Budget Transfer/GAAP Accounting: Customs and Immigration.

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A decision made 25 November 2009 regarding: Budget Transfer/GAAP Accounting: Customs and Immigration.

Decision Reference: MD-HA-2009-0105
Decision Summary Title:	Transfer of Budgets		Date of Decision Summary:	23 November 2009
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 :	Budget Transfers – GAAP Accounting		Date of Written Report:	23 November 2009
Written Report Author:	Finance Manager		Written Report : Public or Exempt?	Public
Subject: 2009 Budget Transfers between Revenue and Capital Heads of Expenditure as a result of moving to GAAP accounting.
Decision(s): The Minister approved net budget transfers of £17,000 for 2009 from the Customs and Immigration Service’s revenue budget to its capital budget.
Reason(s) for Decision: The States of Jersey is implementing Generally Accepted Accounting Principles (GAAP) in 2009. GAAP accounting requires that only expenditure meeting the GAAP definition of capital expenditure should be treated as such. All other expenditure must be accounted for as revenue. These budget transfers are the movements in budgets between capital and revenue required to align the budgeting treatment of expenditure with the GAAP accounting treatment. This does not change the total amount of expenditure approved by the States.
Resource Implications: None
Action required: Finance Director to seek Treasury and Resources Ministerial Approval for the transfer. Once approval has been obtained Treasury and Resources Department to action budget transfers.
Signature:		Position: Minister for Home Affairs
Date Signed:		Date of Decision (If different from Date Signed):

Budget Transfer/GAAP Accounting: Customs and Immigration.

Home Affairs Department Report for Minister
Subject:	Budget Transfers – GAAP Accounting
Exempt Clause:	n/a	Date:	23 November 2009

Author:	Carol Nicholas – Finance Manager

Introduction

The purpose of this report is to seek the Minister’s approval to transfer the sum of £17,000 from the Customs and Immigration revenue budget to its capital budget in order to align budgeting with Generally Accepted Accounting Principles (GAAP).

Background

The States of Jersey is implementing Generally Accepted Accounting Principles (GAAP) in 2009. GAAP accounting requires that expenditure should be accounted for as capital only 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 2009 in the 2009 Business Plan. These budget transfers move budgets between capital and revenue so as to align the budgeting treatment of 2009 expenditure with the GAAP accounting treatment.

This is a restatement exercise that only affects expenditure that is expected to be incurred in 2009. Revenue budgets held in capital that relate to future years will remain on the Department's capital budget ledgers, i.e. this transfer from revenue to capital only relates to 2009 expenditure. There will continue to be ‘capital’ budgets held against capital projects that relate to revenue spend expected in years 2010+, which will be transferred to revenue in the relevant year.

There will continue to be a need to make transfers from capital to revenue on existing approved projects in each of the years in which expenditure will be incurred (please refer to Ministerial Decision’s MD-HA-2009-0017 and 0095).

Recommendation

It is recommended that the Minister approves the net transfer of £17,000 from the Customs and Immigration revenue budget to its capital budget in order to align budgeting with accounting treatment following the move to GAAP accounting.