Meeting f the Bard 13 15 December Apia, Sama Prvisinal agenda item 22(b) GCF/B.15/21/Rev.01 11 December Administrative Budget f the Green Climate Fund fr 2017 Summary This dcument prpses the administrative fr the perid 2017 t supprt the peratins f the Green Climate Fund (GCF): The prpsed administrative fr the perid frm 1 January 2017 t 31 December 2017, is USD 45,666,356. Of this amunt USD 3,125,835 millin in staff csts was already apprved under Bard decisin B.05/20; The Bard is requested t apprve an additinal allcatin f USD 42,540,521 making the ttal allcatin fr 2017 t be USD 45,666,356.
Page 1 I. Intrductin 1. The activities f the Bard, the Secretariat, and the services prvided by the Interim Trustee are supprted thrugh an administrative apprved by the Bard against the funds available in the Green Climate Fund Trust Fund (GCF Trust Fund) established by the Interim Trustee. 2. This dcument prpses the administrative fr the perid 2017 t supprt the peratins f the Green Climate Fund (GCF) during this perid by: (a) (b) (c) The Bard; The Secretariat; and The Interim Trustee. II. Pssible actin by the Bard 3. It is recmmended that the Bard: (a) (b) Take nte f the infrmatin presented in dcument GCF/B.15/21 titled Administrative Budget f the Green Climate Fund fr 2017 ; Adpt the draft decisin presented in annex I t this dcument. III. Prpsed 2017 administrative f the Green Climate Fund 4. The prpsed administrative fr 2017 utlines the anticipated csts f the Bard, the Secretariat, and the Interim Trustee. 5. The 2017 has been develped in cllabratin with relevant divisins and ffices f the Secretariat, and has been based n their activities fr 2017, and estimates prvided by the interim trustee. The has als been reviewed by the Budget Cmmittee and incrprates their feedback. 3.1 Summary 2017 Draft Budget 6. In ttal the prpsed 2017 administrative is USD 45.7 millin as set ut in table 1. This represents a ttal increase f USD 10.3 millin r 29 per cent ver the apprved fr the Bard, the Secretariat and the Interim Trustee. 7. Apprximately 78 per cent (USD 8.1 millin) f the prpsed increase relates t the cst f the additinal psitins 1, apprved by the Bard at B.13 fr 2017. The remaining amunt f USD 2.2 millin cmprises a decrease f USD 0.5 millin fr Bard expenditures, and increases f USD 2.4 millin fr the Secretariat (mainly external prfessinal services) and USD 0.25 millin fr the interim trustee. Details are set ut belw. 1 The assumes that apprximately 80 staff will be n bard by the end f ; apprximately 117 by mid 2017; and 140 by the end f 2017.
Page 2 Table 1. Prpsed administrative fr the perid 2017 (in United States dllars) Apprved at B.12 Draft 2017 Increase/ (Decrease) in 2017 draft ver apprved % change 1 Bard 3,908,140 a 3,454,105 (454,035) (12%) 2 Secretariat 30,560,722 41,086,011 10,525,290 34% 3 Interim trustees 875,800 1,126,240 250,440 29% Grand ttal (1+2+3) 35,344,662 45,666,356 10,321,695 29% a The Bard fr cmparative purpses excludes the f USD 800,053 fr the independent units. The 2017 draft fr the independent units are presented separately fr Bard apprval. 3.2 Bard 8. The csts relating t the Bard, detailed in table 2, cver expenditures assciated with: 9. lgistical arrangements fr and travel t Bard meetings; 10. C-Chair and Bard representative travel n GCF related missins; 11. inter-sessinal meetings f Bard cmmittees, panels and wrking grups; including the csts f the Accreditatin Panel (AP) and the Technical Advisry Panel (TAP); and Table 2. Bard: Prpsed administrative fr the perid (in United States dllars) Apprved at B.13 2017 Increase/ (Decrease) in 2017 draft ver apprved % change 1.1 Bard meetings 1.1.1 Bard representative travel a 1,056,000 1,087,680 31,680 3% 1.1.2 Secretariat staff travel b 260,000 267,800 7,800 3% 1.2.3 Venue and lgistics 380,000 391,400 11,400 3% Sub-ttal: Bard meetings 1,696,000 1,746,880 50,880 3% 1.2 C-Chair and Bard representative travel 1.2.1 C-Chair and Bard representative travel 22,500 23,175 675 3% Sub-ttal: C-Chair and Bard representative travel 22,500 23,175 675 3% 1.3 Bard cmmittees, panels and wrking grups 1.3.1 Bard representative travel c 317,000 326,510 9,510 3% 1.3.2 Venue and lgistics 10,000 10,300 300 3%
Page 3 1.3.3 1.3.4 Cmpensatin f Bard panels: Accreditatin Panel 588,000 605,640 17,640 3% Cmpensatin f Bard panels: Technical Advisry Panel d 720,000 741,600 21,600 3% Recruitment f cnsultant cmpany - Heads f Accuntability Units e 254,640 - (254,640) (100%) Recruitment f the Executive Directr 300,000 - (300,000) (100%) Sub-ttal: Bard cmmittees, panels and wrking grups 2,189,640 1,684,050 (505,590) (23%) Grand ttal (1+2+3) 3,908,140 3,454,105 (454,035) (12%) a 12 Bard members, 12 alternate members and 24 advisers t attend each per meeting. b Assuming 40 Secretariat staff members fr the Bard meeting held away frm the headquarters f the GCF. c Assumes six members f the AP and TAP travelling t three Bard meetings per year in additin t 3 ne week missins fr pre-bard technical sessin; tw AP members making six site visits; and three Private Sectr Advisry Grup (PSAG) meeting. d Assumes six panel members wrking an average f 10 days per mnth e Assumes six panel members wrking an average f 12.5 days per mnth f Assumptin is made fr the purpse f ing and des nt preempt Bard decisins n either the number r venue f meetings in 2017. 12. In aggregate, the prpsed fr the Bard in 2017 shws a decrease f USD 0.45 millin r 12 per cent ver the apprved. This represents a decrease f USD 0.55 millin required in fr the recruitment f the Executive Directr and the Head f the Accuntability Units but nt needed in 2017. In additin, an increase f 3%, amunting t USD 0.1 millin, is prpsed fr ther line items ver the. The prpsed increase f 3% is in line with standard practice. 13. The csts assciated with the meetings lgistics have been ed n the assumptin that there will be three Bard meetings in 2017 tgether with an infrmal meeting and that three f the fur meetings will be held at the Fund s Headquarters, with the ther meeting held utside f Headquarters f. 14. The csts assciated with Bard cmmittees, panels and wrking grups are ed in line with the expected csts. In additin, AP members will again be expected t undertake site visits in 2017. As in, virtual meetings will be the preferred mde f peratin. 15. The draft 2017 f the Independent Units will be presented separately t the Bard fr apprval. 3.3 Secretariat 16. The prpsed fr the Secretariat is set ut in table 3. It includes the csts fr staff, cnsultancies, travel and peratinal/cntractual services required t supprt the expected wrk plan f the GCF fr 2017.
Page 4 Table 3. Secretariat: Prpsed administrative fr the perid 2017 (in United States dllars) Apprved at B.12 Draft 2017 Increase/ (Decrease) in 2017 draft ver apprved % change 2.1 Salaries and cnsultants 2.1.1 Full-time staff 15,711,457 23,766,501 8,055,044 51% 2.1.3 Cnsultancies 4,038,910 3,866,920 (171,990) (4%) Sub-ttal 19,750,367 27,633,421 7,883,054 40% 2.2 Travel 2.2.1 Travel 1,569,500 1,946,450 376,950 24% Sub-ttal 1,569,500 1,946,450 376,950 24% 2.3 Cntractual services, general perating, infrmatin technlgy csts 2.3.1 Office utility csts 300,000 360,000 60,000 20% 2.3.2 Cntractual services 4,117,000 5,936,400 1,819,400 44% 2.3.3 Other Operating csts 475,000 500,000 25,000 5% 2.3.4 Cmmunicatin and printing 315,000 315,000-0% 2.3.5 Infrmatin and cmmunicatin technlgy 3,183,855 3,502,241 318,386 10% 2.3.6 Depreciatin 850,000 892,500 42,500 5% Sub-ttal: Cntractual services, general perating, infrmatin technlgy csts 9,240,855 11,506,141 2,265,286 25% Grand ttal (1+2+3) 30,560,722 41,086,011 10,525,290 34% 17. Staffing: Decisin B.12/27 nted that the current wrklad is being carried ut by a cmplement f 56 regular Secretariat staff and apprximately 33 lng term cnsultants and acknwledges that this situatin is unsustainable and shuld be addressed as a pririty. 18. It further nted the need t increase the number f regular staff in the Secretariat t an apprximately ttal f 100 by the end f and t further increase t a ttal f apprximately 140 by the end f 2017, taking int accunt the ability f the Secretariat t recruit and absrb the increasing staff numbers, fllwing the apprpriate prcesses. Further details n staffing are prvided in the Bard paper GCF/B.15/14 titled Staffing f the Secretariat. 19. The staffing has been prepared n the assumptin that apprximately 80 staff will be n bard by the end f ; apprximately 117 by mid-2017; and140 staff will be n bard by year end. This has resulted in an increase f USD 8.1 millin r 51 percent in the fr staffing csts fr 2017 ver the. 20. The Bard, by its decisin B.05/20, apprved the cvering staff salaries and emluments fr the three-year cntract perid as fllws:
Page 5 a) Fr 2015: USD 12,042,101; b) Fr : USD 12,403,364; and c) Fr 2017: USD 3,125,835. 21. The ttal salaries requested fr 2017 is USD 23,766,501, f which USD 3,125,835 has already been apprved, as nted abve. An additinal amunt f USD 20,640,666 will therefre be required t cver the difference between the amunt already apprved and the prpsed fr staff. 22. Cnsultancy csts cmprise the hiring f individual cnsultants. Prfessinal service firms wh prvide cnsultancy services are ed under the line item cntractual services. Individual cnsultancies are made up f full time cnsultants based in Sngd (staff cnsultants) fr perids f three mnths upwards and cnsultants wh prvide services remtely n a call basis. 23. Cnsultants are ed at USD 3.8 millin f which staff cnsultants cmprise USD 2.6 millin and remte cnsultants USD 1.2 millin. Staff cnsultants in 2017 are required fr tw reasns; firstly t prvide cntinuity when new full time staff are recruited s as t prvide a smth transitin and secndly t prvide a staff functin where the staff psitins have yet t be filled. As the Secretariat becmes fully staffed we wuld expect a large decrease in the number f staff cnsultants at the Secretariat leading t a significant reductin in in future years. 24. Time sheet cnsultants are required t prvide additinal expertise in technical areas where the relevant divisin des nt prpse t hire staff itself. 25. In ttal cnsultancy csts decrease by USD 0.2 millin r 4 percent n the. As nted abve it is anticipated that as the Secretariat further staffs up that these csts will cntinue t decrease in future years. 26. Travel: Staff travel is ed at USD 1.9 millin. The increase f USD 0.38 millin r 24 percent ver the reflects the fact that staff will be required t undertake missins fr utreach and awareness-raising as needed in cuntries and partner institutins and als takes int accunt the large increase in the staffing levels in 2017. At the same time it takes int accunt the increasing awareness within the GCF Secretariat fr staff t cnduct business thrugh virtual meetings wherever pssible. 27. Utility csts are estimated at USD 0.4 millin. These cmprise utility csts fr the headquarters seven flrs which will be ccupied by GCF in 2017. The reasn fr the increase is that the GCF will ccupy an extra tw flrs in G Twer in 2017 t accmmdate the additinal staff. 28. Cntractual services are ed at USD 5.9 millin. This represents the cst f cntracting cnsultancy firms t supplement the substantive wrk prgramme f the Secretariat in 2017. 29. USD 2.1 millin f the requested USD 5.9 millin are fr 2017 prjects which will nt be recurring in future years. These include the Develpment f Risk Plicies/Rating Methdlgy; Advice n Strengthening the Internal Capacity f the Secretariat; human resurce prfessinal recruitment firms; develpment f C-financing Schemes; research n the Establishment f the Replenishment Prcess; Review f Cntributin Plicy; 30. Apprximately USD 1.6 millin are fr prjects which were apprved in the but nt implemented in. These are the develpment f day t day manuals and guidelines fr peratins and risk; and the csts t supprt the establishment f csts f entities t establish a pilt prgramme t supprt micr-, small-, and medium- sized enterprises (MSMEs),
Page 6 and a pilt prgramme t mbilize resurces at scale in rder t address adaptatin and mitigatin; 31. As the capacity f the Secretariat increases we wuld expect further decreases in future years as the sme f the utsurced wrk can be dne in huse. 32. The main cmpnents and utputs by perating divisin are as fllws: (a) (b) (c) (d) (e) (f) The Cuntry Prgram Divisin includes an amunt fr USD 1.0 millin fr prfessinal services t assess applicatins fr accreditatin, t prepare an annual reprt n the glbal state n readiness fr climate finance; and t supprt analytics and cmpilatin f reprts fr cuntry and entity prgrams. The USD 1.4 millin ed under Office f the General Cunsel cmprises an amunt f USD 1 millin fr external legal due diligence, review and drafting f Funded Activity Agreements and related prject dcumentatin (subscriptin agreements, deeds f incrpratin, sharehlders agreements, etc), advice n lcal laws and the issuance f legal pinins. These services will as a rule need t be rendered after the Bard has apprved a Funding Prpsal. In additin, USD 0.4 millin is requested fr legal advice n institutinal matters (bth internatinal and Krean law firms) where the Secretariat des nt have the in-huse expertise and fr translatin services. The Private Sectr Facility includes an amunt f US$ 0.6 millin fr the prvisin f technical advisry services. PSF will launch RFP Prgrammes in 2017 t establish a pilt prgramme t supprt micr-, small-, and medium- sized enterprises (MSMEs), and a pilt prgramme t mbilize resurces at scale in rder t address adaptatin and mitigatin. The divisin will need t strengthen its internal capacity t launch, implement and review the CNs/FPs received under these prgrammes. The M&A includes an amunt f USD 0.4 millin fr the prvisin f technical advisry services. The increasing amunt f funding prpsals, CNs, EDAs, PPFs will require additinal capacities t cnduct secnd level due diligence, technical and cmpliance reviews. The M&A divisin fresees receiving supprt frm specialized firms fr cnducting part f the review prcess allwing the divisin t manage a larger number f prpsals fr mre specialized areas which may nt be cvered by the prfessinal prfile f the new staff that will be jining the team during the next threesix mnths The Office f Risk Management includes an amunt f USD 1.3 millin fr the develpment f cmprehensive risk plicies/rating methdlgy and fr ther cnsulting services requiring a third party pinin. Divisin Supprt Services/CFO includes an amunt f USD 1.2 millin fr a range f services which includes: Advice n strengthening the internal capacity f the Secretariat; human resurce prfessinal recruitment firms; develpment f C-financing Schemes; Research n the Establishment f the Replenishment Prcess; Review f Cntributin Plicy; and audit services. 33. Other perating csts: Miscellaneus csts such as ffice supplies, bank charges, insurance, in-huse wrkshps, etc. amunting t USD 0.5 millin has been prpsed. 34. Cmmunicatin: The cmmunicatins wrk in 2017 will fcus n tw verarching gals: firstly t raise awareness and encurage, supprt and prmte cllabratin amng key stakehlders f the GCF, and secndly t use cmmunicatins t achieve the bjectives f the GCF. In line with the Bard Decisin B.13/25 (e) a prpsal n Secretariat staffing fr cmmunicatins and utreach is still in the prcess f being drafted and will be presented t the
Page 7 Bard nce it has been reviewed by the Budget Cmmittee. The 2017 fr cmmunicatins is being held at the level. 35. Infrmatin and cmmunicatin technlgy (ICT): The 2017 is based n best practices fr rganizatins perating in the Public Sectr. Fr example, a metric derived frm the Gartner benchmark estimates average ICT csts fr rganizatins perating in the Public Sectr. Gartner s applicable ICT benchmark fr natinal/internatinal gvernmental rganizatins such as the GCF is 11.7 per cent f crprate ttal. Fr 2017, the IT systems, excluding staffing csts, is USD 3.5 millin tgether with a depreciatin charge f USD 0.85 millin. 36. The primary fcus will be t cntinue the implementatin f systems (set ut belw) previusly begun in. The mst imprtant prjects are: An investment management prtfli system; Mnitring and Evaluatin management system Readiness and partnering systems & tls; A Cntributins and Cash Management system; A Risk and Quality management system; and Dcument management tl. 37. Depreciatin: Includes the annual depreciatin csts fr systems develped in 2015 and : (a) (b) (c) Sftware and hardware; Bard rm equipment; and Cmputer equipment. 3.4 Interim Trustee 38. The administrative fr the Interim Trustee in table 4 includes the estimated csts and expenses f the Internatinal Bank fr Recnstructin and Develpment (the Wrld Bank) fr the Interim Trustee services f the GCF as estimated by the Interim Trustee. Actual csts fr 2017 will depend n the level f services required. Table 4. Interim Trustee: Estimated csts and expenses fr the perid 2017 (in United States dllars) INTERIM TRUSTEE BUDGET 2017 2017 Increase/ (Decrease) in 2017 draft ver apprved % change 3.1 Financial and prgram management 3.1.1 Staff csts and expenses 304,800 320,040 15,240 5% 3.1.2 Travel 48,400 48,400-0% Sub-ttal: Financial and prgram 353,200 368,440 management 15,240 4%
Page 8 3.2 Investment Management 262,500 595,000 332,500 127% 3.3 Accunting and reprting 3.3.1 Staff csts and expenses 55,000 33,000 (22,000) (40%) 3.3.2 External Audit 50,000 (50,000) (100%) Sub-ttal: Accunting and reprting 105,000 33,000 (72,000) (69%) 3.4 Legal services 3.4.1 Staff csts and expenses 106,700 95,700 (11,000) (10%) 3.4.2 Travel 48,400 34,100 (14,300) (30%) Sub-ttal: Legal services 155,100 129,800 (25,300) (16%) Grand ttal (1+2+3) 875,800 1,126,240 250,440 29% 39. Financial and prgram management: These items cver: prcesses and prcedures relating t all aspects f financial transactins; management and prcessing f cntributins, including negtiatin and executin with cntributrs, all banking, freign exchange, payment requests and acknwledgements; executing cash transfers t recipients; regular financial reprting and activities related t preparatin f financial statements and external audit. It als includes respnding t day-t-day enquiries frm Secretariat, Cntributrs and ther Green Climate Fund cnstituencies and stakehlders, and ad hc advisry services t the Secretariat n specific issues, as requested. The level f effrt required fr these items is expected t remain at r slightly abve that required in. The increase is in line with staff salary increases. 40. Investment management: The Wrld Bank Grup charges a flat fee f 3.5 basis pints (0.035%) f the estimated average annual undisbursed balance in the GCF Trust Fund fr investment management services fr trust funds. Fr the purpse f the estimate nly the interim trustee has used the GCF Secretariat's assumed average balance f USD 1.7 billin fr CY2017. This represents a significant increase ver the estimated average balance fr (USD 750 millin estimated at time f preparatin; hwever average t date has been apprx. USD 1.3 billin). The actual fee will depend n the actual average balances in the GCF Trust Fund during 2017, which may be higher r lwer than this estimate. 41. Accunting and reprting: This item includes maintenance f apprpriate recrds and accunts t identify cntributins and ther receipts and GCF Trust Fund liabilities. The decrease in reflects the decisin by the GCF nt t request separate audited financial statements fr the GCF trust fund. Legal services: These items include the preparatin f cntributin agreements/arrangements with cntributrs and ther agreements and arrangements as required, including with the GCF, and review f dcuments f the GCF given their impact n the rle f the Interim Trustee. The expectatin in 2017 is that there will be a decrease in legal services frm the interim trustee.
Page 9 Annex I: Draft decisin f the Bard The Bard, having reviewed dcument GCF/B.15/21 titled Administrative Budget f the Green Climate Fund fr 2017 : (a) (b) Ntes, that fr the perid 1 January 2017 t 31 December 2017, USD 3,125,835 in staff csts was apprved by Bard decisin B.05/20; and Apprves an additinal administrative f the Green Climate Fund fr the perid frm 1 January 2017 t 31 December 2017 in the amunt f USD 42,540,521 making the ttal apprved administrative fr CY 2017 t be USD 45,666,356
Page 10 Annex II: Administrative Budget f the Green Climate Fund fr 2017 Administrative Budget f the Green Climate Fund fr Apprved 2017 1 Bard 1.1 Bard meetings 1,746,880 1.2 C-Chair and Bard representative travel 23,175 1.3 Bard cmmittees, panels and wrking grups 1,684,050 Sub-ttal: Bard 3,454,105 2 Secretariat 2.1 Salaries and cnsultants 27,633,421 2.2 Travel 1,946,450 2.3 Cntractual services, general perating, infrmatin technlgy csts 11,506,141 Sub-ttal: Secretariat 41,086,011 3 Interim Trustee 1,126,240 Grand ttal 45,666,356