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L'înformâtion et les sèrvices publyis pouor I'Île dé Jèrri

Budget Transfer: Boiler House Controls and Burners: Purchase - GAAP Accounting

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

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A decision made 6 December 2013:

Decision Reference:      MD-HSS-2013-0049

 

Decision Summary Title :

H&SS Budget Transfer from Revenue to Minor Capital to comply with GAAP for the purchase of new boiler house controls and burners.

 

Date of Decision Summary:

23 November 2024

Decision Summary Author:

 

Capital & Control Account Manager

Decision Summary:

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

 

Written Report

Title :

H&SS Budget Transfer from Revenue to Capital to comply with GAAP for the purchase of new boiler house controls and burners.

 

Date of Written Report:

 

Written Report Author:

Capital & Control Account Manager

Written Report :

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Subject:

 

Non-recurring budget transfer in 2013 of £89,400 from the H&SS Revenue head of expenditure to the H&SS Minor Capital head of expenditure. This budget transfer is required in order to comply with Generally Accepted Accounting Principles (GAAP).

Decision(s):

 

The Minister approved a non-recurring budget transfer in 2013 of £89,400 from the H&SS Revenue to the H&SS Minor Capital head of expenditure for the Boiler House project in order to comply with GAAP.

 

 

Reason(s) for Decision:

 

Under Generally Accepted Accounting Principles (GAAP) expenditure that meets the definition of capital expenditure must 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.

 

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 & Resources, be transferred from a revenue head of expenditure to a capital head of expenditure, or vice versa, in order to comply with generally accepted accounting principles or an Order made under Article 32.  Delegation 1.2 delegates authority for non-contentious transfers between heads of expenditure with no financial limit where the transfer is solely to ensure that financial transactions are accurately reflected in the States’ Accounts in accordance with GAAP or an Order made under Article 32 of the Law.

 

Resource Implications:

 

The H&SS revenue head of expenditure to decrease by £89,400 in 2013 and the H&SS Minor capital head of expenditure to increase by £89,400. This decision does not change the total amount of expenditure approved by the States.

Action required:

 

For officers of the Department to request the approval of the Treasurer of the States to the transfer.

Signature:

 

 

Position:

Minister For Health and Social Services

 

Date Signed:

 

 

Date of Decision (If different from Date Signed):

 

 

Budget Transfer: Boiler House Controls and Burners: Purchase - GAAP Accounting

 

Health & Social Services

Minister’s Decision Report

 

 

 

Budget Transfer from Treasury and Resources to Health and Social Services for purchase of new boiler house controls and burners

 

  1. Purpose of Report

 

To enable the Minister to approve a non-recurring budget transfer in 2013 of £89,400 from the H&SS Revenue head of expenditure to the H&SS Minor Capital head of expenditure. This budget transfer is required in order to comply with Generally Accepted Accounting Principles (GAAP).

 

 

  1. Background

 

H&SS have been targeted with achieving recurrent Comprehensive Spending Review (CSR) savings of £260,000 from their annual spend on energy by the end of 2013.

 

A report was commissioned by the Transformation Programme Energy Project (dated 9th January 2012) which identified a number of invest-to-save projects that would yield the targeted savings. This resulted in an agreed total investment of £523,000 from the CSR Restructuring Provision.

 

Of this, £413,000 was allocated to H&SS in 2012 (reference MD-HSS-2012-0006) and the balance of £110,000 was allocated to Corporate Procurement projects. 

Below is a table that summarises the financial position of these projects at the end of 2012:-

 Department

Allocation

2012 Spend *

Balance

Health and Social Services

£413,000

£309,750

£103,250

Corporate Procurement

£110,000

£0

£110,000

TOTAL

£523,000

£309,750

£213,250

The balance of £213,250 was approved by the Minister for Treasury & Resources (T&R) to be carried forward into 2013 to fund a number of energy saving projects within H&SS.

To enable these projects to be carried out the Minister for H&SS accepted a revenue budget transfer of £110,000 from the T&R revenue head of expenditure which represented the Corporate Procurement’s unspent allocation (reference MD-HSS-2013-0030).

Boiler House:

One of the H&SS projects is for the purchase of new controls and burners for the Boiler House at the General Hospital.

The capital element of upgrading the burners of £89,400 is being refunded from the CSR Restructuring Provision whilst the replacement controls panels are being funded as planned by the Jersey Property Holdings backlog maintenance programme. H&SS accepted the transfers from the CSR Restructuring Provision as a revenue transfer. It now needs to be re-categorised as capital to comply with GAAP.

 

3. Recommendation

 

It is recommended that the Minister of Health & Social Services approves a non-recurring budget transfer in 2013 of £89,400 from the H&SS Revenue to the H&SS Minor Capital head of expenditure for the Boiler House project in order to comply with GAAP.

 

4. Reason for Decision

 

Under Generally Accepted Accounting Principles (GAAP) expenditure that meets the definition of capital expenditure must 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.

 

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 Health & Social Services, be transferred from a revenue head of expenditure to a capital head of expenditure, or vice versa, in order to comply with generally accepted accounting principles or an Order made under Article 32.  Delegation 1.2 delegates authority for non-contentious transfers between heads of expenditure with no financial limit where the transfer is solely to ensure that financial transactions are accurately reflected in the States’ Accounts in accordance with GAAP or an Order made under Article 32 of the Law.

 

  1. Resource Implications

 

The H&SS revenue head of expenditure to decrease by £89,400 with effect from 1st January 2013 and the H&SS minor capital head of expenditure to increase by an identical amount. This decision does not change the total amount of expenditure approved by the States.

 

Report author : Capital & Control Account Manager

Document date :

Quality Assurance / Review : Finance Director

File name and path:

 

 

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