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April 19, 2010

Let them Eat Cake!*

How to hold public managers accountable. The role of specialized judges in francophone and lusophone countries. 

Posted by Guilhem Blondy

« Society has the right to ask a public official to account for his administration », states the article 15 of the Declaration of the Rights of Man and the Citizen of 26 August 1789. More than two hundred years later, the landscape of accountability regimes and types of sanctions incurred by public managers remains very diverse, across countries, although usually less harsh than meted out to French royalty in days past. The political accountability concerns usually only a limited number of public managers – elected or, like ministers, accountable to elected assemblies.

The administrative accountability exists in two very different ways. The managerial accountability is based on the determination of objectives and on soft mechanisms to reward success or sanction failure in symbolic or material terms (promotion, salary increase, etc.). This should be the normal framework to evaluate the performance of a public manager, but it is not always relevant for sanctioning serious management faults or violations of government financial regulations. Disciplinary accountability mechanisms following more rigid procedural rules are in order here, but they will not be effective, if internal control and audit institutions are not strong enough.

However, in many countries, it is as final resort also possible to seek the legal liability of public managers in court. In a majority of countries, public managers are only liable in ordinary civil or criminal courts. This system can be enhanced with the recognition of some specific misdemeanors and crimes related to public financial management. For example, in some judicial systems criminal offences are identified specifically linked to the public sector (e.g., corruption). However, in practice the protection of public monies by civil and criminal courts remains in most cases quite limited.

In the Francophone and Lusophone countries, or other countries such as The Netherlands influenced by the French legal tradition, there exists the possibility to make public managers accountable in specialized courts under specific liability regimes. According to the country in question, these regimes belong to one or the other family of accountability systems: reparation or sanction.

In Southern Europe (France, Greece, Italy, Portugal, Spain), the Supreme Audit Institution has a judicial status (Cour des Comptes en France, Ελεγκτικό Συνέδριο in Greece, Corte dei Conti in Italy, Tribunal de Contas in Portugal, Tribunal de Cuentas in Spain), and public managers can be condemned by this court to compensate for any prejudice caused to the Treasury.

In France, this personal liability based on the reparation of a prejudice applies only to the civil servants authorized to handle public monies, called “government accountants” (comptables publics). In France, Portugal and other countries, notably in Africa (for example, Algeria, Angola, Cote d’Ivoire, Gabon, Madagascar, Marocco, Senegal), the Middle East (Lebanon) and Latin America (Brazil), public managers are not only liable to specialized courts for repaying damages incurred by the government, but also for disciplinary sanctions, like fees, in case of serious management faults or violations of financial regulations.

A recent work of Nicolas Groper (“Le régime de responsabilité des gestionnaires publics en droit public financier”, Dalloz, Paris, 2010) presents comprehensively the French system implemented since 1948 by the Budget and Finance Disciplinary Court (Cour de discipline budgétaire et financière). This judicial body is a specialized administrative court, distinct from the Cour des Comptes, the judicial Supreme Audit Institution, in charge of deciding on reparations to be repaid by government accountants, if public monies are missing.** In a very interesting chapter, the author compares this system with similar mechanisms existing in other countries.

Nicolas Groper does not hide the limitations of the French system, especially the low number of decisions of the Budgetary and Financial Disciplinary Court since its creation (170, as of end 2009). He explains this limited activity by restrictions in the scope of the public managers accountable (ministers and elected local officials are excluded) and in the authorities who can refer a case to the court (ministers, presidents of parliamentary assemblies and the Court of Accounts only). He recalls that the court is not permanent and has, partly because of this material weakness, long procedures.

The author underscores nevertheless the positive aspects of not relying only on criminal courts to sanction public financial mismanagement. He mentions the diversity of the offences sanctioned by the Budget and Finance Disciplinary Court, ranging from the violation of formal expenditure execution, revenue collection, asset management and accounting rules to advantages unduly granted, or any serious management fault. He is convincing when he describes the dissuasive effect of the court and the significant level of some fees (100 000 Euros for the manager of one of the subsidiary companies of the former state-owned bank Crédit Lyonnais).

Moreover, Nicolas Groper recalls that some of the weaknesses of the French Budgetary and Financial Disciplinary Court have been corrected in Portugal. In this country, the judicial Supreme Audit Institution can decide itself to impose fees on public managers, in addition to require them to repair the prejudice incurred by the government. Ministers, like any other public managers, are liable to the Tribunal de Contas.

Finally, there is no doubt that judicial accountability regimes specially designed for public managers are complementary to common-law and criminal courts and are a good governance practice to be supported in developing countries. It is interesting to note that the July 2009 Directive on Budget Acts of the Western African Economic and Monetary Union (WAEMU), written with the support of the International Monetary Fund (IMF), creates a legal obligation for member countries to allow their judicial Supreme Audit Institutions to impose fees on public managers in case of management faults. The work of Nicolas Groper will be relevant for all officials in charge of translating this provision into their respective national laws and implementing them.

Notes: The posts on the IMF PFM Blog should not be reported as representing the views of the IMF. The views expressed are those of the authors and do not necessarily represent those of the IMF of IMF policy.

* Comments often wrongly attributed to Queen Marie Antoinette (1755 – 1793): "Qu'ils mangent de la brioche", http://en.wikipedia.org/wiki/Let_them_eat_cake.

** The twelve members of the Budget and Finance Disciplinary Court are chosen amond the judges of the Cour des Comptes or the Supreme Administrative Court (Conseil d'Etat); they cannot be removed before the end of their term

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