Central Finance and Treasury

Her Majesty’s Treasury is the United Kingdom’s economics and finance ministry.  It is responsible for formulating and implementing the UK Government’s financial and economic policy. It has two key objectives:

• Maintaining sound public finances, and 
• Ensuring high and sustainable levels of economic growth, well-being and prosperity for all.

Therefore every UK individual and business is directly affected by the policies and decisions taken by the Treasury, as well as the economy as a whole.

The Treasury also has a number of arms length bodies

• The Royal Mint
• Debt Management Office
• Office of Government Commerce Buying Solutions
• Government Actuary’s Department and
• National Savings & Investments

• The Bank of England, and

• Northern Rock, which was taken into temporary public ownership in February 2008.

The Office of Government Commerce is a separate operating group within the Treasury.

On the Central Funds, the Treasury and the Debt Management Office are responsible for the delivery of the government’s financing requirements and its debt and cash management strategy.  As part of this role, it produces the following complex banking-style accounts:

• Consolidated Fund – the Government’s current account,
• National Loan Fund – the Government’s borrowing and lending account,
• Debt Management Account – issuing government gilts to the market on behalf of the NLF and cash management,
• Public Works Loan Board;
• Exchange Equalisation Account – the Government’s holding of foreign currency, and
• Accounts for the Commissioners for the Reduction of the National Debt.

From 2006-07, the Treasury has published a Consolidated Statement on the Use of EU Funds in the UK.  It is also pursuing its ambition to produce a “Whole of Government Account” consolidating the accounts of the public sector.

Our work in this sector falls into three categories:

• Financial Audit: We audit the accounts produced by the Treasury and its arms length bodies (with the exception of the Bank of England and Northern Rock) and those of the Central Funds  - we are also working with the Treasury as it develops its Whole of Government Account.
  
  The C&AG has reported on The Royal Mint's financial statements for 2001-02, 2004-05, 2005-06 and 2006-07; his Reports are included in the Mint's Annual Report and Accounts.
  
• Value for Money: covering specific areas of HM Treasury’s activities with a view to improving compliance, efficiency, and the reduction of the administrative burden on taxpayers. Past Reports include the Sale of part of the UK's gold reserves and the regular Audit of Budget Assumptions, while work is currently in progress looking into taking Northern Rock into temporary public ownership.
  
• The Comptroller Function, the legislative requirement for the Comptroller and Auditor General to approve every request for the transfer of money into or out of the central funds (see our Feature). 

Feature

The Comptroller Function

Under the Exchequer and Audit Departments Act 1866 the Comptroller General of the Receipt and Issue of Her Majesty's Exchequer, more commonly known as the Comptroller & Auditor General or C&AG, exercises his statutory duty to ensure that all revenues and other public money payable into the Consolidated Fund (the Government’s current account) are duly paid over, and that all issues are authorised by statute.

Read full article: The Comptroller function