Monitoring and Evaluation Manual 1

Performance-
Based Funding and
M&E in Practice
MODULES IN THE
MONITORING AND
EVALUATION MANUAL
1 Performance-Based Funding
and M&E in Practice
2 Completing the performance
framework template
3 Developing an M&E plan
4 Carrying out an
M&E self-assessment
5 An overview of PR assessment
and data verification
ACRONYMS USED IN THIS MANUAL
AIDS Acquired Immunodeficiency Syndrome
ANC
ART
Antenatal Clinic
Antiretroviral treatment
BCC Behavioral Change Communication
CCM Country Coordinating Mechanism
CDC Center for Disease Control
CP Conditions Precedent
DHS Demographic and Health Survey
DQA Data Quality Audit
DTF Dual Track Financing
FPM Fund Portfolio Manager
GPR Grant Performance Report
GSC Grant Score Card
HIV Human Immunodeficiency Virus
HMIS Health Management Information System
HMN Health Metrics Network
HSS Health Systems Strengthening
LFA Local Fund Agent
M&ESS Tool Monitoring and Evaluation Systems Strengthening Tool
MICS Multiple Indicator Cluster Survey
MoH Ministry of Health
NGO Non-Governmental Organization
OSDV On-Site Data Verification
PBF Performance-Based Funding
PEPFAR Presidents Emergency Plan For AIDS Relief
PF Performance Framework
PMI Presidents Malaria Initiative
PMTCT Prevention of Mother to Child Transmission
PO Program Officer
PR Principal Recipient
PU/DR Progress Update/Disbursement Request
SDA Service Delivery Area
SR Sub-Recipient
TRP Technical Review Panel
TWG Technical Working Group
UNAIDS Joint United Nations Programme on HIV/AIDS
UNDP United Nations Development Programme
WHO World Health Organization
UNICEF United Nations Childrens Fund
Monitoring and Evaluation Manual
Why a Global Fund M&E manual?
The Global Fund was created to increase resources to fight three
diseases AIDS, Tuberculosis and Malaria and to direct those
resources to areas of greatest need. As a partnership between
governments, civil society, the private sector and affected
communities, the Global Fund represents an innovative approach to
international health financing.
Performance-Based Funding is one of the core principles of The
Global Fund that is integrated into every phase of the full life cycle
of a grant. It provides a platform for the vast majority of grants to
demonstrate that they can convert financing into results, enabling
further funds to be committed to successful programs reaching
people in urgent need.
The focus on performance by linking ongoing disbursements to the
achievement of clear and measurable programmatic results requires
sound measurement systems. Monitoring and Evaluation (M&E) is
therefore an important and integral part of grant management.
This manual is intended to help those involved in the preparation
of grant proposals to The Global Fund and the management of a grant
to better understand the processes involved in M&E relevant to Global
Fund. By clearly defining M&E requirements and processes, this manual
also contributes to setting standards and ensuring consistency in M&E
practice among the different partners in grant management.
MODULE 1 performance-based fundinG and M&E IN PRACTICE
What are its contents and who is it for?
This manual provides a comprehensive set of guidelines on M&E
standards and practice throughout the life cycle of Global Fund grants.
It is for those working at the country level as well as Global Fund
staff. Users may, therefore, include Global Fund Principal Recipients,
Sub Recipients, Country partners, Fund Portfolio Managers, Program
Officers, Local Fund Agents, and consultants planning to provide
technical support in M&E at country level. Some elements of these
guidelines may not apply to each country-specific situation. In these
cases, consultation with The Global Fund is recommended.
The manual has five modules that present the cornerstones of M&E
in Global Fund grants:
1 Performance-Based Funding and M&E in Practice: Principles
and requirements
2 Completing the Performance Framework template
3 Developing an M&E plan, and
4 Carrying out an M&E self assessment.
5 An overview of PR assessment and data verification
Each module was written as a stand-alone document tailored to the
specific needs of its users. At the beginning, the intended audience is
identified and diagrams are used throughout to clarify concepts and
procedures. A list of acronyms and abbreviations is also provided.
The M&E manual can be complemented by a number of other M&E
documents and guidelines that have been published by The Global
Fund in collaboration with key partners. These are referred to by
individual modules as appropriate.
M&E MANUAL 03/08 
Performance-Based Funding and M&E in Practice

Who this module is for

CONTENTS
This module is written primarily for PRs, SRs, CCMs and other country partners. It may also be useful
for LFAs and The Global Fund staff.
The principles of Performance-Based Funding
and M&E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
What it covers
Managing for results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The concept of Performance-Based Funding in the Global Fund context and how it relates to
Performance-Based Funding and M&E: Step by step . . . . . . . 3
Monitoring and Evaluation; the importance of M&E in tracking the performance of Global Fund
The time factor: the life cycle of a grant and
grants; the performance-tracking tools and forms and the Global Fund M&E requirements at grant
tracking of performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
signature stage and during grant implementation.
Performance tracking tools and forms . . . . . . . . . . . . . . . . . . . . 6

How it will support your program

M&E Requirements at grant signature and
during grant implementation . . . . . . . . . . . . . . . . . . . . . . . 8
At grant signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
During grant implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
This module is intended to improve your understanding of Performance-Based Funding and Global
Fund M&E requirements throughout the grant life cycle. This will help you plan far enough ahead to
ensure adequate program monitoring and timely reporting. A clear understanding of the content
of this module should ultimately speed up the negotiation process for your grant.

For other Global Fund documents on M&E please see the Monitoring & Evaluation area of the GF website:
www.theglobalfund.org/en/performance/monitoring_evaluation

 M&E MANUAL 03/08 MODULE 1 performance-based fundinG and M&E IN PRACTICE

The principles of Performance-Based Funding and M&E

Managing for results In the traditional grant cycle, funds are raised, then spent to
implement activities, which then need to be reported in order to receive raise it
The Paris Declaration on Aid Effectiveness embraced five key principles:
further funding. In the context of a grant funded by the Global Fund,
Ownership, Alignment, Harmonization, Managing for Results and
any disbursement after the first one requires proof of performance.
Mutual Accountability. As one of the signatories to that Declaration, M&E
Then the cycle repeats itself until the grant comes to an end.
the Global Fund subscribes to these principles. As a process which
M&E measures performance and produces the information that
runs through every aspect of the Global Funds operations, Monitoring

spen
e it
determines to what extent continued funding should be allocated. PBF
and Evaluation (M&E) plays a part in upholding all the principles. For

ov

d
cannot be delivered without a reliable M&E system in place.
example, to promote local ownership and alignment to national
t

i
pr
As illustrated in Figure 1, M&E can be seen as one of the cogs in the
priorities, the Global Fund increasingly relies on documents such
central machine that allows the cycle to move to the next stage.
as national strategies, national M&E Plans and assessments of M&E
systems. It also requires indicators and targets to be defined by Figure 1: THE CYCLE OF PBF
applicants. PBF and M&E: Step by step
and the ROLE OF M&E
However, the principle that M&E is mostly concerned with is Step 0: Raise it (initial funding)
Managing for Results, which, for the Global Fund, translates into This is the step where funding is based on the quality of the proposal
Performance-Based Funding (PBF). Effective PBF means that: received and its potential to achieve significant impact in a specific
n Grants are invested where the greatest impact on HIV, TB or context.
malaria can be achieved; A first disbursement is made based on the needs of the first months
n Grant recipients have strong incentives to focus on results and on an agreed Performance Framework, which includes indicators,
and timely implementation; and baselines and targets for the first two years (see Module 2 for more
n Programs and the Global Fund can identify what works in a details). In addition to this, an M&E Plan and a self-assessment of the
particular program for early replication, systems strengthening M&E system including a budget to invest in strenghtening this system
and scale-up (learning from results). is requested from the country as complementary information (see
Module 3 and Module 4). These are all M&E pre-conditions to move to Terminology and basic
PBF is a principle that runs throughout the work of the Global Fund the next step. principles
at global level as well as country level. At the global level, the Global n PBF is about making
Fund raises money from donor countries, the private sector and performance a condition of
foundations, spends it by allocating it to recipient countries and finally funding.
needs to prove its effectiveness and performance before being able n M&E is about collecting,
to raise additional funding. This module focuses on the application of storing, analyzing and
the same principle, through effective M&E, at the country level. finally transforming data
into strategic information.

MODULE 1 performance-based fundinG and M&E IN PRACTICE M&E MANUAL 03/08 

 Step 1: Spend it
raise it The money received is spent on implementation. A functional M&E
system must be in place from the very beginning to monitor activities
on a regular basis. Failure to properly collect data may block the process
M&E at this point or at least undermine the next step.
spen
Step 2: Prove it
e it
The outputs of some of the activities undertaken are measured through
ov
d
t
i
pr
the agreed indicators and reported as achieved results. The data quality
is verified through existing mechanisms by the Local Fund Agent (LFA).
The extent to which achieved results meet the agreed targets will help
determine the amount received in the next disbursement. As important
is an explanation of any deviations and plans to catch up.
Step 3: Raise it
Additional disbursements are made to allow continued implementation.
However, only programs that have demonstrated high performance
receive the complete amount (and, in some cases of overachievement,
advances on future disbursements are possible). The rest will receive an
amount depending on their performance, explanation of deviation and
their plan to catch up during the rest of the grant period.
The time factor: the life cycle of a grant and
tracking of performance
Timing is absolutely critical for PBF and M&E within the Global Fund as
performance-based funding regulates every stage of the life cycle of a
grant.
The Global Fund grants process is divided into two phases (see Figure
2). Phase 1 is the initial two-year period for which a Grant Agreement is
signed with a Principal Recipient(s). Phase 2 is the period from Year 3
to the end of the approved proposal (an additional one to three years).
To implement performance-based funding and to facilitate grant
management throughout the life of a grant, the Global Fund tracks
performance against targets by using a set of indicators. These indicators
are selected and targets are set based on the activities proposed by the
 M&E MANUAL 03/08 MODULE 1 performance-based fundinG and M&E IN PRACTICE
countries in the performance framework and form a part of the formal
and legally-binding grant agreement.
Preparing for grant signature
At the initial grant agreement stage, the Performance Framework for Years
1 and 2 is negotiated: indicators are identified and targets are set for each
agreed reporting period.
These indicators are tracked at every point in the process: from grant
agreement, through regular Disbursement Requests and Progress
Updates, through to the requests for continued funding, to extended Grant
Agreement for Phase 2 funding and to grant closure or beyond Phase 2
(when applicable).
Importantly, the amount of money to be disbursed to the Principal
Recipient at each disbursement period will depend on results against
targets. This is why a Performance Framework, complemented by a robust
M&E system in place at the start of grant implementation, is vital.
Preparing for Phase 2
As a grant approaches its eighteenth month, all performance-related
information is compiled in a Grant Performance Report (GPR). Towards the
end of the initial two-year funding period, the Grant Scorecard (GSC) is then
prepared, combining the aggregate results with independent verification
and assessment data on performance and this becomes the basis for the
Phase 2 funding decisions taken by the Board. If a grant is approved for Phase
2 funding, it is regulated by a new Grant Agreement and newly-approved
Performance Framework covering years 3, 4 and 5 or until the end of the
grant. At grant closure, the PR prepares a programmatic and financial report
indicating the results achieved at the point of closure.
Beyond Phase 2
Funds may be made available to grants beyond Phase 2 if programs can
show strong performance and/or impact. This requires planning impact
measurement, with clear indicators, baseline and targets and funding
mechanisms for data collection, early enough during grant implementation
to be able to demonstrate results in time.
 GRANT END OF
START PHASE 1

3 6 9 12 15 18 21
months months months months months months months

Grant Phase 1 Disbursement CCM Request Grant

Grant Request/ for Continued
Proposal Scorecard PHASE 2
Agreement Progress Funding
Form Update
M&E plan Submission of
PF for
PF year 1&2 Phase 2

Grant Performance Report

PHASE 1

END OF END OF
PHASE 1 PHASE 2

21 27 30 33 36 39 45
months months months months months months months

CCM Request Grant Phase 2 Disbursement

Grant
for continued Grant Request/
scorecard
Proposal BEYOND
funding Agreement Progress
Form PHASE 2
Update
Submission of M&E plan*
PF for
Phase 2 PF year 3&4

Grant Performance Report

* If any change to previous M&E Plan PHASE 2

Figure 2: Tracking performance during THE Grant life cycle

MODULE 1 performance-based fundinG and M&E IN PRACTICE 2 M&E MANUAL 03/08 

Timely reporting
By the 18th month after
grant signature, the PR
must be able to report on
selected output and outcome
indicators (as included in the
Performance Framework/Grant
Agreement). This is when grant
performance is evaluated and a
decision is made about funding
after the first two years.
Baseline data for impact and
outcome indicators must also
be available at this time so that
progress can be assessed.
 M&E MANUAL 03/08
Performance tracking tools and forms
These are the key tools and forms that the Global Fund uses to track
performance against targets at various stages in the grant life cycle.
Performance Framework
The Performance Framework contains a summary of key indicators
and targets measuring output and coverage on a routine basis (quarterly
or six-monthly depending on reporting frequency) and outcome and
impact in the long-term perspective (yearly, biannually or every three
to five years).
For more details see Module 2.
Progress Update/Disbursement Request (PU/DR)
The PU/DR is both a progress report on the disbursement period just
completed and a request for funds for the next period. It serves as an
indicator of how well the grant is going and provides evidence for
performance-based funding decisions. It includes a periodic report
(quarterly or six-monthly depending on reporting frequency) on the
following:
n programmatic progress/results in relation to the targets
n financial accounting including
n expenses to date and cash balance both for Principal Recipient
and Sub-recipients
n budget per line category eg drugs and commodities
n a request for ongoing funding
n an update on Condition Precedents and other requirements in
relation to the Grant Agreement, and
n any response to the Global Fund remarks.
MODULE 1 performance-based fundinG and M&E IN PRACTICE
Grant Performance Report
The Grant Performance Report provides the Secretariat, Principal
Recipients, partners, and all other Global Fund stakeholders with a
thorough and transparent summary of a grant throughout its lifetime.
The report includes important grant information such as the initial PR
assessments, the Grant Agreement, implementation progress, intended
results and results achieved to date.
Grant Performance Reports are created for every grant after grant
signature and updated regularly when any of the following events take
place:
n disbursement decisions
n a new Performance Framework is prepared or revisions are made
to the existing Performance Framework
n a new audit is carried out
n grant consolidation, or
n grant closure.
Additionally, Grant Performance Reports are updated to reflect
any important changes that occur during implementation, such as
reprogramming or critical changes in contextual considerations.
CCM Request for Continued Funding
Before the end of Phase 1, at month 19, the Country Coordinating
Mechanism (CCM) is invited to submit a Request for Continued Funding.
At the same time negotiation of Performance Framework for the initial
years of Phase 2 begins.
At month 21, CCMs are expected to submit a request for the
extension of the initial commitment to cover the full period of the
original proposal. The CCM Request for Continued Funding is the CCMs
formal request for Phase 2 funding and should be accompanied by an
elaborated Performance Framework for year 3, or years 3 and 4. The
request form allows the CCM to:
n outline the country and epidemiological context its program has
been operating in
n assess the programs performance while describing lessons
learned during Phase 1 of program implementation
 n
respond to Fund Portfolio Manager comments contained in the
Grant Performance Report, and
n comment on its own experiences with Global Fund processes.

The CCM can present a revised program implementation strategy

that takes account of changes in country and disease context as
well as lessons learned, budget and workplan for the third year of
implementation broken down by quarters, indicative budget and
workplan for years 4 and 5 (if the original proposal covered these years),
and an updated list of health products to be procured.
In addition, annual reviews, CCMs assessment of the programme,
and other relevant information for evaluation should be completed.

Grant Scorecard
At month 22 all grants undergo Phase 2 review for continued funding.
At this stage, the Secretariat provides a recommended decision
category, recommends what amount of money should be awarded for
Phase 2, and may suggest actions that it believes the CCM or PR need
to implement as pre-conditions for renewal of the grant.
After the Board decision on Phase 2 funding has been made, the
Board-approved Grant Scorecards are published and include:
n program performance and ratings
n contextual information, and
n performance indicators and approved budget for Phase 2.

MODULE 1 performance-based fundinG and M&E IN PRACTICE M&E MANUAL 03/08 

M&E requirements at grant signing and during grant implementation

n Submission of the Performance Framework (formerly referred to

Implementation of strengthening measures and recommendations as the Attachment to Annex A of the Grant Agreement or, simply,
the Attachment) (Module 2).
n Submission of the M&E Plan (Module 3).
M&E Self-Assessment
M&E Self-Assessment (M&E SS Tool)

n Assessment of the M&E system (Module 4).

PR Assessment Report (by LFA)

OSDV #1 OSDV #2 OSDV #3 OSDV #4 OSDV #5 Submission of the Performance Framework

An essential part of the grant negotiations is the agreement on program
results to be achieved during the grant period. These are linked to the
M&E PLAN PF YEAR 1 & 2 M&E PLAN* PF YEAR 3 & 4 PF YEAR 5
main program objectives specified in the approved grant proposal.
The Performance Framework is the document that summarizes the key
performance indicators and targets.
DQA (any time during the grant life cycle)
The Performance Framework is negotiated between the Principal
Recipient (PR) and the Global Fund at the time of grant signature and
Phase 1 Phase 2
Grant signature
forms the basis for future disbursements. It also includes some outcome
Grant signature
and impact indicators to be reported over the medium term.
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
For details see Module 2.
M&E requirement at grant signature (for Phase 1 and Phase 2)
M&E requirement during grant implementation Submission of the M&E Plan
* If any change to previous M&E Plan The Global Fund requires a Monitoring and Evaluation Plan at the time
of grant signature, explaining the Monitoring and Evaluation system
Figure 3: The Global Fund M&E REQUIREMENTS
that the PR will use or proposes to put in place in order to report on
performance against targets in the grant agreement.
At grant signature Indicators related to program management ranging from input and
process to output, outcome and impact are included in the M&E Plan
When proposals submitted by countries applying for Global Fund
for the grant or program. This comprehensive Plan helps in the selection
grants are being turned into Grant Agreements, M&E sets the stage
of a small set of indicators for periodic reporting to the Global Fund. It
for performance-based funding for the entire grant period. The M&E-
also ensures availability of regular updates on grant performance which
related requirements at the time of grant signature are summarised
are then used to make future disbursement decisions.
below (see also Figure 3). They are all described in more detail by other
For details see Module 3.
modules of this manual, as indicated.

 M&E MANUAL 03/08 MODULE 1 performance-based fundinG and M&E IN PRACTICE

Assessment of the M&E system During grant implementation
The Global Fund requires an assessment of the M&E system by The M&E related requirements during grant implementation are as
the PR, which involves two steps. The first step is an M&E self- follows.
assessment by the PR, followed by completion of a PR assessment
report by the LFA.
n LFA On-Site Data Verification
The OSDV Tool is applied by LFAs during the program
n M&E Self-Assessment by the PR implementation period, at least once a year for each grant, to verify
The M&E self-assessment needs to be completed by the PR prior results reported by the PR.
to grant signature, preferably using the M&ESS tool, which has
been designed in collaboration with technical partners and
n Data Quality Audit
provides a framework for countries to systematically:
The DQA tool provides a methodology for independent evaluation
n self-assess their national or program-specific M&E system
of quality of reported data for key indicators and includes in-depth
n identify M&E weaknesses/challenges, and assessment of national data management systems.
n develop a costed action plan to strengthen the M&E
system.

n Completion of PR Assessment Report by the LFA

The M&E self-assessment is followed by an independent review
of the costed action plan derived from this assessment, including
budget allocations from the grant.
This review is performed by the LFA, who assesses whether the
nominated PR has the capacity to collect, record and report
programmatic data with appropriate quality control measures.
It also includes an assessment of how the workplan and budget
will strengthen M&E capacity within the proposed program.
Based on the findings of the M&E self-assessment, the LFA
completes the M&E section of the PR assessment report before
grant signature. (For more details, see Module 4.)

MODULE 1 performance-based fundinG and M&E IN PRACTICE M&E MANUAL 03/08 

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