Download - Agenda
HARVARD TRANSITION PANEL:
Early Lessons Learned & Promising Practices-
Transitioning to NGOsWednesday, August 11, 2010
3:00-4:00PM8th Annual Track 1.0 ART Program
Meeting
Introduction: Two NGO Models: Lessons and Challenges
o John Lichten, PI/Executive Director, Harvard PEPFAR Program
Transition in Nigeria: Independent NGO Modelo 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 Transitiono Mark Barnes, Chair, Harvard PEPFAR Oversight Committee
Agenda
Introduction: Two NGO Models-Lessons and
Challenges
Harvard has two models: Fully Independent NGO, and NGO with Harvard PresenceFully Independent:
Governance includes no Harvard representatives PEPFAR is primary program and primary source
of revenue (i.e. Nigeria)Harvard Presence:
Governance includes Harvard representativesPEPFAR is only one of several active
programs/projectsHarvard 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, 20108th Annual Track 1.0 ART Partners Meeting
Agenda
Development of BHP IntroductionGovernancePhases of TransitionManagement Systems
Current StatusFuture Steps
Introduction and HistoryBHP – 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 2008BHP, LLC officially started operations September,
2009Annual Operating Budget:
o 20% from PEPFARo 80% from sponsored research
Governance
Board of Members and Board of DirectorsMajority from Harvard Representation from MoH
PEPFAR Management Sub-CommitteeHRSA/CDC Review of GovernanceNext steps – develop agreement on model
Transition Workplan
Work plan development by: - Activity - Responsible Person - Status - Deadline for completion
• Categories of Activities - Finance - Human Resources
- Administration - Reporting
- IT - Grant Administration
- Governance
- Activity - Responsible Person - Status - Deadline for completion
BHP Management Systems
Review of Accounting/Financial Softward systemsReview Laboratory and asset
inventory/management systemsReview of automated payroll systemReview of internal controlsReview workflow and reporting structures –
develop new organizational designReview time & effort and expense allocation
methodology
BHP Status
HRSA ClASS Assessment February, 2010Revised and updated workplan with
corrective action for:Financial SystemsGrant administration and managementGovernance
Finalize sub-contracting and migration of financial operations
to BHP from Harvard
BHP Future Actions
Follow-up HRSA Assessment findingsRecruit key staff positionsComplete remaining transition workplan
tasksFinalize BHP Long range planHRSA Readiness Re-Assessment, Spring,
2011
Summary Elements of Building a Successful NGO and Challenges of the NGO
ModelFive Comparative Advantages for NGO success (Macro-
Level)Capacity to reach those most in need – focused service
provisionPromote local participation and implement projects in direct
collaboration with target beneficiary groupsOperate at low costsAble to be innovative, experimental, adaptive and flexiblePromote 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, CIOo Senior Staffo Engaged Board of Directors
Mission and scope must be clearShort and long range plans must be
developed
Elements & Challenges for Successful NGO
Organizational Structure via Strategic Management TheoryOrganic 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 NGOsAre 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 countryHRSA and CDC in-country offices need to work together in
the development of RFAs, for consistency of approach and message
Challenges of Transition
“Gap” PeriodHRSA vs. CDC fiscal year for grant
funding“Gap” unfunded period from March 1-
July 31Carryforward funding can no longer
sustain this funding shortfallConsequences 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 PartnersCash 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 TransitionManagement 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 TransitionGrants Administration Issues in Transition
Planning and ExecutionOccasional 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
ReportingNeed 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!