1. Finance Committee Meeting, November 2017
I. Final Report on the 2016 Financial Closure
II. Interim Report on 2017 Budgetary & Financial Matters
III. Proposed Budget 2018
IV. Implications of not adjusting Membership Contributions (separate agenda item)
V. Dissolution of the IIASA Fund
VI. Deepening the discussion on interim and no regret measures pertinent to the Finance Committee

2. Final Report on the 2016 Financial Closure
IIASA’s financial statements for 2016 (included in the Council package) were audited by BDO in April and May 2017 and were published in June
The closure meeting involving the external auditors, the Chair of the Finance Committee, the Director General and Deputy Director General, as well as staff members from the Finance & Sponsored Research department took place on July 17th 2017
Total income in 2016 was EUR 23.4m (EUR 12.4m from NMO Contributions, EUR 10.3m from external contracts and grants (including income received and distributed to partner organisations collaborating on projects) and EUR 0.7m from other sources)
Total expenditures in 2016 amounted to EUR 23.1m (including income received and distributed to partner organisations collaborating on projects)
The change in net assets in 2016 was therefore an increase of EUR 0.3m
Net assets as at consisted of restricted funds, which declined marginally to EUR 1.1m, and unrestricted funds (‘the reserve’) which increased by EUR 0.5m to EUR 7.3m

3. Interim Report on 2017 Budgetary & Financial Matters (1 of 2)
IIASA’s Finance & Sponsored Research Department recently forecasted the Institute’s financial position as at the end of 2017 based on two scenarios
Total expenditure in 2017 in both scenarios is presently forecasted to be in the region of EUR 24.0m
The scenarios differ to a greater extent on the income side
Both scenarios anticipate potential provisions for some membership contributions, which results in present forecasts for NMO income of EUR 12.7m as opposed to the original forecast of EUR 13.2m
Income from external contracts and grants is forecasted at EUR 10.3m in scenario 1 and EUR 9.7m in scenario 2
Total income according to scenario 1 is therefore expected to be EUR 23.5m, whereas scenario 2 predicts income of EUR 22.9m

4. Interim Report on 2017 Budgetary & Financial Matters (2 of 2)
The forecasted change in net assets for the year differs according to which scenario prevails:
Scenario 1 would result in a draw on reserves of EUR 0.6m, which would be fairly consistent with the budget (Council approved a draw on reserves of EUR 0.4m in November 2016)
Scenario 2 would result in a larger draw on reserves of around EUR 1.0m
The forecasted balance of the reserve (unrestricted net assets) as at 31. December 2017 also differs depending on which scenario prevails:
Scenario 1 would see the reserve decrease by EUR 0.6m to EUR 6.7m
Scenario 2 would see the reserve decrease by EUR 1.0m to EUR 6.3m

5. Projected Realisation of the 2017 Budget

6. NMO Contributions 2017
* List of footnotes not included for presentation purposes. All footnotes can be found on the documents in the Council Packages

7. External Funding Report 2017 (forecasted)

8. Proposed Budget 2018: Budget Sources
2018 Budget Proposal
2017 approved Budget (for Comparison)
Income from NMO Contributions
12.325
13.150
External Contracts and Grants
11.000
Other Income
0.400
0.200
Movement on Reserves
- The Institute aims to achieve ‘efficiency reductions’ in 2018 in order to minimize the reduction in reserves
0.500
0.350
Total:
24.225
24.700
See next slide for breakdown of NMO contribution projection of EUR m in 2017.
External income is forecasted at EUR 11m in This projection is consistent with the figure in 2017, and draws on multiple sources of information (e.g. contracts and grants already in the system, contracts and grants under negotiation, proposals in the system, proposals not yet in the system, intelligence gained during budget and other meetings, etc). This forecast has also be subjected to rigorous plausibility checks (e.g. benchmarking with past experiences) and is considered to be robust, although it is stressed that we will need to keep Programs ‘hungry’ for external funding to achieve it.
Other income includes potential voluntary contributions from NMOs towards the implementation of the Institutional Review recommendations

9. NMO Contributions 2018
* List of footnotes not included for presentation purposes. All footnotes can be found on the documents in the Council Packages

10. Direct Research Allocations
2018 Budget Proposal
2017 approved Budget (for Comparison)
Scientific Research Programs
12.565
12.760
Capacity Development & Training (CDAT)
- Including YSSP and IIASA Post Doc Program
0.850
0.800
Exploratory and Special Projects
0.400
0.600
Direct Research Allocations, SUBTOTAL:
13.815
14.160
Scientific Research Programs in 2018 consists of:
Program Direct Net External Total
ENE
AIR
ESM
WAT
EEP
RISK
POP
TNT
ASA
TOTAL

11. Indirect Research Allocations (1 of 2)
2018 Budget Proposal
2017 approved Budget (for Comparison)
Funds for ongoing Nexus Projects
(includes internal allocations for the GEF-UNIDO-IIASA project and The World In 2050 project)
0.900
1.200
Funds for Strategic IIASA Projects
(‘scientific momentum projects’)
0.500
0.000
Futures Initiatives
(includes Tropical Futures Initiative, Arctic Futures Initiative and Eurasian Futures Initiative)
0.200
0.400
IIASA-JRC Center for Migration
0.275
NMO & Community Service Fund
(for supporting IIASA’s function as a major model and data repository for NMOs and other countries)
Funds for the Retention of Critical Talent and Skills
0.150

12. Indirect Research Allocations (2 of 2)
2018 Budget Proposal
2017 approved Budget (for Comparison)
Funds for ongoing Cross Cutting Research Initiatives
0.000
0.400
Funds for Systems Analysis Forum Projects
0.175
Evaluation and Advisory Committees
(in 2018 Scientific Advisory Committee (SAC) meeting; in 2017 SAC and Evaluation Committee meetings, and costs relating to the Institute Evaluation)
0.030
0.200
Contingency Fund
0.380
0.270
Cost-of-Living and Merit Adjustments
0.300
Indirect Research Allocations, SUBTOTAL:
3.060
3.420

13. Scientific Services, Infrastructure & Administration Support and Other Sundry Allocations
Budget Position
2018 Budget Proposal
2017 approved Budget (for Comparison)
Scientific Services
2.965
2.890
Computer Hardware and General Capital
0.445
0.420
SUBTOTAL:
3.410
3.310
Budget Position
2018 Budget Proposal
2017 approved Budget (for Comparison)
Infrastructure & Administration Support
3.290
3.380
Implementation of Institutional Review Recommendations
0.250
0.000
Maintenance and Utilities
0.400
0.430
Scientific Services in 2018:
ERCL (External Relations, Communications and Library) = KEUR 1.350
ICT = KEUR 965
50% of Directorate & Council & External Relations= KEUR 650
TOTAL = KEUR 2.965
Support Infrastructure in 2018:
50% of Director’s office & Council and External Relations = KEUR 650
FSR (OSR, FAB and AMA) = KEUR 1,300
HR = KEUR 400
Warehouse = KEUR 65
Transport = KEUR 35
Technical Infrastructure = KEUR 390 (maintenance and utilities for Institute listed separately this year)
Domestic Services = KEUR 285
Schloss Restaurant = KEUR 105
Telecommunications = KEUR 60
TOTAL = KEUR 3.290

14. Budget Proposal 2018: Summary
INCOME SOURCES:
2018 Budget Proposal
2017 Budget
NMO Contributions
12.325
13.150
External Contracts & Grants
11.000
Other Income
0.400
0.200
Movement on Reserves
0.500
0.350
SUBTOTAL:
24.225
24.700
ALLOCATIONS:
2018 Budget Proposal
2017 Budget
Direct allocations to Research Programs and related scientific activities
13.815
14.160
Other Scientific Initiatives
3.060
3.420
Scientific Services, Computer Hardware and other Capital
3.410
3.310
Scientific Activities, SUBTOTAL:
20.285
20.890
Infrastructure & Administration Support
3.290
3.380
Implementation of Institutional Review Recommendations
0.250
0.000
Maintenance and Utilities
0.400
0.430
TOTAL ALLOCATIONS:
24.225
24.700

15. Dissolution of the IIASA Fund (1 of 2)
The IIASA fund (previously the IIASA Endowment Fund) is one of several mechanisms that IIASA uses to attract donations
The operation and management of the IIASA Fund falls under the authority of the IIASA Council
The Board of Trustees manages and represents the IIASA Fund, while ensuring that it fulfils the purpose for which it was created
The funds raised to date are insufficient to cover the ongoing costs incurred by the legal counsel, required audits, court and notary fees as well as annual meetings of the trustees at IIASA
Bearing in mind the difficulties in attracting major donations to secure the future of IIASA and dire prospects for a significant improvement of the IIASA Fund financial standing in the coming years, members of the Board of Trustees recommend to dissolve the Fund due to insufficient funds to fulfil its mission

16. Dissolution of the IIASA Fund (2 of 2)
As stipulated in Article 20 of the IIASA Fund statute, the final beneficiary of the Fund is IIASA. To this end, the trustees recommend that remaining assets be allocated to the YSSP Fund to support future YSSP fellows
The balance of the IIASA Fund (assets less liabilities) as at was EUR 89,283. Costs of closure would still need to be subtracted from this amount before the final value of the remaining assets is fully known
The trustees further recommend that IIASA pursues fundraising through directed campaigns, e.g. YSSP Fund, Howard Raiffa Fellows Program, and program-specific projects.
The trustees will continue to offer their guidance and support through the US-based Friends of IIASA ( and their active networks, both in the U.S and in Europe