Bad Financial Advice? How Queen Elizabeth, the Royal Family Spent Their Money

PHOTO: Queen Elizabeth II travels in a horse drawn carriage from Buckingham Palace to attend the State Opening of Parliament, May 8, 2013 in London, England.
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How did the spending of Queen Elizabeth and the royal family get so out of control that they are down to their last million? Blame her people, at least according to a report published today.

The British House of Commons' public accounts committee released a 35-page report that said the queen received 31 million pounds, or about $50 million, from taxpayers for 2012-2013, but overspending had whittled down the royal Reserve Fund to 1 million pounds at the end of that period.

Read More: UK Lawmakers Tell Queen to Cut Costs, Boost Income

The report criticizes the queen's household and the treasury for its financial planning and management.

"It is not clear to us that the Treasury is sufficiently challenging in its scrutiny of the Household's financial affairs, or that the new funding arrangements sufficiently incentivise the Household to find greater efficiency savings," the report states.

It's not the first time the royal family has been told to tighten its belt. Last October, the public accounts committee lectured the queen's treasurer, Sir Alan Reid, about why the royals exceeded their budget of 31 million pounds and spent 33.3 million.

Read More: Parliament Tells Royal Family To Tighten Its Belt

Before 2012, Parliament didn't have the authority to pry into the details of royal spending. But a law passed that year gave Parliament's public accounts committee oversight and also changed the way the royal family gets its funding. Buckingham Palace now gets a single yearly payment called a Sovereign Grant, based on a percentage of the income generated by so-called Crown Estates -- properties including farmland, mines and retail establishments. The money pays for royal travel, entertaining, home maintenance and other family expenses.

On what kind of things are the Queen, Prince William, Kate Middleton and the rest of the royals spending money?

The royal train service cost 200,000 pounds last year, but royal travel spending did fall to 4.5 million pounds in 2012-2013 from 5 million pounds in 2007-2008. The royals have lower helicopter maintenance to thank for that, which was most recently 2.7 million, compared to 3 million in the previous year.

The royals are spending more on their utilities: 9.9 million pounds in 2012-2013, compared with 8.2 million in 2007-2008. The report details increases in electricity and gas for Buckingham Palace and the Royal Mews.

Of note, the Queen is worth an estimated $660 million, according to Wealth-X, a firm that researches ultra-high net worth individuals.

Read More: Royal Baby Could Inherit $1 Billion

"A significant financial priority for the Royal Household is to reduce the backlog in essential maintenance across the Occupied Royal Palaces," Buckingham Palace said in a statement. "Recent examples of work include the renewal of a lead roof over the Royal Library at Windsor and the removal of asbestos from the basement of Buckingham Palace. The need for property maintenance is continually assessed."

A spokesperson for Buckingham Palace explained that the 1 million pounds left in the reserve was all planned and approved by the Treasury.

"In 2012-13 the Household generated £11.6 million in comparison with £6.7 million in 2007-8. Work on income generation continues," the palace said in a statement.

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