Budget transfer: St. Peter's Valley Path Project

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A decision made 28 November 2016:

Decision Reference: MD-T-2016-0102
Decision Summary Title :	Increase of budget and subsequent transfer between Revenue and Capital Heads of Expenditure for a contribution to St Peter’s Valley Path Project.		Date of Decision Summary:	23 November 2016
Decision Summary Author:	Finance Manager		Decision Summary: Public or Exempt?)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Increase of budget and subsequent transfer between Revenue and Capital Heads of Expenditure for a contribution to St Peter’s Valley Path Project.		Date of Written Report:	23 November 2016
Written Report Author:	Finance Manager		Written Report : Public or Exempt?	Exempt QE Article 33(b)
Subject: Increase of budget and subsequent transfer between Revenue and Capital Heads of Expenditure for a contribution to St Peter’s Valley Path Project.
Decision(s): That the Minister approved the following: An increase of up to £180,000 to the Department for Infrastructure (DFI) income budget and an identical increase to the DFI expenditure budget during 2016, and of up to £100,000 per year during 2017, 2018, 2019 and 2020. An internal budget transfer of up to £180,000 from the DFI revenue head of expenditure to the capital head of expenditure for Road Safety Improvements (Q00MF15037) during 2016 and of up to £100,000 each year during 2017, 2018, 2019 and 2020. This decision is to rescind and replace MD-T2016-0096 signed by the Minister on 31st October 2016.
Reason(s) for Decision: 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. Section 5.1 of Financial Direction 3.6 Variation to Heads of Expenditure states that Departments wanting to transfer funds between heads of expenditure must obtain the approval of their minister or of their accounting officer where a scheme of delegation exists prior to obtaining approval from the Treasury Minister or Treasurer. Under Section 5.12 of Financial Direction 3.6 Variations to Head of Expenditure, additional surplus income of not more than 10% or £100,000 of the estimated income notified to the States for that particular service area and of a non-contentious nature, may be used automatically. Where the additional surplus income is greater than these limits, and the use is of a non-contentious nature, approval has been delegated to the Treasurer of the States. In all other instances, the approval of the Minister for Treasury and Resources must be obtained. 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 revenue head of expenditure to a capital head of expenditure, or vice versa, in order to comply with accounting standards issued for the purposes of Article 32(2). Delegation 1.2 delegates authority for non-contentious transfers between revenue and capital heads of expenditure (and vice versa) with no financial limit where the transfer is solely to ensure that financial transactions are accurately reflected in the States’ Accounts in accordance with accounting standards issued under Article 32(2) of the Law.
Resource Implications: The DFI revenue head of expenditure will show an additional income budget of up to £180,000 and an additional expenditure budget of up to £180,000 during 2016, and of up to £100,000 per year during 2017, 2018, 2019 and 2020. This expenditure budget will subsequently be transferred to the DFI capital head of expenditure for Road Safety Improvements.
Action required: The Finance Director to request the Minister for the Treasury and Resources Department to approve the budget creation and subsequent transfers from revenue to capital as referred to in the accompanying report.
Signature:		Position: Minister for Infrastructure
Date Signed:		Date of Decision (If different from Date Signed):