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Budget Results

Last Updated: March 22, 2021
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III. Budget Results - Fourth Quarter 2020

Approved Budget Modifications

The 2020 Budget Resolution delegated to the Chief Financial Officer (CFO) and selected other officials the authority to make certain modifications to the 2020 FDIC Operating Budget. The following budget reallocations were approved during the fourth quarter in accordance with the authority delegated by the Board of Directors:

  • In November, the CFO approved adjustments to the Ongoing Operations budgets of multiple organizations, as follows, resulting in a net increase of about $500,000 in the Corporate Unassigned contingency reserve for that budget component:

    • In conjunction with a periodic review by the Division of Finance, adjustments were made to align the Salaries and Compensation budgets of individual divisions and offices with their projected full-year salaries and benefits expenses and to add funding for the year-end accrual of projected 2020 employee bonus payments under the FDIC’s new Performance Management Program. Funding was also added to the Division of Risk Management Supervision (RMS) budget to cover expenses incurred under the leave buyback program for examiners. These adjustments resulted in a net increase of $6.9 million to the Salaries and Compensation budget at the corporate level.

    • A decrease of $8.0 million in the RMS Travel budget, consistent with pandemic-related travel restrictions implemented in early 2020. 

    • An increase of $600,000 in the Legal Division’s Outside Services-Personnel budget to provide funding for financial advisory services related to the establishment of the new Mission-Driven Bank Fund. 

  • As part of that same November budget adjustment, the CFO approved an increase of $833,715 in the Salaries and Compensation category of the Legal Division’s Receivership Funding budget to address unbudgeted overtime expenses, with a corresponding reduction in the Corporate Unassigned contingency reserve in that budget component.
  • In November, the CFO approved an increase of $85,000 in the Salaries and Compensation category of RMS’s Ongoing Operations budget to increase funding for employee awards. This increase was offset by a corresponding decrease in the Travel category of that budget.
  • In December, the CFO approved increases totaling $2,282,774 to the Salaries and Compensation budgets of multiple organizations in the Ongoing Operations budget component for possible increases in the funds available for 2020 employee performance bonuses. These increases were more than offset by decreases totaling $3,385,000 in the Travel budgets of the Division of Depositor and Consumer Protection (DCP), Division of Complex Institution Supervision & Resolution (CISR), and Corporate University (CU), with the balance reprogrammed to the Corporate Unassigned contingency reserve.
  • In December, the CFO also approved the reprogramming of funds from the Corporate Unassigned contingency reserve to increase the Division of Information Technology (DIT) total Ongoing Operations budget by a total of $14.3 million to address overspending and projected budget shortfalls in multiple expense categories.

Following these fourth quarter budget modifications, the balances in the Corporate Unassigned contingency reserves declined from $16,703,552 to $4,018,761 in the Ongoing Operations budget component and from $18,917,515 to $18,083,800 in the Receivership Funding budget component.

Approved Staffing Modificatons

The 2020 Budget Resolution delegated to the CFO the authority to modify approved 2020 staffing authorizations for the divisions and offices, as long as those modifications did not increase the total approved 2020 FDIC Operating Budget.

  • In October, the CFO approved an increase of six permanent positions in RMS’s 2020 staffing authorization for the new Communications and Training Section (as reported in the Third Quarter CFO Report, seven positions were approved in July 2020 to provide initial staffing for that section). 

Subsequent to this adjustment, authorized 2020 staffing for the Corporation totaled 5,728 (5,723 permanent and 5 non-permanent).

Spending Variances

Significant spending variances by major expense category and division/office are discussed below. Significant spending variances for the full year are defined as those that either (1) exceeded the annual budget for a major expense category or division/office; or (2) were under the annual budget for a major expense category or division/office by more than $5 million and represented more than five 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 totaled almost $1.8 billion, or 6 percent, below budget for 2020. There were significant spending variances in three expense categories:

  • Spending in the Travel expense category was under budget by $43.1 million, or 64 percent. The variance in the Travel expense category was primarily attributable to FDIC’s travel restrictions during mandatory telework, which suspended most business travel including travel related to onsite examinations, regulatory meetings, and in-person training. The variance primarily reflected underspending in RMS, DCP, CU, and CISR.
  • Spending in the Travel expense category was under budget by $43.1 million, or 64 percent. The variance in the Travel expense category was primarily attributable to FDIC’s travel restrictions during mandatory telework, which suspended most business travel including travel related to onsite examinations, regulatory meetings, and in-person training. The variance primarily reflected underspending in RMS, DCP, CU, and CISR.
    • Division of Administration (DOA) underspent its budget by $5.9 million due to reduced requirements for onsite support, delayed contract execution, limited onsite access by contractors due to mandatory telework, and challenges in filling contractor vacancies due to the pandemic.

    • FDiTech Lab underspent its budget by $3.8 million because of the delayed start of Rapid Phased Prototyping initiatives.

    • CISR underspent its budget by $3.3 million because of delays in initiating procurement actions to acquire executive search/leadership consulting advisory services and subject matter expertise to assist in developing bridge bank procedures, cross-border simulations, and resolution playbooks.

    • DIT underspent its budget by $3.0 million due to billing corrections, delays in various planned initiatives, and a decision to reduce contractor work hours in November and December to address budget concerns.

    • Division of Resolutions and Receiverships (DRR) underspent its budget by $2.0 million due to unfilled contractor positions for accounting services and a delay in awarding a new tax consulting contract.

    • CU underspent its budget by $1.8 million due to reduced requirements for in-classroom training facilitation and instructor-led training development during mandatory telework.

    • Office of Chief Information Security Officer underspent its budget by $1.6 million due to delayed contract awards and challenges in filling contractor vacancies.

    • DCP underspent its budget by $1.3 million due to reduced use of contractual services for MoneySmart.

    • The $4.0 million in unused Corporate Unassigned contingency funding also contributed to the total variance in this major expense category.

  • Spending in the Other Expenses category was under budget by $5.8 million, or 38 percent. The variance was attributable primarily to lower-than-expected utilization of professional learning accounts by employees in RMS, DCP, and the Legal Division and reduced expenses for supplies, materials, books and manuals during mandatory telework.

Receivership Funding

Overall spending for the Receivership Funding budget component was about $40.6 million, or 46 percent, below budget for 2020. There were significant spending variances in four major expense categories, including three in which the budget was overspent by small amounts.

  • Spending in the Outside Services – Personnel was under budget by $33.5 million, or 49 percent. Most of the variance ($18.0 million) was attributable to unused funding in the Corporate Unassigned contingency reserve. The remaining variance was primarily attributable to underspending for contractual services by the Legal Division ($12.3 million, or 47 percent of its budget) and DRR ($3.2 million, or 14 percent of its budget). The Legal Division’s underspending was largely the result of settlements, a decision to perform new professional liability investigations with FDIC staff, and delays in pending litigation due to the COVID-19 pandemic. DRR’s underspending was largely due to the smaller and relatively simpler bank failures that occurred during 2020 compared to planning estimates.
  • Spending in the Buildings and Leased Space expense category was over budget by $158,065, or 7 percent. The variance was mostly attributable to taxes and fees associated with the sale of a multi-million dollar owned real estate property.
  • Spending in the Equipment expense category was over budget by $2,130, or 25 percent. The variance was attributable to an accounting error that is being corrected.
  • Spending in the Other Expenses category was over budget by $147,139 or 13 percent. The variance was mostly attributable to receivership-related administrative and post-closing settlement expenses for 2019 and 2020 bank failures that were billed well after closing. These expenses were not accrued at closing because they were difficult to estimate accurately.

Office of Inspector General

There were three expense categories in which the Office of Inspector General (OIG) slightly overspent its corporate budget during 2020, creating reportable variances: Outside Services-Personnel ($12,762), Equipment ($14,233) and Outside Services-Other ($3,747). The OIG remained within its annual appropriation during both FY 2020 (October 2019 through September 2020) and the first quarter of FY 2021 (October 2020 through December 2020).

Significant Spending Variances by Division/Office 1

Eight organizations had significant spending variances through the end of fourth quarter.

  • RMS underspent its budget by $35.9 million, or 6 percent, primarily in the Travel, Other Expenses, and Outside Services – Personnel expense categories in the Ongoing Operations budget component. About $27.9 million reflected reduced travel expenses during mandatory telework. The underspending in the Other Expenses category was the result of lower-than-anticipated PLA participation and a tuition adjustment for FFIEC examiner training which was applied during the fourth quarter. The variance in the Outside Services-Personnel category resulted from suspension of the Cyber Threat Hunting project due to lack of access to the Sensitive Compartmented Information Facility (SCIF).
  • The Legal Division underspent its budget by $17.4 million, or 11 percent, primarily due to underspending of its Outside Services – Personnel budget in the Receivership Funding budget component because of the factors referenced above. Underspending in the Salaries and Compensation category in the Ongoing Operations component due to vacancies in budgeted positions also contributed to the overall variance.
  • DOA underspent its budget by $13.4 million, or 5 percent, mostly in four major expense categories in the Ongoing Operations budget component. Underspending in the Outside Services – Personnel expense category of $5.9 million, or 11 percent, was primarily due to reduced contractual expenses during mandatory telework, as explained above. Underspending in the Buildings and Lease Space expense category of $4.4 million, or 5 percent, was attributable to delayed execution of contracts for several headquarters and regional office building improvement projects and lower utility expenses due to limited onsite employee presence and lower equipment usage during mandatory telework. Underspending in the Equipment expense category of $2 million, or 8 percent, was due to delays in an upgrade of the Electronic Security System and the planned purchase of licenses for human resources application modules as well as reduced spending for corporate shuttles among FDIC buildings. Underspending in the Other Expenses category of $1.8 million, or 34 percent, was largely due to reduced expenses for supplies, materials, books, manuals and employee use of Professional Learning Accounts during mandatory telework.
  • DCP underspent its budget by $13.0 million, or 7 percent, primarily in the Travel, Outside Services – Personnel, and Other Expenses categories in the Ongoing Operations budget component. About $7.4 million of this variance reflected reduced travel expenses during mandatory telework. The remainder was the result of underspending of contractual services for MoneySmart and low utilization of the PLA training budget during the pandemic.
  • CISR underspent its budget by $8.5 million, or 10 percent, primarily in the Travel and Outside Services-Personnel expense categories in the Ongoing Operations budget component. The underspending for travel reflected the cancellation of planned international and domestic travel as a result of the COVID-19 pandemic. The underspending in the Outside Services – Personnel category ($3.3 million) was due to delays in initiating procurement actions to acquire executive search/leadership consulting advisory services and subject matter expertise to assist in developing bridge bank procedures, cross-border simulations, and resolution playbooks.
  • DRR underspent its budget by $8.4 million, or 6 percent of its budget. In the Receivership Funding budget component, DRR underspent in the Outside Services – Personnel expense category by $3.2 million largely due to the smaller size and relatively simpler bank failures that occurred during 2020. In the Ongoing Operations budget component, DRR underspent its Outside Services – Personnel budget by $2.0 million due to unfilled accounting services contractor positions and a delay in awarding a new tax consulting contract, and its Salaries and Compensation budget by $1.7 million due to higher-than-projected attrition and lower overtime expenses.
  • CU underspent its budget by $6.5 million, or 21 percent, primarily in the Travel and Outside Services– Personnel expense categories in the Ongoing Operations budget component. About $3.1 million of this amount reflected reduced travel during mandatory telework. Another $1.8 million resulted from reduced contractual expenses for in-classroom training facilitation and instructor-led training development during this period.
  • Among the Executive Support offices, the FDiTech Lab underspent its budget by $4.0 million, or 84 percent, due to delays in filling its authorized positions and the delayed start of Rapid Phased Prototyping initiatives.

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