The Government of England (Vol. I)

by A. Lawrence Lowell

The administrative procedure for getting money out of the Consolidated Fund to pay the Consolidated Fund charges and the supply services is not precisely the same. In the case of the supply services a royal order for the amounts appropriated by Parliament is made under the King's sign manual, countersigned by two of the Commissioners of the Treasury. The Treasury then requires the Comptroller and Auditor General to grant credits at the Banks of England and Ireland for those amounts, and if satisfied that the authority from Parliament is complete, he makes an order on the banks granting the credits. From time to time the Treasury requests the banks to transfer to the various supply accounts, for disbursement, sums of money not exceeding the credits so granted.[121:1] The procedure in the case of Consolidated Fund charges differs from this only in the fact that a royal order is not needed, and the Comptroller and Auditor General, on the requisition of the Treasury, grants quarterly credits for the amounts prescribed by statute.[121:2] By this process a highly effective security is provided that no money shall be spent without the authority of Parliament. The Consolidated Fund is deposited in the banks of England and Ireland, which are liable if any of it is withdrawn without an order from the Comptroller and Auditor General, while that officer is given the same independence as the judges. Like them he is appointed during good behaviour, with a salary charged upon the Consolidated Fund. The security is not absolutely perfect, for there are some moneys, such as the appropriations in aid, that do not pass through the Consolidated Fund; and as no foresight can be unfailing, the government is given a limited power to meet unforeseen contingencies, and to cover expenses that have inevitably proved larger than was anticipated.[121:3] But all matters of this kind are fully reported to Parliament by the Comptroller and Auditor General.

Audit of the Accounts.

The Treasury lays before Parliament annually the Finance Accounts of the preceding year, while the Comptroller and Auditor General submits at a later date a separate report. Therein he examines the Consolidated Fund charges, and makes for the supply services more elaborate statements, called the Appropriation Accounts, in three volumes, relating to the Army, the Navy and the civil service. The accounts are rendered to him by the several departments, and after auditing them he transmits them to the House of Commons with his comments.[121:4]

The money granted by Parliament is divided into votes, of which there are in all about one hundred and forty.[122:1] In the estimates these votes are subdivided into subheads and items; but the votes would appear to be the only limitation expressly placed by Parliament upon expenditure; for the Annual Appropriation Act provides that the sums granted shall be deemed to be appropriated "for the services and purposes expressed in Schedule (B) annexed" thereto, and that schedule gives a list of the votes, but not of the subheads or items. Nevertheless, the Comptroller and Auditor General is enjoined by the Exchequer and Audit Departments Act of 1866 to ascertain whether the money expended has been applied to the purpose or purposes for which each grant was intended to provide,[122:2] and hence the reports that he submits note the excess or saving with the reasons therefor, under each subhead, and sometimes, as in the case of votes for the construction of new buildings, under each item. He adds, also, his own comments wherever it seems to him necessary to do so. All this is done, even where the saving under one subhead more than counterbalances the excess under another in the same vote. When that happens, however, no action by Parliament is required; but if the total amount of a vote has been overspent, the excess is entirely unauthorised, and must be covered by a deficiency appropriation, which Parliament grants upon the reports of the Comptroller and Auditor General and the Committee on Accounts of the House of Commons. To the last rule there is one exception. In order to facilitate the administration of the Army and Navy, the Annual Appropriation Act declares that the Treasury may authorise expenditure, not provided for, to be defrayed temporarily out of any surplus effected upon other votes in each of those departments; and the Act goes on to recite and sanction the transfers of surplus so authorised by the Treasury in the last year for which the accounts are complete.[123:1] This brings us to another important question, that of the financial control of the Treasury over the other branches of the administration.

Treasury Control over Other Departments.

Control over Estimates.

There has been a great deal of discussion about Treasury control over the receipt and expenditure of public money. In the case of the receipts it is a simple matter, for the financial control over the Post Office has already been described, and the other great revenue departments are, as will shortly be explained, virtually subordinate to the Treasury. The question of control over expenditure is far more complicated. Committees of the House of Commons have, at different times, collected evidence on the subject,[123:2] but the statements made have often been vague, and tend to confuse the control of the Treasury over the estimates, with its control over expenditure after the appropriations have been voted by Parliament. The control over the estimates has been discussed in the preceding chapter. It is only necessary here to repeat that such a control is by no means absolute, because any important question of expenditure becomes a question of policy to be decided, in case of disagreement, by the Prime Minister or the cabinet; and to point out that the departments supported by their political chiefs are usually too strong for the Treasury to resist.[123:3]

Control over Expenditure.

It might be supposed that after the appropriations had been voted the departments would be free in expending them, subject only to their responsibility to Parliament; but this is not altogether true. In the first place a statute sometimes requires that the expenses of a department shall be sanctioned by the Treasury.[124:1] Then it is not infrequently provided that the salaries shall be fixed by the Treasury, or that alterations in the establishment shall require its consent. Moreover, the salaries of certain grades of clerks are regulated by Orders in Council,[124:2] which are changed only on the advice of the Treasury. Apart, however, from statutes and Orders in Council there is a general customary principle forbidding any increase in the civil establishment of a department,—that is, any increase in the number or salary of permanent officials,—without the approval of the Treasury; and this although the appropriations would not be exceeded.[124:3]