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Foreign Aid Canada

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Submitted By Ria27
Words 888
Pages 4
TO: FAC Executive Management Team
FROM: Pat Innes, CMA
Re: Strategic option for HIV/AIDS operation in Asia and Africa

EXECUTIVE SUMMARY:

Foreign Aid Canada (FAC) is a charitable organization whose mandate is to provide humanitarian aid in Asian and African Regions through Relief and Development projects. FAC's new mandate includes providing treatments for HIV/AIDS in these regions as of 2013. FAC's Strategic goal is to provide help to 3000-6000 patients in these HIV/AIDS stricken regions, while maintaining a cost of less than $700/patient /year and keeping its Support to Activity Service cost ratio less than 20%.
Two alternatives are evaluated. The First alternative is to build 2 AIDS clinics and the second alternative is to operate 4 mobile clinics. It is recommended that FAC accept alternative 2 and operate 4 Mobile clinics.

INTRODUCTION

The purpose of this report is to analyze FAC's current business situation, evaluate business opportunities and provide recommended course of action. To achieve this, the report will provide a situational analysis, an analysis of alternatives, recommendations on strategic and operational issues and an implementation plan.

SITUATIONAL ANALYSIS
Mission: FAC's revised mandate is to provide humanitarian emergency relief, development assistance, through agricultural, water, and irrigation projects, and HIV/AIDS prevention and treatment programs in African and Asian countries in need.

Strategic Goals:
1. Undertake AIDS project that will treat between 3000-6000 AIDS patients per year for next 3 years for cost less than $700/patient
2. Obtain CIDA funding of 75% operating and 90% Capital
3. Continue to deliver Relief and Development Projects
Constraints:
A. Support services to project activity ratio must be 20% or lower
B. AIDS project activity expenses must be less than $700/per patient

Key Success Factors:
• Low administrative Cost
• Securing CIDA funding

Financial Analysis: (Appendix 1 A/B)

• FAC's current ratio of 3.50 suggests that it has adequate cash to pay is liabilities
• Debt to equity of .30 speaks to its solvency and low risk to lender
• FAC's support cost to project activity cost ratio is higher than industry standard of 20%

IDENTIFICATION OF STRATEGIC ALTERNATIVES

I. Building two (2) AIDS clinics with Contractor #2
II. Operating four(4) Mobile units from their four regional offices in the are

MINOR OPERATIONAL ISSUES

a. Outsourcing of support staff to OS
b. Ethical issue with not recording donated vehicle as per Taylor
c. Purchase of satellite phones and internet hookups

ANALYSIS OF STRATEGIC ALTERNATIVES

Alternative 1: Building new AIDS clinics with Contractor # 2

Pros
• Achieves target of helping 3000-6000 patients with cost less than $700 (Appendix 3A)
• Meets CIDA funding Criteria
• Funds available for FAC through Restricted donation of $500,000
• FAC has previous experience with Contractor #2 which has proven to more reliable than government suggested contractor
• In line with FAC's new mandated mission
• FAC has available funds after funding development and relief projects (Appendix2)

Cons

• CIDA and Donations do not fund the entire project costs (Appendix 4)
• FAC must use unrestricted funds available to cover the cost of the project
• Contractor 2 is more expensive
• Residents living in rural and remote area will not be able to access these clinics

Alternative 2: 4 Mobile AIDS Clinics

Pros
• Achieves target of helping 3000-6000 patients with cost less than $700 (Appendix 3B)
• Meets CIDA funding Criteria
• CIDA and Donations covers funding
• Takes advantage of strategically located regional offices by using them as home bases
• Vehicle will be donated thus minimizing cost to FAC
• Allows FAC to reach rural and remote areas where residents are too poor to travel to city clinics
• FAC has available funds after funding development and relief projects

Cons
• Ethical issues related to the treatment of donated vehicles
• CIDA is slow in making payments, therefore, FAC will have to cover costs until it is reimbursed.
• Increase travel of mobile clinic workers may further increase field staff turnover

RECOMMENDATION

It is recommended that FAC adopt and implement Alternative 2 : 4 Mobile AIDS Clinics. The vehicles for the 4 clinics will be donated and will be recognized at fair value minimizing project costs. This alternative provides FAC better option to cover funding of its portion with out taking on loans. This alternative is better suited for helping people in remote rural areas who cannot travel due to lack of infrastructure and cost of transportation.
IMPLEMENTATION PLAN

Minor Operating Issues

• It is recommended not to outsource the support staff to OS. FAC's current staff is dedicated to the cause , and there is low staff turnover, this be undermined by outsourcing
• The donated vehicles will be recognized at fair value according as per FAC's accounting policy. Taylor should be educated on FAC's accounting policies.
• FAC could use available funds after relief and development to purchase satellite phones and internet hookups. This will minimize delays in submitting travel expenses to CIDA.
• Taylor should undertake the advertising campaign as the cost of the is more than covered by the expected donations.

Action Plan

• Taylor to complete agreement with company offering vehicles
• Regional managers to hire trained local residents needed for mobile clinics
• Purchase of satellite phones and internet hookups
• Mobile AIDS clinics begin operations

CONCLUSION

By implementing 4 Mobile clinics FAC will be able to achieve its mandate of providing humanitarian aid for AIDS patients in Asia and African remote regions while meeting its strategic goals.

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