Associations must determine the estimated final costs of schemes, if these differ from the estimate thay may have to apply to the NIHE for the additional costs.
Practical Completion is deemed to have occurred when the building contract or phase of the building contract has reached Practical Completion. The Association must determine its estimated final costs. Where such costs are at or below the figure approved at Project Approval stage, grant will be based upon the Association’s forecast final cost figure, subject to an assessment by the NIHE (DPG) of the reasonableness of the forecast. The Association must follow the instructions set out in Table 11.
For more information on Grant Timetable.
Cost Overruns - Where costs exceed the figure agreed at Approval stage - grant will be based upon the approved scheme costs determined at Scheme Approval stage.
Claiming grant to cover additional costs
Claiming grant to cover additional costs - The Association may wish to apply for approval of all or part of any additional costs that were reasonably unforeseeable at Project Approval stage. The Association must follow the instructions set out below and include the additional documentation required for schemes with outturn costs above approved costs (subject to assessment by the NIHE (DPG) of the reasonableness of the forecast). It is the responsibility of the Association as part of its application to clearly identify and explain the specific items leading to the unforeseeable cost overrun. Additional costs relating to items that are deemed by NIHE (DPG) as having been reasonably foreseeable at scheme submission stage will not be considered for grant at practical completion stage.
On receipt of a request from the Association for the recalculation of applicable grant, NIHE (DPG) will follow the normal procedures and assessments to allow an interim payment of grant to proceed based on the total scheme costs approved for grant at Scheme Approval stage. Subsequently, NIHE (DPG) will then re-determine the amount of grant it is prepared to approve and confirm to the Association the final costs figure approved for grant. If satisfied NIHE (DPG) will advance any further grant due based upon the agreed forecast final cost figures.
N.B. The same percentage of approved Grant established at Project Approval (i.e. the same Grant Rate) will apply to any cost overruns agreed at Practical Completion.
The costs are reviewed at project completion and grant eligibility recalculated as eligible outturn cost x the original grant rate. Grant will not be paid on an outturn cost greater than 110% of the estimate at project approval or 130% of TCI, whichever is the lower.
Where additional grant is identified as an approved cost overrun, the Association will be required to submit a further GA1 form to claim the balance of grant based on the re-determined approved scheme costs.
Recoverable costs post practical completion
- Where, following a final grant claim, the Association is able to recover costs as the result of a claim by or against a third party, that proportion of the costs represented by the grant rate for the scheme must be forwarded to NIHE (DPG).
- Also, following a final grant claim, where estimated costs are significantly higher than actual out-turn costs the Association must contact NIHE (DPG) to seek advice on any requirement in respect of the repayment of HAG.