5 Potential Impacts of Sequestration on International Global Health NGOs

By Sally Cowal, Senior Vice President and Chief Liaison Officer, PSI

Today is the deadline after which automatic, across-the-board spending cuts to US government agencies known as sequestration take effect. Unless there is a last minute deal between the leadership in the US Congress and President Obama, some automatic US Government funding cuts will come into force today.

Sequestration would reduce total funding by $85 billion until September 30, 2013, the end of the fiscal year (FY13). By percentage, this would affect non-defense discretionary funding by about 5%, affecting the International Affairs or “Function 150” account which funds USAID, CDC and other key US agencies. Defense discretionary funding would be reduced by about 8%.

Though difficult to estimate in an uncertain funding environment, these sequestration cuts could have drastic and lasting effects on global health efforts. In the House Appropriations Committee Democrats’ “Report on Sequestration”, estimated global health cuts could:

– deny 1.6 million women access to family planning services
– reduce HIV/AIDS treatment for 171,900 people
– result in 1.2 million fewer insecticide-treated mosquito nets to prevent malaria deaths
– provide treatment to 37,400 fewer people with tuberculosis (TB)
– significantly decrease contributions to the Global Fund to Fight AIDS, Tuberculosis and Malaria

The good news is that many INGOs, like PSI, are well positioned to weather the difficult funding environment. Strong systems, diversified funds and a robust global network help to ensure that PSI can provide its local affiliates and country offices with the global perspective, information and resources necessary to effectively deal with these complex situations.

5 Potential Programmatic Effects on International NGOs (INGOs):

1) Sequestration will likely lead to delayed processes with the US Government in the shorter term and could mean smaller available funding pots in the longer term.

2) USAID and other government agencies will be facing budget reductions – affecting staff through furlough days and in some instances letting contractors go – so processes and response times from staff may be slowed as a result.

3) Future awards are likely to be highly scrutinized and could have lower initial obligations.

4) This is the time to manage wisely and demonstrate vigilance, as always, to compliance policies and procedures.

5) Our USG colleagues are facing difficult times as they are under pressure to do more with less money and in some cases are directly concerned for their jobs. In addition to patience with processing time, INGO staff should consider these circumstances and be thoughtful and understanding when interacting with USAID and other USG staff