2
2
3
B. Planning
B1.
B2.
B3.
B4.
B5.
4
4
5
5
6
6
7
8
8
9
10
10
14
15
15
16
17
18
19
19
20
21
22
24
D. Monitoring
D1.
D2.
D3.
D4.
D5.
D6.
D7.
D8.
D9.
D10.
D11.
D12.
26
26
27
27
28
28
28
28
31
31
31
31
Appendices
C1.
C2.
D1.
D2.
E1.
Definition of terms
Role of signatories
Investment appraisal tools
Investment appraisal narrative guidance
Project monitoring groups TORs
32
34
36
37
41
A1
Scope of Projects
These procedures are to be used for all major projects in the University including
capital and long-term maintenance projects within the University of Exeter which will
require appropriate approval to proceed. Therefore, all projects involving new build,
refurbishment or other building, grounds or estate related work and equipment,
irrespective of the funding source, should follow these procedures.
These procedures will therefore specifically include:
Definition of a Project
Major projects are those that cost in excess of 25,000.
Defining the distinction between ordinary operating activity and project activity can be
difficult but in general terms the definition of a project in the context of the University
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of Exeter is set out below, although the Infrastructure Coordination Group (ICG) is the
final arbiter in deeming whether something is a project or not.
Projects are defined as:
A group or portfolio of projects, which together achieve a set of defined objectives and
which are selected, planned and managed in a co-ordinated way are known as
Programmes. Whilst a programme may be submitted for consideration in a master
plan or strategy led exercise it may not be authorised for expenditure, only projects
may attain authorisation.
Projects may include sub-projects or specific work streams and these should be
authorised as part of a main project.
Where a series of projects are brought forward independently, it will be ICGs decision
as to whether these should be considered as one project. An example would be the
various elements of the Forum project.
A3
Maintenance
The only exception to the programme rule noted in the definition of a project is the
maintenance programme of the University, which will be authorised annually as a
programme so long as no single activity (capable of definition as a project by itself)
exceeds 200k. Where such items are included in the maintenance budget then they
will be authorised through the normal project authorisation route as set out in these
procedures.
Maintenance
Project value
>= 200K?
Follow Capital
Planning procedures:
obtain appropriate
authority.
Treat as part of
programme: no
further authority.
Normal reactive, cyclical and planned preventative maintenance budgets will be dealt
with through the revenue budget planning process.
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PLANNING
B1
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project. This approval is sought on the Project Proposal form, which will be submitted
to ICG.
B3
B4
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C1
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approvers (see Table 1, in C2), who will produce summary reports for consideration
by the ICG.
C2
Project
gross
expenditure
Authorisation
bands
From
To
25k
100k
200k
500k
2m+
100k
200k
500k
2m
From
To
25k
100k
200k
500k
2m+
100k
200k
500k
2m
Authorisation
Management approval /
initial screening
PCG
College / Service
funded projects
IT
Projects
Only
Yes
Yes
Yes
Yes
Yes
Infrastructure Fund
funded projects
IT
Projects
Only
Yes
Yes
Yes
Yes
Yes
Dean of
College
/ Head
of
Service
DVC or
Registrar
Yes
Yes
All Infrastructure
funded projects need
to be approved by
ICG for co-ordinating
purposes.
ICG
ISG
Council
For Info
For Info
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Table 1
NOTE on IT Projects: All IT projects need to be initiated through the Projects Office,
in Academic Services, using their procedures prior to proceeding to ICG, ISG and
Council. Contact the Project Office for details of their procedures.
IT projects earmarked in the Infrastructure Fund, can be authorised by the Project Coordination Group (PCG) up to a value of 200k, but still need to be sent to ICG for coordination.
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Project
Proposal
Form
Request for
Authority
form
Investment
Appraisal
Post project
appraisal
Project
Gross
expenditure
From
To
25k
200k
Yes
Yes
Basic
Basic
200k
1m
Yes
Yes
Limited
Limited
Yes
Yes
Full
Full
1m+
Table 2
The rationale for the different levels of appraisal work required for different sized
projects is one of cost / benefit.
In terms of the above levels of Investment Appraisal refer to Appendix D2 for
definition and content.
C3
Project Proposal form (PP) and Request for Authority form (RFA)
A Project Proposal form (PP) is a dual purpose document. It may be used simply to
gauge whether a project aligns with the Universitys overall strategy, in which case it
need not include detailed information of cost or funding, but is likely to be a high-level
indicator of the intended merits of undertaking the project. Secondly, the Project
Proposal form can be used to request authorisation for feasibility / appraisal funds.
In both cases Project Proposals must be submitted to the appropriate management
approver, per Table 1 in C2 above.
Once strategic fit is approved or feasibility studies are completed, a Request for
Authority Form (RFA) needs to be completed, giving a fuller description of the project
and seeking authorisation to proceed.
C4
It becomes foreseeable that the authorised budget for the project will vary by the
lower of 10% or 250,000 (or otherwise agreed in respect of projects in excess of
3m).
Where a project increases in value such that it crosses an authorisation band.
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It becomes foreseeable that the due completion date for the project will slip by 6
months or more after the critical completion date.
It becomes foreseeable that one or more of the key deliverables identified in the
original investment appraisal is no longer attainable to a material extent.
It becomes apparent that the risks of not achieving the project become materially
more onerous such as to jeopardise the prospect of achieving the project.
The authorising committee / body requires additional authorisation at some
milestone or event.
Elements of subjectivity exist with respect to the above. The Project Manager is
responsible for determining whether a project requires revised authorisation. In
addition, where a Project Group is required, the Project Group may require a Revised
Request for Authority form (RRFA).
In the event that a further authorisation is required then the RRFA needs to be
completed. This form can refer to the previously authorised RFA. The revised
documentation need only refer in detail to the revision that has led to the requirement
to seek a new authorisation.
Where revision is in respect of value and the increase in the value now puts the
project in a higher authorisation band, a RRFA needs to be completed for the new
value.
Where a RRFA is required work may continue on the project with the following
caveats:
Where an expected under spend exists on a project, if the Project Manager or Group
wishes to utilise the under spend on new related expenditure not included in the
original appraisal then a RRFA is required to obtain such authorisation. The
authorisation levels required for this are calculated by considering the incremental
spend that is required, but it should be noted that the ICG, or the appropriate
committee must authorise all such proposed incremental expenditures.
C5
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C6
The final project cost, which should be compared with both the latest authorised
amount and the original authorised amount. Explanations of all variances should
be noted.
The actual completion date of the implementation stage of the project, which
should be compared with the latest authorised completion date and the original
completion date. Explanations should be given for the variances.
The delivered key deliverables, which should be compared with the latest
authorised key deliverables and the original key deliverables. Explanations should
be given for significant variances.
Any lessons to be learnt from the project, and how these will be embedded in
future.
C7
C7.1
VCEG
The VCEG acts as the first screening of Project Proposals and Investment Appraisals
above 200k and ensures that they are sufficient to be progressed through the
authorisation route.
C7.2
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ICG need to receive all project proposals seeking advice regarding strategic fit and
will determine whether such PPs need to be forwarded to higher committees.
Although a project may be detailed in the Infrastructure fund, this does not preclude it
from following these authorisation routes.
Projects with a gross cost in excess of 500k will need recommendation for approval
from ICG before they proceed to the next stage of the approval process.
The role of the ICG can be divided into several distinct areas:
Planning (Refer to B2 and B5)
Monitoring (Refer to D12)
Checking
Coordinating
Authorising
Planning are projects committed to in the planning process coming forward for
authorisation as expected (timetable, funding requirements, key deliverables)?
Funding does the Infrastructure Fund have the resources expected, is it able to
sustain the current and expected levels of activity or are further resources
available such that projects rejected during the planning process may now be
included in the Infrastructure programme?
Monitoring are authorised projects progressing as expected, are they on time, to
budget and expected to provide the key deliverables, are revised authorisations
required, does the Project Manager need to explain performance?
Monitoring/planning is the phasing of resource use (especially funding) as
expected? Does the phasing need revisiting and what is the impact on the
Infrastructure Programme and the wider University?
Post project appraisal/evaluation what projects are coming up for review, what
conclusions can be drawn are the key deliverables being achieved?
Strategy is the overall Infrastructure Programme delivering the Universitys
strategy, in what areas is it over performing and where is it underperforming, and
how can this be addressed?
Fundraising what opportunities for fundraising are arising from the Infrastructure
Programme, are these opportunities being taken, and how is performance against
current fundraising initiatives?
Procurement are projects utilising the procurement tools of the University, both
on an individual project basis and as an overall Infrastructure Programme basis?
Reporting what matters need reporting to the VCEG and Council? Are they
being so reported?
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However, ICG will need to minute receipt of the appraisal and will, to assist in the
orderly management of the overall infrastructure programme, need to check the
documentation, ensure that adequate monitoring arrangements are in place, confirm
the projects status in the planning process and ensure the project is coordinated
alongside the remainder of the infrastructure programme.
When coordinating a project the ICG will consider:
Following its coordination role the ICG may instruct as to how and/or when a project is
implemented.
Does the project provide best value in the use of University resources?
Is the project consistent with the sponsoring colleges / services and the
Universitys strategic outputs?
Is the project documentation fully and properly completed?
Are resources (including funding and project team) available to see the project
through to completion?
Does the evaluation of the post implementation income and expenditure streams
indicate a sustainable future outcome for the project deliverables, the
college/service and the University?
Are the risks to the project adequately explained, considered and appropriate
management routes indicated?
Are the procurement routes properly considered?
The ICG has three possible options for action following the above considerations:
C7.3
Authorise a project.
Enter into dialogue with the Project Sponsor and Manager regarding the matters
of concern, and request a change to the proposed project or the project
documentation.
Reject a project.
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Planning are projects committed to in the planning process coming forward for
authorisation as expected (timetable, funding requirements, key deliverables)?
Funding does the Infrastructure Fund have the resources expected, is it able to
sustain the current and expected levels of activity or are further resources
available such that projects rejected during the planning process may now be
included in the Infrastructure programme.
Monitoring are authorised projects progressing as expected, are they on time, to
budget and expected to provide the key deliverables, are revised authorisations
required, does the Project Manager need to explain performance?
Monitoring / planning is the phasing of resource use (especially funding) as
expected? Does the phasing need revisiting and what is the impact on the
Infrastructure Programme and the wider University?
Post project appraisal / evaluation what projects are coming up for review, what
conclusions can be drawn and are the key deliverables being achieved?
Strategy is the overall Infrastructure Programme delivering the Universitys
strategy, in what areas is it over performing and where is it underperforming, and
how can this be addressed?
Fundraising what opportunities for fundraising are arising from the Infrastructure
Programme, are these opportunities being taken, and how is performance against
current fundraising initiatives?
Procurement are projects utilising the procurement tools of the University, both
on an individual project basis and as an overall Infrastructure Programme basis?
Reporting what matters need reporting to the VCEG and Council? Are they
being so reported?
Does the project provide best value in the use of University resources?
Is the project consistent with the sponsoring colleges / services and the
Universitys strategic outputs?
Is the funding and management capacity available to see the project through to
completion?
Is the project, including its impact, financially sustainable?
Are the project risks appropriately managed such that no material adverse
consequences may arise to the University?
Is the project consistent with the longer-term vision of both the Infrastructure and
the University Strategies?
The ISG has three possible options for action following the above considerations:
Authorise a project.
Refer the project back to the appropriate point in the process, highlighting the
matters of concern.
Reject a project.
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C7.4
Council
Council is the supreme governing body of the University. Council is responsible for
approving the University's budgets, forecasts and key strategies. As part of this
responsibility Council approves the Infrastructure Strategy and the Finance Strategy
which identify the University's investment priorities and the financial envelope for
infrastructure investment. Council monitors the delivery of its approved budgets,
forecasts and strategies to confirm that University resources are utilised in
accordance with its approvals.
In addition, all projects above the ISGs authority level of 2m need to be authorised
by Council.
Council when authorising a projects will consider:
Is the project consistent with the sponsoring colleges / services and the
Universitys strategic outputs?
Is the management capacity available to see the project through to completion?
Are the project risks appropriately managed such that no material adverse
consequences may arise to the University?
Is the project consistent with the longer-term vision of the University?
Other matters, as appropriate.
Council has three possible options for action following the above considerations:
Authorise a project.
Refer the project back to the appropriate point in the process, highlighting the
matters of concern.
Reject a project.
IT projects only
C7.5
C8
Procurement
All projects must comply with the Universitys Procurement Procedures.
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C9
C10
That following these procedures will lead to the adoption of best practice and
ensure that the University is complying with HEFCE guidance and the HEFCE
Financial Memorandum.
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All major projects need to be consistent with the Universitys overall strategy; this
process gives a methodology to check that projects are consistent.
Whilst the project may not be expected to require Infrastructure Fund monies if it
were to overspend then the Infrastructure Fund may become the funder of any
overspend.
By reviewing major projects at various levels opportunities arise for improvements
to be identified and incorporated into the project plans.
Any non-external funding will require University cash balances to satisfy external
contractors, this cash needs to be managed on a whole University basis. The
adoption of these procedures will provide a basis for good cash management.
Where a project is externally funded it is the University that will be legally
contracted. These procedures provide a route to advise the University of the
assets, liabilities and risks under the contract.
Thus, all self-funded schemes should follow the same procedural route as other
contracts using these procedures.
C11
Firstly, a project will need to indicate that on balance the overall impact is
beneficial to the colleges / services and Universitys strategic missions.
Secondly, as the University does not have sufficient resources to undertake all
projects that are beneficial to the University, it will be necessary to rank in order of
greatest to least benefit those projects that pass the beneficial test hurdle.
Other areas of these procedures identify the costs and risks of the proposed project.
The Project Sponsor and Project Manager need to identify the key deliverables and
the key indicators of success. The achievement of these will be assessed after the
completion of the project using the post project appraisal or post project evaluation
(for larger projects).
All projects have three core key indicators of success:
Did the project satisfactorily end at the planned project completion date?
Did the project use less than the originally identified net of implementation costs
and incomes?
Did the project achieve the identified key deliverables at the identified time?
The Request for Authorisation form (RFA) needs all of these to be specified. To
enable the Project Accountant to complete a thorough pre-screening of the
investment appraisal, all supporting calculations, spreadsheets and assumptions
should be submitted with the Project Proposal / Request for Authorisation /
Investment Appraisal.
A major projects achievement of the Universitys priority strategic key deliverables will
improve the prospects of a project achieving funding from the Infrastructure Fund,
although this does not exclude the prospect that other deliverables may also qualify a
project for funding. Other key deliverables are (for example):
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In addition it is likely that different teams will deliver different categories of work.
Where risky or uncertain work / activity is a material part of the cost estimate then the
appraisal should note how this work is to be undertaken and the additional
reassurance that can be placed on this category of work being delivered to the value
noted in the appraisal.
C12.2 Contingencies
Contingencies included within the gross expenditure should be identified.
C12.3 Implementation income external income
Where external income is a material component of the funding of a project it is
important to identify from whom the income is coming, what (if any) are the conditions
upon its receipt, the form such funding will take (e.g. cash, donation, in kind), the
risks to its receipt and the conditions which govern when it will be received.
Where external income is to come from more than one source each should be
considered separately. If dependencies exist between certain external income
sources then these should be highlighted (for instance if one donor will only give
match funding or if some funding by one party is dependent upon funding by another
party).
Where a source of external income is from fundraising it is important to note the
status of any fundraising initiative, e.g. have the monies been raised and received by
the University, is some of the total sum pledged but not as yet received, have some
monies yet to be raised? A table should be included in the appraisal setting out the
full position on the fundraising initiative.
C13
The impact of taxation should be included in costs and revenues, the most relevant
tax cost is expected to be VAT. Unless strong information to the contrary exists it
should be assumed that current taxation legislation, regulations and rates will remain
constant.
With respect to inflation the normal basis of calculation of operational costs and
income is to do all calculations at todays prices. Exceptions to this are noted in the
inflation section (C14).
A particular difficulty with operational cost and income is the length of time these
costs and revenues may be incurred, potentially over 20 or 30 years.
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Where costs and income are expected to experience a period of growth and then
remain static, the period of growth should be identified and, using best judgement and
historic experience, the costs and income should be included within the Option
Appraisal form under the appropriate heading.
Some costs and income are erratic in nature, for example lifecycle costs linked to the
maintenance of a building or specialist items of equipment. In such cases, where the
amounts involved may be material (where material is defined as where not allowing
for the inflation differential may lead to an incorrect decision to approve a project that
should otherwise have been rejected, or conversely a project that should have been
approved being rejected) best judgement and historic experience should be used to
reflect when these costs and income may crystallise and what their value will be at
that point. The estimated amount should be included within the Investment Appraisal
form under the correct heading and point in time. Care needs to be taken not to
double count costs already included on the Option Appraisal form.
C14
Inflation
Implementation costs and income may occur over several years, and operational
costs and income may very well be recurring in nature. Operational costs and income
may occur over the maximum 25 year period in the Option Appraisal form. These
operational costs and income should be calculated at todays prices, which are prices
that are not inflated. The discount rates used are on the assumption that no inflation
is included within the cash flow analyses.
The only time where some inflation may be included is where the different cost and
income cash flows will be subject to different inflation rates. For example construction
cost inflation may be materially different to those of pay. Materially in this context is
defined as where not to allow for this inflation differential may lead to an incorrect
decision to approve a project that should otherwise have been rejected, or conversely
a project that should have been approved being rejected. If such a situation
regarding inflation arises then you may either:
C15
Set a standard rate of inflation, probably the current RPI, and allow for inflation
only to the extent that it differs from this, and then only by the extent it differs from
this. The standard approved discount rates should be used in this situation; or
Apply actual inflation to all of the various components of the project cash flows.
This may mean that several different rates of inflation are required. These
different rates should be noted as assumptions in the appraisal narrative. If this
option is used then the discount rates used in the Option Appraisal form should be
increased by the current RPI.
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risk asset (e.g. building society account) and have more than 100 in one years
time.
Risk: in the option above if offered 100 now in repayment of a debt of that value,
or 200 in a years time, then, assuming the individual offering the money was
very trustworthy you may be inclined to accept the 200. Alternatively if the
individual was not trustworthy then you may be inclined to take the 100 now.
Whilst this is a very simplistic example it indicates that when assessing the value
of money over time we also assess the risks arising from the income source.
Discount rates endeavour to do this.
For projects between 0 and 30 years the risk free discount rate will be the Bank of
England base rate; the actual rate(s) used by the University do need to be higher than
this and the discount rate used to evaluate projects will be the risk free discount rate +
the RPIX.
For the purposes of the University capital procedures Council has agreed that three
main discount rates should apply to the University (the current rates are shown on the
Option Appraisal form):
Core activities.
Core activities are those related to mainstream teaching and research activities. It
is also to be used for infrastructure developments largely focussed developing the
mainstream teaching and research activities.
Other rates
For projects where the driver is to generate a surplus or where the risks are
significantly higher the project manager in association with the ICG will need to
agree a suitable discount rate. In these circumstances the investment appraisal
narrative should explain the choice of the rate and explain its suitability.
The current applicable rates are shown on the Option appraisal form within the
Project Authorisation Workbook.
C16
Reviewing alternatives
When considering how to achieve the objectives of a project several options may be
identified. Of these, some will be disregarded for a variety of financial and other
reasons. The remainder should be the subject of an appraisal to determine the
optimum method of attaining the projects goals.
It is important to bear in mind throughout this process that the ultimate objective of a
project is unlikely to be a new building or a new computer system, although this may
be an outcome. The objective of a project is to attain a goal that will assist in the
achievement of a strategic University, college or service objective. The developments
of a new software package, the construction or refurbishment of a building are
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Appraisal narrative
The appraisal narrative plan notes the item to be included. The objective of the
appraisal narrative is to allow ICG, ISG, VCEG, and Council to approve the
recommendations made in the appraisal and supporting documentation. To achieve
this it is important that the documentation needs to:
The groups are being asked to authorise a substantial amount of expenditure, they
need to be reassured that all options have been considered, all risks identified and
managed, and that the team identified is able to achieve the project deliverables to
time and budget. A long, badly written, rambling and incoherent appraisal will fail in
this regard.
The appraisal narrative plan repeats some issues (such as risk) several times. This
does not mean that the same narrative should be included at each point. For
example, in the executive summary a bullet point list of the key risks only may be
required, together with reassurance that they have been managed (assuming they
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have). In the initial investment section there is, again, reference to risks. Here the
approach may be to focus on just the initial investment risks and how they have been
resolved. Finally, in the key risks to the delivery of outputs section it may be decided
to refer only to the risks in delivery of the final projects objectives. When writing the
appraisal the appraisal narrative plan is designed to provide guidance and a broad
template. It does not need to be rigidly adhered to, but bear in mind it is the standard
template and will be what the above groups and committees are accustomed to
using. Therefore, serious consideration should be given to deviating from the
template, and this should be done only where there is sensible cause.
The following points are not mentioned in the appraisal narrative plan, but, where
relevant, these must be included in the narrative:
C18
Where a non-standard discount rate has been used. The rate used and the
reason for it should be noted.
If a full budget centre appraisal has been used rather than just looking at
incremental cash flows. Again, the reason for this should be noted together with
some additional information giving the authorisers of the project some indication
of the scale of the project alone.
All departures from the capital procedures need to be noted in the executive
summary and then commented on in more detail later in the appraisal. The
authorisers need to be reassured that the quality of the appraisal, and hence their
decision, has not been impaired by any such departures.
Where the option selected for approval by the authorisers is not the most
favourable NPV option the reason for this needs explaining. Where this is the
case, it needs noting in the executive summary.
Important risks in this context are risks that could lead to:
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The prospect that some or all of the key deliverables of the project may, to a
material extent, not be achieved or be achieved later than planned.
A material change is one which would have led to a change in the decision to
authorise the project had such an outcome (higher costs, longer period to complete
the project, fewer deliverables at the end of the project) been seen as a probable
outcome when the project commenced.
All risks or uncertainties, which have the potential to have a material impact, as
outlined above, need to be considered. Having concluded that they may have a
material impact the next issue to consider is how probable are they to occur. The
greater the prospect of a risk arising, the greater the need to consider the avoidance
or mitigating actions.
The table below notes the key decision points:
Impact
Probability
Action
Risk 1
High
High
Risk 2
High
Medium
Risk 3
Medium
High
Risk 4
High
Low
Risk 5
Low
High
Risk 6
Medium
Medium
Risk 7
Medium
Low
Risk 8
Low
Medium
Risk 9
Low
Low
The existence of risk when performing a project is inevitable. All actions and projects
involve risk. The key issue is how they are monitored and managed and what
changes can be made to the project plan to minimise the prospect of the key
deliverables being thrown off course by the risks.
All risk management exercises will involve changes to the way the project is
resourced or delivered or to the outcomes of the project.
With risks that need addressing one solution is to avoid the risk altogether. For
instance, if a risk exists such that the performance of a project may detrimentally
impact upon the normal term-time operations of the University, it may be possible to
avoid the risk by undertaking the project in the summer, or at night when normal
University operations are not ongoing.
In some instances it may not be possible to avoid a risk. The next consideration
should be how to mitigate a risk. Risk mitigation does not eliminate a risk. Mitigation
reduces the probability or reduces the impact of a risk.
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The above list is not exhaustive and project teams are encouraged to consider all
methods of managing risks.
Having identified a method of managing a risk, its impact on the project needs to be
considered. What are its resource / cost / time implications and impact on the project
deliverables? Is it the best solution? In some instances it may be better to live with
the high risk and introduce more rigorous monitoring: only using the proposed
solution if this indicates that the risk is likely to materialise.
C19
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The project manager should have the necessary project management skills to enable
them to discharge this function efficient and effectively.
The Project Manager is responsible for reporting the progress on the delivery of the
project to the ICG, via the Project Accountant in Finance Services.
User Representation / Client
In all projects the user needs to be involved in how the project is progressing and as a
point of contact in ensuring that complications arising during the implementation stage
of the project can be discussed. The user representative will be the custodian of the
project outputs and key deliverables. The user may comprise one representative or
more.
In addition any project activities that may cause disruption to the users operational
activities need to be discussed and communicated to them through the user
representative(s).
University Representation / Client
In larger, reputational, sensitive, or novel projects, a University representative will be
required. The University representative will be a member of the Vice Chancellors
Executive Group or their nominated Senior Management Group member.
The University representative will be responsible for ensuring that the key
deliverables identified in the project appraisal are achieved.
In addition any project activities that may cause disruption to the Universitys
operational activities need to be discussed and communicated through the University
representative.
Technical Expertise
Depending upon the nature of a project certain areas of technical expertise may be
required. The appraisers of a project need to be satisfied that appropriate technical
expertise exists within a project team to ensure that a project is capable of proficient
delivery.
It is possible that this will be acquired externally (for example quantity surveyors etc.),
but where such expertise exists within the University consideration should be given to
inviting these specialists on to the project team.
Where a project materially covers issues of University strategic significance, for
example the development of the Web or the development of learning spaces, then a
specialist from that area of the University should be invited to join the team. Similarly,
where a project involves building works a member of the Estates Development
Service team would be expected to be a technical specialist.
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MONITORING
D1
The main purpose of monitoring is to ensure delivery of the project outputs within the
agreed time and resource usage. Where variations to plans are identified through the
monitoring process, then either remedial action must be initiated to bring the plan
back on track, or the variations must be reported and approved through the
appropriate channel.
In addition to monitoring the individual project and its progress against plan, the
impact of the project in relation to relevant consolidated plans must also be
monitored. Consolidated plans will include the University capital programme, longterm maintenance plans and individual college or service plans.
The approved monitoring processes are designed to:
D2
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D3
D4
For IT projects, the PCG is responsible for undertaking the monitoring role of the
ICG and provide it with up to date reports on the performance of IT projects for
each ICG meeting.
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D5
Project code;
Project status (approval pending, approved, approved with variations, completed);
Date and minute number of approval;
Aptos account code;
Total approved expenditure budget;
Total external funding;
Total internal funding;
Frequency of monitoring required;
Date and amount of approved variations;
Date of last monitoring report received.
Financial management
The Project Manager must ensure that appropriate procedures are put in place to
manage financial aspects of the project. This will include preparing a detailed
breakdown of the project budget and the expected expenditure profile and
ensuring all financial commitments and contracts are recorded against the relevant
budget.
Actual project expenditure will be recorded in the Universitys main financial system,
and may be processed via an acceptable job costing system. Detailed financial
progress against plan may be collated in spreadsheets using data from either system.
However this data must be reconciled on a monthly basis to the balance on the
project code in Aptos.
To assist the reconciliation process, monthly transaction reports will be produced
each month by Finance Services and issued to individual project managers, together
with project balance reports, showing total expenditure to date against budget.
D7
D8
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Project reference.
Aptos code.
Project name.
Project sponsor.
Sponsoring college or service.
Project start date.
Project completion date.
Project variation limit.
Indicator as to whether a Revised Request for Authority (RRFA) is required.
Previous forecast.
Revised forecast.
Variance to previous forecast.
Actual to date.
Section 4 Commentary
This should include, as a minimum, comments on the following:
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Sponsoring college or service the name of the college or service that will benefit
from the project.
Project start date the date the project was expected to commence or the actual start
date.
Project completion date the date approved for completion updated for subsequent
forecast changes.
Project variation limit forecast project expenditure may vary by the lower of 250k or
10% of the approved expenditure budget (or as otherwise agreed by ICG) before a
revised request for authority is required.
Indicator as to whether a Revised Request for Authority is required this box will flag
YES if the forecast variance to budget exceeds the project variation limit.
Section 2
Approved budget the budget (expenditure, external and internal funding) approved
by the appropriate authorisation committee for the project, profiled by year of planned
expenditure, including any approved variations to budget.
Forecast variance to budget this will calculate automatically when details of the
latest forecast are completed in section 3 and will show the difference between the
approved budget and the latest forecast.
Liability for additional project resource when the project is approved, it will be
agreed who will be responsible for funding any additional resources. This box will
show the amount of additional funding required if there are variations against budget.
Section 3
Previous forecast details of the forecast completed in the previous monitoring
report, including unallocated contingency.
Revised forecast details of the latest revised forecast, including unallocated
contingency. This should be completed by the Project Manager after reviewing all
relevant information relating to the project and after discussion with the Project
Sponsor.
Variance to previous forecast this will calculate automatically and will show the
movement in forecast income and expenditure between the previous and the latest
forecast.
Actual to date actual expenditure and income to date, taken from the latest monthly
transaction and balance reports.
Section 4
The purpose of the commentary is to provide narrative explanation for any variances
in the financial plan, in the key deliverables, or in the timescale. Risks identified as the
project progresses should be highlighted, and the proposed action to mitigate these
risks detailed. It may be useful to build up the commentary over the lifetime of the
project, retaining the narrative from previous reports. This commentary will act as a
useful reference during the post project appraisal.
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D9
D10
Approval of variations
When a Revised Request for Authority has received approval the Project Manager
and Project Sponsor will be notified by Finance Services and the project status log
will be updated.
D11
D12
Individual project reports will be presented where there are particular issues to be
brought to the attention of the Infrastructure Coordination Group.
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Reference each project has a unique reference. A reference is provided by the Project
Accountant in Finance Services (email: Project-Accountant@ex.ac.uk) on receipt of the
completed Request for Authority (RFA) form.
College / Service / University Funding this is the balancing figure after accounting for all
gross expenditure and external income. It will represent the internal funding required of the
University. These could be from college or service reserves, from the Infrastructure Fund,
the Strategic Development Fund, or other sources internal to the University. It represents the
cash requirement that needs to be funded by the University.
Sponsoring college or service this is the name of the college or service that will benefit
from the delivery of the project post implementation, either directly or through the
achievement of a University-wide goal for which they are responsible.
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The specialist may be internal to the University (e.g. Estate Development Service (for
buildings or ground contracts) or Academic Services (for IT or network related contracts), or
external for issues such as tax advice or specialist buildings/facilities..
Before signing the Request for Authorisation (RFA) form the technical specialist should
ensure that the investment appraisal adequately reflects, in material areas, their views and
concerns.
Academic Services / Corporate Services
To subject both the Project Proposal and Request for Authorisation (RFA) forms to a
screening early on in the process. Appropriate departments from within each service will
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provide input and advice in the areas of feasibility, appointment of consultants, project
management and procurement.
Finance Services
To scrutinize all documentation and calculations relating to the project. The Project
Accountant needs to be satisfied that any matter contained therein has been appropriately
addressed, or is adequately commented upon before signing the Request for Authorisation
(RFA) form.
Head of College / Service
To sign the report if they are satisfied that the appraisal delivers the outputs they wish to
achieve within the correct timeframe and using the appropriate level of resource. They are
indicating their acceptance of the resource requirements on their budget centre and the
disruption and risks that may arise from its delivery, especially if they are accepting the
liability for overspends.
Finally they are agreeing to deliver their element of the outputs following the implementation
stage of the project.
Deputy Vice Chancellor / Registrar & Deputy Chief Executive (for projects in excess of the Head of
College Dean/ Director of Service limit)
To indicate their concurrence (as University managers) with the budget centre and noting
that they are satisfied that the project is in the strategic interest of the budget centre and the
University.
Vice Chancellors Executive Group (VCEG) (for projects in excess of the DVC / Registrar & Deputy Chiefs
Executive limit)
Any member of the Vice Chancellors Executive Group may sign to indicate that the project
appraisal has been considered by the Group and that the Group intends to champion the
investment appraisal through the authorisation process. The Group needs to satisfy itself that
the project represents the best use of the Universitys resources in achieving the strategic
goals and that funding is available for the delivery of the project.
In addition the Group needs to be comfortable that the documentation supplied is sufficient to
ensure the project will be authorised by subsequent Committees.
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200,000
The following are standard headings and prompts to aid the writing of the appraisal narrative.
They relate to limited and full appraisals only.
Note: The full appraisal narrative must comprehensively expand and discuss all
issues for consideration.
Scheme objectives:
What outputs and changes to existing outputs are expected from the project?
Quantities.
Timescales.
Locations.
Quality.
How are they in line with University/ College objectives?
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Initial investment:
Outline the initial investment plan to include in more detail for each distinct part of the
investment:
Main areas of work.
Timescales.
Costs.
Disruption.
The key risks (to the initial investment only as the detailed risks to the delivery of outputs of
the recommended option are to be included later in the appraisal).
Describe how each of the above will be managed and risks controlled or mitigated (note: risk
here relates to the initial investment only). Highlight residual risks and their potential impact
despite these mitigation methods and discuss sensitivities if costs, timescales and disruption
change on outputs of scheme.
Scheme financial / non-financial returns:
Differentiation between cash and non-cash items needs to be considered and defined.
The financial returns of the proposed scheme should:
Include the net present value and, if appropriate, internal rate of return.
Include the gross income and expenditure streams over the next 20 years (or other more
appropriate timeframe).
Differentiate between variable and fixed costs (and income streams).
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