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Countryside Infrastructure: Budget transfer

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A decision made 6 October 2014:

Decision Reference:  MD-PE-2014-0089

Decision Summary Title:

Department of the environment GAAP capital to revenue transfer for countryside infrastructure

Date of Decision Summary:

2nd October 2014

 

Decision Summary Author:

Finance Manager - DoE

Decision Summary:

Public or Exempt?

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

N/A

Written Report

Title:

Department of the environment GAAP capital to revenue transfer for countryside infrastructure

Date of Written Report:

2nd October 2014

Written Report Author:

Finance Manager - DoE

Written Report :

Public or Exempt?

Public

Subject:   Non-recurring Generally Accepted Accounting Principles (GAAP) budget transfer for Countryside Infrastructure

Decision(s):  The Minister approved a non-recurring budget transfer of up to £200,000 over 2014 and 2015 from the Department of the Environment (DoE) capital head of expenditure (I00MF14015) to the DoE revenue head of expenditure for Countryside Infrastructure.

Reason(s) for Decision:  Under Generally Accepted Accounting Principles (GAAP) expenditure that meets the definition of capital expenditure must be capitalised. This budget transfer is the movement in budget between capital and revenue required to align the budgeting treatment of expenditure with the accounting treatment, in order to comply with GAAP.

 

Article 18(1)(a) of the Public Finances (Jersey) Law 2005 states that all or any part of the amount appropriated by a head of expenditure may, with the approval of the Minister for Treasury and Resources, be transferred from a revenue head of expenditure to a capital head of expenditure, or vice versa, in order to comply with accounting standards issued for the purposes of Article 32(2). Delegation 1.2 delegates authority for non-contentious transfers between revenue and capital heads of expenditure (and vice versa) with no financial limit where the transfer is solely to ensure that financial transactions are accurately reflected in the States’ Accounts in accordance with accounting standards issued under Article 32(2) of the Law.

 

Within the Medium Term Financial Plan DoE was awarded £200,000 of capital funding to “maintain the national park and environmental car parks”. In order to gain the best environmental impact from work on the national park the Department needs to identify and assess the biological assets within these highly diverse habitats. The Department has commenced with this work but will not complete everything until 2015. These pieces of work are essential for informing the Department’s ongoing maintenance programme, however, under accounting principles they cannot be capitalised and therefore require being expensed through the Department’s Statement of Comprehensive Net Expenditure. The Department is currently estimating that the total expenditure which will require transfer is £100,000; however, the majority of this work is investigatory in nature and as such may result in additional expenditure up to £200,000.

 

Resource Implications:  Over 2014 and 2015 the DoE Countryside Infrastructure capital head of expenditure will decrease by up to £200,000 and the DoE revenue head of expenditure will increase by an identical amount. This decision does not change the total amount of expenditure approved by the States in the Medium Term Financial Plan 2013 to 2015.

Action required:  

DoE Finance Manager to inform the Treasury and Resources Business Manager that this decision has been approved so that the Treasurer’s decision can be progressed.

Signature:

Position:

Date Signed:

Date of Decision:

Budget transfer for Countryside Infrastructure

 

Department of the Environment

Ministerial Decision Report

 

 

 

Department of the environment GAAP Capital to revenue transfer for couNtryside infrastructure

 

  1. Purpose of Report

 

To enable the Chief Officer to approve a non-recurring budget transfer of up to £200,000 over 2014 and 2015 from the Department of the Environment (DoE) capital head of expenditure (I00MF14015) to the DoE revenue head of expenditure to comply with Generally Accepted Accounting Principles (GAAP).

 

  1. Background

 

Within the Medium Term Financial Plan DoE were awarded £200,000 of capital funding to “maintain the national park and environmental car parks”. In order to gain the best environmental impact from work on the national park the Department needs to identify and assess the biological assets within these highly diverse habitats. The Department has commenced with this work but will not complete everything until 2015. These pieces of work are essential for informing the Department’s ongoing maintenance programme, however, under accounting principles they cannot be capitalised and therefore require being expensed through the Department’s Statement of Comprehensive Net Expenditure. The Department is currently estimating that the total expenditure which will require transfer is £100,000; however, the majority of this work is investigatory in nature and as such may result in additional expenditure up to £200,000.

 

3. Recommendation

 

The Chief Officer is recommended to approve a non-recurring budget transfer of up to £200,000 over 2014 and 2015 from the DoE capital head of expenditure (I00MF14015) to the DoE revenue head of expenditure for Countryside Infrastructure.

 

4. Reason(s) for Decision

 

Under Generally Accepted Accounting Principles (GAAP) expenditure that meets the definition of capital expenditure must be capitalised. This budget transfer is the movement in budget between capital and revenue required to align the budgeting treatment of expenditure with the accounting treatment, in order to comply with GAAP.

 

Article 18(1) (a) of the Public Finances (Jersey) Law 2005 states that all or any part of the amount appropriated by a head of expenditure may, with the approval of the Minister for Treasury and Resources, be transferred from a revenue head of expenditure to a capital head of expenditure, or vice versa, in order to comply with accounting standards issued for the purposes of Article 32(2). Delegation 1.2 delegates authority for non-contentious transfers between revenue and capital heads of expenditure (and vice versa) with no financial limit where the transfer is solely to ensure that financial transactions are accurately reflected in the States’ Accounts in accordance with accounting standards issued under Article 32(2) of the Law.

 

  1. Resource Implications

 

Over 2014 and 2015 the DoE Countryside Infrastructure capital head of expenditure will decrease by up to £200,000 and the DoE revenue head of expenditure will increase by an identical amount. This decision does not change the total amount of expenditure approved by the States in the Medium Term Financial Plan 2013 to 2015.

 

 

Report author : Finance Manager

Document date :

Quality Assurance / Review :

File name and path: I:\FINANCE\Ministerial Decisions\DOE\2014\Countryside Infrastructure Cap – Rev\WR – DoE GAAP Cap to Rev Countryside Infra

 

 

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