Financial Information and Analysis
The level and composition of OCHA’s closing balances is critical as it determines the extent to which its headquarters core and project activities and field activities can continue uninterrupted from one year to the next, pending the receipt of new donor contributions.
Although the closing balances are reflected in the end-of-year financial statements, the total amounts can only be determined after the books are closed for the year (31 March). This closing date is three months after the end of the calendar year to allow all offices, particularly those in the field, sufficient time to: account for all financial transactions up to 31 December; record lastminute contributions and payments; review outstanding allotments and obligations with a view to closing or liquidating those that are no longer needed, releasing additional resources or savings; and record interest earned (only reported by banks after 31 December).
The closing balance for the Trust Fund for the Strengthening of OCHA (DDA), which supports OCHA’s headquarters core requirements, New York-based projects and IRIN, amounted to US$ 24.8 million (an 8.8 per cent increase on the balance at the end of 2005). Of this closing balance, US$ 17.5 million was used for the extension of staff contracts for the full year and six months of operational requirements at headquarters, and for six months project staff contracts and operating costs. US$ 2 million (8 per cent) was kept as mandatory operating reserve. Although the closing balance of the IRIN Sub-Account (the remainder of the Trust Fund’s closing balance) was US$ 5.3 million, it was comprised of US$ 2.3 million in savings from prior years (which are partially deferred expenses from previous closed accounting years). This left US$ 2 million available for the extension of IRIN staff contracts and for operational costs for three months, while US$ 1 million was kept as reserve.
The Trust Fund for Disaster Relief Assistance’s (DMA)
closing balance of US$ 145.8 million represents an increase
of 40 per cent on last year’s balance. US$ 63.1 million
(43.3 per cent) was directly related to funds received
against the OCHA in 2006 appeal, while the balance of
US$ 82.6 million (56.7 per cent) was related to:
unearmarked funds derived from interest and
miscellaneous income; net exchange gains/losses and
operating reserves of the Trust Funds; grants for natural
disaster projects; other humanitarian response funds
earmarked by donors for specific emergencies; government
pre-positioned funds for UNDAC country accounts; and funds for the operation of the UNHRD in Brindisi, Italy.
Although the closing balance related to activities outlined in OCHA in 2006 appears substantial (US$ 63.1 million), by December 2006 the amount that could actually be used to meet the cost of extending staff contracts and covering the first quarter of operating costs for field offices and Geneva-based projects was US$ 47.1 million. Additional funds, including US$ 16 million resulting from prior year’s savings, were made available only by 31 March 2007. The amount was sufficient to cover six months’ staff costs and three months’ operational costs for field offices, while for headquarters projects staff contracts were able to be extended for nine months and operational costs were covered for three months. This improvement in the length of contracts that could be offered to staff was due to the availability of funds from the BCRF, and represents a considerable success of the partnership between OCHA and its donors.
>> Trust Fund for the Strengthening of OCHA – Closing
>> Trust Fund for Disaster Relief Assistance – Closing
The remaining 56.7 per cent of the closing balance of the Trust Fund for Disaster Relief Assistance (US$ 82.6 million), consisted of amounts that were committed and could only be used as follows: