TEL:(82-2)723-0634 FAX:(82-2)-723-0640 E-mail: http://citynetcongress.org
Thirtieth SESSION
3rd Nov. 2013
Seoul, R. O. Korea
Budget for the Year 2014
TABLE OF CONTENTS
TABLE OF CONTENTS
LIST OF ACRONYMS
1 INTRODUCTION Error! Bookmark not defined.
2 OVERVIEW OF BUDGET FOR THE YEAR 2012 AND THE SECOND-QUARTER SETTLEMENT OF ACCOUNTS FOR THE YEAR 2013 Error! Bookmark not defined.
3 BUDGET FOR THE YEAR 2014 Error! Bookmark not defined.
Annexes:
Annex I: Proposed Overall Budget for the Year 2014 7
Annex II: Proposed Administrative Budget for the Year 2014 8
Annex III: Proposed Programme Budget for the Year 2014 9
Annex IV: Proposed Partner Development Budget for the Year 2014 10
Annex V: Proposed Budget for CITYNET Activities with Yokohama City for the Year 2014 10
LIST OF ACRONYMS
C2C / City-to-City CooperationCIFAL / International Training Centre for Local Authorities (in French: Centre International de Formation des Autorités/Acteurs Locaux)
DRR / Disaster Risk Reduction
ISWA / International Solid Waste Association
JICA / Japan International Cooperation Agency
KLRTC / Kuala Lumpur Regional Training Centre
Korieoeoe
KOTI / Korea Transport Institute
PURSUE C2C / Partners United for Realising a Sustainable Urban Environment through C2C
TCDC / Technical Cooperation among Cities of Developing Countries
SI / Seoul Institute
SHRDCentre / Seoul Human Resource Development Centre
KOICA / Korea International Cooperation Agency
UNITAR / United Nations Institute for Training and Research
KOI
Korekdkdkdkdkdkkd
BUDGET FOR THE YEAR 2014
1. Introduction
The budget for the year 2014 is related to the structure of the new organization of the Secretariat in Seoul and has been drafted to reflect the proposed plans for Operational, Partner Development and Programs Activities for the year 2014.
After the relocation of the Secretariat to Seoul at the end of March, 2013, the CITYNET Secretariat has been strengthened, particularly in terms of fundraising and re-structuring the organization into three parts: the Operations Team, the Partner Development Team and the Programs Team.
The newly established Partner Development Team will focus on building the financial sustainability of CITYNET through fundraising from donors and partners. The fundraising will also contribute to expanding the organization of CITYNET by recruiting new members. These efforts will help CITYNET become a financially stable organization in the near future.
2. Overview of Settlements of Accounts for the Year 2012 and the First Three Quarters of the Year 2013
An overview of the settlements of accounts for the year 2012 and the first three quarters of the year 2013 are described below:
1. The total revenue made during the year 2012 was US $555,504.42 and this amount was far lower than the expected budget of US $1,193,469 which was approved during the 28th Executive Committee Meeting in Dhaka, Bangladesh, in 2011. Only 46.54 percent of the actual revenue was made compared to the expected budget revenue.
This means that the revenue budget was extremely over estimated in 2011.
2. The total expenses for the year 2012 were US $692,328.58 which means that US $136,824.16 were over spent from the actual revenue of US $555,504.42.
3. In 2012, program activities were adversely affected since some of the budgeted funds were not received. The actual revenue of the program was US $96,605.83 which was only 17.38 percent of the approved program budget of US $555,620. However, the actual expenses of the program activities were US $140,664.84.
4. Due to the over expenditure of both the administrative and program sections, as of 31 December 31st, 2012, CITYNET’s net assets had decreased, with a final balance of US $425,097.39. This indicates a 25.7 percent decrease from CITYNET’s net assets of US $571,772 (as of 31 December 2011) which is the equivalent of US $146,675.20.
The net assets have been gradually decreasing between2009 and 2012, primarily due to the administrative section and not the programs section.
One of the main reasons for this was a large increase in administrative expenditures, noticeably in personnel costs, compared to an only slight increase in revenues.
Even the expected revenue budget was only half realized. However, the expenditures were fully realized which adversely affected the net assets of CITYNET as of December 31 2012.
5. The year 2013 is the year of the Congress and the relocation of the Secretariat. The relocation was smoothly conducted from Yokohama to Seoul at the end of March, 2013.
6. The total revenues for the 2013 budget was expected to be higher than the previous year due to the expectation of raising funds from many donors and partners, as reflected in the budget approved at the 29th Executive Committee Meeting inSurabaya, Indonesia in 2012.
7. However, the total revenue budget of US $1,610,091 was also highly over estimated and has not been realized. The actual revenues are expected to be less than US $700,000, which will be comprised of the subsidy of the Seoul Metropolitan Government (US $ 495,543) (i.e. US $376,496(Administrative Part)/US $119,047(Program part)) and of the membership fee collection (estimated US $204,295) as of December 31 2013.
8. The program revenue budget for the year 2013 will not be realized. Due to the relocation of the Secretariat and the preparation of the 2013 CITYNET Seoul Congress, it is highly likely that the expected program revenue budget US $756,547 approved at the 29th Executive Committee Meeting will not be realized.
Table 1. Administrative and Program Accounts from 2008-2014 (main items only)
2008 / 2009 / 2010 / 2011 / 2012 / 2013Estimated
US $=
1,176KRW / 2014
Estimated
US $=
1,100KRW
Administrative Account
REVENUES / 309,994 / 347,897 / 449,445 / 476,356 / 458,899 / 580,976 / 491,313
Membership Dues / 152,679 / 187,792 / 174,350 / 173,486 / 181,127 / 204,480 / 262,980
Subsidies / 142,041 / 154,961 / 272,238 / 298,892 / 274,778 / 376,496 / 227,273
EXPENSES / 292,051 / 405,247 / 482,575 / 511,381 / 561,515 / 670,873 / 607,931
Personnel
Rent Expenses / 226,572
- / 281,826
- / 416,207
- / 439,333
- / 459,700
- / 494,740
- / 457,995
90,909
Legislative Meetings / 27,719 / 85,754 / 24,201 / 23,566 / 25,037 / 100,200 / 33,190
Increase in Net Assets / 17,943 / -57,350 / -33,130 / -35,025 / -102,616 / -90,082 / -116,618
Partner Development
Account
REVENUES / 50,000
EXPENSES / 84,510
Increase in Net Assets / - 34,510
Program Account
REVENUES / 305,779 / 308,909 / 284,765 / 142,902 / 96,606 / 119,047 / 136,363
EXPENSES / 288,495 / 275,935 / 273,201 / 147,969 / 140,665 / 129,047 / 146,363
Increase in Net Assets / 17,284 / 32,974 / 11,564 / -5,067 / -44,059 / -10,000 / - 10,000
Net Assets
Beginning of Year / 622,579 / 657,806 / 633,430 / 611,864 / 571,772 / 425,097 / 325,015
Increase in Net Assets / 35,227 / -24,376 / -21,566 / -40,091 / -146,675 / -100,082 / - 161,128
End of Year / 657,806 / 633,430 / 611,864 / 571,772 / 425,097 / 325,015 / 163,887
※ The total CITYNET funds transferred from Yokohama to Seoul was approximately US$250,000. The first transfer was made on March 18th, 2013 in the amount of US $100,000. The second transfer was made on June 10th, 2013 in the amount of US $87,307.17. The third transfer was made on June 24th,2013 in the amount of Japanese Yen 6,989,717.
Please refer to the annex 1.
※ It can be estimated that according to the first half quarter year of settlement of accounts for the year 2013, the total expenditure seemed to be US$150,000 in Yokohama, Japan.
※ For the remaining settlement of half quarter year for accounts for the year 2013, the total expenditure is estimated to be less than US$150,000, of which is included US$100,200 the cost of Congress and Executive Committee Meetings.
※ Finally, the Net Assets of CITYNET as of 31 December 2013 are estimated to be US$325,015 which means that there has been a US $100,000 decreased in the Net Assets compared to the previous year.
3. Budget for the Year 2014
3.1: Overall Budget
The overall budget for the year 2014 is much different from the previous years’ budget. The previous years’ budget was liable to reflect high expectations of raising funds from donors and partners which were not fixed in advance. Due to the expectations and over estimated revenue, it was easier to estimate the expense budget within the over estimated revenue budget. The revenue budget for the year 2014 will be based on the actual revenues and the expenses of the previous years.
The Budget for the year 2014 will be comprised of three parts which are the Administrative Budget, the Program Budget and the Partner Development Team Budget. The total of the proposed budget for the year 2014 is relatively less than the budget for 2013.
In 2014, CITYNET will specifically focus on raising funds from donors and partners through the newly established Partner Development Team, and with the cooperation of the implementation more feasible projects by the Program Team.
3.2: Administrative Budget
The Administrative Budget for the year 2014 is based on the estimate of revenues and expenditures for institutional activities in the year 2014. The main source for the Administrative Budget will be the subsidy from the Seoul Metropolitan Government, the membership fees from the CITYNET members and the reserve fund which was transferred from Yokohama to Seoul.
The Administrative Budget for the year of 2014 will be simpler than that of 2013. Most of the Administrative budget will be used for the personnel costs and office operational costs.
Compared to the previous Secretariat in Japan, the operational costs are expected to be decreased due to lower price index in the Republic of Korea.
The followings are highlights of budget items:
1. Revenue: AR103-00 Subsidy from Seoul Metropolitan Government: The total subsidy from the Seoul Metropolitan Government with respect to both the administrative account and the program account is shown below.
In 2014, the subsidy from Seoul to the Secretariat will decrease compared to the subsidy of 2013. The subsidy budget from Seoul Metropolitan Government for the year 2014 will be around 75.4 percent of the subsidy budget of the year for 2013. The 2014 budget will not reflect any costs incurred from relocation expenses or other expenses for maintenance.
Table 3. Financial Support from Seoul (US $)
2013 / 2014 (Estimated)1 USD=1176 KRW / 1 USD=1100 KRW
a. / Membership Fee / 10,000.00 / 10,000.00
b. / Salary for Seconded Staff(s) from SMG / -(in kind) / -(in kind)
c. / Subsidy for Secretariat Staffs / 212,585.00 / 136,363.63
d. / Rental Expense / 85,034.00 / 90,909.09
e. / Other expense for maintenance of office / 8,503.00 / -
f. / Secretariat Office Relocation expenses / 17,857.00 / -
g. / Installation of the New Secretariat office / 42,517.00 / -
h. / Program support / 119,047.00 / 136,363.63
Total / 495,543.00 / 373,636.35
※ In-kind contributions for the salaries of 3 staff members from the Operations Team from Seoul Metropolitan Government are provided from April to December 2013.
※ In-kind contribution for the salaries of 2 staff for the Operations Team from Seoul Metropolitan Government will be expected to be granted in 2014.
※ The subsidy from Seoul Metropolitan Government shall be based on its budget for the fiscal year 2014, which will be tabled for consideration at the City Council Meeting in December 2013.
2. Revenue: AR200-00 Transfer from the Reserve Fund: In the budget for the year 2014, CITYNET will require a sum of US $116,618 from the Reserve Fund again to be transferred for Administrative revenue. The main reason is the expenses of the salary of the staff of the Secretariat. It will be absolutely necessary to have some sponsorship from donors and partners in order to save the transferred budget from the reserve fund.
3. Expenditure: AE101-00 Personnel: The budget for personnel expenditures for the year 2014 will be estimated at US $457,995 which will be decreased by 7.43percent from the personnel budget of the year 2013, which was US $494,740.
a. The personnel expenditure US $457,995 will be covered by 54.6 percent of the total expenditure of the year of 2014, US $838,804.
b. The personnel costs will be almost the same as the personnel expenditures (US $459,700) from the year 2012. For running of stable organization, it is absolutely necessary to have more sponsorship from donors and partners.
c. In the year 2014, it is expected that CITYNET will raise funding from partners and donors through the newly established Partner Development Team. Nonetheless, personnel expenditures will remain the same.
d. The Secondment staff program will be very effective in saving personnel costs in 2014. Through this program, dispatched officials from CITYNET member cities will join to work in the Secretariat. One staff member could be from a Korean member city and the other will be from a CITYNET member city. The costs of two Secondment staffs which will be less than US $30,000(US$ 9,600 from domestic and US$20,000 from abroad member cities), is included in the personnel budget (expenditures).
e. The newly established Partner Development activities are strongly expected to have more funds and sponsorships from other partners and donor agencies from 2014.
< Administrative costs: personnel, Rental Fee, Legislative Meeting and others>
4. Expenditure: AE102-00 Administrative (Legislative) Meetings: The budget for the year 2014 for the Administrative (Legislative) Meeting will increase compared to the budget of the year 2013, since the Secretariat will have to cover the travel costs for the Executive Committee members and the travel cost of the accountant to visit Seoul during the Audit.
5. Expenditure: AE108-00 Secretariat Office Operational Expense: The budget for the year 2014 US$90,909 for the Secretariat Office Operational Expense will be used for the rental fee of the office which will be almost the same as the budget of the year 2013, US$93,537.
6. Expenditure: AE112-00 Secretariat Relocation Expense: The budget for Secretariat relocation expenses was a special expenditure item only for the year 2013. In 2014, since the relocation of the Secretariat has been completed, that item will not be necessary in 2014.