Budget transfer and use of income for Driver and Vehicle Standards (DVS) Vehicle Registration System

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A decision made 12 September 2016:

Decision Reference: MD-T-2016-0081
Decision Summary Title :	Use of income, increase of budgets and subsequent transfers between Revenue and Capital Heads of Expenditure for the replacement of DVS vehicle registration system		Date of Decision Summary:	08 September 2016
Decision Summary Author:	Finance Manager		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:
Written Report Title :	Use of income, increase of budgets and subsequent transfers between Revenue and Capital Heads of Expenditure for the replacement of DVS vehicle registration system		Date of Written Report:	08 September 2016
Written Report Author:	Finance Manager		Written Report : Public or Exempt?	Public
Subject: Use of income, increase of budgets and subsequent transfer between the Department for Infrastructure (“DfI”) revenue head of expenditure and the DfI Replacement Assets capital head of expenditure (Q00MC10012) totalling £250,000 for the replacement of the DVS vehicle registration system.
Decision(s): The Minister approved the use of additional income from vehicle registration up to £250,000 for the purpose of funding the replacement of the DVS vehicle registration system the increase of up to £250,000 income and expenditure budgets in 2016 in the DfI revenue head of expenditure; and the subsequent internal budget transfer in 2016 of up to £250,000 from the DfI revenue head of expenditure to the DfI Replacement Assets capital head of expenditure (Q00MC10012).
Reason(s) for Decision: Under International Financial Reporting Standards (IFRS) expenditure that meets the definition of capital expenditure must be capitalised. This budget transfer is the movement in budget between revenue and capital required to align the budgeting treatment of proposed expenditure with the accounting treatment, in order to comply with IFRS. 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 of the Public Finances (Jersey) Law 2005 (the Law) and Finance Direction No.3.6 ‘Variations to Heads of Expenditure’ (the FD) set out the procedures for transfers between heads of expenditure. Paragraph 5.1 of the FD and Article 18(2) (c) of the Law require departments wanting to transfer funds between heads of expenditure to obtain the approval of the Minister responsible for their administration. Article 18(1) (c) of the Law requires the approval of the Minister for Treasury and Resources for any budget transfers between heads of expenditure. Paragraph 5.2 of the FD delegates non-contentious transfers between heads of expenditure up to £1,000,000 to the Treasurer of the States. Paragraph 5.3 of the FD states that, in all other instances, the approval of the Minister for Treasury and Resources must be obtained. This transfer puts in place funding for the replacement of the DVS vehicle registration system.
Resource Implications: The DfI revenue head of expenditure will show an additional income budget of up to £250,000 and an additional expenditure budget of up to £250,000, a net nil change. This expenditure budget will subsequently be transferred to the DfI Replacement Assets capital head of expenditure (Q00MC10012).
Action required: The Finance Director to request the approval of the Treasurer of the States to approve the creation of income and expenditure budgets, and the budget transfer 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):