Company Operational Manual(COM) Technical 3.2 Technical Expenditure	Doc No.: COM 3.2 Revision: 1 Date: 15 Oct 2024 Issued by: DPA Approved by: MD

3.2 TECHNICAL EXPENDITURE

3.2.1 Preparation Of Technical Costs Budget

The annual budget for the technical operation of each ship is to be prepared in detail as per the Vessel Budgeting section of this chapter.

The budget requirement for each cost category is to be prepared by the TSI, in conjunction with the TM and taking into account survey items, maintenance requirements and cosmetic upkeep of the vessel.

All records relevant to the preparation of the technical budget are to be kept in the relevant office file.

3.2.2 Analysis Of Running Costs

The Monthly and Quarterly Running Cost sheets are to be reviewed by the TSI and any variance investigated, with the reason for the variance is to be entered in the Running Cost Variance Report.

Should a significant variance be found, it is to be brought to the attention of the TM who will review it and together with the TSI, produce a memo for inclusion in the report.

The T Manager must give his final approval for the explanation prior to the informing the owner. The T Manager must also give his final approval for the Quarterly Variance Report before it is forwarded to the Owner.

3.2.3 Control Of Technical Running Costs

The TSI must be aware of the variances between budgeted and actual expenditure for each of his vessels at all times. When these variances exceed the agreed limit the TSI is to report on the reasons for the variance to the TM.

In order to control the technical running costs and expenditure the TSI is to review all requisitions for spares and/or repair services received from the vessel. He is then to exercise his technical judgement before passing it on for processing in accordance with the Company purchasing procedure.

Where the requisition from the vessel is considered to be excessive or of a non-urgent nature, the TSI must not authorise until he is satisfied on the extent and urgency of the requisition.

The TSI is to review the cost and delivery in conjunction with the budget and current running costs, and where appropriate the necessity for full order supply, or whether the order should have a phased supply.

The TSI is to sight and approve as required, purchase invoices that are not in accordance with the approved quotation, or those covering maintenance and repair work. Should the TSI have any reason to question a purchase invoice, it is to be returned to the purchasing department to be resolved.

The TSI must ensure that the feedback from the vessel on quality of goods or services received is forwarded to the purchasing department.

3.2.4 Unbudgeted Technical Running Costs

When a prospective maintenance and repair cost arises that is not included in the Budget, the TSI is to prepare a technical and cost justification for the repair. The T Manager is to approve the cost justification and forward it to the owner. Should the justification be rejected by the owner, the Fleet Manager is to alert the Fleet Director of any possible consequences of not carrying out the proposed work.

Where safety of the crew or vessel may be jeopardised then this is to be put in writing to the owner stating the consequences of delaying the required action and, where necessary, recommend that the vessel is taken out of service until repair action has been undertaken.

Any matters of this nature must be reported immediately to the Managing Director for confirmation of the action to be taken.

3.2.5 Approval Of Disbursement Accounts

The Technical Controller is to receive Port Disbursement Account forms for verification and approval of those items concerning the technical department. For these items he is to:

• review, sign and date the form for approval of these invoices
• circulate the invoices/forms to other departments as required for their review and approval, or where no further circulation is required return them to the accounts department.
• The TSI should review any disputed disbursement. A copy of any correspondence on disputed disbursements is to be passed to the accounts department.
• Where an invoice or disbursement account relates to a pending hull & machinery insurance claim the Technical Controller is to:
• check that the coding is correct and
• file a copy of the invoice or disbursement account in the relevant hull & machinery claim file.

3.2.6 Dry Dock / Major Repair Costs And Reconciliation

For dry-docking, major repairs and associated services – the TSI is responsible for raising the requisition form and issuing the RFQ, on receipt of tenders the TSI will evaluate and nominate the vendor.

All associated invoices should be sent direct from the vendor to the TSI and/or the Dry Dock Estimator for checking and authorisation then forwarded to the Group for recording before passing to the accounts department for payment.

Repair orders, service and classification requests must be raised, authorised with the supplier and accrual attached by the technical department.