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Secretariat for Administration and Finance – Department of Financial Services – March 19, 2019

Indirect Cost Recovery (ICR) BUDGET DISTRIBUTION Study. Secretariat for Administration and Finance – Department of Financial Services – March 19, 2019. ICR BUDGET - BACKGROUND. AG/RES. 1 (LIII-E/18)

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Secretariat for Administration and Finance – Department of Financial Services – March 19, 2019

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  1. Indirect Cost Recovery (ICR) BUDGET DISTRIBUTION Study Secretariat for Administration and Finance – Department of Financial Services – March 19, 2019

  2. ICR BUDGET - BACKGROUND • AG/RES. 1 (LIII-E/18) • Instructed that the ICR fund must include a provision to cover deferred and basic Infrastructure costs related to the OAS real estate assets. • Instructed that ICR distribution to technical areas should take into consideration amounts of specific funds contributed to each area. • Instructed the General Secretariat to prepare a study of ICR costs and to distribute ICR accordingly in the second half of 2019 and in the 2020 budget formulation.

  3. CURRENT ICR BUDGET

  4. PROPOSED ICR BUDGET • The ICR study considered the following elements: • Workload • Measures the work effort required by the technical areas to execute donor’s contributions. • History • Measures previous ICR allocation patterns. Allocations to enable the execution of donor’s contribution have been shifting in response to donor’s priorities. Prior years execution serves as a baseline to maintain same levels of donor’s compliance. • Support financed by the Regular Fund • Measures overall funding received by areas, allowing an equal and consistent distribution across all technical areas. In other words, this measure takes into consideration Regular Fund resources received and used by areas to execute Specific Funds.

  5. PROPOSED ICR DISTRIBUTION ICR Distribution – Primary Categories:

  6. BASIC INFRASTRUCTURE • Basic Infrastructure Cost: • Security • Public utilities • Maintenance • Cleaning Services • Others • Current basic infrastructure financing: • All costs have are covered by the Regular Fund • 2019 ICR budget included USD 139 thousand for the first time • Regular Fund budget appropriations have under-budgeted these costs • Proposed distribution (Fixed and Variable indirect costs): • Fixed indirect costs must be covered by the Regular Fund • Variable indirect costs must be shared by the Regular Fund and the ICR based on Cost Drivers

  7. BASIC INFRASTRUCTURE

  8. TECHNICAL AREAS Distribution based on • Number of requisitions recorded • Number of CPR contracts • Number of Tickets opened • Amount of expenses • Support financed by the Regular Fund +/ - ADJ 25% 25% 25% 25% Workload

  9. TECHNICAL AREAS • Distribution based on: • Workload considerations • Number of recorded requisitions • Additional weight to travel requisitions (1.5 times) and to larger requisitions (over $50K and over $100K). • Reduce weight if preparer is financed by Specific Funds (0.5 times). • Number of CPRs’ contracts recorded • Number of administrative Tickets opened • Dollar amount of total expenses (objects 2-9: non-personnel only) • Support financed by the Regular Fund • Time of personnel spent on Specific Fund activities, financed by the Regular Fund. Data self-reported by employees through survey.

  10. TECHNICAL AREAS Workload weight results (in %) * Only includes CIM, CITEL, CIJ, IACHR and IIN.

  11. TECHNICAL AREAS Proposed ICR Distribution (in % and thousands of USD) * Only includes CIM, CITEL, CIJ, IACHR and INN. * Only includes CIM, CITEL, CIJ, IACHR and IIN.

  12. CENTRAL ADMINISTRATION • Areas of the Central Administration: • Chapter 4 - Strategic Counsel for Organizational Development and Management for Results • Chapter 11 - Secretariat for Administration and Finance • Chapter 13 - Oversight and Supervisory Bodies • Given that the workload in the various areas of the administration differ widely, the workload within the central administration is not comparable. • Regular Fund and ICR fund execution data for the previous three budget years is used for distributing ICR funds between the areas of the central administration.

  13. ADMINISTRATION

  14. TECHNICAL AREAS AND CENTRAL ADMINISTRATION DISTRIBUTION The distribution of ICR between the Technical Areas and the Central Administration is based on average execution data for the past three years. Using the historical factor, in lieu of a common Cost Driver, allows the GS/OAS to maintain the same level of donor compliance.

  15. PROPOSED ADJUSTED DISTRIBUTION 2019

  16. PROPOSED DISTRIBUTION 2020

  17. ITEMS TO CONSIDER • The proposed distribution is based on rawdata and does not reflect actual cost of headcount nor 2020 required adjustments (i.e., COLA, tax reimbursement, and others). • The study was prepared with internal resources based on records from ORACLE and other GS/OAS applications, verbal interviews with administrative personnel, and self-reported information (survey).

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