TRANSPORT AND TECHNICAL SERVICES DEPARTMENT
Southern Cycle Track and Eastern Cycle Network
Transfers Between Different Heads of Expenditure
Purpose of Report
The purpose of this report is to seek the Minister for Transport and Technical Services’ approval for two internal budget transfers relating to the Southern and Eastern Cycle Networks:
a) An internal budget transfer amounting to £100,000 from the betweenRevenue head of expenditure to the andInfrastructure capital head of expenditure; and
.
b) An internal budget transfer amounting to £82,000 from the Infrastructure capital head of expenditure to the Eastern Cycle Network capital head of expenditurebetween to separate capital heads of expenditure.
Background
Southern Cycle Track
A sum of £100,000 was received from the JEC as a contribution to the southern cycle track infrastructure project. Originally it was treated as a credit against the capital expenditure on this project, thereby reducing the total cost of the asset. This original treatment was inconsistent with GAAP accounting as it meant that an asset would be created and capitalised at nil value.
In order to correct this issue the following needs to occur:
a) The Minister for Transport and Technical Services must seek the permission of the Minister for Treasury and Resources to use additional income in 2011 of £100,000.
b) The original £100,000 needs to be debited out of the Southern Cycle Track capital expenditure (QZH276).
c) The £100,000 will then be credited to Municipal Services – General (QDA000) as income.
d) The TTS income target budget and the revenue expenditure budget will need to be increased by £!00,000.
e) The Minister for TTS will seek the approval of the Minister for Treasury and Resources for a budget transfer of £100,000 from the TTS revenue head of expenditure to the Infrastructure capital head of expenditure.A ministerial decision will be passed allowing a budget transfer from this revenue business unit to the Southern Cycle Track business unit.
Eastern Cycle Network
The Sustainable Transport Policy STP has raised the importance of cycle tracks within Jersey. As a result the department has been required to reprioritise where its expenditure for the rest of 2011.
With this in mind a reallocation of £82,000 from the Infrastructure cCapital Contingency Hhead of Eexpenditure (Q00RL1001) to the Eastern Cycle Network capital Hhead of Eexpenditure (Q00BP10016) is required to progress work on the Eastern Cycle Network.
Discussion
Finance Direction No.3.6 ‘Variations to Heads of Expenditure’ sets out the procedures for the transfers between revenue and capital heads of expenditure and states that budget transfers in excess of £1,000,000 require the approval of the Minister for Treasury and Resources and the relevant Minister party to the transfer. Approval for non-contentious budget transfers of less than £1,000,000 has been delegated to the Treasurer of the States.
Recommendation
Southern Cycle Track
To approve a budget transfer totalling £100,000, from TTS revenue to TTS capital (QZH276 Southern Cycle Track £100,000), that will enable the capitalisation of the asset inline with GAAP accounting principals.
Eastern Cycle Network
To approve a budget transfer totalling £82,000 from Capital IInfrastructure capital Hhead of Eexpenditure (Q00RL1001) to the Eastern Cycle Network capital Hhead of Eexpenditure (Q00BP10016) to create funding for this expenditure.
Reason for Decision
Southern Cycle Track
To enable TTS to correctly account for the asset in line with GAAP accounting principals.
Eastern Cycle Network
To enable the reprioritisation of expenditure between capital votes to occur.
Resource Implications
Once the TTS income target budget and revenue expenditure budget have been increased by £100,000, this sum is subsequently to be transferred from the revenue head of expenditure to the Infrastructure capital head of expenditure.
In a separate budget transfer, the TTS Infrastructure capital head of expenditure to decrease by £82,000 and the TTS Eastern Cycle Network capital head of expenditure to increase by an identical amount. There are no resource implications as a result of this decision.
Action Required
The Finance Director to request the Minister for the Treasury and Resources Department to approve the use of £100,000 of additional income in 2011 and to approve the transfers between revenue and capital as referred to in this report.
Written by: | Capital Accountant |
Approved by: | Acting Finance Director |