Consolidated Fund

Establishment The Consolidated Fund of Great Britain was established in 1787 as a result of the passing of the Customs and Excise Act 1787. It was so named as it consolidated together a number of existing accounts, detailed below, and facilitated proper parliamentary oversight of the spending of the executive; it was defined as "one fund into which shall flow every stream of public revenue and from which shall come the supply of every service". The Treasury established the Consolidated Fund account (formally '''The Account of His Majesty's Exchequer''') at the Bank of England where it remains to this day. The legal term "Consolidated Fund" refers to the amount of credit held in this particular account. Use of the fund is governed by the Exchequer and Audit Departments Act 1866, which stipulates that most of the revenue from taxation, and all other money payable to the Exchequer, must be paid into the Consolidated Fund. The fund can only be drawn upon by HM Treasury, and this can only take place if and where Parliament has given its consent. an older form of wording was used: This follows the constitutional principle that the Crown (government) demands money, the House of Commons grants it, and the House of Lords assents to the grant. Since the Glorious Revolution of 1688 only once, in 1784, has the Commons refused to grant access to funds. If money paid from the Consolidated Fund is not spent by the end of the financial year, it must be repaid to the fund. Grant-in-aid payments are however excluded from this rule. Standing services Certain expenditure is by law charged directly to the Consolidated Fund and is not subject to Parliament's annual budget process, ensuring a degree of independence of the government. Services funded in this way are known as Consolidated Fund Services and include judges' salaries, the Civil List payments, the salary of the Comptroller and Auditor General, and the expenses paid to returning officers at elections. In the case of the judges, this is to ensure the judicial independence introduced by the Act of Settlement 1701. Other modern funds • The National Loans Fund is the government's main borrowing and lending account. It is closely linked to the Consolidated Fund, which maintains a daily balance of zero by means of a transfer to or from the National Loans Fund. • The Exchange Equalisation Account is the government fund holding the UK's reserves of foreign currencies, gold, and special drawing rights. It can be used to manage the value of the pound sterling on international markets. • The National Insurance Fund is an account which holds the contributions of the National Insurance Scheme. • The Contingencies Fund is an account which may be used for urgent expenditure in anticipation that the money will be approved by Parliament, or for small payments that were not included in the year's budget estimates. Control of the fund Once Parliament has authorised a withdrawal from the Consolidated Fund, the Treasury will issue a request to the comptroller for access to the funds granted by Parliament. Scotland The Westminster Parliament provides a sum of money annually to provide a budget for the Scottish Government and fund the operation of the Scottish Parliament and the salaries for judges of Scottish courts. This money is transferred from the UK Consolidated Fund into an account known as the Scottish Consolidated Fund. If the income tax varying powers of the Scottish Parliament were to be used (the rate can be changed by plus or minus three percent), the additional revenue raised would be paid by HM Revenue and Customs directly to the Scottish Consolidated Fund. If the tax is reduced, then the amount paid from the UK Consolidated Fund in that year would be correspondingly reduced. Wales There is also a Welsh Consolidated Fund to provide a budget for the Welsh Government and the Senedd. In addition to the budget provided to the Welsh Government, the expenditures of the Welsh National Assembly, the Auditor General for Wales, and the Public Services Ombudsman for Wales are also paid directly from the Welsh Consolidated Fund. Payments are normally made from the fund following the passing in the Assembly of a budget motion or supplementary budget motion, proposed by the Welsh ministers. There are limited exceptions for emergency situations, or a failure of the Assembly to pass a budget; in addition some payments are automatically authorised by law, such as the salaries of National Assembly officials. The Auditor General has to authorise all payments out of the Welsh Consolidated Fund to the Welsh ministers, having checked that the expenditure has been approved by the National Assembly. Northern Ireland The Northern Ireland Consolidated Fund has existed since 1921. ==Australia==

The use of consolidated funds in Australian government dates back to colonial times. Today the Australian federal and state governments all maintain their own consolidated funds, with authorization for payments required from the relevant parliament. Commonwealth (Federal) Government The Australian Government's Consolidated fund is known as the Consolidated Revenue Fund (CRF). The CRF is established through sections 81 to 83 of the Constitution of Australia. The constitution gives no guidance as to how the revenues or monies that form the CRF are to be kept or accounted for as the CRF is said to be "self‑executing" – that is, all money paid to the Commonwealth automatically forms part of the CRF, whether or not it has been credited to a fund or a bank account. Instead, accounting and banking practices pertaining to government funds are established in the Public Governance, Performance and Accountability Act 2013. The Act requires that the Commonwealth maintains a central bank account with the Reserve Bank of Australia known as the Official Public Account (OPA). The act also allows for non-corporate Commonwealth entities (NCEs) to account for and retain their receipts provided they have legislative and policy authority from the Prime Minister or Cabinet. However, most money collected by NCEs is treated as general government revenue that is not retainable and must be remitted to the OPA. Payments into the Consolidated Revenue Fund Section 81 of the Constitution of Australia provides that: "Revenues or moneys raised or received" includes for instance taxes, fines, charges, levies, borrowings, loan repayments and money held in trust. New South Wales Sections 39 and 40 of the Constitution of New South Wales require that all revenues, loans and other monies collected by the state are to be paid into a single consolidated fund. This was originally formed as the Consolidated Revenue Fund in 1855, and was merged with the state's General Loan Account to be named the Consolidated Fund from 1982. ==The Consolidated Fund of India==

The Indian government and each Indian state government maintain their own consolidated funds. Article 266(1) of the Constitution of India requires revenues received (direct and indirect taxes, money borrowed) by the Government of India and expenses (receipts from loans given by the government), excluding the exceptional items, are part of consolidated fund. The Comptroller and Auditor General of India audits these funds and reports to the relevant legislatures on their management. The budget consists of two types of expenditure – the expenditure ‘charged’ upon the Consolidated Fund of India and the expenditure ‘made’ from the Consolidated Fund of India. The charged expenditure is non-votable by the Parliament, that is, it can only be discussed by the Parliament, while the other type has to be voted by the Parliament. The list of the charged expenditure is: • Emoluments and allowances of the President and other expenditure relating to his office. • Salaries and allowances of the Chairman and the Deputy Chairman of the Rajya Sabha and the Speaker and the Deputy Speaker of the Lok Sabha. • Salaries, allowances and pensions of the judges of the Supreme Court. • Pensions of the judges of high courts. • Salary, allowances and pension of the Comptroller and Auditor General of India • Salaries, allowances and pension of the chairman and members of the Union Public Service Commission. • Administrative expenses of the Supreme Court, the office of the Comptroller and Auditor General of India and the Union Public Service Commission including the salaries, allowances and pensions of the persons serving in these offices. • The debt charges for which the Government of India is liable, including interest, sinking fund charges and redemption charges and other expenditure relating to the raising of loans and the service and redemption of debt. • Any sum required to satisfy any judgment, decree or award of any court or arbitral tribunal. • Any other expenditure declared by the Parliament to be so charged. ==See also==