The Queen's finances are at a "historic low" with just £1 million ($1.9 million) left in reserve, British MPs have been told.
Her courtiers have been advised to take money-saving tips from the Treasury.
A report by the Public Accounts Committee found that the Queen's advisers were failing to control her finances while the royal palaces were "crumbling".
The Queen's courtiers are now looking at ways to save. Photo: Andrew Winning
MPs said her advisers had overspent to such an extent that her reserve fund had fallen from £35 million in 2001 to just £1 million today.
The Queen was once thought of as one of the world's wealthiest women. But no longer. L'Oreal and Wal-Mart heiresses, Harry Potter author J.K. Rowling and Australia's own Gina Rinehart now top those lists with the Head of the Commonwealth nowhere in sight.
The royal household had made efficiency savings of just 5 per cent over the past five years compared with British government departments, that are cutting their budgets by up to a third.
MPs on the committee said the Treasury must "get a grip" and help to protect the royal palaces from "further damage and deterioration".
Margaret Hodge, the Labour chairman of the committee, said: "We believe that the Treasury has a duty to be actively involved in reviewing the Household's financial planning and management – and it has failed to do so."
Buckingham Palace and Windsor Castle are reported to be in urgent need of repair. Staff must catch rain in buckets to protect art and antiquities, while the Queen's old boilers were contributing to bills of £774,000 a year.
Mrs Hodge said: "The Household must get a much firmer grip on how it plans to address its maintenance backlog. It has not even costed the repair works needed to bring the estate back to an acceptable condition. Again, the Treasury has an oversight role here."
In April 2012 the Sovereign Grant replaced the old way of funding the royal family through the Civil List and various government grants.
The Sovereign Grant represents 15 per cent of the net surplus income of the Crown Estate, land holdings that generate money for the Treasury.
A Buckingham Palace spokesman said the Sovereign Grant had made the Queen's funding "more transparent and scrutinised" and was resulting in a "more efficient use of public funds".
He said that repairing the royal palaces was a "significant financial priority", and that the royal household had almost doubled its income to £11.6 million since 2007.
The spokesman said: "The move to the Sovereign Grant has created a more transparent and scrutinised system, which enables the royal household to allocate funding according to priorities. This has resulted in a more efficient use of public funds."
A Treasury spokesman said: "The new arrangements established by the Sovereign Grant Act have made the royal finances more transparent than ever while providing the long term stability necessary for good planning."
Daily Telegraph (London)