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FY19 World Bank Budget

August 31, 2018

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

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CONTENTS1

OVERVIEW AND RECOMMENDATIONS ...................................................................................... 1

1.1 OVERVIEW ....................................................................................................................................... 1

1.2 FY19 BUDGET RECOMMENDATIONS ......................................................................................... 4

STRATEGIC DIRECTIONS AND BUSINESS OUTLOOK ............................................................. 6

2.1 STRATEGIC CONTEXT ................................................................................................................... 6

2.2 LENDING OUTLOOK ...................................................................................................................... 8

2.3 COST OF DOING BUSINESS......................................................................................................... 10

2.4 EFFICIENCY ................................................................................................................................... 11

FY19 EXPENDITURE FRAMEWORK ............................................................................................ 15

3.1 AGGREGATE BANK BUDGET ..................................................................................................... 15

3.2 EXTERNAL FUNDS OUTLOOK ................................................................................................... 18

3.3 AGGREGATE BANK BUDGET AND EXTERNAL FUNDS ....................................................... 19

FY19 BUDGET ..................................................................................................................................... 20

4.1 ADMINISTRATIVE BUDGET PROPOSAL .................................................................................. 20

4.2 ADJUSTMENTS TO THE BUDGET .............................................................................................. 21

4.3 STRATEGIC ALIGNMENT BY WORK PROGRAM ................................................................... 23

4.4 OPERATIONAL WORK PROGRAM ............................................................................................. 27

4.5 GRANT-MAKING FACILITIES ..................................................................................................... 39

4.6 IG&A UNITS.................................................................................................................................... 40

4.7 CENTRALLY-MANAGED ACCOUNTS ....................................................................................... 43

4.8 EXPENSE FUNCTIONAL VIEW .................................................................................................. 45

CAPITAL BUDGET ............................................................................................................................. 48

5.1 FACILITIES ..................................................................................................................................... 48

5.2 TECHNOLOGY AND SYSTEMS ................................................................................................... 49

ANNEXES

ANNEX I: PROGRAM COST SUMMARY .............................................................................................. 51

ANNEX II. INDICATORS OF BUDGET SUSTAINABILITY, STRATEGIC ALIGNMENT, AND

BUDGET EFFICIENCY ......................................................................................................................... 56

1 In the tables, charts, and text, the totals have been rounded to the nearest whole number. Numbers may not sum due to rounding.

ii

TABLES

Table 2.1: Growth in IBRD/IDA Lending Portfolio ..................................................................................... 9

Table 3.1: Bank Budget (US$ million) ....................................................................................................... 15

Table 3.2: FY19 Bank Budget and External Funds (US$ million) ............................................................. 19

Table 4.1: FY19 WB Budget (US$ million) .............................................................................................. 20

Table 4.2: Incremental Additions to the Budget (US$ million) .................................................................. 22

Table 4.3. Claw-backs from Budget (US$ million) .................................................................................... 23

Table 4.4: FY18-19 Budget by Work Program & Funding Source (US$ million) ..................................... 23

Table 4.5: 18-19 Budget Share by Work Program and Funding Source..................................................... 24

Table 4.6: FY19 Operational Budget Envelopes (US$ million) ................................................................. 29

Table 4.7: Grant-Making Facilities Budgets (US$ million) ........................................................................ 39

Table 4.8: FY19 IG&A Budget Envelopes (US$ million) .......................................................................... 42

Table 4.9: FY18 and FY19 ED and IEG Budgets (US$ million) ............................................................... 43

Table 4.10: Centrally-Managed Accounts (US$ million) ........................................................................... 44

Table 4.11: FY18 and FY19 Functional Expense View of Administrative Expenses (US$ million) ......... 45

Table I.1: FY19 Funding for WB Work Program and Unit (US$ million) ................................................. 52

Table I.2: Overview of External Funds Projected Revenues FY19 by Unit (US$ million) ........................ 55

FIGURES

Figure 2.1: Growth in IBRD/IDA Supervision Portfolio (Pre-Capital Increase) .......................................... 9

Figure 2.2: Growth in IBRD/IDA Portfolio Volume vs. Administrative Budget (Percentage Growth from

FY14) .......................................................................................................................................................... 12

Figure 3.1: IBRD Budget Anchor ............................................................................................................... 16

Figure 3.2: IDA Budget Anchor ................................................................................................................. 16

Figure 3.3: Total Admin BB per Lending Project Approved (FY18US$ million) ..................................... 17

Figure 3.4: Total Admin BB per Project under Supervision (FY18US$ million) ...................................... 17

Figure 3.5: Total Admin BB per US$ Billion of Loans Approved (US$ million) ...................................... 17

Figure 3.6: Total Admin BB per US$ Billion Portfolio Under Supervision (US$ million)........................ 18

Figure 3.7: Share of External Funds to Total Funds ................................................................................... 19

Figure 4.1: Operational Share of Unit Budgets ........................................................................................... 24

Figure 4.2: Client Engagement Share of Operational Unit Budgets (including Country Engagement and

Global Engagement) ................................................................................................................................... 25

Figure 4.3: Evolution of the Country Engagement Bank Budget from FY18 to FY19 (US$ million) ....... 30

iii

Figure 4.4: Country Engagement Bank Budget Allocations by Business Process for FY17-19 (US$

million) ........................................................................................................................................................ 31

Figure 4.5: Country Engagement Bank Budget Allocation Shares by Business Process for FY17-19 ...... 32

Figure 4.6: CE Spending on Fiduciary and Safeguards for FY16-19 ......................................................... 33

Figure 4.7: FY19 Country Engagement Allocation Shares by Practice Group .......................................... 33

Figure 4.8: Country Engagement Bank Budget Allocations for FCV and FCV at Risk Countries for FY16-

19 (US$ million) ......................................................................................................................................... 34

Figure 4.9: Country Engagement Bank Budget Allocations to Small States for FY16-19 (US$ million) 35

Figure 4.10: FY19 Global Engagement by Practice Group and Category ................................................. 38

Figure 4.11: Full-time Bank Staff on Payroll (percentage growth since FY14) ........................................ 47

BOXES

Box 4.1: Administrative Budget Envelopes ................................................................................................ 26

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ACRONYMS

AFR Africa Region

AIP Annual Investment Plan

ASA Advisory Services and Analytics (former AAA - Analytical and Advisory Activities)

BB Bank Budget

BETF Bank Executed Trust Fund

BPS Budget, Performance Review, and Strategic Planning

CCAP Climate Change Action Plan

CE Country Engagement

CGIAR Consultative Group for International Agricultural Research

CMA Centrally Managed Accounts

CMU Country Monitoring Unit

COGAM Committee on Governance and Executive Directors' Administrative Matters

COMO Country Monitoring

CPF Country Partnership Framework

CPI Consumer Price Index

CRO Chief Risk Officer

DEC Development Economics

DGF Development Grant Facility

EAP East Asia and Pacific Region

ECA Europe and Central Asia Region

ECR External and Corporate Relations

EFO Externally Financed Output

E/L Equity to Loan Ratio

ESF Environment and Social Framework

ER Expenditure Review

FCV Fragility, Conflict and Violence

FIAS Facility for Investment Climate Advisory Services

GMF Grant-Making Facility

GP Global Practice

GPSA Global Partnership for Social Accountability

GT Global Themes

GSD General Services Department

HRD Human Resources Development

IBRD International Bank for Reconstruction and Development

IAD Internal Audit Department

IDA International Development Association

IDF Institutional Development Fund

IEG Independent Evaluation Group

IFC International Finance Corporation

IMF International Monetary Fund

IG&A Institutional, Governance, and Administrative Units

ITS Information Technology Solutions

vi

LCR Latin America and Caribbean Region

LEG Legal Department

LIC Low Income Countries

LLP Loan Loss Provision

MFD Maximizing Finance for Development

MIC Middle Income Countries

MIGA Multilateral Investment Guarantee Agency

MNA Middle East and North Africa Region

O&M Operations and Maintenance

OPCS Operations Policy and Country Services

PPM Program and Practice Management

PSW Private Sector Window

QBRR Quarterly Business and Risk Review

RAS Reimbursable Advisory Service

RAMP Reserves Advisory and Management Program

RETF Recipient Executed Trust Fund

SAR South Asia Region

SBO Strategy and Business Outlook

SDG Sustainable Development Goals

SEC Corporate Secretariat

SME Small and Medium Enterprises

SMI Salary Merit Increase

SPA Salary Progression Adjustment

SPF State and Peace-Building Fund

STC Short Term Consultant

TRE Treasury

UN United Nations

WB World Bank

WBG World Bank Group

WPA Work Program Agreement

1

OVERVIEW AND RECOMMENDATIONS

This document presents the FY19 World Bank Budget for Board approval. This budget proposal

reflects close consultations between Executive Directors and Management throughout the Strategic

Planning, Budgeting and Performance Management process for the World Bank Group.

1.1 OVERVIEW

1. The WBG has

developed a vision to

help translate the

ambitions of the 2030

Agenda into successes

for development.

The World Bank Group (WBG) is in the unique position to

combine knowledge and financing with global reach, and a strong

representation in the field to find solutions for today’s complex

development challenges. To continue to fulfill its role as a leading

development institution and help to translate the ambitions of the

2030 Agenda into successes for development, the WBG developed

a vision to become a stronger institution. This vision, articulated

in the Forward Look paper2 endorsed by Governors at the 2016

Annual Meetings, sets a transformational path for a “better” and

“stronger” WBG to help its members address today’s complex

development challenges and meet their rising demand for

innovative services.

2. Significant steps have

been taken toward the

Forward Look’s

objective of a “better”

and “stronger” World

Bank Group.

With the successful completion of the IDA-18 replenishment,

which includes the unprecedented transformation of IDA’s

financial model and historical capital market access, the capacity

of the WBG to support Low Income Countries (LICs), especially

countries facing fragility, conflict and violence and small states, has

been significantly strengthened. The recent landmark decision to

support the IBRD/IFC transformative package of capital measures

and integrated policy reforms will enable the WBG to better

support all clients, including new IDA graduates and blend

countries. The launch and roll-out of the Cascade Approach (an

approach to maximizing finance for development (MFD)) across

the WBG, supported by the IDA-18 IFC-MIGA Private Sector

Window (PSW), will leverage these resources by crowding-in

private sector investment to further scale up development finance.

The WBG is also breaking new ground promoting innovative

responses to issues where coordinated global action is critical. Key

areas include crisis management and fragility, conflict and

2 Forward Look – A Vision for the World Bank Group in 2030 (DC 2016-0008).

2

violence, climate change, gender, knowledge and convening, and

regional integration. Actions taken in these areas, in collaboration

with development partners and the private sector, support the

achievement of the SDGs.

Progress has been made in improving the WBG’s effectiveness and

operational model. The new Environmental and Social Framework

(ESF) is being rolled out to help improve the sustainability of

investments. Procurement reforms make it easier to implement

projects, while building the capacity of borrowers. Efforts are

underway through the “Agile” initiative to promote a culture of

continuous improvement and problem solving, and accelerate the

pace of project processing, ensuring that staff have more face time

with clients. Through the Administrative Simplification efforts,

Management is pursuing a range of reforms that include

simplifying expenditure approval processes, trust fund reform,

intranet modernization, implementing a shared services strategy,

HR process initiatives, and leveraging technology such as robotics.

Significant progress has also been made to strengthen the WBG

financial position, by (i) balance sheet optimization by lowering the

policy minimum for the Equity to Loans (E/L) ratio to reflect

improved portfolio credit quality, (ii) adoption of an income-based

formula approach for IBRD transfer to IDA-18, linking IDA

transfer to IBRD’s allocable net income level, (iii) implementation

of a new external funds cost recovery framework, and (iv)

establishment of budget anchors for IBRD and IDA. These were

supported by a series of expenditure and revenue measures,

including loan pricing increases, an ambitious Expenditure Review

which generated over US$300 million in Bank Budget (BB)

savings and an additional US$40 million of savings in Bank-

Executed Trust Funds (BETFs).

3

3. Business plans are

affected by a growing

portfolio, rising cost of

doing business and

offsetting savings from

efficiency measures.

Business plans are affected by cost pressures arising from a

growing portfolio and rising cost of doing business that will

continue to put pressure on Bank’s resources. At the same time,

Management plans several efficiency efforts that will help

strengthen lending capacity and fund new priorities – which will be

complemented by economies of scale as IBRD lending is scaled-

up. Strengthened revenues arising from pricing measures, a

constrained budget in an environment where the costs of doing

business are rising, and a willingness to implement further cost

reductions (after successful implementation of the Expenditure

Review program) demonstrate management commitment to the

institution’s financial sustainability and greater efficiency.

4. Despite rising costs,

Management is

proposing a FY19 Bank

administrative budget

of US$2,611 million

which will be flat in

real terms, and a

capital budget of

US$190 million for

FY19.

Considering strategic priorities but recognizing the need to

maintain budget discipline, Management is proposing a FY19

budget that is flat in real terms and that represents a 2.4 percent

nominal increase on the FY18 budget. Management is also

proposing a capital budget of US$190 million for FY19,

comprising US$105 million for Facilities investments and US$85

million for IT investments. Section 4 provides details underlying

the administrative budget proposal and further details on the capital

budget proposal are set out in Section 5.

5. As agreed with the

Board, Management

will draw on the

flexibility band to

support incremental

costs for implementing

the capital package in

FY19.

The recent decision of Shareholders to endorse the IBRD capital

package presents Management with an opportunity to engage with

clients on strengthening and recalibrating country programs, which

will have a budgetary impact. It also involves new policy

commitments, some of which will add to cost of doing business. It

is too early to determine the full budgetary implications of the

capital increase and Management therefore presents in this

document an administrative budget based on a pre-capital increase

scenario. As agreed with the Board, Management will draw on the

standard 2 percent flexibility band to support any incremental costs

for implementation of the capital package in FY19. If any

additional administrative budget funding is required in FY19 for

the IBRD scale-up above the 2 percent flexibility band,

Management will seek Board approval.

4

6. The FY19 budget aligns

with the WBG strategic

directions and

demonstrates

consistency with the

principles of financial

sustainability and

efficiency.

Management has built its budget plans ensuring strategic alignment

with the priorities agreed in the Forward Look and confirmed

during the planning and budgeting process. Key priorities over the

next few years include remaining engaged with all client groups;

working in partnership with the IFC and MIGA to mainstream the

MFD approach into operational work; strengthening global

leadership and impact in a range of areas, notably in climate

change, fragility, gender, human capital, and technological change;

and strengthening our business model.

The FY19 budget will support financial sustainability with a budget

that allows the Bank to maintain the discipline of budget anchors

in FY19 with administrative expenses that are held within target

zones below revenues from operations. It is important that we

adequately fund operational delivery and supervision, supported by

strong analytics and institutional, governance and administrative

services. At the same time, every dollar the World Bank does not

spend is a dollar it can leverage to support development financing

for its clients.

Building on the gains of the Expenditure Review successfully

completed in FY18, Management has identified opportunities for

further efficiencies over the coming years in areas including

corporate procurement, project portfolio management, workforce

management, travel and real estate. In addition, as part of the

rolling Business Reviews of VPUs, Management plans to complete

reviews of IG&A units and start reviews of operational units.

1.2 FY19 BUDGET RECOMMENDATIONS

7. Management seeks

Board approval of the

FY19 Budget.

Management seeks Board approval of the following FY19 Budget

recommendations:

• That the total administrative budget (Bank Budget) be set at

US$2,611 million, managed within a range of +/- 2 percent.

This includes:

o An indicative budget of US$87.4 million for Executive

Directors. This is subject to a separate endorsement

process by COGAM.

5

o US$29.7 million for the Independent Evaluation Group.

This is subject to a separate endorsement process by

CODE.

• That the capital budget be set at US$190 million.

6

STRATEGIC DIRECTIONS AND BUSINESS OUTLOOK

This section outlines the strategic context and business outlook for FY19 and reviews the cost

pressures arising from increasing cost of doing business as well as the efficiency efforts and

compensation reform necessary to offset additional costs. Together with section 1, it sets the stage

for the FY19 budget, which is detailed in sections 3-5.

2.1 STRATEGIC CONTEXT

8. Management has

identified key focus

areas for the FY19

planning and

budgeting process to

align resources with

the Forward Look

vision.

Ending extreme poverty and boosting shared prosperity by 2030

requires that the WBG scale up efforts to deliver on the ambitious

Forward Look vision. Four strategic focus areas have informed the

FY19 planning and budgeting process for the World Bank,

consistent with the Forward Look vision:

• serving all clients;

• creating markets;

• leading on global issues; and

• continually improving the business model.

Across these areas, Management aims to foster greater partnership

across the World Bank Group to enhance complementarities and

leverage synergies for greater development impact. Achievement

of the twin goals will require the Bank to scale up progress made

across several fronts.

9. Serving all clients:

The recent

endorsement by

Shareholders of the

capital package will

build on the IDA-18

replenishment and

enable the Bank to

expand its services

across all client

groups.

IDA-18 has enabled the Bank to expand its services for low income

countries, double assistance to countries affected by fragility,

conflict and violence, triple assistance to small states, as well as

expand IFC and MIGA services in these countries through the

Private Sector Window (PSW). IDA-18 implementation got off to

a robust start with strong delivery. Sustaining this trend is a key

priority for FY19.

The recently endorsed IBRD/IFC capital package will enable the

WBG to channel more resources to countries at the lower to middle

range of the client income spectrum – many of which are recent

IDA graduates and host large populations of extremely poor people

– while at the same time continuing to engage with all clients across

the income spectrum. In addition, through capital strengthening

measures at the IFC, the package will also strengthen WBG support

to FCV countries and small states. The nature of engagements will

7

be adapted to specific development needs in all countries and

interventions coordinated across WBG institutions to leverage each

other and maximize WBG impact.

10. Creating markets:

WBG entities are

working in partnership

to “Maximize

Financing for

Development.”

A strong focus on “Maximizing Finance for Development” (MFD),

by crowding-in available private finance, is crucial to go from the

billions to the trillions needed to achieve the ambitions of the 2030

Agenda and the Twin Goals. The Bank, IFC and MIGA have

worked in close partnership to develop and implement the MFD

approach, including in the most challenging development contexts.

Going forward, the focus will be on scaling up this approach,

through firmly anchoring MFD in Country Partnership

Frameworks, joint implementation plans and deep dives at the

regional level, strengthening of internal processes such as

incentives, training and advisory, analytical and financial tools for

clients to operationalize the MFD effectively.

11. Leading on global

issues: The Bank

continues to enhance

its engagement and

focus on issues that

transcend national

boundaries.

The Bank is uniquely positioned to lead on global issues given its

global footprint and ability to adapt to a changing development

landscape, invest in knowledge products and adopt innovative

financing mechanisms. The focus will be on the following strategic

priorities in support of the SDGs: (1) employ a range of innovative

financing solutions and analytical capacities to address crisis risks

and enhance crisis response capacity; (2) scale up efforts to tackle

the climate agenda through policy advice, global advocacy and

lending/investment operations; (3) step up financing to help close

gender gaps; (4) increase the WBG knowledge and convening role

to support the design and sharing of development solutions for

greater impact; (5) continue support to help strengthen regional

cooperation and the needed connective and institutional

infrastructure; (6) improve access to technology and related

innovative solutions as well as responding effectively to the jobs

challenges that these innovations will present; and (7) develop a

new human capital index to inform policy and investment

decisions. In pursuing these priorities, the Bank will support South-

South cooperation so that development experiences can be readily

transferred and scaled up in other countries/regions.

8

12. Improving the

business model: The

Bank will continue to

improve its

effectiveness by

promoting operational

agility and

administrative

simplification,

enhancing its financial

sustainability, and by

implementing the new

Procurement and

Environmental and

Social Frameworks.

The Bank’s ability to respond to growing demand across all client

segments and to increased development ambitions calls for

continuous innovation, operational flexibility and agility. Through

the Agile Bank program, a community of staff has been put in place

to promote a culture of continuous improvement and problem

solving. Efforts are also ongoing to speed up implementation of the

Administrative Simplification program through a range of

initiatives, including simplifying expenditure approval processes,

trust fund reform, intranet modernization, implementing a shared

services strategy, HR process initiatives, and leveraging

technology such as robotics. As part of the capital package, a new

financial sustainability framework will be implemented to ensure

that IBRD’s lending trajectory is aligned with long-term

sustainable financial capacity and incorporates a crisis response

buffer. These achievements are being complemented by the roll-

out of the new Procurement and the Environmental and Social

Frameworks which will ensure that Bank-financed projects are

delivered to the highest standards. The new Procurement

Framework was introduced last year. The new Environmental and

Social Framework (ESF) will become operational in FY19.

2.2 LENDING OUTLOOK

13. The IBRD capital

package endorsed at

the Spring Meetings

has altered the lending

outlook.

At the Spring Meetings, the World Bank Group’s shareholders

endorsed an ambitious package of measures that include both

internal measures and a US$13 billion paid-in capital increase for

the World Bank Group, alongside a series of internal reforms, and

a set of policy measures that greatly strengthen the WBG’s ability

to deliver on its mission. For IBRD, the paid-in capital increase

will be US$7.5 billion.

9

14. The FY19 proposed

budget assumes IBRD

lending to decline, in

line with the pre-

capital increase

scenario.

Based on the pre-capital increase scenario, IBRD lending is

assumed to decline from US$24 billion in FY18 to US$22 billion

in FY19. However, following the approval of the capital increase,

this would increase to US$25 billion in FY19. IDA lending is

assumed to be US$25 billion (see Table 2.1).

Table 2.1: Growth in IBRD/IDA Lending Portfolio

15. The IBRD/IDA

portfolio under

supervision is

projected to grow

substantially – even in

the pre-capital

increase scenario.

In the pre-capital increase scenario, the IBRD/IDA portfolio under

supervision is projected to grow by a further 3 percent, from

US$213 billion in FY17 to US$220 billion in FY19; and, more

significantly, by 9 percent from 1,460 operations in FY17 to 1,589

in FY19 (see Figure 2.1). This reflects long term portfolio

dynamics (timing of exits versus entries to the stock of projects

under supervision, in particular the IDA-18 scale up) and an

increase in the number of small projects due to our enhanced focus

on FCV countries and small states. In the higher lending scenario,

post capital increase, portfolio growth would increase further.

Figure 2.1: Growth in IBRD/IDA Supervision Portfolio (Pre-Capital Increase)

FY17 FY18 FY19

Actual Projection Projection

IBRD Pre-Capital Increase 22.6 24.0 22.0

IBRD Post Capital Increase 22.6 24.0 25.0

IDA1 19.5 25.0 25.0

IBRD and IDA Pre-Capital Increase 42.1 49.0 47.0IBRD and IDA Post-Capital Increase 42.1 49.0 50.0

IBRD and IDA post Capital Increase 42.1 49.0 50.0Notes:1The IDA FY19 US$25 billion lending projection is subject to some exchange rate

volatility, and includes the Crisis Response Window and Private Sector Window.

$169 $183

$192 $207 $213

$221 $220

1,3371,386 1,402 1,398

1,460

1,519

1,589

1,200

1,300

1,400

1,500

1,600

1,700

1,800

$-

$50

$100

$150

$200

$250

FY13 FY14 FY15 FY16 FY17 FY18P FY19P

IBRD/IDA Net Commitment (US$ billion) No. of IBRD/IDA Projects

Net

Co

mm

itm

ent

Vo

lum

e

(US$

bill

ion

)

No

. of P

rojects

10

2.3 COST OF DOING BUSINESS

16. The World Bank is

asked to expand its

activity in ways which

increase the cost of

doing business.

The planning and budgeting process has been informed by a Cost

of Doing Business analysis that examined the cost dynamics of the

Bank’s activities. The analysis shows that above average efforts

and costs are incurred in several areas and countries. This is

expected to lead to overall higher costs as the Bank’s mix of

business increases in these areas and countries.

17. The Bank is

significantly

expanding its services

to countries where the

cost of doing business

is higher.

The Cost of Doing Business analysis shows that lending operations

tend to be more expensive to deliver in low and lower-middle

income countries including fragile, more challenging, and smaller

countries. The growth in the number of lending operations to these

countries is outpacing that of upper-middle income countries. This

trend is expected to continue as per the strategic directions

discussed in sections 2.1 and 2.2. Furthermore, as the Bank

expands its footprint into more complex and riskier environments,

cost pressures are also rising. Ramping up the work in FCV

locations has significant cost implications. Increasing our global

footprint also requires increased resources, mainly due to related

assignment benefits for staff decentralized to the field, and rising

facilities and IT resource needs.

18. The Bank’s business

mix is shifting to more

complex and riskier

operations which are

also costlier to

prepare.

The Bank’s business mix is also shifting towards more complex

and riskier lending operations, which the Cost of Doing Business

analysis has shown to be costlier to prepare and supervise. Demand

from clients for projects for sustainable development (mainly

infrastructure) is also increasing, and these projects are also costlier

to prepare. The Bank is increasingly being asked to finance projects

in riskier and more complex environments.

19. Fiduciary and

safeguard budget

allocations have

increased in recent

years and are expected

to grow further with

implementation of the

new frameworks.

The new Environmental and Social Framework (ESF) expands the

scope of related safeguards by including new topical areas,

engaging borrowers more than before, and introducing expanded

processes, instruments, and systems. To support the roll-out, new

guidance and procedures are being developed, training of staff and

familiarization of borrowers are being implemented, and an

enhanced helpdesk and support infrastructure are being put in

place. Implementation of the new Procurement Framework is

ongoing with several supporting activities being implemented.

11

20. The finance units face

additional

responsibilities to

address the increased

complexity of the

hybrid IDA-18

financial model.

The introduction of market leverage of the IDA balance sheet, with

successful bond issuance at capital markets this spring and

corresponding changes to the IDA financial risk framework such

as the asset-liability management framework and liquidity policy,

has resulted in additional responsibilities for the Bank’s finance

units. Additional requirements have also been introduced because

of the increased number and complexity of IDA financing

instruments.3 The introduction of the IBRD financial sustainability

framework will further add new responsibilities for the finance

units.

2.4 EFFICIENCY

21. The Bank has a track

record of strong

budget management

over the past years.

Through a period of budget transformation, Management has been

able to deliver significantly more in an environment of rising costs

and with a flat nominal budget. In addition to meeting the

Expenditure Review (ER) targets, the Bank has significantly

improved strategic planning, performance monitoring and

budgeting through a coordinated WBG process. It has strengthened

resource management systems, reports and accountabilities. The

FY18 budget is expected to close within the flexibility band and

with no major structural imbalances by business area. More

importantly, we have moved to a culture where Management and

staff seek to systematically align resources with WBG priorities in

a way that is sustainable and delivers value for money.

Because of its strong commitment to efficiency measures,

Management has been able to keep the budget at a flat nominal

level for the past five years, despite IBRD and IDA operations

growing by some 21 percent since FY14 (see Figure 2.2).

3 The Private Sector Window and the IDA Scale-up Facility have been established to provide increased non-concessional financing

for transformational projects, and transitional support for IDA graduates.

12

Figure 2.2: Growth in IBRD/IDA Portfolio Volume vs. Administrative Budget

(Percentage Growth from FY14)

22. The Bank achieved

US$340 million of

sustainable savings

through the

Expenditure Review.

As part of the WBG approach to foster a culture of efficiency

through the US$400 million Group-wide Expenditure Review

program, the Bank realized savings of about US$340 million

(US$300 million clawed-back from Bank Budget and US$40

million benefiting External Funds) by FY18 against the agreed

“Everything Else Being Equal” budget. Sustainable efficiency

gains have been achieved mainly in areas related to organizational

changes, travel, workforce, technology, and facilities – an effort

which was made more challenging as changes in our business

model increased the costs of doing business.

23. Management has

continued the rolling

program of Business

Reviews to identify

opportunities for

greater efficiency and

strategic alignment.

Business Reviews have identified significant savings. Examples to

date include the following:

• Efficiencies in the operating model: A US$20 million

reduction in annual IT capital investment in FY18 (compared

to the previous four-year average) will help contain

depreciation costs over the coming years. Additionally,

reforms to ITS operations and maintenance management

resulted in a budget reduction of US$10 million that would

have otherwise increased ITS’s budget from FY19.

• Lean services and staffing: DEC, LEG and ECR tightened staff

complement with exit programs targeted at higher level staff

while maintaining focus on supporting the front line. ECR has

also focused its efforts on delivering core services, eliminating

its publishing and knowledge unit.

13

• Organizational realignment: HRD off-shored more work to

Chennai. Communications staff from other parts of the World

Bank have been remapped to ECR which will enable it to

achieve synergies and efficiencies.

24. Management is

continuing its drive for

efficiencies and

productivity

improvement.

In addition to operational agility and administrative simplification

initiatives and Business Reviews cited in Section 2.1 and paragraph

23, Management has identified specific efficiencies resulting from

productivity improvements, savings and cost avoidance for the

planning horizon in consultation with the Board. Some of these

measures are being pursued in coordination with IFC and MIGA as

was done during the Expenditure Review. They include the

following:

• Corporate procurement: Management is enhancing efforts to

achieve savings and cost avoidance in the

procurement/negotiation of corporate contracts by better

benchmarking, targeting and tracking of savings at the contract

level, by clawing-back savings achieved from unit budgets, and

by introducing more transparent pricing/more economical

standards for goods and services through the introduction of

service catalogues.

• Workforce structure and compensation: Changes in staff

compensation methodology will result in downward budget

adjustments. Other workforce measures being planned include

controlling numbers and optimizing grade mix through a

combination of workforce planning, natural attrition, and

enhance performance management.

• Project portfolio management: Efforts will be made to further

strengthen portfolio management and enhance consolidation of

new operations in the pipeline to reduce fragmentation

whenever feasible.

• Travel expenditures: Savings will be sought through tighter

oversight of travel policy exceptions; roll-out of a mandatory

global travel credit card to travelling staff; use of an external

vendor to negotiate better hotel rates; rebidding the HQ travel

agency contract; and tighter control over number of Bank

participants in global events and conferences.

14

• Real estate expenditures: Key HQ efficiency measures planned

include more efficient space standards; creation of in-house

conference space to accommodate large meetings currently

held externally; and reduction of leased footprint. In country

offices, we are exploring options to purchase rather than lease,

where feasible and economical; to increase space sharing with

IFC; to consolidate country office facilities depreciation; as

well as additional measures to optimize the use of office space

around the world.

• Other measures: Management intends to reduce discretionary

spending on food services. It is also looking at opportunities to

rationalize use of external contractors – particularly in IT.

Finally, it will continue to implement recommendations

identified through the Business Reviews.

15

FY19 EXPENDITURE FRAMEWORK

This section sets out the aggregate funding budget (Bank Budget and External Funds) for World Bank

expenditures and demonstrates the budget’s consistency with the principles of financial sustainability

and efficiency.

3.1 AGGREGATE BANK BUDGET

25. In line with

the Bank’s

current

financial

position and

funding

availability,

Management

proposes a

FY19 budget

which would

be flat in real

terms.

Consistent with the need to maintain budget discipline and considering (i)

strategic priorities, (ii) increasing costs of doing business, and (iii) savings

that would derive from efficiencies and the impact of the revised

compensation methodology, Management proposes a FY19 budget which

would be flat in real terms. More specifically, Management is proposing to

limit the increase of the budget for FY19 to 2.4 percent. This represents a

zero increase in real terms, and a budget below the one in FY14 in real terms.

(See Table 3.1 and Figure 2.2.)

As agreed with the Board, Management will draw on the standard 2 percent

flexibility band to fund any incremental cost of implementation of the capital

package in FY19. If any additional budget funding is required in FY19 for

the IBRD scale-up above the 2 percent flexibility band, Management will

seek Board approval.

Table 3.1: Bank Budget (US$ million)

FY18 FY19

Current Trajectory (FY18-FY19 as per FY18 WB Budget Document) 2,550 2,632

Revision to Trajectory (21)

Revised Trajectory 2,550 2,611

IBRD Anchor 88% 80%

Available for IBRD net income retention/transfer 150 294

IDA Anchor 104% 91%

Available for other uses of IDA income - 147

16

26. The proposed

FY19 budget

will maintain

budget

sustainability

and contribute

to the Bank’s

financial

strengthening.

Based on a pre-capital increase scenario, the IBRD anchor (the ratio of IBRD

expenses over IBRD loan spread revenue) under the planned budget is

projected to decline from 107 percent in FY17 to below 100 percent in FY18

and FY19 —thus strengthening financial capacity.

IDA’s budget anchor (the ratio of IDA expenses over IDA net revenue) is

estimated to be around 104 percent in FY18, falling below 100 percent in

FY19.

Figure 3.1: IBRD Budget Anchor

Figure 3.2: IDA Budget Anchor

27. In developing

the FY19

budget,

Management

sought to

maintain

aggregate

budget

efficiency.

As illustrated in Figures 3.3-3.6, comparing the FY19 budget envelope with

the expected commitments and the size of the portfolio demonstrates the

Bank’s continued aggregate efficiency despite the growing volume and

scope of our work. Annex II provides a detailed breakdown of these

indicators for IBRD and IDA respectively.

• The ratio of administrative budget to number of projects approved is

expected to remain flat. On the other hand, the Administrative Budget

per US$ billions of loans approved has been heavily influenced by two

factors. Firstly, this indicator has shown a declining trend as lending

176%189%

158%160%

155%147% 148%

135%

107%

88%80%

0

200

400

600

800

1,000

1,200

1,400

1,600

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19

0%

40%

80%

120%

160%

200%

Exp

en

ses/

Re

ven

ues

US$

mill

ion

Bu

dge

t A

nch

or

%

IBRD Loan Spread Revenue IBRD-funded Expenses IBRD Budget Anchor

90% 93%98% 96% 98%

102% 100%94%

97%104%

91%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800


0%

20%

40%

60%

80%

100%

120%

Exp

en

ses/

Re

ven

ue

US$

mill

ion

Bu

dge

t A

nch

or

%

IDA Revenue IDA-funded Expenses IDA Budget Anchor

17

volumes have surged (FY08-FY10) and as a result of cost efficiency

drives (FY13-16). Over the FY18-19 period, the increase in the dollar

based indicator is attributable to rising costs of doing business, as well as

a decline in IBRD lending under the pre-capital increase scenario.

• The ratio of administrative budget to number of projects supervised is

expected to slightly improve. However, the total administrative budget

per US$ billions of portfolio under supervision rises only slightly in

FY18-19, reflecting the combination of growing and more challenging

portfolio and budget restraint.

Figure 3.3: Total Admin BB per Lending Project Approved (FY18US$ million)

Figure 3.4: Total Admin BB per Project under Supervision (FY18US$ million)

Figure 3.5: Total Admin BB per US$ Billion of Loans Approved (US$ million)

1.4 1.6

1.7 1.7 1.6 1.6 1.6 1.6 1.5 1.6 1.7 1.7 1.6 1.6

1.5 1.7 1.6

-

0.5

1.0

1.5

2.0

2.5

3.0

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18(P) FY19(P)

IBRD+IDA

88 92 90 88

83 85

46 39

53

67

79

62 59 54

59 53 57

-

20

40

60

80

100

120


IBRD+IDA

10 11

10 10 9 9 9

8 7

11 10

8 9 9

7 7 7

-

2

4

6

8

10

12

14

16


IBRD+IDA

18

Figure 3.6: Total Admin BB per US$ Billion Portfolio Under Supervision (US$ million)

3.2 EXTERNAL FUNDS OUTLOOK

28. External Funds have

grown significantly as

a source of funds in

recent years but this

share is expected to

stabilize.

Most of the Bank Executed Trust Funds (BETFs) that will be drawn

on during FY19 have already been paid in. Cash contributions to

trust funds have slowed during FY16-18 and, as a result, the

double-digit BETF growth of the last few years is not expected to

continue and growth in FY19 (compared to FY18 projections) is

expected to be around 4 percent.

Reimbursable Advisory Services (RAS) is a key element of ASA,

with revenues of US$89 million in FY17 expected to reach about

US$115 million by FY19. A revised set of directives and guidelines

will be issued to equip the Bank with a more flexible and

responsive operational framework for RAS.

29. By FY19, Management

will complete

implementation of a

program of measures

to ensure that Trust

Fund cost recovery

arrangements better

reflect the actual cost

of administering these

funds.

Arising from concerns that a significant share of the costs of

administering external funds were being borne by the

administrative budget, the Board approved the Trust Fund (TF)

cost recovery framework in FY15 which included several measures

totaling US$100 million designed to redress this imbalance. The

new framework became operational on July 1, 2015. All new trust

funds are established under the new cost recovery framework.

Further steps were taken in FY18 by adjusting the benefit recovery

rate on HQ-appointed staff from 50 percent, the previous rate,

which had resulted in an under recovery of actual costs that had to

be borne instead by the Bank budget, to the actual 70 percent rate.

In addition, a 45 percent rate for Country Office-appointed staff

was introduced in FY18 but will be applied to external funds from

FY19.

17.4

20.1 21.6 22.4

21.0 20.2

16.6 14.8

13.8 14.2 14.7 13.9 13.1

11.9 11.7 11.6 12.0

-

5.0

10.0

15.0

20.0

25.0

30.0


IBRD+IDA

19

Progress continues in aligning external funds with strategic

priorities. Forecasting of external funds usage is being improved

through their earlier integration into work programming

agreements and the roll out of new budget planning and reporting

systems.

30. External Funds share

of total administrative

spending plans is

expected to remain

flat.

Under the base case scenario, External Funds as a share of total

administrative spending plans are currently forecast to stabilize at

around 38 percent (see Figure 3.7).

Figure 3.7: Share of External Funds to Total Funds

3.3 AGGREGATE BANK BUDGET AND EXTERNAL FUNDS

31. An aggregate resource

envelope for FY19 has

emerged from the

discussion on the

strategic framework

and the External

Funds outlook.

Resources for both the Bank Budget (BB) and “All Funds”

(including BETFs, RASs and EFOs) show a growth of 3.5 percent

in FY19.

Table 3.2: FY19 Bank Budget and External Funds (US$ million)

27.3%

29.1%

30.5%31.0%

32.8%33.8%

35.4% 35.8%

38.2%

20%

25%

30%

35%

40%

F Y 10 F Y 11 F Y 12 F Y 13 F Y 14 F Y 15 F Y 16 F Y 17 F Y 18 F Y 19

37.0%

FY18

WB Budget

FY18

ProjectionFY19

Bank Budget Trajectory 2,550 2,550 2,611

External Funds Projections 1,496 1,535 1,616

Total All Funds 4,046 4,085 4,226

* Totals have been rounded to the nearest whole number.

20

FY19 BUDGET

This section presents specific details of the FY19 administrative budget proposal and indicates how

resources are allocated between main budget categories, demonstrating how this aligns with the

WBG strategic directions. It provides details on allocations for operational programs, IG&A units,

other non-unit specific budgets, as well as an estimated expense line view.

4.1 ADMINISTRATIVE BUDGET PROPOSAL

32. Management is

proposing a Bank

Budget of US$2,611

million for FY19, as

part of a broader total

funds estimate of

US$4,226 million.

The proposed Budget for FY19 is US$2,611 million as set out in

Table 4.1 below. The proposed budget, based on the “no capital

increase” scenario, limits the increase over FY18 to 2.4 percent,

which is in line with inflation. The “All Funds” FY19 envelope is

expected to be around US$4,226 million (see Table 3.2).

As agreed with the Board, Management will draw on the standard

2 percent flexibility band to fund any incremental cost of

implementation of the capital package in FY19. If any additional

budget funding is required in FY19 for the IBRD scale-up above

the 2 percent flexibility band, Management will seek Board

approval.

Table 4.1: FY19 WB Budget (US$ million)

FY18 FY19

Proposed FY18-19 Budget Trajectory (Nominal) 2,550 2,611

% Change YOY 2.4%

Proposed FY18-19 Budget Trajectory (in FY18$) 2,550 2,547

% Change YOY -0.1%

21

4.2 ADJUSTMENTS TO THE BUDGET

33. Adjustments to the

budget were needed to

address rising cost of

doing business with

offsetting adjustments

resulting from

efficiency measures

and productivity gains.

Adjustments impacting the budget presented in the FY18 Budget

Document come from (1) selected incremental additions to unit

budget trajectories associated with rising business volumes and

rising cost of doing business; and (2) new claw-backs from unit

budget trajectories resulting from efficiency measures and the

impact of the revised compensation methodology. It should be

noted that incremental additions to the budget reflect only a small

part of the cost of doing business – some of the rising costs were

already included in the budget presented in the FY18 Budget

Document; other costs are being absorbed through efficiency

measures, internal redeployments or trade-offs within/across VPUs,

or minimized through cost avoidance and productivity measures. It

should also be noted that new claw-backs more than offset the

incremental additions to result in the flat real budget; and that these

claw-backs are in addition to budget claw-backs to FY19 made in

previous budget cycles.

During the planning process, Management considered options for

funding incremental requests through three mechanisms: (1)

internal reallocations and trade-offs; (2) efficiency measures and

productivity gains; and (3) prioritization of incremental funding as

per the strategic priorities discussed in Section 2. VPUs were asked

to present options for trade-offs and reductions in administrative

budget spend. In addition, savings from efficiency measures and

adjustments resulting from the revised compensation methodology

were reflected in each VPU budget.

34. Incremental funding

additions to unit

budget trajectories

have been prioritized

for FY19, with strong

emphasis on client-

facing operational

priorities, reflecting

increased business

volumes and to ease

selective rising costs of

doing business.

The following funding additions to unit budget trajectories have

been identified:

• Supervising an expanding portfolio with more complex and

risky projects, including enhanced supervision in FCV

countries and small states.

• Sustaining engagement with all clients with an appropriate

level of analytical and advisory services at the country level.

• Rolling out the new Environmental and Social Framework and

implementing the Gender-Based Violence Action Plan.

22

• Performing additional responsibilities to address the increased

complexity of the hybrid IDA-18 financial model and risk

management measures, and reinvestment for efficiencies.

• Addressing a range of cost pressures that are building up across

the institution that cannot be offset by redeployments.

Table 4.2: Incremental Additions to the Budget (US$ million)

As usual, a central contingency (US$10 million) will also be

available to add to unit trajectories during FY19 for unforeseen

priorities and cost pressures.

35. Unit budget

trajectories were then

adjusted to reflect

efficiency measures

and associated claw-

backs.

Management has identified claw-backs for efficiency measures that

more than exceed these cost pressures, with additional savings

identified which have resulted in reduction in growth spending

levels to flat real. Claw-backs include:

• Reductions to budget predicated on declining IBRD lending in

the “pre-capital increase” scenario.4

• Reductions to budget to off-set subsidies previously paid to

World Bank VPUs in lieu of full cost recovery of World Bank

staff benefits for staff time spent providing shared services to

IFC (IFC has agreed to cost Shared Service Agreements at the

full benefit rates effective FY19).

• Adjustments to the budget for Executive Directors in line with

the recent endorsement by COGAM.

• Reduction in the budget of the Board of Governors.

4 They are predicated on a reduction of IBRD lending from US$24 billion in FY18 to the “pre-capital increase” projections of US$22

billion in FY19.

FY19

Supervising an expanding portfolio, including in FCV and

small states

2

Sustaining Client engagement, including through ASA 5

Gender Based Violence Action Plan and additional

funding for the Environmental and Social Framework

17

Increased complexity of IDA 18 financial model, risk

management and reinvestment for efficiencies

6

Depreciation -

Other cost pressures 1

Total Incremental Additions 31

23

Reductions to budget resulting from: (i) impact of the revised

compensation methodology – this is applied across units using a

restated price factor; and (ii) savings from efficiency measures,

including efficiencies in corporate procurement, workforce

structure and other measures.

Table 4.3. Claw-backs from Budget (US$ million)

4.3 STRATEGIC ALIGNMENT BY WORK PROGRAM

36. The FY19 budget

distribution

demonstrates

increased strategic

alignment of

resources with front-

line operational

delivery.

Table 4.4 presents the FY19 budget distribution by main programs

and funding sources. In line with Management’s commitment to

the Board, the share of Bank Budget (BB) resources to Operations

and front-line services will increase from 55 percent in FY16 to 59

percent in FY19. The share of Operations in the “All Funds” unit

budget is projected to increase from 60 percent in FY16 to around

two-thirds of unit trajectories in FY19.

Table 4.4: FY18-19 Budget by Work Program & Funding Source (US$ million)

FY19

Savings due to lower IBRD lending volumes 3

IFC – MIGA full Benefit recovery from SLAs 8

Savings from Board of Governors Budget 1

Savings from Executive Directors Budget 2

Reductions from Compensation Review 12

Efficiency savings 25

Reductions/Clawbacks from Unit Trajectories 52

FY18 1 FY19 FY18 FY19

TOTAL OPERATIONAL UNITS (Excl GMF) 1,494 1,566 2,509 2,678

Client Engagement 820 871 1,745 1,888

Country Engagement 732 781 1,460 1,578

Global Engagement 88 90 285 310

Program & Practice Management 674 695 764 790

Grant Making Facilities 35 35 35 35

TOTAL OPERATIONS 1,529 1,601 2,544 2,713

IG&A PROGRAMS 1,086 1,084 1,402 1,410

Institutional Services 404 412 595 614

Governance Services 219 216 236 234

Administrative Services 463 456 571 562

TOTAL: ALL UNITS 2,614 2,685 3,945 4,123

CENTRALLY MANAGED ACCOUNTS 100 103 101 103

o/w Corporate Contingency 10 10 10 10

TOTAL TRAJECTORY 2,714 2,788 4,046 4,226

o/w Funded by External Funds (164) (177) (1,496) (1,616)

Net Trajectory Funded by IBRD/IDA 2,550 2,611 2,550 2,611

INDICATIVE BUDGET TRAJECTORIESBANK BUDGET ALL FUNDS

24

Table 4.5: 18-19 Budget Share by Work Program and Funding Source

In addition, a greater share of these resources will be allocated to Client

Engagement. The current program shows an increase of the share of BB

Client Engagement (Country Engagement plus Global Engagement) in

operational unit trajectories from 53.7 percent in FY16 to 55.6 percent

in FY19. The Client Engagement share on an “All Funds” basis is

projected to rise from 67.4 percent in FY16 to 70.5 percent in FY19.

Figure 4.1: Operational Share of Unit Budgets

FY18 FY19 FY18 FY19

Total Operational Units 57.9% 59.1% 64.2% 65.5%

Client Engagement 31.8% 32.9% 44.6% 46.2%

Country Engagement 28.4% 29.5% 37.3% 38.6%

Global Engagement 3.4% 3.4% 7.3% 7.6%

Program & Practice Management 26.1% 26.2% 19.5% 19.3%

IG&A Programs 42.1% 40.9% 35.8% 34.5%

Institutional Services 15.7% 15.5% 15.2% 15.0%

Governance Services 8.5% 8.2% 6.0% 5.7%

Administrative Services 17.9% 17.2% 14.6% 13.8%

TOTAL: ALL UNITS (excl. GMFs) 100% 100% 100% 100%

Share of Budget TrajectoryBB ALL FUNDS

54.9%

56.8%57.9%

59.1%60.4%

62.8%64.2%

65.5%

52.0%

54.0%

56.0%

58.0%

60.0%

62.0%

64.0%

66.0%

68.0%

FY16 FY17 FY18 FY19

BB All Funds

Note: FY16-18 BB restated to reflect the new arrangements for RAMP and other asset management services

(original BB operational share of unit budgets were: 54.3%, 56.2%, and 57.2% for FY16, FY17, and FY18,

respectively).

25

Figure 4.2: Client Engagement Share of Operational Unit Budgets (including Country

Engagement and Global Engagement)

53.7% 54.1%54.9% 55.6%

67.4% 67.7%69.6%

70.5%

52.0%

57.0%

62.0%

67.0%

72.0%

FY16 FY17 FY18 FY19

BB All Funds

26

Box 4.1: Administrative Budget Envelopes

Under the organization structure introduced in FY15, the World Bank’s administrative

budget is allocated to units through work program envelopes and additional expense

envelopes as follows:

1. Operational Units

Funding is provided to operational units through the Client Engagement and Program and

Practice Management envelopes.

• Client Engagement: This comprises Country Engagement and Global Engagement

envelopes.

o The Country Engagement (CE) envelope: This includes funding for preparation and

supervision work with respect to financial services (such as lending, grants and

guarantees), knowledge services (such as advisory services and analytics) and

convening services (such as country strategy and partner

coordination/mobilization).

o The Global Engagement (GE) envelope: This includes funding for global

engagement activities, without a specific country identification, incl. work on

Global Public Goods, global knowledge services, global convening services, and

global programs administrative services.

• Program and Practice Management (PPM): This envelope funds the cost of running

the operational work program, and includes funding for management, administrative

support services, space and IT costs, extended assignment benefits for field assignments,

plus knowledge management, innovation and staff training/learning.

2. Institutional, Governance and Administration (IG&A)

This envelope comprises the funding provided to IG&A units to cover the cost of running

the institutional, governance and administrative services that support the World Bank’s

operational delivery.

Total unit trajectories are the sum of Operational and IG&A unit trajectories.

The two additional expense area envelopes comprise the following:

3. Grant-Making Facilities (GMF)

This envelope provides Board-mandated transfers to external facilities.

4. Centrally Managed Accounts (CMA)

This envelope contains funding for expenses that are centrally administered and non-unit

specific such as depreciation, lease costs and benefits as well as certain institutional

programs.

27

4.4 OPERATIONAL WORK PROGRAM

37. As a greater share of

resources is directed to

operational activities

in FY19 and

allocations to all

regions grow,

additional funding

will be made available

for the Bank’s key

strategic priorities.

As more resources are directed toward front-line activities,

additional funding will be made available for the Bank’s key

strategic priorities: (i) ensuring delivery of IDA-18 scale up, (ii)

enhancing engagement in FCV countries and small states, (iii)

continued engagement with IBRD clients, (iv) supporting

implementation of the new ESF, and (v) harnessing collaboration

across the WBG in maximizing finance for development in

developing client solutions.

Specifically, as set out in Table 4.6, additional resources have been

directed towards the two largest IDA regions, namely AFR and

SAR, for the preparation and delivery of the pipeline for IDA and

FCV scale-up as well as related supervision needs. The AFR

Region’s FY19 Country Engagement (CE) budget would increase

by 8 percent (or US$20 million) over FY18. Similarly, the SAR

Region’s FY19 CE budget would increase by 4 percent (or US$5

million) over FY18.

To avoid crowding out of other country programs due to cost

pressures in delivering on small states, additional resources have

been allocated to the two regions with the largest IDA allocations

for these countries – the EAP Region (with an increase of 4 percent

or US$4 million over its FY18 CE budget) and the LCR Region (an

increase of 1 percent or US$1 million over its FY18 CE budget).

The MNA and ECA Regions were allocated an increase to support

continuing client engagement demands.

As shareholders endorsed the IBRD capital package during the

Work Program Agreement (WPA) process, Management has

started consulting externally with clients and internally with

business units on the specific lending volumes, policy commitments

and budgetary implications of this package, which are not yet

reflected in the WPA outcomes discussed in this section. Any

incremental funding needs for FY19 emerging from this analysis

will be absorbed within the 2 percent flexibility band and, if above

that, Management will seek Board approval. FY20-21 budget

needs will be assessed as part of the next year’s Strategic Planning

and Budgeting cycle.

28

Management has recently aligned the Sustainable Development

Practice Group and the Global Themes Vice-Presidency to balance

the distribution of responsibility over the World Bank program. The

budget of these two Vice Presidencies will be re-apportioned

according to the new structure as the details are finalized and will

be updated in the FY19 Q1 Quarterly Business and Risk Review

(QBRR).

29

Table 4.6: FY19 Operational Budget Envelopes (US$ million)

FY18 FY19 FY18 FY19

AFR

CE 266 286 489 528

PPM 119 123 123 127

Total 385 409 612 654

EAP

CE 105 109 232 247

PPM 61 61 66 65

Total 167 171 298 312

ECA

CE 86 87 188 194

PPM 54 55 55 56

Total 140 142 243 250

LCR

CE 96 97 151 156

PPM 56 57 57 58

Total 152 154 207 213

MNA

CE 60 61 166 189

PPM 36 36 37 38

Total 95 97 203 227

SAR

CE 120 125 235 249

PPM 52 55 54 57

Total 172 180 289 306

Other Operational Units' Allocations1

CE - 16 - 16

All Regions

CE 732 781 1,460 1,578

PPM 378 387 393 400

Total for Regions 1,111 1,168 1,853 1,978

GP/GT GE

GE 88 90 285 310

GP/GT PPM

Equitable Growth, Finance and Institutions 77 80 89 92

Human Development 37 40 43 46

Sustainable Development 106 105 164 168

Other Operational Support2 62 64 62 64

Global Themes 13 18 13 19

Total GP/GT PPM 295 308 371 390

Total GP/GT 383 398 656 700

Total Operational Units 1,494 1,566 2,509 2,678

INDICATIVE BUDGET TRAJECTORIESBB ALL FUNDS

1CE funded to GPs for FCV enhanced supervision pilot, and additional funding for GBV Action

Plan and the new ESF implementation. The latter is complemented by US$6 million

additional funding to OPCS in FY19 to support the new ESF roll-out.

2Includes Extended Assignment Benefits (EAB) for operational staff and funding to support

Agile Bank initiative, and aspects of the work on FCV Supervision Pilot and Gender-based

Violence (GBV) Action Plan.

30

38. The outcome of the

WPA process shows a

significant increase in

budget allocations for

work on IDA

countries in FY19.

Allocations to IBRD and IDA countries from the CE envelope are

set out in Figure 4.3. Overall budget allocations for operational

work in IDA countries have increased from US$420 million in

FY18 to US$459 million in FY19 – an increase of US$39 million

(9 percent), bringing the IDA funded share of the Country

Engagement Work Program from 57 percent to 59 percent. The

allocations to IBRD countries (pre-capital increase) increased by

US$10 million (3 percent), but are expected to increase further post-

capital increase.

Figure 4.3: Evolution of the Country Engagement Bank Budget from FY18 to

FY19 (US$ million)

39. Country Engagement

allocations across

business processes are

reflective of strategic

priorities emerging

from country

dialogue.

As highlighted in figures 4.4 and 4.5, additional resources have

been directed towards front-line activities, in particular for

Supervision, Fiduciary and Safeguards work. The total allocation

for these categories in FY19 amounts to US$387 million or 50

percent of the total CE allocation. This is an increase of US$40

million over the FY18 allocation or an increase of 12 percent. This

noteworthy increase reflects the Bank’s growing and increasingly

complex portfolio and the implementation of the new ESF.

Funding for Analytical and Advisory Services (ASA), which aim to

help our clients adopt better policies, implement reforms,

strengthen institutions, build capacity and inform development

operations, also see a significant increase and represents 20 percent

of CE. This is the second successive annual increase and reflects

the Bank’s commitment to do more core diagnostic/analytical work,

31

remain engaged in dialogue across all client groups, as well as

underpin future lending including in FCV/FCV-risk countries.

Resources for Lending preparation (pre-capital increase),

representing 17 percent of CE, on the other hand, have slightly

declined from previous years reflecting an explicit effort to

consolidate tasks and reduce fragmentation in the pipeline

whenever feasible. Given the IDA-18 envelope that is 50 percent

larger than IDA-17, the doubling of IDA resources in FCV, and a

tripling in resources for small states, as well as new windows, the

Bank will need to be more agile and innovative in finding synergies

in consolidating lending tasks and reducing fragmentation.

Figure 4.4: Country Engagement Bank Budget Allocations by Business Process

for FY17-19 (US$ million)

32

Figure 4.5: Country Engagement Bank Budget Allocation Shares by Business

Process for FY17-19

40. Fiduciary and

Safeguards allocations

will increase

significantly for the

third year in a row.

The roll-out of the new Procurement Framework and

Environmental and Social Framework have been designed to ensure

that Bank-financed projects are delivered to the highest standards.

The recently introduced Procurement Framework is designed to

increase the flexibility, efficiency and transparency of the

procurement process, and the new Environmental and Social

framework (ESF), which will become operational in FY19, will

enhance the sustainability of financing by deepening protections of

people and the environment from adverse impacts. Going beyond

individual projects, the framework aims to strengthen national

systems and institutions in client countries.

As the Bank’s portfolio grows, and the Bank’s footprint expands

into more challenging environments, Fiduciary and Safeguard

allocations will increase by an additional 12 percent in FY19, or 62

percent since FY16. Following a significant increase in FY17 and

FY18 to support the implementation of the new procurement

framework and the IDA-18 scale up, resources for fiduciary work

will increase by an additional 4 percent to US$70 million in FY19.

Equally, following large increases in FY17 and FY18, allocations

for Safeguards work will increase by 23 percent to US$64 million

in FY19. This includes an additional allocation of US$10 million

provided in response to an estimate of the incremental costs of

9% 9% 10%4% 3% 4%

21% 20% 20%

7% 7% 8%8% 9% 9%

31% 31% 32%

20% 20% 17%

FY17 FY18 FY19

Other COMO ASA Safeguards Fiduciary Supervision Lending

33

project safeguard requirements expected under the new ESF

effective October 2018.

Figure 4.6: CE Spending on Fiduciary and Safeguards for FY16-19


allocations across

Practice Groups

reflect strategic

priorities emerging

from country

dialogue.

FY19 WPAs, driven by client demands, have resulted in increased

resources in all GP Practice Groups. The increases across Practice

Groups are broadly equal in percentage terms and consequently the

FY19 CE allocations show Sustainable Development, including

Safeguards, holding the largest share, followed by Equitable

Growth, Finance and Institutions, followed in turn by Human

Development.

Figure 4.7: FY19 Country Engagement Allocation Shares by Practice Group

34


allocations for

fragility, conflict, and

violence (FCV)

affected countries will

increase by 9 percent

in FY19, which is a 35

percent increase since

FY16.

As illustrated in Figure 4.8, the CE allocation to FCV and FCV at

risk countries (IDA and IBRD) increased by US$13 million (9

percent) from US$142 million in FY18 to US$155 million in FY19.

Of the total FY19 CE increase (US$49 million), some 27 percent

(US$13 million) was directed to FCV/FCV-Risk countries. The

increase in allocations on FCV and FCV at risk countries since

FY16 amounts to US$40 million or 35 percent.

The Bank is meeting its IDA-18 commitment to add staff in FCV

locations during the IDA-18 three-year cycle. In the area of mobility

and careers for FCV staff, the Bank’s focus is on: a) emphasizing

FCV experience in selections and assignment to senior positions; b)

strengthening next assignment planning; and c) monitoring

recruitment, deployment, development, promotion and careers. A

number of leadership, learning and mentoring programs for FCV

staff and managers have been developed, such as an onboarding

program customized for FCV staff and delivered in Cairo in

December 2017. Hazard and Fragility Pay was introduced in

October 2017, benefitting over 700 country office appointed staff

in 27 hazardous and/or FCV locations. Another area of focus is staff

health and wellbeing, with several initiatives underway to support

FCV staff.

Figure 4.8: Country Engagement Bank Budget Allocations for FCV and FCV at

Risk Countries for FY16-19 (US$ million)

35


allocations to Small

States will increase by

8 percent in FY19,

which is a 51 percent

increase since FY16.

As illustrated in Figure 4.9, the CE allocation to Small States

increased by 8 percent from US$45 million in FY18 to US$48

million in FY19. The increase in spending on Small States since

FY16 amounts to US$16 million or 51 percent.

Figure 4.9: Country Engagement Bank Budget Allocations to Small States for

FY16-19 (US$ million)

44. The Bank is

continuing to make

progress on the goals

set out in the WBG

Climate Change

Action Plan.

Continued ambitious attention to, and global leadership on, climate

change is critical to meeting the development mission of the World

Bank Group (WBG). To this end, the WBG is expected to reach at

least 26 percent climate co-benefits in total commitments by the end

of FY18 and will meet its 28 percent target by 2020. This continues

the strong upward trend from 18 percent in FY15.

The World Bank will continue to support transformational policies

needed to deliver climate actions, mobilize private sector

investment and inform the global discussion on the climate agenda.

Funding for such efforts will be directed through: (1) the Country

Engagement budget envelope in support of the preparation and

supervision of projects that generate climate co-benefits and of

climate related analytical and advisory work (both projects and

analytical/advisory tasks are “climate tagged” during the FY as their

content and design are defined); (2) the Global Engagement and

PPM budgets in support of the Global Themes VPU (see Table 4.6);

and (3) research work done by DEC.

36

45. Narrowing the gender

gap features

prominently in the

World Bank Group’s

FY19 work program.

The World Bank Group Gender Strategy (FY 2016-2023) outlines

the support to countries and companies to (i) close gaps in health

and education, (ii) remove constraints to women’s labor force

participation, (iii) work to increase women’s ownership and control

of assets, and (iv) enhance women’s voice and agency, including

addressing gender-based violence. In addition, following the report

of an independent Task Force in the Fall of 2017, an action plan has

been adopted by Management and shared with the Board detailing

measures to help prevent and respond to sexual exploitation and

abuse or gender-based violence, improve monitoring systems, and

empower teams to report any cases as they emerge in the projects

the Bank supports.

To operationalize the Bank’s gender goals, gender issues will be

included in the Country Partnership Frameworks (CPF) and other

diagnostic instruments. Bank tasks are becoming increasingly

gender informed reflecting the mainstreaming of Gender in to the

Bank’s work program. Accordingly, funding for gender work will

be directed through: (1) the Country Engagement budget envelope

in support of the preparation and supervision of projects and of

analytical and advisory work that address gender gaps (both

projects and analytical/advisory tasks are “gender tagged” during

the FY as their content and design are defined); (2) the Global

Engagement and PPM budgets in support of the Global Themes

VPU; (3) the Practice and Program Management budget in the two

regions (AFR and EAP) where staff work on gender issues in the

Gender Innovation Labs; and (4) research work done by DEC.

46. Global Engagement

funding from BB

sources is expected to

increase in FY19 to

US$90 million and is

complemented by

external funds

provided by various

partners.

The Bank’s Global Engagement work program supports non-

country-specific priorities, including (i) fulfilling corporate

commitments; (ii) supporting innovation and product development

to support evidence-based policy making by developing global

databases, tools and evaluations and to maintain WBG leadership

in global public goods, (iii) sustaining partnerships and global

engagements, and (iv) providing operational support to leverage

knowledge services and enable rapid and flexible operational

response.

37

Bank funding has been allocated based on the following categories:

• Corporate Commitments (US$40 million). Priorities include

work on data quality and production in support of both the Twin

Goals and the SDGs (Data for Goals), support to the G20, and

contributions to the Global Partnership for Social

Accountability (US$1.5 million) and Facility for Investment

Climate Advisory Services (US$2.0 million). Other

engagements include work on the Human Capital Project, debt

relief, sustainability and management, jobs, Universal Financial

Access, support to the Financial Stability Board (FSB), products

design to support MFD, and the Stolen Asset Recovery (StAR)

initiative.

• Global Themes (US$26 million). This category supports the

Bank’s efforts to better deliver on cross-cutting commitments

that involve multiple Global Practices, and in many cases

IBRD/IDA, IFC and MIGA. These commitments comprise

Fragility, Conflict and Violence (FCV), Gender,

Infrastructure/PPPs/Guarantees, Knowledge Management as

well as addressing key climate change mitigation and adaptation

priorities in partner countries and to enable delivery of the

Climate Change Action Plan. Priorities include delivering on

IDA-18 commitments and the MFD approach.

• Operational Support (US$24 million). This includes allocations

to Global Practices to support on-going and new strategic

engagements, innovation, product development and

partnerships, and to facilitate knowledge services. New

engagements in FY19 are expected to include work on trade,

poverty and inequality; Jobs Country implementation and

analysis; adult learning and literacy; Schools of the Future;

Disruptive Technologies for Development; pollution-smart

interventions; and innovative financing for city development

and infrastructure.

38

Figure 4.10: FY19 Global Engagement by Practice Group and Category

47. The Program and

Practice Management

(PPM) budget will

increase by 3 percent

(see Table 4.4), with

units targeting

efficiencies to address

rising cost pressures.

The PPM budget for operational units will continue to support the

operational work program, including for priorities like

decentralization and staff learning. Rising cost pressures in this

area (notably for country office facilities, security and extended

assignment benefits resulting from continuous decentralization)

will be addressed through efficiencies measures – keeping focus on

how best to optimize organizational and management structure,

grade mix and facilities management, and applying agile and

simplification in approaching our work. Within the PPM budget,

units continue to redeploy resources toward priorities, for example

staff learning (including for the new ESF implementation learning

requirements) and span of control of Practice Managers. PPM in

FY19 also includes allocations toward aspects of work under FCV

supervision pilot and the Gender Based Violence (GBV) Action

Plan, and for the implementation of the Knowledge Management

Action Plan.

39

4.5 GRANT-MAKING FACILITIES

48. While significant

progress has been

made in phasing out,

mainstreaming or

reducing Bank

funding for Grant-

Making Facilities,

alternative financing

for CGIAR has not

been forthcoming.

As part of the budget reforms in recent years, the Bank changed its

practice from funding grant-making activities “below the line” to

allocating grant-making funds as part of the planning process. In

some cases, Bank funding has been phased out (e.g., Institutional

Development Fund (IDF) and Development Grant Facility (DGF));

in others, it was decided to mainstream the activity into a Bank

program and subject it to contestability (e.g., Global Partnership for

Social Accountability (GPSA)), or reduce funding (e.g., State and

Peace-Building Fund (SPF) and Consultative Group for

International Agricultural Research (CGIAR)). Table 4.7 below sets

out the progress made to date in meeting these objectives.

Table 4.7: Grant-Making Facilities Budgets (US$ million)

Management has explored alternative sources of funding for

CGIAR and SPF. In the case of SPF, funding levels have been

reduced in recent years to US$5 million and are expected to remain

at this level. Management responded in June 2017 to a request from

some Board members to provide a briefing on CGIAR, including

details of alternative funding models. Despite much effort on the

part of the Agriculture Global Practice over many years, no

additional external funding for CGIAR has been forthcoming to

replace World Bank funding.

FY14 FY15 FY16 FY17 FY18 FY19

State and Peace-Building Fund (SPF) - 25 21 14 5 5

Institutional Development Fund (IDF) 9 - - - - -

Development Grant Facility (DGF) 51 33 12 - - -

Global Partnership for Social Accountability

(GPSA)1 5 5 5 - - -

Consultative Group for International Agricultural

Research (CGIAR)50 47 30 30 30 30

Total Operational Activities Related to Grants 115 110 68 44 35 35

1The activities of the GPSA have now been mainstreamed into the GE work program.

40

4.6 IG&A UNITS

49. Allocations to IG&A

units will remain

broadly flat despite

increasing mandates,

with IG&A units

achieving savings

through

administrative

simplification; and

with increases being

limited to critical

needs or to fund

efficiency initiatives.

Allocations to IG&A units have been assessed against their

contribution to key priorities, namely:

• Support to finance units for the IDA-18 scale up, in particular

arising from the leveraging of the IDA balance sheet, supporting

delivery of a higher lending envelope, support to the IDA-18

mid-term review and IDA-19 replenishment, and facilitating the

expansion of the Bank’s field presence in priority locations.

• Strengthening the IBRD financial position, through measures to

enhance IBRD financial capacity. Additional resources will

also be considered as part of the incremental funding for the

implementation of the capital package to support

implementation of its financial commitments.

• Implementation of the Environmental and Social Framework

(ESF), for OPCS to support the roll-out of the new

Environmental and Social Framework and strengthening

oversight.

• Supporting other operational priorities including Maximizing

Finance for Development (MFD), Climate commitments,

Fragility and Gender.

• Supporting the WBG delivery including the People Strategy,

security, knowledge, data and statistical capacity work,

communication and stakeholder engagement, enhanced risk

management and innovative financial products.

• Enhancing the business model through administrative

simplification measures.

Management has made continuous efforts to seek efficiencies,

productivity improvements and cost avoidance in IG&A VPUs.

IG&A units have pursued such efficiencies through the

administrative simplification initiative and Business Reviews (see

Section 2.4), both of which have played a critical role in this

realignment of resources. As already detailed in Section 2,

Management will continue to seek greater efficiencies from these

VPUs by pursuing more innovative and simpler ways of doing

business that conform with external best practice. In FY19,

incremental funding for IG&A units have been limited to fund

41

critical needs, namely to support the implementation of the new ESF

Framework and support to Treasury and risk management

functions, as well as investments to improve the business model.

Management has recently informed the Board of its intention to

create a data compliance function. The budget implications of this

new function are being assessed.

42

Table 4.8: FY19 IG&A Budget Envelopes (US$ million)

FY18 FY19 FY18 FY19

1.0 Institutional Services

1.1 Budget, Performance & Strategy 74 76 74 76

1.2 Financing for Development - 1 - 1

1.3 Chief Risk Office 117 16 18 17

1.4 Development Economics 52 52 107 106

1.5 Development Finance 2 28 24 65 65

1.6 External & Corporate Relations 50 54 53 57

1.7 Global Environment Fund - - 33 37

1.8 Legal Services 39 39 41 41

1.9 Operational Policy & Country Services 351 58 52 58

1.10 Strategy, Performance, and Admin. 9 11 12 14

1.11 Treasury 4 38 36 86 89

1.12 WBG Finance & Accounting 46 46 53 53

Sub-Total 404 412 595 614

2.0 Governance Services

2.1 Administrative Tribunal 2 2 2 2

2.2 EDs 88 87 88 87

2.3 Board of Governors 7 6 7 6

2.4 DC Secretariat 2 2 2 2

2.5 Conflict Resolution System 5 5 6 6

2.6 Corporate Secretariat 17 16 18 17

2.7 Independent Evaluation Group 29 30 38 39

2.8 Integrity Vice Presidency 21 21 21 21

2.9 Internal Audit 9 9 11 11

2.10 Inspection Panel 4 4 4 4

2.11 Office of Ethics and Business Conduct 7 7 9 9

2.12 Office of the President 7 7 7 7

2.13 Office of Suspension & Debarment 2 2 2 2

2.14 Office of the CEO 4 4 4 4

2.15 Office of the MD and CAO 3 3 3 3

2.16 Office of the MD and CFO 3 3 3 3

2.17 Office of the SVPMM 5 6 6 6 6

2.18 Sanctions Board 2 2 2 2

2.19 Strategic Initiatives Unit 1 1 1 1

Sub-Total 219 216 236 234

3.0 Administrative Services

3.1 General Services and Facilities 153 152 193 192

3.2 Human Resources 6 68 63 84 78

3.3 Information & Technology Solutions 241 241 293 292

Sub-Total 463 456 571 562

1,086 1,084 1,402 1,410

3OPCS: Reflects in FY19 staff transfers to ECR and incremental funds to support the ESF roll-out.

5Office of the SVPMM includes New York and Geneva Offices. 6HR: Reflects in FY19 adjustment to the staff benefit rate compensation allocation in FY18 and staff

transfers to ECR.

1CRO: Reflects the cessation in FY18 of timebound allocations for work on IDA-18 and the IBRD capital

package.

INDICATIVE BUDGET TRAJECTORIESBB All Funds

TOTAL INSTITUTIONAL, GOVERNANCE & ADMIN.

2DFI: Reflects in FY19 the move from DFI of Financing for Development as a stand-alone unit, staff

transfers to other units, in particular to ECR, and adjustment to the staff benefit rate compensation

allocation in FY18.

4 TRE: FY18 BB restated to reflect the new arrangements for RAMP and other asset management

services; also reflects adjustment to the staff benefit rate compensation allocation in FY18.

43

50. The FY19 WBG

budget for the

Executive Directors

and IEG amount to

US$117 million.

The FY19 budgets for the Executive Directors Offices (EDs) and

the Independent Evaluation Group (IEG) amount to US$117

million – a small increase in the budget of IEG and a reduction in

the budget of Executive Directors.

Although the Bank’s share of these budgets is authorized as part

of this document, and included in the total administrative budget

approval, the sizing of these budgets is not determined by

Management.

Table 4.9: FY18 and FY19 ED and IEG Budgets (US$ million)

4.7 CENTRALLY-MANAGED ACCOUNTS

51. Centrally-Managed

Accounts (CMAs) will

increase by US$3 million

in FY19 due to higher

depreciation costs and

staff separations offset

by trust fund recoveries.

Centrally Managed Accounts (CMAs) contain funding for

expenses that are either not easily attributed to specific units, or

institutional programs that are managed by units but for which

Management maintains discretion over the budget. The net

change in the budget for the CMAs between FY18 and FY19 is

US$3 million, as explained below:

• Depreciation is expected to increase by US$12 million (12

percent) over FY18 primarily due to increases in Centrally-

Managed IT depreciation. Further details are provided in

section 5. This reflects the downstream impact of the

significant ramp up of IT investment over the past decade.

• Corporate Contingency is set at US$10 million in FY19 to

support unforeseen priorities and cost pressures (same as

FY18).

• Funding for Institutional Programs will remain flat at FY18

levels.

• Staff Benefits and Allowances are budgeted at US$894

million in FY19 and shown net of an estimated US$914

million of recoveries from units and external funds collected

through the 70 percent and 45 percent staff benefit rate for

HQ-appointed and Country Office-appointed staff. While

FY18 FY19

Executive Directors (EDs) 88 87

IEG 29 30

Total 117 117

44

overall net staff benefits increase by US$2 million, this is

due to a US$53 million increase in gross benefits and a

US$51 million increase in recoveries. Gross benefits are

expected to increase faster than salary expense growth due

to certain benefits, such as medical costs, rising at a faster

rate. The budget for recoveries includes an expected

additional US$10 million due to the introduction of the 45

percent Country Office staff benefit rate on external funds

in FY19.

• Other Budget Recoveries comprise the recovery of indirect

costs from BETFs and other external funds as well

miscellaneous rebates and internal recoveries. The increase

of US$11 million in this category is principally due to an

anticipated increase in recoveries from the 17 percent

personnel charge on BETFs.

Table 4.10: Centrally-Managed Accounts (US$ million)

FY18 WB

Budget FY19 % Change $ Change

A B (B/A) (B-A)

Depreciation1 102 114 12% 12

Corporate Contingency 10 10 0% -

Institutional Programs 84 84 0% -

Staff Separations 14 21 48% 7

Washington Real Estate Costs 32 28 -12% (4)

Business Continuity1 18 15 -16% (3)

Awards Programs 4 4 0% -

Corporate Insurance 4 4 0% -

Community Connections 3 3 0% -

Evacuation Costs 2 2 0% -

Other Programs 7 7 0% -

Net Staff Benefits & Allowances (22) (20) -7% 2

Gross Staff Benefits & Allowances 841 894 6% 53

HRD-managed Staff Benefits 251 273 9% 22

Tax Allowances 129 136 6% 7

Staff Retirement and PCRF 462 485 5% 24

Institutional Benefits Recovery (863) (914) 6% (51)

Other Budget Recoveries (74) (85) 15% (11)

Total 100 103 2% 3

1Includes a US$3 million transfer in FY19 from the Business Continuity allocation to

Depreciation for the centralization of related IT depreciation costs.

45

52. The Post-Retirement

Contribution Reserve

Fund (PCRF) was

established in FY13 with

the objective of reducing

budget volatility

resulting from the

Bank’s contributions to

the staff post-retirement

plans.

The Bank’s contributions to the staff post-retirement benefit

plans remain at the established 35 percent of net salaries, which

is higher than the FY19 contribution rate of 28.43 percent

calculated by actuaries. The excess (the difference between the

actual rate determined by PFC and the 35 percent fixed

contribution rate) is added to the PCRF to build up the Reserve

Fund. The balance of the Fund is projected to be US$357

million at the end of FY19. A review of the PCRF, led by

Treasury, is scheduled for FY19.

4.8 EXPENSE FUNCTIONAL VIEW

53. The Bank follows a

dollar budget

approach which allows

budget holders

flexibility to vary

inputs as long as they

stay within workforce

planning affordability

parameters and their

authorized budgets.

The Bank does not set specific budgets by expense category, for

example, staff salaries, short term consultants or travel.

Accordingly, the functional expense line view presented in

Table 4.11 below is an illustrative decomposition of the

administrative budget by expense line item. Nevertheless, as the

shares of the expense items have remained relatively stable over

the years, the estimates below represent the current view of the

most likely outcome. The actual outcome may differ because

work programs vary during the year, and decisions are made to

respond to changing business needs that may entail trade-offs

between different expense categories.

Table 4.11: FY18 and FY19 Functional Expense View of Administrative

Expenses (US$ million)

US$m% of

TotalUS$m

% of

TotalUS$m

% of

TotalUS$m

% of

Total

Fixed Expenses 2,300 76% 2,728 67% 2,372 76% 2,818 67%

Of which:

Staff Salaries and Benefits 1,919 64% 2,286 56% 1,971 63% 2,355 56%

Other Fixed Expenses 1/ 381 13% 442 11% 401 13% 464 11%

Variable Expenses 710 24% 1,322 33% 738 24% 1,373 33%

Of which:

ST/ET Consultants & Temporaries 215 7% 647 16% 226 7% 676 16%

Travel Costs 229 8% 349 9% 238 8% 363 9%

Contractual Services 224 7% 273 7% 230 7% 279 7%

Other Variable Expenses 2/ 42 1% 52 1% 44 1% 54 1%

Total Unit Gross Expenses 3,009 100% 4,050 100% 3,110 100% 4,191 100%

Grant Making Facilities (GMFs) 35 35 35 35

Total Gross Admin Expenses (incl. GMFs) 3,044 4,085 3,145 4,226

Reimbursable Revenues and Fee income (495) (534)

Total Net Admin Expenses (incl. GMFs) - BB Only3/ 2,550 2,611 1/ Other fixed expenses include Communications & IT, Equipment & Building, Depreciation, and TF Indirect costs.

Expenses by Type of Expense

FY18

Projections

FY19

Projections

BB+Reimb. All Funds

2/ Other variable expenses include Supplies, Printing, and other indirects costs.

* Numbers may not add up due to rounding.

BB+Reimb. All Funds

46

FY19 projected gross administrative expenses on an All Funds

view are expected to be higher than FY18 projections by US$141

million or 3.5 percent. This increase is driven by an increase in

Bank Budget funded expenditures of US$61 million or 2.4

percent, and externally funded expenditures of US$80 million or

5 percent.

54. The functional

expense view shows

staff costs to be the

main expense

category.

Staffing is the main expense category representing about 56

percent of total unit gross expenses on an All Funds view (63

percent of Bank Budget).

47

55. Management considers

that the staff

remuneration increase

proposed in the 2018

Review of Staff

Compensation paper to

the Board is affordable

within the proposed

budget.

Staff costs across all funds are projected to increase by 3.0 percent

(US$69 million) in FY19 due to the proposed structure adjustment

of 1.1 percent for Washington-appointed staff and the country-by-

country structure adjustments covering country office-appointed

staff. Management considers the projected increase in staff costs

to be affordable and manageable within the overall budget

framework.

56. Staffing counts are

below FY14 levels.

In terms of staff count, the number of full-time Bank staff in FY18

is projected to be around 2.5 percent above that in FY17 but, from

a longer perspective, Bank budget-funded FTE staff is 4 percent

below the level in FY14 (1 percent below on an All Funds view),

despite the significantly increased IBRD/IDA portfolio (20.8

percent over FY14) with a flat nominal budget over the same

period (see Figure 4.11 below).

Figure 4.11: Full-time Bank Staff on Payroll (percentage growth since FY14)

57. Variable expenses are

estimated to grow in

FY19 by 4 percent

across all funds.

In terms of other expense categories, FY19 projections reflect a

stable share of major line items to total costs, driven by the needs

of operational units and travel costs. The re-introduction of the

Extended Term (ET) category of consultants/temporaries under

Variable Expenses may have some impact on this cost category.

Expenses on the contingent work force will be monitored as the

reintroduction of ET consultants/temporaries moves forward.

4.8%

13.2%

16.0%

20.8%

0.0%

1.1%

-0.7% -0.9%0.1%

-7.4%-3.5%

-1.1%

-3.0%

-7.9%-6.3%

-4.0%

-8%

-4%

0%

4%

8%

12%

16%

20%

24%

FY14 FY15 FY16 FY17 FY18P*

% Growth in IBRD/IDA Net Commit (US$ billion)

% Growth in Admin. Budget (BB) US$ million

% Growth in Full-time WB Staff Count on Payroll (All Funds)

% Growth in Full-time Equiv. (FTE) WB Staff Count on Payroll (BB+)

*Projected

48

CAPITAL BUDGET

This section includes an outline of the Bank’s FY19 Capital Budget.

5.1 FACILITIES

58. The proposed

Facilities Capital

Budget for FY19 is

US$105 million.

The proposed FY19 Facilities investment of US$105 million

comprises:

• Country office construction, purchases, relocations, and

upgrades (US$53 million or 50 percent). These investments

aim to accommodate an increasing presence in the field,

prioritize FCV needs, and to move from expensive leasehold

properties to Bank owned properties in select countries.

• HQ facilities repairs, renovations and upgrades (US$30

million or 29 percent) represent ongoing maintenance and

upgrades as well as efforts to increase efficiency of space

usage. Key investments include replacements of lighting

system, air handling unit, roof, chiller plant, and video

conferencing equipment.

• Security in HQ and country offices (US$22 million or 21

percent) mainly for country office security equipment

upgrades in medium and high priority offices, integrating and

upgrading country office access systems, fire alarm and other

system upgrades in Washington, and deployment of

defibrillators and trauma kits. The planned increase in security

spending from prior years reflects the Bank’s expanded

footprint in more challenging and less secure environments, as

well as the deterioration in the global security environment

generally.

49

5.2 TECHNOLOGY AND SYSTEMS

59. The proposed Capital

Budget for Technology

and Systems in FY19

is US$85 million.

The FY19 Technology and Systems investment plan of US$85

million is spread across three segments, as follows:

• IT Infrastructure Services (US$26 million or 31 percent)

aimed at (i) ensuring the reliability, continuity, and resiliency

of IT infrastructure and WBG global network, (ii) replacing

and upgrading end-of-life infrastructure, and (iii) safeguarding

information based on business value and risk.

• Modern Operations (US$16 million or 19 percent) which will

be used to enhance systems and enable operational staff to

deliver better and faster results. These enhancements will

enable simpler processing of projects, ensure robust

compliance, strengthen data analytics and collaboration,

strengthen mobile access to key operations solutions, and

deliver standard reports and dashboards.

• Finance, Accounting and Budget Systems (US$15 million or

18 percent) which will allow the Bank to meet compliance

with current market practices and expanding regulatory

requirements (IBRD), and compliance with the Financial

Accounting Standards Board’s (FASB’s) directive for

implementation of the new accounting standards for lease. In

addition, systems enhancements will also automate corporate

re-organizations which are conducted at least twice annually

and involve many manual interventions.

• Information, Knowledge and Learning (US$9 million or 11

percent) which will simplify and centralize our knowledge

repositories, provide easier contextual access to information,

leverage information, learning, and data in client solutions,

and promote collaboration and knowledge sharing.

• Digital Workspace (US$9 million or 10 percent) which will

provide safe and secure end points, enabling easy and

appropriate access and functionality to Bank IT systems

anytime and anywhere, and across all devices.

• Risk Management (US$5 million or 6 percent) which will

upgrade systems capabilities to handle valuation of capital

market issuances and IBRD liquidity management.

50

• Modern HR (US$5 million or 5 percent) which will be

directed at consolidating HR IT platforms to take advantage

of the most efficient HR technologies, as well as allow

systems to provide agile solutions for contextual, data-driven

decision making.

51

ANNEX I: PROGRAM COST SUMMARY

1. Table I.1 Program Cost Summary (PCS) shows the FY19 budget by: work program and

unit, Bank Budget, and external funds. Table I.2 further classifies external funds into

coupled reimbursable revenues (refer to definition below) and BETFs. All budget figures

are reported in nominal terms.

2. The PCS reflects framework adjustments since FY15 and takes another step towards a

unified approach to planning for revenues and expenditures. As was done since FY16 this

budget is constructed using holistic revenue and expense budgeting with respect to

reimbursable revenues and IBRD/IDA funding. Reimbursable revenues have been

classified as either:

• Coupled Reimbursable Revenues (CRR) which are earned by the Bank for services

that are directly related to the underlying expense incurred by a unit; revenue is not

earned unless there is a corresponding expense, similar to BETF; or

• Decoupled Reimbursable Revenues (DRR), on the other hand, which are earned by the

Bank for services that are not directly driven by the underlying expenses incurred by

the managing unit. Examples of these revenues include: Trust Funds fee income,

Health Services Department services, and revenues from sub-letting office space to

third parties.

3. Since the FY16 Budget Framework, expenditure authorization previously given as

reimbursables expense budget associated with DRR is now allocated to units or programs

as regular Bank Budget (i.e., it is “budgetized” and is now no different from a unit’s other

BB allocations). This facilitates better medium-term planning for the units, while

allowing flexibility at the corporate level. All changes in BB allocation are now subject

to the annual planning process as they are no longer linked to the revenue earned.

52

Table I.1: FY19 Funding for WB Work Program and Unit (US$ million)


1.0 Country Engagement

1.1 AFRVP 265.7 286.0 223.6 241.5 489.2 527.5

1.2 EAPVP 105.5 109.3 126.6 137.3 232.0 246.6

1.3 ECAVP 85.6 87.1 102.0 107.0 187.7 194.1

1.4 LCRVP 95.9 97.0 54.6 58.8 150.5 155.8

1.5 MNAVP 59.6 60.6 106.4 128.4 166.0 189.0

1.6 SARVP 120.0 125.3 114.9 123.7 234.9 249.0

1.7 Other Operational Units' Allocations1 - 15.8 - - - 15.8

Sub-Total 732.3 781.2 728.1 796.8 1,460.4 1,578.0

2.0 Global Engagement

2.1 GP/GT 87.7 89.6 196.9 220.7 284.7 310.3

Sub-Total 87.7 89.6 196.9 220.7 284.7 310.3

A TOTAL CLIENT ENGAGEMENT 820.0 870.8 925.0 1,017.5 1,745.0 1,888.3

3.0 Region PPM

3.1 AFRVP 119.4 122.9 3.4 3.7 122.8 126.6

3.2 EAPVP 61.1 61.3 5.2 3.7 66.3 65.0

3.3 ECAVP 54.1 55.1 1.3 1.0 55.4 56.1

3.4 LCRVP 55.7 56.6 0.9 1.0 56.6 57.6

3.5 MNAVP 35.8 36.2 1.4 1.5 37.1 37.7

3.6 SARVP 52.2 54.9 2.2 2.3 54.4 57.2

Sub-Total 378.3 387.0 14.3 13.2 392.6 400.2

4.0 GP/GT PPM

4.1 Equitable Growth, Finance and Institutions 76.9 79.8 12.2 12.6 89.1 92.4

4.2 Human Development 37.3 40.4 5.4 5.7 42.7 46.1

4.3 Sustainable Development 105.9 105.4 57.8 62.1 163.7 167.5

4.4 Other Operational Support2 62.2 64.4 - - 62.2 64.4

4.5 Global Themes 12.9 17.9 0.4 1.2 13.3 19.1

Sub-Total 295.3 307.9 75.8 81.6 371.1 389.5

B TOTAL PROGRAM & PRACTICE MGMT. 673.6 694.9 90.1 94.8 763.7 789.8

C TOTAL OPERATIONAL UNITS 1,493.6 1,565.7 1,015.1 1,112.3 2,508.7 2,678.1

5.0 Operational Grant Making Facilities

5.1 CGIAR 30.0 30.0 - - 30.0 30.0

5.2 State and Peace Building Fund 5.0 5.0 - - 5.0 5.0

Sub-Total 35.0 35.0 - - 35.0 35.0

D TOTAL OPERATIONS 1,528.6 1,600.7 1,015.1 1,112.3 2,543.7 2,713.1

INDICATIVE BUDGET TRAJECTORIESBB External Funds All Funds

53

Table I.1: FY19 Funding for WB Work Program and Unit (US$ million) (Cont’d.) / 2 of 3



6.1 Budget, Performance & Strategy 74.0 76.1 - - 74.0 76.1

6.2 Financing for Development - 0.9 - - - 0.9

6.3 Chief Risk Office 17.2 16.2 0.9 0.9 18.0 17.1

6.4 Development Economics 52.4 52.0 54.7 54.2 107.1 106.2

6.5 Development Finance 27.8 23.6 37.3 41.0 65.1 64.6

6.6 External & Corporate Relations 50.0 53.5 3.1 3.7 53.0 57.2

6.7 Global Environment Fund - - 33.0 36.6 33.0 36.6

6.8 ICSID - - - - - -

6.9 Legal Services 38.8 39.2 2.4 1.7 41.2 40.9

6.10 Operational Policy & Country Services 51.4 57.9 0.5 0.5 51.9 58.4

6.11 Strategy, Performance, and Admin. 8.9 10.5 3.2 3.2 12.1 13.7

6.12 Treasury3 37.7 35.5 48.0 53.8 85.8 89.3

6.13 WBG Finance & Accounting 46.0 46.2 7.4 7.1 53.4 53.3

Sub-Total 404.1 411.6 190.6 202.8 594.6 614.4


7.1 Administrative Tribunal 1.9 1.9 0.5 0.5 2.4 2.4

7.2 EDs 87.7 87.4 - - 87.7 87.4

7.3 Board of Governors 7.3 6.2 - - 7.3 6.2

7.4 DC Secretariat 1.7 1.8 - - 1.7 1.8

7.5 Conflict Resolution System 5.0 4.5 1.5 1.5 6.4 6.0

7.6 Corporate Secretariat 17.1 15.8 1.2 1.4 18.4 17.2

7.7 Independent Evaluation Group 29.2 29.7 9.0 8.9 38.2 38.6

7.8 Integrity Vice Presidency 21.0 20.9 0.4 0.4 21.4 21.3

7.9 Internal Audit 8.6 8.6 2.7 2.8 11.3 11.4

7.10 Inspection Panel 4.0 4.1 - - 4.0 4.1

7.11 Office of Ethics and Business Conduct 7.2 6.8 2.1 2.1 9.3 8.9

7.12 Office of the President 7.4 7.2 - - 7.4 7.2

7.13 Office of Suspension & Debarment 1.8 1.8 - - 1.8 1.8

7.14 Office of the CEO 4.3 4.1 - - 4.3 4.1

7.15 Office of the MD and CAO 2.7 2.8 - - 2.7 2.8

7.16 Office of the MD and CFO 3.2 3.3 - - 3.2 3.3

7.17 Office of the SVPMM46.3 6.4 - 0.0 6.3 6.4

7.18 Sanctions Board 1.9 1.9 - - 1.9 1.9

7.19 Strategic initiatives unit 1.0 1.0 - - 1.0 1.0

Sub-Total 219.1 216.1 17.4 17.5 236.5 233.7


8.1 General Services and Facilities 152.7 151.7 40.3 40.2 193.0 191.9

8.2 Human Resources 68.4 63.4 15.9 14.7 84.4 78.1

8.3 Information & Technology Solutions 241.4 241.3 51.8 50.9 293.2 292.2

Sub-Total 462.5 456.4 108.1 105.8 570.6 562.2

INDICATIVE BUDGET TRAJECTORIES

BB External Funds All Funds

54

Table I.1: FY19 Funding for WB Work Program and Unit (US$ million) (Cont’d) / 3 of 3


E TOTAL INSTITUTIONAL, GOVERNANCE & ADMIN. 1,085.7 1,084.2 316.0 326.1 1,401.7 1,410.3

F TOTAL: ALL UNITS 2,614.3 2,684.9 1,331.2 1,438.4 3,945.5 4,123.4

9.0 Centrally Managed Accounts & Programs

9.1 Budget recovery5(936.9) (999.5) - - (936.9) (999.5)

9.2 Corporate Contingency 10.0 10.0 - - 10.0 10.0

9.3 Depreciation 102.4 114.4 - - 102.4 114.4

9.4 Institutional Programs 83.8 83.7 0.4 0.5 84.2 84.2

9.5 Staff Benefits & Retirement 840.8 894.0 - - 840.8 894.0

Total Centrally-Managed Accounts & Programs 100.1 102.6 0.4 0.5 100.5 103.1

G TOTAL ALL FUNDS EXPENDITURE ENVELOPE 2,714.4 2,787.6 1,331.6 1,438.9 4,046.0 4,226.5

H o/w Funded by External Funds DRR (164.4) (176.6) - - (164.4) (176.6)

I o/w Funded by External Funds CRR - - (356.4) (357.3) (356.4) (357.3)

J o/w Funded by External Funds BETF - - (975.2) (1,081.6) (975.2) (1,081.6)

K o/w Admin Budget Funded by IBRD/IDA 2,550.0 2,611.0 - - 2,550.0 2,611.0

2Include Extended Assignment Benefits (EAB) for Operational staff and funding to support Agile Bank initiative, and aspects of the 3FY18 BB restated to reflect the new arrangements for RAMP and other asset management services.4Office of the SVPMM includes New York and Geneva Offices. 5Includes staff benefits recoveries from internal transfer pricing, rebates, TF recoveries, and Corporate Services.

INDICATIVE BUDGET TRAJECTORIES

BB

1CE funded to GPs for FCV enhanced supervision pilot, and additional funding for GBV Action Plan and the new ESF implementation.

The latter is complemented by US$6 million additional funding to OPCS in FY19 to support the new ESF roll-out.

External Funds All Funds

55

Table I.2: Overview of External Funds Projected Revenues FY19 by Unit (US$ million)

FY18

WB Budget FY19 FY18

WB Budget FY19 FY18

WB Budget FY19

1.0 Country Engagement

1.1 AFRVP 22.2 18.1 201.4 223.4 223.6 241.5

1.2 EAPVP 6.7 4.4 119.9 133.0 126.6 137.3

1.3 ECAVP 32.6 30.0 69.5 77.1 102.0 107.0

1.4 LCRVP 9.4 8.7 45.2 50.1 54.6 58.8

1.5 MNAVP 53.0 69.2 53.4 59.2 106.4 128.4

1.6 SARVP 7.3 4.4 107.6 119.3 114.9 123.7

Sub-Total 131.1 134.7 597.0 662.0 728.1 796.8

2.0 Global Engagement

2.1 GP/GT 10.1 13.5 186.8 207.2 196.9 220.7

Sub-Total 10.1 13.5 186.8 207.2 196.9 220.7

A TOTAL CLIENT ENGAGEMENT 141.2 148.2 783.8 869.2 925.0 1,017.5

3.0 Region PPM

3.1 AFRVP 1.5 1.6 1.9 2.1 3.4 3.7

3.2 EAPVP 3.6 2.0 1.6 1.8 5.2 3.7

3.3 ECAVP 1.3 1.0 0.0 0.0 1.3 1.0

3.4 LCRVP 0.2 0.2 0.7 0.8 0.9 1.0

3.5 MNAVP 0.5 0.6 0.9 1.0 1.4 1.5

3.6 SARVP 0.7 0.6 1.5 1.7 2.2 2.3

Sub-Total 7.6 5.9 6.6 7.4 14.3 13.2

4.0 GP/GT PPM

4.1 Equitable Growth, Finance and Institutions 2.8 2.2 9.4 10.4 12.2 12.6

4.2 Human Development 0.9 0.8 4.5 5.0 5.4 5.7

4.3 Sustainable Development 5.3 3.9 52.5 58.2 57.8 62.1

4.4 Global Themes 0.1 0.8 0.3 0.4 0.4 1.2

Sub-Total 9.1 7.6 66.7 74.0 75.8 81.6

B TOTAL PROGRAM & PRACTICE MGMT. 16.8 13.5 73.3 81.3 90.1 94.8

C TOTAL OPERATIONS 158.0 161.7 857.1 950.6 1,015.1 1,112.3


5.1 Chief Risk Office 0.9 0.9 - - 0.9 0.9

5.2 Development Economics 7.1 1.4 47.6 52.8 54.7 54.2

5.3 Development Finance 6.1 6.0 31.2 35.0 37.3 41.0

5.4 External & Corporate Relations 0.7 1.1 2.3 2.6 3.1 3.7

5.5 Global Environment Fund - - 33.0 36.6 33.0 36.6

5.6 Legal Services 1.8 1.7 0.6 - 2.4 1.7

5.7 Operational Policy & Country Services - - 0.5 0.5 0.5 0.5

5.8 Strategy, Performance, and Admin. 3.2 3.2 - - 3.2 3.2

5.9 Treasury 47.4 52.3 0.7 1.5 48.0 53.8

5.10 WBG Finance & Accounting 7.4 7.1 - - 7.4 7.1

Sub-Total 74.7 73.8 115.9 129.0 190.6 202.8


6.1 Administrative Tribunal 0.5 0.5 - - 0.5 0.5

6.2 Conflict Resolution System 1.5 1.5 - - 1.5 1.5

6.3 Corporate Secretariat - - 1.2 1.4 1.2 1.4

6.4 Independent Evaluation Group 8.3 8.5 0.7 0.4 9.0 8.9

6.5 Integrity Vice Presidency 0.4 0.4 - - 0.4 0.4

6.6 Internal Audit 2.7 2.8 - - 2.7 2.8

6.7 Office of Ethics and Business Conduct 2.1 2.1 - - 2.1 2.1

Sub-Total 15.5 15.8 1.9 1.8 17.4 17.5


7.1 General Services and Facilities 40.3 40.2 - - 40.3 40.2

7.2 Human Resources 15.7 14.4 0.2 0.3 15.9 14.7

7.3 Information & Technology Solutions 51.8 50.9 - - 51.8 50.9

Sub-Total 107.8 105.5 0.2 0.3 108.1 105.8

D TOTAL INSTITUTIONAL, GOVERNANCE & ADMIN. 198.0 195.1 118.1 131.0 316.0 326.1

E TOTAL: ALL UNITS 356.0 356.8 975.2 1,081.6 1,331.2 1,438.4

8.0 Centrally Managed Accounts & Programs

8.1 Other Centrally Managed Accounts 0.4 0.5 - - 0.4 0.5

Total Centrally-Managed Accounts & Programs 0.4 0.5 - - 0.4 0.5

F TOTAL EXTERNAL FUNDS 356.4 357.3 975.2 1,081.6 1,331.6 1,438.9

Coupled

Reimbursable Funds

(CRR)

Bank Executed Trust

Funds (BETF) External Funds

56

ANNEX II. INDICATORS OF BUDGET SUSTAINABILITY, STRATEGIC ALIGNMENT, AND

BUDGET EFFICIENCY

Focus Indicator Definition Trend

IBRD Anchor Administrative expenses as a

share of operational revenues

(loan spread revenue) (percent)

IDA Anchor Administrative expenses as a

share of operational revenues

(IDA net revenues) (percent)

External Funds Ratio External funds as a share of

total administrative spending

plans (percent)

Bu

dget

Su

stain

ab

ilit

y

90% 93%98% 96% 98%

102% 100%94%

97%104%

91%

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800


0%

20%

40%

60%

80%

100%

120%

Exp

en

ses/

Re

ven

ue

US$

mill

ion

Bu

dge

t A

nch

or

%

IDA Revenue IDA-funded Expenses IDA Budget Anchor

176%189%

158%160%

155%147% 148%

135%

107%

88%80%

0

200

400

600

800

1,000

1,200

1,400

1,600


0%

40%

80%

120%

160%

200%

Exp

en

ses/

Re

ven

ues

US$

mill

ion

Bu

dge

t A

nch

or

%

IBRD Loan Spread Revenue IBRD-funded Expenses IBRD Budget Anchor

27.3%

29.1%

30.5%31.0%

32.8%33.8%

35.4% 35.8%

38.2%

20%

25%

30%

35%

40%

F Y 10 F Y 11 F Y 12 F Y 13 F Y 14 F Y 15 F Y 16 F Y 17 F Y 18 F Y 19

37.0%

57

Focus Indicator Definition Trend

Operational Share of Unit

Budgets

Total share of unit

Administrative Budget (BB

and All Funds) allocated to

Operational Units excluding

GMFs (percent)

Client Engagement

Share of Operational

Unit Budgets

Share of Operational Unit

Budget (BB and All Funds)

Allocated to Country

Engagement (CE) and

Global Engagement (GE)

excluding GMFs (percent)

FCV Share of Country

Engagement Budgets

CE (BB) budget share for

FCV and FCV at Risk

Countries over Total CE

Envelope (percent)

Str

ate

gic

Ali

gn

men

t54.9%

56.8%57.9%

59.1%60.4%

62.8%64.2%

65.5%

52.0%

54.0%

56.0%

58.0%

60.0%

62.0%

64.0%

66.0%

68.0%

FY16 FY17 FY18 FY19

BB All Funds

53.7% 54.1%54.9% 55.6%

67.4% 67.7%69.6%

70.5%

52.0%

57.0%

62.0%

67.0%

72.0%

FY16 FY17 FY18 FY19

BB All Funds

18.3% 18.3%

19.4%

19.8%

15.0%

16.0%

17.0%

18.0%

19.0%

20.0%

FY16 FY17 FY18 FY19

58

Focus Indicator Definition TrendA

dm

inis

tra

tiv

e B

ud

get

Eff

icie

ncy

Bank Budget to

Lending Volume Ratio

Total Administrative

Budget (BB) per US$

billion of loans approved

(US$ million)


Budget (BB) per lending

project approved

(FY18 US$ million)

Bank Budget per

Project Approved

Ratio

88 92 90 88

83 85

46 39

53

67

79

62 59 54

59 53 57

-

20

40

60

80

100

120


IBRD+IDA

111

101

115 108

87 91

72 75 70

78 77

58 65

73 68

59 61

-

20

40

60

80

100

120


IDA

74

85

74 74 80 81

35 27

43

59

80

68

54

44 52

47 52

-

20

40

60

80

100

120


IBRD

10 11

10 10 9 9 9

8 7

11 10

8 9 9

7 7 7

-

2

4

6

8

10

12

14

16


IBRD+IDA

12

15

12 12 12

14

11

9 10

15 15 15

12 12

9 9 9

-

2

4

6

8

10

12

14

16


IBRD

8 8 8 8 7

6 7 7 6

8 8

6 7

8

6 6 6

-

2

4

6

8

10

12

14

16


IDA

59

Focus Indicator Definition TrendA

dm

inis

tra

tiv

e B

ud

get

Eff

icie

ncy

(C

on

t'd

.)Bank Budget to

Porfolio Volume

Ratio


Budget (BB) per US$

billion portfolio under

supervision

(US$ million)


Budget (BB) per project

under supervision (FY18

US$ million)

Bank Budget per

Project under

Supervision Ratio

17.4

20.1 21.6 22.4

21.0 20.2

16.6 14.8

13.8 14.2 14.7 13.9 13.1

11.9 11.7 11.6 12.0

-

5.0

10.0

15.0

20.0

25.0

30.0


IBRD+IDA

14.5

17.9 18.6 19.8 18.9 19.4

15.7 12.9 11.8 12.4 12.8 12.8 12.8 12.0 11.0 10.3 10.9

-

5.0

10.0

15.0

20.0

25.0

30.0


IBRD

21.9 23.1

25.8 25.8 23.6

21.2

17.9 17.7 16.4 16.7 17.1

15.2 13.3

11.9 12.5 12.8 12.9

-

5.0

10.0

15.0

20.0

25.0

30.0


IDA

1.4 1.6

1.7 1.7 1.6 1.6 1.6 1.6 1.5 1.6 1.7 1.7 1.6 1.6

1.5 1.7 1.6

-

0.5

1.0

1.5

2.0

2.5

3.0


IBRD+IDA

1.5 1.8

2.0 2.0 2.0 2.1 2.1 2.1 2.0

2.2 2.2 2.2 2.2 2.2 1.9

2.0 1.9

-

1.0

2.0

3.0


IBRD

1.3 1.4 1.5 1.5 1.4 1.3 1.2 1.3 1.3 1.3 1.4 1.4 1.3 1.2 1.3

1.5 1.4

-

0.5

1.0

1.5

2.0

2.5

3.0


IDA

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