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Budget Results 0624

Budget Results - Second Quarter 2024

III. Budget Results - Second Quarter 2024

Approved Budget Modifications

The 2024 Budget Resolution delegated to the Chief Financial Officer (CFO) and selected other officials the authority to make certain modifications to the 2024 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:

  • The Salaries and Compensation budgets of individual divisions and offices were realigned in June to reflect updated projections of 2024 salaries and benefits expenses.  These adjustments did not change the total Salaries and Compensation budget at the corporate level, as increases for divisions and offices with projected shortfalls were fully offset by reductions in division and offices with projected surpluses.
  • The following mid-year adjustments were made in June to the Ongoing Operations and Receivership Funding budgets of individual divisions and offices (there was no change to the total FDIC budget in either component):
    • An increase of $1.7 million in the Ongoing Operations budget of the Division of Depositor and Consumer Protection (DCP). The budget for Outside Services-Personnel was increased by $1,029,462 for consumer affairs initiatives, including Money Smart and Bankable Moments, fair lending exam data support, and administrative operations support.  The budget for Travel was increased by $600,000 for employees to attend required anti-harassment training and training related to the use of new compliance technology software.  The budget for Outside Services-Other was increased by $73,523 for additional in-person consumer outreach.
    • An increase of $861,176 in the Ongoing Operations budget of the Office of Women and Minority Inclusion (OMWI).  The Outside Services-Personnel budget was increased by $500,210 to provide additional resources for investigations related to an increased number of Equal Employment Opportunity complaints and to address additional demand for sign language interpreter services and higher costs for speaker fees; and the Outside Services-Other category was increased by $360,966 to support enhanced outreach to minority and women investors and to minority- and women-owned businesses.
    • An increase of $200,000 in the Ongoing Operations budget of the Office of Risk Management and Internal Controls (ORMIC).  The Outside Services budget was increased by that amount to support the validation of additional models used for corporate decision making.
    • A decrease of $2.8 million in the Ongoing Operations budget of the Division of Risk Management Supervision (RMS).  The Outside Services-Personnel budget was reduced by that amount to reflect RMS’s decision not to pursue a contract to provide third-party support for risk management examinations on a contingent basis to supplement FDIC examination resources.
    • An increase of $5,440 in the Receivership Funding budget of the Division of Finance (DOF).  The Salaries and Compensation budget was increased by that amount to cover unbudgeted year-to-date overtime costs and potential overtime expenses later this year.  
    • A decrease of $6.9 million in the Receivership Funding budget of the Division of Information Technology (DIT).  The Outside Services-Personnel budget was reduced by $4.8 million to reflect a less-than-projected need for professional services under the FDIC Business Data Services (FBDS) Contract; and the Equipment budget was reduced by $2.1 million to reflect lower projected costs for external IT hosting services under the FBDS Contract.

Following these second quarter budget modifications, the balance in the Corporate Unassigned contingency reserve for the Ongoing Operations budget remains at $20.75 million.  The balance in the Corporate Unassigned contingency reserve for the Receivership Funding budget component increased to $132.4 million. 

Approved Staffing Modifications

The 2024 Budget Resolution delegated to the CFO the authority to approve changes to the 2024 staffing authorizations of divisions and offices, as long as those modifications do not increase the total approved 2024 FDIC Operating Budget.

In April the CFO approved the following modifications to 2024 staffing authorizations:

  • An increase of one permanent Supervisory Examiner (SE) position in RMS to reflect a correction to the 2024 span-of-control analysis that was completed earlier in the year.
  • The addition of 21 authorized non-permanent SE positions in the RMS territories to provide additional resources to train pre-commissioned examiners, subject to the requirement that those SEs spend most of their time coaching and training pre-commissioned or newly-commissioned examiners while participating in bank examinations either on-site at the bank or in field offices.

Subsequent to these second quarter adjustments, authorized 2024 staffing for the Corporation totaled 6,854 (6,493 permanent and 361 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, 2024, 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 $113.7 million, or 9 percent, below budget through the second quarter of 2024.  There were significant spending variances in three major expense categories:

  • Spending in the Outside Services – Personnel expense category was under budget by $21.0 million, or 10 percent. The variance was largely attributable to underspending in the following divisions and offices:
    • DIT underspent its YTD budget by $9.2 million, mostly in its budget for initiatives.  Significant project variances were related to delays in interagency projects, a temporary pause in a major project, and slow project starts.
    • The Division of Administration (DOA) underspent its YTD budget by $3.0 million, largely due to delays in awarding contracts for human resources and acquisition support, lower-than-planned contractor staffing for electronic Official Personnel Folder implementation, and underspending in special event support due to delays in implementing the Virtual Event Management Platform. The underspending also reflected a delay in the award of a contract for the San Francisco Regional Office Building Management System Cybersecurity Review and lower-than-planned spending to operate health units and fitness centers.
  • The Legal Division underspent its YTD budget by $2.8 million because of lower-than-projected expenses for outside counsel, due largely to slower-than-projected proceedings in one major litigation matter.
  • The Division of Resolutions and Receiverships (DRR) underspent its YTD budget by $2.2 million due to lower-than-anticipated expenses for Cyber Incident Response Advisory Services, Digital Assets Advisory Services, Closing Teams Support, Modeling and Analytics Services, and ORE Infrastructure Maintenance Fees.
  • Spending in the Buildings and Leased Space expense category was under budget by $13.4 million, or 23 percent, largely due to delayed contract awards and long lead times for receiving materials for planned improvements and major repairs at owned buildings; delays in beginning leasehold improvements for the Atlanta Regional Office expansion and Field Office modernization projects; slower-than-expected progress on minor repairs at owned buildings; and delayed receipt of deliverables from Architecture and Engineering vendors.
  • Spending in the Equipment category was under budget by $16.9 million, or 20 percent.  DOA underspent its YTD budget by $8.8 million, largely due to delays in space planning decisions for Headquarters, delayed delivery of furniture for Field Office Modernization, delays in acquiring online subscriptions for the FDIC library, and lower-than-expected maintenance costs for hiring software.  DIT underspent its YTD budget by $7.0 million ($6.1 million for continuing operations and $0.9 million for initiatives), primarily attributable to delays in expensing funds that were budgeted for use during the first six months of the year.

Receivership Funding

The Receivership Funding component of the 2024 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 Salaries and Compensation category was under budget by $12.5 million, or 58 percent, primarily due to vacancies in authorized non-permanent positions in DRR.
  • Spending in the Other Expenses category was under budget by $30.0 million. This was because the final settlement expenses paid to the acquiring institution by the Silicon Valley bridge bank receivership were substantially lower than the amount that was accrued for those expenses at the end of 2023.

Office of Inspector General

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

Significant Spending Variances by Division/Office1

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

  • DIT underspent its YTD budget by $23.4 million, or 10 percent, including $21.6 million in its Ongoing Operations budget and $1.7 million in its Receivership Funding budget.  The biggest contributors to the underspending in the Ongoing Operations budget component were underspending of $9.2 million in the Outside Services - Personnel expense category and $6.1 million in the Equipment expense category, as explained above; and underspending of $5.4 million in the Salaries and Compensation expense category due to a high number of vacancies in budgeted positions.  Underspending in the Receivership Funding budget component included $1.3 million in the Equipment expense category and $0.4 million in the Outside Services-Personnel expense category because of lower-than-projected expenses related to the 2023 bank failures.
  • DOA underspent its YTD budget by $29.6 million, or 16 percent. Most of the underspending occurred in DOA’s Ongoing Operations budget.  This included $3.0 million in the Outside Services-Personnel expense category, $13.3 million in the Buildings and Leased Space expense category, and $8.8 million in the Equipment expense category, for the reasons stated above. It also included $2.8 million in underspending in the Salaries and Compensation expense category due to vacancies in budgeted positions.
  • DRR underspent its YTD budget by $62.8 million, or 43 percent, including $14.4 million in its Ongoing Operations budget and $48.5 million in its Receivership Funding budget. The biggest contributor to the underspending in the Ongoing Operations budget component was lower-than-projected spending of $10.8 million in the Salaries and Compensation expense category due to vacancies in budgeted positions.  The underspending in the Receivership Funding budget component included $10.4 million in the Salaries and Compensation expense category due to the high number of vacancies in non-permanent positions, and $30.0 million in the Other Expenses category, as explained 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. 

Last Updated: September 17, 2024