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Certification of the French general social security system financial statements for 2016

COUR DES COMPTES

The Cour des comptes – France’s supreme audit institution – hereby issues its eleventh audit opinion of the French general social security system financial statements for the year 2016.
The fact that the Cour des comptes confirms that these financial statements present a reliable, true and fair view is an advantage for the social security system in terms of transparency and reliability.
For the fourth year running, the Cour des comptes certifies that the financial statements of all the entities of the general social security system for the year 2016 are, according to the applicable accounting rules and principles, fairly presented, and give a true and fair view of their financial situation and assets, subject to 31 material qualifications as opposed to 33 for 2015. Five qualifications have been removed and the Cour set out three new qualifications on the Health insurance, the CNAMTS and the Collection activity financial statements.

The Cour delivers an opinion on nine series of financial statements:

  • the combined financial statements of the Collection activity and each of the four social security system branches —Health insurance, Accidents in the workplace and Occupational illness (AT-MP), Family benefits and Old age pensions;
  • the annual financial statements of the four national bodies concerned: Caisse Nationale d’Assurance Maladie des Travailleurs Salariés (CNAMTS), Caisse Nationale des Allocations Familiales (CNAF), Caisse Nationale d’Assurance Vieillesse des Travailleurs Salariés (CNAVTS) and Agence Centrale des Organismes de Sécurité Sociale (Acoss).

In 2016, the scope of certification by the Cour consisted of expenditures of EUR 433.5 billion (19.5% of GDP) and income of EUR 536.8 billion (24.2% of GDP), of which part is collected on behalf of entities other than the general social security system. In 2016, the combined branches of the social security system suffered a shortfall of EUR 4.13 billion (vs. EUR 6.85 billion in 2015).
In 2016, significant progress was made especially by the Old age pensions branch and Collection activity regarding the implementation of recommendations of the Cour. 34 audit points were removed for all branches. However, only limited progress was made by the Health insurance, Accidents in the workplace and Occupational illness, Family benefits and Old age pensions regarding internal control, resulting in no improvement in the residual financial risk. Moreover, the Cour expressed new findings on the Health insurance, Accidents in the workplace and Occupational illness, and Family benefits financial statements, following legislative and regulatory changes introduced in 2016, and further audit investigations.

Health insurance, Accidents in the workplace and Occupational illness (AT-MP) and CNAMTS

The Cour certifies the 2016 financial statements with six qualifications for Health insurance, six qualifications for AT-MP and three qualifications for CNAMTS. Although Health insurance has continued to improve its internal control, the residual financial risk on medical expenses and daily allowances remains high. The Cour expresses a new qualification for Health insurance and CNAMTS, due to an amount of social security contributions (of EUR 0.7 billion) wrongly recorded as income in the financial statements. AT-MP's accounting provision for legal disputes, which may give rise to a reduction in employers' contributions, remains unreliable.

Family benefits and CNAF

The Cour certifies the 2016 financial statements of the Family benefits branch with three qualifications, and the annual financial statements of CNAF with two qualifications. The progress made in 2015 in justifying accounting entries, estimating accounting provisions and ensuring reliable information in the notes to the financial statements, have been maintained in 2016. However, the residual financial risk remains very high, revealing serious shortcomings in internal control. The Cour notes that multi-annual commitments vis-à-vis the recipients of statutory benefits (family housing benefits and disabled child care allowance) are not mentioned in the notes to the financial statements of the Family benefits branch and CNAF.

Old age pensions and CNAVTS

The Cour certifies the combined 2016 financial statements of Old age pensions subject to three qualifications, and the annual financial statements of CNAVTS subject to two qualifications. Thanks to new IT developments, it is now possible to trace back the amount of pensions paid with reasonable assurance. The residual financial risk is now measured more reliably, but is higher than in previous years, raising persistent doubts about the quality of the branch's internal control, accurate calculation of pensions and adequate information gathering on pension rights. Multi-annual commitments vis-à-vis its contributors are not mentioned in the notes to the financial statements. This information is necessary, however, to ensure that these financial statements are transparent and comply with general accounting principles.

Collection activity and ACOSS

The Cour certifies the combined 2016 financial statements of the Collection activity subject to four qualifications, and the annual financial statements of ACOSS subject to two qualifications. IT developments in 2016 have made it possible to produce an audit trail of accounting income. Internal control has improved but remains inadequate, and persistent irregularities and shortcomings in the management of self-employed workers'contributions have only been partially corrected. ACOSS wrongly notified, with no legal basis, contribution income (of EUR 0.7 billion), resulting in undue reduction of the Health insurance shortfall. The Cour therefore expresses a new qualification on the financial statements of the Collection activity.

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