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III.
Budget Results -
First Quarter 2006
Approved Budget Modifications
During the first quarter of 2006, three modifications were made to
the 2006 Corporate Operating Budget:
- The
Board of Directors increased the Ongoing Operations component
by $9,050,000 and authorized staffing was increased by two
positions for the implementation of the deposit insurance
reform legislation.
- The Chief
Financial Officer approved the reallocation of $3,319,957
within the Ongoing Operations component from
the Division of Information Technology (DIT) to Corporate-Unassigned
budget. The reduction in DIT’s operating budget was the
result of completion in late 2005 of the transition of maintenance
responsibilities for most application systems to the new Information
Technology Applications Services (ITAS) contractors. These
funds will remain available to meet unbudgeted funding requirements
that arise during the year, including the possible need for
additional funds for deposit insurance reform implementation.
The reallocation of these funds for such purposes will be reported
to the Board in accordance with the 2006 Budget resolution.
- Further
reallocation of the Corporate Operating Budget was made among
major expense categories within certain divisions in accordance
with the authority delegated by the Board to those division
directors.
Spending
Variances
Significant
spending variances by major expense category and division/office
are discussed below. Significant spending variances
for the three months ending March 31, 2006, are defined as those
that either (1) exceed the YTD budget by $3 million and represent
more than 5 percent for a major expense category or for a division/office;
or (2) are under the YTD budget for a major expense category
or division/office by an amount that exceeds $5 million and represents
more than 10 percent of the major expense category or total division/office
budget.
Significant
Spending Variances by Major Expense Category
Ongoing
Operations There
was only one major expense category in which a significant
spending variance occurred during the first quarter
in the Ongoing Operations component of the Corporate
Operating Budget:
- Outside
Services-Personnel expenditures were $8 million, or 24 percent,
less than budgeted, largely due to delays in
starting IT projects.
Receivership
Funding
There was one major expense category in which a significant
spending variance occurred during the first quarter in the
Receivership Funding component of the Corporate Operating Budget:
- Outside
Services-Personnel expenditures were $14 million, or 89 percent,
less than budgeted, primarily due to limited
receivership and resolution activity that occurred during the
quarter.
Significant
Spending Variances by Division/Office1
There were two organizations that had a significant spending
variance during the first quarter:
- The Division of Resolutions and Receiverships spent
$13 million, or 54 percent, less than budgeted. This was primarily
because spending for contractual services was $10 million less
than budgeted during the first quarter due to the low level
of resolution and receivership management workload.
- The Division of Information Technology spent $7
million, or 15 percent, less than budgeted, due to delays
in the start of certain IT projects.
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1Information
on division/office variances reflects variances in both the Corporate
Operating and Investment Budgets. |
