Government of Jersey

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demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
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A decision made 17 April 2014:

Decision Reference: MD-T-2014-0036
Decision Summary Title:	Budget Transfer from Capital to Revenue for the Trial Exportation of Ash Residue		Date of Decision Summary:	14 April 2014
Decision Summary Author:	Finance Manager		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Budget Transfer from Capital to Revenue for the Trial Exportation of Ash Residue		Date of Written Report:	14 April 2014
Written Report Author:	Finance Manager		Written Report : Public or Exempt?	Public
Subject: Non-recurring budget transfer of up to £1,550,000 over the years 2014 and 2015 from Transport and Technical Services (TTS) Waste: Ash Pit La Collette capital head of expenditure (Q00DD11003) to the TTS revenue head of expenditure to fund the trial exportation of the Island’s ash residue. This budget transfer is required in order to comply with Generally Accepted Accounting Principles (GAAP).
Decision(s): The Minister approved a non-recurring budget transfer of up to £1,550,000 over the years 2014 and 2015 from TTS Waste: Ash Pit La Collette capital head of expenditure (Q00DD11003) to the TTS revenue head of expenditure to fund the trial for exportation of the Island’s ash residue.
Reason(s) for Decision: Financial Direction 3.6 ‘Variations to Heads of Expenditure’, paragraph 5.1 states that Departments wanting to transfer funds between heads of expenditure must obtain the approval of their Minister or of their accounting officer where a scheme of delegation exists. Under Generally Accepted Accounting Principles (GAAP) expenditure that meets the definition of revenue expenditure must be expended through the statement of comprehensive net expenditure. 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.
Resource Implications: The TTS Revenue head of expenditure to increase by up to £1,550,000 over the years 2014 and 2015 and the TTS Waste: Ash Pit La Collette Capital head of expenditure (Q00DD11003) to decrease by an identical amount. This decision does not change the total amount of expenditure approved by the States.
Action required: The Finance Director to seek the approval of the Minister for Treasury and Resources in accordance with Financial Direction 3.6 (Treasurer’s Delegation) once this decision is approved.
Signature:		Position:
Date Signed:		Date of Decision:

Budget Transfer: Ash Pit - La Collette: Trial Exportation of Ash

Transport and technical services

Budget Transfer from Capital to revenue for the TRIAL

exportation of ash residue

Purpose of Report

To enable the Minister to approve a non-recurring budget transfer of up to £1,550,000 in 2014 and 2015 from the Transport and Technical Services (TTS) Waste: Ash Pit La Collette capital head of expenditure (Q00DD11003) to the TTS revenue head of expenditure to fund the trial exportation of the Island’s ash residue. This budget transfer is required in order to comply with Generally Accepted Accounting Principles (GAAP).

Background

The previous policy followed by TTS was to entomb all ash residue from the Energy from Waste Plant within specially constructed cells within the La Collette headland. The La Collette headland was a temporary solution until TTS were able to find an alternative disposal method for ash residue. Subsequent technical enhancements have allowed for a trial into the exportation of ash residue to be disposed of off island.

The trial exportation of ash residue will last for a one year period beginning in the middle of 2014 and finishing in the middle of 2015. Should this trial prove successful, exportation will provide a cheaper and sustainable method of disposal for this ash residue in the future.

TTS was previously awarded a capital budget through the Medium Term Financial Plan (MTFP) Capital Programme for the disposal of ash residue at La Collette (Q00DD11003). Whilst the method employed for this trial is different to that proposed within the original capital vote the result is entirely in keeping with the proposal in the MTFP, i.e.: the disposal of ash residue. Therefore, the use of this funding for the exportation of ash residue is appropriate. However, in order to comply with GAAP and States of Jersey Accounting Policies this funding allocation needs to be transferred from this capital head of expenditure to the revenue account.

Recommendation

The Minister is recommended to approve a non-recurring budget transfer of up to £1,550,000 over the years 2014 and 2015 from TTS Waste: Ash Pit La Collette capital head of expenditure (Q00DD11003) to the TTS revenue head of expenditure to fund the trial for exportation of the Island’s ash residue.

Reason for Decision

Financial Direction 3.6 ‘Variations to Heads of Expenditure’, paragraph 5.1 states that Departments wanting to transfer funds between heads of expenditure must obtain the approval of their Minister or of their accounting officer where a scheme of delegation exists.

Under Generally Accepted Accounting Principles (GAAP) expenditure that meets the definition of revenue expenditure must be expended through the statement of comprehensive net expenditure. 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.

Resource Implications

The TTS Waste: Ash Pit La Collette capital head of expenditure (Q00DD11003) to decrease by up to a total of £1,550,000 in 2014 and 2015 and the TTS revenue head of expenditure to increase by an identical amount. This decision does not change the total amount of expenditure approved by the States.

Action Required

The Finance Director to seek the approval of the Minister for Treasury and Resources in accordance with Financial Direction 3.6 (Treasurer’s Delegation) once this decision is approved.

Written by:	Finance Manager
Approved by:	Director of Finance