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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  

 

KEY FINANCIAL TABLES

Explanation of Financial Statements and Terminology

The financial statements and financial tables in the following pages present an overview of the sources and use of extra-budgetary funds administered by OCHA through its main Trust Funds and other funding mechanisms in the year 2005.

Funding Sources and Mechanisms

Voluntary contributions to OCHA are received and managed through the following trust funds and special accounts:

The Trust Fund for Strengthening of the Office of the Emergency Relief Coordinator (DD) was established in 1974 pursuant to General Assembly resolution 32/43. Voluntary contributions to the Fund are used primarily to support the core activities of OCHA that are not funded by the regular budget.It is also used to fund New York headquarters projects that support OCHA’s core mandate.
The fund is subject to 13 percent programme support costs.

The Integrated Regional Information Networks (IRIN) Sub-Account (QT) was established under the Trust Fund for Strengthening of OCHA to finance IRIN core needs. The sub-account is subject to 13 percent programme support charge.

The Trust Fund for Disaster Relief Assistance (DM) was established by General Assembly resolution 28/16 to receive earmarked and unearmarked contributions for emergency relief assistance. The fund, which finances humanitarian coordination in natural disasters and complex emergencies, serves as the vehicle for financially supporting all of OCHA’s field activities (except for IRIN), and Geneva-based headquarters projects, as reflected in OCHA in 2005. The fund is also used to channel donor contributions for natural disaster activities, humanitarian funds and other activities of operational Agencies and NGOs. The fund is subject to 13 percent programme support costs for activities directly implemented and supported by OCHA, and three percent for funds channeled through OCHA. Funding mechanisms under the Trust Fund are as follows:

  • The Field Coordination Reserve Fund (FCRF) was established to receive contributions for field
    coordination that are not earmarked for a specific country. It other unearmarked contributions from donors who do not otherwise provide any contributions directly for the field. The contributions from the FCRF are allocated
    • i. for the establishment of field presence in new emergencies, either natural disaster of complex emergencies;
    • ii. expansion of field presence due to a change in the coordination needs of a deteriorating situation or increased access to previously inaccessible areas; and
    • iii. support to severely underfunded offices to avoid interruption in contractual and operational commitments.
  • The Budgetary Cash Reserve Fund (BCRF) was established in November 2005 with the intention of establishing a reserve of US$ 30 million so that, at the end of each calendar year, OCHA can meet its immediate requirements for the following year. In particular, the fund would be used to enable the issuance of one-year contracts for eligible field staff and to cover the operational requirements of field offices for the first quarter. So far, OCHA has received US$ 3 million for this newly established reserve.
  • The Unearmarked Sub-Account consists of funds that are derived from the interest generated by the Trust Fund for Disaster Relief (DM) and are primarily used: (i) to fund activities pending receipt of actual cash contributions against unpaid pledges, whenever the activity requires urgent infusion of funds; (ii) as cash reserve to provide funding for severely underfunded activities, on the basis of urgent needs and priorities and where funds from the Field Coordination Reserve (FCRF) are insufficient; (iii) as an advance to meet the urgent requirements of new emergencies, pending receipt of donor contributions; and (iv) to provide for the mandatory operating reserve. In all instances where monies are used as advance against unpaid pledges, the Sub-Account is reimbursed upon receipt of donor contributions. Reimbursements may occur in other instances if unexpected contributions are received at a later date or unearmarked funds are received in the FCRF accounts for distribution to various priority activities.

The Trust Fund for Tsunami Disaster Relief (TKB) was established in February 2005 to fund activities related to the coordination of humanitarian action providing relief to victims of the Indian Ocean tsunami and other immediate recovery related activities. The magnitude and the regional scope
of the tsunami, together with the unprecedented response by donor countries, humanitarian partners, private sector and the general public required a specific and separate account that would facilitate the management and reporting of the funds entrusted to OCHA. The funds were used to finance OCHA’s coordination and response activities, and to provide allocations to UN Agencies and NGOs in meeting their priority needs in responding to the crisis. The trust fund is subject to 13 percent programme support charge for activities implemented by OCHA, and three percent for allocations provided to Agencies and NGOs.

Special Account for Programme Support consists of resources derived from the programme support costs or overhead charges applied to all trust funds administered by OCHA. The rate charged is that which has been approved by the General Assembly, normally ranging from three to 13 percent of the annual final expenditures of the trust funds. Charges of three percent are levied for contributions channelled through OCHA for other UN Agencies and NGOs, and 13 percent for activities directly
implemented and supported by OCHA, such as those reflected in OCHA in 2005.

While OCHA generates a relatively good annual income from its programme support account, the use of such resources is limited to areas where a demonstrable relationship exists between the activities which generated the programme support revenue and the supporting activities. They cannot be used to fund substantive activities and can only be used for administrative support functions, finance, personnel and common services.

Financial Tables

The statements of income and expenditure summarise the total funds available under each trust and/or account, their utilisation during the year, and the year-end balance as of 31 December 2005. Funds available consists of the beginning balance or carry-over from 2004, adjustments to prior periods’ income and expenditure, income for the year comprising cash contributions and unpaid pledges in accordance with the UN accounting standards; miscellaneous income, transfers from other funds and savings from financial commitments of the prior year. Expenditure shows their utilization during the year, and includes both actual disbursements as well as commitments made but not yet disbursed. The closing balances show the remaining funds available at the end of the year to be carried forward into 2006. It also includes the mandatory operating
reserves for contingency purposes.

Table 1 shows the Statement of Income and Expenditure of the Trust Fund for the Strengthening of the Office of the Emergency Relief Coordinator (DD), the Trust Fund for Disaster Relief (DM) and the Trust Fund for the Tsunami Disaster Relief (TKB).

Table 2 shows the financial status, income and expenditure, of the Trust Fund for the Strengthening of the Office of the Emergency Relief Coordinator (DD), broken down by activities, namely, headquarters core, headquarters projects and IRIN.

Headquarters core activities comprise the minimum level of activities that OCHA must carry out to effectively discharge its mandate, given an average level of humanitarian emergency programming around the world. The definition of “core” is based on three priority functions identified by the General Assembly: humanitarian coordination, advocacy and policy development. OCHA’s core activities can also be seen as the basis that underpin and allow for additional activities to take place. Examples include the capacity required to establish field offices in an emergency or to undertake evaluation of activities. These are supported by executive direction and management, IASC and ECHA mechanisms, as well as external relations and resource mobilisation.

Headquarters Projects New York are other incremental activities of time-limited duration, generally implemented at headquarters. In particular, these are the activities associated with coordination of emergency response, timebound projects undertaken by OCHA on behalf of the IASC or the international community, and projects including ReliefWeb, Field Information Management, Donor Relations, Staff Development and Learning, Field Support, Evaluation and Studies, and Protection of Civilians. These activities may also include other projects that OCHA takes on, at the request of the Security Council, Secretary-General, IASC or similar body on the understanding that such activities are not part of OCHA’s regular activities but meet an emerging need for the short term.

The Integrated Regional Information Networks (IRIN), which is reflected in OCHA in 2005 under Field Activities, is an independent humanitarian news service covering Sub-Saharan Africa, Central Asia and the Middle East. It was established to improve the flow of vital information to those involved in relief efforts, and help the humanitarian community better understand, anticipate and respond to evolving crises and emergencies.

Table 3 shows the financial status, income and expenditure, of the Trust Fund for Disaster Relief (DM), broken down by complex emergencies, headquarters projects – Geneva, natural disaster activities, humanitarian funds and other activities, and unearmarked sub-account.

Complex Emergencies refers to the coordination activities of field offices as reflected in OCHA 2005, including the utilisation of the Field Coordination Reserve Funds (FCRF), a mechanism that enables donors to provide unearmarked resources in support of field coordination offices in emergencies in three circumstances: establishment of coordination offices in new emergencies, expansion of existing offices due to deteriorating situations, and support to severely underfunded offices. The FCRF allows OCHA to manage the field activities with the necessary flexibility.

Headquarters Projects Geneva are projects administered and managed in Geneva. Like the New York-based projects, they comprise incremental activities of limited duration in support of OCHA’s core mandate. They include, in particular, support activities associated with the coordination of disaster and emergency response such as UNDAC, CMCS and INSARAG, and other activities aimed at strengthening existing capacities in areas including the Consolidated Appeals Process (CAP), Surge Capacity, Donor Relations, and Staff Development, among others.

Natural Disaster Activities consist of Regional Disaster Response Advisor (RDRA) offices, government prepositioned funds used for emergency grants to provide immediate humanitarian relief at the onset of disasters, UN Disaster Assessment and Coordination (UNDAC) activities, and other natural disaster related activities including funds for the Brindisi warehouse.

Humanitarian Funds and other Activities include rapid response mechanisms for humanitarian aid. Funds in this category are expended in the form of grants to NGOs and are not available for use by OCHA.

The Unearmarked Sub-Account consists of funds advanced from the Sub-Account to other activities pending receipt of cash contributions against pledges, to support severely underfunded activities, to meet urgent needs of new emergencies and to provide for the mandatory operating reserve.

Table 4 shows the status of the Special Account for Programme Support, the income generated from programme support costs levied on OCHA’s trust funds and expenditure to support the administrative and common services requirements of OCHA’s extrabudgetary activities.

Extra-budgetary Requirements and related Income and Expenditure

Table 5 and Table 6 summarise the budget and expenditure tables by Headquarters Core and Project Activities, and Field Coordination Activities respectively. These tables present OCHA’s extrabudgetary requirements as reflected in OCHA in 2005, the revised requirements, and contributions, other income and expenditure recorded for each activity. Contributions include cash receipts and unpaid pledges earmarked by donors for each activity and allocations from the Field Coordination Reserve Funds (FCRF). Expenditure includes obligations and actual disbursements.

Donor Contributions

Table 7 shows cash contribution and pledges made by governments, and individual donors to each trust fund. Tables are provided on the top 20 donors and their contributions, broken down by headquarters activities, field offices and other activities to which they contributed. The information is summarised inTable 8 in the form of a matrix that matches donors with activities.

Requirements, Income and Expenditure Breakdown

Narratives on core activities, headquarters projects and field offices are complemented by financial tables that show the revised requirements, income from voluntary contributions and expenditure breakdown, using UN accounting standards.

Explanation of Terminology used in the Financial Statements

Opening balance represents the total amount of funds available for the trust fund and/or main activity on 1 January 2005, and is also referred to as carry-over balance from 2004. Fewer actual funds are available or implementation purposes because unpaid pledges, while recorded as income, are not cash on hand; and because a mandatory 10 percent cash operating reserve must be held to cover any unforeseen expenditure.

Adjustment includes adjustments of income or expenditure reported in 2004 or previous years. This may be due to adjustments for contributions recorded and other miscellaneous income for prior years and adjustments for expenses incorrectly reported.

Income from contributions is composed of contributions received from donors that have been credited to OCHA’s trust funds and unpaid pledges.

A pledge is a written commitment by a donor to provide, at a future date, a monetary contribution to OCHA’s activities and is recorded as income under the UN Financial Regulations and Rules at the time of receipt of the written commitment. If the pledge is in a currency other than US dollars, its value is converted according to established UN rates of exchange prevailing at the time of receipt. The US dollar value of the pledge changes in accordance with the UN rates of exchange for as long as the pledge remains outstanding as a receivable in the UN financial statement. Foreign exchange gains or losses may arise at the time of receipt of cash.

Transfers, refunds and savings include transfers between projects, allocations from the Field Coordination Reserve Funds to underfunded field offices, transfers from/to the unearmarked fund sub account, transfers between trust funds, refunds to donors and savings from prior period unused obligations.

Other funds available includes contributions from other UN Agencies and other miscellaneous income, such as gain or loss on currency exchange, proceeds from sale and disposition of old equipment, etc. Total funds available comprise opening balance, adjustments, income from contributions, and other
funds available.

Expenditure corresponds to the disbursements and obligations recorded for the year.

Closing balance represents funds carried over from 2005 to 2006. The carry-over available for the implementation of activities is lower than the figure indicated in the statement of income and expenditure.

For the Trust Fund for Disaster Relief (Table 3), a substantial portion of the carry-over relates to government prepositioned funds for natural disasters and humanitarian funds, and other activities that have not been included in the extra-budgetary programme requirements laid out in OCHA in 2005, as well as mandatory operating reserves not available for use by programmes.

Expenditure is grouped into the following broad categories:

  • Staff costs: salaries and related entitlements of staff holding United Nations contracts
  • Consultants fees and travel: salaries and travel costs of consultants engaged for a specific time-bound mandate and purpose
  • Travel: includes travel and related expenses incurred on official business by staff or other representatives participating in OCHA activities
  • Contractual services: relates to payments for outsourced services, such as printing, translation, editing, security services
  • Operating expenses: payments for rental and maintenance of office premises and equipment, communications, shipment, banking charges, etc.
  • Supplies, furniture and equipment: payments for office supplies, materials, furniture, and equipment, including computers, fax machines, photocopiers, and vehicles in the field
  • Grants, contributions, fellowships, and seminars: grants provided to external entities, including UN Agencies, NGOs, institutions, universities and other organizations working in partnership with OCHA. It includes seminars and workshops included in requirements as reflected in OCHA in 2005
  • Programme support costs: calculated at 13 percent of all activities and projects executed and directly supported by OCHA, and 3 percent of grants provided to other entities that do not require significant administrative support from OCHA. These programme support costs, while recorded as expenditure in each trust fund, revert to OCHA as income for its Special Account for Programme Support Costs.

The Tables

Statement of Income and Expenditure in 2005

Extra-budgetary Requirements and Expenditure in 2005


 


 

 

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