TRANSPORT AND TECHNICAL SERVICES DEPARTMENT
BUDGET TRANSFER BETWEEN REVENUE AND CAPITAL HEADS OF
EXPENDITURE FOR ASBESTOS RECEPTION
WORKS
Purpose of Report
To request the Minister to approve an internal budget transfer of up to £200,000 from the Transport and Technical Services (TTS) revenue head of expenditure to the capital head of expenditure (Q00MD11091).
Background
The original allocation of capital funding for a new asbestos waste transfer station and associated works was based on an estimate in 2011. Since this date firm design solutions and costs have been established. These take into account inflation and other factors including the deterioration of the proposed asbestos cell.
Under MD-TR-2015-0045 the Treasury and Resources Minister approved departmental carry forwards, including the sum of £1,180,640 relating to disposal of asbestos waste. In order for TTS to construct the new asbestos reception and transfer station some of this funding needs to be allocated to capital. The asbestos disposal carry forward into 2015 originally came from the same funding source as this capital head of expenditure in 2011.
Discussion
The States of Jersey implemented Generally Accepted Accounting Principles (GAAP) in 2009 and subsequently moved to IFRS accounting in 2012. IFRS accounting requires that expenditure should be accounted for as capital if it meets the IFRS accounting definition of capital expenditure, and revenue otherwise.
These budget transfers move budgets between revenue and capital so as to align the budgeting treatment of 2015 expenditure with the IFRS accounting treatment.
Recommendation
That the Minister approves the budget transfer of up to £200,000 from the TTS revenue head of expenditure to the TTS capital head of expenditure (Q00MD11091) to enable TTS to achieve the urgent asbestos reception infrastructure works.
Reason for Decision
Under Financial Direction 3.6 and the Public Finances (Jersey) Law 2005, the approval of the Minister for Treasury and Resources is required for any variations to heads of expenditure. Authority to approve non-contentious budget transfers under £1,000,000 has been delegated to the Treasurer of the States.
Resource Implications
The TTS revenue head of expenditure will decrease by up to £200,000 throughout 2015 and the TTS capital head of expenditure will increase by the identical amount.
Action Required
The Minister for Transport and Technical Services to seek approval from the Minister for Treasury and Resources for the budget transfer highlighted above. The Finance Director for Transport and Technical Services will then action the budget transfers in conjunction with the Head of Financial Performance Reporting.
Written by | Operations and Contracts Manager |
Approved by | Director of Finance |