Identification of carry forwards balances and budget reporting

1240/5(2528)

WRITTEN QUESTION TO THE PRESIDENT OF THE FINANCE AND ECONOMICS COMMITTEE BY DEPUTY G.P. SOUTHERN OF ST. HELIER

ANSWER TO BE TABLED ON TUESDAY, 24th MAY 2005

Question

Would the President inform members –

1. what carry forward balances, if any, have been identified, and from whichCommittees' budgets, to fund the Economic DevelopmentCommittee'sEconomicGrowthPlanand would he state whether any otherprojects will now suffer as a resultof this new priority; if so, whichprojects will be affected?
2. whether  the  Committee's policy to eliminate  carry-forward budgets  is  counter-productive to  any Committee's attempts to reduce spending given that Committees are nowaware that any unspent budget at the yearendwillbereturned to the central fundsof the States?
3. whether the JD Edwardsaccounting system provides for any limitations intheaccuracyofbudget reporting and, if so, whether this could lead to unintentional reporting of, for example, underspends when such underspends donotinfact exist?

Answer

1. The Finance andEconomicsCommittee, as in previous years, has consideredrequests from Committees to carry forward revenuevotes from 2004 to 2005. The policy it applied was to allow positive carry forwards of up to3%oforiginalgrossrevenueexpenditurebudgetexcept in exceptional circumstances. After applying that policy it was identified that excess carry forwardsof £1.3 million in total couldbereturned to General Funds, including the following significantbalances:

P o li c y and Resources £ 2 11,009

P r ivileges and Procedures £ 1 81,201 F i nance and Economics £ 9 00,191.

H  owever, before returning those sums to General Funds the Committee considered the pressing need for

pump-priming the States' approved Economic Growth Plan for 2005/06, and has approached both the Policy and Resources and Privileges and Procedures Committees for their agreement to apply their excess carry forwards to the Economic Growth Plan. In the event that those Committees do not agree to that application of those funds, they will be returned to General Funds.

T  herefore, no projects will suffer as a result of pump-priming the States Economic Growth Plan as those

funds, if not used for that purpose, will be returned to General Funds to contribute towards funding the deficits forecast prior to the implementation of the Fiscal Strategy.

2. The Committee would bedisappointedshouldCommittees unnecessarily spend taxpayers money simply to avoid havingfundswhich they donot need being ploughed back into States finances to providefunding for future high priority expenditure.TheCommitteeis not awareof any such misuse.
3. The JDEdwards system is a modern day financial ledger system with full functionality to be expected of such a system. Atthe year end the figures for that system form the basis for thefinancialstatementswhich are audited.Assuch,assurance can begained that all expenditure properly incurred is recordedon the ledger and that therefore anyunderspends (or overspends) are also accurate. As always, there is the possibility of human error, but the system itself is sound and robust.