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September 28, 2012

Public Prominence and “Muscle” — the Role of the French Court of Accounts

Posted by Maximilien Queyranne and Delphine Moretti

Supreme Audit Institutions (SAIs) are the national bodies, found in many countries around the globe, responsible for reviewing public expenditure and providing an independent opinion on government financial reporting. The Court of Accounts (Cour des Comptes) in France is one of these bodies but has a wider range of responsibilities, and a more prominent place in public life and political debates than in other countries.

The Court is part of the judicial system and consequently operates independently of the executive and legislative branches of government. Since a ruling by the Supreme Court (Conseil Constitutionnel) in 2001, the Court’s independence as well as its institutional relationship with the executive and legislative branches has been protected by the Constitution. A revision of the Constitution in July 2008 incorporated these important principles (article 47-2).

The main functions of the Court may be summarized as follows:

  • Judgment – The Court’s judicial role requires it to verify the legality of revenue and expenditure operations authorized and performed by public accountants. It can also impose penalties on public servants in cases where there are breaches of the law. This judicial role is one of the oldest functions of the Court but is no longer its main activity. The Court can also prosecute public servants who committed management offences, through the Court of Budgetary and Financial Discipline, a body attached to the Court.   
  • Control – The Court is required to ensure the regularity, effectiveness and efficiency of public management by conducting “controls” on government departments, agencies, public enterprises and associations that either receive or raise public funds. These controls are broader than financial audit in the strict sense. Their aim is to provide an opinion on the management and financial performance of the entity controlled.
  • Financial audit (Certification) – The adoption, a few years ago, of two modern organic financial laws (one for the government, the so-called “LOLF”, enacted in 2001, and the other for social security agencies, enacted in 2005) has brought to the Court a new mission, namely to certify the annual accounts of the state (now prepared on an accrual basis) and those of the social security system[1].
  • Evaluation – This final role of the Court is fast becoming its core activity, namely to review and analyze public policies. The Court is authorized to make its analysis and conclusions available to the public. It has published audit reports on a wide range of subjects such as public education, railroad investment, the efficiency of various public agencies, and the sustainability of the government’s fiscal policies. The reports usually receive a great deal of attention from media, citizens and politicians. The growth in this area of work has contributed to the prominent place the Court holds in French public life. In recognition of this status, the newly elected government in May 2012 asked the Court of Accounts to perform a general audit of French fiscal policy and accounts.

The head of the Court (the “First President”) also heads the network of regional Chambers of Accounts, which control and judge the management and accounts of local authorities. He is also in charge of bodies auditing or controlling tax policy and revenue administration (Conseil des prélèvements obligatoires) and collecting royalties for authors and other artists (Sociétés de perception des droits d’auteurs). In the coming months, a fiscal council (Haut Conseil des finances publiques), responsible for evaluating the macroeconomic forecasting capability of the government, and the execution of the annual budget may added to this list.

For historical reasons, the members of the Court of Accounts comprise a special category of judges with full judicial powers as they are entitled to impose various penalties to public accountants. The members usually have a legal rather than an accounting or auditing background, though in recent years auditors have been recruited to deal with specialized tasks such as the certification of accounts. As with other categories of judge in the French legal system, members are appointed for a non-time-limited term, in order to protect their independence.  

Traditionally, the members of the Court of Accounts have been recruited amongst the best ranked students of the French school for high-level public servants (“Ecole nationale d’administration”, the so-called ENA). This recruitment policy has been a cornerstone of the credibility and reliability of the Court in providing a rigorous evaluation of public policies.

The position of First President of the Court – who is nominated by the French President for a term of nine years – in recent decades has been filled by several high-profile politicians, thus contributing to Court’s reputation for independence and effective public outreach. Two of the three last French President are magistrates from the Court of Accounts (Jacques Chirac, 1995-2007, and François Hollande, since May 2012), as well as the current Minister of Finance.

In conclusion, though the institutional position of the Court and staffing may differ from other SAIs, especially of Westminster tradition, these differences should not be overestimated, and are decreasing with the extension of the court’s mandate in the area of financial and performance audit and its strengthened cooperation with the French Parliament.

[1] Also, the Court acts as the external auditor for international organizations such as the WTO, the OECD, and UNESCO, and was until recently external auditor of the United Nations.

Note: 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 or IMF policy. 




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