Certification of the French General Social
Security System Financial Statements
2020 fiscal year
Key takeaways
The certification mission and its challenges
The mission entrusted to the Court
Each year, pursuant to Article L.O. 132-2-1 of the Financial Courts Code, the
Court of Accounts prepares a report on the certification of the French general
social security system financial statements, which it submits to parliament and
the government. In carrying out this mission, it applies the International
Standards on Auditing (ISA).
It formulates a reasoned and independent opinion on the accounts, after having
collected information allowing it to assess the compliance and fairness of the
financial statements of the branches of the general social security system and
the accuracy of the image these financial statements provide of their results,
financial position and assets.
Scope of certification
The Court's annual report presents
nine opinions
on the reliability of the
accounts subject to certification:
five
relating to the respective accounts of the collection activity and the
healthcare and occupational accidents/occupational diseases (AT-MP),
family and old age branches;
four
concerning the accounts of national bodies: Central Agency for Social
Security Funds (ACOSS), National Health Insurance Fund (CNAM), National
Family Allowance Fund (CNAF) and National Old Age Insurance Fund
(CNAV).
Social security contributions subject to certification
The collection activity ensures the collection of social security contributions and
levies, earmarked taxes and duties and other income for the general social
security system and for other beneficiaries (other systems and bodies, Unédic,
central government, etc. ). The social security contributions collected by ACOSS
and URSSAF in 2020 for branches of the general system and other beneficiaries
amounted to €469.2 billion, of which €363.4 billion for the general system and
€105.6 billion for other beneficiaries.
Breakdown of allocations in 2020 (in € bn)
A-A: AGIRC-ARRCO.
Source: Court of Accounts
Taking into account internal transfers to social security, as well as from central
government and the départements (€126.8 billion), the amount of income falling
under the Court's certification mission totalled
€596.1
billion (26% of GDP)
in
2020
, including €437.8 billion for the branches of the general social security
system.
Expenditure subject to certification
From a financial audit point of view, the general system is characterised by the
scale of the sums involved and the considerable number of transactions
recorded. Primarily, the expenditure subject to certification corresponds to
benefits paid by branches of the general system and to solidarity benefits
financed by the State (housing benefit, the allowance for disabled adults (AAH),
benefits for low-paid workers) and the départements (income support (RSA)). In
2020, this expenditure totalled €526.6 billion (compared to €491.1 billion in
2019), or 23% of GDP, including €474.1 billion for branches of the general
system.
Expenditure of the general system (% of expenses - 2020)
Source: Court of Accounts
The balance of the general system in 2020
The general social security system, all branches combined, recorded a deficit
of -
€36.2 billion in 2020, after a deficit
of -
€0.4 billion in 2019.
The health branch
deficit stood at -
€30.4 billion, against
-
€1.5 billion in 2019, and that of the old
age branch came to -
€3.7 billion, versus
-
€1.4 billion in 2019, while the deficit of
the Old Age Solidarity Fund (FSV), whose accounts are not certified by the Court,
increased to -
€2.5 billion (from €1.5 billion in 2019). The branches that generated
a surplus in 2019 also recorded a deficit: the family branch recorded a deficit of
-
€1.8 billion (after a surplus of €1.5 billion) a
nd the AT-MP branch reported a
deficit of -
€0.2 billion (after a surplus of €1 billion).
Overall, the aggregate deficit of the general social security scheme and the FSV
increased by nearly €37 billion, to stand at
-
€38.7 billion in 2020.
The contribution of certification and changes in the
Court's opinions
The certification of accounts since 2006 has made a decisive contribution to
improving the transparency and reliability of social security accounts:
independent and reasoned opinion on the reliability of the financial statements
of the main social security system; improvement of internal control of
management processes; correct payment of social benefits; completeness of the
collection of social security contributions; fight against fraud; contribution to the
preparation of social security finance acts submitted for parliamentary approval.
The context of the health crisis
The accounts for the 2020 financial year reflect the diversity and scale of the new
measures decided by the public authorities in response to the health crisis.
Social security organisations play a major role in this crisis: implementation of
exceptional support measures for businesses and self-employed workers by
URSSAF (broad possibilities to defer payment of social security contributions,
targeted aid for the sectors the most affected by business closures); financing
for members of the healthcare system (exceptional aid for healthcare
institutions and independent healthcare professionals), allocation of common
law exceptional daily allowances and the contacting of persons having been in
contact with a person infected by the virus by the primary healthcare offices
(CPAM).
The Court's opinions on the 2020 accounts
For fiscal year 2020,
the Court:
certifies the four sets of combined accounts of the branches of the
general system, with a qualified opinion regarding twenty-two items
,
compared with sixteen items the previous year;
was unable to issue an opinion on the combined accounts of the
collection activity
(which were certified with a qualified opinion regarding
four items the previous year);
certifies the four sets of accounts of national bodies, with a qualified
opinion regarding eight items
, as in the previous year.
These opinions reflect the cumulative effect of persistent weaknesses in the
control of financial risks, which were already noted in previous years, and
unprecedented uncertainties or discrepancies relating to income, expenditure,
amounts receivable, debts or provisions recognised in respect of the exceptional
measures decided by the public authorities.
Regarding the control of financial risks, the indicators which aim to measure
errors that the internal control systems fail to detect and correct
("Residual
financial risk indicators") have deteriorated, have been the subject of a major
review or remain at high levels.
This reflects the ineffectiveness of internal
control systems, which, in addition, were pared down in 2020 due to the
measures taken in response to the health crisis.
For the future, changes in the Court's findings will depend in particular on a
strengthening of risk controls, the implementation of large-scale IT projects
and an improvement in the justification of certain accounting items.
The Court's positions on the accounts for the financial
years 2006 to 2020