Victoria College: Budget transfer: Minor Projects

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A decision made 17 July 2014:

Decision Reference: MD-ESC-2014-0017
Decision Summary Title:	Budget transfer from revenue to capital for minor capital projects at Victoria College	Date of Decision Summary:	4th June 2014
Decision Summary Author:	Finance Manager, DfESC	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 revenue to capital for minor capital projects at Victoria College	Date of Written Report:	4th June 2014
Written Report Author:	Finance Manager, DfESC	Written Report : Public or Exempt?	Public
Subject: Budget transfer from revenue to capital for minor capital projects at Victoria College.
Decision(s): The Minister for Education, Sport and Culture approved budget transfers of £85,000 in 2014, £110,000 in 2015 from the ESC revenue head of expenditure to capital head of expenditure.
Reason(s) for Decision: The Ministerial Decision (MD-ESC-2014-0007) signed on 7 April 2014, covering Victoria College and Victoria College Preparatory fees for the academic year 2014-2015, highlighted the need for fee increases to assist with funding for minor capital projects as set out in the Victoria College 10 Year School Development Plan. Revenue to capital transfers identified for the next 3 years will enable the schools to update facilities and extend classroom space in accordance with the Plan. Under Generally Accepted Accounting Principles (GAAP) expenditure that meets the definition of capital expenditure only can 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 capital head of expenditure to a revenue head of expenditure, or vice versa, in order to comply with generally accepted accounting principles or an Order made under Article 32. Delegation 1.2 delegates authority for non-contentious transfers between heads of expenditure with no financial limit where the transfer is solely to ensure that financial transactions are accurately reflected in the States’ Accounts in accordance with GAAP or an Order made under Article 32 of the Law.

Resource Implications: The ESC capital head of expenditure will increase by £85,000 in 2014, £110,000 in 2015 and the revenue head of expenditure will decrease by identical amounts in 2014, 2015. This decision does not change the total amount of expenditure approved by the States for 2014, 2015.
Action required: The Minister for ESC to seek approval of the Treasurer of the States for the transfers.
Signature:	Position: Minister for Education, Sport and Culture
Date Signed:	Date of Decision:

Victoria College: Budget transfer: Minor Projects

Education, Sport and Culture

Ministerial Decision Report

Budget transfer from revenue to capital for minor capital projects at Victoria College

Purpose of Report

To enable the Minister for Education, Sport and Culture (ESC) to request that the Minister for Treasury and Resources (T&R) approve budget transfers of £85,000 in 2014, £110,000 in 2015 from the ESC revenue head of expenditure to capital head of expenditure to fund minor capital works at Victoria College.

Background

The Ministerial Decision (MD-ESC-2014-0007) signed on 7 April 2014, covering Victoria College and Victoria College Preparatory fees for the academic year 2014-2015, highlighted the need for fee increases to assist with funding for minor capital projects as set out in the Victoria College 10 Year School Development Plan, with immediate objectives including:

Conversion of the old drama studio to create a modern studio and additional classrooms (estimate £500,000);
Development of a new dining hall above the science department.

To assist with the funding of these projects fee increases forecast over the next three years provide for the following revenue to capital transfers:

	2014	2015	2016
	£	£	£
Victoria College	50,000	75,000	75,000
Victoria College Prep.	35,000	35,000	50,000
Total	85,000	110,000	125,000

Financial forecasts prepared for the years 2015 to 2017 provide indicative fee increases as follows to fund minor capital work projects:

	2015	2016	2017
	%	%	%
Victoria College	3.5	2.5	2.5
Victoria College Prep.	2.5	2.5	2.5

Recommendation

The Minister for ESC is recommended to request that the Minister for T&R approve budget transfers of £85,000 in 2014, £110,000 in 2015 from the ESC revenue head of expenditure to capital head of expenditure to fund minor capital works at Victoria College.

Reasons for Decision

Under Generally Accepted Accounting Principles (GAAP) expenditure that meets the definition of capital expenditure only can 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 capital head of expenditure to a revenue head of expenditure, or vice versa, in order to comply with generally accepted accounting principles or an Order made under Article 32.

Delegation 1.2 delegates authority for non-contentious transfers between heads of expenditure with no financial limit where the transfer is solely to ensure that financial transactions are accurately reflected in the States’ Accounts in accordance with GAAP or an Order made under Article 32 of the Law.

Resource Implications

The ESC capital head of expenditure will increase by £85,000 in 2014, £110,000 in 2015 and the revenue head of expenditure will decrease by identical amounts in 2014, 2015. This decision does not change the total amount of expenditure approved by the States for 2014, 2015.

Report author: Finance Manager	Document date : 4 June 2014
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