2.10.1 The ultimate outcome of any appraisal is a decision whether or not to proceed with a proposal or a particular option. Such decisions can have far reaching consequences. Therefore the presentation of the results and conclusions of an appraisal to decision makers and stakeholders can be as important as the analysis itself.
2.10.2 In all cases, transparency is vital. The presentation should make the analysis accessible to personnel who do not have an intimate knowledge of the project but need to make judgements based upon the information given. Presentations should be clear, logical, well founded and geared towards helping the decision at hand. Summary reports in particular should be drafted in non-technical language wherever possible, but if it is necessary to use technical terms, they should be explained.
2.10.3 Reports should provide sufficient evidence to support their conclusions and recommendations. They should provide an easy audit trail for the reader to check calculations, supporting evidence and assumptions. Major costs and benefits should be described, and the values attached to each clearly shown rather than netted off or hidden within highly aggregated totals. Appraisal reports should contain sufficient information to support the conduct of any subsequent evaluation.
2.10.4 The results of sensitivity and scenario analysis should be included in presentations and summary reports to decision makers, rather than just single point estimates of NPV values. Decision makers need to be enabled to understand that there are ranges of potential outcomes and hence to judge the capacity of proposals to withstand future uncertainty.
2.10.5 Appraisal results should be presented within a strategic, outline or full business case, as explained in section 8 below. Business cases should be comprehensive and include all of the steps of appraisal listed at 1.4.1 above, undertaken in accordance with this guide.
2.10.6 The main body of the appraisal report should generally follow the sequence indicated at 1.4.1. However, DoF will accept variations in the style of presentation where they are clearly more suited to a particular type of project, provided all the necessary information is still covered. Detailed assumptions, calculations and supporting material should be included, but consideration should be given to recording these in separate appendices rather than in the main text.
2.10.7 It is important to include a section which draws together the main findings and conclusions of the appraisal. This should summarise the main results for each option including, for example, the:
- NPV or NPC
- capital and recurrent costs
- non-monetary impacts, including costs and benefits not easily valued, distributional issues, and other factors
- main risks and uncertainties
- budget, cash flow and funding implications
2.10.8 Summary tables or matrices should be used to facilitate comparison of the results of the option analysis.
2.10.9 The balance of advantage among the options should be assessed, taking account of the appraisal results, and a preferred option should be identified. In the simplest cases, this may be a matter of choosing the option with the lowest NPC. In other cases, non-cost factors may be crucial and may justify selection of an alternative that is not the least costly. Timing considerations and affordability may also influence option choice. Whatever the justification for the preferred option is, its VFM should be confirmed and its advantages over the main alternatives should be explained specifically.
2.10.10 The proposed arrangements for financing and managing the preferred option should be provided; and the arrangements for benefits realisation, monitoring and ex post evaluation should be detailed.
2.10.11 Attention should be drawn to any outstanding issues that require special attention, for instance any important financial, managerial, industrial relations, legal or other issues that need to be resolved, or any risks or cost estimates or other factors that require further consideration before final decisions are taken.