Stag and Capital Bids in Indian Scenario

Transcription

1 SNH/01/4/Info2 CAPITAL INVESTMENT STRATEGY Summary 1. `This information papr provids an ovrviw of th critria and prioritis usd by Managmnt Tam in dtrmining SNH s annual capital programm, as rqustd by th Board at its last mting. Action 2. Th Board is invitd to not: (1) th capital programm dcision making procss; and (2) th rsultant outlin capital programm for Prparation of Papr 3. Staff in Financ Srvics and Ian Edglr, Dirctor of Corporat Srvics, hav prpard this papr. Background 4. In Novmbr 2000, SNH advisd th following provisional baslin for its capital programm in rspons at short notic to a Dpartmntal rqust: Forcast outturn Budgt Capital 1,800,000 2,700,000 xpnditur Capital -200, ,000 rcipts Total (nt) 1,600,000 2,500, Th actual capital outturn in was 2.148m (nt). Th diffrnc btwn forcast and actual outturn rflctd Managmnt Tam s approval in Q4 to incrasing th capital budgt to 2.1m. This was both a yar-nd budgt masur and in anticipation of mor rstrictiv budgt arrangmnts for th nxt yar. Ths wr rspondd to and agrd by th Board at its mting on 13 Fbruary From , changs to SNH s capital baslin rquir to b submittd for approval to Scottish Excutiv Financ. 1 C:\My Documnts\MainBoardpaprs\3july\014info2.DOC

2 6. At its 13 Fbruary mting, th Board ndorsd a provisional capital baslin of 2.5m (nt) for capital including a cor programm allocation of 2m (nt). 7. Th Dpartmnt s grant-in-aid lttr of 6 March 2001, following th Budgt Act, confirmd a capital budgt of 2.7m. It has sinc bn clarifid that this is 2.7m (gross) or 2.5m (nt of rcipts). Dcision-making procss 8. Th following stags illustrat th intrnal dcision-making procss usd to invit, sift, prioritis, considr and approv in outlin, capital bids. Stag on - inviting capital bids in th Oprational Planning round 9. Managmnt Units ar invitd to submit capital bids covring a thryar rolling programm undr th annual Oprational Planning xrcis. Invitably bids us bst stimats of cost. Ths can chang as bids progrss through approvals in principl, appraisal, tndring and contract prformanc. Bids ar rcordd, xcpt whr thy rlat to IT, whn a dpndncy is notd in th Unit s Planning rturn and followd up sparatly by IS Srvics for possibl inclusion in its Information Srvics Implmntation Programm (ISIP) submission to Managmnt Tam. Stag two initial sift for compltnss, accuracy and fit to SNH objctivs 10. All bids ar initially scrutinisd by Financ Srvics for accuracy and compltnss. Th dfinition of capital xpnditur can involv judgmnts. Annx A sts out th currnt working dfinition. 11. Bids for vhicls, land, and building projcts, covring both offics and NNRs, ar submittd to th Had of Common Srvics for initial considration. Bids rlating to NNRs ar also passd to th NNR String Group for rviw. 12. Financ Srvics idntifis carry forward projcts that hav not yt startd or rprsnt part yar costs for projcts spanning two financial yars. With th mphasis on a rolling programm to accommodat potntial projct slippag and cancllation, it is invitabl that a numbr of capital approvals will ithr not b takn up in th prvious financial yar or b work-in-progrss at 31 March. Ths projcts ar includd in th draft capital programm alongsid nw bids, onc it is confirmd that thy ar still viabl. Thy ffctivly rprsnt a prior-commitmnt of capital funds that is first call in th nw yar. Critria and prioritis 2 C:\My Documnts\MainBoardpaprs\3july\014info2.DOC

3 13. Common Srvics adviss on a list of approvd capital bids on accommodation and vhicls applying th critria st out in th approvd corporat stratgis for Accommodation and Vhicls,.g. halth and safty, ag and milag of vhicls. Procurmnt staff also advis on th valu for mony cas advancd for administrativ quipmnt bids such as photocopirs. 14. IS bids ar collctd indpndntly, catgorisd and assssd through th ISIP procss. This diffrntiats bids btwn initiativ roll out projcts, implmntation projcts, fasibility studis, and infrastructur projcts. A sparat Managmnt Tam papr is considrd at th sam mting as th balanc of th capital programm. 15. NNR capital bids ar submittd to th NNR String Group for commnt and considration. Bids ar prioritisd as follows: Priority 1 = projct carrid ovr Priority 2 = halth & safty issus for staff and th public Priority 3 = improvd NNR fit undr th NNR rviw Priority 4 = grning issus Priority 5 = othr bids. Th currnt classification of th Rsrvs is also indicatd, i.. rd, orang or grn, to inform MT of a Rsrv s status. Stag thr prparation of draft capital programm papr 16. A draft Managmnt Tam papr is prpard by Financ Srvics, including an annx of all individual capital bids and any commntary on thm. This cross-rfrs to th quivalnt ISIP papr. Stag four rviw by Dirctor of Corporat Srvics 17. Th draft paprs ar clard through th Dirctor of Corporat Srvics as sponsoring Dirctor. Stag fiv - submission to Managmnt Tam of draft capital programm and ISIP 2001/02 for approval in principl Stag six - submission to Board for information Stag svn formal issu by Financ Srvics of a Capital Approval Rfrnc 18. Upon rcipt of Managmnt Tam approvals in principl, Financ notifis th rlvant Budgt Managr, Administrator, and Projct Officr for ach projct. 19. In addition, Financ rtains a budgt contingncy of 100,000 for ad hoc minor bids in-yar. Also traditionally, som in-yar flxibility can b 3 C:\My Documnts\MainBoardpaprs\3july\014info2.DOC

4 rquird for possibl ractiv land acquisition via capital or grant xpnditur. Stag ight - Units initiat projcts obsrving businss procurmnt, and financial dlgation rquirmnts. cas, 20. Th final stag in th procss is th compltion of a suitabl option appraisal and its rviw and approval by an officr holding th corrct prsonal financial dlgation to authoris th commitmnt of SNH xpnditur. Subsqunt ordring or tndring activitis follows standard SNH procurmnt practic. Th capital programm is adjustd throughout th yar for diffrncs btwn stimatd and actual cost and rvisions to projct timtabls. This is managd by th Had of Financ Srvics and th Principal Financ Officr in lin with thir financial dlgations. Budgt ovr-commitmnt 21. By its vry natur, th capital programm will flx during th yar for a varity of factors. Thrfor, Managmnt Tam gnrally approvs, in principl, individual capital bids mor than baslin by up to 10%. Summary of capital bids and outlin approvals Th following ovrall rcommndations wr mad by Managmnt Tam against individual capital bids rviwd. This also includs bids submittd undr th dvlopmnt programms xrcis. Futur issus Expnditur sub-had Total valu of bids Valu of MT approvals C3 Frhold Land & 1,171, ,500 Buildings C5 Capital quipmnt & 471, ,900 vhicls C6 Capital r SNH 1,529, ,400 ownd NNR s C7 Computr quipmnt 907, ,000 Capital works-inprogrss 100, ,000 at y/ Corporat budgt minor 100, ,000 in yar bids Balanc of budgt hld 500, ,000 back for dvlopmnt programm approvals Capital rcipts (200,000) (200,000) Total (nt) 4,558,284 2,704, In viw of th Dpartmnt s timtabl for th Budgt Bill (Novmbr), it is intndd that futur capital programm xrciss should ithr b advancd within th oprational planning xrcis or pursud sparatly to an nd of Octobr timtabl. 4 C:\My Documnts\MainBoardpaprs\3july\014info2.DOC

5 24. Th Dpartmnts budgt prsntation in th Budgt Bill has also changd and now shows an SNH capital lin as a sparat control total. This mans that SNH no longr njoys an intrnal dlgation to vir budgt funds ithr into, or out, of capital as a potntial yar-nd budgt masur. A formal submission to th Dpartmnt would b rquird. Thr will clarly b rducd flxibility in managing th capital programm in futur. 25. SNH oprats an annual Efficincy Plan, which includs asst managmnt as an fficincy masur. Managmnt Tam has indicatd that potntial asst disposals should b capturd as part of th annual Fixd Asst Rgistr vrification xrcis undrtakn btwn Financ and Unit Managrs. 26. In futur, it is proposd to combin th ISIP and capital programm papr into on documnt to allow MT to considr thm togthr as on agnda itm. This would allow for fullr discussion and comparison of th rlativ cost / bnfits from diffrnt capital invstmnts within a fixd budgt baslin. Contact Andrw Lyll, Financ Srvics Jacki Barns, Financ srvics C:\My Documnts\MainBoardpaprs\3july\014info2.DOC

6 Annx A Dfining capital xpnditur in SNH 1. In SNH, w apply a common dfinition of capital for both budgt managmnt and in prparing our auditd annual accounts. Th Fixd Asst Rgistr rcords all capital transactions. Although th dfinition is th sam, th subsqunt accounting tratmnt diffrs for managing budgts (cash basis) and th annual accounts (accruals basis using dprciation and cost of capital chargs). 2. Th following tchnical dfinition of capital is usd in SNH in lin with th provisions of Financial Rporting Standard 15: Capital xpnditur is: VAT inclusiv (unlss HM C&E approvs rcovrabl tratmnt for a trading asst); ovr 1,000 pr individual invoic (invoics blow this amount will not b tratd as capital but chargd to othr xpnditur hads); and crats a tangibl fixd asst that is hld for us in discharging SNH s rmit, for rntal to othrs or administrativ purposs, on a continuing basis; only includs ligibl costs dirctly attributabl if matrial, i.. ovr capitalisation thrshold, to bringing an asst into working condition for its intndd us (.g. purchas cost, dlivry, installation and profssional fs); or that rprsnts subsqunt xpnditur which nhancs th conomic bnfits drivabl byond prviously assssd standard of prformanc, rplacs or rstors a sparatly idntifid componnt or that rprsnts a major inspction or ovrhaul rstoring th usful conomic lif of an asst. 3. It covrs land, buildings, computr hardwar and softwar, othr quipmnt, vhicls and fixturs, furnitur and fittings. All capital xpnditur, irrspctiv of whthr it is oprational (.g. NNR) or administrativ, should b chargd to th C had. 4. Capital rcipts, from th sal or part xchang of assts, ar codd to th C had and ffctivly rduc th cost of our capital programm. In th annual accounts th tratmnt is vry diffrnt and only th profit or loss on disposal is countd in th Incom and Expnditur Account. For spcific VAT rcovris on ligibl capital projcts, th accounting tratmnt is to nt any VAT rcovry off th cost of th capital asst. 6 C:\My Documnts\MainBoardpaprs\3july\014info2.DOC

7 ANNEX A Plas complt on form pr proposal CAPITAL EXPENDITURE PROPOSAL FORM Financ us only Thr Yar Priod 1 April 200_ to 31 March 200_ Managmnt Unit: Capital Approval Rfrnc Numbr Fixd Asst Job Cod Dscription and purpos of proposal: Consqunc of non approval / dfrral: Othr supporting information: TOTAL ESTIMATED PROJECT COST (ovr its whol lif) Expnditur Sub Had C3 Frhold Land and Buildings C4 Lashold Land and Buildings Financial Yar : 200_-200_ Financial Yar : 200_-200_ Financial Yar : 200_-200_ Estimatd Disposal Rsulting Rsulting Estimatd Disposal Rsulting Rsulting Estimatd Disposal Rsulting Rsulting Gross Procds/ Saving in Incras in Gross Procds/ Saving in Incras in Gross Procds/ Saving in Incras in Capital Part Rvnu Rvnu Capital Part Rvnu Rvnu Capital Part Rvnu Rvnu Expnditur Exchang Expnditur Expnditur Expnditur Exchang Expnditur Expnditur Expnditur Exchang Expnditur Expnditur C5 Capital Equipmnt (xcl. NNRs) C6 Capital rlatd to SNH ownd NNRs C7 Computr Equipmnt CZ Capital Rcipts TOTALS C:\My Documnts\MainBoardpaprs\3july\014info2.DOC