TDR Financial report 2012-2013
and outlook
Table of contents
2012-2013 Financial report ..................................................................................................... 3
1.
Financial summary ......................................................................................................................................... 3
2.
Revenue ......................................................................................................................................................... 4
3.
Expenses ........................................................................................................................................................ 6
4.
Financial Situation ......................................................................................................................................... 8
Outlook 2014-2017 and budget scenario 2016-2017 ................................................................ 8
Key highlights ....................................................................................................................... 10
1
2012-2013 financial report .......................................................................................................................... 10
2.
Outlook for 2014-2017 and budget scenario for 2016-2017....................................................................... 11
ANNEX ............................................................................................................................... 12
TDR Certified Financial Statement for the year ended 31 December 2013
TDR 2012-2013 FINANCIAL REPORT
2
TDR/STRA/15.1
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TDR 2012-2013 FINANCIAL REPORT
3
2012-2013 Financial report
1. Financial summary
Table 1. TDR key financial results 2012-2013 (US$)
Funding available
65,276,617
Total expenses
(43,296,324)
Closing balance as at 31 December 2013
21,980,294
Repayment set aside for IER *
Adjusted closing balance at 31 December 2013
1,340,000
20,640,294
* Prior to moving to the HIV/AIDS, Tuberculosis, Malaria and Neglected Tropical Diseases
(HTM) cluster in November 2012, TDR was located in the Innovation, Information, Evidence
and Research (IER) cluster.
TDR 2012-2013 FINANCIAL REPORT
4
2. Revenue
Table 2. Voluntary contributions based on revenue recognized, 2007-2013 (US$)
Since 1 January 2012, income is recorded on an accrual basis (on signing of binding agreement and when payment terms are in
the current accounting year), per International Public Sector Accounting Standards (IPSAS). Prior to this date, income was
recorded on a cash basis.
WHO contribution for the biennium 2012-2013 was advanced in 2011.
TDR 2012-2013 FINANCIAL REPORT
5
Figure 1. TDR revenue recognized by source of funds, 2012-2013
Co-Sponsors
9%
Intergovernmental
organizations
2%
Programmes
administered by
WHO
1%
Research/NGO
15%
Private Sector
1%
WHO Member
States
70%
Foundations
2%
Figure 2. Evolution of TDR revenue recognized by type of funds, 2006-2013
70
76%
60
66%
75%
50
75%
40
30
20
Undesignated
34%
25%
Designated
24%
25%
10
2006-7
2008-9
2010-11
2012-13
TDR 2012-2013 FINANCIAL REPORT
6
3. Expenses 1
US$ Million
Figure 3. TDR approved budget and revised planned costs for 2012-2013 by main category
70.0
60.0
WHO advances (2011)
4.6
60
2012-2013
Operational
Support - 5.5
50.0
WHO advances (2011)
4.6
53.4
Operational
Support - 4.9
Operations
18.9
40.0
Operations
16.7
30.0
Reorganisation
10.9
Reorganisation
5.0
20.0
Personnel
20.1
Personnel
22.2
APPROVED BUDGET
(Oct 2012)
REVISED PLANNED COST
(31 Dec 2012)
10.0
0.0
Figure 4. 2012-2013 financial implementation overview
(includes settlement of commitments from previous workplans)
UD
41.8
Plan
DF
11.6
UD
37.8
Actual
.0
10.0
20.0
DF
6.8
30.0
40.0
US$ million
UD: Undesignated funds
DF: Designated funds
1
Where relevant, figures have been rounded to the nearest hundred thousand.
53.4
44.6
50.0
60.0
TDR 2012-2013 FINANCIAL REPORT
7
Figure 5. 2012-2013 workplan implementation by main category
16.7
Operations
9.7
4.9
Operation support
3.4
22.2
Personnel
Plan
21.8
5.0
Reorganisation
Actual
3.5
4.6
WHO Advances (2011)
4.6
0
5
10
15
20
25
30
US$ millions
Figure 6. 2012-2013 operations implementation by work area
Plan
0.8
Actual
0.7
VES
5.6
Actual
4.2
3.4
Plan 0.3
IIR
2.0
0.3 0.6
6.4
2.3
Undesignated
1.0
Designated
RCS/KM
Actual
Transition
3.4
Plan
Plan
Actual
1.9
1.7
0.3 2.2
1.5
1.3
5.1
1.6
1.1
VES: Vectors, environment and society
IIR: Intervention and implementation research
3.0
2.4
RCS/KM: Research capacity strengthening and knowledge
management
Transition: Projects being phased out
TDR 2012-2013 FINANCIAL REPORT
8
4. Financial Situation 2
Figure 7. TDR financial situation dashboard 2012-2013
70.0
60.0
US$ millions
50.0
58.4
DF 11.4
UD Working Capital for future
biennia 8.0
DF 6.8
40.0
44.6
UD: Undesignated funds
DF: Designated funds
30.0
20.0
UD 47.1
UD 37.8
10.0
0.0
Resources Available
Expenditure
Resources available for 2012-2013 differ from revenue recognized:
• They exclude revenue recognized that is earmarked for use in a future financial period
• They include revenue that was recognized in a prior period that was earmarked for use in 2012-13
Outlook 2014-2017 and budget scenario 2016-2017
Figure 8. TDR Forecast Resources 2014-15 compared to budget scenarios, 2014-2015
UD: Undesignated funds
DF: Designated funds
2
Where relevant, figures have been rounded to the nearest hundred thousand.
9
TDR 2012-2013 FINANCIAL REPORT
Figure 9. TDR comparison of resource available over 3 biennia
These figures exclude US$ 8m working capital, which is not earmarked against workplan implementation.
Figure 10. TDR Programme Budget scenarios for 2016-2017
TDR 2012-2013 FINANCIAL REPORT
10
Key highlights
1. 2012-2013 financial report

Revenue recognized: US$ 57 million (Tables 1 and 2; Figures 1 and 2)

Resources available 3 for 2012-2013 workplan implementation (Figure 7): US$ 58.4 million
(US$ 47.1 million undesignated funds) against US$ 60 million budget scenario

Implementation (Figures 3-6): US$ 44.6 million (US$ 37.8 million undesignated funds) against revised
planned costs of US$ 53.4 million (endorsed by JCB36 in June 2013)
o
o

TDR recovery plan successfully implemented:

Revised planned costs further optimized (e.g. decrease of reorganization costs due to
reassignment of additional staff within WHO and optimization of programme support costs).

Transition projects have been implemented successfully.

All funds needed to reimburse the WHO advances have been set aside and payments
processed.
Some designated funding activities have been delayed (Figure 6). A large part of it is due to
the unavailability of ethical review committees. Low financial implementation for the area of
research capacity strengthening and knowledge management is due to the African Network
for Drug and Diagnostics Innovation (ANDI) project. Following the termination of the
Memorandum of Understanding (MOU) between WHO and UNECA, funds were returned to
WHO during the 2012-2013 biennium. In early 2014, a new MOU was signed with UNOPS,
where the project is now hosted, and funds have been transferred accordingly.
Savings (Figure 7) of US$ 9.3 million undesignated funds (US$ 47.1 - US$ 37.8) have enabled TDR to
earmark US$ 8 million as the Programme’s ‘working capital’ to ensure sound financial management
and to cover one year of salary costs liability in case of financial difficulties. This is a requirement of
WHO’s rules and standards.
The remaining US$ 1.3 million of undesignated funds have been carried forward to the 2014-2015
biennium to support the implementation of TDR’s approved budget.

Enhanced management:
o TDR’s financial management systems and processes have now been revised and tested. They
ensure sound financial management and contribute to streamlined operations.
o The portfolio management processes and tools have been reviewed and enhanced. These
include clear guidance for the definition of strategic directions and prioritization at TDR.
o TDR is implementing its risk management policy.
o A new staff development approach has been introduced at TDR in order to enhance staff
engagement, skills and motivation and to best plan for each individual’s career development.
o Income forecasts are developed in a realistic and conservative way, based on continuous
interactions with contributors and historical data.
3
Resources available differ from revenue recognized. They exclude revenue that is earmarked for use in future
biennia and include revenue recognized in prior biennia but earmarked for use in 2012-13.
TDR 2012-2013 FINANCIAL REPORT
11
2. Outlook for 2014-2017 and budget scenario for 2016-2017
2014-2015

Income forecast for 2014-2015 has been assessed conservatively (80% probability) based on
historical figures combined with ongoing discussions with donors. The forecast at June 2014 is
US$ 57.3 million ($41.5 million UD). The intention to raise additional designated funds is not
reflected in the forecast. (Figure 8)

TDR initiated the implementation of the US$50 million budget scenario in January 2014. A budget
revision will take place in September 2014 and if funds are sufficient the US$ 60 million scenario can
then be initiated.
2016-2017

For 2016-2017 the forecast income (60% plus probability) amounts to US$ 49.8 million (Figure 9).
This includes:
o US$ 35.2 million of undesignated funds (80% probability) based on historical data and
ongoing discussions, and an additional US$ 2 million (60% probability) to take into
consideration possible new sources of funds.
o US$ 2.6 million of designated funds for ongoing projects and an additional US$ 10 million
(60% probability) to reflect TDR’s ongoing and planned discussions.
Note: 2016-17 includes 60% probability forecasts due to the difficulty in forecasting long term. Core
contributors may not know the level of their contributions for 2016-2017. Discussions with donors of
designated funding of new projects are just beginning for 2016-2017.
Budget scenarios 2016-2017

The Standing Committee reviewed two options for 2016-2017 budget scenarios
(US$ 45 million / US$ 50 million and US$ 45 million / US$ 55 million). These were defined with a
conservative approach. The Standing Committee endorsed the US$ 45 million / US$ 55 million
budget scenario option (Figure 10).

Approach for implementation of the US$ 45 million / US$ 55 million budget scenarios is as follows:
implementation of the US$ 45 million budget and related workplan will be initiated in January 2016.
When sufficient funds have been received, the US$ 55 million budget scenario and related workplan
can then be implemented. The lower scenario (US$ 45 million from which US$ 35 million are
undesignated funds and US$ 10 million are designated funds) is based on the level of undesignated
funds forecast estimated with 80% probability (US$ 35 million).

In light of the global health financing situation and the probable downward trend in the level of
TDR’s core funding, discussions should begin with the TDR Joint Coordinating Board to determine
what approaches could be taken to strengthen TDR's financing.
TDR 2012-2013 FINANCIAL REPORT
ANNEX
TDR Certified Financial Statement
for the year ended
31 December 2013
certified by the WHO Comptroller
12
TDR 2012-2013 FINANCIAL REPORT
13
Trust Fund for the UNICEF/UNDP/World Bank/WHO Special Programme for
Research and Training in Tropical Diseases
Statement I. Statement of Financial Performance
For the year ended 31 December 2013
(In US dollars)
2013
REVENUE
2012
3.1
Voluntary contributions
Interest income
24 200 253
58 019
32 748 702
24 258 272
32 748 702
Staff and other personnel costs
8 772 919
16 658 364
General operating expenses
1 123 935
2 089 798
283 864
2 721 082
Medical research services
2 914 478
2 459 831
Travel
1 079 401
941 870
484 064
241 017
64 891
86 322
Total revenue
EXPENSES
3.2
Contractual services, general
Fellowships and training
Telecommunication
Medical supplies and materials
90 428
55 191
1 614 433
1 614 434
16 428 413
26 867 911
7 829 859
5 880 791
Fund balance at beginning of year
14 150 435
8 269 643
Fund balance at end of year
21 980 294
14 150 435
1 340 000
-
20 640 294
14 150 435
Repayment to WHO for administrative services
Total expenses
Total surplus for the year
Repayment set aside for IER
Adjusted fund balance at end of year
3.3
TDR 2012-2013 FINANCIAL REPORT
14
Notes to the Financial Statement
1. Basis of preparation
This financial statement has been prepared in accordance with International Public Sector Accounting
Standards (IPSAS).
The results of TDR are consolidated within the General Fund of the World Health Organization (WHO).
Revenue and expenses for the TDR Trust Fund are recorded in a separate fund to allow for financial
reporting. A separate balance sheet is not available for TDR as all balance sheet transactions are
managed in one set of ledgers for WHO.
The TDR statement of financial performance has been extracted from WHO accounts and all transactions
have been recorded in accordance with relevant WHO accounting policies.
2. Significant accounting policies
For a full set of accounting policies, please refer to WHO Financial Report and Audited Financial
Statement (A67/43). The policies below support the statement of financial performance.
• Revenue
Revenue is recognised following IPSAS 23 (Revenue from Non-Exchange Transactions). Revenue from
voluntary contributions is recorded when a binding agreement is signed between TDR and a contributor.
Where there are no payment terms or payment terms are in the current accounting year, revenue is
recognised immediately.
Revenue is deferred where according to the contractual agreement signed with the contributor, the
funds are earmarked and due in a future period. Deferred revenue is reported on WHO’s balance sheet
as a liability and is released in the period in which it falls due.
• Expenses
WHO recognizes expenses at the point where goods have been received or services rendered and not
when cash or its equivalent is paid.
• Budget comparison
TDR’s budgets are prepared on a biennial basis.
15
TDR 2012-2013 FINANCIAL REPORT
3. Supporting information to the TDR Statement of Financial Performance
• Revenue
Voluntary Contributions
The total voluntary contributions were US$ 24.2 million (US$ 32.7 million for 2012). These contributions
represent revenue recognized in 2013 from governments, intergovernmental organizations, institutions,
other United Nations organizations as well as the private sector. 4
The reported figure of US$ 24.2 million is after deduction of refunds to contributors (US$ 9 030) and the
adjustment of payment terms with the effect of increasing deferred revenue and decreasing current
revenue for revenue recognised in previous years – these amounted to US$ 2.4 million.
Deferred revenue represents multi-year agreements signed in 2013 or prior years but for which
revenue recognition has been deferred to future financial periods. As at 31 December 2013, the
following amounts have been deferred:
Deferred revenue
Belgium
Drugs for Neglected Diseases Initiative (DNDi)
European Commission
Germany
Global Alliance for TB Drug Development
Spain
United Kingdom of Great Britain and Northern Ireland
University of Heidelberg
Grand Total
2013 (US$)
4 076 087
844 679
2 246 302
814 111
80 000
137 931
13 740 458
625 472
22 565 041
Interest Income
Interest income for 2013 was US$58 019. This represents income received from the investment of TDR
funds by WHO. TDR did not carry sufficient balances in the fund to earn interest in 2012.
• Expenses
Staff and other personnel costs
US$ 8.8 million in 2013 (US$ 16.7 million in 2012) reflects the total cost of employing staff including
charges for base salary, post adjustment and any other types of entitlements (e.g. pensions and
insurances) paid for by TDR. The figure also includes cost related to the terminal indemnities accrual.
Costs are considerably lower than the prior year due to savings from restructuring.
General operating expenses
US$ 1.1 million in 2013 (US$ 0.9 million in 2012) reflects the cost of general operations to support the
office. It includes utilities, internet, global network expenses, rent and the purchase of equipment,
vehicles and furniture. The amount also includes $0.5m programme support costs paid by TDR to WHO
based on 4% of total expenditure excluding rent.
4
Refer to Schedule 1 for details of revenue recognised by contributor.
TDR 2012-2013 FINANCIAL REPORT
16
Contractual services, general
This represents expenses for service providers. The main components are agreements for performance
of work or consulting contracts given to individuals to perform activities on behalf of TDR.
Medical Research Services
This represents expenses covered under Technical Services Agreements that relate to collaborative
research activities between TDR and various institutions, universities and laboratories.
Travel
The cost of travel for TDR staff, non-staff participants in meetings, consultants and representatives of
the Standing Committees and Joint Coordinating Board paid by TDR is included in the total travel costs.
Travel expenses include airfare, per diem and other travel-related costs. This amount does not include
the statutory travel for home leave and education grant that is accounted for within staff and other
personnel costs.
Fellowships and training
This represents expenses for fellows supported by TDR. The main components include stipends,
education allowances, travel and insurance. It also includes expenses for training of grantees who are
not fellows.
Telecommunications
This represents expenses related to video conferencing, mobile phones and fixed telephones.
Medical supplies and materials
The majority of these costs relate to medical supplies purchased and distributed by TDR for programme
activities, as well as medical literature.
Repayment to WHO for Administrative Services
Due to financial difficulties in 2011 it was agreed that $3.2 million due to WHO for administrative
services would be deferred until 2012-13. $1.6 million was repaid in 2012 and the outstanding balance
of $1.6 million was repaid in 2013.
• Repayment set aside for IER (Information, Innovation, Evidence & Research)
TDR received assistance from IER in 2011 whilst experiencing financial difficulties. Repayment was set
aside for IER in 2013 for their use in 2014-15.
TDR 2012-2013 FINANCIAL REPORT
17
Trust Fund for the UNICEF/UNDP/World Bank/WHO Special
Programme for Research and Training in Tropical Diseases
Schedule 1 - Voluntary contributions
For the year ended 31 December 2013
(in US dollars)
CONTRIBUTOR
Member States
Belgium
Cuba
Germany
India
Japan
Luxembourg
Malaysia
Netherlands
Nigeria
Norway
Panama
Spain
Sweden
Switzerland
Thailand
Turkey
United Kingdom of Great Britain and Northern Ireland
Zambia
Total Member States
Drugs for Neglected Diseases Initiative (DNDI)
European Commission
Global Alliance for TB Drug Development
International Development Research Centre (IDRC)
MMV Medicines for Malaria Venture
Pfizer Inc
United Nations Development Programme (UNDP)
University of Heidelberg
University of Oxford
World Bank
Other and adjustments
Refunds to donors
Total Revenue
Amount ($)
1 289 009
4 791
1 072 636
110 000
270 000
1 617 076
25 000
400 000
192 511
2 564 103
7 000
94 980
4 847 645
1 819 184
50 268
5 000
6 010 768
110 604
20 490 576
96 250
670 930
240 000
655 716
64 782
500 000
650 000
345 112
78 493
2 800 000
( 2 382 575)
( 9 030)
24 200 253
Note: ‘Other and adjustments’ mainly represents the adjustment of payment terms with the effect of
increasing deferred revenue and decreasing current revenue for revenue recognised in previous years.
TDR 2012-2013 FINANCIAL REPORT
18
Trust fund for the UNICEF/UNDP/World Bank/WHO Special Programme for Research and
Training in Tropical Diseases
Schedule 2 –Statement of Comparison of Budget and Actual Amounts
For the biennium ended 31 December 2013
Note 1: This budget was prepared on a biennial basis. Expenditure has been accumulated for 2012-13 to be comparable.
Note 2: Planned cost is a revision to the programme budget at 31 December 2012, endorsed by JCB.