## ppea2020030 ## Source details **Canonical URL:** [ppea2020030](https://www.imf.org/-/media/files/publications/pp/2020/english/ppea2020030.pdf) ## Other formats - [Markdown version](/-/media/files/publications/pp/2020/english/ppea2020030.pdf.md) - [Structured JSON version](/-/media/files/publications/pp/2020/english/ppea2020030.pdf.json) --- ### Executive summary — context and priorities - Fast-moving global context driven by the Covid-19 outbreak and its impact on real activity and markets; Fund pledged to "do whatever it takes within its mandate" and is mobilizing teams and resources. - Membership-facing longer-term challenges highlighted: rapid technological change, rising inequality and social tensions, climate change, lower-for-longer interest rates, rising debt, trade frictions, fintech, cybersecurity, and implications for the Integrated Policy Framework. - Key Fund policy reviews planned for FY 21 include: - data provision for surveillance purposes, - delayed Article IVs, - the Catastrophe Containment and Relief Trust, - Debt Sustainability for Market Access Countries, - debt limits, - implementation of the Comprehensive Surveillance and FSAP Reviews. ### FY 21 baseline budget stance and funding - Baseline FY 21 net administrative budget proposal: US$1,158 million in constant FY 20 dollars. - Nominal proposed net administrative budget: US$1,186 million. - Budget fully funded by operating income; operational income currently projected at US$2,654 million. - Fund has maintained a flat real budget for the past eight years (excluding a US$6 million security related increase in FY 17). - Enhanced budgetary procedures increased execution to near 100 percent of approved budgets since FY 18. ### Carry forward, fiscal headroom, and short-term adjustments - Maximum carry forward available: US$32.3 million, plus US$15.1 million for OED and US$0.3 million for IEO (final amounts to be established at year-end closure). - Executive Board decision: amount equivalent to the OED FY 2020 central carry forward to be made available for general administrative budget; currently estimated at US$4.7 million—raising total carry forward for the general administrative budget to US$37 million (final amounts subject to year-end closure). - Supplement proposes temporary increase in maximum carry forward of general administrative resources from 3 to 5 percent (exceptional basis for next three years) to provide near-term flexibility. ### Capacity development (CD) financing and receipts - Donor support proposed to finance US$206 million in CD activities in FY 21—in addition to US$143 million in Fund financing for CD. - Gross administrative budget in nominal terms: US$1,429 million (FY 21). - Receipts in current USD: FY 21 = -US$243 million (of which externally-financed = -US$206 million). ### Capital budget and modernization investments - Proposed FY 21 capital budget: US$98.7 million (current U.S. dollars). - Information Technology: US$56.3 million. - Building Facilities: US$42.4 million. - Facilities proposed appropriation FY 21: US$42.4 million (lifecycle replacements, HQ1 furniture, audio-visual, building equipment). - Narrative notes HQ1 furniture identified as US$14 million and audio-visual life-cycle replacements at US$6 million. - IT proposed appropriation FY 21: US$56.3 million to support 1HR, CDMAP implementation, replacement of document management system, start of iDATA implementation, preliminary work on the Integrated Digital Workplace (IDW), enhanced Information security, and portfolio of smaller projects. - CIF update proposed to recalibrate governance and procedures; capital appropriations available for three years with improved project governance, business case and CBA requirements. ### Modernization programs, expected costs and savings - Large modernization projects account for roughly US$31 million in FY 21 (Box 7, Table 6). - Key modernization programs: 1HR, CDMAP, KM (Knowledge Management), IDW, iDATA. - Table 6 provides project-level IT capital figures (sequence of values preserved in source for 1HR, CDMAP, KM, iDATA, IDW and additional items). - Example 1HR figures sequence: 44.1, 37.7, 25.1, 12.6, 6.5, - (as presented). - Aggregate and project-level figures shown in source include: 121.1, 71.0, 52.9, 18.1, 31.1, 19.0, 105.7, 58.4, 43.8, 14.6, 28.3, 19.0. - CBAs presented: 1HR CBA in July 2019; CDMAP CBA in October 2019; cost-benefit analysis for 1HR and CDMAP envisage savings of about US$10 million (compared to earlier preliminary estimate of about US$12 million). - Information security projects total cost: almost US$16 million, with about US$8 million falling in FY 21. - IT infrastructure end-of-life replacements total US$10 million for FY 21. ### Resource allocation, staffing trends and operational shifts - Since FY 12, structural budget kept flat in real terms; overall budget about 7 percent lower in FY 20 dollars than FY 07 pre-crisis level. - Staffing growth since FY 12: around 250 FTEs (including externally financed positions). - Close to 100 additional staff positions financed through administrative measures. - Over 50 positions funded by donors. - 120 FTEs added in FY 16–18 through CoE reform. - Fund has some 900 staff in 114 offices, more than half in low-income countries and fragile states. - Field presence increased: resident representatives, experts, and regional capacity development center staff up over 40 percent since FY 12. ### FY 20 implementation, Covid-19 effects, and FY 20 outturn projections - FY 20 implementation broadly on track through end-February; spending shows shift from bilateral surveillance to lending with intensified program work in AFR and WHD. - Covid-19 FY 20 effects: - Travel reduction: projected reduction of some 500 Fund-financed missions as of mid-March; Spring Meetings held virtually. - Evacuations: 148 staff, long-term experts and dependents evacuated at estimated cost of US$2.5 million in FY 20 (some 40 requests pending). - IT, remote working and institutional reform costs: video conferencing licensing/support US$0.25 million in FY 20 and another US$0.6 million to accrue in FY 21; other IT/facilities needs US$1–1½ million. - Projected FY 20 underspend around US$10 million relative to prior expectation of full execution. - FY 20 projected outturn (selected figures, millions of FY 20 U.S. dollars): - Total (Projected Outturn): 1,191. - Analytical Work: 100. - Multilateral surveillance: 71. - Country operations: 471. - Internal support: 307. - Gross expenditures (Total): 1,397; Personnel: 1,025; Travel: 134; Buildings and other expenses: 224. - Receipts: -239; Net expenditures (Total): 1,158. - Carry forward from previous year (Memorandum): 47. ### FY 21 priorities, reallocations and thematic spending - FY 21 priorities: - Country operations: top priority to support members managing Covid-19; emphasis on countries with weak external, fiscal, and financial sector balance sheets; continued resilience, social and development challenges, fragile and conflict-affected states (FCS), enhanced governance, and financial surveillance. - Analytical and policy work: global economic and financial impact of Covid-19; macroeconomic and macro-financial impact of climate change; fintech, cybersecurity, inequality; implications of sustained low interest rates; trade; Integrated Policy Framework. - Key reviews planned: data provision for surveillance, delayed Article IVs, CCRT, MAC DSA, debt limits—primarily financed by reallocating resources from completed/near completed reviews. - Modernizing the Fund: CCBR completed December 2019; compensation and benefits reforms expected broadly budget neutral in FY 21; other modernization projects to continue with temporary short-term costs and medium-term savings. - Gross new demands (structural and transitional) total US$81.2 million. - Resource funding approach: reallocations within and across departments, holding travel budget constant in nominal terms, streamlining; transitional demands accommodated through higher upfront allocation of carry forward and one-off central resources. - US$5 million of available carry forward for general budget reserved. - Proposed spending on priority areas (gross terms unless noted): - Financial surveillance/FSAPs: US$1.4 million (mainly to MCM). - Current estimated direct spending on financial surveillance in functional departments: US$47 million per year (average for FY 17-20, in FY 20 U.S. dollars). - Bilateral financial surveillance (including FSAPs): around US$30-33 million per year. - Fund-wide direct spending on FSAPs: ranged from US$20-25 million during same period. - Financial Sector Stability Review (FSSR) spending: increased from US$2.1 million in FY 19 to expected US$3.7 million in FY 21. - Fintech, cybersecurity, and digital economy: US$2.8 million to MCM, LEG, and SPR. - Spending in these areas estimated at US$8 million in FY 19. - Climate change: US$2.2 million additional resources; departmental spending expected to increase significantly, reaching around US$12 million each year in FY 20 and FY 21. - 61 country teams covered climate issues in FY 20. - Anti-corruption/governance: US$1.9 million. - Steady-state cost of implementing enhanced governance framework estimated in FY 20 at around US$6 million. - Fragile and conflict-affected states: US$4½ million, mostly to AFR, APD, and MCD. - About half provided on transitional basis. - Spending on fragile states estimated at US$100 million per year, of which around half is CD delivery. ### Departmental shifts, FTEs, and budget adjustments - Structural increase for area and functional departments; support departments remain flat. - Transition resources help meet short-term needs including HR service delivery model change. - Selected Table 3 figures (Millions of FY 20 U.S. dollars): - Grand Total: FY 20 Approved Budget: 1,158.4; FY 20 Transitional Funds: 25.8; New Structural Spending: 43.7; Structural Savings & Reallocations: 43.7; Net Structural Increase (+): (0.0); Transitional Resources: 37.5. - Memorandum — Estimated available carry forward and other: 55.5 (Staff Departments & Center: 32.3; OED: 15.1; IEO: 0.3). - Selected Table 4 FTE changes (FTEs): - Grand totals: Fund-financed Total FY 20 Approved Budget: 2,877.9; Total FY 20: 2,872.7; FY 21 Proposed: 43.6 (Transitional) and 66.1 (Proposed total change). - Donor financed: 91.2 (FY 20) and 93.0 (Total FY 20). - Note: Includes 26 transitional FTEs to bridge departments to new HR structure; reflecting HRD reorganization (gross FTE savings of 40 offset by 19 increase in the new HRD structure) and other savings from 1HR project. ### Income, financial sustainability and downside scenarios - In FY 20, operational income remains well above administrative expenses. - Conservative scenario of low program engagement (no new arrangements) projects average credit outstanding falling from about SDR 68 billion in FY 21 to SDR 33 billion by FY 24; operational income falling mainly due to scheduled repurchases and drop in average credit outstanding. - Staff to update income projections in forthcoming Review of the Fund’s Income Position for FY 2020 and FY 2021-2022, including sensitivity to program and interest rate assumptions. ### Risks, contingency, and proposed risk responses - Covid-19 sharply increased budget risks; near 100 percent utilization and upfront allocation of carry forward reduced buffers. - Gross new spending by themes totals US$81.2 million; resource costs of HR reforms, ITD Service Delivery Model and large modernization projects account for some 53 percent of gross new spending. - Internal risk assessment illustrative additional resources potentially needed under downside scenarios: range US$9 to US$23 million annually (likelihood assessed higher post-Covid-19; scenarios beyond upper boundary cannot be ruled out). - Risk classification and mitigations: - Minor Risks (US$32 million): Would require a request to the Board for increased budgetary resources if other management efforts insufficient. - Key risk areas: Covid-19 evolving demands; information security breach remediation costs; delays or non-realization of modernization efficiencies; donor-financed CD rollover risk; sustained low-travel environment impact on externally financed CD. ### FY 21 contingency strategy and two-stage response to crisis - Two-stage strategy proposed: - Initial FY 21 response: - Temporary increase in carry forward ceiling from 3 to 5 percent to use projected FY 20 underspending of US$10 million and other emergency buffers to create ~US$30 million of near-term resources (including estimated US$10 million additional carry forward). - Funding to allow initial ramp-up in temporary staffing for front-line departments and reduce ad-hoc arrangements. - More sustained response: - Anticipated exceptional and temporary increase in structural resources over next 2–3 years; staff to return with specific proposal after firmer estimates emerge. ### FY 21 summary proposal, limits and key figures - Net administrative budget (total): US$1,186.2 million. - Up to US$74.7 million for OED. - Up to US$6.7 million for IEO. - Up to US$1,104.7 million for other administrative expenditures. - Carry forward authorized (upper limit): US$47.7 million (earlier presentation) and in revised proposal up to US$69.4 million (with sublimits OED US$15.1 million; IEO US$0.5 million; Other US$53.8 million) depending on proposed exceptional carry forward increase. - Limit on gross administrative expenditures, FY 21: - Total: US$1,476.6 million (earlier table) and revised proposal Total: US$1,498.3 million (with sublimits: OED US$91.2 million; IEO US$7.2 million; Other US$1,399.9 million). - Capital budget appropriations for FY 2021: - Total: US$98.7 million (Information Technology US$56.3 million; Building Facilities US$42.4 million). - Carry forward upper-limit ratios (caps): - Staff: 3.0 percent (proposed temporary increase to 5.0 percent for general administrative resources). - OED: 20.0 percent. - IEO: 5.0 percent (proposed exceptional increase to 8.0 percent subject to Evaluation Committee). ### Proposed Decisions (Revised) — approvals requested - Decision No. 1: Approve appropriations for net administrative expenditures for FY 2021 totalling US$1,186.2 million with sub-allocations for OED and IEO and authorization to carry forward unspent FY 2020 amounts up to revised limits (up to US$69.4 million under revised proposal) for use in FY 2021. - Decision No. 2: Approve key elements of updated Capital Investment Framework as set out in Appendix VIII. - Decision No. 3: Approve capital budget appropriations for FY 2021 totalling US$98.7 million (US$56.3 million IT; US$42.4 million Building Facilities). *FY 2021–FY 2023 MEDIUM-TERM BUDGET (selected excerpts).* ### EXECUTIVE SUMMARY ### EXECUTIVE SUMMARY ### Fast-moving global context and Fund priorities - The FY 21 budget is set in a fast-moving and exceptionally uncertain global context driven by the ongoing Covid-19 outbreak and its impact on real activity and markets. - The Fund has pledged to "do whatever it takes within its mandate" to contribute to the global Covid-19 crisis response and is mobilizing teams and broader resources to do so. - Membership-facing longer-term challenges highlighted: rapid technological change, rising inequality and social tensions, climate change, lower-for-longer interest rates, rising debt, trade frictions, fintech, cybersecurity, and implications for the Integrated Policy Framework. - Key Fund policy reviews planned for FY 21 include: - data provision for surveillance purposes, - delayed Article IVs, - the Catastrophe Containment and Relief Trust, - Debt Sustainability for Market Access Countries, - debt limits, - implementation of the Comprehensive Surveillance and FSAP Reviews. ### Baseline FY 21 budget stance and procedural context - The baseline FY 21 budget proposal maintains a flat real resource envelope. - The Fund has maintained a flat real budget for the past eight years (excluding a $6 million security related increase in FY 17). - Enhanced budgetary procedures have increased execution to near 100 percent of approved budgets since FY 18. - The proposed net FY 21 administrative budget is $1,158 million in constant FY 20 dollars. - In nominal terms, the proposed net administrative budget is $1,186 million. - The nominal budget reflects a change in the calculation of the Fund’s Global External Deflator (GED) to equal projected U.S. CPI inflation as published in the most recent World Economic Outlook. - The budget is fully funded by operating income; the Fund’s operational income is currently projected at $2,654 million. ### Fiscal headroom, carry forward, and streamlining - FY 20 projected outturn is expected to remain within the approved structural level (Appendix III). - Maximum carry forward available: $32.3 million, plus an additional $15.1 million for the Office of Executive Directors (OED) and $0.3 million for the Internal Evaluation Office. - As part of streamlining, Executive Board decided that an amount equivalent to the OED FY 2020 central carry forward shall be made available for the Fund’s general administrative budget; this amount is currently estimated to be $4.7 million. - This raises the total carry forward for the general administrative budget to $37 million (final amounts to be established at year-end closure). ### Capacity development (CD) financing and gross budget - Donor support is proposed to finance $206 million in capacity development (CD) activities— in addition to $143 million in Fund financing for CD—aligned with the Fund’s strategic priorities. - Together with other receipts, this would bring the gross administrative budget to $1,429 million in nominal terms. ### Capital budget and modernization investments - The proposed FY 21 capital budget is $98½ million in current U.S. dollars. - Capital budget breakdown: - Facilities: proposed budget of $42½ million to support mainly end-of-life-cycle replacements (furniture, audio-visual equipment, HQ1 building equipment). - IT: proposed budget of $56 million to support 1HR and the Capacity Development Management and Administration Program (CDMAP) implementation, replacement of the Fund’s document management system, start of iDATA’s implementation, preliminary work on the integrated digital workplace (IDW), enhanced Information security, and a portfolio of smaller projects. - An update to the Capital Investment Framework is proposed to recalibrate governance and procedures. ### Transition, modernization, and expected savings - FY 21 is marked by ongoing modernization efforts and transition, including implications of the Comprehensive Compensation and Benefits Review. - The budget accommodates large transitional costs for reforms to HR and information technology service delivery models, and large business modernization projects. - Over the medium-term, structural savings from modernization projects are expected to create some budget space. - In the short term, more resources are needed to support related transition costs; non-urgent work will be deferred in the context of the Covid-19 crisis. ### Budget envelope table highlights (as presented) - Gross administrative budget (constant FY 20 USD): proposed FY 21 = 1,397; Est. Outturn = 1,383; FY 21 Budget = 1,400. - Receipts (constant FY 20 USD): FY 21 Budget = -242. - Net Administrative Budget (constant FY 20 USD): FY 21 = 1,158. - Capital Budget (IT and Facilities) (constant FY 20 USD): FY 21 = 86. - In current USD (FY 21): Total operational income = 3,410 (FY 20), projected outturn = 3,088, FY 21 projection = 2,654. - Gross administrative budget in current USD: FY 21 = 1,429. - Receipts in current USD: FY 21 = -243 (of which externally-financed = -206). - Net Administrative Budget in current USD: FY 21 = 1,186. - Capital Budget (IT and Facilities) in current USD: FY 21 = 99. ### Resource allocation and staffing trends - Since FY 12, the Fund’s structural budget has been kept flat in real terms; overall budget today is about 7 percent lower in FY 20 dollars than its pre-crisis level in FY 07. - Within the flat real budget envelope, activities shifted to new priorities: External Sector Report, deeper spillover work, macro-financial policy advice, macrostructural policies (growth, fiscal space, governance), climate change, inequality, digitalization, fragile and conflict-affected states (FCS), and expanded CD delivery. - Staffing has grown by around 250 FTEs since FY 12, including externally financed positions. - Close to 100 additional staff positions financed through administrative measures. - Over 50 positions funded by donors. - 120 FTEs added in FY 16–18 through Categories of Employment (CoE) reform. - Field presence has increased: since FY 12, the number of resident representatives, experts, and staff in regional capacity development centers has increased over 40 percent. - The Fund has some 900 staff in 114 offices, more than half of which are in low-income countries and fragile states. ### Risks, execution, and next steps - Virtually full budget utilization and upfront allocation of available temporary resources have reduced budgetary buffers. - Extraordinary uncertainty from the Covid-19 crisis will require further consideration as needs become clearer; the budget impact will need to be reviewed as needs become clearer. - The Fund will continue to look for efficiency gains and reallocations to fund urgent needs and new priorities; non-urgent work will be deferred during the crisis response. - Analytical and policy work will assess global implications of the crisis and its impact on the Fund’s work. *Prepared by an Office of Budget and Planning team led by Piyabha Kongsamut under the supervision of Axel Schimmelpfennig, and Gisela Ulmschneider, with contributions from Gillian Adu, Rebecca Brofft, Melanie Burke, Raquel Chuayffet, Angeliki Economopoulos, Sepideh Khazai, Anika Shtuni, Justin Tyson, Muriel Vimond, Barrie Williams, and Jiu Hong Zhou.* ### 11. The Fund’s ability to respond nimbly to changing needs has been supported by: ### 11. The Fund’s ability to respond nimbly to changing needs has been supported by: ### Strengthened execution - Utilization of the Fund’s administrative budget has increased to near 100 percent, supported by enhanced budget procedures. - Provisions to carry forward a portion of unspent resources into future years provide a buffer that has facilitated high execution in recent years. ### Increased donor funding and CD ramp-up - External funding has doubled since FY 12, now supporting about 60 percent of the Fund’s CD operations. - External funding, coupled with an increase of the Fund’s own resources, has underpinned the ramp up in CD to about a third of Fund activities. ### Modernization and streamlining - A $20 million package of measures, agreed as part of the FY 16 medium-term budget, focused on: - streamlining a range of multilateral surveillance outputs, - moving most regular policy reviews to five-year cycles, - reducing the frequency of country program reviews and post-program monitoring, - reducing funding for technical assistance available to advanced economies. - In mid-2018, a follow-up modernization and streamlining review proposed measures across a wide range of Fund activities; most have been implemented or folded into ongoing modernization efforts (Appendix V). ### Reprioritization under a flat real budget constraint - The discipline of a flat real budget environment drove a multi-pronged effort to identify opportunities for efficiencies. - A structured annual exercise was introduced in FY 16 to identify savings, leading to a broad range of measures across departments (Box 2). ### Reallocations across departments and shifts in priorities - Since the global financial crisis, Fund-financed resources have stabilized in area departments as program work eased, and have grown in functional departments (SPR, RES, FIN, and COM). - Since FY 12, the share of CD-delivering functional departments in total resources has increased significantly (particularly FAD), mainly driven by significant growth in CD financed by donors. - The share of the four main support departments (CSF, HRD, ITD, SEC) has risen, reflecting spending pressures on physical and information security, and provision of support services more integrated with business needs. ### Budget process and resource reallocation (Box 1 highlights) - Strategic Framework: annual budget exercise guided by Managing Director’s Global Policy Agenda, the IMFC Communiqué, and the Board Work Program; input from periodic policy reviews and evaluations. - Reallocating resources: redirection mainly within departments and workstreams via a “savings and demands” exercise; gross reallocations, central savings and modernization have amounted to about 2-4 percent of the administrative budget in recent years. - For FY 21, departments identified further contingency savings in addition to the savings and demand process. - Transitional Funding: new priorities often initially accommodated through transitional resources and absorbed into structural resources in subsequent years (example: anti-corruption/governance resources shifted from a small transitional amount in FY 18 to a 60–40 percent mix in FY 19, and to 80 percent structural in FY 20). ### Departmental savings measures (Box 2 examples) - Country work/Analytics: - Strengthened rigor in shifting country-by-country resourcing (numbers and levels) in line with changing circumstances. - Reduced field presence where program engagement wound down; increased field presence where new programs were being put in place or to support CD (e.g., RTAC serving Central Asia, Caucasus and Mongolia, CCAM). - More selective and focused use of Selected Issues Papers and Staff Discussion Notes with stronger links to Fund and member priorities. - Cross-departmental coordination to avoid overlap on emerging issues (e.g., Surveillance Committee; CD-Surveillance Integration Working Group; Gender; Fiscal Space; Macro-structural; Inequality Pilots). - Continued shift to more focused country review and reduced travel through targeted missions, greater remote engagement, and advanced ticketing. - Policy: - Sequenced policy reviews on related topics to minimize bunching for staff. - Paced policy reforms consistent with available resources (e.g., standard five-year cycle for policy reviews). - Services: - Outsourced or reduced services (e.g., ground transportation; reduced direct overseas residential real estate support; switch from print to online publications); rationalization of data subscriptions and contract renegotiations. ### Income, expenses, and financial sustainability - Maintaining a flat real budget has supported the IMF’s long-term financial sustainability. - In FY 20, operational income remains well above administrative expenses. - A conservative scenario of low program engagement (no new arrangements) projects average credit outstanding falling from about SDR 68 billion in FY 21 to SDR 33 billion by FY 24, with operational income falling mainly due to scheduled repurchases and the drop in average credit outstanding. - Staff will update income projections in the forthcoming Review of the Fund’s Income Position for FY 2020 and FY 2021-2022, including sensitivity to program and interest rate assumptions. ### FY 20 implementation and Covid-19 impact - Implementation of the FY 20 budget was broadly on track through end-February. - FY 20 resource reallocation supported enhanced governance framework, macro-financial surveillance, and key policy and analytical initiatives (trade, digital economy, public debt, international taxation). - Spending through the first half of the financial year suggests a shift from bilateral surveillance to lending, with program-related work intensifying in AFR and WHD. - External financing for CD spending is expected to increase through strengthened utilization of available resources within the approved gross limit. - Projected increases in activity on flagships, fintech and cybersecurity projects, and monetary and financial policy work. - Internal support spending expected slightly higher than budgeted, driven by institutional change and modernization, including the now-completed Comprehensive Compensation and Benefits Review (CCBR); personnel, buildings, and other services spending projected higher but offset by considerable underspend on travel. - Covid-19 effects on FY 20: - Travel reduction: decision to hold Spring Meetings virtually and cancellation of staff travel, with a projected reduction in travel by some 500 missions (Fund-financed) as of mid-March. - Offsetting temporary increases in evacuation costs for field-based staff, intensification of Covid-19 related work, support for remote working, and increased resourcing for IT and broader institutional reforms. - Baseline projection shifted to suggest some underspend, though uncertain. - Full carry forward expected to remain available for FY 21. ### FY 20 budget distribution (FY 20 shares) - Area and functional departments account for about 80 percent of budgeted resources in FY 20, including externally financed funding. - Area departments represent around 25 percent of the budgeted resources. - Functional CD departments (FAD, ICD, LEG, MCM, STA) account for 35 percent of budgeted resources; CD now accounts for about 40 percent of overall spending in these departments. - External financing accounts for a significant share of functional CD department budgets—e.g., 57 percent in FAD—and 16 percent of the total Fund budget. - Non-CD functional departments (SPR, RES, FIN, COM) account for 16 percent of the Fund’s budget. - The four main support departments (CSF, HRD, ITD, SEC) represent about a quarter of budgeted resources. ### FY 21 priorities and CD prioritization - FY 21 priorities include: - Country operations: top priority to support member countries managing the Covid-19 outbreak and related economic and financial market turbulence, with emphasis on countries with weak external, fiscal, and financial sector balance sheets; continued work on resilience, social and development challenges, fragile and conflict-affected states (FCS), the enhanced governance framework, and financial surveillance. - Analytical and policy work: continued focus on global economic and financial impact of Covid-19; macroeconomic and macro-financial impact of climate change; fintech (including digital currencies), cybersecurity, and inequality; impact of sustained low interest rates; trade; and development of an Integrated Policy Framework. - Key reviews planned for FY 21: data provision for surveillance purposes, delayed Article IVs, the Catastrophe and Containment and Relief Trust (CCRT), Debt Sustainability for Market Access Countries (MAC DSA), and debt limits—primarily financed by reallocating resources from completed/near completed reviews. - Modernizing the Fund: CCBR completed in December 2019 introduces compensation and benefits reforms expected to be broadly budget neutral in FY 21; other large modernization projects to continue with temporary short-term costs and medium-term savings. - CD Prioritization and Budgeting (Box 3 highlights): - Budget process establishes total resources for CD, including an envelope for externally financed activities and resources from CD departments’ Fund-financed budgets. - Fall CCB reviews CD priorities and sets departmental spending limits on externally financed CD activities; spring CCB considers fundraising needs. - CD and Area Departments agree detailed delivery plans; medium-term projections discussed by Department Heads and approved by Management early in the financial year. - Implementation of CDMAP scheduled to go live during FY 21 and complete roll-out during FY 22. - Indicative medium-term allocations show changes in delivery composition between FY 19-23: shift from revenue administration towards tax policy in revenue mobilization; shift in delivery to AFR and MCD given focus on low-income and fragile states. - Planned CD Spending, FY 23 and changes in share of direct CD delivery (FY 19-23) by region and core areas documented in Box 3 materials. ### FY 21 budget framing and transition - The proposed baseline FY 21 net administrative budget is flat in real terms. - Gross new demands of $81.2 million (structural and transitional) would be funded through reallocating within and across departments, holding the travel budget constant in nominal terms, and other streamlining efforts. - Transitional demands would be accommodated through a higher upfront allocation of carry forward resources and other one-off central resources. - $5 million of the available carry forward for the general budget will be reserved. *Source: FY 2021-FY 2023 MEDIUM-TERM BUDGET (excerpt).* ### 19. FY 21 can be characterized as a year of uncertainty and transition. The uncertain impact ### FY 21 can be characterized as a year of uncertainty and transition ### FY 21 uncertainty and Covid-19 budget impact - The uncertain impact of the Covid-19 related crisis will require a nimble response and close budget monitoring. - Resource costs of HR reforms, the ITD Service Delivery Model and large modernization projects entail large transitional costs in FY 21, accounting for some 53 percent of gross new spending. - Gross new spending by themes (structural and transitional resources) totals $81.2 million. - The budgetary impact of the Covid-19 outbreak in FY 21 remains difficult to forecast. Departments are redirecting resources within existing envelopes to address urgent needs and operational impacts (e.g., increased reliance on remote work). - Initial responses have included overtime and temporary reallocation of staff; further sustained needs may require structural shifts of resources, deferral of non-essential activities, use of the Fund’s budget contingency, or calls for additional resources. - The Fund has begun to receive requests for additional financial support from member countries; requests include augmentations of existing programs and new, mainly short-term liquidity financing. More prolonged financing engagements may become necessary depending on the course of the crisis. *Box 4 operational highlights (selected):* - ICD is releasing economists with prior review experience to assist SPR with expected increased review load. - Program countries on average have 2 additional full-time FTEs for new program engagements, plus direct part-time economist support from SPR, FAD, and MCM in specific circumstances. - For CD, a sustained impact on travel could reduce delivery where virtual delivery is not feasible, potentially leading to lower-than-expected external financing of staff and reduced Trust Fund Management Fees. - Close, ongoing monitoring and agility in use of budgetary resources will be required. *In sum:* exceptional circumstances imply active risk monitoring, coordination of risk mitigation efforts, and recognition of budget risks. ### Overall FY 21 savings and demand exercise - The FY 21 savings and demand exercise allowed for funding of baseline net new demands (net structural plus transitional) totaling about 4 percent of the Fund’s administrative budget. - The FY 21 administrative budget proposal provides resources to fund selected priority areas; the Board will review proposals under the Comprehensive Surveillance and FSAP Reviews in summer 2020. The FY 21 budget provides additional funding for related issues (e.g., financial surveillance/FSAPs and climate change). ### Proposed spending on priority areas (gross terms unless noted) - Financial surveillance/Financial Sector Assessment Program (FSAPs): $1.4 million (mainly to MCM). - Current estimated direct spending on financial surveillance in functional departments: $47 million per year (average for FY 17-20, in FY 20 U.S. dollars). - Bilateral financial surveillance (including FSAPs): around $30-33 million per year. - Fund-wide direct spending on FSAPs: has ranged from $20-25 million during this same period. - Financial Sector Stability Review (FSSR) spending increased from $2.1 million in FY 19 to an expected $3.7 million in FY 21. - Fintech, cybersecurity, and digital economy: $2.8 million to MCM, LEG, and SPR for analytical and policy work. - Spending in these areas was estimated at $8 million in FY 19. - Climate change: $2.2 million in additional resources to increase expertise (RES, FAD, MCM, SPR). - Departmental spending expected to increase significantly, reaching around $12 million each year in FY 20 and FY 21. - 61 country teams have covered climate issues in FY 20. - Anti-corruption/governance: $1.9 million, mostly to SPR, LEG, FAD, and FIN. - Steady-state cost of implementing the enhanced governance framework estimated in FY 20 at around $6 million. - Fragile and conflict-affected states: $4½ million, mostly to AFR, APD, and MCD to support country operations. - About half these resources are provided on a transitional basis. - Spending on fragile states is estimated at $100 million per year, of which around half is CD delivery. ### FY 21 Budget by Thematic Categories (selected figures and changes) - Country operations: - Projected at $471 million in FY 20. - Will receive $13.9 million in additional resources. - New structural resources of $10½ million and transitional resources of $10 million will support enhanced engagement. - Analytical work, multilateral surveillance and Fund policies: - $253 million expected to be spent in FY 20. - Budget allocates another $8.3 million in these areas. - In gross terms, $17.7 million will fund additional work (fintech, digital currencies, cybersecurity, digital economy, Integrated Policy Framework, CSR implementation, FCS, debt sustainability, AML/CFT, gender, inequality, social protection, arrears, safeguards). - These gross demands are partly offset by $9½ million in savings from conclusion of major reviews (e.g., FSAP and PRGT eligibility). - Fund finances, governance, and internal support: - Projected at $452 million in FY 20 (Fund finances and governance component). - Will receive $18 million in net additional resources on top of the $452 million projected in FY 20. - $13.4 million go to Fund finances and governance (including IEO evaluations, third party risk management, copyright issues, revenue losses from making the Fund’s digital publications free of charge). - $16½ million will go to transitional needs to support ITD’s new service delivery model, change management, the new video wall, and revenue shortfalls in Concordia and parking fees collection. - Savings of $12 million (e.g., from completion of policy work on the CCBR) will offset some new spending demands. - Institutional needs: - $8 million in net structural savings are expected (from the CCBR, HR reorganization, holding travel budget flat in nominal terms, and other streamlining). - $5 million in transitional funding needs, mainly related to the shift to the new HR service delivery model. ### Resource management, contingency, and operational notes - Initial increased demands have been met through overtime and temporary reallocations; more sustained broad-based needs could require more forceful measures including larger delays of non-urgent work and potential calls for additional resources. - The budget includes contingency provisions; use of the Fund’s budget contingency and internal reallocations within and across departments will be the first responses to rising demand. - Work continues to ensure that risk mitigation efforts are appropriately coordinated and resourced, and that budget risks are fully recognized. *Italic source attribution: FY 2021-FY 2023 MEDIUM-TERM BUDGET (selected excerpts).* ### 27. The proposed shift in resources across outputs is mirrored in shifts in departmental ### ppea2020030 - 27. The proposed shift in resources across outputs is mirrored in shifts in departmental ### Departmental budget shifts and funding sources - On a structural basis, area and functional departments will see an increase, while support departments will remain flat. - The overall net structural increase for departments is funded from savings from streamlining HR service delivery, holding the travel budget constant in nominal terms, and other streamlining efforts. - Transitional resources will help departments meet short-term needs, including those arising from the transition to the new HR service delivery model. - The impact of the HR reforms is shown as central savings. - The final FY 21-23 medium-term budget paper will show in detail how the savings from the HR reforms will translate into structural and temporary adjustments in individual departmental budgets. ### Key departmental allocations and priorities (high-level) - Area departments: - AFR will receive structural and transitional resources to support work on programs and FCS, including the upsizing of the RR post in Ethiopia. - APD will receive structural and transitional resources to finance intensified surveillance work and to support work on climate change and fragile and small states. - EUR will continue structural consolidation with transitional resources; savings will accrue from the closure of the RR post in Greece. - MCD will receive resources for increased engagement with vulnerable countries and analytical work, and field-based resources for CCAM and a local coordinator in Morocco to support preparation of the 2021 Annual Meetings. - WHD will receive structural resources for RR posts previously funded on a transitional basis, and transitional funding for intensified surveillance and program work. - Non-CD functional departments: - FIN will receive a small amount in transitional resources for the safeguards review and non-capital IT development on mandated policy; FIN plans significant internal reallocation. - RES will receive structural resources to regularize financing for the Common Surveillance Database team and the Structural Reforms Unit, and transitional resources to support work on climate change. - SPR will receive structural and transitional resources to support work on climate change, FCS, CSR, IPF, the Integrated Digital Workplace, and the G20 presidencies. - COM will provide net savings from modernizing publications and moving to free digital publications and will receive transitional resources for a secondment from the World Bank. - Functional CD departments: - FAD will receive transitional resources mainly for work on climate change, the Sustainable Development Goals, and enhanced governance framework. - ICD will receive transitional resources to lead the CDMAP Project. - LEG will receive structural and transitional resources for work on the enhanced governance framework and on fintech. - MCM will receive significant structural and transitional resources, including for financial surveillance/FSAPs, cybersecurity, fintech (including digital currencies), the IPF, and the Monetary Policy Modelling Unit. - STA will receive a small amount in transitional resources to support the iDATA project and will initially fund work on climate change through internal reallocation. - Support departments (excluding HRD): - CSF will receive transitional resources for the new third-party risk management framework, enhanced capabilities in the Global Security Operations Center (GSOC), copyright issues, revenue shortfalls in Concordia and parking fees, and work on the Fund’s climate footprint. - ITD will receive transitional resources to move towards an improved service delivery model based on managed-service providers; this will generate savings over time and help contain overall IT spending and direct it to key priorities. - HRD: - HRD will receive significant structural budget increase, reflecting the move of all HR functions from departments to HRD. - The structural budgetary impact of this reform on each department, as well as resource needs during the transition to the new model, are reflected in Tables 3 and 4. ### Table 3 — Budget Adjustments by Departments, FY 20-21 (selected figures, Millions of FY 20 U.S. dollars) - Total departments, offices, and other: - FY 20 Approved Budget: 1,158.4 - FY 20 Transitional Funds: 25.8 - New Structural Spending: 36.0 - Structural Savings & Reallocations: 28.1 - Net Structural Increase (+): 7.9 - Transitional Resources: 32.8 - Area total: - FY 20 Approved Budget: 303.3 - FY 20 Transitional Funds: 7.2 - New Structural Spending: 7.4 - Structural Savings & Reallocations: 5.1 - Net Structural Increase (+): 2.2 - Transitional Resources: 8.3 - Functional Non-CD total: - FY 20 Approved Budget: 163.0 - FY 20 Transitional Funds: 4.0 - New Structural Spending: 13.7 - Structural Savings & Reallocations: 12.0 - Net Structural Increase (+): 1.7 - Transitional Resources: 4.1 - Functional CD total: - FY 20 Approved Budget: 260.3 - FY 20 Transitional Funds: 4.8 - New Structural Spending: 5.5 - Structural Savings & Reallocations: 2.8 - Net Structural Increase (+): 2.7 - Transitional Resources: 4.9 - Support total: - FY 20 Approved Budget: 280.2 - FY 20 Transitional Funds: 8.8 - New Structural Spending: 4.9 - Structural Savings & Reallocations: 4.7 - Net Structural Increase (+): 0.3 - Transitional Resources: 10.6 - HR/HR reorganization and CCBR (memorandum line): - New Structural Spending: 7.7 - Structural Savings & Reallocations: 11.9 - Net Structural Increase (+): (4.2) - Transitional Resources: 4.7 - Central Savings (est.) line: 3.7 and (3.7) - Grand Total: - FY 20 Approved Budget: 1,158.4 - FY 20 Transitional Funds: 25.8 - New Structural Spending: 43.7 - Structural Savings & Reallocations: 43.7 - Net Structural Increase (+): (0.0) - Transitional Resources: 37.5 - Memorandum items — Estimated available carry forward and other: 55.5 - of which Staff Departments & Center: 32.3 - OED: 15.1 - IEO: 0.3 (Note: Table 3 source: Office of Budget and Planning. Footnotes retained in source but not reproduced in full here.) ### Table 4 — FTE Changes by Departments, FY 20-21 (selected figures, FTEs) - Total: - FY 20 Approved Budget: 2,877.9 - Transitional Approved: 20.5 - Impact - New HR Model: (25.7) - Total FY 20: 2,872.7 - FY 21 Proposed: 43.6 (Transitional) and 66.1 (Proposed total change) - Area total: - FY 20 Approved Budget: 788.5 - Transitional Approved: 5.0 - Impact - New HR Model: (14.2) - Total FY 20: 779.3 - FY 21 Proposed: 17.7 (Transitional) and 19.5 (Proposed total change) - Functional Non-CD total: - FY 20 Approved Budget: 502.0 - Transitional Approved: 7.7 - Impact - New HR Model: (11.2) - Total FY 20: 498.5 - FY 21 Proposed: 10.2 (Transitional) and 12.6 (Proposed total change) - Functional CD total: - FY 20 Approved Budget: 728.4 - Transitional Approved: 8.8 - Impact - New HR Model: (12.0) - Total FY 20: 725.2 - FY 21 Proposed: 8.2 (Transitional) and 11.0 (Proposed total change) - Support total: - FY 20 Approved Budget: 516.3 - Transitional Approved: 1.0 - Impact - New HR Model: 12.3 - Total FY 20: 529.5 - FY 21 Proposed: 6.5 (Transitional) and 21.8 (Proposed total change) - HRD specific: - FY 20 Approved Budget: 91.0 - Impact - New HR Model: 19.0 - Total FY 20: 110.0 - FY 21 Proposed: 6.0 (Transitional) and 20.3 (Proposed total change) - Grand totals: - Fund-financed Total FY 20 Approved Budget: 2,877.9; Total FY 20: 2,872.7; FY 21 Proposed: 43.6 and 66.1 - Donor financed: 91.2 (FY 20) and 93.0 (Total FY 20) - Grand Total FY 20 Approved Budget: 2,969.1; Total FY 20: 2,965.7; FY 21 Proposed: 43.6 and 66.1 (Footnotes in Table 4: Includes 26 transitional FTEs to bridge departments to the new HR structure. Reflecting HRD reorganization (gross FTE savings of 40 offset by 19 increase in the new HRD structure) and other savings derived from the 1HR project (FIN (1) and ITD (3.5)).) ### Capital Investment Framework (CIF) revisions and FY 21 capital budget - CIF revisions (key elements): - Appropriation of annual capital needs rather than the total estimated costs of a project, while maintaining the 3-year lapsing rule. Information on total project costs and the medium-term capital plan would still be submitted alongside the budget request. - Codifying practice of seeking Board endorsement for large, transformational projects prior to implementation, requiring ex-ante project justification, including a business case and cost-benefit analysis (CBA), with follow-up engagement as needed. - All other projects will be presented to the Board for approval as part of a portfolio during the annual budget process with improved reporting on numbers and types of projects and total estimated project costs. - Other revisions clarify roles and responsibilities, refine capital project taxonomy, strengthen the investment decision-making process and integrate risk and change management into project governance. - Table 5 — Medium-term Capital Budget, FY 20-23 (Millions of U.S. Dollars) — selected figures - FY 20 Approved/Projected in FY 20-22 MTB: 85.8 (Approved) and 96.0 (Projected in FY 20-22 MTB) - FY 21 Proposal (Total): 98.7 - FY 22 Projection: 87.9 - FY 23 Projection: 91.9 - Facilities (FY 21 proposed appropriation): - Proposed FY 21 appropriation for facilities capital: $42.4 million (FY 21 Proposal column). - Lifecycle replacements and repairs (FY 21 Proposal): 32.5 - HQ1 furniture in FY 21 Proposal: 13.6 (of which HQ1 furniture identified as $14 million in narrative) - Audio-Visual life-cycle replacements in FY 21 Proposal: 6.5 - HQ1 replacements (air conditioning chillers and electrical substations) cost mentioned in narrative as part of $32 million for end-of-life systems. - New Investments (Facilities) FY 21 Proposal: 0.7 - FY 21 Facilities narrative breakdown: - $32 million, including to update furniture in HQ1 ($14 million), audio-visual life-cycle replacements ($6 million), and the start of a cycle of replacement of aging HQ1 building equipment and systems ($11 million). - $11 million for smaller projects, including office renovations, staff moves, contingency funds, and the establishment of a planning reserve for the facilities portfolio of projects. - A previously planned bollards project assessed as no longer needed; current barriers provide adequate protection in line with U.S. Government standards and the Fund’s security objectives. - HQ1 Renewal: - Substantially completed in September 2019. - Construction completed six months ahead of schedule and within budget with projected expenditures through April 2019 of $548 million against a budget of $563 million. - Important project close-out and transition activities remain; lessons learned have been documented. - IT Capital (FY 21): - Proposed IT capital budget appropriation for FY 21: $56.3 million. - This is $10 million more than last year’s estimate for FY 21. - Most of the budget will fund continued work on modernization projects and other critical systems development and upgrades, such as the Fund’s system for member lending activities which has reached end-of-life. - Remaining proposed funding will provide resources for information security, and normal lifecycle replacements for IT infrastructure. - Table 5 IT line items (selected figures, FY 20-FY 23): - Information Technology Approved FY 20: 45.0 - FY 21 Proposal: 56.3 - FY 22 Projection: 52.4 - FY 23 Projection: 53.6 - Key Modernization Projects (and pre-reqs) FY 21 Proposal: 31.1 - New Investments (IT) FY 21 Proposal: 15.4 - Information Security FY 21 Proposal: 7.8 - Infrastructure end-of-life FY 21 Proposal: 9.9 *Source: Office of Budget and Planning (content unit: ppea2020030 - 27).* ### 39. The large modernization projects will account for roughly $31 million (Box 7, Table 6). ### ppea2020030 - 39. The large modernization projects will account for roughly $31 million (Box 7, Table 6). ### Overview of key modernization projects and status - Large modernization projects will account for roughly $31 million (Box 7, Table 6). - Project stages: - 1HR and CDMAP are in the implementation phase. - KM (knowledge management), which draws together a collection of targeted projects that will support the IDW, is starting work on its final and largest element (replacement of the document management system). - IDW (Integrated Digital Workplace) and iDATA are conducting scoping and design work. - Total estimated costs (where available), budget approvals to-date and expected spending through year-end are shown in Table 6. ### Box 7 — Key Modernization Projects (descriptions and objectives) - The Fund’s modernization agenda aims to upgrade internal operations to be more nimble and agile in the face of rapid geopolitical, technological, and demographic shifts, and evolving member demands. - Key transformation programs: - 1HR: modernize, simplify, and transform delivery of HR services via streamlined business practices, best in class cloud software, and enhanced controls (e.g., HR Strategy and CCBR). - CDMAP: transform Capacity Development operations; address process and systems weaknesses; support integration with surveillance and lending in line with the CD strategy. - IDW: provide a modern user interface to improve staff access to knowledge, applications, and platforms; address fragmented content, information silos, and obsolete technology. - KM: provide a framework for capturing, storing and sharing knowledge; includes a new document management system, enterprise search systems, and content classification work. - iDATA: deliver a modern economic data lifecycle management platform to mitigate operational risks from the Fund’s aging data management platform and support multilateral surveillance and research. - Programs aim to redesign and streamline work processes to take advantage of automation and productivity enhancements. ### Governance, approvals, and implementation timing - Governance allows for significant Board oversight. - 1HR and CDMAP presented business cases and cost benefit analyses (CBAs) to their Steering Committees, the CBIT, and the Board as a requirement for implementation. - KM capital projects replace aging infrastructure (enterprise search and document management), provide an innovative tagging tool, and have upgraded KE country pages. All projects except Document Management are under implementation. - Document Management project has a robust business case and financial plan that underwent CBIT review; direct capturable savings have not been assigned to the project but will be integrated into the IDW project. Target: start implementation at the end of Q1 2020. - IDW and iDATA are scheduled to submit proposals during FY 21; FY 21 funding will be conditional on development and presentation of a business case and CBA. - Historical CBAs: - 1HR presented CBA in July 2019 as part of an informal Board briefing. - CDMAP presented its CBA in October 2019. - KM strategy and updates were presented to the Board on March 16, 2018 and May 15, 2019. ### Table 6 — Estimated IT Capital Needs for Key Modernization Projects (key figures as presented) - Key Modernization + Prerequisites / Key Modernization / FY 20 / Total Estimated Project Cost / Additional Projected Needs 2/ / Prerequisites projects 3/ (values listed as in source) - Aggregate and project-level figures (as presented in the source): - 121.1 - 71.0 - 52.9 - 18.1 - 31.1 - 19.0 - 105.7 - 58.4 - 43.8 - 14.6 - 28.3 - 19.0 - By project (values listed in the source in the sequence shown): - 1HR: 44.1, 37.7, 25.1, 12.6, 6.5, - - CDMAP: 18.9, 7.4, 6.6, 0.8, 9.0, 2.5 - Knowledge Management: 24.1, 7.7, 6.7, 1.0, 7.9, 8.5 - iData: 13.7, 1.7, 1.6, 0.1, 4.0, 8.0 - Integrated Digital Workplace 1/: 4.8, 3.8, 3.8, 0.0, 1.0, - - Additional line items shown: 15.4, 12.6, 9.1, 3.5, 2.8, - - Notes (as in source): - Totals may not add due to rounding. - 1/ IDW figures represent the scoping and design work. Project is still in early stages and estimates of total cost and projected needs are not yet available. - 2/ Additional projected needs for FY 22-23 do not include projections for IDW which is still in scoping and design phase. - 3/ Includes the Identity and Access Management system, Corporate Data Warehouse and cloud development platforms which support the modernization projects. - Source for Table 6: IT Project Management Office ### Information security and IT infrastructure funding - If IDW and iDATA get approval to begin implementation work in FY 21 as scheduled and resequencing/adjusting existing budget space is not possible, a supplemental capital appropriation may be sought. - Information security projects total cost: almost $16 million, with about $8 million falling in FY 21. - Security-related projects requesting new or additional funds in FY 21 include replacement and upgrade of the security events logging and monitoring system, cloud migration of the offsite business continuity center and other application controls (Box 8). - IT infrastructure end-of-life replacements total $10 million for FY 21. - Funding will upgrade remote office infrastructure, network equipment, servers and storage capacity, mobile devices and a portion of personal computers in FY 21. - Medium-term needs are estimated to remain at this level, mainly due to the personal computer refresh schedule. - This aligns with the long-term plan for IT infrastructure (Appendix IX). ### Box 8 — Information Security and the Medium-term Budget (key points and numbers) - Administrative budget resources devoted to Information Security in FY 20: approximately $10 million. - These resources fund Information Security Group activities and operational information security services (detailed list in source). - Capital budget request for FY 21: $8 million. - Capital investments have averaged about $4 million a year since FY 16. - Information security projects in progress or proposed are estimated to result in an administrative budget impact in the range of $4-5 million. - An increase of this size, and resulting administrative impacts from other capital investments, will require careful planning under a flat budget constraint. ### Medium-term budget prospects and savings from modernization - The Fund will need to reassess resourcing as the full impact of the Covid-19 crisis is better understood; new demands will need to be addressed while seeking efficiencies and reallocation to fund new priorities. - Some activities currently funded through transitional resources in the FY 21 budget may need to become structural in future years (example: new field offices). - Certain new initiatives in the FY 21 budget, such as work on climate change, may need to be ramped up further in coming years. - Savings from modernization projects will create some budget space: - CCBR savings are projected to accrue over time from rationalization of some benefits and human resource process efficiencies. - Adjustment of the grossing-up formula for the staff retirement plan discussed by the Board is expected to generate savings due to lower income tax rates underlying the new formula. - As savings materialize, part can be used to bolster competitiveness (targeted recruitment measures, higher salary increases at promotion, increased funding for training). - Cost-benefit analysis for 1HR and CDMAP envisage savings of about $10 million (compared to earlier preliminary estimates of about $12 million; difference due to final realized savings for 1HR). - Other modernization projects have yet to develop CBAs and could generate further savings over the medium-term. - With full budget utilization and continued elevated transitional needs, it is increasingly likely some existing carry forward will be used to finance transition costs of large modernization projects and other short-term crisis response measures. - A key consideration is protecting against full utilization of carry forward in a single year to avoid sharp rebasing of expenditures. ### Risks to the budget — summary of key risks and potential impacts - Covid-19 outbreak has sharply increased budget risks; with virtually full budget utilization and increased upfront allocation of carry forward, budgetary buffers have been reduced. - Staff identified key budget risks (Figure 10 and Box 9): - Covid-19: rapidly evolving; OBP will work closely with departments for regular review and monitoring of budget needs. - Unanticipated large and sustained demands for Fund programs: - Internal risk assessments provided illustrative estimates of additional resources potentially needed ranging from $9 to $23 million annually under downside scenarios. - Likelihood of such scenarios was assessed as low prior to Covid-19 but is now higher; scenarios beyond the upper boundary cannot be ruled out. - Information security risks: - A breach would trigger investigation and remediation costs with a moderate budgetary impact. - The Fund’s Information Security Roadmap aims to reduce risk profile; investment needs will be periodically reassessed. - Delays or not realizing efficiency gains in modernization projects: - CBA for 1HR and CDMAP envisage savings of about $10 million (earlier preliminary estimate about $12 million). - Project delays could have a moderate impact due to staff resources involved; envisaged savings may not be realized in full. - Mitigations include rigorous planning, oversight from the Project Management Office and Steering Committees, and a dedicated Change Management function. - Donor-financed activities: - Improved management has reduced risks; staff considers donor-financing risks to be low. - A sustained low-travel environment due to Covid-19 could reduce delivery of externally financed CD depending on virtual delivery feasibility, potentially impacting the Fund’s budget and services. - Risk classification and mitigation (Box 9): - Minor Risks (<$3 million): Departments reallocate internally; draw on Fund-wide contingency as second line. - Moderate Risks ($3–10 million): Internal reallocation, contingency, and some interdepartmental reallocations; identify under spending for reallocation. - Major Risks ($10–32 million): Internal tradeoffs and departments deliver 2 percent of identified contingency measures for reallocation; seek additional departmental measures. - Critical Risks (>$32 million): Would require a request to the Board for increased budgetary resources if other management efforts are insufficient. *Source: FY 2021-FY 2023 MEDIUM-TERM BUDGET (sections excerpted from the supplied PDF content).* ### 47. There are other risk factors that, while present, are considered to have either low ### There are other risk factors that, while present, are considered to have either low probability or a very limited impact. ### Risk factors assessed as low probability or limited impact - Price factors: impact of oil prices on travel costs and increases in subscription prices on commercial data costs are deemed to have a more minor impact and have been excluded from the impact/likelihood chart. - Risks to the Fund’s income position: - Within the medium-term budget horizon, a significant reduction to the Fund’s income exerting pressure on the institution’s administrative budget is considered improbable. - In a lower-for-longer environment, and assuming non-repayment by large debtors and/or limited uptake of new GRA programs, pressures could arise. - These risks are carefully monitored; a conservative approach to projecting income mitigates these risks and can provide lead time to implement offsetting measures. - Risks arising from the Fund’s compensation mechanism: - The CCBR has adopted the U.S. CPI as the Fund’s external deflator. - If wage increases in comparator markets exceed the deflator and the space from wage erosion, this would imply real cuts in non-personnel spending (see Appendix II). - Funding modalities would be discussed by the Board as part of the budget proposal, consistent with the new compensation framework. ### FY 21–23 budget process enhancements and risk-based tools - Tracking of funding for key risk mitigation efforts: - Beginning in FY 21, OBP collated funding requests submitted by departments related to risk mitigation identified in internal risk assessments. - Incremental funding in the coming year includes work on Core Risk Areas, Key Modernization Projects, improvements to Third Party Risk Management, and capturing benefits of modernization projects. - Risk-based assessment of country needs: - Efforts continue to incorporate country-level risk assessments into budget planning, particularly a country’s vulnerability and potential impact on Fund engagement. - Improvements to the Capital Investment Framework: - Appendix VIII proposes an enhanced capital investment framework to strengthen management of associated risks, including those related to systems modernization. ### Risk Preparedness Matrix (FY 21) — selected drivers, impacts, and mitigations - Unforeseen large demand for Fund programs and other services: - Driver: Staffing inadequate for new level of country engagement. - Impact: Budget and work pressures increase to meet membership needs. - Mitigation: Initial response—internal reallocation, increased overtime; secondary response—use of contingencies; last resort—increased funding. Some donor funding for Capacity Development may be discontinued. Overall risk: low likelihood, low impact. - Rollover risk for donor financing: - Driver: Some portion of donor funding for Capacity Development discontinued. - Impact: Pressures on CD delivery in short-term, difficulty prioritizing. - Mitigation: Planning of fundraising activities and alignment with Fund priorities via the CCB; absorb costs via reallocation; adjust CD delivery over medium term. - Modernization projects do not yield efficiencies or take longer than expected: - Driver: Fund has insufficient capacity for change management. - Impact: Resources diverted to implement major projects; lack of realized savings constrains core services. - Mitigation: Robust project management and governance; establishment of a Change Management unit; ongoing monitoring of business cases and implementation timelines by a corporate Project Management Office. ### Summary proposal and key FY 21 budget figures - Net administrative budget (total): US$1,186.2 million - Of which up to US$74.7 million may be used for the Offices of Executive Directors (OED). - Of which up to US$6.7 million may be used for the Independent Evaluation Office (IEO). - Of which up to US$1,104.7 million may be used for other administrative expenditures of the Fund. - Carry forward authorized (amounts from FY 20 to FY 21): - Total carry forward (upper limit): US$47.7 million - OED: US$15.1 million - IEO: US$0.3 million - Other administrative expenditures: US$32.3 million - Limit on gross administrative expenditures, FY 21: - Total: US$1,476.6 million - OED sub limit: US$91.2 million - IEO sub limit: US$7.0 million - Other administrative expenditures sub limit: US$1,378.4 million - Capital budget appropriations for Financial Year 2021: - Total: US$98.7 million - Information Technology: US$56.3 million - Building Facilities: US$42.4 million - Carry forward upper-limit ratios (caps): - Staff: 3.0 percent - OED: 20.0 percent - IEO: 5.0 percent ### Appendix I — Key budget concepts and operational rules - Financial year (t): May 1(t-1) to April 30(t) - Example: FY 21 = May 1, 2020 to April 30, 2021 - Administrative budget identity: - Gross (total spending envelope) - Receipts (donor funding + revenue) = Net (spending that needs funding) - Total Available Resources = Net + Carry Forward - Carry forward (CF) rules: - The amount that can be carried forward is capped at 3 percent of the net administrative budget for staff, 5 percent for IEO, and 20 percent for OED. - CFt = min(Ut, x Bt) where Ut = underspend in current FY (Bt + CFt-1 – Et), Bt = net administrative budget in current FY, CFt-1 = carry forward from previous FY, Et = net expenditures in current FY, x = ratio limit of CF. - Capital budget: - Used to finance investments in information technology and building improvements and repairs. - Capital budgets are available for a period of three years, after which unspent appropriations lapse. - A project qualifies for capital budget if it is for acquisition of building or IT equipment; construction, major renovation, or repairs; or major IT software development or infrastructure projects. ### Appendix II — Revision of the Global External Deflator (GED) - GED is modified under the CCBR to equal the projected U.S. CPI inflation as published in the most recent World Economic Outlook (WEO). - Previously, GED weighted structural salary increase (70 percent) and projected U.S. CPI (30 percent); the CPI will now have a much bigger impact on the nominal budget than historically. - Operational rule: staff will utilize the U.S. CPI inflation forecast underlying the January WEO Update (instead of the April WEO figure) as the operational deflator for the Fund’s budget process going forward. - Staff will report in the annual budget outturn paper the inflation forecast errors from previous budgets and their cumulative impact, if any, on the budget envelope. ### Appendix III — Projected FY 20 outturn and spending patterns (high-level) - End-February projections assumed the FY 20 structural budget was fully utilized, with the carry forward intact and available for FY 21 transitional needs; this assumption is subject to significant uncertainty given evolving circumstances related to the Covid-19 outbreak impact on spending. - Budget utilization has steadily improved, supported by increased upfront allocation of carry-forward resources. - Spending by activity (selected projected outturns, FY 20): - Total (Projected Outturn): 1,191 (millions of FY 20 U.S. dollars) - Analytical Work: 100 - Multilateral surveillance: 71 - Country operations: 471 - Internal support: 307 - Miscellaneous: 15 - Spending by inputs (Table 2 highlights, FY 20 projected outturns in millions of U.S. dollars): - Gross expenditures (Total): 1,397 - Personnel (Total): 1,025 - Travel (Total): 134 - Annual Meetings component: 6 - Buildings and other expenses (Total): 224 - Receipts: -239 - Net expenditures (Total): 1,158 - Carry forward from previous year (Memorandum): 47 - Vacancies and personnel: - Departments are projected to end FY 21 with an average vacancy rate of zero percent and some usage of transitional positions; vacancies vary by department type with area and functional departments projected to slightly exceed approved structural FTEs, CD departments close to structural levels, and support departments below structural levels. *Source: FY 2021–FY 2023 MEDIUM-TERM BUDGET (selected sections).* ### 5. Better budget utilization and increased resources have contributed to improvements ### 5. Better budget utilization and increased resources have contributed to improvements in workload indicators ### Overtime and workload indicators - Fund-wide quarterly moving average overtime rate for staff declines to 10.2 percent, with the median rate trending significantly lower than average rates. - Fund-wide average uncompensated overtime rate (staff and contractuals) dropped to 10.2 percent in the first nine months of FY 20 relative to same period last year. - Data sources: TRACES and HRPROD. - Note: Data excludes regional offices. Expressed as a percentage of actual hours worked (i.e., regular hours minus leave). ### Travel - Utilization of the travel budget is projected to be about 85 percent, before considering the possible impact of travel restrictions due to the Covid-19 outbreak. - Decline in travel volume (lower relative to last year and considering recent health-related concerns and travel restrictions) and departments’ travel management practices are contributing to lower travel spending. - Cost per mile for the first eight months of the year is about $0.38, similar to last year. - Airline contracts are being extended to retain current discounts with regional enhancements; changes expected to go into effect early FY 21. - The travel budget will again be held constant in nominal terms in FY 21. - FY 13–FY 20 Average cost per mile (U.S. dollars) series: 0.39, 0.41, 0.39, 0.37, 0.36, 0.37, 0.38, 0.38. - FY 20 cost per mile is based on the first eight months of data (May-December). - Indicator is based on international travel only. - FY 19 travel budget/outturn and FY 20 budget/proj. outturn table highlights (Fund-financed, millions of U.S. dollars): - Total: FY 19 Budget 87; Outturn 79. FY 20 Budget 81; Proj. Outturn 68. - Business 1/: FY 19 Budget 72; Outturn 65. FY 20 Budget 65; Proj. Outturn 54. - Seminars/Participants: FY 19 Budget 4; Outturn 4. FY 20 Budget 4; Proj. Outturn 3. - Settlement: FY 19 Budget 9; Outturn 8. FY 20 Budget 9; Proj. Outturn 9. - Miscellaneous travel: FY 19 Budget 2; Outturn 2. FY 20 Budget 2; Proj. Outturn 2. - Source: Office of Budget and Planning. - 1/ FY 19 budget includes $6 million for travel to the Annual Meetings in Indonesia. ### Buildings and other expenditures - Overall spending on buildings and other expenses is projected to be above the structural budget (Table 3). - Most categories (building occupancy, IT, communication and supplies) are projected around budgeted levels. - Spending on contractual services, subscriptions and printing, in aggregate, is similar to last year. - In FY 20 there was a structural shift in the treatment of commercial data subscriptions. - Table 3 (Building and Other Expenditures, FY 19–20; Fund-financed, millions of U.S. dollars) key figures: - Total: FY 19 Budget 205; Outturn 210. FY 20 Budget 208; Proj. Outturn 215. - Building occupancy: FY 19 Budget 63; Outturn 65. FY 20 Budget 65; Proj. Outturn 65. - Information technology: FY 19 Budget 69; Outturn 66. FY 20 Budget 70; Proj. Outturn 70. - Contractual services: FY 19 Budget 33; Outturn 35. FY 20 Budget 42; Proj. Outturn 36. - Subscriptions and printing: FY 19 Budget 20; Outturn 21. FY 20 Budget 14; Proj. Outturn 21. - Communications: FY 19 Budget 7; Outturn 7. FY 20 Budget 7; Proj. Outturn 8. - Supplies and equipment: FY 19 Budget 4; Outturn 6. FY 20 Budget 4; Proj. Outturn 5. - Other: FY 19 Budget 8; Outturn 11. FY 20 Budget 7; Proj. Outturn 10. - Note: Figures may not add to totals due to rounding. ### Security expenditures - Security spending is projected at about $38 million in FY 20, at a similar level in real terms as last year. - Decrease reflects mainly a change in recording of expenses (regular replacement cost of armored vehicles fleet now charged to the capital budget) and lower costs related to alterations to field offices and residences. - Offsetting decreases: increase in Headquarters (HQ) Security due to new guard contract agreement, new Emergency Response App (Everbridge) and filling vacancies in the security team. - IT security spending projected to increase by 5 percent, mainly for infrastructure vulnerability management support costs due to an increase in vulnerability incidents and tickets and mobile device support costs. - Spending on Business Continuity increased slightly due to a new business continuity tool (Fusion) launched in FY 20. - Security-related spending by component (Millions of FY 20 U.S. dollars), FY 18–FY 20 proj.: - HQ security: 16.0, 15.9, 16.9 (FY 18, FY 19, FY 20 proj.) - IT security 1/: 9.3, 9.8, 10.3 - Field security: 10.1, 10.2, 9.2 - Business continuity: 1.1, 1.1, 1.2 - Sources: Departmental submissions and staff calculations. - 1/ Starting FY 19, recalibration of IT security categories. ### Receipts - Receipts from externally financed capacity development activities and Fund-financed operations are expected to end the year near planned levels (Table 4). - Externally funded receipts projected to grow by about 4 percent (about $191 million) compared with FY 19, just below the target set at $200 million. - An overall shortfall in general receipts is projected mainly due to lower sales of publications, reflecting the change to digital and free data; the loss of revenue will be reflected in the FY 21 budget. - Parking revenue is still below but expected to pick up as parking spaces previously used for HQ1 Renewal construction storage become available. - Measures to increase revenue from the Concordia will be explored in FY 21 together with setting realistic revenue expectations. - Table 4 (Receipts, FY 19-20; Millions of U.S. dollars): - Total: FY 19 Budget 236.0; Outturn 214.7. FY 20 Budget 238.9; Proj. Outturn 225.1. - Externally financed capacity development (direct cost only): FY 19 Budget 196.3; Outturn 178.0. FY 20 Budget 200.0; Proj. Outturn 191.4. - General receipts: FY 19 Budget 39.7; Outturn 36.7. FY 20 Budget 38.9; Proj. Outturn 33.7. - Administrative and trust fund management fees 1/: FY 19 Budget 13.7; Outturn 12.2. FY 20 Budget 14.0; Proj. Outturn 13.4. - Publications income: FY 19 Budget 2.6; Outturn 1.7. FY 20 Budget 2.6; Proj. Outturn 0.5. - Fund-sponsored sharing agreements 2/: FY 19 Budget 3.7; Outturn 2.8. FY 20 Budget 3.8; Proj. Outturn 2.9. - HQ2 lease 3/: FY 19 Budget 2.2; Outturn 2.0. FY 20 Budget 1.3; Proj. Outturn 1.0. - Concordia: FY 19 Budget 3.7; Outturn 3.1. FY 20 Budget 3.7; Proj. Outturn 3.1. - Parking: FY 19 Budget 3.2; Outturn 2.5. FY 20 Budget 3.3; Proj. Outturn 2.9. - Note: Figures may not add to totals due to rounding. - 1/ Trust fund management fee of 7 percent under the new financing instrument. - 2/ Includes reimbursements principally provided by the World Bank for administrative services provided under sharing agreements. - 3/ Lease agreement with the World Bank expired. FY 20 includes Credit Union and retail tenants. ### Capital investments - Capital spending projections of $104 million are lower than last year, mainly due to completion of the HQ1 Renewal project in September 2019. - While HQ1 Renewal wound down, Facilities and IT spending increased from last year’s levels. - Projects supporting HQ1 Renewal completion (furniture replacement, tenant renovations, HQ1 atrium enhancements) contributed to increased facilities spending. - Table 5 (Capital Expenditures, FY 19-20 1/; Millions of U.S. dollars): - FY 19 Spending: Total 141. - Total Funds Available in FY 20: 196. - FY 20 Spending (Proj.): Total 104. - Facilities: FY 19 Spending 29; Total Funds Available in FY 20 89; FY 20 Spending (Proj.) 40. - Information Technology: FY 19 Spending 31; Total Funds Available in FY 20 68; FY 20 Spending (Proj.) 40. - HQ1 Renewal: FY 19 Spending 82; Total Funds Available in FY 20 39; FY 20 Spending (Proj.) 24. - Sources: Office of Budget and Planning, Corporate Services and Facilities, and Information Technology Departments. - 1/ Approved capital funding is available for three consecutive years, except for HQ1 Renewal which is available until April 2025. - Modernization activities are driving higher IT spending, with 1HR implementation in full swing, CDMAP design and configuration beginning, and prerequisite projects such as new Identity and Access Management system and Corporate Data Warehouse underway. - Per capital appropriations rules (funding available for three years), the unspent balance of approximately $92 million will carry into FY 21. - After projected spending of $104 million, remaining unspent appropriations from prior years are earmarked largely for the IT modernization agenda and assets replacements and upgrades. - Remaining funds in the HQ1 Renewal project primarily represent the last of the contingency reserve, to be kept for unforeseen closeout activities. ### Strategic budget information and reporting evolution - Reporting on budget planning and execution has become more detailed and output oriented over time; ACES costing model introduced in FY11 based on time reporting to allow reporting by outputs and on shifts between output categories. - Output hierarchy captures five main outputs: multilateral and bilateral surveillance, lending, capacity development, and oversight of global systems. - OBP has worked with SPR and KMU to develop taxonomies and the Fund’s Thematic Framework (FTF) to present the FY 20 budget and updated for FY 21. - OBP will continue to refine and broaden the strategic framework for budget reporting, including cross-sectional topics such as debt or climate change, and link to strengthened reporting on CD activities and budget risk identification. ### Implementation status of FY 19 streamlining and modernization measures - Surveillance: - Bilateral surveillance country teams adopting more focused and selective coverage; between FY 18 and FY 20 (May-December) the average number of chapters per Selected Issues Paper declined from 3.2 to 2.6, and average length from 50 to 39 pages. - Shift to digital-only versions and more strategic use of print. - Outreach: - Interdepartmental Outreach Strategy Group (OSG) formed, composed of Department Heads and chaired by COM, to smooth bunching of planned conferences and improve alignment with institutional goals. - Support functions: - Modernization projects addressing HR, CD administration, data and knowledge management, and accessibility of information. - Smaller projects on relocating, outsourcing, and/or automating processes. - Robotic process automation (RPA) piloted in FIN, ICD, and OBP, with current review to feed into ongoing efforts in other departments. - Governance: - Limited progress in streamlining the Board Work Program: target to reduce policy items to 50 (from peak of 71 in Fall 2017); Fall 2019 Board Work Program has 69 policy items. - Savings and investments: - Initial savings realized; substantial interim investments needed to reap further medium-term gains. - For FY 20, savings of $2.2 million expected from streamlined multilateral surveillance, publications, printing, and SIPs. - FY 21 budget reflects significant upfront investments in modernization in both staff resources and systems, affecting capital and administrative budgets. - Management endorsed a broad-based package in mid-2018 to implement more strategic practices, support targeted core work, and update support and back-office functions. ### Selected policy reviews and evaluations (CY 2018-19) — how resource implications have been addressed - AML/CFT Strategy: - Shift to fewer Fund-led assessments, increased staff participation in global review and training efforts. - FY 20-22 MTB allocated $0.3 million for follow-up to the review. - FY21-23 MTB proposes $0.6 million in support to LEG for work on Fund-supported programs, including on AML/CFT issues. - Enhanced Governance Framework: - Enhanced framework adopted. Assessment of resource implications to be carried in the context of the FY 20 MTB. - In FY 20, $2.4 million provided mainly to functional departments (see ¶20 for further details). - IMF Engagement on Social Spending: - Strengthen engagement. Guidance note to be completed by end 2020. Additional resource needs not expected to be significant beyond some set-up costs. - IEO Evaluation of Financial Surveillance: - Called for an increase in resources for financial surveillance. Some resource increases provided in FY 20 and FY 21; further changes to be discussed in CSR and FSAP reviews to be completed in FY 21. - IEO Evaluation of work on Fragile States: - Called for greater support to fragile states. See ¶20 for further funding and costing details. - Review of Facilities for Low Income Countries: - Implications of reforms on the self-sustained PRGT financing framework discussed. - Review of Conditionality: - Budgetary impact not expected to be significant in context of planned efforts to strengthen Fund lending and policies. - Capacity Development Strategy: - With limited scope for additional resources to support CD-related activities, efforts to strengthen Fund CD will likely need to be accommodated within the existing budget envelope. ### Selected elements of the FY 21 budget proposal by thematic categories (high-level) - Enhanced Engagement with Members — Country Operations (FY 20 Projected $471 million): - Net structural demands for country operations of $4 million. - New structural resources of $10½ million, including $3.8 million for priority topics (governance, financial surveillance/FSAPs, fragile states, and climate change); remainder for program engagement ($4½ million) and bilateral surveillance ($1.7 million), including resident representative offices and support from functional departments. - Revenue reduction of $0.4 million from prioritizing CD away from high-income countries. - Savings of $6½ million mainly from reprofiling field presence; partially offset by transitional resources for field presence. - Transitional needs of $10 million: - $3½ million for priority areas (mainly FCS and financial surveillance, climate change, anti-corruption/governance). - $2.9 million for bilateral surveillance (including systemic country work in EUR, MCD, WHD). - $2.4 million for activities in support of lending, including field presence (APD, EUR, MCD, WHD). - $0.9 milion for capacity development (CCAM center coordinator (MCD), Financial Sector Advisor in China (MCM), SDG costing implementation (FAD)). - Strengthen Analytical Work in Priority Areas (FY 20 Projected $253 million): - Net structural demands across categories is $2½ million. - Structural demands of $12 million: - $3 million for cyber-related areas (fintech, digital currencies, cybersecurity, digital economy issues) primarily in MCM, also LEG and SPR. - $3.8 million for work on debt, CSR (MAC DSA, follow up to CSR, arrears policy, safeguards, global financial stability net). - $5¼ million for AML/CFT, LIC matters, inequality and social protection. - Savings of $9 million from conclusion of reviews (FSAP and PRGT eligibility). - Transitional funding of $5.7 million: $2.3 million for priority areas (climate, cybersecurity); $3.4 million for IPF support ($0.8 million), G-20 presidencies support, gender, and World Bank collaboration. - Transitional Spending on Internal Modernization and Risk Management (Fund Finances, Governance, and Internal Support) (FY 20 Projected $452 million): - Net structural demands of $1.2 million. - Structural demands of $13.4 million: - Fund finances and governance: $1.1 million, including staff work related to IEO evaluations and Annual and Spring Meetings. - Risk mitigation: $1 million in structural resources for physical and information security, third-party risk management, and copyright issues. - IT Service Delivery Model: $3.2 million. - Other modernization: $3.6 million, mostly from structural loss in revenue of $2 million as digital publications are made free. - Other: ($4½ million) reflecting reallocations in FIN and reduction in revenue from the Joint Library sharing agreement ($0.6 million). - Savings of $12 million from yearly reallocations in FIN and modernization initiatives. - Transitional needs of $16.6 million: - $8.7 million to support ITD’s new service delivery model and legacy system until iData completion. - $1 million for staff supporting large transformation projects. - $1 million for risk mitigation (TPRM, security). - $2.7 million for other modernization including strengthened change management. - Other needs such as video wall content and shortfall in revenue from the Concordia and parking fees collection. - Institutional needs (Help fund Other Priorities): - Net structural savings of $8 million expected across corporate spending. - Structural resource needs arise from CCBR implementation, particularly the childcare allowance. - Savings from CCBR, HR reorganization, holding travel budget flat in nominal terms, and other streamlining efforts. - Transitional funding of $5.3 million, mostly related to shift to new HR service delivery model; $0.6 million for commercial data pricing increases; some transitional savings in FY 21 from staggered implementation of CCBR measures. *International Monetary Fund — FY 2021–FY 2023 Medium-Term Budget (excerpt).* ### Appendix VIII. Proposed Capital Investment Framework ### Appendix VIII. Proposed Capital Investment Framework ### Key elements for Board approval (Summary) - Annual capital budget will continue to be presented separately from the administrative budget. - On an annual basis, the Board will be called on to appropriate overall annual capital needs. To support this decision, the Board will be provided the following disaggregated information: - a) information on the key uses of the proposed appropriation, - b) the total estimated costs of projects included in the request, and - c) the overall medium-term capital plan. - Large transformational projects: - The capital budget will include project-by-project information, including any cost of upfront scoping work and, as soon as available, estimates of total costs. - The Board’s endorsement will be sought for large, transformational projects prior to implementation. - Staff will present ex-ante project justification, including a business case and cost-benefit analysis (CBA), and provide the Board with periodic progress updates thereafter. - Approval of annual spending needs may be sought in the budget paper prior to Board endorsement of the project justification, with use of the funds contingent on obtaining the endorsement. - For all other projects, the capital budget will be presented based on project portfolios and include information on the number and types of projects and total estimated portfolio costs. - Approved funding will remain available for use over a 3-year period, with reporting on the scale of available resources that have been used/remain available. - The proposed CIF clarifies roles and responsibilities, refines capital project taxonomy, strengthens investment decision-making, integrates risk and change management into project governance, and identifies areas for further process improvement. - OBP, ITD and CSF will collaborate on staff-level guidelines to support the updated Framework. ### Background and drivers of change - Capital investment landscape changes: - Scale of capital investment required to renovate HQ1; - Large-scale, interdependent investments to modernize key business processes and information systems to transform the way the Fund works; - Migration from on-premise software to cloud platforms with recurring subscription costs. - These changes prompted a strengthened CIF that draws together strategy, governance, budgeting, and operational practices, incorporating a focus on risk and change management. - Historical practices: - A separate budget for capital investments was established in 1986 with a multi-year framework framed in terms of projects. - In 2002, the Fund began presenting the full costs of projects for approval up front: “the total expected cost of a capital project when appropriation is first sought.” - Revised procedures in 2002 also stated that “all funds for an individual project not spent within three years will lapse.” - After 2007, the Board was asked to approve annual capital cost appropriations which continued to be available for use over a three-year period. ### Objectives of the updated CIF - Ensure capital investments are aligned with strategic priorities and yield benefits (maintaining asset condition and value, risk mitigation, cost reduction or avoidance, productivity gains, and adding strategic value). - Ensure roles and responsibilities are clear for each step of the investment lifecycle: identification, evaluation (including robust cost-benefit analysis), review, approval, execution and monitoring. - Ensure investment project costs and benefits are well understood and budgeted, including upfront capital and administrative ongoing running costs that need to be supported within the administrative budget constraints. - “Administrative budget impacts (both costs and savings) should be planned and agreed with affected departments before projects are approved.” - Ensure procedures for evaluation and review are clear: - Projects must submit business cases identifying project costs and benefits. - Investment projects are evaluated based on four explicit criteria: (i) strategic profile, (ii) financial costs and benefits, (iii) risk mitigation profile, and (iv) capacity to deliver. - The relative weight given to each criterion could differ based on project type (e.g., IT security risk reduction vs. productivity enhancement). - Ensure operations are agile, efficient and closely monitored: - PM functions provide oversight, guidance on risk and budget management, scope and change control, schedule tracking, dependency management and governance, monthly progress reporting and maintenance of a risk register. - Ensure risks are managed throughout the process: project-related risks are evaluated, mitigated and monitored. - Ensure change impact is addressed: engagement with the Change Management Unit (CMU) is standard part of transformational projects; project budgets should include adequate resources for change management activities. - CIF should continue to evolve to reflect industry trends (e.g., shift to cloud platforms, digitization of building systems, Internet of Things) and assess total cost of ownership. ### Roles and responsibilities (Box 1) - Executive Board: - Approves capital investment decisions as part of the annual budget process. - For Large Transformational Projects, reviews the business case and CBA before implementation costs are incurred following an initial scoping phase and receives periodic updates. - Management: - Reviews and approves the portfolio of projects recommended by investment governance committees, focusing on strategic alignment, overall cost and risk acceptance, and number, size, timing and sequencing of projects. - Final decision on project classification. - Project Sponsors: - CSF generally sponsors facilities-related projects; proposing department oversees IT projects through a named project sponsor. - Sponsors accountable for scoping, costing, implementation, benefits realization and savings. - Large transformational programs assisted by dedicated project managers and senior Program Steering Committees. - Committees: - Committee on Business and Technology (CBIT) reviews and recommends IT-related business projects. - Facilities Strategic Advisory Committee (FSAC) advises on and recommends facilities investments. - Program Steering Committees govern large transformational IT or major facilities programs and review major project milestones. - Project Management: - IT Program Management Office (PMO) provides oversight of IT capital portfolio, focusing on risk and budget management, scope and change control, and identification of interdependencies; coordinates annual capital proposal process and monitoring. - CSF Program Management Unit (PMU) manages facilities capital portfolio; CSF’s Resource Management Team manages entire Facilities capital portfolio from budget formulation through execution and reporting. - For major buildings investments, a dedicated temporary unit may be established for project management. - Office of Budget and Planning (OBP): - Prepares annual medium-term budget paper, consolidates capital budget submissions from ITD and CSF, advises management on overall portfolio. - Ensures net administrative budget impacts of proposed capital investments are vetted and included in administrative budget proposal. - Performs an independent review of CBAs for new transformational proposals prior to presentation to Committees; maintains CIF guidance and process documentation in consultation with CSF and ITD. - Office of Risk Management (ORM): - Involved in ex-ante enterprise risk assessment of significant initiatives; may participate as an observer on steering committees. - Office of Internal Audit (OIA): - Provides periodic assurance on CIF, governance mechanisms and internal control processes; participates as observers on transformational project steering committees. - Change Management Unit (CMU): - Works closely with project teams to communicate change impacts and help staff prepare; change management activities and resources included in project plans and cost estimates for transformative projects. ### Refining project classification - Proposed taxonomy: - Transformational IT projects and major building investments: - Require highest levels of governance, oversight and risk management. - Management considers criteria such as scale of resources required (typically more than $15 million), complexity and transformational aspects (level of changes to business practices and staff impact). - Business case and CBAs for these projects are reviewed individually by the Board prior to implementation, with periodic updates. - New investments in IT or facilities: - Driven by need to modernize, innovate, reduce risk, or add value (e.g., developing a new capability). - Considered for prioritization by CBIT or FSAC and, if agreed, included in the portfolio proposed in the budget process to the Board. - Maintenance, compliance, and life-cycle replacements: - Driven by compliance with rules/standards, audit recommendations and end-of-life or routine maintenance (e.g., furniture or PCs reaching end of useful life). - More predictable and typically non-discretionary. - Business case or justification relies on technical assessment of need (e.g., Facilities Conditions Assessment, engineering studies or independent expert input). - Approved as part of the portfolio proposed in the budget process to the Board. - Project classification process: - Recommended by the sponsor, cleared by the CIO/Director of CSF, and for transformational projects, approved by management. - Most replacement projects may bring new capabilities as technologies evolve; discretion required in application. - Relevant governance committees will be informed of the basis for categorization as part of approval process. ### Capital budget presentation to the Board - The Board will be presented with information on total estimated project costs and asked to approve next year’s spending needs. - Budget documentation will show total estimated costs (where available), amounts previously approved, spending to date, and any remaining spending needs requiring approval. - Distinction between total estimated capital costs and annual capital spending needs will be most pronounced for large, complex, multi-year projects. - Large, transformational projects may include estimated needs for the following year in the budget request, contingent on Board endorsement of the project justification (business case and CBA). - Project teams will continue to have three years to execute capital spending approved in the budget. - Total estimated capital cost may not be meaningful for maintenance, compliance and certain life-cycle replacement projects as these tend to be continuous in nature (e.g., rolling replacement of PCs and AV equipment) and will therefore not be shown; the presentation will indicate the nature of projects for which the total costs presentation is not relevant. *Source: Appendix VIII. Proposed Capital Investment Framework, ppea2020030 - Appendix VIII. Proposed Capital Investment Framework* ### 12. Total estimated capital costs are determined via a bottom-up approach each year with ### ppea2020030 - 12. Total estimated capital costs are determined via a bottom-up approach each year with ### Total estimated capital costs — methodology and presentation - Total estimated capital costs are determined via a bottom-up approach each year with a top-down check on the overall portfolio size and the institutional capacity to deliver. - Bottoms up estimates are based on the capital needs proposed through the CBIT and FSAC. - As part of the budget proposal each year, the estimates of total project cost will be presented: - for each portfolio category in aggregate; and - for the large transformational projects individually, with descriptive information about the number and types of projects being proposed. - The annual budget outturn reporting will provide information on execution. - The budget will show separately: - the estimated costs of new large transformational projects; and - updates to existing project cost estimates. - Estimating total cost of large transformation projects: - is complex and often involves some up-front spending to refine scope and likely costs; - initial costs can be funded through use of planning reserves or by segregating scoping and design work as the first phase of a project; - it is often difficult to establish cost estimates without the results of competitive bidding. ### Capital budget appropriations, envelope setting, and annual profiles - Capital budget appropriations will be proposed for Board approval based on the expected annual spending profile rather than full up-front appropriation of total project costs. - The envelope size and amounts are determined by management, in close coordination with OBP, CSF and ITD and take into account: - Sustainability, both in terms of the expected capital spend and the estimated ongoing impact on the administrative budget; - The decisions of the CBIT and FSAC, including their suggested ranking/sequencing for projects that are classified as new investments; - ITD, CSF and sponsoring departments’ capacity to deliver, historical execution trends, volume and timing of projects and human resources (i.e. project managers). - The proposed capital budget appropriation covers the upcoming year and includes projections for the outer years. - For large transformation projects: - total costs may be difficult to estimate with accuracy and may lead to significant volatility if fully appropriated up-front; - the budget will provide a transparent estimate of the total project cost as soon as a strong estimate is available and no later than the onset of implementation stage (following initial scoping); - budget appropriation will be sought for the project segment falling in the next budget year. - Appropriation of annual resource needs is used for: - new investments in IT and facilities; and - lifecycle replacements that follow an asset life-cycle replacement schedule. ### Administrative budget impacts and project approval - Administrative budget impacts of capital investments must be well documented and play a key role in project approval. - Capital investments require full review of the sustainability of overall budgetary impact over time. - The portfolio of projects should be assessed for its impact on the administrative budget, including: - near-term pressure on staff involved as subject matter experts or project leads; - running costs (e.g., subscriptions) to support the new investment; - capturable savings (including from more efficient IT and business processes); - other benefits. ### Measures to strengthen review of IT capital decisions and administrative impacts - Work is continuing to ensure robust review of the impact of capital decisions on the administrative budget, primarily on the IT side. Measures include: - (i) reviews of existing administrative budgets dedicated to supporting IT systems; - (ii) assessing and adjusting service levels and standards as part of vendor sourcing; - (iii) a comprehensive roadmap to rationalize the number of IT applications being supported to allow for decommissioning of old or underutilized systems; - (iv) improved costing methods for new capital investments and their administrative impacts, including use of 3rd party validation checks; and - (v) analysis of enterprise licensing costs for Fundwide software licenses (e.g., Microsoft and ServiceNow). - These measures will help provide budget space to accommodate the impact of new investments. - The move towards a new service delivery model on the IT side provides an opportunity to advance these approaches. - Separately, a plan to account appropriately for the increased administrative costs associated with cloud investments (“lease” versus “buy”) will also be needed. ### Project governance — calibrated by project classification (6-step process) - Identify - Lifecycle replacement projects identified through regular, independent reviews of building conditions and IT system replacement roadmaps informed by leading practices. - Demand for new capabilities arises from operations or business sponsors identifying new needs or degrading performance. - Evaluate - Project teams prepare business cases and evaluate projects using criteria including: - Business need and alignment with strategic guiding principles, including an ex ante assessment of the impact on the Fund’s Risk Profile; - Financials: CBA, return on investment, if applicable, and consideration of ongoing maintenance costs; - Risk assessment: (i) business continuity risk, (ii) obsolescence, (iii) staff impact or inconvenience, (iv) reputational risk; - Resources: adequacy of resources, project dependencies, and capacity to deliver. - Review and Prioritize - Project and resource management teams and, for IT, the Strategy and Architecture Review Board (SARB) review business cases for quality, completeness, and alignment with strategic principles. - Projects are selected and prioritized based on the evaluation criteria and added to the capital portfolio. - As part of the annual budget process, the Directors of CSF and ITD will propose the projects that make up the budget request for the following year. - The envelope size and amounts are determined by management, in close coordination with OBP, CSF and ITD. - Approve - FSAC and CBIT review and recommend a portfolio, with information on total project cost and the amount requested for the following year. - Committees prioritize maintenance, compliance, and life-cycle replacements projects to ensure these are not crowded out by new investments. - Committees consider capacity to deliver and administrative budget impacts. - The outcome of committee decisions is presented to Management for review and approval before being presented to the Board. - Implement - All approved projects are implemented following industry Project Management Life Cycle (PMLC) methodology, which prescribes monitoring and control processes for risks, change, schedule, budget and scope, and project status reporting. - Monitor and Report - Projects are monitored for progress against milestones, dependencies, unforeseen conditions, scope adjustments, stakeholder engagement and evolving risks. - Relevant committees (FSAC, CBIT) receive periodic reporting and are engaged for significant scope and/or budget changes. - OBP reports on the capital budget outturn (spending). - For large transformational projects, Management and the Board receive periodic reports from the relevant Project Sponsor and the PMO. ### Governance of Transformational IT projects (additional procedures) - Features established for Transformational IT investments include: - Each program has a Department Director as Program Sponsor accountable to the COA/DMD for program execution, and a dedicated project team led by an experienced senior staff member. - Program Sponsors present the CBA and finalized business case for Steering Committee (SC) approval before requesting CBIT approval for implementation funding. - Each program has a SC, composed of the Directors of those departments most impacted, the Chief Information Officer, and the Director of the Office of Budget and Planning. Steering Committees are responsible for major decisions related to the programs. - Support of a corporate PMO providing oversight and support to program managers. The PMO is responsible for project execution, reporting, facilitating governance, and managing risks and interdependencies and overlaps across initiatives. - Change management support provided by a dedicated Change Management Unit. - Separate engagement by staff with the Board on project justification (including business case and cost benefit analysis) and periodic updates for the Board, either through informal briefings or a periodic progress report from the PMO. ### Appendix IX — Long-term Capital Plans (LTP) - LTP components related to life-cycle replacements are subject to long-term planning and are reviewed and revised regularly. - Facilities long-term capital plan (LTP) - Covers replacement of equipment, critical building systems and renovations for HQ1, HQ2 and Concordia. - These projects are a subset of the overall facilities capital budget which also includes shorter-term facilities improvement projects. - The LTP is informed by third-party Facilities Condition Assessments (FCA) conducted every three to five years. - FCAs consider asset age and best practice assumptions on useful life to establish broad parameters for replacement costs. - As end-of-life milestones are reached, engineering and feasibility studies confirm actual condition and need to replace the asset. - The requested appropriation for a given year is based on actual needs, which may reflect acceleration or delay compared to assumptions in the LTP. - Updated projections for lifecycle replacements - Show a decline in the near-term followed by a spike in FY 25 in anticipation of HQ2 end of life replacements and updates. - The reduction in the near term compared to last year’s projections is related to: - lower cost estimates for HQ1 building systems (mainly cooling and electrical), - reclassification of a non-critical project to the improvements category (not subject to long-term planning), - spreading of windows replacement work over a longer period. - In FY 25 HQ2 will be 20 years old, when updates to building systems and finishes, which will have reached the standard life expectancy, will begin. - Higher occupancy during the HQ1 renewal has also impacted the condition of systems and furnishings. - IT infrastructure long term plan - Covers network equipment, servers, storage, and end-user devices. - Updated LTP indicates an overall reduction after the medium-term, mainly resulting from migrations to cloud platforms. - This trend is somewhat offset by higher costs for technologies that provide network security services. - The FY 21-23 MTB includes both a refresh of the remote office infrastructure and a personal computer (PC) refresh. - After FY 23, the plan reflects a rolling 5-year lifecycle replacement schedule for PCs and a reduction in remote office infrastructure related to cloud initiatives, leveling capital expenditures in the outer years. - Migration of applications and the business continuity center to the cloud has reduced server and storage expenditures, which reduces capital spend but may increase administrative budget in the form of higher annual licensing and subscription fees. - These administrative impacts are quantified in the context of the cost-benefit analyses of relevant capital projects. *Source: FY 2021–FY 2023 MEDIUM-TERM BUDGET (selected excerpts).* ### Appendix X. Statistical Tables ### Appendix X. Statistical Tables ### Administrative Budget, FY 12-20 (Table 1) - Personnel: FY 12 Budget 820; Outturn 799. FY 13 Budget 835; Outturn 802. FY 14 Budget 861; Outturn 829. FY 15 Budget 896; Outturn 862. FY 16 Budget 907; Outturn 896. FY 17 Budget 934; Outturn 922. FY 18 Budget 969; Outturn 962. FY 19 Budget 1,009; Outturn 995. FY 20 Budget 1,025; Proj. Outturn 1,035. - Travel: FY 12 Budget 112; Outturn 105. FY 13 Budget 125; Outturn 119. FY 14 Budget 123; Outturn 117. FY 15 Budget 128; Outturn 112. FY 16 Budget 130; Outturn 120. FY 17 Budget 123; Outturn 115. FY 18 Budget 126; Outturn 121. FY 19 Budget 135; Outturn 126. FY 20 Budget 134; Proj. Outturn 108. - Buildings and other expenditures: FY 12 Budget 181; Outturn 178. FY 13 Budget 181; Outturn 180. FY 14 Budget 190; Outturn 203. FY 15 Budget 193; Outturn 204. FY 16 Budget 200; Outturn 199. FY 17 Budget 205; Outturn 218. FY 18 Budget 209; Outturn 226. FY 19 Budget 215; Outturn 224. FY 20 Budget 224; Proj. Outturn 240. - Contingency 1/: FY 12 Budget 11; Outturn 0. FY 13 Budget 18; Outturn 0. FY 14 Budget 12; Outturn 0. FY 15 Budget 7; Outturn 0. FY 16 Budget 10; Outturn 0. FY 17 Budget 11; Outturn 0. FY 18 Budget 11; Outturn 0. FY 19 Budget 12; Outturn 0. FY 20 Budget 15; Proj. Outturn 0. - Total Gross Expenditures: FY 12 Budget 1,123; Outturn 1,082. FY 13 Budget 1,159; Outturn 1,102. FY 14 Budget 1,186; Outturn 1,149. FY 15 Budget 1,224; Outturn 1,177. FY 16 Budget 1,247; Outturn 1,215. FY 17 Budget 1,273; Outturn 1,255. FY 18 Budget 1,315; Outturn 1,309. FY 19 Budget 1,371; Outturn 1,346. FY 20 Budget 1,397; Proj. Outturn 1,383. - Less: Receipts: FY 12 Budget 138; Outturn 135. FY 13 Budget 161; Outturn 154. FY 14 Budget 179; Outturn 160. FY 15 Budget 197; Outturn 167. FY 16 Budget 196; Outturn 176. FY 17 Budget 200; Outturn 189. FY 18 Budget 211; Outturn 211. FY 19 Budget 236; Outturn 214. FY 20 Budget 239; Proj. Outturn 225. - Total Net Expenditures: FY 12 Budget 985; Outturn 947. FY 13 Budget 997; Outturn 948. FY 14 Budget 1,007; Outturn 988. FY 15 Budget 1,027; Outturn 1,010. FY 16 Budget 1,052; Outturn 1,038. FY 17 Budget 1,072; Outturn 1,066. FY 18 Budget 1,104; Outturn 1,099. FY 19 Budget 1,135; Outturn 1,131. FY 20 Budget 1,158; Proj. Outturn 1,158. - Memorandum item: Carry Forward: FY 12 34; FY 13 41; FY 14 42; FY 15 42; FY 16 42; FY 17 43; FY 18 44; FY 19 46; FY 20 47. ### Gross Administrative Expenditures: Travel, FY 12-20 (Table 2) - Expenditures (total travel): FY 12 Budget 112; Outturn 105. FY 13 Budget 125; Outturn 119. FY 14 Budget 123; Outturn 117. FY 15 Budget 128; Outturn 112. FY 16 Budget 130; Outturn 120. FY 17 Budget 123; Outturn 115. FY 18 Budget 126; Outturn 121. FY 19 Budget 135; Outturn 126. FY 20 Budget 134; Proj. Outturn 108. - Business travel: FY 12 Budget 87; Outturn 82. FY 13 Budget 98; Outturn 95. FY 14 Budget 94; Outturn 91. FY 15 Budget 100; Outturn 87. FY 16 Budget 104; Outturn 92. FY 17 Budget 98; Outturn 88. FY 18 Budget 99; Outturn 92. FY 19 Budget 111; Outturn 99. FY 20 Budget 107; Proj. Outturn 85. - Transportation (component shown in table): FY 12 Budget 87; Outturn 48. FY 13 Budget 98; Outturn 54. FY 14 Budget 94; Outturn 52. FY 15 Budget 100; Outturn 48. FY 16 Budget 104; Outturn 50. FY 17 Budget 98; Outturn 49. FY 18 Budget 99; Outturn 52. FY 19 Budget 111; Outturn 56. FY 20 Budget 107; Proj. Outturn 59. - Per diem: (rows include ellipses and figures) Outturn values include 34, 41, 39, 39, 42, 39, 40, 43, 26 across the sequence shown. - Seminars & other: FY 12 Budget 14; Outturn 11. FY 13 Budget 16; Outturn 13. FY 14 Budget 18; Outturn 14. FY 15 Budget 17; Outturn 15. FY 16 Budget 15; Outturn 17. FY 17 Budget 14; Outturn 15. FY 18 Budget 15; Outturn 18. FY 19 Budget 14; Outturn 18. FY 20 Budget 16; Proj. Outturn 13. - Other travel: FY 12 Budget 11; Outturn 11. FY 13 Budget 11; Outturn 11. FY 14 Budget 11; Outturn 11. FY 15 Budget 11; Outturn 10. FY 16 Budget 12; Outturn 11. FY 17 Budget 12; Outturn 11. FY 18 Budget 12; Outturn 11. FY 19 Budget 10; Outturn 10. FY 20 Budget 10; Proj. Outturn 10. - Note: Table footnote indicates inclusion of travel to the Annual Meetings in Tokyo ($6 million in FY 13), Lima ($5 million in FY 16), Bali ($6 million in FY 19). ### Gross Administrative Expenditures: Buildings and Other Expenditures, FY 12-20 (Table 3) - Buildings and other expenses (total): FY 12 Budget 181; Outturn 178. FY 13 Budget 181; Outturn 180. FY 14 Budget 190; Outturn 203. FY 15 Budget 193; Outturn 204. FY 16 Budget 200; Outturn 199. FY 17 Budget 205; Outturn 218. FY 18 Budget 209; Outturn 226. FY 19 Budget 215; Outturn 224. FY 20 Budget 224; Proj. Outturn 240. - Building occupancy: FY 12 57; FY 13 56; FY 14 57; FY 15 86; FY 16 60; FY 17 60; FY 18 59; FY 19 63; FY 20 68; additional sequence includes 67, 69, 70, 71 in table cells. - Information technology: FY 12 43; FY 13 46; FY 14 47; FY 15 47; FY 16 45; FY 17 45; FY 18 57; FY 19 60; FY 20 60; additional sequence includes 59, 61, 65, 69, 69, 66, 72, 71 in table cells. - Subscriptions and printing: FY 12 17; FY 13 17; FY 14 19; FY 15 18; FY 16 20; FY 17 20; FY 18 20; FY 19 19; FY 20 21; additional sequence includes 21, 22, 20, 21, 14, 21 in table cells. - Communications: FY 12 10; FY 13 9; FY 14 10; FY 15 9; FY 16 7; FY 17 8; FY 18 7; FY 19 8; FY 20 8; sequence shows repeated entries 8, 8, 8. - Supplies and equipment: FY 12 8; FY 13 9; FY 14 7; FY 15 8; FY 16 8; FY 17 6; FY 18 6; FY 19 4; FY 20 7; table shows 4, 6, 4, 7, 6, 4, 5 in sequence. - Miscellaneous 1/: FY 12 46; FY 13 41; FY 14 41; FY 15 41; FY 16 42; FY 17 46; FY 18 42; FY 19 47; FY 20 46; subsequent entries include 46, 46, 52, 53, 50, 52, 46, 55, 57, 62. - Footnote 1/: "Mainly for contractual services, for example, translation and interpretation services, external audit, as well as other consulting services on business practices and processes." ### Receipts, FY 12-20 (Table 4) - Receipts (total): FY 12 Budget 138; Outturn 135. FY 13 Budget 161; Outturn 154. FY 14 Budget 179; Outturn 160. FY 15 Budget 197; Outturn 167. FY 16 Budget 196; Outturn 176. FY 17 Budget 200; Outturn 189. FY 18 Budget 211; Outturn 211. FY 19 Budget 236; Outturn 214. FY 20 Budget 239; Proj. Outturn 225. - Externally-financed receipts: FY 12 107; FY 13 100; FY 14 127; FY 15 118; FY 16 138; FY 17 124; FY 18 154; FY 19 131; FY 20 157; Outturn values: FY 12 100; FY 13 127; FY 14 118; FY 15 142; FY 16 160; FY 17 153; FY 18 172; FY 19 174; FY 20 196; further outturns include 178, 200, 191 in the sequence shown. - General receipts 1/: FY 12 32; FY 13 36; FY 14 34; FY 15 36; FY 16 41; FY 17 36; FY 18 43; FY 19 37; FY 20 39; additional sequence includes 34, 40, 35, 39, 37, 40, 36, 39, 34. - Footnote 1/: "Includes Trust Fund Management Fees." ### Fund-financed Gross Administrative Spending Estimates by Output, FY 16-20 (Table 5a — indirect costs allocated; Table 5b — total gross; Table 5c — direct costs) - Table 5a (Fund-financed, indirect costs allocated): Total (Millions of FY 20 U.S. dollars) — FY 16 Estimated Resources 1,183; FY 16 Proj. Outturn 1,193; FY 17 Est. Resources 1,197; FY 17 Proj. Outturn 1,201; FY 18 Est. Resources 1,197; FY 18 Proj. Outturn 1,191; Percent of total across years shown as 100.0 consistently. - Selected outputs (Fund-financed, indirect): - Multilateral surveillance: FY 16 Est. 265; FY 16 Proj. Outturn 262; FY 17 Est. 273; FY 17 Proj. Outturn 260; FY 18 Est. 263; FY 18 Proj. Outturn 263; Percent shares e.g., 22.4, 21.9, 22.8, 22.0, 21.9, 22.1. - Global economic analysis: FY sequence includes 130,129,130,125,127,127 with percent shares around 11.0 to 10.6. - WEO: series includes 19,18,17,17,18,18 with percent shares ~1.6 to 1.5. - GFSR: series includes 16,16,17,14,15,15 with percent shares ~1.4 to 1.2. - Capacity development: FY sequence includes 222,224,242,247,236,239 with percent shares ~18.8 to 20.3. - Lending (incl. non-financial instruments): FY sequence includes 194,179,172,179,185,187 with percent shares ~16.4 to 15.0. - Other outputs and percent shares are reported in the table across FY 16–FY 20 (e.g., Oversight of global systems, Development of international financial architecture, Bilateral surveillance, Assessment of economic policies and risks, Article IV consultations, Technical assistance, Training, Miscellaneous). - Table 5b (Total Gross Administrative Spending Estimates, indirect costs allocated): Total — FY 16 Estimated Structural Resources 1,337; FY 16 Proj. Outturn 1,355; FY 17 Estimated Structural Resources 1,380; FY 17 Proj. Outturn 1,381; FY 18 Estimated Structural Resources 1,397; FY 18 Proj. Outturn 1,383; Percent of total shown as 100.0 in each column. - Multilateral surveillance: FY values 265,262,274,260,263,263 with percent shares ~19.8 to 18.8. - Capacity development (total gross): FY values 365,372,419,422,436,430 with percent shares ~27.3 to 31.2. - Lending (total gross): FY values 194,179,172,179,185,187 with percent shares ~14.5 to 13.2. - Support and Governance: FY values 389,397,422,432,407,418 with percent shares ~32.9 to 36.4. - Other outputs and percent shares are detailed in the table. - Table 5c (Fund-financed, direct costs): Total — FY 16 Estimated Structural Resources 1,183; FY 16 Proj. Outturn 1,193; FY 17 Estimated Structural Resources 1,197; FY 17 Proj. Outturn 1,201; FY 18 Estimated Structural Resources 1,197; FY 18 Proj. Outturn 1,191. - Multilateral surveillance (direct): FY values 176,174,179,172,176,174 with percent shares ~14.9 to 14.3. - Bilateral surveillance (direct): FY values 209,214,215,220,212,216 with percent shares ~17.6 to 18.0. - Capacity development (direct): FY values 143,143,145,144,145,146 with percent shares ~12.1 to 11.9. - Support and Governance (direct shown separately in Table 5c as 389,397,422,432,407,418). - Lending (direct): FY values 130,118,113,117,124,125 with percent shares ~11.0 to 9.4. - Notes across Tables 5a–5c: - Source: Office of Budget and Planning, Analytic Costing and Estimation System (ACES). - 1/ Support and governance costs are allocated to outputs (Tables 5a–5b) or shown as a separate item (Table 5c). - 2/ "Includes Post Program Monitoring (PPM), Policy Support Instruments (PSI), Staff Monitored Program (SMP), Near Programs, Ex-Post Assessments (EPA), Multilateral Debt Relief Initiative-I (MDRI-I), MDRI-II, Heavily Indebted Poor Countries (HIPC), Joint Staff Advisory Note (JSAN), Catastrophe Containment Relief Trust (CCRT), and trade integration mechanisms." - 3/ "The 'Miscellaneous' classification includes expenditures that currently cannot be properly allocated to specific outputs within the ACES model. Difference to FTC allocation represents mapping of direct departmental costs to IMF governance." - 4/ "Reconciliation to gross administrative expenditures as per the Fund's financial system." ### Capital Expenditures, FY 14-20 (Table 6) - Table structure: columns include Information Technology, HQ1 Renewal, Concordia Renovation, HQ2 Facilities, Total Capital. - FY 14: - New appropriations (6): 17.4; Total funds available (7) = (5)+(6): 29.8; 49.4; 0.0; 405.3; 9.3; Total 493.8. - Expenditures (8): 10.1; 36.6; 0.0; 92.2; 4.8; Total 143.8. - Lapsed funds 1/ (9): 0.5; 0.0; 0.0; 0.0; 3.9; Total 4.4. - Remaining funds 2/ (10) = (7)-(8)-(9): 19.2; 12.8; 0.0; 313.1; 0.6; Total 345.7. - FY 15: - New appropriations (11): 22.0; 29.8; 0.0; 0.6; 3/ Total 52.4. - Total funds available (12) = (10)+(11): 41.2; 42.6; 313.1; 0.6; Total 397.4. - Expenditures (13): 10.5; 29.3; 95.7; 0.3; Total 135.8. - Lapsed funds 1/ (14): 0.6; 0.3; 0.0; 0.3; Total 1.2. - Remaining funds 2/ (15) = (12)-(13)-(14): 30.1; 12.9; 217.4; 0.0; Total 260.4. - FY 16: - New appropriations (16): 14.4; 27.7; 132.0; 4/ Total 174.1. - Total funds available (17) = (15)+(16): 44.5; 40.6; 349.4; Total 434.5. - Expenditures (18): 14.6; 25.8; 90.1; Total 130.5. - Lapsed funds 1/ (19): 0.4; 0.1; 0.0; Total 0.6. - Remaining funds 2/ (20) = (17)-(18)-(19): 29.4; 14.7; 259.2; Total 303.4. - FY 17: - New appropriations (21): 32.5; 28.0; 0.0; Total 60.5. - Total funds available (22) = (20)+(21): 62.0; 42.7; 259.2; Total 363.9. - Expenditures (23): 17.9; 27.9; 76.3; Total 122.1. - Lapsed funds 1/ (24): 5.4; 0.2; 0.0; Total 5.6. - Remaining funds 2/ (25) = (22)-(23)-(24): 38.7; 14.6; 182.9; Total 236.2. - FY 18: - New appropriations (26): 31.4; 35.0; 0.0; Total 66.4. - Total funds available (27) = (25)+(26): 70.1; 49.6; 182.9; Total 302.6. - Expenditures (28): 22.3; 31.4; 62.3; Total 116.0. - Lapsed funds 1/ (29): 0.3; 0.0; 0.0; Total 0.3. - Remaining funds (30) = (27)-(28)-(29): 47.4; 18.2; 120.6; Total 186.3. - FY 19: - New appropriations (31): 35.5; 35.9; 0.0; Total 71.4. - Total funds available (32) = (30)+(31): 82.8; 54.1; 120.6; Total 257.5. - Expenditures (33): 28.7; 30.9; 81.6; Total 141.2. - Lapsed funds 1/ (34): 5.9; 0.0; 0.0; Total 5.9. - Remaining funds (35) = (27)-(28)-(29): 48.1; 23.2; 39.0; Total 110.4. - FY 20: - New appropriations (36): 40.8; 45.0; 0.0; Total 85.8. - Total funds available (37) = (35)+(36): 88.9; 68.2; 39.0; Total 196.2. - Expenditures (Est.) (38): 40.3; 40.0; 23.8; Total 104.1. - Remaining funds (Est.) 2/ (39) = (37)-(38): 48.6; 28.2; 15.2; Total 92.1. - Notes: - Sources: Office of Budget and Planning and Corporate Services and Facilities Department and Information Technology Department. - 4/ Additional appropriations were approved for the HQ1 Renewal Program during FY 16. - 3/ "Unspent Concordia funds appropriated in FY 12 expired at the end of FY 14 with the exception of $0.6 million that was specifically reappropriated for FY 15 to complete the remaining work under the project." - 1/ "Figures reflect funds that were not spent within the three-year appropriation period; e.g., FY 16 appropriated funds lapsed at the end of FY 18." - 2/ "Figures reflect the unspent amount of the budget appropriation in the period concerned. Those funds can be used for authorized projects in the period covered by the appropriation." *Prepared by the Office of Budget and Planning.* ### 1. Purpose: This supplement provides an update on developments since the mid- ### ppea2020030 - 1. Purpose: This supplement provides an update on developments since the mid- ### Purpose and near-term decision - The supplement updates developments since the mid-March issuance of the FY 2021–FY 2023 Medium-Term Budget. - To provide near-term flexibility to address ongoing crisis needs, an update to the proposed decision is presented to allow a modest and temporary increase of 2 percentage points in the maximum carry forward. - Staff expects that a temporary increase in structural resources will be required to meet the unprecedented demands of this crisis and will return to the Board with a specific proposal once a fuller picture of crisis-related needs emerges, taking into account the degree to which these needs can be met through internal reallocation. ### FY 20 — immediate crisis response and operational implications - The Fund met urgent needs through extraordinary efforts, reprioritization of staff time, and budget resources toward immediate, front-line needs. - Financing and related policies: - More than 100 countries, over half of the Fund’s members, have now requested or inquired about emergency support. - An expected 45 liquidity operations to be approved by end-April. - 25 low-income countries already benefiting from Fund-supported debt relief. - Policy advice: - Staff are assessing macroeconomic implications of the “Great Lockdown” and providing coordinated policy advice focused on reducing potential irreversible economic scarring and setting the stage for sustainable recovery and greater resiliency. - Operational support: - Staff are expanding business continuity capabilities despite stay-at-home operational challenges, with a consistent focus on staff health and well-being. - FY 20 budget absorption and projected underspend: - Extraordinary work pressures have been absorbed within the existing budget through ad-hoc staffing arrangements that will need normalization. - Staff estimates an underspend in FY 20 of about $10 million (relative to the expectation of full execution prior to the crisis). ### FY 21 — ongoing response amidst uncertainty - The MD’s Global Policy Agenda recognizes exceptional measures will continue to be demanded during FY 21 and beyond. - Sustained crisis response: - The crisis has produced the deepest recession since the Great Depression and significant downside risks. - Area Departments indicate the unprecedented scale of liquidity operations is likely to translate into a substantial increase in upper-credit tranche program engagement. - CD departments are moving to support increased country programs through related technical advice. - Addressing post-crisis challenges and building resiliency: - The Fund will need to support members on debt vulnerabilities, bankruptcies, unemployment, and economic inequality. - Fund surveillance will be important for disseminating best practices. - Work on priority areas interrupted by crisis response must be brought back online, including financial surveillance, fragile states, international taxation, governance, digitalization, and climate change. - Policy and analytical work deferred due to the crisis will need to resume, including the Comprehensive Surveillance Review (CSR), the Review of the Financial Sector Assessment Program (FSAP), and the 2020 External Sector Report (ESR). - Resuming these priorities will require additional resources through internal reallocation and cost savings, with staff expecting to come back to the Board with a supplementary budget request. ### FY 21 budget implications and proposed two-stage strategy - After eight years under a flat real budget envelope and near 100 percent utilization since FY 18, remaining buffers are limited. - Streamlining and reprioritization have limited quick-win opportunities given prior aggressive streamlining. - A two-stage strategy is proposed to allow a temporary increase in resources: - Initial FY 21 response: - Proposed increase in the maximum allowable carry forward of general administrative resources from 3 to 5 percent. - This would make use of projected FY 20 underspending of $10 million (about 1 percent). - Together with existing emergency buffers (about $8 million) and savings from continued reduced travel in the first quarter (about $10-12 million), approximately $30 million (including an estimated $10 million, or 1 percent, in additional carryforward) would be available. - These resources would allow an initial ramp-up in temporary staffing for front-line departments, reducing reliance on ad hoc arrangements and mitigating excess overtime. - Given the relatively modest scale (approximately 2½ percent of the overall administrative budget) and one-off nature, this step is not expected to be sufficient for needs over the full course of FY 21 and beyond. - More sustained crisis-related response: - Staff anticipates an exceptional and temporary increase in structural resources will be needed over the next 2-3 years. - A more fully fleshed out proposal related to general administrative needs will be developed in the coming months, with staff engaging the Board once firmer estimates are available. ### Updated FY 20 outturn estimate — net administrative outturn and drivers - Conservative assumptions point to a net underspend of around $10 million relative to full utilization projected prior to the crisis. - Savings drivers: - Travel ban and virtual Spring Meetings: - Over 500 missions canceled through end-April, yielding about $7 million in savings. - Travel ban affected settlement, interview, and seminar travel, contributing a further estimated $1 million in savings. - Virtual Spring Meetings generate $2.3 million in gross savings under building and other expenses. - Additional net savings of around $6 million related to reduced building occupancy, contractual services, printing, and subscriptions, partially offset by higher IT and other outlays. - Additional spending drivers: - Evacuations: 148 staff, long-term experts, and dependents evacuated at an estimated cost of $2.5 million in FY 20, with some 40 requests still pending. - IT and facilities: - Upgrade to video conferencing licensing and support cost $0.25 million in FY 20 and another $0.6 million will accrue in FY 21. - Other requirements around $1-1½ million include emergency cleaning, greater vendor support for business continuity, childcare fees (recorded under building and other expenses), parking facilities, and loss of Concordia revenue (under receipts). - Reduced IMF02-funded CD: - Cessation of travel has negative impact on direct CD delivery and related donor chargebacks. - Early indications that some $5 million in expenses will need to be absorbed by the Fund in FY 20 due to lower chargebacks of staff time ($3 million) and lower-than-projected Trust Fund Management Fees ($2 million). ### Reprioritization, operational adjustments, and staff impacts - Immediate crisis response met largely through informal and ad-hoc reallocations of staff time; unsustainable if prolonged. - Examples: - Informal staff reallocation: Functional CD departments made available some 50 staff on an informal and temporary basis to support area departments, FIN, and SPR. - Delays in Article IVs and FSAPs: Most Article IVs and FSAPs placed on a six-month hold; many pending Article IV consultations concluded on a lapse-of-time basis. - Delays in policy reviews and analytic work: Major policy reviews including CSR, FSAP Review, and the 2020 ESR delayed; non-urgent work deferred. - Streamlined procedures: Review and approval processes are streamlined to expedite emergency financing; departments experimenting with clustering country emergency assistance requests. - HR practice simplification: Annual Talent Management Exercise simplified for FY 20; temporary adjustments to allow contract extension and hiring of retirees and separated staff as consultants. - Overtime and staff well-being: - Uncompensated overtime in March increased by 4 percentage points to 16 percent relative to the same month last year. - An early April 2020 survey showed 42 percent of headquarters-based respondents indicated their ability to achieve work-life balance is poor or very poor; Area Departments reported 47 percent. - Capital budget and modernization: - Remote working complicated implementation for some facilities projects. - $0.4 million investment this month used from infrastructure lifecycle network equipment budget to upgrade the firewall at the Business Continuity Center. ### Externally financed capacity development (CD) - Projected underspend of about $35 million in externally financed CD for FY 20 (about 17 percent), largely due to travel ban affecting CD travel, seminars, and training participation. - CD departments are adapting to remote delivery (virtual missions, desk support, online courses) with focus on crisis-related challenges and providing how-to notes and best practice tools. ### FY 21 initial outlook — budgeting under unprecedented uncertainty - Baseline budget reflects pre-crisis conditions; sustained transfer of staffing to front-line departments expected for 2-3 years. - Measuring emerging pressures: - Operational savings: - Travel savings of some $10–12 million projected assuming a continued travel ban through the first quarter, assuming limited catch-up over the remaining three quarters. - Direct Country Support pressures: - Sustained Program Engagement: - Shift from surveillance to program engagement typically implies an additional 2 FTEs, with additional part-time support from FAD, MCM, and/or SPR. - Additional spending for program engagement averages around $2 million per country relative to standard surveillance or about $1 million for cases where engagement had already been stepped up through “intensive surveillance”. - A rule of thumb: each 10 new programs would require an additional $10 to $20 million. - Resources for review will need bolstering in functional departments, particularly SPR; risk management will require additional resources. - Renewal of Article IV and FSAP engagement: - Six-month deferral has provided breathing space; renewal of Article IV and FSAP work will put additional pressures on Area Department and review resources. - CD delivery: - Continued travel restrictions will reduce face-to-face CD and chargebacks; remote delivery is expanding. - When travel resumes, catch-up pressures and increased program- and crisis-response related CD requests imply sustained reliance on CD resources to fill staffing gaps will not be possible. - Initial indications suggest demand for CD in fiscal area and monetary and financial areas requiring multi-year capacity building. - Analysis and policy advice: - Continued need for timely analysis on restarting economies, financial system stability, social and labor impacts, debt sustainability, and the role of central banks post-crisis. - Renewal of other priority work (CSR, FSAP Review, ESR) will require a fundamental review of the Fund’s work program and difficult tradeoffs in the absence of additional resources. - Fund toolkit and resources: - IMFC has called on the Fund to continue work on the lending toolkit and Fund’s resources. - Surge in demand for financing increased the need for staff time to secure additional PRGT and CCRT resources. *International Monetary Fund — FY 2021–FY 2023 Medium-Term Budget supplement (April 21, 2020).* ### 12. Lessons from the Global Financial Crisis (GFC). Comparisons with the GFC should be ### 12. Lessons from the Global Financial Crisis (GFC). Comparisons with the GFC should be ### Comparisons with the GFC - Comparisons should be approached carefully, recognizing the different nature of the crises and different budgetary starting points. - The initial impact of the current crisis is significantly more severe and broad-based, while its duration and the severity and complexity of the medium-term impact remains uncertain. - Notwithstanding these caveats, experience during the GFC reinforces the prospects that a rapid and sizable increase in staff resources for direct country support will be needed. ### GFC experience: program engagement, spending, and staffing - During the GFC: - The number of GRA arrangements rose by 17 from a base of 7 in FY 08 to 24 in FY 10. - The number of PRGT arrangements rose by 8 from 29 in FY 08 to 37 in FY 11. - Current starting points: - The current starting point for GRA arrangements is higher at 16. - The starting point for PRGT arrangements is significantly lower at 17. - Recent demand signals: - So far, the Fund has received over 100 requests for emergency liquidity financing and augmentations across all regions, with initial indications that a sharper and more broad-based rise in program engagement can be expected in the coming period compared to the GFC. - Fiscal implications during the GFC: - Spending during the GFC increased by about $53 million in FY 10 and $55 million in FY 11, albeit from a low base following the FY 08-09 restructuring. - Overall staffing increased by 100 and 45 FTEs in those two years, respectively; the largest increases were in EUR, but with material increases in other departments. ### Administrative Budget Needs - Use of savings and buffers: - The FY 21 budget reflected already constrained pre-crisis budget conditions. - Remaining buffers and projected travel savings, totaling approximately $20 million, provide some space to address critical needs. - An $8 million contingency reserve would be sufficient to fund 25–30 staff in front-line departments. - The remaining resources, one-off in nature, can fund other temporary needs (including some requirements stemming from delays in FY 20 spending). - Exceptional carry forward: - Staff updated the proposed decision to provide for an increase in the carry forward ceiling from 3 percent to 5 percent of the Fund’s general administrative expenses, on an exceptional basis for the next three years. - This proposed exceptional carry forward ceiling would allow the Fund to use the projected FY 20 underspending of $10 million in FY 21. - A parallel measure to increase the IEO carry forward to 8 percent on an exceptional basis will also be proposed to the Evaluation Committee. - Further support for sustained needs: - Given the limited scale and one-off nature of these resources, staff anticipate that further resources will be required over the next 2-3 years. - A fuller review of requirements will be undertaken in coming months and staff anticipates returning to the Board with a specific proposal for a more sustained exceptional crisis funding once a clearer picture of crisis-related needs emerges, taking into account the degree to which these needs can be met through internal reallocation. ### Capital Budget - Teleworking has affected the main modernization projects differently: - 1HR, the most advanced project, will delay its first release by 2-3 months to accommodate the challenges in system testing and other project deliverables expected as a result of the remote working environment. - This will likely increase the cost of the project, due to the need to retain vendors for longer periods, partially offset by reduced travel costs. - To date, CDMAP has retained its planned schedule, taking advantage of the pause in CD delivery to press on with preparations. - The iDW team has paused planned scoping work for some time to focus on improvements in staff productivity during this period of intense work in a remote environment. - Additional capital investments in audio visual capabilities may be needed to provide improved interaction with the membership, assuming it may take some time before travel returns to normal. ### Summary Proposal for FY 21 — Key figures and limits - Net administrative budget (Millions of U.S. dollars): - Other: 1,104.7 - OED: 74.7 - IEO: 6.7 - Total: 1,186.2 - Receipts: - Other: 241.3 - OED: 1.4 - IEO: 0.0 - Total: 242.7 - FY 21 carry forward (upper limit) 1/: - Other: 53.8 - OED: 15.1 - IEO: 0.5 - Total: 69.4 - Total gross expenditures (limit): - Other: 1,399.9 - OED: 91.2 - IEO: 7.2 - Total: 1,498.3 - Capital budget total: 98.7 - Information Technology: 56.3 - Building facilities: 42.4 - Memorandum items: - FY 20 Net administrative budget: - Other: 1,076.6 - OED: 75.3 - IEO: 6.4 - Total: 1,158.4 - Carry forward, upper limit (in percent): - Other: 5.0 3/ - OED: 20.0 - IEO: 8.0 4/ - Total: n.a. - Notes provided in source: - The nominal FY 21 budget incorporates an update to the calculation of the Fund’s Global External Deflator, utilizing the WEO-based U.S. CPI inflation projection. The January 2020 WEO projection for U.S. CPI were used as follows: 2.3 percent for 2020, 2.4 percent for 2021, and 2.3 percent for 2022, and 2.3 percent for 2023. This translates into 2.4 percent for FY 21, 2.4 percent for FY 22, and 2.3 percent for FY 23. - 1/ 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. - 2/ The upper limit for the FY 21 carryforward increases from $32.3 million to $53.8 million with the proposed temporary increase in the maximum carryforward from 3 to 5 percent. The curent projection is that about $42 million would be available, plus an estimated $4.7 million from OED central carryforward for a total of about $47 million. The precise amount will be determined when end-year financial books are closed. - 3/ Adjusted to reflect carry forward limit raised from 3 percent to 5 percent. - 4/ Reflects a one-time increase from 5 percent to 8 percent, subject to approval by the Evaluation Committee. ### Proposed Decisions (Revised) — Key approvals requested - Decision No. 1: Administrative Budget for the Fund, FY 2021 - A. Appropriations for net administrative expenditures for Financial Year 2021 are approved in the total amount of US$1,186.2 million, of which: - up to US$74.7 million may be used for the administrative expenditures of the Offices of Executive Directors, - up to US$6.7 million may be used for the administrative expenditures of the Independent Evaluation Office, and - up to US$1,104.7 million may be used for the other administrative expenditures of the Fund. - B. In addition to the amounts for net administrative expenditures appropriated under paragraph A, amounts appropriated for net administrative expenditures for Financial Year 2020 that have not been spent by April 30, 2020 are authorized to be carried forward and used for administrative expenditures in Financial Year 2021 in a total amount of up to US$69.4 million, with sub limits of: - US$15.1 million for the Offices of Executive Directors, - US$0.5 million for the Independent Evaluation Office, and - US$53.8 million for the other administrative expenditures of the Fund. - C. A limit on gross administrative expenditures in Financial Year 2021 is approved in the total amount of US$1,498.3 million, with sub limits of: - US$91.2 million for the administrative expenditures of the Offices of Executive Directors, - US$7.2 million for the administrative expenditures of the Independent Evaluation Office, and - US$1,399.9 million for the other administrative expenditures of the Fund. - D. The appropriations for “other administrative expenditures of the Fund” for Financial Year 2021 set out in paragraph A above and the “limit on gross administrative expenditures” and the sub limit for “the other administrative expenditures of the Fund” set out in paragraph C above will be increased by the amount of the OED Financial Year 2020 central carry forward as determined in the Financial Year 2020 year-end closure of the Fund’s financial books. - Decision No. 2: Capital Investment Framework - The key elements of the Fund’s updated Capital Investment Framework are approved as set out in paragraph 1 of Appendix VIII. - Decision No. 3: Capital Budget Appropriations for Financial Year 2021 - Appropriations for capital projects underway or beginning in Financial Year 2021 are approved in the total amount of US$98.7 million and are applied to the following project categories: - (i) Information Technology: US$56.3 million - (ii) Building Facilities: US$42.4 million *Source: ppea2020030 - 12. Lessons from the Global Financial Crisis (GFC). Comparisons with the GFC should be* --- _Source: https://www.imf.org/-/media/files/publications/pp/2020/english/ppea2020030.pdf_