Committed to Connecting the World Draft Financial Plan

Committed to Connecting the World Draft Financial Plan of the Union 2016– 2019 Presented by Financial Resources Management Department

Committed to Connecting the World Purpose of the ITU Financial Plan Ø Establish Revenue and Expenses assumptions to finance the ITU Strategic Plan for 2016 -2019; and set the basis for the next two biennial Budgets; Ø Allow PP-2014 to establish the amount of the Member State Contributory Unit for the planning period; Ø Allow PP-2014 to deal with long-term financial issues; Ø Linkage with the ITU Strategic Plan by providing the cost of Goals and Objectives. 1

Committed to Connecting the World Planning Assumptions - Revenue Ø It is proposed that the amount of the contributory unit be maintained at CHF 318, 000 for the 20162019 period; Ø No withdrawal from the Reserve Account is foreseen in the draft Financial Plan. Ø Assessed contributions from Member States, Sector Members, Associates and Academia are based on actuals at 31 December 2013 (345 units for Member States, 354 units were planned for 2014 -2015 budget); Ø Cost recovery revenue to remain constant; 2

Committed to Connecting the World Planning Assumptions - Expenses Ø The 2016 -2019 Financial Plan is based on the approved Budget 2014 -2015, with program variation adjustments; Ø The 2016 -2019 draft Financial Plan includes : 1 WTSA, 1 WTDC, 1 WRC, 1 RA and 1 PP; Ø 5% vacancy rate as in the 2014 -2015 budget; Ø No new additional posts. Ø Staff cost calculations include (natural growth) step increments, replenishment of repatriation fund, cumulated leave, installation costs, increases in education grants and health insurance increased contributions; 3

Committed to Connecting the World Planning Assumptions - Long-term Expenses Ø Financial resources for medium and long-term maintenance or replacement of ITU buildings. The replacement of the Varembé building is anticipated; Ø Financial resources for the replenishment of the ICT Capital Fund; Ø Financial resources for long-term liabilities such as ASHI, repatriation grants, accrued annual leave. Steps have to be taken to gradually cover these requirements and the current negative net assets of the Union which amounted to CHF 228 million at 31 December 2012. 4

Committed to Connecting the World Draft Annex 1 to Decision 5 5

Committed to Connecting the World Balance between Revenue and Expenses Ø There is a CHF 60. 5 million shortfall between revenue and expenses; Ø This is a first version of the draft Financial Plan, ITU management is working to reduce the shortfall by identifying efficiency measures and increasing revenue; Ø The gap is equivalent to 48 contributory units from Member States. 6

Committed to Connecting the World Status of the Reserve Account 7

Committed to Connecting the World Draft Financial Plan for 2016 -2019 Contributory Unit Table 8

Committed to Connecting the World Draft Financial Plan for 2016 -2019 Sector Members Detail Cost Recovery Detail 9

Committed to Connecting the World Draft Financial Plan for 2016 -2019 General Secretariat detail * The CHF 16. 1 million increase in GS Departments is due to step increments, health insurance, installation costs, cumulated leave, education grants and repatriation fund, as in the other Sectors. 10

Committed to Connecting the World Draft Financial Plan for 2016 -2019 Sectors detail 11

Committed to Connecting the World Challenges Ø To increase the Union’s revenue in the short, medium and long-term; Ø To absorb increasing costs of the Union within limited resources; Ø To finance long-term Union’s liabilities; Ø To maintain the effectiveness and efficiency of the Union. 12

Committed to Connecting the World Linkage with the ITU Strategic Plan Ø The linkage between the draft Financial Plan and the draft Strategic plan is made through the reallocation of the resources of the draft Financial Plan to the various ITU Goals and Objectives of the draft Strategic Plan; Ø New revised cost-allocation methodology (Decision 535). 13

Committed to Connecting the World New Costs Allocation Methodology Slide 1 14

Committed to Connecting the World New Costs Allocation Methodology Slide 2 15

Committed to Connecting the World Draft Financial Plan 2016 -2019 in RBB Format 16

Committed to Connecting the World Reallocation process – Step 1 From General Secretariat centralized services to Bureaux 17

Committed to Connecting the World Reallocation process – Step 2 From Bureaux to Outputs 18

Committed to Connecting the World Reallocation process – Step 3 From Outputs to Objectives 19

Committed to Connecting the World Reallocation process – Step 4 From Objectives to Goals 20

Committed to Connecting the World Financial Plan 2016 -2019 § This is the first draft of Financial plan § More efforts will be made to improve the situation § SG wishes to submit a final draft FP with a balance, and no withdraw from the reserve account. October 2011 22

Committed to Connecting the World Thank you Questions, comments? 21