Various Budget Transfers/GAAP Accounting

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A decision made 23 November 2009 regarding: Various Budget Transfers/GAAP Accounting.

Decision Reference: MD-TR-2009-0189
Decision Summary Title:	Revenue/Capital Budget Transfers		Date of Decision Summary:	18/11/2009
Decision Summary Author:	Finance Director - Corporate Group		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Report on Revenue/ Capital Budget Transfers		Date of Written Report:	18/11/09
Written Report Author:	Finance Director - Corporate Group		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 the 2009 departmental budget transfers between revenue and capital detailed in the attached report.
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 net expenditure approved by the States. Article 15 (1) of the Public Finances (Jersey) Law 2005 requires that the Minister for Treasury and Resources approves transfers between capital and revenue heads of expenditure, following approval by the Minister in the relevant department. Financial Direction 3.6 (Variations to Heads of Expenditure), issued under Article 34 (1) of the Public Finances (Jersey) Law 2005 requires that the Minister for Treasury and Resources and the Council of Ministers approve transfers to new capital heads of expenditure.
Resource Implications: None.
Action required: Minister for Treasury and Resources to seek approval of transfer to new capital heads of expenditure from the Council of Ministers. Financial Planning team to action budget transfers.
Signature:		Position: Senator P. F. C. Ozouf, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Various Budget Transfers/GAAP Accounting

Report Name: Report on Revenue/Capital Budget Transfers

Support for Ministerial Decision: MD-TR-2009-0189

Date: 18 November 09

Purpose of the report

To detail the individual Departmental transfers requiring approval from the Minister for Treasury and Resources in accordance with Article 15 (1) of the Public Finances (Jersey) Law 2005, which requires that the Minister approves transfers between revenue and capital heads of expenditure, following approval by the Minister of the department/accounting officer of the Non-ministerial States-funded body.

Where new capital heads of expenditure are created by these transfers, approval by the Council of Ministers is also required under Financial Direction 3.6 (Variations to Heads of Expenditure), issued under Article 34 (1) of the Public Finances (Jersey) Law 2005.

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 under the old basis, therefore a transfer of budgets is required. These budget transfers move budgets between revenue and capital so as to align the budgeting treatment of 2009 expenditure with the GAAP accounting treatment.

These transfers only affect expenditure that is expected to be incurred in 2009. Revenue budgets held in capital that relate to future years will remain on department's capital budget ledgers, i.e. this transfer from revenue to capital only relates to 2009 expenditure.

These transfers do not change the total amount of expenditure approved by the States.

Departmental Budget transfer requests included in report to approve:

MD Reference	Department	Net (Decrease) in Revenue Budget (£)	Net Increase in Capital Budget (£)
MD-E-2009-0206	EDD	(11,995)	11,995
N/A	Probation	(25,500)	25,500
N/A	States Assembly	(14,790)	14,790
	Total	(52,285)	52,285