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9.2 DFP Approval of Projects in Excess of Delegated Limits

9.2.1General guidance about DFP approval and delegation is given in Managing Public Money Northern Ireland (MPMNI) and is not repeated here. This section concentrates on approval and delegation specifically in relation to economic appraisals and business cases.
9.2.2Arrangements on the level of delegation from DFP are subject to agreement between Departments and DFP. The level of delegation will take account of past history of project management, and the current expertise in project management, as evidenced by documented client project management procedures and client training.
9.2.3DAO(DFP)06/05, issued to Departments on 6 April 2005, lists the current delegations and sets out the requirements for Departments to obtain prior DFP approval before making commitments to or incurring expenditure. Supply Officers can advise on the current delegations. They are generally expressed in terms of "total central government cost", but there are some differences in detail depending on the type of expenditure e.g. some delegations are expressed solely in terms of capital costs, while others include both capital and resource costs.
9.2.4Where a Department is proposing to introduce a new policy or programme of expenditure, prior DFP approval must be obtained before any relevant expenditure is incurred. DFP approval should be sought only after the sponsoring Department has considered the proposals thoroughly itself and granted formal approval to them.
9.2.5

Projects must not be split into separate components or phases in order to bring them below delegation limits and avoid submission to DFP. Expenditure incurred in this way will be regarded as irregular. Where expenditures or activities are linked together and the costs or benefits are mutually dependent, the proposal must be appraised as a whole and submitted to DFP accordingly. Examples of bad practice include:

  • Appraising purchases of capital items such as vehicles or computers separately from other directly related capital expenditures such as ancillary equipment, accommodation, installation or testing;
  • Splitting the roll out of ICT projects into phases to avoid exceeding delegation limits; and
  • Appraising building construction costs without taking account of associated spending on land purchase, infrastructure and works services, fitting out with equipment, security, staffing, maintenance and other operational costs.
9.2.6Where expenditure proposals exceed the Department's delegated limits, DFP Supply will act as the approving authority. The principles at 9.1 above will generally apply, but DFP would also emphasise the following additional points.
9.2.7

Where DFP approval of expenditure is required, none of the relevant expenditure should be committed, and none of the relevant works should commence, until DFP approval has been granted. When DFP's approval has not been sought, DFP will not generally grant retrospective approval in cases where the relevant expenditure has already been committed or project works have commenced.

MPMNI states that DFP may consider granting retrospective approval if it is satisfied that;

(a) it would have granted approval had it been approached properly in the first place; and

(b) the Department is taking steps to ensure that there is no recurrence.

DFP will generally interpret condition (a) to refer to a situation where a Department has already completed a business case to support the decision to spend, but has neglected to forward it to DFP for approval. Regarding condition (b), DFP will expect evidence that specific measures have been taken to ensure that the need to seek retrospective approval is not repeated.
9.2.8Submissions to DFP should be made at a stage early enough to permit dialogue on assumptions and methodology between DFP and the relevant Department; and to permit revision of business cases or re-appraisals to be undertaken where necessary. DFP reserves the right to withhold approval when there is inadequate time for the appropriate scrutinies and discussions to be undertaken.
9.2.9Submissions to DFP should normally be in the form of a suitable business case in accordance with Section 8 above. The general arrangements for DFP approval of business cases (SOCs, OBCs and FBCs) are as set out in Sections 8.5 to 8.7. DFP will continue to monitor the quality of submissions and will expect proposals to comply with the appropriate procedures and to be VFM and affordable.
9.2.10It is a function of Departmental economists to quality assure economic appraisals. Departments should consult their economists in all cases requiring DFP approval, and should take account of their views before submissions are made to DFP.

Read on to Standard Conditions of DFP Approval

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