FINANCIAL HIGHLIGHTS 2014
The 2014 financial outcomes discussed in the section, “Financial Summaries of the CGIAR System, Centers and Research Programs”, are an aggregation of the audited financial statements of the 15 CGIAR Centers. The statements were prepared on the accrual basis of accounting. Hence, the revenues reported here are only the earned portion of funding based on revenue recognition, which, in the CGIAR context, means money spent. The CGIAR Fund, however, reports contributions based on cash receipts and disbursements, as the Fund is a channel for contributions, not an implementing agent (see “Financial Summary of the CGIAR Fund”). Therefore, some funding tables will not match the CGIAR Fund data reported in Tables 4 and 5 and in Annexes 1 and 2.
FINANCIAL SUMMARIES OF THE CGIAR SYSTEM, CENTERS AND RESEARCH PROGRAMS OVERVIEW
CGIAR continues to make steady progress in securing greater levels of financial resources to support its research-for-development agenda. In 2014, CGIAR system revenue, including $23 million in Center-generated income, amounted to $1.08 billion, an increase of $73 million, or 7% over 2013 revenue. Expenditure was $1.067 billion, an increase of $83 million, or 8% more than in 2013. The net result was a surplus of $13 million, as shown in Table 1, which includes data on bilateral funding as well as CGIAR’s multi-donor trust fund. Donors to the CGIAR Fund may designate their contributions to one or more of three funding Windows. Harmonized funding is channeled through Windows 1 and 2, with donors designating their contributions to specific CGIAR Research Programs via the latter. Donors can allocate funding to particular CGIAR Centers through Window 3.
1 Table 1 is a summary of all revenues and expenses in the CGIAR, and includes figures for system offices, special initiatives and other partner programs, which are not part of the Centers’ financial summaries.
From 2011 to 2014, the Fund’s share of total CGIAR revenue grew from 28% to 57%, highlighting growing donor interest in a multilateral approach to funding and the increasing importance of the Fund to overall income growth. Significantly, during that time period, harmonized funding more than doubled, climbing from $187 million to $382 million, which accounted for 35% of CGIAR revenue in 2014 (see Windows 1 and 2 of the Fund in Figure 1).
From 2013 to 2014, contributions to the Fund, which increased by $137 million, or 28%, also helped drive CGIAR’s total revenue growth, which increased by $73 million. There was a corresponding decline of $64 million in bilateral revenue and an increase of $98 million in Window 3 contributions from 2013 to 2014, part of a continuing pattern of migration of funding from bilateral sources into the CGIAR Fund.
In 2014, total CGIAR expenditures reached $1,067 million, an increase of $83 million, or 8%, over 2013 levels (see Table 1). In keeping with past trends, the majority of CGIAR resources (52%) was spent in sub-Saharan Africa in 2014, as shown in Figure 2. In terms of cost category (see Figure 3), personnel costs accounted for 39% of total expenditures in 2014, while spending on supplies and services, collaboration and partnerships, and travel accounted for 30%, 20%, and 7%, respectively, of the overall budget, which was consistent with 2013 spending patterns. In addition, depreciation decreased from 6% in 2013 to only 4% of total expenditures in 2014.
CGIAR RESEARCH PROGRAMS (CRPS): FINANCIAL SUMMARY
In 2014, CRP funding and expenditure totaled $887 million – or 83% of total CGIAR expenditure for the year – an increase of 10% relative to 2013. The $887 million includes $5 million of Centers’ own funds, which were used to fill a gap between expenditure and CRP funding of $882 million. As shown in Table 2, Windows 1 and 2 combined, at $362 million, accounted for 42% of CRP funding (consistent with 41% in 2013), while Window 3, at $182 million, experienced the most growth, increasing from 13% of funding in 2013 to 21% in 2014. In contrast, the proportion of bilateral funding to total CRP funding dropped from 45% in 2013 to 38% in 2014.
TABLE 2: SUMMARY OF CRP FUNDING IN 2014 ($ MILLION)
FIGURE 1. SOURCES OF REVENUE ($ MILLION)
FIGURE 2. EXPENDITURE BY REGION
FIGURE 3. EXPENDITURE BY COST CATEGORY
CGIAR CENTERS: FINANCIAL SUMMARY
As shown in Table 3, CGIAR Centers exhibited wide variability in financial results in 2014, leading to a net accumulated surplus of $13 million. Three Centers (CIFOR, ICARDA and IRRI) finished the year with a deficit; one Center, AfricaRice, had a balanced budget; and the remaining eleven Centers generated surpluses from other income and/or unrestricted grants and recovery of indirect costs.
TABLE 3: 2014 CENTER REVENUE, EXPENDITURE AND SURPLUS ($ MILLION)
Figure 4 sets out Center revenue by source of funding. The International Maize and Wheat Improvement Center (CIMMYT) has by far the most non-CRP revenue, due mainly to realigning bilateral projects to non-CRP activities, while the International Livestock Research Institute (ILRI) has significant non-CRP revenue, largely from hosting of the BecA-ILRI Hub at its research campus in Nairobi in collaboration with Biosciences eastern and central Africa.
FIGURE 4: CENTER REVENUE BY CRP AND NON-CRP ($ MILLION)
FINANCIAL SUMMARY OF THE CGIAR FUND
Table 4 shows Fund contributions by Window for four years, beginning with the Fund’s first year of operation in 2011. In 2014, total contributions were $555 million, which is $97 million, or 15%, less than in 2013, due mainly to one-time contributions made in 2013 that were not repeated in 2014. Windows 1 and 2 combined accounted for 54% of total Fund contributions in 2014.
TABLE 4: FUND CONTRIBUTIONS ($ MILLION)
STATUS OF THE CGIAR FUND
Table 5 shows Fund receipts, disbursements and balances, as of December 31, 2014. Of the $875 million that was made available during the year, $811 million was disbursed. This left a balance of $64 million in the Fund at the end of 2014. Of that, $32 million was in Windows 1-2, $22 million was in Window 3, and $10 million was provisional (i.e., the donor had not yet decided on the final allocation of funds). Of the $811 million, $469.8 million was from Windows 1 and 2, $120.3 million of which related to 2013 activities that had been pre-financed by Centers, while the remainder was used to fund 2014 CRP activities, system costs and special initiatives.
TABLE 5: STATEMENT OF RECEIPTS, DISBURSEMENTS AND FUND BALANCE AS OF DECEMBER 31, 2014 ($ MILLION)
CGIAR FUND INFLOWS AND OUTFLOWS
Figure 5 shows the monthly cash flow and Fund balance throughout 2014. By the end of the year, nearly all (99%) of the Fund contributions were received, a significant “first” on the part of donors. In addition, contributions to Windows 1 and 2 were collected in full, enabling – also for the first time – the disbursement of the balance of the entire CRP budget requirements before the end of 2014. This was made possible in large part thanks to the multiyear contribution agreements of a number of donors: Australia, Austria, Belgium, Bill & Melinda Gates Foundation, Denmark, IFAD, Luxembourg, The Netherlands, New Zealand, Russia, South Africa, Sudan, Sweden, Switzerland, and the United Kingdom. The multi-annual commitments shortened the processing time required to get contributions into the Fund, thereby facilitating the more timely disbursement of funds to support CGIAR’s critical research agenda.
Figure 5: Balance in the CGIaR fund in 2014 ($ million)
CGIAR FUND 2014 DONOR CONTRIBUTIONS ($ MILLION)
CGIAR FUND 2014 WINDOW 2 CONTRIBUTIONS BY CRP ($ MILLION)
CGIAR DONORS 2014 CONTRIBUTIONS ($ MILLION)
In response to donors’ request for a report that shows both Fund and bilateral contributions by donor, the table in Annex 3 was prepared, but with the understanding that these funding numbers are not comparative nor additive. The report was prepared and a “total” column was added for illustration purposes only and not for financial analysis, as generally accepted accounting principles do not allow combining reports based on two different accounting methods of revenue recognition (i.e., cash and accrual), as is the case here.