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2016

ANNUAL PUBLIC

REPORT

Follow-up of recommendations

Summaries

DISCLAIMER

These summaries are intended to facilitate the understanding and

use of the report produced by the Cour des comptes.

Only the original report is legally binding on the Cour des

comptes.

The responses of the administrations and government authorities

concerned appear after the report.

The order of the summaries corresponds to the order of the

chapters of the report.

The Cour des comptes is responsible for ensuring that public funds are used

properly. It examines public management, policies, and accounts and rules on

their compliance with the applicable rules and standards as well as on the

efficiency and effectiveness of actions taken.

The Cour des comptes has also been called upon – particularly since the early

2000s – to fulfill two complementary and recurring expectations: propose

solutions to shortcomings that it identifies and ensure that public policy-

makers follow up on its interventions.

The legislator has gradually established these two expectations as obligations

that the Cour des comptes is now required to fulfill.

It endeavours to do so by generalising recommendations and systematising the

periodic review of the follow-up actions taken. In the same way, the regional and

territorial chambers of accounts undertook an approach in 2013 established by

the act of 7 August 2015 on the new territorial organisation of the Republic,

which entrusts the chambers with responsibility for producing an annual sum-

mary of monitoring reports on their final observations.

The Cour des comptes' review of the follow-up actions taken in response to its

interventions is organised as follows

• at the beginning of each audit, a thorough analysis of the follow-up actions

resulting from the observations made at the conclusion of the previous audit;

• between two periodic audits, if the need arises, the performance of a follow-up

audit, limited to the examination of the follow-up actions of the previous audit,

or the anticipation of the next thorough audit;

• lastly, with the new Article L. 143-10-1, introduced in the French financial

jurisdiction code by the supplementary budget act of 29 July 2011, the legislator

institutionalised the monitoring of interventions of the Cour des comptes, by

establishing a particularly ambitious configuration and obligations for both the

recipients of the observations and for the Cour des comptes itself:

the recipients of the final observations of the Cour des comptes are required

to provide it with reports on the follow-up actions that they have given to

them;

Introduction

Synthèses du Rapport public annuel 2016 de la Cour des comptes

______________________

1) These principles are incorporated into the professional standards: Collection of professional

standards, chapter 3 – C, available at www.ccomptes.fr

the Cour des comptes presents these follow-up actions in its annual public

report, on the basis of the reports provided.

This booklet first presents the

overall results of the follow-up carried out by

the Cour des comptes on all of its recommendations made public

in 2012 to

2014 (chapter I). It then provides the summaries of

14 follow-up investigations

that it performed.

These 14 texts are grouped into three categories, each represented by a

colour, depending on the degree of implementation of the recommendations

previously made by the financial courts:

category 1 (green) (chapter II):

the Cour des comptes notes progress

(3);

category 2 (orange) (chapter III):

the Cour des comptes insists

(7);

category 3 (red) (chapter IV):

the Cour des comptes warns

(4).

Introduction

Summaries of the 2016 Annual Public Report of the Cour des comptes

The expression and follow-up of recommendations

according to ISSAI 300

The follow-up of recommendations and the publication of the work of the Cour

des comptes meet the professional standards and best practice guidelines for

auditors in the public sector approved by the International Organisation of

Supreme Audit Institutions (INTOSAI).

To that end, ISSAI 300 sets out fundamental principles relating to the expression

and follow-up of recommendations for performance audits.

It provides that “auditors should seek to provide constructive recommendations

that are likely to contribute significantly to addressing the weaknesses or

problems identified by the audit”. Quality criteria are set out. In particular,

recommendations must “address the causes of problems and/or weaknesses,”

must be expressed “in such a way that avoids truisms or simply inverting the

audit conclusions”. The recipient of each recommendation, as well as the person

responsible for taking any initiative, must be identified and cited. The meaning

and relevancy of the recommendations should be mentioned, indicating “how

they will contribute to better performance”.

This standard was transposed into the professional standards of the Cour des

comptes.

Contents

Summaries of the 2016 Annual Public Report of the Cour des comptes

Follow-up of recommendations

Chapter I - Follow-up of recommendations in 2015

Chapter II - The Cour des comptes notes progress

Energy efficiency certificates: an improved system

. . . . . . . . . . .13

Biofuels: improved results, necessary adjustments

. . . . . . . . . . . .17

Reducing exceptional resources in the funding of national

defence: a welcome clarification

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

Chapter III - The Cour des comptes insists

Sciences Po: adjustment efforts to be finalised

. . . . . . . . . . . . . . .27

Urban policy: a renovated framework, priorities to be clarified

.30

The

fight

against

tobacco

addiction:

policy

to be strengthened

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33

The fight against tax fraud: progress to be confirmed

. . . . . . . . .36

Reforming agriculture aid paying agencies: a strategy to be

defined, savings to be sought

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39

Run-off management of Dexia: precarious initial results, conclusions

to be drawn about liability in case of a financial disaster

. . . . . . . . . .42

Rail transport in the Greater Paris region since 2010: significant

progress, persistent insufficiencies

. . . . . . . . . . . . . . . . . . . . . . . . . . . . .45

Chapter IV - The Cour des comptes warns

National centre for territorial civil service (CNFPT): train better,

tax less

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51

Preventive archaeology policy: late adjustment measures, an operator

to be thoroughly reformed

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54

Military pay: despite efforts undertaken, problems persist

. . . . .57

Amnéville indoor ski area: under-used equipment, a risky

investment

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61

Chapter I

Follow-up of recommendations

in 2015

Follow-up of recommendations in 2015

Summaries of the 2016 Annual Public Report of the Cour des comptes

The degree of implementation of the recommendations made by the Cour des

comptes published over the last three years is the main performance indicator

of the State budget programme related to financial courts (programme 164 –

Cour des comptes and other financial courts).

This indicator is defined as the proportion, in the most significant recommendations

made during the period, of those that have been followed by effective implementation.

In order to be considered effective, the implementation does not necessarily need

to be total; it may be only partial.

For the 2015 campaign of follow-up of recommendations, the Cour des

comptes decided to better take into account the variety of situations covered

by the category of recommendations partially implemented, which could range

from effectively partial implementation, or even very partial implementation

(experimentation), to implementation in progress with a view to total

implementation. As such, this year, recommendations that were previously

rated as “partially implemented” have been classified under two new ratings:

• “implementation in progress”, which applies to recommendations for which

implementation has been initiated with a timetable for implementation. The

perspective here is clearly full implementation;

• “incomplete implementation”, which applies to recommendations for which

implementation is only partial in its content.

These two new ratings have made it possible to reflect as best as possible the reality

of the process of implementation of the recommendations by the administrations

concerned and to better understand the degree of implementation of each

recommendation in the three consecutive years of follow-up.

After a significant increase in the number of recommendations made and followed

up by the Cour des comptes until 2014, this number decreased in 2015

(1,792 recommendations followed up in 2015 versus 1,924 in 2014). 2012 and

2013 were marked by a particularly high number of publications, which had a major

impact on the number of recommendations to be followed up in 2014, but this

number has decreased since then.

The recommendation follow-up indicator is stable in 2015: 70% of the

recommendations are totally or partially implemented, after an increase of

7.8 points between 2013 and 2014. Thus, of the 1,792 recommendations followed

up in 2015, 1,256 were partially or fully implemented.

Follow-up of recommendations in 2015

Summaries of the 2016 Annual Public Report of the Cour des comptes

Change in the recommendation follow-up indicator for the last three years

2013

(follow-up of

recommenda-

tions made in

2010, 2011,

and 2012)

2014

(follow-up of

recommenda-

tions made in

2011, 2012,

and 2013)

2015

(follow-up of

recommenda-

tions made in

2012, 2013,

and 2014)

Change

2015/2013

Number of recommendations

subject to follow-up

1,671

1,924

1,792

+ 7.30%

of which recommendations

partially or fully implemented

(in %)

1,033

(

62 %)

1,343

(69,8 %)

1,256*

(70 %)

+ 21.59%

Source : Cour des comptes

*Including implementation in progress and incomplete implementation.

Rating

Number

of recommendations

As %

of number

of recommendations

Fully implemented

491

27.4%

Implementation in progress

461

25.7%

Incomplete implementation

304

17.0%

Not implemented

367

20.5%

Now irrelevant

1.5%

Refusal to implement

142

7.9%

Total

792

100%

Rating of recommendations followed in 2015

Source : Cour des comptes

Chapter II

The Cour des comptes notes progress

Energy efficiency certificates: an improved system

Biofuels: improved results, necessary adjustments

Reducing exceptional resources in the funding of national

defence: a welcome clarification

Summaries of the 2016 Annual Public Report of the Cour des comptes

Energy efficiency certificates:

an improved system

Created by the programming law

setting the guidelines for energy

policy of 13 July 2005, the energy

efficiency certificates (EEC) are

intended to provide an incentive to

energy suppliers to promote energy

efficiency to their customers by imposing

on them a three-year obligation to

generate savings. This measure is

among the various tools involved in the

control of energy consumption (such as

the tax credit for the energy transition

or the no-interest eco-loan).

Although the Cour des comptes

validated the principles and general

operation of the EECs in its 2013 report,

it also issued 12 recommendations that

revolved around three main ambitions:

- launch new targets and actions to

increase the dynamism of the

EECs;

- streamline administrative proce-

dures, particularly in order to

improve EEC application processing

times, reduce the burden for liable

parties and eligible parties, and

simplify the governance of the

mechanism;

- improve the effectiveness and

sustainability of the EECs by

reinforcing the assessment of

energy conservation and ensuring

its transparency and security.

Two years after its report and in the

light of the qualitative and quantitative

issues, the Cour des comptes wondered

about the follow-up actions taken in

response to the recommendations that

it had made.

The EECs, which now actively help

reduce energy consumption, present

three advantages: a low cost for

public finances, real autonomy for

players in how the targets are

achieved, and an important role in

raising awareness.

Since their creation, the EECs – which

are

becoming

common

Europe – have contributed €24bn to

help fund energy-efficiency work and

generated €2bn in annual savings for

consumers.

The EEC mechanism, which was launched

in 2006 and recently entered its third

period of activity on 1 January 2015,

quickly gained ground.

Energy efficiency certificates:

an improved system

Source: Cour des comptes, according to data from the DGEC and the ADEME (French environment

and energy management agency)

The principle of energy efficiency certificates

Summaries of the 2016 Annual Public Report of the Cour des comptes

A mechanism that has become

more effective

The effectiveness of the EECs has

gradually improved, in line with the

recommendations of the Cour des

comptes, under the effect of four factors:

- a periodically updated mechanism.

Ten working groups and 150 experts

reviewed nearly 95% of the volume

of EECs issued in the 2

period, thus

allowing the energy gains related

to the various operations to be

updated. This operation should be

finalised in 2016;

- a simplification of procedures

was implemented. The increase in

the minimum threshold and the

transition

the

declaration

mode for submitting an EEC

application are in keeping with

this perspective. Similarly, the

dematerialisation project could soon

be finalised, with implementation

planned in 2017 by the directorate

general for energy and climate

(DGEC);

- an optimisation of ongoing pro-

grammes. In the case of the “Habiter

mieux” (Live better) programme, a

new faster process for EEC recovery,

registration, and distribution among

participating local government

authorities was gradually imple-

mented;

- better targeting, with the imple-

mentation of a dedicated obligation

benefiting households in precarious

energy situations. This obligation,

set at 150 TWh for 2016 and 2017,

has

been

operational

since

1 January 2016. It now involves a

Energy efficiency certificates:

an improved system

The increased importance of EECs

Source: Cour des comptes according to DGEC data

Summaries of the 2016 Annual Public Report of the Cour des comptes

ramp-up of energy conservation

actions for the benefit of the

households concerned.

Two years after its report on the EECs,

the Cour des comptes finds that a

large part of its recommendations

have been taken into account, and the

improvements permit better targeting

and greater effectiveness of the

mechanism.

Beyond these rather positive develop-

ments, the Cour des comptes identified

several areas where further progress is

needed.

Areas requiring

further progress

In 2013, the Cour des comptes stressed

that the EEC mechanism, like any

public policy, should be periodically

monitored and assessed.

The policy of post-audits, implemented

starting in 2014, still appears insufficient

and should be reinforced in the short

term with sampling better suited to the

estimated risks. The act of 17 August

2015 on the energy transition to green

growth also provides for a set of

penalties commensurate with the

seriousness of the deficiencies found.

Although the EECs were the subject of

fragmented studies, now it is essential

to define a true methodology for

assessing the effectiveness and

performance of the mechanism.

Lastly, there must be control over the

risks resulting from a certificate

exchange mechanism characterised

by a certain lack of transparency

and security in the monitoring of

transactions.

Energy efficiency certificates:

an improved system

Recommendations

Summaries of the 2016 Annual Public Report of the Cour des comptes

make retrospective studies with

liable parties mandatory in order

to improve knowledge of the

savings actually obtained thanks

to EEC-funded operations;

ensure the transparency and

security of transactions by separating

the certificate registration functions

and the management of transactions;

gradually implement the additional

“energy poverty” obligation provided

for by the law on the energy transition

to green growth;

continue the simplification of the

mechanism;

develop the procedures for post-

audits on the supporting evidence

for the allocation of certificates.

Biofuels: improved results,

necessary adjustments

Summaries of the 2016 Annual Public Report of the Cour des comptes

Conventional biofuel production sectors

Source : IFP énergies nouvelles

Biofuels are produced from biomass

and are blended with fuels. Ethanol, to

be mixed with gasoline, is processed

from wheat, corn or beets while bio-

diesel, mixed with diesel fuel, is made

from rapeseed or sunflower oil.

France has a share in world produc-

tion of 3%, i.e. 1.1 bn litres of ethanol

and 2.1 bn litres of biodiesel in 2014.

This production has been stable over

the last five years.

Within a European framework targe-

ting 10% renewable energy in trans-

portation by 2020, French policy has

so far relied on several instruments in

order to support production (reduced

TICPE

for authorized production

units) and to impose blending to dis-

tributors (TGAP

which imposes a

stiff penalty in case blending targets

are not met).

In its 2012 public policy evaluation,

the Cour des comptes concluded this

policy had been:

- moderately effective in terms of

support to agriculture;

limited with regard to energy inde-

pendence;

______________________

TICPE: domestic consumption tax on energy products

TGAP: general tax on polluting activities

Biofuels : improved results,

necessary adjustments

Summaries of the 2016 Annual Public Report of the Cour des comptes

- difficult to quantify in terms of

reductions of greenhouse gas

emissions. Furthermore, its impact

on the price of agricultural com-

modities gave rise to considerable

controversy.

Faced with the inconsistencies in the

biofuels support policy, the Cour des

comptes issued three sets of recom-

mendations in the case this policy

was to be continued:

R1. acknowledge that French blen-

ding targets were too ambitious

and redefine more realistic ones;

R2. speed up the end of TICPE

exemption while keeping TGAP at

a high enough level in order to

make sure blending targets are

met;

R3. better satisfy feasibility require-

ments and policy consistency with

regard to environmental regula-

tions and energy taxation, espe-

cially at European level.

More realistic policy objectives

Five years later, the Cour des comptes

found:

- starting in 2013, progress was

made in the blending targets, but

more so because of tricks such as

double counting of animal fat or

used edible oils or taking into

account nonroad diesel fuel;

- blending targets are now more

realistic (R1) stabilized at 7% in

energy content for ethanol in

gasoline and 7,7% for biodiesel in

diesel fuel.

However, the implementation of this

policy is not yet fully consistent. Because

of the excessive number of authorized

production units, overcapacity is impor-

tant. In addition, for gasoline, there is

still a contradiction between 7% mini-

mum blending in energy content (which

requires 10,6% in volume) and the fuel

quality directive which prohibits selling

gasoline with more than 10% blending

in volume.

Even if environmental objectives (R3)

are better met, the new European rule

introduced in 2015 capping at 7% bio-

fuels that compete with food commo-

dities makes the 10% target of rene-

wable fuels in transportation by 2020

even more difficult to achieve. At the

same time, large scale application of

second generation biofuels that use

biomass as a whole, including waste,

are not expected within the next

decade.

A more appropriate taxation,

a lesser cost of support

Cumulative TICPE exemptions reached

€3.6bn between 2005 and 2015, but,

from 2016 onwards, this tax exemption

is no longer renewed, as the Cour des

comptes suggested (R2).

Biofuels : improved results,

necessary adjustments

Summaries of the 2016 Annual Public Report of the Cour des comptes

Source: Cour des comptes according to data from the general directorate of customs and excise

(projected for 2015)

Amount of TICPE exemptions

The high cost of this policy has in fact

been mainly borne by the consumer.

Indeed, because of the lower energy

content of biofuels, motorists travel

fewer kilometres on biofuels for the

same volume of fuel purchased.

Source: Cour des comptes according to “Biofuels in France”, August 2012 (French union of oil

industries, UFIP)

Biofuels: improved results,

necessary adjustments

However, as the Cour noted in 2012,

because of this overconsumption of fuel,

the state receives additional tax reve-

nues. These are estimated at €2.2bn over

the period 2005-2015. If one adds the

fact that TGAP, kept at a high level (R2),

returned €0.9bn to the state, one can see

that the overall balance did not exceed

€0.5bn over 10 years.

As far as the consumer is concerned,

the additional cost of the inclusion of

biofuels was approximately 1.5 ct per

litre of diesel and 2.6 ct per litre of

petrol in 2014. However, the 2 ct diffe-

rence in TICPE between SP95 and

SP95-E10, introduced in 2016, will jus-

tifiably offset in a large part the addi-

tional cost of SP95-E10, also making

the excess corresponding tax disap-

pear.

Necessary adaptations

in a changing context

Given the harshness of the European

controversies concerning its environ-

mental benefits, the policy toward

biofuels has become indecisive. For

one, the incorporation targets set by

the EU end in 2020. The 2030 climate

and energy package no longer sets a

target for renewable energies in trans-

port, whereas the French law on the

Summaries of the 2016 Annual Public Report of the Cour des comptes

energy transition to green growth has

established a target of 15% for these

energies. These reasons have led the

Cour des comptes to recommend an

adjustment of goals and tools in order

to achieve the target of 10% renewa-

ble energy in transport by 2020.

Furthermore, reinforcing transparency

vis-à-vis the consumer would guaran-

tee a better acceptability of biofuels by

motorists.

Ensuring

that

future

European directives do not contradict

the French law on the energy transition

is also a priority. In order to promote

compliance with Community obliga-

tions, it remains desirable for the TGAP

to be maintained at a high level, but at

a level that could be reduced if neces-

sary to avoid being blamed for having

established a permanent form of taxa-

tion.

The Cour des comptes welcomes the

measure it had recommended concer-

ning inclusion of non-road diesel fuel

in the TGAP calculation base to have

been included in part into the supple-

mentary finance act for 2015. It

believes in addition that eliminating

the double-counting of biofuels obtai-

ned from waste and residues in the

TGAP calculation would wisely com-

plement the previous measure.

Summaries of the 2016 Annual Public Report of the Cour des comptes

Recommendations

Finally, the Cour des comptes

makes four new recommendations

reduce TGAP for ethanol whilst

keeping it at a level sufficiently

incentive;

Fully apply TGAP to biodiesel

blended into nonroad diesel fuel;

reserve double-counting in TGAP

calculation for next-generation bio-

fuels only with a significant impact

on CO2 emissions;

harmonise the VAT deduction

scheme for professional fleets of die-

sel and gasoline vehicles, at constant

revenues for the State.

Biofuels: improved results,

necessary adjustments

White papers on defence and national

security, published in 2008 and 2013

and transcribed into the military pro-

gramming bills for 2009-2014 then

2014-2019, defined an ambitious

objective for national defence, whilst

attaching an expenditure control

objective. At the same time, the conti-

nuing deterioration of public finances

weighed on the ability to fund military

expenditure through budget credits.

An accommodating process

criticised by the Cour des

Comptes

In order to fund these expenditures, in

addition

budget

credits,

the

Government resorted to the anticipa-

tion of revenues from the sale of

public assets, both physical (buildings,

land,

equipment)

and

intangible

(Hertzian

frequency

bands),

and

public programmes intended to sup-

port investment (future investments

programme – PIA – for example).

Since 2009, the Cour des comptes had

reservations about the use of these

resources, as it indicated in various

reports (on the State’s budget for

2013 and 2014 and on the military

programming bill in 2012), particu-

larly by making the following recom-

mendations:

- adopt

realistic,

conservative

assumptions in budget construc-

tion, avoiding the use of hypotheti-

cal resources whose implementa-

tion does not depend solely on the

ministry of defence;

- limit the use, in the budget plan-

ning of the Defence mission, of

extra-budgetary resources that are

uncertain in their amount and in

their timetable;

improve the budget forecast of the

ministry of defence, in conjunction

with the ministry responsible for

the budget, using realistic assump-

tions.

It warned against the accommodating

nature of the process, stressed the

delays and uncertainties weighing on

these

resources,

and

spoke

out

against the facilities in their imple-

mentation, in connection with its

annual reports on the State’s budget.

Nevertheless, these resources were

still further used to balance the mili-

tary programming bills.

Reducing exceptional resources

in the funding of national

defence: a welcome clarifica-

tion

Summaries of the 2016 Annual Public Report of the Cour des comptes

Reducing exceptional resources in the funding

of national defence: a welcome clarification

Source : Cour des comptes

Use of exceptional resources

The projected proportion of all these

“exceptional resources” in the funding

of national defence increased from

2.8% to 4.6% between the military

programming bill for 2009-2014 and

the public finance programming bill

for 2014-2019. They became a subs-

tantial, recurring item for the execu-

tion of the military programming bills,

even though they are, for those

coming from sales of public assets,

random

their

realisation

and

amount.

Using these exceptional resources

has allowed the State to fund national

defence by exempting itself from res-

pecting the “zero volume” expendi-

ture standard.

Systematic under-budgetisa-

tion

Between 2009 and 2013, the reve-

nues expected from sales of public

assets (real estate sales and alloca-

tions of Hertzian frequency bands)

proved to be lower than the forecasts

(€2.96bn versus €3.81bn expected)

and materialised two years late on

average.

Lastly,

the

use

exceptional

resources to fund national defence

led to changes in the operating rules

of tools, such as the two earmarked

accounts devoted to the manage-

ment of State’s real estate and the

enhancement of revenues from the

use of the Hertzian spectrum or, like

the economic recovery plan and the

PIA, created for other objectives.

The exemptions became widespread,

particularly starting in 2011, for the

earmarked accounts and the PIA. The

common law of payment procedures,

through direct pledges and pay-

ments, was respected for only 14% of

expenditure paid to the two earmar-

ked accounts. Exceptional procedures

were implemented until 2013 in the

form of “balancing payments”, consis-

ting in applying to an earmarked

account the balance of payments of a

transaction already initiated on bud-

get credits. However, since then,

efforts have been undertaken to eli-

minate this practice, in accordance

with the recommendations that the

Cour des comptes had made, particu-

larly in the reports relating to annual

budget implementation.

A welcome budgetisation

The Defence Council of 29 April 2015

put a stop to these excesses, and the

act of 29 July 2015 updating the mili-

tary

programming

provided

for

€5.2bn in budget credits in substitu-

tion

for

random

exceptional

resources. The initial 2016 budget act

thus provided for €1.6bn in budget

credits to replace the exceptional

revenues and €0.6bn for the increase

in the Defence budget; it also put an

end to the Hertzian spectrum earmar-

ked account. The supplementary 2015

budget act allocated €2.1bn in budget

credits.

The Cour des comptes welcomes this

approach, which should be continued

during the next four financial years for

amounts that are all the more subs-

tantial given that, simultaneously, the

military programming updating bill

devoted a significant revaluation of

the budget credits allocated to the

Defence mission. This double effort of

budgetisation

exceptional

resources

and

reinforcement

resources is particularly significant

(reaching €9bn).

The Cour des comptes calls for efforts

to strengthen this approach in the

future, to the extent that the amount

provided for exceptional resources

still remains high (€0.9bn).

Recommendation

Eliminate any use of exceptional

resources to ensure the balance of

the funding of the Defence mission

in the military programming bills.

(1) 2009-2014 military programming bill; (2) 2014-2019 military programming bill; (3) After the 2014-

2019 public finance programming bill and the 2014 finance act (initial and supplementary); (4) 2015-

2019 military programming updating bill.

Source : Cour des comptes according to data from the ministry of defence

The expected amounts of exceptional resources

Summaries of the 2016 Annual Public Report of the Cour des comptes

Reducing exceptional resources in the funding

of national defence: a welcome clarification

Chapter III

The Cour des comptes insists

Sciences Po: adjustment efforts to be finalised

City policy: a renovated framework, priorities to be

clarified

The fight against tobacco: a policy to be strengthened

The fight against tax fraud: progress to be confirmed

Reforming agriculture aid paying agencies: a strategy to

be defined, savings to be sought

Run-off management of Dexia: precarious initial results,

conclusions to be drawn about liability in case of a finan-

cial disaster

Rail transport in the Greater Paris region since 2010:

significant progress, persistent insufficiencies

Destabilised by a crisis of growth and

governance, Sciences Po, including

the IEP (Paris political studies insti-

tute) and the FNSP (French national

political science foundation), which

handles its administrative and finan-

cial management, undertook efforts

to straighten out its management

starting in 2013 and a reform of its

articles of association, as recommen-

ded by the Cour des comptes in its

thematic public report of November

2012. However, this movement, which

must be completed, leaves a few areas

of uncertainty for the institution’s

development.

Management irregularities and

remuneration excesses have

been corrected

This effort to straighten out the situa-

tion resulted in:

the return to rules of law regarding

remuneration for teachers under

public status and allocation of

staff housing;

the application of rules relating to

public order that apply to Sciences

Po, a private-law entity pursuing a

general-interest purpose and fun-

ded primarily by public resources;

- the regulation of remuneration of

the various employee categories.

Discretionary decisions have given

way to allocation schemes with

explicit criteria, whether for staff

bonuses or executive remunera-

tion incorporated into the institu-

tion’s salary scales. The annual

total remuneration of the direc-

tor/administrator, which had pea-

ked at €537,000 in 2011, was cut

back to €200,000: €70,000 for the

responsibilities of the administra-

tor of the FNSP and €130,000 for

the responsibilities of director of

the IEP, in “reference” to the remu-

neration of a university president,

but without being aligned with

such remuneration, which does not

exceed €100,000. Furthermore, it

provides for the possibility of a

variable portion, even if the cur-

rent director has chosen not to

receive this.

At this stage, this effort to straighten

out the situation excludes the transi-

tion to the “expanded responsibilities

and skills” scheme introduced by the

universities freedom and responsibi-

lity act of 10 August 2007. Yet, the

transfer to Sciences Po of the payroll

of staff currently paid by the State

(approximately 12% of staff expendi-

tures) would give it more autonomy

and transparency of management.

Summaries of the 2016 Annual Public Report of the Cour des comptes

Sciences Po: adjustment efforts

to be finalised

Sciences Po:

adjustment efforts to be finalised

Even reformed, the dual gover-

nance is still a source of uncer-

tainties

The dual architecture of Sciences Po,

formed from the FNSP (French natio-

nal political science foundation), a pri-

vate-law entity, responsible for admi-

nistrative and financial management,

and the IEP (political studies insti-

tute), a public-law entity, responsible

for education, had changed little since

1945. Sciences Po undertook efforts

to modernise it, particularly by adop-

ting

new

articles

association

coming into force at the beginning of

the year 2016. They provide for:

the transfer of research skills from

the FNSP to the IEP, more consis-

tent with the IEP’s ambition to

assert itself as an international

research university;

- reinforcement of the role of the

FNSP’s board of directors, whose

composition is tighter. It relies on

an audit and remuneration com-

mittee and an ethics commission.

It votes on the remuneration of the

director/administrator, who is no

longer a member of the board,

even if present. Meetings are also

attended by two representatives of

the State, who have no right to

vote but have the right to require

the inclusion of items on the

agenda.

The State, the institution’s primary

financier, is now more involved. In

addition to its presence on the board

of directors, it now has other means to

exercise more effective supervision,

through regular management dia-

logue and the signing of a medium-

term contract incorporating perfor-

mance indicators with targets: the IEP

is committed to the State in the sec-

tion that it devoted to it in the 2014-

2018 site contract of the community

universities

and

institutions

(COMUE) “Sorbonne Paris Cité”, of

which the IEP has been a member

since its creation. The IEP defines the

strategic priorities for research, edu-

cation, and governance.

Nevertheless, by preserving the dual

architecture of 1945, Sciences Po

continues to operate with a gover-

nance whose operating rules are still

uncertain and are sources of compli-

cations. The new articles of associa-

tion do not put an end to the risks of

confusion in the management of per-

sonnel, particularly teachers/resear-

chers.

The proper functioning of the system

requires seamless coordination and a

common understanding between the

managing bodies of the FNSP and the

IEP. In fact, this coordination and com-

mon

understanding

rely

the

concentration of the the responsibili-

ties of administrator of the FNSP and

director of the IEP on a single person.

Development prospects call for

particular vigilance

After a decade of growth in its budget

at an annual rate of around 9%,

Sciences Po’s figures are now closer to

3% per year, which should allow it to

pursue its internationalisation objec-

tives. Yet, unlike in the 2000s, neither

the State nor the local government

authorities, the source of 45% of the

Summaries of the 2016 Annual Public Report of the Cour des comptes

institution’s budgetary resources in

2014, are able to support it in its new

developments. The second major

source of additional potential reve-

nues, tuition fees, offers limited room

for growth after recently undergoing

significant increases.

The institution must therefore focus

its efforts on its other own resources

(vocational training and sponsorship

of companies or individuals). However,

basing medium-term development

forecasts, even reduced to 3%, on just

these items means very high growth

rates by 2018, which the Cour des

comptes considers ambitious.

In addition to this uncertainty about

resources, there will be uncertainties

from 2020 onwards related to the

planned acquisition and renovation of

the Hôtel de l’Artillerie, currently not

finalised. The objective of this major

real estate project in the heart of Paris

is to allow Sciences Po, currently scat-

tered across many sites, to come toge-

ther. However, this massive operation

may include financial risks requiring

control of the scheduling, calendar,

and projected renovation costs.

Summaries of the 2016 Annual Public Report of the Cour des comptes

Sciences Po:

adjustment efforts to be finalised

Recommendations

To Sciences Po:

continue the reforms undertaken

with regard to governance;

clarify the conditions for alloca-

ting the variable portion that may

be paid to the administrator;

subject the proposed acquisition

of the Hôtel de l’Artillerie to in-

depth studies relating to the cost of

rehabilitation of the site;

devise and examine alternative

financial scenarios, based on less

optimistic assumptions.

To the State and Sciences Po:

transition the institution to the

expanded responsibilities and skills

scheme, by transferring the payroll

currently managed by the State to it.

The urban policy is “a policy of urban

cohesion and national and local soli-

darity geared towards disadvantaged

neighbourhoods and their inhabi-

tants”. Today it concerns 1,436 neigh-

bourhoods, or nearly 8% of the French

population. Its objective is to reduce

the differences in economic and social

development and improve the living

conditions of the inhabitants of these

neighbourhoods.

In its thematic public report of July

2012, the Cour des comptes pointed

out that despite reforms, the urban

policy still struggled to achieve its

objectives. The assessment of the

implementation of the 18 recommen-

dations that it had issued shows that

half of them were at least partially

taken into account, but the other half

were still not implemented.

Numerous adjustments more

than a comprehensive reform

The management of this policy has

been boosted thanks in particular to

more frequent interministerial com-

mittee meetings.

Particular emphasis has been placed

on the role of inter-communal struc-

tures that are now responsible for

entering into city contracts.

The priority geography was reformed

through a redefinition of the neigh-

bourhoods of the city policy, more

directly targeting the most vulnerable

populations. However, the effects of

this new targeting must be put into

perspective, as the covered popula-

tion is ultimately comparable with

that of the old sensitive urban areas.

The persistence of specific zonings in

other ministerial policies has also limi-

ted the simplification and conver-

gence effort that was undertaken.

Hardly any progress has been made in

the precise identification of the

amounts of the credits allocated to

the neighbourhoods but not depen-

ding directly on the urban policy.

Similarly, the distribution of the speci-

fic credits of the urban policy on the

basis of the observed development

differences must continue to be

improved.

Lastly, despite the implementation of

interministerial agreements on objec-

tives, the assessment process has

remained limited and insufficiently

prioritised. The extent of the impact of

the actions of the urban policy

remains difficult to establish.

Urban policy:

a renovated framework,

priorities to be clarified

Summaries of the 2016 Annual Public Report of the Cour des comptes

Uneven progress in the mobili-

sation of public policies

From “urban renovation” to “urban

renewal”

The implementation of the French

national

urban

renovation

pro-

gramme (PNRU) is expected to conti-

nue until 2021, bringing its total

duration to 18 years. At the end of

2014, 99,840 housing units had been

rebuilt and delivered out of the

140,980 planned.

Urban renovation operations are still

struggling to achieve their objectives.

The quality of the PNRU’s actions is

difficult to assess because of the lack

of data on, for example, the characte-

ristics of the rebuilt housing.

Rehousing operations have not made

the

occupant

densities

uniform.

However, in order to promote social

diversity, these operations are inten-

ded to decrease the proportion of

social housing in the sector, which

decreased from 65% to 55% on ave-

rage in the neighbourhoods concer-

ned. Yet, the geographical rebalancing

of the social housing supply has been

slow.

The opening up of neighbourhoods

comes less from the development of

“functional diversity”, i.e., from all

urban functions (housing, activity,

shops, administrative, cultural, mobi-

lity, recreation facilities, etc.), than

from the development of public trans-

port, allowing it up to open up the

priority neighbourhoods to the rest of

the city.

The new French national urban rene-

wal programme (NPNRU), funded on

the basis of payments spread over

20 years, will follow the PNRU, after a

period of running these two pro-

grammes concurrently between 2015

and 2021.

Despite its name, the NPNRU does

not truly constitute a new pro-

gramme: it covers the same number

of neighbourhoods as the PNRU. This

programme is already encountering

obstacles in the achievement of its

social diversity objectives. It has also

been slow to launch: demolitions were

announced as early as 2015, but, at

the end of September 2015, only one

prefiguration agreement had been

signed.

A concentration of efforts in the

field of education to be emphasised

The recent priority education reform

has resulted in a convergence with the

urban policy: 86% of secondary

schools and 84% of primary schools

within the priority education networks

are now located in the priority neigh-

bourhoods or nearby. However, the

extent of the scope covered by the

urban policy is around 20% of secon-

dary school students, which may lead

to a relative scattering of efforts. The

scholastic, extra-curricular, and edu-

cational offering also remains insuffi-

ciently focused on the most vulnera-

ble populations, which leads to a risk

of being spread too thinly. It is also

split up, difficult to coordinate, and

not immune to the effects of substitu-

tion between ordinary credits and

specific credits.

Urban policy: a renovated framework,

priorities to be clarified

Summaries of the 2016 Annual Public Report of the Cour des comptes

Targeting of the employment policy

to be continued

Progress has allowed the employ-

ment policy to be targeted more

towards populations of the priority

neighbourhoods. The main access to

employment

schemes

thus

have

quantified objectives targeting resi-

dents of the neighbourhoods as well

as indicators by territory. However, the

deterioration of the employment

situation and an unemployment rate

that continues to be much high in the

priority neighbourhoods than in the

rest of the territory justify continuing

and better assessing the mobilisation

of the resources committed by the

public employment service for the

benefit of the population of these

neighbourhoods.

Recommendations

identify the priorities in the city

contracts and specify the amounts

of ordinary credits and specific cre-

dits mobilised to fund them;

systematically quantify the social

diversity objectives of the urban

renewal operations;

rebalance the priority education

resource allocations to the priority

neighbourhoods in favour of pre-

school and primary education;

set quantified objectives for the

mobilisation of the public employ-

ment service in the priority neigh-

bourhoods.

Urban policy: a renovated framework, priori-

ties to be clarified

Summaries of the 2016 Annual Public Report of the Cour des comptes

Tobacco is the leading cause of avoi-

dable death in France. In 2012, at the

request of the National Assembly, the

Cour des comptes conducted an

assessment of anti-smoking policies.

While the prevalence of smoking had

risen in France since 2005, unlike in

comparable countries, it noted distur-

bing shortcoming: lack of continuity in

actions undertaken, inadequate appli-

cation of health regulations, deficient

controls, very weak efforts in preven-

tion and smoking cessation assis-

tance, and insufficient price increases

to reduce consumption for the long

term. It called for and made several

recommendations in support of a

comprehensive policy.

Since then, in line with the analyses

and recommendations of the Cour des

comptes, a national smoking reduc-

tion programme (PNRT) was publi-

shed in September 2014, several pro-

visions of which have been incorpora-

ted into the law on modernisation of

our healthcare system.

The definition of ambitious

objectives as part of a compre-

hensive strategy

The PNRT has ambitious near-term

objectives: decrease the number of

daily smokers by 10% in five years, to

below 20% daily smokers in ten years,

and ensure that children born in 2014

form the first generation of “tobacco-

free” adults.

The identified areas of action fit into a

consistent, structured approach: pro-

tect young people and stop them

from starting to smoke, help smokers

stop smoking, and take action on the

tobacco economy. The management

is clarified and unified and is entrus-

ted to the minister of health.

In order to change behaviours, the

public authorities have toughened the

regulations, whether they relate to

introduction of new products on the

market, advertising at points of sale,

or places where smoking is possible.

They have also strengthened support

for smoking cessation by improving

the reimbursement for treatments

with nicotine substitutes, the use of

which had decreased, and by expan-

ding prescription opportunities.

The implementation beginning in May

2016, at the same time as the United

Kingdom, and shortly before Ireland,

of the major innovation of the “plain

package{PS}”, aims, in accordance

with

the

WHO

Framework

Convention

Tobacco

Control,

which France was first to sign in

October 2004 and as the Cour des

comptes

had

recommended,

reduce the number of new smokers

among young people, where a very

sharp rise in smoking has been seen

since 2011 in France, unlike in compa-

rable countries. Given the debates

that surrounded its introduction, the

precise monitoring of its impact on

consumption and the methods of pur-

The fight against tobacco

addiction: a policy

to be strengthened

Summaries of the 2016 Annual Public Report of the Cour des comptes

chasing tobacco appears to be parti-

cularly necessary.

Disturbing developments high-

light the importance of public

health issues

The annual number of deaths caused

by tobacco has been reassessed, cur-

rently reaching 78,000, far ahead of

any other cause of avoidable death.

The global social costs related to

smoking could reach €120bn accor-

ding to a recent independent study,

even if its assessment of the costs of

tobacco for the healthcare system

(€26bn) should be regarded with

some caution, given that the reliable,

share assessment method recom-

mended by the Cour des comptes has

not been put in place.

France had 13.4 million daily smokers

in 2014, meaning a smoking preva-

lence rate of 28.2%. If occasional smo-

kers are taken into account, the figure

rises to 16 million, which corresponds

to a prevalence of 34.1%. One in three

French people smokes, whereas only

one in five English people smokes.

France is the European country where

pregnant women smoke the most.

After several years of declining sales

(except for rolling tobacco, which is

taxed less than cigarettes), 2015

marks a halt in this movement.

Although it is too early to see a sustai-

nable trend, this poor performance

shows that time has been lost in

public action and highlights the need

to reinforce the strategy implemen-

ted on certain crucial points: preven-

tion, involvement of healthcare pro-

fessionals, and tobacco prices.

An action to be strengthened

Prevention and education efforts

have remained modest, for lack of

appropriations specifically devoted to

this objective. The PNRT’s planned

creation of a fund financed by the

tobacco industry could not be imple-

mented at this stage.

The countries with the best results in

the reduction of consumption have

developed networks of healthcare

professionals around the physicians

for more effective support in smoking

cessation.

In France, the mobilisation of health-

care

professionals

has

remained

insufficient. Tools to help physicians

support smokers are being deployed,

but these measures do not put an

emphasis on establishing multi-pro-

fessional networks.

With regard to tobacco pricing policy,

the use of the taxes as a tool has been

very limited. Since July 2013, no tax

increases have occurred (with the

exception of rolling tobacco, which

was further taxed in 2014). In 2015,

this freeze was accompanied by a

reform that had the effect of freezing

changes to one of its components

indexed to prices up to then, depriving

social

security

approximately

€170m in revenues. This moratorium

will continue in 2016, with priority

given to establishing the “plain

package”. This policy, optimising the

financial performance for the State,

industrials, and tobacco retailers,

coincides with the recovery of sales of

cigarettes, and even more rolling

tobacco, seen since the beginning of

2015. Its extension beyond 2016

would be likely to very heavily com-

promise the achievement of smoking-

reduction goals by 2020 then 2025.

The fight against tobacco addiction:

a policy to be strengthened

Summaries of the 2016 Annual Public Report of the Cour des comptes

The recurring debate in this regard on

the effects on “off-grid” sales (cross-

border purchases and smuggling) of

price differentials and taxation bet-

ween European countries is also still

poorly

documented.

Despite

the

recommendations of the Cour des

comptes, there are no objective data

for lack of a reliable, precise establish-

ment of an instrument to shed light

on the significance of off-grid sales

and especially the effects of price

increases on them, as there are large

divergences between the assess-

ments

tobacco

retailers

and

Customs. This gap is a major difficulty

for pursuing a price policy that effecti-

vely contributes to the public health

objectives. It is even more abnormal

given that the expiry at the end of

2016

the

“contrat

d’avenir”

(contract for the future) between the

public authorities and tobacconists, to

support their revenues, will not fail to

spark debate on off-grid purchases,

particularly unlawful purchases, in the

context of the establishment of the

“plain package”.

Recommendations

refine

the

measurement

impacts of price movements on off-

grid sales and measure the effects

the

plain

package

consumption;

implement over time a policy of

steady price increases by using

taxes as a tool at a level sufficient

to cause an effective and sustainable

decline in consumption;

mobilise all the various healthcare

professionals in a coordinated man-

ner, and by encouraging the creation

of networks, on the prevention of

smoking and assistance in smoking

cessation.

The fight against tobacco addiction:

a policy to be strengthened

Summaries of the 2016 Annual Public Report of the Cour des comptes

Cigarette sales (in millions of units)

and price per pack of cigarettes of the best-selling brand

Source : Logista

In any case, these price increases have always been, for cigarettes, less than the minimum threshold (10%), deemed

necessary to cause a sustainable decline in sales according to all the experts. Their amplitude has been declining since

2012. Conversely, for rolling tobacco, the increases have been greater, especially in 2014, when the price increase was

10.8% and, for the first time since 2009, the volume of sales of this product category decreased.

The fight against tax fraud has three

goals: encourage tax compliance,

punish the most serious offences, and

ensure budget revenues for the State.

In a context of a global financial crisis,

major developments took place, res-

ponding in part to the recommenda-

tions made by the Cour des comptes

between 2010 and 2013 aimed at

strengthening the management of fis-

cal controls and adapting its organisa-

tion to the new risks of fraud, moder-

nising the auditing tools, decompart-

mentalising the action of the adminis-

trations, and better coordinating the

interventions of the tax administra-

tion and the judicial authority. Despite

the progress observed, there is still

room for improvement, particularly in

the organisation of the audit and the

management of the assigned officers,

as well as in the improvement of the

results of the audit and recovery.

The fight against tax fraud has

become a priority

Since the adoption by the United

States of FATCA (“Foreign Account

Tax Compliance Act”) in 2010, the

fight against fraud benefits from a

favourable international context: an

agreement was signed at the end of

2014 within the OECD to foster the

automatic exchange of data between

tax administrations, and the European

Union has new legal means to prevent

the risks of VAT fraud.

At the national level, many legislative

texts have been adopted since 2010 to

improve information for the adminis-

trations, strengthen the investigative

powers of the tax officials and the

specialised judicial police, tax, and

customs services, and adapt them to

changes in the economic, financial,

and accounting practices of tax-

payers. A financial public prosecutor

was introduced to deal with the

increasing technical nature of cases of

tax fraud, and the criminal penalties

have been increased. Lastly, the rela-

tionship between the tax and criminal

treatment of cases is improving, des-

pite a continued insufficient diversifi-

cation of cases referred to the judicial

authority. Although the effects of

these reforms are still uncertain, their

principle is consistent with the recom-

mendations of the Cour des comptes.

The fight against tax fraud:

progress to be confirmed

Summaries of the 2016 Annual Public Report of the Cour des comptes

The organisation of fiscal

control still needs to be impro-

ved

The coordination between administra-

tions in charge of the fight against

fraud has progressed, and the coope-

ration between the general directo-

rate of public finance (DGFiP) and its

key partners has improved, particu-

larly customs: more fiscal controls are

now initiated on the basis of customs

information, resulting in a growing

amount of recalled duties and penal-

ties (€122m in 2013 versus €68m in

2011), but these directorates still

need to complete the development of

reciprocal access to their databases. In

addition, the coordination between

the tax authority and the judicial

authority still needs to be thorough.

Within the DGFiP, the creation of the

fiscal control service in 2011 helped

to strengthen the management of

directorates specialising in control

(national directorates and interregio-

nal directorates) and reposition them

on complex, high-stakes cases of

fraud. The coordination of the fiscal

control network was also improved,

but

the

scope

implemented

changes remains limited because of

the absence of any hierarchical link

between the officers responsible for

fiscal control at the local level, who

fall under the local directorates of

public finances, and the interregional

directorates of fiscal control (DIR-

COFI). The management role of the

interregional directorates must there-

fore be strengthened.

In addition, although the level of

expertise has been raised thanks to

increased specialisation of the officers

or control services on certain types of

fraud, controls, or taxpayers, in accor-

dance with a recommendation of the

Cour des comptes dating back to

2010, the internal management rules

of the DGFiP run counter to these

changes. By promoting mobility at the

initiative of the officers (possibility of

requesting a change after one year in

the position only), these rules result in

a high rate of staff turnover, which

appears incompatible with the deve-

lopment of an area of expertise. The

allocation to the seniority criterion

and the low number of positions

whose incumbents are chosen “on

profile” (depending on their skills and

professional experience) lead to a mis-

match between the distribution of

control officers on the territory and

the needs arising from the characte-

ristics of the tax base or the technical

nature of the mission. The adaptation

of these rules must therefore be a

priority.

The results and recovery are

poorly documented and still

insufficient

The “Ways and Means” annex of the

finance bills includes only an incom-

plete presentation of the results of the

fiscal control and does not make it

possible to assess the breakdown by

tax of the recalled fees or the results

of the controls against the most

serious cases of fraud. Recovery data

are also very patchy.

The fight against tax fraud:

progress to be confirmed

Summaries of the 2016 Annual Public Report of the Cour des comptes

Recommendationss

entrust the interregional directo-

rates with a role of managing the

units responsible for external fiscal

control at the local level;

implement a control officers

redeployment plan permitting a

distribution of resources adapted to

the needs on the territory and bet-

ween

the

different

levels

external fiscal control;

modify the rules of internal

management, in order to develop

recruitments by job profile or as

required and impose a minimum

time

certain

fiscal

control

positions;

continue the diversification of

the types of offences subject to pro-

posals for correctional proceedings;

publish, in the annexes to the

finance bills, complete information

about the results of fiscal controls

(recalled fees, amounts recovered,

recovery rates);

. improve the recovery of debts

resulting from the fiscal control,

particularly:

- by accelerating the generalisation

of the specialised recovery centres

with the DIRCOFI;

- by reconciling the information sys-

tems dedicated to control and

accounting as early as possible;

- by unifying the procedures for reco-

very of debts resulting from the fis-

cal control.

In 2014, the 1.5 million fiscal controls

performed resulted in notifications

for €19.3bn in adjustments (fees and

penalties) versus €15.2bn in 2009.

However, this increase of nearly 20%

is only partially due to an improve-

ment in the targeting of controls.

Thus, since 2012, the amount of recal-

led fees includes the exceptional

revenues generated by the amended

return processing service, responsible

for reviewing applications for adjust-

ments from taxpayers holding unde-

clared assets abroad (€1.9bn in 2014

and forecast at €2.6bn for 2015),

revenues that are not long-lasting

Lastly, the overall rate of recovery of

debts resulting from the external fiscal

control remains very unsatisfactory,

below 50% on average, or even less

within

the

decentralised

services.

Although this weakness is due in part to

the economic situation (bankruptcy,

liquidations, etc.), it also reflects a lack of

coordination between the control ser-

vices responsible for investigating cases

and the accounting services responsible

for recovery. The efforts recently made

through various experiments must the-

refore be supported and further develo-

ped by an action relating to the organisa-

tion of recovery, the increased consis-

tency of computer applications, and the

harmonisation of procedures.

Summaries of the 2016 Annual Public Report of the Cour des comptes

The fight against tax fraud:

progress to be confirmed

Summaries of the 2016 Annual Public Report of the Cour des comptes

Reforming agriculture aid

paying agencies: a strategy to

be defined, savings to be sought

The services and payment agency

(ASP) is the result of the merger of the

single payment agency (AUP) and the

national centre for the development

of farm structures (CNASEA), whereas

FranceAgriMer is the result of the

merger of five agricultural offices. The

purpose of these mergers, carried out

in 2009, was to unify and improve

organisation and management whilst

cutting costs. The office for develop-

ment of the overseas agricultural eco-

nomy (ODÉADOM) was not affected

by these mergers.

In 2011, the Cour des comptes provi-

ded the Senate, at its request, an ini-

tial assessment of the merger of the

offices and the creation of the ser-

vices and payment agency.

The recent controls of FranceAgriMer,

the ASP, and the ODÉADOM show

that, although the creation of the ASP

and FranceAgriMer helped to improve

the organisation of the paying agen-

cies, the results of these mergers are

mixed.

Improvement of organisation

and management: an objective

partially met

Six years later, the merger of these

bodies remains unfinished, whether it

involves internal organisations, real

estate establishments, or information

systems.

As regards the organisation, the ASP

retains its double headquarters resul-

ting from the bodies having preceded

it. FranceAgriMer’s officers in the

regions are not always sufficiently

physically incorporated into the regio-

nal directorates of food, agriculture,

and forestry (DRAAF). The change in

the map of regions and the increased

role of these government authorities

in the management of European aid

should lead the ministry of agriculture

to initiate thinking about the joint evo-

lution of its territorial network and

that of the paying agencies.

The streamlining of information sys-

tems is incomplete even though this

function is very expensive (€323m

over 2009-2014 at the ASP) and

constitutes a major strategic chal-

lenge. For example, although the ASP

has a single debt recovery chain, pay-

ments rely on five different informa-

tion systems.

The real estate streamlining policy

was ambitious but ran into the com-

mitment made by the ministry not to

impose forced mobility on officers.

The ASP thus maintains a site in Cergy

for fewer than 20 people, and certain

locations of FranceAgriMer are cha-

racterised by a low occupancy rate. In

addition, the Arborial site remains

very costly despite the renegotiation

of the lease.

Additional costs instead of expec-

ted savings

The operating subsidies paid to the

three institutions continued to grow,

until 2013 for FranceAgriMer and

until 2014 for the ASP and the

ODÉADOM.

The sharp decline in staff at the ASP

and FranceAgriMer was accompanied

by an increase in individual remunera-

tion, with the result that the payroll

decreased only slightly (ASP) or even

increased (FranceAgriMer).

Expenditure should be streamlined,

particularly travel and purchases at

FranceAgriMer.

The financial corrections, related to

intervention expenditure incurred by

France, significantly increased to

more than €1.2bn in 2015.

A reform to be intensified

The current organisation shows its

limits both within each organisation

and in the general organisation of the

payment of agriculture aid.

It no longer seems appropriate to

entrust the payment of Community

agriculture aid to several operators.

The

aid

managed

and

paid

FranceAgriMer and the ODÉADOM

represent only a very small part of the

agriculture aid and are in sharp

decline. With regard to the payment

of national aid, contrary to the recom-

mendation made by the Cour des

comptes in 2011, the sharing of com-

petencies between FranceAgriMer

and the ASP has not been clarified, as

regards emergency agriculture aid.

With

regard

Community

aid,

FranceAgriMer covers only a small

share of this aid (€0.4bn out of €9.1bn.

In addition, the respective roles of the

State and the agricultural inter-pro-

fession organisations need to be clari-

fied. Certain fields of action of the

inter-profession

organisations

are

common with those of FranceAgriMer,

particularly knowledge of supply and

demand, promotion, and experiments.

The inter-profession organisations

and agricultural technical institution

are major beneficiaries of subsidies

from FranceAgriMer: between 2012

and 2014, the inter-profession organi-

sations received at least €45m in sub-

sidies, and the technical institutes at

least €36m.

Lastly, it is necessary to define a cohe-

rent, sustainable strategy for the ASP,

faced with a multiplicity of order origi-

nators, a depletion of its resources

funding its investments, and the

unprofitable nature of some of its

activities.

Summaries of the 2016 Annual Public Report of the Cour des comptes

Reforming agriculture aid paying agencies:

a strategy to be defined, savings to be sought

Summaries of the 2016 Annual Public Report of the Cour des comptes

Reforming agriculture aid paying agencies:

a strategy to be defined, savings to be sought

Recommendations

study the conditions of a grou-

ping of the agriculture aid paying

agencies;

for the ASP, strengthen a stra-

tegy linking all the missions and the

jobs, together with the supervisors;

for the ASP, FranceAgriMer, and

the ODÉADOM, oversee changes in

individual payroll;

clarify and harmonise the condi-

tions for implementation of the com-

pensatory scheme in the paying

agencies.

Run-off management of Dexia:

precarious initial results,

conclusions to be drawn about

liability in case of a financial

disaster

Summaries of the 2016 Annual Public Report of the Cour des comptes

The public report of the Cour des

comptes relating to the Dexia disaster,

published in July 2013, highlighted

three major subjects to which the

public authorities should be attentive:

the implementation level of the reso-

lution plan in order to ensure that the

cost for public finances, for an amount

of more than €6bn, would be contai-

ned in the future; the challenge for

the local government authorities of

“toxic” loans that they had entered

into with Dexia; the need to punish

poor management by the heads of

financial institutions and control their

remuneration in the event of financial

aid from the State. Three years after

the start of implementation of the

resolution plan, the Cour des comptes

noted progress in the implementation

of its recommendations, although

incomplete.

The implementation of the

resolution plan is consistent

overall with the commitments

made, but uncertainties remain

On 28 December 2012, the European

Commission endorsed a resolution

plan (PRO) defining a run-off manage-

ment framework for Dexia. It could

last until 2076. Dexia is in an unprece-

dented situation being in a run-off

situation while still having a very large

balance sheet, making it one of the

top 25 European banks. The company

has 1,200 employees.

Belgium is a 50.02% shareholder of

the company , whereas France holds

44.40% of the shares. These two

States, as well as Luxembourg, have

committed to guarantee up to €85bn

in corporate bonds issued by the

Franco-Belgian bank. At 23 October

2015, Dexia’s total issues guaranteed

by France amounted to €29bn (out of

a total of €63.6bn).

Since 2012, Dexia has managed to

meet most of its commitments, parti-

cularly with regard to monitoring and

sale of the main assets: the balance

sheet suffered attrition of almost two-

thirds.

However, the context in which Dexia

implements the plan is characterised

by two new factors, not envisaged at

the end of the year 2012, which dis-

rupt the achievement of its objectives:

- the

decline

interest

rates

requires Dexia to use more liqui-

dity, which is slowing the institu-

tion’s return to equilibrium, origi-

nally planned for 2018;

- placed under the direct supervi-

sion of the European Central Bank

(ECB) since 4 November 2014, the

bank has managed to meet most

requirements.

However,

Dexia

must periodically undergo new

tests and needs to satisfy harmoni-

sed requirements of solvency,

liquidity, and leverage designed to

test the resistance of banks in

expansion and not in run-off, which

do not have room for significant

action.

From 2013 to 2015, the impact on

State

finances

Dexia

decreased

almost

€0.2bn, to

€6.4bn, thanks to the collection of the

remuneration of the guarantee gran-

ted to the institution. However, the

uncertainties mean that the risk of a

need for recapitalisation cannot be

ruled out.

The desensitisation of “toxic”

loans has been slow

Since 2013, the renegotiation of struc-

tured loans has been done at a pace

that has permitted only the reduction

of outstandings by half. Today, outs-

tandings are still estimated at around

€8bn.

In this regard, the consistency of the

commercial and legal interventions of

Dexia Crédit Local and the local finan-

cing company (SFIL) with 68 borro-

wers common to the two entities,

representing outstandings of €0.69bn

– reduced by half since 2012 – is still

insufficient.

Too little has been learned

about liability in case of a

financial disaster

Despite timid attempts in this sense,

no action in law has been conducted,

since 2012, to return to the supple-

mentary pension plans paid to Dexia’s

former executives.

Plans for significant increases in the

remuneration of Dexia’s executives at

the end of 2013 were unsuccessful,

more because of the public outcry

than the control performed by the

shareholding States. The vigilance of

the French state shareholding agency

on this point must therefore be

strengthened.

Most of the guidelines formulated by

the Cour des comptes in terms of super-

vision of the variable remuneration of

the leaders of financial institutions in

case of public intervention have seen

only modest beginnings of implementa-

tion. Only practice will allow the scope

of measures adopted since 2012 to be

ensured. In addition, France, unlike

Germany or the United Kingdom, still

does not have a criminal law to hold exe-

cutives of financial institutions liable for

reckless risk-taking.

Run-off management of Dexia: precarious

initial results, conclusions to be drawn about

liability in case of a financial disaster

Summaries of the 2016 Annual Public Report of the Cour des comptes

Recommendations

Run-off management of Dexia: precarious

initial results, conclusions to be drawn about

liability in case of a financial disaster

Lastly, it is still necessary to call into

question the possibility, in the future,

for officials to collect compensation

related to the termination of their

functions as an executive in a state-

owned company or a company recei-

ving public financial support when

they return to public service.

ensure the consistency of the

practices of Dexia Crédit Local

(DCL) and SFIL concerning the

renegotiation (“desensitisation”) of

structured loans in the local public

sector, particularly in the case of the

68 government authorities with

“sensitive” loans at DCL and SFIL

(repeated

and

restated

recommendation);

call into question the possibility

for civil servants to collect compen-

sation related to the termination of

their functions as an executive in a

state-owned company or a company

receiving public financial support

whilst returning to public service

(repeated and restated recommen-

dation).

Summaries of the 2016 Annual Public Report of the Cour des comptes

Rail transport in the Greater

Paris region since 2010:

significant progress, persistent

insufficiencies

In November 2010, the Cour des

comptes published a thematic public

report entitled “regional rail transport

in the Greater Paris region”. Five years

later, it conducted a survey to mea-

sure the changes made in the consis-

tency of the rail network of the

Greater Paris region and assess the

extent to which the five recommenda-

tions that it made were followed up.

The organisation of the network is

under the responsabilty of the trans-

port authority of the Greater Paris

region (STIF). For the most part, its

operation is entrusted to the RATP for

the metro, trams, and the bus net-

work, and the SNCF for the five RER

lines (the RER A and B lines being co-

operated with the RATP), the eight

regional train lines, and a “tram-train”

line that constitute the “Transilien”

network.

The

Transilien

network

covers

approximately 10% of the national rail

network, supports 40% of the passen-

ger traffic of the SNCF, and transports

70% of its customers. Each day, the

Transilien trains carry 12 times more

travellers than all high-speed trains

(TGV) in France.

The Cour des comptes finds that

although significant progress has

been made since 2010, the situation in

2015 continues to show several short-

comings that are especially worrying

given that the prospects for improve-

ment remain random.

Progress made

The 2012-2015 contracts entered into

between the STIF (organising autho-

rity) and the two operators (SNCF and

RATP) contain new indicators that

better take into account the point of

view of passengers; they provide for a

heavily increased volume of invest-

ments and greater transparency of

the accounts of each line.

The rail network has been extended

thanks to the opening of four new

tram lines and the extension of seve-

ral tram and metro lines.

New rolling stock, of greater capacity,

have been put in service, particularly

on the RER A (double-decker trains).

Information delivered to customers in

case of a disturbance on the lines has

been improved, like the cleanliness of

the trains and stations.

The coordination between the SNCF

and the RATP has been strengthened

Rail transport in the Greater Paris region

since 2010: significant progress, persistent

insufficiencies

with, in particular, the development of

a blueprint of the RER A and B, the

most commonly travelled, and the

establishment

technical

and

human resources to facilitate the sha-

red management of these two lines.

Persistent shortcomings

The service offering, the regularity,

and the punctuality of many lines

remain below the contractual objec-

tives and, in some cases, have even

deteriorated.

The user satisfaction index decreased

between 2012 and 2014 for the RER A

and B and, on average, for the

Transilien. Only 3 out of 14 Transilien

lines saw this index increase.

Source : Cour des comptes according to OMNIL, STIF, SNCF, RATP, Optile

Change in passenger traffic on the various rail networks

of the Greater Paris region between 2010 and 2014

Summaries of the 2016 Annual Public Report of the Cour des comptes

Despite the efforts undertaken over

the past few years, many infrastruc-

tures of the Greater Paris region net-

work of the SNCF are obsolete (for

example, the catenaries of the RER C

are more than 90 years old), which

leads to the proliferation of incidents,

too many traffic interruptions, and, for

safety reasons, the slowdown in speed

authorised on certain sections. The

priority given to the development of

high-speed lines for more than three

decades explains the accumulated

delay in the maintenance of the

Greater Paris region network. It will

take many years for this delay to be

diminished, since the situation will

continue to deteriorate until 2020,

and it will not be until 2025 that the

current level will be regained, which is

far from being satisfactory.

Rail transport in the Greater Paris region

since 2010: significant progress, persistent

insufficiencies

Summaries of the 2016 Annual Public Report of the Cour des comptes

Prospects for improvement

appear uncertain

Of course, ambitious projects have

been defined to improve the situation:

the “Eole” project, the “Grand Paris

Express”

(GPE),

and

the

“CDG-Express” should be initiated,

and their realisation should be spread

out from 2020 to 2030, and even

beyond. However, they face two diffi-

culties: financial and technical.

Their projected cost is considerable:

€5bn for “Eole”, a minimum of approxi-

mately €30bn for the GPE, more than

€2bn for CDG-Express, not counting

running costs incurred.

However, the coverage of these dis-

bursements by equivalent resources

seems hypothetical: the constraints

that weigh on the budgets of the

State and the local government

authorities leave only a small margin

of manoeuvre for increasing public

subsidies, i.e., recourse to the tax-

payer; further increasing the expendi-

ture incurred

by the companies

– which currently fund, through the

transport payment and the reimbur-

sement of half of the “Navigo pass”,

nearly half of the cost of Paris region

transport – seems difficult; the use of

debt is just as random considering the

debt already accumulated by the

SNCF and the RATP. With regard to

the share borne by customers – cur-

rently only approximately 30% – it will

decrease starting in 2015 given the

decision of the STIF to introduce, as

from 1 September 2015, a single fare

for the “Navigo” and “Imagine’R”

packages. This decision, unpreceden-

ted in Europe, appears even more

remarkable given that the price paid

by the travellers in the Greater Paris

region, as the Court already noted in

2010, is one of the lowest of the com-

parable cities and that a large number

of people already enjoy special fares.

At the technical level, the combina-

tion of major maintenance operations

on the existing rail network, in the

Greater Paris region and elsewhere,

the commitment of the work of Eole

and the GPE, and the considerable

new transport infrastructure projects

envisaged raises the question of the

ability of the operators and the indus-

try to handle such projects at once. All

these uncertainties are not lifted.

It also appears necessary to prevent

insufficiently targeted measures of

deterrence from automobile use from

having the effect of increasing traffic

on the already saturated rail lines.

Otherwise, there is a risk of further

degrading a service quality already

regarded as critical by the users, parti-

cularly by those who live farthest

from the heart of the metropolitan

area.

Rail transport in the Greater Paris region

since 2010: significant progress, persistent

insufficiencies

Summaries of the 2016 Annual Public Report of the Cour des comptes

Recommendations

To the State and SNCF Réseau:

maintain the absolute priority

given to the servicing and mainte-

nance of the Transilien network

(repeated recommendation).

To the State and the STIF:

increase the share of transport

cost funded by travellers (repeated

recommendation).

To the State:

prioritise and rigorously select

transport infrastructure projects

envisaged in the next 10 to 15 years

in terms of financial, technical, and

human resources that could be

mobilised during this period.

Map of the Grand Paris Express

Source : Société du Grand Paris

Chapter IV

The Cour des comptes warns

National centre for territorial civil service (CNFPT): train

better, tax less

Preventive archaeology policy: late adjustment measures,

an operator to be thoroughly reformed

Military pay: despite efforts undertaken, persistent

problems

Amnéville indoor ski area: under-used equipment, a risky

investment

The CNFPT is a public agency respon-

sible for the professional training of

officers of the territorial public ser-

vice. Present on almost all of the

national territory, it employs 2,392

people divided between the head-

quarters, 29 regional delegations, 64

departmental branches, and 5 insti-

tutes. Its operating budget, €400m in

2014, is primarily funded by the

government authorities, thanks to a

1% payroll deduction on the 1.9 mil-

lion local officers.

The management of the CNFPT was

the subject of a chapter of the annual

public report of February 2011. The

Cour des comptes noted that the

adaptation of the agency’s activities

to the missions (training, exam prepa-

ration, organisation of administrator

recruitment and training, territorial

employment observatory) was late,

despite a comfortable financial posi-

tion, and that serious management

irregularities persisted.

The Cour des comptes recommended

reducing the legal cap on the rate of

the contribution in order to decrease

the CNFPT’s surpluses and correspon-

dingly alleviate the burden of contri-

buting government authorities. A few

months

later,

in July

2011, the

Parliament reduced the maximum

rate of the mandatory contribution for

the local government authorities

from 1% to 0.9% for 2012 and 2013,

then reversed its decision by bringing

the rate back up to 1% for 2013. It is in

this

context

that

the

Cour

des

comptes conducted a new control of

the institution.

Efforts to improve the training

offering to be amplified

Training volumes increased signifi-

cantly between 2008 and 2011 then

experienced a sharp drop related to

the decrease in the contribution rate

in 2012. In 2014, the training volume

reached 14.47 million hours of trainee

training (HTT), a level certainly higher

than in 2008, but still lower than in

2011, which is not satisfactory. The

training activity is highly cyclical: the

most intense six months for training

account for more than 70% of the

activity. The Cour des comptes conclu-

ded that the CNFPT can still increase

its service offering.

The government authorities remain

free to use other service providers, but

they then bear the financial expendi-

ture whilst remaining fully liable for

their contribution to the CNFPT.

National centre for territorial

civil service (CNFPT):

train better, tax less

Summaries of the 2016 Annual Public Report of the Cour des comptes

Training expenditure of the govern-

ment authorities totalled more than

€650m in 2013, around half of which

corresponds to training expenditures

that are in addition to the mandatory

contribution paid to the CNFPT. The

improvement of the CNFPT’s offering

should therefore help cut this expen-

diture of the government authorities.

The Cour des comptes stresses that

the scope of training covered by the

CNFPT is still too limited. Some man-

datory training is not handled by the

CNFPT. Categories of officers have

access only to paid training. The Cour

des comptes proposes better defining

the scope of mandatory training fun-

ded by the CNFPT.

Management autonomy not

conducive to savings

The CNFPT’s management is still

insufficiently

economical.

The

agency’s payroll represents an increa-

singly large share of the contribution.

The Cour des comptes regrets that

the agency does not derive sufficient

productivity gains from its invest-

ments in information systems. It

recommends ending unjustified bene-

fits (mission expenses, funding of

unions

activities,

staff

housing,

bonuses, sales to staff) and better

controlling

certain

day-to-day

management expenditure (communi-

cation expenditure, exam organisa-

tion).

The Cour des comptes is critical of

how the CNFPT managed the decline

of its resources in 2012: its training

activity was reduced in proportions

well

above

the

decrease

its

resources, paid training increased, and

the reimbursement of trainee travel

expenses was shifted to the local

government authorities. The Cour des

comptes recommends clarifying the

conditions for covering trainee travel.

Lastly, the Cour des comptes recom-

mends that the CNFPT’s resources be

better supervised by the Parliament

and that they be de-indexed from the

change in the payroll of the govern-

ment authorities.

The Cour des comptes takes note that

the cap on the contribution based on

the payroll of the local government

authorities for which the CNFPT is eli-

Summaries of the 2016 Annual Public Report of the Cour des comptes

National centre for territorial civil service

(CNFPT): train better, tax less

Changes in revenues, running costs, and activity of the CNFPT

Source: Cour des comptes. HTT: hours of trainee training

Summaries of the 2016 Annual Public Report of the Cour des comptes

Recommendations

National centre for territorial civil service

(CNFPT): train better, tax less

define the scope of training to

which the mandatory contribution

gives access in a manner consis-

tency with the act of 12 July 1984

and fund diploma-granting training

for recipients of future jobs on the

revenues from the contribution;

accelerate the changes underta-

ken since 2011 with regard to the

harmonisation

training,

the

deployment digital training tools,

and the assessment of training

efficiency;

reduce operating costs particu-

larly by reducing payroll and com-

munication expenditure and putting

an end to unjustified benefits;

clarify the conditions for covering

trainee travel;

clarify through the law the legal

regime applicable to the CNFPT and

supervise its available resources so

to make them less dynamic (for

example, by indexing them to the

staff to be trained) and better

controlled.

gible was lowered to 0.9%, which was

decided when the finance act for 2016

was passed. However, this measure

will only be fully favourable on the

condition that this decrease does not

lead to, once again, shifts of expendi-

tures to the government authorities

or a decrease in the volume of training

offered. This means a change in the

framework of the agency’s gover-

nance, which will encourage the

agency to make the savings efforts

that should be expected from it.

The current institutional system of

preventive archaeology was defined

by the legislator in 2001 and 2003.

The INRAP (French national preven-

tive archaeological research institute),

an administrative public agency crea-

ted in 2002 with the mission to per-

form diagnostic operations and pre-

ventive archaeological excavations, no

longer has a monopoly, but holds a

major place. In observations to the

Government dated 6 June 2013, the

Cour des comptes observed that the

necessary measures had not been

taken to support the sector’s transi-

tion to a competitive situation and

ensure stable funding for the INRAP

and reported major problems in the

management of the institution. The

following-up

audit,

conducted

2015, showed that the progress made

since then by the State and the INRAP

was late and insufficient.

Delays in the definition of a

public policy for preventive

archaeology

The State’s role in this policy is essen-

tial since it prescribes the prior diag-

nostics and excavations, approves the

public or private operators responsi-

ble for performing them, exercises

scientific control of their work, and

ensures funding for part of the sec-

tor’s activities. However, despite the

commitments made in 2013, the State

has been slow to take the measures

incumbent on it.

The new national programming for

archaeological research in France, in

preparation for several years, has thus

been adopted, but it still has not been

published. No policy of harmonisation

of the policies prescribing diagnostics

and excavations conducted by the

regional

directorates

cultural

affairs (DRAC) was defined before

November 2015 or implemented.

Similarly, the State has not yet establi-

shed safeguards designed to ensure

free competition in preventive excava-

tions, a sector open to the INRAP and

to the archaeological services of the

local government authorities and pri-

vate structures.

Several provisions of the “freedom of

creation, architecture, and heritage”

bill under consideration by Parliament

certainly go in the right direction, but

their effectiveness will largely depend

on the use, by the State’s services, of

increased powers, whereas the perfor-

mance of their control and sanction

mission already raises questions.

Preventive archaeology policy:

late adjustment measures, an

operator to be thoroughly

reformed

Summaries of the 2016 Annual Public Report of the Cour des comptes

Preventive archaeology policy:

late adjustment measures, an operator to be

thoroughly reformed

A late reform of the funding of

public service activities in the

face of a deteriorated situation

Part of the funding for preventive

archaeology, particularly diagnostics

prior to excavations, comes from a tax

payable by developers: the preventive

archaeology tax (RAP). The reform of

this tax in 2012 has not had the des-

ired effects. Technical problems rela-

ted to its implementation prevented

or severely limited the collection of

the tax in 2013 and 2014. Despite

emergency measures taken by the

State, the inadequacy of the collected

resources caused major difficulties in

the management of the INRAP and,

more generally, the funding of the pre-

ventive archaeology sector.

Returning to its earlier doctrine, in the

initial finance act for 2016, the State

endorsed a change in the funding

model with the “budgetisation” of the

RAP. This reform consists in providing

for the income from the tax, as well as

the amount of the budget appropria-

tions allocated by the State to the pre-

ventive archaeology public service

missions, in the finance act. Although

it offers the advantage of putting an

end to the uncertainty about the level

of resources for these missions, the

conditions of its implementation, still

uncertain, will be decisive for preven-

ting the return to the previous bad

habits.

INRAP has not sufficiently

adapted to the sector’s

developments

The slowdown in economic activity

since 2008 and the decrease or pause

in the launch of major works (motor-

ways, high-speed lines, etc.) have

resulted in a reduction of the preven-

tive archaeology activity, with a major

impact on the INRAP’s activity. Faced

with changes in the market, the insti-

tution made some adjustments (slight

moderation of its rates and significant

redeployment of its resources to its

research, valuation, and consulting

activities). They have been unable to

prevent the deterioration of its posi-

tions in the preventive excavation sec-

tor in relation to other stakeholders,

particularly private structures. The

INRAP occupied only 48% of this mar-

ket in 2013 compared with 56.7% in

2010. The partial data available for

2014 show that, despite a slight reco-

very, the INRAP has not regained its

previous positions.

In response to the previous observa-

tions of the Cour des comptes, the

INRAP attempted to modernise its

operation.

Its

management

was

strengthened by entering into a

contract of objectives and perfor-

mance with the State for the 2011-

2014 period and then by adopting of

development plan. New management

tools were put in place for cost

accounting, property management,

and human resources management.

However, in its public service missions

funded by the State, like in its activi-

ties falling within the competitive sec-

tor, the INRAP can no longer be

exempt from implementing reforms

that more crucial for its future.

The forecasting tools, which are

essential for good management, show

persistent weaknesses that are harm-

ful to the reliable preparation of a

budget and staffing forecasts.

Similarly, the compensation scheme

for officers and the travel expense

Summaries of the 2016 Annual Public Report of the Cour des comptes

reimbursement procedures, which

have specific characteristics that are

often unwarranted, still need to be

reformed, as the Cour des comptes

recommended in 2013.

However, the main reforms must

focus on cutting costs and improving

productivity. The recent changes in

human resources raise real concerns,

particularly the reduction of possibili-

ties of adapting the INRAP’s staff to

its level of activity, the steady increase

in its payroll, the ageing of its staff,

whose possibilities of internal or

external mobility remain too limited,

and the deterioration of working time

devoted to

operational

activities

Lastly, the reduction of structural

costs requires a reform of the map of

the institution’s territorial locations,

which presents obvious inconsisten-

cies.

Recommendations

To the State:

publish the new national pro-

gramming

for

archaeological

research, which must guide the

State’s prescribing policy and regu-

late the INRAP’s scientific policy;

harmonise the practices of regio-

nal

archaeology

services

with

regard to prescription and control

of the scientific quality of interven-

tion projects of excavation opera-

tors.

To the State and the INRAP:

put in place, as part of the revi-

sion of the arrangements for fun-

ding

diagnostics,

measures

ensure consistency between the

level of prescriptions and the finan-

cial resources allocated to opera-

tors (INRAP and local government

authorities) and control the cost of

performing diagnostics;

redefine

the

compensation

scheme for officers and initiate a

reform of the provisions governing

business travel;

define

ambitious

goals

concerning the number of days wor-

ked devoted to operational activi-

ties; consider measures to reduce

the effects of the ageing of the work-

force on productivity, particularly by

developing internal and external

mobility for officers;

review the map of territorial loca-

tions in order to better adapt to the

level of activity in each region and

reduce the institution’s structural

costs.

Summaries of the 2016 Annual Public Report of the Cour des comptes

Preventive archaeology policy:

late adjustment measures, an operator to be

thoroughly reformed

Summaries of the 2016 Annual Public Report of the Cour des comptes

Military pay: despite efforts

undertaken, problems persist

Implemented in 2011, the Louvois

software (LOgiciel Unique à VOcation

Interarmées de la Solde) is designed

to calculate the military service pay of

approximately 180,000 military per-

sonnel representing an annual payroll

of €11bn. It has experienced serious,

lasting issues since then.

In 2013, the Cour des comptes audited

the conditions of design, organisation,

and implementation of this computer

system. Its work resulted in observa-

tions issued to the minister of defence

on 27 December 2013. As early as

December 2013, the ministry of

defence launched a plan for improve-

ment of

Louvois

and decided to

replace this system with a new calcu-

lator called

Source Solde.

It also

endorsed the recommendations of

the audit of the Cour des comptes.

Today, the Cour des comptes notes

the ministry’s efforts to overcome the

issues with

Louvois

. However, these

efforts, which have been and continue

to be expensive, will need to be conti-

nued. The Cour des comptes also

notes that the organisation put in

place by the ministry of defence to

improve

Louvois

and prepare the

future

Source Solde

to replace it

remains complex and that its coordi-

nation still needs to be perfected.

Emergency measures have

settled in over time

Emergency measures

In order to cope with the issues of the

military service payment chain, the

ministry of defence took emergency

measures to overcome errors in the

calculator, improve the quality of the

service payment, and reduce the

inconveniences for military personnel

and their families.

On the one hand, the defence minister

put in place a “military pay assistance

unit”, which still deals with a steady

volume of requests, reflecting the

ongoing difficulties in the field. On the

other hand, it decided to establish a

“ministerial emergency plan”, which

led to the payment of 27,000 indivi-

dual advances representing €53m

between 1 November 2012 and

31 December 2014. At times, these

advances were made without suppor-

ting documents and were not follo-

wed by rigorous recovery procedures.

A new directive published in April

2015 aimed to better regulate this

plan, which continues to be exceptio-

nal and precarious. Lastly, the persis-

tence of numerous errors necessita-

ted constant workaround measures

and intervention for the calculation of

service payments.

Despite computer corrections, many

irregularities remained and were still

remains too numerous. On 1 April

2015, there were 1,418 “system

errors” not yet resolved, a decrease of

barely 23% in relation to the peak in

2013 (1,840).

Twelve gradual improvement initia-

tives

Beyond these emergency measures,

the ministry of defence put in place

twelve thematic initiatives to identify

difficulties and propose actions to

improve

Louvois

as well as the entire

military service payment chain and

prepare

Source Solde

. These various

initiatives, which are still far from

being completed, deserve close perio-

dic monitoring, based on a dashboard

and specific milestones. The steering

and comitology associated with these

initiatives are particularly complex.

The efforts to remedy the

shortcomings of Louvois and

its errors are costly

The problems with

Louvois

have requi-

red additional staff (nearly 600 full-

time equivalents) in all the operatio-

nal services involved with the military

service payment as well as of many

outside support services to resolve

the persistent abnormalities.

The Cour des comptes estimated the

cost of these additional staff at €15m

in 2013 and €18m in 2014 and the

cost of outside support services, both

for the IT services and for the human

resources and payroll expert centre, at

€7m in 2013 and €20m in 2014. In

addition to this expenditure, there was

approximately €7.5m in work that has

become unusable because of the sus-

pension of certain IT projects related

to payroll.

Moreover, the malfunctions resulted

in an increase of salary expenditure

because of payments of sums greater

than the amounts owed to the per-

sonnel. These unwarranted payments,

net of recoveries, reached €149m

during financial year 2013, €96m

during financial year 2014, and €37m

during the first ten months of 2015. In

April 2015, overpayments reached a

total cumulative amount of €358m, of

which only €171m had been recove-

red. The ministry of defence and the

ministry

finance

and

public

accounts must combine their efforts

to allow for the rapid recovery of

these overpayments.

Conversely, other errors relate to

underpayments, estimated at €47m in

April 2015 for the army and navy; the

offices should be paid as soon as pos-

sible.

The prospects for the future

are still uncertain

The ministry is pursuing two objec-

tives simultaneously: take care of the

monthly payroll with the

Louvois

sys-

tem and prepare

Source Solde

, which

is scheduled to come into operaion in

Summaries of the 2016 Annual Public Report of the Cour des comptes

Military pay: despite efforts undertaken,

problems persist

Summaries of the 2016 Annual Public Report of the Cour des comptes

Governance of the military service payment chain the Source Solde project

Military pay: despite efforts undertaken,

problems persist

Source : Cour des comptes

2017 and will work together with

Louvois

until around 2021 to enable

the retroactive calculation of past

events related to rights of military

personnel.

In order to complete the project of the

future payroll system,

Source Solde,

the ministry of defence has entrusted

the implementation to a programme

director from the Direction générale

de l’armement who works in tandem

with a “programme officer” from the

human resources Department of the

ministry of defence.

The communication between, on the

one hand, the teams responsible for

the operation of

Louvois

and the

management of the improvement ini-

tiatives and, on the other hand, the

Source Solde

team must therefore be

optimal to ensure overall consistency

and achieve the goals within the allot-

ted time. Despite an effort of clarifica-

tion, the complexity persists because

of the multiplicity of services, the

overlapping of responsibilities, and a

vast network of committees and wor-

king groups.

Military pay: despite efforts undertaken,

problems persist

Summaries of the 2016 Annual Public Report of the Cour des comptes

Recommendations

implement all the due diligence

measures

for

the

recovery

unwarranted payments and the

resolution of underpayments;

clarify the interpretation of the

time limitation rules applicable to

unwarranted payments made prior

to 31 December 2011 and advances

of military service payments;

steer the twelve improvement

initiatives on the basis of a dash-

board, establishing the steps and

the deadlines for each of them;

put in place a training plan with a

detailed timetable for the various

stakeholders in the human resources

and payroll processes;

ensure complete, quick sharing of

information between the teams in

charge of

Louvois

Source Solde

, and

human resources.

Major difficulties likely to weigh on

the release of the new system are far

from being resolved. These difficulties

arise from the large number (170) and

the characteristics of the rules of

management of the compensation

right, the need to incorporate the new

system

into

the

set

human

resources software, the need to

enhance the quality of the master

data used to calculate military service

payments, and the need to have the

two payroll systems coexist until

2021.

These findings should lead the minis-

try to greater responsiveness and vigi-

lance in order to ensure compliance

with the timetable of the S

ource Solde

development contract.

Source : Cour des comptes

Amnéville indoor ski run:

under-used equipment, a risky

investment

On the slag heap of a former iron-

works

area,

the

commune

Amnéville, located a few kilometres

north of Metz, built a covered ski run

opened in 2005, currently the only

indoor ski run in France. The manage-

ment of this facility has been entrus-

ted to a municipal agency with legal

personality and financial autonomy.

In its 2006 Annual Public Report, the

Cour des comptes alerted the com-

mune about the absence of an assess-

ment of the financial risks that it

incurred by opening an indoor ski run.

Despite this warning, the commune

continued the process of developing

its tourist area, without assessing its

viability and the risks for its finances.

A very poor financial situation,

partly hidden

Since 2009, the municipal agency has

faced a deficit situation, obscured by a

vote on budgets on the basis of disin-

genuous forecasts, with an overvalua-

tion of its operating revenues and an

undervaluation of estimated disburse-

ments. In the absence of available

cash, unpaid expenditures are carried

over from one year to another.

In reality, the financial position is

much worse than announced by the

agency (-€32,000 in 2014), with a

result of nearly -€1.02m in 2014, after

restatements by the regional chamber

of accounts. Thus, although the

agency had assumed all of its expen-

ditures, its cumulative operating defi-

cit would be approximately €4.5m at

31 December 2014, representing

more than 160% of its operating reve-

nues since the opening of the ski run.

Summaries of the 2016 Annual Public Report of the Cour des comptes

Operating result of the ski run after restatements

This situation is explained by deficien-

cies in the management (absence of

cost accounting, for example) and in

the steering of the activity. However,

the agency’s deficit situation presents

primarily a structural nature, to the

extent that the activities is not suffi-

ciently profitable, taking into account

the low number of visits to the ski run

and a side food service activity that

has been in sharp decline for seven

years. The public price charged (€21 in

2014 for two hours) is far below the

rate required for operational breake-

ven (€31 in 2014).

The lack of prospects

of recovery

This situation is likely to continue,

given that the prospects for revenue

growth are limited and disburse-

ments, for the most part, cannot be

reduced. In 2014, the establishment of

a strategy of customer solicitation

and

diversification

marketing

actions, and the definition of new

packages or promotional offers failed

to reverse the trend. It appears that

the price lever can only be slightly

mobilised, at the risk of intensifying

the decline in visits to the ski run. The

downsizing initiated in 2014 (€0.2m in

savings) and the decrease in annual

rent owed to the commune did not

help to significantly reduce running

costs.

In addition, the plan to discharge the

agency’s energy debt, launched in

2014, over 10 years, does not appear

to be realistic and has not been res-

pected – an amendment having post-

poned the start of the debt repay-

ment. According to the projections of

the regional chamber of accounts, the

discharge of the debt would have led

to a continued high operating deficit,

on the order of €0.7m per year.

As such, the sustainability of the ski

run can no longer be ensured, even if

the commune were to decide to cover

the agency’s operating deficit directly.

In fact, for several years, the com-

mune no longer has any self-financing

capacity (-€3m in 2014, i.e., 13.5% of

operating income), despite raising the

level of its taxation in 2015.

Summaries of the 2016 Annual Public Report of the Cour des comptes

Amnéville indoor ski run:

under-used equipment, a risky investment

Recommendation

Cease operation of the ski run as

soon as possible.

Amnéville indoor ski run

Source : Cour des comptes