Budget Transfer: Revenue and Capital Heads of Expenditure

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A decision made on 24 November 2015:

Decision Reference: MD-ESC-2015-0024
Decision Summary Title:	Increase of Budget and subsequent transfers between Revenue and Capital Heads of Expenditure as a consequence of capital grants received for the 3G Pitch and Playground Equipment.	Date of Decision Summary:	24 November 2015
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:	Increase of budget and subsequent transfers between Revenue and Capital Heads of Expenditure as a consequence of capital grants received	Date of Written Report:	24 November 2015
Written Report Author:	Finance Manager	Written Report : Public or Exempt?	Public
Subject: Increase of budgets and subsequent transfer between Revenue and Capital Heads of Expenditure totalling £410,000, being £400,000 for the Sports Division as a contribution towards the costs of the 3G pitch, and £10,000 from the Jersey College for Girls Preparatory School as a contribution towards the costs of the new playground equipment.
Decision(s): The Minister approved the following: The use of capital grant income received in the sum of £410,000 as contributions towards capital projects detailed above. An increase of £410,000 to the Education, Sport and Culture (ESC) income budget and an identical increase to the ESC expenditure budget. An internal budget transfer of £410,000 from the ESC Revenue head of expenditure to the Capital head of expenditure for Sports Strategy Infrastructure (£400,000) and Minor Capital (£10,000).
Reason(s) for Decision: In support of the 5 year strategy (“Fit for the Future”) for sport and physical activity in Jersey an extra £4.5 million in capital funding was allocated to Education, Sport and Culture in 2014/2015 to improve facilities in preparation for the 2015 NatWest Island Games and for the use by the community afterwards. One of the capital projects identified by the sport strategy was for a new 3G Pitch at Springfield Stadium. The Football Foundation agreed to grant Education, Sport and Culture £400,000 from their Premier League and FA Facilities Fund towards this project. The Ministerial Decision (MD-ESC-2015-2021) signed on 7 October 2015 covered a revenue to capital budget transfer for a new playground at Jersey College for Girls Preparatory School. A contribution from the school PTA of £10,000 has been received towards this project. 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. Section 5.1 of Financial Direction 3.6 Variation to Heads of Expenditure states that Departments wanting to transfer funds between heads of expenditure must obtain the approval of their minister or of their accounting officer where a scheme of delegation exists prior to obtaining approval from the Treasury Minister or Treasurer. 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 revenue head of expenditure to a capital head of expenditure, or vice versa, in order to comply with accounting standards issued for the purposes of Article 32(2). Delegation 1.2 delegates authority for non-contentious transfers between revenue and capital heads of expenditure (and vice versa) with no financial limit where the transfer is solely to ensure that financial transactions are accurately reflected in the States’ Accounts in accordance with accounting standards issued under Article 32(2) of the Law. Under Article 19(1) of the Public Finances (Jersey) Law 2005 the Minister for Treasury and Resources can authorise a States funded body to withdraw from the consolidated fund during a year an amount not exceeding the likely excess of income over the amount approved in that year’s revenue allocation. Authority is delegated to the Treasurer of the States to approve any such income which matches additional expenditure.

Resource Implications:

The ESC revenue head of expenditure will show an additional income budget of £410,000 and an additional expenditure budget of £410,000. This expenditure will subsequently be transferred to the ESC capital head of expenditure which will increase by £410,000.

Action required:

The Minister for Education, Sport and Culture to request the Treasurer of the States to approve the use of capital grant income received, creation of income and expenditure budgets and the budget transfer from revenue to capital as referred to in the accompanying report.

Signature:

Position: Deputy Rod Bryans

Minister for Education, Sport and Culture

Date Signed:

Date of Decision: