1


Re port to the Board
?
Doc 07 ? Annex A: Risk im plication and mitigation
Annex A: Risk implication and mitigation
1. Risks associated with this proposed transaction are as follows:
a) Risk of Norway failing to honour its commitment: IFFIm will issue a bond
on the back of the pledge from Norway and disburse the proceeds of the
bond to Gavi. Gavi disburses this amount to CEPI. Repayment of the bond
will be covered by IFFIm?s assets, which will now include the new Norway
pledge. If Norway fail to make a payment, IFFIm would use future pledges
that have not been drawn to repay that portion of any debt incurred on the
back of the defaulting donor?s pledge. This is an inherent risk of any IFFIm
pledge that has not materialised in over 11 years of operation. It is for this
reason that the IFFIm donors must approve any new donor and why IFFIm
pledges are legally binding. IFFIm has the capacity to seek recovery from
any donor of any unpaid pledge. Norway is Gavi?s third largest donor (and
IFFIm?s fifth largest donor) and has a longstanding strategic relationship
with Gavi, as well as being rated triple -A (the highest credit rating awarded
by rating agencies). Donors are also aware of the fact that any non -
payment could be seen as weakening of donor support to IFFIm with a
subs equent downgrading of IFFIm and loss of its financial strength in the
capital markets.

b) Risk that Gavi is perceived as acting outside of its mandate: At the PPC
discussion of Norway?s proposal in May, there were questions around
whether Gavi could support research and development under its current
mandate. Gavi?s Statutes set out its purpose as promoting health by ?(i)
providing vaccines and the means to deliver such vaccines to people in
the poorest countries; (ii) facilitating the research and development of
vaccines of primary interest to the developing world; and (iii) to provide
support in connection with achieving the foregoing purposes by helping to
strengthen health care systems and civil societies supporting such
purposes in the developing world.? T he Secretariat considers that the
support proposed in this paper would fall within the wording of sub -
paragraph (ii) above given CEPI?s focus on emerging infectious diseases
for which no commercial market exists that would typically affect low
income count ries. The Secretariat has consulted with Swiss counsel, who
have confirmed that support to CEPI would fall within the scope of Gavi?s
mandate. Furthermore, Gavi?s mission and strategic goals are not
changing for the current strategic period, and the CEPI A rrangement will
not impact upon Gavi?s current focus.

c) Risk of liability for Gavi arising from an adverse event following
immunisation: At this point the Secretariat considers this risk to be limited
given that Gavi would be funding CEPI, and CEPI would th en be funding
a vaccine developer. Gavi would be remote from any decisions made by
CEPI and/or a vaccine developer and as a consequence any third party
claims would be directed against the vaccine developer. For example, at
no point would Gavi have any con trol as to how a clinical trial would be
managed. The Secretariat has also confirmed with its insurers that any

1



Board -2018 -Mtg -2-Doc 06b

Section A: Summary
? This paper addresses the recent trend that an increasing amount of Gavi
funds are being channelled away from governments in Gavi supported
countries primarily as a means to manage fiduciary risks. It provides a more
holistic evaluation of the issue and tra de -offs associated with the current
way of managing fiduciary risks, and presents alternative approaches that
Gavi proposes to further explore, evaluate and scale up. It is anticipated
that th is will allow Gavi to strike a better balance between using and building
country systems and staying within acceptable levels of fiduciary risk.
? Following a discussion in the Programme and Policy Committee (PPC), t he
Board is asked for further guidance on this proposal. PPC members were
overall support ive and expressed a desire to accelerate timelines for moving
funds back to government systems. Some members clarified that their
constituencies? fiduciary risk appetite remained low while others welcomed
looking into a more differentiated risk appetite for misuse beyond d eliberate
fraud. PPC members asked to identify which tools are, and under what
circumstances, most conducive and appropriate to achieving the aims of
channelling more funds through government systems and to building
country systems, while keeping fiduciary risks at a low level. It was also
highlighted as important to pro -actively identify and address patterns of
fiduciary risk and to ensure Gavi works closely with national assurance
mechanism s where feasible, relevant and practical.
Section B: Working throu gh country systems while managing fiduciary risk
Introduction
1.1 Working through country systems and building country ownership and long -
term sustainability is at the heart of the Gavi model . However, work ing in
the world?s poorest countries, often with weak systems, comes with inherent
risks of misuse . W ith an improved understanding of country -level risks and
the Board?s low appetite for fiduciary risks, Gavi ha s found it inc reasingly
challenging to channel i ts cash grants through country systems.
1.2 While PPC and Board members, in previous discussions, agreed that the
amount of funding being channelled away from governments is concerning
SUBJECT : APPROACHES TO FIDUCIARY RISK MANAGEMENT IN
GAVI?S CASH GRANTS
Agenda item: 06 b
Category: For Guidance
Report to the Board
28 -29 November 2018

Report to the Board
Board -2018 -Mtg -2-Doc 06b -Annex A
Annex A: Fiduciary risk mitigation models
Model Basic description When used / Other features Current case s
*) joint with Global Fund
Possible future cases
Fiduciary
agent (FA)
Usually embedded within
governmen t systems to manage
Gavi risks through
approval/validation of grant
expenditures. Typically Gavi
contract s FAs in conjunction with
another agency e.g. Global Fund. A
capacity building component would
usually be included in its scop e of
work.
Can be used in a variety of high risk situations where
a close control of procurement and spending is
needed. If remaining at central level only may be
ineffective in dealing with sub -national risks.
The FA role can be expanded to the sub -nati onal
level with a subnational presence which also may
support coverage & equity objectives.
Relatively low cost but becomes more costly as the
sub -national level is included.

? DRC
? Madagascar *
? Malawi *
? Uganda
? Guinea * (under discussion)
Monitoring
agent (MA)
Party providing external assurance
of programme implementation and
management but which can be
focussed towards financial
assurance only .
MAs are a very flexible way to attain better
assurance. Can be used in almost any situation but
add most value where systems exist but compliance
and management override is a big risk. Scope of work
is risk driven and fully tailored to Gavi needs in each
case.
May engage in capacity building.
Costs are normally lower than a Fiduciary Agent.
? Ghana
? Kenya * (CSO)
? Burundi
? Mozambique
(campaign)
? Ethiopia (campaign)
? Ghana (campaign)
? Rwanda (construction)
? Ghana 2 campaigns
? DRC (campaigns)
Management
agent (ManA)
An alternative UN partner or
external agency (not a Gavi Alliance
partner) which acts as lead
implementer taking responsibility for
delivery of results and managing
risks and overseeing the activities of
implementers. Would typically cover
both programmati c and fiduciary
responsibilities.
Could be used in any high risk situation when there is
a need for stronger oversight (inc l. fiduciary risk
management) , usually where Alliance partners would
be operating through 3 rd party implementers rather
than directly implementing the programme.
Capable of delivering effective capacity building.
Generally an expensive option.

This model has not been
used before by Gavi ? Use of a private foundation
as a ManA is under
discussion in PNG
? Use of UNDP as lead
implementer in a country
TBD

1



Board -2018 -Mtg -2-Doc 06a

Section A: Introduction
? At the end of each year, the Board reviews and approves the Alliance?s Risk
& Assurance Report. The Risk & Assurance Report 2018 has been
reviewed and recommended for approv al by the Audit & Finance Committee
(AFC) and guidance from both the Audit and Fina nce Committee and the
Programme and Policy Committee (PPC) have been incorporated in the
final version annexed to this paper.
? The Gavi Alliance Board is requested to approve the report attached as
Annex A and to provide guidance on the questions outlined b elow.
Section B: Risk & Assurance Report
Portfolio discussion o n top risks to the Alliance
1.1 The Gavi Alliance Board has ultimate responsibility for risk oversight in the
Alliance and is responsible for agr eeing on overall risk appetite and
understanding and agreeing with the most significant risks and related
mitigation. It therefore has an annual in -depth discussion on risk, based on
a comprehensive Risk & Assurance Report.
1.2 This is the third year the Alliance prepares its annual Risk & Assurance
Report which discusses the most critical risks that could potentially impact
the ability of the Alliance to achieve its mission and strategic goals. The
report provides an update on risk management across the Alliance, an
analysis of macro -trend s affecting Gavi?s risk profile, an overview of key
changes in top risks compared to last year, and an overview of how current
levels of risk compare to Gavi?s risk appetite (i.e. the willingness to accept
being exposed). Detailed information including ana lysis of each top risk and
corresponding mitigation plans is included in the annexes of the report .
Where applicable, links are made with findings from audits, evaluations and
other reviews where these provided assurance on the effectiveness of
current mit igation measures and/ or identified risks.
1.3 This year?s report shows that Gavi?s overall risk profile has remained
relatively stable with all 15 top risks from last year still included and two
additional top risks. One new risk (Polio transition) was previo usly unranked
pending assessment and is now included as a high risk. The other new risk
SUBJECT : RISK AND ASSURANCE REPORT
Agenda item: 06 a
Category: For Decision
Report to the Board
28 -29 November 201 8

Gavi

Board -2018 -Mtg -2-Doc 05
Report to the Board
27 -28 November 2018

Section A: Introduction
? This report asks the Gavi Alliance Board to approve the updated financial
forecast of resource s and expenditure for 2016 -2020 and take note of the
indicative financial projections for 2021 -2025 . Doing so will enable the CEO
to allot funding to programmes in 2019.
? The Audit and Finance Committee (AFC) has reviewed the 2016 -2020
forecast and 2021 -2025 projections , including the financial implications of
the decisions that the Board will consider at this meeting . The AFC
concluded that these decisions could be approved by the Boar d in
accordance with the Programme Funding Policy.
? This report also recommends that the Board approve a request from
UNICEF for an additional amount of US$ 0.7 million in 2019 for UNICEF
fees for procurement of cold chain equipment for delivery to countr ies.
? For information, the report provides an update on the evolution of the
estimates of resources and expenditure in 2018, reports back on
expenditures that are subject to Board -approved programme funding limits,
and provides an overview of in -country cas h balances of Gavi -support.
? For 2016 -2020, the overall expenditure forecast has remained consistent
at the level that was forecast a year ago, whereas resources have
increased. Therefore, the amount available for future investments has
increased slightly. Expected p rogrammatic expenditure for this period is
less than previously forecast , primarily due to supply constraints . This has
enabled the decisions made at the June 2018 Board, and those proposed
for the current Board meeting to be absorbed .
? For 2018, the programmatic expenditures are anticipated to be 86% of the
forecast , again due mainly to the impact of supply constraints. The
Partners? Engagement Framework ( PEF ) and Secretariat budgets are
forecast to b e nearly fully utilised by the year -end , and as a result, the
Secretariat?s operating and overhead ratios have increased slightly .
? For 2021 -2025 , an indicative projection is included , based on existing and
anticipated programmatic expenditures, and a formulaic allowance for
future contributions , in a ccordance with policy . This projection i s dependent
on the future Board approval of Gavi?s strategy for th e 2021 -2025 period,
as well as any programmatic or policy changes .
SUBJECT: FINANCIAL UPDATE , INCLUDING FORECAST
Agenda item: 05
Category: For Decision

1



Board -2018 -Mtg -2-Doc 04
Report to the Board
28 -29 November 201 8

















SUBJECT: GAVI MID -TERM REVIEW (MTR)
Agenda item: 04
No paper

1



Board -2018 -Mtg -2-Doc 03

Section A: Introduction
? This report present s a holistic view of Alliance -wide progress, challenges
and potential risks in implementing Gavi?s 2016 -2020 strategy.
Section B: 2016 -2020 Strategy: Implementation and Progress
Progress against Gavi?s mission aspiration s: t he Alliance is on track
to reach all Mission Progress indicator targets by 2020


SUBJECT : 2016 -2020 STRATEGY: PROGRESS, CHALLENGES AND
RISKS
Agenda item: 03
Category: For Information
Report to the Board
28 -29 November 201 8 2016 ?2020 INDICATORS MISSION PROGRESS
1
Gavi BoardUPDATED: 1 October 2018
1UNDER -5 M ORTALITY
2FUTURE DEATHS AVERTED
3FUTURE DISABILITY -ADJUSTED LIFE YEARS (DALYS) AVERTED
4CHILDREN IM M UNISED WITH GAVI SUPPORT
5VACCINES SUSTAINED AFTER GAVI SUPPORT ENDS
2020 TARGET56 per 1,000 2015 BASELINE62 per 1,000
2020 TARGET300 million 2015 BASELINE ? 0
2020 TARGET250 million 2015 BASELINE ? 0
2020 TARGET5-6 million
ON TRACKMODERATE DELAYS / CHALLENGESSIGNIFICANT DELAYS / CHALLENGES
500
100% 2020 TARGET100%
2015 BASELINE ? 0
2015 BASELINEn/a
AWAITING DATA0
127m
The Vaccine Alliance tracks five key targets to help achieve our mission: to save children's lives and protect people's health by increasing equitable use of vaccines in lower -income countries .
?Baseline value reset to ?0? at the start of the strategy period. Targets for 2020 represent anticipated cumulative achievement over the duration of the strategy period.
2.5m
105m
57 PER 1,000

AFC -2018 -Mtg -07 1
th


G avi Alliance Audit and Finance Committee Meeting
26 November 2018
G lobal Health Campus , Geneva , Switzerland


1. Chair?s report

1.1 Finding a quorum of Audit and Finance Committee (AFC) members present, the
meeting commenced at 13.00 Geneva time on 26 November 201 8. David Sidwell,
AFC Chair, chaired the meeting .

1.2 Standing declarations of interest were tabled to the Committee (Doc 01a in the
Committee pack) alongside t he minutes of its meeting on 12 October 2018 (Doc
01b) . The Committee also reviewed its action sheet (Doc 01c).


Decision One

The Gavi Alliance Audit and Finance Committee :

? Approved the minutes of its meeting on 12 October 201 8.

------

2. Forward year workplan review

2.1. The Committee note d its forward workplan for 2019 (Doc 02).

------

3. Finance update

3a . Financ ial forecast

3a.1 Barry Greene, Managing Director, Finance and Operations, presented to the
Committee a summary of the Gavi financial forecast for the current strategic period
2016 -20 and a projection for the next period 202 1-25.

3a.2 Mr Greene started by reminding the Committee of the forecast from November
2017 for the current period of US$ 9.2 billion. He noted that while programme
decisions made earlier in 2018 by the Board added US$ 353 million to the
expenditure estimate, upda ted estimates of the overall costs for this period
resulted in a reduction of US$ 524 million , mainly from supply constraints and
pricing assumptions. This brought the expenditure forecast to US$ 9 billion prior
to providing US$ 174 million for the decisions for consideration at the November
2018 Board meeting . These decisions would bring the new forecast to US$ 9.2
billion , the same overall expenditure level as was forecast a year ago .

Minutes

Gov -2018 -Mtg -06 1




G avi Alliance Governance Committee Meeting
26 November 2018
Global Health Campus , Geneva , Switzerland


1. Chair?s report

1.1 Finding a quorum of members present, the meeting commenced at 16.45 local
time on 26 November 2018 . Mr Bill Roedy, Board Vice Chair and Governance
Committee Chair, chaired the meeting .

1.2 Standing declarations of interest were tabled to the Committee (Doc 01a in the
Committee pack).

1.3 The Committee noted the minutes of its meeting on 10 October 2018 (Doc 01b)
which had been approved by no -objection on 20 November 2018 .

1.4 The Committee noted its action sheet ( Doc 01c ) and forward workplan (Doc 01d).

-----

2. Nominations

2a. Board/Committee member nominations

2a.1 Philip Armstrong, Director, Governance and Secretary to the Board, presented this
item (Doc 02a), drawing attention in particular to the submission from the Research
and Technical Health Institutes (R&THI) constituency which had submitted three
candidates for one seat and requested the Governance Committee to make its
selection based on submitted information.

Discussion

? Governance Committee members discussed the three candidates put forward by
the R&THI constituency, agreeing on the high calibre of all three. Following due
consideration, it was agreed that the Governance Committee would recommend
the appointment of William Schluter to take the Alternate Board seat to be vacated
by Kate O?Brien at th e end of the year.

? Governance Committee members noted that the constituency had sought to
include female candidates in their list but that two potential candidates app roached
had declined the nomination .

? Governance Committee members briefly discussed the constituency seat on the
Programme and Policy Committee (PPC) which would also be vacated by Kate


Minutes