THE WORLD BANK’S BUDGET: TRENDS AND ......Table 3.10: Capital Program Summary – Investment Schedule FY11-14.....35 Table B.1: Indicative Distribution of Net Admin Budget Actuals

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FOR OFFICIAL USE ONLY

THE WORLD BANK’S BUDGET:

TRENDS AND RECOMMENDATIONS FOR FY12

AUGUST 9, 2011

International Bank for Reconstruction and Development

International Development Association

Corporate Finance and Risk Management

This document contains forward looking statements that are based on management's expectations, estimates, projections and assumptions. Words such as "proposes," "plans," "estimates," "anticipates," "intends," and variations of these words and similar expressions are intended to identify forward-looking statements. Such statements are not guarantees of future performance. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances, and the Bank is under no obligation to update or alter its forward looking statements, whether as a result of such changes, new information, subsequent events or otherwise.

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FY12 Budget Document

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CONTENTS

1. INTRODUCTION AND OVERVIEW ...................................................................................................................... 8

1.1 MAIN ISSUES AND SUMMARY ......................................................................................................................... 8

1.2 FY12 BUDGET RECOMMENDATIONS ............................................................................................................... 9

2. FOCUSING LIMITED RESOURCES ON PRIORITY AREAS .................................................................................... 11

2.1 FOCUS ON THE REGIONS ............................................................................................................................... 13

2.2 NON-REGIONAL UNIT TRENDS ...................................................................................................................... 19

2.3 MODERNIZING THE BANK’S BUSINESS .......................................................................................................... 21

2.4 ALLOCATION CRITERIA AND FLEXIBILITY ....................................................................................................... 21

3. THE BUDGET FRAMEWORK ............................................................................................................................ 25

3.1 NET ADMINISTRATIVE SPENDING ................................................................................................................. 25

3.2 SUMMARY OF FY12 ADMINISTRATIVE BUDGET PROPOSAL AND EXTERNAL FUNDS .................................... 26

3.3 BUDGET ALLOCATIONS BY UNIT TYPE ........................................................................................................... 27

3.4 NON-UNIT SPECIFIC ACCOUNTS .................................................................................................................... 28

3.5 BELOW THE LINE ITEMS ................................................................................................................................ 29

3.5.1 BOARD-RELATED BUDGETS .................................................................................................................. 29

3.5.2 STAFF RETIREMENT AND RELATED PLANS ........................................................................................... 30

3.5.3 GRANT-MAKING FACILITIES .................................................................................................................. 30

3.6 EXTERNAL SOURCES OF FUNDS..................................................................................................................... 32

3.7 PRICE FACTOR ............................................................................................................................................... 33

3.8 CAPITAL BUDGET SUMMARY ........................................................................................................................ 34

3.9 ONGOING PROCESS IMPROVEMENTS ........................................................................................................... 35

3.9.1 THE REVAMPED BUSINESS PLANNING PROCESS .................................................................................. 35

3.9.2 TRUST FUND INTEGRATION AND COST RECOVERY .............................................................................. 37

3.9.3 TREASURY’S BUDGET – PLANNING AND REGULARIZATION OF REIMBURSABLES ................................ 38

3.9.4 RING-FENCING IMT DEPRECIATION INSTITUTIONALLY ........................................................................ 39

3.9.5 CROSS SUPPORT SIMPLIFICATION ........................................................................................................ 39

3.9.6 SECURITY .............................................................................................................................................. 40

3.10 FY12 BUDGET RECOMMENDATIONS ........................................................................................................... 40


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ANNEXES

ANNEX A: GEOGRAPHIC VIEW OF THE NET ADMINISTRATIVE BUDGET ...................................................................... 42

ANNEX B: PROGRAM COST SUMMARY FY09–14 ......................................................................................................... 43

ANNEX C: COMPONENTS OF FUNDING ....................................................................................................................... 45

ANNEX D: REIMBURSABLES ......................................................................................................................................... 46

ANNEX E: THE CAPITAL BUDGET .................................................................................................................................. 49

TABLES

Table 2.1: Lending Projections FY11-12 (as of Q3 FY11) ............................................................................................. 12

Table 2.2: Allocation of Available Budget Flexibility FY12-14 ($FY11 million) ............................................................. 23

Table 2.3: Allocated Budget, based on FY11 Funding Decisions ($FY11 million)......................................................... 24

Table 3.1: FY11/12 Budget and Total Funds Summary ($ millions) ............................................................................. 26

Table 3.2: Change in the Bank Budget Plan by Unit Type ($FY11 million) ................................................................... 27

Table 3.3: Change in External Funds by Unit Type ($FY11 million) ............................................................................. 27

Table 3.4: Change in All Funds by Type ($FY11 million) – Budget Plan and External Funds ........................................ 27

Table 3.5: Non-Unit Specific Accounts ($FY11 million) ................................................................................................ 28

Table 3.6: Board-Related Budgets ($FY11 million) ...................................................................................................... 30

Table 3.7: Grant-Making Facilities Budgets ($ million) ................................................................................................ 32

Table 3.8: External Funds ............................................................................................................................................ 32

Table 3.9: Reimbursables by Unit Type ....................................................................................................................... 33

Table 3.10: Capital Program Summary – Investment Schedule FY11-14 ..................................................................... 35

Table B.1: Indicative Distribution of Net Admin Budget Actuals by Geographic Region (FY06 to FY10) ..................... 42

Table E.1: Reimbursements and Fee Income FY08-FY11 ($ millions) .......................................................................... 47

Table F.1: Capital Program Summary – Investment Schedule FY11-14 ....................................................................... 49

Table F.2: Thematic Organization and Programs – Investment Schedule FY11-14 ..................................................... 50

Table F.3: Capital Program - Investment Schedule FY12-14 ........................................................................................ 50

Table F.4: Capital Investment Schedule – Washington Facilities FY12-14 ................................................................... 50

Table F.5: Capital Investment Schedule – Country Facilities FY11-14 ......................................................................... 50


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FIGURES

Figure 2.1: FY12 Funding Composition and FY12/11 Growth - Regions ...................................................................... 18

Figure 2.2: FY12 Funding Composition and FY12/11 Growth – Networks & Other Operational Units ....................... 19

Figure 2.3: FY12 Funding Composition and FY12/11 Growth – Large FACs................................................................. 19

Figure 2.4: FY12 Funding Composition and FY12/11 Growth – Small FACs ................................................................. 20

Figure 3.1: Proposed FY11/13 Net Admin Budget Spending Authority (From FY11 base, $FY11 million) .................. 25

Figure B.1: Projected Expenditures for FY12 Net Administrative Budget ($1,778 million in FY11) ............................. 42

BOXES

Box 2.1: The Uncertain Political Situation in the Middle East and North Africa, and the Bank’s Response ................ 11

Box 2.2: Special Attention To Gender .......................................................................................................................... 16

Box 2.3: Presentation of Bank Resources in the Budget Document, and Key Terms .................................................. 17

Box 2.4: Approval Criteria and Procedures for Access to the Institutional Contingency ............................................ 22

Box 3.1: Summary of Key Planning Decisions for MDs/CFO Endorsement ................................................................. 37

Box 3.2: Mitigating Security Risks ................................................................................................................................ 40


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ACRONYMS

AAA Analytical and Advisory Activities

AFR Africa Region

AMC Advance Market Commitments

BB Bank Budget

BETFs Bank Executed Trust Funds

CFO Chief Finance Officer

CFP Concessional Finance and Global Partnerships

CFR Corporate Finance and Credit Risk Management

CGIAR Consultative Group on International Agricultural Research

CIF Climate Investment Fund

CIO Chief Information Officer

CRO Chief Risk Officer

CSF Civil Society Fund

CTF Clean Technology Fund

DEC Development Economics Vice Presidency

DGF Development Grant Facility

EAP East Asia and Pacific Region

ECA Europe and Central Asia

EDs Executive Directors

EFOs Externally Funded Outputs

EXT External Affairs Unit

FAC Finance, Administrative and Corporate

FBS Fee-Based Services

FCS Fragile and Conflict-affected Situations

GCI Global Carbon Initiative

GEF Global Environment Facility

GETs Global Expert Teams

GPPs Global Programs and Partnerships

GSD General Services Department

GTI Global Tiger Initiative

HDN Human Development Network

HQ Headquarters

HR Human Resources

HRS Human Resource Services

IBRD International Bank for Reconstruction and Development

ICSID International Centre for Settlement of Investment Disputes

IDA International Development Association

IDF Institutional Development Fund

IEG Independent Evaluation Group

IFC International Finance Corporation


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IISEC IDA-IFC Secretariat

IMF International Monetary Fund

IMT Information Management and Technology

IPS Integrated Planning System

ISG Information Solutions Group

KLC Knowledge and Learning Council

LCR Latin America and the Caribbean Region

LEG Legal VPU

LTIP Long Term Income Portfolio

MIGA Multilateral Investment Guarantee Agency

MLT Matrix Leadership Team

MNA Middle East and North Africa

MTSF Medium-Term Strategy and Finance

OPC Operations Policy and Country Services

ORAF Operational Risk Assessment Framework

PCD Post-Crisis Directions

PPMF TF Management Framework and Global and Regional Partnership Programs

QBR Quarterly Business Review

RAMP Rural Access and Mobility Project

RETF Recipient Executed Trust Funds

RSA/CSA Regional and Country Security Advisors

RVP Regional Vice President

SAR South Asia Region

SBU Sanctions Board Unit

SEC Corporate Secretariat

SPF State- and Peace Building Fund

TF Trust Fund

TA Technical Assistance

TFMF Trust Fund Management Framework

VPU Vice Presidential Unit

WBI World Bank Institute

WBG World Bank Group

WBT World Bank Tribunal

WDR World Development Report

WPA Work Program Agreement


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1. INTRODUCTION AND OVERVIEW

1.1 MAIN ISSUES AND SUMMARY

1. In the aftermath of the financial crisis, the global landscape remains volatile and in flux. Although

global economic recovery has continued to strengthen, widespread disruptions and tensions –

political turmoil in the Middle East and North Africa and increased fragility in other regions, a series

of natural disasters, rising oil and food prices – signal renewed risks to development progress.

2. In the face of these challenges, international aid efforts continue to focus on the most pressing

crisis-related needs and priorities: G20 leaders reiterated their concerns over development

challenges and aim to establish more shared growth; the IDA16 replenishment concluded with

record donor contributions; and IBRD lending projections suggest that – while decreasing from

financial crisis peaks – demand is likely to remain above pre-crisis levels.

3. For the World Bank, the critical challenge is to deliver an expanding work program, while preserving

the flexibility to respond to rapidly changing client needs, all within the constraints of a flat real

budget. Management’s response to this challenge is to focus on budget flexibility and increasing

operational and organizational effectiveness.

4. This approach has benefited from the feedback and guidance received from the Board of Executive

Directors in the first three engagement points of this year’s planning cycle. During the discussion of

the Medium-Term Strategy and Finance (MTSF) Paper, Directors paid particular attention to three

issues: the impact of the flat real budget on the quality of Bank programs and delivery to clients; the

effect of corporate priorities on budget decisions and trade-offs made at the corporate and regional

levels; and the achievement of an integrated and holistic approach to trust funds in business

planning and budgeting. These points are further addressed in this document.

5. The FY12 net administrative budget recommendation is consistent with the proposals in the MTSF

paper. While delivering on Management’s commitment to return to planned flat real budget

expenditure by FY13, it re-establishes an institutional contingency to support Regional units’

responses to unexpected crises or events (a key request from Regional VPUs in the recent planning

process). It funds newly established units, such as Chief Risk Officer, Sanctions Board Secretariat,

and Group Conflict of Interest Office. It invests in a number of initiatives that will benefit the

frontline, including in information technology. In addition, it funds some significant volume-driven

cost pressures, largely in the Legal VPU.

6. The proposed budget framework does not include significant budget re-allocations across VPUs.

Three-year budget trajectories developed in FY10 already allocated most resources to front-line

units and are broadly aligned with the Post-Crisis Directions. The framework, with the newly re-

established institutional contingency, will enable the Bank to respond to evolving work program

needs linked to ongoing developments, such as events in the MNA Region and in South Sudan, and

will support the continued, measured implementation of the Modernization Agenda.


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7. The remainder of the FY12 Budget Document is structured as follows:

Chapter 2 – Focusing Limited Resources on Priority Areas: This chapter elaborates on a number

of themes that were discussed in the Medium-Term Strategy and Finance paper, including

additional information on key Regional budget choices, allocating FY12 budget flexibility,

additional funds allocated in FY12 based on FY11 funding decisions, and continuation of the

Knowledge Fund.

Chapter 3 – The Budget Framework: This chapter provides specifics on changes to the budget

framework, including below the line items; reviews Unit budgets, the Price Factor, the capital

budget envelope; and discusses the evolution of the new business planning process.

Annexes provide additional technical and other background material relevant to the overall

budget framework and recommendations in this document.

1.2 FY12 BUDGET RECOMMENDATIONS

8. To carry out the work program described in this document, Board approval is sought for the

following budget recommendations for FY12 (in $FY12):

A net administrative budget of $1,823.3 million to be managed within a range of +/- 2 percent,

including the price adjustment factor of 2.58 percent ($45.8 million).

Board-related FY12 funding to comprise:

o $84.0 million for Executive Directors (EDs), Board of Governors, Development Committee,

and Inspection Panel, of which $22.2 million reimbursables;

o $16.3 million for the Corporate Secretariat, of which $1.3 million reimbursables; and

o $33.1 million for IEG, of which $7.3 million reimbursables.

Grant-making facilities:

o $50.0 million for the Consultative Group on International Agricultural Research (CGIAR);

o Up to $33.3 million in FY12 for the State and Peace Building Fund (SPF);

o Up to $17.6 million for the Institutional Development Fund (IDF) to maintain annual

commitment capacity of the Fund at the level set by the Board at $25 million;

o $2.8 million for the Social Development Civil Society Fund (CSF); and

o No approval is sought in this paper for the FY12 Development Grant Facility (DGF) budget.

Management’s proposal of $57.3 million for the DGF is being submitted separately, along

with the FY12 Annual Review of DGF activities.

Contributions for the Staff Retirement Plan, the Retired Staff Benefits Plans, and the Post

Employment Benefits plan amount to $299.4 million.


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A capital budget of $139.1 million.


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2. FOCUSING LIMITED RESOURCES ON PRIORITY AREAS

This chapter provides an update on how FY12-14 planning considerations focus on priority areas. It

includes an update on how Regional units are planning to operationalize their strategies within the

limited resource environment, a discussion of unit trajectories over the past years, and an overview of

how the available budget flexibility is being allocated over the planning cycle, including use of the rebuilt

institutional contingency.

9. As detailed in the Medium-Term Strategy and Finance paper, client demand for Bank assistance

will remain high over the FY12-14 planning cycle as the global landscape remains volatile and in

flux. Following political turmoil in the Middle East and North Africa and increased fragility in other

regions, a series of natural disasters, and rising oil and food prices, international aid efforts continue

to focus on the most pressing crisis-related needs and priorities. The IDA16 replenishment

concluded with record donor contributions, the G20 reinforced their commitment to development,

and IBRD lending projections remain high compared to pre-crisis levels.

Box 2.1: The Uncertain Political Situation in the Middle East and North Africa, and the Bank’s Response

The MNA Region enters FY12 with unprecedented demands from its clients and partners and the need to take

immediate action on a number of fronts through a combination of instruments. Together with its partners, the

Bank is developing a framework for support to the region featuring four pillars: (i) governance; (ii) economic and

social inclusion; (iii) creating jobs; and (iv) accelerating economic growth.

The Bank is strengthening work focused on these pillars, both at the country level and through the Arab World

Initiative, through strengthening in-house capacity with senior technical staff in the areas of governance, social

protection, education, finance and regional infrastructure development, and increasing field staff presence

through greater decentralization.

Given the flat budget trajectory for MNA, all country strategies have been reviewed. Country budget

reallocations have been made to those whose capacity for reform is the greatest. Cost saving efforts through

country office reorganizations, support functions, and line items such as travel and overheads have been

undertaken, and will continue through FY12. Savings will be redeployed to the new areas of emphasis.

Deliverables within country programs have been consolidated where possible (e.g., combining DPLs in both

Tunisia and Morocco, reducing fragmentation of AAA in West Bank and Gaza) and scaled back where there is

either a lack of client traction, uncertainty and/or delay of caretaker governments, and where there is already

strong partner involvement.

Although many uncertainties remain, particularly in the pace and direction of political changes in many countries

which will affect the content of Bank programs, demand for Bank involvement will be high and strain available

resources. Greater Bank engagement from current levels may require additional resources. MNA is reviewing its

additional budget requirements with Management, and a decision on access to the institutional contingency is

expected shortly. The Region will provide the Board with regular updates on the situation in the Middle East and

North Africa.


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10. Table 2.1 shows lending projections by Region. Projected FY12 IBRD commitment range is $22.4-

29.9 billion, lower than FY10's actual commitments of $44.2 billion, but considerably higher than the

pre-crisis levels (FY08 IBRD commitments were $13.5 billion) and the same level as FY11 projections.

11. Projected FY12 IDA commitment range is $15.8-17.9 billion, consistent with the IDA16 envelope of

$49.3 billion (approximately $16.4 billion annually and representing an increase of 18% over IDA15

envelope). The projections are tentative and subject to actual IDA allocations.

12. FY11 IBRD disbursements are projected to be $25.8-26.6 billion, coming down from FY10's actual

disbursement of $28.9 billion. Year-to-date IBRD disbursements in FY11 are $18.2 billion (end-

March), compared to $20.5 billion disbursed in FY10 during the same period. FY12 IBRD

disbursements are projected to be $21.4-24.3 billion.

13. FY11 IDA disbursements are projected to be $10.4-10.7 billion, compared to $11.5 billion disbursed

in FY10. Year-to-date IDA disbursements (end March) are $7.5 billion, $1.5 billion lower than in

FY10 for the same period. FY12 disbursement projections show an upward trend ($11.4-11.9

billion).

14. Management remains committed to returning the institution to flat budget levels by FY13. The

critical challenge for the World Bank is therefore to deliver an expanding work program, while

preserving the flexibility to respond to rapidly changing client needs, all within the constraints of a

flat real budget. Management’s response to this challenge is to focus on budget flexibility and

increasing operational and organizational effectiveness.

15. Going in to the FY12 planning cycle, budget flexibility was limited to $27 million, as most available

funds had already been redeployed to the Regional VPUs, to support the crisis response, and to the

modernization agenda. Indicative VPU trajectories agreed in the FY11-13 planning cycle showed

Regional budgets as flat in real terms over the planning period, while most other units were

anticipating real declines. Existing budget allocations were already in line with historical decision

criteria and hence with corporate priorities (such as the focus on the poorest). No major shifts from

the FY11-13 trajectories were therefore recommended in this planning cycle. Management agreed

that the FY13-15 planning process, when Network Anchor and Finance, Administrative, and

Corporate units’ business plans will also be available, could lead to reallocations across VPUs. As

Low Case High Case Low Case High Case

Africa $6.70 $6.70 $8.70 $10.40

East Asia and Pacific $7.80 $8.20 $6.00 $7.00

Europe and Central Asia $6.00 $6.10 $6.10 $8.00

Latin America and Caribbean $9.50 $9.70 $7.00 $9.10

Middle East and North Africa $1.60 $2.90 $2.60 $3.90

South Asia $9.30 $9.90 $8.00 $9.50

Totals $40.90 $43.60 $38.20 $47.80

Geographic Region IBRD/IDA Lending Commitments (Billions of US$)

FY11 Projections FY12 Projections

Table 2.1: Lending Projections FY11-12 (as of Q3 FY11)


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part of the new planning process, only the six Regional VPUs and Treasury have developed business

plans at this stage.

16. Management believes the return to flat real by FY13 is both desirable and feasible. It is desirable to

drive greater efficiency in the organization as well as to maximize the capital available for IBRD

lending. It is feasible to be more selective in our work program and there are still opportunities to

reduce unnecessary spending.

17. At the same time, it is important to recognize that, in order to facilitate the World Bank’s response

to the global financial crisis, actual budget spend increased in FY10 by a real 4 percent over FY09 –

from the bottom of the +/- 2 percent flexibility band to the top. With the return to flat real, half of

this one-year increase (i.e., 2 percent) is being reversed over the three years FY11-13.

2.1 FOCUS ON THE REGIONS

18. Regional VPUs are planning based on a flat real budget trajectory. In order to enhance the Bank’s

capacity to respond to unforeseen events (such as the political developments in the Middle East and

North Africa), an institutional contingency has been established for FY12-14. In FY12, Regions will

have priority access to this contingency. An update on Regional trends, and how these units are

planning to operationalize their work programs, is provided below. Box 2.2 highlights Regional VPU

approaches to mainstreaming gender.

i. Africa (AFR): The Region continues to face the challenge of providing an adequate level of

support to a robust and complex lending and supervision portfolio, while continuing to scale

up in key areas such as competitiveness, vulnerability and governance and anti-corruption.

The new Africa Strategy places special emphasis on selectivity. The aim is to improve quality

and results/impact on the ground while at the same time improving budget efficiency. As part

of strategic selectivity, the Region aims to consolidate the pipeline and the portfolio while

increasing project size when appropriate, in line with the scaling up of IDA resources. Through

this consolidation, the Region expects to improve span-of-control and create the budgetary

space necessary to (i) reallocate within the country budget envelope to other strategic areas of

the budget and (ii) maintain a sufficient contingency to respond to strategic priorities/crises

that emerge over the course of a fiscal year. At the individual country level, this targeted

portfolio reduction will be achieved by each CMU reducing its IDA/IBRD number of active

projects. Countries with particularly high portfolio fragmentation and/or lower net

commitments than the FY06 level will be expected to achieve greater reductions.

ii. East Asia and the Pacific (EAP): Several trends continue to run its course in the region. The

recent drop in average completion costs will continue with Management pressure on delivery,

cycle time, the use of Track 1 processing for ORAF low risk operations, and the use of repeater

projects/additional financing. Additionally, the Region aims to consolidate the pipeline to

fewer larger projects, reducing the overall amount of resources needed in lending preparation

and allowing reallocation to implementation support. EAP has implemented a risk based


14

supplemental funding facility to support operations at risk with higher need for supervision

resources. AAA resources are expected to remain at current levels, with greater emphasis on

quick turnaround policy notes and technical assistance and consolidating the number of large

reports. The region strives to keep cost pressures in non-program areas such as sustaining and

indirect costs to a minimum. Each country office faces specific situations where drivers such as

local staff compensation or office lease/rent may cause a significant increase. Through long-

term plans, the Region works to minimize such situations and allow the largest possible

resources to flow to the work program. It is also closely monitoring its field benefits costs,

ensuring that the balance of HQ and country office, internationally recruited staff and locally

recruited staff is viable under the current resource envelope.

iii. Europe and Central Asia (ECA): The Region’s post-crisis strategy focuses on competitiveness,

social inclusion, and climate action, in combination with achieving results in sub-regional areas

(e.g., southeastern regional solutions, Roma inclusion, REPARIS, Central Asia Management of

Water and Energy, and Caspian to Black Seas Highway Transit corridor). Further focus will be

on leveraging resources through closer cooperation with donors, leveraging the Region’s

country offices, shifting more Task Management to the field, and planning to relocate Country

Directors from HQ. The Region will also provide additional financing and scaled-up projects,

tailored analytical work and fee-based services, and coordinate financing and knowledge with

development partners. Fewer small projects, transaction intensive projects, and activities

where others have a comparative advantage are planned. To strengthen the focus on quality

and results, the Operational Services and Quality Department was created in July 2010,

processes for most products have been streamlined and harmonized and compulsory core

operational training for TTLs has been established.

iv. Latin America and Caribbean (LCR): Selectivity in the Region means not being in every sector

in all countries. The Region is scaling up in a number of areas (e.g., programmatic packages to

provide integrated development solutions at the thematic and sectoral levels, and cutting-

edge knowledge and innovativeness), and scaling down in others (e.g., small, one-off projects,

basic projects where others have a comparative advantage). LCR is taking advantage of the

region's time zone and proximity to Washington by not expanding the existing country offices.

With increased use of technology, LCR is reducing the level of ACS support in the region by

changing the ACS to operational staff ratio. LCR tends to undertake a larger share of complex

projects based on demand from clients. Many are large complex infrastructure projects with

the expected risk typically associated with such projects. LCR has established a comprehensive

risk management system which is fully operational and which includes a range of elements

such as use of the ORAF, weekly Pipeline Risk Review meeting, Monthly RMT Business

Meeting, and RVP Risk List with quarterly review meetings.

v. Middle East and North Africa (MNA): See Box 2.1 for information on MNA’s response to

developments in the region. To protect quality in a flat budget environment, the Region has

undertaken several actions: (i) a comprehensive review of problem and potential problem


15

projects; (ii) review of the entire portfolio twice a year; (iii) strengthening operational support

to task teams by providing just-in-time learning opportunities, development of tools such as

the MNA Reform Survival Toolkit, and operational advisory services; (iv) other in-depth reviews

of the portfolio such as on disbursement performance; and (v) increased attention to project

preparation and implementation support. Other efforts to strengthen support to project

preparation and implementation include rolling out new regional operational guidelines to

provide operational staff with a package of resources, and regularly scheduled systematic

monitoring efforts and reporting on portfolio quality and deliverables to Regional

management to ensure that new portfolio challenges and worrisome trends can be more

promptly addressed, if not preempted all together.

vi. South Asia (SAR): SAR’s approach to country-based priority setting and trade-offs is guided by:

(i) use programmatic approaches to leverage greater development impact; (ii) consolidate

stand alone projects into fewer, larger sector projects; (iii) focus on projects with the potential

for regional transformation; (iv) make increasing use of public private partnerships for

infrastructure and (v) emphasize innovative results-based projects focused on MDGs. Less

effort is devoted to (i) sectors where a weak fiduciary environment carries large risk for the

Bank; (ii) areas where IFC and other MDBs have a comparative advantage; (iii) transaction

intensive projects; and (iv) projects in areas where lack of reforms limits the impact of

investments. To protect and enhance the quality of new projects in the pipeline, the Region

has concentrated on: (i) reducing time spent on review and processing procedures; (ii)

enhancing support to CAS teams and the review of CAS products; and (iii) innovating project

design, including with larger projects and through a less transaction intensive approach to

mitigating fiduciary risk. For projects under supervision, SAR has: (i) sought to protect

supervision budgets to ensure careful oversight and implementation support; (ii) maintained

regular and high-profile joint portfolio reviews to retain attention on project performance and

catalyze action on problem projects; and (iii) adjusted approaches where it is practical to be

more cost effective in project supervision (such as in some cases raising prior review

thresholds for procurement; enlarging the use of beneficiary/ third party monitoring and

reporting on aspects of project performance).


16

Box 2.2: Special Attention To Gender

A new transition plan to scale up and replicate activities under the Gender Action Plan, informed by the

independent Evaluation Group’s recommendations on gender activities, reinforces the importance of gender

across Bank activities, by better integration in Bank operations and analysis. Specific actions have been

programmed under IDA16 with gender representing one of the special themes. The World Development Report

for 2012 on Gender Equality and Development will further guide work program focus by reviewing the evolution

of gender equality across the world and elaborating on key dimensions, including women's and men's

endowments of human and physical capital, their access to economic opportunities, and their ability to shape

their lives. Regions have identified a range of mainstreaming actions:

AFR: The front office of AFR PREM has enhanced its coordination role by identifying evidence on gender gaps,

the effects on projects, and addressing them. Additional poverty economists have been hired to ensure that

gender is better integrated into poverty assessments. Each country team will devote 12 staff weeks per year to

integrate gender in relevant projects, Country Assistance Strategies/Interim Strategy Notes, and Analytic and

Advisory Activities.

EAP: Country Gender Action Plans are being developed in nine country offices. All Plans will be updated on an

annual basis to reflect shifting country contexts and priorities. The Region is also developing a Results

Monitoring Framework for Gender-related activities, and began work on a major analytical product to serve as a

Companion Piece to the 2012 World Development Report on Gender Equality.

ECA: In the Western Balkans, ECA is monitoring gender developments and incorporating gender more

systematically in the portfolio. Future activities will build upon the inclusion of gender analysis in the areas of

land registration, social protection, and labor markets. Gender work will also commence in the South Caucuses.

ECA has committed to strengthen gender in Country Partnership Strategies by ensuring that gender analysis

underpins the strategies, and integrating gender more systematically in key AAA products.

LCR: A new strategy will focus on mainstreaming gender in core sectors and stepping up activities on maternal

and adolescent health, the economic role of women, and gender based violence. Through its efforts on

expanding access to family health services and health insurance, strengthening the social safety net for poor

households, and improving the quality of education for all, investments help to embed the creation of

opportunities for girls and women into the core social policies reaching those in need.

MNA: Regional and country Gender Action Plans are being developed. A highlight of the FY12 work program is

the completion and imminent dissemination of the 2010 Egypt Gender Report. This will provide a strong

analytical basis for mainstreaming gender issues in the upcoming Egypt Country Assistance Strategy (FY12). The

Jordan Adolescent Girls Initiative (AGI) pilot, Jordan New Work Opportunities for Women under the patronage of

Queen Rania al-Abdullah, is well under implementation. In Yemen, a rapid qualitative assessment on Gender

and Economic Decision Making is underway and forms part of a multi-country analytical product for the World

Development Report 2012 on Gender.

SAR: In FY12, the Region plans to: (i) discuss findings of gender assessment in all IDA CASs; (ii) prepare and

implement Regional Gender Action Plans to accelerate progress on gender-related MDGs; (iii) actively

disseminate the 2012 WDR on gender by identifying obstacles to gender mainstreaming; (iv) monitor progress in

gender mainstreaming in investments; (v) track indicators to measure IDA's support to gender-based country

outcomes; and (vi) implement the new education sector strategy with gender in the focus.

Next Steps: Senior management is committed to mainstreaming gender. Once Regions have completed their

work planning in June, the degree of mainstreaming will be assessed, and additional signals put into the system

if necessary. Progress will also be monitored through the new quarterly performance reviews. Roll out of the

new business planning process to the Network Anchors and Other Operational Units in the Fall will provide the

opportunity for a further review of gender.


17

19. Regions formulated their strategies based on Management’s commitment to return the institution

to flat budget levels by FY13 – assuming no increase in their budget trajectories over the planning

cycle. However, based on discussions that have been held to date, MNA is expected to receive

additional funding from the institutional contingency, for FY12. Also, Regional trajectories

(especially for the outer years FY13 and FY14), remain subject to changes based on the outcome of

the new business planning process for the Network Anchors and FAC units.

20. With the exception of ECA, all Regional spend (comprising Bank Budget and reimbursables) grew

in real terms over the period FY07-FY10. FY12-14 Budget trajectories are expected to remain at the

same level as in FY11, while external funds are expected to grow. Highlights are as follows:

AFR: Spend increased over FY07-10 by 9.1 percent. For the period FY12-14, AFR’s budget

trajectory is projected to remain flat at $330.0 million (in $FY11) (with an additional $0.9 million

in FY12 for establishing the Nairobi hub), while external funds are expected to increase resulting

in total increase of 1.7 percent.

Box 2.3: Presentation of Bank Resources in the Budget Document, and Key Terms

The Board approves annually the Net Administrative Budget for the whole IBRD/IDA work program, i.e., the

portion of the Bank’s work program funded by the owned resources of the IBRD and IDA. It has been a

longstanding practice for the budget document to provide a “program cost summary” with unit level program

estimates covering both the Bank’s own resources as well as program activity funded by fee income

(reimbursables) for the year and the three-year planning period – Annex C. Prior to FY08, this was the only table

that provided the Board with funding estimates of program activity at the unit level. This definition of program

cost does not cover work program activity funded by Bank-Executed Trust Funds (BETFs). Thus, for example, the

Program Cost view for the Africa unit does not capture all of the externally funded work program in the Africa

Region. Note: The components of the Total Administrative Budget shown in Table 3.1 are all found in Annex C.

To provide a fuller and more transparent view of unit work program funding, another table has been included

since the FY09 budget document – Annex D. This table covers the components of all unit funding sources,

including BETFs, for the current and budget years. Note: The summary Tables 3.2 to 3.4 are drawn from Annex

D.

Key Terms

Reimbursables are revenues generated when the Bank provides operational and/or administrative services to

external organizations and/or parties (such as staff), or shares administrative costs through negotiated cost-

sharing arrangements. The term includes income from “fee based services” as well as from fee income received

by the Bank for administering trust funds. The Bank also receives reimbursements for services provided to staff

(personal trip reimbursements, personal phone call reimbursements, parking, etc.).

Trust funds are donor contributions held and accounted for separately from WBG assets. The World Bank

categorizes trust funds into three groups one of which is Bank-Executed Trust Funds (BETFs). BETFs contain

funds that support the Bank’s work program (i.e., program activities for which the Bank has spending authority).

They include analytical and advisory services. BETFs are administered in accordance with the provisions of the

Bank’s Administrative Manual, which also applies to the Bank’s administrative budget.

External funds consist of reimbursables and BETFs.

All funds means Bank budget plus external funds (i.e., reimbursables plus BETFs).


18

EAP: Spend increased by 6.9 percent over FY07-10. Based on the planned budget trajectory that

was determined for this Region in FY11, its FY12 budget is $150.5 million, while external funds

are expected to increase resulting in a total increase of 0.9 percent.

ECA: FY07-10 spend declined by 1.5 percent as countries in the Region graduated. Given

circumstances in the Region, this decline has been halted, and for the period FY12-14, ECA’s

budget trajectory is projected to remain flat at $167.9 million (in $FY11), while external funds

are expected to increase resulting in a total increase of 6.7 percent.

LCR: Spend increased by 3.3 percent over FY07-10. For the period FY12-14, LCR’s budget

trajectory is projected to remain flat at $173.3 million (in $FY11), while external funds are

expected to increase resulting in a total increase of 0.1 percent.

MNA: FY07-10 spend increased by 17.3 percent. Based on the planned budget trajectory that

was determined for this Region in FY11, its initial FY12 budget is $100.2 million (in $FY11), while

external funds are expected to increase resulting in a total increase of 3.7 percent. MNA’s initial

budget is expected to increase as the Region accesses the institutional contingency.

SAR: Spend increased by 12.1 percent over FY07-10. For the period FY12-14, SAR’s budget

trajectory is projected to remain flat at $145.4 million (in $FY11), while external funds are

expected to increase resulting in a total increase of 3.9 percent.

21. Figure 2.1 illustrates FY12/11 changes for Regional unit funding (Bank Budget (BB), reimbursables,

and Bank-Executed Trust Fund (BETFs)). Based on the information available, all funds growth in

FY12 for Regional units is projected to be 2.5 percent, 3.3 percent after allocations from the

institutional contingency.

22. ECA is initially projected to have the highest

rate of increase in total funding due to

growth in fee-based services (a

component of reimbursables), and LCR

has the lowest growth rate reflective of

the unit’s limited access to BETFs. MNA’s

anticipated access to the institutional

contingency will likely result in the

highest regional growth.

23. AFR is the only Regional VPU with a

small, positive growth in Bank Budget in

FY12 (approximately 0.3 percent). This

reflects time-bound funding for the

establishment of the Nairobi Hub ($0.9

million).

Figure 2.1: FY12 Funding Composition and

FY12/11 Growth - Regions

0%

1%

2%

3%

4%

5%

6%

7%

8%

0

50

100

150

200

250

300

350

400

450

AFR EAP ECA LCR MNA SAR

FY

12/1

1-P

erc

en

tage C

hange in

All F

unds

FY

12 F

un

din

g b

y S

ourc

e -

FY

11 $

million

BB Reimb. BETF FY11-12 Change - All Funds


19

24. Figure 2.1 excludes expected funding from the Knowledge Fund ($6.4 million) and funding for the

Bank/FAO Cooperation Program ($13.4 million), both of which are expected to provide additional

funding sources for the Regional units.

2.2 NON-REGIONAL UNIT TRENDS

25. Networks and other Operational Units: The projected growth in all funds for the Network Anchors

and Others Operational Units grouping in FY12 is 2.3 percent.

26. As shown in Figure 2.2, in terms of all funds, FPD and SDN are expected to grow in FY12 by 20.9 and

2.4 percent, respectively. These two units are also the only Networks and Other Operational units

with growth in Bank Budget – 4.9 and 0.4 percent, respectively. FPD’s high growth in FY12 is driven

by BETF projections.

27. FPD will receive $2.3 million in additional

funding in FY12 to support the

implementation costs of the Global

Practice pilot. SDN’s FY12 funding

includes $0.9 million to mainstream the

budget of the Special Climate Change

Envoy, and an additional $0.5 million for

the joint Bank-IFC sub-national finance

program (subject to Board approval).

The Anchor will be transferring $1 million

to the regions during the course of the

year to support specific sub-national

projects.

28. Not included in Figure 2.2 is expected

funding from the Knowledge Council ($6.4

million), which will also be a funding

source for the Network Anchors and

Others Operational Units.

29. Finance, Corporate and Administrative

Units: In terms of the large FACs depicted

in Figure 2.3, CTR and HRS are the only

units that are expected to decline in all

funds in FY12. Of the remaining units,

TRE, GSD, and LEG are expected to grow

in all funds.

30. GSD’s FY12 BB budget is at the same level

as in FY11. However, its FY12

Figure 2.2: FY12 Funding Composition and

FY12/11 Growth – Networks & Other Operational

Units

Figure 2.3: FY12 Funding Composition and FY12/11

Growth – Large FACs

-10%

-5%

0%

5%

10%

15%

20%

25%

0

50

100

150

200

250

SDN FPD HDN PREM OPCS DEC WBI

FY

12/1

1 -

Perc

en

tag

e C

hange in

All F

unds

FY

12 F

un

din

g b

y S

ourc

e -

FY

11 $

million


-4%

-2%

0%

2%

4%

6%

8%

10%

0

50

100

150

200

250

TRE CTR HRS ISG GSD EXT LEG

FY

12/1

1 -

Perc

en

tag

e C

hange in

All F

unds

FY

12 F

un

din

g b

y S

ourc

e -

FY

11 $

million



20

reimbursable budget is expected to grow due to increased chargeback revenues.

31. Regarding Bank Budget alone, HRS, ISG, and LEG are expected to grow in FY12. ISG’s FY12 additional

funding is approximately $0.9 million and supports a number of short-term activities such as

enhancements to the Operational Portal, and increased license requirements of ERP systems. For

HRS, the FY12 additional funding of $2.5 million supports the PeopleSoft 9.1 upgrade. This funding

is time bound.

32. The apparent growth in funding for TRE reflects Management’s decision to replace the unit’s

reimbursable budget with Bank Budget. There is no net increase in TRE expenditure. (See

paragraphs 92-93).

33. In the case of LEG, the $2.5 million additional FY12 funding is to finance the increased costs of

operational work. This increment, along with $7.2 million currently spent by LEG on support to

operations, will be transferred to Regional Budgets during the year. This funding will be earmarked

to fund Legal cross support and establish a closer linkage between the cost of Legal services and

operational activity. (See paragraph 100 for further information). In addition, LEG will receive $0.5

million to set up the new WBG Conflict of Interest Office (CoIO). It is responsible for all matters

related to advice, consultation, management, training, data gathering and monitoring and

evaluation of inter-institutional business conflicts of interest that arise in the context of the business

activities of the WBG. The CoIO will report to a Council comprising of senior officials of the various

stakeholders of IBRD/IDA, IFC and MIGA, and will be housed in the Legal Vice Presidency of the

World Bank for administrative purposes.

34. Among select small FAC units (Figure 2.4), MDG and ICSID have received additional funding

(compared to their original FY12 trajectories). CFP and INT have slightly declining Bank Budgets

(after significant recent increase in the

case of INT). The increase for MDG

reflects restoration of the full

complement of Managing Directors.

The increase for ICSID covers a $0.9

million funding deficit for ICSID in

FY12. Other small FAC units have

zero growth in their Bank Budgets.

35. In addition, noteworthy (not included

in Figure 2.4) is the establishment of

two small FAC units for which funds

have been allocated in FY12 - $1.0

million for the Sanctions Board

Secretariat (SBU) and $1.2 million for

the office of the Group Chief Risk

Officer (CRO).

Figure 2.4: FY12 Funding Composition and FY12/11

Growth – Small FACs

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

0

5

10

15

20

25

30

35

40

45

50

EXC MDG CFR OES IAD ICS CFP CRS INT

FY

12/1

1 -

Perc

en

tag

e C

hange in

All F

unds

FY

12 F

un

din

g b

y S

ourc

e -F

Y11 $

millio

n



21

2.3 MODERNIZING THE BANK’S BUSINESS

36. Reforms in support of modernizing the Bank’s business are increasing the operational

effectiveness and accountability of the institution. The Board paper on Modernizing the World

Bank Group: An Update describes progress in the following three areas:

i. Strengthening the Bank’s products and services with a sharper focus on results.

ii. Improving the Bank’s organization for increased integration, openness, and accountability.

iii. Modernizing the Bank’s processes and systems for more efficiency and flexibility.

This year’s Medium-term Strategy and Finance paper provided additional information on efforts

undertaken by Management and units to make adjustments in deploying Bank resources (staff,

technology and other uses of funds) and manage the institution’s product mix in the most efficient

and effective way to support implementation of priority areas.

37. The Bank’s Knowledge Strategy supports Business Modernization efforts with its focus on: (i)

delivering the best expertise to Bank clients; (ii) enhancing the development impact of the Bank’s

knowledge portfolio; and (iii) strengthening the Bank’s global connector role. The Knowledge and

Learning Council (KLC) provides leadership to and oversight implementation of the knowledge

strategy, and is responsible for determining which strategic knowledge priorities should be funded

out of the Knowledge Fund.

38. By end-FY11, the KLC anticipates that $10.1 million out of the $11.2 million budget will have been

spent on the following strategic knowledge activities: GETS ($4.7 million), Knowledge Platforms

($1.9 million), support to front line teams ($1.2 million), South-South Innovation ($1.0 million),

Grade GI Technical Experts ($0.6 million), Open Access ($0.3 million), Bank Fellows ($0.2 million),

and Collaborative Tools (i.e., Jive) ($0.2 million).

39. In FY12, the allocated budget of $12.8 million ($FY11) will be used to fund a similar menu of

activities as FY11, although it is likely that some may be scaled back with others expanded. For

example, higher operations and maintenance, and depreciation costs, are expected on Jive and

SharePoint (collaborative IT tools) in FY12. The KLC is also planning to fund the preparation of the

annual Knowledge Report from this budget - this report is intended to help inform the Bank on how

to become better at responding to client demands for timely world-class knowledge and to enable

the Bank to regularly measure how well it performs this role in an increasingly competitive

environment. The indicative Knowledge and Learning Council budget for FY13 and FY14 is $15.4

million a year ($FY11).

2.4 ALLOCATION CRITERIA AND FLEXIBILITY

40. As indicated in the MTSF paper, Management has followed a 4-step approach to allocating the

available budget flexibility of $27 million in FY12, rising to $46 million by FY14:


22

1. Re-build the institutional contingency to help Regional units respond to significant unexpected

crises or events that have staff or operational consequences as well as to fund key corporate

initiatives that require further management review. In the outer years, the contingency will

also support mainstreaming internal reform pilots. Access to the institutional contingency is

expected to be based on the criteria and procedures set out in Box 2.3.

2. Fund already approved corporate mandates, including newly established units and other

institutional priorities.

3. Fund initiatives that benefit the front line. While generally managed by FAC units, these

initiatives are crosscutting and support Regional operations.

Box 2.4: Approval Criteria and Procedures for Access to the Institutional Contingency

The approval procedures and criteria with respect to the release of funds to respond to emergencies and

unanticipated work program demands in the Regions are:

Timing of the release of funds

The contingency funds should be released in a timely manner.

80 percent of the institutional contingency funds are expected to be released by Jan 2012. The

remaining 20 percent percent ($2 million) by Q3.

Any funds not released by end Q3 can be considered for other priority activities outside of the

original scope of the contingency.

Requests that have staffing and cost implications beyond the current fiscal year will be carefully

reviewed in the context of multi-year budget impact as part of the quarterly performance reviews.

What would constitute an emergency/unanticipated work program demand?

These are incremental work program demands that cannot be funded within a unit’s existing

budget envelope.

These incremental work program demands result from external events, such as natural disasters,

political upheavals, and conflict.

Operational issues (such as staffing re-entries or pipeline development) are not eligible.

Funding requests

A request for funding should detail the activities and any associated deliverables, and justify the

need for incremental funding.

It should indicate unit plans to mitigate longer-term impacts (e.g., staffing, fixed costs

considerations).

Recommendations to Senior Management will be based on:

o Validity of the request (is it truly unanticipated work program?)

o Clarity of activities and deliverables

o Long term impact on the work-program

o VPU ability to redeploy own funds (including regional contingencies)


23

4. Fund units with significant external or volume-driven cost pressures.

41. Table 2.2 provides further detail on the use of available budget flexibility to fund the institutional

contingency and various priority initiatives under each of these steps.

42. In the course of FY11, a number of decisions were made with budgetary implications for FY12-14, as

noted in Table 4.2 of the Medium-Term Strategy and Finance paper. Table 2.3 lists these decisions

and their associated budgetary impacts. These amounts are included in the responsible unit’s

budget.

Table 2.2: Allocation of Available Budget Flexibility FY12-14 ($FY11 million)

FY12 FY13 FY14

Institutional contingency ava i lable to: 14.5 29.8 30.1

Regions to respond to emergencies and unanticipated work

program demands

11.0

(approx.)

13.0

(approx.)

13.0

(approx.)

Corporate Ini tiatives that need further management review

(StAR, TF Reform, Global Mobi l i ty, Grievance Mechanism)

3.5

(approx.)

3.8

(approx.)

4.1

(approx.)

Mainstreaming internal reform pi lots - 13.0

(approx.)

13.0

(approx.)

Preapproved Corporate Mandates. 6.1 5.2 5.3

Newly establ ished units :

Chief Risk Office 1.2 1.2 1.2

Sanctions Board Secretariat 1.0 1.0 1.0

Confl ict of Interest Office 0.5 0.5 0.5

Other insti tutional priori ties such as :

Growth in corporate systems software l icenses (IMT) 0.6

(approx.)

0.7

(approx.)

0.7

(approx.)

Reform publ ications for Open Data (EXT) 1.0

(approx.)

- -

Bus iness Continuity Management Unit 0.4

(approx.)

0.4

(approx.)

0.4

(approx.)

Bus iness Continuity - Global Strategic Real ignment 0.5

(approx.)

0.5

(approx.)

0.5

(approx.)

Initiatives that will benefit the front line operations. 3.8 7.4 7.9

Human Resources systems upgrades and process reforms 2.5 3.0 1.9

Operations systems improvements such as the Operations

porta l enhancement or IDA16 Mid-Term Review/IDA 17

Replenishment

0.8

(approx.)

3.9

(approx.)

5.5

(approx.)

Joint Bank-IFC Sub-national Finance Program 0.5 0.5 0.5

Units with significant external or volume driven cost pressures 2.7 2.7 2.7

of which for LEG 2.5 2.5 2.5

Total 27.0 45.0 46.0


24

Table 2.3: Allocated Budget, based on FY11 Funding Decisions ($FY11 million)

FY12 FY13 FY14

Establ ishment of a Fragi le and Confl ict-affected Si tuations (FCS) hub in

Nairobi

$1.7 $1.1 $1.0

Pi loting the transformation of FPD into Global Technical Practice $2.3 - -

Specia l Cl imate Change Envoy $0.9 $0.9 $0.9

Mainstreaming conservation into development $0.8 $0.7 $0.7

Supporting the Office of Information Securi ty $1.6 $1.6 $1.6

Bus iness Continuity $0.7 $0.7 $0.7

Internal Reform Secretariat $1.2 $1.1 -

Total $9.2 $5.9 $4.8


25

3. THE BUDGET FRAMEWORK

This chapter describes key changes to the overall budget framework. It also summarizes Management’s

request for below-the-line items and the capital budget, and discusses some of the improvements in

budget and planning methodology.

3.1 NET ADMINISTRATIVE SPENDING

43. Management’s proposal for the Net Administrative Budget is consistent with the requirement to

return to flat real budget expenditure by FY13. Relative to FY11, pre-planned spending will decline

by $6.5 million in FY12, and by a further $11.9 million in FY13.

44. The Bank’s Net Administrative spending peaked in FY10 with full use of the +2 percent flexibility

band and has since been on a declining trajectory (in real terms). While the +/- 2 percent flexibility

band remains available in case of unexpected events, Management’s agreement with the Board is to

end pre-allocating the band as part of the annual planning process by FY13.

-2% band

(-$36m)

+2% band ($36m)

$1,777.5

$0

Programmed budget for units and central accounts

Flexibility

Flat budget

Budget for units,

central accounts,

Real Estate

FY11 Framework

Recommended FY12 Framework

Set aside for post-crisis and Modernization Agenda ($18.4m in FY11) to ensure core program gets funding

FY12 Framework envisions using $11.9m of the flexibility bandFY12 Institutional

Contingency $14.5m

Potential FY13 Framework

Commitment to return to flat budget levels by FY13;

Potential FY14 Framework

Institutional

Contingency to be rebuilt within flat budget for FY13/14

Figure 3.1: Proposed FY11/13 Net Admin Budget Spending Authority (From FY11 base, $FY11 million)


26

3.2 SUMMARY OF FY12 ADMINISTRATIVE BUDGET PROPOSAL AND EXTERNAL FUNDS

45. The proposed FY12 budget and work programs support the Bank’s continued crisis response, post-

crisis directions, and internal reform agenda, while protecting core work program priorities and

maintaining some flexibility through the institutional contingency. Table 3.1 summarizes the main

components of the proposed FY12 budget and the remainder of this chapter provides more specifics

on each budget item. Further details on Unit resource envelopes were discussed in chapter 2, and

are set out in Annexes B and C.

46. To implement the work program along the key priorities and parameters endorsed by shareholders,

Management seeks approval of a FY12 Net Administrative Budget that is flat in real terms, following

Board guidance to return to flat budget spending by FY13. In nominal terms, the Net Administrative

Budget will increase by around $45.8 million with application of the Board approved price factor

methodology.

47. Taking into account “below-the-line” items, the total administrative budget will increase nominally

by 3.7 percent ($86.1 million) to $2,386.3 million. Including external funds, total funds growth is 4.8

percent to $3,329.6 million; $19 million lower than projected in the MTSF. This $19 million

reduction is attributed to the following:

An upward revision of the Price factor from $42 million to $46 million due to a change in the

projected US CPI in regard to non-salary US$-based costs;

The impact of an increase in IFC/MIGA/IMF Board reimbursables (approximately $5million);

Increase of about $24 million from estimated contribution to staff retirement accounts

(please see paragraph 59 for further information); and

A downward revision of $42 million to the FY12 external sources of funds projections.

Table 3.1: FY11/12 Budget and Total Funds Summary ($ millions)

FY11 Budget FY12 Budget

Net Admin Budget Net Admin Budget in $FY11 1,777.5 1,777.5

Price increase 0.0 45.8

Net Admin Budget ($Nominal) 1,777.5 1,823.3

Memo: Board-approved expenditure range +/-2% +/-2%

Below-the-line items Budget for Boards , SEC, IEG ($FY11) 1 104.7 100.3

Board Price Increase 2.3

Contribution to Staff Retirement Accounts 250.8 299.4

Grant Faci l i ties (DGF, SPF, IDF, CSF, CGIAR) 167.2 161.0

Total Admin Budget Sum of Net admin Budget and below-the-l ine i tems 2,300.2 2,386.3

External Funds Bank-Executed Trust Funds (BETFs) 555.7 604.1

Total Reimbursables 322.1 339.2

Total Funds Sum of Total Admin Budget and External Funds 3,178.0 3,329.6

1 Board budget of $100.3 mi l l ion in FY12 is net of reimbursables . The reduction of $4.4 mi l l ion in

comparison to FY11 is due to increased Board reimbursables .


27

3.3 BUDGET ALLOCATIONS BY UNIT TYPE

48. Compared with FY11 budget allocations, there is minimal change to Regional Unit budget plans

(Table 3.2), though Regions will also have the first call on the new institutional contingency to fund

crisis response and unexpected work program demands. Network Anchor and Other Operational

Units’ FY12 budgets remain virtually unchanged. Finance, Administrative, and Corporate budget

allocations increase by around $7 million in FY12 for units such as the Office of the Chief Risk Officer,

the Sanctions Board Secretariat, Legal Services and Information Management and Technology.

49. Estimates of expected external funds growth show a different pattern, though they remain subject

to significant uncertainty. As shown in Table 3.3, current external fund projections remain robust

for most unit types. Regions expect to receive the largest increase in external funding followed by

Network Anchors and then FACs.

50. As a result, overall spending (including Bank budget and external funds) is expected to increase for

all unit types. In total, this increase amounts to a year-over-year change of approximately 2.4

percent (Table 3.4).

Table 3.2: Change in the Bank Budget Plan by Unit Type ($FY11 million)

Table 3.3: Change in External Funds by Unit Type ($FY11 million)

Regions Network Anchors Other Ops FACs All Units

FY11 External Funds 373.7 240.4 62.5 123.6 800.2

FY12 External Funds 410.3 258.5 58.2 131.0 857.9

FY12/FY11 increase (change) 36.7 18.1 -4.4 7.4 57.7

FY12/FY11 increase (Percentage change) 9.81% 7.52% -6.99% 5.95% 7.21%

Regions1Network

Anchors1 Other Ops FACs All Units1

FY11 All Funds 1,455.2 399.7 208.6 666.6 2,741.3

FY12 All Funds 1,491.9 418.8 203.0 680.7 2,807.1

FY12/11 Difference 36.7 19.0 -5.6 14.1 65.8

FY12/FY11 Percentage Change 2.5% 4.8% -2.7% 2.1% 2.4%1 $11.2 m in FY11 and $12.8 m in FY12 for KLC are included in the All Units amount, but not in the Regions

and Network amounts.

Regions1Network

Anchors1 Other Ops FACs All Units1

FY11 Bank Budget Plan 1,081.5 159.3 146.0 543.0 1,941.1

FY12 Bank Budget Plan 1,081.6 160.3 144.8 549.8 1,949.2

FY12/11 (change) 0.0 1.0 -1.2 6.8 8.1

FY12/11 (Percentage change) 0.0% 0.6% -0.8% 1.2% 0.4%1 $11.2 m in FY11 and $12.8 m in FY12 for KLC are included in the All Units amount, but not in the Regions and

Network amounts.

Table 3.4: Change in All Funds by Type ($FY11 million) – Budget Plan and External Funds


28

3.4 NON-UNIT SPECIFIC ACCOUNTS

51. Along with Unit-specific budgets, the Net Administrative Budget contains a series of centrally

managed accounts that consolidate expenses not easily attributed to specific Units. Non-unit

specific accounts spend is expected to decrease in FY12 mainly due to savings realized through the

HQ Real Estate strategy. Highlights are as follows (see Table 3.5 for details):

The budget for the Staff Separation Fund will be $9.5 million. This fund supports a number of

business instruments dealing with staff in transition and exit.

The HQ Real Estate Proposal, a separate reporting line item since FY10, will have $16.3 million

allocated in FY12. This reflects savings of $21 million compared to what the Board originally

approved, due to the impact of the early C Building purchase and space realignment program.

Centrally managed overhead and benefits expenses are expected to increase by 3.9 percent in

real terms in FY12. This is in spite of a projected $12 million decline in depreciation expenses.

Within the centrally managed benefits accounts, the cost of insurance and other benefits are

expected to increase due to market factors, a cyclical increase in home leave expenses, and the

reintroduction of the market premium. Appointment benefits are expected to remain the same

with a projected increase in relocation shipping grants offset by a decrease in appointment

grants. Termination benefits are expected to decline slightly as the number of employees hired

before 1998 declines.

52. Managing volatility within the centrally managed benefits accounts: In addition to expenses

incurred during the fiscal year for centrally managed benefits, the Bank also maintains a set of

Central Benefit Reserve accounts for benefits that are accrued by staff. These liabilities include

Table 3.5: Non-Unit Specific Accounts ($FY11 million)

FY11 FY12

Staff Separation Fund 9.5 9.5

Centrally-Managed Overhead & Benefits -190.9 -183.0

Depreciation 32.4 19.5

Liabi l i ty Insurance 3.9 3.9

Benefi t Expenses -78.7 -78.8

Office Occupancy Recovery 1 295.6 317.9

Benefi t Recovery 1 -444.0 -444.5

Business Continuity Plan 14.6 16.1

HQ Real Estate Proposal 35.9 16.3

J Building Remap 10.8 10.3

Others 8.4 11.2

Total -111.7 -119.71 The Office Occupancy Recovery and Benefit Recovery amounts reflect the credit side

of the internal transfer pricing for office space at HQ and benefits paid to HQ staff. The

corresponding debit side is posted ot units using standard markup rates.


29

benefits that will be paid either during a staff member’s term of employment (i.e., home leave) or

upon termination (i.e., resettlement grants).

53. In the past, there has been significant volatility in Central Benefit Reserve accounts due to:

Changes in the principle economic assumptions (e.g., the discount rate and inflation rate);

Changes in the demographics of the population covered, including changes in pay and staffing;

Changes in demographic assumptions, including: terminations, retirements, deaths, the merit

scale for salary increases, tax gross-ups, and the percentage of staff assumed to receive

resettlement benefits;

Changes in the method used to calculate the liability; and

Changes in the plan rules that increase or decrease the value of a benefit.

54. This volatility can distort performance against the flat real net administrative target. As indicated in

the FY11 Q3 Quarterly Business Review, Management engaged Aon Hewitt as consultants to explore

options to limit the volatility in the reserve accounts and explore ways to protect Management

Accounts from these volatilities.

55. Following the consultants’ recommendations, Management intends to revise the budget treatment

for within-the-year changes. This will be discussed with the Budget Committee before

implementation.

3.5 BELOW THE LINE ITEMS

3.5.1 BOARD-RELATED BUDGETS

56. Highlights are as follows (see Table 3.6 for details):

The FY12 budget for Executive Directors (EDs), Board of Governors, Development Committee,

and Inspection Panel is $82.5 million, of which $22.2 million is reimbursable budget that

represents cost sharing arrangements with IFC, MIGA and IMF. This reflects the COGAM

discussion of the Board-related budget.

The $69.8 million EDs’ Budget for FY12 in Table 3.6 incorporates the recommendations made by

COGAM on May 4, 2011, including a gross increase of the EDs’ Budget by $1.0 million.

The increase in EDs’ budget will be offset by a $1.0 million reduction in the Board of Governors

Budget, which has systematically under-spent in the past several years. This measure is

consistent with the commitment and efforts by the Board to maintain at flat real level the

budgets directly related to the Board.

The Board is committed to bringing the Board of Governors’ and EDs’ budget back to FY11 levels

(with adjustment for price increases) by FY13.


30

A comprehensive review will be conducted of all aspects of the EDs’ budget, including travel and

staffing entitlements, by the end of the calendar year. This is a major undertaking that will

review options for maintaining the Board budgets constant and on a sound footing without the

need for any further increases in resources.

The proposed FY12 budget for SEC is $16.0 million, of which $1.3 million is reimbursable budget.

SEC will keep to the flat budget except for the inclusion of funding for the management of the

Financial Disclosure Program1.

The proposed FY12 IEG budget covers its activities across the World Bank Group ($FY11 32.7

million). The cost of activities pertaining to IFC and MIGA are shown as reimbursables.

3.5.2 STAFF RETIREMENT AND RELATED PLANS

57. Per the Pension Finance Committee’s approved rates for FY12, contributions to the Staff Retirement

Plan ($175 million), the Retired Staff Benefits Plans ($72 million), and the Post Employment Benefits

plan ($52 million) are expected to increase to an estimated total of $299 million in FY12

(representing 30.15 percent of Net Salaries), in comparison to $251 million in FY11. The FY12

allocations are based on the modified methodology - first applied in FY11 - which involves the use of

a five-year asset averaging method and a hybrid funding method that includes 10 years of expected

staff hires in the valuation model. The FY12 allocations are $24 million higher than the estimated

$275 million outlined in the FY12/14 Medium Term Strategy and Finance paper. The increase

reflects higher contribution rates compared to the MTSF (due to the latest actuarial valuation

recognizing changes in the liability profile over the year as well as effects of the US health care

reform) and an increased salary bill.

3.5.3 GRANT-MAKING FACILITIES

58. Grant-making facilities allocations in FY12 remain in line with MTSF projections from May 2011.

1 This program was previously funded under EDs’ budget.

Table 3.6: Board-Related Budgets ($FY11 million)

FY11 FY12

EDs total 68.7 69.8

Board of Governors 8.4 7.4

DC Secretariat 1.9 1.9

Inspection Panel 3.4 3.4

Total: EDs, Board of Gov, DC Secretariat

and Insp Panel

82.4 82.5

SEC 15.5 16.0

IEG 32.5 32.7

Board, SEC Reimbursables -18.7 -23.4

IEG Reimbursables -7.0 -7.3

Total 104.7 100.3


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59. Development Grant Facility (DGF): Budget contributions will decline by $6.4 million in nominal

terms from FY11 to FY12. An overall budget reduction began in FY11 as part of the Facility’s

reorientation strategy. The FY11 budget of $63.8 million represented a 13 percent reduction over

FY10, and the additional $6.5 million reduction in FY12 (10 percent over FY11) will reduce the

budget to $57.3 million.

60. The reorientation strategy requires grant recipients to have a clearly articulated and time-bound

strategy for disengaging from the Facility. It also repositions the Facility to provide seed money for

innovation – one of its original objectives. Out of the original long-standing 24 programs,

substantive progress has been made in developing exit strategies for 19 over the next 3-5 years; and

Senior Management has committed to the exit of the remaining five programs as well. The overall

budget is projected to remain at $57.3 million in FY13 and FY14 to allow the implementation of the

exit strategies with sponsors and partners.

61. For the State and Peace-Building Fund (SPF), Management plans to allocate up to $33.3 million per

annum on an ongoing basis and is currently reviewing the demands and options. The Fund was

established as a Multi-Donor Trust Fund in April 2008, with an overarching goal of strengthening

state and local governance and peace building in fragile and conflict-affected situations. The Board

endorsed an initial allocation of $100 million to the fund over FY09/11, and to date the Netherlands,

Australia, Sweden, Denmark, and Norway have contributed a further $25 million.

62. The Fund is emerging as an important entry point to fragile and conflict-affected situations (19

countries) and is a critical source of funding for countries in arrears (Somalia, Sudan, and

Zimbabwe). The Fund continues to respond not only to an existing pipeline of requests but also to

an increase in demand due to recent events in the Middle East and North Africa, Cote d’Ivoire, South

Sudan, and Guinea, and the need to support the operationalization of the FY11 World Development

Report.

63. For the Institutional Development Fund (IDF), Management plans to allocate $17.6 million for each

year of the planning cycle. This will ensure that the Fund can maintain its annual commitment level

of $25 million as set by the Board.2

64. Management implemented an improved cash management framework for major multi-year grant-

making facilities such as the Institutional Development and the State and Peace Building Funds in

FY11. The framework lowered budget transfers while ensuring that recipient programs are

resourced to honor the Bank’s legal commitments. The deferral of transfers achieved from this cash

management framework is expected to reduce IBRD expenses for FY11 by around $16 million

compared with the authorized budget.

65. Management is proposing $50 million in funding to the Consultative Group on International

Agricultural Research (CGIAR). It is expected that this funding will be maintained over the FY12-14

planning period. Discussions on increasing general donor contributions by FY15 are ongoing.

2 The $17.6 million request translates into $25 million annual commitment level after considering investment income earned by

the IDF program, reflows of funds from closed IDF projects, and funds from cancelled IDF projects.


32

66. Social Development Civil Society Fund (CSF): Management proposes a budget of $2.8 million for

FY12, unchanged from previous years.

3.6 EXTERNAL SOURCES OF FUNDS

67. External sources of funds (BETFs and reimbursables) will continue to be an important leveraging tool

to reinforce IBRD/IDA work programs. While it is difficult to predict increases or decreases in BETFs

in the current uncertain environment, the present forecast takes the midpoint between central and

VPU-specific projections.3

68. Most units are projecting increases in BETF spend in FY12, albeit at different rates. Most notably,

ECA projects substantial growth in TF funding in Central Asia and the Caucasus (in the Water and

Sanitation and Energy and Mining sectors) and in Russia (in Health and Social Services and Public

Administration). Another pocket of growth is in FPD, where the InfoDev program – a part of a newly

established practice on Innovation, Technology and Entrepreneurship – is projected to more than

double in FY12 its mostly donor-funded work. DEC, on the other hand, is projecting a drop in BETFs,

affecting work such as on remittances and migration, and largely due to uncertainty in donors’

funding.

3 The mid-point between central and VPU-specific projections is about 10.8 percent lower than central projections for FY12.

Table 3.7: Grant-Making Facilities Budgets ($ million)

Grant-making Facilities Budgets FY12 FY13 FY14

Institutional Development Fund (IDF) 17.3 17.6 17.6 17.6

Civil Society Fund (CSF) 2.8 2.8 2.8 2.8

State & Peace-Building Fund (SPF) 33.3 33.3 33.3 33.3

Core Development Grant Facility (DGF) 63.8 57.3 57.3 57.3

Consultative Group on International Agricultural

Research (CGIAR)

50 50 50 50

Total Grant-making Facilities, including CGIAR 167.2 161.0 161.0 161.0

FY11

Budget

Multi-year Framework

Table 3.8: External Funds

FY11 FY12 ($FY11) Percentage Change

BETFs 555.7 604.1 8.7%

Reimbursables, of which: 322.9 339.5 5.2%

Operational, TF-related 1 138.9 135.8 -2.2%

Operational, Fee for services 2 47.3 58.8 24.2%

Other Operational 1.0 1.6 51.9%

Non-operational 135.6 143.4 5.7%

Total External Funds 878.6 943.6 7.4%1 Includes TF fees , trustee fees , program implementation fees , and EFOs.2 Includes FBS, RAMP, and RTA porgrams.


33

69. Projections for reimbursables (Table 3.8) show robust growth (about 5.2 percent or $16.6 million),

with most of the growth coming from the Fee for Services category ($11.5 million), and from non-

operational reimbursables ($8.8 million). Cost Sharing revenues contribute to the projected

increase in the non-operational reimbursables. Reimbursable revenues for Regions are expected to

grow (11.4 percent, see Table 3.9) due to an increase in trust fund administration fees and Fee-

Based Services. Networks expect a decline (-12.3 percent) in Externally Financed Outputs revenue

and in programs supported by the Carbon Funds, while projecting constant revenues from program

implementation, such as GEF and CIF. Among FAC Units, Treasury (TRE) is the largest recipient of

reimbursables and fee income and is projecting a growing investment fee income from Pension

Administration (10.0 percent in FY12) and in its Asset Management Program (9.9 percent in FY12)

(see paragraphs 92-93).

3.7 PRICE FACTOR

70. Applying the Board-approved methodology, the price adjustment factor for FY12 is 2.58 percent (to

a Net Administrative Budget of $1,823.3 million). This yields an overall price adjustment of $45.8

million comprised of the following:

A price adjustment of $19.0 million on US$-based headquarters salary and salary-related costs

(compare with HQ wage bill base of $997 million);

A price adjustment for non-US$ Country Office salaries of $11.0 million comprised of a positive

local structural adjustment of $10.8 million and an adjustment reflecting local currency

appreciation relative to the $US of $0.2 million (compare with non-HQ wage bill base of $131

million);

A price adjustment for other (non-salary) US$-based costs of $13.7 million;

A price adjustment for non-US$ Country Office, non-salary related costs of $10.3 million

comprised of an offsetting adjustment reflecting local currency depreciation of -$0.6 million;

and

An adjustment of -$8.2 million that eliminates reimbursables from four components above.

Table 3.9: Reimbursables by Unit Type

FY11 FY12 ($FY11) Percentage Change

Regions 97.2 108.3 11.4%

Networks/ Other Opps 46.3 40.6 -12.3%

FACs1 143.2 150.2 4.9%

IEG, COGOV/ SEC 25.8 30.8 19.2%

Others2 10.4 9.7 -6.5%

Total Reimbursables 322.9 339.5 5.2%1 Includes TRE's reimbursables , regularized into Bank budget s tarting FY12.2 Includes publ ication revenue, faci l i ties rental income, AMEX rebates , and other

income.


34

71. The overall price adjustment is the weighted average of the above components: 1.90 percent

structural adjustment for Washington-based staff costs, 1.89 percent for US$-based non-staff costs,

8.4 percent for Country Office staff costs, and 5.7 percent for non US$-based non-staff costs. Price

for Country Office costs includes adjustments for local currency depreciation.

72. Management plans to apply Unit (VPU) specific price adjustment for selected Units that have sizable

local currency costs.

3.8 CAPITAL BUDGET SUMMARY

73. The total proposed capital budget for FY12 is $139.1 million. This 2.6 percent ($3.7 million)

decrease over the Board approved FY11 capital budget of $142.8 million is due to: increased

investments in Technology and Systems ($12.4 million) and Country Office Facilities ($26.7 million)

offset by decreased investments in Washington Facilities ($42.8 million). Additional details are

provided in Annex E.

74. The FY11-13 Information Management and Technology (IMT) Three-Year Strategy provides the

selection framework for Technology and Systems capital investments – a critical element of the

Bank’s internal reform agenda. Major areas of investment include Global Communications and

Country Office Network ($18.6 million), Corporate Systems and Infrastructure ($15.1 million), and

Systems Development and Specialized Computing ($22.1 million).

75. The near completion of the Real Estate Proposal and the Space Realignment Project resulted in a

reduction of $42.8 million in the proposed FY12 capital budget when compared to approved FY11

capital budget for Washington facilities. Projects related to public space improvements ($2.0

million), print services ($1.5 million), and furniture replacements ($1.3 million) are to receive the

most funding in FY12.

76. The FY12 capital budget request of $63.5 million for Country Office Facilities includes $39.0 million

for Global Bank Set-aside and $24.5 million for new construction, as well as security, expansions and

upgrades of existing facilities in support of greater decentralization of staff and authority to the

Country Offices. New construction, totaling $7.5 million, is proposed for Lao PDR and Sri Lanka.

77. The Bank is establishing a new Kenya country office in Nairobi with the FCS hub. More acquisitions

are being explored versus leases given the global real estate market and favorable economic terms

and benefits.

78. For Country Offices, the Global Bank set-aside increases from $89.9 million for the FY11-13 period to

$118.5 million for the FY12-14 period. The Global Bank Set-aside includes relocations and is an

estimate that takes into account on-going/anticipated decentralization reforms and co-location with

IFC.


35

79. A centralized approach to management of the Country Office Facilities program is being considered

to optimize the global real estate portfolio. Managing the institution’s assets centrally will enable

management to plan and implement real estate and facilities projects as a portfolio from a long-

term and strategic perspective.

3.9 ONGOING PROCESS IMPROVEMENTS

3.9.1 THE REVAMPED BUSINESS PLANNING PROCESS

80. As reported on in the MTSF, Management is in the early stages of implementing a new business

planning and budget allocation process. Over time, the new process will: (i) Move away from

incremental budgeting (which characterized the allocation process in the past), to an approach that

is more grounded in results and built up from work program needs; (ii) place greater emphasis on

thematic/cross-VPU issues rather than a purely VPU-centric approach; (iii) reinforce accountability

for the use of resources; and (iv) establish greater transparency in budget allocations.

81. This year, the new approach was piloted for the Regions. It will be extended to the Network

Anchors in the first half of FY12, and to other units by the end of FY12.

82. The FY12-14 business planning process centered on a series of four engagements with the MDs/CFO

and select groups of VPs:

February 25, 2011 – MDs/CFO, RVPs and NVPs met to develop a common understanding of the

broad budget environment, corporate priorities and key strategic issues informing the FY12-14

business planning cycle. Also discussed were opportunities for internal realignments to meet

business needs and address constraints to more effective resource management.

Table 3.10: Capital Program Summary – Investment Schedule FY11-14

FY11 FY11 FY12 FY13 FY14

Budget YTD1 Budget Plan Plan

Technology and Systems 54.9 27.7 67.3 52.3 55.4

of which IMT Investment Scale-Up Reserve 7.9 n/a 0.2 5.5 39.1

Facilities – Washington2 267.2 222.4 8.3 19.5 14.4

of which HQ Real Estate Proposal 233.2 216.1 0.5 0.4 0.7

Space Realignment Project 26 1.1 0 0 0

Facilities - Country Office 36.8 12.4 63.5 63.9 64.7

of which Global Bank Set-aside 24.9 8.2 39 34.5 45

Total Capital Release (All Parts): 358.9 262.5 139.1 135.7 134.5

2 The Washington Facilities line under "FY11 YTD" reflects a FY11 Board-approved supplemental budget of $216.1m for purchase of the "C

Building" at 1225 Connecticut Avenue.

Capital Funds ($ Millions)

1 Data on capital release of funds as of May 13, 2011


36

March 28, 2011 – MDs/CFO, RVPs and NVPs met to discuss issues stemming from Regional

Business Plans that were drawn up following the February 25th meeting, and were informed by

the Regional Updates presented to the Board in February/March. The issues were grouped

under the following crosscutting themes: selectivity and trade-offs; corporate commitments;

financial services (lending, supervision); AAA services; expense structure and staffing; and

external funds.

April 4, 2011 – MDs/CFO and select FAC VPs met to discuss specific corporate issues that had

been suggested by the earlier meetings (most notably in the areas of HR and IT), issues affecting

two units (TRE, LEG) and MDs/CFO also had a first discussion on unit trajectories and principles

to guide use of available budget flexibility.

April 12, 2011 – MDs/CFO met to confirm decisions taken during previous meetings (see Box

3.1) and to decide on unit trajectories.

83. The insights gleaned from the Regional Business Plans and the discussions at the MDs/CFO meetings

were incorporated into Chapter 3 of the MTSF.

84. Memoranda of Understanding will be drawn up with the Regions. They will form the basis of

periodic business discussions between the MDs/CFO and the RVPs, including performance metrics,

deliverables, and key Management actions.

85. As a necessary pre-requisite to extending the new business planning process to the NVPs, DEC and

WBI in the first half of FY12, Management has asked the Matrix Leadership Team (MLT) and

Knowledge and Learning Council (KLC) to complete relevant ongoing work (see Box 3.1).

86. The MLT is accountable for ensuring the efficient and effective functioning of the Bank’s matrix

structure, including the Regional and Network accountability frameworks, and the integration of

global and country programs. Management would like the MLT to:

i. Develop terms of reference for the Network Anchors that clarify accountability arrangements -

including accountability for the quality of sectoral knowledge and ways to measure it.

ii. Agree on performance metrics for the Network Anchors.

iii. Define core business lines and ensure comparability in the use of these business lines across

Anchors as well as DEC and WBI.

87. This work should ensure the alignment of Network Anchor managed trust funds and GPPs with the

objectives of the new Trust Fund Management Framework and Global and Regional Partnership

Programs Management Framework (PPMF).


37

88. The KLC’s mandate is to provide leadership oversight of the Bank’s knowledge and learning

strategies. Management has asked the KLC to develop a governance framework for knowledge

services covering direction setting, accountability for sectoral knowledge product quality, and

product definition for core knowledge assets, among other things. The KLC will also determine

(jointly with the MLT) arrangements for the quality control function for knowledge products.

3.9.2 TRUST FUND INTEGRATION AND COST RECOVERY

89. Trust funds featured prominently in this year’s planning process discussions, culminating in the

decisions noted earlier in this section. During the discussion of the MTSF paper, EDs expressed

strong support for achieving an integrated and holistic approach to trust funds in business planning

and budgeting. They reiterated this view in the May 5th Board meeting on the Trust Fund

Management Framework. Two of the pillars of the Trust Fund Reform Roadmap of particular

relevance to the budget are:

Integration with budget and business processes; and

Cost recovery and efficiency.

Planning and Budgeting: Improvements in the integration of trust funds in budget and business

planning processes are ongoing, and include:

Box 3.1: Summary of Key Planning Decisions for MDs/CFO Endorsement

Business management decisions made by the MDs/CFO during the FY12-14 business planning meetings

include the following:

1. Review and clarify the criteria used for budget allocation decisions ahead of the FY13-15 business

planning cycle.

2. Rebuild institutional contingencies to respond to emergencies and unanticipated work program

demands in the Regions.

3. Develop a framework for collective management decision making on important staff issues, such as

decentralization, global mobility and relocation support, and batch recruitment.

4. Develop HR policies with reduced customization and complexity.

5. Complete implementation of the IMT federated operating model. Ring fence IT depreciation at the

institutional level. Develop a robust IT risk framework to enable more risk taking and staff

productivity.

6. Review TA funding models and Fee Based Services (FBS) policy framework.

7. Review fiduciary and safeguard policies to mitigate impact on costs and risk aversion.

8. Deepen trust fund integration into plans, programs, systems, and operational reviews. Take external

funds into account in budget allocation.

9. Develop and implement a Trust Fund road map, including an umbrella (thematic mobilization)

approach to enable more strategic use of Trust Funds.

10. Complete work on Terms of Reference for Network Anchors, including GPG positioning and integration

(MLT).

11. Complete work on a governance framework for Knowledge services (KLC).


38

o Incorporation of information of BETF use in Bank budget/planning documents (the

Quarterly Business Reviews and the papers for the four points of engagement with the

Board);

o Inclusion of selected indicators on trust funds in the Corporate Scorecard, and continued

quarterly reporting in the Quarterly Business Reviews;

o Development of the multi-year Integrated Planning System, to cover the budget (all funds),

deliverables, expense, revenue, and staff planning. The new system, currently being used

by all Regions, will permit detailed corporate and unit-level planning for all sources of

funding – Bank Budget, Bank-executed trust funds, Fee-based Services, reimbursables and

Externally Financed Outputs; and

o BETFs are being integrated into work program agreements and Country Assistance

Strategies. ECA, AFR, EAP, LEG, LCR, MNA, SDN, PREM, WBI, among others now include

Trust Funds in their Work Program Agreements.

Improved Trust Fund Cost Recovery

o In 2007, the Board called for full cost recovery for the management of trust funds. A series

of measures improved the level of cost recovery to around 92 percent by FY10. An under-

recovery of around $35 million remained, however, of which $23 million was related to

central unit costs.

o To address the remaining under-recovery, the 2010 Board report recommended

simplification of existing arrangements for customization of larger trust funds and

adjustments to the fee scale for central unit costs to ensure full cost recovery. A new fee

schedule has been established, with a view to progressively achieving full central unit cost

recovery by FY15.

3.9.3 TREASURY’S BUDGET – PLANNING AND REGULARIZATION OF REIMBURSABLES

90. Effective FY12, Senior Management has decided to change the way Treasury’s operations are

budgeted. Currently, part of Treasury's budget is adjusted automatically during the year by an

amount equivalent to the income received from external clients. Under the new arrangement,

Treasury’s budget will be determined through the Bank’s corporate planning process based on an

agreed 3-year business plan. As agreed by the Board, when the Reserves Asset Management

Program was established, the principle of full cost recovery of developmental services will be

maintained. The new arrangement will provide more certainty for Treasury and allow better

integration of delivery capacity with client needs.

91. Treasury will provide a broad outline of the requirements for delivering its work program, including

services to external clients. This will allow a strategic budgeting process, built around a conversation

with Senior Management on Treasury’s full budget trajectory. The approach will ensure that the

growth of the Treasury business is sustainable by ensuring that there is sufficient investment in


39

infrastructure to cope with evolving business demands. During the year, interim adjustments will be

applied to align budget with emerging business opportunities, and to respond to unforeseen shocks.

3.9.4 RING-FENCING IMT DEPRECIATION INSTITUTIONALLY

92. As noted in Box 3.1, one of the decisions reached during the FY12/14 Planning Process was to ring-

fence depreciation for Information Management and Technology at the institutional level.

93. Depreciation is currently embedded in unit operating budgets and is treated as fungible with other

expenditures. This has resulted in systemic underfunding of depreciation, and postponement of

replacement and upgrade of systems, introducing additional operating risks.

94. In future, approval of capital investment and multi-year depreciation will be consolidated in a single

decision. Depreciation commitments will be non-fungible and managed separately from the rest of

the administrative budget similar to depreciation for Head Quarters facilities. The depreciation

accounts would not be subject to productivity taxes since depreciation represents a financial

commitment for cost of replacement of an existing asset.

95. The WBG Chief Information Officer will present the three-year capital and required multi-year

depreciation budgets for all business lines for approval as part of the annual business planning

process. It is expected that planned depreciation expenditures currently in units’ budgets will be

redirected to central accounts and corresponding budget clawed back by the beginning of FY12.

3.9.5 CROSS SUPPORT SIMPLIFICATION

96. Inter-VPU cross support entails the purchase by one VPU of staff time from another unit. The

current system is complex and transaction intensive. Management favors a more simplified and

transparent mechanism. However, given ongoing matrix and knowledge reforms, including the FPD

Global Practice pilot, implementation of institution-wide cross support reform will wait until FY13.

97. One component of the FPD pilot is cross support reform. The objective is to increase the level of

cross-support by addressing two binding constraints: a) the perceived high costs of FPD staff vis-a-vis

consultants; and b) the lack of alignment between when cross support is provided and when

settlement for this cross support takes place. Other objectives are to avoid excessive transactions in

the medium term, have minimal impact on other units, and learn as much as possible from the pilot

arrangement in the first year. Before the lessons of the FPD pilot can be applied institution-wide,

other important prerequisites will have to put in place in FY12. These include: (i) a clear

accountability framework for Networks and strengthening of the role of Sector Boards, and (ii) clear

incentives for cross support.

98. Cross support has also arisen in the context of addressing the substantial cost pressures faced by the

legal VPU (see paragraph 35). LEG provides three kinds of services: institutional and corporate,

operational, and justice reform advisory. In recent years, the VPU has faced substantially increased

demand for institutionally mandated fiduciary support to operations. The funding model for this

activity will move from direct budget allocation to cross support. The portion of LEG’s budget

currently spent on supporting Regions will transfer to Regional units in FY12, to be used as a


40

prepayment for purchases of LEG fiduciary services for operations. This amount, $9.7 million,

includes an additional $2.5 million to reflect the increase in demand for legal services because of the

scale-up in IBRD/IDA in response to the crisis. The Regions/LEG will monitor and review legal

services and charges in FY12 against Memoranda of Understandings, with the expectation that

future operational budgets for LEG will be more closely aligned with country programs.

3.9.6 SECURITY

99. A review of security operations was undertaken to facilitate a more effective implementation of

security standards/policies and increased accountability across the WBG. Construction is underway

to move the Security Operations Center (SOC) from the Main Complex to the I-building. This next

generation SOC will merge global and headquarters centers, and the Emergency Operations Center

into one location so the process is seamless and streamlined.

100. To enable further expansion, the Regional and Country Security Advisors delivering the Global

Security Program will change in a two-phased approach. First, the Advisors will be converted to

Bank staff positions, which will result in close to 30 positions covering all the major regions where

the Bank has offices and operations. Second, the funding for the Advisors and related programs

previously covered by Regions will now be consolidated in GSD. In response to this and the growing

demands on security, the security unit has gone through a major restructuring of its headquarters

structure and personnel to better serve the institution's ever-increasing needs.

3.10 FY12 BUDGET RECOMMENDATIONS

101. To carry out the work program described in this document, Board approval is sought for the

following budget recommendations for FY12 (in $FY12):

Box 3.2: Mitigating Security Risks

The Bank's increased involvement in post-conflict and fragile situation environments, along with the

continuously evolving security situation in some locations, has raised the exposure of staff and physical assets to

increasing security risk. In addition, recent natural disasters and geo-political turmoil in a number of countries

have led to an increased focus on staff well-being and security. Corporate Security had a busy year assisting

staff and their families who needed to be evacuated or relocated in Egypt, Tunisia, Kyrgyzstan, Cote D"Ivoire

and Japan. As a result of the lessons learned from those experiences, the Bank's policies concerning these

contingencies have been improved.

Road-related crashes pose one of the biggest safety risks to staff globally. 12 staff have died in road incidents

since 2005. In response, the Bank has launched a road safety program and initiative, which includes a Road

Safety Policy, AMS 6.85. Country Offices are busy finalizing individual road safety plans so they can comply with

the policy milestones.

Security delivered trainings and outreach to thousands of staff in face-to-face briefings but also through on-line

trainings. The Business Continuity and training units delivered a program update to the Board in January 2011

that was a major milestone in maturing the business continuity program. Additionally, the unit organized the

Emergency Management Team exercise in September to ensure the institution is prepared and well rehearsed

to respond to a major crisis that could affect the business and welfare of our staff.


41

A net administrative budget of $1,823.3 million to be managed within a range of +/- 2 percent,

including the price adjustment factor of 2.58 percent ($45.8 million).

Board-related FY12 funding to comprise:

o $84.0 million for Executive Directors (EDs), Board of Governors, Development Committee,

and Inspection Panel, of which $22.2 million reimbursables;

o $16.3 million for the Corporate Secretariat, of which $1.3 million reimbursables; and

o $33.1 million for IEG, of which $7.3 million reimbursables.

Grant-making facilities:

o $50.0 million for the Consultative Group on International Agricultural Research (CGIAR);

o Up to $33.3 million in FY12 for the State and Peace Building Fund (SPF);

o Up to $17.6 million for the Institutional Development Fund (IDF) to maintain annual

commitment capacity of the Fund at the level set by the Board at $25 million;

o $2.8 million for the Social Development Civil Society Fund (CSF); and

o No approval is sought in this paper for the FY11 Development Grant Facility (DGF) budget.

Management’s proposal of $57.3 million for the DGF is being submitted separately, along

with the FY12 Annual Review of DGF activities.

Contributions for the Staff Retirement Plan, the Retired Staff Benefits Plans, and the Post

Employment Benefits plan amount to $299.4 million.

A capital budget of $139.1 million.

42

ANNEX A: GEOGRAPHIC VIEW OF THE NET ADMINISTRATIVE BUDGET

1. The Board annually approves the Net Administrative Budget for the IBRD/IDA work program as a

whole. Details on unit level estimates are provided in the Program Cost Summary provided in Annex

B.

2. To complement the Program Cost Summary view, Management has developed a geographic view

that shows how Regions benefit from budget spending irrespective of the delivering unit (e.g., SDN

delivers aspects of the water program to clients in Africa).

FY07 FY08 FY09 FY10 CAGR

Global Programs 18.4% 19.2% 19.8% 19.1% 1.3%

Africa 18.6% 19.0% 19.0% 18.9% 0.5%

East Asia & Pacific 7.6% 7.4% 7.5% 7.2% -1.8%

Europe & Central Asia 11.4% 11.3% 10.7% 10.3% -3.4%

Latin America & Caribbean 10.3% 10.3% 10.2% 10.1% -0.7%

Middle East & North Africa 5.9% 6.1% 6.2% 6.0% 0.6%

South Asia 8.7% 8.7% 8.8% 9.0% 1.1%

Finance, Administration & Corporate

33.4% 31.7% 33.2% 32.3% -1.1%

Centrally-managed accounts -12.8% -13.4% -15.9% -12.8% 0.0%

(Distribution based on FY10 Actuals)

Table B.1: Indicative Distribution of Net Admin Budget Actuals by Geographic Region (FY06 to FY10)

Figure B.1: Projected Expenditures for FY12 Net Administrative Budget ($1,778 million in FY11)

Africa$336

East Asia& Pacific

$128

Europe &Central Asia

$182

Latin America& Caribbean

$179

Middle East & North Africa

$106

SouthAsia

$160

Finance, Administration

& Corporate$346

Global Programs$340

Support & Other Services, $93

Other Client Services, $30

Sector & Global Services, $70

Knowledge Management , $67

External Partnerships, $39

Other Country Services, $29

Analytic & Advisory Activities, $10


43

ANNEX B: PROGRAM COST SUMMARY FY09–14

ADMINISTRATIVE PROGRAMS 1/

FY09

Budget

Plan

FY10

Budget

Plan

FY11

Budget

Plan

FY11

Budget

Remap

FY12 Plan

($FY11)

FY12

Plan

($FY12)

FY13

Indicative

($FY12)

FY14

Indicative

($FY12)

A. REGIONAL PROGRAMS

Africa 321.0 332.7 347.2 347.2 348.1 354.5 353.3 352.4

East As ia and Paci fic 155.9 162.6 170.0 170.0 168.5 176.0 175.5 175.1

Europe and Centra l As ia 190.2 189.4 189.0 189.0 197.6 201.3 201.3 200.3

Latin America and Caribbean 177.3 178.5 186.4 186.4 185.4 191.0 190.5 189.5

Middle East and North Africa 110.2 114.8 117.7 117.7 119.3 121.5 121.8 121.6

South As ia 145.8 152.7 155.0 155.0 157.5 164.5 164.5 164.5

Subtotal 1100.5 1130.7 1165.3 1165.3 1176.4 1208.8 1207.0 1203.4

Expected funding from Knowledge Counci l for Regional Units 0.0 0.0 5.6 5.6 6.4 6.5 7.8 7.8

Strategic Repriori ti zation Fund 8.4 2.0 - - - - - -

Bank/FAO Cooperative Program 13.1 13.1 13.4 13.4 13.4 13.7 13.7 13.7

Subtotal 1,122.0 1,145.8 1,184.4 1,184.4 1,196.2 1,229.0 1,228.5 1,224.9

B. NETWORK & OTHER OPERATIONAL PROGRAMS

Susta inable Development Network 79.4 89.9 94.4 94.4 92.9 94.0 91.0 89.3

Financia l and Private Sector Development 37.8 39.1 39.8 39.8 42.0 42.8 39.9 39.9

Human Development 30.9 33.4 32.4 32.4 30.7 31.2 30.3 30.3

Poverty Reduction and Economic Management 31.1 32.6 32.7 32.7 31.8 32.4 31.4 31.4

Expected funding from Knowledge Counci l for Network Units 0.0 0.0 5.6 5.6 6.4 6.5 7.8 7.8

Operations Pol icy & Country Services 40.5 41.3 43.3 40.8 40.4 41.2 39.1 39.3

Internal Reform Secretariat - - - 2.6 3.7 3.8 3.7 -

Qual i ty Assurance Group 5.5 0.0 0.0 - - - - -

Development Economics 51.7 52.0 55.3 55.3 52.2 53.2 51.7 51.7

World Bank Insti tute 56.6 56.3 54.9 53.7 51.8 52.7 51.4 51.3

Subtotal 333.5 344.6 358.5 357.3 352.1 357.8 346.3 341.1

C. OPERATIONAL UNITS SUBTOTAL 1,455.5 1,490.4 1,542.8 1,541.6 1,548.3 1,586.8 1,574.8 1,565.9

D. FINANCE, ADMIN. AND CORPORATE PROGRAMS

Treasurer's 76.7 87.8 88.8 72.5 75.0 75.5 76.7 78.4

Control ler's 59.3 48.0 50.1 51.5 50.5 51.8 50.8 50.8

Concess ional Finance and Global Partnerships 19.5 25.3 24.0 22.3 21.9 22.1 22.9 21.9

Corporate Finance and Credit Risk - - 20.4 20.5 21.0 21.3 21.3 20.5

Finance CIO Office - - - 33.8 34.2 34.8 35.9 38.2

Chief Risk Office - - - - 1.6 1.6 1.7 1.7

Human Resources 79.5 78.0 76.8 77.0 74.7 75.9 74.1 73.0

Information Solutions Group 82.7 83.4 90.1 73.1 73.2 74.2 74.2 74.6

Genera l Services and Faci l i ties 143.9 150.2 160.0 158.8 163.2 165.5 163.7 163.7

Office of the Pres ident 6.4 5.5 5.6 5.6 5.6 5.7 5.7 5.7

Managing Directors 8.2 8.2 7.9 8.9 9.4 9.6 9.6 9.6

IDA IFC Secretariat 1.1 1.1 0.8 0.8 - - - -

Office of Eva luation and Suspens ion 1.3 1.3 1.6 1.6 1.6 1.6 1.6 1.6

External Affa i rs 35.9 35.5 35.4 35.4 35.3 35.9 33.9 33.9

Internal Audit 11.8 11.9 12.1 12.1 12.2 12.3 12.3 12.3

Legal Services 36.5 36.1 35.9 35.9 39.0 39.6 39.4 39.4

International Centre for the Settlement of Investment Disputes 5.1 1.9 1.9 1.9 2.8 2.8 2.8 2.9

Confl ict Resolution System 7.1 10.4 12.2 6.0 5.0 5.1 5.1 5.1

Department of Insti tutional Integri ty 18.7 18.7 20.3 20.3 20.2 20.5 19.9 19.8

Office of Ethics and Bus iness Conduct - - - 4.6 5.6 5.7 5.7 5.7

Adminis trative Tribunal - - - 1.4 2.0 2.0 2.0 2.0

Sanctions Board - - - - 1.0 1.0 1.0 1.0

Subtotal 593.7 603.2 644.0 644.0 654.8 664.6 660.2 661.9

E. ALL UNITS SUBTOTAL 2,049.1 2,093.7 2,186.8 2,185.6 2,203.0 2,251.3 2,235.0 2,227.8


44

ADMINISTRATIVE PROGRAMS 1/

FY09

Budget

Plan

FY10

Budget

Plan

FY11

Budget

Plan

FY11

Budget

Remap

FY12 Plan

($FY11)

FY12

Plan

($FY12)

FY13

Indicative

($FY12)

FY14

Indicative

($FY12)

F. INSTITUTIONAL CONTINGENCY 2/ 20.2 - - - 2.6 2.6 30.3 30.7

G. STAFF SEPARATION FUND 9.3 8.7 9.5 9.5 9.5 9.7 9.7 9.7

H. CENTRALLY-MANAGED OVERHEAD & BENEFITS (137.3) (159.2) (190.9) (190.9) (183.0) (186.4) (179.7) (176.6)

I. BUSINESS CONTINUITY PLAN 14.0 15.4 14.6 14.6 16.1 16.4 16.4 16.4

J. HQ Real Estate proposal - 25.1 35.9 35.9 16.3 16.3 (5.5) (5.3)

K. J Building Remap 10.0 10.0 10.8 10.8 10.3 10.4 11.0 11.0

L. OTHERS 3/ 10.0 10.2 7.2 8.4 11.2 11.4 10.7 10.4

M. ADMINISTRATIVE BUDGET 1,975.3 2,003.9 2,073.9 2,073.9 2,085.9 2,131.7 2,127.9 2,124.0

Less: - - - - - - - -

N. Reimbursables & Fee Income (262.7) (282.6) (296.4) (296.4) (308.4) (308.4) (304.6) (300.7)

O. NET ADMINISTRATIVE BUDGET 1,712.6 1,721.3 1,777.5 1,777.5 1,777.5 1,823.3 1,823.3 1,823.3

P. Board of Governors, EDs, DC, IPN, SEC & IEG - - - - - - - -

Board of Governors , EDs , Development Committee & IPN 80.2 82.4 82.4 82.4 82.5 84.0 84.0 84.0

Corporate Secretariat 14.2 14.4 15.5 15.5 16.0 16.3 16.3 16.3

Independent Evaluation Group 24.8 24.9 32.5 32.5 32.7 33.1 33.1 33.1

Less : Reimbursables & Fee Income (25.1) (20.6) (25.7) (25.7) (30.8) (30.8) (30.8) (30.8)

NET BUDGET FOR Board of Governors, EDs, DC, IPN, SEC & IEG 94.1 101.0 104.7 104.7 100.3 102.6 102.6 102.6

Q. STAFF RETIREMENT ACCOUNTS 4/ 176.6 232.2 250.8 250.8 299.4 299.4 337.5 389.4

R. DEVELOPMENT GRANT FACILITY 148.8 73.1 63.8 63.8 57.3 57.3 57.3 57.3

S. INSTITUTIONAL GRANT PROGRAMS 5/ 19.0 14.8 20.1 20.1 20.4 20.4 20.4 20.4

T. STATE AND PEACE BUILDING FUND 33.3 33.3 33.3 33.3 33.3 33.3 33.3 33.3

U. CGIAR - 50.0 50.0 50.0 50.0 50.0 50.0 50.0

V. TOTAL ADMINISTRATIVE BUDGET 2,184.5 2,225.8 2,300.2 2,300.2 2,338.2 2,386.3 2,424.4 2,476.3 1/

2/

3/

4/

5/Includes Institutional Development Fund (IDF) and Social Development Civil Society Fund (CSF).

Includes regular and reimbursable programs. Figures may not add due to rounding.

The amounts for FY11 and FY12 do not include allocations from the 2% flexibility band, nor do they include Knowledge and Learning Council funds.

Includes New Product Development, Publication Revenue, Reimbursable Escrow, Global Tigers Initiative and Community Connections Campaign.

Includes Staff Retirement Plan (SRP), Retired Staff Benefit Program (RSBP) and Post-Employment Benefits Plan (PEBP).


45

ANNEX C: COMPONENTS OF FUNDING

ADMINISTRATIVE PROGRAMS

REGIONAL PROGRAMS

Africa 330.0 17.2 96.8 444.0 330.9 17.2 103.6 451.7 0.3% 1.7%

East As ia and Paci fic 151.0 18.9 81.9 251.9 150.5 18.0 85.6 254.0 -0.3% 0.9%

Europe and Centra l As ia 167.9 21.1 21.8 210.8 167.9 29.7 27.4 225.0 0.0% 6.7%

Latin America and Caribbean 173.3 13.1 21.6 207.9 173.3 12.1 22.8 208.2 0.0% 0.1%

Middle East and North Africa 100.6 17.2 19.4 137.1 100.2 19.2 22.8 142.2 -0.4% 3.7%

South As ia 145.4 9.7 35.0 190.1 145.4 12.1 39.9 197.4 0.0% 3.9%

SUB TOTAL 1,068.1 97.2 276.5 1,441.8 1,068.2 108.3 302.1 1,478.5 0.0% 2.5%

Expected funding from Knowledge Counci l for Regional Units 5.6 - - 5.6 6.4 - - 6.4 13.6% 13.6%

Bank/FAO Cooperation Program 13.4 - - 13.4 13.4 - - 13.4 0.0% 0.0%

TOTAL 1,087.2 97.2 276.5 1,460.8 1,087.9 108.3 302.1 1,498.3 0.1% 2.6%

NETWORK & OTHER OPERATIONAL PROGRAMS 0.0% 0.0%

Susta inable Development Network 59.1 35.4 120.0 214.5 59.3 33.6 126.6 219.6 0.4% 2.4%

Financia l and Private Sector Development 38.7 1.1 30.6 70.4 40.6 1.4 43.1 85.2 4.9% 20.9%

Human Development 29.7 2.7 35.0 67.3 29.2 1.5 35.5 66.1 -1.8% -1.8%

Poverty Reduction and Economic Management 31.8 0.9 14.8 47.5 31.2 0.7 16.1 47.9 -2.1% 0.9%

Expected funding from Knowledge Counci l for Network Units 5.6 - - 5.6 6.4 - - 6.4 13.6% 13.6%

Operations Pol icy & Country Services 40.6 0.2 2.2 42.9 40.1 0.3 2.3 42.7 -1.2% -0.5%

Internal Reform Secretariat 2.6 - - 2.6 3.7 - - 3.7 46.4% 46.4%

Development Economics 52.0 3.3 21.8 77.0 50.6 1.6 18.3 70.5 -2.6% -8.5%

World Bank Insti tute 50.9 2.8 32.3 86.0 50.3 1.5 34.2 86.0 -1.1% 0.0%

TOTAL 311.0 46.3 256.6 613.9 311.5 40.6 276.1 628.1 0.2% 2.3%

FINANCE, ADMIN. AND CORPORATE PROGRAMS 0.0% 0.0%

Treasurer's 72.5 - 0.2 72.6 75.0 - - 75.0 3.5% 3.2%

Control ler's 37.7 13.8 - 51.5 36.7 13.8 - 50.5 -2.6% -1.9%

Concess ional Finance and Global Partnerships 14.5 7.7 0.9 23.1 14.0 7.9 1.9 23.8 -3.6% 3.0%

Corporate Finance and Credit Risk 20.3 0.2 - 20.5 20.3 0.7 - 21.0 0.0% 2.1%

Finance CIO Office 33.8 - - 33.8 33.8 0.4 - 34.2 0.0% 0.0%

Chief Risk Office - - - - 1.2 0.4 - 1.6 0.0% 0.0%

Human Resources 67.3 9.7 15.6 92.7 67.6 7.1 17.6 92.2 0.4% -0.5%

Information Solutions Group 52.5 20.7 - 73.1 52.7 20.5 - 73.2 0.5% 0.1%

Genera l Services and Faci l i ties 124.4 34.4 - 158.8 124.3 38.9 - 163.2 -0.1% 2.8%

Office of the Pres ident 5.6 - - 5.6 5.6 - - 5.6 0.0% 0.0%

Managing Directors 8.9 - - 8.9 9.4 - - 9.4 6.5% 6.5%

IDA IFC Secretariat 0.3 0.5 - 0.8 - - - - -100.0% -100.0%

Office of Eva luation and Suspens ion 1.6 - - 1.6 1.6 - - 1.6 0.0% 0.0%

External Affa i rs 34.4 1.0 1.8 37.3 34.4 0.9 1.8 37.1 -0.1% -0.4%

Internal Audit 9.4 2.7 - 12.1 9.4 2.7 - 12.2 0.0% 0.5%

Legal Services 31.1 4.8 4.1 40.0 33.4 5.6 4.6 43.6 7.3% 9.0%

International Centre for the Settlement of Investment Disputes 1.9 - - 1.9 2.8 - - 2.8 48.6% 48.6%

Confl ict Resolution System 4.1 2.0 - 6.0 4.1 0.9 - 5.0 0.0% -17.5%

Department of Insti tutional Integri ty 16.8 3.5 - 20.3 16.4 3.9 - 20.2 -2.6% -0.5%

Office of Ethics and Bus iness Conduct 4.6 - - 4.6 4.6 1.1 - 5.6 0.0% 0.0%

Adminis trative Tribunal 1.4 - - 1.4 1.6 0.4 - 2.0 0.0% 0.0%

Sanctions Board - - - - 1.0 - - 1.0 0.0% 0.0%

TOTAL 543.0 101.0 22.6 666.6 549.8 105.0 26.0 680.7 1.2% 2.1%

ALL UNITS TOTAL 1,941.1 244.5 555.7 2,741.3 1,949.2 253.8 604.1 2,807.1 0.4% 2.4%

Notes: Budget refers to Administrative Budget, Reimb refers to Reimbursables and Fee Income, BETF refers to Bank Executed Trust Funds.

FY11/FY12 BETF figures are based on the latest mid-point projections.

FY11 Budget figures includes minor adjustments subsequent to the FY10 Budget Document.

Operations Policy & Country Services includes Internal Reform Secretariat.

All Funds Budget All Funds

FY11 in FY11 $'s FY12 in FY11 $'s FY11-12 Growth

Budget Reimb. BETF All Funds Budget Reimb. BETF


46

ANNEX D: REIMBURSABLES

FY12 OPERATIONAL REIMBURSABLES

1. Reimbursements and fee income (reimbursables) – both operational and non-operational – will

continue to grow and are projected to reach $339.5 million in FY12. This represents an increase of

5.2 percent from the original FY11 budget. Within this larger reimbursable amount, the operational

reimbursables4 are expected to grow by 4.8 percent in FY12, similar to the growth experienced in

FY11. Growth projections however, vary on a component-by-component basis of the operational

reimbursables.

2. In comparison to FY11, Trust Fund Administration Fees are expected to grow at a higher rate in

FY12. Regions’ project higher revenues from the donor-approved increase in administration fees on

Afghanistan Reconstruction trust fund and from several new large trust funds that are coming

onboard in ECA. In addition, LEG, CTR, and ISG will benefit from an upward revision in the

attribution of Trust Fund Administration fees for Central Units. As a result, trust fund fees are

expected to reach $41.4 million in FY12 - approximately 16.7 percent higher than anticipated in the

FY11 Budget Document.

3. Strong growth in ECA’s fee-based services and moderate growth in MNA’s Reimbursable Technical

Assistance (RTA) and TRE’s RAMP (Treasury’s Assets Management Program ) underpin growth

expectations for FY12 fees (for operational services). This growth, however, is expected to be

balanced by a drop in reimbursable revenue on CIF (due to the conversion of regional revenue

streams into trust funds), continued decline in IFAD (International Fund for Agricultural

Development) projects (albeit from a smaller base), and reduction in Carbon fund-financed projects

(due to near-full commitment of Kyoto Protocol-mandated funds). As a result, fees for operational

services5 are expected to generate $142 million in revenue in FY12 - a slight 2.3 percent increase

relative to the figure stated in the FY11 Budget Document.

FY12 NON-OPERATIONAL REIMBURSABLES

4. Non-operational reimbursable income is generated when the Bank provides a service for a fee to an

external organization or when the Bank participates in the sharing of costs. Cost-sharing income6

and other non-operational revenues7 are parts of non-operational reimbursables. Bank units that

provide such services are allocated reimbursable budgets. Table E.1 offers details on such

allocations.

4 Operational reimbursables contain fees for TF administration and trustee services (fees for administrative services) and fees

for program implementation support (fees for operational services). 5 This category collects revenue from program implementation support on projects funded by IFAD, MNA’s RTA program, GEF,

CIF, Montreal Protocol, and Carbon Funds, as well as revenues from EFOs, Fee-based Services (FBS), TRE’s Assets Management Program (RAMP), and other operational reimbursables. 6 Cost-sharing income includes reimbursements from formal cost-sharing arrangements with the International Monetary Fund

(IMF), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA), involving a variety of services on a full-cost recovery basis. 7 This category covers services such as facilities rental, publishing, parking, training, other informal cost shared services, pension

administration, IT and GSD external user charges, and miscellaneous non-operational services.


47

5. The non-operational reimbursables are expected to grow at 5.7 percent relative to the original, FY11

budget plans.

6. Cost sharing revenues are projected to increase by 11.3 percent relative to the figure stated in the

FY11 Budget Document. The main contributing factors of this anticipated growth are: an increase in

IFC’s share of the Board’s work program, reflecting a growing volume of IFC projects going to the

Board in CY10; the addition of a VP and Group Chief Risk Officer to the cost sharing arrangements

with IFC and MIGA; and an increase in the lease revenue for the U building, as GSD would now be

charging full market rate on office occupancy to lessees such as MIGA. Cost sharing with the IMF

(International Monetary Fund), driven by a declined use of the Bank’s Health and Work-Family

services is reducing. The closing of IISEC (IDA IFC Secretariat) given the expiration of this body’s

temporary mandate, has also contributed to reductions in the growth of cost sharing revenue.

7. Overall, the other non-operational revenues category is expected to remain flat; however, several

line items show notable changes. For example, revenues from publications will continue to decline

(approximately 28.5 percent this year) due to implementation of the Access to Information policy.

In addition, revenues from staff reimbursements will also continue to decline (81 percent in FY12 in

addition to a 58.7 percent drop in FY11 plans) due to reductions in the Global Secondment program

and discontinuation of the Staff Exchange program. Meanwhile, revenues from Pension

Administration (9.5 percent increase to $13.69 million in FY12) and IMT and GSD chargebacks (12

percent increase to $33.2 million in FY12), will increase.

FY09 FY10 FY11 FY12

Budget Budget Budget Budget

OPERATIONAL SERVICES Fees for Administrative Services

1 42.1 48.1 48.2 53.9

Fees for Operational Services 118.1 131.6 139.0 142.2

International Fund for Agricultural Development (IFAD) 0.9 0.7 0.4 0.3

Reimbursable Technical Assistance (RTA) 12.4 13.0 12.7 14.0

Global Environmental Facility (GEF) 30.6 25.1 25.8 23.5

Montreal Protocol (MP) 3.1 3.2 3.4 3.9

Carbon Finance (CF) 28.8 28.4 29.1 26.2

Clean Investment Fund (CIF)2 9.5 13.7 11.0

Management Services (RAMP)3 14.0 18.8 19.0 23.9

Externally Financed Outputs (EFO)4 9.2 17.4 18.8 17.3

Fee Based Services (FBS) 5 10.4 13.2 15.6 20.9

Other Operational Reimbursable Arrangements 5 8.7 2.4 0.6 1.3

SUBTOTAL OPERATIONAL SERVICES 160.2 179.7 187.3 196.2

NON-OPERATIONAL SERVICES

Cost Sharing Income 55.9 51.9 64.3 71.5

IMF6 4.6 4.9 4.8 4.1

IFC 45.1 40.7 51.0 57.7

Table E.1: Reimbursements and Fee Income FY08-FY11 ($ millions)


48

MIGA 6.2 6.3 8.4 9.7

Other Non-Operational Services 70.7 71.5 71.4 71.9

Facilities Rental/Services7 3.8 3.8 3.8 4.6

Publications Sales 6.0 5.0 3.5 2.5

Parking 4.9 5.0 5.1 5.1

Training/ Conferences 1.9 1.9 1.0 0.7

Informal Cost Sharing/ Co-location8 2.4 2.7 3.1 3.0

Staff Reimbursements9 3.6 2.8 1.2 0.2

Pension Administration and Other Investment 12.4 13.7 12.5 13.7

IMT Support and General Services10

10.3 28.2 29.6 33.2

Other Miscellaneous 25.5 8.4 11.6 8.8

SUBTOTAL NON-OPERATIONAL SERVICES 126.6 123.5 135.6 143.4

TOTAL 286.8 303.2 322.9 339.5

Of which:

Reimbursable Programs11

256.0 297.6 316.7 288.1

1 Includes Trust Fund Admin Fees and GFATM, LDC, SCCF fees, and GEF Trustee, CIF Trustee Fees, and Other

TF Fees. TF Startup Fees are also included in this category in FY10, but not in FY09. 2 Clean Investment Fund was established in FY09 and invests in the demonstration, deployment, and

transfer of low carbon technologies. The Bank will act as both a trustee and an implementing agency.

3 RAMP includes TRE's Assets Management program to Client Countries.

4 Externally Financed Outputs are introduced as of January 1, 2008

5 Prior FY09 categorized as part of Other Miscellaneous.

6 Includes TRE's Assets Management program (RAMP) to IMF.

7 Includes projections for HQ Real Estate, netted out in the Program Cost Summary Table (Annex B).

8 Includes cost sharing for co-location of offices with IFC, IMF, ADB, etc.

9 Staff Reimbursements include cost sharing for the Staff Exchange Program, and selected payments for

seconded staff. 10

Includes ISG and GSD external chargeback such as to IFC and MIGA. 11

Reimbursable Programs are the categories of income against which Bank Units are allocated expense budgets, as opposed to general income related to rentals, rebates and support services provided to the IMF. Starting FY12 TRE's reimbursables and fee income is excluded from Reimbursable Programs


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ANNEX E: THE CAPITAL BUDGET

1. The total proposed capital budget for FY12 is $139.1 million, a 2.6 percent ($3.7 million) decrease

over the Board Approved FY11 capital budget of $142.8 million. Increased investments in

Technology and Systems ($12.4 million) and Country Office Facilities ($26.7 million) are offset by

decreased investments in Washington Facilities ($42.8 million).

THE CAPITAL PROGRAM FOR TECHNOLOGY AND SYSTEMS

2. The Information Management and Technology (IMT) Three-Year Strategy FY11-13 provides the

selection framework for Technology and Systems capital investments – a critical element of the

Bank’s modernization agenda.

3. The FY12 capital budget for the Technology and Systems program will be distributed as follows:

Global Communications and Country Office Network ($18.6 million). This includes the cyclical

renewal of country office servers and networks, in addition to the enterprise communications

infrastructure. Capital investment for FY12 include: Integrated Communications Platform ($6.6

million), Country Office (CO) Initiative ($4.5 million), HQ Network Infrastructure Replenishment

($3.0 million), Videoconferencing Infrastructure Replenishment ($1.0 million), and application

re-design to improve CO performance ($1.0 million). Increase over FY11.

Desktop Computing and Enterprise Network ($1.8 million). This includes the cyclical

replacement of hardware related to server infrastructure, as well as the engineering of the

enterprise desktop software and related investments such as information and network security.

Increase over FY11.


Budget YTD1 Budget Plan Plan

Technology and Systems 54.9 27.7 67.3 52.3 55.4

of which IMT Investment Scale-Up Reserve 7.9 n/a 0.2 5.5 39.1

Facilities – Washington2 267.2 222.4 8.3 19.5 14.4

of which HQ Real Estate Proposal 233.2 216.1 0.5 0.4 0.7

Space Realignment Project 26 1.1 0 0 0

Facilities - Country Office 36.8 12.4 63.5 63.9 64.7

of which Global Bank Set-aside3 24.9 8.2 39 34.5 45

Total Capital Release (All Parts): 358.9 262.5 139.1 135.7 134.5

Percent Utilization (FY11 YTD Release/FY11 Approved Budget) 73.1%

3 Global Bank Set-aside includes relocations and is an estimate that takes into account on-going/anticipated Decentralization reforms

and co-location with IFC.

2 The Washington Facilities line under "FY11 YTD" reflects a FY11 Board-approved supplemental budget of $216.1m for purchase of the "C

Building" at 1225 Connecticut Avenue.


1 Data on capital release of funds as of May 13, 2011

Table F.1: Capital Program Summary – Investment Schedule FY11-14


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Corporate Computer Replenishment ($9.6 million). This represents the Bank’s corporate

replacement program for notebooks, desktops, and monitors. Increase over FY11.

Corporate Systems and Infrastructure ($15.1 million). This category includes capital

investments that support web portals and infrastructure, data management and delivery, and

corporate business systems. Notable FY12 capital investments include: Business Intelligence

Infrastructure ($2.5 million), SAP/BW Server and Data Storage Infrastructure ($1.1 million), CTR

eBusiness initiative ($1.0 million), Passkey Infrastructure Capacity ($1.0 million), Loans Data

Warehouse (LDW) renewal ($1.0 million), Integrated Planning System ($0.3 million), and

Corporate Scorecard ($0.3 million). Increase over FY11.

Systems Development and Specialized computing ($22.1 million). Within the Technology and

Systems program, capital investments are initiated and supported directly by the sponsoring

VPUs. These investments are mainly aimed at addressing regulatory compliance, reducing

fiduciary risks, supporting revised business models, providing increased support to front-line

business processes, and improving effectiveness, especially in the delivery of services to internal

and external clients. Major investment for FY12 includes: Finance business projects ($6.0

million) related to bank payments and cash systems, comprehensive platform for FIFs, and

quantitative, risks and analytics system renewal; HR Renewal: PeopleSoft Re-Implementation

($4.5 million); External Web Renewal ($2.5 million); Access to Information ($1.6 million); lending

products for non-IBRD/IDA and completion of platform transition ($1.4 million); Case

Management System Platform ($0.9 million), and Fiduciary Systems Revamp ($0.9 million).

Increase over FY11.

Special Allocations. Capital investments include the enterprise-wide content and document

management system or Operations and Knowledge Systems Program (OKSP). No capital funding

was proposed for OKSP in FY12. Decrease over FY11.

IMT Investment Scale-Up Reserve ($0.2 million). The FY12 capital budget includes an

investment reserve associated with the IMT Three-Year Strategy and its associated

Implementation Agenda (as shared with the Board in April 2010). The WBG CIO has committed

to a further round of review before any IMT reserves are considered for allocation and release

of funds. IMT reserves for release of funds will be contingent upon following:

o Identification of business efficiencies that can be redeployed to fund the sustaining costs

for added investments;

o Confirmation of sequencing of investments to align with actual implementation timing of

business reforms;

o Capturing of synergies with IFC’s capital program; and

o Leveraging of scale across shared services for all Bank Group entities.


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4. The IMT thematic organization provides an alternative perspective of the Technology and Systems

budget (see Table F.2). These themes serve to align strategic direction with the implementation

agenda for delivery.


Theme FY11 FY12 FY13 FY14

Program App'd Budget Plan Plan

1 Modernization of Core Business Capabilities

17.8 23.0 27.2 12.5

Bank Operations and Knowledge Reforms 9.4 4.1 5.3 3.5

HR Reforms and Other Corporate Systems 2.5 6.4 7.0 1.5

Financial Systems Modernization 5.9 12.5 14.8 7.5

2 Information Transparency and Access 6.3 7.5 5.3 2.6

Information Delivery 3.5 5.0 0.5 0.3

Strategic Business Intelligence 2.8 2.5 4.8 2.3

3 Productivity and Connectivity 6.6 28.6 13.6 0.7

Global Mobile Solutions 6.6 28.6 13.6 0.7

4 IMT Capacity Building 9.7 1.4 6.2 39.6

Standard Platform Leverage 1.8 1.3 0.7 0.5

IMT Scale-Up Reserve 7.9 0.2 5.5 39.1

5 Steady State Cyclical Re-Investment 14.5 6.8 0.0 0.0

Subtotal Capital Release Base Case: 47.0 67.2 46.8 16.3

Subtotal IMT Scale-Up Reserve: 7.9 0.2 5.5 39.1

Total Capital Release: 54.9 67.3 52.3 55.4

THE CAPITAL PROGRAM FOR WASHINGTON AND COUNTRY OFFICE FACILITIES

5. The total Bank Facilities capital budget for FY12 is $71.8 million, of which Washington Facilities is

$8.3 million and Country Office Facilities is $63.5 million. The FY12 proposed envelope is $16.1

million less than in FY11. The FY12-14 investment plan for Washington Facilities is $42.1 million and

Country Offices $192.1 million.

Table F.2: Thematic Organization and Programs – Investment Schedule FY11-14


52

6. The Washington Facilities capital budget in FY12, $8.3 million, will mainly support maintenance,

replacements and improvements. Key points to note:

The near completion of the HQ Facilities projects - Real Estate Proposal and the Space

Realignment Project has resulted in a significant reduction ($42.8 million) in the proposed FY12

envelope for Washington facilities.

Public space improvements ($2 million), Print Services ($1.5 million) and Furniture

Replacements ($1.3 million) are categories with the most funding in FY12. The following table

summarizes by category the capital budget for FY12-14.

Capital Funds ($ Million)

FY11 FY12 FY13

Budget Plan Plan

Air Conditioning/Mechanical Repairs 0.7 0.0 1.0

Audio Visual Systems Upgrade 0.6 1.2 0.5

Business Continuity Initiatives 0.0 1.0 0.0

Food Service Equipment Purchases 0.6 0.7 0.3

Table F.3: Capital Program - Investment Schedule FY12-14

Table F.4: Capital Investment Schedule – Washington Facilities FY12-14


Original Budget YTD* Budget Plan Plan

A Facilities - Washington

Securi ty 5.1 0.5 0.7 4.9 1.0

HQ Real Estate Strategy1 17.1 216.1 0.5 0.4 0.7

Space Real ignment Project 26.0 1.1 0.0 0.0 0.0

Infrastructure Maintenance and Upgrades 2 2.9 4.7 7.1 14.2 12.7

Washington: 51.1 222.4 8.3 19.5 14.4

B Facilities - Country Office3

Securi ty 3.0 0.0 1.3 1.5 1.5

Acquis i tion and Outfi tting4 n/a n/a 7.5 16.3 10.0

Expans ions 2.6 0.6 5.1 5.0 2.0

Global Bank Set-as ide 5 24.9 8.2 39.0 34.5 45.0

Infrastructure Maintenance and Upgrades2 6.3 3.6 10.6 6.7 6.2

Country Office: 36.8 12.4 63.5 63.9 64.7

Facilities: 87.9 234.8 71.8 83.4 79.0

*Data on capita l release of funds as of May 13, 2011

4 The Acquis i tion and Outfi tting category i s related to outfi tting/construction of purchases .


1 The Washington Faci l i ties l ine under "FY11 YTD" reflects a FY11, Board-approved budget supplemental of $216.1m 2

Includes capita l projects for equipment upgrades , repairs , replacements , and purchases . Also includes projects for

space renovation and fi t-out.3 GSD and Regional VPUs managed country office projects .


53

Furniture Replacements 1.3 0.6 5.4

Print Services 1.5 0.5 1.0

Public Space Improvements 2.0 7.9 5.2

Security Systems Upgrade/Disaster Planning System 0.7 3.9 1.0

Structural Repairs 1.0 3.8 0.0

Total: 8.3 19.5 14.4

7. Investments in Country Office facilities are increasing compared to previous investment cycles. For

FY12, the investment plan is $63.5 million, of which $39 million is for Decentralization initiatives

(i.e., Global Bank Set-aside) and for Relocations. The capital budget takes into account ongoing

decentralization and anticipated alignment with internal reforms, as well as the co-location of Bank

entities. The Global Bank set-aside will ensure the necessary flexibility and fiscal space for future

decentralization. For Country Office facilities, key points to note are:

More acquisitions are being explored versus leasing facilities given the global real estate market

and favorable economic terms and long-term benefits.

The Bank is committed to the establishment of a new Kenya country office in Nairobi, which also

will pilot the Bank’s first fragile and conflict-affected situations Hub. The purchase of the new

building in Kenya is expected to take place in early FY12. The Bank’s share of the investment is

estimated to be $24 million, of which $10.3 million will be for the fit-out. The IFC will also

contribute separately and co-locate in the same building.

The FY12 capital budget includes budget to fund construction of new offices in Lao PDR and Sri

Lanka totaling $7.5 million. The remaining $17 million funding is for investments in security,

expansions, and upgrades of existing facilities in support of greater decentralization of staff and

authority in the Country Offices.

A more centralized approach to management of country office facilities is being considered to

optimize the Bank’s global real estate portfolio. Currently, this is decentralized with each of the

Regions managing its respective country office facilities portfolio. Managing the institution’s

assets as a global real estate portfolio will enable management to plan and implement real

estate and facilities projects as a portfolio from a long term and strategic perspective. It will

reduce the likelihood of short-term considerations, such as annual budget targets or constraints,

driving significant decisions that will have long-term impact on the Bank. It will also ensure that

critical decisions on real estate and facilities are made by staff with requisite knowledge,

expertise and based on relevant information. This approach will also facilitate consistency;

provide a global view in terms of risk management (e.g., security); enable better decisions with

respect to leasing, purchasing and/or construction of new facilities; and improve efficiencies in

terms of pipeline management.


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Capital Funds ($ Million)

FY12 FY12 FY13

Budget Plan Plan

Acquisition and Outfitting 7.5 16.3 10.0

Expansions 5.1 5.0 2.0

Global Bank Set-aside 25.1 29.0 39.0

Infrastructure Maintenance and Upgrades 10.6 6.7 6.2

Relocation 13.9 5.5 6.0

Security 1.3 1.5 1.5

Total: 63.5 63.9 64.7

ADMINISTRATIVE BUDGET IMPACT OF THE CAPITAL BUDGET

8. The Bank’s Administrative Budget may be affected in subsequent fiscal years based upon the level of

capital spending authority approved by the Board. Budget expenses such as depreciation and

operating and maintenance have a claim on a Unit’s budget resources once a capital project is

completed and becomes an asset. In general, VPUs are responsible for these expenses over the life

of the asset. A VPU must demonstrate that it can fund carrying costs of a capital investment over

the asset’s life cycle within their allocated budget before any release of funds.

9. Over the three-year planning period, Technology and Systems capital projects will affect the

Administrative Budget over the FY11 envelope by $7.5 million in FY12, $16.6 million in FY13, and

$18.3 million in FY14 (includes Business Continuity program). These incremental increases are

associated with on-going investment impacts such as OKSP, Process Reform, and the Integrated

Communication Platform (ICP) and new investments planned within the capital program. The

impact from new investments over the three-year period is related to Country Office Initiative,

collaboration applications, eBusiness and finance modernization, and HR Reform initiative.

10. Specific capital investments identified as part of the Information Management and Technology

reserve will need to achieve tradeoffs within the Administrative Budget in order to support any

unfunded costs.

11. The Space Realignment project will affect the Administrative Budget over the long run, and the

resulting savings in lease expenses are estimated to average $8-11 million per annum net of

expenses. For Country Offices, the Global Bank set-aside in FY12 will not have a significant change

over FY11, but will likely increase in outer years.

Table F.5: Capital Investment Schedule – Country Facilities FY11-14

Documents

THE WORLD BANK’S BUDGET: TRENDS AND ......Table 3.10: Capital Program Summary – Investment Schedule FY11-14.....35 Table B.1: Indicative Distribution of Net Admin Budget Actuals