Budget transfer between capital and revenue relating to replacement equipment

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A decision made 12 December 2010 regarding: Budget transfer between capital and revenue relating to replacement equipment.

Decision Reference: MD-HSS-2010-0069
Decision Summary Title:	Reallocation of Equipment Replacement Budget Between Capital and Revenue		Date of Decision Summary:	10th December 2010
Decision Summary Author:	Director of Finance Health and Social Services		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Reallocation of Equipment Replacement Budget Between Capital and Revenue		Date of Written Report:	10th December 2010
Written Report Author:	Head of Financial Accounting Health & Social Services		Written Report : Public or Exempt?	Public
Subject: Transfer of the funds from the revenue equipment replacement budget to the capital equipment replacement budgets for specific items in excess of the capitalisation threshold of £10,000.
Decision(s): The Minister approved the transfer of £445,000 from the revenue equipment replacement budget, being, £245,000 to the capital equipment replacement budget and £200,000 to the budget for the replacement of the PSA Oxygenators.
Reason(s) for Decision: The transfer of these funds to the capital budgets will allow the Department to replace specific capital equipment in accordance with the requirements of the States of Jersey Capital Accounting Manual.
Resource Implications: The proposal will result in the transfer of a part of the revenue equipment budgets to capital schemes which on completion will be added to the departmental asset register and depreciated in accordance with the applicable rules. There are no other resource implications.
Action required: A copy of the Ministerial Decision and the report are to be sent to the Treasury for the approval of the Minister Treasury and Resources. The Treasury will be required to process the budget transfers as approved.
Signature:		Position: Minister for Health and Social Services
Date Signed:		Date of Decision:

Budget transfer between capital and revenue relating to replacement equipment

Health and Social Services Department

Ministerial Decision Report

REALLOCATION OF EQUIPMENT REPLACEMENT BUDGET BETWEEN CAPITAL AND REVENUE

Purpose of Report

The purpose of this report is to request the Minister to approve the transfer of part of the revenue equipment replacement to capital to allow for the replacement of certain assets in excess of the capitalisation threshold.

Background

The funding available to the Health and Social Services Department for the replacement of equipment is split between a capital allocation for items costing in excess of £10,000, which when complete are transferred to the asset register, and a revenue allocation for minor items. A transfer of part of the revenue budget is required to fund the replacement of specific capital items.

Equipment Replacement Reallocation

At the end of October the unspent for the replacement of major capital items of equipment was £1,244,421, of which £1.1million related to orders and projects in progress, the remaining balance has been allocated for specific items for which orders had not been placed.

It is proposed to transfer unallocated funding from the 2010 revenue equipment allocation to the capital vote (JZ0106) to fund specific larger purchases as follows:

	Capital Budget
	£
Patient transport and ambulance vehicles and van	154,000
Histology coverslipper and slide stainer	51,000
Lighting system Operating Theatre 3	40,000

The oxygen supply at the General Hospital is provided by two PSA (Pressure Swing Adsorption) machines with a back up provided by oxygen cylinders. These machines are due for replacement and a capital vote of £180,000 (JZ0109) is available for this, however to develop a comprehensive solution to appropriate standards will require additional funding and it is proposed to transfer £200,000 from the revenue equipment allocation to this project.

It is proposed to transfer £445,000 from KFR150.562010 to:

		To
JZ0106	121150 - Plant & Equipment	91,000
JZ0106	121160 - Vehicles	154,000
JZ0109	120410 - Main Contract	200,000

Recommendation

It is recommended that the Minister approves the transfer of £445,000 from the revenue equipment replacement budget, £245,000 to the capital equipment replacement budget and £200,000 to the budget for the replacement of the PSA Oxygenators.

From
KFR150	562010 – Equipment Replacement	£445,000
To
JZ0106	121150 - Plant & Equipment	£91,000
JZ0106	121160 - Vehicles	£154,000
JZ0109	120410 - Main Contract	£200,000

Reason for Decision

The transfer between the revenue and capital budgets is necessary to ensure that the equipment and vehicles which it is intended be replaced can be accounted for in accordance with the States of Jersey capital accounting manual.

Resource Implications

The proposal will result in the transfer of a part of the revenue equipment budgets to capital schemes which on completion will be added to the departmental asset register and be depreciated in accordance with the applicable rules. There are no other resource implications.

10th December 2010

Nick Aubin - Head of Financial Accounting

Health & Social Services