1 rbm workplanning and budgeting-fao managing for results in fao module iii. budgeting, review and...

1RBM Workplanning and Budgeting-

FAO

Managing for results in FAO

Module III.

Budgeting, review and approval


FAO

1. Distribution of staff costs across organizational results

2. Validation of unit results

3. Development of products and services and related activities for each UR and preparation of workplans

4. Adjustment of estimated planned costs for URs

5. Review of financial feasibility of URs

6. Quality assurance

7. Final approval of workplans

Operational Planning Steps in the workplanning process


FAO

Step 4 Adjustment of estimated planned costs for Unit Results

Calculate reasonable estimates of non-staff planned costs to do planned activities to deliver products and services and, in turn, URs

Estimate staff planned costs for the same• map post contributions ensuring skills sets needed and roles

and responsibilities in the workplan• estimate in work-months• review staff mappings across all unit result and organizational

result to ensure all staff resources are accounted for, that they do not exceed 100% and to clarify what %FTE was entered under each result.


FAO

3 main components / constraints that managers and staff have to work with

– Cost / resources available– Time– Scope of result

Tips in budgeting: the Triple Constraints Model

QUALITY OUTPUTS & OUTCOMES

RESOURCES/COSTS

SCOPE TIME


FAO

Scope, Time and Resources

KEY:Red = scopeBlue = timeGreen = $/resources

• If one changes, another must be adjusted.• When the right balance and sufficient amount of each (Resources,

Time, Scope) exists, we get quality outputs and outcomes.


FAO

Estimating non-staff planned costs

WHO The responsible officer for each activity, and the responsible officer for the linked product or

service, and team members

WHAT

Estimate where appropriate the financial resource requirements for non-staff in order to complete each activity; this will be aggregated upwards to estimate the planned costs of linked product or service and ultimately the unit result

Estimate financial resource requirements directly for products and services where it is not feasible to estimate the non-staff planned costs by activity

WHY To justify the allocation of financial resources to achieve the linked product or service and unit

results

WHEN

Planned costs are estimated after agreeing to products and services to deliver, and defining their associated activities

All planned costs must be set before the workplan is submitted for approval

Non-staff costs and staff costs need to be estimated separately


FAO

Standard budget categories for estimating non-staff cost

• Consultants• Travel• Equipment / Procurement• Research contract• Supplies Contractual• Fellowships• Fee (if applicable)

The estimated non-staff planned costs are most easily set by first estimating them by

type of expenditure where feasible

Activity Level

Aggregating them

Product or service level (Minimum Requirement)

Option 1 (preferred Option)Option 2

Where it is not feasible to determine the planned costs for the individual

activities

Unit Result Level


FAO

Other Direct Costs (ODCs)

Operational/Recurring Costs• Often based on historical data and adjusted for inflation,

currency fluctuations each year• Include: Office expenses (rent, supplies, other contracts),

shipping and communications, vehicle and equipment lease and maintenance, bank fees, etc.

• Facility or system rehabilitation costs, if anticipated

Activities/Workshops • Conferences / Trainings / Workshops / Meetings• Renovations (not equipment procurement)• Supplies and commodities


FAO

Since costing is linked to activities (preferred option), you should be able to answer the following questions for each activity:

– What will you do?

– What are the steps you will take to do it?

– With whom will you work?

– What resources (if any) will you use (e.g. training manuals, tools, etc.)?

– Who will benefit?

– What will be the end result of the activity?

– When will you achieve the result?

– How will you measure and show achievement?

Alternatives and options should be collectively considered, not only for defining these activities, but also for detailed

costing

Costing activities - an iterative process

An iterative process for getting consensus on the

scope of the proposed activities

to deliver the agreed

products/services, and on the

reasonableness of estimated cost within the unit

owning the work plan.


FAO

• Activities consuming only staff time are indicated in the workplan with no costs

• Non-staff planned costs include the cost of consultant and staff for whom it is not required to establish a position

Issues in estimating non-staff costs

During the biennium, when revision of a workplan involves an increase of the total estimated planned costs exceeding the approved allocations, formal

submission, review and approval of the changes are required.


FAO

Estimating planned staff cost

"Staff costs" relate to staff members or posts in the establishment.

WHO Sub-regional coordinator, ADG/Regional Representative for regional office, division director,

responsible officer for workplan, and team members

WHAT

Indicate the staff involvement in the delivery of the workplan, and estimate the planned staff time

Estimate the costs of staff required for the delivery of products and services necessary for the achievement of the unit results

WHY To provide the basis for estimating the total costs of the unit results

To justify the budget allocations for achieving the unit results

WHEN After products and services are tentatively agreed to

It is actually an iterative process


FAO

Estimating planned staff cost: Basic Requirements

The estimated planned costs

Product or Service Level

Aggregating them

Option 1 (preferred Option)Option 2

Where it is not feasible to determine the planned costs at the product or

service level

Unit Result Level

Ensure that the skill set requirements and individual roles and responsibilities are reflected in the workplan.


FAO

Staff member/Post Strategic Objective A – Sustainable intensification of crop production HL EC KN PW GA

Unit Result 1 – Implementation of guidance and criteria for strategies on sustainable crop production, intensification and diversification at regional level

13 9 20 18 21

Product 1 – Management practices that minimize pesticide use on small farms

2 1 4 2 5

Product2 – Framework to support rural extension service agent retraining in sustainable crop production

6 6 3 4 5

Product 3 – Pesticide policy manuals - 1 - 4 7

Product 4 – Framework for monitoring and reporting on sustainable crop production

1 5 6 4

Product 5 – Framework for evaluation of sustainable crop production

4 1 6 2 -

Mapping of Staff Member and Positions to Unit Results, and Products and Services

(Person months)


FAO

Strategic Objective A – Sustainable intensification of crop production

Estimated Staff Planned Cost Notes

Unit Result 1 – Implementation of guidance and criteria for strategies on sustainable crop production, intensification and diversification at regional level

Mr. H.L for 13 person x months 219,125 D2

Ms. E.C. for 9 person x months 63,750 G6

Mrs. KN for 20 person x months 288,000 P5

Mr. PW for 18 person x months 250,250 P5

Mrs. GA for 21 person x months 275,00 P4

Estimating Staff Costs

Based on the mapping, the estimated staff costs are then determined by multiplying the staff time in person months by the

average staff cost for the staff’s grade.


FAO

Staff shared across various projects Proportion of time charged per project

No. Detail

FTE TOTAL Project A Project B Project C Project D

% # wks % #

wks % # wks % #

wks % # wks

1 SAMPLE: Mohammed Ibrahim/Snr Officer 47 100

% 47 30% 14 40

% 18 10% 4 20

% 9

2 Staff member name/title 0% 0




Level of Effort (LOE) Non-FAO Example to Determine Staff Cost


FAO

Task Allocation: Sample Responsibility Matrix

TASKS INDIVDUALS/POSITIONS AND ROLES

Person 1 Person 2 Person 3 Person 4Task 1 C I I, R R, ATask 2 I C A RTask 3 I I C R

KEY: C = coordinate; I = give input; R = reviewA = approve

Other options:Other options:

S = supportS = support

Others???Others???


FAO

• Being too optimistic & ambitious: – Be realistic! – Build in some slack to allow for the unexpected (“Defensive

scheduling and budgeting”)– Remember: exceeding expectations is more appreciated than

behind schedule or off target due to unanticipated expenditure

• Pressure from “higher ups”:– Resist the temptation to rely upon speed as the only selling

point. – Emphasize quality (requiring higher budget), staff morale and

beneficiary satisfaction.

Practical Guesstimation Problems


FAO

Sources of Funds

• Extra-budgetary (EB) and Regular Programme (RP) resources need to be planned in an integrated way.

• Targets have been provided to ADGs and Heads of Independent Offices at the department/office level for both sources of funds.

Regular Programme targets are bindingThe EB targets provide guidance based on expected delivery

levels.

• Units are asked to estimate and plan extra-budgetary funds based on three considerations:

the projects pipelinenon-project contributions andprospects.


FAO

Sources of Funds

Units should estimate the picture of actual overall resource availability based on four elements:

RP targets provided at the department/office levels, including regional, sub-regional and liaison offices

Delivery estimates for the biennium for on-going and pipeline field projects funded from voluntary contributions

Entity contributions not related to projects, such as WHO contributions for Codex, World Bank and investment earnings

Prospects reflecting project ideas or, more simply, staff knowledge of developments that are likely to occur in the biennium, allowing for a

“top-up” of available resources based on this knowledge.

While the first element has been provided, the other three must be estimated and planned by Units.


FAO

Step 5 Review the financial feasibility of Unit Results

• Review feasibility of activities, products and services, and unit results for both budgetary and extra-budgetary resources based on total estimated staff and non-staff resource requirements.

• Adjust accordingly where necessary to secure financial feasibility


FAO

Groupwork

• Your turn• Steps 4-5 based on

your own unit Time Frame Biennial Budget Organizat-

ional Result Unit Result (Unit Result HQ>Product/Service>

Activity)

Impact Focus Area

Partner Country/Implementa

tion Site

Milestone (if milestone pls put a check)

Responsible Person

Start Finish Planned Cost

Assessed Contributio

n

Extra Budgetary

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) HQ Unit Result 1: TITLE

Product/Service 1: TITLE

Activity 1: TITLE

Activity 2: TITLE

Activity 3: TITLE


Activity 1: TITLE

Activity 2: TITLE

HQ Unit Result 2: TITLE


Activity 1: TITLE

Activity 2: TITLE

OR TITLE

Activity 3: TITLE


FAO

Step 6 Quality assurance

• Peer review of URs, products and services and activities; for soundness, logic, roles and responsibilities; indicators and result measurement

• Ensure synergies and linkages across SOs and FOs• Finalize workplans reflecting peer reviews


FAO

Pitfalls with Results and Assumptions

• Results not linked to the strategy above e.g. URs are not logically linked to OR

• Results derived without effective stakeholder participation

• A single result statement includes several results at different levels joined with ‘by’, ‘through’, ‘in order to’, ‘so that’

• URs do not clearly convey what a unit expects to achieve

• Result is not achievable within the biennium

• Products and services proposed are not sufficient to achieve the UR, the unit’s expected contribution to OR.

• Multiple Unit Results overlap towards one OR

• Similar URs under different ORs

• Results dependent on conditions that have not been analysed and, where relevant, mitigated; no robust risk analysis


FAO

Pitfalls with performance measurement

• Unrealistic targets within the timeframe

• Components (often adjectives) of results not addressed in indicators

• Baseline data not known

• Excessive number of indicators

• Too much data collected; data not used

• Underestimated cost of data collection

• False proxy indicators

• Data not available when needed

• Indicators measure actions and not results


FAO

Review: budgeting questions

• Does the proposed service level justify the budget request? Could the money be put to better use elsewhere?

• Are the objectives of the service worthwhile? Is the best approach being taken to achieve the objectives? Is there adequate financing for the service level proposed?

• Will spending more on the service next year save money in the long run?

• Can existing services be delivered in ways that are more efficient thus reducing costs?

• Have price changes been taken into account?

• If there is not enough money to fund all services, which are to be eliminated first?


FAO

Review: budgeting issues

Workplanning and Budgeting-FAO

• Work together as a team to complete the budget and review against the workplan.

• Budget recurrent expenses (i.e., utilities, communication, supplies and other office expenses) based on actual expenditures from previous months; you may refer to quarterly pipelines and/or monthly financial reports.

• If there are ‘extraordinary’ expenses, make note of them and include a justification.

• Make sure there is no duplication.

• Verify that all recurring, monthly costs are budgeted at the correct number of months (i.e. in line with the duration of the budget).

• Review and check formulas!


FAO

Step 7 Final approval of workplans

• Compliance with business rules

• Signing off and formal approval by sub-regional

coordinator, ADG/RR, ADG s in HQ as appropriate

• Party and / or sleep!!

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