The development of the WHO Programme budget (PB) is launched, on average, about one year before the PB is approved by Member States, and approximately 1.5 years before the start of the biennium for which it is approved (See figure 1). It involves two major streams of work that are interrelated: the “programmatic” side, and the “budget costing” side.

Figure 1: High-level process of the WHO Programme budget (PB) development

The programmatic side of the WHO Programme budget focuses on reviewing and updating, as needed, the Impact goals, outcomes and outputs with their respective technical scope, deliverables and indicators for the upcoming biennium. The review is coordinated by the technical or managerial leads that have been designated for that purpose. This part of the process goes beyond the scope of this document, but needs to be mentioned as the programmatic results drive the development of the budget costing. 

The budget costing [1] side involves a mix of top-down decisions, decentralized costings at the budget centre level [2] and a high degree of coordination and interaction across the three levels of the Organization. All budget centres in Headquarters, Regional offices and all WHO Country offices, are solicited.  Prioritization of WHO programmatic results plays a key role in linking the programmatic side with the budgetary side of the Programme budget.  

The earliest step in the development of any Programme budget is to define the main strategic focus the new Programme budget will have. This usually takes place right after the WHA of year one in any given biennium (or 1.5 years before the new biennium starts). The Global Policy Group (GPG)3 and Senior Management within the WHO Secretariat are consulted on the general orientation for the Programme budget, and on main lessons learned, including arising challenges and priorities that need to be incorporated in the new Programme budget. Key to these consultations are responses to the following questions: 

The decisions resulting from responding to these questions allow - on the budget costing side - to define the first high level proposed overall budget envelope for the upcoming biennium and to propose an initial distribution across the seven Major offices of WHO. While not set in stone, this strategic budget setting establishes a guideline for the entire organization to work towards.  

The global process of prioritization is launched by the Director-General and may involve a joint launching with the Regional Directors of the six WHO Regional offices. The process of prioritization for the results of the Thirteenth General Programme of Work (GPW 13) were described in document A72/INF.2.  

While the establishment of indicative budget envelopes for bottom-up costing might seem counterintuitive, it has proven a good lesson learned. Not setting indicative envelopes has led in the past to unrealistic planning that might not be achievable in terms of financing or human resources capacities. Instead, budget centres are requested to plan ambitiously based on the needs faced, but also taking into consideration the best information they have in terms of corporate financing (see Box 2) and resource mobilization intelligence, human resources capacities, partnerships and other technical and managerial considerations.

Still, budget centres have a responsibility to determine where and how they will focus their work for the next biennium, based on the consultations they had with Member states and all other information gathered.  

WHO sees the costing process for the development of the Programme budget as the first major concerted strategic discussion that is held at each budget centre on the main actions and resources (human and financial) that will be required to deliver the goals that are being set for the next biennium. 

Given the time difference between the moment when the costing process takes place and the actual start of implementation -usually around 15 months before the start of the biennium, guidance is provided so the costing is performed at a higher level, focusing on the main deliverables that need to take place in the following biennium so an impact can be achieved. 

At the budget center level, the costing process of WHO consists of two major streams: activities, and workforce resources. 

Budget centres then distribute the cost of any given position among the outputs that this position contributes the most, so human resources are adequately reflected across the different outputs that the organization works on.  Budget centres will also consider non-staff resources (e.g. consultants) and their contribution to the programmatic deliverables and outputs.

The costing of workforce at this stage does not equal to an HR plan. Inclusion of staff or non-staff costs in this process does not guarantee an approval of creation of new positions; likewise, no decisions on specific positions or individuals are made at this stage. Instead, this process provides the three levels of the Organization with an idea on how much the workforce component will overall cost, and how workforce will be contributing to the different outputs and outcomes of the Programme budget.  Full workforce planning decisions are made and approved only once the Programme budget is approved by Member states and the Secretariat launches the process of “operational planning” (see below).

Once the costing of activities and workforce is finalized by each budget centre, the costing plans are submitted to the respective Major office. Each Major office aggregates all contributions, reviews the submission, requests changes if required, and adapt as needed, based on additional information on discussions held with Member states and executive management on regional priorities or any other strategic information at that level. 

Given that the budget by Major office is being planned from the bottom-up starting from the aggregation of all budget centres that conform that Major office, the resulting distribution of the budget across the outcomes and outputs proposed for the upcoming biennium might result in counter-intuitive trends -for example, a highly prioritized outcome for a given Major office that shows a reduction in budget (like the example presented in Box 2). Major offices may decide to adjust the budget to make sure priority outcomes demonstrate stable or positive budgetary trends, or may submit rationale to explain the reasoning for their costing. If changes occur between the submission provided by budget centres and the Major office to the global level, Major offices are responsible to provide feedback to budget centres so they make adjustments as necessary, during Operational Planning.

Similarly, the global level receives the submission by Major office levels and aggregates all information comparing the draft aggregated levels against current budget, prioritization results, as well as data and recommendations from consultations and other used to build the global budget. If the global level has a concern or change suggested for any Major office submission, this is usually discussed at once with the Major office. Major offices would record and adjust as needed and resubmit to the global level. 

Along this period, global level may organize several formal or informal consultations with Member states. The guidance and recommendations from consultations are incorporated as the draft Programme budget is being built and presented for Member states consideration in the upcoming formal or informal presentation. Further changes might be required prior to the approval of the Programme budget by Member states. If there are changes between submission by Major office and the final budget approved by Member states, global level is responsible for providing feedback to Major offices before operational planning. 

As mentioned in the introduction, parallel to the costing process, internal discussions take place to update and redefine the programmatic side as needed. Changes on the programmatic side may result in changes that affect the budgetary side. The global level is in charge to guarantee consistency between programmatic and budgetary side for the consolidated Programme budget. 

Following governing bodies statutory requirements, the draft Proposed programme budget is discussed by the Executive Board through its Programme, Budget and Administration Committee, that usually takes place at the end of January before the new biennium starts.  Any recommendation provided by Member states during these meetings are incorporated for the draft to be presented to WHA.  Depending on what was requested by Member states, Major offices may or may not be required to be involved at this stage.

After the WHA approves the Programme budget, the process of operational planning is launched. Operational planning usually starts around six months before the biennium starts. While operational planning goes beyond the scope of this document, it is important to recognize its linkage with the budget costing process, summarized as follows: 

• Operational planning starting point is the budget costing made by budget centres during the development of the Programme budget, and it expands on the level of detail required. Based on the scope of deliverables proposed during the costing period, this is the instance where detailed plans and activities are built, and where workforce plans are fully discussed and approved. 
• Since the Secretariat now has a fully approved budget, more controls are established and observed to make sure that the operational planning abides to budget amounts agreed with Member states.
• If there were changes between the submission of budget centres and the aggregation by Major office, or between the submissions from Major office and what global level finally presented to Member states, global and or Major office levels must feedback their respective lower levels on changes finally approved by Member states, so planning can happen in accordance with the latest approved budget amounts.

To allow for implementation to start, activity workplans and workforce plans are built in the WHO ERP system and approved internally according to the process and business procedures established by each Major office. This would conclude the operational planning process for a specific budget centre, which then would move to the implementation phase, preferably a few weeks before the biennium starts, so there is a smooth transition of activities between closure of the old and start of a new biennium.

[1] In WHO budget does not refer to actual funding. WHO's Programme budget translates General Programme of Work into the Organization’s strategic deliverables and budget requirements for a biennium; it sets out the details of what will be achieved and indicates the resources required for their achievement. Programme budget is a plan collectively agreed by the Secretariat and the Member states. 

[2] At the country office level, a Budget Centre is the country office. At Regional or Headquarters level, Budget Centres can be departments or divisions.