New Chief Unveils Plan to Revive Disease-Fighting Fund

The new leader of the Global Fund to Fight AIDS, TB and Malaria said he plans to establish “a disciplined private-sector governance process” for managing grants, improving risk management from country to country, and raising funds.

Noted for transparency, the fund last year disclosed that a small portion of its grants had been misused. A report it commissioned suggested retooling grant management, financial practices, and business relationships with grant recipients. The fund also is working to recover the misspent money.

Its new general manager, Gabriel Jaramillo, is a specialist in corporate turnarounds and served last year on a panel that recommended some of the changes now in process. He takes the helm on Feb. 1 for one year, with a salary of $1. Executive Director Michel Kazatchkine, who endorsed the report’s recommendations, will step down in March.

In light of the euro currency crisis and other economic issues that slowed government donor support, the fund’s $11.7 billion target between 2011 and 2013 was “aggressive,” said one person familiar with its operations. It included a $4 billion pledge from the US government subject to annual Congressional approval; however, Congress has authorized just $2.1 billion for fiscal years 2011 and 2012 combined.

Last November, the fund announced a freezing of new grants until 2014. It has received $2.64 billion from all donors so far for 2011-13 but expects $10 billion.

“This should never have happened,” said Jaramillo, adding that he will strengthen funding forecasts. “Uncertainty is a reality. You have to project the most likely scenario and the most horrible scenario. That’s what we do in business every day.”

In a strong signal of its commitment, the Bill & Melinda Gates Foundation, which has given the fund $650 million since its inception, on Thursday pledged an additional $750 million.

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