The Financial Case

Which case answers the question 'Is the proposed spend affordable?'

• A The Economic Case
• B The Management Case
• C The Financial Case ✓
• D The Strategic Case

Answer: The Financial Case demonstrates affordability, setting out the funding required and confirming it can be met within available budgets.

What is the primary focus of the Financial Case?

• A The benefits realisation plan and governance
• B The long list to short list filtering of options
• C The procurement route and supplier selection
• D The impact on the organisation's budgets, funding and cash flow ✓

Answer: The Financial Case focuses on the affordability of the preferred option and its impact on budgets, funding sources and the balance sheet.

Why must funding sources be confirmed in the Financial Case?

• A To demonstrate that the money to pay for the preferred option is available and committed ✓
• B To allocate delivery risk to the supplier
• C To compute the net present value of options
• D To define the critical success factors

Answer: Identifying and confirming funding sources shows that the resources needed to deliver the preferred option are available and have been secured.

In the Financial Case, what does a statement of accounting treatment typically clarify?

• A The supplier's profit margin
• B The strategic fit with policy
• C The SWOT analysis of options
• D How the spend will be classified, for example as capital or revenue ✓

Answer: The accounting treatment clarifies how costs are recognised, such as capital versus revenue and any balance sheet implications, which affects budget impact.

Which financial impact is the Financial Case particularly concerned with presenting over the life of the proposal?

• A The output specification for suppliers
• B The optimism bias percentage by year
• C The list of project board members
• D The net budgetary impact and any funding gap across financial years ✓

Answer: The Financial Case sets out the net financial impact year by year, highlighting any funding gaps that must be addressed for the scheme to proceed.

How does the Financial Case differ from the Economic Case in its treatment of cost?

• A They are identical in scope and purpose
• B The Financial Case focuses on actual cash and affordability, while the Economic Case focuses on value for money ✓
• C The Financial Case applies optimism bias while the Economic Case does not
• D The Financial Case uses public value while the Economic Case uses cash budgets

Answer: The Economic Case assesses value for money using a broad social cost-benefit view, whereas the Financial Case addresses real cash affordability against budgets.