Financials
Budget
Description
The approved budget is the culmination of all the approved STP funding requests and generally concluded at the RIBA Stage 5 Construction Stage funding reqest based on proposed Tender/Contract Sum and overall anticipated outturn cost for the project.
A high-level budget estimate can be useful in understanding the likely magnitude of cost of a proposed project within a +/- range to inform Senior Management and the Capital Planning process. This information may also influence if a project will or will not proceed to the Stage 1 Feasibility Stage.
Engagement
The Project Manager will coordinate with the appointed Cost Manager at the end of each design stage to calculate the estimated outturn cost to inform the likely budget. The Head of Cost Management holds a log of all funding approvals and can confirm the funding formally approved to date on your project. The Head of Cost Management and/or Projects Delivery Commercial Manager can assist with high-level budget estimating upon request prior to an external Cost Manager being appointed.
Forms & Links
Change Control (Inside Budget): F04a Change Control (Inside Budget)
Change Control (Outside Budget): F04b Change Control (Outside Budget)
Approvals & Compliance Review
The budget is agreed upon receipt and formal approval of an STP (Situation Target Proposal) document as part of the project approval process.
Change Control Forms (CCF's) will be required for any further funding additions/omissions and transfers of approved funding on projects.
Cost Plan & Cost Reports
Description
The Cost Plan is a structured, evolving document prepared by the external Cost Consultant that forecasts, allocates, and controls the total project sosts from inception to completion, ensuring the design aligns with the approved budget.
The Cost Report is a structure, regular (minimum monthly) update prepared by the external Cost Consultant that tracks actual expenditure against the approved budget. It outlines costs incurred to date, forecasts future costs, and highlights variances.
Engagement
The Project Manager will coordinate with the Design Team and appointed Cost Manager to ensure a Cost Plan/Cost Report is prepared and approved at the appropriate stages of design and construction. A Cost Plan is required at the end of each Design Stage, a Cost Report is required monthly (minimum) from commencement on site to completion. The Project Manager will provide the Cost Consultant with all the information required to ascertain Imperial direct costs in order for the total project cost to be monitored.
Approvals & Compliance Review
The Project Manager will review and confirm acceptance of Cost Plan/Cost Report. The Project Manager will also review and confirm acceptance of any significant differences from previously issued and accepted Cost Plans/Cost Reports. .
Repeated Subsequent RIBA Stages
RIBA Stage 1
Coordinate with the Design Team and Cost Manager to ensure an initial budget estimate, or number of estimates if options are being considered, are prepared and accepted from the feasibility design proposals.
RIBA Stage 2-4
Coordinate with the Design Team and Cost Manager to ensure a Cost Plan is prepared and accepted at the end of each Design Stage. Ensure that a pre-tender estimate is prepared at the end of Design Stage 4 and compared against the Stage 4 Cost Plan.
RIBA Stage 5
Coordinate with the Design Team and Cost Manager to ensure a cost report is prepared and accepted in an agreed format at specified intervals (minimum monthly). Cost Reports are to be provided until completion and if required/instructed, after completion until the end of defects date.
Cash Flow
Description
The term Cash Flow, when referred to as part of the Capital Project process refers to an analysis of when costs will be incurred and how much they will amount to during the life of the project. Cash Flow is for the value of the whole project, not just construction costs, forecast to the end of the project (no adjustment for retention is necessary). College Financial Years run from 1st August to 31st July. There is a need for improved Cash Flow forecasting to contribute towards improving the University's cash management and enable Senior Management to make future project decisions based on the most reliable set of information. Finance allocate University funds to a particular year based on the cashflow information. Therefore, if there is a potential change due to delays etc, they need to know; as this unutilised funding in the year could be reallocated for other projects and the phasing impacts on the following year's Capital Plan.
Engagement
The Project Manager will coordinate with the appointed Cost Manager to collate Cash Flow information as follows:
- Prepare quarterly Cash Flow updates on project budgets <£5m (month end of June, September, December and March).
- Prepare monthly updates and hold Cash Flow meetings with Finance on project budgets >£5m.
- Provide a brief explanation if Cash Flow deviates from the original Cash Flow.
Cash Flow reports to be issued to, and meetings held with, the Head of Cost Management and Capital Financial Accountant.
Forms & Links
Cash Flow Template: F04 Cost Template
Repeated Subsequent RIBA Stages
Project Managers to ensure that the Cash Flow is updated and issued in line with any revised and approved Cost Plan and subsequent Cost Reports.
VAT
Description
The University is entitled to claim certain VAT reliefs on capital building projects. Most of the time the University has to pay VAT on capital building projects, but sometimes it can recover part (and very occassional all) of this VAT from HM Revenue & Customs (HMRC).
Typicall, the University can recover 15% of the VAT incurred on mixed use projects, in which case the VAT burden is 17% of the net cost.
Engagement
The Project Manager must provide the Tax Team with detailed information e.ie STP/Design Stage Report etc, about what the project entails and how the finished building or refurbishment etc will be used by the department(s) occupying it because the extent to which VAT is recoverable will depend on the use of the building.
Approvals & Compliance Review
The Project Manager to request and receive email confirmation from the Tax Team (Head of Tax or Analyst in Finance Division) the appropriate Tax Rate for their project.