ADMINISTRATIVE MANUAL Policy and Procedure TITLE:

Capital Planning & Acquisition Process

NUMBER:

CH 09-080

Effective Date:

April 2015

Page

1of 7

Applies To:

All

Refer to NSHA-AD-FIN-001Financial Signing Authority for information regarding authorized signing authorities.

POLICY 1. The capital planning process is developed annually as part of Capital Health’s Business Planning Process. The budget is approved by the Leadershift Enabling Team (LET) and the Board of Directors. 2. Capital expenditures at Capital Health are allotted into four streams: 2.1. Capital patient care equipment 2.2. Patient support equipment 2.3. Capital information technology 2.4. Capital infrastructure: includes improvement projects – Infrastructure Repair and Renewal and large Clinical Capital projects. Clinical Capital projects are subject to 75 percent DHW /25 percent DHA or other sources for local share funding.

DEFINITIONS Capital Acquisition Ranking System (CARS):

System with weighted formulas built into the Capital Request SmartForm to automate the ranking of all the requests.

Capital Patient Care Equipment:

Equipment required for the direct delivery of safe, quality care (E.g.: heart lung machine, MRI, microscopes, monitors). Expenditures are for any new equipment where the total value, inclusive of installation, freight, transportation, insurance and duties exceeds $10,000.00 and can be depreciated.

Capital Patient Support Equipment:

Equipment required that is critical to maintaining a safe environment for patients (E.g.: OR lighting, sinks for infection

This is a CONTROLLED document for internal use only. Any documents appearing in paper form are not controlled and should be checked against the electronic file version prior to use.

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control, major housekeeping equipment). Expenditures are for any new equipment where the total value, inclusive of installation, freight, transportation, insurance and duties exceeds $10,000.00. *Replacement parts and/or repair costs exceeding $10,000.00 are also considered a capital expenditure when the related equipment’s original capacity, useful life, quality of output or associated operating cost is substantially improved. Capital Information Technology:

Applications, hardware and devices valued in excess of $50,000.00 with a useful life greater than one year. Major Information Technology (IT) system upgrades are also recorded as an asset if they fit into the costing threshold and significantly increase the useful life of the system.

Capital Infrastructure Projects:

Projects valued in excess of $50,000 involved with basic building systems, structures and renovations that support general operation functions within the healthcare facility.

Capital Infrastructure Aesthetics:

Projects valued in excess of $50,000 involved with basic building systems that have high visibility (e.g.: carpet replacement, painting, etc.) These projects typically rank low but improve patient experience.

Capital Leasehold Improvements:

Projects valued in excess of $50,000 that are permanent improvements constructed or installed on property that is leased to Capital Health under an operating lease or rental agreement.

Capital Clinical Projects:

Projects valued in excess of $50,000 where buildings are significantly modified or built to meet clinical program needs.

Requisitioning Authority:

Internal positions required to authorize specific expenditures.

GUIDING PRINCIPLES AND VALUES 1. As per the Capital Health Mission Statement, Capital Health is on a journey to become a world leading haven for people centered health, healing, and learning . 2. The Capital Planning process strives to apply sound evidence based practices to the Capital decision making process to enable innovative organizational changes by: 2.1. Using innovative approaches to support organizational changes that contribute to improving patient outcomes. Capital Health seeks best practice models that contribute to transforming the system. 2.2. Challenging current approaches to decision making to open up creative new ways of thinking. 2.3. Being transparent regarding how decisions are made. 2.4. Making explicit connections between our business strategies, service models, and how capital dollars are allocated. This is a CONTROLLED document for internal use only. Any documents appearing in paper form are not controlled and should be checked against the electronic file version prior to use.

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2.5. Integrating innovation and known research to our unique challenges - applying ethics, evidence and economic factors to the prioritization process.

GUIDELINES 1. The Capital Planning process ensures that Capital Funds are allocated in a way that is in compliance with sound auditing principles, maximizes impact of funding and is in alignment with the strategic directions, and clinical goals of Capital Health. 2. The Capital Planning Clinical Review Executive Committee: 2.1. Ensures that the acquisition of all capital acquisitions is appropriately aligned within the District’s strategic directions and goals. 2.2. Recommends to the Business Planning Committee and LET the multi-year plan, equipment and infrastructure priorities and the recommended allocation of the capital budgets. 2.3. Gives consideration to maintaining some funds for emergency capital equipment needs. Note: Emergency purchases are made at the discretion of the Capital Planning Clinical Review Executive Committee. 3. The Capital Planning Working Group collects all information and data, manages the process of ranking requests and presents information to the Capital Planning Clinical Review Executive Committee.

PROCEDURE 1. Request Process All capital requests for capital IT, infrastructure/renovations and equipment that support patient care are to follow the process as outlined below using the SmartForm. 1.1. The Capital Planning Working Group solicits capital requests annually during the Business Planning process. 1.2. When submitting requests, use the electronic SmartForm located at http://chshrpoint01/capreq/default.aspx 1.3. The Financial Analyst for the Capital Planning Working Group ensures the appropriate VP(s) reviews and approves their department’s SmartForm submission. (Approval is required before the request will be accepted for priority ranking.) Note: Projects are ranked by top priority through Capital Acquisition Ranking Score (CARS). 1.4. The Capital Planning Working Group sends the prioritized list to the Capital Planning Clinical Review Executive Committee for review and approval. 1.5. Once approved, the Director of Technology and Infrastructure Renewal signs the requisitions and sends to the VP of Sustainability and CFO. Note: For infrastructure projects and infrastructure emergency requests refer to NSHA-AD-FIN-001Financial Signing Authority. This is a CONTROLLED document for internal use only. Any documents appearing in paper form are not controlled and should be checked against the electronic file version prior to use.

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1.6. The Director of Technology and Infrastructure Renewal (or designated manager) forwards approved documents to the Department of Health and Wellness (DHW) or Procurement for processing. 1.7. Procurement Services refers to the summary information on the request forms and coordinates the tendering and purchasing of approved equipment/services. 2. Emergency Funding: 2.1. Submit all requests on the electronic Capital Request SmartForm and forward to the appropriate VP responsible for the requesting department. Note: CARS process should capture all emergency requests and rank them at high priority. 2.2. The VP responsible for the requesting department approves the request and forwards to the Director of Technology and Infrastructure Renewal indicating that it’s an emergency request. 2.3. The Director of Technology and Infrastructure Renewal reviews the request and determines available funding options. 2.4. If funding is attained and the request ranks high (CARS), the Director of Technology and Infrastructure Renewal forwards the recommendation to the VP of Sustainability and CFO for approval. 3. Capital Equipment from sources other than the Capital Equipment Fund: 3.1. The appropriate Director reviews and signs each request. 3.2. The requestor indicates the amount and source of funding available. 3.3. If funded through a Foundation/Auxiliary, include with the request a letter of approval from the Foundation’s Executive Director or Auxiliary Chair. 3.4. The Vice President responsible for the requesting department approves the request and forwards to the Director of Technology and Infrastructure Renewal for review who then forwards to the VP of Sustainability & CFO for approval. 3.5. The VP of Sustainability & CFO approves and sends authorization letter to the Director of Technology and Infrastructure Renewal and Procurement Coordinator. 3.6. Upon approval of the request, the Materials Management Department follows the processes outlined in CH 09-010 Procurement (Purchasing). 4. Scoring Criteria: 4.1. Refer to Appendix A for information on the scoring criteria that the Capital Planning Working Group uses to evaluate and categorize requests. 5. Requisitioning Authority 5.1. Refer to NSHA-AD-FIN-001Financial Signing Authority for information for the appropriate requisitioning authority 5.2. For consulting contracts, once approval is received from the requisitioning authority, obtain a valid purchase order from the Procurement Office. 6. Role of Foundations/Auxiliaries

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The role of the Foundations & Auxiliaries is critical to achieving capital acquisitions. It is noted in provincial policy that Foundations & Auxiliaries may be required to contribute 25 percent (local share) of projects/acquisitions that receive DHW funding. In some cases DHW may waive this requirement; or organizations may find other sources for the local share. 6.1. Capital Planning provides a list of priorities (approved by LET) to the Foundations and Auxiliaries on an annual basis. 7. Role of Department of Health & Wellness 7.1. Department of Health & Wellness (DHW) divides infrastructure and patient care equipment between two separate departments- Capital Equipment and Capital Repair and Renewal/Projects (R&Rs) and Capital Grants (projects over $1 M) Capital Equipment: 7.2. DHW issues a call for District Health Authorities (DHAs) Top 10 medical equipment requests. 7.3. The DHAs submit requests generally in early January prior to the fiscal year for funding. 7.4. DHW may approve some of the items; approvals can occur throughout the fiscal year as the DHW secures funding. Capital Repair and Renewal/Projects (R&Rs) 7.5. DHW Infrastructure Department issues a call for the over $90,000 and under $90,000 R&Rs (generally in October/November of preceding fiscal year for funding). 7.6. DHW uses a formal ranking system to rank all requests and has forms that include all supporting detailed descriptions of each project. 7.7. A provincial group of senior infrastructure managers from all DHA’s meet to determine which projects will be funded for the next fiscal year, with a goal of completing the list of approved projects for the DHA by the end of February/early March (before the start of the next fiscal period.) 8. Capital Grants 8.1. DHW issues requests for capital grants (projects that exceed 1 Million Dollars) in February/March at least 1 year preceding the year that the projects would be implemented (I.e.: requests for grants was issued in March 2013 for fiscal 2014/2015). 8.2. Vice Presidents at Capital Health bring requests for capital grant projects forward for review and approval at LET; once approved, LET forwards to DHW.

RELATED DOCUMENTS Policies CH 09-010 CH xx-xxx CH 09-055

Procurement (Purchasing) Tangible Capital Assets Accounting Policy (Draft) Requisition Preparation and Processing

This is a CONTROLLED document for internal use only. Any documents appearing in paper form are not controlled and should be checked against the electronic file version prior to use.

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CH 09-060 Procurement NSHA-AD-FIN-001 Financial Signing Authority

Forms Capital Request “SmartForm” Appendices Appendix A – Scoring Criteria Other (Internal Procedure Documents located within Infrastructure Renewal Department) Capital Acquisition Ranking Description Document Capital Acquisition Flow Diagram and Planning Process Committee Terms of Reference Department of Health & Wellness Repair and Renovation/Capital Equipment Ranking Process. (Internal DHW process all DHA’s follow to request funding from DHW)

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This is a CONTROLLED document for internal use only. Any documents appearing in paper form are not controlled and should be checked against the electronic file version prior to use.

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Appendix A Scoring Criteria Capital Equipment: Capital Patient Care Equipment: The Capital Planning Working Group evaluates and categorizes the requests using the following criteria:  Safety – life threatening/saving  Critical to functioning  Improved Service  Will be required within the next 2 to 5 years (no longer supported)  Obsolete/current no longer functioning  Operational savings  Catastrophic/major event (flooding)  Population impact Capital Patient Support Equipment: The capital patient support equipment will use identical ranking system as capital patient care equipment with low priority rankings expected. Given the low ranking, efforts are made to allocate funds to this category to ensure equipment is functioning as required. Capital Infrastructure: Capital Infrastructure: The Capital Planning Working Group will evaluate and categorize the requests using the following criteria:  Safety  Impact on operations  Code/standard liability  Probability of occurring  Facility utilization  Operational cost impact Capital Infrastructure Aesthetics: Capital infrastructure funding may be set aside for capital infrastructure aesthetics. The Capital Planning Working Group will evaluate and categorize the request using the following criteria:  Public Visibility  Traffic Intensity  Current Condition Capital Clinical Projects: The Capital Planning Working Group evaluated and categorizes the requests using the following criteria:  Quality/efficiency (patient centered improvement)  Sustainability (impact on wait times)  Safety  Code/standard liability  Clinical impact Clinical Capital Projects must align with the Facility master plan and have 25% local share funding prior to evaluation.

This is a CONTROLLED document for internal use only. Any documents appearing in paper form are not controlled and should be checked against the electronic file version prior to use.