Financial Information and Analysis
OCHA’s funding for its activities detailed in its appeal document, OCHA in 2006, is derived from the United Nations regular budget and voluntary donor contributions, and it is supplemented by income generated from programme support costs. In 2006, donor contributions of US$ 115.2 million made up 83 per cent of OCHA’s funding related to OCHA in 2006 activities, while programme support income of US$ 11 million stood at 8 per cent. The remaining 9 per cent was derived from the United Nations regular budget, equivalent to US$ 12.9 million.
|>> Funding Sources in 2006||>> OCHA’s Funding Trend 2002–06|
>> Voluntary contributions to OCHA are managed through:
During 2006, the funding requirements for activities detailed in OCHA in 2006 were revised up by 4 per cent (to US$ 133.5 million) against the original request, because of new and additional emergency needs that arose during the year, particularly in the Central African Republic, Chad, Côte D’Ivoire and the Democratic Republic of the Congo (DRC).
In responding to the requirements for activities in OCHA in 2006, donors contributed 18 per cent more than they had in 2005, meeting 86 per cent of the revised requirements. In addition to funding for the activities detailed in OCHA in 2006, OCHA also received donor contributions of US$ 8.5 million earmarked for the Budgetary Cash Reserve Fund (BCRF), as well as US$ 39.8 million comprising: contributions received in response to ad hoc requests and special projects; funds channelled through OCHA for natural disasters; country-specific emergency response funds; the operation of the United Nations Humanitarian Response Depot (UNHRD) in Brindisi, Italy; and the UNDAC Mission Account (funds pre-positioned by governments for deployment of their nationals). These amounts – together with donor contributions of US$ 115.2 million against OCHA in 2006 – bring the total extrabudgetary funds received by OCHA during the year to US$ 163.5 million.
Voluntary contributions for OCHA’s headquarters core activities covered by the Trust Fund for the Strengthening of OCHA (DDA) totalled US$ 15.8 million against revised requirements of US$ 33.7 million. Although this represented only 47 per cent of requirements for activities funded by this Trust Fund, the remainder was covered by the carry-over from 2005 and US$ 6 million from the Special Account for Programme Support. OCHA’s core requirements at headquarters were therefore fully covered in 2006.
For projects undertaken by headquarters (New York and Geneva), OCHA received US$ 15.8 million, or 86.1 per cent of its revised requirements of US$ 18.3 million. While this represents a 12.2 per cent decrease compared to 2005, the actual implementation of priority activities was not adversely affected as the Consolidated Appeals Process, Surge Capacity and Staff Development and Learning projects were transferred from headquarters projects to headquarters core activities.
A positive funding trend for the Integrated Regional Information Networks (IRIN) continued in 2006, with US$ 8.4 million received in earmarked and unearmarked contributions – representing 120 per cent of its revised core budget of US$ 7 million. Although this was an increase of US$ 2.3 million or 36.6 per cent compared to 2005, IRIN implemented additional projects related to radio, film and Plus News (HIV/AIDS) reporting service during 2006. At year end, IRIN required considerable additional funding to cover staff and operating costs for the first quarter of 2007; this was allocated to its budget from unearmarked contributions. IRIN continues to rely on generous funding for its cash reserve to avoid interruption to its core activities and retain high quality staff.
in 2006 Requirements
versus Donor Contributions (US$ million)
The overall requirements for field coordination activities increased from US$ 74.2 million in 2005 to US$ 85.8 million in 2006. Donors provided 97 per cent (US$ 83.7 million) of the revised requirements – representing an increase of US$ 23.8 million or 40 per cent compared to 2005.
The increase in requirements for field coordination activities of US$ 11.6 million compared to 2005 was primarily due to the consolidation of the Regional Office for Asia and the Pacific in Bangkok and strengthened country offices in DRC and Zimbabwe. This was offset to some extent by the scaling down or closing of country offices in Burundi, Guinea, Niger, Republic of Congo, Democratic People’s Republic of Korea and the Russian Federation.
Donors also contributed a total of US$ 4.7 million to OCHA’s ad hoc requests for support in response to the Indonesia (Yogyakarta) earthquake and the Lebanon crisis.
Until 2006, a number of donors contributed earmarked funding for OCHA field coordination in DRC and Sudan. Since the introduction of pooled funds, they are now channelling all of their funding to these countries through the country-based pooled funds (administered by UNDP), from which OCHA received a total of US$ 16.1 million in 2006.
The introduction of the BCRF in 2006 in conjunction with the Field Coordination Reserve Fund (FCRF) – resulting in field coordination activities being almost fully funded– demonstrated the value of these two mechanisms in allowing flexibility and highly effective cash management. OCHA will nevertheless continue to strive for full funding of its annual requirements to allow for more predictability and to be able to offer more stable employment conditions, in particular for its field staff.
In 2006 a total of US$ 12.1 million was channelled through the FCRF (including the closing balance of US$ 1.2 million from 2005), either by donors or by OCHA’s allocation of unearmarked contributions. A total of US$ 7.8 million was transferred out of the FCRF in 2006, including for the Avian and Human Influenza activities carried out by regional offices. As those amounts could not be refunded to the FCRF by year end, they were subsequently recorded as donor contributions to the respective field offices. The closing balance of US$ 4.3 million was carried over into January 2007 to meet shortfalls for the first quarter of the year.
The increase in contributions to the FCRF allowed a greater allocation of resources to field activities, resulting in the substantial repayment of loans to the Unearmarked Sub-Account. This account is used to advance funds to programmes with unpaid pledges pending the receipt of funds; it is also used for unforeseen expenses that commonly occur when offices are closed and activities terminated.
Four donors supported the BCRF in 2006, with total contributions of US$ 11.4 million. Although the amount received by the end of 2006 was well short of the target of US$ 30 million, the BCRF – combined with careful cash management and the use of the remainder of unearmarked or loosely earmarked funds for field coordination – made it possible at year end to extend field staff contracts for six months and the majority of headquarters staff contracts for nine months. A small number of projects were funded for 12 months and three months’ operating costs were met. This is a major improvement on 2005 when OCHA had scarcely enough funding to cover the initial three months of staffing and operating costs in 16 field offices.