III.
Budget Results - First Quarter 2013
Approved
Budget Modifications
The 2013 Budget Resolution delegated to the Chief Financial Officer (CFO) and selected other officials the authority to make certain modifications to the 2013 Corporate Operating Budget. The following budget reallocations were approved during the first quarter in accordance with the authority delegated by the Board of Directors.
In January 2013, various divisions and offices realigned their approved Ongoing Operations or Receivership Funding budget authority among expense categories. The most significant realignments of the Ongoing Operations budget component occurred within the CIO Council and the Division of Administration (DOA). The CIO Council reallocated slightly over $1 million from Outside Services – Personnel to the Equipment expense category, largely due to third-party hosting of application software and related hardware for several IT projects. DOA reallocated about $1 million from Buildings to the Equipment expense category to cover additional equipment needs identified after the annual budget was formulated. The Division of Information Technology (DIT) reallocated $223 thousand of its Receivership Funding budget authority from Equipment to the Outside Services – Other expense category to correctly account for telephone usage fees.
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, 2013, are defined as those that either (1) exceed the YTD budget by $3 million and represent more than five percent for a major expense category or total division/office budget; 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 ten percent of the major expense category or total division/office budget.
Significant
Spending Variances by Major Expense Category
Ongoing
Operations
There was a significant spending variance in only one major expense category during the first quarter in the Ongoing Operations component of the 2013 Corporate Operating Budget:
- Travel expenditures were $5 million, or 21 percent, less than budgeted. The Division of Risk Management Supervision (RMS) spent $3 million less than budgeted primarily due to a larger than expected number of field examiner vacancies and lower-than-projected travel costs per on-board examiner.
Receivership
Funding
The Receivership Funding component of the 2013 Corporate Operating Budget includes funding for expenses that are incurred in conjunction with institution failures and the management and disposition of the assets and liabilities of the ensuing receiverships, except for salary and benefits expenses for permanent employees assigned to the receivership management function.
There were significant spending variances in two of the seven major expense categories during the first quarter in the Receivership Funding component of the 2013 Corporate Operating Budget:
- Outside
Services - Personnel ($46 million, or 32 percent, less than
budgeted).
- Other Expenses ($7 million or 64 percent, less than budgeted).
The variance in the Outside Services – Personnel expense category was attributable to lower-than-budgeted contractual costs during the first quarter of 2013 due to fewer than projected bank closings, less costly resolutions and lower than anticipated asset management and marketing costs. The variance in the Other Expenses category was attributable to fewer bank failures and reduced time required to transfer failed institutions’ banking operations and dispose of failed bank assets.
Significant
Spending Variances by Division/Office1
Only one organization had a significant spending variance through the end of the first quarter:
- DRR spent $58 million, or 30 percent, less than budgeted, mostly due to less-than-budgeted spending for resolution and receivership management activities for the reasons noted above.
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1Information on division/office variances reflects variances in both the Corporate Operating and Investment Budgets.
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