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Transition to the (new) Business Model

Transition to the (new) Business Model. Annual Meeting Bogor, 26 September 2016. Outline. CIFOR Funding Transition A view outside CIFOR Transition to 2017 Changes, challenges, expectation and readying for the future. Remember this from last AM?. Transition to 2017.

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Transition to the (new) Business Model

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  1. Transition to the (new) Business Model Annual Meeting Bogor, 26 September 2016

  2. Outline • CIFOR Funding Transition • A view outside CIFOR • Transition to 2017 • Changes, challenges, expectation and readying for the future

  3. Remember this from last AM?

  4. Transition to 2017..

  5. Transition to 2017.. a different perspective

  6. A view outside CIFOR

  7. Evolution of CGIAR Funding 2011-15 Source: CGIAR 2015 Financial Report

  8. Center Performance 2015 Source: CGIAR 2015 Financial Report

  9. Indirect Costs 2015 Source: CGIAR 2015 Financial Report

  10. Center Financial Stability 2015 (adequacy of reserve in days) Source: CGIAR 2015 Financial Report CIFOR: Unadjusted for deficit in 2014-15

  11. Center Liquidity 2015(working capital in days) Source: CGIAR 2015 Financial Report

  12. Transition to CIFOR 2017

  13. The Transition Transition to 2017 (first cut) USD 37.7m revenue, W1/2: 7.1m FY 2012 USD 33.8m revenue, W1/2: USD 14.9 W1/2 and W3/B cover RS costs

  14. CIFOR Revenue Forecast 2017 USD 37.7m funding forecast • By distribution • By Source of Funding OH recovery is 9% and RS is 3%

  15. RS Costs 2017 (1st estimate) RS costs are USD 5.57m Our global presence alone costs USD 2.47m IT and Systems support costs another USD 0.8m RS recovery from W3/B is only USD 1.3m

  16. IU Costs (1st estimate) IU costs are USD 5.67m

  17. The Transition: some key changes • We are already raising 64% more W3/B than in 2012 • We can only charge up to the audited OH to W1/2 • We are at present charging way beyond that • Research Support costs will need to be covered by W3/B • There are not enough funds for co-financing • Uncollected CSP will have to be financed by Center funds

  18. The Transition: what we need to do • Fund raise : a constant and strong pipeline • a combination of big and small proposals/projects • Guidelines to assist with proposal budgeting • Staff time budgeted adequately against grants OH recovery from W3/B may remain around 10%, thus: • Be creative in converting some of our costs (RS and Indirect) into direct • Find ways to charge CSP as a direct cost • Provide adequate time to assist preparing and reviewing proposal • Budget and promise to deliver only what is possible within financial limitations of the grant • Deliver on our commitments

  19. The Transition: what to expect • Compliance matters will take front seat e.g. Financial Accounting guidelines in EU International Co-operation and Development projects (PAGODA guidelines) US NICRA • Donor conditionality will likely drive how we spend the funds we receive; almost all funds we now receive are with restrictions • Review and understand donor guidelines: • What are eligible costs and financial reporting requirements • What are staff cost accounting requirements • What are requirements to account for indirect costs • Additional audits (internal and external) • Review and implement audit / 7 pillar recommendations • Financial Reporting • Timely financial reporting and invoicing • Monitor AR and follow up of receivables

  20. Ready(ing) for the transition • A new Strategy 2016-2025 linking to the SDGs • A new org structure • The RDP team being strengthened • Operational policies, procedures • Key business processes (myCIFOR) • RDP • PMC • HR • Travel • Event Management • Reporting • Etc.

  21. Thank You!

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