TRANSPORT AND TECHNICAL SERVICES DEPARTMENT
Transfers Between Different Heads of Expenditure FOR Le DICQ
PUMPING STATION UPGRADE
Purpose of Report
The purpose of this report is to seek approval from the Minister for Transport and Technical Services (TTS) for an internal budget transfer of £25,000 from the Revenue head of expenditure to the Infrastructure capital head of expenditure.
Background
Antler Homes paid TTS a lump sum of £25,000 for the upgrade of Le Dicq Pumping Station as a result of the development they are undertaking. The amount is currently sitting on the TTS balance sheet as a prepayment.
In order to use this extra income to upgrade the asset and comply with GAAP accounting principles the following process needs to occur:
a) The prepayment needs to be realised as income in the TTS income statement. This will occur in business unit QBP000 – Pumping Stations – General.
b) The TTS income target budget and the revenue expenditure budget will need to be increased by £25,000.
c) The Minister for TTS will seek the approval of the Minister for Treasury and Resources for a budget transfer of £25,000 from the TTS Revenue head of expenditure to the Infrastructure capital head of expenditure.
Discussion
Finance Direction No 3.6 ‘Variations to Heads of Expenditure’ sets out the procedures for the transfers between revenue and capital heads of expenditure and states that budget transfers in excess of £1,000,000 require the approval of the Minister for Treasury and Resources and the relevant Minister party to the transfer. Approval for non-contentious budget transfers of less than £1,000,000 has been delegated to the Treasurer of the States.
Recommendation
The Minister for TTS approve a budget transfer totalling £25,000, from TTS Revenue to TTS Capital head of Infrastructure that will enable the correct GAAP accounting principles to be followed.
Reason for Decision
To enable TTS to correctly account for the project in line with GAAP accounting principles.
Resource Implications
Once the TTS income target budget and revenue expenditure budget have been increased by £25,000, this sum is subsequently to be transferred from the Revenue head of expenditure to the Infrastructure capital head of expenditure.
Action Required
The Finance Director to request the Minister for Treasury and Resources to approve the use of £25,000 of additional income in 2012 and to approve the transfers between revenue and capital as referred to in this report.
Written by: | Capital Accountant |
Approved by: | Acting Director of Finance |