Financial consulting & public sector decision support

Public Spending Code 2019 (PSC) issued by the Department of Public Expenditure and Reform (DPER), sets out guidance for government departments. 

The PSC identifies six stages in the project lifecycle:

1. Strategic assessment
2. Preliminary business case
3. Final business case (including design, procurement strategy and tendering)
4. Implementation
5. Review
6. Ex-post evaluation

Our expertise and experience in completing cost effectiveness analysis and cost benefit analysis allows us to support clients through each of the stages; from the strategic assessment report, to the preliminary business case and the final business case, right through to the project completion report, post project review and the value for money report (VFM).

Strategic assessment report

The output of the strategic assessment stage is the strategic assessment report (SAR). The report details the following for each project:

• Investment rationale
• Project objectives
• Strategic alignment with government policy – in particular the National Planning Framework and National Development plan
• Preliminary demand analysis
• The long list of potential options
• The potential range of costs involved, both financial and economic
• An assessment of affordability in the context of available resources (including the medium-term capital envelope in the case of exchequer funded proposals
• An identification of risks
• A framework for determining key performance indicators for the proposed intervention such as a logic path model
• An appraisal plan
• An outline governance plan

Business case

The business case process is iterative and should be viewed as both a process and a product. In the event that a proposed project progresses through the lifecycle stages, the business case should be updated continuously as new information becomes available.

The business case will therefore inform key decisions for the Approving Authority at various points of the project lifecycle.

The Business Case for the project should include the following elements:

• Confirmation of the strategic relevance of the proposal and detailed specification of the objective of the proposal
• Description of the short-list of potential options to deliver the objectives set out
• Detailed demand analysis and description of underlying assumptions
• Options appraisal, including
  • Financial appraisal
  • Economic appraisal
  • Sensitivity Analysis
• Assessment of affordability within existing resources
• Risk assessment, allowance for optimism bias and full risk management strategy
• Proposed approach to procurement
• Proposed approaches to implementation and operation
• Assessment of delivery risk
• Plan for monitoring and evaluation including key performance indicators
• Recommendation to the Approving Authority

Cost benefit analysis (CBA) & cost effectiveness analysis (CEA)

CBA and CEA aim to evaluate the proposal from the perspective of society by placing all the options on a comparative scale.

Cost benefit analysis (CBA)

The general principle of the CBA is to assess whether the social and economic benefits associated with a project are greater than its social and economic costs.

Cost effectiveness analysis (CEA)

A CEA compares the cost of different projects/programmes with their intended impact, where the project/programmes have an identifiable primary goal and where the measurement of benefit is difficult or impossible. The CEA will assist in the determination of the least cost way of determining the capital project objective. A choice can then be made as to which of these options is preferable.

Value for money review (VFMR)

The objectives of the VFMR Initiative are to analyse Exchequer spending in a systematic manner and to provide a basis on which more informed decisions can be made on priorities within and between programmes.

The evaluation is largely based on a Programme Logic Model (PLM) approach which is a standard evaluation tool and can be helpful to the review team in thinking about the programme / policy area under review:

• Strategic objectives
• Input
• Activity
• Output
• Result
• Impact

Mazars post project review services

Post-project reviews are in depth evaluations of projects/programmes/grant schemes. They are necessary because:

• Regular monitoring of performance indicators needs to be supplemented with a more in-depth study to assess efficiency and/or effectiveness;
• An independent review of efficiency, effectiveness and continued relevance is sometimes needed;
• The outcomes of the intervention will not occur for some time and a different approach to measuring effectiveness is required; and
• The scale of the investment/intervention justifies an in-depth evaluation.

The review stage is the penultimate stage of the project lifecycle and is critical for identifying lessons learned and driving the process of continuous improvement in how public bodies evaluate, plan and manage public investment projects.

Mazars assists clients in completing project completion reports and ex-post evaluation reports.

• Sponsoring Agencies are required to compile project completion reports for all projects.
• For projects with an estimated capital cost of greater than €10 million, the Sponsoring Agency is required to conduct an ex-post evaluation report.