Department of the Environment
Ministerial Decision Report
Department of the environment GAAP Capital to revenue transfer for REPAIRS TO FISHERIES VESSELS
- Purpose of Report
To enable the Chief Officer to approve a non-recurring budget transfer of £8,000 in 2015 from the Department of the Environment (DoE) capital head of expenditure (I0000C0974) to the DoE revenue head of expenditure to comply with Generally Accepted Accounting Principles (GAAP).
- Background
The Marine Resources Section employ two Avon Searider semi-rigid inflatables for boarding work, one is carried onboard the Norman Le Brocq Patrol vessel and the other is kept ashore both as an emergency backup and for independent use. The Seariders are identical and exchanged regularly with each other to spread out wear and tear. Originally it had been intended to replace the oldest Searider on a regular basis, but to reduce costs this policy has been dropped in favour of replacing outboards and other equipment fitted to the vessels, as and when necessary.
The Norman Le Brocq has just undergone a 5 yearly maintenance period at a yard in the UK and as part of this process the No 1 Searider was refurbished. During the absence of the patrol vessel the No 2 Searider was heavily utilised and suffered an engine failure. This vessel and engine are 17 years old and the engine failure has been identified as due to internal corrosion. Repairs (if possible) are likely to be expensive and cannot be seen as a long term solution.
The Marine Resources Section has just completed a refit of the Norman Le Brocq patrol vessel and due to extremely tight control over emergent work savings in the region of £19,000 have been identified. The Marine Resources section believe that in order to minimise future capital expenditure £8,000 of savings achieved on the Norman Le Brocq refit is transferred to the Department of the Environment revenue budget to allow the repairs necessary to the No 2 Searider.
3. Recommendation
The Minister is recommended to approve a non-recurring budget transfer of £8,000 in 2014 from the DoE capital head of expenditure (I0000C0974) to the DoE revenue head of expenditure for Marine Resources.
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.
- Resource Implications
The DoE Fisheries Mid-Year Refit capital head of expenditure will decrease by £8,000 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 |
|
18 November 2014