Public Spending Code: A. Expenditure under consideration
ICT Expenditure Approval Process
A.01 – 01
ICT Expenditure Approval Process
All ICT-related expenditure is subject to additional controls and approvals as set out in relevant Circulars1 and, in general, the prior approval of the Department of Public Expenditure and Reform is required in respect of all proposals that may result in ICT-related expenditure. Approval for such expenditure is a two stage process:
- Internal Approval (within the Sponsoring Organisation)
- Approval by the Department of Public Expenditure and Reform
1. Internal Approval (within the Sponsoring Organisation) Prior to seeking approval from the Department of Public Expenditure and Reform, organisations must ensure that the proposal has been approved at the appropriate management level within the organisation (and by a parent body if appropriate in respect of bodies under the aegis of another Department/Office) and that:
- the proposal complies with Government policy, supports the business priorities and fits within a current ICT Strategy for the organization;
- the Business Case has been established;
- the required levels of financial and human resources are available to the organisation so that it will be able to develop; implement and deploy/operationalise the initiative within agreed allocations. The availability of required once-off and recurring financial resources must be confirmed by the Finance Unit;
- the value for money aspects are established through an ex-ante evaluation, confirm that the expenditure is warranted and that the initiative will deliver a return on investment;
- stakeholder agreement has been obtained with regard to the functionality and use of the system and with regard to data integration/data sharing requirements with any third parties including any associated costs;
- the associated risks are acceptable and manageable. The risk assessment function should be formally assigned by the Accounting Officer, for example to the Internal Audit Unit or Risk Management Committee, as appropriate;
- project management and decision making structures have been established in line with the formal ICT Governance procedures for the organisation; and
- ownership and overall responsibility for the project has been assigned to an internal official
2. Approval by the Department of Public Expenditure and Reform The Department of Public Expenditure and Reform will make a decision on a request for approval of a proposal based on an overall assessment of the proposal and on the understanding that the sponsoring body has adhered to all of the prerequisites at 1 above. The Department or the sponsoring body may also seek to submit a proposal to the Peer Review Process as part of the approval consideration process. Generally, proposals can be submitted to Peer Review if they are technically difficult; or are expected to cost in excess of €5million; or are cross-agency in nature or are likely to stretch the resources of the sponsoring organisation. The Peer Review Process provides an independent view at key decision points in the lifecycle of a project including with regard to the Business Case; the Request for Proposals; the Evaluation of Proposals; the proposed contract; and post implementation. Consequently, the status of a project is reviewed at each key stage before progressing. In many cases approval from the Department of Public Expenditure and Reform will be conditional, for example, requiring the sponsoring body to revert for approval prior to signing a contract. In any event, approval from the Department of Public Expenditure and Reform to commence a project does not free the sponsoring body from complying with Government Policy; Irish and European legislation; Public Financial Procedures; etc.
Decision to Proceed
A final decision regarding the appropriateness or otherwise of a project can only be made by the sponsoring body following the evaluation of submissions in response to a request for proposals as the decision will take into account not only the total cost of the proposal but also the capacity of providers to deliver the business/functionality objectives; a demand on internal resources greater than was envisaged; an inability to link payments to tested and working deliverables; an unacceptable ‘lock-in’ to a provider; an inability to support or operate the system post implementation; an unacceptable level of risk or an unacceptable level of cost exposure which exceeds internal guidelines or that allowed by the Department of Public Expenditure; etc. If the sponsoring organisation decides that a project should proceed it must consider whether legal advice should be obtained from the State’s legal advisors with regard to the proposed contract, in particular, if there are potential significant risks or liabilities for the state.
The progress of ICT Projects and associated expenditure must be continuously monitored with regard to progress against the project management and deliverables schedule. Particular attention must be paid to the continuing cost-effectiveness of the selected approach/solution. In this context, a project that has been appropriately approved remains cost-effective if it maintains all of the functionality and usability required, and stays on time and in budget. Particular care must be exercised in order to ensure that payment procedures are not initiated where a liability has not matured for payment. Where there is a persistent or serious lessening of the cost-effectiveness of the approach/solution, the Project Board or ICT Steering Committee (as applicable) must develop a proposal to remedy the situation as quickly as possible. This proposed remedy must be agreed with the organisation’s Finance Unit (with respect to availability of resources), and approved by the top management of the organisation. The proposed remedy with certification of the internal approvals must be submitted to the Department of Public Expenditure and Reform which may require the proposed remedy to be varied.
Post Implementation Review
All projects should be subject to a post-implementation review, tailored according to the scale of the project, in order to assess whether the objectives identified at the outset were achieved; whether costs were in line with the original estimates and the signed contract; and whether the envisaged schedules were achieved. Particular effort should be taken to identify lessons learned that could be applied to future projects or to governance/project management arrangements.
Circulars1 – Department of Finance Circular 2/09 and Department of Finance Circular 2/11