A 10% pay increase also factored in

Samisoni Pareti
A travel budget of $12.66 million* came under fire in the Pacific Islands Forum Officials Committee meeting (FOC) in Tonga last September.

This was $3.15 million more than the 2007 travel budget of 2007, a 25% rise.

These figures were part of the 2008-2010 budget and work programmes of the Pacific Islands Forum Secretariat (PIFS) that were rejected and not adopted by FOC in Tonga.

PIFS’ Corporate Services Division has been told to revise the figures and a new budget with downward revisions in operational items like travel and meeting costs to be presented at an extraordinary session of FOC next month.
In the meantime, PIFS is operating under the confines of two thirds of its 2007 budget in line with a rarely used provision of its financial regulations.

Total revenue provided under the original 2008 budget was $28.41 million.

Compared to last year’s budget of $36.90 million, this is a drop of about $8.4 million.

Members’ contribution for 2008 is projected at $3,472,000—about 12% of total revenue.

Total expenditure for 2008 on the other hand was projected at $43,487,899, giving a deficit of $15.08 million.

Reality

But PIFS’ Corporate Services director Stephanie Jones explains that in reality, deficit is not the right way of describing how the secretariat’s budget operates.

“The only reason our budget is showing a deficit is because we have to list down all the activities that we want to do in a year,” explains Jones.

“But in reality, we will only spend the amount of money we have. In the event however that members want us to do some other activities that are not on our list of priorities but still listed in our work programme for that year, we then have to fan out for possible donors.

“It may sound complicated, but that is how the budget is structured.”

Acting Secretary-General Feleti Teo added that linking the work programme to the revenue projected was the main issue in FOC last year.

“We hadn’t linked what we can do with the revenue we have, so FOC asked us to revise that, and that is what we have done,” says Teo.

Both Teo and Jones offered to speak on their 2008 budget following a request from the magazine.

Complication

Part of the complication also lies with the way PIFS prepares its budget as it is different from the conventional ones.

PIFS has a regular budget, the operational account that is funded by member contributions; a core budget that is met mainly by Australia and New Zealand; and the extra budget mostly funded through donors.

“The regular budget shows a one-off deficit in 2008 of $440k due to an increase ($500k) in the capital expenditure budget to support significant improvements to our communication and information technology infrastructure and management of our intellectual property,” said a PIFS 2008 budget explanatory note.

“This deficit will be funded from prior year savings and through capitalisation of the capital expenditure to the balance sheet.”

Part of the expenditure too is a 10% salary increase for professional staff and 5% increase for its support staff.

The budget note said the increase is needed to harmonise remuneration with other regional organisations.

The note went on to explain the $7.5 million deficit in its core budget for 2008 was mainly because of a new item of special projects of $933,320 and increases in allocations for political and security governance and corporate services.

Expenditure for the extra budget is showing a deficit of $7.094 million, brought about by the $4 million needed for its four trade offices in Australia, China, Japan and New Zealand.

The explanatory note added that a sum of $9.9 million listed as extraordinary funding has already been committed.

During the Tonga FOC meeting, bulk of the queries from delegates was on PIFS’ core budget which was showing a deficit of $7.536 million, in the event all the activities listed under its work programmes were to be implemented.

Teo said delegates wanted a reprioritising of all activities in the  2008 core budget, individually linking the revenue it has to the job that needs to be done.

This, the corporate services division of which Jones heads, has done and the revised budget will go before FOC next month.

A big revision has been the removal from the budget, Teo said, of all ministerial meetings planned for 2008.

“We’ve already received several questions on this, but we are not saying that we had taken the unilateral decision that no ministerials will be held this year,” explained PIFS acting secretary-general.

“What we are instead offering is that may be if we get members to consider paying some of the costs of these ministerials, we may be able to keep our costs down.”

According to PIFS’ calculation, a Forum meeting—be it ministerial or officials—in Palau costs four times more than if it was held at PIFS headquarters in Fiji.

Similarly, a meeting in neighbouring Vanuatu still costs three times more than if it was held in Suva.

“We have also taken other measures like getting senior management to vet all official travel of PIFS staff,” said Teo.

“If we feel the same objective will be met if it is done via video conferencing, then that is the way to go.”

Getting ministers to do video conferencing instead of face to face meetings is however out of the question for now given the telecommunication challenges faced by some Forum member countries.

Even transmitting a faxed letter could be unreliable.

“Officials are also telling us that we should exercise a lot more discipline in the costing of meeting venues,” said Feo.

“If a member offers to host the next meeting for example, officials want us to start asking about the cost of holding this meeting there.”

For the unrevised total budget for 2008, travel was the most expensive item at $12.657 million, or 29% of total expenditure.

Personnel at $12.159 million is second.

Capital expenditure was budgeted at $1.350 million.

*Currency in Fiji Dollar.