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Part I Financial Information and Analysis

 
 
Introduction
 
 
How OCHA is Funded
 
 
Donor Funding in 2005
 
 
Expenditure
 
  Carry-Over  
  Management of Cash Resources  
  Building Partnerships  
  Accountability and Risk Management  
  Key Financial Tables  

 

CARRY-OVER

The level and composition of carry-over is critical to OCHA, since it determines the extent to which
OCHA core, project and field activities can continue uninterrupted from one year to the next, pending
receipt of new donor contributions.

Carry-over balances may include unpaid pledges that are recorded as income and are not available cash for spending, and the mandatory operating reserves for contingency purposes that cannot be used for annual programming and implementation purposes.

Although the “carry-over” is reflected in the end-of year financial statements, the actual carry-over sum cannot be determined until after the closing of the books for the year. Under UN Financial Regulations and Rules, that does not occur until 31 March of each year. The closing date is set at three months after the end of the calendar year to enable all offices, particularly those away from headquarters and in the field, sufficient time to account for all financial transactions, up to 31 December; to record last minute contributions and payments; to review outstanding allotments and obligations with a view to closing or liquidating those that are no longer needed, thus releasing additional resources or savings; and to record interest earned, which is reported by banks only after 31 December.

In the case of the Trust Fund for Disaster Relief, which supports other activities outside the appeal
document, the net carry-over that can be used for implementation of activities reflected in OCHA in
2005 is actually lower than the figure indicated in the statement. The carry-over under the Trust Fund
includes the Unearmarked Funds derived from interest and miscellaneous income, net exchange
gains/losses and operating reserves of the Trust Fund, grants for natural disaster activities, other country humanitarian response funds earmarked by donors for specific emergencies, government pre-positioned funds for UNDAC country accounts and funds for the operation of the Brindisi warehouse, none of which were included in the appeal document for 2005. Except for the income generated from interests earned and gains on currency exchange, none of these funds can be used by OCHA for its planned activities.

Carry-Over from 2005 to 2006

The carry-over for the Trust Fund for Strengthening of the Office of the Coordinator, which supports
OCHA’s core requirements, New York-based projects and IRIN, amounted to US$ 22.7 million,
a three percent increase on the balance at the end of the previous year. Of this carry-over balance,
US$ 17 million, or 75 percent, was part of the core activities, and used to cover the extension of staff contracts for the full year and six months of operational requirements; US$ 2.8 million, or 12 percent, was used to extend project staff and provide project operation costs for six months; the balance of US$2.9 million, or 13 percent, from the IRIN Sub-Account was used for the extension of IRIN staff contracts for three months and to allow for the first three months of operational costs.

Although the carry-over of the Trust Fund for Disaster Relief, as reported in the financial statement, appears substantial, only 46.9 percent, or US$ 48.7 million, related to activities outlined in OCHA in 2005 that can actually be used to meet the cost of extending staff contracts and covering the first quarter’s operating costs for field offices and Geneva-based projects.

This amount was sufficient to cover only three months of staff and operational costs for offices of
the Africa region; and three to six months staff cost, plus three months operational costs, for most field
offices in the Middle East, Asia, Europe, the Americas and the Caribbean, and headquarters projects.

The remaining 53.1 percent, or US$ 55.0 million, consists of amounts held for varying purposes, as follows:

  1. US$ 2.8 million, or 2.7 percent, for natural disaster emergency grants;
  2. US$ 6.2 million, or 6.0 percent, for underfunded offices, drawn from the Unearmarked Funds;
  3. US$ 7.7 million, or 7.4 percent, for mandatory operating reserves; and
  4. US$ 38.3 million, or 37 percent, for earmarked funds to be used for natural disasters, other country humanitarian response funding, funds for UNDAC deployment and earmarked funds for the operation of the Brindisi warehouse.

Overall, the carry-over for the Trust Fund for Disaster Relief came to US$ 103.7 million, 12.4 percent up on the previous year’s balance. The increase can be attributed to the significant growth in the carry-over balances for natural disaster activities and humanitarian funds, and other activities described above, which were not included in OCHA in 2005. Natural disaster activities benefited from a 43 percent increase, while other humanitarian response funds grew by 70 percent as a result of strong donor support.


 


 

 

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