Budget transfer from Department of the Environment to Department for Infrastructure: Planning Obligation Agreements 2017

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A decision made 17 July 2017:

Decision Reference: MD-PE-2017-0057
Decision Summary Title :	The increase of budget and subsequent transfer between Department of the Environment Revenue Head of Expenditure and Department for Infrastructure Revenue Head of Expenditure 2017-2019		Date of Decision Summary:	29 June 2017
Decision Summary Author:	Finance 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 :	The increase of budget and subsequent transfer between Department of the Environment Revenue Head of Expenditure and Department for Infrastructure Revenue Head of Expenditure 2017-2019		Date of Written Report:	29 June 2017
Written Report Author:	Finance Manager		Written Report : Public or Exempt?	Public
Subject: The transfer of up to £570,004.24 from the Department of the Environment (DoE) Revenue Head of Expenditure to the Department for Infrastructure (DfI) Revenue Head of Expenditure for work completed by the Department for Infrastructure (DfI) to fulfil the requirement of various Planning Obligation Agreements during the current MTFP 2017-19.
Decision(s): The Minister for Department of the Environment agreed to request the Minister for Treasury and Resources approve the transfer of up to £570,004.24 from the Department of the Environment (DoE) Revenue Head of Expenditure to the Department for Infrastructure (DFI) Revenue Head of Expenditure during the current MTFP 2017-19.
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 GAAP or an Order made under Article 32 of the Law. 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.
Resource Implications: The Department of the Environment (DoE) revenue head of expenditure will show additional income budget of up to £570,004.24 and an additional expenditure budget of up to £570,004.24 during the current MTFP 2017-19. This expenditure budget will subsequently be transferred to the Department for Infrastructure (DFI) Revenue Head of Expenditure.
Action required: The Finance Director to request the Treasurer of the States to approve the budget creation and subsequent transfers from Department of the Environment (DoE) Revenue Head of Expenditure to Department for Infrastructure (DFI) Revenue Head of Expenditure as referred to in the accompanying report.
Signature:		Position:
Date Signed:		Date of Decision (If different from Date Signed):

Budget transfer from Department of the Environment to Department for Infrastructure: Planning Obligation Agreements 2017 - 2019

Department of the Environment

Ministerial Decision Report

Increase of budget and subsequent transfer between Department of the Environment Revenue Head of Expenditure and Department for Infrastructure Revenue Head of Expenditure 2017-2019

Purpose of Report

To enable the Minister to approve the following:

The transfer of up to £570,004.24 from the Department of the Environment (DoE) Revenue Head of Expenditure to the Department for Infrastructure (DfI) Revenue Head of Expenditure for work completed by the Department for Infrastructure (DfI) to fulfil the requirement of various Planning Obligation Agreements during the current MTFP 2017-19.

Background

Planning Obligation Agreements signed by the Minister for the Department of the Environment (DoE) and/or the Minister for the DfI frequently set out conditions entailing transport / highway improvements which require work to be carried out by Department for Infrastructure (DfI). The amounts for individual POAs vary from £2,000 to £180,379. This Ministerial Decision will only enable individual transfers up to £180,379. Those over this amount will require separate Ministerial Decisions.

This Ministerial Decision allows for budget transfers up to £570,002.24 in total over the current MTFP period of 2017 to 2019. The Finance Director for Department of the Environment (DoE) will ensure that this total is not exceeded without additional Ministerial approval being sought.

DoE currently hold the following amounts on their balance sheet for POAs:

RP/2011/0614 - £33,668.02 towards bus services contribution (Service 20 for 2018 and 2019)
P/2013/1806 – £2,000 towards Eastern Cycle Network
P/2014/0635 - £7,500 towards bus shelter provision
P/2011/14/03 - £50,000 towards footpath works on Rue Horman
P/2012/1654 - £51,157.24 towards cycle and walking improvements at La Frigate
P/2013/0337 - £7,500 towards bus shelter provision
P/2016/0137 - £6,300 towards footpath works on Beach Road
P/2016/0308 - £34,500 towards a bus shelter provision and road safety crossing and highway improvements
P/2015/1538 - £176,500 of which £16,500 is toward bus shelter provision and £160,000 is for enhancement of the public realm infrastructure within the vicinity of the “BOA/Play.com” site
P/2012/1141 - £180,378.98 for the improvement works to Charing Cross
P/2015/1313 - £15,500 of which £8,000 is toward the Eastern Cycle Network, and £7,500 bus shelter provision
P2015/1947 - £5,000 towards Eastern Cycle Network

In fulfilling these conditions on behalf of the planning applicant, DfI incur a variety of capital costs without receiving budgets to do so on the understanding that when these works are complete the budget will be transferred. Prior to the budget transfer being actioned by Finance, the operational manager within DfI must seek the approval of DoE Planning Director in order to release the funds.

Once this agreement is in place, DfI finance team are notified by the Planning team. The finance team will then send details of the intended transfer to Treasury to check prior to the transfer being made. Details will include information on the costs incurred to meet the Planning Obligation Agreement and a copy of the Planning Obligation Agreement.

The payments from the planning applications will then transferred to DfI by way of additional income.

Recommendation

The Minister approves the following:

The transfer of up to £570,004.24 from the Department of the Environment (DoE) Revenue Head of Expenditure to the Department for Infrastructure (DfI) Revenue Head of Expenditure for work completed by the Department for Infrastructure (DfI) to fulfil the requirement of various Planning Obligation Agreements during the current MTFP 2017-19.

Reason for the Decision

To enable the reimbursement of budgets spent within Department of Infrastructure on fulfilling Planning Obligation Agreement conditions.

Resource Implications

The Department of the Environment (DoE) revenue head of expenditure will show additional income budget of up to £570,004.24 and an additional expenditure budget of up to £570,004.24 during the current MTFP 2017-19. This expenditure budget will subsequently be transferred to the Department for Infrastructure (DFI) Revenue Head of Expenditure.