For the last three years, OHCHR’s expenditures exceeded its annual income. This budget deficit was absorbed by the surplus that accumulated during the years in which the Office received more voluntary contributions than it spent. While those reserves still allow for the absorption of projected funding shortfalls in the 2012-2013 biennium, a situation in which funding is not commensurate with spending is clearly unsustainable in the long term.
After a long period of growth, OHCHR underwent a budget reduction exercise for the first time in 2012. The ever-increasing demands for support from the Office saw the extrabudgetary cost plan rise to nearly US$151.5 million against an expected income of US$110 million. In light of this fact, it became clear that concerted efforts were required to ensure that the remaining surplus would be sufficient to continue covering a shortfall in income that is not expected to improve in the near future.
Consequently, in the context of the 2012 Mid-Year Review, OHCHR’s Programme and Budget Review Board (PBRB) recommended some initial savings (reducing the total costs for 2012 to US$142 million) and agreed to establish a target for the 2013 cost plan for ongoing programmes at US$130 million. The initial re-costed budget for 2013 was US$147 million. To achieve the estimated 12 per cent reduction necessary to meet the 2013 target of US$130 million, senior managers, in consultation with their staff, were requested to identify possible cuts amounting to 15 per cent of their division’s initial re-costed resource requirements and indicate the programmatic consequences of those cuts.
The financial shortfall compelled the Office to question the status quo in terms of distribution of resources and explore new ways to prepare and discuss its annual cost plans. In reviewing the proposals from the divisions, the PBRB ensured that reductions were primarily undertaken in areas where efficiency gains could be achieved or in areas that were not identified as priorities for the biennium. Where cuts would have impacted on OHCHR’s capacity to undertake strategically important engagement and commitments, proposals for reductions were not accepted. As a result of the exercise, a total of 46 posts were cut.
In addition to these efforts, OHCHR held substantive discussions on the programmatic value of the different elements of its cost plan. In the course of the exercise, the added value of ensuring a close link between the programmatic discussions on priorities and the allocation of resources became evident to the PBRB. The Office was able to combine broader strategic decisions with section-level creativity in exploring new ways of implementing activities. The various reductions demonstrated that although there is room for efficiency gains in existing programmes, streamlining has its limits.
The exercise also showed that while the Office was clearly implementing austerity measures, some investments were required to support activities to increase the voluntary contributions to the Office. An external outreach strategy is currently under preparation and OHCHR is exploring the potential of Inter-agency cooperation and securing increased funding from new sources. In this vein, OHCHR will be working in the coming years to increase its sources of funding and achieve sustainability by strengthening the current donor base; tapping into new institutional donors; working with the private sector; tapping into UN pooled funds (e.g. Peacebuilding Fund); making a clear case for support to donors, with better reporting and improved communication with stakeholders; enhancing its capacity to fundraise at the field level; and developing partnerships.