Project Management of Capital Expenditure

Project management and capital expenditure go hand in hand. This is particularly pertinent across the public sector as the demands to allocate and manage budgets across a portfolio of projects are extremely challenging.

The Problem

The DEHLG oversee all water capital investment expenditure in the country. This includes items such as water schemes and sewage schemes. These schemes can typically range in value from €100,000 to €100m.

A typical example:  funding would be sought from the Department by the Local Authority for a €12m project.  The Department would fund €10m and the local authority would have to provide alternative budget sources for the remainder of the project costs.

Each of the individual local authorities throughout the country have their own financial management system, these are pre-dominantly Agresso and JD Edwards.  Financial expenditure reports are extracted from these systems by the administrative staff of the local authority.  These financial reports are then painstakingly “yellow marked” (highlighted) to pick out the relevant expenditures against a specific project (job code).  These are then entered into a claim form manually which in turn is sent to the Department to form a claim for recoupment of expenditure.  The Department staff then audit these expenditure claims and in some cases require a full on-site visit to validate the claim.

All project management and tracking of the project was in general handled by the engineering and paper based.  This was not very user friendly or efficient.

To summarise the key issues were:

• No clearly defined Project Management methodology or framework in place due to the paper-based methods employed
• No Project Management tools available
• Visibility of project plans were poor
• No automated system for validating claims
• Generating reports for managers, peers and Department was time consuming
• Speed of payment from the Department was slow because of errors in claims

For the Administration Staff:

• Querying of financial system was time consuming
• Several mis-categorisations of expenditure due to manual process
• Duplication of data entry employing manual methods in some cases
• Manual generation of claims to the Department
• Submission of claim forms to the Department is time consuming
• Clarification of claim forms to the Department could require several iterations of the claim forms

For the Department:

• Significant number of claims have errors requiring phone and email contacts – all time consuming
• Mis-categorisation of costs at the beginning of a project would cause claim and final account issues towards the end of the project
• Reporting at a nationwide level difficult and carried out manually
• Reconciliation of Final Accounts difficult and time consuming
• Approvals process for capital expenditure not visible enough to the users of the process
• Justifying payments made against project work implemented was difficult due to the paper-based nature of the project control process

Our Solution

Essentially, the solution incorporated the following key elements:

• ProjectVision – The core system would take care of all project management processes in a simple easy-to-use tool with a common framework for project management
• A financial module – which allowed interrogation of the financial management system (Agresso & JD Edwards) relating financial data to project data via a common job-code
• Standard ProjectVision Reports – for standard Programme and Project Management reporting
• Customised Reports and Claims – to automatically generate claim forms from the Local Authority to the Department, tracking each claim history and providing an audit trail of all claims.

Key to our successful delivery of this project were the following elements:

• Our knowledge of the Local Authority environment
• Our focused project management approach, incorporating regular Steering Group and Project Team meetings with constant communication to all stakeholders
• Our ability to take business requirements of both Local Authorities staff.  This included training, site preparation at multiple national training centres, co-ordination of the training programme for over 400 delegates, preparation of course material and manuals and the use of best practise “just in time” approach to end user training
• Constant validation of our project activities to ensure stakeholder buy-in
• Our proven product “ProjectVision” and the successful track record of this product in similar projects

To download a PDF of this Case Study please Click Here - DEHLG Water Case Study