The Ministry of Health (MOH) Central Medical Stores (CMAM) is responsible for managing logistics for all medicines and medical supplies, including commodities for all priority programs such as HIV, TB, and Malaria. CMAM currently reports to the MOH National Medical Care Department (DNAM) but also has a direct line to the Minister. CMAM is responsible for leading the forecasting of needs, conducting procurement, coordinating importation, warehousing, and the distribution of all public health commodities to the provincial warehouses and hospitals. All USG-funded commodities enter the CMAM importation and distribution system when they arrive in Mozambique, and become MOH property. Virtually all other donor support for commodities is also managed by CMAM, including Global Fund. These funds are monitored through the Medications Technical Working Group (GTM), a SWAp working group, of which CMAM is the vice-chair.

CMAM had previously been semi-autonomous, and all procurement, warehouse management, and distribution had been outsourced to Medimoc, a parastatal institution. In 2007, CMAM assumed direct responsibility for conducting procurement, distribution and central warehouse management in 2008 and all financial and administrative autonomy was removed. As a fully public institution, CMAM has had significant challenges managing its operations due to significant infrastructure, human and financial resource constraints, as well as its dependence on the MOH and MOH/Department of Administration of Finance for resources and approvals.

Following a Warehousing and Distribution Needs Assessment conducted by SCMS in 2008, SCMS supported CMAM to complete the new Zimpeto warehouse, to be launched at the end of 2009. In addition, CMAM with SCMS technical assistance developed a 5-year Pharmaceutical Logistics Master Plan. This plan, which covers the policy and legislation, infrastructure, human resource, supply-chain, and financial needs of CMAM that will be needed to strengthen the supply chain, was recently approved by the MOH. Key outcomes of the PLMP include providing CMAM with administrative and financial autonomy; revision of the procurement laws to allow multi-year contracting; support for human resource needs to manage a supply chain, including recruitment and retention schemes and pre- and in-service logistics training; active distribution managed fully by CMAM to the districts; implementation of a warehouse management information system (MACS) and LMIS; and improved coordination between CMAM and other departments with in the MOH.

CMAM's main objective is to "ensure the availability and accessibility of safe and quality medicines, reagents and other consumables" by "guaranteeing procurement, warehousing and distribution in line with applicable laws, best practices, and international and national standards to ensure the highest level of service to the Mozambican population, and making the best use of the available resources and budget of the MOH."

Providing direct funding to CMAM will give them more control over implementation of the PLMP and its operations: to directly hire needed staff, to conduct training and supervision to the provinces and districts, for distribution of medicines, and procurement of requisite supplies and equipment to manage operations. USG has highlighted support for the PLMP as a key goal within the Partnership Framework with the GOM and a significant activity within the overall health systems strengthening budget. Engaging in a direct agreement with CMAM is an initial step in the transfer of capacity and ownership to the GOM and local institutions, a key principle within the PFIP. This new Agreement with CMAM coupled with external TA through SCMS, enables the USG, to over time, reduce the need for significant external assistance from international partners, including for procurement of commodities. .

To support CMAM to manage the Agreement, USG will broaden its systems strengthening portfolio to include training in financial and administrative management of CMAM through a possible public private partnership (PPP) with Standard Bank. This is also in line with the PLMP recommendations to increase CMAM skills in other areas, such as finance, administration and management.

USG will work with CMAM to develop a monitoring and evaluation plan, and will be managed by the USAID technical advisors. SCMS recently supported CMAM to develop Key Performance Indicators (KPIs), which will be the main tool for CMAM to monitor and evaluate the performance of its own staff and operations. In addition, since early 2009, CMAM has conducted joint supervision and on-the-job training visits to provinces and districts with SCMS and USG. The M&E plan will include at least quarterly reporting on activities, justification of expenditures, and documentation of site visits.

Cross-cutting budget attribution includes contributions to HRH, for hiring additional staff and training activities, and contributions for SI for implementing KPIs, implementing an LMIS, and using data for strategic information purposes.

CMAM receives funding for its various activities through the health donor supported common fund budget (PROSAUDE), which includes funds for procurement of medicines as well as for costs of operations. This funding, in addition to the MOH State funds, is budgeted into an annual plan for the Health Sector for carrying out activities, and allocated across various MOH institutions, including CMAM. As resources are limited, CMAM priorities and operations budgets, including PLMP implementation, are not always adequately funded.

This cooperative agreement will complement the existing State and PROSAUDE funds that CMAM receives to carry out key functions to manage the supply chain of medicines, laboratory reagents and other supplies. These funds will be used to support supervision visits to 11 provinces; training for provincial warehouse and laboratory staff, districts and sites in line with a national training plan developed by CMAM; hiring additional staff and monitoring staff performance using the KPIs. In addition, these funds will also be used to support operations costs, such as clearance fees, fuel for transport, medicine distribution and other operational costs. These funds will be used to support additional components of the PLMP, such as travel and per diem costs for overseeing the roll out of the PLMP implementation, for participating in factory inspections of manufacturers supplying essential medicines, including OI and STI drugs, contracting technical assistance or training as needed to support development of policies outlined in the PLMP, to implement an LMIS, and to carry out assessments identified by CMAM and the GTM. Finally, to strengthen the use of the supervision and supply planning update information in program monitoring and to improve coordination, CMAM will hold bi-annual or quarterly seminars with partners, USG and MOH programs to present findings from supervision visits as well as updates of supply plans to address programmatic challenges and estimated forecasting.