Informal consultation on highlights ofUNDP’s Integrated budget estimates,

2014-2017

13 June 2013

Figures are provisional estimates subject to change until budget is finalized

Contents• Strategic context• Financial context and integrated resources plan• Programmatic components• Institutional components• Linkage of resources to results• Next steps

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Strategic context• Integrated budget is integral complement to the strategic plan & integrated results

and resources framework therein

• Provides information on resource estimates in the integrated results and resources framework.

• Supports transformation of institutional effectiveness called for so that UNDP can deliver effectively, responsively and with greater cost effectiveness on the vision and outcomes in the Strategic Plan.

 • Builds on improvements made under the Agenda for Organisational Change,

using three interrelated strategies : (i) higher quality programmes through results based management; (ii) greater organizational openness, agility and adaptability to harness knowledge, solutions and expertise; and (iii) improved management of financial and human resources in pursuit of results in a way which is sustainable within project resource flows. 

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Strategic context (continued)

Culmination of ‘joint roadmap to integrated budget’ (with UNICEF, UNFPA and UNWOMEN):

• harmonized cost classification framework (decision 2010/32);

• harmonized results-based budgeting approach (decision 2011/10); and

• harmonized conceptual cost recovery methodology and cost recovery rates (decisions 2012/27 and 2013/9).

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Strategic context (continued)

• For the first time, decision sought on single integrated presentation, on areas previously legislated through two distinct funding instruments – the institutional budget and the programming arrangements.

• This holistic approach:• acknowledges the synergies and linkages between development and

institutional results at country, regional and global levels, and the associated resource requirements.

• Recognizes that Institutional activities represent essential strategic enablers for the achievement of development results.

• Facilitates the process of continuous re-alignment of institutional capacities required to help programme countries achieve development results within the remit of the strategic plan.

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Financial contextKey facts for 2014-2017 – overall:- Total of $20.8 billion in estimated regular + other resources income (plus $3.4

billion in opening balance), noting that partners provide funding for current and future years

- Total $22.6 billion in planned use of regular ($3.8 billion) + other resources ($18.8 billion):- Development activities: $20.1 billion (88.8%);- UN development coordination activities: $0.4 billion (1.7%);- Management activities: $1.8 billion (8.1%); and- Special purpose activities: $0.3 billion (1.4%)

- Trend with respect to reduced allocation of regular (core) plus other (non-core) resources to management activities (8.1% compared to 8.6% estimated in 2012-2013), that reflects improved burden sharing and greater efficiency

- Largest reduction in UNDP’s recent history of regular resources allocation to management activities

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Financial context (continued)• Millions of US dollars

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Estimated contributions by funding category

Figures are provisional estimates subject to change until budget is finalized

5,4676,630 6,025 6,253 6,506

2,1121,942 1,756 1,750 1,850

1,812 1,550 1,500 1,500 1,500

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2008-2009 2010-2011 2012-2013(est)

2014-2015(est)

2016-2017(est)

Other resources - bilateral and multilateral partners resources

Regular resources

Other resources - government cost-sharing

Financial context (continued)

2012-2013 (actuals/est.) 2014-2015 (estimates)

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Estimated use of regular and other resources

88.71%

1.67% 8.16%

1.46%

Development activities UN development coordination

Management activities Special purpose activities

88.01%

2.17% 8.59%

1.24%

Development activities UN development coordination

Management activities Special purpose activities

Figures are provisional estimates subject to change until budget is finalized

Financial context (continued)- Premised on UNDP financial regulations & rules + relevant EB decisions; with coverage of same 4-year

period as strategic plan: change from prior practice of 2-year institutional budgets and 4-year programming arrangements frameworks.

- Reduced allocation to management to maximize allocation to development activities (programmes and development effectiveness (DE)): annual report of Administrator shows that increased investment in DE leads to higher quality and more effective programmes. Nevertheless, the significant reductions in management will pose challenges. In response, UNDP will launch a structural adaptation plan, noting there will be a level of risks.

- Development is a long-term challenge that requires strategic and sustained focus with necessary capacity, agility and responsiveness to crises and opportunities. Hence, it is important to secure, on a predictable, continuous and sustained basis, a critical mass of resources to support the pursuit of long-term development objectives. UNDP relies on its bedrock of regular resources to support strategic and flexible approaches. 

- With respect to regular resources, note the following key highlights: - Increased share for development activities, including programmes and development effectiveness- Reduced share for management activities- Greater support to financing of UN development coordination activities (continued financing of

backbone plus provision for UNDP contribution to system-wide cost sharing formula) – in line with application of harmonized cost classification categories and cost recovery decision 2013/4.

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Integrated resources plan – 2012-2013 and 2014-2015 (in million of US dollars)

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Figures are provisional estimates subject to change until budget is finalized

Financial context (continued)

Regular resources

Regular (other income

utilization) resources

Bilateral + multilateral

partner resources

Government cost sharing

Cost recovery

Total resources Regular resources

Regular (other income

utilization) resources a/

Bilateral + multilateral

partner resources

Government cost sharing

Cost recovery

Total

2,074.4 75.4 8,994.2 2,448.7 600.7 14,193.4 1,985.3 75.4 8,827.7 2,067.3 670.5 13,626.2

I. Development activities 1,159.7 - 6,362.4 1,877.6 119.1 9,518.8 88.01% 1,170.9 - 6,919.8 1,635.0 121.9 9,847.6 88.71%

II. UN Development Coordination activities 157.8 0.3 24.9 - 51.3 234.3 2.17% 185.0 0.3 - - - 185.3 1.67%

III. Management activities 489.4 68.4 - - 371.3 929.1 8.59% 354.3 68.4 - - 483.1 905.8 8.16%

IV. Special Purpose activities 32.2 6.7 - - 95.0 133.9 1.24% 39.8 6.7 - - 115.1 161.6 1.46%

1,839.1 75.4 6,387.3 1,877.6 636.7 10,816.1 100.00% 1,750.0 75.4 6,919.8 1,635.0 720.1 11,100.3 100.00%

% of Total

1. Resources available

2. Use of resources

Total 1. Resources available

% of Total

2012 (actuals) + 2013 (estimates) 2014-2015 budget estimates

Total 2. Use of Resources (I + II + III + IV)

Regular resources Other resources Regular resources Other resources

(*) Agency partners’ share of system-wide cost sharing formula (starting in 2014) is not included in UNDP’s resources plan.

(*)

Increased rate of delivery on other resources in integrated resources plan

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Figures are provisional estimates subject to change until budget is finalized

Financial context (continued)

Regular resources

Regular (other income

utilization) resources

Bilateral + multilateral

partner resources

Government cost sharing

Cost recovery

Total resources Regular resources

Regular (other income

utilization) resources a/

Bilateral + multilateral

partner resources

Government cost sharing

Cost recovery

Total

2,074.4 75.4 8,994.2 2,448.7 600.7 14,193.4 1,985.3 75.4 8,827.7 2,067.3 670.5 13,626.2

I. Development activities 1,159.7 - 6,362.4 1,877.6 119.1 9,518.8 88.01% 1,170.9 - 6,919.8 1,635.0 121.9 9,847.6 88.71%

II. UN Development Coordination activities 157.8 0.3 24.9 - 51.3 234.3 2.17% 185.0 0.3 - - - 185.3 1.67%

III. Management activities 489.4 68.4 - - 371.3 929.1 8.59% 354.3 68.4 - - 483.1 905.8 8.16%

IV. Special Purpose activities 32.2 6.7 - - 95.0 133.9 1.24% 39.8 6.7 - - 115.1 161.6 1.46%

1,839.1 75.4 6,387.3 1,877.6 636.7 10,816.1 100.00% 1,750.0 75.4 6,919.8 1,635.0 720.1 11,100.3 100.00%

% of Total

1. Resources available

2. Use of resources

Total 1. Resources available

% of Total

2012 (actuals) + 2013 (estimates) 2014-2015 budget estimates

Total 2. Use of Resources (I + II + III + IV)

Regular resources Other resources Regular resources Other resources

71% 77% 78% 79%

(*) Agency partners’ share of system-wide cost sharing formula (starting in 2014) is not included in UNDP’s resources plan.

(*)

Integrated resources plan – estimates covering 2014-2017in millions of US dollars

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Figures are provisional estimates subject to change until budget is finalized

Financial context (continued)

Regular resources

Regular (other income

utilization) resources

Bilateral + multilateral

partner resources

Government cost sharing

Cost recovery

Total

3,835.3 150.8 15,333.7 3,567.3 1,358.5 24,245.6

I. Development activities 2,508.2 - 14,149.6 3,272.0 181.8 20,111.6 88.83% 88.01%

II. UN Development Coordination activities 370.0 0.6 - - - 370.6 1.64% 2.17%

III. Management activities 642.9 136.8 (*) - - 1,056.6 1,836.3 8.11% 8.59%

IV. Special Purpose activities 78.9 13.4 - - 230.9 323.2 1.43% 1.24%

Total 2. Use of Resources (I + II + III + IV) 3,600.0 150.8 14,149.6 3,272.0 1,469.3 22,641.7 100.00% 100.00%

(*) includes expenditures financed from GLOC

2012-2013 comparison% of Total2. Use of resources

Regular resources Other resources

1. Resources availableTotal 1. Resources available

(*) Agency partners’ share of system-wide cost sharing formula (starting in 2014) is not included in UNDP’s resources plan.

(*)

Financial context (continued)Key Variances in integrated resources plan:

• Development activities– Increased share of allocation of resources to development activities–

response to QCPR and EB direction - cost recovery decision 2013/4

• UN coordination activities– Commitment to UNDP financing of backbone of coordination plus its share of

cost-sharing formula with partner UNDG agencies.

• Management activities– Overall decrease in share of resources allocated to management activities;– Decrease in regular resources allocation – response to QCPR and EB

direction – cost recovery decision 2013/4

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Programmatic components• Based on PA decisions 2007/33; 2010/2;

2012/1; 2012/28; and 2013/4

• Key proposal: two total annualized programming resource bases: – $540m per year for 2014-2015 (equal to actual

annual programming bases for 2012-2013)– increasing to $600m per year for 2016-2017

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Institutional components (continued)– Positions:

• D1 and above level positions:– No increase - will remain at 2012-2013 approved level– No change in approach for these leadership positions

• P5 level and below positions:– In past: detailed presentation, and single funding source for positions -> non-responsive to changes in

funding and thereby lacking agilitiy and responsiveness– Proposed: envelope of regular resources rather than pre-set number of positions in order to:

» Better align with organizational structure and multi-funded nature of activities.» Better able to respond to evolving development needs.» Better linkage of costs to results frameworks and related funding streams.» Allow more strategic use of limited resources for development activities.

– UN development coordination• Financing of backbone continued• Provision for UNDP contribution to system-wide cost sharing formula included

– Cost recovery• Compliant with EB decision 2013/4 after taking transitionary measures referenced

in DP/FPA/2013/1 into account

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Linkage of resources to results

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Next steps• June-September, 2013:

– Further consultations, including on Strategic Plan, Integrated Budget, physical presence– EB document on integrated budget sent to EB and ACABQ last week of June.– Late June/Early July: Informal on Integrated Budget– Informal in July on physical presence– Introductory informal information session in July– ACABQ formal meeting on 2 July focusing on institutional component of integrated

budget.– ACABQ formal report submitted to EB mid-end July

• Second regular session, 2013:– formal discussion and decision on integrated budget, 2014-2017– Separate report on physical presence in MICs (response to 2013/4)

• Second regular session, 2015: • Mid-term review focusing on financial estimates of institutional components of the

integrated budget, if adjustments are required due to a need for re-alignment of resources and results, and/or major changes in the overall financial framework.

• 2016: • review of cost recovery policy (EB decision 2013/9)

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