In keeping with its aim to promote country ownership and to maintain a lean organizational structure, the Global Fund does not have offices in the countries, regions or territories that receive Global Fund financing. Instead it relies on contracted entities, selected through a competitive bidding process, to serve as Local Fund Agents (LFAs). The LFA is a crucial part of the GF system of oversight and risk management, providing independent, professional information and recommendations that enable the Global Fund to make informed funding decisions at each stage of the grant life cycle. Typically, the Global Fund contracts with one LFA per country receiving Global Fund resources.

During grant making, the LFA assesses the financial management, procurement, monitoring and evaluation (M&E) and administrative capacities of the nominated Principal Recipient (PR) using the PR Capacity Assessment Tool.

The Grant Agreement specifies that the PR is required to cooperate with the LFA to permit it to carry out its function. It also specifies the following obligations of the PR with respect to the LFA:

• channel all reports (including periodic and SR audit reports, Disbursement Requests and required communications) to the Global Fund through the LFA;
• permit the LFA to make *ad hoc *site visits; and
• cooperate with the LFA in any way the Global Fund might specify in

The Global Fund website provides additional information about LFAs.

The UNDP Global Fund/Health Implementation Support Team has developed a Global Fund/LFA Access to Information during the Grant Life Cycle Guidance Note advising on UNDP PR interactions with the LFA. Any issues regarding the LFAs are managed at the corporate level of the UNDP/Global Fund Health Implementation Support Team.