Abstract
FY2020-FY2022 Medium-Term Budget
Overview
Proposed FY 20 Budget and Medium-term Spending Envelopes
Proposed FY 20 Budget and Medium-term Spending Envelopes
| A multi-year strategic agenda | The FY 20 budget proposal is formulated against the backdrop of a weakened global outlook and financial volatility. The budget reflects a strategic agenda— operationalized in the Managing Director’s Global Policy Agenda (GPA) and Board Work Program (BWP)—to help members rebuild policy space, strengthen resilience, and implement structural reforms. This will be supported by continued work to review policies and strategies to enhance Fund advice. |
| Flat budget in real terms in FY 20 | While the Fund’s income position remains healthy over the medium-term, the budget stance remains disciplined and mindful of long-term constraints, and the proposed net administrative budget envelope for FY 20 is unchanged in real terms in relation to the Fund budget deflator.1 The proposal reflects reallocation towards new needs and priorities of some 3 percent of the net budget. |
| The FY 20 budget would support important modernization projects. These projects (the so-called “Big 5”) aim to improve processes and capabilities in areas including human resources, capacity development, and data and knowledge management. By leveraging technological innovations and streamlining business processes, these projects should increase efficiency, improve the quality of service delivery, and reduce risk. Because significant resources (capital and administrative) will be needed up-front to pay for these projects, robust cost-benefit analyses are being undertaken to ensure that the projects deliver a satisfactory return on investment. Proactive change management will also be critical given the significant changes that the projects will bring to how work is done. | |
| The increased upfront distribution of carry-forward resources means that the buffers for handling unexpected resource needs will be reduced. This makes it all the more important that departments manage their budgets carefully, to reduce the risk of overruns. Staff’s ongoing efforts to strengthen internal capacity to cost the Fund’s work should contribute to more robust estimates of expected expenses, and better prioritization of available resources. | |
| Flat resource envelope over the medium term | The same level of real resources is assumed for the medium term, without prejudging the outcome of internal reviews and modernization efforts, nor of the impact of new work streams that may arise. Table 1 sets out the main budget components: net and gross administrative budget envelopes, and capital budget envelope, expressed in current and constant USD. |
Proposed FY 20 Budget and Medium-term Spending Envelopes
| A multi-year strategic agenda | The FY 20 budget proposal is formulated against the backdrop of a weakened global outlook and financial volatility. The budget reflects a strategic agenda— operationalized in the Managing Director’s Global Policy Agenda (GPA) and Board Work Program (BWP)—to help members rebuild policy space, strengthen resilience, and implement structural reforms. This will be supported by continued work to review policies and strategies to enhance Fund advice. |
| Flat budget in real terms in FY 20 | While the Fund’s income position remains healthy over the medium-term, the budget stance remains disciplined and mindful of long-term constraints, and the proposed net administrative budget envelope for FY 20 is unchanged in real terms in relation to the Fund budget deflator.1 The proposal reflects reallocation towards new needs and priorities of some 3 percent of the net budget. |
| The FY 20 budget would support important modernization projects. These projects (the so-called “Big 5”) aim to improve processes and capabilities in areas including human resources, capacity development, and data and knowledge management. By leveraging technological innovations and streamlining business processes, these projects should increase efficiency, improve the quality of service delivery, and reduce risk. Because significant resources (capital and administrative) will be needed up-front to pay for these projects, robust cost-benefit analyses are being undertaken to ensure that the projects deliver a satisfactory return on investment. Proactive change management will also be critical given the significant changes that the projects will bring to how work is done. | |
| The increased upfront distribution of carry-forward resources means that the buffers for handling unexpected resource needs will be reduced. This makes it all the more important that departments manage their budgets carefully, to reduce the risk of overruns. Staff’s ongoing efforts to strengthen internal capacity to cost the Fund’s work should contribute to more robust estimates of expected expenses, and better prioritization of available resources. | |
| Flat resource envelope over the medium term | The same level of real resources is assumed for the medium term, without prejudging the outcome of internal reviews and modernization efforts, nor of the impact of new work streams that may arise. Table 1 sets out the main budget components: net and gross administrative budget envelopes, and capital budget envelope, expressed in current and constant USD. |
Administrative and Capital Budget Envelopes, FY 19–22
(Millions of U.S. dollars, unless otherwise noted)
Includes travel to the Annual Meetings held abroad; Indonesia in FY 19, and Morocco in FY 22.
For FY 20, reflects compensation adjustment as approved by the Executive Board (EBAP/19/18, Supplement 1). Outer years are technical placeholders.
Reflects most recent updates for the April 2019 WEO projections of U.S. CPI.
Administrative and Capital Budget Envelopes, FY 19–22
(Millions of U.S. dollars, unless otherwise noted)
| Proposed | Indicative | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| FY 19 | Budget changes | FY 20 | FY 21 | FY 22 | |||||
| Current USD | Budget 1/ | Est. Outturn | Demands | Savings | Ext.-financed | Budget | Budget | Budget 1/ | |
| Total operational income | 1,683 | 2,190 | 3,410 | 3,202 | 3,566 | ||||
| Gross administrative budget | 1,371 | 1,363 | 1,397 | 1,435 | 1,479 | ||||
| Receipts | -236 | -228 | -239 | -246 | -252 | ||||
| Net Administrative Budget | 1,135 | 1,135 | 1,158 | 1,190 | 1,227 | ||||
| Capital Budget (IT and Facilities) | 71 | 75 | 86 | 96 | 82 | ||||
| Constant FY 19 USD | |||||||||
| Gross administrative budget | 1,371 | 1,363 | 31 | 33 | -1 | 1,362 | 1,362 | 1,368 | |
| Receipts | -236 | -228 | 2 | 0 | 1 | -233 | -233 | -233 | |
| Net Administrative Budget | 1,135 | 1,135 | 33 | 33 | - | 1,129 | 1,129 | 1,135 | |
| of which Annual Meetings | 6 | 5 | 6 | ||||||
| Capital Budget (IT and Facilities) | 71 | 75 | 84 | 91 | 76 | ||||
| Memo items: | |||||||||
| Carry forward (upper limit) | 46 | … | 47 | … | … | ||||
| Allocated up-front | 19 | … | 25 | … | … | ||||
| Global external deflator (change) | 2.3 | … | 2.6 | 2.7 | 2.6 | ||||
| Personnel component (70 percent) 2/ | 22 | … | 2.7 | 2.7 | 2.7 | ||||
| Non-personnel (30 percent) 3/ | 2.6 | … | 2.3 | 2.6 | 2.2 | ||||
Includes travel to the Annual Meetings held abroad; Indonesia in FY 19, and Morocco in FY 22.
For FY 20, reflects compensation adjustment as approved by the Executive Board (EBAP/19/18, Supplement 1). Outer years are technical placeholders.
Reflects most recent updates for the April 2019 WEO projections of U.S. CPI.
Administrative and Capital Budget Envelopes, FY 19–22
(Millions of U.S. dollars, unless otherwise noted)
| Proposed | Indicative | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| FY 19 | Budget changes | FY 20 | FY 21 | FY 22 | |||||
| Current USD | Budget 1/ | Est. Outturn | Demands | Savings | Ext.-financed | Budget | Budget | Budget 1/ | |
| Total operational income | 1,683 | 2,190 | 3,410 | 3,202 | 3,566 | ||||
| Gross administrative budget | 1,371 | 1,363 | 1,397 | 1,435 | 1,479 | ||||
| Receipts | -236 | -228 | -239 | -246 | -252 | ||||
| Net Administrative Budget | 1,135 | 1,135 | 1,158 | 1,190 | 1,227 | ||||
| Capital Budget (IT and Facilities) | 71 | 75 | 86 | 96 | 82 | ||||
| Constant FY 19 USD | |||||||||
| Gross administrative budget | 1,371 | 1,363 | 31 | 33 | -1 | 1,362 | 1,362 | 1,368 | |
| Receipts | -236 | -228 | 2 | 0 | 1 | -233 | -233 | -233 | |
| Net Administrative Budget | 1,135 | 1,135 | 33 | 33 | - | 1,129 | 1,129 | 1,135 | |
| of which Annual Meetings | 6 | 5 | 6 | ||||||
| Capital Budget (IT and Facilities) | 71 | 75 | 84 | 91 | 76 | ||||
| Memo items: | |||||||||
| Carry forward (upper limit) | 46 | … | 47 | … | … | ||||
| Allocated up-front | 19 | … | 25 | … | … | ||||
| Global external deflator (change) | 2.3 | … | 2.6 | 2.7 | 2.6 | ||||
| Personnel component (70 percent) 2/ | 22 | … | 2.7 | 2.7 | 2.7 | ||||
| Non-personnel (30 percent) 3/ | 2.6 | … | 2.3 | 2.6 | 2.2 | ||||
Includes travel to the Annual Meetings held abroad; Indonesia in FY 19, and Morocco in FY 22.
For FY 20, reflects compensation adjustment as approved by the Executive Board (EBAP/19/18, Supplement 1). Outer years are technical placeholders.
Reflects most recent updates for the April 2019 WEO projections of U.S. CPI.
Main Components of the Budget Proposal (Table 1)
Main Components of the Budget Proposal (Table 1)
| FY 20 net administrative budget | $1,129 million in constant FY 19 dollars, defined in relation to the Fund’s global external deflator, representing a flat real resource envelope for the eighth year in a row (excluding a $6 million security related increase in FY 17).2,3 |
| $1,158 million in nominal terms, reflecting a preliminary assumption for the increase in the Global External Deflator (GED) of 2.6 percent.4 The personnel component of the deflator reflects the Board’s decision on the FY 20 compensation adjustment. | |
| FY 20 gross administrative budget | $1,397 million in nominal terms, reflecting $239 million in receipts, most of which consist of reimbursements for externally financed CD activities. |
| Savings and demands | $33 million in constant FY 19 dollars of net additional structural demands, offset by reallocations and savings of the same amount. |
| Transitional needs | As the expected FY 19 outturn is projected to be roughly at the level of the approved structural budget (see Appendix II), some $30 million in carry-forward resources from the previous year would still be available to staff. Of this, $25 million is to be allocated up front to departments in the FY 20 budget process. This is some $6 million more than last year, largely due to temporary modernization costs. |
| FY 20 capital budget | $86 million in nominal terms, comprising $41 million for building facilities and $45 million for information technology. The latter includes $30 million for the Big 5 programs for which summaries of business cases and cost benefit analyses will be presented to the Board as they are finalized. Indicative estimates are provided for the outer years. |
Main Components of the Budget Proposal (Table 1)
| FY 20 net administrative budget | $1,129 million in constant FY 19 dollars, defined in relation to the Fund’s global external deflator, representing a flat real resource envelope for the eighth year in a row (excluding a $6 million security related increase in FY 17).2,3 |
| $1,158 million in nominal terms, reflecting a preliminary assumption for the increase in the Global External Deflator (GED) of 2.6 percent.4 The personnel component of the deflator reflects the Board’s decision on the FY 20 compensation adjustment. | |
| FY 20 gross administrative budget | $1,397 million in nominal terms, reflecting $239 million in receipts, most of which consist of reimbursements for externally financed CD activities. |
| Savings and demands | $33 million in constant FY 19 dollars of net additional structural demands, offset by reallocations and savings of the same amount. |
| Transitional needs | As the expected FY 19 outturn is projected to be roughly at the level of the approved structural budget (see Appendix II), some $30 million in carry-forward resources from the previous year would still be available to staff. Of this, $25 million is to be allocated up front to departments in the FY 20 budget process. This is some $6 million more than last year, largely due to temporary modernization costs. |
| FY 20 capital budget | $86 million in nominal terms, comprising $41 million for building facilities and $45 million for information technology. The latter includes $30 million for the Big 5 programs for which summaries of business cases and cost benefit analyses will be presented to the Board as they are finalized. Indicative estimates are provided for the outer years. |
Structure of the Paper
Structure of the Paper
| The strategic context sets the stage for the medium-term budget proposal. It is followed by a section describing planned spending by outputs across the Fund’s Thematic Categories (FTC). This is part of an ongoing effort to better align the budget process with strategic planning as laid out in the GPA and the BWP, and to improve the costing of products to aid the evaluation of tradeoffs. From there follows a brief section on planned spending by inputs and implications for departmental budgets. The capital budget is discussed next, followed by risks to the budget. Appendices cover Budget Concepts and Methodology, the Projected FY 19 Outturn, Evolution of the Budget, Strategic Planning Process Timeline, Mapping between ACES and FTCs, Implementation Status of Streamlining and Modernization Measures, Long-term Capital Investment Plan, Big 5 Program Objectives, Timelines, and Governance, and Statistical Tables. |
Structure of the Paper
| The strategic context sets the stage for the medium-term budget proposal. It is followed by a section describing planned spending by outputs across the Fund’s Thematic Categories (FTC). This is part of an ongoing effort to better align the budget process with strategic planning as laid out in the GPA and the BWP, and to improve the costing of products to aid the evaluation of tradeoffs. From there follows a brief section on planned spending by inputs and implications for departmental budgets. The capital budget is discussed next, followed by risks to the budget. Appendices cover Budget Concepts and Methodology, the Projected FY 19 Outturn, Evolution of the Budget, Strategic Planning Process Timeline, Mapping between ACES and FTCs, Implementation Status of Streamlining and Modernization Measures, Long-term Capital Investment Plan, Big 5 Program Objectives, Timelines, and Governance, and Statistical Tables. |
The Strategic Context
1. Over the medium to long term, the size of the Fund’s budget and its allocation reflect long-standing twin objectives:
Financial sustainability, underpinned by appropriately conservative assumptions for net income projections and prudent management of budgetary resources. With net operational income projected to remain positive over the longer term (Figure 1), and higher in the near term than projected at the time the FY 19 budget was formulated, precautionary balances can be adequately built up to manage financial risks. This assumption holds under appropriately conservative longer-term assumptions in the context of the New Income Model.5 Additionally, reflecting prudent management, budgetary resources have been held flat in real terms over the past eight years, notwithstanding rising demands and the launching of new products and activities (Appendix III on the Evolution of the Budget).
Meeting the evolving needs and priorities of members in an agile, integrated, and member-focused way. The IMF’s conjunctural priorities are elaborated in the GPA and shift in response to the global economic conditions as well as underlying structural trends affecting members (e.g., challenges arising from rapid technological and financial innovations, with impacts such as Fintech and concerns about the future of work). Multi-year reviews of the Fund’s main activities, such as the Comprehensive Surveillance Review (CSR) and IEO evaluations, help ensure that the toolkit evolves in line with the needs of its membership. Budgetary resources need to be flexible enough to respond to changing priorities, including through the ability to reallocate across departments, and the provision of transitional funds to accommodate temporary demands.
Actual and Projected Income and Expenses, FY 08–29
(Millions of U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Finance department1/ Actual and projected operational income includes surcharges, investment income from the Fixed-Income Subaccount and payouts from the Endowment Subaccount and excludes IAS 19 gains and losses. The endowment payout is indicative and assumes a constant payout of 2 Percent of the NAV (in US$) starting in FY2021, adjusted for inflation in the following years.2/ Assumes that the net administrative budget is held constant in real terms.3/ The illustrative scenario in FY 2029 assumes credit outstanding to be SDR 20 billion, precautionary balances at SDR 15 billion, SDR interest rate of 3 percent the premium on investment return equal to 50 basis points, and a payout from the endowment at 2 percent of the U.S. dollar NAV.
Actual and Projected Income and Expenses, FY 08–29
(Millions of U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Finance department1/ Actual and projected operational income includes surcharges, investment income from the Fixed-Income Subaccount and payouts from the Endowment Subaccount and excludes IAS 19 gains and losses. The endowment payout is indicative and assumes a constant payout of 2 Percent of the NAV (in US$) starting in FY2021, adjusted for inflation in the following years.2/ Assumes that the net administrative budget is held constant in real terms.3/ The illustrative scenario in FY 2029 assumes credit outstanding to be SDR 20 billion, precautionary balances at SDR 15 billion, SDR interest rate of 3 percent the premium on investment return equal to 50 basis points, and a payout from the endowment at 2 percent of the U.S. dollar NAV.Actual and Projected Income and Expenses, FY 08–29
(Millions of U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Finance department1/ Actual and projected operational income includes surcharges, investment income from the Fixed-Income Subaccount and payouts from the Endowment Subaccount and excludes IAS 19 gains and losses. The endowment payout is indicative and assumes a constant payout of 2 Percent of the NAV (in US$) starting in FY2021, adjusted for inflation in the following years.2/ Assumes that the net administrative budget is held constant in real terms.3/ The illustrative scenario in FY 2029 assumes credit outstanding to be SDR 20 billion, precautionary balances at SDR 15 billion, SDR interest rate of 3 percent the premium on investment return equal to 50 basis points, and a payout from the endowment at 2 percent of the U.S. dollar NAV.2. Capacity development (CD) activities have allowed the Fund to increase its level of support to the membership and its effectiveness overall, but limits to this expansion may have been reached. Supported by greater external financing, the balance of the Fund’s outputs has shifted significantly toward CD. Since FY 12, the share of CD spending has grown by 7 percentage points to reach 31 percent of total gross administrative expenditures (including indirect costs).6 While demand continues to exceed supply, several interlinked factors argue for broadly containing the level of CD at current levels:
Synergies with other outputs and comparative advantage: Ensuring that CD is integrated with the Fund’s other outputs means that the topics and scale of CD should be guided by the synergies created with lending programs and surveillance.7 The Fund should also deliver CD only in areas of its core mandate and where it has a comparative advantage relative to other CD providers. While in some topical areas the IMF is the only CD provider, in other areas it is not.
The need to ensure high quality: CD’s high value to the membership is derived from the quality and consistency of its advice. This means that quality control can be a limiting factor on the size of CD. There is a limited pool of experienced permanent staff to oversee and deliver CD, and this constraint can only be partially relieved by hiring external experts, given the limits on their availability and the critical need for back-stopping by HQ-based staff.
Financing constraints: A greater reliance on external funding increases risks to the Fund’s budget given the inherent volatility of external funding, and changing donor priorities may also affect the Fund’s ability to meet country needs on certain topics (see Section on Budget Risks). In addition, increases in externally financed CD activities, while a possibility, have a knock-on effect to the Fund-financed budget via indirect costs that cannot be recovered from external partners (e.g., facilities, human resource services, etc.). The Fund-financed budget therefore represents a constraint even on the externally financed activities.
Need for modernization: Processes and systems to support CD budget, planning and results monitoring, as well as related reporting, have not kept pace with the large and complex portfolio resulting from CD growth. The Fund is investing in modernizing CD systems which will lead to more effective and efficient delivery, and potentially support further scaling up of donor financing in the future.
3. In the near term, the budget is set within the priorities laid out in the GPA and fleshed out more fully in the BWP.8 Global growth has weakened, and risks are increasingly tilted to the downside amid growing policy uncertainty, mounting vulnerabilities, and greater volatility. Responding to these challenges, priority areas for the current budget cycle include:
Country operations: The GPA calls for the Fund to help members face global economic challenges by providing advice on macroeconomic policies tailored to their circumstances.9 This includes program support and intensive surveillance of countries and regions, as well as CD provision. The current number of formal Fund financial arrangements is relatively low, particularly for the PRGT and PSI facilities (Figure 2), though recent cases have proven more complex. In addition, staff expect an uptick in program work in FY 20. These expectations have been built into the budget proposal with additional resources. Based on area departments’ view on the prospective engagement status for their countries and other risk analysis, the budget provides for a reallocation of resources to where engagement is most likely to pick up—reflecting the type of arrangements for which a similar amount of staff resources is expected, some of which may be non-financial arrangements such as PCI, PSI, or PPM. Beyond this, short-term unforeseen pressures are typically met through intra- and inter-departmental reallocations and use of the contingency. Priorities include strengthening support to low-income countries (LICs) and fragile states, implementing the enhanced governance framework, as well as strengthening macro-financial surveillance.
Analytical work to support policy advice. The GPA outlines several areas for further analysis, such as supporting efforts toward a strengthened, rules-based multilateral trade system (new multilateralism) through work on trade; contributing to the international tax debate; and work on the digital economy and on public debt. Resources are proposed for BWP items such as Fintech and digitalization, social spending, as well as work still under development such as the integrated policy framework.
Major Fund policy reviews of surveillance (Comprehensive Surveillance Review (CSR), FSAP review, data provision), lending (conditionality, LIC facilities), and debt issues (debt limits).
Fund Arrangements, FY 00–19 1/
(Number of countries)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: MONA Database and staff calculations.1/ Blend GRA/PRGT arrangements are included as PRGT. Based on number of arrangements at end of period. For FY 19, includes current arrangements as of December 18, 2018.
Fund Arrangements, FY 00–19 1/
(Number of countries)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: MONA Database and staff calculations.1/ Blend GRA/PRGT arrangements are included as PRGT. Based on number of arrangements at end of period. For FY 19, includes current arrangements as of December 18, 2018.Fund Arrangements, FY 00–19 1/
(Number of countries)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: MONA Database and staff calculations.1/ Blend GRA/PRGT arrangements are included as PRGT. Based on number of arrangements at end of period. For FY 19, includes current arrangements as of December 18, 2018.4. To improve the quality of the Fund’s outputs, with increased emphasis on results, several major modernization efforts are underway. These include implementation of the Fund’s human resource (HR) strategy, which seeks to ensure an agile, diverse, and inclusive workplace, supported by a new modern human resources IT system, in addition to completion of the Comprehensive Compensation and Benefits Review (CCBR). Other initiatives are focused on better leveraging knowledge management, improving data management, enhancing the management and administration of capacity development, and transforming work processes through an integrated digital workplace. These so-called “Big 5” major initiatives will require substantial investments over a number of years, with commensurate savings and efficiency gains bearing fruit over the medium-term (Box 1). In addition, follow-up work to the recommendations of the 2018 Modernization and Streamlining Advisory Group is underway in areas outside the scope of the Big 5, including but not limited to support services. Together, these efforts aim to simplify processes and practices to achieve greater efficiency, freeing up resources to directly support the membership. The objective is to ultimately improve the quality of the Fund’s outputs, with increased emphasis on results. In the near-term, some temporary resources (including staff resources) and capital investments will be needed to support these efforts.
Modernization and the “Big 5” Programs
The Fund is modernizing internal processes and capabilities in an effort to increase its effectiveness and adapt to the members’ needs. This includes five transformational programs (the “Big 5”) that are in various stages of implementation: transformation of the HR system and operating model (1HR), reformed Capacity Development Management and Administration Processes (CDMAP), development of an Integrated Digital Workplace (IDW), a next generation economic data platform (iDATA), and knowledge management (KM).
Benefits common to all the programs include replacement and consolidation of obsolete technology platforms, mitigation of operational and reputational risks, and updated features and functionality provided by modern and mobile technology. The programs provide the opportunity to redesign and streamline work processes and practices to take advantage of automation and other productivity enhancements.
Big 5 implementation will require considerable administrative and capital resources. The FY 20 administrative budget includes close to $4 million in transitional resources for project management activities; departments are additionally devoting considerable staff time to program governance, requirements gathering, vendor selection, process reengineering, testing and training. The medium-term capital budget includes funding for technology and consulting components that are specific to each program, but also include a number of prerequisite, or foundational, IT elements that must be present for successful implementation. In FY 20, the initial capital budget allocation for the Big 5 has been set at $30 million, but additional resources may be required (see Section on Capital Budget).
The modernization effort, underpinned by the Big 5, is expected over the medium term to result in efficiencies and more cost-effective delivery. Each program team is preparing a comprehensive business case and cost-benefit analysis, which will document performance indicators and quantify expected cost reductions and efficiency gains. Savings resulting from the programs can be used to finance other priorities in support of the membership.
1HR will modernize, simplify, and transform the way the Fund delivers its HR services, through streamlined business practices, best in class cloud software, and enhanced controls, providing flexibility to accommodate future policy, practice or regulatory changes (e.g., HR Strategy and CCBR).
CDMAP will transform CD operations, supporting more efficient and transparent implementation of the CD governance framework. It will address process and systems weaknesses, support better decision-making, and help strengthen the integration with surveillance and lending in line with the CD strategy.
iDW will provide a modern user interface where staff have improved access to knowledge, applications, and other platforms to do their work. The goal is to address the pain points experienced from existing fragmented content, information silos, and obsolete technology.
KM provides a framework for efficiently capturing, storing and sharing knowledge, thereby enabling staff to more easily draw lessons and insights from the Fund’s rich cross-country experience and subject-matter expertise. This includes a new document management system and enterprise search capabilities.
iDATA will deliver a modern economic data lifecycle management platform that can be further extended to meet the growing business needs for creating and maintaining databases for multilateral surveillance and economic research.
| Business outcomes | Streamlined and standardized processes Alignment with best practices Manage operational and reputational risk Flexiblity to adapt to policy/practice changes Improved access to data and information Productivity and efficiency gains | ||||
| Big 5 | 1HR | CDMAP | IDW | KM | iDATA |
| Prerequisite projects | Identity and access management Cloud development and integration Corporate data warehouse | ||||
| Business outcomes | Streamlined and standardized processes Alignment with best practices Manage operational and reputational risk Flexiblity to adapt to policy/practice changes Improved access to data and information Productivity and efficiency gains | ||||
| Big 5 | 1HR | CDMAP | IDW | KM | iDATA |
| Prerequisite projects | Identity and access management Cloud development and integration Corporate data warehouse | ||||
The Budget: How are Priorities Supported?
This section discusses the proposed use of budget resources across the Fund’s main output areas according to the Fund’s Thematic Categories as presented in the BWP (Table 2).10
Overall Shift in Outputs
Overall Shift in Outputs
| Longer-term output trends | Two main observations can be made on how the Fund’s output structure has changed between FY 12 and FY 19:
|
| Net shifts in the FY 20 budget | The FY 20 budget provides increased resources for country work ($13 million) and for internal support ($6.7 million), mostly through transitional funding.12 Within the flat structural budget, resources will be reallocated from internal support to country work and to IMF governance ($2.9 million net reallocation), and similarly from policy advice and economic analysis to work on Fund policies (roughly $1.3 million net reallocation). |
| The text figure below shows the changes in structural and transitional resources, by FTC, and Table 2 reflects the impact of these changes on the overall budget. | |
| Transitional resources | Carry forward resources are currently projected at about $30 million (excluding OED and IEO), providing continued room to meet transitional needs. For FY 20, an upfront allocation of $25 million in transitional funds is planned. This is some $6 million higher than last year, largely due to temporary modernization costs. A higher upfront allocation of transitional resources means lower centrally held resources to meet unexpected demands, over and above the central contingency of $8 million. In the event of significant unanticipated needs, departments would need to activate contingency measures and reprioritize as warranted (see Section on Budget Risks).13 |
| More than half of the transitional resources are for country work, to support more intense engagement with the membership, implementation of the enhanced governance framework, and to provide bridge financing as EUR continues its structural downsizing. Another third of transitional funds will support modernization projects, including the Big 5 and for the CCBR. | |
| Reallocations and savings | The budget stance entails reallocation within and across departments of $33 million in gross terms, or close to 3 percent of total spending. While most of the reallocations reflect changes and shifting of resources across work streams, about 30 percent comes from operational efficiencies, streamlining and modernization, as well as savings from travel.14 Further details are provided in the following sections. |
Overall Shift in Outputs
| Longer-term output trends | Two main observations can be made on how the Fund’s output structure has changed between FY 12 and FY 19:
|
| Net shifts in the FY 20 budget | The FY 20 budget provides increased resources for country work ($13 million) and for internal support ($6.7 million), mostly through transitional funding.12 Within the flat structural budget, resources will be reallocated from internal support to country work and to IMF governance ($2.9 million net reallocation), and similarly from policy advice and economic analysis to work on Fund policies (roughly $1.3 million net reallocation). |
| The text figure below shows the changes in structural and transitional resources, by FTC, and Table 2 reflects the impact of these changes on the overall budget. | |
| Transitional resources | Carry forward resources are currently projected at about $30 million (excluding OED and IEO), providing continued room to meet transitional needs. For FY 20, an upfront allocation of $25 million in transitional funds is planned. This is some $6 million higher than last year, largely due to temporary modernization costs. A higher upfront allocation of transitional resources means lower centrally held resources to meet unexpected demands, over and above the central contingency of $8 million. In the event of significant unanticipated needs, departments would need to activate contingency measures and reprioritize as warranted (see Section on Budget Risks).13 |
| More than half of the transitional resources are for country work, to support more intense engagement with the membership, implementation of the enhanced governance framework, and to provide bridge financing as EUR continues its structural downsizing. Another third of transitional funds will support modernization projects, including the Big 5 and for the CCBR. | |
| Reallocations and savings | The budget stance entails reallocation within and across departments of $33 million in gross terms, or close to 3 percent of total spending. While most of the reallocations reflect changes and shifting of resources across work streams, about 30 percent comes from operational efficiencies, streamlining and modernization, as well as savings from travel.14 Further details are provided in the following sections. |
Gross Administrative Fund-Financed Resources: Estimated Allocation by Output, FY 19–20
(Millions of FY 19 U.S. dollars)
The “Miscellaneous” classification covers expenditures that currently cannot be allocated within the ACES model. For FY 19 it includes $6 million for the 2018 annual meetings, no adjustment for the annual meetings was made in FY 20.
Includes the contingency for staff OED, and IEO. Not included is the proposed transfer of $0.8 million from OED to staff, curently recorded under IMF Governance.
Gross Administrative Fund-Financed Resources: Estimated Allocation by Output, FY 19–20
(Millions of FY 19 U.S. dollars)
| FY 19 | FY 20 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Structural | Transitional | Total | Est. Outturn | Structural Demands | Structural Savings | Structural | Transitional | Total | |||
| (a) | (b) | (c)= (a)+ (b) | (d) | (e) | (f) = (a)+ (d)-(e) | (g) | (h) = (f)+ (g) | ||||
| Gross expenditures | 1,175 | 19.4 | 1,194 | 1,171 | 31.4 | 33.0 | 1,167 | 25.4 | 1,193 | ||
| Country engagement | 467 | 7.7 | 475 | 479 | 11.3 | 9.0 | 469 | 10.7 | 480 | ||
| Policy advice and economic analysis | 166 | 2.0 | 168 | 170 | 3.3 | 4.7 | 164 | 2.9 | 167 | ||
| Contributions to global stability | 23 | 0.3 | 23 | 23 | 0.3 | 0.4 | 23 | 0.5 | 23 | ||
| Fund policies | 26 | 0.7 | 27 | 30 | 7.2 | 5.9 | 28 | 0.9 | 29 | ||
| IMF governance | 118 | 0.1 | 118 | 114 | 1.1 | 0.5 | 119 | 0.8 | 120 | ||
| Internal organization/support | 335 | 8.5 | 343 | 342 | 8.1 | 12.6 | 330 | 9.5 | 340 | ||
| Miscellaneous 1/ | 28 | 28 | 13 | 22 | 22 | ||||||
| Contingency 2/ | 12 | … | 12 | ... | 12 | … | 12 | ||||
| Receipts | (40) | (40) | (36) | 1.6 | 0.0 | (38) | (38) | ||||
| Net expenditures | 1,135 | 1,155 | 1,135 | 33.0 | 33.0 | 1,129 | 1,155 | ||||
| Carry forward (upper limit) | 46 | 47 | |||||||||
| Allocated up-front in budget process | 19 | 25 | |||||||||
| Total available resources | 1,181 | 1,176 | |||||||||
The “Miscellaneous” classification covers expenditures that currently cannot be allocated within the ACES model. For FY 19 it includes $6 million for the 2018 annual meetings, no adjustment for the annual meetings was made in FY 20.
Includes the contingency for staff OED, and IEO. Not included is the proposed transfer of $0.8 million from OED to staff, curently recorded under IMF Governance.
Gross Administrative Fund-Financed Resources: Estimated Allocation by Output, FY 19–20
(Millions of FY 19 U.S. dollars)
| FY 19 | FY 20 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Structural | Transitional | Total | Est. Outturn | Structural Demands | Structural Savings | Structural | Transitional | Total | |||
| (a) | (b) | (c)= (a)+ (b) | (d) | (e) | (f) = (a)+ (d)-(e) | (g) | (h) = (f)+ (g) | ||||
| Gross expenditures | 1,175 | 19.4 | 1,194 | 1,171 | 31.4 | 33.0 | 1,167 | 25.4 | 1,193 | ||
| Country engagement | 467 | 7.7 | 475 | 479 | 11.3 | 9.0 | 469 | 10.7 | 480 | ||
| Policy advice and economic analysis | 166 | 2.0 | 168 | 170 | 3.3 | 4.7 | 164 | 2.9 | 167 | ||
| Contributions to global stability | 23 | 0.3 | 23 | 23 | 0.3 | 0.4 | 23 | 0.5 | 23 | ||
| Fund policies | 26 | 0.7 | 27 | 30 | 7.2 | 5.9 | 28 | 0.9 | 29 | ||
| IMF governance | 118 | 0.1 | 118 | 114 | 1.1 | 0.5 | 119 | 0.8 | 120 | ||
| Internal organization/support | 335 | 8.5 | 343 | 342 | 8.1 | 12.6 | 330 | 9.5 | 340 | ||
| Miscellaneous 1/ | 28 | 28 | 13 | 22 | 22 | ||||||
| Contingency 2/ | 12 | … | 12 | ... | 12 | … | 12 | ||||
| Receipts | (40) | (40) | (36) | 1.6 | 0.0 | (38) | (38) | ||||
| Net expenditures | 1,135 | 1,155 | 1,135 | 33.0 | 33.0 | 1,129 | 1,155 | ||||
| Carry forward (upper limit) | 46 | 47 | |||||||||
| Allocated up-front in budget process | 19 | 25 | |||||||||
| Total available resources | 1,181 | 1,176 | |||||||||
The “Miscellaneous” classification covers expenditures that currently cannot be allocated within the ACES model. For FY 19 it includes $6 million for the 2018 annual meetings, no adjustment for the annual meetings was made in FY 20.
Includes the contingency for staff OED, and IEO. Not included is the proposed transfer of $0.8 million from OED to staff, curently recorded under IMF Governance.
Change in Share of Spending, by FTC, FY 19 vs FY 12 1/
(Percent of Fund-financed Spending)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.1/ Change in share of total spending between FY19 projected outturn and FY 12 outturn.
Change in Share of Spending, by FTC, FY 19 vs FY 12 1/
(Percent of Fund-financed Spending)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.1/ Change in share of total spending between FY19 projected outturn and FY 12 outturn.Change in Share of Spending, by FTC, FY 19 vs FY 12 1/
(Percent of Fund-financed Spending)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.1/ Change in share of total spending between FY19 projected outturn and FY 12 outturn.
Proposed Changes in Resources, by FTC, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.
Proposed Changes in Resources, by FTC, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.Proposed Changes in Resources, by FTC, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.Country Engagement/Country Work
Country Engagement/Country Work
%Overview15 | Engagement with member countries is at the heart of the Fund’s work, accounting for half of total spending. This takes place through bilateral surveillance, FSAPs, lending, and CD. A country’s degree of engagement with the Fund helps set the resource base for area departments. Year-to-year changes reflect the evolving intensity of engagement.
|
| Net structural | An increase of $2.3 million (½ percent in real terms) in FY 20. |
| Demands | Structural resources are provided to support program work, mainly for AFR, including for work on fragile states (Box 3), and for SPR to support review. Under bilateral surveillance, structural resources are provided to functional departments to support implementation of the enhanced governance framework (FAD, MCM, LEG), international taxation (FAD), and macro financial surveillance (MCM). |
| Savings | Mainly from the structural downsizing in EUR (bridged by transitional resources), as well as streamlining of analytical work, and reductions in travel. |
| Transitional needs | $10.7 million to fund increased program work in AFR and WHD, enhanced bilateral surveillance in APD, EUR, and MCD, work on governance (FAD) and better integration of FSAPs and Article IVs (MCM). In CD, transitional resources are envisaged for SDG implementation (FAD), and training and RBM oversight and development (FAD and ICD). Overall, this compares to $7.7 million provided inFY19. |
| Leveling off in external funding | After a decade of expansion in CD activities, a leveling off in external financing levels is envisaged, with the overall resource envelope for CD remaining broadly unchanged from FY 19 onwards. As discussed in the Strategic Context section, (¶2,) various considerations factor into this stabilization. It is proposed to limit external financing for CD to $200 million in FY 20. |
| Given a flat resource envelope, prioritization of CD activities will become increasingly important, and reallocations between areas and topics will be needed to fund new initiatives. Decisions on priorities are made following discussion in the Committee on Capacity Building (CCB), culminating in agreement by relevant heads of department and management. The CCB has recently reviewed the framework for monitoring and prioritization of CD (Box 4). |
Country Engagement/Country Work
| %Overview15 | Engagement with member countries is at the heart of the Fund’s work, accounting for half of total spending. This takes place through bilateral surveillance, FSAPs, lending, and CD. A country’s degree of engagement with the Fund helps set the resource base for area departments. Year-to-year changes reflect the evolving intensity of engagement.
|
| Net structural | An increase of $2.3 million (½ percent in real terms) in FY 20. |
| Demands | Structural resources are provided to support program work, mainly for AFR, including for work on fragile states (Box 3), and for SPR to support review. Under bilateral surveillance, structural resources are provided to functional departments to support implementation of the enhanced governance framework (FAD, MCM, LEG), international taxation (FAD), and macro financial surveillance (MCM). |
| Savings | Mainly from the structural downsizing in EUR (bridged by transitional resources), as well as streamlining of analytical work, and reductions in travel. |
| Transitional needs | $10.7 million to fund increased program work in AFR and WHD, enhanced bilateral surveillance in APD, EUR, and MCD, work on governance (FAD) and better integration of FSAPs and Article IVs (MCM). In CD, transitional resources are envisaged for SDG implementation (FAD), and training and RBM oversight and development (FAD and ICD). Overall, this compares to $7.7 million provided inFY19. |
| Leveling off in external funding | After a decade of expansion in CD activities, a leveling off in external financing levels is envisaged, with the overall resource envelope for CD remaining broadly unchanged from FY 19 onwards. As discussed in the Strategic Context section, (¶2,) various considerations factor into this stabilization. It is proposed to limit external financing for CD to $200 million in FY 20. |
| Given a flat resource envelope, prioritization of CD activities will become increasingly important, and reallocations between areas and topics will be needed to fund new initiatives. Decisions on priorities are made following discussion in the Committee on Capacity Building (CCB), culminating in agreement by relevant heads of department and management. The CCB has recently reviewed the framework for monitoring and prioritization of CD (Box 4). |
Financial Surveillance
Financial surveillance (FS) encompasses both multilateral and bilateral surveillance activities. Spending on multilateral surveillance is focused on the GFSR and analysis of vulnerabilities and risks. SPR and LEG also participate in FS activities, for example on Fintech. In bilateral surveillance, spending includes FSAPs in around 13 jurisdictions each year as well as support provided by MCM, LEG, RES, and SPR to area departments, both at Headquarters and through Article IV missions.
Spending on FS is estimated at around $40 million. While not tracked separately, this estimate is based on direct spending on (i) the GFSR, and on analysis of vulnerabilities and imbalances in MCM of around $10 million; and (ii) within bilateral surveillance of $30 million, which contrasts to around $200 million in direct spending on overall bilateral surveillance.1
One of the priorities for FY 20 is to redirect resources to bilateral FS. This is in keeping with the IEO Review of Financial Surveillance, which called for devoting significant additional resources to FS, and principally bilateral FS. In FY 20, $1.7 million (5½ percent increase) is allocated in gross terms to MCM to enhance bilateral FS. This covers support to area departments, deepening the integration of FSAPs and Article IVs (as recommended by IEO), easing FSAP staffing constraints, and governance. This is achieved in part through savings of $0.9 million from implementation of modernization measures (GFSR streamlining).
As a complement, the Financial Sector Stability Review (FSSR) was launched in FY 18 as a donor-funded, TA instrument. The FSSR helps low and lower-middle income countries diagnose financial sector vulnerabilities and prioritize financial sector reforms. It provides a TA roadmap that in turn may be used to support members’ efforts to strengthen and reinforce their financial stability frameworks. The FSSR work plan allows for around five FSSR diagnostics each year, totaling about $1.5 million in FY 19. In FY 20, spending on FSSR diagnostics and follow up TA is projected to increase to $1.8 million, a 22 percent increase. Going forward, a larger proportion of the targeted $30 million in donor financing will be allocated to follow up TA as diagnostic missions are completed.
In addition, MCM is in the process of establishing a Monetary Modeling Unit. This unit is aimed at buttressing the Fund’s position as a global center of excellence on financial and macrofinancial topics and maintaining the value added of the Fund’s financial surveillance for our membership. The unit will advance the integrated policy framework, model development, and support members in the implementation of monetary and foreign exchange operations. It is expected to consist of 6.5 FTE positions, of which one will be contractual. This will be funded mostly through reallocation within and more cost-effective travel by MCM, together with one additional FTE to be financed initially with transitional funds.
Beyond FY 20, the IEO’s call for additional resources for FS will be taken up in the context of the ongoing CSR and FSAP reviews that are scheduled to be completed in 2020. Consideration of a further increase in resources along with ways to make FS more efficient will be deferred until those reviews are completed.
1 This includes bilateral surveillance undertaken by MCM (including FSAPs), dedicated macro-financial units in RES and SPR, and cost estimates of area department work at the time of the macro-financial pilot. This is likely an underestimate, as it excludes macro-financial surveillance in area departments outside of the pilots, and LEG’s work on bilateral surveillance beyond FSAPs.
Proposed Shifts in Country Engagement, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.
Proposed Shifts in Country Engagement, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.Proposed Shifts in Country Engagement, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.Spending on Fragile and Conflict States
Spending on fragile states has averaged around $96 million per year in real terms since FY 15 (10 percent of total direct spending). Over 40 percent is CD, including external financing. The set of over 40 countries designated as fragile is diverse, encompassing small islands and high security risk locations, and includes surveillance and program countries. Accordingly, spending varies widely, from below $200,000 in countries with little engagement due to security risks, to several million dollars per year in countries where engagement is intense.
Spending on Fragile States, projected FY 19
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Spending on Fragile States, projected FY 19
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Spending on Fragile States, projected FY 19
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
In FY 20, increased resources for fragile states could come from an internal reallocation of existing departmental resources and from net new resources provided to departments. Budget discussions suggest that country work on fragile states will increase by $1.2 million, mostly for AFR countries. This includes support from FAD, which plans to shift six fiscal economists to LICs and fragile states from other countries. Based on the outturn so far, spending on fragile states outside of CD is expected to increase by 8 percent in FY 19, on a base of around $59 million. If spent as planned, FY 20 would see an additional rise of 2 percent in real terms. CD to fragile states is a priority (see Box 4) and should also increase.
Gross Administrative Resources for CD: Estimated Allocation, FY 19–20
(Millions of U.S. dollars)
Differs from ACES data in Appendix Tables 8a and 8b where some CD expenditures are classified as Miscellaneous and the totals include support and governance costs.
Nominal structural budget (i.e., excluding transitional resources).
Operational targets established by the CCB. Outturn is based on receipts.
Covers administration of the sub-account and not indirect costs linked mainly to IT and facilities.
Gross Administrative Resources for CD: Estimated Allocation, FY 19–20
(Millions of U.S. dollars)
| FY 19 | FY 20 | |||
|---|---|---|---|---|
| Budget | Est. Outturn | Budget | ||
| Direct Spending on CD1/ | 338.2 | 335.5 | 345.2 | |
| Fund-Financed CD 2/ | 141.9 | 143.4 | 145.2 | |
| Externally-Financed CD 3/ | 196.3 | 192.1 | 200.0 | |
| Memorandum Items: | ||||
| CD (plus indirect costs) as a share of total Fund output | 30.4 | 30.9 | 31.0 | |
| Trust Fund Management Fee (receipts) 4/ | 13.7 | 13.4 | 14.0 | |
| Fund-Financed CD in FY 19 dollars | 141.9 | 143.4 | 141.5 | |
| Estimated Indirect Cost of Externally Financed CD | 17.7 | 17.3 | 18.0 | |
Differs from ACES data in Appendix Tables 8a and 8b where some CD expenditures are classified as Miscellaneous and the totals include support and governance costs.
Nominal structural budget (i.e., excluding transitional resources).
Operational targets established by the CCB. Outturn is based on receipts.
Covers administration of the sub-account and not indirect costs linked mainly to IT and facilities.
Gross Administrative Resources for CD: Estimated Allocation, FY 19–20
(Millions of U.S. dollars)
| FY 19 | FY 20 | |||
|---|---|---|---|---|
| Budget | Est. Outturn | Budget | ||
| Direct Spending on CD1/ | 338.2 | 335.5 | 345.2 | |
| Fund-Financed CD 2/ | 141.9 | 143.4 | 145.2 | |
| Externally-Financed CD 3/ | 196.3 | 192.1 | 200.0 | |
| Memorandum Items: | ||||
| CD (plus indirect costs) as a share of total Fund output | 30.4 | 30.9 | 31.0 | |
| Trust Fund Management Fee (receipts) 4/ | 13.7 | 13.4 | 14.0 | |
| Fund-Financed CD in FY 19 dollars | 141.9 | 143.4 | 141.5 | |
| Estimated Indirect Cost of Externally Financed CD | 17.7 | 17.3 | 18.0 | |
Differs from ACES data in Appendix Tables 8a and 8b where some CD expenditures are classified as Miscellaneous and the totals include support and governance costs.
Nominal structural budget (i.e., excluding transitional resources).
Operational targets established by the CCB. Outturn is based on receipts.
Covers administration of the sub-account and not indirect costs linked mainly to IT and facilities.
Strengthening the Framework for Capacity Development Prioritization
Capacity Development (CD) work has grown rapidly in the past decade and now accounts for about a third of all Fund spending. This increase has largely been driven by external financing, which grew by 16 percent per year on average in the same period. The share of CD in total spending is now programmed to stabilize.
The framework for CD monitoring and prioritization is continuing to evolve. As noted in the 2018 CD Strategy Review, this framework has been significantly strengthened in recent years, with further reforms now underway aimed at facilitating more timely and analytically useful information on CD-related activities and spending. These reforms and a planned strengthening of systems and processes under the CDMAP project will facilitate better monitoring and reporting. This will support better resource allocation and strategic review of the alignment of CD activities with country demand and Fund strategic priorities.
Spending on CD, FY 13–21
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Spending on CD, FY 13–21
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Spending on CD, FY 13–21
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
The prioritization process follows a three-step process:
The budget process establishes resources for CD. This includes an envelope for externally financed activities and resources made available by CD departments within their Fund-financed budgets.
The CCB sets the areas targeted for growth for the coming three-year period and the departmental spending limits on externally financed CD activities.
The Resource Allocation Plan (RAP) sets out detailed delivery of CD activities between CD and Area Departments, in line with the agreed priorities. Details of the FY 20–22 RAP, conducted in Spring, will be included in the summer budget outturn report to the Board.
The prioritization framework recognizes that all Fund CD should target high-impact activities. Core CD areas, such as revenue mobilization, public financial management, and financial supervision and regulation, statistics and macroeconomic training will continue to account for the bulk total CD. The updated tracking system will support analysis of trends in these areas. This year’s CCB agreed a narrower set of “growth areas” where an increase in the share of CD over the medium-term is being targeted, recognizing that measurable growth may take time as new tools are developed. An initial list of growth areas includes:
Topics: Anti-corruption; debt sustainability and debt statistics; expenditure policy and public investment management; tax policy, fintech, and cyber risks.
Country-type: Fragile states, highly vulnerable countries, and Caucasus-Central Asia-Mongolia.
As the CD envelope stabilizes, much of this growth will need to be accommodated within existing areas for Fund CD, e.g. increases in fintech as part of work on financial regulation.
Planned CD Spending FY 19
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Planned CD Spending FY 19
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Planned CD Spending FY 19
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Policy Advice and Economic Analysis
Policy Advice and Economic Analysis
Overview | The flagship publications (WEO, GFSR, and Fiscal Monitor), External Sector Report (ESR), and the Regional Economic Outlooks represent a stable core of spending within “multilateral surveillance”, accounting for around $35 million. The remainder, forming the bulk of spending on policy advice and economic analysis, is spent on work streams that are constantly evolving, with the findings usually presented to the Board and reflected in the BWP (e.g., Bali Fintech Agenda, corporate taxation, External Balance Assessments methodology, SDNs). This means that reallocations within this category are usually relatively large. Box 5 discusses the relationship between the strategic planning cycle, the BWP, and resource allocation. |
| Net Structural | A decrease of $1.4 million in FY 20, or 0.1 percent in real terms. |
| Demands | Structural funding is envisaged for systemic risk analysis, capital controls and Fintech (MCM), public sector balance sheet (FAD), work to extend the EBA-lite to non-ESR countries (SPR), as well as for regional work (EUR). |
| Savings | Significant resources are freed up from modernization and streamlining measures (e.g., fewer GFSR analytical chapters and more focused REOs), and completion of policy work, such as the review of the EBA-lite methodology (combined savings of $1.5 million). Further savings come from completed projects on systemic financial crises, exchange rate intervention, and capital flows. |
| Transitional needs | Transitional funds of $2.9 million. This includes work on cyber risk and the integrated policy framework (MCM, $0.8 million), and accommodating price increases for commercial data subscriptions ($0.4 million). Overall, this compares to $2 million provided in FY 19. |
Policy Advice and Economic Analysis
| Overview | The flagship publications (WEO, GFSR, and Fiscal Monitor), External Sector Report (ESR), and the Regional Economic Outlooks represent a stable core of spending within “multilateral surveillance”, accounting for around $35 million. The remainder, forming the bulk of spending on policy advice and economic analysis, is spent on work streams that are constantly evolving, with the findings usually presented to the Board and reflected in the BWP (e.g., Bali Fintech Agenda, corporate taxation, External Balance Assessments methodology, SDNs). This means that reallocations within this category are usually relatively large. Box 5 discusses the relationship between the strategic planning cycle, the BWP, and resource allocation. |
| Net Structural | A decrease of $1.4 million in FY 20, or 0.1 percent in real terms. |
| Demands | Structural funding is envisaged for systemic risk analysis, capital controls and Fintech (MCM), public sector balance sheet (FAD), work to extend the EBA-lite to non-ESR countries (SPR), as well as for regional work (EUR). |
| Savings | Significant resources are freed up from modernization and streamlining measures (e.g., fewer GFSR analytical chapters and more focused REOs), and completion of policy work, such as the review of the EBA-lite methodology (combined savings of $1.5 million). Further savings come from completed projects on systemic financial crises, exchange rate intervention, and capital flows. |
| Transitional needs | Transitional funds of $2.9 million. This includes work on cyber risk and the integrated policy framework (MCM, $0.8 million), and accommodating price increases for commercial data subscriptions ($0.4 million). Overall, this compares to $2 million provided in FY 19. |
Proposed Shifts in Policy Advice and Economic Analysis, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.
Proposed Shifts in Policy Advice and Economic Analysis, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.Proposed Shifts in Policy Advice and Economic Analysis, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.The Board Work Program and Resource Allocation
The strategic planning cycle is updated twice a year as the GPA and the IMFC Communiqué (issued during the Spring/Annual Meetings) are translated into a Board Work Program that covers the subsequent twelvemonth period. This budget proposal reflects the priorities laid out in the 2018 GPA and the latest Board Work Program (BWP). Internally, these priorities feed into Management’s Key Goals and the Accountability Frameworks that set out departmental objectives and shape budget priorities.
The BWP covers non-country items, primarily economic analysis to support policy advice, work on Fund policies (which helps provide the framework for country engagement), multilateral surveillance products (flagships, the External Sector Report, and REOs), IMF governance, and IMF finances. The BWP also covers many operational and administrative items such as on HR issues, risk, and the budget.
Since 2016, staff have been costing nonrecurrent policy and administrative items of the BWP. In 2018, this was broadened to cover recurring items (though the cost of producing the flagships and REOs was already being captured in ACES). In the Fall 2018 BWP, the estimated cost of non-recurrent items was 72 FTEs, or roughly $23 million. Together with the cost of items recurring annually or more frequently, the total cost of the BWP is estimated at around $68 million. This represents around 30 percent of non-country work.
The BWP influences the allocation of resources through both leads and lags. For example, policy reviews may require extensive analytical or exploratory work ahead of Board discussion and may thus span several BWPs, while follow-up work could stretch over several years. The budget proposal includes funding for several BWP-related workstreams, such as:
$2.4 million to support implementation of the recently adopted Framework for Enhanced Engagement on Governance, mainly to functional departments as they implement a structured assessment process and support area departments’ work.
$1.8 million for work on the Comprehensive Surveillance Review which will span BWPs.
$0.3 million for follow-up to the recent Review of AML/CFT.
$0.5 million to develop the integrated policy framework.
Board Work Program, Estimated Cost, FY 19
(Millions of U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: OBP estimates, ACES and Fall 2018 BWP.
Board Work Program, Estimated Cost, FY 19
(Millions of U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: OBP estimates, ACES and Fall 2018 BWP.Board Work Program, Estimated Cost, FY 19
(Millions of U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: OBP estimates, ACES and Fall 2018 BWP.Contributions to Global Stability
Contributions to Global Stability
Overview | Spending on the Fund’s contributions to global stability includes participation in global standard-setting bodies on financial regulation (e.g., FSB, other standard setters), support to various G-groupings (e.g., G-7, G-20) and joint work with other international organizations (e.g., work on trade with the World Bank and the World Trade Organization). In most cases, this involves no new analytical or policy work, but rather summaries of Fund policy or other analytical work that have already been presented to the Board (e.g., on capital flows, macroprudential policies). |
| Net Structural | No change. |
| Demands | Demands of $0.4 million, including for work on trade (SPR). |
| Savings | Savings of $0.4 million with the completion of some policy work (e.g., on SDGs). |
| Transitional needs | $0.5 million for support to the G-7 and G-20 presidencies (SPR), and work on trade (LEG). Overall, this compares to $0.3 million provided in FY 19. |
Contributions to Global Stability
| Overview | Spending on the Fund’s contributions to global stability includes participation in global standard-setting bodies on financial regulation (e.g., FSB, other standard setters), support to various G-groupings (e.g., G-7, G-20) and joint work with other international organizations (e.g., work on trade with the World Bank and the World Trade Organization). In most cases, this involves no new analytical or policy work, but rather summaries of Fund policy or other analytical work that have already been presented to the Board (e.g., on capital flows, macroprudential policies). |
| Net Structural | No change. |
| Demands | Demands of $0.4 million, including for work on trade (SPR). |
| Savings | Savings of $0.4 million with the completion of some policy work (e.g., on SDGs). |
| Transitional needs | $0.5 million for support to the G-7 and G-20 presidencies (SPR), and work on trade (LEG). Overall, this compares to $0.3 million provided in FY 19. |
Proposed Shifts in Contributions to Global Stability, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.
Proposed Shifts in Contributions to Global Stability, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.Proposed Shifts in Contributions to Global Stability, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.Fund Policies
Fund Policies
Overview | Work on Fund policies includes mandated regular policy reviews (e.g., on surveillance, lending-related) on multi-year cycles as well as more topical policy issues of interest, as reflected in the BWP. While this category takes up only 2 percent of spending, these policies decided by the Board shape the work of all country teams, for example through guidance on how surveillance and lending are to be carried out. Most policy work is undertaken by FIN, LEG and SPR. Resource needs evolve according to the cycle of reviews, and spikes tend to be associated with the large reviews (such as the Comprehensive Surveillance Review (CSR) and CD Review) that often take two to three years to carry out from inception to completion (including guidance issued to staff). |
| Net Structural | Net structural needs increase by $1.3 million (0.2 percent) in FY 20. |
| Demands | Funding of $7.2 million for Fund policy reviews in surveillance and debt policy (e.g., the CSR, debt limits policy), as well as follow-up work such as on the enhanced governance framework and on natural disasters. |
| Savings | Savings of $5.9 million from mostly completed analysis required for the reviews of debt policy (MAC DSF), conditionality, and LIC facilities, which is undertaken well in advance of the final Board discussion. |
| Transitional needs | $0.9 million will fund work on debt policy (restructuring cases, including a database, and data transparency) and updating the policy on small and fragile states. Overall, this compares to $0.7 million provided in FY 19. |
Fund Policies
| Overview | Work on Fund policies includes mandated regular policy reviews (e.g., on surveillance, lending-related) on multi-year cycles as well as more topical policy issues of interest, as reflected in the BWP. While this category takes up only 2 percent of spending, these policies decided by the Board shape the work of all country teams, for example through guidance on how surveillance and lending are to be carried out. Most policy work is undertaken by FIN, LEG and SPR. Resource needs evolve according to the cycle of reviews, and spikes tend to be associated with the large reviews (such as the Comprehensive Surveillance Review (CSR) and CD Review) that often take two to three years to carry out from inception to completion (including guidance issued to staff). |
| Net Structural | Net structural needs increase by $1.3 million (0.2 percent) in FY 20. |
| Demands | Funding of $7.2 million for Fund policy reviews in surveillance and debt policy (e.g., the CSR, debt limits policy), as well as follow-up work such as on the enhanced governance framework and on natural disasters. |
| Savings | Savings of $5.9 million from mostly completed analysis required for the reviews of debt policy (MAC DSF), conditionality, and LIC facilities, which is undertaken well in advance of the final Board discussion. |
| Transitional needs | $0.9 million will fund work on debt policy (restructuring cases, including a database, and data transparency) and updating the policy on small and fragile states. Overall, this compares to $0.7 million provided in FY 19. |
Proposed Shifts in Fund Policies, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.
Proposed Shifts in Fund Policies, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.Proposed Shifts in Fund Policies, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.IMF Governance
IMF Governance
Overview | Governance work encompasses that supporting the Board of Governors, the Executive Board, Management, and internal functions, such as risk management and internal audit. It also covers work on quota and voice. |
| Net Structural | $0.6 million (increase of 0.5 percent) in FY 20. |
| Demands | Structural resources of $0.8 million for the operations of the Annual and Spring Meetings. |
| Savings | Savings of $0.4 million from the work on quota and voice, following intense analytical work in FY 19. |
| Transitional needs | $0.8 million to supplement structural resources for the Annual and Spring Meetings. |
IMF Governance
| Overview | Governance work encompasses that supporting the Board of Governors, the Executive Board, Management, and internal functions, such as risk management and internal audit. It also covers work on quota and voice. |
| Net Structural | $0.6 million (increase of 0.5 percent) in FY 20. |
| Demands | Structural resources of $0.8 million for the operations of the Annual and Spring Meetings. |
| Savings | Savings of $0.4 million from the work on quota and voice, following intense analytical work in FY 19. |
| Transitional needs | $0.8 million to supplement structural resources for the Annual and Spring Meetings. |
Proposed Shifts in IMF Governance, FY20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.
Proposed Shifts in IMF Governance, FY20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.Proposed Shifts in IMF Governance, FY20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.Internal Support (Internal Organization in BWP)
Internal Support (Internal Organization in BWP)
Overview | Spending on internal support has been under pressure for several years, reflecting modernization (data, knowledge and risk management), the need to shore up cyber security defenses and strengthening staff and building safety, increased demands for creative solutions and language services, and HQ1 Renewal-related needs. Efforts to manage demand through charge-backs and show-back models are proving helpful in surfacing costs and aid in prioritization.17 Further scope for modernization exists, particularly in the areas of IT, automation and business streamlining. These areas promise significant savings in the medium term but will require significant upfront investments. Looking ahead, continued modernization, including through the Big 5, will raise administrative and capital spending on internal support over the next few years. Streamlining business processes and adopting technological innovations will allow the Fund to reap potentially significant efficiency gains over the medium-term, while improving the quality of service delivery (both in-house, and to the membership). Ensuring a good return on these investments will depend critically on proactive change management to address the impact of modernization on corporate organization and culture. |
| Net Structural | Net savings of $2.9 million for FY 20. |
| Demands | Structural needs include higher spending on information security ($1.5 million), which is part of ongoing efforts to narrow the gap between risk assessment and approved risk appetite, the final tranche of revenue reduction from the recently expired World Bank lease in HQ2, and reduced publications income data due to digitalization in line with the Strategy on Data and Statistics (combined $1.6 million). |
| Savings | More cost-effective delivery of IT support services ($4 million) by transitioning to a managed service model for IT infrastructure ($2.1 million; recommended as part of the TransformIT initiative) and implementing a revised strategy for sourcing IT providers ($1.9 million). Additional savings will be realized from rationalization of translation volume and other streamlining initiatives ($0.4 million). |
| Shifting the acquisition cost of the Fund’s fleet of vehicles to the capital budget, consistent with the fixed asset nature, will free up $1 million in the administrative budget (see section on Capital Budget). This will help offset some of the shifts in IT expenditures from capital costs to annual license and subscription fees as systems are transitioning to the cloud. | |
| Transitional needs | $9.5 million, of which around half to support the CCBR and 1HR. The bulk of the remainder is to support projects like the digital workplace and iData, through project coordination and change management ($1.8 million), and a range of other supporting services (e.g., the iLab and internal justice offices). Overall, this compares to $8.5 million provided in FY 19. |
Internal Support (Internal Organization in BWP)
| Overview | Spending on internal support has been under pressure for several years, reflecting modernization (data, knowledge and risk management), the need to shore up cyber security defenses and strengthening staff and building safety, increased demands for creative solutions and language services, and HQ1 Renewal-related needs. Efforts to manage demand through charge-backs and show-back models are proving helpful in surfacing costs and aid in prioritization.17 Further scope for modernization exists, particularly in the areas of IT, automation and business streamlining. These areas promise significant savings in the medium term but will require significant upfront investments. Looking ahead, continued modernization, including through the Big 5, will raise administrative and capital spending on internal support over the next few years. Streamlining business processes and adopting technological innovations will allow the Fund to reap potentially significant efficiency gains over the medium-term, while improving the quality of service delivery (both in-house, and to the membership). Ensuring a good return on these investments will depend critically on proactive change management to address the impact of modernization on corporate organization and culture. |
| Net Structural | Net savings of $2.9 million for FY 20. |
| Demands | Structural needs include higher spending on information security ($1.5 million), which is part of ongoing efforts to narrow the gap between risk assessment and approved risk appetite, the final tranche of revenue reduction from the recently expired World Bank lease in HQ2, and reduced publications income data due to digitalization in line with the Strategy on Data and Statistics (combined $1.6 million). |
| Savings | More cost-effective delivery of IT support services ($4 million) by transitioning to a managed service model for IT infrastructure ($2.1 million; recommended as part of the TransformIT initiative) and implementing a revised strategy for sourcing IT providers ($1.9 million). Additional savings will be realized from rationalization of translation volume and other streamlining initiatives ($0.4 million). |
| Shifting the acquisition cost of the Fund’s fleet of vehicles to the capital budget, consistent with the fixed asset nature, will free up $1 million in the administrative budget (see section on Capital Budget). This will help offset some of the shifts in IT expenditures from capital costs to annual license and subscription fees as systems are transitioning to the cloud. | |
| Transitional needs | $9.5 million, of which around half to support the CCBR and 1HR. The bulk of the remainder is to support projects like the digital workplace and iData, through project coordination and change management ($1.8 million), and a range of other supporting services (e.g., the iLab and internal justice offices). Overall, this compares to $8.5 million provided in FY 19. |
Proposed Shifts in Internal Support, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.
Proposed Shifts in Internal Support, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.Proposed Shifts in Internal Support, FY 20
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.From Outputs to Inputs
Output Spending Shifts are Reflected in Departmental Budgets
Output Spending Shifts are Reflected in Departmental Budgets
| Trends in departmental budgets | Resources are continuously reallocated within and across departments to meet changing needs of the membership and output shifts, as discussed above. With the unwinding of the global financial crisis, over time resources have shifted away from area departments to non-CD functional departments. More recently, resources have been shifted to support departments to address spending pressures in physical and IT security as well as economic data and knowledge management initiatives. CD functional departments have seen significant increases, mostly related to donor funded activities. |
| Slight reversal in FY 20 to meet output shifts | In FY 20, the output shifts discussed above are reflected in a small reversal of recent trends, with a net structural reduction in the budget for support departments, mostly due to TransformIT savings and a net increase in structural resources to area and functional departments (Figure 3). This net structural increase, together with corporate needs to accommodate loss of HQ2 lease revenue and publication income, is funded with central savings and reallocations of $4.5 million stemming from IT cost recovery from donor-funded CD, holding the travel budget constant in nominal terms, the effects of the U.S. Tax Reform on personnel costs, and moving acquisition costs of the Fund’s vehicle fleet to the capital budget. All departments will receive transitional funds to meet identified short-term priorities as discussed earlier, with roughly one-third each provided to area and support departments. Key departmental highlights are also summarized below and shown in Table 3 and Table 4. |
| Area departments: Intensified country engagement | AFR will receive additional structural and transitional resources for two new resident representative (RR) posts and to help meet demands related to additional program work and fragile states. APD will see a small structural increase for work on critical surveillance countries together with continued transitional funds for a RR post and some program work. EUR will continue its downsizing with a structural budget reduction more than offset by transitional funds to help with the transition, including the closure of RR posts and some program work. MCD will receive some structural and transitional funds for intensified country engagement, while WHD will receive mostly transitional resources, including for two new RR posts. |
| Functional non-CD departments: Resources shift in line with policy and review work | Within an unchanged structural budget, FIN will reallocate 17 percent of resources to new work related to upgrades to financial systems, the Global Financial Safety Net, Investment and Risk Management activities, the 15th Quota Review and work on IMF resources (quota and borrowing). RES will receive the last tranche of transitional funding for the structural reforms unit as RES absorbs the costs in a budget neutral way. SPR will shift resources from completed policy reviews to new work endorsed in the Board work program and will receive transitional resources for review, trade, CSR, work on the Digital Workplace, and support to the G7/G20 presidencies. Finally, COM’s budget will increase by a small amount to right-size the Fund’s Giving Campaign to match increased contributions. |
| Functional CD departments: work supported by mix of structural and transitional resources | Internal savings and transitional resources will enable FAD to step up work on governance and SDGs and fund international tax work from the structural budget. Offset by increased Trust Fund Management Fees, ICD will receive contractual resources for fundraising and management of donor funded resources as well as transitional resources for the internal training unit and risk management of IT systems. LEG will receive funding for work on AML/CFT and governance and anti-corruption, including to implement the enhanced governance framework. Through a combination of internal savings, and additional structural and transitional resources, MCM will accommodate new needs, including for macro financial surveillance and FSAPs, Fintech and governance, and systemic risk analysis. Concluding the modernization of its data management operation, STA will receive transitional resources to backfill two staff working on the implementation of the iData project. |
| Support departments: Transitional resources to cover critical temporary needs | CSF remains structurally flat while receiving transitional resources for utilities, security services, copyright issues, and third-party risk management as well as HQ1 Renewal-related costs. HRD will be allocated significant transitional resources to support work on corporate initiatives, including the HR Strategy, 1HR, and the CCBR. ITD continues its efforts to reduce costs and release resources for priority needs, resulting in a net structural reduction of $0.7 million, after TransformIT-related savings of $2.1 million and implementation of a revised strategy for sourcing IT providers that is expected to generate $1.9 million in savings. Transitional resources are provided for elevated IT support costs until the implementation of a new economic data management platform (iDATA project) and HQ1 Renewal-related costs. SEC will receive a mix of structural and transitional resources for costs associated with the Annual and Spring Meetings. |
Output Spending Shifts are Reflected in Departmental Budgets
| Trends in departmental budgets | Resources are continuously reallocated within and across departments to meet changing needs of the membership and output shifts, as discussed above. With the unwinding of the global financial crisis, over time resources have shifted away from area departments to non-CD functional departments. More recently, resources have been shifted to support departments to address spending pressures in physical and IT security as well as economic data and knowledge management initiatives. CD functional departments have seen significant increases, mostly related to donor funded activities. |
| Slight reversal in FY 20 to meet output shifts | In FY 20, the output shifts discussed above are reflected in a small reversal of recent trends, with a net structural reduction in the budget for support departments, mostly due to TransformIT savings and a net increase in structural resources to area and functional departments (Figure 3). This net structural increase, together with corporate needs to accommodate loss of HQ2 lease revenue and publication income, is funded with central savings and reallocations of $4.5 million stemming from IT cost recovery from donor-funded CD, holding the travel budget constant in nominal terms, the effects of the U.S. Tax Reform on personnel costs, and moving acquisition costs of the Fund’s vehicle fleet to the capital budget. All departments will receive transitional funds to meet identified short-term priorities as discussed earlier, with roughly one-third each provided to area and support departments. Key departmental highlights are also summarized below and shown in Table 3 and Table 4. |
| Area departments: Intensified country engagement | AFR will receive additional structural and transitional resources for two new resident representative (RR) posts and to help meet demands related to additional program work and fragile states. APD will see a small structural increase for work on critical surveillance countries together with continued transitional funds for a RR post and some program work. EUR will continue its downsizing with a structural budget reduction more than offset by transitional funds to help with the transition, including the closure of RR posts and some program work. MCD will receive some structural and transitional funds for intensified country engagement, while WHD will receive mostly transitional resources, including for two new RR posts. |
| Functional non-CD departments: Resources shift in line with policy and review work | Within an unchanged structural budget, FIN will reallocate 17 percent of resources to new work related to upgrades to financial systems, the Global Financial Safety Net, Investment and Risk Management activities, the 15th Quota Review and work on IMF resources (quota and borrowing). RES will receive the last tranche of transitional funding for the structural reforms unit as RES absorbs the costs in a budget neutral way. SPR will shift resources from completed policy reviews to new work endorsed in the Board work program and will receive transitional resources for review, trade, CSR, work on the Digital Workplace, and support to the G7/G20 presidencies. Finally, COM’s budget will increase by a small amount to right-size the Fund’s Giving Campaign to match increased contributions. |
| Functional CD departments: work supported by mix of structural and transitional resources | Internal savings and transitional resources will enable FAD to step up work on governance and SDGs and fund international tax work from the structural budget. Offset by increased Trust Fund Management Fees, ICD will receive contractual resources for fundraising and management of donor funded resources as well as transitional resources for the internal training unit and risk management of IT systems. LEG will receive funding for work on AML/CFT and governance and anti-corruption, including to implement the enhanced governance framework. Through a combination of internal savings, and additional structural and transitional resources, MCM will accommodate new needs, including for macro financial surveillance and FSAPs, Fintech and governance, and systemic risk analysis. Concluding the modernization of its data management operation, STA will receive transitional resources to backfill two staff working on the implementation of the iData project. |
| Support departments: Transitional resources to cover critical temporary needs | CSF remains structurally flat while receiving transitional resources for utilities, security services, copyright issues, and third-party risk management as well as HQ1 Renewal-related costs. HRD will be allocated significant transitional resources to support work on corporate initiatives, including the HR Strategy, 1HR, and the CCBR. ITD continues its efforts to reduce costs and release resources for priority needs, resulting in a net structural reduction of $0.7 million, after TransformIT-related savings of $2.1 million and implementation of a revised strategy for sourcing IT providers that is expected to generate $1.9 million in savings. Transitional resources are provided for elevated IT support costs until the implementation of a new economic data management platform (iDATA project) and HQ1 Renewal-related costs. SEC will receive a mix of structural and transitional resources for costs associated with the Annual and Spring Meetings. |
FY 20 Budget Adjustments, by Department Type and FTCs 1/
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
1/ Not allocated are central demands (loss of HQ2 lease and publication income) and central savings.Note: S = Structural; T = Transitional
FY 20 Budget Adjustments, by Department Type and FTCs 1/
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
1/ Not allocated are central demands (loss of HQ2 lease and publication income) and central savings.Note: S = Structural; T = TransitionalFY 20 Budget Adjustments, by Department Type and FTCs 1/
(Millions of FY 19 U.S. dollars)
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
1/ Not allocated are central demands (loss of HQ2 lease and publication income) and central savings.Note: S = Structural; T = TransitionalBudget Adjustments by Department, FY 19–20
(Millions of FY 19 U.S. dollars)
Ex-ante, in line with FY 19–21 Medium-Term Budget paper; actual transfers may vary.
Includes offices with Accountability Framework discussions with Management.
Includes the Offices of the Managing Director and Deputy Managing Directors, Innovation Lab, Knowledge Management, Office for Asia and the Pacific, Office in Europe, Overseas Trainining Offices, Economic Data Team, HQ1 Task Force, Mediator, Ethics Office, Office of Internal Investigation, Secretarial Support Group.
Includes revenue losses from HQ2 leases and publications, and price adjustments in commercial data subscriptions.
The table does not account for FTEs transfer from HQT to CSF and EDT to STA.
Budget Adjustments by Department, FY 19–20
(Millions of FY 19 U.S. dollars)
| FY 20 Proposed Adjustments | |||||||
|---|---|---|---|---|---|---|---|
| FY 19 Approved Budget | FY 19 Transitional Funds 1/ | New Structural Needs | Structural Savings & Reallocations | Net Structural Increase (+) | Transitional Resources | ||
| Area | 295.1 | 4.3 | 6.2 | 5.2 | 1.0 | 7.0 | |
| AFR | 86.8 | 1.8 | 2.4 | 0.3 | 2.1 | 2.1 | |
| APD | 42.8 | 0.9 | 1.1 | 0.8 | 0.3 | 0.8 | |
| EUR | 67.6 | 0.9 | 0.9 | 2.7 | (1.8) | 2.8 | |
| MCD | 51.2 | 0.7 | 0.9 | 0.6 | 0.3 | 0.2 | |
| WHD | 46.7 | - | 1.0 | 0.8 | 0.2 | 1.1 | |
| Functional Non-CD | 159.5 | 2.9 | 13.6 | 13.0 | 0.6 | 3.9 | |
| COM | 37.7 | 0.2 | 0.5 | 0.3 | 0.2 | 0.1 | |
| FIN | 35.1 | 0.5 | 5.5 | 5.5 | (0.0) | 0.5 | |
| RES | 34.3 | 0.6 | 0.3 | 0.3 | - | 0.2 | |
| SPR | 52.5 | 1.7 | 7.3 | 6.8 | 0.4 | 3.1 | |
| Functional CD | 246.9 | 4.6 | 5.5 | 4.3 | 1.3 | 4.7 | |
| FAD | 60.9 | 0.6 | 1.0 | 0.9 | 0.1 | 1.2 | |
| ICD | 33.8 | 0.7 | 0.1 | 0.1 | - | 0.7 | |
| LEG | 27.6 | 0.7 | 1.5 | 0.8 | 0.7 | 0.6 | |
| MCM | 83.5 | 2.1 | 2.9 | 2.4 | 0.5 | 2.0 | |
| STA | 41.1 | 0.4 | - | - | - | 0.3 | |
| Support | 271.5 | 4.1 | 5.3 | 5.7 | (0.3) | 8.7 | |
| CSF | 96.3 | 2.7 | 1.0 | 1.0 | 0.0 | 1.6 | |
| HRD | 34.6 | 1.6 | - | 0.3 | (0.3) | 5.0 | |
| ITD | 104.9 | 1.3 | 3.3 | 4.0 | (0.7) | 1.0 | |
| OBP | 5.0 | - | 0.3 | 0.3 | - | - | |
| OIA | 5.1 | - | - | - | - | - | |
| ORM | 2.9 | 0.1 | - | - | - | 0.2 | |
| SEC | 22.6 | 1.0 | 0.8 | - | 0.8 | 0.8 | |
| Total Departments 2/ | 973.0 | 18.5 | 30.7 | 28.1 | 2.6 | 24.3 | |
| Small offices 3/ | 39.1 | 0.8 | 0.5 | 0.4 | 0.1 | 0.6 | |
| Total Departments/offices | 1,012.1 | 19.3 | 31.1 | 28.5 | 2.7 | 24.9 | |
| OED, IEO, others | 116.4 | - | - | - | - | - | |
| Other 4/ | 6.7 | - | 1.8 | - | 1.8 | 0.4 | |
| Central Savings (estimated) | 4.5 | (4.5) | |||||
| Total 5/ | 1,135.2 | 19.3 | 33.0 | 33.0 | 0.0 | 25.4 | |
Ex-ante, in line with FY 19–21 Medium-Term Budget paper; actual transfers may vary.
Includes offices with Accountability Framework discussions with Management.
Includes the Offices of the Managing Director and Deputy Managing Directors, Innovation Lab, Knowledge Management, Office for Asia and the Pacific, Office in Europe, Overseas Trainining Offices, Economic Data Team, HQ1 Task Force, Mediator, Ethics Office, Office of Internal Investigation, Secretarial Support Group.
Includes revenue losses from HQ2 leases and publications, and price adjustments in commercial data subscriptions.
The table does not account for FTEs transfer from HQT to CSF and EDT to STA.
Budget Adjustments by Department, FY 19–20
(Millions of FY 19 U.S. dollars)
| FY 20 Proposed Adjustments | |||||||
|---|---|---|---|---|---|---|---|
| FY 19 Approved Budget | FY 19 Transitional Funds 1/ | New Structural Needs | Structural Savings & Reallocations | Net Structural Increase (+) | Transitional Resources | ||
| Area | 295.1 | 4.3 | 6.2 | 5.2 | 1.0 | 7.0 | |
| AFR | 86.8 | 1.8 | 2.4 | 0.3 | 2.1 | 2.1 | |
| APD | 42.8 | 0.9 | 1.1 | 0.8 | 0.3 | 0.8 | |
| EUR | 67.6 | 0.9 | 0.9 | 2.7 | (1.8) | 2.8 | |
| MCD | 51.2 | 0.7 | 0.9 | 0.6 | 0.3 | 0.2 | |
| WHD | 46.7 | - | 1.0 | 0.8 | 0.2 | 1.1 | |
| Functional Non-CD | 159.5 | 2.9 | 13.6 | 13.0 | 0.6 | 3.9 | |
| COM | 37.7 | 0.2 | 0.5 | 0.3 | 0.2 | 0.1 | |
| FIN | 35.1 | 0.5 | 5.5 | 5.5 | (0.0) | 0.5 | |
| RES | 34.3 | 0.6 | 0.3 | 0.3 | - | 0.2 | |
| SPR | 52.5 | 1.7 | 7.3 | 6.8 | 0.4 | 3.1 | |
| Functional CD | 246.9 | 4.6 | 5.5 | 4.3 | 1.3 | 4.7 | |
| FAD | 60.9 | 0.6 | 1.0 | 0.9 | 0.1 | 1.2 | |
| ICD | 33.8 | 0.7 | 0.1 | 0.1 | - | 0.7 | |
| LEG | 27.6 | 0.7 | 1.5 | 0.8 | 0.7 | 0.6 | |
| MCM | 83.5 | 2.1 | 2.9 | 2.4 | 0.5 | 2.0 | |
| STA | 41.1 | 0.4 | - | - | - | 0.3 | |
| Support | 271.5 | 4.1 | 5.3 | 5.7 | (0.3) | 8.7 | |
| CSF | 96.3 | 2.7 | 1.0 | 1.0 | 0.0 | 1.6 | |
| HRD | 34.6 | 1.6 | - | 0.3 | (0.3) | 5.0 | |
| ITD | 104.9 | 1.3 | 3.3 | 4.0 | (0.7) | 1.0 | |
| OBP | 5.0 | - | 0.3 | 0.3 | - | - | |
| OIA | 5.1 | - | - | - | - | - | |
| ORM | 2.9 | 0.1 | - | - | - | 0.2 | |
| SEC | 22.6 | 1.0 | 0.8 | - | 0.8 | 0.8 | |
| Total Departments 2/ | 973.0 | 18.5 | 30.7 | 28.1 | 2.6 | 24.3 | |
| Small offices 3/ | 39.1 | 0.8 | 0.5 | 0.4 | 0.1 | 0.6 | |
| Total Departments/offices | 1,012.1 | 19.3 | 31.1 | 28.5 | 2.7 | 24.9 | |
| OED, IEO, others | 116.4 | - | - | - | - | - | |
| Other 4/ | 6.7 | - | 1.8 | - | 1.8 | 0.4 | |
| Central Savings (estimated) | 4.5 | (4.5) | |||||
| Total 5/ | 1,135.2 | 19.3 | 33.0 | 33.0 | 0.0 | 25.4 | |
Ex-ante, in line with FY 19–21 Medium-Term Budget paper; actual transfers may vary.
Includes offices with Accountability Framework discussions with Management.
Includes the Offices of the Managing Director and Deputy Managing Directors, Innovation Lab, Knowledge Management, Office for Asia and the Pacific, Office in Europe, Overseas Trainining Offices, Economic Data Team, HQ1 Task Force, Mediator, Ethics Office, Office of Internal Investigation, Secretarial Support Group.
Includes revenue losses from HQ2 leases and publications, and price adjustments in commercial data subscriptions.
The table does not account for FTEs transfer from HQT to CSF and EDT to STA.
FTE Changes by Department Type, FY 19–20
(Full-time equivalents (FTEs), excluding donor funding)
Ex-ante, in line with FY 19–21 Medium-Term Budget paper; actual transfers may vary.
Includes 4 FTEs transfer from EDT to STA.
Includes 6 FTEs transfer from HQT to CSF.
FTE Changes by Department Type, FY 19–20
(Full-time equivalents (FTEs), excluding donor funding)
| FY 19 | FY 20 Proposed | Transitional | ||||||
|---|---|---|---|---|---|---|---|---|
| Approved Budget | Structural Adjustments | Total | FY 19 1/ | FY 20 Proposed | ||||
| Area | 785 | 3 | 789 | 12 | 18 | |||
| AFR | 220 | 5 | 226 | 5 | 5 | |||
| APD | 112 | 2 | 114 | 2 | 1 | |||
| EUR | 186 | (6) | 180 | 3 | 8 | |||
| MCD | 134 | 2 | 136 | 2 | 1 | |||
| WHD | 133 | (0) | 133 | - | 3 | |||
| Total | ||||||||
| Functional Non-CD | 501 | 1 | 502 | 6 | 10 | |||
| COM | 92 | - | 92 | - | - | |||
| FIN | 130 | (0) | 130 | - | - | |||
| RES | 110 | - | 110 | 2 | 1 | |||
| SPR | 169 | 1 | 170 | 4 | 9 | |||
| Functional CD | 717 | 11 | 728 | 10 | 8 | |||
| FAD | 161 | 1 | 162 | 1 | 3 | |||
| ICD | 124 | - | 124 | 2 | 1 | |||
| LEG | 82 | 2 | 84 | 2 | 2 | |||
| MCM | 218 | 4 | 222 | 5 | 3 | |||
| STA 2/ | 133 | 4 | 137 | - | - | |||
| Support | 510 | 6 | 516 | 3 | 7 | |||
| CSF 3/ | 157 | 6 | 163 | - | - | |||
| HRD | 91 | - | 91 | 3 | 6 | |||
| ITD | 153 | - | 153 | - | - | |||
| OBP | 16 | - | 16 | - | - | |||
| OIA | 16 | - | 16 | - | - | |||
| ORM | 10 | - | 10 | - | - | |||
| SEC | 68 | - | 68 | 0 | 1 | |||
| Small offices | 79 | (9) | 70 | 1 | 1 | |||
| HQT | 7 | (6) | 1 | - | - | |||
| ILU | 1 | 1 | 2 | 1 | 1 | |||
| OED, IEO, others | 275 | (3) | 272 | - | - | |||
| Total | 2,868 | 9 | 2,878 | 31 | 44 | |||
Ex-ante, in line with FY 19–21 Medium-Term Budget paper; actual transfers may vary.
Includes 4 FTEs transfer from EDT to STA.
Includes 6 FTEs transfer from HQT to CSF.
FTE Changes by Department Type, FY 19–20
(Full-time equivalents (FTEs), excluding donor funding)
| FY 19 | FY 20 Proposed | Transitional | ||||||
|---|---|---|---|---|---|---|---|---|
| Approved Budget | Structural Adjustments | Total | FY 19 1/ | FY 20 Proposed | ||||
| Area | 785 | 3 | 789 | 12 | 18 | |||
| AFR | 220 | 5 | 226 | 5 | 5 | |||
| APD | 112 | 2 | 114 | 2 | 1 | |||
| EUR | 186 | (6) | 180 | 3 | 8 | |||
| MCD | 134 | 2 | 136 | 2 | 1 | |||
| WHD | 133 | (0) | 133 | - | 3 | |||
| Total | ||||||||
| Functional Non-CD | 501 | 1 | 502 | 6 | 10 | |||
| COM | 92 | - | 92 | - | - | |||
| FIN | 130 | (0) | 130 | - | - | |||
| RES | 110 | - | 110 | 2 | 1 | |||
| SPR | 169 | 1 | 170 | 4 | 9 | |||
| Functional CD | 717 | 11 | 728 | 10 | 8 | |||
| FAD | 161 | 1 | 162 | 1 | 3 | |||
| ICD | 124 | - | 124 | 2 | 1 | |||
| LEG | 82 | 2 | 84 | 2 | 2 | |||
| MCM | 218 | 4 | 222 | 5 | 3 | |||
| STA 2/ | 133 | 4 | 137 | - | - | |||
| Support | 510 | 6 | 516 | 3 | 7 | |||
| CSF 3/ | 157 | 6 | 163 | - | - | |||
| HRD | 91 | - | 91 | 3 | 6 | |||
| ITD | 153 | - | 153 | - | - | |||
| OBP | 16 | - | 16 | - | - | |||
| OIA | 16 | - | 16 | - | - | |||
| ORM | 10 | - | 10 | - | - | |||
| SEC | 68 | - | 68 | 0 | 1 | |||
| Small offices | 79 | (9) | 70 | 1 | 1 | |||
| HQT | 7 | (6) | 1 | - | - | |||
| ILU | 1 | 1 | 2 | 1 | 1 | |||
| OED, IEO, others | 275 | (3) | 272 | - | - | |||
| Total | 2,868 | 9 | 2,878 | 31 | 44 | |||
Ex-ante, in line with FY 19–21 Medium-Term Budget paper; actual transfers may vary.
Includes 4 FTEs transfer from EDT to STA.
Includes 6 FTEs transfer from HQT to CSF.
Budget Input Structure
Budget Input Structure
| Broadly unchanged | The flat real budget (excluding a reduction in the travel budget from FY 19 for the Annual Meetings in Indonesia) is translated into a nominal budget using the Global External Deflator (GED). As noted in the Overview Section, the GED has two components: a personnel component (70 percent) which will increase by the Board approved compensation adjustment of 2.7 percent, and a non-personnel component (30 percent) which is tied to the projected U.S. CPI. Formulated within this aggregate budget envelope, the FY 20 input budgets (personnel, travel, and building and other expenses) reflect the departmental budget adjustments that are planned to meet the above-discussed budget priorities and output shifts. The input structure is broadly unchanged from FY 19 (Table 5). |
Budget Input Structure
| Broadly unchanged | The flat real budget (excluding a reduction in the travel budget from FY 19 for the Annual Meetings in Indonesia) is translated into a nominal budget using the Global External Deflator (GED). As noted in the Overview Section, the GED has two components: a personnel component (70 percent) which will increase by the Board approved compensation adjustment of 2.7 percent, and a non-personnel component (30 percent) which is tied to the projected U.S. CPI. Formulated within this aggregate budget envelope, the FY 20 input budgets (personnel, travel, and building and other expenses) reflect the departmental budget adjustments that are planned to meet the above-discussed budget priorities and output shifts. The input structure is broadly unchanged from FY 19 (Table 5). |
Administrative Budget Envelope, FY 19–20
(Millions of U.S. dollars)
The GED is applied to the administrative budget (formulated in real terms) to obtain the nominal budget. For calculation of GED see Appendix I.
Includes the contingencies for staff, OED, and IEO. Included is the proposed transfer of $0.8 million from OED’s budget to staff as additional reserve for institutional priorities.
Administrative Budget Envelope, FY 19–20
(Millions of U.S. dollars)
| FY 19 | Proposed FY 20 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Approved Budget | Transitional demands | Available Resources | Approved Budget | Transitional demands | Available Resources | ||||
| Net administrative budget (in FY 19 U.S. dollars) | 1,135 | 1,154 | 1,129 | 1,184 | |||||
| of which Annual Meetings | 6 | ||||||||
| Net administrative budget (nominal terms) 1/ | 1,135 | 1,154 | 1,158 | 1,184 | |||||
| of which Annual Meetings | 6 | ||||||||
| Total Gross (nominal terms) | 1,371 | 1,417 | 1,397 | 1,444 | |||||
| Fund-financed | |||||||||
| Gross administrative budget | 1,175 | 19 | 1,194 | 1,197 | 25 | 1,223 | |||
| Personnel | 870 | 12 | 882 | 894 | 17 | 911 | |||
| Travel | 87 | 0 | 88 | 81 | 1 | 81 | |||
| Buildings and other expenses | 205 | 7 | 211 | 209 | 8 | 216 | |||
| Contingency 2/ | 12 | … | 12 | 14 | … | 14 | |||
| Receipts | -40 | -40 | -39 | -39 | |||||
| Net administrative resources | 1,135 | 1,154 | 1,158 | 1,184 | |||||
| Carry forward (upper limit) | 46 | 27 | 47 | 22 | |||||
| Total net available resources | 1,181 | 1,181 | 1,205 | 1,205 | |||||
| Externally-financed | |||||||||
| Gross administrative budget | 196 | 196 | 200 | 200 | |||||
| Personnel | 139 | 139 | 141 | 141 | |||||
| Travel | 47 | 47 | 48 | 48 | |||||
| Buildings and other expenses | 10 | 10 | 10 | 10 | |||||
| Receipts | -196 | -196 | -200 | -200 | |||||
| Net administrative budget | - | - | - | - | |||||
The GED is applied to the administrative budget (formulated in real terms) to obtain the nominal budget. For calculation of GED see Appendix I.
Includes the contingencies for staff, OED, and IEO. Included is the proposed transfer of $0.8 million from OED’s budget to staff as additional reserve for institutional priorities.
Administrative Budget Envelope, FY 19–20
(Millions of U.S. dollars)
| FY 19 | Proposed FY 20 | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Approved Budget | Transitional demands | Available Resources | Approved Budget | Transitional demands | Available Resources | ||||
| Net administrative budget (in FY 19 U.S. dollars) | 1,135 | 1,154 | 1,129 | 1,184 | |||||
| of which Annual Meetings | 6 | ||||||||
| Net administrative budget (nominal terms) 1/ | 1,135 | 1,154 | 1,158 | 1,184 | |||||
| of which Annual Meetings | 6 | ||||||||
| Total Gross (nominal terms) | 1,371 | 1,417 | 1,397 | 1,444 | |||||
| Fund-financed | |||||||||
| Gross administrative budget | 1,175 | 19 | 1,194 | 1,197 | 25 | 1,223 | |||
| Personnel | 870 | 12 | 882 | 894 | 17 | 911 | |||
| Travel | 87 | 0 | 88 | 81 | 1 | 81 | |||
| Buildings and other expenses | 205 | 7 | 211 | 209 | 8 | 216 | |||
| Contingency 2/ | 12 | … | 12 | 14 | … | 14 | |||
| Receipts | -40 | -40 | -39 | -39 | |||||
| Net administrative resources | 1,135 | 1,154 | 1,158 | 1,184 | |||||
| Carry forward (upper limit) | 46 | 27 | 47 | 22 | |||||
| Total net available resources | 1,181 | 1,181 | 1,205 | 1,205 | |||||
| Externally-financed | |||||||||
| Gross administrative budget | 196 | 196 | 200 | 200 | |||||
| Personnel | 139 | 139 | 141 | 141 | |||||
| Travel | 47 | 47 | 48 | 48 | |||||
| Buildings and other expenses | 10 | 10 | 10 | 10 | |||||
| Receipts | -196 | -196 | -200 | -200 | |||||
| Net administrative budget | - | - | - | - | |||||
The GED is applied to the administrative budget (formulated in real terms) to obtain the nominal budget. For calculation of GED see Appendix I.
Includes the contingencies for staff, OED, and IEO. Included is the proposed transfer of $0.8 million from OED’s budget to staff as additional reserve for institutional priorities.
FY 20–22 Capital Budget Proposal
The Capital Budget
The capital budget appropriation covers investment, maintenance, and improvement in the Fund’s building facilities, information technology (IT) and other fixed assets. The proposed appropriation for FY 20 is about $15 million (21 percent) higher than assumed in the FY 19–21 Medium-Term Budget (MTB) (Table 6). The increase reflects needed improvements and security enhancement projects to the campus and investments in the Big 5 which promise to modernize and transform the way we work.
Medium-term Capital Budget, FY 19–22
(Millions of U.S. dollars)
Long-term plans included in Appendix VII.
Includes HQ1 electrical and cooling systems that have reached end-of-life and are not included in the HQ1 renewal project.
FY 20–22 resource needs contingent on approval of cost benefit analysis and finalized business cases.
Medium-term Capital Budget, FY 19–22
(Millions of U.S. dollars)
| Approved | Proposed | Estimated | |||||||
|---|---|---|---|---|---|---|---|---|---|
| FY 19 | FY 20 | FY 21 | FY 22 | ||||||
| Total | 71 | 86 | 96 | 82 | |||||
| Building Facilities | 36 | 41 | 49 | 33 | |||||
| Of which: | |||||||||
| Life-cycle, buildings and systems 1/ | 21 | 16 | 28 | 25 | |||||
| Of which: Furniture | 11 | 4 | 11 | 7 | |||||
| Audio-Visual | 7 | 5 | 5 | 5 | |||||
| HQ1 Building Systems 2/ | 0 | 10 | 10 | ||||||
| Improvements | 10 | 16 | 8 | 4 | |||||
| HQ Security | 5 | 9 | |||||||
| Information Technology | 36 | 45 | 47 | 48 | |||||
| Of which: | |||||||||
| Big 5 programs & prerequisites 3/ | 26 | 30 | 31 | 16 | |||||
| Infrastructure End-of-life 1/ | 9 | 6 | 10 | 12 | |||||
Long-term plans included in Appendix VII.
Includes HQ1 electrical and cooling systems that have reached end-of-life and are not included in the HQ1 renewal project.
FY 20–22 resource needs contingent on approval of cost benefit analysis and finalized business cases.
Medium-term Capital Budget, FY 19–22
(Millions of U.S. dollars)
| Approved | Proposed | Estimated | |||||||
|---|---|---|---|---|---|---|---|---|---|
| FY 19 | FY 20 | FY 21 | FY 22 | ||||||
| Total | 71 | 86 | 96 | 82 | |||||
| Building Facilities | 36 | 41 | 49 | 33 | |||||
| Of which: | |||||||||
| Life-cycle, buildings and systems 1/ | 21 | 16 | 28 | 25 | |||||
| Of which: Furniture | 11 | 4 | 11 | 7 | |||||
| Audio-Visual | 7 | 5 | 5 | 5 | |||||
| HQ1 Building Systems 2/ | 0 | 10 | 10 | ||||||
| Improvements | 10 | 16 | 8 | 4 | |||||
| HQ Security | 5 | 9 | |||||||
| Information Technology | 36 | 45 | 47 | 48 | |||||
| Of which: | |||||||||
| Big 5 programs & prerequisites 3/ | 26 | 30 | 31 | 16 | |||||
| Infrastructure End-of-life 1/ | 9 | 6 | 10 | 12 | |||||
Long-term plans included in Appendix VII.
Includes HQ1 electrical and cooling systems that have reached end-of-life and are not included in the HQ1 renewal project.
FY 20–22 resource needs contingent on approval of cost benefit analysis and finalized business cases.
Over the past year, considerable work has gone into defining IT capital budget needs. However, the overall level of effort, timing and sequencing of the Big 5 programs are still being refined as teams are working through the pre-implementation phases and developing cost benefit analyses to justify approval and release of funding. The proposed capital budget appropriation is based on what is currently known and expected delivery capacity, and changes in the timing and capital budget envelope may be warranted as the work matures.
A Big 5 governance structure has been established to provide strong ownership and accountability. The Board will be engaged as work on the Big 5 programs progress. In particular, the business cases and CBAs will be presented to the Board as they become available, and the Board will be kept informed of implementation progress.
Facilities Capital
Facilities Capital
| Facilities Capital Facilities budget includes campus improvements, security enhancements and end-of-life replacements | The proposed capital budget appropriation for facilities is $41 million to provide improvements to the HQ buildings, enhance security, and replace facilities and systems that have reached end-of-life.
|
| Medium-term facilities capital needs | The outer years of the MTB include approximately $20 million for replacement of aging HQ1 building systems (mainly chillers used for cooling, electrical substations, and backup generator). This was not included in the scope of the HQ1 Renewal project because the original completion date of the building renovation was well before the end-of-life of these systems. Following finalization of a facilities condition assessment and subsequent engineering studies, the long-term facilities capital plan has been updated to include an additional $36 million for HQ1 building systems replacement needs beyond the amounts included for FY 20–22.18 |
| The final stages of office furniture replacement are also included in the outer years, at the end of which all office furniture in both HQ1 and HQ2 buildings will have been updated. |
Facilities Capital
| Facilities Capital Facilities budget includes campus improvements, security enhancements and end-of-life replacements | The proposed capital budget appropriation for facilities is $41 million to provide improvements to the HQ buildings, enhance security, and replace facilities and systems that have reached end-of-life.
|
| Medium-term facilities capital needs | The outer years of the MTB include approximately $20 million for replacement of aging HQ1 building systems (mainly chillers used for cooling, electrical substations, and backup generator). This was not included in the scope of the HQ1 Renewal project because the original completion date of the building renovation was well before the end-of-life of these systems. Following finalization of a facilities condition assessment and subsequent engineering studies, the long-term facilities capital plan has been updated to include an additional $36 million for HQ1 building systems replacement needs beyond the amounts included for FY 20–22.18 |
| The final stages of office furniture replacement are also included in the outer years, at the end of which all office furniture in both HQ1 and HQ2 buildings will have been updated. |
Information Technology Capital
Information Technology Capital
| Bulk of IT capital modernization of supports critical systems | The proposed IT capital budget appropriation for FY 20 is $45 million, which is $8 million higher than what was assumed in last year’s budget paper. Two-thirds of the proposed budget is to support the modernization of systems and work practices as part of the Big 5, with a large portion thereof expected to support the implementation of the 1HR system that began in FY 19. The remainder is principally aimed at improving information security, replacing end-of-life infrastructure, and preparing for the replacement of other legacy systems. |
| Big 5 program governance… | To prepare for the implementation of the Big 5 programs, a governance structure has been established to ensure accountability, adhere to budget and schedule, and manage risks:
 |
| … and preparing for implementation | Considerable work has gone into preparing each of the Big 5 programs. Following CBIT approval of the business need, initial funding has been allocated for pre-implementation work. This includes developing requirements based on redesigned and streamlined work processes, market analysis ahead of systems solution selection, and subsequent implementation partner selection. |
| As these steps are completed, program teams finalize the CBA, which will have a multi-year focus. All costs must be quantified, from the upfront pre-implementation costs to the ongoing costs for licensing and support. Benefits to be quantified include IT cost savings from the elimination of legacy systems and from efficiency and productivity gains. The CBA will provide the basis for determination of return on investment, an important input into the final investment decision. | |
| The Program Sponsors present the CBA and finalized business case for SC approval, before requesting CBIT approval of implementation funding. To mitigate risk and ensure that benefits are realized, departmental commitments to the stated savings will be required upfront, and savings capture plans will be developed with OBP, and, where needed, HRD. | |
| Each Big 5 is on a different schedule with 1HR and CDMAP most advanced | Figure 4 shows a high-level overview of the status of each Big 5, while Appendix VIII provides more detailed information on objectives, anticipated timelines, and governance.
|
| Establishing the foundational platforms for the Big 5 | In the meantime, work continues to establish the foundational platforms necessary for implementing the Big 5. From the FY 20 IT capital budget envelope, pre-requisite projects (identity access management, cloud development and integration platforms) will require about 3½ million. These projects will enable the migration of information and applications to the cloud and provide the foundational platforms to ensure proper integration, data management, and security controls. |
| Overall capital IT budget needs for Big 5 programs and pre-requisites | Until the CBAs and the schedules have been completed for all the Big 5s, it is difficult to determine the overall level of effort and the return on investment. Based on current estimates, total multi-year capital costs may be in the range of $92–110 million, including $36 million allocated through FY 19. In addition, the multi-year capital cost of the pre-requisites is estimated at around $8 million, of which close to $3 million has been allocated through FY 19. |
| Considering the institution’s capacity to deliver on such a broad range of initiatives at the same time, $30 million is believed to be a prudent IT capital budget appropriation for the Big 5 and pre-requisites for FY 20. In the event that planning and design phases progress more quickly than anticipated, it is possible that the capital resource needs for FY 20 could increase. Should this be the case, the cost of delaying project implementation will have to be weighed against the cost of seeking a supplemental capital budget appropriation. | |
| Other IT needs, including IT security and infrastructure | Other IT needs that require funding in FY 20 are as follows:
|
| Elevated medium-term IT capital needs | IT capital budget needs are expected to be elevated in the medium term. In addition to continued funding needs for the Big 5, other critical legacy systems will require funding either to begin planning or possibly to start implementation. These include the member banking, administrative financial, and travel management systems that are reaching end of life. As with the Big 5, these projects will aim to implement best in class IT solutions, streamline processes and identify efficiencies or other cost reductions to provide adequate return on investment. |
| Eventually, the migration of legacy, on-premise systems to cloud-based solutions should result in lower capital needs, since the cloud solutions inherently provide for the platform to always be up-to-date and not require periodic, costly upgrades. |
Information Technology Capital
| Bulk of IT capital modernization of supports critical systems | The proposed IT capital budget appropriation for FY 20 is $45 million, which is $8 million higher than what was assumed in last year’s budget paper. Two-thirds of the proposed budget is to support the modernization of systems and work practices as part of the Big 5, with a large portion thereof expected to support the implementation of the 1HR system that began in FY 19. The remainder is principally aimed at improving information security, replacing end-of-life infrastructure, and preparing for the replacement of other legacy systems. |
| Big 5 program governance… | To prepare for the implementation of the Big 5 programs, a governance structure has been established to ensure accountability, adhere to budget and schedule, and manage risks:
|
| … and preparing for implementation | Considerable work has gone into preparing each of the Big 5 programs. Following CBIT approval of the business need, initial funding has been allocated for pre-implementation work. This includes developing requirements based on redesigned and streamlined work processes, market analysis ahead of systems solution selection, and subsequent implementation partner selection. |
| As these steps are completed, program teams finalize the CBA, which will have a multi-year focus. All costs must be quantified, from the upfront pre-implementation costs to the ongoing costs for licensing and support. Benefits to be quantified include IT cost savings from the elimination of legacy systems and from efficiency and productivity gains. The CBA will provide the basis for determination of return on investment, an important input into the final investment decision. | |
| The Program Sponsors present the CBA and finalized business case for SC approval, before requesting CBIT approval of implementation funding. To mitigate risk and ensure that benefits are realized, departmental commitments to the stated savings will be required upfront, and savings capture plans will be developed with OBP, and, where needed, HRD. | |
| Each Big 5 is on a different schedule with 1HR and CDMAP most advanced | Figure 4 shows a high-level overview of the status of each Big 5, while Appendix VIII provides more detailed information on objectives, anticipated timelines, and governance.
|
| Establishing the foundational platforms for the Big 5 | In the meantime, work continues to establish the foundational platforms necessary for implementing the Big 5. From the FY 20 IT capital budget envelope, pre-requisite projects (identity access management, cloud development and integration platforms) will require about 3½ million. These projects will enable the migration of information and applications to the cloud and provide the foundational platforms to ensure proper integration, data management, and security controls. |
| Overall capital IT budget needs for Big 5 programs and pre-requisites | Until the CBAs and the schedules have been completed for all the Big 5s, it is difficult to determine the overall level of effort and the return on investment. Based on current estimates, total multi-year capital costs may be in the range of $92–110 million, including $36 million allocated through FY 19. In addition, the multi-year capital cost of the pre-requisites is estimated at around $8 million, of which close to $3 million has been allocated through FY 19. |
| Considering the institution’s capacity to deliver on such a broad range of initiatives at the same time, $30 million is believed to be a prudent IT capital budget appropriation for the Big 5 and pre-requisites for FY 20. In the event that planning and design phases progress more quickly than anticipated, it is possible that the capital resource needs for FY 20 could increase. Should this be the case, the cost of delaying project implementation will have to be weighed against the cost of seeking a supplemental capital budget appropriation. | |
| Other IT needs, including IT security and infrastructure | Other IT needs that require funding in FY 20 are as follows:
|
| Elevated medium-term IT capital needs | IT capital budget needs are expected to be elevated in the medium term. In addition to continued funding needs for the Big 5, other critical legacy systems will require funding either to begin planning or possibly to start implementation. These include the member banking, administrative financial, and travel management systems that are reaching end of life. As with the Big 5, these projects will aim to implement best in class IT solutions, streamline processes and identify efficiencies or other cost reductions to provide adequate return on investment. |
| Eventually, the migration of legacy, on-premise systems to cloud-based solutions should result in lower capital needs, since the cloud solutions inherently provide for the platform to always be up-to-date and not require periodic, costly upgrades. |
Big 5: High-level Overview of Status
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Notes: 1/ Business case and CBA will be prepared for the whole KM program, rather than individual tools.
Big 5: High-level Overview of Status
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Notes: 1/ Business case and CBA will be prepared for the whole KM program, rather than individual tools.Big 5: High-level Overview of Status
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Notes: 1/ Business case and CBA will be prepared for the whole KM program, rather than individual tools.Risks to the Budget
Risk Preparedness, Mitigation and Management
Risk Preparedness, Mitigation and Management
| Near-term risks and budgetary buffers | Given higher rates of budget utilization and an increase in the upfront allocation of transitional funds in FY 20, the Fund’s ability to absorb unanticipated shocks has been reduced. Lower budgetary buffers require stronger budget monitoring and controls. The main near-term risks are unforeseen demand for Fund programs, shocks related to price factors (travel, data), and information security incidents (see Risk Preparedness Matrix). Nevertheless, the potential budgetary impact is manageable in the near-term, through reprioritization, an unavoidable temporary rise in overtime, and use of departmental contingency measures and the central contingency. Should these risks materialize and persist over the medium term, an increase in the budget envelope could be required (Figure 5). As further described below, risks related to modernization efforts could have a significant negative budgetary impact should they materialize, while financing risks for CD activities are considered low. |
| Medium-term risks | The ongoing modernization efforts present opportunities and risks. Plans for Big 5 program implementation are still under development, and uncertainty remains as to the eventual scope, phasing and cost of these initiatives. While funded from the capital budget, implementation requires support from the administrative budget in the form of staff time. Detailed project plans currently under development, and the oversight of a dedicated project management office, are intended to mitigate these risks. |
| Modernization is seen as a means to increase the Fund’s cost-effectiveness and reduce risk exposure more generally. Realizing the planned benefits from implementation of these modernization efforts will be key to ensuring sufficient budget flexibility exists in the medium-term. This in turn will allow re-allocation of resources to higher-priority areas. Moreover, delays in or not replacing the highly customized and aging IT legacy systems would expose the Fund to increasingly costly systems maintenance and upgrades and would make it difficult to implement changes in policies and remediate vulnerabilities and control weaknesses. | |
| Donor financing risks | While no further increases in donor financing of CD are envisaged, the scale of external funding poses some inherent risks. Funding is mobilized on a rolling basis and on a five year horizon. Based on an indicative annual breakdown, 67 percent of the five-year fundraising target has been committed by donors, and 75 percent of FY 20 funding goals secured (Figure 6). In general, there is a lag between CD fund-raising and spending, as disbursements are up front. Staff believe financing risks for donor financed activities are manageable. Efforts to further mitigate external funding risks are part of ICD’s work program. |
Risk Preparedness, Mitigation and Management
| Near-term risks and budgetary buffers | Given higher rates of budget utilization and an increase in the upfront allocation of transitional funds in FY 20, the Fund’s ability to absorb unanticipated shocks has been reduced. Lower budgetary buffers require stronger budget monitoring and controls. The main near-term risks are unforeseen demand for Fund programs, shocks related to price factors (travel, data), and information security incidents (see Risk Preparedness Matrix). Nevertheless, the potential budgetary impact is manageable in the near-term, through reprioritization, an unavoidable temporary rise in overtime, and use of departmental contingency measures and the central contingency. Should these risks materialize and persist over the medium term, an increase in the budget envelope could be required (Figure 5). As further described below, risks related to modernization efforts could have a significant negative budgetary impact should they materialize, while financing risks for CD activities are considered low. |
| Medium-term risks | The ongoing modernization efforts present opportunities and risks. Plans for Big 5 program implementation are still under development, and uncertainty remains as to the eventual scope, phasing and cost of these initiatives. While funded from the capital budget, implementation requires support from the administrative budget in the form of staff time. Detailed project plans currently under development, and the oversight of a dedicated project management office, are intended to mitigate these risks. |
| Modernization is seen as a means to increase the Fund’s cost-effectiveness and reduce risk exposure more generally. Realizing the planned benefits from implementation of these modernization efforts will be key to ensuring sufficient budget flexibility exists in the medium-term. This in turn will allow re-allocation of resources to higher-priority areas. Moreover, delays in or not replacing the highly customized and aging IT legacy systems would expose the Fund to increasingly costly systems maintenance and upgrades and would make it difficult to implement changes in policies and remediate vulnerabilities and control weaknesses. | |
| Donor financing risks | While no further increases in donor financing of CD are envisaged, the scale of external funding poses some inherent risks. Funding is mobilized on a rolling basis and on a five year horizon. Based on an indicative annual breakdown, 67 percent of the five-year fundraising target has been committed by donors, and 75 percent of FY 20 funding goals secured (Figure 6). In general, there is a lag between CD fund-raising and spending, as disbursements are up front. Staff believe financing risks for donor financed activities are manageable. Efforts to further mitigate external funding risks are part of ICD’s work program. |
FY 20–22 Budget Risk Matrix
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.1/ Refers to administrative budget.
FY 20–22 Budget Risk Matrix
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.1/ Refers to administrative budget.FY 20–22 Budget Risk Matrix
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Office of Budget and Planning.1/ Refers to administrative budget.
Externally Financed Spending and Operational Targets
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Institute for Capacity Development Department.
Externally Financed Spending and Operational Targets
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Institute for Capacity Development Department.Externally Financed Spending and Operational Targets
Citation: Policy Papers 2019, 009; 10.5089/9781498311168.007.A001
Source: Institute for Capacity Development Department.Risk Preparedness Matrix
Risk Preparedness Matrix
| Risk Identified | Vulnerability | Impact Assessment | Mitigation and Management |
|---|---|---|---|
| Increased demand for Fund programs and other services. | Staffing is inadequate for new level of country engagement. | Budget and work pressures increase to meet the needs of membership. | Policy response involves a combination of reallocation, increased overtime, use of contingency. As last resort, increased funding. |
| Shortfalls in donor funding for Capacity Development. | Rollover risk is inherent to donor financing. | Pressures on CD delivery in short-term, difficulty prioritizing. | Careful planning of fundraising activities and alignment with Fund priorities via the CCB, including preference to CD in support of program work. |
| Price increases, e.g., related to travel or economic data. | Increased utilization of administrative budget provides limited scope to absorb unexpected price increases. | Pressure on resources for core services. | In short term, internal reprioritization and use of central contingency. In medium term, identification of offsetting savings. Working group led by STA to review budget formulation process for commercial data. |
| Information security breach. | The Fund is a cyber target like any other international organization. | The budgetary cost to respond and recover from a breach, and subsequent vulnerability remediation, could be significant. | Use of central contingency. Efforts underway to reduce information security risks. |
| Modernization projects costlier or implementation longer than expected. | Implementation of projects meet unexpected complications requiring further resources. Delays require costly changes to legacy systems. | Staff resources diverted towards implementation of major projects, higher costs crowd out core services. | Development of robust business cases, regular monitoring of implementation timelines, and upfront commitment for savings to be returned to the center for reallocation to Fund priorities. |
| Modernization efforts do not yield expected efficiencies or benefits. | Change management capacity is stretched too thinly. Project teams overpromise and/or underdeliver. | Inefficient work practices reduce the Fund’s ability to address new work streams; staff morale negatively impacted. | Seek institutional consensus on implementation of measures, pay sufficient attention to needed changes in underlying business practices and change management efforts, and continue to seek modernization opportunities. |
Risk Preparedness Matrix
| Risk Identified | Vulnerability | Impact Assessment | Mitigation and Management |
|---|---|---|---|
| Increased demand for Fund programs and other services. | Staffing is inadequate for new level of country engagement. | Budget and work pressures increase to meet the needs of membership. | Policy response involves a combination of reallocation, increased overtime, use of contingency. As last resort, increased funding. |
| Shortfalls in donor funding for Capacity Development. | Rollover risk is inherent to donor financing. | Pressures on CD delivery in short-term, difficulty prioritizing. | Careful planning of fundraising activities and alignment with Fund priorities via the CCB, including preference to CD in support of program work. |
| Price increases, e.g., related to travel or economic data. | Increased utilization of administrative budget provides limited scope to absorb unexpected price increases. | Pressure on resources for core services. | In short term, internal reprioritization and use of central contingency. In medium term, identification of offsetting savings. Working group led by STA to review budget formulation process for commercial data. |
| Information security breach. | The Fund is a cyber target like any other international organization. | The budgetary cost to respond and recover from a breach, and subsequent vulnerability remediation, could be significant. | Use of central contingency. Efforts underway to reduce information security risks. |
| Modernization projects costlier or implementation longer than expected. | Implementation of projects meet unexpected complications requiring further resources. Delays require costly changes to legacy systems. | Staff resources diverted towards implementation of major projects, higher costs crowd out core services. | Development of robust business cases, regular monitoring of implementation timelines, and upfront commitment for savings to be returned to the center for reallocation to Fund priorities. |
| Modernization efforts do not yield expected efficiencies or benefits. | Change management capacity is stretched too thinly. Project teams overpromise and/or underdeliver. | Inefficient work practices reduce the Fund’s ability to address new work streams; staff morale negatively impacted. | Seek institutional consensus on implementation of measures, pay sufficient attention to needed changes in underlying business practices and change management efforts, and continue to seek modernization opportunities. |
Summary Proposal for FY 20
Within the total administrative appropriation, separate appropriations and expenditure ceilings are proposed for the Offices of the Executive Directors (OED), the Independent Evaluation Office (IEO), and other administrative expenditure in the Fund. The capital budget is made up of two components: building facilities and information technology.
Proposed Appropriations, FY 20
(Millions of U.S. dollars, unless otherwise noted)
The actual amount that can be carried forward is the lesser amount of the underspend in the current year or the specified ratio (shown in the table) of the current year’s net administrative budget.
Includes for IEO a one-time increase in the carry forward limit from 5 percent to 10 percent as approved by the Evaluation Committee.
Proposed Appropriations, FY 20
(Millions of U.S. dollars, unless otherwise noted)
| Other | OED | IEO | Total | ||
|---|---|---|---|---|---|
| Net administrative budget | 1,076.6 | 75.3 | 6.4 | 1,158.4 | |
| Receipts | 237.6 | 1.4 | 0.0 | 238.9 | |
| FY 19 carry forward (upper limit) 1/ | 31.5 | 14.8 | 0.6 | 46.9 | |
| Total gross expenditures (limit) | 1,345.6 | 91.5 | 7.1 | 1,444.2 | |
| Capital budget | 85.8 | ||||
| Information Technology | 45.0 | ||||
| Building facilities | 40.8 | ||||
| Memorandum items: | |||||
| FY 19 Net administrative budget | 1,052.6 | 76.2 | 6.4 | 1,135.1 | |
| Carry forward, upper limit (in percent) 2/ | 3.0 | 20.0 | 10.0 | n.a. | |
The actual amount that can be carried forward is the lesser amount of the underspend in the current year or the specified ratio (shown in the table) of the current year’s net administrative budget.
Includes for IEO a one-time increase in the carry forward limit from 5 percent to 10 percent as approved by the Evaluation Committee.
Proposed Appropriations, FY 20
(Millions of U.S. dollars, unless otherwise noted)
| Other | ||
|---|---|---|