AAOM Handbook

WA.10 Is the Work Within EPS? Context

As a business, most of the expenditure we incur is related to completing some work necessary to produce an outcome. Therefore, the key to effective forecasting and management of costs is the understanding and forecasting of the work and the resources required to complete it, and the management of cost commitments against that forecast. These key outcomes are achieved in the Operating Master Schedule (OMS) - define the work, the ExPenditure Schedule (EPS) - define the resources and cost, and the Work Approval process - understand and approve cost commitments. The ExPenditure Schedule (EPS) is a costed version of the Operating Master Schedule (OMS). That is, the forecast cost for the Resource Types (labour, equipment, materials/spares and utilities etc) that will be required to implement the OMS is combined with a quantity estimate on each OMS Activity, and the frequency/timing of the Activities, to forecast the expenditure profile over time. The review process for a Work Request has so far established a scope of work technically suitable to the sustainable (i.e. dealing responsibly with safety, the environment, employees, communities, governments and asset life), effective and efficient performance of a business area. However, these outcomes must be achieved at a cost that the business area can sustain, that is within the constraints of the approved Expenditure Schedule - the current working revision of the costed OMS. To help make this decision an Upper Cost Limit was estimated for the scope of work that was defined during the review of the request. Therefore, as part of the approval process, an assessment must be made whether:  Funds are available in the forecast,  The funds are available for commitment, or  There are lower cost alternatives for achieving the same outcomes, or  Other work may need to be deleted from the forecast, modified or deferred to make funds available for this work, and  Any potential hazards and risks related to amendments of the forecast activities are adequately addressed. Purpose To decide if funds forecast for the work are available for commitment. Quantity One decision whether;  Funds were included in the forecast for the requested work scope, and