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A decision made 20 June 2011 regarding:

Decision Reference: MD-ESC-2011-0021
Decision Summary Title:	Capital/Revenue Budget Transfer – Education, Sport and Culture		Date of Decision Summary:	13 June 2011
Decision Summary Author:	Senior Management Accountant		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	ESC ICT Capital/Revenue Budget Transfer		Date of Written Report:	25 May 2011
Written Report Author:	Senior Management Accountant		Written Report : Public or Exempt?	Public
Subject: Budget Transfer between: (i) ESC Capital votes for ICT Phase II Strategy and ICT Phase III Strategy (ii) ESC ICT Phase III Strategy Capital and ESC ICT Phase III Strategy Revenue as a result of moving to GAAP accounting
Decision(s): The Minister agreed the transfer of: (i) £538,558 from ESC ICT Phase II Strategy Capital vote to ESC ICT Phase III Strategy Capital vote (ii) £600,000 from the ESC ICT Phase III Strategy Capital vote to the ESC ICT Phase III Revenue budget.
Reason(s) for Decision: (i) ESC’s ICT Strategy has been part-funded by a central allocation of £500,000 per annum, and partly by an allocation from unspent capital funds within ESC capital votes – which were depleting. Due to ongoing uncertainty surrounding the budget in the final year of Phase II implementation it was decided to develop a new 3 year plan (Phase III) and submit a ‘growth’ bid as a more stable, long-term funding solution. In support of this - the unspent capital balance and outstanding project deliverables were to be transferred from Phase II to III. (ii) The budget transfer is the movement between capital and revenue required to align the budgeting treatment of expenditure with the GAAP accounting treatment as implemented by the States of Jersey in 2009. This does not change the total amount of expenditure approved by the States.
Resource Implications: Nil – transfer between capital/capital and capital/revenue budgets.
Action required: Assistant Director - Finance to seek Treasury and Resources Ministerial approval for the transfer. Once approval obtained, Assistant Director - Finance to action budget transfers.
Signature:		Position: Deputy J. Reed, Minister for Education, Sport and Culture
Date Signed:		Date of Decision:

Budget transfer - GAAP Accounting

Education, Sport and Culture Department

Senior Management Report

Subject:

ICT Phase II/Phase III Strategy Budget Transfer

Exempt Clause:

Date:

25 May 2011

Author:

Senior Management Accountant

Introduction

The purpose of this report is to ask the Minister to:

(i) approve a capital/capital budget transfer of £538,558 from ICT Phase II Strategy to ICT Phase III Strategy

(ii) approve a capital/revenue budget transfer of £600,000 from ICT Phase III Strategy capital to revenue in order to correctly identify ICT strategy spend in 2011

(ii) request the Minister for Treasury & Resources to approve these transfers.

Background

ICT Phase II Strategy

ESC’s IS Strategy has been part-funded by a central allocation of £500,000 per annum, and partly by an allocation from unspent capital funds within ESC capital votes – which were depleting. Due to ongoing uncertainty surrounding the budget in the final year of Phase II implementation it was decided to develop a new 3 year plan (Phase III) and submit a ‘growth’ bid as a more stable, long-term funding solution. In support of this - the unspent capital balance and outstanding project deliverables were to be transferred from Phase II to III.

The balance on the ICT Phase II capital budget is as follows:

ICT Phase II Strategy	Vote	Budget	Expenditure	Variance

EXIC01 Curriculum Replacemnt	C3314	538,558.66	0.00	538,558.66

ICT Phase III Strategy

A new Strategy, ‘Extending Boundaries’ was therefore developed for the period 2009-2011. This aimed to develop a learning vision for the island and tackle the challenges of e-safety; increasing personalisation, improving communication and streamlining information management – and has made good progress.

The balance on the ICT Phase III capital budget (assuming the approval of the transfer of £538,558 from Phase II is agreed) and revenue budgets to date is as follows:

ICT Phase III Strategy	Vote	Budget	Expenditure	Variance

Capital Budget
EXI300 Ph 3 Strategy General	C3317	600,000	0	600,000
EXI311 Central Database	C3317	0	111,872	(111,872)
		600,000	111,872	488,128
Transfer from ICT Phase II		538,558	0	538,558
		1,138,558	111,872	1,026,686

Revenue Budget		406,000	107,771	298,229

Total		1,544,558	219,643	1,324,915

A review of the ICT Phase III Strategy expenditure has identified that most of the costs will be revenue costs and to account for this correctly a transfer between capital and revenue is required.

Identified capital and revenue costs for 2011 are shown below:

	Capital	Revenue	Total

Expenditure to Date (from above)	111,872	107,771	219,643

Identified Future 2011 Expenditure
Central Database	262,000		262,000
Early Years	41,000	4,000	45,000
CMIS Realview application		25,000	25,000
Student Finance application.		71,000	71,000
Secondary Schools File Servers		420,000	420,000
Primary Schools Routers		30,000	30,000
Primary Schools Virtualised Server separations		15,000	15,000
Central Virtualised Server Platform		30,000	30,000
Safestick Management Console		11,000	11,000
PC Replacement programme		110,000	110,000
Netbook deployment programme		41,000	41,000
Wireless Filtering Licences and Support		10,000	10,000
Online services		6,000	6,000
Library Tallis servers and support		20,000	20,000
ICT Coordinators		110,000	110,000
Teacher training		20,000	20,000
Programme delivery		97,000	97,000
Total Identified Future 2011 Expenditure	303,000	1,020,000	1,323,000

Total Expenditure Planned for 2011	414,872	1,127,771	1,542,643

In previous years, a transfer between capital and revenue has normally taken place at year end. This has resulted in the monthly revenue accounts being distorted during the year. In 2011 efforts have been made to not only forecast the expenditure accurately, but to determine the exact nature of the expenditure.

It is therefore proposed that an initial transfer of £600,000 is made from capital to revenue with a further review of the ICT Phase III Strategy to take place later in the year when more accurate figures are known.

Recommendation

It is recommended that the Minister:

(i) requests the Minister for Treasury and Resources to approve the transfer of £538,558 from the ICT Phase II Strategy capital budget to the ICT Phase III Strategy capital budget

(ii) requests the Minister for Treasury and Resources to approve the transfer of £600,000 from the ICT Phase III Strategy capital budget to the ICT revenue budget as required by a change in accounting treatment.

(iii) notes that a future request for the transfer of funds between the ICT capital and revenue budgets will be made in 2011 when more accurate figures are known.