Public Finances
(Transitional Provisions) (No. 2) (Jersey) Regulations 2005
THE STATES, in pursuance of Article 70 of the Public
Finances (Jersey) Law 2005, have
made the following Regulations –
Commencement [see endnotes]
Chapter 1 – General interpretation
1 Interpretation
In these Regulations –
“1967 Law” means the Public Finances (Administration)
(Jersey) Law 1967;
“2005 Law” means the Public Finances (Jersey) Law 2005.
Chapter 2 – Investment of money owned or controlled by the
States
2 Application
of Chapter 2
(1) This Chapter shall have
effect when Article 6 of the 2005 Law comes into force[2] and may be amended by
Regulations made by the States in accordance with paragraph (2) of that
Article.
(2) This Chapter applies to
money to which Article 6 of the 2005 Law applies.
(3) [3]
2A Pooling[4]
(1) All
or any part of the money to which this Chapter applies may be pooled for
investment purposes.
(2) Money pooled under
paragraph (1) may be invested in the name ‘States of
Jersey – Common Investment Fund’.
(3) If –
(a) an
instrument that established a special fund;
(b) a
trust; or
(c) an
enactment,
relates to the whole or any part of money pooled under paragraph (1),
the investment strategy mentioned in Regulation 3 must take account of the
provisions of the instrument, trust or enactment.
3 Minister
to develop and to invest in accordance with investment strategy
(1) The Minister must
develop and keep under review an investment strategy for money to which this
Chapter applies.
(2) Where the Minister
considers it appropriate to do so the Minister must seek the advice of persons
who are appropriately qualified and have the necessary experience to provide
the required investment advice.
(3) The investment strategy
and any review of it must, in particular, have regard to –
(a) the
desirability of diversification in the management of the money to which this
Chapter applies; and
(b) the
level of the funds to be invested.
4 Minister
to present investment strategy and any review of it to the States
(1) As soon as practical
after the Minister has prepared the investment strategy, or any review of it,
the Minister must present it to the States.
(2) The Minister and the
Treasurer may invest money to which this Chapter applies –
(a) to
the extent and in the manner set out in the investment strategy presented to
the States; but
(b) where
that strategy has been reviewed, to the extent and in the manner set out in the
last review of the strategy presented to the States.
(3) The Minister and the
Treasurer –
(a) where
the investment strategy so requires, must invest money to which this Chapter
applies through the use of investment managers; and
(b) in
any other case, may do so through the use of investment managers.
5 Treasurer
to ensure compliance with investment strategy
The Treasurer must ensure –
(a) that money to which
this Chapter applies is invested in accordance with Regulation 4; and
(b) that any investments so
made are properly managed, controlled and accounted for in accordance with the investment
strategy or review of it, mentioned in Regulation 4(2).
6 Treasurer
to appoint investment managers and other qualified persons
(1) To comply with
Regulation 5, the Treasurer –
(a) must
appoint any investment mangers required by virtue of the investment strategy;
and
(b) may
appoint such other suitably qualified and experienced investment managers,
custodians, agents, investment advisers and other persons as the Treasurer
considers necessary or convenient to enable the Treasurer to comply with Regulation
5.
(2) Before appointing an
investment manager the Treasurer must satisfy himself or herself that any
person proposed to be appointed is suitably qualified and has the necessary
experience to make investment decisions on behalf of the States and to offer
investment advice to the States.
(3) Persons appointed in
accordance with this Regulation are to be appointed on such terms as the
Treasurer determines are best suited to ensure that he or she is able to comply
with Regulation 5.
Chapter 3 – Borrowing by or on behalf of the States
7 Application
of Chapter 3
This Chapter shall have
effect when Article 22 of the 2005 Law comes into force[5] and may be amended by Regulations made by the States in accordance
with paragraph (1) of that Article.
8 Transactions
that are not borrowing
(1) The following
transactions, or classes or types of transactions do not amount to borrowing by
the States for the purposes of the 2005 Law, namely –
(a) the
purchase by or on behalf of the States of goods or services on credit terms of
not more than 90 days;
(b) the
issue by the States of Jersey currency;
(c) a
transaction undertaken by or on behalf of the States where the use of an asset
is secured and the ownership, risk and responsibility does not pass to the
States or to a States funded body.
(2) A temporary transfer of
money from one fund that is capable of being audited by the Comptroller and
Auditor General under the 2005 Law to another such fund solely to meet the cash
flow requirements of the second fund does not amount to borrowing by the
States.
9 Minister’s
authority to borrow money in the name of and on behalf of the States
(1) The Minister may, in
the name of and on behalf of the States –
(a) arrange
a bank overdraft;
(b) arrange
a bank overdraft facility; or
(c) arrange
a temporary loan to the States,
in anticipation of or required to meet a cash deficiency in respect
of an expenditure approval or any other financial commitment approved by the
States or by the Minister under this Regulation or by the Treasurer by delegation
under Regulation 10.
(2) The Minister may not
exercise his or her power under paragraph (1) if the total amount borrowed
by the States under that paragraph at that time would exceed an amount equal to
25% of the estimated income of the States derived from taxation during the
previous financial year.
(3) The Minister may, if
requested to do so by the minister with responsibility for a States trading
operation, in the name of and on behalf of the States, borrow money
where –
(a) the
amount borrowed is to be used by the States trading operation;
(b) the
Minister is satisfied that the assets to be purchased or created by the use of
the borrowed amount will produce income from external sources or from tangible
financial savings sufficient to repay that amount and the interest on it over
the period of the borrowing; and
(c) any
necessary approval by the States of the assets to be purchased or created by
the use of the borrowed amount has been given.
(4) In addition to the
borrowing that the Minister may undertake on behalf of the States by virtue of paragraphs (1)
and (3), the Minister may, in any financial year, in the name of and on behalf
of the States borrow up to £1 million in respect of any one transaction
where –
(a) the
total amount borrowed in that financial year by virtue of this paragraph does
not exceed £3 million;
(b) the
amount borrowed by virtue of this paragraph and still outstanding at any one
time does not exceed £20 million; and
(c) any amount
borrowed by virtue of this paragraph is repayable within 10 years.
(5) In addition to the
borrowing permitted by or mentioned in paragraph (4), the Minister may, in
the name of and on behalf of the States, borrow money that forms part of a
class, type or series of borrowings for which the States have given their
general approval.
(6) The Minister may
use –
(a) any
asset of the States; and
(b) the
future revenues of the States,
to secure any borrowing in accordance with this Regulation.
(7) For the purpose of this
Regulation –
(a) borrowing
by the States shall be taken to include the giving of a guarantee in the name
of the States and the provision of an indemnity in the name of the States; and
(b) the
liability of the States in respect of any such guarantee or indemnity shall be
taken as an amount borrowed by the States.
(8) The Minister must, at
periods of no longer than 6 months, report to the States details of any
additional borrowing under this Regulation since the last such report.
10 Power
of Minister to delegate functions – borrowing
(1) The Minister may
delegate to the Treasurer, wholly or partly, a function vested in the Minister
by Regulation 9.
(2) Such a delegation shall
not prevent the Minister exercising the function personally.
Chapter 4 – Lending by or on behalf of the States
11 Application
of Chapter 4
This Chapter shall have
effect when Article 23 of the 2005 Law comes into force[6] and may be amended by Regulations made by the States in accordance
with paragraph (3) or paragraph (5) of that Article.
12 Transactions
that are not lending
(1) The sale or provision
of goods or services by or on behalf of the States on terms that provided for
them to be paid for not more than 90 days from the date of their sale or
provision does not amount to lending by the States for the purposes of the 2005
Law.
(2) A temporary transfer of
money from one fund that is capable of being audited by the Comptroller and
Auditor General under the 2005 Law to another such fund solely to meet the cash
flow requirements of the second fund does not amount to lending by the States.
13 Minister's
authority to lend money in the name of and on behalf of the States
(1) The Minister may, in
any financial year, in the name of and on behalf of the States, lend up to
£500,000 in respect of any one transaction where –
(a) the
total amount lent in that financial year by virtue of this paragraph does not
exceed £3 million;
(b) the
amount lent by virtue of this paragraph and still outstanding at any one time
does not exceed £10 million; and
(c) any
amount lent by virtue of this paragraph is repayable within 20 years.
(2) Except as otherwise
provided by paragraph (1), a loan made under that paragraph may be made on
such terms, conditions and at such rate of interest (if any), and may be
secured in such manner (if any) as the Minister may determine.
(3) In addition to the
money permitted to be lent under paragraph (1), the Minister may, in the
name of and on behalf of the States, make a specific loan that forms part of a
class, type or series of loans for which the States have given their general
approval.
(4) The Minister must, at
periods of no longer than 6 months, report to the States details of any
additional lending under this Regulation since the last such report.
14 Power
of Minister to delegate functions – lending
(1) The Minister may
delegate to the Treasurer, wholly or partly, a function vested in the Minister
by Regulation 13.
(2) Such a delegation shall
not prevent the Minister exercising the function personally.
Chapter 5 – Comptroller and Auditor General
15 [7]
Chapter
6 – Administration of money forming part of trust assets
16 Application
of Chapter 6
This Chapter shall have
effect when Article 67 of the 2005 Law comes into force[8] and may be amended by Regulations made by the States in accordance
with paragraph (3) of that Article.
17 Treasurer
to be generally responsible for money forming part of trust assets
(1) Except as otherwise
provided by this Chapter, money forming part of trust assets shall be managed,
handled and accounted for by the Treasurer.
(2) The Treasurer
may –
(a) authorize
the accountable officer of a States funded body to administer and account for
any specified money forming part of any trust assets; or
(b) authorize
any other suitably qualified person to manage, handle and account for any
specified money forming part of any trust assets.[9]
(3) The Treasurer shall not
give any authorization under paragraph (2)(a) except with the approval of
any minister assigned responsibility for the States funded body.
(4) The Treasurer shall not
give any authorization under paragraph (2)(b) except with the approval of
the Minister.
(5) An authorization given
under paragraph (2) –
(a) may
be given subject to such terms, conditions and other limitations as the Treasurer
considers appropriate; and
(b) may
be revoked by the Treasurer at any time.
18 Trust
assets bank accounts
Unless the trust under which the money is held provides otherwise,
any bank account used to manage, handle or account for money forming part of
trust assets shall be kept with a bank approved for the purpose by the
Minister.
19 Application
of the Law to
trust assets
(1) Where money forming
part of trust assets is managed, handled or accounted for by –
(a) the
Treasurer;
(b) an accountable
officer; or
(c) by
virtue of Regulation 17(2)(b), any other person,
the Treasurer, the accountable officer or that person shall have the
same personal accountability, with the necessary amendments, in respect of the
money as an accountable officer of a States funded body has in respect of the
financial management of the resources of the body.[10]
(2) In particular the
Treasurer, accountable officer or person shall ensure that the money is used
for the purpose intended.[11]
(3) Where paragraph (1)
applies –
(a) the
internal auditor may carry out an internal audit of the transactions and
internal controls and systems of the Treasurer, accountable officer or person
in respect of the money forming part of trust assets as if the Treasurer, accountable
officer or person were a States funded body;
(b) the
Comptroller and Auditor General shall have the same functions in respect of the
Treasurer, accountable officer or person as the Comptroller and Auditor General
would have if the Treasurer, accountable officer or person were a States funded
body; and
(c) Part 7
of the Law (which relates to offences) shall apply in respect of the money as
if it were money being managed, handled and accounted for by a States funded
body.[12]
20 Administration
costs may be charged
(1) Where money forming
part of trust assets is managed, handled or accounted for by –
(a) the
Treasurer;
(b) an accountable
officer; or
(c) by
virtue of Regulation 17(2)(b), any other person,
the Treasurer, the accountable officer or that person may deduct
from the money such amount (if any) by way of administration costs as the
Minister may agree.[13]
(2) The Minister shall not
give approval under paragraph (1) that is contrary to any trust subject to
which the money is held.
Chapter 7 – Financial administration of
States trading operations
21 Application
of Chapter 7
This Chapter shall have
effect when Article 26 of the 2005 Law comes into force[14] and may be amended by an Order made by the Minister in accordance
with paragraph (3) of that Article.
22 Expenditure
from trading fund of States trading operation
(1) Money standing to the
credit of the trading fund of a States trading operation may, in particular, be
used –
(a) for a
capital project of the trading operation approved by the States as part of an
annual business plan;
(b) in
the early repayment of a loan made to the States trading operation; and
(c) for
any other purpose approved by the States.
(2) Money standing to the
credit of the trading fund of a States trading operation may also be used, with
the approval of the Minister, for a capital project of the trading operation
if –
(a) the
amount approved by the States for the project as part of an annual business
plan has proved to be insufficient; or
(b) the
project arises from a contingency that could not have been reasonably foreseen
at the time the estimates of the States trading operation were submitted to the
Minister in accordance with Article 8 of the 2005 Law for inclusion as
part of an annual business plan.
(3) Money standing to the
credit of the trading fund of a States trading operation may also be used, with
the approval of the Minister, for a purpose other than one approved as part of
an annual business plan if expenditure for the purpose is necessary or
expedient to advance the business of the trading operation.
(4) The Minister must, at
periods of no longer than 6 months, report to the States details of any
approval given under paragraph (2) or paragraph (3) since the last
such report.
23 Payments
into a trading fund of States trading operation
(1) At the end of a
financial year there shall be placed to the credit of the trading fund of a
States trading operation an amount equal to any amount earned by the trading
operation during that year that is in excess of the total of –
(a) the
expenditure of the trading operation; and
(b) the
contribution to be made to the States in respect of that year as agreed between
the Minister and the minister with responsibility for the States trading
operation, being an amount that is not less than the minimum contribution that
the trading operation is required to make to the States as approved by the
States as part of the annual business plan for the year.
(2) There shall be placed
to the credit of the trading fund of a States trading operation such other
amounts as the Minister may from time to time direct.
24 Interest
in respect of a trading fund of a States trading operation
(1) At the end of any
period of a financial year, as determined by the Treasurer, there shall be
placed to the credit of the trading fund of a States trading operation interest
on the money from time to time standing to the credit of the fund during that
period.
(2) The interest shall be
calculated at the rate for the time being specified in financial directions.
(3) Should the expenditure
of a States trading operation at any time exceed the funds available to it at
that time there shall be debited from its trading fund interest on the excess
at the rate for the time being specified in financial directions.
25 Borrowing,
lending, guarantees and indemnities in the name of the States by a States
trading operation
(1) Money shall not be
borrowed in the name of the States by a States trading operation except in
accordance with Regulation 9(3).
(2) Money shall not be lent
in the name of the States by a States trading operation except with and in
accordance with the approval of the States or the Minister.
(3) A guarantee or
indemnity shall not be given in the name of the States by a States trading
operation except with and in accordance with the approval of the States or the
Minister.
(4) The Minister may
delegate to the Treasurer, wholly or partly, the function vested in the
Minister by paragraph (2) or paragraph (3).
(5) Such a delegation shall
not prevent the Minister exercising the function personally.
(6) The Minister must, at
periods of no longer than 6 months, report to the States details of any
approval given by the Minister or the Treasurer under this Regulation since the
last such report.
26 States
trading operations to provide an annual financial statement
(1) An annual financial
statement in respect of the accounts, assets, liabilities and operations of a
States trading operation for each financial year must be prepared and supplied
to the Treasurer in sufficient time to enable the Treasurer to prepare an
annual financial statement in respect of the accounts of the States before the
end of the period of 3 months mentioned in Article 32(1) of the 2005
Law or any extension of that period by virtue of paragraph (6) of that
Article.
(2) The Minister may, in
addition, require that a financial statement in respect of the accounts and
operations of a States trading operation be prepared and supplied in respect of
any other period.
(3) Unless the Minister
directs otherwise, a statement mentioned in paragraph (1) or paragraph (2)
must be prepared in accordance with the standards applicable to the annual
financial statement of the States by virtue of Article 32(2) of the 2005
Law.
Chapter 8 - Citation and commencement
27 Citation
These Regulations may be cited as the Public Finances (Transitional
Provisions) (No. 2) (Jersey) Regulations 2005.