Financial Report 2018 for the BSPC Joint Financing Mechanism (JFM)

At its meeting in Oslo on 25 August 2019, the Standing Committee of the BSPC unanimously decided to publish the following budget report on the BSPC website:19/02/2019Financial Report 2018 for the BSPC Joint Financing Mechanism (JFM)Contents1. The BSPC Joint Financing Mechanism (JFM)1.1 Financing of BSPC1.2 Basis for the JFM in 20181.3 Purpose of the JFM1.4 Management of the JFM2. Looking Back: JFM Result in 2017 total3. Financial Result in 20183.1 Income in 20183.2 Result in 2018 and Implications for the 2019 Budget3.2.1 Result by Budget Posts3.2.2 Result by Expenditure Categories3.3 Balance in 20183.4 Unused Means3.5 Summary of the Financial Result in 20184. Proposed Budget Plan for 2019Annex 1 Financial Result 2018Annex 2 Proposed BSPC Budget Plan for 2019Annex 3 Annex 3 of the Rules of Procedure---------------------1. The BSPC Joint Financing Mechanism (JFM)Financing of BSPCThe activities of the BSPC in 2018 were in principle financed through four channels:Firstly, the costs for delegates that are appointed by the member parliaments and parliamentary organizations to participate in BSPC activities – such as the Standing Committee, the annual Conference, Working Groups, etc. – were paid by the sending parliament or parliamentary organization itself.Secondly, the operating costs of the BSPC Secretariat were covered by the BSPC Joint Financing Mechanism (JFM), which was established in 2007. The nominal budget of the JFM (total running costs) is €112,000. This sum has remained unchanged since 2007 and had been exceptionally complemented in 2016 with regard to the Silver Jubilee by unused means from former years.Thirdly, the costs for personnel and technical support of the BSPC Secretary (€80,000) were covered by the BSPC Joint Financing Mechanism (JFM). Additional personnel and office costs were covered by the State Parliament of Mecklenburg-Vorpommern.Fourthly, the host parliament of the 27th BSPC, Åland Island, covered all costs related to the meeting itself in connection with the Conference, the excursions and the reception by the Parliament. Costs for interpretation, technical equipment and external experts were covered by the JFM. As for meetings in other BSPC bodies, the parliament hosting the meeting usually provides certain basic amenities, for instance a meeting room. In several cases, catering was provided by the host parliament or regional authorities. The interpretation costs in Brussels were covered by the European Parliament. However, the major part of the costs for those meetings, such as interpretation and equipment and partially catering, are paid through the JFM.1.2 Basis for the JFM in 2018The BSPC Rules of Procedure adopted by the 20th BSPC in fall 2011, and amended by the 26th BSPC in 2017, include provisions by the JFM for the BSPC Secretariat. They have served as the formal basis for the JFM since 2012.1.3 Purpose of the JFMThe joint financial resources for the BSPC Secretariat should be allocated to, but not limited to,interpretation and other meeting costs for meetings in various BSPC bodies, including the annual Conference;compilation and layouting (exceptionally printing) of the BSPC Conference Report and of other joint documents from the BSPC bodies;information activities and maintenance of the website (www.bspc.net);remuneration of the BSPC Secretary;travelling expenses for the Secretariat to Standing Committee meetings, Secretary Level meetings and other relevant internal and external meetings and conferences.This does not exclude the possibility of financing other types of common activities via the JFM.The Standing Committee decides, in its fall meeting, on the nominal sum of the contributions to the Joint Financing Mechanism in the following year.1.4 Management of the JFMAll BSPC member parliaments contribute to the JFM according to a cost-sharing model described in section 11 and annex 3 of the BSPC RoP from 2017.Latest at the beginning of each year, a letter of request is sent to the member parliaments of the BSPC, asking them to remit their contributions to the JFM.Contributions are deposited in a dedicated account in the German Bundesbank. Since the BSPC budgetary affairs have been administratively located at the Landtag Mecklenburg-Vorpommern, the receiving Landeszentralkasse Mecklenburg-Vorpommern administers the account.The Secretary General has the right to administer and use the JFM. The right to authorize expenses on the JFM account is vested in the Landtag administration. The account is subject to audit by the state.All contributions to the JFM for 2018 have been paid yet (see table 1 at section 3.1).The request letter for contributions to the JFM in 2019 was issued on 6 December 2018. Members had been kindly asked to remit their contributions no later than 1 February 2019.Annex 3 of the BSPC Rules of Procedure lists the relative cost shares of the contributions of the BSPC members to the JFM – on the basis of the 26th BSPC resolution now with 2 decimal places after the decimal point.2. Looking Back: JFM Result in 2017The total expenditure for the JFM in 2017, as of 31 December 2017, amounts to €191,841. This yields a total surplus of the budget of €120.In summary, it can be concluded that the predictions for 2018 had been adequately correct. There were some notable exceptions from this pattern, including lower travel costs (Secretary), slightly lower costs for the Standing Committee, higher costs for the Working Group meetings, lower costs for the Conference, mainly because of the invoice of the technical equipment, which was only presented in the new budget year, higher costs have been incurred for the development of the new website and an invoice relating to it, which was only received in the new budget year, as well as the layout (not printing) of the reports. Total running costs were, however, all in all right on target.3. Financial Result in 2018Income in 2018The BSPC Standing Committee agreed at its meeting on 22 February 2018 on the distribution of contributions to the BSPC Joint Financing Mechanism (JFM) in 2018.The total nominal sum of the contributions to the JFM in 2018 was €191,961. Previous years saw total projected expenditures of €192,000. This covers the running costs of the Secretariat (€112,000) as well as personnel and technical support of the BSPC Secretary (€80,000), which includes additional administrative support by the parliaments of Mecklenburg-Vorpommern and the Åland Islands.The letter of request for contributions to the JFM in 2018 was issued on 14 December 2017. As of 31 December 2018, the total actual income was €191,961 (see table 1).Table 1. BSPC Income in 2018, EUR3.2 Result in 2018 and Implications for the 2019 Budget3.2.1 Result by Budget PositionsThe budget disposition for the JFM in 2018, agreed by the Standing Committee on 22 February 2018, appears in the Budget column in annex 1.The total expenditure for the JFM in 2018, as of 31 December 2018, amounts to €195,224. This yields a total budget deficiency compared to the budget plan of €3,263. The distribution of expenditures by budget positions appears in the Result column in annex 1.The distribution and size of expenditures by budget positions in annex 1 warrant some comments concerning the results as well as possible implications for the budget plan in 2019.In section 1, Secretariat, the result is some €600 lower than expected. The travel costs in post 1.1 and the Meeting costs in 1.2 have been below the budget proposal. The Secretariat Level meetings are held in English only.The budget allocation and distribution for budget section 1 in the 2019 budget proposal could basically be the same as in 2018. It is the same amount as in previous years, even though costs have risen.Section 2, Standing Committee, shows a result which is lower than budgeted. The meeting costs in 2.1 for four meetings are very high under budget and costs for interpretation in 2.2 are above budget. A reason for this was partially one post of interpretation costs for a meeting a year before. The result in section 2 was only possible because one hosting Parliament had provided at one meeting interpreting services free of charge, and the costs for catering had been partially covered by one parliament and in two other cases covered by local authorities and the hosting parliaments.The budget allocation and distribution for budget section 2 in the 2019 budget proposal could basically be the same as in 2018 and previous years, should, however, take account of the increased need for interpreting costs by slightly redeploying the planning approaches in the specific areas.In section 3, Working Groups, the result is some €300 over what was projected. The meeting costs (3.1) were under the budget and costs for interpretation (3.2) were higher as budgeted. Catering was in two cases covered by the hosting parliaments. Additional costs of € 1,041 were incurred for the documentation of the mid-way report (not printing), which includes hundreds of pages of work material and is published on the BSPC website.For the 2019 budget, it is proposed to adapt the planned funding in this area more closely to the needs discernible in 2018. Since a need for documentation and expertise was evident in 2018, it is also recommended that Section 3 should be increased by € 2000, as it is assumed that the expenditures under 4.4 can be reduced by this amount (see comments on Section 4).Section 4, 27th BSPC, shows a result that is some €6,000 higher than budgeted. The main reason for this are the costs for the 26th BSPC, which were discussed in the last financial report and paid in this budget year. These are the invoices mainly for the equipment for the interpretation, but also the invoice for the translation of the resolution and the layout for the conference report on the website.Since the expenses for the translation of the resolution and the conference report are no longer incurred, the funds planned for 2019 under 4.4 will be reduced by 2000 € and reallocated to 3.3. Position 3.3 is given the title "Documentation and Expertise". The title of position 4.4 will be changed into “Conference Report ENG”.The total amount of the proposed budget for 2019 in this section can therefore be reduced to 54.000 €.In section 5, Information/Communication, the result is nearly €1,000 above budget.There is a main reason for this:The reason was that the costs for layout of the reports (no printing) were nearly €1,000 higher than planned. The background for this is that, in the run-up of the annual conference more reports by Rapporteurs than expected had been published on the website as well as the statements of governments to the survey of the Working group.In this way, the BSPC was able to present more detailed results of its work in various policy fields and to make the committed work of Rapporteurs in particular public in an appealing way.Moreover, Section 6, BSPC Secretary, remains unchanged.In summary, it can be concluded that the predictions for 2018 had been adequately correct. There were some notable exceptions from this pattern, including lower travel costs (Secretary) (1.1), slightly lower costs for the Standing Committee (2.), higher costs for the Working Group meetings (3.), higher costs for the Conference, mainly because of the invoice of the technical equipment from 2017, which was only presented in the new budget year (4.), higher costs have been incurred for the development of the new website and an invoice relating to it, which was only received in the new budget year, as well as the layout of the reports (5.). Total running costs were, however, all in all right on target.The deficiency of €3,263 will be covered from the unused means.The overall disposition of the proposed 2019 budget could basically be similar to the 2018 budget.As it was decided by the Standing Committee that the conference report and other reports should be published in the future only on the website, the respective layout costs should be listed in section 5, Information/Communication, and include the layout of Rapporteur reports. The interim report of the WG is listed in section 3.3.Since it cannot be excluded that in particular the costs for interpretation are rising and could exceed the plan, it is asked that the agreement is reiterated that unforeseen meeting costs, which might exceed original budget plan positions, can be covered by the unused means up to 10 % of the budget. In that case, it could be also discussed if other costs could be reduced.3.2.2 Result by Expenditure CategoriesThe distribution of expenditures by major categories appears in table 2 below:Table 2. Expenditures in 2018 by Major Categories, EURThe result for Travel meet the expectations, because there were so many meetings and events in 2018 all over the Baltic Sea region where the BSPC was expected to be present. The result for Meeting Costs similarly falls below budget, because they were more covered by hosting parliaments and other official hosts. Interpretation costs are above the budget, because it was needed for each Standing Committee and WG meeting. Costs for Information/Documentation are under budget. Extra Costs for the past conference 26th BSPC in Hamburg (4.5) are composed of the translation equipment, the Russian translation of the resolution and the layout for the report on the website.The overall disposition of the proposed 2019 budget could basically be similar to the 2018 budget.3.3 Balance in 2018The balance of the JFM in 2018, as of 31 December 2018, appears in table 3.Table 3. Balance of the JFM in 2018, EURThe Income column indicates the nominal income for 2018. The total actual result shows a deficiency of €3,263. This has been explained in the sections above.3.4 Unused meansThe principles for using the unused means (“Reserve Fund”) are laid down in the BSPC Rules of Procedure from 2011. The Rules state that “If additional resources are needed for organizing events, the Standing Committee, after receiving an application from the BSPC Secretary, shall decide on the possibility of granting additional funding”. Moreover, “The Standing Committee shall decide on the BSPC budget reserve fund and its use”.The BSPC Standing Committee has agreed (31 January 2013) on the following procedure for authorizing withdrawals from the Reserve Fund in accordance with certain provisions: A Rapporteur/BSPC member who wants to examine the possibility of using the Reserve Fund contacts the BSPC Secretary for deliberations. The Secretary then raises the issue with the BSPC Chairmanship, which approves of the use of the Reserve Fund. The Chairmanship and Secretary also reports to the Standing Committee about any uses of the Reserve Fund (cf. para 11.6 in the Rules of Procedure).The Standing Committee agreed in Mariehamn (17 November 2017) and in Hamburg (15 November 2016) that contributions do not have to be raised with a view to the next year because of the current surplus and that the same contributions as in previous years shall be paid. The Standing Committee in Riga (6 November 2015) agreed that the surplus could be used to develop a new website, draw up contracts to support the Secretariat with its work, special projects regarding the BSPC Silver Jubilee - i.e. a special brochure - and to cover unforeseen meeting costs, which might exceed original budget plan positions. The Standing Committee meetings in Liepāja and Riga (28 August 2016) agreed, that the unused means could be used to finance the mission to Minsk of the Standing Committee (~€10,000) and a 2nd edition of the Silver Jubilee brochure.In 2016, the funds of the JFM were transferred from the Nordea Bank account to the Landeszentralkasse Mecklenburg-Vorpommern, which administers the account. On 26 June 2015, €168,821 were transferred into the new account.The current amount of the unused means is mainly due to the exceptional situation that three years earlier no remuneration had to be paid for the secretary for one year and the state parliament of Mecklenburg-Vorpommern provided additional personnel support.On 31 December 2018 the amount of the unused means was €85,357.3.5 Summary of the Financial Result in 2018The total expenditure for the JFM in 2018, as of 31 December 2018, amounts to €195,224. This yields a total deficiency of the budget of €3,263, which will be covered from the unused means.In summary, it can be concluded that the predictions for 2018 had been adequately correct. There were some notable exceptions from this pattern, lower costs for the Standing Committee (2.), higher costs for the Working Group meetings (3.), higher costs for the Conference, mainly because of the invoice of the technical equipment of the 26th BSPC, which was mentioned in the financial report 2017 (4.), slightly higher costs have been incurred for the layout of the reports (5.). Total running costs were, however, all in all right on target.The overall disposition of the proposed 2019 budget could basically be similar to the 2018 budget.As it was decided by the Standing Committee, that the conference report and other reports should be published in the future only on the website, the respective layout costs should be listed in section 5, Information/Communication and include the layout of Rapporteur-reports. The interim-way report of the WG is listed in section 3.3.Since it cannot be excluded that in particular the costs for interpretation are rising and could exceed the plan, it is asked as in former years that the agreement is reiterated that unforeseen meeting costs, which might exceed original budget plan positions, can be covered by the unused means up to 10 % of the budget. This could also include special projects which need additional personnel support, for example to task again a political scientist for analyzing the implementation reports of the governments or - if this is wished again - for producing a short concluding “BSPC in a nutshell” - report in the end or right after the end of the conference as in the past 3 years or – as agreed by the Standing Committee – for policy analyses of surveys by the working group. In that case it could be also discussed, if other costs could be reduced.4. Proposed Budget Plan for 2019The proposed budget plan for 2019 is found in Annex 2. The proposal is based on the actual financial result for 2018 and considerations concerning relevant adjustments of the allocation on budget posts. See sections 3.2.1 and 3.2.2 above for comments.ANNEX 1BSPC Secretariat/31.12.2018Financial Result 2018 (Euro)*The concrete amount of all contributions is: 191 961 EURO*The detailed ratio of revenue to expenditure is as follows:195 224 EURO : 191 961 EURO = 101,69% (rounded: 102%)Unused means per 31 December 2018: €85,357ANNEX 2Budget Plan approved by the BSPC Standing Committee on 19 February 2019Proposed BSPC Budget Plan for 2019 (Euro)Budget Plan 2019 by Major Expenditure CategoriesANNEX 3Joint Financing Mechanism of the BSPC SecretariatRelative Shares of Contributions to the JFMThe relative cost shares of the contribution or the BSPC members to the JFM are listed below:*rounded”Baltic Sea Parliamentary ConferenceThe SecretariatApproved unanimously by the BSPC Standing Committee on 19 February 2019Financial Contributions to the BSPC Joint Financing Mechanism in 2018, in Euro | Financial Contributions to the BSPC Joint Financing Mechanism in 2018, in Euro | Financial Contributions to the BSPC Joint Financing Mechanism in 2018, in Euro“Big” Countries | Share | PaidDenmark | 17 968 | 17 968 (01.02.)Finland | 17 968 | 17 968 (01.02.)Germany (Bundestag) | 17 968 | 17 968 (31.01.)Norway | 17 968 | 17 968 (01.02.)Poland (Sejm + Senate) | 17 968 | 17 968 (12.02.+26.01.)Russia (Duma + Fed Council) | 17 968 | 17 968 (26.02.)Sweden | 17 968 | 17 968 (01.02.)“Small” CountriesEstonia | 5 989 | 5 989 (29.01.)Iceland | 5 989 | 5 989 (01.02.)Latvia | 5 989 | 5 989 (08.01.)Lithuania | 5 989 | 5 989 (02.01.)Regional ParliamentsBremen | 3 839 | 3 839 (26.01.)Faroe Islands | 3 839 | 3 839 (01.02.)Greenland | 3 839 | 3 839 (01.02.)Hamburg | 3 839 | 3 839 (05.02.)Kaliningrad | 3 839 | 3 839 (26.01.)Karelia | 3 839 | 3 839 (21.12.)Leningrad | 3 839 | 3 839 (27.06.)Mecklenburg-Vorpommern | 3 839 | 3 839 (05.03.)St Petersburg | 3 839 | 3 839 (19.01.)Schleswig-Holstein | 3 839 | 3 839 (01.02.)Åland Islands | 3 839 | 3 839 (01.02.)Sum | 191 961 | 191 961Category | Budget Posts | Budget 2018 | Q4 ResultTravel | 1.1 | 20000 | 19522Meeting Costs | 1.2, 2.1, 3.1, 4.1 | 25000 | 9968Interpretation | 2.2, 3.2, 4.2 | 51000 | 60388Documentation | 3.3, 4.3, 4.4, 5.2 | 11000 | 9320Information/Communication | 5.1 | 5000 | 5123Past conference costs | 4.5 | 10903Subtotal | 112000 | 115224Secretary | 6. | 80000 | 80000Sum total | 192000 | 195224Income | Expenditure | Balance191961 | 195224 | -3263Budget Post | Result 2017 | Budget2018 | Result as per 31.12.2018 | Comments1. Secretariat (3 meetings)1.1 Travel (Secretary) to all BSPC meetings plus other relevant meetings/events | 15719 | 20000 | 19522 (98%)1.2 Secretary Level meeting costs | 3171 | 2000 | 1850 (93%) | Berlin: 753Turku: 520Stockholm: 433SL Hamburg 2017: 144Subtotal | 18890 | 22000 | 21372 (97%)2. Standing Committee (4 + 1 meetings)2.1 Meeting costs | 5148 | 7000 | 1925 (28%) | Brussels: 1478Trondheim: 4472.2 Interpretation | 9036 | 8000 | 9212 (115%) | Nov 2017 Mariehamn: 210Koli: 4711Trondheim: 4291Subtotal | 14184 | 15000 | 11137 (74%)3. Working Group (3 meetings)3.1 Meeting costs, incl. extern experts | 6076 | 6000 | 2734 (46%) | Copenhagen3.2 Interpretation, incl. equipment | 6100 | 6000 | 8531 (142%) | Stockholm: 2327Copenhagen: 2146Kiel: 40583.3 Documentation | 1108 | - | 1041 | layout mid-way reportSubtotal | 13284 | 12000 | 12306 (103%)4. 27th BSPC, Mariehamn 20184.1 Meeting costs | 9075 | 10000 | 3459 (35%) | Experts; Policy Analysis 26th BSPC4.2 Interpretation + translations, incl. equip. | 33972 | 37000 | 42645 (115%) | Translations (34119) + equipment (8526)4.3 Conference report: Rapporteur | 2500 | 3000 | 2500 (83%)4.4 Conference report ENG and RUS | 3324 | 6000 | 2822 (47%) | Nutshell (write, print, layout)4.5 Past conference costs | - | - | 10903 | Costs for 26th BSPC:equipment translation 8674,layout report 1603, Russian translation resolution 626)Subtotal | 48871 | 56000 | 62329 (111%)5. Information/Communication5.1 BSPC website + other outreach | 10052 | 5000 | 5123 (102%) | Personnel & technical support, domain5.2 Layout of reports | 6560 | 2000 | 2957 (148%) | 5 layoutsSubtotal | 16612 | 7000 | 8080 (115%)Total Running Costs | 111841 | 112000 | 115224 (103%)6. BSPC Secretary | 80000 | 80000 | 80000 (100%) | RemunerationGrand Total | 191841 | 192000* | 195224 (102%)*Budget Post | Budget 2018 | Result2018 | Proposal2019 | Comment1. Secretariat (3 meetings)1.1 Travel (Secretary) to all BSPC meetings plus other relevant meetings/events | 20000 | 19522 | 200001.2 Secretary Level meeting costs | 2000 | 1850 | 2000Subtotal | 22000 | 21372 | 220002. Standing Committee (4 meetings)2.1 Meeting costs | 7000 | 1925 | 6000 | Some logistics; catering2.2 Interpretation | 8000 | 9212 | 9000 | 2 interpr ́s usually neededSubtotal | 15000 | 11137 | 150003. Working Group M&I (3 meetings)3.1 Meeting costs | 6000 | 2734 | 3000 | Incl external experts, study visits, catering, etc.3.2 Interpretation | 6000 | 8531 | 80003.3 Documentation and Expertise | - | 1041 | 3000 | For expertise and layout for websiteSubtotal | 12000 | 12306 | 140004. 28th BSPC, Oslo 20194.1 Meeting costs | 10000 | 3459 | 10000 | For experts as in former years and personnel support4.2 Interpretation + translations | 37000 | 42645 | 37000 | As in former years4.3 Conference report: Rapporteur | 3000 | 2500 | 30004.4 Conference report ENG | 6000 | 2822 | 4000 | Nutshell: personnel support, layout, print; Report: layout4.5 Past conference costs | - | 10903 | -Subtotal | 56000 | 62329 | 540005. Information/Communication5.1 BSPC website and other outreach | 5000 | 5123 | 5000 | Personnel and technical support, domain5.2 Layout of reports | 2000 | 2957 | 2000 | rapporteursSubtotal | 7000 | 8080 | 7000Total Running Costs | 112000 | 115224 | 1120006. BSPC Secretary | 80000 | 80000 | 80000 | RemunerationGrand Total | 192000 | 195224 | 192000Category | Budget Posts | Result 2018 | Nominal allocation 2019Travel | 1.1 | 19522 | 20000Meeting Costs | 1.2, 2.1, 3.1, 4.1 | 9968 | 21000Interpretation | 2.2, 3.2, 4.2 | 60388 | 54000Documentation and Expertise | 3.3, 4.3, 4.4, 5.2 | 9320 | 12000Information/Communication | 5.1 | 5123 | 5000Past conference costs | 4.5 | 10903 | -Subtotal | 115224 | 112000Secretary | 6 | 80000 | 80000Sum total | 195224 | 192000Member Parliament | Share %*DenmarkFinlandGermanyNorwayPolandRussiaSwedenEstoniaIcelandLatviaLithuaniaBremenFaroe IslandGreenlandHamburgKaliningradKareliaLeningradMecklenburg-VorpommernSt. PetersburgSchleswig-HolsteinÅland Islands | 9.369.369.369.369.369.369.363.123.123.123.122.002.002.002.002.002.002.002.002.002.002.00Total | 100.00