Revenue to Capital Transfers 2010

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A decision made on 2 December 2010 regarding 2010 budget transfers between Revenue and Capital Heads of Expenditure

Decision Reference: MD-T-2010-0125
Decision Summary Title:	TTS Revenue to Capital Transfers 2010		Date of Decision Summary:	25 November 2010
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:	TTS Revenue to Capital Transfers 2010		Date of Written Report:	25 November 2010
Written Report Author:	Finance Manager		Written Report : Public or Exempt?	Public
Subject: 2010 Budget Transfers between Revenue and Capital Heads of Expenditure for TTS to comply with GAAP accounting.
Decision(s): The Minister approved the 2010 budget transfers between revenue and capital for TTS, representing a net budget transfer of £658,140 from revenue to capital, as detailed in the attached report.
Reason(s) for Decision: The States of Jersey implemented Generally Accepted Accounting Principles (GAAP) in 2009. GAAP accounting requires that all expenditure meeting the GAAP definition of capital expenditure should be treated as such; other expenditure must be accounted for as revenue. These budget transfers are the movements in budgets between revenue and capital 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.
Resource Implications: The effect of the transfer would be to decrease the Department’s 2010 Revenue Cash Limit from £27,609,600 to £26,951,460 a decrease of 2.38%, and increase the value of capital budgets by an equivalent amount. This does not change the total amount of expenditure approved by the States.
Action required: For the Finance Director to seek the approval of the Minister for Treasury and Resources for the transfer. Once approval obtained, the Finance Director to action budget transfers.
Signature:		Position:
Date Signed:		Date of Decision:

Revenue to Capital Transfers 2010

TRANSPORT AND TECHNICAL SERVICES

TTS Revenue to Capital Transfers 2010

Purpose of the Report

For the Minister to approve the budget transfer of £658,140 between the Transport and Technical Services Department revenue and capital budgets to align budgeting with Generally Accepted Accounting Principles (GAAP).

Background

The States of Jersey implemented Generally Accepted Accounting Principles (GAAP) in 2009. GAAP accounting requires that expenditure should be accounted for as capital if it meets the GAAP accounting definition of capital expenditure, and revenue otherwise.

Previously, ‘capital’ budgets have represented whatever the States Assembly voted as capital. The States have already approved capital allocations for 2010 in the 2010 Business Plan. These budget transfers move budgets between revenue and capital so as to align the budgeting treatment of 2010 expenditure with the GAAP accounting treatment.

This is a restatement exercise that only affects expenditure that is expected to be incurred in 2010. This transfer from revenue to capital only relates to 2010 expenditure.

Discussion

The following table identifies transfers between revenue and capital that meet the relevant GAAP definitions.

Rev – Cap

Description

Account codes

Debit £

Credit £

Waste

From Revenue	Waste Management General	QBB000. 701525		150,000
To Capital	Replacement Assets	New BU to be set up	150,000

Heating system for Bellozanne workshops, offices & staff welfare facilities due to closure of Bellozanne EFW plant.

Transport

From Revenue	Transport Init. Infrastructure	QTP100.713005		205,000
To Capital	STP Infrastructure Improv.	QZT300.121010	205,000

Improvements to the road infrastructure as part of the Sustainable Transport Policy to provide improved safety for pedestrians and cyclists including bus lay-bys, pedestrian refuges and improved cycle track surface.

From Revenue	DVS Admin – Hired Services	QTD000.540110		109,140
To Capital	Replacement Assets	New BU to be set up	109,140

DVS dataease project..

From Revenue	DVS Admin – Hired Services	QTD000.540110		54,000
To Capital	Replacement Assets	New BU to be set up	54,000

DVS driving test software for theory and practical.

Municipals

From Revenue	P&G Equipment Purchase	QGP000.562010		90,000
To Capital	Replacement Assets	New BU to be set up	90,000

New play ground equipment for Coronation Park.

From Revenue	Resurfacing General	QEH000.540110		50,000
To Capital	Infrastructure Capital	QZH243.121010	50,000

Resurfacing road at Mont Saint Marie.

Conclusion

Revenue to Capital transfers required in the sum of £658,140 to comply with UK GAAP.

Recommendation

The Minister approves the net budget transfer of £658,140 between revenue and capital within the Transport and Technical Services Department to align budgeting with accounting treatment.

Reason(s) for Decision

The States of Jersey implemented Generally Accepted Accounting Principles (GAAP) in 2010. GAAP accounting requires that all expenditure meeting the GAAP definition of capital expenditure should be treated as such; other expenditure must be accounted for as revenue. These budget transfers are the movements in budgets between revenue and capital required to align the budgeting treatment of expenditure with the GAAP accounting treatment. This does not change the total amount of expenditure voted by the States.

Resource Implications

The effect of the transfer would be to decrease the Department’s 2010 Revenue Cash Limit from £27,609,600 to £26,951,460 a decrease of 2.38%, and increase the value of capital budgets by an equivalent amount. This does not change the total amount of expenditure approved by the States.

Action Required

Written by:	Finance Manager

Approved by:	Acting Director of Finance– Transport and Technical Services

Attachments:	None

I:\Minister\2010\Ministerial Decisions\MD 00 TTS Revenue to Capital Transfers 2010\WR TTS 2010 Revenue Capital Budget Transfers V2.doc