Budget Transfer: Revenue to Capital Heads of Expenditure

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A decision made on 1 December 2016:

Decision Reference: MD-ESC-2016-0028
Decision Summary Title:	Budget transfer from revenue to capital for minor capital expenditure	Date of Decision Summary:	7 November 2016
Decision Summary Author:	Head of Finance	Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written	Person Giving Oral Report:	N/A
Written Report Title:	Budget transfer from revenue to capital for minor capital expenditure	Date of Written Report:	7 November 2016
Written Report Author:	Head of Finance	Written Report : Public or Exempt?	Public
Subject: Budget transfer from revenue to capital for minor capital expenditure.
Decision(s): The Minister for Education approved a budget transfer of £101,431 in 2016 from the Education revenue head of expenditure to capital head of expenditure (Minor Capital E00MC10003).
Reason(s) for Decision: Under Generally Accepted Accounting Principles (GAAP) expenditure that meets the definition of capital expenditure only can 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. The transfer to capital includes capital grant income received in the sum of £38,000 as contribution towards the purchase of a wheelchair access vehicle requiring an increase in the Education income budget and an identical increase in the Education expenditure budget, and a subsequent internal budget transfer of £38,000 from the Education revenue head of expenditure to the capital head of expenditure (Minor Capital E00MC10003). 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.

Resource Implications: The Education capital head of expenditure (Minor Capital E00MC10003) will increase by £101,431 in 2016 and the revenue head of expenditure will decrease by an identical amount. This decision does not change the total amount of expenditure approved by the States for 2016.
Action required: The Minister for Education to seek approval of the Treasurer of the States for the transfers.
Signature:	Position: Deputy Rod Bryans Minister for Education
Date Signed:	Date of Decision:

Budget Transfer: Revenue to Capital Heads of Expenditure

Education Department

Ministerial Decision Report

Budget transfer from revenue to capital for minor capital expenditure

Purpose of Report

To enable the Minister for Education to request that the Minister for Treasury and Resources (T&R) approves a budget transfer of £101,431 in 2016 from the ESC revenue head of expenditure to capital head of expenditure (Minor Capital E00MC10003) to fund minor capital expenditure.

Background

The Education Department has incurred the following capital expenditure in 2016 requiring revenue to capital budget transfers in order to comply with Generally Accepted Accounting Principles (GAAP):

Service Area	Description	£
Mont-à-l'Abbé School	Wheelchair access vehicle	53,000
Youth Service	2 rigid inflatable boats (RIBs)	48,431
Total		101,431

The transfer to capital includes capital grant income received in the sum of £38,000 as contribution towards the purchase of a wheelchair access vehicle requiring an increase in the Education income budget and an identical increase in the Education expenditure budget, and a subsequent internal budget transfer of £38,000 from the Education revenue head of expenditure to the capital head of expenditure (Minor Capital E00MC10003).

Recommendation

The Minister for Education is recommended to request that the Minister for T&R approves a budget transfer of £101,431 in 2016 from the Education revenue head of expenditure to capital head of expenditure (Minor Capital E00MC10003) to fund minor capital expenditure.

Reasons for Decision

Under GAAP expenditure that meets the definition of capital expenditure only can 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.

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.

Resource Implications

The Education capital head of expenditure (Minor Capital E00MC10003) will increase by £101,431 in 2016 and the revenue head of expenditure will decrease by an identical amount. This decision does not change the total amount of expenditure approved by the States for 2016.

Report author: Head of Finance	Document date : 07 November 2016
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