Flexible Cash Contributions
In line with the principles of Good Humanitarian Donorship, OCHA promotes the unearmarking of a greater share of extrabudgetary donor contributions. This allows for more equitable allocation of resources among all OCHA activities prioritized through the strategic planning process. If a degree of earmarking is required, donors are encouraged to earmark loosely, for example, to field offices or headquarter activities in general, or to thematic areas. Contributions that are earmarked loosely in this manner may be allocated to those field offices or thematic areas that have limited funding or increased requirements due to changing situations.
In 2008, unearmarked contributions against the OCHA financial plan increased by 8 percent (from 35 percent in 2007 to 43 percent in 2008) or $9 million. To ensure more effective cash management, OCHA hopes to build on this positive trend by encouraging further unearmarked contributions in 2009 and adopting a more strategic approach to earmarked contributions, including for instance encouraging donors to re-direct earmarked funds from well-funded to less well-funded projects where necessary.
In 2008, two member states in the “top twenty ranking” (see Table 4) provided their entire contribution to OCHA unearmarked: Denmark and New Zealand. A number of other donors provided substantial unearmarked funding in addition to their earmarked contributions to field offices.
Given the OCHA heavy reliance on extrabudgetary donor contributions, and that OCHA may only incur expenditures against cash received and not against pledges, the timely implementation of activities is dependent on when contributions are received. In 2008, there was a slight deterioration in the timeliness of donor contributions per quarter: by end March, only 17 percent of the total donor contributions had been received (down from an average of 25 percent in 2006 and 2007); by end June, 51 percent had been received (down from 64 percent in 2006 and 56 percent in 2007).
Chart 2: Earmarking of Donor Contributions, 2006-2008 (Excluding Specially Designated Contributions)
Following good financial management practices, OCHA adopts the position that there must be a minimum amount of cash available in November to cover the cost of staff contracts and activities (if possible for twelve months) and operations (for three months) for the following year. This amount — which constitutes a significant proportion of the opening balance carried forward — is allocated towards the end of each year, allowing for a smooth continuation of operations.
OCHA continues to aim for receipt of at least 75 percent of annual contributions by the end of the second quarter to enhance cash management and ensure continuation of ongoing activities without delays or interruptions. In 2009, OCHA is taking a more proactive approach to following up on pending pledges to help reverse the deterioration in timeliness of contributions.
Chart 3: Timeliness of Contributions 2006-2008 (Appeal, Outside Appeal & Reserve Funds)
Ranking of Extrabudgetary Donor Contributions
This year’s donor ranking table lists the top twenty donors to the OCHA final financial plan for 2008 (see Table 4). Contributions from the multi-donor trust fund for Avian-Human Influenza (AHI) and from the Common Humanitarian Funds for CAR, DRC and Sudan are listed in Table 5 — together with remaining contributions from an additional 18 member states, public donations and contributions from international organizations (UNAIDS, UNOPS, UNFPA, WHO, ILO and IFRC). In addition, Table 6 shows the top twenty donor contributions to the OCHA financial plan by headquarter activities, reserve funds and field activities.
The Top 20 ranking table shows donor earmarked and unearmarked contributions to the OCHA financial plan. The ranking for 2009 is based solely on the total of these contributions, though the tables show income for Specially Designated Contributions separately. These are funds handled by OCHA on behalf of the wider humanitarian system, and used for the implementation of emergency relief activities by partners (see Annex II). Table 6 shows the contributions made to headquarters, regional and field activities.
In 2008, OCHA launched a review of its accounts under the Trust Fund for Disaster Relief Assistance, aiming to further improve OCHA cash flow management and increase transparency in reporting to donors. As a result of the financial reconciliation exercise, 132 “dormant” accounts were identified, containing a total of $12.7 million. The majority of these funds were transferred to reserve funds ($6.1 million) or returned to donors ($3.5 million).
As part of its efforts to enhance financial discipline, OCHA has committed to an ongoing annual review of the carryover balances of its projects, to ensure the closing of dormant accounts in a timely manner.
|Rank||Donor||Total||Unearmarked||Earmarked||Specially Designated Contributions||Total Contributions|
|1 — including unpaid pledges of $150,094.|
|2 — including unpaid pledges of $429,185 (as of 31 December 2008, paid in 2009).|
|3 — including unpaid pledges of $173,974 (as of 31 December 2008, paid in 2009).|
|4 — including unpaid pledge of $246,917.|
|5 — including unpaid pledges of $2,579,365 (as of 31 December 2008, paid in 2009).|
|Donor||OCHA Activities||Specially Designated Contributions||Total Contributions|
|Multi Donor funding (AHI & CHF)*||7,444,124||957,000||8,401,124|
|Republic of Korea||700,000||700,000|
|United Nations Office for Project Services (UNOPS)||400,000||400,000|
|World Health Organization (WHO)||33,900||33,900|
|United Nations Population Fund (UNFPA)||25,957||25,957|
|International Organization for Migration (IOM)||24,874||24,874|
|International Federation of Red Cross and Red Crescent (IFRC)||18,638||18,638|
|International Labor Organization (ILO)||5,808||5,808|
|* Avian-Human Influenza and Common humanitarian Funds for Central Africa Republic, Democratic Republic of the Congo and Sudan|