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A decision made 23 September 2011 regarding:

Decision Reference: MD-PE-2011-0085
Decision Summary Title :	Department of the Environment (DoE) – Revenue to Capital Budget Transfers for PIP Carry Forward		Date of Decision Summary:	18/08/11
Decision Summary Author:	Senior Management Accountant		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Revenue to Capital Budget Transfers for PIP Carry Forward		Date of Written Report:	18/08/11
Written Report Author:	Senior Management Accountant		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: 2011 Budget Transfers from the DoE Revenue head of expenditure to the DoE Minor Capital Head of Expenditure for the Department of the Environment to comply with GAAP accounting.
Decision(s): The Minister approved 2011 budget transfers from Revenue to Capital for the Department of the Environment, representing a net budget transfer from revenue to capital of £122,750 for the Process Improvement Programme (PIP) as detailed in the attached report.
Reason(s) for Decision: Generally Accepted Accounting Principles (GAAP) requires that expenditure meeting the GAAP definition of capital expenditure should be treated as such. These budget transfers are the movements in budgets between revenue and capital to align the budgeting treatment with GAAP accounting treatment. This does not change the total amount of expenditure approved by the States.
Resource Implications: The effect of the transfer would be to decrease the Department’s 2011 Revenue head of expenditure by £122,750 and increase the Minor Capital head of expenditure by an equivalent amount. This does not change the total amount of expenditure approved by the States.
Action required: For the Finance Director to seek the Minister for Treasury and Resources approval for the transfer. Once approval is obtained, the Finance Director to action budget transfers.
Signature: Deputy R Duhamel		Position: Minister
Date Signed:		Date of Decision (If different from Date Signed):

Budget Transfers 2011 - GAAP Accounting

DEPARTMENT OF THE ENVIRONMENT

REVENUE TO CAPITAL BUDGET TRANSFERS FOR PROCESS IMPROVEMENT PROGRAMME

Purpose of the Report

To approve budget transfers of £122,750 from the Department of the Environment revenue to capital budgets to align budgeting with Generally Accepted Accounting Principles (GAAP).

Background

The States of Jersey has implemented Generally Accepted Accounting Principles (GAAP) during 2009. GAAP accounting requires that expenditure should be accounted for as capital if it meets the GAAP accounting definition of capital expenditure, and revenue otherwise. Previously, ‘capital’ budgets have represented whatever the States Assembly voted as capital.

The Minister for Treasury and Resources approved revenue budget carry forwards from 2010 of £150,000 for the Process Improvement Programme (PIP). The PIP is the implementation of recommendations made by an independent review by the Planning Officers’ Society of the Planning Development Control process. Central to these recommendations was that the department should streamline the business process and make better use of IT to support these processes. The improvements planned will provide caseload management, reduce the time taken to make DC decisions, provide transparent/accessible services to the public, improve business partnering with consultees and streamline data management. These monies were allocated based on assumptions made in 2010 about the nature of the work that would be carried out. These assumptions have been updated following finalisation of the PIP work. The budget transfers move £122,750 between revenue and capital budgets so as to align the budgeting treatment of expenditure on the PIP with the correct GAAP accounting treatment.

This transfer only affects 2011 budgets and expenditure that is expected to be incurred in 2011.

Discussion

The following table identifies breakdown of the project between revenue and capital following the relevant GAAP definitions.

	Capital	Revenue	Total
ApSIS Licences (Embedded for 20 Users) - software	7,000	-	7,000
Online Application and Submission - software	10,000	-	10,000
Core Info@Work - software	10,000	-	10,000
Public Access - software	5,000	-	5,000
Initial Training and Consultancy Package		16,000	16,000
Hardware 2 x scanners	5,000	-	5,000
Project Management	13,850	-	13,850
Local Consultations Module	2,400	-	2,400
DME to I@W	4,800	-	4,800
ApSIS Licences - service	2,400	-	2,400
Online Application and Submission (Dev Work) - service	21,100	-	21,100
Core Info@Work (inc no. days for remaining items) - service	25,600	-	25,600
10% contigency for extra service costs	15,600	-	15,600
ApSIS Licences - maintenance	-	1,500	1,500
Online Application and Submission - maintenance	-	2,500	2,500
Core Info@Work - maintenance	-	4,000	4,000
Northgate Hub or Planning Integration Module - maintenance	-	1,500	1,500
Public Access - maintenance	-	1,250	1,250
Hardware 2 x scanners - Maintenance	-	500	500
	122,750	27,250	150,000

The effect of the transfer would be to decrease the Department’s 2011 Revenue head of expenditure by £122,750 and increase the value of the Minor Capital head of expenditure by an equivalent amount. This does not change the total amount of expenditure approved by the States.

Recommendations

To approve budget transfers of £122,750 for the Process Improvement Programme from the Department of the Environment Revenue to Capital budgets to align budgeting with GAAP accounting treatment.

Reason(s) for Decision

The States of Jersey is implementing Generally Accepted Accounting Principles (GAAP). GAAP accounting requires that expenditure meeting the GAAP definition of capital expenditure should be treated as such. These budget transfers are the movements in budgets between revenue and capital required to align the budgeting treatment of expenditure with the GAAP accounting treatment. This does not change the total amount of expenditure approved by the States.

Action Required

For the Finance Director to seek Treasury and Resources Ministerial approval for the transfer. Once approval obtained, the Finance Director to action budget transfers.

Written by:	Senior Management Accountant

Approved by:	Finance Director

Reference: