Financial and Administrative Support

Highlights

In 2014, CIAT’s net assets increased to US$22.3 million (excluding capital invested in fixed assets), and daily operating expenses rose to $0.23 million, leading to a 7-day reduction in operating reserves (to 98 days), despite a surplus of $3.8 million.

By the end of 2014, the Center’s staff had grown to a total of 952 [1], including 128 expatriate staff members performing international functions and 824 national staff; 156 staff members were recruited, and 106 departed during the year.

We implemented a new benefit plan for Colombian staff, taking into account changes over the last 25 years in employees’ needs and national labor laws. More than 500 Colombian staff members are eligible for the modernized plan, which offers employees a unique portfolio of benefits to choose from, according to their needs and circumstances. The new plan is optional, and so far just under half of the eligible staff members have made the switch. We expect that over the next few years most staff not covered by the union contract will follow suit. The plan was developed with the help of Human Capital, a firm with strong expertise in human resource management and experience with benefit plans in Colombia and other Latin American countries. Benefit plans for staff in Africa were adjusted a year ago.

We actively supported restructuring of CIAT’s Asia Regional Office in Hanoi, Vietnam, including the creation of a small finance and administration team, which supports the regional director in his efforts to expand Center research for Asia in line with our new strategy. CIAT, as an international organization, is now close to being granted a hosting agreement by the Socialist Republic of Vietnam.

CIAT’s open water canal irrigation system – built over 40 years ago – was replaced with a closed pipeline system, which reduces water loss due to seepage and evaporation by 40-50%. Almost fully automated, the modern system also reduces labor costs. As a result, we expect to recover our investment of almost US$ 1.5 million within about 5 years.

As a participant in the CGIAR Consortium’s One Corporate System (OCS) inter-center initiative, CIAT began replacing its Oracle ERP platform with Agresso. The new system went “live” at Center headquarters and in our regional offices during January 2015 and will undergo further refinement and stabilizationthrough 2016. New modules will be created as well, including one for Human Resources Management.

We determined this year that CIAT will not be able to offset its global carbon footprint (8,400 tons of carbon) solely through activities at Center research stations, particularly since offset by means of established trees is not permitted and planting of new trees causes additional carbon generation during approximately the first 10 years. As a result, starting in 2015, the Center will need to invest in carbon offsetting projects in Africa and Latin America. Given that air travel accounts for nearly half of CIAT’s carbon output, we are considering a fee-based approach to cost recovery. At Center headquarters, we continued installing more energy-efficient equipment in line with our plan to make the Center carbon neutral within 3 years.

CIAT is negotiating a significant increase in the speed of its internet connection to accommodate increased use of video conferencing, social media, downloading and uploading of ever larger data sets, and additional demand due to off-site hosting of Agresso. In 2015, the Center will increase its internet access by a factor of four to five, reaching 200 megabytes per second, with the aim of increasing this to 1 gigabyte subsequently. We also significantly improved internet access in our regional and subregional offices. Continued improvement will be essential, as the use of mobile computing, cloud computing, and social media continues to increase.

[1]Excluding Interns and associate staff members.

Financial results for 2014

CIAT increased its revenues this year by 17% to US$133 million. Almost $8 million of this resulted from fully accounting for the activities of partners in HarvestPlus, as agreed with the International Food Policy Research Institute (IFPRI), which shares the coordination of this CGIAR initiative with CIAT. Our research execution reached $129 million.

Excluding the Harvest Plus adjustment, our revenues thus exceeded budget by 8%. A significant part of the surplus resulted from self-generated income (obtained through investments, fees, sale of assets, and farm operations), which amounted to $2.2 million and accounted for nearly 60% of the surplus.

CIAT managed the volatility of the Colombian peso by protecting the budget exchange rate with forward hedges. Our investments were at all times in full compliance with the investment policy approved by the Center’s Board of Trustees.

Partners in CCAFS, including CIAT, executed US$45.4 million in research, representing 99% of CCAFS funds disbursed from windows 1 and 2. The program’s total execution, including window 3 and bilateral funds, amounted to $69.5 million, giving an execution rate of 93%. CCAFS received 50% of its window 1 and 2 funds² during the last week of December 2014. CIAT, as lead center of CCAFS, disbursed funds to participating centers within a few days after receiving funds from the CGIAR Fund.

CIAT made progress toward the goal of reporting its Financial Statement under International Financial Reporting Standards (IFRS), putting the Center on track to achieve IFRS compliance by the end of 2015.

Statement of Activity
As of December 31, 2014 and 2013
(Expressed in thousand of US$)

	2014	2013
Window 1 & 2	74,495	68,939
Window 3	7,735	6,106
Bilateral	48,730	37,513
Total Grant Revenue	130,960	112,558
Other Revenue and Gains	2,203	1,730
Total Revenue and Gains	133,163	114,288

Research Expenses	120,746	102,390
General and Administration	9,307	9,451
Other Expenses and Losses	(711)	0
Total operating Expenses	129,342	111,841

Surplus (Deficit) for the Year	3,821	2,447

Statement of Financial Position
As of December 31, 2014 and 2013
(Expressed in thousand of US$)

	2014	2013
Current Assets	68,288	59,002
Non-Current Assets	26,386	26,178
Total Assets	94,674	85,180

Current Liabilities	60,456	53,959
Non-Current Liabilities	3,471	3,580
Total Liabilities	63,927	57,539

Undesignated Net Assets	20,862	17,123
Designated Net Assets	10,600	10,518
Temp. Net Assets - Other Comp. Income	(715)	0
Total Net Assets	30,747	27,640

Total Liabilities and Net Assets	94,674	85,179

Expenses by Function
As of December 31, 2014 and 2013
(Expressed in thousand of US$)

	2014	2013
Personel	34,378	31,883
CGIAR Collaboration	44,689	39,136
Other Collaboration	19,808	13,978
Supplies and Services	22,366	16,871
Travel	5,800	6,254
Cost Share Percentage	398	243
Depreciation	1,903	3,476
Total Operating Expenses	129,342	111,841

Financial Outlook for 2015

Changes in the Consortium Financing Plan for 2015 and 2016 have created considerable budget uncertainty. CIAT saw a reduction in its original Board-approved budget (US$134 million) of more than $12 million, of which nearly 40% will come directly from the Center’s own research budget, with the remainder representing a reduction in the budgets of CCAFS and the CRP on Agriculture for Nutrition and Health. Efforts are underway to compensate for the window 1 and 2 budget reduction through new bilateral projects and measures to lower operating costs.

Low prices for oil, coal, and other minerals are seriously undermining the Colombian economy. The government’s budget will be further squeezed, if as expected, peace negotiations continue to progress, creating significant demand for post-conflict investment. Against this background, we are negotiating in collaboration with the Colombian Corporation of Agricultural Research (Corpoica) the extension of two large initiatives with the country’s Ministry of Agriculture and Rural Development.

In planning a new state-of-the art genebank, we selected the concept design proposal from architecture firm Alejandro Echeverri & Valencia in Medellin, Colombia, and have begun developing detailed designs and work plans. A fundraising committee comprising national and international experts was formed this year, and final plans and a detailed budget are expected to be available by the end of 2015. CIAT’s Board of Trustee is providing oversight of this important initiative.