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Chief Financial Officer's (CFO) Report to the Board

III. Budget Results - Fourth Quarter 2016

Approved Budget Modifications

The 2016 Budget Resolution delegated to the Chief Financial Officer (CFO) and selected other officials the authority to make certain modifications to the 2016 FDIC Operating Budget.  The following budget reallocations were made during the fourth quarter in accordance with the authority delegated by the Board of Directors.  None of these modifications changed the total 2016 FDIC Operating Budget as approved by the Board in December 2015.

The net effect of these changes was to increase the DIT Ongoing Operations budget by a net of $1,179,647, with the following changes by major expense category:  Outside Services – Personnel ($1,729,651), Equipment (-$290,124), Outside Services – Other (-$690,000), Travel ($255,120), and Other Expenses ($175,000).

In addition, ISPS’s Ongoing Operations budget was increased by $250,000 to address a shortfall in ISPS’s “technical refresh” allowance, with additional funds for that purpose provided through internal reallocations within the ISPS budget.  These changes increased ISPS’s Equipment budget by $2.3 million, while reducing its Outside Services – Personnel budget by $2,050,000.

The amounts remaining within the Corporate Unassigned contingency reserves for the Ongoing Operations and Receivership Funding budget components were $13,285,893 and $27,536,513, respectively, following these reallocations. This unused budget authority lapsed at the end of the year.

Spending Variances

Significant spending variances by major expense category and division/office are discussed below.   Significant spending variances for the year ending December 31, 2016, are defined as those that either (a) exceed by any amount the annual budget for a major expense category or the total budget for a division or office, or (b) are under the annual budget for a major expense category or the budget for a division/office by an amount that exceeds $1 million and represents more than three 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 all major expense categories in the Ongoing Operations component of the 2016 FDIC Operating Budget:

Receivership Funding

The Receivership Funding component of the 2016 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.  There were significant spending variances in five of the seven major expense categories in the Receivership Funding component of the 2016 FDIC Operating Budget:

 Significant Spending Variances by Division/Office

Fourteen organizations had significant spending variances from their 2016 budgets: