10. As with any project the focus here is to ensure that the project whole life cost estimate is comprehensive and accurate and that adequate and appropriate budgetary provision exists to pay for and account for the services delivered through the contract (as identified in the PFRM described in Section 3 paragraph 21). For PFI projects the main challenges lie in producing a robust cost estimate during phases before bidder financial models are submitted, compiling and maintaining a robust reference or should cost model, identifying and managing the funding for the project, which may lie in several TLB areas and determining the appropriate accounting treatment for the project assets.
11. This is an area where the expertise of external financial advisers will be of particular benefit.
Relevant Government policy/guidance:
• MOD PFU Guidance Note - Assessing Value for Money for PFI Projects
• MOD PFU Guidance Note - Accounting for PFI Projects
• JSP 507
• Resource Accounting Bulletins (e.g. RAB 472/462 & RATb13)
• Departmental budgeting guidance
• Departmental plans
• International Accounting standards (e.g. IFRS and/or ESA95)
• OGC Achieving Excellence Guide 7 - Whole-Life costing