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A decision made 17 July 2009 regarding: 2009 Budget transfer - GAAP accounting.

Decision Reference: MD-ESC-2009-0012
Decision Summary Title:	Capital to Revenue Budget Transfer – Education, Sport and Culture		Date of Decision Summary:	15 July 2009
Decision Summary Author:	J Harris – Management Accountant - Finance		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Sport Division: Capital to Revenue Budget Transfer		Date of Written Report:	15 July 2009
Written Report Author:	J Harris – Management Accountant, Finance & P Robinson – Assistant Director, Finance		Written Report : Public or Exempt?	Public
Subject: 2009 Budget Transfer between Capital and Revenue within the Sport Division as a result of moving to GAAP accounting
Decision(s): The Minister approved the 2009 budget transfer between capital and revenue of £106,077.
Reason(s) for Decision: The States of Jersey implemented Generally Accepted Accounting Principles (GAAP) in 2009. GAAP accounting requires that only expenditure meeting the GAAP definition of capital expenditure should be treated as such. All other expenditure must be accounted for as revenue. The budget transfer is the movement between capital and revenue required to align the budgeting treatment of expenditure with the GAAP accounting treatment. This does not change the total amount of expenditure approved by the States. The total sum involved in the transfer is £106,077 and would be expended as follows: £33,900 in the sports centres, specifically, · Replacement of Gym & Sports Equipment. · Refurbishment of Active Changing Areas at Fort Regent. · Re-carpeting of internal areas at Les Quennevais and Fort Regent. · Install low energy lighting at Les Quennevais. · Maintenance of Astro-turf at Les Quennevais · Replace flooring in Les Quennevais Gym · Re-tile Swimming Pool changing areas at Les Quennevais. · Re-place lockers in changing areas. The remaining £72,177 on various works at Les Creux. · Repairing Vandalised Toilets · Fencing & Security · Lighting · Lighting Replacement · Drainage/Down Pipes · Hoggin Surfaces · Soft Landscaping · Regrading of BMX area
Resource Implications: None.
Action required: Assistant Director - Finance to seek Treasury and Resources Ministerial approval for the transfer. Once approval obtained, Assistant Director - Finance to action budget transfers.
Signature:		Position: Deputy J.Reed, Minister for Education, Sport and Culture
Date Signed:		Date of Decision:

2009 Budget transfer - GAAP accounting

Education, Sport and Culture Department Senior Management Report
<><><><> Subject:<><><><>	Sport Division: Capital to Revenue Budget Transfer
Exempt Clause:		Date:	15 July 2009
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Author:	Julie Harris – Management Account & Peter Robinson – Assistant Director, Finance

Introduction

The Department has a balance of budget on capital votes, (1) Minor Capital 2009 (ERYC32), of £33,900 and (2) Les Creux Country Park (ERYC09) of £72,177 which it wishes to request the approval of the Treasury & Resources Minister, in accordance with Financial Direction 3.6 Variations to Heads of Expenditure, to transfer to the 2009 revenue budget.

Background – (1) Minor Capital 2009

2008 Equipment Replacement

The Sport Division’s annual minor capital allocation was permanently reduced from £250,000 in 2006 to £100,000 in 2007. This fund is required to invest in equipment and essential refurbishment of the facilities to provide the best level of service and maintain the highest possible standards across the centres and playing fields. This is essential as the Sports Division operates in a commercial and competitive environment within the Island and needs to ensure that income targets can be achieved each year.

It should be noted that prior to 2009 and the implementation of Generally Accepted Accounting Principles (GAAP), this budget was used on expenditure which is now classed separately as capital or revenue expenditure.

The balance on Equipment Replacement 2008 is £58,471

Minor Capital 2009

In 2009, the Sport Division received its annual allocation of minor capital of £100,000. In February 2009, following a Ministerial decision, a sum of £45,000 was transferred from capital to revenue, leaving £55,000 in the capital budget for the purchase of the Les Quennevais Sport Centre Swimming Pool cover.

Langford Climbing Wall

The climbing wall was purchased in 2008, equally, by Victoria College, Jersey College for Girls and the Sport Division. In July 2009, an extension to the climbing wall is scheduled which will cost an estimated £21,100. This cost is to be shared equally between the three areas. As the responsibility of the asset lies with the Sport Division and because the two schools have no capital budget, it is proposed that the Sport Division leave a balance in Minor Capital 2009 for the full cost and that the two schools make revenue budget transfers to the Sport Division revenue budget for their share.

After this purchase the remaining balance on Minor Capital 2009 will be £33,900 with no further capital expenditure identified for 2009.

Les Quennevais Swimming Pool Cover

As part of the 2008 Building Maintenance Schedule, the Sport Division made plans to install a Swimming Pool cover at Les Quennevais Sports Centre. Due to technical problems, the project was delayed and is now due to be installed in July 2009. The estimated cost of the project was initially £55,000 but is now more accurately valued at £57,300. The cost of the cover can be met from the balance of the 2008 capital allocation which will release the remainder of the 2009 allocation to be used to fund the forecast revenue overspend identified below.

2009 Revenue Budget

To date, £107,031 has been spent against the minor capital revenue budget of £45,000 allocated in 2009. This has been used on various revenue projects such as new cricket nets at Les Quennevais, Fencing maintenance at FB fields and a complete refurbishment of the changing rooms at the Queens Hall, Fort Regent.

Further revenue projects include:

· Replacement of Gym & Sports Equipment.

· Refurbishment of Active Changing Areas at Fort Regent.

· Re-carpeting of internal areas at Les Quennevais and Fort Regent.

· Install low energy lighting at Les Quennevais.

· Maintenance of Astro-turf at Les Quennevais

· Replace flooring in Les Quennevais Gym

· Re-tile Swimming Pool changing areas at Les Quennevais.

· Re-place lockers in changing areas.

The balance on this revenue budget is currently £62,031 overspent

Background – (2) Les Creux Country Park

The then Sport, Leisure and Recreation Committee was allocated funds for the creation of the Les Creux Country Park as a Millennium Project in 2000 and this has been supplemented since that time with funding for miscellaneous additional works.

The balance on Les Creux Country Park is £72,177.

No additional revenue budget has ever been allocated to the Department for the maintenance of the Park. A meeting has been held with officers of Property Holdings so that responsibility for future maintenance and repairs can be agreed and so that current outstanding works can be agreed. These works include the following:

Work Detail	Responsible Dept
Repair Vandalised Toilets	PH/ESC
Fencing & Security	PH
Lighting	PH
Lighting Replacement	ESC
Drainage/Down Pipes	PH
Hoggin Surfaces	PH
Soft Landscaping	ESC
Regrading of BMX area	PH

The transfer of the remaining budget to revenue will ensure that the majority of works can be completed.

Recommendation

It is recommended that SMT approves the transfer of the £33,900 balance of Minor Capital 2009 and £72,177 balance of Les Creux Country Park capital budgets’ to the 2009 Sport Division revenue budget, to meet the forecast overspend and to carry out miscellaneous maintenance work at the Park. This will align budgeting with accounting treatment under the implementation of GAAP.