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adcom – june 2012[ Finance Department]

www.unrwa.org

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Contents

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1) May 2012 Income Statement - GF

2) May 2012 Cash Flow Forecast – GF

3) 2011 Results – GF

4) UNBOA

5) ABC

6) ERP

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May 2012 Income Statement

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US$000

Description Actuals Budget Variance Actuals Budget Variance Annual

Budget

Managed

To E(EOY) F/C Variance

Income

Donors Contributions 30,661 - 30,661 276,886 346,922 (70,037) 496,171 496,171 503,350 7,179

United Nations RB 2,100 2,400 (300) 9,900 12,001 (2,101) 28,803 28,803 28,803 -

Programme Support Cost Recovery 2,645 1,667 978 9,304 8,333 971 20,000 20,000 20,000 -

Interest and Other Income 54 250 (196) 813 1,250 (437) 3,000 3,000 3,000 -

Total Income -(A) 35,459 4,317 31,142 296,903 368,507 (71,604) 547,974 547,974 555,153 7,179

Expenses

International Staff -(B) 1,813 2,451 638 9,808 12,255 2,447 29,413 29,413 29,413 -

Total Area Staff -manning table costs -(C) 41,834 40,068 (1,766) 197,327 200,227 2,900 481,184 491,518 491,518 -

LDC and Temporary Staff -(D) 1,131 681 (450) 3,784 3,266 (518) 7,031 7,232 7,232 -

Grand Total Area staff Costs -(E)=(C+D) 42,965 40,749 (2,216) 201,111 203,493 2,382 488,216 498,750 498,750 -

Total Non Staff -(F) 10,655 7,528 (3,127) 40,738 43,150 2,412 134,723 116,609 116,609 -

Total Operational Expenses -(G)=(B+E+F) 55,432 50,728 (4,704) 251,657 258,898 7,241 652,351 644,772 644,772 -

Surplus (Deficit) before Depreciation & Amortization (H) =(A)-(G)(19,973) (46,411) 26,438 45,245 109,609 (64,364) (104,377) (96,798) (89,619) 7,179

Depreciation (I) 1,885 1,787 (98) 9,123 8,777 (346) 21,437 21,436 21,436 -

Total Operational Surplus (Deficit) (K)=(H)-(I)-(J)(21,859) (48,198) 26,536 36,122 100,832 (64,018) (125,814) (118,234) (111,055) 7,179

Exchange (Gains) / Losses (L) 2,830 - (2,830) 2,884 - (2,884) - - 2,884 2,884

2012 GF Financial Derivatives (Gains) Losses (M) (4,729) - 4,729 (11,477) - 11,477 - - (11,803) (11,803)

2012 ILS Hedgings (Gains) losses (N) - - - 191 - (191) - - 191 191

Prior Year Adjustments (O) 2,503 - (2,503) 32 - (32) - - 32 32

Total Expenses (Q) =(G+I+J) + (L+M+N+O+P) 57,921 52,515 (5,406) 252,410 267,675 15,265 673,789 666,208 657,512 8,696

Net Surplus (Deficit) (R) =(A)-(Q) (22,462) (48,198) 25,736 44,492 100,832 (56,340) (125,814) (118,234) (102,359) 15,875

FINANCIAL PERFORMANCE REPORT - BY RESOURCES - AGENCY WIDE - IPSAS VIEW

UNRWA TOTAL - GENERAL FUND - UNEARMARKED FUND - May 2012

Month of May Year To Date Year - 2012

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May 2012 Cash Flow Forecast

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Income Statement Surplus (Deficit)

in $m

Working Capital (Equity) in $m

UNSAS Pre Capitalization - 2011 (2.5)

Depreciation (41.5)

Capitalization of Prior expenses 6.1

Provision for VAT (3.1)

UNSAS Post capitalization (Deficit) (41.0)

Working Capital (Equity) as at 01/01/2011 41.8

Deficit for the year 2011 (41.0)

Initial Recognition of PPE 404.9

Financial Derivative Reserve 17.4

UNSAS Post Capitalization (Net Equity 31/12/2011) 423.1

Initial Recognition of Employee Liabilities (404.4)

Provision for doubtful debts - VAT (22.0)

Reversal of Obligations accrued under UNSAS 12.5

IPSAS Results – Net Equity as on 01/01/2012 9.2

Cash Balance as on 31/12/2011 35.1

2011 Results – General Fund

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External Audit Update

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• UNBOA Audit 2010-2011, Accounts effectively finalized – Awaiting Final report

• Main Fund, Provident Fund, Microfinance Department – All Unmodified opinion

• Implementation results

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Year Recommendations Current o/s

End of 2008-

2009

61 9

New 2010-2011

(Indicative)

20 29

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External Audit

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• August 2012 – UNBOA Opening Balance IPSAS audit

• Feb – March 2013 – UNBOA IPSAS audit, expected UNRWA IPSAS compliance

• Expect UNBOA audit on 2102 Accounts to raise concerns on UNRWA’s cash position.

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Questions?

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Activity-Based Costing (ABC)

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• What is A.B.C.

• Scope/Methodology

• Current Status

• Next Steps

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Questions?

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UNRWA’s Need for an ERP

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• Key objectives are:

• Critical need to replace the Agency’s legacy ERP system (Ramco)in 2014

• Expanding system functionality to manage core business

• Improving the Agency’s monitoring and oversight capabilities

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Implementation Approach

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• After lengthy consideration UNRWA rejected an autonomous ERP solution as too costly and too risky for the Agency (2011)

• UNRWA & World Food Programme (WFP) signed an MOU to explore the viability of ERP Partnership in December 2011

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Implementation approach..

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• UNRWA is partnering with WFP to implement their ERP (WINGS II, SAP System)

• UNRWA signed contract with WFP Implementation partner CapGemini for $1.4m (6 months contract) to assist UNRWA in appraising WFP’s ERP. (Jan 2012)

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Partnership Benefits

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• Ready to use streamlined and best practice operational processes

• Adopt a system already IPSAS compliant & tailored for a UN environment

• Benefit from WFP’s experience and lessons learned (WFP’s project cost $100m over 10 years)

• Supports UN Harmonization of business practices

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Project Costs (Estimated)

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• ERP costs included in the General Fund for 2012-13

• Estimated $26m over the project lifespan

•Expect approximately $9m in expenditure for 2012

•Remaining $17m for project through Go Live (Q2 2014).

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Planned Steps

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Questions?

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