/Office of HIV/AIDS (GH/OHA) began a consultation process in May
2021 to inform the next three years of the USAID PEPFAR Local Partner Transition. This
process involved consultations with OHA and GH leadership, GH staff at headquarters, and
Mission staff working on the Local Partner Transition across all PEPFAR African OUs. The
consultations also focused on the next three years, new opportunities, risks related to the
transition, and what was needed to support the next three years of the transition, including
capacity strengthening needs.
Missions Draft Risk & Capacity Analysis (August - Sept 2021)
USAID Mission teams updated the local partner funding goals and capacity needs for current and
future prime local implementing partners. These draft local partner funding goals and capacity
needs will be adjusted and confirmed based on discussions with leadership, GH/OHA, and other
stakeholders before finalizing.
Mission Director Inputs (September - October 2021)
Following the country consultations GH/OHA led calls with Mission Directors and USAID
Mission staff from the Operating Units in Africa to discuss the local partner transition progress
to date, plans, risks, and opportunities associated with the next three years of the Local Partner
Transition. The series of calls were as follows:
● September 8, 2021 - Southern Africa Regional: Angola, Botswana, Eswatini, Lesotho,
Namibia, and South Africa
● September 22, 2021 - Cameroon, Côte D'Ivoire, and DRC
● September 27, 2021 - East/Central Africa: Ethiopia, Kenya, Tanzania, South Sudan, and
Uganda
● September 29, 2021 - Southern Africa Bilateral: Malawi, Mozambique, Zambia, and
Zimbabwe
● October 4, 2021 - Burundi, Nigeria, and Rwanda
During these calls each country identified country specific local partner transition opportunities
for the next three years and drafted estimates on local partner funding goals. Mission Directors
touched on critical areas of need from their perspective such as the need for staff to support
oversight of local partners, importance of government-to-government agreements, capacity
building needs of local partners, the support needed for USAID local partner procurements, and
USAID Office of Inspector General 20
desire for strategic plans for supply chain transitions.
Risk Workshop for Local Partner Transition (November 2021)
As part of the OHA 3rd Annual Local Partner Meeting (November 1-5, 2021), OHA hosted an
internal Risk Workshop for USAID/PEPFAR field staff; including health, financial management
(Office of Financial Management) and grants and contract (Office of Assistance and Acquisition)
staff supporting local awards. The Risk Workshop session on November 1, 2021, kicked off with
a plenary focused on Risks and Lessons Learned from the past three years of USAID HIV
program Local Partner Transition efforts, as well as an introduction to USAID’s approach to
Enterprise Risk Management. Following the Plenary, Operating Unit teams held breakout
sessions that focused on country and program specific risk identification and risk management
approaches relevant to Local Partner transition goals for the next 3 years. Teams used a template
provided by GH/OHA that had pre-populated opportunities from the Mission Director calls in
September/October.
Finalize Risk and Capacity Analysis (November 2021 - April 2022)
Operating Units required more consultation and time to complete the templates. They will take
until mid December 2021 to draft analysis for each Local Partner Transition opportunity. After
submission of those drafts, GH/OHA will support Mission teams to finalize the Risk and
Capacity Analysis. Teams will address the risks and capacity gaps through activities in the
PEPFAR Country Operational Plan submissions, addressing Mission staffing needs,
headquarters support, or alternative means.
Final Deliverable:
Risk Analysis and Capacity Plans for FY22-FY24 for 20 Africa Operating Units.
Target Completion Date: April 29, 2022
USAID Office of Inspector General 21
Recommendation 2: Develop and implement a plan to update mission-level local partner
funding goals for future PEPFAR funding at its critical missions considering the Agency’s
current progress, the COVID-19 operating environment, and OGAC’s intentions for the
local partner initiative.
Management Comment:
USAID agrees with this recommendation. The process outlined within this Recommendation #2
will lead to Local Partner Funding Projections FY22-24 for 20 Operating Units in Africa. The
work has already started and will continue until April 2022. The following steps are to address
this recommendation:
Plan for the Updated Local Partner Transition (May 2021)
GH/OHA held initial consultation with the Bureau for Global Health leadership during a Senior
Management Meeting on the progress to date on the USAID PEPFAR Local Partner Transition
and the proposed process to update targets and assess needs for the next three years. The
proposed process to update the Local Partner Transition funding goals included consultations
with USAID headquarters staff, Mission staff, Mission Director calls, and discussions at the 3rd
Annual Local Partner Meeting. GH leadership was supportive of the proposed plan and the need
to update the Local Partner Transition funding goals.
Headquarters and Mission Listening Sessions and Survey (June - July 2021)
To begin the consultations GH/OHA held a Mission “Listening Session” with staff from our
PEPFAR Operating Units to share our progress to date on direct funding of local partners and
discuss recommendations for the next three years. This Mission consultation was followed by a
presentation to GH/OHA to share the same background and again request feedback for the next
three years. In both cases, GH/OHA provided a survey for people to respond in writing. These
USAID “Listening Sessions” and survey inputs were critical in shaping overarching priorities for
the next three years of the local partner transition. Three priority areas identified were: 1)
Increasing capacity building support for local partners, 2) Supporting better integration across all
health programs, and 3) Continuing to transition HIV service delivery programs to local partners.
Initial Mission Consultations on Local Partner Funding Goals (July - August 2021)
GH/OHA developed country-specific Local Partner slide decks for each USAID PEPFAR
Operating Unit to review progress to date on funding local partners and the performance of the
existing local partners. The team held consultations with USAID PEPFAR Operating Unit staff
working on the Local Partner Transition. Additionally, the discussion included the opportunities
for direct funding to local partners for the next three years and what specific risk and capacity
support might be needed to support the transition. Teams discussed the impact of COVID on the
country program and in some instances how COVID had caused delays in new procurements for
local organizations or dip in performance measures. The USAID Mission teams drafted updated
Local Partner Transition Workplans with specific country funding goals for FY22-FY24 (or
COP21-COP23).
USAID Office of Inspector General 22
Mission Director Inputs on Local Partner Funding Goals (September - October 2021)
As noted above, the Local Partner consultations culminated in calls with Mission Directors from
the Operating Units in Africa from September to October 2021. The specific grouping of
countries with dates is noted in Recommendation #1. During these calls each country team
identified country specific local partner transition opportunities for the next three years and the
draft estimates on local partner funding goals. These estimates were based on specific local
context realities, COVID’s on-going impact on the HIV programs, in some countries political
unrest or other conflicts, and the lessons learned of the last three years of the local partner
transition. The newly drafted goals were once again Mission driven estimates of funding shifts
that could occur while still maintaining the ambitious PEPFAR targets and priorities for
programs.
Continued S/GAC Prioritization of the Local Partner Transition (September 2021)
As noted above, on September 10, 2021 S/GAC released the new draft 2025 PEPFAR Vision
(Draft Vision Statement), which includes as one of the three pillars “Build Enduring Capabilities
of Country Health Systems, Communities and Local Partners”, with a focus on working with
local organizations and building local health systems. Local Partner funding is still a goal within
the draft COP22 Guidance, and one of the minimum program requirements is to show progress
against this goal. The 70% target is still highlighted in draft COP22 Guidance but no longer has a
specific year associated with achieving the goal. GH/OHA will continue to consult with S/GAC
on the details of the Local Partner Transition goal as part of external consultations noted below.
The 3rd Annual Local Partner Meeting (November 2021)
The draft Local Partner Transition global estimates for FY22-24 were presented at OHA’s 3rd
Annual Local Partner Meeting. Additionally during country specific “Listening Sessions” at the
meeting, local organization representatives shared with the USAID Mission teams (often with
USAID Mission Directors or Deputy Directors present), their recommendations for how USAID
could improve the Local Partner Transition. These recommendations were documented and
Missions plan to address the feedback in country. GH/OHA is also compiling feedback from
local organizations to share with Agency leadership. Overall, GH/OHA projects a continued
increase in funding to local partners globally over the next three years but the final projections by
country will be completed after full analysis of feedback from local partners, additional external
consultations, and finalization of risk and capacity analysis; as noted in the steps below and in
Recommendation #1.
External Consultations (January - April 2022)
With the global estimates and initial priority areas of focus for the next three years of the USAID
HIV Local Partner Transition, GH/OHA will hold additional external consultations. These will
include discussions with the S/GAC existing and new leadership and existing international
implementing partners as well as additional meetings with local partners themselves.
Finalize Country Specific Funding Goals for FY22-FY24 (January 2022 - May 2022)
GH/OHA will work with each country to update the draft local partner funding goals in the Local
USAID Office of Inspector General 23
Partner Workplans. These initial drafts will be informed by the risk analysis and capacity gap
analysis process noted above in Recommendation #2. As with the last years of the Local Partner
Transition (FY18-FY21), targets will be updated annually (and sometimes at greater frequency)
based on specific updates within each country, including the impact of COVID on projections,
shifts directed by S/GAC, the HIV epidemic data, and other contextual factors.
Final Deliverable:
● Local Partner Funding Projections FY22-24 for 20 Operating Units in Africa (dollar
value and % funding by year).
Target Completion Date: April 29, 2022.
In view of the above, we request that the OIG inform USAID when it agrees or disagrees with a
management comment.
USAID Office of Inspector General 24
Appendix C. Major Contributors to This Report
Members of the audit team include:
• Rob Mason, Audit Director
• Louis Duncan Jr., Assistant Director
• Ismail Kenessy, Lead Auditor
• Lydelle Botha, Auditor
• Unothando Moribe, Auditor
The audit team would also like to acknowledge contributions from Joanne Howard.
