N A T O ^^^^ Copy No.
CONFIDENTIAL gg5EDT>2TL2, Addendum 1
" IgrSS April 1952
FINANCIAL AND ECONOMIC. BOARD
Summary surveys of the Budget Techniaues_adooted '1 Ja' Belgium. Luxembourg and""thi"lfetherliads
ggI^sed^S^Vey of United Kingdom Budget Techniques Note by the Secretary.
Ref: FEB-D(>2)h - . FEB-R(52)1 and Corrigendum FEE-D(52 )12
Delegations will find attached summary surveys of the Budget Techniques adopted in Belgium, Luxembourg and the Netherlands. A revised summary of United Kingdom Budget Tecinicues prepared on the basis of a paper communicated to the Financial and Economic Board by the United Kingdom Delegation to NATO has been added.• '
Delegations are therefore requested to substitute Part IV of the present document for Part III of document FEB-Df52 )12 - United Kingdom. 17 '
Similar surveys for the other NATO countries will be prepared as information becomes available.
DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED (signed) J.R.E. Dobson
Palais de Chaillot, Paris 16e . CONFIDENTIAL FEB-IJ ( 5 sTHTAddendum No.I.
I. GUIVL ÏA RY SURVEY Orn BELGIAN BUDGET TECHNIQUES
PREPARATION OF TKE BUDGET
.. 1. The final date for the submission of draft budgets is 30th'September. The financial year coincides with the calendar yoar.
The preparation of draft budgets involves two basic operations i.e.* estimating expenditure and estimating revenue.
The various Ministries'are responsible for the preliminary stages of budget preparation. The Budget Committee (consisting of the Prime Minister and the Finance Minister* who are cx-officio members* as well as tv/o other ministers appointed by the King) then take's over and examines the financial aspects of the Budget proposals of the different Ministries which aro laid before it by the Finance Minister. 2. The Finance Minister notifies his colleagues of the decisions taken with respect to the framing of the draft budgets and'to harmonising proposed expendituro with anticipated receipts. The Budget Committee supervises the preparation of the draft budgets and of the accompanying allocations' documents• All proposals involving further budgotary commitments* even if only provisional* if they are likely to require renewal* of temporary or of unlimited' duration during suecceding financial years* must be submitted to the Budget Committee with an overall programme and f o re ca sts for f ut ure budg et s.
3. For supplies and works extending over more than one financial year* special, obligational authority is requested within the frame- work of tho Budget Acts and Parliament; by voting such expenditures* Parliament gives the Executive authority to enter Into firm con- tracts (for works, or supplies) for'a period extending beyond that cove rod by tho financial year. Later budgets make provision* in the form'of money votes* for annual expenditures to moot these DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED obligation's. As a general rule* these obligat ional authority commitments are written into an overall long-term programmo which is approved by Parliament by means of successive votes.
In cases of exceptional urgency* the Council of Ministers can authorise expenditure commitments In excess of those voted by the legislature. The proposed expenditure must bç submitted to the Budget Committee for its opinion before action is taken by tho Council. C ONFIDEI-ITIAL .
FEb-IH a )12 Addendum- No»,l -2_
COMPOSITION OF BUDGETARY DOCUMENTS A. Every draft budget comprises the following throe sections: t a) The text of tho draft b) Tables of roccipts and/or expenditure c) Explanatory notes in support of estimates The C-ovcrnment's financial policy is outl.ncd annually in a paper known as the "General Statement" ( exposé général) v/hich is circulated simultaneously v/ith the draft budgets. It supplies the information and, statistical data required for a clcar under- standing of furthermore » it compares estimated revenue and expenditure with actual revenue and expenditure in- previous years..
5V Every year* the Finance Minister submits tho following Budget documents: a) Thc AVays and Moans Budget (ordinary revenue budgot) the provisions of v/hich aro classified under three distinct heads: fiscal revenue* non-fiscal revenue and revenue arising from the war. The last-named item includes all extraordinary roccipts whose origin goes back to war-timo eventsj
b) Ministries' ordinary expenditure budgets* which include not only all ordinary expenditure properly so-callcd* but also* where appropriate* a section for expenditure arising from the,war*/i.e. extraordinary expenditure due to the war and aesLined to cease at some future time; c) The ordinary budgets for special o.-.pondlturcs: tho Grants-IruAid Budget* the Bad Debts and Puef unds Budget (budgot des Non-Valours ot des Remboursements)* the Pensions Budget;
d) The Extraordinary Roccipts and Expenditure Budget;
c) The Self-Balancing Revenue and Expenditure Budget (lo budget des Recettes et Déponses pour Ordre).
DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED On the "Expenditure" side of the Extraordinary Receipts and Expondituro Budget* estimates arc arranged under the following heads:
1. Rccovcrablc advances (The State as banker);
2. Participation in tho capital of public bodies (The State as share-holder ) ; COÏT '1IOINTI Mj 'addendum No .1 -3-
; 3. Nov; capitaliscd expenditure (Nov Investment capital);
Restoration of national and related property(Repair of public property end the like damaged by acts of war).
In principle, all the abovo expenditure is mot through borrowing.
On the "Receiptsi! side of the Extraordinary Receipts and ' Expenditure budget, the yield from special taxes levied for the redemption of the Currency Reform Loan is shown offset, on tho "Expenditure" side, by a similar amount, representing the sum written off by means of tho revenue obtained through thi3 oper- ation.
6. In their tables, the Minisi-rios generally arrange the proposed budget allocations ur.de the following four heads:
a) Expenditure for general administration'
b) Subsidies
c) Works
d) Other oxpondituro.
7. The explanatory notes in the last section of the Budgot document give all nocossary indications regarding the use uo which the-desired allocations aro to bc put, their composition and, whore applicable, the legislative or administrative regulations on which their assessment was based.
^11' ADOPTION OF TPIE BUDGET
8. The. draft, budgets aro printed and circulated to members of the two Houses before Ist October.
Although it is not a prorogative of the House of Represen- tatives to deal with the drafts of the purcl- financial oudgcts before the Senate, In practlcc it does so. Tho other budgets are considered by the two Houses alternately. During che las* 'throe months of tho year, for tho House of Representatives, and _ DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED from November on, for the Senate, the discussion of oho ara-t ^ budgets is given priority ovor all othor business. Axtor_oxamiru- ' at ion by the Coimait too s, they nrc discusscd in public session. A vote is taken on oach draft separately and the result of such a voto by cither House is immediately announced.
A. Examination by the Comm.lt too s
a) House of Roprosontativos
9. At the beginning of oach Scssion(2nd Tuesday of November), the House of Reorosontativos forms itself into five sections which aro renewed after tho Erster Rccoss. Each section appoints two "rapporteurs" • Tlio "rapporteurs" of the five sections join the C ON? ISlgITIZ-L
gjÏÏ-D ( g 2 ) IT-AdcIondura No .1 -in-
appropriate permanent committees, which together constitute tho
Spocial Committee • The Hules of Procedure require the sections to examine tv'0 draft budgets before thoy are passed on to the cornaittoes. Sinco tho end of the 19AO-IÎ.5 War, however, the House has waived this condition and refers draft budgots direct to tho competent perman- ent committees for examination. Ihcrc is ono such committee for oach Ministry.
b) Senate
10. ' Fourteen committcos aro set up, one for oach Ministry. Sach draft budget is therefore referred to the appropriate coernttcc for examination.
11. The reports drawn up following examination of the draft budgets by tho committees contain a summary of the proceedings of the questions put to the Govermiont and of the replies to thoso questions .
3. Discussion in public, sossion_
12. Under the Rules of Procedure of the House of Representatives, public discussion of the draft budgots must commoncc in November on the first convenient day of a public session.
Budgets of an essentially financial character must be taken first.
Every member of either House has the right to move amend- ments. All amendments involving an Increase in expenditure must bc notified to the President of the Houso within cipjnt days oi the distribution of the report on the budget conccrned.
There is no legal stipulation to the oCfect that proposals for Increased expenditure submitted ^uring public discussion of the. Budget shall at-the sane time provide for fresh rovonuo to offset tho increase, but the ^ules of Procedure cf the house of Rcprcsentativos nevertheless- lay down that if a favourable report has boon made on the proposal, the former must indicate hoe' the increased charges are to bo
13. Having closcd the general discussion of a budget, the Houso proceeds to vote on each item spcaratcly, aftor whicn a vote on tho draft budget as a whoij is taken. DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED
• A budget adopted by one House is thon referred to the other which, as a rule, has alroady had the original draft examined oy th appropriate comuittoo. ^fter adoption by both Houses, the Budget Act is promulgated and published.
Belgian budgetary nrocoduro makes provision for supplemen- tary crodits, complementary credits and "provisional twelfths« CON?IDSNTIAL 2 )12 Addenclun Noil --5-
IV. IMPL'-MINTATION OF THd BUDGET
111. ' Iho Budget Ie drawn up for one year. Although for commitments the period ie the calendar year, accounts aro not closed until 31st IIarch of the following yoar.
During the supplom.ntary period, revenue is colloctod and oxponditure authorised and cleared.. Revenue is booi-jd to the year in which it falls duo or is liable to bo demanded. after 31st March, revenue received on. account- of tho past financial year is booked to the year in which it is actually collected.
In 1951, Solgium Introduced the system of anticipatory payments for Iircct'"tax ,s . In this way, the financial year 1951 benefited fron revenue whioh woulcl normally have accrued to tho fin- cial yoar 1952. Except for over-spending sanctioned by the Council of Ministers and ratified later by allocations voted by the Legislat- ure, Hinistors may not enter into commitments cxccoding the sums put at their disposal. Allocations may only be transferred from one head tc another with the prior authorisation of Parliaaont.
15. - Itnaturally devolves on Ministers to sec that tho budget is ImLo- x»Eted# The law lays down that spending officers shall not bo their own accountants. ^ho Government's caaliier is the Bmquc Rationale, under the direct control of the Treasury, to which, at regular intervals, it must submit vouchors for all transactions.
16. The Public expenditure procedure may bc divided into four staaos: commitment, authorisation, cloaranco and payment. 1. Coiamitmont : This is tho stage at which tho Government Socomcs party to a contract. Tnero aro standard forms for contracts with suppliers (either obtained by open tenders or by mutual consort) and the Government acknow- ledges its liability through the signature of the Iiinister of his represent at ivo .
DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED 2. ' uthcrisrtion: Bv -his th ; existence and legality of a ^bt'' 10 acknowledged, theoretically by tho - visa of the • ;.u'V"t Office, in practice by the cloaranco, i.e. the order or' authorisat Ion to pay signed bv the Minister or his représentât Ivo » ^ . P"-ym-nt : Tais Is usually si" do throu "h the Office dos üHlqucs et Yiroeients Postaux after approval by tho *.u 17» Expend ituro voted must be committod before tho end of tho financial year, while the clearancc mav take placo during tho throo months1 supplementary period (In Bolgiun, commitment in tho true senso takes place as the result of v;hat is lenovrn .as a "first order" (ordonnance primaire) and. clcaranco as the result of a ''second order" (ordonnance secondaire). Once the clearance is signed, p-ynunt may be made from the budget funds concerned, any time within five yoars » It should be understood that commitments ("first order" be fore 31st December) not cleared by 3Ist Harch ("second order") may bc carricd over tc the following financial year by administrativo action wIthout tho further approval of tho legislature t 18« The collation of payments accounts is perfectly satisfactory. Tho thcorotic^l basis of tho Belgian system Is similar to that of tho French, With respect to defence expenditure in particular, all payments vouchors pass through the hands of tho financial services v/hich classify them under the appropriate budget heads. SUPERVISION OF BUDGET XT.!PLEMEIIxATIOe a) Admlni s t ratIvo supe r vi s ion 19. At governmental lovol, the execution of the budget is supervised by tho Budget Conaittoo, the Prime Minister and the Finance Minister. The departments concerned arc tho "Inspection das Finances" and tho "Comptabilité dos Dépenses Engagées", both undor tho control of tho Financo Ministry. Tho Budget Committee is tho Administration's highost financial authority. It must advise on: 1) All proposed changes in money votes: ad/" it ion-1 credits, adjustments and reductions. • When In the course cf a financial year the balance of tho budget is thro'toned by chan :od. economic conditions, proposals Intendoe to restore the balance arc examine d by tho Budget Committee, final responsibility resting with tho Council of Ministers $ 2) Proposals for submission to the Council of Ministers requesting the lrtter to authorise the over-spending of allocations in exceptional circumstances of groat urgency: 3) Bills and draft decrees involving budgetary oxpondituro, Vihothcr to be met by allocations or othorwiso; DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED Any proposals for expenditure which have gi\on riso to disagreement between the Prime Jiinistor or the Finaico Minister and th Minister concerned. h) Par1 iernenta.ry supervision 23.» Parliamentary supervision is mainly exorcised: D - By submission of the accounts and the relevant observati- ons of th-.; Audit Office to both Houses? CONFIDENTIAL ^0-0 (5 2)12 Addondun No .1 -7- 2)- By tho dobato rnd vote closing the budget accounts . During tho implementation of a budget, the Audit Odfico _ an offshoot of Parliament - exorcises negative control through its right to adthold visas. Ihc Audit Office, moreover, has jurisdiction over publie accountants and in cortain eases ovor officers responsible for paymonts. The two basic texts laid before Parliament are the Gon^ral Account presented by the Financial A ministration, and the treasure Statement ( a provisional forecast), both closed on Jlst De-o er.foer of the vonr under review. DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED C OIIF ID JI-TTIAL PJ3-D (52lir:.dclondun ITo .1 -8- Tnblo shov/ing tho preparation of tho Belgian Budgot Month Stago Body Operation concernod January ) \ / February ) Preparation Ministrios Ministrios March ) submit requ- ) ests for Anril ' ) alloc ations ) iUay ) » J"uno ) July Preparation Bud go t C omnit tee- Examination and1 coordination of the proposals of the various Ministries August Mi ni s try of Pin- Circulation : Soptomber moo of the draft September budgot bill to members of both Houses October * ) ) Final form ) ) Discussion ) Tv;o Houses ) and vote November) ) Budget ) ) Deccmbor) DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED CCKFIEEiSgIAZi _ g _ "APPEN. No: 1. II - SUMMARY SUKygY OF LUXEMBOURG BUDGET TSCSIiqtES I. PREPARAI1 ICN QE THE BUDGET 1. From July to September each Ministry prepares its budget and puts in requests for such allocations as it considers necessary for the task's it has to perforai These proposals are submitted to a special committee appointed "qy the Finance Minister, and known as the 'Commission diSconomies et de Rationalisation'. From September to November tEe~~Committee discusses the proposals with representatives of the Ministries concerned and fixes thé amounts which it regards as essential'for the efficient operation of the various Government Departments consistent with the financial situation then prevailing. 2. The figures agreed by the Committee are laid before the Chamber of Deputies in the form of a Bill presented by the Finance Minister. 11 • COMPOSITION OF BUDGETARY 3XXHIMPS 3. The Luxembourg financial year coincides with the calendar year. As in Belgium, accounts are kept strictly on an annual basis (régime de l'exercice), revenue and expenditure being posted to the period Ist January - December even if payments and collection are only effected later. It follows that in Luxembourg, there is a supplementary period fixed at six months by Article J of the basic law of 27th July IJjê on Government Accounting. Generally speaking, all the usual budgetary rules of unity, universality ar-d non-transferability are observed. The Budget"BTll takes the form of a sin^e~SLocument divided into chapters (5 i^ number), sections and articles; it is prefaced by a preliminary Statemcnt-O?''accounts for'the preceding year and the final statement of accounts for the year before that. The rule of universality requires that all Government revenue and expend!t. re ' shall be shown, but that there shall be no offsetting, it being contrary to the rule to link items of revenue with specific items of expenditure. Certain unimportant departures from the rule prohibiting the earmarking of revenue are, however, tolerated as in the case of the use of the tax on wireless sets, for meeting the cost of preventing radio interference. Moreover, although all spending .nust, in principle, be entered in the Budget cefore-hand, certain emergency expenditure may be contracted ty Ministers with the prior approval of the Finance Minister. This procedure entails seeking tht advice of the "Chambre des Comptes". 5- The.rule of non-transferability, 'Aich requires that all DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED items of revenue and expenditure shall be- shown separately is applied to the Articles, both of the Ordinary and of the Sctraordinary Budget. Although the Luxembourg Budget Bill is a single document, a distinction is nevertheless drawn between ordinary revenue (direct taxes, indirect taxes, Customs duties, registration fees and revenue from public property) and extraordinary revenue (comprising, such nor.-recurrin£ revenue as taxes on war profits, personal property and, especially, on the proceeds from loan issues and Treasury Bonds). It likewise draws a distinction between ordinary expenditure for the operation of public services, and extraordinary expenditure (investment, war CŒffIDS'.TIAL - 10 - F£3-D(52)Tg~AXCM\L No: 1. damage and reconstruction). 6. The rule of noh-transfera'oility at article level, which is designed to prevent the transfer of items from one Article to another, is not strictly observed. Although transfers betweon different sections are ruled out, aftor 30th June of the current financial, year, transfers from one .article to another in the same Section are permissible. However, in no circumstances may such transfers be :aade in connection with allocations for nc"^urcnases"and"new constriction or with credits for which no upper limit His beer, set. TrTthe Budget STll, Articles which may not be" toucheaTby transfers are distinguished by the note "Credit not restricted to any one Financial Year". Articles of this nature include those or. pensions, the National Debt a-/ large- scale works such as highways and pipe-laying. 7. It should be noted thai although the Iirccmbourg Budget operates on a yearly basis, large-scale works and obligational authority; corcmitments constitute an exception to the rule that the accounting period mist coincide \iritli the financial year. The line between obligational authority and money votes is not so sharp ir. Luxembourg as in France or Belgium and the Budget contains a number of Articles accompanied by tne note: "Credit not restricted to any one Financial Tear". Any allocation in respect of such an Article is in reality a form of obligational authority, but since the portion to be spent during the current year is not specified, payments may be ef feet cd up to the full amount committed. As regards 2¾tional Defence, the 1952 Budget Bill only contains four Articles of this kind (Articles Jo bis. SO, 90 ani 32: costs entailed by the participation of volunteers in the Korean Vfar - medical services, family allowances and military social insurance, funeral expenses). In tho 1952 Budget Bill, these Articles represent an expenditure of Fr 35.5 million out of a total of Fr JB.377 (see Sections $A and SJ of the Budget 3ill). National Defence therefore involves practically no obligational authority commitments for Luxembourg. III. ADOPTION CF '155 3UDGBS! S. The 3udget is subject to normal Luxembourg legislative procedure. The Budget Bill is laid before the Council of State for its opinion. It is then examined by the three Sections of the Chamber of Deputie's, part icularly ' the Central Section. A vote is taken on oach Article separately, followed by a vote on the Bill as a whole at the end of the discussions. 9. In principle, the Budget musi be passed every year by Ist January, but since the Ordinary Session of the Chamber only commences on the first Tuesday after Jrd November, the discussions and. voting are seldom terminated on time. To meet this situation, the Chamber makes funds available to the Government in the form of provisional twelfths for one month at a time, as advances on the 3udgot to bo voted later, generally not before March or April. DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED 10. It is always possible, moreover, during the course of a financial year, that the Government may be called upon to make an urgent disbursement for which there is no provision in the Budget or for which the allocation of the Section concerned is exhausted. In these circumstances, with the backing of the Government Council countersigned by the Finance Minister, the Government may issue Provisionali payment. vouchers without the prior authorisation of the Chamber of^c"uFies. • Payment is made under the personal responsibility of the Government which COHFIDBjiTIAL -Il- . Ko; 1. mast subsequently vindicate its action. Under this form of procedure, the backing granted by the Government Council stands in lieu of authorisation by the Chamber of Deputies. IV. II€M51gATI0N 0? THS 3UDG5I 11. The Ianisters implement the Budget, each Mnister being responsible for the funds allocated to his Ministry and attached adminstrative departments. 12. Formal procedure is for payment vouchers to bc passed by the !Chambre dès Comptes', disbursements requiring clearance by the Finance Department, a branch of the Treasury. In an emergency. Ministers can . issue provisional payment vouchers (see para. 10 above),, Unless issued by the Finance Minister himself, provisional payment vouchers must be endorsed by him. All provisional payment vouchers must receive legal . sanction before the end of the financial year following their date cf issue. 13. The Treasuiy observes the rule of unified accounting (l). All receipts and expenditures are entered in the 'Treasury LSiger and Accounts. Centralisation is effected by two départants, the Caisse generale de I'Btat, which deals with all cash transactions, ancTtne Treasury department responsible for Treasury book-keeping and for the general accounts. 1½. Svery Ministry keeps a record of the payment vouchers issued under its budget allocations and forwards its figures to the Finance Ministry, so that in practice there are two parallel sets of accounts, those of the Finance Ministry and those of the Treasury, the latter . being required by law. V. SCTPEH7ISI0S? OF FUDGST IMPI^^xATICSI a) Administrative 15. During the preparation of the Budget, there is no organised administrative supervision beyond that of the FLiance Mnistcr and the Commission d'Economies ot de Nationalisation. A scheme is on foot to establish administrative supervision as -practised in France and Belgium. The Chambre des Conptes 16. The Chambre des Comptes is an offshoot of the Chamber of Deputies and is independent of the Sxecutive. It consists of a Chairman, two Counsellors and two Alternate Counsellors appointed Trr the Grand Duke from DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED a list submitted by the Chamber of Deputies, containing the names of three candidates for each vacancy. Its members cannot be dismissed without the consent of the Chamber of Deputies. (l) Sxcept in the case of semi-public agencies enjoying the legal status of corporate bodies independent of the State. CgjglPSHPIAL - 12 - FS3-D(52)12 ADDZIT. No: 1. It- performs three duties: 1) It audits and passes the general administration accounts and those for the Administration of Public Funds* 2.) It checks orders-to-pay prior to payment, both for the accuracy of the vouchers submitted to it and for the validity and authenticity of the crédits to which they refer. 3) formulates criticisms of the Governments' General Statement of Accounts, which requires the approval of the CSiamber of Deputies before they are closed. c) Parliamentary 17. Svery year, the Government submits to the Chamber of Deputies a General Statement of Accounts showing receipts and payments for the last financial year but one. The Chamber of Deputies closes the Government Accounts by means of an Act of Parliament (see paras. 3 and b). DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED COi1IFIDaaTIAL -17- Ko; 1. • Table showing the stages Jg. the preparation of the Luxembourg Budget " " MCME j STAGS t BODY j OPERATION j COSCSSSD i • July ) Preparation for All Ministries j Assessment of ] the following including I requirements j August ) year Ministry of (proposals) ) Proposals put Finance September ) forward by the Ministries « October ) Elaboration of Commission Formulation of final draft of d'Economies et final 3u&get Hovemoer ] Budget 3111 de BatIonali- figures sation, Representatives' of the Ministries i December ^ Ebcaminationf discussion and Januazy ) Chamber of vote. Budget Bill Deputies j February ) . March ) DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED COKFIDE-YriAL 0 FSB-D( 52 ) f2~*Addendum B I -Ili- III. SUMMARY SURVEY OF NSThaRl^Dd BuDGET TBCKAIIjUES PREPARATIOH OF THJS BUDGET 1. The Budget is prepared in accordance with norral practice. Between January and June, each Ministry determines its budget requirements for the next fiscal year, which coincides with the calendar year. These estimates are subsequently submitted to the Ministry of Finsmce for review and approval. As a rale, the Draft Budget is laid before Parliament*on the third Tuesday in September, accompanied by a survey of the country's overall financial situation and comments on each "bill". Revenue estimate are worked out directly by the fiinistry of Finance. COMPOSITION OF BUDGETARY DOCUMENTS 2. Budget documents consists of Official Docureents (Acts), explanatory memoranda and supporting tables. Bach "bill" is divided into : i) - ordinary expenditure ii) - extraordinary expenditure arising from the war and Iii) - extraordinary capital expenditure (investment). It may thus be said that there are one ordinary arri two. extraordinary budgets. 3. Although they are all submitted to Parliament together, the various "bills" (they were 29 in the 1950 Budget) may be voted at different times. They are generally considered as falling into several distinct categories, the first of which included 19 expenditure bills, one for each Ministry, and four special bills for the Queen's Household, the most important State Institutions, the National Debt and Emergency Expenditure. The other categories contain, first a Revenue Bill and, second ten other bills, these being really auxiliary bills for State Funds and Undertakings. 4. The Funds permit direct allocation of revenue to expenditure They are at present four in number, namely, the Civil Pensions Fund, the Zuiderzee Fund, the Fund for the Communes and the Fund for the Provinces. These Funds were designed so as to avoid, at least in part, the effects of the stipulation that budget DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED allocations outstanding at the close of the fiscal year shall be cancelled.- Thus, any .surplus from the previous year car. be carried forward. The expenditure of these Funds must, however, be voted by Parliament. 5. Expenditure is broken down into chapters (special bills), sections, sub-sections, paragraphs and articles. The division into sections, sub-sections and paragraphs (but -hot that into articles) corresponds roughly to the administrative structure of the ministries. A distinction should, however, be made in every case between a Ministry's General Running Expenses, which are entered in the first section, and the costs of other services, which are shown under their separate sections. COfrPIDEMIAL StJSB-D (52) IF-Addenduia IT0 1 6. Articles - the "basic budget units - are purely empirical and are determined partly by the nature of the expenditure, partly by the requirements of the different services. They constitute a legal limitation on expenditure (non transferability of credits). Unless specially authorised, transfers between articles are not permitted. However, each bill contains an , article providing for a small amount to cover contingencies, available for use by the liinister concerned, as he thinks fit. In addition, one of the Budget bills provides for a contingency fund available to any Government Department. 7. Although Netherlands' budget procedure makes no provision for obligational authority, this form' of appropriation never- theless exists in practice. First, parts of the extraordinary investment budget refer to programmes extending over a number of years. Secondly, Netherlands' practice with regard to expenditure authorisations is similar to that of the United States. The allocations voted for a given financial year are very much larger than the sums actually expended, and the balance is carried forward for use in subsequent years. The« carry-overs are of three types : a) — The sums required for paying expenditure cleared at the end of the financial year : these are carried forward. automatically, the expenditure incurred as a / result of this operation being booked to the financial year of original allocation ; b) - Sums committed but not cleared by the end of the financial year : these may be carried forward to the next financial year by the Executive (by decree) without authorisation by the Legislature ; c) - Allocations for defence may always be carried forward, even if not already committed, by special authorisation of the Legislature (arrangement introduced in 1951)» It is therefore apparent that the volume of money votes will not give any clear idea of expenditure in a given financial year. As in the United Strvtes, it" "is better to "work from the expenditure estimates prepared by the Ministries concerned, and in particular by the Ministry of Finance. DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED III. ADOPTION OF THE BUDOET 8. The Budget is first laid feborë the Lower House, v/hich drafts a report on each chapter for reference to the Ministers concerned. 'While the ministers' replies to these observations furnish' some material for discussion, the debate really takes place on the explanatory memoranda. The House is empowered to mak< whatever changes it may neem "necessary in the Budget. COSDIFBIrIIAL Fs1B-D( 52 j 12 Addendum 11° 1 9. After an item-by-item vote in the Lower House, in January the Budget passes to the Upper House, which merely undertakes a 'general, discussion and has no power to amend articles. It either accepts or rejects the articles as they stand. Rejected articles are' referred back to the Lower House, which may reconsider its decision. In practice, reference back is comparatively rare, all real legislative power in financial matters being vested in the Lower House. 10. The Budget is voted for a period of one year : allocations- take the form of expenditure authorisations (see para. 7 above). 11. If' the various bills have not been passed by the opening of the fiscal year (Ist January), Ministers are authorised to effect drawings not exceeding one quarter of the amount allocated to them under the previous Budget, and any department may be granted further amounts by the Finance Minister if ar.olutely essential. Thev are therefore no "douzièmes provisoires" (i.e. advances voted by Parliament), as in France. 12;. Supplementary allocations are usually made available by bills laid before Parliament. IV. IMPLEMENTATION OF THE BUDG-ET 13- Government expenditure is subject to the usual forms of procedure, i.e. commitment, clearance, order to pay and payment. Until 1945, there was no control over expenditure commitments Since that time centralised accounting of commits,ents has been carried out by the office for checking orders to pay, set up by the Ministry of Finance. The accounting services now distinguish between the opening of credits and the granting of advances to accounting officers. 14. Requests for lines of credit are dealt with differently for recurrent expenditure (wages, cost of materials) and non- recurrent expenditure (works, supplies). For the former, a general authorisation by the Ministry of Finance at the beginning of the financial year suffices, the ministers concerned notifying the Finance Minister of their overall credit requirements monthly. For the latter, separate applicationsmust be submitted to the Finance Minister for authorisation. This distinction is maintained for payments procedure, but with less force, it difference h~s always DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED been recognised between payments made by the Finance Ministry and those made by the Accounting Officers of the Ministries concerned. Generally speaking, non-recurrent payments are made by the Finance Minister, recurrent payments by the officers of the ministries concerned. Nevertheless, when recurrent payments are made by cheque, it is the Finance Minister who signs. 15- Although since 1945 the Finance minister has been able to keep track of expenditure as a whole, h-- often has no information regarding-individual items. The ihr Ministry ^nd the Admiralty have details of defence expenditure by budget heads, but at the COKFIDEKTIAL F.h.'B-Dl 52 j 12 Addendum 1 -17- date when the Finance Ministry informs them that payment has 'been made and not at the date of actual payment ; and some considerable time may elapse between actual payment and' the despatch of summary statements by the Finance Ministry to the ^ar Ministry and the Admiralty. V. SUPERVISION OF BUDGET IMPLEMENTATION 16. The existing supervisory bodies are the Audit Office, the Central Accounts Inspectorate and the audit branches of the different Ministries. The Audit Office is the Parliamentary agency ; the Central Accounts Inspectorate is maintained by the Finance Ministry and the Government ; the audit branches are part of the various Ministries. 17. The basic function of the Audit Office is to investigate Government expenditure from the legal aspect as well as from the standpoint of its efficient use. In both cases, it may address whatever comments it considers desirable, to Parliament, to the Ministers concerned and to the Finance Minister. It issues an annual report summaricing its activities. The Office refuses to insert in the Government Accounts any item of expenditure which it does not consider legal. 18. The other supervisory bodie-s conduct their investigations on the spot. The most important of these is the Finance Ministry's Central Accounts Inspectorate which audits the accounts of the different ministries .and, where appropriate, of their external branches. -17- DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED COMF1DBKTIAL FB3-D(52)T2""Addondum K0 1 -18- TABLE SHOv.1 IUG THE STAGES OF PREPARATION OF THB NETHERLAIiDS BUDGET Month Stage of Body- Action Procedure concerned January- Submission of Budget Upper House Vote on articles to Upper House 1 •without power February to amend March i Preparation of Assessment of j April Budget for ensuing Mnistries budgetary year requirements j May i j June j July i i August ) I September Submission of Draft Finance Survey of country's '( 3rd Tuesday) Budget to Lower Mini stry financial position House : October D I) Budget debate and ; November Lower House ') voting by articles | I) with power to ; December J Budget i) amend i DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED OON^DJrI TJAL F AdcUndum "o .1 IVo SWJ-Ry SURVEY OP UtTITHD KINGDOM J-UDG-HT T JCIIrJI 1IJ IS PREPARATIOM 0? TKH 3UDG3T 1. The Treasury Is the Department primarily- ro sponsible for the Budget In Great Britain-"-. In this respect the Treasury corresponds to the Ministry of Financo in many other countries thou-h its responsibility is by no moans confined to budgetary matters: it also deals vith overseas finance, economic affairs, establishment matters and so forth. The Chancellor of the Hxchcquer is the' effective head of the Treasury. 2» The financial year runs from Ist April to 31st Harch. The Treasury sets the budgetary process into motion In the preceding October by sending to each Department or LIinistry a c-ircular calling for an estimate of 'its expenditure during the coming finan- cial year. Iho IBstimatea are received by the Treasury in tho course of December and are there subjected to intensive scrutiny and if necessary amended after discussion betv/oen the Treasury and the Mlnistrjr conecmod. 3. TVlion the HstImatos are in final form (usually in the course of February) they arc presented to parliament and thereafter published. The Estimates for the Civil Departments and those for the Revenue Departments aro presented and signed b/ the financial Secretary to the Treasury. The Hstimates for the three Fighting Services, after approval by the Treasury, are presented and signed by the Board of Admiralty, the Army Council and the Air Council respectively and that for the Ministry of Dofonco, osain after approval by the Treasury, is presented by the Minister of Defence. h• The Treasury is also tho Department -principally concerned -Tith the revenue-raising aspects of the Budget, though the Chancellor of the Hxchequcr is also advised on the technical •aspects- of this subject by tho Board of IriIand Revenue and the Board, of. Customs and Excise. COMPOS IT IOII OF BUDGETARY DOCUMENTS The Estimates are published In several volumes :- 1) Civil Estimates (usually nine, volumes, each containing one; "Class" of votes. These aro re-published later as one complote volume). DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED 2) Estimates of Revenue Departments 3) Army Estimates U) Navy Estimates 5) Air Estimates. * The Northern Ireland Budget is the business of th Ministry of Finaaco in that Country. r C0M7IDDNTIAL "Addendum Mo »1 -2 Cl- in addition, the Minis try of Djfonco lstiinate is issued a y a separate booklet. 6. Each volVjno contains several separate estimates (or "Votes"), relating- to a dofinod service or group of services. The Dstimato may cover the whole of a Ministry's work, or part of it, or it may only provide funds granted in aid of the work of outside bodies. Dach Estimate has three parts: - Part I specifies the services and purpor.es for which tho Estimate is presented and the net"- .amount of the grant roc v. ire - Part II classifies under " Vubhcads" the expenditure and rcccipts which go to m ok o up the total amount specified in Part I and names the Ministry which will account, subhead by subhead, for oxpondituro out of the grant. - Part III explains in such detail as Ie considered necessary the nature of the expenditure and receipts provided for under oach of the subheads in Part II. Part I alono appears in the Apnropriation Act and receives Parliamentary authority; the distribution of each grant omon^ the subheads has therefore no statutory significance. The Treasury may, if it thinks fit, exorcise its nowor to vary the allocation, botv/oon subheads; but not even the Treasury has power to vary tho allocation- botwoon one Vote and another, oxcopt ( subject to subsequent approval by Parliament) between tho severel Votos of any one of the Fighting Sorvicos hen important new services, or largo variations in the pa-'.tern of expenditure compared with tho Estimate, aro in question, now Parliamentary authority is sought by Supplementary Estimate. The same procedure is followed if tho gross or not total of the Vote is oxpoctod to be overspent, though such over-spending is of course avoided if at all possiblo, Soo paras» Ik, lj? and 16. 7« , Normally all the Dsliraatos, m d in many caso tdo totals of the Votes, arc published before the Chmccllor introduces his Budget, so that details of projected Governdient expenditure can bc oea-ùnoS in advaneo. 'The Budget Speech has, however, of recent yoars become something more than an oxp.lo.nantIon of how the Government proposes to balance its accounts • Tlao Chancellor has in fact used It to survey the economic state of the nation, and to reveal how monetary and financial policy, as well as the Budget itself, will be used to chock any dangerous trends. In this hc is normally helped by the prior publication of two tThito Papers - the «economic Survey" for DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED tho coming -year, and the statement cf "National Incomo and expen- diture", giving details for the previous year* III.ADOPTION OF THE BUDGET 8o Thus, the Budget Speech, normally in early èpril, in which the Chancellor of tho exchequer surveys the whole economy of the nation and outlines his intentions for the raising and spending of money in tho coming 12 months, Is_ the most lhiportant event of tlir financial year« Parliamontory discussion o'OiTs proposals, Valid- ating in the nassing annually of a Finance Act(authorIsing tho I»e. after expropriating in aid of the Vote thoso roc:.:Ipcs oxpoc- tod to arise from tho current- activities of tho MinIe arid which arc directly related to two ox'vr.id::t"ro provided Tor in the eel; "mate -2 0- C OIFIDBKTIAL . JtjH1BADT??)TT"Addondum No 4 -21- raising of rovonuo),nnd an Appropriation Act (authorising and allocating 'Its spending) cOntini1-Oa ovor the succeeding months but " must bc complete by 5th Auquet at latest. For these debates che House of Commons f orm's its elf"'int o a "Comnittco of the ''.hole Housow under.tho Chairmanship not cf the Speaker, but of a Chairman of Committees (v/ho is also Do•outy-Spcaicor) or of a Deputy Chairman. There aro tv/o such Committees, the Cornraittoo of Supply (dealing v/ith expenditure), and the Committoo of 1Aeys and Hoans (dealing v:ith the raising of money, and in' particular r/ith revenue proposals). A. Committee of Supply 9* The Coimnittoo of Supply examines and debates the Hetimates presented to the House of Commons, and finally reports upon them' to the House in the form of resolutions that the oums aslrocl for - or smaller sum3 — bo granted. Its resolutions can take no other forraj . it cannot attach a condition or ar. expression of opinion to a arant, nor can It suggest an increase in the amount, for any request for additional money must bo mado to the House itself in tho first instance and bo made by Ministers (on behalf of the Cr'or/n) . 10.- Tlie time available for debate in tho Committee of Supply and, on Report, in the House, is limited. 26 da -3 are specially allotted to Supply business In cach Session but these arc " not expected to be sufficient to allow every Hstimato to be discussed and voted individually. (Moreover, they have to cover more than just the Estimates for the coming year.) Debates, usually of a rather general character, therefore 'coko place upon certain Estimates only (the choice of subject resting v/ith the Opposition). The '''guillotino" is usod to ensure that all thoso outstanding arc passed by-the ConKiittoc of Iaipply and considered, on Report, by tho Houso, by the end cf tho 26th allotted drey. 3. Committee of IVays and Ho ans 11. The grant of supply by tho Houso of Cornons does not of itself maire money available for the purposes nemo d In He tima tes; uVZays and Moans" must also bo granted by resolutions authorisina the payment of sufficient money out of the Consolidated Fund. Such resolutions must;bo considered first in the Committee of «'ays and Moans and then agreed to by the Houso on Roport. The necessary 'lays and Hoans resolutions usually follow closoly upon DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED the resolutions in Cossnittoo of Supply to ah ich thoy relate and and aro normally a formality only. 12. As soon as the House of Commons has agreed on report to all the IYa-rS and I1Ioans resolutions, a ConsolidatcdFund (Approp- riation) Bill is introduced. Hhis Bill, when passed Into Ire; as the Appropriation Act, gives statutory authority to the grants and ensures that tho sums thus put at the disposal of the Crovm may not bo diverted to purposes othor than thoso for which thoy havc boon specifically demanded and granted. This Act is passed (usually v/ith little debate) in late July or oarly August, and thus tho Govornmont ( so long, as it can command succoss in any elivieion v/hich may bc forccd) is assured of obtaining the money it requires for the year before the Summer Adjournment. C02\?IDTiITIAL 7 :;3~pj52 )12 AddondUK Ho .1 -2 2- C-., Votes . on v Account 13. Before tho end of. oach financial year the House of Cordons is asked torIiicJcc ..available to the Govormcnt, funds sufficient for the period of^ four to five months which will elapse before tho full programme of : grant and appropriation can bo completed. Diff- erent procedures; aro followed for tho Civil Departments r.nd the Fighting'Services Departments- Iii« For the Civil .and Rovonuo Departments and the Ministry of DefORCO., a statement is; presented to the House showing the total sum roquirod on each Voto before tho Appropriation Act Is oassod. This "Vote- on Account" is debated in the Committee of Supply r.nd tho Committee of %ys end Moans and the "guillotine" is âvailablo, as doscribcd in paragraph 10, to.cnsuro that the money is provided by a Consolidated Fund Act'before Ist April. 1$• The requirements of the. Fighting Service Departments during tho oarly months of a now financial year aro however provided not by passing a s cp arc. to "Vote on Account", but by passing one or more of the several Votes for oach Sorvico Department, which may bo used to meet expenditure on any of the Department's Votes during the early months of the Financial Year ( see para* 6.) D. Supplementary Bstlmatos 16. Supplementary Estimates may bc roquirod cither to establish o. new sorvico not covered by the original Cstimato or because the funds granted have proved in practice to bc inadequate. In either ease the consent o.f tho Treasury is-required before .a Supplementary Sastimato is. presented. Generally, Supplementary Ustimatcs for new sorvices arc taken in July with the main Estimates, and thoso arising from lack of funds aro taken in the following February, when tho further sum needed can be more ac.curatoly judged. Supplementary Estimate follows broadly the form of the corresponding original Estimate and like it must bo the subjoct of a resolution in Committee of Supply and a resolution in Committee of '."/ays and Means before finally being covered by a Consolidated Fund Act In March or an Appropriation Act in July or August. 17« Iticn a need for funds arises unexpectedly and it is in the public interest that It should be met without-waiting for the necc.ssary Supplementary Estimate to bc passed, money can, if the Treasury agrees, bc advanced to the Ministry cor.ccrncd from the Civil Contingencies Fund. Tliis fund is not normally available DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED to the Defence Departments. Such advances are however in the naturo of loans and'a corresponding amount to onablo repayments to bo made to the Fund must bc includod in duo courso in ar. Estimate or Supplementary estimate» 5» Note ; Absencc of Obllgational Authority 18. United Kingdom budgetary procedure makes no provision for obligational authority enabling the Dxocutlvc to enter into commitments beyond tho end'of the current financial year. However, in order to carry out long-term schcmcs (Including cortain dofonco projocts), the Executive signs long-term contracts for completion in stages over a number of years, supervision of progross being a -2 2- CO I^ IDE NT LJL ÏÏSBjSTZniZ -Addonduia IIo «1 -23- Troasury responsibility. This is a purely administrativ© dovico now hallowed by tradition, BlPLELamTIOH QF THIS BUDGET rJh-O "Consolidated Fund" into which all revenue is paid end from v/hich all Govornincnt expenditure is fin m eod, is the Exchequer Account kept at the Bank of England. Before drawing any money * from the Consolidated Fund, the Treasury must receive "credit" from the Comptroller and Auditor General, an Independent officor who is responsible for seeing that issues from the Consolidated Fund have boon duly authorised by an Act of Parlirmcnt. 2'f • Tho first stago of public oxpondituro consists of payments to tho Ministries spending the amounts for which allocations aro granted by Parliament. The Government's creditors are never paid directly by a draft on the Exchequer Account at tho Bank of England. The Treasury, which alone can draw on tho Consolidated Fund, periodically crédits the various spending departments with a lump svim . • 21. During tho course.of a financial year, two sots of paymonts returns are availablo: ~ 1) Rogular statements of the sums transferred by the Treasury to the spending departments. Thoso, however, indieato neither the dates of o.-vmcnt nor the final destination; 2) A set of estimates, constantly reviewed and brought up to date by higher authority, of expenditure .incurred and envisaged by the various departments. 22. So far as dofonco is conoornod, the paymonts situation is complicated for tho accountant by the existence of the Ministry of Supply as an Independent body mdking direct payments for military items falling within its compctcnco and supplying to military users the items which it has produced or caused to be producod. As a result, there arc two parallel sots of payments figurosr thoso by the IIinistry of Supply to Ite contractors and those by military departments to the IvIinistry of Supply. SUPERVISION OF IIiPL IMENTATIOII DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED 23. The control of Goverrunent oxpondituro is a traditional responsibility of the Treaeairy but I'; is important to boar in mind that it shares this responsibility with several other partlos: the Ministry concerned and in particular its Accounting Officer (almost Invariably nowadays Its Permanent Hoad); the Comptroller and Auditor General; and the Pablic .ccounts Committee cf the House of C ommons. Zb • The Accounting Officor(i.e. the Permanent Head) of every I-Iinistry boo/as a spocific and personal responsibility (under IIinistcrs ) for oconony and regularity in tho policy and in tho CONFIDENT I.". L FEB_D ( 3 27I2TV.ddondum No.l -2it- managomont of his Department• This responsibility is emphasised by the fact that oach Accounting Officer"nay be called before the Fablic Accounts Conimittoe of the House of Commons and submitted to cross-examination by it on his Department's accounts. Other Departmental officers - and particularly those of Finance branches of Departments _ also have the duty of ensuring, in cooperation uith the Treasury, that policy is framed and oxceuted in tho most economical way possible. The Comptroller and Auditor General scrutinises the accounts of all Ministrios and reports on thorn to Parliament represented by the Public Accounts Committee. The primary purpose of his scrutiny,. Is to ascertain that expenditure has not exceeded the sums •granted or been incurred for pusooscs othor than those intended, but the Comptroller and Auditor ^oncral would also draw attention to any instanco of lax or extravagant administration, even when no financial irregularity was prosont. 26. Tho accounts of oach Ministry and tho comments of the Comptrollor and Auditor Gonoral upon them are then considered by the Public Accounts Committee, a Committoo of 15> IIombers of Parliament divided among the Parties in proportion to their strengths in tho Houso of Corenons. Tho Chairman of the Committee is always, a Member of the Opposition. After considering theso documents and cross-examining the Accounting Officor of thoso Ministrios which it selects for particular scrutiny, tho Committee present's to Parliament a report in which it may criticsc the finnncial administration of any Ministry and propose any alteration of system it thinks necossary to avoid repetition of tho occurren- ces which havo called for censure . 2 7« Parlio.monto.ry control over Government expenditure is further reinforced by the appointment of a Select Committee on Estimates, of 28 members. Each year sub—committees of this body examino cert- ain of tho Estimates and the Committee may make recommendations upon the form in whioh the Istimatos are-presented and upon any oconomics which they think might bc made, consistently with Governmont policy. Any criticism mado in Its report by the-Selcct Committee on Estimates may bo debated in Committee of Supply, but tho Committee of Supply does not wait for a report from tho Solcct Committee before voting the sums included in the Estimates. 28* Reports by these two Committees are published, as are (in general-) the verbatim reports of thoir examination of witnesses• DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED -2b, - C OITP IPe NT I-. L ?éB-DTj27l2 Addendum No.l -25- T'BLD SKOrrING- TKe STAGES IN TH3 PTHP'.RATIO! OPERATIONS MON-TH STACH BODY CONCeRITCD Chancellor of the April Budget Spcech Uxchcciuor May Debate June of vVays AulUor ib^ July Resolutions Committee an d '--e an s îArpropriat ion of Suouly :Act August Discussions C OECiitt ee Comriitteo of 'Vry s : Scptcrabcr' and Means p V* Tre asury : Circul to : October (1) : Minist ers inv iting « rthor.i t O O s t im .. . W••> W : the ir -> V^-endI i tur o : Novcribor Submission cf Estimates Tre acury : estimates to the • December •. :Tr 2 asury • • î •. January .•m- +- • Pobuary • ' Committee of V'ays :Approval of inter- : March Resolutions rnd Mosis : im allocations . ^ : Corsolieatea Funa Interim Committee of Supply :Act. Civil Veto Credits :on Acc ount ^ne :Dofencc Votes. (1) Procedure for the following financial year b,--Lns in October« DECLASSIFIED - PUBLIC DISCLOSURE / DÉCLASSIFIÉ - MISE EN LECTURE PUBLIQUE LECTURE EN - MISE / DÉCLASSIFIÉ DISCLOSURE - PUBLIC DECLASSIFIED