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A decision made 21 January 2010 regarding: Budget transfer relating to JD Edwards - States accounting system upgrade.

Decision Reference: MD-TR-2010-0012
Decision Summary Title:	Budget Transfer – Treasury & Resources - JDE		Date of Decision Summary:	19 January 2010
Decision Summary Author:	Finance Director		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	n/a
Written Report Title:	Treasury & Resources Budget Transfer - JDE		Date of Written Report:	19 January 2010
Written Report Author:	Finance Director		Written Report : Public or Exempt?	Public
Subject: Budget Transfer – Treasury & Resources – JD Edwards development and upgrade costs
Decision(s): The Minister agreed the transfer of £267,305 from the Treasury & Resources JD Edwards capital vote to the Treasury and Resources 2009 Systems revenue budget on a non-recurring basis.
Reason(s) for Decision: The Treasury undertook a review of the expenditure charged to Treasury & Resources capital projects in 2009 in order to ensure that these accounts were compliant with Generally Accepted Accounting Practices, (GAAP). It was recognised that some of the expenditure was of a revenue nature and should be more appropriately recognised in the revenue accounts.
Resource Implications: No additional resources – transfer between capital and revenue budgets.
Action required: Treasury and Resources Finance Director to action budget transfers.
Signature:		Position: Deputy E. J. Noel, Assistant Minister for Treasury and Resources
Date Signed:		Date of Decision:

Budget transfer relating to JD Edwards - States accounting system upgrade

Date: 18 th January 2010

Treasury & Resources Budget Transfer

Purpose of the report

To request approval for the transfer of £267,305 budget from the Treasury & Resources capital budget to its revenue budget in order to comply with correct GAAP accounting treatment.

Background

As part of its 2009 capital vote Treasury & Resources were allocated a budget of £750,000 for the ‘Development and Upgrade of JD Edwards’. The funding was for the continued upgrade of the system in order to ensure that it can be fully supported and to reduce the risk of system failure. Furthermore more the work would also ensure that JD Edwards is compatible with the States’ infrastructure, is adaptable to changes and can be integrated with other systems if possible.

In 2009 two projects were carried out.

1. Project to ensure that the accounting systems are fully supported and mitigate the identified risk of system failure - £134,925.

2. Project to review entire JDE system and ensure its compatibility with States infrastructure - £132,380.

The project expenditure was initially classified as capital expenditure but under GAAP accounting the projects do not meet the definitions of asset enhancement. The expenditure has therefore been reclassified as revenue because the work was required to maintain JDE at its existing operational performance. The amounts therefore need to be charged to the revenue account instead of being capitalised as part of the existing fixed asset.

reCOMMENDATIONS

To approve the non-recurring transfer of £267,305 budget from the Treasury & Resources capital vote to the Treasury & Resources revenue budget in 2009 as required by GAAP accounting.