Budget Transfer: Grouville School Access Improvements

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A decision made 20 December 2017:

Decision Reference: MD-T-2017-0112
Decision Summary Title :	Budget transfer from DfI Revenue expenditure Head of Expenditure to Education Minor Capital Head of Expenditure in relation to Grouville School access improvements		Date of Decision Summary:	19 December 2017
Decision Summary Author:	Finance Manager		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:
Written Report Title :	Budget transfer from DfI Revenue expenditure Head of Expenditure to ESC Minor Capital Head of Expenditure in relation to Grouville School access improvements		Date of Written Report:	19 December 2017
Written Report Author:	Finance Manager		Written Report : Public or Exempt?	Public
Subject: A non-recurring budget transfer of £85,000 from the Department for Infrastructure (DfI) revenue head of expenditure to the Education Minor Capital Head of Expenditure (E00MC10003) in relation to Grouville School access improvements.
Decision(s): The Minister approved a non-recurring budget transfer of £85,000 from the Department for Infrastructure (DfI) revenue head of expenditure to the Education Minor Capital Head of Expenditure (E00MC10003) in relation to Grouville School access improvements.
Reason(s) for Decision: 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 capital head of expenditure to a revenue 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 IFRS or an Order made under Article 32 of the Law. Under International Financial Reporting Standards (IFRS) 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 IFRS. It was agreed by Education Department and Jersey Property Holdings (JPH) that works to improve the drop-off and pick up area at Grouville School would be funded 50% by the Education Department and 50% by Jersey Property Holdings. JPH have agreed to pay the additional costs identified during the project, making the final split 52% JPH 48% EDU. As these works improve the school asset the JPH portion of the funding needs to be transferred to the ESC Minor Capital Head of Expenditure (E00MC10003) so that it can be properly capitalised against the school. There is no suitable Head of Expenditure in DfI to transfer the funds to.
Resource Implications: The DfI revenue head of expenditure to decrease by £85,000 and the ESC Minor Capital Head of Expenditure (E00MC10003) to increase by £85,000.
Action required: The Finance Director to request the approval of the Treasurer of the States to approve the creation of income and expenditure budgets, and the budget transfer from revenue to capital as referred to in the accompanying report.
Signature:		Position: Minister for Infrastructure
Date Signed:		Date of Decision (If different from Date Signed):

Budget Transfer: Grouville School Access Improvements

DEPARTMENT FOR INFRASTRUCTURE

BUDGET TRANSFER FROM DFI REVENUE EXPENDITURE HEAD OF EXPENDITURE

TO ESC MINOR CAPITAL HEAD OF EXPENDITURE IN RELATION TO GROUVILLE

SCHOOL ACCESS IMPROVEMENTS

Purpose of Report

To enable the Minister to approve a transfer of £85,000 between the Department for Infrastructure (“DfI”) revenue head of expenditure and the Education Minor Capital Head of Expenditure (E00MC10003) in relation to Grouville School access improvements.

Background

Works have been carried out at Grouville School during 2017 to improve the drop-off and pick-up area. It has been agreed that these works will be jointly and equally funded by Jersey Property Holdings (JPH) and Education. As these works improve the Grouville School asset they need to be capitalised. This necessitates transferring the JPH share of the budget from the DfI revenue head of expenditure to the Education Minor Capital Head of Expenditure (E00MC10003), in order that the costs can then be transferred to the Grouville School asset on the JPH balance sheet. There is not an appropriate Head of Expenditure in JPH to transfer the costs to.

Recommendation

That the Minister approves a non-recurring budget transfer of £85,000 from the Department for Infrastructure (DfI) revenue head of expenditure to the Education Minor Capital Head of Expenditure (E00MC10003) in relation to Grouville School access improvements.

Reason for Decision

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 capital head of expenditure to a revenue 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 IFRS or an Order made under Article 32 of the Law.

Under International Financial Reporting Standards (IFRS) 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 IFRS.

It was agreed by Education Department and Jersey Property Holdings (JPH) that works to improve the drop-off and pick up area at Grouville School would be funded 50% by the Education Department and 50% by Jersey Property Holdings. JPH have agreed to pay the additional costs identified during the project, making the final split 52% JPH 48% EDU. As these works improve the school asset the JPH portion of the funding needs to be transferred to the ESC Minor Capital Head of Expenditure (E00MC10003) so that it can be properly capitalised against the school. There is no suitable Head of Expenditure in DfI to transfer the funds to.

Resource Implications

The DfI revenue head of expenditure to decrease by £85,000 and the ESC Minor Capital Head of Expenditure (E00MC10003) to increase by £85,000.

6. Action Required

The Finance Director to request the approval of the Treasurer of the States to approve the creation of income and expenditure budgets, and the budget transfer from revenue to capital as referred to in the accompanying report.

Written by:	Finance Manager
Approved by:	Director of Finance