Department for the Environment
Ministerial Decision Report
Budget Transfer from capital to revenue in order to comply with IFRS for MET OFFICE SPEND
- Purpose of Report
To enable the Minister to approve the internal budget transfer in 2016, totalling £149,152.66, from the Equipment, Maintenance and Minor Capital head of expenditure (I00MC10009) to the Department of the Environment (DOE) revenue head of expenditure to comply with International Financial Reporting Standards (IFRS).
- Background
A review of expenditure in capital assets under course of construction has identified spend by the Met office that is revenue in nature and is required to be expensed.
The budgets for this spend have been loaded into the Equipment, Maintenance and Minor Capital head of expenditure (I00MC10009) and, accordingly, a budget transfer to the DOE revenue head of expenditure is required to match the accounting treatment.
- Recommendation
That the Minister approves the transfer of £149,152.66 budget from the DOE Equipment, Maintenance and Minor Capital head of expenditure (I00MC10009) to the DOE revenue head of expenditure.
- Reason for Decision
Under International Financial Reporting Standards (IFRS) expenditure that meets the definition of revenue expenditure must be expensed in year. 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 IFRS.
Article 18 of the Public Finances (Jersey) Law 2005 (the Law) and Finance Direction No.3.6 ‘Variations to Heads of Expenditure’ (the FD) set out the procedures for transfers between heads of expenditure. Paragraph 5.1 of the FD and Article 18(2) (c) of the Law require departments wanting to transfer funds between heads of expenditure to obtain the approval of the Minister responsible for their administration. Article 18(1) (c) of the Law requires the approval of the Minister for Treasury and Resources for any budget transfers between heads of expenditure. Paragraph 5.2 of the FD delegates non-contentious transfers between heads of expenditure up to £1,000,000 to the Treasurer of the States. Paragraph 5.3 of the FD states that, in all other instances, the approval of the Minister for Treasury and Resources must be obtained.
This transfer moves budgets to match the accounting treatment for the expenditure incurred.
- Resource Implications
The DOE Equipment, Maintenance and Minor Capital head of expenditure (I00MC10009) will decrease in 2016 by £149,152.66 and the DOE revenue head of expenditure will increase in 2016 by £149,152.66.
Report author : Finance Manager | Document date : 14 July 2016 |
Quality Assurance / Review : Finance Director | |
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