Update on UNRWA s finances Advisory Commission November

Transcription

1 Update on UNRWA s finances Advisory Commission November

2 Contents 1) 2012 Financial Status 2) 2013 Budgets 3) Activity Based Costing Update Slide 2

3 Key Messages 1) GF Financial situation until the end of 2012 Close coordination with donors on payment schedules Close supervision of spending 2) Austere 2013 Budgets New budget panel and extensive reviews Critical Objective no reduction in services 3) One Budget presented GF, projects and Emergency Appeals 4) Activity Based Costing Progress and finalized in ) 2013 focus Budget Panel quarterly reviews all portals Procedures for Project Mgmt Management of labour costs Inclusive Project and EA Reporting Slide 3

4 Mid Nov 2012 GF Cash Forecast Amount In $m Actual Jan Actual Feb Actual Mar Actual Apr Actual May Actual Jun Actual Jul Actual Aug Actual Sep Actual Oct F/C Nov F/C Dec Total B/F Balance Income (Outflow) (68.2) (45.0) (33.2) (56.0) (67.1) (36.4) (44.0) (46.0) (44.0) (51.7) (42.8) (47.0) (581.4) Balance *9.7 *Predicated upon receiving in December 2012, from UK 10m or USD16m, from 2013 advance. Slide 4

5 GF Cash Position 2012 Budget Line items $m $m General Fund Cash Budget Position to 31/12/2012 (97.5) a) Increase in Donor Income 30.0 b) Derivative Gains 14.0 c) SSNP over budgeted 12.0 d) Deferred ERP Capital Expenditure 5.0 e) Mid Year Review - Non Spend (i) Deferred Capital Expenditure 2.0 (ii) Fx (ILS) Savings on CAF 4.0 (iii) Training /Travel and Consultancy 1.5 (iv) Utilities/Inventories/Others 2.1 (v) Deferred or non appointment of Staff (including through Class formation exercise) f) Other (2.1) End of October (21.0) Mid November - Additional Income/Cash 30.7 E (EOY) Forecast at 31/12/2012 *9.7 Note : Only able to pay December creditors and finish year in cash surplus due to UK 10m or USD16m advance from Slide 5

6 Austerity Measures 2012 Due to challenging financial circumstances, in September, new austerity measures put in place, till further notice, comprising: Cease all business class travel, Cease all international travel unless prior approval- DCG/CoS, Only essential inter-field travel, prior approval - Field Directors/CoS, Cease IT/Capital/Consultancy spend, new contracts DCG approval, Cease all In-Person interviews for international positions DHR approval, All workshops at UNRWA facilities unless DCG approval, and General - No UNRWA calendars, essential attendance only at Adcom/MTMs etc. Slide 6

7 Explanation on Funding Portals - Definitions GF Projects EA Gaza &WB; SHRP & NBC Definition: Support core activities that require recurrent resources. Typical Intervention: Provision of health, education, and relief and social services as well as support services that enable UNRWA to operate. Source of Funding: 93% voluntary contributions, 6% UNNY Int. Staff, 1% Others Definition: For specific and time bound activities, with a view to improve services and add to Capital Stock (schools, clinics, shelters etc)without increasing recurrent costs. Typical Intervention: Building of facilities and reform related items that are supposed to be integrated in the medium term. Source of Funding: Earmarked contributions. Definition: Responding to emergency conditions; i.e. created by external factors and expected to be provided as long as these external conditions prevail. Typical Intervention: JCP, emergency education, additional relief related to the external factors Source of Funding: Earmarked and un-earmarked contributions Slide 7

8 Development of 2013 Budgets 1) Templates based on expenditures Jan-Sept 2012 Operational plans accompanied budget requests On-going and proposed projects submitted at the same time Emergency Appeal 2) Two rounds of budget hearings (DCG, DFIN, DERCD, DHR, CoS) All budgets shared with all budget holders Panel recommendations to ACRA 3) ACRA Recommendation to CG Further review of consultancy, training and portion of staffing budget lines Risk register presented to CG Quarterly reviews of all budgets; monthly for Syria 4) Austere Budget $0.0m salary reserve/risks to budget Slide 8

9 GF Budgets Comparison Amount In $m Budget Line items 2013 Budget Rec Donor income Others 49.4 Total Income (A) Expense - Budget Field Offices HQ Departments 42.9 Reserves 17.2 Add 60% provision of 2013 Budgeted Risks of $12.7m 7.6 Total Expense (B) Operational Expense Deficit (A-B) (112.3) Include Capital (C) (38.2) Exclude Non-cash Expense (D) (Provisions and Depreciation) 81.7 Total Cash Deficit (A-B+C+D) (68.9) Slide 9

10 UNRWA Funding Portals 2013 ( one budget ) NBC 6% Amount In $m Prj 9% Funding Portals 2013 Budget $m % General Fund % In Kind 1.9 0% Emergency Appeal s(wb & Gaza) % EA 27% Projects * % NBC % IK 0% GF 58% Syria ** 0.0 0% Total 1, % Projects Budget 2013 still being developed * * New Syria 2013 Appeal is imminent Slide 10

11 Projects & NBC 2013 Budget Amount In $m Projects & NBC NBC Reconstruction 54.0 Gaza Reconstruction & Construction of Schools 50.7 Camp Improvement Gaza (Deir el Balah Camp) 22.0 SSNP Food Aid 20.3 NBC Restoring Dignity Appeal 14.7 Others 8.0 Support to Human Rights in Gaza 2.3 Total Slide 11

12 Activity Based Costing ABC defines all activities (services) provided by the Agency (internal and external services) in a harmonized structure which enables the Agency to: Ensure comparability/benchmarking of specific activities/activity groups across the Agency. Be more transparent on total costs of each activity, considering staff costs, other direct costs and indirect costs on all Agency levels. Establish a fair, realistic and transparent methodology to allocate indirect costs. Slide 12

13 Next Steps Finalize ABC, enhanced Reporting Functionality, improve allocators and K.P.Is (April 2013) Preparation for the year end 2012 run cycle based on actual costs Comparison with 2011 actual costs Consultation with the Field Offices and HQ Departments on the Activities and allocation of FTEs Develop further KPI s in agreement with all stakeholders Conclude all reports and agree on the frequency and distribution list for such reports Continue using ABC reports as an integral part of the decision making process of the Agency Slide 13

14 Questions adcom November 2012 Slide 14

15 Appendices Slide 15

16 UNRWA Funding Portals (One Page, one slide) % 5% 6% 5% 10% 9% 14% 21% 1% 4% 60% 15% 0% 2% 59% 27% 0% 0% 58% $M Funding Portals 2011 Actual 2012 Forecast 2013 Budget $m % $m % $m % General Fund % % % Restricted Fund % % 0.0 0% In Kind 9.3 1% 3.0 0% 1.9 0% Emergency Appeal % % % Projects * % % % NBC % % % SHRP 0.0 0% % 0.0 0% Total 1, % 1, % 1, % * Projects Budget 2013 still to be developed Slide

17 $M UNRWA By Programme ( ) 2011 Actual GF RF IK EA Prj NBC SHRP Total % Education % Health % ICID % Relief % Support % Total , % 2012 Forecast GF RF IK EA Prj NBC SHRP* Total % Education % Health % ICID % Relief % Support % Total , % 2013 Budget GF RF IK EA Prj NBC SHRP Total % Education % Health % ICID % Relief % Support % Total , % * SHRP = Budget Appeal Slide

18 GF Budget Comparison Amount In $m Budget EOY Budget Hearing Submission Budget Rec Donor income United Nations - RB Programme Support Cost Recovery Interest and Other Income Total Income Expense Field Offices Gaza Jordan Lebanon Syria West Bank Total Field Offices HQ Departments Education Health Relief and Social Services Infrastructure and Camp Improvement Administrative Services Executive Office (2013 includes Agency wide consultancy) External Relations and Communications Finance UN Support Human Resources (2013 includes Agency wide Training) Enterprise Resource Planning Internal Oversight Services Dispute Tribunal Legal Affairs Total HQ Departments Slide 18

19 GF Budget Comparison Budget EOY Budget Hearing Submission Budget Rec Reserves & Adjustments Salary reserve DAS - Legal Officer Staff Assistance (P-4) RSS Reserve GMIP Syria Annual Leave Reserve HQ Reserve and Provision for Doubtful Debts Total Reserves Finance Derivatives & Other adjustments Total Expense Total Operational Expense Deficit Add Capital and Other Cash Outflow Items Equipment and other capital items ERP JFO -Cash payout in Jan 2013 for Sep 2012 Dec Retirement Benefits - EVR Severance Cash Payments (1) Total Capital and Others(C) Less Non-Cash Items Severance Provision Annual Leave Depreciation (3) Other Non Cash items (2) Total non-cash Expense (D) Interim Cash Deficit (A-B+C+D) (4) Add 60% provision of 2013 Budgeted Risks of $12.7m 7.6 Total Cash Deficit including Budget Risks Assumptions: 1. Other non-cash items is movement in provisions 2. Depreciation Draft - to be finalized 3. The cash deficit reflected above is under the assumption that no income in 2012 is received as an advance. 4. $12.7m comprises of hospitalization in LFO/JFO, planned headcount and others Amt in $m Slide 19

20 GF Comparison * Amount In $m 2012 E(EOY) 2013 Draft Diff. Labour Total One-Offs $25.4m- comprising; a) step increase- CAF (19.7) (12.5) Severance (44.9) (54.9) Adj. Labour Non-Labour Depreciation (21.4) (20.1) Adj. Non-Labour (11.2) Total Adjustment $8.5m b) Labour Costs- $4.7m (Indemnity, WB GMIP, restructure), c) SFO GMIP- $1.4m d) JFO salary Increase (2012)- $6m e) Miscellenous provisions-$4.8m Therefore, effectively Labour Costs decrease from $444.2m to $418m reflecting an austere Budget. Also, no general salary reserve provided. Non-Labour: an effective reduction of around ($107m - $96m) -$11.2m or 10% (training, travel, consultancy and other). a. Please note initial draft 2013 GF Budget (mid Oct. 2012) produced a cash deficit of -$94m which is now reduced to generate a cash deficit of -$69m. b. Also, potential spend of $5m not included in the 2013 Budget i.e. in 'Risk Register' * Excludes International staff Expense Slide 20

21 General Fund ( ) Amounts In $M Support RSS ICID Health Education - Bgt Act 2011 Bgt F/C 2012 Bgt 2013 Activities 2011 Actuals 2012 F/C 2013 Budget Actual Budget F/C Budget Education Health ICID Relief Support Grand Total Slide 21

22 General Fund 2012 Forecast US$ Millions GF Forecast Education - No. of schools: 700; No. of students: 485,501; Average Class Size: No. of staff: 19,217; and Vocational & Technical Training Centres: 10 Health -No. of Clinics: 139 and one Qalqilia Hospital in West Bank No. of staff: 3,525 with 504 doctors, 1,127 nurses, 122 dental surgeons and 633 paramedical staff attending million medical consultations in 2011 (104/doctor) Relief and Social Services No. of SHCs: 291,757 -No. of staff: 699 Infrastructure & Camp Improvement & Planned Infrastructure Activities: Camps = Support Departments 95.7 (Includes Int. Staff $22m, area staff costs $45m, supplies $5m, admin. Support $5m, utilities/maintenance $2m, Depreciation $4m & other misc. services $13m) Total Slide 22

23 General Fund Education Programme: Provide Palestine refugee children and youth with access to quality education and training through 700 schools, ten technical vocational colleges, and two teacher training institutes across five fields of operation. Health Programme: Provide primary health care, and help refugees access secondary and tertiary care services. Relief and Social Services: Provide a social safety-net for Palestine refugees: assistance that includes basic food support, cash subsidies, and an additional supplement to family income for the poorest of the poor the abject poor. Also provide individual need-based cash grants on a case-by-case basis for household basic or family emergencies. Infrastructure and Camp Improvement: Maintain UNRWA facilities such as school and health facilities, environmental infrastructure including water and sewerage systems, improvement in refugee camps and shelter improvement. Slide 23

24 Budget by Programme Projects ( ) Amount In $m Activities 2011 Actuals 2012 F/C 2013 Budget A ct ual Budget F/C Budget Educat ion Healt h I CI D Relief Support Grand Total Slide 24

25 Emergency Appeal Temporary Job Creation Programme: Aims to relieve economic hardship by providing temporary employment opportunities. These opportunities alleviate poverty and restore dignity while contributing to community development and protection. Emergency Food Assistance: Deliver food aid to families unable to meet their food needs, as well as improve the food security through targeted livelihood support. Includes food distribution to abject poor and absolute poor refugees not included amongst the SSNP list of beneficiaries funded by GF/Projects. Emergency Health: Ensure access to essential Health Services including support to refugee coping mechanisms by addressing the psychosocial needs, with a particular focus on children and youth. Includes emergency support staff to cope with increased demand in WB; 6 mobile clinics in WB; medical supplies to repair/replace medical equipment in WB & Gaza; Child Health including mental health in Gaza; and HospitalCareinWB&Gaza. Emergency Education: Focus on developing a participatory, equitable and conducive learning environment focusing on school supplies for students; remedial programmes including grade-appropriate learning support, teaching guides etc.; and improved discipline with a special focus on boys schools with acute behavioural problems. Others: Include Protection which includes identification of protection needs, prioritizing identified vulnerable groups; Operation Support Officers; Temporary Shelter (Gaza Strip only); and coordination & management. Slide 25

26 Emergency Appeal Gaza ( ) Amounts In $M. Bgt 2013 Activities 2011 Actuals 2012 F/C 2013 Budget Actual Budget F/C Budget Food Assistance Cash Assistance Job Creation Programme Shelter Repair Others (PSC, Co-ordination, Manag., OSO, etc) Grand Total Slide 26

27 Emergency Appeal West Bank ( ) Amounts In $M. Activities 2011 Actuals 2012 F/C 2013 Budget Actual Budget F/C Budget Job Creation Programme Food Assistance Cash Assistance Health Others (PSC, Co-ordination, Manag., OSO, etc) Grand Total Slide 27

28 EA in Gaza & WB 2012 Forecast US$ Millions EA -Gaza & WB Forecast Job Creation Programme 31.4 Food Assistance (food commodities & other distributed costs) 55.7 Shelter repair and reconstruction of demolished houses 31.7 Emergency capacity (emergency programme & admin sup.etc) 9.8 Emergency support to CBOs (Community Based Orgs.) 1.8 Emergency Health (medicines and mobile clinics etc) 4.7 Environmental health (water and sanitation etc) 1.3 Community mental health 3.5 Emergency Education (school feeding, summer games etc) 1.7 Operation support officers (OSOs) 3.7 Protection 1.3 Programme support costs 13.4 Total 160.0

29 Amount In $m NBC ( ) Activities 2011 Budget 2011 Expenditure 2012 Budget 2012 Forecast 2013 Forecast Capital Construction- Package 1 to Shelter Management NMU Management Cost Health Pogramme Infrastructure Household Furniture Others Grand Total Slide 29

30 Syria Humanitarian Response Plan The Appeal for $53.8 million for the period September 2012 to March 2013 with $44 million for Syria; $1.5 million for Jordan and $8.3 million for Lebanon comprises of the following Activities: Amount In $m Cash Assistance 12.6 Non-Food Items (NFI) 9.9 Food Assistance 17.6 Rental Subsidies 2.5 Emergency Environmental health/water 0.9 Emergency Health 2.9 Emergency Shelter Rehabilitation 0.4 Emergency Education 5.2 Safety and Security 1.4 Capacity and Management Support 0.4 Total 53.8 Slide 30

31 In-Kind Donations Amount In $m Services Budget Actual Budget Forecast Budget In-Kind In-kind donations are assets transferred to UNRWA without any charge and include: a.inventory Items e.g. basic commodities, medicines etc. b.property, Plant and Equipment e.g. building equipment, vehicle etc. c. Non-inventory items e.g. computers. Slide 31

32 Definition, Objectives and Benefits Through development of a fair and transparent cost allocation model, it provides the total costs of the front line (core) activities. Combined with agreed KPIs for UNRWA s services, ABC can provide a comprehensive basis for better decision making (reduce costs and/or increase efficiency and effectiveness) at all management levels. Slide 32

33 Project Approach, Scope & Methodology - Major Activity Groups Based on their functional character, activities have been grouped in three major categories: Core Activities Core Activities reflect the agency s front-line activities. The core activities are the major focus of the ABC exercise, so they have the highest level of detail and bear full absorption costs. Internal Support Services Internal Support Services have the character of real services with a potential service provider customer relation (at least partially). The management focus for these services is increasing efficiency by giving quality levels of services. Executive Management & Governance Executive Management & Governance comprises all corporate, management and management support functions, which have a more superior, political and tactical character (no real or potential service provider customer relation), e.g. Com-Gen Office, DIOS, Dispute Tribunal, etc. Slide 33

34 2. Project Approach: All relevant activities have been defined in workshops with HQ and the fields and documented in the UNRWA Activities Dictionary UNRWA Activities Dictionary (major activity groups) Core Activities Internal Support Services Education Health Infrastructure & Camp Improvement HR IT Finance Procurement & Logistics Administrativ e Services Legal Affairs Relief & Social Services Microfinance * Security Executive Management & Governance Emergency* ComGen s Office / Front Office Programme / Project Support *As not part of GF, the activities have been defined, but are not used in the ABC costing model Slide 34

35 2. Project Approach: General value streams in ABC cost allocation model 1 Allocation of HQ overhead costs to the fields HQ 2 Allocation Field Office Management to core activities and internal support services Allocation internal support services to core activities Allocation core activities to core activities (only ICI) 1 1 Field A Field B Field n Slide 35

36 3. Results: Total direct costs per Field & HQ Departments Based on 2011 data, the total GF actual of $ 572M can be broken down to the fields / HQ as follows. This figures match 100% with RAMCO data. Slide 36

37 3. Results: Agency-wide benchmarking - Health Total programme costs $ ,00 $ ,00 $ ,00 $ ,00 $ ,00 $ ,00 $ ,00 $- HQ GFO LFO SFO JFO WBFO Average Health direct costs total Health total costs This graphic shows the direct (without indirect cost allocations) and total costs (including indirect cost allocations) for the Health programme across the agency. Slide 37

38 3. Results: Agency-wide benchmarking - Health, Activity Group Primary Care Total costs - Primary Care Total costs Primary Care per patient visit $ ,00 $16,00 $ ,00 $ ,00 $14,00 $12,00 $10,00 $ ,00 $8,00 $ ,00 $ ,00 $6,00 $4,00 $2,00 $- HQ GFO LFO SFO JFO WBFO Average $- HQ GFO LFO SFO JFO WBFO Average Primary Care direct cost total Primary Care indirect cost total Primary Care: Average direct costs per Patient visit Primary Care: Average indirect costs per Patient visit GFO shows the highest total costs for Primary Care with approx. $25M, followed by WBFO and JFO. Looking at the average Primary Care costs per patient visit, GFO has the lowest costs with approx. $6, whereas LFO spends more than $14 per patient visit. SFO and JFO are in the midfield with around $10 per visit. Slide 38

39 3. Results: Agency-wide benchmarking -Health, Activity Group Secondary & Tertiary Care Total costs - Secondary & Tertiary Care Total costs Secondary & Tertiary Care per hospitalization $ ,00 $ ,00 $ ,00 $ ,00 $ ,00 $ ,00 $ ,00 $250,00 $200,00 $150,00 $100,00 $50,00 $- HQ GFO LFO SFO JFO WBFO Average $- HQ GFO LFO SFO JFO WBFO Average Secondary & Tertiary Care direct cost total Secondary & Tertiary Care indirect cost total Secondary & Tertiary Care: Average direct costs per Hospitalization Secondary & Tertiary Care: Average indirect costs per Hospitalization The total costs of Secondary & Tertiary Care are by far the highest in WBFO with more than $6M, followed by LFO with approx. $1.4M. All other fields spend less than $1M for Secondary & Tertiary care. Looking at the average Secondary & Tertiary Care costs per hospitalization, WBFO again has the highest costs with $225 per hospitalization, followed by GFO with $150. The other fields range between $20 and $50. One explanation for this high costs in WBFO can be Qalqilia hospital, as all other fields almost only outsource secondary & tertiary care services. adcom November 2012 Slide 39

40 4. Lessons learned & recommendations Topic Activity structure and allocation of FTEs Lessons learned & recommendations The defined activity structure is a big step for the agency as it is the first agency-wide harmonized catalogue of UNRWA services There is a need to conduct joint workshops per programme / activity group of HQ and field departments to discuss and analyze the first ABC results, regarding the figures on one hand but also challenging the activity structure itself (structure, level of detail, comparability, etc.) ABC projects like this always need a learning phase of the first 6 12 months until everything is stable and all parties involved have gained some experience to work with the model and the reports Slide 40

41 END Slide 41