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Budget

Sacrifice rewarded

Foundation reconstitutes net worth and reestablishes financial health

FAPESP’s budgetary performance in the last two years – which required, at a given moment, the adoption of bitter measures, like the temporary constraint of expenses in foreign currency – has made possible the reconstitution of its net worth and the return to normality of the investments in the import of equipment and inputs for research, without jeopardizing support for scientific and technological research. The problems with the budget occurred mainly as a result of the swift rise of the dollar in the second half of 2002.

The US$ 60 million demand for funds for imports, the release of which had been suspended in July 2002, as a way out for facing up to the currency crisis, for example, were able to be gradually authorized from September of the same year, so as not to jeopardize the carrying out of projects under way. On October 31 this year, only 1% of this amount had not yet been disbursed, not for the unavailability of funds, but because the interested researchers had not sent the documentation for the consummation of the purchase, says the administrative director, Joaquim J. de Camargo Engler. Another indicator of financial normality in the external purchases is that of the new approvals for imports – granted between August 2002 and October 2004, and which add up to R$ 40 million – about 25% are still under way. The others have already been scheduled or await scheduling by the researchers. At the moment, there is  no restriction, for foreign currency reasons, on the imports of goods and services granted by FAPESP.

Financial surplus
In the same period, and as a consequence of a strategic programming of investments, the Foundation’s net worth, which had fallen into the range of R$ 500 million, in 2002, has returned to its historical level of R$ 700 million, according to Engler.  The recovery of the net financial worth was also significant: it increased from R$ 3 million, in 2002, to R$ 117.1 million in 2003. And by September 2004, it had already reached the mark of R$ 182.6 million. “We went from a deficit in relation to the real income of over R$ 50 million in 2002 to a surplus of R$ 89 million in 2003. This year, this amount should be surpassed and may reach R$ 90 million. By September, the recorded surplus was already in the region of R$ 79 million”, explains  Carlos Vogt, FAPESP’s president.

Having considerable wealth available is a condition for the Foundation to be able to comply, with regularity, with its task at moments of crisis, such as a fall of tax receipts or the dollar shooting up. The reconstitution of wealth and the financial surplus were possible with a “new model for managing resources” which made it possible to maintain the programs financed by the Foundation and to resume the contracted obligations that had been suspended in an emergency situation. The strategy was to regulate the system by the publication of regulations. “The first, by the way, was published in August 2002, in the middle of the foreign currency crisis”, Vogt recalls.

Prepared by the executive board and approved by the board of Trustees, the regulations constituted “a system of public norms, rules and procedures to make the system more efficient”, which ended up creating a new “culture” amongst the Foundation’s staff, as noted by FAPESP’s president. The new management model provides for the computerization of all the Foundation’s procedures, including the thousands of processes for scholarships, grants and research programs.

“Computerization imparts more agility, allows greater organization and planning, and also guarantees the decisions more visibility, because all the files will be accessible, preserving the levels of confidentiality”, he argues. The computerization process, started at the end of last year, will be ready in April next year. “All this has to be accompanied by an ample participation of the managers at systematic and periodic meetings with the Executive Board, where the Foundation’s policies are harmonized”, says Vogt.

Budget for 2005
Another proof of the Foundation’s financial health is its budget for the next year. The income forecast for the next year, R$ 487,353,030.00, will be 8.89% higher than in 2004. Of this total, 388.6 million corresponds to the transfers from the government of the State of São Paulo. The forecasts of the Secretariat for the Economy and Planning were drawn up following the expectation that the interest rates will slip back to levels close to 14% in the coming year. The amounts to be passed on by the state government are the equivalent to a 1% portion of the State Value-added tax (ICMS), as provided for in the state constitution.

Over 18% of the budget is made up of the Foundation’s capital revenues and financial investments, amongst other revenues of its own.  The revenues from property will be 10% higher in 2005, while those from financial investments will see a 15% reduction. The rest of the Foundation’s income, a little more than 1%, is made up of a contribution from the federal government. For the coming year, R$ 462,993,030.00 has been set aside for supporting research; of this total, R$ 74.3 million comes from FAPESP’s own revenues. The scholarships will be able to count on amounts identical to those of the current financial year: something around 39% of the budget for 2005. These amounts include the scholarships built into the modalities Young Researcher, Science Media, Technical Qualification, amongst others. In the total reckoning, R$ 33.9 million will be set aside for the 24 modalities of grants for research, an amount about 13.36% higher than the amount for the current financial year.

The budget for 2005 provides for an increase in the resources intended for the special programs – Young Researcher, Support for Infrastructure, Science Media, Technical Qualification, Public Teaching, amongst 12 programs -, which will be able to count on R$ 116 million, against the R$ 46.2 million of last year, and in the funds intended for programs for technological innovation, such as, for example, the Research, Innovation and Diffusion Centers (Cepids), Advanced Internet Development Information Technology (Tidia), FAP Books, and the Integrated State of São Paulo Hydrometrology System (Sihesp), amongst others. The disbursements for costs will be financed by the resources from own income.  “This has been a differential of FAPESP in relation to the other foundations”, he says. “We have maintained the financial health of the institution and a profitable net worth, in order to be able to supplement the budget”, Engler underscores.

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