Consideration of scenarios for 2014 Program-Budget Ceiling

Secretariat for Administration and Finance

April 2013

2014 Program-BudgetAssumptions

• Impact of statutory increases on RF personnel expenditures: $1.9 million

Impact of 2013 increases 666.2

Health and Life Insurance 139.6

Salary / Post Adjustment 755.1

Step Increases 379.5

1,940.4

2014 Program-BudgetFinancing Considerations for All Scenarios

• Reduced Income to the Regular Fund:– Prompt Payments discounts to member States in 2014: $553

thousand (64% increase)– FEMCIDI 15% contribution reduced by $176 thousand (-58%

decrease)

• ICR contribution to the RF to remain unchanged ($1.5 million).

• 100% of rental income now needed to cover repayment of demand notes for F Street renovation. $500k income contribution to Regular Fund no longer included, and expense for repayment to be charged to Rental Income Fund.

Why reduce rental income?

• Rental income served a dual purpose– To make payments on funds borrowed to finance renovation/improvements

to GSB and Main building infrastructure during 2001-2004.– To defray maintenance costs of leased office space and some of the GSB’s

maintenance costs

• In the past, $500 thousand from rental income was allocated to the Regular Fund as income exceeded required debt payments.

• In recent years, debt servicing and rental income are nearly equal; thus, all rental income must be used to make payments on the demand note. This prompted the Secretariat to transfer, every year, $500 thousand back to its funding account, effectively cancelling out the rental income of the RF.

Budget Scenarios 2014

• Scenario 1:– Covers statutory increases to personnel expenditures

(COLA, step increases, Health Insurance)– Excludes $500 thousand contribution to Reserve Sub-Fund– Ceiling increases by $940 thousand (1.12%)– Quota increase: 2.26%

OAS REGULAR FUND BUDGET CEILING PROPOSAL FOR 2014

Scenario One

Ceiling Increase Includes: Statutory payments to staff members (COLA and step increases)

Ceiling increase level: 1.12%

Quota income increase: 2.26%

2013 2014 Variation Variation

$thousand %

Personnel 53,024 54,964 * 1,940 3.66%

Non-Personnel 30,347 29,847 -500 -1.65%

Reserve Sub Fund Contribution 500 0 -500 -100.00%

Budget Ceiling $ 83,871 $ 84,811 $ 940 1.12%

FINANCING

Quotas 81,105 82,938 1,833 2.26%

Less prompt payment discount -337 -553 -216 64.09%

Net Quota Income 80,768 82,385 1,617 2.00%

FEMCIDI contribution 302 126 -176 -58.28%

ICR subsidy 1500 1500 0

Other Income 1300 800 -500 * -38.46%

Total Financing $ 83,870 $ 84,811 $ 941 1.12%

*Preliminary projection Includes Impact of Statutory Increases $ 1,940

Budget Scenarios 2014

• Scenario 2:– Covers statutory increases to personnel expenditures

(COLA, step increases, Health Insurance)– Maintains $500 thousand contribution to Reserve Sub-

Fund– Ceiling increases by $1,440 thousand (1.72%)– Quota increase: 2.88%

OAS REGULAR FUND BUDGET CEILING PROPOSAL FOR 2014

Scenario Two

Ceiling Increase Includes: Statutory payments to staff members (COLA and step increases)

Maintenance of $500k contribution to Reserve Fund

Ceiling increase level: 1.72%

Quota income increase: 2.88%

2013 2014 Variation Variation

$thousand %

Personnel 53,024 54,964 * 1,940 3.66%

Non-Personnel 30,347 29,847 -500 -1.65%

Reserve Sub Fund Contribution 500 500 0 0.00%

Budget Ceiling $ 83,871 $ 85,311 $ 1,440 1.72%

FINANCING

Quotas 81,105 83,438 2,333 2.88%

Less prompt payment discount -337 -553 -216 64.09%

Net Quota Income 80,768 82,885 2,117 2.62%

FEMCIDI contribution 302 126 -176 -58.28%

ICR subsidy 1500 1500 0

Other Income 1300 800 -500 * -38.46%

Total Financing $ 83,870 $ 85,311 $ 1,441 1.72%

*Preliminary projection Includes Impact of Statutory Increases $ 1,940

Budget Scenarios 2014

• Scenario 3:– Covers statutory increases to personnel expenditures

(COLA, step increases, Health Insurance)– Maintains $500 thousand contribution to Reserve Sub-

Fund– Increase in non-personnel by 1.7% to compensate for

inflation– Ceiling increases by $1,940 thousand (2.31%)– Quota increase: 3.49%

OAS REGULAR FUND BUDGET CEILING PROPOSAL FOR 2014Scenario Three

Ceiling Increase Includes: Statutory payments to staff members (COLA and step increases) 1.7% increase in non-personnel funding to cover inflation Maintenance of $500k contribution to Reserve Fund

Ceiling increase level: 2.31%

Quota income increase: 3.49%

2013 2014 Variation Variation

$thousand %

Personnel 53,024 54,964 * 1,940 3.7%Non-Personnel 30,347 30,347 0 0.0%

Reserve Sub Fund Contribution 500 500 0 0.0% Budget Ceiling $ 83,871 $ 85,811 $ 1,940 2.3% FINANCING Quotas 81,105 83,938 2,833 3.5%Less prompt payment discount -337 -553 -216 64.1%Net Quota Income 80,768 83,385 2,617 3.2%

FEMCIDI contribution 302 126 -176 -58.3%ICR subsidy 1500 1500 0 Other Income 1300 800 -500 * -38.5% Total Financing $ 83,870 $ 85,811 $ 1,941 2.3%

*Preliminary projection Includes Impact of Statutory Increases $ 1,940