More budget for a late programme? What a CFO should verify before approval

The decision is not really about the size of the request

When a programme asks for more money, a CFO often receives a dense pack of progress reports, forecasts, risk registers and explanations. The visible question is how much funding is missing. The responsible question is different: which future commitment remains defensible among the options available today? That distinction separates an account of what has happened from a decision about capital, management attention and operational exposure that can still be changed.

HM Treasury defines sunk costs as costs already incurred that cannot be changed and says they should not influence what happens next. That does not make prior performance irrelevant. Delivery to date is evidence about forecasting quality, governance and execution capability. It must not, however, become the economic justification for approving another tranche.

Five evidence blocks before the next approval

First, the CFO needs an updated outcome case. What measurable business result is still expected, who will own it in operation, and which assumptions have changed since the last approval? A list of completed features is not evidence of value, adoption, control readiness or risk reduction.

Second, the causes of variance must be separated. A one-off disruption calls for a different response from a structural pattern of underestimated complexity, missing capability, unstable architecture or unclear accountability. A new number without a causal model is merely another forecast built on the same foundation.

Third, the remaining plan must start from demonstrated capacity and dependencies. It should cover more than supplier commitments: critical decisions, data migration, test evidence, business readiness, controls and the availability of key people. The plan should make explicit which assumptions must hold for the target to remain credible.

Fourth, alternatives must be evaluated explicitly. Continue may be justified when outcome and delivery path are supported. Reset may be necessary when the objective remains sound but governance, scope, architecture, team or delivery model does not. Stop is a genuine management option when value or feasibility is no longer defensible. Without these alternatives, the discussion quietly becomes a false choice between more funding and wasting what has already been spent.

Fifth, every approval needs conditions. A number alone controls nothing. Accountable owners, decision dates, evidence still to be supplied, tolerances and stop criteria turn a funding release into a manageable executive decision.

What a plausible forecast still does not prove

A detailed forecast can look precise while depending on untested assumptions. A CFO should test where the numbers come from. Have effort estimates been independently challenged? Do business, technology and the vendor agree on remaining scope and dependencies? Are risks reflected in the financial model or merely listed beside it? Are contingency and management reserve distinct? Do earlier forecasts reveal persistent optimism?

The most useful number may not be the revised total but the decision range. What would Continue, Reset and Stop each cost? Which commitments remain avoidable? What transition or shutdown costs follow? Which opportunity costs persist while the programme consumes scarce people and attention? A defensible paper shows the consequence of each option rather than protecting only the preferred figure.

When an independent decision review helps

An independent review is particularly useful when the decision date is close, internal functions report different realities, or an implementation partner benefits commercially from continuation. It should not take over delivery or create months of assurance activity. Its narrower purpose is to expose the claims that matter, test the evidence beneath them and compress the remaining options into a concise Decision Memorandum.

Management retains the decision. Independence does not automatically improve the programme; it improves the basis on which capital and accountability are committed again. The CFO's test is therefore not ‘Is the plan green now?’ but ‘What evidence would allow us to defend this next commitment to the board, owners and operations?’

Questions for the approval forum

Before deciding, the forum should be able to answer five questions in one sentence each. Which future outcome justifies the commitment? Which cause of prior variance has demonstrably been removed? Which assumption could change the new forecast most? What does the best realistic alternative cost? Which signal triggers the next escalation or Stop? If those answers exist only across separate appendices, the paper is not ready for decision.

A strong approval also creates an earlier evidence point, not merely another completion date. It specifies when critical proof must exist and what happens if it does not. Capital is then released against learning rather than hope. This cannot remove all loss or substitute for leadership, but it reveals whether the programme is genuinely improving its position or simply moving the forecast.