Supplementary Budget Passed
Members in Finance Committee recently accepted government's proposal to reduce the approved overall budget for the 2007/2008 financial year by about $2 million.
After the financial year has ended, it is customary for government to reduce the initial budget, in order to reflect actual performance for the year, explained the Financial Secretary, the Hon. Kenneth Jefferson.
The reductions usually occur in two areas - capital expenditures, and operating expenditures. With capital expenditures, projects often do not start as originally planned; and equally often, operating expenditures are less than what was budgeted, he said.
During Finance Committee, Mr Jefferson noted that government ended the year with a $10.6 million surplus.
He added that the debt-servicing ratio for the year stood at 5.6 percent, well under the limit of 10 percent as required by the Public Management and Finance Law (PMFL), the legislation under which government conducts business.
For the third supplementary budget for the year ended 30 June 2008, 199 changes were sought. Of those changes, 122 were for decreases in appropriations, totalling $43.3 million; and 77 were for increases, which amounted to $41.3 million.
Under capital expenditure, changes to 43 appropriations resulted in a decrease of $13.6 million. That figure is based on a decrease in capital expenditure by $17,976,107, minus a $4,443,036 increase in spending, Mr Jefferson outlined.
Overall, operating expenses rose by $11.6 million, based on 72 requests for increases in spending that totalled $36.9 million. This rise in operating expenses was not offset by the 84 items on which government under-spent on costs, because their value only amounted to $25.3 million, Mr Jefferson noted.
Total operating revenue for core government rose from a budgeted sum of $523.3 million to $528.5 million for the last financial year, he said.
Total operating expenditure also rose, from $489.3 million to $504.7 million. The bulk of this increase went to increased personnel costs, which rose from $205 million to $212 million.
Surplus from operating activities was budgeted to be $34 million. The actual unaudited surplus from operating activities for the year to 30 June 2008 was $24 million.
Financing of government's borrowings reduced marginally to $10 million, he said. There was no change in the $3 million for government's payments to the National Recovery Fund used for repairs to homes, budgeted under extraordinary items.
The budgeted net surplus, which takes all expenditures and revenues into account, was $20.8. The actual unaudited net surplus for the year was $11 million, approximately.
Government's total assets after liabilities stood at $509 million at end of June this year, from a budgeted figure of $519 million.
To comply with a key requirement of the PMFL, government had to maintain in 07/08 cash reserves of not less than 75 days' of estimated executive expenses. At the end of the 07/08 fiscal year, government's cash reserves stood at 102 days' of expenses, better than the budgeted 91.1 days' and complying well with the law's requirement, Mr Jefferson noted.
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