Capital Projects Approval Protocol

Each Capital Project must be approved in accordance with the Capital Projects Approval Protocol (CPAP), with the support of the ‘Estates’/TSO function who also provide project administration, technical expertise and project management.

5.1.

Capital Projects Approval Bands

The ‘Capital Projects Approval Protocol’ sets out the specific criteria and requirements with regard to approval and management of capital projects within the specified value bands. Projects are divided into four different Bands which have incremental requirements. The four bands are;

(A) Projects less than €500,000

(B) Projects between €500,000 and €5,000,000

(C) Projects between €5,000,000 and €20,000,000

(D) Projects greater € 20,000,000

Details of these requirements can be obtained from the Capital Projects Approval Protocol The current version of this protocol was included in the Capital Programme/Plan as approved by the HSE Directorate.. The Capital Programme/Plan is currently being reviewed by the HSE following feedback from the DOHC and the Capital Approval Protocol may be amended in that context.

5.2.

Capital Projects; Financial Regulations

The general principles of the National Financial Regulations (such as balanced budgets, Sourcing options and Expenditure Approval, Receiving, Segregation of Duties) apply to all areas of Non pay spend including Capital Projects.

Budget holders are responsible for proposing and selection of Capital Projects. Each Capital Project must be approved in accordance with the Capital Projects Approval Protocol (CPAP), with the support of the ‘Estates’/TSO function who also provide project administration, technical expertise and project management.

The ‘Capital Projects Approval Protocol’N8 sets out the specific procedures to be followed in order to obtain approval for a Capital Projects, (refer to page84.), and establishment of related contracts/POs.

5.3.

Capital Projects Approval and Contract Approval.

Capital Projects/works expenditure approval and Contract/PO is governed by CPAP approval procedures rather than those for general procurement. However, if there is any uncertainty or where expenditure is made before a project has been approved then the general rules should apply (see Table 2, on page 52).

The Estates function is responsible for managing the approval of Capital Projects in accordance with four value thresholds (Bands) set out in the CPAP. They are also responsible for co- ordinating procurement of goods or services and putting in place a contract(s)/POs relating to that project i.e. sourcing, tender process and contract award.

Procurement/Tendering and award of Contract or Purchase Order may, depending on the project value occur either as part of the Project authorisation process or after the Project has been autorised, e.g. Band A - minor capital projects are normally approved before expenditure approval/contract is made whereas Band C projects require Tender reports is incorporated into the project approval process.

Example 1. – a Capital Project value € 6m is approved in accordance with CPAP . The approval of the project by HSE corporate requires that the tender is approved by HSE corporate before the project is authorised. A letter of authorisation is then provided.

Example 2. – A Capital Project value €450,000 that had been included in the list of minor projects in the capital plan is submitted by service pillar and is vetted and approved by the local Estates office. A letter of authorisation is issued. The tendering process for this expenditure can then commence and the contract is awarded by the Estates function.

Unless formal notification has been provided then the project should not be considered approved.

Project funding is not available until the project has been approved in accordance with the protocol and that approval is then notified to the relevant project manager and project sponsor. Notification must be provided by the Finance directorate (Chief Financial Officer or relevant Assistant National Director of Finance).

5.4.

Capital Projects; Main Requirements

Project Proposals

1. Each Capital project has to be fully appraised, evaluated, approved and notified. 2. The inclusion of a Capital Project in an approved Capital Programme/plan does not in

itself signify that the project has been authorised.

N 8

This Capital Projects Approval Protocol was prepared by the Estates/TSO Directorate included in the 2006 Capital Plan submission for approval by the HSE board.

Ver 4.0 12/20/2013 Page 46 of 133

Project approvals i.e. approvals to progress projects and eventually incur expenditure on same are needed for each individual project or group of projects and this requirement is separate to the capital plan.

3. Only fully costed Capital Project proposals are individually included in the approved budgeted Capital Programme/plan (Minor capital are grouped and totalled).

4. Any preliminary work carried out with regard to project evaluation or appraisal must be agreed in advance by the budget holder.

Project Approval and Authorisation to Commence

5. A Capital Project cannot be considered ‘approved’ and must not commence until formal notification of the project’s approval has been provided by the Finance Directorate.

6. All Capital funded projects and revenue funded capital projects with value greater than € 0.5m are appraised, evaluated, and approved in accordance with the Capital Projects Approval Protocol. This process is managed under the Estates directorate. 7. The future recurring revenue cost and WTE impact of each Project must be validated

and signed off by the relevant Assistant National Director of Finance or their nominee. Projects must be approved in advance of a contract/order being awarded. 8. Tendering procedures (including EU procedures) must be complied with.

9. Capital Projects with a contract value greater than €10m must be approved by the HSE Directorate.

Project Management and Report

10. Project Cost ‘Variations’ must be approved in accordance with the ‘Capital Projects Approval Protocol’.

5.5.

Controls within Capital Projects;

Independent Project evaluation and Appraisal

Certification of Work completed for construction contracts

Budget holder within service, Project management in Estates directorate. ii) Capital approval procedure

Specific Capital Projects approval procedures within predefined bands Full costing prepared, including future Revenue and Staffing commitments Cost Variation approval and reporting

iii) Sourcing of Goods/Services for Capital projects Tendering Process

Certification of Work completed for construction contracts iv) Project Management

Project Expenditure – monitoring and review