Government of Jersey

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

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
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made 11 May 2015:

Decision Reference: MD-TR-2015-0056
Decision Summary Title:	States of Jersey Accounting Standards		Date of Decision Summary:	07 May 2015
Decision Summary Author:	Financial Accountant		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Accounting standards to be adopted for the States of Jersey’s Annual Financial Statement 2014 Updated		Date of Written Report:	07 May 2015
Written Report Author:	Financial Accountant		Written Report : Public or Exempt?	Public
Subject: States of Jersey Accounting Standards.
Decision(s): The Minister decided: to adopt a new version of the Jersey Financial Reporting Manual (JFReM), which sets the GAAP-based accounting standards to be adopted in the preparation of the States of Jersey Financial Statements 2014. to adopt the Accounting Standards Policy (Appendix 1 in the attached report). to present the JFReM to the States.
Reason(s) for Decision: Following the Accounting Standards policy set in MD-2014-0146, the JFReM has been updated to clarify points regarding the presentation of consolidated and separate financial statements and the treatment of subsidiary companies.
Resource Implications: None.
Action required: The Greffier of the States to be requested to arrange for the JFReM to be presented to the States for their information at the earliest opportunity.
Signature:		Position: Senator A J H Maclean, Minister for Treasury and Resources
Date Signed:		Date of Decision:

States of Jersey Accounting Standards - Financial Statements 2014

Treasury and Resources Minister

Report

Accounting standards to be adopted for the States of Jersey’s Annual Financial Statement 2014 UPDATED

Purpose of Report

The purpose of this report is:

1) To set out the policy for implementing and updating the Accounting Standards to be used in the preparation of the States of Jersey annual financial statements.

2) To provide additional information on the basis on which the States of Jersey’s 2014 Annual Financial Report and Accounts will be prepared.

Background

The Public Finances (Jersey) Law 2005 (as amended by P.73/2013) states that the annual financial statements of the States must be prepared in accordance with accounting standards issued by the Treasurer with the approval of the Minister.

In Ministerial Decision MD-TR-2014-0146, the Minister recognised that accounting standards are not fixed, that they evolve over time. The Minister’s policy is to update the accounting standards adopted by the States on an annual basis, following those standards adopted by the UK Government in their annually updated Financial Reporting Manual. This policy has been continued, with the 2014 version being based on the UK FReM for the year ending March 2013, adapted as appropriate for the public sector in Jersey.

Due to interpretation being required, additional wording has been included in the JFReM to clarify the States of Jersey position on two points specific to the island.

Under IAS 27, entities need to produce single entity financial statements. For the States of Jersey, it is difficult to define a single entity on which to produce the accounts. An amendment has been made which means the States of Jersey will prepare consolidated financial statements only.

Due to the nature of Andium and the level of direct control deemed to be held by the States of Jersey, this could be open to interpretation. The Treasurer has determined that direct control is held over Andium meaning this should be consolidated within the group boundary. Additional wording has been included to state that the subsidiary companies, being SoJDC and Andium, will be considered part of the group boundary and consolidated.

An updated policy for implementing and updating the GAAP-based Accounting Standards to be used in the preparation of the States of Jersey financial statements is set out in Appendix 1.

The JFReM 2014 is included in Appendix 2.

Recommendation

That the Minister approves the Jersey Financial Reporting Manual (JFReM), which sets out the accounting standards to be adopted in the preparation of the States of Jersey Financial Statement for 2014.

That the Minister approves the policy for implementing and updating the Accounting Standards to be used in the preparation of the States of Jersey annual financial statements.

Reason for Decision

Following the Accounting Standards policy set in MD-2014-0146, the JFReM has been updated following a clarification being required for the application of IAS 27 Consolidated and Separate Financial Statements.

Appendix 1 – Treasury and Resources Accounting Policy

Introduction

The Public Finances (Jersey) Law 2005 states that the annual financial statements of the States must be prepared in accordance with accounting standards issued by the Treasurer with the approval of the Minister. This policy sets out the proposed model for implementing the accounting standards to be used in the preparation of the States annual financial statements, and the process for updating these accounting standards.

Maintaining Accounting Standards

The Minister’s policy is to require the States of Jersey accounting records to be maintained and accounts prepared in accordance with IFRS GAAP, modified for the Jersey public sector.

The Minister recognises that accounting standards are not fixed, that they evolve over time and also that the implementation of new standards in the public sector context can be a complex and resource hungry exercise.

The Minister’s policy, therefore, is to update the accounting standards adopted by the States on an annual basis.

The Minister intends to follow those standards adopted by the UK Government in their annually updated Financial Reporting Manual. The implementation of new accounting standards can be complex and resource intensive; there are obvious benefits to a small jurisdiction such as Jersey to learning from others and not being at the cutting edge of such implementations. The Minister intends to adopt the standards implemented by the UK central government with a one year delay. Therefore it is the Minister’s policy that the Jersey FReM for 2014 will adopt IFRS in line with the UK FReM for the year ending March 2013.

Future years will adopt the same one year delay, and so, for example, the Jersey FReM for 2015 will adopt IFRS in line with the UK FReM for the year ending March 2014.

As with the preparation of the initial JFReM, new standards introduced in the UK FReM may require some modification for the States of Jersey. The Minister intends to continue to consult the Comptroller and Auditor General and Audit Committee on all significant amendments to the JFReM before implementing them.

Summary of amendments to JFReM 2014

The reason for the first update to JFReM 2014 is to clarify the position of the States of Jersey in regard to the subsidiary companies and the Group Boundary.

Andium Homes Limited has been incorporated during the year, and due to the level of direct control held over them by the States of Jersey, they are deemed to be within the group boundary. An amendment has been made to confirm that the States has direct control over the subsidiary companies, and as such they should be within the group boundary.

This has been amended in paragraph 4.2.4.

The reason for the second update to JFReM 2014 is to clarify the position of the States of Jersey in regard to preparing financial statements under IAS 27 Consolidated and Separate Financial Statements and the treatment of the subsidiary companies held by the States.

The States of Jersey is the parent entity as per the JFReM, and consolidated statements are presented only, with no separate single entity financial statements. An amendment has been made to clarify that the States of Jersey will only present Consolidated Financial Statements, and will not present the parent entity financial statements, due to the complexity in defining the single entity boundary, as the States of Jersey itself consists of many departments.

This has been amended in paragraph 4.2.8.

Appendix 2 – JFReM 2014 v 6.3 (attached)

Appendix 3 – JFReM 2014 Amendment record v 6.3 (attached)