B UDGET C OMMITTEE P RESENTATION BY THE O ZONE S ECRETARIAT Joint 10 th meeting of the Conference of the Parties to the VC and 26 th Meeting of the Parties to the MP

I SSUES FOR THE A TTENTION OF THE P ARTIES Reserves and fund balances – the big picture, changes introduced by the IPSAS Proposed 2014 revised budget for the VC and the MP Trust Funds Proposed 2015 – 2017 budgets for the VC Trust Fund and audit recommendations Proposed 2015 – 2016 budgets for the MP Trust Funds Earmarked contributions TEAP funding issues What’s new in the presentation of the budget documents 2

R ESERVES AND F UND B ALANCES C HANGES DUE TO IPSAS Expenses are recognised only in the year they occur. Closing of obligations not relevant to 2013 goes to reserves. This led to an increase in fund balances as of 31 Dec

R ESERVES AND F UND B ALANCES C HANGES DUE TO IPSAS Under IPSAS, provisions (resources) are established (set aside) against old contributions. This leads to decrease in fund balances and reserves. Provision is not a write off. Outstanding contributions are still due from parties. A percentage provision is applied to contributions that have been outstanding for years. The actual provision under the MP Trust Fund is 1,455,262 USD. The actual provision under the VC Trust Fund is 393,454 USD. 4

R ESERVES AND F UND B ALANCES C HANGES DUE TO IPSAS Impact of the two main changes due to IPSAS on the fund balances and reserves: (a) impact of expenditures occurring in the year that the service is provided, (b) impact of the provision for overdue contributions. 5

T RENDS IN F UND B ALANCES AND R ESERVES In 2006, parties agreed to keep contribution steady and drawdown on reserves. Since then, there has been a decrease every year. At 2013, the closing of obligations resulted in increase and in 2014 the provisions for outstanding contributions resulted in decrease. 6

P ROPOSED R EVISED 2014 B UDGET FOR THE VC T RUST F UND Overall revised 2014 budget remains unchanged. Major shift: increase 3% in conference services for COP. The increase in conference services budget line is partly due to loss of flexibility to use unobligated money from previous years. 7

P ROPOSED R EVISED 2014 B UDGET FOR THE MP T RUST F UND Overall revised 2014 budget remains unchanged. Main shift: increase by 5% in conference services for MOP, OEWG. The increase in conference services budget line is partly due to loss of flexibility to use unobligated money from previous years. 8

P ROPOSED B UDGETS FOR THE VC T RUST F UND AND A UDIT R ECOMMENDATIONS 2015 – 3% increase over 2014 revised budget, less the costs for ORM and COP 2016 – 0.8% increase over 2015 proposed budget 2017 (COP/MOP year) – 8.6% increase over 2014 cost. Despite these increases, annual contributions by parties remain constant because of the draw downs. 9 Revised Total budget ( with psc ) 1,280,309782,377789,7131,390,636 Draw down677,309179,377186,713787,636 Required contribution 603,000

P ROPOSED B UDGETS FOR THE VC T RUST F UND AND A UDIT R ECOMMENDATIONS Extension of Trust Fund to Inclusion of 2% operational reserve Inclusion of 15% financial reserve according to the auditors’ recommendations. The 15% can be assessed on the 2015 budget and can remain steady for the next three years. 10

P ROPOSED B UDGETS FOR THE MP T RUST F UND % increase when compared to 2014 without the HFC management workshop budget. Extension of Trust Fund to Inclusion of 2% operational reserve Annual contributions by parties remain constant because of the draw downs. Revised Total budget ( with psc ) 5,065,4605,090,7655,133,894 Draw down788,527813,832856,961 Required contributions 4,276,933 11

E ARMARKED C ONTRIBUTIONS Contributions from Norway, Sweden and Finland for support of the participation of Least Developed Countries to the meetings Contributions from IPAC Contributions from EU 12

TEAP F UNDING I SSUES Budget for travel of Assessment Panels (A5 experts) was 500,000 in 2010 but decreased to 450,000 in On exceptional basis, travel of non-A5 experts was funded whenever their participation became necessary after funding of A5 experts was ensured. Parties may wish to build on decision XXI/32 and consider flexibility of up to 5% for funding non-A5 experts in exceptional circumstances. 13 * As of October 2014

W HAT ’ S N EW IN THE B UDGET P RESENTATION Inclusion of summarised tables and comparisons for ease of understanding Inclusion of the OS organogram and staffing tables Certified financial statements of earmarked contributions distributed. 14

P OSSIBLE A DDITIONAL R EQUIREMENTS FOR THE C ONSIDERATION OF THE P ARTIES - 1 Activities for the 30 th Anniversary of the VC by highlighting accomplishments about health, environmental, economic, social benefits. Products: Ozone feature film, strategic media outreach activities to disseminate key messages via a youth campaign. The parties may wish to consider some additional funding for the funding of the above mentioned activities. 15

P OSSIBLE A DDITIONAL R EQUIREMENTS FOR THE C ONSIDERATION OF THE P ARTIES - 2 If the parties wish to contribute to the carbon neutrality of the 26 th MOP, 10 th COP, the cost of offsetting the climate impact of the meeting is 513 Euros (640 USD). CO2 emissions for the 26MOP/10COP estimated at 760 tons of CO2 equivalent. Current price is 0,25 Euros for 1 AFCER (Adaptation Fund Certified Emissions Reduction). Cost of offsetting the CO2 emissions is 190 Euros. 16