MAPGuideⓇ
Equitable Access Toolkit
Reporting Requirements and Audit Rights to Support Compliance and Impact Monitoring for Funding Agreements
Provisions that establish requirements for periodic reporting from a funded partner are an important mechanism for enabling funders to monitor the use of their funds and evaluate the impact of a funded project on equitable access objectives. Failures by a funded partner to produce timely reporting or to meet deliverable and milestone deadlines can be indicators of risks to the fulfilment of access commitments, and potentially of inefficient use of the funder’s resources. Reporting requirements should be supported by audit rights that enable a funder to review underlying records for the information reported, and to assess a funded partner’s compliance with access commitments.
Reporting requirements
The reporting requirements established under a funding agreement usually address the type and frequency of reports to be submitted. Some agreements additionally include rights for the funder to share certain elements of the information reported with third parties, potentially on an aggregated or anonymized basis.
The type of information required in periodic reports should be determined based on the scope and goals of a particular agreement, as well as the information needed by a funder to meet their own internal reporting requirements and their obligations to upstream funders or investors and external stakeholders. Some agreements also include ad hoc notification requirements for key events in addition to regular reporting (e.g., product safety or quality issues, regulatory authority communications or inspections).
Information required as part of periodic reports often includes:
Product development and commercialization progress
Project progress reporting, often with reference to project milestones and deliverables such as non-clinical or clinical trial start dates and end points, regulatory submissions and approvals, manufacturing scale-up, and first commercial sale. Progress reporting requirements may also include an assessment of potential risks or delays and mitigation measures, as well as forecast progress in the next period.
Equitable access objectives or impact metrics
Reporting on the progress towards, or the fulfilment of, equitable access commitments such as product registration in the access territory, responses to public tenders, pricing and sales volumes to eligible purchasers.
Intellectual Property
Information on the generation or acquisition of new intellectual property related to the project. This may be used by funders to identify IP rights required in the event of exercising an access license.
General compliance confirmations
Confirmations that a funding recipient is in compliance with the general conditions and warranties of a funding agreement. These confirmations can be used as part of corporate governance processes to ensure that funding is used in accordance with the laws and regulations applicable to the project.
Financial information
Reporting of actual expenditure against budgeted costs. This information can be used to assess the funding recipient’s progress on a project compared to the project plan and identify risks of budget overruns. Some funders also require copies of funding recipients’ annual financial statements and audit reports to support analysis of ongoing financial stability and any potential increase in risk level for the funder’s investment.
The frequency of reporting requirements should balance a funder’s need for up-to-date information against the time and resources required for a funding recipient to produce the reports and for the funder to review and follow-up on the information received. The required frequency of reports can depend on factors such as:
Product development stage: projects reaching critical milestones such as first doses in clinical trials, regulatory submissions, or commencement of commercialization may require more frequent reporting to ensure timely information on outcomes.
Urgency of need: products intended for response to an ongoing public health emergency may require more frequent reporting to support input to global response mechanisms.
Investment risk level: more frequent reporting may be considered good governance practice for projects perceived to have a higher risk profile, for example due to an inexperienced partner or the scale of the investment.
Some agreements also specify a reporting duration beyond the end of the funding period, for example linked to first commercial sale of a funded product, or to the duration of access commitments under the agreement. These requirements can support funders in monitoring and evaluating the ongoing impact of their investments and of the access commitments in the funding agreement.
Examples from the MAPGuide
[Developer] shall provide reports of its expenditure under the Budget with supporting documentation and using a template provided by [Funder] (“Financial Reports”) within thirty (30) Business Days of the end of each calendar quarter during the term of the Project or such other date(s) as may be identified in the Budget. [Developer] shall submit a final Financial Report for a Work Package within sixty (60) days after the completion of any Work Package.
Source: taken from a development funding agreement for up to USD $33 million between CEPI (Funder) and Variation Biotechnologies (Developer). Partner types: non-profit funder, industry; Product type: COVID-19 vaccine; Development stage at signature: early stage development. Read in context.
[Developer] shall complete and submit a detailed report on the work done and outcomes of the Programme (“End of Award Report”) in the prescribed form to the [Funder] such report to be presented to the [Funder] within [**] months of completion of the Programme (or other such date as may be agreed with the [Funder]. The [Funder] will evaluate the End of Award Report and will notify the [Developer] within [**] Business Days of receipt whether the report is acceptable to the [Funder]. If the End of Award Report is not acceptable to the [Funder], it shall notify the [Developer] of its reasons at the same time, which may include that the report is incomplete or insufficiently detailed and the [Funder] shall have the right to withhold further funding until the [Funder] receives an End of Award Report which the [Funder] deems to be acceptable.
[…]
Following the annual audit of [Developer] by its external auditors, [Developer] shall provide the [Funder] with the audited financials which shall indicate whether the external auditors have signed their opinion on the annual accounts of [Developer] without qualification. [Developer] shall further confirm in writing to the [Funder] that the management letter from the auditors raises no matters that did or could significantly affect the administration of grants awarded by the [Funder]. If the auditors have raised any such matters in their management letter, [Funder] shall, on request from the [Funder], provide the [Funder] with relevant extracts from the letter.
Source: taken from a USD $5.4 million grant agreement between the Wellcome Trust (Funder) and PTC Therapeutics (Developer). Partner types: philanthropic funder, industry; Product type: cancer therapeutic; Development stage at signature: drug discovery. Read in context. Read in context.
[Developer] shall provide the following to [Funder] to the extent not already included in the reports and information provided by the Partner to [Funder]:
(i) progress report on the scale-up of the Platform for Manufacturing and a good faith estimate of the cost of the scale-up where such scale-up is necessary;
(ii) progress report on the scale-up of Manufacturing of Project Vaccine for use in the Field to fulfill any requirements of an Approved Regulatory Authority for the grant of marketing approval for such Project Vaccine for use in the Field in the Affected Territory;
(iii) progress reports on submissions to Regulatory Authorities for a Platform Confirmation or plans to do the same;
(iv) a good faith estimate of the number of doses of each Project Vaccine for use in the Field the [Developer] and/or Trusted Manufacturers are capable of producing, using the Platform and dates by when Partner estimates such volume will be achieved;
(v) a good faith estimate of Cost of Goods of doses of each Project Vaccine for use in the Field for both the investigational stockpile and any additional doses; and
(vi) the documents and information any estimates are based on together with any information on any factors that may impact the cost of each Project Vaccine use in the Field.
Source: taken from a USD $34 million funding agreement between CEPI (Funder) and CureVac (Developer). Partner types: philanthropic funder, industry; Product type: mRNA platform technology; Development stage at signature: preclinical. Read in context.
In addition to reports required to be delivered to the [Funder] under the Investment Documents, the [Developer] will furnish, or cause to be furnished, to the [Funder] the following reports and certifications:
(within [**] days after the end of each of the [Developer’s] fiscal years during which the [Funder] owns any securities in the [Developer], a certificate from the [Developer] signed by an officer of the [Developer] and substantially in the form attached to this Letter Agreement as Appendix 3, certifying that the requirements of the [Funder] Investment set forth in this Letter Agreement were met during the immediately preceding fiscal year, describing the use of the proceeds of the [Funder] Investment and evaluating the [Developer’s] progress toward achieving the Global Access Commitments; […]
At the Foundation’s reasonable request, the Company will provide the Foundation with a summary of scientific data and progress to date on all Programs and any Platform Technology related to the foregoing, and the considerations made by the Company with respect to accessibility, affordability and cost–effectiveness of the applicable Products for people and payors in Developing Countries, in addition to the information that may be required under any grant agreements or other funding agreements.
Source: taken from a strategic relationship agreement between the Gates Foundation (Funder) and Arsanis (Developer) signed in connection with an USD $8 million investment by the Foundation. Partner types: philanthropic funder, industry; Product type: neonatal sepsis mAb (staphylococcus aureus); Development stage at signature: discovery. Read in context.
Within 75 days after the end of each fiscal quarter of the Company, a quarterly written report (which report may be informal to the extent it contains the information requested in this Section 4(e)(4)) on the impact performance relative to the Program Products, together with information on the impact key performance indicators (“Impact KPIs”) achieved that are aligned with the Investor’s objectives to improve global health. For the purposes of the foregoing, the priority Impact KPIs are:
IPI 1 – Program Product – Regulatory approvals in target countries
IPI 2 – Program Products – Number of Company products catalyzed/distributed
IPI 3 – Lives Improved – Number of Lives improved by the provision of Program Products in LMICs
IPI 4 – Reach – Number of Low-Middle Income Countries benefiting from Program Products.
Source: taken from a global health agreement between the AXA Prime Impact Master Fund (Funder/Investor) and Revelation Biosciences (Developer) signed in connection with a USD $4 million preferred stock purchase agreement. Partner types: impact investor, industry; Product type: allergic rhinitis therapeutic & diagnostic; Development stage at signature: early stage development. Read in context.
In order to assist [Funder] in monitoring the public healthcare benefit derived from [Funder] funding, until the seventh (7 ) anniversary of the date of first commercial sale of a Product in the Field anywhere in the world, regardless of whether [Funder] has converted the Loan or been repaid, the [Developer] shall provide annually to [Funder] at the end of its financial year (or where the [Developer] is exploiting the Project IPRs and/or Products in the Field via third parties, procure that such third parties provide annually to [Funder]) a summary, together with supporting data, of the efforts being taken to provide equitable access to the Product in the Field. This summary shall include the number of Products in the Field (including doses if applicable) sold, supplied or made available for distribution globally and in each country.
Source: taken from a USD $11.7 million convertible loan agreement between the Wellcome Trust (Funder) and Alto Neuroscience (Developer). Partner types: philanthropic funder, industry; Product type: bipolar depression therapeutic; Development stage at signature: phase 2b clinical trials. Read in context.
[Developer] will submit reports according to the Reporting & Payment Schedule using the [Funder’s] templates or forms, which the [Funder] will make available to [Developer] and which may be modified from time to time. For a progress or final report to be considered satisfactory, it must demonstrate meaningful progress against the targets or milestones for that investment period. If meaningful progress has not been made, the report should explain why not and what adjustments [Developer] are making to get back on track. Please notify the [Funder’s] Primary Contact if [Developer] need to add or modify any targets or milestones. The [Funder] must approve any such changes in writing. [Developer] agree to submit other reports the [Funder] may reasonably request.
[…]
During the term of this Agreement and for 5 years after, [Developer] will submit upon request annual intellectual property reports related to the Funded Developments, Background Technology, and any related agreements using the [Funder’s] templates or forms, which the [Funder] may modify from time to time.
[…]
You will conduct, control, manage, and monitor the Project in compliance with all applicable ethical, legal, regulatory, and safety requirements, including applicable international, national, state, local, institutional, and school district or school network standards (“Requirements”). You will obtain and maintain all necessary approvals, consents, and reviews before conducting the applicable activity. As a part of Your annual progress report to the Foundation, You must report whether the Project activities were conducted in compliance with all Requirements.
Source: taken from a USD $9.3 million grant agreement between the Gates Foundation (Funder) and Arsanis (Developer). Partner types: philanthropic funder, industry; Product type: RSV mAb; Development stage at signature: preclinical. Read in context.
Audit rights
Funding agreements often include both financial and non-financial audit rights. Financial audits involve the review of accounting systems and data related to the project budget, actual expenditure, calculation of the cost of goods for the funded product, and/or sales of the funded product. Non-financial audits may involve the review of scientific, manufacturing, and other project data, as well as physical inspections of facilities related to the conduct of research, development, and manufacturing activities.
Audit rights enable funders to validate the accuracy of reports that they receive and obtain assurance that their investment is being used in accordance with expectations. Audit rights do not need to be limited to cases of suspected wrongdoing and can be exercised as part of a funder’s business as usual project and financial governance activities.
Examples from the MAPGuide
During the term and for a period of [***] after expiration or termination of this Agreement, [Funder], or its designee (which shall be a internationally recognized certified public accounting firm, not engaged on a contingent basis), and at [Funder’s] reasonable cost, shall have on-site access to inspect [Developer’s] Project- related financial records once annually upon at least [***] advance notice. Such inspections shall be conducted during normal operating hours in a manner to minimize disruption to [Developer’s] business. For clarity, access to such records also shall be provided to records related to Cost of Goods as described in Clause [x].
During the term and for a period of [***] after expiration or termination of this Agreement, if requested by [Funder], and at [Funder’s] reasonable cost, [***] notice, [Developer’s] external auditors shall conduct a Project audit in accordance with ISA800 and/or ISA805 and like standards and provide [Funder] with audited statements. Such requests shall not occur more frequently than [***] and will be conducted during normal operating hours in a manner to minimize disruption to [Developer’s] business.
Source: taken from a development funding agreement for up to USD $384 million between CEPI (Funder) and Novavax (Developer). Partner types: non-profit funder, industry; Product type: COVID-19 vaccine; Development stage at signature: phase I clinical trials. Read in context.
Without limiting the foregoing, at the [Funder’s] request, the [Developer] will permit the [Funder] or its representatives to inspect (at a reasonable time and location) the scientific records of the [Developer] relating to each Program with due regard to the reasonable need to protect trade secrets covering the Platform Technology.
Source: taken from a strategic relationship agreement between the Gates Foundation (Funder) and Arsanis (Developer) signed in connection with an USD $8 million investment by the Foundation. Partner types: philanthropic funder, industry; Product type: neonatal sepsis mAb (staphylococcus aureus); Development stage at signature: discovery. Read in context.
During the Project Commencement Period, within [*****] of the end of each calendar quarter, [Developer] will (A) provide the [Funder] with written reports in form and detail reasonably satisfactory to the [Funder] and confer with the [Funder] (by teleconference or in scheduled site visits as appropriate) regarding progress with respect to the Projects including information regarding progress against the Global Access Commitments and (B) coordinate with the [Funder] to determine reasonable times for the [Funder’s] representatives to make site visits to the [Developer’s] facilities and to conduct any inspections with respect to the Projects. Such site visits may be conducted in [*****] by a consultant selected by the [Funder] and approved by the [Developer] (such approval not to be unreasonably withheld or delayed) who is subject to a confidentiality agreement that is reasonably acceptable to the [Developer] and the [Funder].
Source: taken from a global access commitments agreement between the Gates Foundation (Funder) and CureVac (Developer) signed in relation to an investment in CureVac by the Foundation. Partner types: philanthropic funder, industry; Product type: vaccines and drugs for target diseases using mRNA platform technology; Development stage at signature: preclinical. Read in context.
The [Funder] may appoint a Site Visit Group, made up of a small team of independent experts and observers from the [Funder]’s Technology Transfer Division. The Site Visit Group shall have reasonable access for the duration of the Programme during normal working hours and at mutually agreed times to visit all the premises where the Programme is being conducted to consult informally with [Developer]’s employees, researchers, consultants or contractors working on the Programme to evaluate progress, performance and key issues and to report back to the [Funder] and the RSG on their findings.
The Site Visit Group may recommend that the [Funder] terminates the Programme due to a serious failure in the progress, management or conduct of the Programme (including but not limited to a finding that the Programme will be unable to achieve the next Milestone within a reasonable time period after the relevant Milestone Date), or due to a major external scientific, technical or commercial barrier which means that the Programme is unlikely to succeed in its objectives. If the Site Visit Group makes such a recommendation pursuant to this Clause [x], it must provide written notice of its recommendations and the rationale therefor to the Parties.
If [Developer] is unable to remedy a serious failure or external barrier identified by the Site Visit Group pursuant to Clause [x] within [**] Business Days, or such longer time period as the [Funder] may, in its sole discretion, allow, the [Funder] may terminate this agreement pursuant to Clause [x].
Source: taken from a USD $5.4 million grant agreement between the Wellcome Trust (Funder) and PTC Therapeutics (Developer). Partner types: philanthropic funder, industry; Product type: cancer therapeutic; Development stage at signature: drug discovery. Read in context.
What information needs to be shared with other stakeholders to support coordination of broader activities to facilitate access?
How do the reporting requirements in the agreement align with the governance committee schedules and responsibilities?
What actions are available to the funder if the funding recipient does not meet their reporting obligations, or if reports or audits show that access commitments have not been fulfilled?
This toolkit has been built based on the data in the MAPGuide and the GHIAA team’s experience of negotiating and implementing agreements. We intend that the toolkit will evolve and expand over time based on input from MAPGuide users and availability of new agreements showing examples of alternative approaches. We welcome ongoing constructive dialogue around these materials and encourage you to contact us or fill in our feedback survey to share your thoughts, questions and suggestions.