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February 2011

 File n°9 

The Court of Accounts

 

 

 

 

 

 

    Key Points

    The Court of Accounts is the body responsible for monitoring the legality of public accounts and checking the correct use of public funds.

    In accordance with article 47-2 of the Constitution, the Court of Accounts “shall assist Parliament in monitoring Government action”; it “shall assist Parliament and the Government in monitoring the implementation of Finance Acts and Social Security Financing Acts as well as in assessing public policies”. Collaboration between the Court of Accounts and Parliament takes various forms. This is particularly displayed by means of the special transmission of the work of the Court of Accounts to the National Assembly and to the Senate and by the attendance of the Court at various parliamentary bodies (Finance Committees, Assessment and Monitoring Missions and Assessment and Monitoring Missions for the Laws Governing Social Security.

See also files 49, 50 and 51

 

    The Court of Accounts was set up in 1807 and has gradually seen its role broaden with the extension of the powers of both the State and the public sector.

    Nowadays it has within its remit, the obligatory monitoring of:

        • The State;

        • National public establishments;

        • Public companies;

        • Social security agencies.

    In all these cases, referral to the Court of Accounts is a matter of law and is thus automatic.

    It also has within its remit, the optional monitoring of:

        • Agencies in private law with a majority of votes or capital held by bodies submitted to obligatory monitoring by the Court of Accounts or in which such bodies have a dominating decision-making or managerial role;

        • Agencies in private law (particularly associations) supported by public funding;

        • Bodies of ‘general interest’ funded by donations from the general public;

        • Bodies supported by European Union funding;

        • Bodies entitled to grants of any type and to impose legally obligatory fees.

    I. – THE MONITORING OF LEGALITY: THE COURT OF ACCOUNTS AS THE JUDGE OF THE ACCOUNTS OF STATE PUBLIC ACCOUNTANTS

    Articles L. 111-1 and L. 111-3 of the Code of Financial Jurisdictions states that “the Court of Accounts judges the accounts of public accountants” and that it “checks, using all available evidence, the correctness of the expenditure described in public accounts”.

    The Court of Accounts is thus responsible for checking that the tax revenue has been collected and that expenditure has been engaged in accordance with the accountancy rules in force. It analyses the accounts and the accompanying supporting documents and examines the balance of the accounts. It releases the accountant from responsibility if the accounts are correct but declares him with a balance due if tax revenue has been lost or if expenditure has been irregularly carried out. The responsibility of the account is thus both personal and financial.

    The Court of Accounts does not only judge the accounts of public accountants but also those of every person who has been involved in an irregular manner with the handling of public funds; the de facto accountant, so declared beforehand by the Court of Accounts, is then submitted to the same requirements and to the same responsibilities as a public accountant.

    II. – THE MONITORING OF MANAGEMENT: THE COURT OF ACCOUNTS AND THE CORRECT USE OF PUBLIC FUNDS

    The Court of Accounts does not judge the officials empowered to authorize expenditure but checks the correct use of public funds (according to L.111-3 of the Code of Financial Jurisdictions, it “checks the correct use of credits, funds and assets managed by state bodies”), either when it examines the accounts of state accountants and public establishments or when it directly verifies the management of officials empowered to authorize expenditure.

    In 1976, the Court of Accounts also received the responsibility previously held by the Public Companies’ Accounts Verification Committee which, since 1948, had been monitoring public companies and was then a body attached to the Court of Accounts. The Court of Accounts expresses its opinion on the correctness and the legality of such accounts and proposes improvements, if necessary. It also provides an opinion on the quality of management of such companies.

    Since 1950, the remit of the Court of Accounts also includes the monitoring of social security agencies. Almost all such agencies are private law legal entities whose resources are contributions of an obligatory nature. At a local level the accounts of social security offices are often checked by the departmental committees for account verification (CODEC) under the supervision of the Court of Accounts.

    In addition, state aid to a private body may take the form of a grant. It is within the remit of the Court of Accounts to check the use of such public aid and since 1991, this remit has been extended to include agencies requesting donations from the general public. The Court makes an assessment of the conformity of the expenditure of such agencies with the objectives set down in the call for public donations.

    In the case of clear irregularities in the management of the officials empowered to authorize expenditure, working for one of these agencies or for a state body, the Court of Accounts may refer the matter to the Court of Budgetary and Financial Discipline (CDBF).

    III. – ASSISTANCE TO PARLIAMENT AND GOVERNMENT

    Article 47-2 of the Constitution, in the wording of the Constitutional Act of July 23, 2008, provides that the Court of Accounts:

      • Shall assist Parliament in monitoring Government action;

      • Shall assist Parliament and the Government in monitoring the implementation of Finance Acts and Social Security Financing Acts, as well in assessing public policies;

      • Shall contribute to the information of the citizens by means of its public reports.

    In the wording of the Constitutional Act of July 23, 2008, the reference to assessment seems to complete an evolution which has led the assemblies as well as the Court, to introduce a new dimension into their work: the evaluation of results and of the efficiency of public policies.

    The Court’s assistance to Parliament by the Court of Accounts consists, first of all, in the transmission of numerous documents, only a limited number of which are public.

      Parliament receives, of course, the public reports of the Court of Accounts:

    - The annual report to the President of the Republic is, in accordance with article L-136-1 of the Code of Financial Jurisdictions, “presented to Parliament”. This presentation takes the form of a formal tabling of the report by the First President of the Court of Accounts in the Chamber of each of the assemblies. The law of July 12, 2005 provides that this report may give rise to a debate both in the National Assembly and in the Senate (article 11 modifying the Institutional Act of August 1, 2001 concerning finance acts);

    - Thematic or specific public reports which are the result of inquiries by the Court of Accounts sometimes jointly with the regional chambers of accounts.

    - Parliament also receives documents which are not public: specific reports on the management and accounts of public companies, the “references” of the Court of Accounts (observations made to ministers and signed by the First President), etc.

    - This information provided by the Court to Parliament was increased in 2008 by a provision stating that the First President should communicate to the finance committees, to the social affairs committees and to the commissions of inquiry of the assemblies, upon their request, the definitive findings and observations of the Court which are not required to be transmitted.

    - Article 58 of the Institutional Act of August 1, 2001 concerning finance laws modified and clarified the assistance mandate of the Court of Accounts to Parliament as regards the monitoring of finance acts and more generally public finances.

    - It is stated that the assistance mandate given to the Court of Accounts now includes the tabling of several reports:

    - A preliminary report linked to the tabling of the Government report on national economic development and on policies for public finances that the Government must present in the last quarter of the ordinary session with a view to the debate on budgetary policy (article 48 of the Institutional Act of August 1, 2001);

    - A report on the implementation of the finance acts, the content of which is broadened to include all associated accounts and which must include an analysis per assignment and per programme of the use of the budgetary credits;

    - A report linked to the tabling of each finance bill on the movements of credits through administrative channels, which must be ratified in the said finance bill (in practice this represents decrees authorizing advances).

    In addition, the Court of Accounts must certify the legality, correctness and accuracy of the state accounts.

    It must also reply to the requests for assistance made by the Chairman and the General Rapporteur of the finance committees of each of the two assemblies in the carrying out of their assessment and monitoring mission.

    In addition, the Court of Accounts is also obliged to reply, within a time limit of eight months, to any inquiry made by a finance committee concerning the management of agencies or bodies which it monitors.

    The Court of Accounts provides similar assistance in the area of the monitoring of laws on the financing of social security. Every year it draws up a report on their implementation and which it tables before Parliament. It may also be referred to by the relevant parliamentary standing committees on any question dealing with the implementation of the social security financing acts and may carry out inquiries upon their request on bodies which it monitors (article 2 of the Institutional Act of July 22, 1996).

    The Court of Accounts may also attend the meetings of the Assessment and Monitoring Mission (MEC) set up in 1999 by the Finance Committee of the National Assembly and those of the Assessment and Monitoring Mission for the Laws Governing Social Security (MECSS) established in 2005.