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Budget Results

Last Updated: October 26, 2023
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III. Budget Results - Second Quarter 2023

Approved Budget Modifications

The 2023 Budget Resolution delegated to the Chief Financial Officer (CFO) and selected other officials the authority to make certain modifications to the 2023 FDIC Operating Budget. The following budget reallocations were approved by the CFO during the second quarter in accordance with the authority delegated by the Board of Directors:

  • In June, in conjunction with a periodic review by the Division of Finance (DOF), adjustments were made to align the Salaries and Compensation budgets of individual divisions and offices with their projected salaries and benefits expenses. These adjustments resulted in no net change to the Salaries and Compensation budget at the corporate level, as increases for individual divisions and offices with shortfalls were fully offset by reductions to division and office budgets with excess funding.
  • In June, in conjunction with the corporate-wide mid-year budget review, the following adjustments were made to the Ongoing Operations budgets of multiple divisions and offices, with no net change to the total budget for that budget component:

    • An increase of $5,492,976 in the budget for the Division of Resolutions and Receiverships (DRR). This included an increase of $281,100 in the Salaries and Compensation expense category for performance awards to recognize exceptional staff and management efforts responding to the three recent large bank failures; an increase of $56,424 in the Buildings expense category to enhance readiness within the environmental work stream; and an increase of $5,155,452 in the Outside Services – Personnel expense category to provide additional funding for digital assets/crypto advisory services, initial software configuration costs for the Joint Venture Transaction Program, and contractor teams available to ensure readiness and provide pre-resolution services.

    • An increase of $1,049,635 in the budget of the Office of Minority and Women Inclusion (OMWI). This included increases of $979,147 in the Outside Services – Personnel expense category to provide additional funding for the DEIA Strategic Plan, DEIA-related training development, and speaker’s fees; $54,000 in the Equipment expense category to provide funding for access to a new online learning platform; and $16,488 in the Other Expenses expense category to add funding for food services for the Chairman’s Diversity Advisory Council events.

    • An increase of $261,300 in the budget of the Division of Complex Institution Supervision and Resolution (CISR) to provide additional funding for performance awards to recognize exceptional staff and management efforts responding to the three recent large bank failures.

    • An increase of $229,542 in the budget for the Office of Risk Management and Internal Controls (ORMIC). This included increases of $20,171 in the Salaries and Compensation expense category for performance awards to recognize efforts related to the recent large bank failures; $204,371 in the Outside Services – Other expense category to provide additional funding for the Corporate Insurance Program; and $5,000 in the Other Expenses expense category to add funding for the reimbursement of employee professional membership fees.

    • An increase of $96,000 in the Salaries and Compensation budget of the DOF to provide additional funding for overtime and employee awards associated with the three recent large bank failures.

    • An increase of $10,000 in the budget of the Office of Ombudsman (OO) to provide additional funding for conference registration fees and other onsite engagements.

    • A net decrease of $6,170,742 in the budget of the Division of Risk Management Supervision (RMS). RMS’s budget in the Travel expense category was reduced by $6,358,742 in budget authority that was not used during the first half of the year. This reduction was partially offset by an increase of $188,000 in RMS’s Salaries and Compensation expense category to provide additional funding for performance awards to recognize the contributions of staff and managers to the heightened monitoring of insured institutions with elevated risk profiles following the three recent large bank failures.

    • A net decrease of $560,000 in the budget of the Legal Division. This included a decrease of $570,000 in the Outside Services-Personnel expense category to reflect delays in resolving pending litigation, and an increase of $10,000 in the Salaries and Compensation expense category to provide additional awards funding to recognize the efforts of employees related to the three recent large bank failures.

    • A decrease of $300,000 in the Outside Services–Personnel budget of the Division of Insurance and Research (DIR) to reflect changes in projected 2023 contract expenses.

    • A net reduction of $108,711 in the budget of the Office of Communications (OCOM), which included the realignment of funds among expense categories, as well as a decrease in the Outside Services-Personnel expense category due to the deferred acquisition of Digital Design Support Services. 
    • Realignments among major expense categories in the budgets of the Division of Information Technology (DIT), the Division of Administration (DOA), the Office of the Chief Information Officer, and the Executive Offices, with no net change to the total budget of each organization.

    • No funds were allocated during the second quarter from the Corporate Unassigned contingency reserve for the Ongoing Operations budget. The balance in that reserve remains $15 million.
  • The Board of Directors in May approved an increase of $750 million in the Receivership Funding budget component. During June, in accordance with the Board resolution approving that increase, the CFO approved the reprogramming of those funds to reflect updated estimates of the expenses expected to be incurred in each division during 2023, as follows:

    • An increase of $2,493,818 in the Legal Division’s Receivership Funding budget, including $2,000,000 in the Outside Services-Personnel expense category for increased litigation costs, $470,000 in the Travel expense category for failure-related travel, and $23,818 in the Salaries and Compensation expense category for overtime associated with the three recent large bank failures.

    • An increase of $2,347 in the Salaries and Compensation expense category of ORMIC’s Receivership Funding budget to provide funding for overtime expenses related to the three recent large bank failures.

    • An increase of $1,395 in the Outside Services-Personnel expense category of OCOM’s Receivership Funding budget for expenses incurred for internet support services in connection with the three recent large bank failures.

    • A reduction of $2,497,560 in DRR’s Receivership Funding budget, where those funds had originally been budgeted, to offset the increases itemized above.

Approved Staffing Modifications

The 2023 Budget Resolution delegated to the CFO the authority to modify approved 2023 staffing authorizations for divisions and offices, as long as those modifications do not increase the total approved 2023 FDIC Operating Budget.

  • In April, the CFO approved the following modifications to 2023 staffing authorizations:
    • An increase of 20 non-permanent positions in DRR to bring back into the workforce retirees who possess skills and experience that is needed immediately to assist with both the workload associated with increased failure activity and the training of newly hired staff. As a result, DRR’s 2023 total staffing authorization increased from 355 to 375 (355 permanent, 20 non-permanent).

    • An increase of one permanent Administrative Assistant position to assist with administrative workload in the Office of the Chief Operating Officer. The total staffing authorization of the Executive Offices increased from 30 to 31 permanent positions.

    • An increase of 19 permanent positions in DOA, mainly to support improvements to acquisition and contract oversight strategy and governance to address numerous audit finding and recommendations. The increase also included one position for DOA’s Administrative Services Group, which provides support to DOA, CU, and several executive and executive support offices. As a result, DOA’s 2023 authorized staffing level increased from 415 (414 permanent, 1 non-permanent) positions to 434 (433 permanent, 1 non-permanent) positions.

    • An increase of one non-permanent Product Manager position in RMS to represent the FDIC in the interagency project to develop a replacement for the Examination Tool Suite (with the Federal Reserve Board of Governors and Conference of State Bank Supervisors). As a result, RMS's total staffing authorized increased from 2,681 to 2,682 (2,554 permanent, 128 non-permanent).

  • In May, the CFO approved the following modifications to 2023 staffing authorizations:
    • An increase of one permanent position in RMS to restore the previously abolished position of Associate Director of Technology Services in the Operations Branch to enhance managerial oversight of mission-critical technology projects. As a result, RMS's total staffing authorization increased from 2,682 to 2,683 (2,555 permanent, 128 non-permanent).

    • An increase of three non-permanent Consumer Affairs Specialists and one non-permanent Senior Consumer Affairs Specialist in the Division of Depositor and Consumer Protection’s (DCP) National Center for Consumer and Depositor Assistance to address a substantial growth in the volume of deposit insurance inquiries and consumer complaints. These changes increased total authorized staffing in DCP from 874 to 878 positions (868 permanent and 10 non-permanent).

    Subsequent to these second quarter adjustments, authorized 2023 FDIC staffing totaled 6,374 (6,197 permanent and 177 non-permanent) positions.

Spending Variances

Significant spending variances by major expense category and division/office are discussed below. Significant spending variances for the quarter ending June 30, 2023, are defined as those that either (1) exceeded the YTD budget for a major expense category or division/office by more than $2 million and represented more than three percent of the major expense category or total division/office budget; or (2) were under the YTD budget for a major expense category or division/office by more than $10 million and represented more than 10 percent of the major expense category or total division/office budget.

Significant Spending Variances by Major Expense Category

Ongoing Operations

Overall spending for the Ongoing Operations budget component was $130.8 million, or 12 percent, below budget through the second quarter of 2023. There were significant spending variances in four major expense categories:

  • Spending in the Outside Services – Personnel expense category was under budget by $27.0 million, or 15 percent. The variance was largely attributable to underspending in the following divisions and offices:

    • DIT underspent its YTD budget by $10.7 million ($6.4 million for continuing operations and $4.3 million for non-recurring initiatives). Underspending was principally related to delays in awarding a major services contract, lower-than-projected spending on application enhancements, delays in contractor onboarding, and contractor turnover. Underspending on initiatives resulted primarily from late starts and contract delays for various projects. In conjunction with the mid-year budget review process, DIT reallocated unused funds among projects to address projected funding shortfalls for some projects and to fund some new project starts.

    • DOA underspent its YTD budget by $4.9 million largely due to lower-than-budgeted spending for HR operations support and delays in starting the Predictive Maintenance initiative and the Headquarters cybersecurity assessment project.

    • The Office of Communications (OCOM) underspent its year-to-date budget by roughly $4.0 million. This was mainly due to $3.7 million in underspending on the Deposit Insurance Awareness Campaign, which was delayed to adapt the campaign strategy to address increased public attention to deposit insurance after the three large bank failures in March and May.

    • The Office of Chief Information Security Officer (OCISO) underspent its YTD budget by $2.2 million due to higher-than-anticipated contractor turnover.
  • Spending in the Buildings and Leased Space expense category was under budget by $17.4 million, or 31 percent, primarily due to delayed starts to planned projects in Headquarters (HQ), the San Francisco Regional Office, and field offices; and a delay in awarding the HQ moving and storage contract.
  • Spending in the Equipment category was under budget by $26.3 million, or 30 percent. DIT underspent its budget by $18.0 million, primarily due to delays in executing hardware and software maintenance contracts and misalignment of the budget for subscription and software maintenance contract renewals. DOA underspent its budget by $6.9 million, primarily due to delays in Field Office modernization projects, the extension of HQ office space move timelines, and a delay in execution of a nationwide furniture contract.

Receivership Funding

The Receivership Funding component of the 2023 FDIC 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 and other expenses required to ensure readiness without regard to whether failures occur.

There were significant spending variances in two major expense categories through the end of the second quarter:

  • Spending in the Outside Services – Personnel category was under-budget by $19.6 million, or 17 percent. DRR’s $6.0 million variance was driven primarily by the timing of sales of retained assets, which are expected to increase in the second half of the year as large retained asset sale transactions occur. CISR’s $4.6 million variance was due to lower-than-anticipated pricing on its franchise marketing contract, and the Legal Division’s $6.0 million variance was due to lower-than-projected spending on one major litigation matter.
  • Spending in the Other Expenses category was under budget by $50.2 million, or 47 percent, primarily due to delays in finalizing settlement expenses for payroll, leave entitlement, and other administrative expenses for the three large bank failures that occurred in the first half of the year.

Office of Inspector General

There were no significant spending variances through the second quarter in the Office of Inspector General (OIG) budget component.

Significant Spending Variances by Division/Office1

There were four organizations with significant spending variances through the end of second quarter:

  • DIT underspent its YTD budget by $36.3 million, or 16 percent, primarily due to underspending in the Outside Services – Personnel and Equipment expense categories in its Ongoing Operations budget, as detailed above.
  • DOA underspent its YTD budget by $31.7 million, or 18 percent, primarily due to underspending in the Outside Services – Personnel, Buildings and Leased Space, and Equipment expense categories of its Ongoing Operations budget, as detailed above.
  • The Legal Division underspent its YTD budget by $11.7 million, or 14 percent, primarily due to underspending of $4.2 million in the Salaries and Compensation expense category of its Ongoing Operations budget due to a large number of vacancies in budgeted positions and $6.1 million in the Outside Services – Personnel expense category of its Receivership Funding budget, as detailed above.
  • DRR underspent its YTD budget by $61.3 million, or 27 percent, including $4.6 million in its Ongoing Operations budget and $56.7 million in its Receivership Funding budget. The biggest contributor to the underspending in the Ongoing Operations budget component was lower-than-budgeted spending of $2.3 million in the Salaries and Compensation expense category due to vacancies in budgeted positions. The underspending in the Receivership Funding budget component included $6.0 million in the Outside Services-Personnel expense category, and $50.0 million in the Other Expenses category, as detailed above.

1Information on division/office variances reflects variances in the FDIC Operating Budget and does not include variances related to approved multi-year investment projects.