DEPARTMENT FOR INFRASTRUCTURE
BUDGET TRANSFER IN RELATION TO VICTORIA COLLEGE CAPITAL PROJECT
- Purpose of Report
The purpose of this report is to seek the Minister’s approval for a non-recurring budget transfer of £45,170 from the Victoria College Capital Projects capital head of expenditure (FA0MD09002) to the DfI revenue head of expenditure in order to return unspent funds to the Victoria College Foundation in line with the initial funding contributions.
- Background
The Victoria College Foundation contributed funds towards the construction of the Le Brocq building at Victoria College. As the project came in underspent it has been agreed that a proportion of the underspend is returned to the Foundation, with the remainder of the underspend returned to the Consolidated Fund (whence it came). The final underspend on the project was £127,240, as the Fund contributed 35.5% of the original budget the amount due to the Fund us £45,170. In order to transfer the funds to the Foundation, whilst still complying with States of Jersey accounting policies and the Public Finances (Jersey) Law 2005 a capital to revenue budget transfer is required.
3. Recommendation
The Minster is recommended to approve a non-recurring budget transfer of £45,170 from the Victoria College Capital Projects capital head of expenditure to the DfI revenue head of expenditure in order to return unspent funds to the Victoria College Foundation in line with the initial funding contributions.
4. Reason for Decision
Under International Financial Reporting Standards (IFRS) expenditure that meets the definition of capital expenditure must be capitalised. These budget transfers are the movement in budgets between capital and revenue heads of expenditure required to align the budgeting treatment of expenditure with the accounting treatment, in order to comply with IFRS and to ensure that capital expenditure is charged to the correct head of expenditure. These transfers do not change the amount of expenditure agreed by the States.
Article 18 of the Public Finances (Jersey) Law 2005 and Finance Direction No.3.6, Variations to Heads of Expenditure, set out the procedures for transfers between heads of expenditure. Paragraph 5.1 of FD3.6 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.
5. Resource Implications
As a result of the above transfers the Victoria College Capital Projects capital head of expenditure will decrease by £45,170 and the DfI revenue head of expenditure will increase by the same amount.
These transfers do not change the amount of expenditure agreed by the States.
6. Action Required
The Department for Infrastructure Finance Manager to request the approval of the Treasurer of the States for this budget transfer.
Written by: | Finance Manager |
Approved by: | Director of Estates |