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FY18 World Bank Budget
September 25, 2017
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
INTERNATIONAL DEVELOPMENT ASSOCIATION
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FY18 WORLD BANK BUDGET
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CONTENTS
1. OVERVIEW AND RECOMMENDATIONS ...................................................................................... 1
1.1 OVERVIEW ....................................................................................................................................... 1
1.2 FY18 BUDGET RECOMMENDATIONS ......................................................................................... 3
2. FY18-20 BUDGET FRAMEWORK ..................................................................................................... 4
2.1 STRATEGIC ALIGNMENT .............................................................................................................. 4
2.2 BUDGET SUSTAINABILITY ........................................................................................................... 7
2.3 CONTINUED FOCUS ON EFFICIENCIES ................................................................................... 10
3. FY18 BUDGET ..................................................................................................................................... 16
3.1 ADMINISTRATIVE BUDGET PROPOSAL .................................................................................. 16
3.2 SOURCES AND USES OF FLEXIBILITY ..................................................................................... 16
3.3 OPERATIONS .................................................................................................................................. 19
3.4 IG&A UNITS.................................................................................................................................... 29
3.5 NON-UNIT SPECIFIC ALLOCATIONS ........................................................................................ 31
3.6 EXPENSE FUNCTIONAL VIEW ................................................................................................... 33
4. CAPITAL BUDGET ............................................................................................................................. 36
4.1 OVERVIEW ..................................................................................................................................... 36
4.2 FACILITIES ..................................................................................................................................... 36
4.3 TECHNOLOGY AND SYSTEMS ................................................................................................... 36
ANNEXES
ANNEX I. PROGRAM COST SUMMARY .............................................................................................. 37
ANNEX II. INDICATORS OF BUDGET SUSTAINABILITY, STRATEGIC ALIGNMENT AND
BUDGET EFFICIENCY ......................................................................................................................... 42
ANNEX III. FULL COST RECOVERY OF STAFF BENEFITS ............................................................. 46
TABLES
Table 2.1: FY18 Emerging Budget Trajectories (US$ million) .................................................................... 9
Table 2.2: Expenditure Review Total Savings Estimates, May 2017 (US$ million) .................................. 10
Table 2.3: Expenditure Review Reconciliation Against FY18 Target Baseline (US$ million) .................. 13
Table 3.1: FY17 WB Budget and Proposed FY18WB Budget Trajectory (US$ million) ......................... 16
Table 3.2: FY18 Sources and Uses of Flexibility (US$ million) ................................................................ 17
Table 3.3: FY17-18 Budget by Work Program and Funding Source (US$ million) .................................. 18
FY18 WORLD BANK BUDGET
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Table 3.4: FY17-18 Budget Share by Work Program and Funding Source (%) ........................................ 18
Table 3.5: Lending Commitments (US$ billion) ........................................................................................ 19
Table 3.6: FY17-18 Operational Budget Envelopes (US$ million) ............................................................ 21
Table 3.7: Grant-making Facilities Budgets (US$ million) ........................................................................ 29
Table 3.8: FY18 IG&A Budget Envelopes (US$ million) .......................................................................... 30
Table 3.9: FY17 and FY18 Board-Related Budgets (US$ million) ............................................................ 31
Table 3.10: Centrally-Managed Accounts (US$ million) ........................................................................... 32
Table 3.11: FY17 and FY18 Functional Expense View of Administrative Expenses (US$ million) ......... 34
Table I.1: FY18 Funding for WB Work Program and Unit (US$ million) ................................................. 38
Table I.2: Overview of External Funds Projected Revenues FY18 by Unit (US$ million) ........................ 41
FIGURES
Figure 2.1: Operational Share of Unit Budgets (excluding GMF) ................................................................ 5
Figure 2.2: Client Engagement Share of Operational Unit Budgets ............................................................. 6
Figure 2.3: FCV and FCV at Risk CE Budgets as a Share of Total CE Budget ........................................... 6
Figure 2.4: IBRD and IDA Budget Anchors with Proposed Increased Budget Trajectory .......................... 8
Figure 2.5: External Funds as a Share of Total Administrative Spending Plans .......................................... 9
Figure 2.6: Total Administrative Budget per US$ Billion Loan Approved (in US$ million) .................... 11
Figure 2.7: Total Administrative Budget per Lending Project Approved (in FY17 US$ million) ............. 11
Figure 2.8: Total Administrative Budget per US$ Billion Portfolio under Supervision (in US$ million) . 12
Figure 2.9: Total Administrative Budget per Project under Supervision (in FY17 US$ million) .............. 12
Figure 3.1: Evolution of the Country Engagement Bank Budget from FY17 to FY18 (US$ million) ....... 22
Figure 3.2: Country Engagement Bank Budget Allocations by Business Process for FY16-18 (US$
million) ........................................................................................................................................................ 23
Figure 3.3: Country Engagement Bank Budget Allocation Shares by Business Process for FY16-18 ...... 23
Figure 3.4: FY18 Country Engagement Allocation Shares by Practice Groups ......................................... 24
Figure 3.5: Country Engagement Bank Budget Allocations for FCV & FCV at Risk Countries for FY16-
18 (US$ million) ......................................................................................................................................... 25
Figure 3.6: Country Engagement Bank Budget Allocations to Small States for FY16-18 (US$ million) 25
Figure 3.7: Full-time Bank Staff on Payroll .............................................................................................. 35
BOXES
Box 3.1: Embedding the Cascade Across the Client Engagement Cycle ................................................... 26
FY18 WORLD BANK BUDGET
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ACRONYMS
ASA Advisory Services and Analytics
AFR Africa Region
BB Bank Budget
BETF Bank-Executed Trust Fund
BPC Budget Planning and Consolidation
BPS Budget, Performance Review, and Strategic Planning Vice-Presidency
CCSA Cross-cutting Solution Areas
CE Country Engagement
CGIAR Consultative Group for International Agricultural Research
CMA Centrally-Managed Account
CO Country Offices
CODE Committee on Development Effectiveness
CPF Country Partnership Framework
CRO Chief Risk Officer
DEC Development Economics Vice-Presidency
DFI Development Finance Vice-Presidency
DGF Development Grant Facility
DPF Development Policy Financing
EAP East Asia and Pacific Region
EBC Ethics and Business Conduct Vice-Presidency
ECR External and Corporate Relations Vice-Presidency
ECA Europe and Central Asia Region
EFO Externally Financed Output
ER Expenditure Review
ESF Environmental and Social Framework
FCV Fragility, Conflict and Violence
GE Global Engagement
GMF Grant-Making Facility
GSD General Services Department
GGEVP Equitable Growth, Finance and Institutions Practice Group
GGHVP Human Development Practice Group
GGSVP Sustainable Development Practice Group
GPSA Global Partnership for Social Accountability
HRD Human Resources Development Vice-Presidency
IBRD International Bank for Reconstruction and Development
ICSID International Centre for Settlement of Investment Disputes
IDA International Development Association
IDF Institutional Development Fund
IEG Independent Evaluation Group
IFC International Finance Corporation
IG&A Institutional, Governance, and Administrative
IJS Internal Justice System
INT Integrity Vice-Presidency
FY18 WORLD BANK BUDGET
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ITS Information & Technology Solutions Vice-Presidency
LCR Latin America and Caribbean Region
LEG Legal Vice-Presidency
LLI Learning, Leadership, and Innovation
MEF Mediation Facility
MIGA Multilateral Investment Guarantee Agency
MNA Middle East and North Africa Region
OPCS Operations Policy and Country Services Vice-Presidency
PAD Project Appraisal Document
PCRF Post-retirement Contribution Reserve Fund
PCS Program Cost Summary
PFC Pension Finance Committee
RAMP Reserves Advisory and Management Program
PPM Program and Practice Management
PSW Private Sector Window
RAS Reimbursable Advisory Services
RETF Recipient-Executed Trust Fund
RM Resource Management
SAR South Asia Region
SBO Strategy and Business Outlook
SCD Systematic Country Diagnostic
SDG Sustainable Development Goals
SPF State and Peace-building Fund
STC Short Term Consultant
TA Technical Assistance
TRE Treasury Vice-Presidency
VPU Vice Presidential Unit
WBG World Bank Group
WBT World Bank Tribunal
WFA World Bank Group Finance and Accounting Vice-Presidency
WPA Work Program Agreement
FY18 WORLD BANK BUDGET
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1. OVERVIEW AND RECOMMENDATIONS
This document, which supports the key engagement with Executive Directors in this year’s strategic planning
and budget discussions, presents the FY18 World Bank Budget for Board approval. This budget proposal
reflects close consultations between Executive Directors and Management throughout the strategic planning,
budgeting and performance management process for the World Bank Group.
1.1 OVERVIEW
1. The World Bank Group
has embarked on a
number of reforms to
meet emerging
development challenges.
In recent years, the World Bank Group (WBG) has stepped forward to
meet the emerging development challenges articulated in the Sustainable
Development Goals. The WBG Twin Goals and the Forward Look paper
chart a course to building a better and stronger World Bank Group that can
meet these challenges. Implementation of the Forward Look will enable
the Bank to pursue a “2x3” strategy, i.e., achieving the twin goals with
investments in three priority areas, namely Sustainable and Inclusive
Growth, Human Capital, and Resilience. The strategic planning and
budgeting process enables management across the WBG to convert
strategy to action on the ground, with a focus on five key areas to ensure
the WBG remains “fit for purpose:” (i) serve all client segments, (ii) lead
on global issues, (iii) mobilize financing, (iv) improve the business model,
and (v) ensure adequate financial capacity.
2. The World Bank has
strengthened its
financial position and
is on track to meet all
of its FY18 budget
sustainability goals.
The World Bank (WB) has placed itself on a stronger financial footing and
is better equipped to meet the growing demands of its clients. The IDA
replenishment discussions concluded in December 2016 with a
groundbreaking US$75 billion replenishment, around 50 percent higher
than IDA-17. This will enable IDA to scale up interventions over the next
three years, including a doubling of lending to Fragility, Conflict and
Violence (FCV) affected countries, and to support critical governance and
institution building, jobs and economic transformation, climate change,
and gender equality.
Through the financial reforms and the Expenditure Review (ER), the Bank
has successfully implemented measures to increase revenues and contain
expenditures through savings and efficiencies. The Bank is on track to
meet its target of US$300 million in Expenditure Review savings by
FY18, as part of broader savings of US$400 million for WBG institutions
and Trust Funds. In addition, in a landmark achievement, IBRD and IDA
will each fully cover administrative expenses with revenues generated
from their operations and meet their budget sustainability principles in
FY18. In the case of IBRD, this will be the first time that this has been
achieved on a sustainable basis in at least 20 years, as IBRD administrative
FY18 WORLD BANK BUDGET
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expenses have for many years been funded in part from earnings from
capital.
3. Management is
proposing an
administrative budget
of US$2,550 million,
and a capital budget of
US$198 million for
FY18.
Recognizing the need to maintain budget discipline and adhere to the ER
target on the one hand, and additional work program pressures (in both
volume and scope) on the other, Management is proposing a US$2,550
million administrative budget for FY18. This represents an increase to the
FY18 administrative spending trajectory, as presented in last year’s
Budget Paper, of US$19 million, and an increase in the funding trajectory
for Grant-making Facilities (GMFs) of US$5 million for the Consultative
Group for International Agricultural Research (CGIAR). The FY18
administrative budget represents a 1.0 percent increase over the FY17
budget in nominal terms and a 1.3 percent decrease in real terms.
Management is also proposing a capital budget of US$198 million for
FY18, comprising US$113 million for Facilities investments and US$85
million for IT investments. Chapter 3 provides details underlying the
budget administrative proposal and further details on the capital budget
proposal are set out in Chapter 4.
4. The FY18 budget has
been framed taking into
account the need to
align spending plans
with strategic priorities,
meet the Bank’s budget
sustainability goals,
and promote greater
efficiency in the use of
resources.
Management has built its budget plans around the following three key
principles:
a) Direct resources toward strategic priorities agreed during the W
process including (i) the preparation and delivery of the pipeline for
IDA and FCV scale-up built around IDA-18’s five themes and the
Private Sector Window (PSW); (ii) maintaining engagement in IBRD
countries and optimizing lending delivery while capital options are
considered; (iii) developing and implementing WBG approaches to
“creating markets”, catalyzing private sector investments, to address
the infrastructure gap; (iv) speeding up support and innovation on key
global public goods and corporate commitments, such as climate
change, fragility, displacement, pandemics, domestic resource
mobilization, and resilience to shocks; (v) implementing the WBG
Gender Strategy, mainstreaming it into operational work; and (vi)
investments in internal reforms to ensure the Bank remains “fit for
purpose”, e.g., agile and administrative simplification initiatives,
safeguards and procurement reform, strengthening knowledge
management, increasing field presence, especially in FCV countries,
continuing adjustment of span of control in operations, improving
resource management, and continued Trust Fund reform and further
integration of external funds into strategy and budget. To better meet
these challenges, Management is improving the incentive system and
management of its staff through the implementation of the FY17-19
People Strategy.
FY18 WORLD BANK BUDGET
3
b) Ensuring budget sustainability with a budget that allows the Bank to
meet the budget anchor targets in FY18 and onwards for both IBRD
and IDA.
c) Promoting efficiency by pursuing savings that will ensure the Bank
meets its Expenditure Review target in FY18, implementing Business
Reviews of SEC, TRE, CRO and OPCS in FY18, and enhancing
efforts to achieve further efficiencies and savings beyond FY18.
1.2 FY18 BUDGET RECOMMENDATIONS
5. Management seeks
Board approval of the
FY18 Budget.
Management seeks Board approval of the following FY18 Budget
recommendations:
• That the total administrative budget (Bank Budget) be set at US$2,550
million, managed within a range of +/- 2 percent. This includes:
o An indicative budget of US$87.7 million for Executive
Directors;
o US$13.0 million for Board of Governors, Development
Committee Secretariat, and Inspection Panel;
o US$17.1 million for the Corporate Secretariat; and
o US$29.2 million for the Independent Evaluation Group. This
is subject to a separate approval process by CODE.
• That the capital budget be set at US$198 million.
FY18 WORLD BANK BUDGET
4
2. FY18-20 BUDGET FRAMEWORK
This section discusses the key strategic priorities in light of the emerging development agenda and the
principles used in determining the size of the expenditure envelope for FY18-20 based on the institution’s
financial outlook in the context of the financial sustainability framework, and the implementation of the
Expenditure Review and other efficiency initiatives.
6. The budgetary
implications of priorities
that have emerged from
the W process have been
assessed against three
principles, namely
Strategic Alignment,
Budget Sustainability
and Efficiency.
Resource allocation decisions for the planning period FY18-20 were
based on the following three broad principles:
• Strategic alignment of resources to priorities, particularly in view of
the Forward Look and IDA-18 commitments;
• Budget sustainability - ensuring that the IBRD and IDA Budgets are
affordable; and
• Efficiency - achieving the Expenditure Review targets in FY18 and
driving further efficiencies.
2.1 STRATEGIC ALIGNMENT
7. Implementation of the
Forward Look enables
the Bank to pursue its
“2x3” strategy:
achieving the twin goals
with investments in
three priority areas,
namely Sustainable and
Inclusive Growth,
Human Capital, and
Resilience.
Endorsed by shareholders at the 2016 Annual Meetings, the Forward
Look Paper provides a roadmap for a better and stronger Bank. It
positions the WB to serve its members with reforms to (i) assist all client
segments, (ii) lead on global issues, (iii) mobilize financing, (iv) improve
the business model, and (v) ensure adequate financial capacity.
Mobilization
Improving the Business Model
Leading on Global Issues
Ensuring Adequate Financial Capacity Twin Goals
(i) Eliminating Extreme Poverty(ii) Boosting Shared Prosperity
Assisting All Client Segments
FY18 WORLD BANK BUDGET
5
8. The FY18-20 W process
has addressed the
substantive elements of
the “2x3” strategy.
The FY18-20 planning process has paid attention to the need to resource
Forward Look paper priorities, directing funding to critical aspects such
as scaling up IDA, especially in FCV countries, increasing
decentralization, enhancing security, implementing the new Procurement
Framework and Environmental and Social Framework (ESF), expanding
Agile Bank reforms, and knowledge management. Regional and GP
strategies are built on the “2x3” strategy, as well as key Forward Look
paper priorities such as creating markets, climate action, gender, and
crisis response.
9. As a result, the FY18
budget further aligns
resources with key
strategic priorities.
Management has continued to shift resources towards operations and
client facing services. As shown in Figure 2.1, the relative share of Bank
Budget (BB) allocated to operational units and programs (i.e., excluding
the Grant-making Facilities and central accounts) increases from 56.2
percent to 57.2 percent between FY17 and FY18.
Figure 2.1: Operational Share of Unit Budgets (excluding GMF)
Within operational units, resources have been shifted towards Client
Engagement (Country Engagement and Global Engagement) and away
from operational overheads (Program and Practice Management). See
Figure 2.2.
FY18 WORLD BANK BUDGET
6
Figure 2.2: Client Engagement Share of Operational Unit Budgets
W process decisions also included shifting Country Engagement
resources from IBRD countries to IDA countries, reflecting the increased
IDA-18 scale up (see further details in section 3.3). In addition, the share
of Country Engagement resources for FCV (both IDA and IBRD) and
FCV at Risk countries1 has increased from 17.9 percent in the FY17
budget to 19.5 percent in the FY18 budget, illustrating a greater
commitment to FCV activities (see Figure 2.3).
Figure 2.3: FCV and FCV at Risk CE Budgets as a Share of Total CE Budget
For Institutional, Governance, and Administrative (IG&A) units, within
an overall context of tight budgetary constraints, Management has
targeted the key priority areas of staff security, implementation of the
complex IDA-18 Financing Framework, and implementation of the new
Procurement Framework and Environmental and Social Framework for
incremental funding. Details on the allocation of resources for FY18
across operational and IG&A units and across functions are provided in
Chapter 3.
1 Comprises Guinea, Nepal, Niger, and Tajikistan as per IDA methodology.
53.7% 54.1%54.9%
50.0%
52.0%
54.0%
56.0%
58.0%
60.0%
FY16 FY17 FY18
1 Reflects the transfer of International Offices Budget from ECA to ECR in FY17
1
18.3% 17.9%19.5%
10.0%
15.0%
20.0%
25.0%
30.0%
FY16 FY17 FY18
$121m$143m
$115m
FY18 WORLD BANK BUDGET
7
2.2 BUDGET SUSTAINABILITY
10. A combination of
Margins for Maneuver
and budget sustainability
measures have placed
the Bank on firmer
financial footing to meet
the budget anchors in
FY18.
Through a combination of measures designed to increase revenues (loan
volumes and charges) and contain spending (Expenditure Review) the
Bank is expected to achieve the budget anchor targets in FY18. The
budget anchor principle requires that the Bank’s own administrative
resources (or Bank budget) should be covered by the revenues generated
from its lending operations.
As referred in Figure 2.4, the IDA budget anchor has always been close
to 100 percent and is projected to be at or below 100 percent in FY18.
Unlike IDA, IBRD expenses have not been covered by revenues from
lending for many years. However, as a result of successful efforts to
grow revenues and contain spending, the IBRD anchor is projected to
fall from a historical high of 189 percent in FY10, and 148 percent even
as late as FY15, to below 100 percent in FY18. Consequently, the FY18
IDA anchor is estimated at 98 percent and the projected FY18 IBRD
anchor is estimated at 91 percent. Nevertheless, because of the volatility
of the IBRD/IDA cost sharing ratio, and of potential shortfalls of loan
revenues for IBRD/IDA and external funds, the budget anchor space is
still susceptible to unexpected changes2.
2 In particular, the incremental costs for the preparation of the IDA-18 scale-up in FY18 ahead of the related but later materialization
of incremental IDA revenues gives rise to a small possibility that IDA expenses may slightly exceed revenues in FY18.
FY18 WORLD BANK BUDGET
8
Figure 2.4: IBRD and IDA Budget Anchors with Proposed Increased Budget Trajectory
IBRD Anchor
IDA Anchor
11. Management is
proposing a budget of
US$2,550 million in
FY18 which balances the
need to fund a growing
program and maintain
financial discipline.
Recognizing the need to maintain budget discipline and adhere to the
ER target on the one hand, and additional work program pressures
(volume and scope) on the other, Management is proposing a FY18
budget of US$2,550 million (Table 2.1). This represents an increase on
the FY18 administrative spending trajectory, as presented in last year’s
Budget Paper, amounting to US$19 million and an increase in the GMF
funding trajectory of US$5 million for CGIAR. The FY18
administrative budget represents a 1.0 percent increase over the FY17
budget in nominal terms and a 1.3 percent decrease in real terms.
189%
158%160%
155% 147% 148%
135%
109%
91%
0
200
400
600
800
1,000
1,200
1,400
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
0%
40%
80%
120%
160%
200%
Expe
nses
/Rev
enue
s US$
mill
ion
Budg
et A
ncho
r %
IBRD loan spread revenue IBRD-funded expenses IBRD budget anchor
93%98% 96% 98%
102% 100%94%
100% 98%
0
200
400
600
800
1,000
1,200
1,400
1,600
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
0%
20%
40%
60%
80%
100%
120%
Exp
en
ses/
Re
ven
ue
US$
mill
ion
Bu
dge
t A
nch
or
%
IDA revenue IDA-funded expenses IDA budget anchor
FY18 WORLD BANK BUDGET
9
Table 2.1: FY18 Emerging Budget Trajectories (US$ million)
12. External funds represent
a significant share of
total administrative
spending.
The base case scenario for FY18 envisages growth in Bank Executed
Trust Funds (BETF) of 6 percent. External funds have grown
significantly as a source of funds in recent years, but this share is
expected to stabilize. In the case of Trust Funds, the Bank maintains a
stock of funds amounting to almost two years of requirements, leaving
the Bank time to adjust to any significant drop in contributions.
13. Progress continues in
aligning external funds
with strategic priorities,
improving cost recovery
and integrating Trust
Funds into budget
plans.
Strategic fundraising plans are being developed for business units to
further align external funds and priorities. Forecasting of external funds
usage and their alignment with strategic priorities are being improved
through their earlier integration into work program agreements and the
introduction of new budget planning and reporting systems. Due to the
size and importance of external funds, further efforts are being made to
accelerate Trust Fund reform and deepen Trust Fund integration.
Figure 2.5: External Funds as a Share of Total Administrative Spending Plans
FY17 FY18
Current Trajectory (FY17-FY19 as per FY17 WB Budget Document) 2,524 2,526
Revision to Trajectory 24
Of which - Work Program increase 19
Of which - CGIAR increase 5
Revised Trajectory 2,524 2,550
IBRD Anchor 109% 91%
Available for IBRD net income retention/transfer 120
IDA Anchor 1 100% 98%
Available for other uses of IDA income 5 24
1FY18 based on IDA-18 revenue definition.
27%
29%30% 31%
33%34%
35% 36%37%
20%
25%
30%
35%
40%
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
FY18 WORLD BANK BUDGET
10
2.3 CONTINUED FOCUS ON EFFICIENCIES
14. Expenditure Review
measures and ongoing
Business Reviews
support more efficient
use of resources.
The Expenditure Review (ER) program will be fully implemented in
FY18, with the Bank meeting its target. Together with other efforts, the
ER has helped the Bank meet its budget anchors and redirect resources
toward strategic priorities and corporate commitments.
The Internal Audit Department (IAD) review, completed in June 2016,
confirmed that the ER program was delivering as expected, that savings
had been firmly embedded in budget trajectories and that Management
had instituted an effective governance framework to oversee program
implementation. On completion of the ER program in FY18, IAD is
planning to perform an ex-post review and will report to the Board on its
findings.
Table 2.2 provides a summary of the evolution of ER savings since initial
May 2015 estimates. These confirm that the Bank is on its way to achieve
the savings originally targeted.
Table 2.2: Expenditure Review Total Savings Estimates, May 2017 (US$ million)
15. Building on the ER, the
Bank is implementing a
program of Business
Reviews across IG&A
units to monitor
efficiency and assist in
sizing of budgets. This
program will be
extended to operational
units from FY20.
Business Reviews in FY16 and FY17 covered about half of the IG&A
units, and further reviews are planned in FY18 and FY19. This practice
follows from Management’s commitment to budget discipline through
benchmarking and ensuring continued efficiency focus. The next wave
of business reviews will build on lessons learned in the first two years.
Management will put in place an enhanced peer review and governance
mechanism and will make greater use of outside expertise where
appropriate. Starting from FY20, and as requested by the Board,
Management will conduct business reviews for all operational units.
Total o/w BB o/w BETF
Immediate Measures 110 133 96 71 25 36 1
Group-Wide Measures 54 42 29 24 5 13 1
Finance, Tech & Corporate 84 99 92 91 1 7 -
Operations 100 84 78 78 - 6 -
Additional Measures 48 52 42 33 9 10 -
Total 396 410 336 296 40 72 1
Board Related Savings 8 7 6 6 - 1 -
Total 404 417 342 302 40 73 1
MIGA
`
Previous WBG
Estimates
May 2015
Latest WBG
Estimates
May 2017
IBRD/IDAIFC
FY18 WORLD BANK BUDGET
11
16. Comparing the FY18
budget envelope with
expected commitments
and with the size of the
portfolio demonstrates
the Bank’s ongoing
aggregate efficiency
despite the growing
volume and scope of
our work.
While program costs will increase modestly as demand for Bank services
grows, this growth will be managed within the budget anchors,
demonstrating the Bank’s commitment to a financially sustainable budget
trajectory. As illustrated in Figures 2.6-2.9 below, comparing the FY18
budget envelope with expected commitments and with the size of the
portfolio demonstrates the Bank’s ongoing aggregate efficiency despite
the growing volume and scope of our work (see Annex II for a breakdown
of these indicators for IBRD and IDA).
Figure 2.6: Total Administrative Budget per US$ Billion Loan Approved (in US$ million)
Figure 2.7: Total Administrative Budget per Lending Project Approved (in FY17 US$ million)
88 92 90 88 83 85
46 39 53
67 79
62 59 54 61 53
-
20
40
60
80
100
120
IBRD+IDA
US$
mill
ion
10 10
10 9 9 9 8
8 7
11 10
8 9 9
7 6
-
2
4
6
8
10
12
14
16
IBRD+IDA
US$
mill
ion
FY18 WORLD BANK BUDGET
12
Figure 2.8: Total Administrative Budget per US$ Billion Portfolio under Supervision (in US$ million)
Figure 2.9: Total Administrative Budget per Project under Supervision (in FY17 US$ million)
17. Proposed changes to the
budget trajectory in
FY18 fall within the ER
target.
As set out in the FY17 Budget Paper, and reproduced below, the agreed
FY18 trajectory that would meet the ER was US$2,545 million, and the
originally planned FY18 budget trajectory was US$2,526 million,
leaving a buffer of US$19 million. Two adjustments were made in
framing the FY18 Budget proposal. These include (i) an increase in the
budget trajectory of US$19 million, and (ii) an increase in the ER
trajectory to accommodate a US$5 million increase in the GMF trajectory
for CGIAR. Further details on these two increases totaling US$24
million are provided in Chapter 3.
1.4 1.6 1.6 1.7 1.6 1.6 1.5 1.6 1.5 1.6 1.7 1.7 1.6 1.6 1.5 1.4
-
0.5
1.0
1.5
2.0
2.5
3.0
IBRD+IDA
US$
mill
ion
17 20
22 22 21 20
17 15 14 14 15 14 13
12 11 11
-
5
10
15
20
25
30
IBRD+IDA
US$
mill
ion
FY18 WORLD BANK BUDGET
13
Table 2.3: Expenditure Review Reconciliation Against FY18 Target Baseline (US$ million)
18. Building on the ER
efficiency gains,
Management is working
on initiatives to further
promote efficiency and
budget discipline across
the Bank.
As noted earlier, achievement of the ER targets required a number of
expenditure policy reforms as well as changes to the Bank’s operating
model, the benefits of which will continue to accrue to the Bank beyond
FY18. In addition, the program of Business Reviews of VPUs will also
continue with the enhanced framework detailed above.
As we approach the end of the ER implementation period, Management
intends to pursue further efficiencies. While at this time it would not be
appropriate to revise the FY19-20 indicative target trajectory to reflect all
possible efficiencies, given the uncertainties surrounding the future level
of IBRD lending and related resource implications, Management is
working to identify additional measures that will further promote
efficiency across the Bank. Further analysis is being conducted to define
these measures, related savings and implications for future budgets. The
next paragraphs provide an indication of the planned directions.
Management plans to further brief the Board in the Fall on them.
19. Management is
strengthening
governance over
investments in facilities
and IT projects to ensure
value-for-money.
A WBG Real Estate Council is being established to refine and implement
the WBG real estate strategy, as well as set and approve real estate and
facilities standards and principles, and prioritize and approve specific
large facilities investments in accordance with the strategy. This will
support Management in its efforts to review the Bank’s global footprint
and global space standards, both in Washington and around the world,
with a view to prioritizing and rationalizing spending on facilities overall.
As Presented in
FY17
WB Budget
Baseline
Everything Else Being Equal Trajectory 2,793
Less: GMF Phase Out (85)
Everything Else Being Equal Trajectory (BB Only) 2,708
ER Savings
Less: ER Target, Gross Savings (300)
Add: 25% reinvestment 75
Net ER Savings (225)
Adjustments
Add: IDA-18 Scale up 62
BB Target Trajectory, after Net ER savings and adjustments 2,545
FY18 Budget Trajectory in FY17 Budget Paper 2,526
∆ FY18 Existing Budget and Target Trajectories in FY17 Budget Paper 19
FY18 Budget Adjustment to GMF Trajectory for CGIAR 5
FY18 WORLD BANK BUDGET
14
ITS continues to implement new efficiency measures over and above
those of the Expenditure Review. As part of the FY16 Business Review
of ITS, it was agreed to seek opportunities to rationalize spending on ITS
Operations and Maintenance (O&M).
20. As the largest spending
item, comprising around
56 percent of total
spending, Management
will continue to ensure
prudent management of
staffing costs.
The Bank will continue affordability assessments of annual workforce
plans and limit hiring by VPUs where it is not affordable within their
budget trajectory. Furthermore, analysis is ongoing on the structure of
staffing in both operational units and IG&As with a view to fine-tune it
to reduce unnecessary layers. In addition, HRD will follow Board
guidance related to staff compensation issues.
21. The Bank is working to
identify innovations in
working more flexibly,
through the Agile
initiatives, and will
continue to expand
those efforts.
Overall, the Bank continues to pilot and rapidly scale up ideas that make
our business model more agile. In selected operational units, pilots are
identifying opportunities to streamline internal processes where lessons
learned can be scaled up to create a more agile Bank. Incorporating cross
functional teams, pilots are underway on programs delivered in regions.
In the pilots, over a hundred interventions were identified through
bottom-up team workshops, and a quarter of these are being pursued.
Almost 1,800 staff have been involved thus far, with plans to reach 50
percent of all staff in the coming year. Lessons learned are being used to
enable the Bank to offer services with greater speed and more flexibility,
while ensuring that staff remain engaged and empowered throughout the
process. Examples of interventions that are improving the speed and
quality of our work, while ensuring staff empowerment, include (i) risk-
based flight paths for project preparation that allow for faster project
concept approval and tailored review meetings according to specific
project risks, and (ii) streamlined, agile Project Appraisal Documents
(PADs) that eliminate redundancies and focuses on the added-value
substance.
22. The Bank will also
pursue reforms aimed
at streamlining
procedures and
processes to generate
greater efficiencies in
IG&A units.
To build a strong institution in the long term, Management plans to
pursue administrative simplification more aggressively and capture the
cost savings that accrue from these efforts. These include (i)
standardizing, automating and simplifying processes using lean
methodologies (e.g., Lean Six Sigma pilots on loan origination and Trust
Fund activation) and robotics, and (ii) enhancing the Bank’s shared
services model for more effective and efficient service delivery for staff.
Going forward, all new initiatives and strategies must be properly costed
and budgeted before being rolled out and implemented.
FY18 WORLD BANK BUDGET
15
23. The Bank will continue
to upgrade Resource
Management systems
and tools, and make
enhancements as
necessary based on user
feedback.
As part of an effort to strengthen transparency, predictability, and
accountability over expenditures across the Bank, Resource Management
(RM) systems and tools have been upgraded in the past year with the
development of the Budget Planning and Consolidation system (BPC) to
strengthen and align budget and staff planning, among others.
Implementation is at an advanced stage. A Resource Management
reporting portal has also been developed this year and widely welcomed
by managers and staff across the Bank, giving them real time access to
reports. Further upgrades are planned for FY18.
24. Reforms to improve the
way the Bank manages
external funds will
continue to be
implemented.
A number of reforms to external funds are underway including (i)
alignment of external funds with strategic priorities and budgets, (ii)
improved cost recovery, (iii) simplification and standardization of Trust
Fund requirements, and (iv) improving transparency for donors through
the Development Partner Center (DPC) portal. Priority will be given to
advancing these reforms in FY18.
25. Further efforts will also
be made to strengthen
the link between
planning, budgeting
and the Corporate
Scorecard.
As the current planning and budgeting model evolves, efforts will
continue to be made to strengthen the linkages between the Corporate
Scorecard and planning and budgeting papers across the World Bank
Group. The use of consistent metrics throughout will enhance
transparency and accountability.
FY18 WORLD BANK BUDGET
16
3. FY18 BUDGET
This section presents the specifics of the FY18 administrative budget proposal, and provides details on its
impact on Operational Programs, IG&A units, other non-unit specific budgets, as well as an expense line
view.
3.1 ADMINISTRATIVE BUDGET PROPOSAL
26. Management is
proposing a budget of
US$2,550 million for
FY18, as part of a
broader total funds
envelope of US$4,046
million.
The proposed Budget for FY18 is US$2,550 million, which is an overall
increase of US$24 million compared with the FY18 trajectory presented
in the FY17 Budget Paper – comprising a US$19 million increase to
cover higher expected administrative costs associated with the IDA-18
scale up and other resource needs, and US$5 million for CGIAR (see
Table 3.1). Compared with the FY17 budget, this is an increase of 1.0
percent in nominal terms and a decline of 1.3 percent in real terms. The
“All Funds” FY18 envelope is expected to be around US$4,046 million
(see Table 3.3).
Table 3.1: FY17 WB Budget and Proposed FY18WB Budget Trajectory (US$ million)
3.2 SOURCES AND USES OF FLEXIBILITY
27. The proposed budget
increase (i) reflects an
expansion in the Bank’s
program not foreseen a
year ago, (ii) takes into
account redeployments
at the Bank and VPU
level, and (iii) can be
accommodated within
the Bank’s ER and
budget anchor targets.
At the time of the FY17 Budget Paper, it was not possible to anticipate
the extent of certain IDA-18 commitments, including the FCV scale up,
the new and more complex IDA financing framework (blending donor
and market resources), the new IDA windows (PSW and refugees) and
other cost pressures. The developments of the past year have required the
Bank to adjust and recalibrate the budget trajectory.
The total FY8 budget flexibility amounts to US$67 million. Some US$43
million was identified through internal deployments, US$19 million by
utilizing space within the existing ER target trajectory, and US$5 million
by increasing the trajectory for GMFs.
FY17 FY18
Proposed FY18 Budget Trajectory (Nominal) 2,524 2,550
% Change YOY 1.0%
Proposed FY18 Budget Trajectory (in FY17$) 2,524 2,490
% Change YOY -1.3%
FY18 WORLD BANK BUDGET
17
Table 3.2: FY18 Sources and Uses of Flexibility (US$ million)
28. Allocations by Unit
reflect adjustments to
trajectories arising
from additional
flexibility, staff benefit
rate adjustments, ER
changes, and unit
reorganizations.
The resulting allocations across programs are set out in Tables 3.3 and
3.4 and discussed in further detail in Sections 3.3, 3.4, and 3.5 of this
chapter. These highlight a shift in resources toward Operational Units,
and toward Client Engagement within these Operational Units. In
addition, they reflect changes to VPU trajectories arising from benefit
rate adjustments, remapping of units arising from reorganizations (e.g.,
ECA and ECR), implementation of the ER, and inflation adjustments.
Management plans to ensure that all Bank products and activities,
however funded, reflect the full cost of staff. The Bank currently assesses
a 50 percent charge on Washington-appointed staff salaries to the costs
of its products but this charge only partially covers the institutional
benefits of such staff, the balance being borne by the Bank’s Centrally-
Managed Accounts. Effective July 1, 2017, the benefit recovery rate will
revert to the originally set rate of 70 percent for Washington appointed
staff, enabling unit-level decision making to be based on the full cost of
staff, and to end the subsidy that IBRD and IDA currently provide to
external funds. A 45 percent benefit rate will also be introduced for
Country Office appointed staff. The Country Office rate will be
discounted for external funds cost recovery purposes until FY19. To
reflect this policy change, Bank Budget unit trajectories have been
adjusted upwards from FY18 in a cost neutral manner, with
corresponding reductions in the Bank’s Centrally-Managed Accounts.
Sources
Sources of Internal Flexibility 43 Allocations to Operations Units (75%) 39
Benefits Recovery from Reimbursables 5 Lending & Supervision Coefficient Increase 7
Unallocated Flexibility Identified in FY17 WB Budget 1 Increase in Capacity of FCV CCSAs 2
Centrally-Managed Accounts (including LLI efficiency gains) 9 Global Public Goods 5
PCRF Advance Payment in FY17 16 Safeguards/Procurement Reforms 4
Corporate Contingency 12 Staff Decentralization/Country Office Facilities 12
Managerial Span of Control 8
Knowledge/Learning 4
Simplification/Agile Bank 4
Total 45
Already in the FY18 Trajectory (6)
Trajectory Increase 24 Allocations to IG&A Units (25%) 13
Administrative Spending 19 Security 5
CGIAR 5 Safeguards/Procurement Reforms 4
Support to IDA-18 Scale Up 6
Total 15
Already in the FY18 Trajectory (2)
Corporate Contingency 10
CGIAR 5
Total Sources of Flexibility 67 Total Uses of Flexibility 67
Uses
FY18 WORLD BANK BUDGET
18
Table 3.3: FY17-18 Budget by Work Program and Funding Source (US$ million)
Table 3.4: FY17-18 Budget Share by Work Program and Funding Source (%)
FY17
WB Budget
Restated
FY17 FY18
FY17
WB Budget
Restated
FY17 FY18 FY20
CLIENT ENGAGEMENT 29.9% 30.4% 31.4% 43.0% 42.5% 44.6%
Country Engagement 26.6% 27.2% 28.1% 35.7% 35.5% 37.4%
Global Engagement 3.2% 3.2% 3.4% 7.2% 7.0% 7.3%
Program & Practice Management 26.7% 26.2% 25.8% 20.5% 20.5% 19.5%
Total Operational Units 56.5% 56.6% 57.2% 63.5% 63.1% 64.2%
IG&A PROGRAMS 43.5% 43.4% 42.8% 36.5% 36.9% 35.8%
Institutional Services 16.0% 16.4% 16.6% 14.8% 15.2% 15.2%
Governance Services 8.8% 8.7% 8.4% 6.4% 6.4% 6.0%
Administrative Services 18.6% 18.3% 17.7% 15.4% 15.3% 14.6%
TOTAL: ALL UNITS (excl. GMFs) 100% 100% 100% 100% 100% 100%
1"Restated FY17" reflects FY17 WB Budget based on the new staff benefits recovery rates effective July 1, 2017. FY18
trajectory is similarly stated on the new basis. The International Offices budget of US$8.5 million was transferred from
ECA’s PPM to ECR in FY17. This transfer is reflected in the above tables in FY18. If this transfer had been reflected in FY17,
the Operational share of unit budgets (excl. GMF) in "Restated FY17" would be 56.2% for BB and 62.8% for All Funds.
Share of Budget Trajectory1
BB All Funds
FY17
WB Budget
Restated
FY17 FY18
FY17
WB Budget
Restated
FY17 FY18
CLIENT ENGAGEMENT 674 752 820 1,465 1,543 1,745
Country Engagement 601 672 732 1,218 1,289 1,460
Global Engagement 73 79 88 247 253 285
Program & Practice Management 602 648 674 699 745 764
Total Operational Units 1,276 1,400 1,494 2,164 2,288 2,509
Grant Making Facilities 44 44 35 44 44 35
Total Operations 1,320 1,444 1,529 2,208 2,332 2,544
IG&A PROGRAMS 981 1,076 1,116 1,245 1,340 1,401
Institutional Services 362 407 434 505 550 593
Governance Services 199 216 219 217 234 236
Administrative Services 420 453 463 524 556 571
TOTAL: ALL UNITS 2,301 2,520 2,644 3,454 3,672 3,944
TOTAL: ALL UNITS (excl. GMFs) 2,257 2,476 2,609 3,410 3,628 3,909
CENTRALLY MANAGED ACCOUNTS 407 188 101 418 200 102
o/w Corporate Contingency 12 12 10 12 12 10
TOTAL TRAJECTORY 2,708 2,708 2,746 3,871 3,871 4,046
o/w Funded by External Funds (184) (184) (196) (1,347) (1,347) (1,496)
Net Trajectory Funded by IBRD/IDA 2,524 2,524 2,550 2,524 2,524 2,550
INDICATIVE BUDGET TRAJECTORIES1
BB All Funds
1"Restated FY17" reflects FY17 WB Budget based on the new staff benefits recovery rates effective July 1, 2017. FY18 trajectory is
similarly stated on the new basis.
FY18 WORLD BANK BUDGET
19
3.3 OPERATIONS
3.3.1 BY WORK PROGRAM AND VPU
29. Growing demand for
Bank services will be
met by higher lending
volumes overall. In
addition, the “Cascade”
approach will allow the
Bank to make greater
leverage of these
resources than in the
past.
Current projections for IBRD and IDA lending commitments suggest
higher levels of lending overall.
• IBRD delivery in FY16 was US$30 billion. In the context of a more
constrained capital environment, it is projected that IBRD’s existing
capital will support lending of up to US$24 billion in FY17 and FY18
(see Table 3.5). IBRD’s capital position is the subject of ongoing
discussions between Management and Shareholders.
• The IDA-18 envelope includes a doubling of resources to countries
facing fragility, conflict and violence (FCV). Increased financing will
also boost core IDA resources and dramatically expand IDA’s support
for crisis response and pandemic preparedness, small states, and
regional integration. The FY18 IDA pipeline is developing rapidly and
is on track for a strong launch.
• The Bank has developed a “Cascade” approach to facilitate greater
leveraging of existing resources and development solutions to mitigate
risks for private sector investors in developing countries, thereby
crowding in private capital (see Paragraph 41). A new IDA Private
Sector Window (PSW), introduced together with IFC and MIGA, will
help mobilize private capital and scale up private sector development,
particularly in fragile situations.
Table 3.5: Lending Commitments (US$ billion)
FY16 FY17 FY18
Actual Projection Projection
IBRD 30 24 24
IDA 16 16 25
Total 46 40 49
FY18 WORLD BANK BUDGET
20
30. As Bank Operational
Programs expand,
budget trajectories are
also being increased to
fund key priorities.
As identified in the current budget and strategic planning process, the
major operational priorities for FY18 include (i) ensuring delivery of
IDA-18 and scaling up engagement in FCV countries and small states,
(ii) maintaining engagement in IBRD countries, (iii) accelerating work
on global public goods and corporate commitments, including climate
change, fragility, displacement, pandemics, domestic resource
mobilization, and resilience to shocks, (iv) developing and implementing
WBG approaches to “creating markets”, and (v) implementing the WBG
Gender Strategy. These priorities are reflected in the budget trajectories
for Operations.
The proposed FY18 budget for Operations is US$1,529 million, an
increase of US$86 million or 6 percent from FY17 (see Table 3.6). Of
this increase, resources for Client Engagement have increased by US$69
million, including for Country Engagement (US$60 million) and Global
Engagement (US$9 million) work to meet these priorities. PPM
allocations have increased by US$26 million, while for GMFs have fallen
by US$9 million. External funds complement Bank resources for Client
Engagement work. Annex I presents an all funds view for these by VPUs
and budget categories.
31. Allocations to Regions
reflect underlying
business shifts.
IDA-18 scale-up was a key driver in the CE realignments between
regions, and to the Africa and South Asia regions in particular, with these
incremental resources supporting CMUs covering IDA countries,
including FCV countries. IBRD budgets have also been tightened to
reflect lending projections for FY18.
FY18 WORLD BANK BUDGET
21
Table 3.6: FY17-18 Operational Budget Envelopes (US$ million)
FY17
WB Budget
Restated
FY17 FY18
FY17
WB Budget
Restated
FY17 FY18
AFR
CE 207 229 266 403 425 489
PPM 108 116 119 111 119 123
Total 315 345 385 513 543 612
EAP
CE 84 96 105 180 193 232
PPM 54 59 61 55 61 66
Total 138 155 167 236 253 298
ECA
CE 78 87 86 154 163 188
PPM2 58 62 54 59 64 55
Total 135 149 140 213 227 243
LCR
CE 89 99 96 143 153 151
PPM 49 55 56 50 55 57
Total 138 153 152 193 208 207
MNA
CE 51 57 60 149 155 166
PPM 33 36 36 38 42 37
Total 84 93 95 187 197 203
SAR
CE 93 105 120 189 201 235
PPM 48 51 52 49 53 54
Total 141 156 172 239 254 289
All Regions
CE 601 672 732 1,218 1,289 1,460
PPM 349 379 378 363 393 393
Total for Regions 950 1,051 1,111 1,581 1,682 1,853
GP/CCSAs GE
GE 73 79 88 247 253 285
Total 73 79 88 247 253 285
GP/CCSAs PPM
Equitable Growth, Finance and Institutions 72 76 77 84 89 89
Human Development 37 40 37 45 47 43Sustainable Development 84 90 106 105 112 164
EAB and Other346 46 62 46 46 62
CCSAs4 15 17 13 55 57 13
Total GP PPM 253 269 295 336 352 371
Total GP/CCSAs 326 349 383 583 606 656
Operational Grant Making Facilities 44 44 35 44 44 35
Total Operations 1,320 1,444 1,529 2,208 2,332 2,544
4FY17 CCSAs include Climate Change (CC), Public Private Partnerships (PPP) and Jobs. These units are consolidated under Sustainable
Development (CC, PPP) and Human Development (Jobs) Practice Groups in FY18, reflecting the revised organizational structure.
INDICATIVE BUDGET TRAJECTORIES1
BB All Funds
1"Restated FY17" reflects FY17 WB Budget based on the new staff benefits recovery rates effective July 1, 2017. FY18 trajectory is
similarly stated on the new basis.
2The International Offices budget of US$8.5 million was transferred from ECA’s PPM to ECR in FY17. This transfer is reflected in the
above tables in FY18.
3Includes Extended Assignment Benefits (EAB) for all GP/CCSA staff and funding to support Agile Bank initiative.
FY18 WORLD BANK BUDGET
22
32. The outcome of the WPA
process shows a
substantial increase in
allocations to IDA
countries in FY18.
Allocations to IBRD and IDA countries from the CE envelope are set out
in Figure 3.1. Overall allocations to IDA countries have increased from
US$359 million to US$415 million – an increase of US$56 million (16
percent), bringing the IDA funded share of the Country Engagement
Work Program from 53 percent to 57 percent. The allocations to IBRD
countries increased by US$4 million (1 percent), reflecting the Bank’s
commitment to remain engaged in IBRD countries, albeit in an
environment of constrained IBRD capital.
Figure 3.1: Evolution of the Country Engagement Bank Budget from FY17 to FY18 (US$ million)
33. Country Engagement
allocations across
business processes are
reflective of strategic
priorities emerging from
country dialogue.
The distribution of the additional CE allocation has been spread across
Business Processes (Figure 3.2) for (i) increased lending volumes for a
growing program, (ii) higher lending and supervision coefficients
reflecting increased scope, and (iii) increased effort to support safeguard
and fiduciary reforms. As a result, the share of CE allocations to lending
has been growing over FY16-18 (Figure 3.3).
34. Country Engagement
allocations for fiduciary
spending amount to
US$67 million in FY18.
The resources for fiduciary work respond to the need to support the
implementation of the new procurement framework, and the IDA-18
scale up. Resources for fiduciary work represent 9 percent of total CE
allocations in FY18.
FY18 WORLD BANK BUDGET
23
35. Country Engagement
allocations for
environment and social
safeguards work
amount to US$52
million in FY18.
The resources for safeguards work respond to the need to support the
implementation of the new Environmental and Social Framework, and
the IDA-18 scale up. Resources for safeguards work represent 7 percent
of total CE allocations in FY18.
36. Allocations for Advisory
Services and Analytics
(ASA) have broadly
maintained their share
of CE allocations since
FY17.
Additional CE resources were injected as part of the WPA process to
ensure that growth in lending and supervision volumes and coefficients
would not continue to be at the expense of critical Advisory Services and
Analytics (ASA). The outcome of the WPA process suggests that this
strategy was broadly successful, with ASA allocations held constant
overall at about 21 percent of total CE spending (after the ER-related
ASA rationalization between FY16 and FY17) (see Figure 3.3).
Figure 3.2: Country Engagement Bank Budget Allocations by Business Process for FY16-18 (US$ million)
Figure 3.3: Country Engagement Bank Budget Allocation Shares by Business Process for FY16-18
75 88 90
148 138 150
260 272 297
144 175
195
FY16 FY17 FY18
Lending1
ASA
Others2
2Includes Country Monitoring, CPFs, Portfolio Management, Quality Assurance, Contingency, Col laboration, Country Operations Support, and Internal Knowledge Management
Supervision1
628672
732
+20
+25
+12
+2
+44+60
1Includes Fiduciary and Safeguards
FY18 WORLD BANK BUDGET
24
37. Country Engagement
allocations across
Practice Groups reflect
strategic priorities
emerging from country
dialogue.
The FY18 CE allocations show Sustainable Development, including
Safeguards, holding the largest share at 44 percent; Equitable Growth,
Finance and Institutions, including Fiduciary, with 32 percent; and
Human Development with 14 percent. Regional, Cross-Cutting Solutions
Areas and Others, which includes regional contingencies, currently hold
a 10 percent share, but this amount will be reduced during the year as
regional contingency funds are directed to the Practice Groups, whose
allocations will increase.
Figure 3.4: FY18 Country Engagement Allocation Shares by Practice Groups
38. Country Engagement
allocations for fragility,
conflict, and violence
(FCV) affected countries
have increased
significantly.
As illustrated in Figure 3.5, the CE allocation to FCV and FCV at risk
countries (IDA and IBRD) increased by US$22 million (18 percent)
from US$121 million in FY17 to US$143 million in FY18. This is on
top of a US$6 million (5 percent) increase from FY16 to FY17.
The FCV and FCV at Risk country CE share of total CE spending for
FY18 is projected to be 19.5 percent which compares with 17.9 percent
in FY17. A portion of these additional resources will fund staff to work
on these countries. As part of the IDA-18 replenishment deliberations,
Management committed to deploy 50 more professional staff for FCV
IDA by End-September 2017 and another 100 by end IDA-18. This is in
addition to an increase of 50 staff that has already taken place in FCV
countries since FY15.
Sustainable Development44%
(of which 7% Safeguards)
Safeguards
Equitable Growth, Finance & Institutions
32%(of which 9% Fiduciary)
Fiduciary Human Development
14%
Regional, Cross-Cutting Solutions Areas & Others
10%
FY18 WORLD BANK BUDGET
25
Figure 3.5: Country Engagement Bank Budget Allocations for FCV & FCV at Risk Countries for FY16-18 (US$ million)
39. Country Engagement
allocations to Small States
have also increased by 29
percent, on top of a 9
percent increase in FY17.
As illustrated in Figure 3.6, the CE allocation for small states (IDA and
IBRD) increased by US$10 million (a 29 percent increase) from US$35
million in FY17 to US$45 million in FY18. This is on top of a US$3
million (9 percent) increase from FY16 to FY17. Since FY16, CE
allocations to small states have increased by a total of US$13 million, a
41 percent increase.
Figure 3.6: Country Engagement Bank Budget Allocations to Small States for FY16-18 (US$ million)
3 3 5 2 2
4 6 7
8 1 1
1 7 7
10 13
15
18
FY16 FY17 FY18
AFR EAP ECA LCR MNA SAR
32
35
45
+9%
+29%
+41%
FY18 WORLD BANK BUDGET
26
40. Focus on implementation
is key to successfully
deliver on the IDA-18
scale-up and commitments
agreed with partners.
To operationalize IDA-18 policy commitments and allocations,
sustained efforts and close coordination between Regions and
GPs/CCSAs are underway to: (i) build a strong and robust pipeline for
IDA-18, strengthen project preparation, and support country capacity;
(ii) launch new facilities like the Private-Sector Window; (iii) implement
the IDA-18 policy commitments; and (iv) ensure solid monitoring of
IDA-18 implementation. In addition, the Bank has increased lending and
supervision coefficients to reflect the more complex scope of work and
challenging geographies the Bank faces, and coefficients for multi sector
tasks have also been increased to reflect the increased need of closer
collaboration. As the Bank is also committed to increasing its presence
on the ground, additional resources have been made available for
Extended Assignment Benefits (EAB).
41. The Bank has developed
a “Cascade” approach to
facilitate greater
leveraging of resources.
The Bank will redouble efforts to mitigate risks for private sector
investors in developing countries, thereby helping to crowd in private
capital. In this regard, the new IDA Private Sector Window (PSW),
introduced together with IFC and MIGA, will help mobilize private
capital and scale up private sector development, particularly in fragile
situations. The “Cascade” approach is being embedded across the CE
work program. As a start, nine pilot countries have been identified, and
work is underway to explore and pursue opportunities through
diagnostics and technical support in priority sectors. Technical
assistance and policy work will also be done to address binding
constraints. Finally, investment projects with potential for commercial
finance will follow an adapted Cascade approach with commercial
financing options explored and WBG support adapted accordingly. The
Cascade is further illustrated in Box 3.1 below.
Box 3.1: Embedding the Cascade Across the Client Engagement Cycle
FY18 WORLD BANK BUDGET
27
42. To support global
climate goals, the WBG
developed and is
implementing its
Climate Change Action
Plan.
Driven by client demand, the Climate Change Action Plan focuses on
activities that support the WBG’s core mission and build on its
comparative advantage. It reconfirms the WBG’s commitment to
increase the climate-related share of its portfolio from 21 to 28 percent
by 2020.
43. Gender gaps and their
impact on development
feature prominently in
regional and practice
group Country
Engagement work.
Issues including women’s employment, inclusion and gender-based
violence will be addressed through the WBG Gender Strategy,
integration of gender components in lending operations and ASA, and
Gender Innovation Labs (GILs). The WBG also partners closely with
agencies such as UN Women, Global Banking Alliance for Women, and
the Chartered Insurance Institute. The Bank will continue to track
projects to ensure that they include components addressing gender gaps.
44. Global Engagement
funding from all sources
is expected to increase in
FY18 to US$285 million
from US$253 million in
FY17.
The Bank’s Global Engagement work program supports non-country-
specific priorities including (i) fulfilling corporate commitments, (ii)
supporting innovation and product development to support evidence-
based policy making by developing global databases, tools and
evaluations, and maintain WBG leadership in global public goods, (iii)
sustaining partnerships and global engagements, and (iv) providing
operational support to facilitate knowledge services and enable rapid and
flexible operational response.
This includes US$88 million of Bank funding representing an increase
of US$9 million from FY17. Bank funding has been allocated based on
the following categories:
• Corporate Commitments: Priorities include work on climate change,
including the operationalization of the 28 percent lending target,
implementation of the WBG Gender Strategy, support to the G20,
implementation of the Cascade approach, fragility, pandemics,
refugees, debt, jobs, citizen engagement, domestic resource
mobilization and support for the SDGs.
• Innovation/Product Development: A number of activities will be
undertaken including support to the operationalization of the Twin
Goals, design of country job strategies, accelerating progress on
Universal Healthcare implementation strategies, analyzing the
potential use of guarantees in FCV countries, as well as assessment
of the impacts of climate on migration.
FY18 WORLD BANK BUDGET
28
• Partnerships: Initiatives are underway including the development of
a database on public-private partnerships, support to COP23 and
G20 agendas on climate, as well as support to UN agencies and
donor funded initiatives across a range of issues.
• Operational Support: This includes allocations to Global Practices
in support of strategy development and implementation, knowledge
work, as well as issues requiring a rapid response. It also includes
an increase of US$3 million in the allocations of the Gender and
FCV CCSAs.
45. The Program and
Practice Management
(PPM) budget will
increase by US$26
million in FY18.
The budget for Program and Practice Management will increase from
US$648 million in FY17 to US$674 million in FY18, which is an
increase of US$26 million (see Table 3.3). The PPM budget for
operational units funds the support and overhead costs, including
management, support staff, Country Office Facilities. Additional
resources provided to PPM in FY18 will address a number of priorities,
including: reducing the front-line managerial span of control; supporting
additional decentralization of staff to FCV countries which will increase
spending on Country Office facilities, security, and Extended
Assignment Benefits; GP contributions to the new Procurement
Framework and Environmental and Social Framework implementation,
including for training; and implementation of the Knowledge
Management Action Plan.
3.3.2 GRANT-MAKING FACILITIES
46. Management has made
progress in phasing out,
mainstreaming or
reducing Bank funding
for Grant-making
Facilities.
In the case of Grant-making Facilities (GMFs) a decision was made to
phase out Bank funding (e.g., Institutional Development Fund (IDF),
Development Grant Facility (DGF)); mainstream the activity into a
Bank program and subject it to contestability (e.g., Global Partnership
for Social Accountability (GPSA)); or reduce funding (e.g., State and
Peace-Building Fund (SPF), Consultative Group for International
Agricultural Research (CGIAR)).
FY18 WORLD BANK BUDGET
29
Table 3.7: Grant-making Facilities Budgets (US$ million)
3.4 IG&A UNITS
47. IG&A unit allocation
increases have been
constrained with
additional funding
targeted very
selectively on key
strategic priorities.
Additional funding has been allocated to IG&A units in FY18 to focus
on three strategic priorities, namely:
• Support to finance units for the IDA-18 scale up: A number of VPUs
face additional responsibilities to address the IDA-18 expansion, in
particular arising from the leveraging of the IDA balance sheet.
• Support the implementation of the new Procurement Framework
and Environmental and Social Framework3.
• Support to enhance institutional security measures.
Management will continue to seek greater efficiencies through
strengthened management of Facilities and IT investments (including
greater use of cloud computing and reviewing the Bank’s global
footprint), and control of staffing levels to ensure alignment with budget
trajectories.
3 For funding of safeguards and fiduciary work in operational units, see paragraphs 34 and 35.
FY13 FY14 FY15 FY16 FY17 FY18
State and Peace-Building Fund (SPF) 33 - 25 21 14 5
Institutional Development Fund (IDF) 17 9 - - - -
Development Grant Facility (DGF) 56 51 33 12 - -
Global Partnership for Social Accountability (GPSA)1 5 5 5 5 - -
PD 50 50 47 30 30 30
Total Operational Activities Related to Grants 161 115 110 68 44 351The activities of the GPSA have now been mainstreamed into the GE work program.
FY18 WORLD BANK BUDGET
30
Table 3.8: FY18 IG&A Budget Envelopes (US$ million)
FY18 WORLD BANK BUDGET
31
48. The FY18 WBG budget
for the Boards, SEC,
and IEG amounts to
US$147 million.
The FY18 budget for the Boards, which includes the Executive Directors
Offices (EDs), the Board of Governors (BDG), the Development
Committee Secretariat (DCS), and the Inspection Panel (IPN), amounts
to US$100.7 million. The FY18 budget for SEC amounts to US$17.1
million, and that for IEG amounts to US$29.2 million.
Although the Bank’s share of these budgets is authorized as part of this
document, the sizing of these budgets is not determined by Management.
Table 3.9: FY17 and FY18 Board-Related Budgets (US$ million)
3.5 NON-UNIT SPECIFIC ALLOCATIONS
49. The changes in budget
for the Centrally-
Managed Accounts are
principally due to the
changes to the staff
benefit recovery rate
and the scaling down of
funds set aside for staff
separations.
The principal movement in the Centrally-Managed Accounts (CMAs) in
FY18 is due to the change in the staff benefit recovery rates as explained
previously. The FY17 restated information in Table 3.10 shows a
decline in budget for the CMAs by US$219 million as budgets are
correspondingly transferred to VPUs to compensate them for the
adjusted benefit recovery rates. After adjusting for the benefit rate
increase, the net change in the budget for the CMAs between Restated
FY17 and FY18 is US$87 million, as explained below:
• Budget Recoveries in FY18 comprise principally the recovery of the
staff benefit charge from both units and external funds as well as
other recoveries for indirect costs. The increase from FY17 is due
to a combination of the elimination of the Washington-appointed
staff cost subsidy to external funds and salary increases.
• Corporate Contingency is set at US$10 million in FY18 (reduced
from US$12 million in FY17).
FY17
WB Budget
Restated
FY17
FY18
WB Budget
Executive Directors (EDs) 79.0 85.7 87.7
Board of Governors (BDG) 7.3 7.3 7.3
DC Secretariat (DCS) 1.7 1.7 1.7
Inspection Panel (IPN) 3.6 3.9 4.0
Total Boards 91.7 98.6 100.7
SEC 15.5 16.8 17.1
IEG 26.3 28.8 29.2
Total 133.4 144.1 147.0
FY18 WORLD BANK BUDGET
32
• Depreciation is expected to increase by US$11 million (12 percent)
over FY17 primarily due to an increase in Centrally-Managed ITS
depreciation. This reflects the downstream impact of the significant
ramp up of ITS investment over recent years.
• Funding for Institutional Programs is decreasing by US$53 million
(38 percent). This decline is mainly due to the completion of the
Expenditure Review and accompanying scaling down of funding for
the Staff Separation program (US$45 million). Unallocated LLI
savings are fully utilized in FY18 (US$8 million) and are a source
of flexibility as presented in Table 3.10. Other Institutional
Programs are expected to stay relatively flat.
• Centrally-Managed Staff Benefits expenses are expected to increase
by US$52 million (7 percent) due to a combination of salary and
staff growth from original FY17 budget estimates.
Table 3.10: Centrally-Managed Accounts (US$ million)
FY17
WB Budget
Restated
FY17FY18 $ Change % Change
A B C=(B-A) (C/A)
Budget Recoveries (613) (842) (937) (95) 11%
Corporate Contingency 12 12 10 (2) -17%
Depreciation 91 91 102 11 12%
Institutional Programs 138 138 85 (53) -38%
Staff Separations 59 59 14 (45) -76%
Washington real estate costs 31 31 32 1 3%
Business Continuity 18 18 18 - 0%
HRD-managed awards programs 4 4 4 - 0%
Corporate insurances 4 4 4 - 0%
Community Connections 3 3 3 - 0%
Evacuation costs 2 2 2 - 0%
Unallocated LLI efficiency gains 8 8 - (8) -100%
Other programs 9 9 8 (1) -11%
Staff Benefits & Allowances 779 789 841 52 7%
HRD-managed Staff Benefits 233 243 251 8 3%
Tax Allowances 122 122 129 7 6%
Staff Retirement and PCRF 424 424 462 38 9%
Total 407 188 101 (87) -46%
FY18 WORLD BANK BUDGET
33
50. The Bank’s required
contributions to the staff
post-retirement plans are
based on actuarial
recommendations
approved by the Pension
Finance Committee
(PFC).
Using the PFC’s approved FY18 rates, required contributions to the
Staff Retirement and related plans are expected to increase to an
estimated total of US$398 million in FY18 compared to US$380 million
in FY17. This change is a combination of a slight increase in the
actuarially determined contribution rate to 30.15 percent from FY17’s
rate of 29.99 percent, and projected salary increases. Total Staff
Retirement Plan costs, comprising contributions to the plans and
contributions to the Post-Retirement Contribution Reserve Fund (PCRF)
will increase from US$459 million projected in FY17 to US$462 million
in FY18.
51. The PCRF was
established in FY13
with the objective of
reducing budget
volatility resulting from
the Bank’s
contributions to the
staff post-retirement
plans.
The Bank’s contributions to the staff post-retirement benefit plans has
been set at 35 percent of net salaries, above the actual annual contribution
rate currently recommended by the actuaries, so that the excess
(difference between the actual rate determined by PFC and the 35 percent
fixed contribution rate) can be added to the PCRF in order to build up the
Reserve Fund. The balance of the Fund is projected to be US$263
million at the end of FY18.
52. In FY17, Management
settled a US$16
million deferred
contribution to the
PCRF, reducing
pressures on the FY18
budget.
The Board had agreed that an FY15 obligation to contribute US$16
million to the PCRF could be deferred to FY18. Based on anticipated
savings in the current year, Management decided to settle this obligation
in FY17, resulting in creating flexibility of US$16 million in FY18.
3.6 EXPENSE FUNCTIONAL VIEW
53. The functional expense
view shows staff costs to
be the main expense
category.
The Bank follows a dollar budget approach which allows budget holders
flexibility to vary inputs as long as they stay within staffing affordability
parameters and their authorized budgets. As a result, the Bank does not
set specific budgets by expense category for staff salaries, short term
consultants, or travel. Accordingly, the functional expense line view
presented in Table 3.11 below is an illustrative decomposition of the
administrative budget by expense line item. Nevertheless, as the relative
shares of the expense items have remained relatively stable over the
years, the estimates below represent the current view of the most likely
outcome. The actual outcome may differ because work programs vary
during the year, and decisions are made to respond to changing business
needs that may entail trade-offs between different expense categories.
FY18 WORLD BANK BUDGET
34
Table 3.11: FY17 and FY18 Functional Expense View of Administrative Expenses (US$ million)
FY18 projected administrative expenses on an All Funds view are
expected to grow by 2.9 percent (US$114 million), compared to FY17
projections of expenditures4, mainly driven by an increase in external
funds of 6.3 percent (US$88 million) with Bank Budget increasing by
1.0 percent (US$26 million).
Staffing is the main expense category, representing about 56 percent of
total unit gross expenses on an All Funds view (63 percent of Bank
Budget).
4 The difference between the FY17 projection of US$3,932 million and the US$3,871 million presented in Table 3.3 is due to revised
estimates of External Funds from the FY17 Budget.
US$mPercent of
Total US$mPercent
of Total US$mPercent
of Total US$mPercent
of Total
Fixed Expenses 2,268 76% 2,607 67% 2,312 76% 2,701 67%
Of which:
Staff Salaries and Benefits 1,890 63% 2,178 56% 1,922 63% 2,255 56%
Other Fixed Expenses 1
378 13% 429 11% 390 13% 446 11%
Variable Expenses 700 24% 1,268 33% 724 24% 1,310 33%
Of which:
ST Consultants & Temporaries 214 7% 610 16% 221 7% 631 16%
Travel Costs 224 8% 336 9% 235 8% 350 9%
Contractual Services 218 7% 266 7% 224 7% 273 7%
Other Variable Expenses 2 44 1% 57 1% 45 1% 57 1%
Total Unit Gross Expenses 2,968 100% 3,875 100% 3,036 100% 4,011 100%
Grant Making Facilities (GMFs) 44 57 35 35
Total Gross Admin Expenses (incl. GMFs) 3,012 3,932 3,071 4,046
Reimbursable Revenues and Fee income (488) (521)
Total Net Admin Expenses (incl. GMFs) - BB Only 2,524 2,550
Type of Expense
1 Other fixed expenses include Communications & IT, Equipment & Building, Depreciation, and TF Indirect costs. 2 Other variable expenses include Supplies, Printing, and other indirects costs.
FY17
Projections
FY18
Projections
BB+Reimb. All Funds BB+Reimb. All Funds
FY18 WORLD BANK BUDGET
35
54. The average number of
full- time Bank staff has
increased by about 1
percent in FY17.
In terms of staff count, the average level of full-time Bank staffing in
FY17 has been about one percent above the average of FY16 (refer to
Figure 3.7 below). Terminations of full-time staff, including those
related to the phasing out of the Extended Term Consultants/Temporaries
and Junior Professional Associates, were offset by new hires mainly in
operational units.
Figure 3.7: Full-time Bank Staff on Payroll
55. The People Strategy for
FY17-19 prioritizes
areas that will have the
most impact on the
WBG’s ability to
achieve strong business
outcomes.
56. All other expenses are
estimated to grow in
FY18 by 2.1 percent
across all funds.
The People Strategy for FY17-19 prioritizes areas that will have the most
impact on the WBG’s ability to achieve strong business outcomes, while
strengthening the Employment Value Proposition (“EVP”). The strategic
staffing reviews by HRD is one element of the new People Strategy for
FY17-19 which is anchored on five areas of focus: (i) leveraging the
WBG’s global and diverse talent; (ii) building and developing leadership
and managerial capacity; (iii) strengthening performance and rewards;
(iv) promoting the health, safety, and well-being of staff; and (v)
improving the WBG’s organizational effectiveness. Three cross cutting
themes of diversity and inclusion, FCV and focus on HR fundamentals
are embedded throughout the action items in the strategy. To this end,
efforts will be made to strengthen technical skills, and align demand with
business needs and corporate priorities, while remaining within the
proposed budget envelope.
In terms of other expense categories, FY18 projections reflect the growth
in total administrative expenses from projected FY17 levels and a stable
share of major line items to total costs. These costs are driven by the needs
of Operational units and increased depreciation.
FY18 WORLD BANK BUDGET
36
4. CAPITAL BUDGET
This chapter includes an outline of the Bank’s FY18 Capital Budget request.
4.1 OVERVIEW
57. The proposed capital
budget for FY18 is
US$198 million.
The proposed capital budget for FY18 is US$198 million, comprising
US$113 million for Facilities investments and US$85 million for
Technology and Systems investments.
4.2 FACILITIES
58. The proposed Facilities
Capital Budget for FY18
is US$113 million.
The proposed FY18 Facilities investment of US$113 million comprises:
• Country office construction, purchases, relocations, and upgrades
(US$74 million or 65 percent) in select country offices.
• HQ facilities repairs, renovations and upgrades (US$30 million or 27
percent) that include higher-density office space set-up, pilots to
modernize efficient space concepts, relocations and construction of
facilities, replacement of equipment, and security systems.
4.3 TECHNOLOGY AND SYSTEMS
59. The proposed Capital
Budget for Technology
and Systems in FY18 is
US$85 million.
The FY18 Technology and Systems investment plan of US$85 million is
spread across three segments, as follows:
• Business Programs Solutions (US$62 million or 73 percent) that
address the day to day business needs of Bank VPUs, including
modernizing operations and HR; information, knowledge and
learning; core financial and strategic budget systems; and digital
workspace programs.
• Technology and Systems Capabilities Enhancements (US$12 million
or 14 percent) with focus on enhanced capabilities in: data
management, analytics, information management, collaboration,
cloud, connectivity, mobility, and security.
• Cyclical Replenishment Investments (US$11 million or 13 percent) to
build a modern, robust and flexible IT infrastructure.
FY18 WORLD BANK BUDGET
37
ANNEX I. PROGRAM COST SUMMARY
1. Table I.1 Program Cost Summary (PCS) shows the FY17-18 budget by: work program and unit, Bank
Budget, and external funds. Table I.2 further classifies external funds into coupled reimbursable
revenues (refer to definition below) and BETFs. All budget figures are reported in nominal terms.
2. As described in Annex III, changes are to be made effective July 1, 2017 to the staff benefit recovery
rates. To reflect these policy changes, Bank Budget unit trajectories have been adjusted upwards from
FY18 in a cost neutral manner, with corresponding reductions in the Bank’s Centrally-Managed
Accounts. To enable the reader to see trajectories on a consistent basis, the Restated FY17 column of
the PCS displays FY17 WB Budget for units as if the recovery rate changes had always been in place.
3. The PCS reflects framework adjustments since FY15 and takes another step towards a unified approach
to planning for revenues and expenditures. As was done in FY16 and FY17, the FY18 budget is
constructed using holistic revenue and expense budgeting with respect to reimbursable revenues and
IBRD/IDA funding. Reimbursable revenues have been classified as either:
• Coupled Reimbursable Revenues (CRR) which are earned by the Bank for services that are directly
related to the underlying expense incurred by a unit; revenue is not earned unless there is a
corresponding expense, similar to BETF, or
• Decoupled Reimbursable Revenues (DRR), on the other hand, which are earned by the Bank for
services that are not directly driven by the underlying expenses incurred by the managing unit.
Examples of these revenues include: Trust Funds fee income, and revenues from sub-letting office
space to third parties.
4. Since the FY16 Budget Framework, expenditure authorization previously given as reimbursables
expense budget associated with DRR is now allocated to units or programs as regular Bank Budget (i.e.,
it is “budgetized” and is now no different from a unit’s other BB allocations). This facilitates better
medium-term planning for the units, while allowing flexibility at the corporate level. All changes in BB
allocation are now subject to the annual planning (W) process as they are no longer linked to the revenue
earned.
FY18 WORLD BANK BUDGET
38
Table I.1: FY18 Funding for WB Work Program and Unit (US$ million)
FY17
WB Budget Restated
FY17 FY18
FY17
WB Budget FY18 FY17
WB Budget Restated
FY17 FY18
1.0 Country Engagement
1.1 AFRVP 207.0 229.2 265.7 195.6 223.6 402.7 424.8 489.2
1.2 EAPVP 83.9 96.2 105.5 96.5 126.6 180.4 192.7 232.0
1.3 ECAVP 77.6 87.0 85.6 76.4 102.0 153.9 163.3 187.7
1.4 LCRVP 88.7 98.5 95.9 54.2 54.6 142.9 152.7 150.5
1.5 MNAVP 50.9 56.7 59.6 98.2 106.4 149.1 154.9 166.0
1.6 SARVP 93.2 104.8 120.0 96.1 114.9 189.4 200.9 234.9
Sub-Total 601.4 672.3 732.3 617.0 728.1 1,218.4 1,289.4 1,460.4
2.0 Global Engagement
2.1 GP/CCSA 72.9 79.5 87.7 174.0 196.9 246.8 253.5 284.7
Sub-Total 72.9 79.5 87.7 174.0 196.9 246.8 253.5 284.7
A TOTAL CLIENT ENGAGEMENT 674.2 751.8 820.0 791.0 925.0 1,465.2 1,542.8 1,745.0
3.0 Region PPM
3.1 AFRVP 107.5 115.6 119.4 3.1 3.4 110.6 118.6 122.8
3.2 EAPVP 53.7 58.9 61.1 1.7 5.2 55.4 60.6 66.3
3.3 ECAVP2 57.8 62.3 54.1 1.5 1.3 59.3 63.8 55.4
3.4 LCRVP 49.4 54.6 55.7 0.9 0.9 50.3 55.4 56.6
3.5 MNAVP 32.8 36.2 35.8 5.5 1.4 38.3 41.7 37.1
3.6 SARVP 47.5 51.2 52.2 1.8 2.2 49.3 52.9 54.4
Sub-Total 348.7 378.8 378.3 14.3 14.3 363.0 393.1 392.6
4.0 GP/CCSA PPM
4.1 Equitable Growth, Finance and Institutions 71.5 76.4 76.9 12.8 12.2 84.3 89.2 89.1
4.2 Human Development 37.1 39.6 37.3 7.8 5.4 44.9 47.4 42.7
4.3 Sustainable Development 83.8 90.4 105.9 21.6 57.8 105.4 112.0 163.7
4.4 EAB and Other3 46.2 46.3 62.2 - - 46.2 46.3 62.2
4.5 CCSAs4 14.7 16.8 12.9 40.5 0.4 55.2 57.3 13.3
Sub-Total 253.2 269.5 295.3 82.7 75.8 335.9 352.1 371.1
B TOTAL PROGRAM & PRACTICE MGMT. 601.9 648.2 673.6 97.0 90.1 698.9 745.2 763.7
5.0 Operational Grant Making Facilities
5.1 CGIAR 30.0 30.0 30.0 - - 30.0 30.0 30.0
5.2 State and Peace Building Fund 14.0 14.0 5.0 - - 14.0 14.0 5.0
5.3 Development Grant Facility - - - - - - - -
5.4 Global Partnership for Social Accountability - - - - - - - -
Sub-Total 44.0 44.0 35.0 - - 44.0 44.0 35.0
C TOTAL OPERATIONS 1,320.1 1,444.1 1,528.6 888.0 1,015.1 2,208.1 2,332.0 2,543.7
INDICATIVE BUDGET TRAJECTORIES1
BB External Funds All Funds
FY18 WORLD BANK BUDGET
39
Table I.1: FY18 Funding for WB Work Program and Unit (US$ million) (Cont’d.) / 2 of 3
FY17
WB Budget Restated
FY17 FY18
FY17
WB Budget FY18 FY17
WB Budget Restated
FY17 FY18
6.0 Institutional Services
6.1 Budget, Performance & Strategy 68.8 79.0 74.0 - - 68.8 79.0 74.0
6.2 Chief Risk Office 13.4 15.0 17.2 0.7 0.9 14.1 15.7 18.0
6.3 Development Economics 47.3 52.4 52.4 47.1 54.7 94.3 99.4 107.1
6.4 Development Finance 22.5 25.8 27.8 37.0 37.3 59.5 62.9 65.1
6.5 External & Corporate Relations2 34.8 39.1 50.0 2.2 3.1 37.0 41.3 53.0
6.6 Global Environment Fund - - - 32.0 33.0 32.0 32.0 33.0
6.7 ICSID - - - - - - - -
6.8 Leadership, Learning & Innovation - - - - - - - -
6.8 Legal Services 32.0 36.7 38.8 1.9 2.4 33.9 38.5 41.2
6.9 Operational Policy & Country Services 45.4 49.4 51.4 0.7 0.5 46.1 50.1 51.9
6.10 Treasury 59.4 65.7 67.8 15.9 16.7 75.4 81.6 84.6
6.11 WBG Finance & Accounting 38.5 44.0 46.0 5.7 7.4 44.2 49.7 53.4
6.12 Strategy, Performance, and Admin.5 - - 8.9 - 3.2 - - 12.1
Sub-Total 362.1 407.0 434.2 143.3 159.3 505.3 550.2 593.4
7.0 Governance Services
7.1 Administrative Tribunal 1.7 1.8 1.9 0.5 0.5 2.2 2.3 2.4
7.2 Boards 91.7 98.6 100.7 - - 91.7 98.6 100.7
7.3 Conflict Resolution System 4.3 4.9 5.0 2.5 1.5 6.9 7.4 6.4
7.4 Corporate Secretariat 15.5 16.8 17.1 1.2 1.2 16.7 18.0 18.4
7.5 Independent Evaluation Group 26.3 28.8 29.2 8.6 9.0 34.9 37.4 38.2
7.6 Integrity Vice Presidency 18.5 20.5 21.0 0.1 0.4 18.6 20.6 21.4
7.7 Internal Audit 7.7 8.4 8.6 2.5 2.7 10.2 10.9 11.3
7.8 Office of Ethics and Business Conduct 6.6 7.4 7.2 2.3 2.1 8.9 9.7 9.3
7.9 Office of the President 7.0 7.5 7.4 - - 7.0 7.5 7.4
7.10 Office of Suspension & Debarment 1.6 1.8 1.8 - - 1.6 1.8 1.8
7.11 Office of the CEO 5.4 5.9 5.3 - - 5.4 5.9 5.3
7.12 Office of the MD and CAO 2.4 2.7 2.7 - - 2.4 2.7 2.7
7.13 Office of the MD and CFO 2.9 3.1 3.2 - - 2.9 3.1 3.2
7.14 Office of the SVPMM6 5.6 6.2 6.3 - - 5.6 6.2 6.3
7.15 Sanctions Board 1.7 1.8 1.9 - - 1.7 1.8 1.9
Sub-Total 198.9 216.0 219.1 17.7 17.4 216.5 233.7 236.5
8.0 Administrative Services
8.1 General Services and Facilities 138.4 143.7 152.7 38.0 40.3 176.4 181.7 193.0
8.2 Human Resources 57.3 67.0 68.4 12.8 15.9 70.1 79.8 84.4
8.3 Information & Technology Solutions 224.6 241.9 241.4 52.4 51.8 277.1 294.4 293.2
Sub-Total 420.3 452.6 462.5 103.3 108.1 523.6 555.9 570.6
D TOTAL INSTITUTIONAL, GOVERNANCE & ADMIN. 981.3 1,075.6 1,115.8 264.2 284.7 1,245.5 1,339.7 1,400.5
E TOTAL: ALL UNITS 2,301.4 2,519.6 2,644.4 1,152.2 1,299.9 3,453.6 3,671.8 3,944.3
INDICATIVE BUDGET TRAJECTORIES1
BB External Funds All Funds
FY18 WORLD BANK BUDGET
40
Table I.1: FY18 Funding for WB Work Program and Unit (US$ million) (Cont’d.) / 3 of 3
FY17
WB Budget Restated
FY17 FY18
FY17
WB Budget FY18 FY17
WB Budget Restated
FY17 FY18
9.0 Centrally Managed Accounts & Programs
9.1 Budget recovery7 (613.0) (842.0) (936.9) - - (613.0) (842.0) (936.9)
9.2 Corporate Contingency 12.0 12.0 10.0 - - 12.0 12.0 10.0
9.3 Depreciation 91.0 91.3 102.4 - - 91.0 91.3 102.4
9.4 Institutional Programs 138.0 138.2 85.1 11.3 0.4 149.3 149.5 85.5
9.5 Staff Benefits & Retirement 778.6 788.9 840.8 - - 778.6 788.9 840.8
Total Centrally-Managed Accounts & Programs 406.6 188.4 101.4 11.3 0.4 417.9 199.7 101.8
F TOTAL ALL FUNDS EXPENDITURE ENVELOPE 2,708.0 2,708.0 2,745.7 1,163.5 1,300.3 3,871.5 3,871.5 4,046.0
G o/w Funded by External Funds DRR (184.0) (184.0) (195.7) - - (184.0) (184.0) (195.7)
H o/w Funded by External Funds CRR - - - (322.3) (325.1) (322.3) (322.3) (325.1)
I o/w Funded by External Funds BETF - - - (841.1) (975.2) (841.1) (841.1) (975.2)
J o/w Admin Budget Funded by IBRD/IDA 2,524.0 2,524.0 2,550.0 - - 2,524.0 2,524.0 2,550.0
2The International Offices budget of $8.5 million was transferred from ECA’s PPM to ECR in FY17. This transfer is reflected in the above table beginning in FY18.
3Includes Extended Assignment Benefits (EAB) for all GP/CCSA staff and funding to support Agile Bank initiative.
4FY17 CCSAs include Climate Change (CC), Public Private Partnerships (PPP) and Jobs. These units are consolidated under Sustainable Development (CC, PPP) and
Human Development (Jobs) Practice Groups from FY18, reflecting the revised organizational structure.
5Reflects the move of the Corporate Procurement unit from BPS.6Office of the SVPMM includes New York and Geneva Offices.
7Includes staff benefits recoveries from internal transfer pricing, rebates, TF recoveries, and Corporate Services.
INDICATIVE BUDGET TRAJECTORIES1
BB External Funds All Funds
1"Restated FY17" for BB reflects FY17 WB Budget based on the new staff benefits recovery rates effective July 1, 2017. FY18 trajectory is similarly stated on the new
basis.
FY18 WORLD BANK BUDGET
41
Table I.2: Overview of External Funds Projected Revenues FY18 by Unit (US$ million)
FY17
WB Budget FY18 FY17
WB Budget FY18 FY17
WB Budget FY18
1.0 Country Engagement
1.1 AFRVP 30.4 22.2 165.2 201.4 195.6 223.6
1.2 EAPVP 6.2 6.7 90.3 119.9 96.5 126.6
1.3 ECAVP 24.2 32.6 52.2 69.5 76.4 102.0
1.4 LCRVP 11.3 9.4 42.9 45.2 54.2 54.6
1.5 MNAVP 61.0 53.0 37.2 53.4 98.2 106.4
1.6 SARVP 6.6 7.3 89.5 107.6 96.1 114.9
Sub-Total 139.7 131.1 477.3 597.0 617.0 728.1
2.0 Global Engagement
2.1 GP/CCSA 4.5 10.1 169.5 186.8 174.0 196.9
Sub-Total 4.5 10.1 169.5 186.8 174.0 196.9
A TOTAL CLIENT ENGAGEMENT 144.2 141.2 646.8 783.8 791.0 925.0
3.0 Region PPM
3.1 AFRVP 1.4 1.5 1.7 1.9 3.1 3.4
3.2 EAPVP 0.3 3.6 1.4 1.6 1.7 5.2
3.3 ECAVP 1.5 1.3 - 0.0 1.5 1.3
3.4 LCRVP 0.2 0.2 0.7 0.7 0.9 0.9
3.5 MNAVP 4.6 0.5 0.9 0.9 5.5 1.4
3.6 SARVP 0.3 0.7 1.5 1.5 1.8 2.2
Sub-Total 8.1 7.6 6.2 6.6 14.3 14.3
4.0 GP/CCSA PPM
4.1 Equitable Growth, Finance and Institutions 1.3 2.8 11.5 9.4 12.8 12.2
4.2 Human Development 1.1 0.9 6.7 4.5 7.8 5.4
4.3 Sustainable Development 0.6 5.3 21.0 52.5 21.6 57.8
4.4 CCSAs 0.3 0.1 40.2 0.3 40.5 0.4
Sub-Total 3.3 9.1 79.4 66.7 82.7 75.8
B TOTAL PROGRAM & PRACTICE MGMT. 11.4 16.8 85.6 73.3 97.0 90.1
C TOTAL OPERATIONS 155.5 158.0 732.4 857.1 888.0 1,015.1
5.0 Institutional Services
5.1 Chief Risk Office 0.7 0.9 - - 0.7 0.9
5.2 Development Economics 5.8 7.1 41.3 47.6 47.1 54.7
5.3 Development Finance 6.0 6.1 31.0 31.2 37.0 37.3
5.4 External & Corporate Relations 0.4 0.7 1.8 2.3 2.2 3.1
5.5 Global Environment Fund - - 32.0 33.0 32.0 33.0
5.6 Legal Services 1.9 1.8 - 0.6 1.9 2.4
5.7 Operational Policy & Country Services 0.3 - 0.4 0.5 0.7 0.5
5.8 Treasury 15.6 16.1 0.3 0.7 15.9 16.7
5.9 WBG Finance & Accounting 5.7 7.4 - - 5.7 7.4
5.10 Strategy, Performance, and Admin. - 3.2 - - - 3.2
Sub-Total 36.5 43.4 106.8 115.9 143.3 159.3
6.0 Governance Services
6.1 Administrative Tribunal 0.5 0.5 - - 0.5 0.5
6.2 Conflict Resolution System 2.5 1.5 - - 2.5 1.5
6.3 Corporate Secretariat - - 1.2 1.2 1.2 1.2
6.4 Independent Evaluation Group 7.9 8.3 0.7 0.7 8.6 9.0
6.5 Integrity Vice Presidency 0.1 0.4 - - 0.1 0.4
6.6 Internal Audit 2.5 2.7 - - 2.5 2.7
6.7 Office of Ethics and Business Conduct 2.3 2.1 - - 2.3 2.1
Sub-Total 15.8 15.5 1.9 1.9 17.7 17.4
7.0 Administrative Services
7.1 General Services and Facilities 38.0 40.3 - - 38.0 40.3
7.2 Human Resources 12.8 15.7 - 0.2 12.8 15.9
7.3 Information & Technology Solutions 52.4 51.8 - - 52.4 51.8
Sub-Total 103.3 107.8 - 0.2 103.3 108.1
D TOTAL INSTITUTIONAL, GOVERNANCE & ADMIN. 155.5 166.7 108.7 118.1 264.2 284.7
E TOTAL: ALL UNITS 311.0 324.7 841.1 975.2 1,152.2 1,299.9
8.0 Centrally Managed Accounts & Programs
8.1 Other Centrally Managed Accounts 11.3 0.4 - - 11.3 0.4
Total Centrally-Managed Accounts & Programs 11.3 0.4 - - 11.3 0.4
F TOTAL EXTERNAL FUNDS 322.3 325.1 841.1 975.2 1,163.5 1,300.3
Coupled
Reimbursable Funds (CRR) External Funds
Bank Executed
Trust Funds (BETF)
FY18 WORLD BANK BUDGET
42
ANNEX II. INDICATORS OF BUDGET SUSTAINABILITY, STRATEGIC ALIGNMENT AND BUDGET
EFFICIENCY
Focus Indicator Definition Trend
IBRD Anchor Administrative expenses as a
share of operational revenues
(loan spread revenue) (percent)
IDA Anchor Administrative expenses as a
share of operational revenues
(IDA net loan revenues)
(percent)
External Funds
Ratio
External funds as a share of
total administrative spending
plans (percent)
Bu
dg
et S
ust
ain
ab
ilit
y
189%
158%160%
155% 147% 148%
135%
109%
91%
0
200
400
600
800
1,000
1,200
1,400
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
0%
40%
80%
120%
160%
200%
Exp
en
ses/
Re
ven
ue
s U
S$ m
illio
n
Bu
dge
t A
nch
or
%
IBRD loan spread revenue IBRD-funded expenses IBRD budget anchor
27%29%
30% 31%33%
34%35% 36%
37%
20%
25%
30%
35%
40%
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
93%98% 96% 98%
102% 100%94%
100% 98%
0
200
400
600
800
1,000
1,200
1,400
1,600
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18
0%
20%
40%
60%
80%
100%
120%
Exp
en
ses/
Re
ven
ue
US$
mill
ion
Bu
dge
t A
nch
or
%
IDA revenue IDA-funded expenses IDA budget anchor
FY18 WORLD BANK BUDGET
43
Focus Indicator Definition Trend
Operational Share of Unit
Budgets
Total share of unit
Administrative Budget (BB)
allocated to Operational Units
excluding GMFs (percent)
Client Engagement
Share of Operational Unit
Budgets
Share of Operational Unit
Budget (BB) excluding
GMFs Allocated to Country
Engagement (CE) and Global
Engagement (GE) (percent)
FCV Share of Country
Engagement Budgets
CE (BB) budget share for
FCV and FCV at Risk
countries over total CE (BB)
envelope (percent)
Str
ate
gic
Ali
gn
men
t
1
53.7%54.1%
54.9%
50.0%
52.0%
54.0%
56.0%
58.0%
60.0%
FY16 FY17 FY18
1Reflects the transfer of International Offices Budget from ECA to ECR in FY17
1
18.3% 17.9%19.5%
10.0%
15.0%
20.0%
25.0%
30.0%
FY16 FY17 FY18
$121m$143m
$115m
FY18 WORLD BANK BUDGET
44
Focus Indicator Definition
Bank Budget per
Project Approved
Ratio
TrendB
ud
get
Eff
icie
ncy
Bank Budget to
Lending Volume
Ratio
Total Administrative
Budget (BB) per US$
billion loan approved
(US$ million)
Total Administrative
Budget (BB) per lending
project approved
(FY17 US$ million)
88 92 90 88 83 85
46 39 53
67 79
62 59 54 61 53
-
20
40
60
80
100
120
IBRD+IDA
US$
mill
ion
74 85
74 74 80 81
35 27
43
59
80 68
54 44 50 48
-
20
40
60
80
100
120
IBRD
US$
mill
ion
111 101
115 108
87 91
72 75 70 78 77 58
65 73 75 58
-
20
40
60
80
100
120
IDA
US$
mill
ion
10 10 10 9 9 9 8 8 7
11 10 8 9 9
7 6
- 2 4 6 8
10 12 14 16
IBRD+IDA
US$
mill
ion
12
15
12 12 12
13
11
9 10
15 15 14
12 12 10
8
-
2
4
6
8
10
12
14
16
IBRD
US$
mil
lio
n
FY18 WORLD BANK BUDGET
45
Focus Indicator Definition
Bank Budget per
Project under
Supervision
Ratio
Trend
Bu
dget
Eff
icie
ncy
(C
on
t'd
.)Bank Budget to
Portfolio Volume
Ratio
Total Administrative
Budget (BB) per US$
billion portfolio under
supervision
(US$ million)
Total Administrative
Budget (BB) per project
under supervision
(FY17 US$ million) 1.4 1.6 1.6 1.7 1.6 1.6 1.5 1.6 1.5 1.6 1.7 1.7 1.6 1.6 1.5 1.4
-
0.5
1.0
1.5
2.0
2.5
3.0
IBRD+IDAU
S$ m
illio
n
1.5 1.8
1.9 2.0 2.0 2.1 2.0 2.1 1.9
2.1 2.2 2.2 2.1 2.1 1.8 1.8
-
0.5
1.0
1.5
2.0
2.5
3.0
IBRD
US$
mill
ion
1.3 1.4 1.4 1.4 1.4 1.3 1.2 1.3 1.2 1.2 1.4 1.4 1.3 1.2 1.3 1.2
-
0.5
1.0
1.5
2.0
2.5
3.0
IDA
US$
mill
ion
17 20
22 22 21 20
17 15 14 14 15 14 13 12 11 11
-
5
10
15
20
25
30
IBRD+IDA
US$
mill
ion
14
18 19 20 19 19
16 13 12 12 13 13 13 12
10 10
-
5
10
15
20
25
30
IBRD
US$
mill
ion
22 23
26 26 24
21
18 18 16 17 17
15 13
12 12 13
-
5
10
15
20
25
30
IDA
US$
mill
ion
FY18 WORLD BANK BUDGET
46
ANNEX III. FULL COST RECOVERY OF STAFF BENEFITS
1. Management plans to ensure that all Bank products and activities, however funded, reflect the full cost
of staff.
2. The Bank currently assesses a 50 percent charge on Washington-appointed staff salaries to the costs of
its products which partially covers the institutional benefits of such staff. The balance between these
charges and the total staff benefit cost (equivalent to 20 percent of salary costs for at least the past five
years) is borne by the Bank’s Centrally-Managed Accounts. Effective July 1, 2017, the benefit
recovery rate will revert to the originally set rate of 70 percent, enabling unit-level decision making to
be based on the full cost of staff.
3. The benefit costs of Country Office (CO)-appointed staff had not to date been assessed to products and
activities in the same manner as for Washington-appointed staff. With a third of the Bank's staff now
Country Office (CO)-appointed, Management plans to introduce a benefits recovery rate, set at 45
percent, to be applied to CO salaries to fully cover their benefit costs. This is effective July 1, 2017
except for external funds which will be charged the new rate from FY19.
4. These policy changes are budget neutral from a Bank Budget perspective. Bank Budget unit trajectories
have been adjusted upwards in a cost neutral manner to reflect these changes with corresponding
reductions in the Bank’s Centrally-Managed Accounts. To enable the Board to see trajectories on a
consistent basis, the VPU trajectories for FY17 have been restated as if the changes had always been in
place.
5. Charging the actual benefit rate on all sources of funds is an integral step to fully implement the US$100
million incremental annual cost recovery targeted from BETFs as part of the trust fund cost recovery
framework approved by the Board in FY15. The recovery from BETFs of the subsidy of around US$30
million for Washington-appointed staff benefits was already assumed in the FY18-19 trajectory set out
in the FY17 Budget. The incremental cost of these policy changes on Trust Funds is estimated to
amount to around 1 percent of total annual Bank Trust Fund disbursements. This cost increase though
is expected to be offset by the savings already being applied to trust funds under the Expenditure
Review measures at the aggregate trust fund portfolio level.
6. These policy changes also apply to other external funds (i.e., RAS and EFO instruments) and US$5
million annually is expected to be recovered from the elimination of the benefit cost subsidy on these
funds.
Recommended