1. Informal consultation on highlights of UNDP’s Integrated budget estimates, 2014-2017 13 June 2013
Figures are provisional estimates subject to change until budget is finalized

2. Contents Strategic context
Financial context and integrated resources plan
Programmatic components
Institutional components
Linkage of resources to results
Next steps
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3. Strategic context
Integrated budget is integral complement to the strategic plan & integrated results and resources framework therein
Provides information on resource estimates in the integrated results and resources framework.
Supports transformation of institutional effectiveness called for so that UNDP can deliver effectively, responsively and with greater cost effectiveness on the vision and outcomes in the Strategic Plan.
Builds on improvements made under the Agenda for Organisational Change, using three interrelated strategies :
(i) higher quality programmes through results based management;
(ii) greater organizational openness, agility and adaptability to harness knowledge, solutions and expertise; and
(iii) improved management of financial and human resources in pursuit of results in a way which is sustainable within project resource flows. 
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4. Strategic context (continued)
Culmination of ‘joint roadmap to integrated budget’ (with UNICEF, UNFPA and UNWOMEN):
harmonized cost classification framework (decision 2010/32);
harmonized results-based budgeting approach (decision 2011/10); and
harmonized conceptual cost recovery methodology and cost recovery rates (decisions 2012/27 and 2013/9).
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5. Strategic context (continued)
For the first time, decision sought on single integrated presentation, on areas previously legislated through two distinct funding instruments – the institutional budget and the programming arrangements.
This holistic approach:
acknowledges the synergies and linkages between development and institutional results at country, regional and global levels, and the associated resource requirements.
Recognizes that Institutional activities represent essential strategic enablers for the achievement of development results.
Facilitates the process of continuous re-alignment of institutional capacities required to help programme countries achieve development results within the remit of the strategic plan.
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6. Financial context Key facts for 2014-2017 – overall:
Total of $20.8 billion in estimated regular + other resources income (plus $3.4 billion in opening balance), noting that partners provide funding for current and future years
Total $22.6 billion in planned use of regular ($3.8 billion) + other resources ($18.8 billion):
Development activities: $20.1 billion (88.8%);
UN development coordination activities: $0.4 billion (1.7%);
Management activities: $1.8 billion (8.1%); and
Special purpose activities: $0.3 billion (1.4%)
Trend with respect to reduced allocation of regular (core) plus other (non-core) resources to management activities (8.1% compared to 8.6% estimated in ), that reflects improved burden sharing and greater efficiency
Largest reduction in UNDP’s recent history of regular resources allocation to management activities
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7. Financial context (continued)
Estimated contributions by funding category
Millions of US dollars
Figures are provisional estimates subject to change until budget is finalized
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8. Financial context (continued)
Estimated use of regular and other resources
(actuals/est.) (estimates)
Figures are provisional estimates subject to change until budget is finalized
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9. Financial context (continued)
Premised on UNDP financial regulations & rules + relevant EB decisions; with coverage of same 4-year period as strategic plan: change from prior practice of 2-year institutional budgets and 4-year programming arrangements frameworks.
Reduced allocation to management to maximize allocation to development activities (programmes and development effectiveness (DE)): annual report of Administrator shows that increased investment in DE leads to higher quality and more effective programmes. Nevertheless, the significant reductions in management will pose challenges. In response, UNDP will launch a structural adaptation plan, noting there will be a level of risks.
Development is a long-term challenge that requires strategic and sustained focus with necessary capacity, agility and responsiveness to crises and opportunities. Hence, it is important to secure, on a predictable, continuous and sustained basis, a critical mass of resources to support the pursuit of long-term development objectives. UNDP relies on its bedrock of regular resources to support strategic and flexible approaches. 
With respect to regular resources, note the following key highlights:
Increased share for development activities, including programmes and development effectiveness
Reduced share for management activities
Greater support to financing of UN development coordination activities (continued financing of backbone plus provision for UNDP contribution to system-wide cost sharing formula) – in line with application of harmonized cost classification categories and cost recovery decision 2013/4.
for – followed by additional $66.4 million in real reductions for
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10. Financial context (continued)
Integrated resources plan – and (in million of US dollars)
(*)
(*) Agency partners’ share of system-wide cost sharing formula (starting in 2014) is not included in UNDP’s resources plan.
Figures are provisional estimates subject to change until budget is finalized
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11. Financial context (continued)
Increased rate of delivery on other resources in integrated resources plan
71%
77%
78%
79%
(*)
(*) Agency partners’ share of system-wide cost sharing formula (starting in 2014) is not included in UNDP’s resources plan.
Figures are provisional estimates subject to change until budget is finalized
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12. Financial context (continued)
Integrated resources plan – estimates covering in millions of US dollars
(*)
(*) Agency partners’ share of system-wide cost sharing formula (starting in 2014) is not included in UNDP’s resources plan.
Figures are provisional estimates subject to change until budget is finalized
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13. Financial context (continued)
Key Variances in integrated resources plan:
Development activities
Increased share of allocation of resources to development activities– response to QCPR and EB direction - cost recovery decision 2013/4
UN coordination activities
Commitment to UNDP financing of backbone of coordination plus its share of cost-sharing formula with partner UNDG agencies.
Management activities
Overall decrease in share of resources allocated to management activities;
Decrease in regular resources allocation – response to QCPR and EB direction – cost recovery decision 2013/4
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14. Programmatic components
Based on PA decisions 2007/33; 2010/2; 2012/1; 2012/28; and 2013/4
Key proposal: two total annualized programming resource bases:
$540m per year for (equal to actual annual programming bases for )
increasing to $600m per year for
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15. Institutional components (continued)
Positions:
D1 and above level positions:
No increase - will remain at approved level
No change in approach for these leadership positions
P5 level and below positions:
In past: detailed presentation, and single funding source for positions -> non-responsive to changes in funding and thereby lacking agilitiy and responsiveness
Proposed: envelope of regular resources rather than pre-set number of positions in order to:
Better align with organizational structure and multi-funded nature of activities.
Better able to respond to evolving development needs.
Better linkage of costs to results frameworks and related funding streams.
Allow more strategic use of limited resources for development activities.
UN development coordination
Financing of backbone continued
Provision for UNDP contribution to system-wide cost sharing formula included
Cost recovery
Compliant with EB decision 2013/4 after taking transitionary measures referenced in DP/FPA/2013/1 into account
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16. Linkage of resources to results
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17. Next steps June-September, 2013: Second regular session, 2013:
Further consultations, including on Strategic Plan, Integrated Budget, physical presence
EB document on integrated budget sent to EB and ACABQ last week of June.
Late June/Early July: Informal on Integrated Budget
Informal in July on physical presence
Introductory informal information session in July
ACABQ formal meeting on 2 July focusing on institutional component of integrated budget.
ACABQ formal report submitted to EB mid-end July
Second regular session, 2013:
formal discussion and decision on integrated budget,
Separate report on physical presence in MICs (response to 2013/4)
Second regular session, 2015:
Mid-term review focusing on financial estimates of institutional components of the integrated budget, if adjustments are required due to a need for re-alignment of resources and results, and/or major changes in the overall financial framework.
2016:
review of cost recovery policy (EB decision 2013/9)
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