Government of Jersey

Information about the publication of Ministerial Decisions

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demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
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A decision made 11 November 2011:

Decision Reference: MD-T-2011-0117
Decision Summary Title :	Transfer From Revenue To Capital Heads of Expenditure for STP Capital Expenditure		Date of Decision Summary:	09 November 2011
Decision Summary Author:	Capital Accountant		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Transfer From Revenue To Capital Heads of Expenditure for STP Capital Expenditure		Date of Written Report:	09 November 2011
Written Report Author:	Capital Accountant		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Internal budget transfer from revenue to capital heads of expenditure amounting to £231,000 expenditure for the correct treatment of expenditure, as a result of GAAP accounting.
Decision(s): The Minister for Transport and Technical Services approved a budget transfer from revenue to capital totalling £231,000 of expenditure as set out in the attached report.
Reason(s) for Decision: The States of Jersey implemented Generally Accepted Accounting Principles (GAAP) in 2010. GAAP accounting requires that all expenditure meeting the GAAP definition of capital expenditure should be treated as such; other expenditure must be accounted for as revenue. These budget transfers are the movements in budgets between revenue and capital required to align the budgeting treatment of expenditure with the GAAP accounting treatment. This does not change the total amount of expenditure voted by the States.
Resource Implications: Other than those detailed in the report there are no further financial or manpower implications.
Action required: The Finance Director to request the Minister for Treasury and Resources to approve the budget transfer from revenue to capital as referred to in the accompanying report.
Signature:		Position:
Date Signed:		Date of Decision (If different from Date Signed):

Budget Transfer - GAAP Accounting

TRANSPORT AND TECHNICAL SERVICES

TRANSFER BETWEEN REVENUE AND CAPITAL HEADS OF EXPENDITURE

FOR SUSTAINABLE TRANSPORT POLICY (“STP”) EXPENDITURE

Purpose of Report

The purpose of this report is to seek the Minister for Transport and Technical Services’ approval to an internal budget transfer amounting to £231,000 expenditure from revenue to capital head of expenditure.

Background

The States of Jersey implemented Generally Accepted Accounting Principles (GAAP) in 2009. GAAP accounting requires that expenditure should be accounted for as capital if it meets the GAAP accounting definition of capital expenditure, and revenue otherwise.

Previously, ‘capital’ budgets have represented whatever the States Assembly voted as capital. The States have already approved capital allocations for 2011 in the 2011 Business Plan. These budget transfers move budgets between revenue and capital so as to align the budgeting treatment of 2011 expenditure with the GAAP accounting treatment.

This is a restatement exercise that only affects expenditure that is expected to be incurred in 2011. This transfer from revenue to capital only relates to 2011 expenditure.

The STP was one of the key priorities of the States as set out in the Strategic Plan 2009- 2014. The STP was granted £500k revenue monies and one of the aims of this was to improve the safety of the islands’ road network for all road users, including pedestrians, cyclists and motor vehicles. As a result, spend is a mix of capital and revenue projects depending on annual priorities.

In 2011 this has meant that work of a capital nature has been performed on the road infrastructure network. This includes implementing permanent traffic calming devices and other road safety measures for the benefit of all road users. The projects which will be capitalised are shown below. Therefore, the request is to move both budget and actual spend to date on these projects to capital so that they can be correctly treated as assets upon completion.

Project Name	Budget
Project Name	Expenditure

Bethlehem Church	45,000.00
Garden Lane	46,000.00
Le Mare	70,000.00
Wellington Hill	30,000.00
Southern Cycle Route	40,000.00

Total	231,000.00

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. Authority to approve non-contentious budget transfers under £1,000,000 has been delegated to the Treasurer of the States.

Recommendation

To approve a budget transfer totalling £231,000 expenditure from TTS revenue head of expenditure to TTS capital head of expenditure (“STP Infra-Improvements”) that will allow for this capital expenditure to be capitalised correctly under GAAP.

Reason for Decision

To create a budget within a capital vote that will allow expenditure on the STP projects to be capitalised under GAAP.

Resource Implications

There are no resource implications as a result of this decision.

Action Required

The Finance Director to request the Minister for Treasury and Resources to approve the budget transfer from revenue to capital as referred to in this report

Written by:	Capital Accountant
Approved by:	Acting Finance Director