The Development of Government Expenditure Control: The Issue and Audit Phases

Abstract

The Consolidated Revenue and Audit Act of 1931 is the statutory embodiment of the principles underlying the control which the Parliament of Canada exercises over the receipt and issue of moneys from the Consolidated Revenue Fund. It is the most recent of the legislative milestones which mark the evolution of systematic control from the plodding simplicity of the methods of 1855, when the first Audit Act was passed, to the mechanized organization of the present day.Legislative financial power had been firmly established in 1878 with the appointment of an Auditor General as an officer of Parliament, to regulate the issue of moneys from the treasury and to examine and report upon the public expenditures. With wide powers of inquiry and examination, the Auditor General possessed the means to learn if legislative directions were being obeyed. Control of the issue gave him the means to deal with the misapplication of appropriations by refusing to sanction further issue. This ever-present threat, hovering as the sword of Damocles over the heads of the spending departments, was ready at the word of the Auditor to cut off the flow of money from the treasury. For fifty-three years, legislative regulation of the issue served as a more or less effective restraint on executive disobedience to parliamentary directions.