BUDGET COMMITTEE PRESENTATION BY THE OZONE SECRETARIAT Joint 10th meeting of the

Conference of the Parties to the VC and

26th Meeting of the Parties to the MP

17.11.2014

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ISSUES FOR THE ATTENTION OF THE PARTIES

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

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RESERVES AND FUND BALANCES CHANGES 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 2013.

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RESERVES AND FUND BALANCES CHANGES 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.

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RESERVES AND FUND BALANCES CHANGES 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.

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TRENDS IN FUND BALANCES AND RESERVES 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.

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PROPOSED REVISED 2014 BUDGET FOR THE VC TRUST FUND 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.

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PROPOSED REVISED 2014 BUDGET FOR THE MP TRUST FUND 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.

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PROPOSED 2015-2017 BUDGETS FOR THE VC TRUST FUND AND AUDIT RECOMMENDATIONS

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.

Revised 2014

2015 2016 2017

Total budget (with psc)

1,280,309

782,377 789,713 1,390,636

Draw down 677,309 179,377 186,713 787,636

Required contribution

603,000 603,000 603,000 603,000

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PROPOSED 2015-2017 BUDGETS FOR THE VC TRUST FUND AND AUDIT RECOMMENDATIONS

Extension of Trust Fund to 31.12.2025 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.

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PROPOSED 2015-2016 BUDGETS FOR THE MP TRUST FUND

2015 - 4.8% increase when compared to 2014 without the HFC management workshop budget.

Extension of Trust Fund to 31.12.2025 Inclusion of 2% operational reserve Annual contributions by parties remain

constant because of the draw downs. Revised 2014

2015 2016

Total budget (with psc)

5,065,460 5,090,765 5,133,894

Draw down 788,527 813,832 856,961

Required contributions

4,276,933 4,276,933 4,276,933

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EARMARKED CONTRIBUTIONS

Contributions from Norway, Sweden and Finland for support of the participation of Least Developed Countries to the meetings

Contributions from IPAC Contributions from EU

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TEAP FUNDING ISSUES Budget for travel of Assessment Panels (A5 experts)

was 500,000 in 2010 but decreased to 450,000 in 2012.

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.

* As of October 2014

YearApproved Budget

Funding of Art 5 experts

Funding of non Art 5 experts

Total funds spent

% spent on non Art 5 experts

Utilization of budget

2010 500,000 453,092 24,852 477,944 5.50% 96%2012 400,000 309,847 21,858 331,705 6.59% 83%2014 * 450,000 287,915 17,613 390,002 4.50% 87%

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WHAT’S NEW IN THE BUDGET PRESENTATION

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.

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POSSIBLE ADDITIONAL REQUIREMENTS FOR THE CONSIDERATION OF THE PARTIES - 1

Activities for the 30th 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.

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POSSIBLE ADDITIONAL REQUIREMENTS FOR THE CONSIDERATION OF THE PARTIES - 2

If the parties wish to contribute to the carbon neutrality of the 26th MOP, 10th 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.