Board Committee Reports Report of the Finance & Performance Committee

Transcription

1 Board Committee Reports Report of the Finance & Performance Committee 26th RBM Board Meeting Geneva, May 14-16

2 Since the 26th Board Meeting the Finance and Performance Committee has addressed six key issues 1. Review and endorsement of the RBM Financial Report for the year 2013, which is submitted to the Board for approval. 2. Review and endorsement of Revised Estimated Funds Available for Review and endorsement of Revised Partnership Work Plan PWP for , which is submitted to the Board for approval 4. Review and endorsement of Performance Management Framework 5. Review of Sensitivity Analysis on Revenue and Expenditure Review of GMAP Implementation Overview 2

3 Revised Estimated Funds Available for 2014 and setting of a new Budget Ceiling for the PWP 2014 The FPC was advised at its meeting in September 2013 that funds available for 2014 were estimated at US $20,330,838. Due to the signing of a number of new grants and the carry forward of some funding from 2013, funds available for 2014 have increased by approximately US $6M to US$26,204,663. The earmarked funds carried forward from 2013 to 2014 are included in the revised PWP and Budget Taking into account the above the FPC endorsed a revised maximum Budget Ceiling for the PWP and Budget 2014 of US $25,578,230 This leaves US $626,433 still available for allocation 3

4 Revised Estimated Funds Available for 2014 and setting of a new Budget Ceiling for the PWP 2014 Board decision (Board November 2013) recommended the creation of a provision of 2,5% (US $503,655) of the Expenditure Budget 2014 (US $20,146,195) for implementation of the recommendations of the Independent Evaluation. The FPC recommended that this provision be taken out of the funds identified as available for allocation ( i.e. US $626,433). The FPC also recommended adding the balance (US $122,778) to the Working Capital Reserve (WCR) or simply not allocating it at this stage. 4

5 Revised Partnership Work Plan and Budget (PWP) The FPC noted that the Executive Director had undertaken a revision process in conjunction with the mechanisms that had, to the extent possible, taken into account the FPC recommendations that were agreed by the Board in November The Expenditure Budget for 2014 has increased by approximately US $5M to US $25,230,927 incorporating earmarked funds unspent in 2013 and new funding that was raised for activities previously in SAF. The Revised Expenditure Budget 2014 remains within the Revised Budget Ceiling as endorsed by the FPC. The Supplemental Activity Framework (SAF) for 2014 has decreased significantly, following advice to all Mechanisms to include only activities it is somewhat confident of being able to raise funding for. 5

6 Revised Partnership Work Plan and Budget (PWP) The FPC noted that the proposed Expenditure Budget for 2015 of approximately US $19 million was significantly higher than the expected funds available for the same period. The FPC recommended endorsing the revised PWP and Budget for 2014, but that the PWP and Budget for 2015 be noted as a list of costed activities but not be approved. Performance Management Framework The FPC reviewed the Performance Management Framework and suggested a number of minor modifications, and noted that it was a significant improvement over previous performance frameworks. The FPC recommended that the Performance Management Framework be updated and implemented. 6

7 Sensitivity Analysis on Revenue and Expenditure 2015 As requested by the RBM Board, the Secretariat presented a Sensitivity Analysis for the FPC to better understand potential risks to RBM funding sources and to develop mitigation strategies. Over the three years 2010 to 2012 funding available for RBM PWP funded staff and activity costs was between US $15 and 16 million per year. In 2013 there was an increase in revenue to nearly US $19 million followed by an increase to more than US $23 million in Almost all of the increases in 2013 and 2014 relate to project specific earmarked funding and not to core funding. Based on current donor agreements and current confirmations, revenue for 2015 is expected to amount to approximately US $10.5 million. 7

8 Sensitivity Analysis on Revenue and Expenditure 2015 The Secretariat presented a number of scenarios for expected revenue and corresponding expenditure scenarios to highlight the impact of the reduction in available funds The FPC noted that Scenario 3 Probable (Scenario 2 plus Likely ) the most likely scenario and recommended that the Working Capital Reserve (WCR) currently at US $1,977,342 is excluded from Scenario 3 and only used in case of emergency. Accordingly, funds available under Scenario 3 would be US $10,597,482. It should be noted that the Board adopted a ratio of 40% staff cost to 60% activity cost as a budgeting principle. The FPC agreed to present the findings of the Sensitivity Analysis on Revenue and Expenditure for 2015 to the EC on 16 April 2014 and also recommended that the External Evaluation Task Force be formally advised of the Sensitivity Analysis. 8

9 GMAP Implementation Overview & Dashboard Definition: A data collection exercise that captures key information from the partners strategic and operational plans for the coming 5 years (whenever available) across all GMAP Areas. Represents a key informant of the strategic analysis and recommendations presented in the report of the Executive Director. Importance: Improves data integrity. Promotes efficient resource allocation. Enables comprehensive gap analysis of GMAP to identify areas that require additional attention. 9

10 GMAP Implementation Overview & Dashboard (Continued) Achievements: Almost 80% participation from respondents representing more than 20 partner organizations, incl. all RBM constituencies and most of the RBM mechanisms. All GMAP areas received updates. Data quality has improved substantially. Several indicators reported for the first time in the areas of Disease Control and Advocacy. Funding: Captures commitments vs. disbursements whenever possible. 10

11 GMAP Implementation Overview & Dashboard (Continued) Opportunities for Improvement: Alignment with the indicators of the Performance Management Framework. Disease Control: No information is still available for community level data. Commodity Supply: Missing information on the estimation of stock levels incountry since AMFm was introduced. R&D: non-existance of baseline and target needs to be addressed with GMAP II Implementation Plan. Programme Coordination: Expand regional data collection beyond SADC. Technical Standards: Missing focus areas identified for stimulating a dialogue on how RBM can facilitate the country uptake of WHO normative guidance. 11

12 Financial Report for the year th RBM Board Meeting Geneva, May

13 RBM had an international funding base of 9 key donors in 2013 Kuwait Fund 2% GFATM Gap Analysis 2% World Bank 6% USAID (OGAC) 17% Abu Dhabi (HAAD) 28% IDB 2% Gates GMAP 2 10% Gates Core 11% UK DFID Data Strength 11% UK DFID 11% As at 31 December 2013 $ 17.8 million of revenue was recognized 13

14 Millions $25 RBM Budget 2013 made up of the Expenditure Budget and Supplemental Activity Framework (SAF) RBM Budget 2012 Overview $20 $15 $10 $5 SAF $7.1 Revised Expendit ure Budget $18.1 Revised Expenditure Budget of $18.1M for SRNs, the Secretariat, and 7 Working Groups Supplemental Activity Framework (SAF) is $7.1M $0 14

15 Budget 2013 was prepared in order to track performance in three dimensions GMAP Area "Results based" Funding Disease Control Commodities Advocacy Governance & Management Mechanism "Organization based" Expenditure type "Cost structure based" 15

16 Budget vs Expenditure for 2013, Carry Forward $2.1M Millions $20 $18 $16 $14 Carry Forward $2.1 Encumbrances $1.2 $12 $10 $8 $6 $4 $2 $0 Expenses $14.8 Revised Budget $

17 Millions $8 Area Funding has low expenditure due to signing of grants in late 2013 and some activities being reprogrammed to 2014 $7 $0.7 $6 $5 $7.1 $4 $0.2 $7.3 $3 $5.7 $7.0 $0.03 $2 $3.8 $2.4 $0.2 $3.6 $2.5 $0.01 $2.4 $1 $2.1 $1.9 $2.5 $0.2 $0.2 $0.2 $0 Funding Disease Control Commodities Advocacy Governance & Management Original Budget Revised Budget Expenses Encumbrances 17

18 Total Expenditure Rate (inc. Encumbrances) of 88% WG expenditure low due to HWG activities being reprogrammed to 2014 Millions $12 $11 $10 $0.7 $9 $11.0 $8 $7 $6 $11.9 $5 $10.0 $4 $3 $2 $1 $0 $0.2 $3.6 $3.6 $1.9 $0.2 $0.1 $3.4 $0.7 $0.8 $0.6 $0.6 $0.5 SRNs WGs GOV SEC Original Budget Revised Budget Expenses Encumbrances 18

19 Millions $8 Major cost types are Staff, and Agreements with UN & NGOs $7 $6 $5 $4 $3 $7.1 $7.3 $6.4 $2 $1 $0 Staff $4.0 Agreements: UN and NGO $2.8 $2.6 $2.6 $1.2 $0.4 $2.1 $1.8 $1.1 $1.8 $0.9 $0.8 Consulting Contractual Services Equip, Vehicles, Furniture $2.3 $2.2 $1.8 Travel General Operating Costs Telecom Original Budget Revised Budget Expenses Encumbrances 19

20 Key Issues & Developments for 2013 Rate of Expenditure 88% (incl. encumbrances) Available fund balance as at 31 Dec 2013 = US$ 3,036,693 Working Capital Reserve accumulated to US$ 1,393,920 as at 31 Dec 2013 Significant increase in contributions from DFID, The Gates Foundation and Islamic Development Bank, however, these are one off grants and are earmarked for specific activities to occur mostly in 2013 and 14. Grant agreements with multiple donors will expire in (Abu Dhabi, Kuwait Fund, Kuwait State and GFATM) or will be reduced (World Bank) The grants with The Gates Foundation and DFID must also be renegotiated in 2014 Dialogue with current and prospective donors must be intensified 20

21 Sensitivity Analysis on Revenue and Expenditure th RBM Board Meeting Geneva, May 14-16

22 Sensitivity Analysis on Revenue and Expenditure 2015 The Board was advised that there were potential risks to RBM funding sources that were predicted to take effect in The RBM Board asked for a sensitivity analysis to be undertaken to better understand these risks and possible mitigation strategies. Based on the analysis, a number of funding scenarios are presented. Historic expenditure patterns have also been analysed and possible allocation of funding based on the four funding scenarios are presented 22

23 Sensitivity Analysis on Revenue and Expenditure 2015 $25,000,000 Actual & Projected Revenue $23,582,942 $20,000,000 $18,915,001 $15,000,000 $15,853,363 $15,099,739 $15,441,611 $10,597,482 $10,000,000 $5,000,000 $0 Revenue 2010 Revenue 2011 Revenue 2012 Revenue 2013 Projected Revenue 2014 Projected Revenue

24 Sensitivity Analysis on Revenue and Expenditure 2015 Donor Carry Forward and Reserves Certain Likely Possible Estimated Carry Forward from ,000,000 Working Capital Reserve 1,977,342 Abu Dhabi (HAAD) 0 0 5,000,000 UK DFID 0 1,953,125 0 UK DFID Data Strengthening ,000 Gates Foundation - Core 0 2,000,000 0 Gates Foundation - GMAP 2 1,075,007 Islamic Development Bank ,000 USAID (OGAC) 2,997, USAID (PMI) 1,072, World Bank 0 500, ,000 Kuwait Fund ,000 Kuwait State 0 0 1,500,000 GFATM (New Funding Model) 0 0 2,000,000 Total 2,977,342 5,144,357 4,453,125 9,950,000 24

25 Sensitivity Analysis on Revenue and Expenditure 2015 Revenue Scenarios Total Earmarked Core Scenario 1 - Worst Case - "Certain" but not using reserves 5,144,357 4,547, ,175 Scenario 2 - Worst Case plus Reserves - "Certain" plus carry forward plus WCR 8,121,699 4,547,182 3,574,517 Scenario 3 - Probable - Scenario 2 plus "Likely", excluding WCR 10,597,482 4,547,182 6,050,300 Scenario 4- Possible - Scenario 2 plus "Possible" 19,547,482 9,097,182 10,450,300 Most Likely Scenario based on current donor commitments Total Earmarked Core Staff Cost based on 40% Staff 60% Activity Approximate No. Posts Scenario 3 - Probable - Scenario 2 plus "Likely", excluding WCR $10,597,482 $4,547,182 $6,050,300 $4,238, to 20 25

26 Sensitivity Analysis on Revenue and Expenditure 2015 Possible Impact Cost saving measures as well as increases in productivity through staff mobility and a focus on priority activities are needed. It is expected that in the order of US $2.5 million in savings and efficiency gains can be made. All scenarios other than Scenario 4 involve a reduction in the number of Secretariat staff The Board needs to assess the likely impact on the partnership and particularly on the delivery of activities in the Partnership Work Plan if additional funds are not identified. 26

27 Sensitivity Analysis on Revenue and Expenditure 2015 Possible Impact Taking the WHO employment conditions into account, the realistic lead time needed to reduce staff by significant numbers is approximately six months. If it is assumed that the funding scenarios would take effect from 1 January 2015 then the Executive Director would need to take concrete action by commencing staff terminations by 30 June 2014 if reconfirmations of funding or new pledges are not forthcoming by that time. It is critical that this time line is clear to the RBM Board so it is able to provide adequate guidance to the Executive Director. 27

28 Finance and Performance Committee Recommendations 26th RBM Board Meeting Geneva, May 14-16

29 Requested Board Action Financial Report 2013 The FPC recommends that the Board: Note the FPC Report to the Board Approve the Financial Report for the year 2013; and Approve the RBM Statement of Income and Expenditure 1 January 2013 to 31 December 2013 extracted from the WHO Financial Report and certified by WHO Chief Finance 29

30 Requested Board Action PWP The FPC recommends that the Board: Note the FPC has reviewed the Revised PWP and Budget 2014 and that the Executive Director has undertaken a revision process in conjunction with the mechanisms that has, to the extent possible, taken into account the FPC recommendations that were agreed by the Board in November Approve the revised PWP and Budget for 2014 with an Expenditure Budget of US $25,230,927, including implementation of the Performance Management Framework, and note the PWP and Budget for 2015 as a list of costed activities but not approve it. 30

31 Requested Board Action Sensitivity Analysis 2015 The Board recommends: That a small group of Board members work with the EXD to prioritise and summarise minimal critical requirements to maintain the minimal essential services of the Secretariat with costings by June 1 The Board recommends: That the EXD presents a plan to a maximum budget of US$ 10,5 Million by June 1 (unless further funds become available) That the EXD presents a plan to a maximum budget of US$ 10,5 Million by? With inputs as required by Board members and considered by EC before approval by Board electronic vote by,,,,, (unless further funds become available) 31

32 Requested Board Action Sensitivity Analysis 2015 The FPC advises: That under Scenario 3 a significant reduction in operational capacity would be necessary, including a reduction in Secretariat staff by approximately half. Executive Director would need to take concrete action by commencing staff terminations by 30 June 2014 if reconfirmations of funding or new pledges are not forthcoming by that time. The FPC recommends that the Board consider: The guidance to be given to the Executive Director on the critical functions of RBM to be implemented through the Partnership Work Plan in the context of a reduction of financial resources. 32