The stakes of the certification audit
The Cour des comptes
mission
Every year, in application of article
L.O. 132-2-1 of the French Financial
Jurisdiction Code, the Cour des comptes
drafts a report on the certification
of the general social security regime
financial statements, which it submits to
Parliament and the Government.
In performing this task, it complies with
the stipulations of international audit
standards (ISA).
It
provides
a
substantiated
and
independent opinion on the general
regime
financial
statements,
after
collecting data to certify that they are
regular and accurate and give a true and
fair view of the financial situation and
assets.
Certification scope
The Cour des comptes annual report
presents
nine opinions
on the reliability
of the financial statements submitted
for certification:
l
five
concern
the
combined
accounts
for
the
Health
insurance, the Accidents in the
workplace
and
occupational
illness
(AT-MP),
the
Family
benefits
and the Retirements
branches of the general regime,
and the combined accounts of
the
collection activity ;
l
four
concern the accounts of the
respective
national
agencies:
CNAM, CNAF, CNAV and ACOSS.
Activities involve the collection of social
security contributions and allocated
taxes,
duties
and
miscellaneous
revenue for the general branch and
for other beneficiaries (other social
security and social protection branches,
Central Government, Unédic, etc.).
Social security contributions collected
by ACOSS and URSSAF in 2019 for the
general branch and other beneficiaries
have
reached
€483.6B,
including
€374.4B for the general branch and
€109.2B for other social security and
social protection bodies and branches,
as well as other beneficiaries.
Social security contributions subject to certification
CERTIFICATION OF THE FINANCIAL
STATEMENTS OF THE GENERAL
SOCIAL SECURITY REGIME -
financial year 2019
Main remarks
2
The stakes of the certification audit
AGIRC ARRCO :
5,3
Retirement
107,1
Sickness
203,8
AT-MP
13,0
Family
50,5
Unédic
38,5
Other
65,4
FSV: 17,5
CADES: 16,3
CNDSSTI: 2,8
AOM: 9,2
CNSA: 5,1
FNAL: 2,7
Miscellaneous
branches and
funds :
11,8
Including internal social
security transfers, Central
Government
and
local
public entities (€116.6B),
revenues
subject
to
certification by the Cour
des comptes amount to
€600.2B (24.7% of GDP)
in 2019.
Expenses subject to certification
Breakdown by beneficiary in 2019
(in billions of euros)
Source: Cour des comptes
For all branches combined, in 2019
the general social security regime
recorded a loss of €0.4B, following a
surplus of €0.5B in 2018 and a loss of
€2.2B the year before.
The loss in the Health insurance branch
was €1.5B, as opposed to -€0.7B in 2018.
The Retirement
branch, which recorded
a small surplus in 2018 (€0.2B), recorded
a loss of €1.4B in 2019, bearing in mind
that the loss incurred in the Retirement
Solidarity Fund (FSV,whose accounts are
not certified by the Cour des comptes)
were reduced to -€1.5B (as opposed to
-€1.8B in 2018).
The only branches to record a surplus
were the family branch, which recorded
a surplus of €1.5B (€0.5B in 2018) and
the AT-MP branch, which saw its surplus
increase from €0.7B in 2018 to €1B.
In total, the aggregate loss for the
general scheme and the FSV increased
by €0.6B and stands at €1.9B in 2019.
General social security regime balance in 2019
From a financial audit point of view,
the general branch is characterized
by very high financial stakes and the
considerable number of operations
taken into account.
The expenses subject to certification
include
primarily
those
benefits
provided by the general branch and
welfare benefits funded by the Central
Government (housing benefit, AAH,
employment bonus) and local public
entities (RSA).
General branch expenses
(as a percentage of costs in 2019)
Retirement
AT-MP
Family
Health insurance
Health insurance
49%
AT-MP
3%
Family
20%
Retirement
28%
In 2019, it reached a
total of €491.1B
(as opposed to €473.2B in 2018), or
20%
of GDP.
Source: Cour des comptes
3
Since 2006, the certification of social
security financial statements has made
a decisive contribution to achieving
transparency and reliability of social
security accounting:
l
It has furnished Parliament, citizens,
the ministries concerned and the
boards of directors of national general
branch bodies - and the financial
markets on which ACOSS operates -
with an independent and substantiated
assessment
on
the
reliability
of
financial accounts issued by the main
social security branch.
l
It has contributed to improving internal
control systems and combating fraud,
thereby improving the service provided
to the beneficiaries of social security
benefits and those who make social
security payments. Indeed, it allows the
correct and due payment for benefits
to be appraised, the thoroughness of
contributions collection in accordance
with
the
law
and
regulations.
It
identifies discrepancies between the
operations carried out and those that
would have been made if internal
control had prevented or corrected
all errors affecting statements or the
processing of said data by the social
security bodies.
l
It also contributes to improving the
reliability of financial data required to
prepare parliamentary social security
funding bills and provides data for
the appraisal and correct application
of decisions by the legislator and
the regulatory authority. It provides
comparative data on the results of
the general social security regime and
the breakdown between its various
branches.
Contribution of certification and updates to
the Cour des comptes opinions
The financial year 2019 was marked
by
the
continued
integration
of
self-employed
workers
into
the
general
social
security
regime,
following the discontinuation of the
RSI on 1 January 2018. During this
period, the Family branch paid out
employment incentives to 1.4 million
additional beneficiaries. The general
social security regime continued to
adapt information systems and risk
management systems in response to
the legislative and regulatory changes.
For the financial year 2019, the Cour
des comptes certifies the nine sets
of accounts for the general social
security regime, subject to twenty-
eight qualifications, compared with
twenty-nine the previous year.
As a demonstration that progress
continues in internal control and the
recording of operations,
twenty-three
sections or points of qualifications
issued in 2018 have been removed in
2019 (twenty-eight in 2018).
A
new
qualification
regarding
the 2019 financial statements for
collection activities is attributable
to the incorrect recording in 2020 of
receivable revenue due in 2019, which
downgraded the 2019 results of their
main beneficiary, the Health insurance
branch for an amount of €0.6B.
The
continued
high
number
of
qualifications
reflects
persisting
difficulties in reaching a higher level of
financial risk control. This is evidenced
by the continued high level - and at
times even by a deterioration - in most
residual financial risk indicators. If
other audit points are to be resolved
in future, it would require large-
scale work aiming at transforming
management processes, the extension
of information systems functionality
and maximizing the benefits of data
digitization.
4
FINANCIAL YEAR 2019
AUDIT OPINIONS OF THE COUR
DES COMPTES
Collection activities and
ACOSS
Collection of social security contributions and allocated
taxes and duties: €483.6B
Financial relations between the Central Government and the
social security system changed significantly in 2019, due to a rise
of €36B in VAT allocated to social security branches, and the
extension of a general easing of social contributions to additional
unemployment and retirement insurance premiums
In
an
ever-changing
regulatory
environment,
ACOSS
has
continued its programme to modernise the URSSAF information
system and implement a unified program for internal control.
The financial risk management systems still have a number of
weaknesses related to the coverage and the reliability of control
measures. Information systems risks are still not entirely covered.
The number of pending declarative anomalies has greatly
increased over the year, and the average rejection rate for
nominative social security declarations (DSN) by automated
processing has again deteriorated.
ACOSS still does not have global indicators to measure the
financial risks that the internal control systems were unable to
prevent or correct, which limits the potential to evaluate the
efficiency of these systems.
Accounting processes non-compliant
with applicable accounting principles and rules affected the
reliability of the financial statements.
The Cour des comptes certifies the 2019 financial
statements of collection activity with four qualifications
and of ACOSS with two qualifications
The
discrepancies
or
limitations
that
substantiate
the
qualifications formulated for the 2019 combined accounts for
collection activity originate as follows:
inadequacies in general internal control systems, which
only provide limited assurances on the financial risks to
which the collection activity is exposed.
persistent vulnerabilities in the internal control systems for
the main social security collection processes for employers
of salaried staff and for the self-employed.
uncertainties and limitations affecting several accounting
records and estimates during the preparation of financial
statements.
the non-inclusion in 2019 of conventional receivables from
pharmaceutical
firms,
which
resulted
in
an
understatement of revenue for the Health insurance
branch of €0.6B.
2019 expenses: €237.4B
In 2019, internal control was notably strengthened with the
formalisation of a control plan including the medical services,
within the framework of the gradual implementation of an
integrated social security management system.
Persistent vulnerabilities in the internal control affect the
information systems and the correct and timely reimbursement of
health expenses and daily allowances. The tools and processes
implemented to produce and justify the financial statements
show some persisting weaknesses.
The definitive errors that affect the coverage by social security of
expenses paid by the Heath insurance branch represented 7.45% of
costs covered, for all risks combined, with an impact of at least €1B,
mainly at the expense of social security. The definitive errors that
affect daily allowances reached at least €0.4B, mainly at the expense
of social security. They affect one case in ten of daily allowances.
The high level of expenses with errors limits the reliability
provided by internal control regarding service quality, financial
statements reliability and the appropriate use of public funding.
The limited digitisation of medical prescriptions, work stoppage
notices, wage certificates and requests for prior agreement holds
back the deployment of automated controls to reduce the high
frequency of errors that characterises benefits paid by social
security.
The Cour des comptes certifies the 2019 accounts
of the Health insurance branch with five qualifications
and of CNAM with two qualifications
Limitations and discrepancies for the 2019 combined financial
statements of the Health insurance branch involve:
the limited assurance that the national internal control and
audit systems provide on the management of financial
risks that affect management processes.
significant
persistent
financial
errors
affecting
the
coverage of expenses billed to social security by health
system actors.
the risk of erroneous payments to public and private health
establishments due to the inadequate scope of controls
enacted on hospitalisation and treatment costs billed to
social security.
errors with severe financial impact affecting the calcula-
tion of daily allowances, and inadequate error risk manage-
ment on the payment of disability benefits.
justification of some accounting entries, especially the
omission of pharmaceuticals receivables in 2019, which led
to the incorrect result for the branch in 2019 (of the order
of €0.6B).
Health Insurance branch
and CNAM
5
FINANCIAL YEAR 2019
ASSESSMENT OF THE AUDITOR GENERAL
AT-MP branch
Family branch
and CNAF
Retirement branch
and CNAV
2019 expenses (including benefits funded by the Central
Government and local public entities: €98.8B
In 2019, CAF activities were marked by a strong increase in the
number of beneficiaries (+ 1.4 million) of the work incentive
(prime d’activité) and legal benefits paid (+6% compared to 2018),
following emergency measures taken at the end of 2018.
The controls deployed made it possible to detect increasing
undue amounts and recalls, but they were not improved
sufficiently to prevent a rise in fraudulent users and undetected
recall. Thus, the scope of errors linked to declarative data used for
awarding legal benefits has degraded significantly: nine months
on average after payment of benefits, undetected errors reached
€5.7B in 2019 (i.e. the equivalent of 7.8% of benefits paid),
compared to €4.9B in 2018. Work incentive, RSA and housing
benefit make up almost 85% of these errors, mainly at the
expense of social security. Payments not due and recalls
undetected by internal control represent one fifth of work
incentive (prime d’activité) and one sixth of RSA paid.
In this respect, deploying the “monthly resource system” could
result in a milestone being achieved in the reliability of data used
for awarding benefits.
In addition, definitive errors on internal CAF operations have
continued at a high level (1.65% of the amount of legal benefits,
i.e. €1.2B).
2019 expenses: €13.1B
Beyond findings common to the Health insurance branch, the certifica-
tion audit led to the raising of other internal control weaknesses.
Thus, vulnerabilities in the processes for the recognition of
occupational accidents and injuries and for the determination of
contribution levels are continuing to affect the reliability of
benefits awarded and the revenue recorded in this regard.
In addition, weaknesses in the benefits award process and in data
exchanges between the primary funds and pricing bodies affect
the correct determination of the gross sums used to calculate
AT-MP contribution rates.
The internal control of the permanent disability allowances does not
provide a sufficient level of assurance concerning the reliability of all
related settlements and recordings in the accounts of the AT-MP branch.
2019 expenses: €139.5B
LIn 2019, the retirement branch set out a new plan for supervising
authorisation activities, improved the selection of cases for checking
and continued the work to transform the career data repository.
However, definitive errors that affect pension benefits have
continued to increase. Thus, in 2019 more than one newly allocated
or revised pension in seven contained at least one financial error,
whether beneficial or detrimental to the beneficiary. In several
branches, this proportion was one pension in five.
Between 2016 and 2019, the frequency of definitive errors increased
by a third and their financial incidence doubled (up from 0.9% to 1.8%
of the amount of newly paid benefits).
The errors that occurred in 2019 and which were not found and
corrected ex-post will have a cumulative financial impact of €1.1B, as
opposed to €0.8B for those of the previous year. The deployment of
the single career management repository (RGCU) and the career
regularisation system (SYRCA) could meet a milestone in the
reliability of career data considered in allocating pensions.
The Cour des comptes certifies the financial statements
of the AT-MP branch with five qualifications
The limitations or discrepancies for the 2019 combined financial
statements of the AT-MP branch are due to vulnerabilities in
internal control, which affect:
as with the Health insurance branch: coverage of the
branch’s exposure to financial risks; the control of internal
process for covering healthcare costs by direct billing;
payments to public and private health establishments and
the justification of accounting entries.
specific to the AT-MP branch (occupational accidents and
sickness): determining contribution rates and recognition of
occupational
accidents
and
injuries;
the
accuracy
of
calculations for permanent disability and daily allowances;
justification of accounts which involve inventory entries.
The Cour des comptes certifies the 2019 financial
statements of the family branch (CAF) with three
qualifications and those of CNAF with two qualifications
Limitations or discrepancies for the 2019 combined accounts of
the family branch involve:
the internal control system, which does not provide
sufficient cover for all financial risks to which the family
branch is exposed.
significant financial errors that affect the correct and due
payment of legal benefits: the work incentive (prime
d’activité), the income support (revenue de solidarité active)
and
housing
benefits
due
to
uncorrected
errors
in
declarative data and specific fund operations.
for extra-legal social welfare benefits, the weaknesses of
internal control.
The Cour des comptes certifies the 2019 accounts
of the retirement branch with three qualifications
and of CNAV with two qualifications
Limitations or discrepancies for the financial year 2019 combined
accounts of the retirement branch involve:
weaknesses of internal control and insufficient reliability of
data received from social security partners which limit the
reliability of pensions paid;
an increasing proportion of newly allocated pension
benefits (and legal revisions) subject to significant financial
errors affecting the correct and due payment;
inadequately reliable declarative salary data and equivalent
employment periods reported in the career summaries of
insured individuals accessing pension entitlements.
6
The Cour des comptes position on the financial
statements for the years 2006 to 2019
Certification (with 1 or 2 qualifications)
Certification (with 3 or 4 qualifications)
Certification (with 5 or more qualifications)
Adverse opinion/refusal (number of reasons)
Disclaimer of opinion/impossibility
CNAM
CNAF
CNAV
ACOSS
2006
Certification
(7)
Certification
(4)
Impossibilité
Certification
(7)
Certification
(3)
Certification
(3)
Impossibilité
Certification
(7)
Certification
(1)
2007
Certification
(9)
Certification
(5)
Impossibilité
Certification
(4)
Refus
(11)
Certification
(4)
Impossibilité
Certification
(4)
Refus
(3)
2008
Certification
(7)
Certification
(2)
Refus
(7)
Refus
(9)
Certification
(10)
Certification
(2)
Refus
(2)
Refus
(2)
Certification
(2)
2009
Certification
(6)
Certification
(3)
Certification
(7)
Refus
(7)
Certification
(5)
Certification
(2)
Certification
(4)
Refus
(2)
Certification
(2)
2010
Certification
(6)
Refus
(3)
Certification
(5)
Certification
(7)
Certification
(9)
Certification
(1)
Certification
(3)
Certification
(2)
Certification
(3)
2011
Certification
(5)
Refus
(5)
Refus
(6)
Certification
(6)
Certification
(8)
Certification
(3)
Refus
(3)
Certification
(3)
Certification
(3)
2012
Certification
(4)
Impossibilité
Certification
(4)
Certification
(6)
Certification
(6)
Certification
(3)
Certification
(2)
Certification
(3)
Certification
(3)
2013
Certification
(4)
Certification
(5)
Certification
(6)
Certification
(4)
Certification
(4)
Certification
(2)
Certification
( 3)
Certification
(2)
Certification
(3)
2014
Certification
(4)
Certification
(5)
Certification
(6)
Certification
(4)
Certification
(4)
Certification
(2)
Certification
(3)
Certification
(2)
Certification
3)
2015
Certification
(5)
Certification
(6)
Certification
(4)
Certification
(4)
Certification
(4)
Certification
(3)
Certification
2)
Certification
(2)
Certification
(3)
2016
Certification
(6)
Certification
(6)
Certification
(3)
Certification
(3)
Certification
(4)
Certification
(3)
Certification
(2)
Certification
(2)
Certification
(2)
2017
Certification
(5)
Certification
(6)
Certification
(3)
Certification
(3)
Certification
(3)
Certification
(2)
Certification
(2)
Certification
(2)
Certification
(2)
2018
Certification
(5)
Certification
(6)
Certification
(3)
Certification
(3)
Certification
(3)
Certification
(3)
Certification
(2)
Certification
(2)
Certification
(2)
2019
Certification
(5)
Certification
(5)
Certification
(3)
Certification
(3)
Certification
(4)
Certification
(2)
Certification
(2)
Certification
(2)
Certification
(2)
Sickness
branch
Branch
AT-MP
Family
branch
Retirement
branch
Collect-
ion