Integrated Care Record Project: Budget transfer

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A decision made 17 January 2011 regarding: Integrated Care Record Project: Budget transfer - GAAP accounting.

Decision Reference: MD-TR-2011-0003
Decision Summary Title:	Health and Social Services – Capital to Revenue Budget Transfer for Integrated Care Record Project		Date of Decision Summary:	6th January 2011
Decision Summary Author:	Head of Decision Support		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Health and Social Services – Capital to Revenue Budget Transfer for Integrated Care Record Project		Date of Written Report:	6th January 2011
Written Report Author:	Decision Support Officer		Written Report : Public or Exempt?	Public
Subject: 2010 budget transfer between Health and Social Services Department (H&SS) capital and revenue heads of expenditure for the Integrated Care Record (ICR) project.
Decision(s): The Minister for Treasury and Resources approved the transfer of £1.2 million from the H&SS ICR Project capital head of expenditure to the H&SS revenue head of expenditure in 2010.
Reason(s) for Decision: The States of Jersey implemented Generally Accepted Accounting Principles (GAAP) in 2009. GAAP accounting requires that only expenditure meeting its definition of capital should be treated as such and that all other expenditure must be accounted for as revenue. This budget transfer is the movement in 2010 between capital and revenue and is required to align the budgeting treatment of 2010 expenditure with GAAP accounting principles. Article 15(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 used for the purposes of another head of expenditure.
Resource Implications: The H&SS ICR Project capital head of expenditure to decrease by £1.2m and the H&SS revenue head of expenditure to increase by an identical amount in 2010. This decision does not change the total amount of expenditure approved by the States for that year.
Action required: Head of Decision Support to inform the Head of Financial Performance Reporting and the H&SS Assistant Director of Finance that the transfer has been approved.
Signature:		Position: Senator P F C Ozouf, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Integrated Care Record Project: Budget transfer - GAAP accounting

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Treasury and Resources

Ministerial Decision Report

HEALTH AND SOCIAL SERVICES – CAPITAL TO REVENUE BUDGET TRANSFER FOR INTEGRATED CARE RECORD PROJECT

Purpose of Report

To enable the Minister for Treasury and Resources to approve a 2010 budget transfer between the Health and Social Services Department (H&SS) capital and revenue heads of expenditure for the Integrated Care Record (ICR) project.

Background

The initial ICR Project budget allocation between capital and revenue expenditure was undertaken at an early stage in the project. As the project has progressed a more detailed analysis of the expenditure incurred has been undertaken to support the capitalisation of the appropriate elements of the project in accordance with the States of Jersey Capital Accounting Manual; a budget transfer is now necessary to align the total budget to the expenditure profile.

Integrated Care Record (ICR Project)

The remaining funding for this project following transfers to completed works and the capitalisation of completed elements is allocated as follows:

	Current Budget
	£
JZ0073 ICR Project	6,232,716
KFT610 ICT - Projects	897,691
	7,130,407

A detailed analysis of the costs incurred and the forecast expenditure indicate that it is necessary to reallocate part of the existing capital budget to fund the revenue part of the project. The forecast expenditure to the end of 2010 is as follows:

	2010 Forecast
	£
Capital: Patient Administration and Pharmacy Systems	3,447,000
Revenue Expenditure	2,124,000
	5,571,000

To meet the expected revenue expenditure a transfer of £1,200,000 from the capital budget JZ0073 ICR Project to the revenue budget KFT610 ICT – Projects is required.

Recommendation

The Minister for Treasury and Resources is recommended to approve the transfer of £1.2 million from the H&SS ICR Project capital head of expenditure to the H&SS revenue head of expenditure in 2010.

Reason for Decision

The States of Jersey implemented Generally Accepted Accounting Principles (GAAP) in 2009. GAAP accounting requires that only expenditure meeting its definition of capital should be treated as such and that all other expenditure must be accounted for as revenue. This budget transfer is the movement in 2010 between capital and revenue and is required to align the budgeting treatment of 2010 expenditure with GAAP accounting principles.

Article 15(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 used for the purposes of another head of expenditure.

Resource Implications

The H&SS ICR Project capital head of expenditure to decrease by £1.2m and the H&SS revenue head of expenditure to increase by an identical amount in 2010. This decision does not change the total amount of expenditure approved by the States for that year.

Report author : Decision Support Officer	Document date : 6th January 2011
Quality Assurance / Review : Head of Decision Support	File name and path: l:\treasury\sections\corporate finance\ministerial decisions\dss, wrs and sds\2011-0003 - hss budget transfer for icr project - lmr\wr - h&ss budget transfer for icr - lmr.doc
MD Sponsor : Treasurer of the States