1. Capital Procedures 2017
Source: Marketing – Spring Lane Teaching Building

2. Content Capital Procedures overview What’s changed?
Project scope and definition
Project Pathway
Project appraisal and approval
Documentation
Approval limits
Committees and roles
Post Project Review
Capital Expenditure web pages
Questions

3. Overview The new Capital Procedures are designed to:
Assist in decision making for capital investment
Provide governance for the University’s capital investment
Provide clear guidance on how a project should be brought forward for consideration
Provide clear guidance on approval routes including documentation and approval limits.
Any project should have a clear link to one of the three key objectives of the University’s Strategic Plan:
To be a world leader in research
To offer outstanding teaching and learning
To offer all our students an outstanding and valuable experience

4. What’s changed? Capital Procedures Approval Documentation
Identify link to University Strategy
Role of Planning Committee
Inclusion in the CP is a marker – FULL approval is subsequently required
Expected project outputs specified at full approval stage
Re-approval required where expected outputs, time or cost materially change
Projects that fit the definition

5. Project Scope
The procedures are to be used for all major projects (the University and its subsidiaries) which fall within the limits set out below.
all projects involving new build, refurbishment or other building, grounds or estate related work
new information systems or major upgrades to existing systems
equipment
Values Limits
capital expenditure >£20k
equipment purchases where gross cost >
£200k externally research funded
£20k all other equipment
£20k all equipment where purchase of equipment requires infrastructure works
Revenue projects > £200k (falling within the limits above)
Finance leases > £20k
University making a cash or in kind contribution > £200k

6. Project Definition
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 of York is set out below.
Projects are defined as:
- Initiatives with a beginning and an end
- Having a determinable implementation period
- Having a determinable implementation cost
- Having measurable and pre-defined objectives / initiatives to achieve

7. Project pathway
Step 1
Project Identification - identify the need for the project
Step 2
Project Pre-Screening - Capital Accountant, Project Sponsor, the Development Team and other stakeholders to review options and feasibility costs. Project Proposal Form completed.
Step 3
Project Proposal Form (PPF) submitted to CMG and reviewed. If the form is properly completed the PPF will go to PC with a note commenting on whether funding is available in the Capital Programme.
Step 4
If external expenditure is required to enable a Request for Authority to be completed, a Pre Request for Authority (PRFA) should be submitted to CMG.
Request For Authority (RFA) submitted to CMG for review
Step 5
RFA submitted for approval to the appropriate body for authorisation, (project approval limits slide).
Step 6
Commence project once approval confirmed and documentation approved.
Step 7
Revised Request for Authority (RRFA) submission through the committees to the final approval body, where the project has varied from its original submission by the lower of £250,000 or 10% of the gross expenditure authorised, or the timetable, risks or outputs have materially changed.
Step 8
Post Implementation Review - Identify success and failures within the projects and lessons learnt for future projects.

8. Project Appraisal and Approval
How a project links to the University’s Strategic Plan will be the key driver for appraisal.
Any project submitted to CMG will require clear documentation linking it to the University’s Strategic Plan.
(Procedures Ref: C1)
There are four key documents which may be required during the lifecycle of the project:
Project Proposal form (PPF)
Pre Request for Authority (PRFA)
Request for Authority (RFA)
Revised Request for Authority (RRFA)

9. Project Proposal Form (PPF)
A Project Proposal Form is a high level document which is submitted to the Capital Accountant once a need for capital investment has been identified.
A PPF is the document which will be considered when prioritising projects and assessing the affordability of a project within the capital programme.
PPF Key points:
Completion by the project sponsor
Identifies link to University Strategy
Requires an estimation of capital investment, revenue income and future revenue costs
Identifies risks and uncertainties associated with the project
Capital Programme
PPF No.3
PPF No.1
PPF No.2

10. Project Proposal Form (PPF)
New projects for inclusion in the Capital Programme will be considered following the submission of a Project Proposal Form (PPF) to the Capital Accountant.
A PPF will be:
Presented at the next meeting of CMG (via Capital Accountant) where it will be reviewed for correct completion.
Reviewed by CMG to consider the funding requested in the PPF and assess whether it is affordable within the current capital allocation.
Submitted to PC with a note to whether it is affordable within the current capital allocation.
Considered by PC to determine if it is aligned with the University Strategy, such that it should be prioritised for funding.
5) PPF’s which have been properly completed, can be included within the Capital Programme’s allocated funding limit and PC consider a priority in comparison to alternate projects proposed will be included in the proposed Capital Programme to the Board.
- in the event of a fully committed Capital Programme, PC can recommend for inclusion through the removal of existing projects based on their assessment of the strategic needs of the University.
6) Where PC decides to remove, re-phase or reduce in scale a project, the Capital Accountant will advise the Project Sponsor of any such decision.

11. Project Proposal Form (PPF) continued
NO expenditure can be committed against a project until it has been included in the Capital Programme and has been approved through the various committees in the budget process or quarterly forecasts.
Thereafter any expenditure on a project can only be committed to once:
The project has received full Request for Authority (RFA) authorisation through these procedures or
A Pre-Request for Authority (PRFA) request has been submitted to and approved by CMG.
Further detail on the PPF can be found in section C3 of the procedures.

12. Process – PPF Pathway

13. Pre Request for Authority Form (PRFA)
The inclusion of a project in the Capital Programme does not allow any expenditure to be committed against it. Expenditure may only be committed against a project with an approved:
- Pre-Request for Authority (PRFA)
- Request for Authority (RFA)
The PRFA is designed to release funding for feasibility and preliminary works which will then enable more accurate costings to be included within the detailed RFA.
- It is not to progress the project to tender stage
Further detail on the PRFA can be found in section C3 of the procedures.

14. Pre Request for Authority Form
PRFA to Capital Accountant for check and review
CMG review PRFA and check the project is in line with the previously submitted PPF
CMG can then approve the PRFA and spend at the lower of £50k or 10% of the estimated project cost
Pre Request for Authority (PRFA) form Pathway

15. Request for Authority Form (RFA)
Academic Dept
Estates / IT
Finance
Research
The RFA form is the detailed document which is required to obtain full project approval.
The diagram opposite demonstrates the various sources that should be consulted during the preparation of a detailed RFA.
The RFA will identify (among other things) the costs, outputs and deliverables that the project will be reviewed against.

16. Request for Authority Form (RFA)
A Request for Authority (RFA) form must be submitted to CMG, following completion by the Capital Accountant in conjunction with:
the Project Manager, Project Steering Group (where in existence), the sponsoring department and other relevant stakeholders.
Depending on the value of the project, and in comparison to the amount held within the Capital Programme, the relevant committee can approve
The RFA is key to committing expenditure in the delivery of a project and the Capital Programme will be updated for the figures approved on the RFA. The performance of a project will be closely monitored against this and any subsequent revised RFA’s.

17. Request for Authority Form (RFA) continued
The RFA is crucial in setting out:
The total amount of capital expenditure phased over time
The total amount of capital grants and income phased over time
The expected outcomes of the project (incomes and expenditure)
The key strategic deliverables of the project
The key delivery milestones for the strategic outputs of the project
Key risks that may threaten the delivery of the strategic outputs of the project and how they are to be managed
Further detail on the RFA can be found in section C3 of the procedures.

18. Process – RFA Pathway

19. Revised Request for Authority Form (RRFA)
Movement in cost (lower of 10% or £250k)
Project cost increase taking it over a committee approval limit
Project funding declines
Delivery slippage by 3 months or more
Key deliverable no longer manageable
Requirements for an RRFA
Further detail on the RRFA can be found in section C4 of the procedures.

20. Revised Request for Authority Form (RRFA)
RRFA - Financial
Requirement for RRFA should be flagged immediately by Project Manager / Capital Accountant
The RRFA should be approved by the relevant committee
RRFA – Other deliverable identified in RFA
Requirement for RRFA should be flagged immediately by Project Manager / Capital Accountant
Where a Project Steering group is operating they can approve the RRFA, otherwise it should be as per a financial variation
The diagram opposite shows the way an RRFA should be approved.
Where an RRFA is required work on the project can continue providing financial commitment does not exceed the level approved on the original RFA.
Where an underspend occurs on a project that funding should return to the Capital Programme. If a PM or PSG wishes to utilise the underspend on items NOT included in the original scope then an RRFA is required.

21. Project Approval Limits
Value
Approval Persons/Body
£20,000 - £100,000
The Director of Estates and Campus Services AND one of the Finance Director or Deputy Finance Director
£100,001 - £1,000,000
One of the Vice Chancellor or Deputy Vice Chancellor and Provost AND the Registrar and Secretary AND one of the Finance Director or Deputy Finance Director
£1,000,001 - £4,000,000
University Executive Board (excluding novel projects*)
In excess of £4,000,001
Council (having been recommended for approval by FPC)

22. Key Committees and roles
Council (decision making)
FPC (advisory)
UEB (decision making)
Planning Committee (advisory)
Capital Management Group

23. Key outcomes delivered? Customer satisfaction?
Post Project Reviews
Post Project Review
Within Budget?
On time?
Key outcomes delivered?
Customer satisfaction?

24. Summary Planning and Project Identification Documentation and Approval
Key Deliverables
Project Review

25. Questions?
Source: Estates Development –Artist impression IPC Building