6. 2008 and 2009 Budgets
WHEREAS JAFI has been forced to contend with three concurrent negative trends in the world economy: the weakening of the US dollar; the rise in inflation and the economic slowdown in the US; and
WHEREAS the deficit for budget year 2008 is expected to be between $20 and $30 million US, unless substantial steps are taken to reduce this shortfall, taking into consideration the difficulties involved in stopping programs that JAFI has already undertaken to implement in 2008; and
WHEREAS the projected budget deficit for 2009 assuming no reduction in expenditures is $45 million US; and
WHEREAS in order to properly deal with this projected budget deficit, it is now necessary to immediately take steps towards reducing the 2009 JAFI budget and to subsequently implement similar reductions in the 2008 budget;
Therefore be it resolved:
A. The 2009 Budget:
To take the following steps towards reducing the deficit for the 2009 budget:
1. The Executive shall receive, not later than by August 1, 2008, a comprehensive plan to increase income and cut expenses in 2009 as follows:
a) To increase income by $8.5 million US;
b) To reduce administration and make organizational changes amounting to $7.5 million US, after having received the recommendations of the JAFI Director General, which are to be submitted to the Chairman of the Executive by July 21, 2008;
c) To cut programs as determined on an organizational level in the amount of $16 million US;
d) To cut programs as determined on a departmental level in the amount of $13 million US, after having received the recommendations of the Departmental Committees of the Board of Governors regarding programs to be cut in their respective departmental activities, which are to be submitted by July 21, 2008, as follows –
o Aliya and Klita Department $6.2 million US
o Education Department $4.4 million US
o Israel Department $2.0 million US
o JAFI Projects $0.4 million US
2. The Executive may change the amounts listed for each of paragraphs 1 (a) to (c) above, provided that the amount in paragraph 1 (b) shall not be reduced, and provided that the recommended amount of reduction of deficit will, in total, not be less than $45 million US for the 2009 JAFI budget.
3. The Executive shall decide on its recommendations for expenditure reductions and income increases totaling $45 million, to be applied in the 2009 budget, by August 15, 2008, in order to maintain a balanced budget.
4. The Board of Governors will review and determine the 2009 budget at its meetings in November 2008, in accordance with regular budgetary procedure.
B. The 2008 Budget
In view of the above, to take the following steps towards reducing the deficit and applying financial restraint in the 2008 budget, as follows:
1. Once the Executive has made its decision on its recommendations for the 2009 budget as mentioned in Section A 3 above, the Finance Department, in coordination with the Departments, shall, where it determines that it is practical to do so, extrapolate the influence of the recommended 2009 budget cuts pertaining to Section A 1 (c) and (d) into the 2008 budget. As a result, an activity or program which is expected to be cut in 2009 will be terminated immediately in 2008, subject to existing contractual commitments.
2. Once the Executive has made its decision on its recommendations for the 2009 budget as mentioned in Section A 3 above, the JAFI Director General shall immediately start the application of the recommended 2009 expected budget cuts from adminstration reductions and organizational changes in relation to 2008.
3. All new transactions (contracts, orders etc.) are hereby frozen until the directions for the 2009 budget are approved by the Executive, as detailed in paragraph A 3 above. The Chairman of the Executive and the Treasurer, after consultation with the Director General, shall be entitled to extend the freeze until a subsequent date. The Director General, in consultation with the Chairman of the Executive shall create a mechanism enabling exceptions to this freeze.
4. The uncommitted funds in the 2008 budget are hereby to be reduced by 10%.
5. The Budget and Finance Committee will consider recommendations to be brought to the approval of the Board of Governors in November 2008, regarding steps to cover the remaining shortfall between the expected 2008 deficit and the savings resulting from the steps outlined in Section B 1 – 4 above.