Sort by *
Annual Public
hese executive summaries are designed for ease of
reading and use of the report of the Cour des comptes.
Only the report is legally binding on the Cour des
comptes. The responses of the administrations and other
interested bodies have been integrated into the report.
The 2010-2013 plan
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Tax expenditures: A major budget issue
. . . . . . . . . . . . . . . . . . . . . .12
A few tax expenditures dedicated to the development of companies
and jobs
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Employment bonus: tax expenditure with increasingly
indeterminate objectives
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Retirement reserve fund (Fonds de réserve des retraites or FRR) :
Abandoned ambition, risky reorientation
. . . . . . . . . . . . . . . . . . . . .21
The French compensation system for partial unemployment: An
insufficiently used tool
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
The campaign for the fight against the Influenza A(H1N1) epidemic :
assessment and lessons learnt
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
The healthcare system in French Polynesia and its financing
. . . .28
The public support to export companies
. . . . . . . . . . . . . . . . . . . .30
Offsetting the public electric utilities charges
. . . . . . . . . . . . . . . . .32
Higher education and Research clusters (PRES): In need
of a new impetus . . . . . . . .…………………………………
National Research Agency (ANR): First findings
and outlook… . . . . . . . . . . . .…………………………………….36
Executive summaries of volume 1:
Comments from the financial courts
Table of contents
Annual public report
Executive summaries
Annual public report
Executive summaries
Table of contents
Irregular migratory movements to French Guiana, Mayotte and
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Management of natural hazards in the Overseas Departments
. .42
Agricultural support policy in the Overseas Departments
. . . . . . .45
A first assessment on the outsourcing activities at the ministry of
defence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .…48
Management of the Rhône-Alpes ski area
. . . . . . . . . . . . . . . . . . .51
Territorial continuity with Corsica
. . . . . . . . . . . . . . . . . . . . . . . . . .53
Government workers at the Ministry of equipment and
civil aviation 55
The “one-quarter fare” of the military servicemen
. . . . . . . . . . . .58
Particularities of the remuneration of military reserves
. . . . . . . .61
SOVAFIM: An operator with no real usefulness
. . . . . . . . . . . . . .62
Paris Habitat’s new headquarters
. . . . . . . . . . . . . . . . . . . . . . . . . . .63
Exemptions of allowances paid to sports referees and judges :
An ill-adapted tool
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
The national museum of sport: A poorly monitored project
. . . . .68
Annual public report
Executive summaries
Table of contents
I - The Cour des comptes finds
Public water and sanitation services: Encouraging
Agencies receiving charitable funding. . . . . . . . . . . . ..……………74
The “decrystallisation” of pensions of nationals of territories
previously under French sovereign rule………………..…………76
Financial regulatory authorities………………………..……77
Central services in charge of Overseas France…………………...78
Geology and mining research office (Bureau des recherches
géologiques et minières or BRGM). .
. .. . . . . . . . . . . . . . . ………80
Air navigation personnel. . . . . . . . . . . .. . . . . . . . . ………………82
II - The Cour des comptes insists
The CNRS in the new landscape of research……. . . . ……….…83
Preparation and monitoring of the execution of the Central
Government’s budget
The effects of the certification of the financial statements of the
Central Government
Executive summaries of volume 2:
Implementation of the recommendations of
the financial courts
Table of contents
Legislative measures concerning Social Security and
retirement...………………………………………. . . . . .….……..88
……………………………… . . ..……………………..89
Reorganization of the collection of apprenticeship tax in the fields
of transport and logistics . . . . . . . . . . . . .. . …………………………90
GIP Housing and social actions for marginally homeless and
homeless persons……………………………………………...…92
Ecole nationale de la voile et des sports nautiques
III - The Cour des comptes warns
Chorus and the Financial Reporting Systems of the Central
Centre national de la fonction publique territoriale (CNFPT)
Grand port maritime de Marseille: social dialogue breakdown
and decline
Accounting agencies of public schools (lycées and colleges)…
Etablissement public d’insertion de la défense (EPIDe) ……
The participation of France in the European permanent military
Annual public report
Executive summaries
Executive summaries of
volume 1
Comments from the financial
Annual public report
Executive summaries
The 2010-2013 plan
A fast and strong recovery of all the
public accounts is essential to a return to
sustainable growth, to preserve the
expenditure capacity and to maintain
confidence. It must be part of a
planning that is precise and credible.
The Cour des comptes conducted
an audit to determine whether the
public accounts were following the
course described in the public finances
planning laws and whether the measures
selected by the Central Government to
decrease public deficit from 7.7% of
GDP in 2010 to 3.0% of GDP in 2013
were sufficient. .
Worsening of the
structural deficit in 2010
In 2010, the public deficit sharply
veered off the path laid out in the first
planning law -- adopted in early 2009 for
the years 2009 to 2012 - as a
consequence of the crisis, but also
because of inadequate expense control
and because the rules introduced by the
planning law were not followed.
Putting aside the effects of the crisis
put aside, the recovery plan and other
expenditures rose by 1.4% in volume in
The increase was lower than the
average recorded over the past ten years
(2.3%), but greater than the medium-
term objective of the first planning law
(1.0%) and too high to contribute to the
reduction of the structural deficit.
Conversely, the latter, having already
reached 5.0% of GDP in 2009, was
aggravated by long-lasting reductions in
compulsory withholdings, of 0.3% of
GDP, which were not in compliance
with the rules of the planning law.
More ambitious objectives
and regulations for the
2011-2014 planning
As the Cour des comptes had
recommended, the rules established by
December 2010 for the years 2011 to
2014 now impose, each year, a structural
effort to decrease public deficit by
capping expenditure and setting a
Cour des comptes
The 2010-2013 plan
Annual public report
Executive summaries
minimal return for the compulsory
withholding increases.
However, the scope of these rules
presents some limitations: In particular,
some budget acts or some ordinary laws
may challenge the provisions of the
planning laws as was shown by the VAT
decrease in the food and catering
industry. Far-reaching reforms are still
expenditure changes sought.
Insufficient structural
effort in 2011
The increase in expenditures plan-
ned by the Central Government for
2011 is still 1.4% in volume, not inclu-
ding exceptional factors or those related
slowdown compared to the trend of the
past ten years presupposes the achieve-
ment of approximately €13bn in savings
interest charges on debt, but those that
have been identified by the Cour des
comptes total approximately €5bn.
Even if there is a 1.4% increase in
expenditures in 2011, which is still pos-
sible, such would exceed the target of
the planning law for 2011- 2014 (0.8%)
and it would still be too sharp to contri-
bute to significantly reducing the struc-
tural deficit.
The structural effort to reduce the
deficit will result only from measures to
increase the compulsory withholdings,
which would increase income by €10bn
in 2011 (0.5% of GDP). Certain
measures only have a temporary effect
however and the efficiency of perma-
nent measures equals €7.5bn.
This structural effort shows a
distinct reorientation of budget policy,
but it is still a long way from the €20bn
effort that the Cour des comptes had
recommended achieving every year
from 2011 onwards in its report of June
2010 on the situation and prospects of
public finances in order to stabilise and
then rapidly decrease public debt.
The decrease in deficit by 1.7 point
of GDP prescribed by the Government
for 2011 depends, for its largest portion,
on the removal of exceptional or tem-
porary measures (recovery plan, one-off
overrun in 2010 of the reform of the
business tax, among other things). It is
also based on a favourable assumption
(2.0%) of an increase in GDP.
Beyond 2011, recovery
measures to be defined
The expenditure and revenue objec-
tives set out in the planning law starting
in 2012 represent a structural effort for
a decrease in deficit by approximately
0.65 points of GDP each year, which
remains, once again, below the one-
point of GDP recommended by the
Cour des comptes.
Furthermore, it is very difficult to
identify, in the documents accompa-
nying the planning law and the draft
reforms of the Government, the mea-
The 2010-2013 plan
Annual public report
Executive summaries
sures aimed at increasing compulsory
withholdings and decreasing expendi-
tures that make it possible to achieve
this effort. As in the stability pro-
grammes presented by France for 12
years now and as in the planning law for
2009-2012, the recovery measures are
poorly documented beyond the first
year of planning.
And yet, the analysis of certain line
items shows that the changes in expen-
ditures planned by the Government
require implementing reforms that are
significantly more ambitious than those
already announced. In a September
Government’s total payroll, the Cour
des comptes had underscored that sim-
ply stabilising its amount, when the
three-year budget anticipates a decrease
from 2010 to 2013, would imply free-
zing the public service point value until
2013 and much stricter capping on pay-
grade increase.
The increase in GDP and public
revenues could finally be lower than the
forecasts in the planning law, which
would make it much more difficult to
bring the deficit to 3.0% of GDP in
2013. For the plan described in the
public finances planning law to be fully
credible, the structural effort must be
more ambitious and the measures
necessary to achieve it must be specified
without delay.
Tax expenditures :
A major budget issue
“Tax expenditures” refer to legal
provisions overriding a reference tax
standard resulting in a loss of revenues
for the Central Government. In prac-
tice, the borderline, for a given tax or
fee, between what is to be considered as
overriding and what is to be treated as a
simple application of the rule often
sparks debate.
High and sharply rising
After being fairly stable from 2000
to 2004, the number of tax expenditures
listed in the appendix to the budget acts
rose from approximately 400 to 500
from 2004 to 2009 and their total cost
increased by 43%. The cost of tax
expenditures listed on the official list
thus reached €68bn in 2009, not inclu-
ding recovery measures, i.e. 30% of the
Central Government’s net tax revenues.
The ratio was 18% in 2004, and -- had it
stayed at that level -- the budget deficit
would have been €27bn less in 2009.
Moreover, the 2009 cost of the items
removed from the list of tax expendi-
tures since 2004 stands at €75bn.
This sharp rise in the cost of tax
expenditures since 2004 has coincided
with the implementation of a “zero
volume” increase rule for the Central
Government’s budget expenditures. In
addition thereto, the cost of tax
decreases and credits, which are the tax
expenditures that are the easiest to subs-
titute for budget expenditures, rose
142% between 2004 and 2009. The
creation and extension of certain tax
expenditures made it possible to bypass
the budget rules.
A vague concept, little
known costs
There is no definition for the “refe-
rence tax standard” in France and, even
less so for the measures that may be
considered overriding. The list of tax
expenditures appended to the budget
bills is extremely incoherent. Thus,
many measures for the discontinuation
or decrease of tax expenditures presen-
ted by the Central Government in the
2011 Budget Act concern arrangements
that were never on the list or that have
been recently removed therefrom. The
Cour des comptes would like tax expen-
ditures to be given a precise definition
and the list to be reviewed from this
Their cost, as presented in the bud-
get documents, must be interpreted with
caution, firstly because they are often
higher than the revenues that would
have been obtained had they been remo-
ved. In fact, it is estimated without
taking into account any behavioural
changes, often impossible to accurately
quantify, which could result from such
discontinuation. Secondly, the informa-
Cour des comptes
Annual public report
Executive summaries
Tax expenditures :
A major budget issue
Annual public report
Executive summaries
tion available could be insufficient to
correctly quantify the cost. Finally, it
corresponds to the loss of revenues
compared to what would have resulted
from the application of a reference stan-
dard, but such standard is not explicitly
stated and may vary from year to year.
The Cour des comptes would like to
see an improved quantification of the
cost of tax expenditures. Projecting the
development of this cost is certainly an
even more delicate matter, but the
ministry of finance significantly unde-
restimates its increase by merely rene-
wing the latest cost recognized for more
than half of tax expenditures. Pending
the possible implementation of a more
reliable method, the Cour des comptes
recommends calculating a tax expendi-
ture cost increase similarly to the reve-
nue from the corresponding tax or to
the nominal GDP.
Rules remain flexible
The planning law for the years 2009
to 2012 had provided for a pledge rule
according to which the creations and
extensions of tax expenditures should
be offset, for each year, by decreases and
removals of an equivalent total amount.
This rule was not followed in either
2009 or 2010 and the measures adopted
since the filing of the planning law have
contributed to a €1.9bn increase in the
cost of tax expenditures in 2010.
The new planning law, adopted in
December 2010 for the years 2011 to
2014, sets, for each of these years, the
minimal efficiency of the new measures
for the increase in compulsory withhol-
dings, which could take the form of a
decrease in tax expenditures. Moreover,
it includes more specifically the tax
expenditures by stipulating that the
amount of their total cost may not
increase. Considering the level already
reached and the condition of the public
finances, a significant decrease in this
cost rather than a simple stabilization
thereof should be sought. In its report
of June 2010 on the public finances
situation and outlook, the Cour des
comptes had recommended decreasing
it by €10bn, and by the same amount
that of the social niches.
The measures adopted in the
Budget Act for 2011 will reduce the cost
of tax expenditures from the official list
by only €0.5bn in 2011, and this cost will
remain 7% higher than the amount rea-
ched in 2008. The effect of certain mea-
sures will be nevertheless deferred past
2011 and the return expected in 2012 is
€2.4bn. By adding measures relative to
the arrangements not included on the
tax expenditure list, but very similar to
those that are, the total impact on the
public accounts would be €4.3bn in
2011 and €6.2bn in 2012.
The latter
amount is still quite far from the €10bn
target recommended by the Cour des
Therefore, the effort to decrease the
cost of the tax expenditures must be
Tax expenditures :
A major budget issue
Annual public report
Executive summaries
Specify the definition of tax
expenditure provided in the appen-
dices to the Budget Bills and revisit the
resulting list; expanding the field to
taxes allocated to other public organi-
zations ;
Improve their costing process
and, in the absence of any reliable
forecast method, instead of renewing
it from one year to the next, have it fol-
low the change of the revenue from
the corresponding tax or the GDP ;
Replace, in the next planning
law, the freeze of the total cost of tax
expenses by a clause imposing mea-
sures to discontinue or decrease the
tax expenditures whose total return
exceeds a minimum amount ;
Expand the cuts and “shave
off ” costs at least from all the income
tax reductions and credits ;
Complete the systematic assess-
ment of tax expenditures set out in the
previous planning law and take the
results into account in the Budget Bill
for 2012 ;
Base the revision of the tax
expenditures on the work of the Cour
des comptes, which has often demons-
trated the inconsistencies in the expen-
ditures and their disproportionate cost
with respect to the results obtained.
Cour des comptes
Annual public report
Executive summaries
A few tax expenditures
dedicated to the
development of
companies and jobs
The tax expenditures that are favou-
rable to companies and to job creation
have an economic impact that is difficult
to measure, considering that they are
part of a movement of far-reaching
reforms of company taxation, which
have contributed to improving the envi-
ronment in which the latter are growing.
Their follow-up is even more impe-
rative considering that companies know
how to use them quickly and optimally.
Their cost is heightened and the
windfall effects are sizeable.
Particular attention should be paid
to monitoring the changes in the costs
of certain arrangements, which could
call into question, in whole or in part,
some of them, without that adversely
affecting the balance of taxation of
companies in France.
Real cost of tax expendi-
tures often higher than its
original valuation
The valuation of tax expenditures
which concern companies as well as of
measures considered as methods for the
calculation of tax (programme 134 of
the Budget Act) is not satisfactory.
Generally, the initial valuations of the
cost of tax expenditures specific to
companies prove to be lower than the
actual cost resulting from their effective
The valuation of the principal tax
expenditures put in place in the recent
period illustrates how difficult it is to
provide Parliament with reliable infor-
mation on which it can base its decision
as to whether to introduce them; that is
how striking the differences found can
These differences can be explained
by the use of traditional valuation rules,
by an underestimation of the number of
beneficiaries and by the responsiveness
of companies, which are quick to imple-
ment new measures for the purpose of
tax optimisation.
Budget issues of tax
expenditures specific to
large groups insufficiently
taken into account
The tax consolidation system, the
budget cost of which is valued at close
to €20bn, is particularly attractive. It
makes it possible to offset the losses and
gains of member companies or to
deduct the financial expenses without
real limitation. The application condi-
Annual public report
Executive summaries
A few tax expenditures dedicated to
the development of companies
and jobs
tions are very favourable. It offers
numerous possibilities to neutralize
intra-group transactions. The neutraliza-
tions lead, year after year, to decreases in
the taxable profit of groups compared
to those that would result from the sim-
ple offset of losses and gains, represen-
ting on their own a cost of over €2.3bn.
Certain paths could be explored in
order to limit the cost of this treatment,
without challenging the fundamental
principle of offsetting gains with losses
of companies within the same group.
The worldwide consolidated profit
treatment enables an international
group to determine its taxable income in
France, by offsetting gains with losses of
its at least 50%-held subsidiaries and of
its foreign operations.
This optional treatment can be very
favourable. While it has, undoubtedly,
been useful in helping the international
development of the largest French
industrial groups, this is no longer the
case today, in an environment in which
companies achieve a major portion of
their profit abroad. Its removal could be
Use of the PEA to shelter
significant capital gains
from tax
The tax treatment of the stock
savings plan (plan d’épargne en actions
or PEA) was created in order to incite
taxpayers to invest, over the long term,
their savings into company stock, by
enabling them to benefit from a tax
exemption on their income from divi-
dends and on realized capital gains.
Expanding the PEAs to include
unlisted companies has led to significant
tax optimization practices and even to
abuse. This is done by including in a
PEA stocks of unlisted companies at
per unit values below their true value, in
order to place on the plan, for the same
capped amount, the largest possible
number of stocks, in order to benefit
from an exemption from capital gains,
the amounts of which have no common
denominator with those that can be
recognised with those that it is possible
to recognise when such capital gains are
achieved through domestic savings. An
anti-abuse mechanism could be imple-
mented in order to limit capital gain
Annual public report
Executive summaries
A few tax expenditures dedicated to
the development of companies
and jobs
Do not be too quick to reclassify
a tax expenditure as a tax calculation
method, as this could prevent in the
future querying the relevance of the
measure and the need to preserve it ;
Anticipate, during the prepara-
tion of the Budget Acts, the rapid res-
ponse of companies to new measures,
in order to better assess their costs and
to limit their effective application only
to the situations corresponding to the
objectives defined by law ;
Assess the tax expenditures
which correspond to the neutralisation
of intra-group transactions, planned
for the tax treatment of the group ;
Study the consequences from
the discontinuation of the worldwide
consolidated profit treatment, which
seems to no longer respond to an eco-
nomic need ;
Introduce an anti-abuse mecha-
nism, in order to limit the amount
represented by exemptions on capital
gains realised on the sale of stocks of
unlisted companies included in a PEA,
as this applies to limiting dividend
Employment bonus : tax
expenditure with
increasingly indeterminate
The employment bonus (prime pour
l’emploi or PPE) introduced by the Law
of 30 May 2001 aims, according to the
terms of the general tax code, to moti-
vate people to return to or continue
their occupational activity. It is calcula-
ted only on the basis of earned income
and is awarded to tax households for
each person exercising an occupational
activity. Its amount increases for
incomes ranging from 0.3 to 1 of the
growth-linked guaranteed minimum
wage (salaire minimum interprofession-
nel de croissance or SMIC), after which
it decreases for those up to 1.4 times the
It is broadly spread: close to one out
of four households receives it (8.2 mil-
lion beneficiaries in 2009) for an average
amount of approximately €500 per year.
The cost of the measure for the Central
Government has nearly doubled bet-
ween 2001 and 2009, from €2.5bn to
over €4bn.
An ambiguous measure
with several goals
The PPE has a multiplicity of objec-
tives (return to work, supplemental
income, rebalancing of income tax, sup-
port in the moderation of the SMIC).
The numerous adjustments introduced
in it year after year, added to the increase
in number of the other mechanisms
intended to motivate people to return to
work, have made it even more confu-
The PPE can be paid to households
whose income is clearly over the ave-
rage, but conversely, it excludes people
having difficulties finding work.
This lack of a clear target prevents it
from being a tool to motivate people to
return to work, considering that its
amount remains inadequate, despite the
twofold increase in its overall cost.
Created in December 2008 with theore-
tically similar objectives, the earned
Solidarité Active or RSA “activité”),
both in terms of amount and in terms
of the number of beneficiaries, does
not call into question this finding.
Strategy steering and
budget management fai-
The PPE is not managed by the
departments of the ministries responsi-
ble for the budget and finances or by the
general delegation of employment and
vocational training (délégation générale
Annual public report
Executive summaries
Cour des comptes
Annual public report
Executive summaries
à l’emploi et à la formation profession-
nelle or DGEFP). Serious uncertainty,
representing for three years one quarter
of the amount announced, is affecting
the estimate of its cost for the Central
Government’s budget.
Improvements have however been
made to the management of income
declarations, thanks to a number of
innovations (pre-filled declarations,
reminder procedures, taxpayers certifi-
cation). The PPE, with which taxpayers
are familiar, is a benefit that is easy to
obtain. The tax procedure makes it pos-
sible for it to be paid out to the majority
those entitled to it without needing to
take any special steps.
Nevertheless, persistent fraud makes
it crucial to have a tax control that is sui-
table for the high number of beneficia-
ries and the low level of the amounts of
each bonus.
The need to make a
respect to the objective of
the measure and its link to
the RSA “activité”
If the reiterated objective of the
PPE is to motivate people to return to
work, then its amount has to be increa-
sed so that it can truly become an incen-
tive and to start targeting beneficiaries
whose earned income is insufficient to
naturally motivate them to return to
The resulting decrease in the
number of beneficiaries would make it
possible to increase the amount of the
bonus, without increasing the overall
The RSA “Activité” should then
become part of the PPE, whose simple
method of payment makes it more of
an incentive compared to the RSA,
which is complex to manage.
Should the idea of changing the
PPE at the expense of the RSA “acti-
vité” not be adopted, two other paths
could be considered :
- discontinuing the PPE: the RSA
“activité” would then remain the only
measure providing income to low paid
workers as an incentive to re-enter the
labour market ;
- preserving both measures: in this
case, their objectives should be clearly
differentiated. The RSA “activité”
would be the measure used to incite
people to resume an occupation, while
the PPE would become an income sup-
plement for those who are already
resources. In that case, the PPE would
have to be structured so as to also take
into account the family situation of the
Employment bonus : tax
expenditure with increasingly
indeterminate objectives
Employment bonus : tax
expenditure with increasingly
indeterminate objectives
Annual public report
Executive summaries
Should the PPE be maintained :
Designate a true leader who will
provide strategic management, selected
according to the objective retained,
income or work ;
Secure the registration mode for
all the tax expenditure related to
income tax, a vital step for the imple-
mentation of a performance measure ;
Present in an appropriate man-
ner the total cost of the tax expendi-
ture, the amount of tax deductions and
of refunds in the form of bonuses;
Set up a selective control not
based on prior examination of certain
declarations selected on the basis of
the irregularities they present;
Include time worked on the pre-
filled declarations based on the hypo-
thesis that the measure would remain
an incentive to return to work ;
Improve the reminder proce-
dures for taxpayers that may be eligible
for the PPE ;
Eliminate all cheque payments
and all payments in cash with a view to
phasing in payments via bank wire
Annual public report
Executive summaries
Cour des comptes
Retirement reserve fund
(Fonds de réserve des
retraites or FRR):
Abandoned ambition, risky
The retirement reserve fund (Fonds
de réserve des retraites or FRR) was
created in 1999 to establish a reserve,
designed, originally, to reach €150bn
and intended to contribute, starting in
2020, to the financing of the retirement
schemes of employees and craftsman
and industrial and commercial profes-
sionals. The Fund was a new instrument
for France, embodying the desire of the
Central Government to set long-term
ambitions. It was supposed to be funded
annually through various contributions
(surplus from the national old-age insu-
rance fund (Caisse nationale d’assurance
vieillesse) or from the old-age solidarity
fund (Fonds de solidarité vieillesse), pri-
vatisation proceeds, fees, among other
things, and interest income from the ins-
titution’s investment on the markets.
An abandoned ambition
In June 2010, the missions of the
FRR were radically modified, since the
Government had announced that it
intended to use its resources during the
ramp up period of the retirement
reform. The Fund, the assets of which,
as at 1 November 2010, stood at
€36.2bn, would now be supposed to pay
annually, starting in 2011 and until 2024,
an amount of €2.1bn at current rate to
the social debt redemption fund (Caisse
d’amortissement de la dette sociale or
CADES), the latter receiving, in addi-
tion, allocations and transfers of taxes
previously given to the institution
Results below expecta-
tions after six years
The annualised performance (3.1%)
from June 2004 to the end of 2010
stands below the cost of the Central
Government’s borrowings (3.45%) over
the same period, which means that, for
the period under consideration, there
was an increase in public debt. It is true
that the poor performance was only
recorded in the first six years of a fund
designed and managed as a long-term
investor, after a very large-scale financial
market crisis. The Cour des comptes,
nevertheless, found that the crisis was
not the only factor that could explain
the result observed. It found that the
Central Government had not given any
strategic orientation to the FRR that
would enable it to be guided by stable
and precise objectives; it did, conversely,
contribute to placing the Fund in an
unstable environment by planning on
several occasions to withhold in whole
Retirement Reserve Fund (FRR) :
Abandoned ambition, risky
or in part resources of the institution,
and by regularly decreasing the annual
amount for the allocations made
(€5.5bn in 2002, €1.5bn in 2010).
Furthermore, the investment policy of
the Fund was not totally adapted: invest-
ments on the financial markets were
made during periods of high prices,
with a high proportion of equities. It
had an inadequate response to the finan-
cial crisis.
A risky reorientation
The change in the nature of the
FRR presents serious risks. It had,
indeed, built its financial strategy on the
premise that it was a long-term investor
and could therefore take risks, since the
losses, if any, would smooth out over
time. The new conditions with a ten-
year shorter horizon for its liabilities
reduce the Fund’s chances to return to a
satisfactory annualised performance,
considering that it will not be able to
apply, over the long term, an investment
policy that would enable it to seize the
opportunities that the financial markets
would present. The short-term choice
that was made presents one risk: the
reserves booked by the FRR will not be
there if the retirement schemes’ losses
continued beyond 2020.
Management in need of
The FRR’s situation requires, in any
event, an improvement of its gover-
nance and management. The Cour des
comptes recommends clarification of
the roles of the supervisory board and
management board and a more active
role for the audit committee of the ins-
titution. It further underscores that pro-
gress needs to be made in terms of
entrusted by law to the Caisse des
dépôts et consignations, could be
improved both in terms of costs and in
terms of services. The Cour des
comptes also recommends that the FRR
reviews the conclusions to be drawn
from the changes in progress in relation
to the extent of the outsourcing of its
activities. The law stipulates that finan-
cial investments be made through agent
financial companies the cost of which
was high and whose usefulness seems
less relevant with the sharp decrease of
the equities portfolio. This obligation of
outsourcing could be fully or partially
challenged. The FRR should then exa-
mine the consequences of this reorgani-
zation for its statutes and governance
Annual public report
Executive summaries
Retirement Reserve Fund (FRR) :
Abandoned ambition, risky
Annual public report
Executive summaries
Preserve, referring to the Central
Government, a framework that would
enable the FRR to manage its portfolio
with a stabilised horizon for its
liabilities ;
Research the possibility, for the
FRR, to challenge the obligation to
outsource the financial management of
its portfolio and that aimed at entrus-
ting the Caisse des dépôts, in whole or
in part, with the financial management
of the assets concerned. ;
Examine the consequences of
this reorganization for the statutes of
the establishment and on its gover-
nance methods ;
Continue to improve internal
management, notably in the area of
The French compensation
system for partial
unemployment : An
insufficiently used tool
Partial unemployment (or short-
time working) has been one of the prin-
cipal tools called on in Europe to help
face the economic crisis. This work-time
adjustment measure allows an employer
to reduce the work time of employees
whenever there is a temporary decline in
During off-work periods, the remunera-
tion of the employees is covered, in
whole or in part, by the public authori-
ties (the Central Government in France,
unemployment insurance in Germany).
Partial unemployment is thus for
employees a tool for securing their pro-
fessional situation and, for businesses,
an instrument to preserve their produc-
tive capacities.
Limited revival of a
system fallen in disuse
Over the past two years, the French
partial unemployment system grew
stronger. Largely fallen into disuse
during the 2000s, it was revived when
the crisis occurred. However, the
European comparison made by the
Germany, Italy and Belgium, shows that
the intensity with which it was brought
to action was clearly lower than that in
certain neighbouring countries. Thus,
Germany had up to 1.53 million
employees in partial unemployment at
the height of the crisis (2nd half of
2009), while France had only 275,000 as
at the same date.
The amounts allotted
to partial unemployment in the two
countries reflect the difference: while
the public finances cost for this arrange-
ment was €610m in France for 2009, it
is estimated at €6bn in Germany for the
same year. Likewise, the portion of the
population of employees concerned by
partial unemployment was clearly lower
in France than in Belgium or in Italy.
The French economy thus took less
advantage of partial unemployment
than others such as Germany or Italy. Its
impact in terms of remaining employed
de facto seems to have been modest:
According to a study by the OECD, par-
tial unemployment contributed to the
Germany during the crisis, compared to
124,000 in Italy and only 18,000 in
France. Moreover, the use of partial
unemployment periods for the purpose
of training employees, which was diffi-
cult to implement, remained marginal.
Cour des comptes
Annual public report
Executive summaries
The French compensation system
for partial unemployment :
An insufficiently used tool
Annual public report
Executive summaries
Reasons for the under-use
of the partial unemploy-
ment scheme in France
The relative under-use of the partial
unemployment scheme in France seems
to be related to several causes:
-obsolescence of the legal mecha-
nism when the crisis broke out: the prin-
cipal parameters of the system (notably,
the rates of aid to businesses and the
level of remuneration guaranteed to the
employees) had not been revised, in
some cases, since the previous crisis in
The legal mechanism had to be
renewed urgently at the end of 2008,
with initially an update of what was in
place, followed by the creation in 2009
of a new system, known as “long-term
partial employment”. The latter includes
higher replacement remuneration paid
to the employees as well as higher aid to
businesses, due notably to the response
of unemployment insurance which
undertook to participate in the finan-
cing. However, the “long-term partial
employment” only entered into effect
once the peak of the crisis had already
passed, which can explain, to a certain
extent, the low level of use of partial
unemployment in France ;
structural factors related to certain
specificities of the economy and the
labour market: More than 80% of par-
tial unemployment concerns industrial
jobs. The portion of the latter being
lower in France (20% of the actively
employed population) than in Germany
(25%) or in Italy (28%), partial unem-
ployment logically concerned a narro-
wer public. The development of the
legislation applicable to the labour mar-
ket in France from the late 1990s
onward reinforced the external flexibi-
lity tools (fixed-term contracts or tem-
porary employment) and introduced
new work-time management methods,
notably the possibility to annualise it in
order to adapt the pace of work to that
of the business; this organisational
adaptability made it possible to avoid, at
least initially, the use of partial unem-
ployment ;
-insufficient incentives for busi-
nesses: In fact, while the compensation
of employees under partial unemploy-
ment is rather more favourable in
France than abroad, our system is
conversely less favourable than elsew-
here to employers who remain responsi-
ble, in the most commonly encountered
cases, for one fourth and potentially up
to half of the compensation of
employees, i.e. a level that is significantly
higher than that observed in neighbou-
ring countries, notably in Germany or in
Make the legal mechanism more
attractive ;
Simplify its legal framework ;
Build upon the incentives aimed
at combining partial unemployment
and training.
The campaign for the fight
against the Influenza
A(H1N1) epidemic :
assessment and lessons
In order to contribute to a better
response by the public authorities in the
event of another national health crisis,
the Cour des comptes presents here its
main observations following two audits
conducted at the request of the compe-
tent Commissions of the Senate on the
use of public means in the campaign to
fight influenza in 2009, and of the
National Assembly on the role attribu-
Preparedness and Response Agency
(Etablissement de préparation et de
réponse aux urgences sanitaires or
EPRUS) created in 2007.
A new and disappointing
crisis management system
This campaign was the first time the
new public system for the management
of a crisis was put to the test in the face
of a pandemic risk. Despite the positive
joint action of the administrations and
the active involvement of players
concerned, the situation reflected a
major disproportion between the size of
the financial means and of the organisa-
tion deployed therefor and the poor
vaccination coverage achieved, which
only reached just over 5 million people,
i.e. 8.5% of the population.
The actual cost for public finances
of the policy followed thus amounted to
60 Euros per vaccine used and over 110
Euros per person vaccinated.
A vaccination strategy
that lacked flexibility
The strategy intended to offer to the
entire population the possibility to be
vaccinated at centres created for that
purpose turned out to be excessively
rigid, with respect to the rapid adapta-
tions which would have been required
by the emergence of a more moderate
than anticipated health risk. The defi-
cient response and lack of flexibility
also affected the communication provi-
ded to the public and developed to sup-
port the campaign as well as the
contracts for the procurement of vac-
cines (signed without contingency
clauses) or the organization mode, too
exclusively based on special vaccination
Annual public report
Executive summaries
Cour des comptes
Annual public report
Executive summaries
Revise the national influenza
pandemic plan to further adapt it to
the needs of crisis management and
seriousness of the threat on the natio-
nal territoryl ;
Introduce in that same plan a
financial and budget component ;
Better estimate the reality of
the workload and the response time of
the decentralised services involved in
the local organisation of crisis mana-
gement ;
Not automatically exclude from
the organisation of the vaccination
campaign the hospitals or physicians
in private practice, considering the
role of local advisors that they must
play in terms of public health ;
Rethink the governmental com-
munication on the vaccination cam-
paign ;
In addition to managing any
health crisis, start a concerted effort in
favour of a vaccination policy to
enable a more objective appreciation
of advantages it has to offer ;
Organise a European coordina-
tion effort to reinforce the position of
the Central Governments in the nego-
tiation of procurement contracts for
The compaign for the fight against
the Influenza A(H1N1) epidemic :
assessment and lessons learnt
The healthcare system in
French Polynesia and its
The French Polynesia Territory
(260,000 inhabitants) has a separate
healthcare system, for which it assures
the organisation, steering and manage-
ment, as part of its specific political and
administrative autonomy.
An overall performing
The healthcare organisation in place,
accessible to the majority of the popula-
tion, covers the entire territory and
combines preventive and medical care.
For activities not provided locally,
patients benefit from medical evacua-
tion through which they receive appro-
priate care in Metropolitan France or in
New Zealand.
The performance of the healthcare
system presents undeniable positive
aspects, especially when compared to
that of the countries that share with the
disadvantages of insularity and isolation
this overseas territory. The changes in
and level of life expectancy and of the
mortality rate place French Polynesia in
a favourable position. Means indicators,
such as the physician-to-population
ratio, are equivalent to or even higher
than those in the most developed coun-
tries of the South Pacific.
Deficient management
The political instability which the
overseas territory has been experiencing
since 2004 and the lack of continuity of
managers in charge of designing stan-
dards largely explain management defi-
Numerous weaknesses, notably in
terms of healthcare safety, are not
addressed by regulations. There has
been no true healthcare policy since
The healthcare organization sys-
tem for French Polynesia is out-dated.
The opening of a new referral hospital
in 2010 would have offered the occasion
to overhaul it. The system in fact has
never been considered as the tool for
regulating the offer of hospital care and
optimal distribution of resources that it
should have been.
healthcare availability is incomplete and
out-dated. The results from the most
recent general surveys on the health
condition of Polynesians go back to
Medicalisation of the Information
Systems (programme de médicalisation
des systèmes d’information or PMSI) is
insufficiently developed and underused.
Annual public report
Executive summaries
Cour des comptes
Annual public report
Executive summaries
The cost of the healthcare
system in French
Polynesia is high
Current healthcare expenditure,
never estimated since general social pro-
tection was introduced in 1994, was in
2008 over CFP72bn (€605m), or the
equivalent of 48.7% of the budget of
French Polynesia and 13% of its GDP.
Its growth rate, by far higher than that
observed in Metropolitan France, is
approximately twice as high as that of
the GDP. And yet, this trend seems dif-
ficult to curb both because of the mor-
bidity characteristics of the population,
combined with its aging, and because of
the consequences of the renovation of
hospital facilities.
Under these conditions, the two
main financiers of healthcare, the
Welfare Fund (caisse de prévoyance
sociale or CPS) and the Territorial
Administration, which must face gro-
wing budget difficulties related to an
unprecedented economic crisis, no lon-
ger seem able to ensure, as things stand,
the balance of the system.
A large-scale reform is
required to guarantee the
continuity of the system
Drastic savings measures seem
indispensable. Streamlining the health-
care entities, notably the hospitals and a
more efficient management of human
resources must be envisaged.
But the principles and mechanisms
of financing of the healthcare system
must also be overhauled. The overseas
authority should be able to set objec-
tives and define their performance indi-
cators and provide annual data derived
from the healthcare accounts. This
means that it will contrast with the usual
methods for the allocation of resources,
should enable it to set an annual health-
care spending target and to prepare
objectives and means agreements, in
order to ensure both a transparent and
quantified management of public poli-
cies in this sector.
Define and prioritise the health-
care objectives ;
Optimise the healthcare offer ;
Overhaul the principles and
mechanisms for the financing of
healthcare ;
Assert the pre-eminence of The
Territory Administration of French
Polynesia in the decision-making
The healthcare system in French
Polynesia and its financing
The public support to
export companies
France, like its principal competitors
and in compliance with the competition
rules imposed by European Community
laws, the OECD (Organisation for
Development) and the World Trade
Organisation (WTO), is preserving
numerous laws intended to ease the
access of its companies to foreign mar-
kets. Public support however is intended
to be subsidiary with respect to the mar-
6.9% of French exports and some
10% to 15% of the export companies
received support in 2009.
An as yet incomplete reor-
The great variety of players in
foreign trade within the public sphere
has led the Central Government to try
to create a better organisation for them.
It created an inter-ministerial commis-
sion to support international contracts,
tasked with coordinating the resources
allocated to the largest projects. It esta-
blished a public industrial and commer-
cial institution, Ubifrance, which now
has a network of economic missions
present in 44 countries.
This positive rationalisation of
public support levers is nevertheless yet
to be completed. The clarification of
the role of Ubifrance, whose action has
been updated, on the one hand, and that
of the other players - Oséo, Coface,
chambers of commerce in France and
abroad, private operators specialising in
international trade, regions – still seems
inadequate. As part of the renegotia-
tion, in 2011, of the objectives and
means agreement of Ubifrance, the
Central Government should define in a
more precise manner the public service
mission of that institution, following
the logic of subsidiarity with respect to
the private players in the field of export.
A questionable support
The laws are poorly oriented
towards geographic areas where compa-
nies’ access to the markets is more diffi-
cult. Moreover, support could be awar-
ded in a more selective manner to com-
panies likely to export over the long-
term. The current target-setting policy
may be costly to public finances, as it
Government to a high rate of failure
which it assumes under its guarantee to
Coface. Generally, the budget risks rela-
ted to the Central Government’s guaran-
tee should be better framed and mana-
ged. The Parliament should be better
informed thereabout.
Annual public report
Executive summaries
Cour des comptes
Annual public report
Executive summaries
Define a “company internatio-
nalisation” policy that would take into
account its consequences in terms of
national employment ;
Improve the management of
this policy by :
- Providing a precise definition of
Ubifrance in the next objectives and
means agreement signed by the
Central Government;
- Monitor the cross-agreements
signed between the various foreign
trade players and streamline their res-
pective roles ;
- Implement systems for the eva-
luation of the support tools ;
- Improve the monitoring mecha-
nism for the various financing and
support systems, including outside
OECD countries ;
Better target-setting for the sup-
port through:
- A more selective orientation of
the supports towards companies likely
to export over the long-term ;
- Limitation of the windfall effects
prospecting such as SIDEX and the
tax credit ;
- Better control over budget risks
through an improved budget follow-
up of public guarantees granted to
Coface due to better informing of
Parliament, better understanding of
risks, in particular non-sovereign risks,
and efficient use of accrual accoun-
The public support to
export companies
Consequences from the
policy of support provided
to international develop-
The policy to support exports is
being reoriented in an uncertain manner
towards the support of the internationa-
lisation of companies, which leads to
French offers becoming part of the pro-
duction of subsidiaries or suppliers
abroad, in Europe or elsewhere. Public
guarantee financing of such export
contracts, which has flexible terms, may
lead to supporting strategies for the
delocalisation of the companies.
Offsetting the public
electric utilities charges
The contribution to the
public electric utilities
charges (contribution aux
charges de service public
de l’électricité or CSPE): A
substantial, yet overloo-
ked, amount (€1.7bn in
This contribution, which the consu-
mers pay directly when paying their elec-
tricity bills, serves to offset charges
inherent in the public electricity service
supported by various operators of the
electricity market: mainly, the support to
renewable energy and cogeneration, the
rate equalization in the Overseas
Departments and Corsica and the low-
income electric rates.
Since its creation by Article 38 of
the Law of 3 January 2003, the charges
that the CSPE is supposed to offset
have grown rapidly and uncontrollably,
while the contribution rate, for its part,
has remained unchanged, at €4.5/MWh
until 2010, as the Energy Minister has
refrained from modifying it.
Between 2004 and 2009,
total public utilities
charges rose from
€1.53bn to €2.55bn
Within those charges :
-The low-income rates, even though
increasing sharply, still only occupy a
marginal place (3.2% in 2008) ;
Overseas Department and in Corsica
rose from 23% in 2004 to over 45% in
- the energy purchases, which result
from the support to renewable energy
and cogeneration, occupy a predomi-
nant place, of close to two-thirds of the
amount of the charges.
Within those, the wind and photo-
voltaic sectors are gaining increasing
importance. Compared to the total
volume of electricity purchased, this
sector would only increase from 0.07%
in 2008 to 0.8% in 2010, but its relative
weight in the charges offset by the
CSPE would increase at the same time
by from 0.9% to 10.3%.
Annual public report
Executive summaries
Cour des comptes
Annual public report
Executive summaries
The CSPE basis has
increased at a slower pace
than the charges
The result from that is a growing
imbalance of the offsetting mechanism,
for the most part supported by EDF
which assumes more than 95% of the
charges of public electric utilities. The
company quantifies the accumulated
CSPE recovery loss at €2.6bn at the end
of 2010.
For 2011, the Energy Regulation
Commission (Commission de régulation
de l’énergie or CRE) estimates the fore-
casted charges at €3.47bn It values at
€12.90/MWh the contribution that
would be needed to offset them.
Admittedly, corrective measures
have just been taken. The 2011 Budget
Act allows an increase by €3/MWh for
the CSPE, whose total amount thus
becomes €7.5/MWh. Moreover, the
Central Government has, by decree of 9
December 2010, suspended for three
months, the obligation mechanism for
the purchase of electricity produced by
certain facilities using radiating solar
The Cour des comptes considers
however that these corrective measures
do not constitute a true remedy for the
structural drift in the current system.
Achieve control over the
growth factors for the public electric
utilities charges, the number one target
being the system of compulsory pur-
chase at too attractive rates which ope-
rates on an “open for business” basis ;
Inquire about the possibility to
continue supporting sectors that are
not among the governmental priorities
in terms of energy policy, such as the
co-generation ;
Re-examine from every angle
the overall system in order to make its
operation more readable and clarify its
tax status ;
Re-examine the financing of the
support for the development of rene-
wable energy by the consumer of
Offsetting the public
electric utilities charges
Higher education and
research clusters (PRES):
In need of a new impetus
A new momentum since
The 2006 planning law for research
created research and higher education
clusters (pôles de recherche et d’ensei-
gnement supérieur or PRES), which
were supposed to be the privileged place
for structuring mutualisations between
At 1 January 2011, 21 PRES had
been created. A real momentum was
launched. The ministry of higher educa-
tion and research favoured the emer-
gence of projects in the form of new
public institutions for scientific coope-
ration (établissements publics de coopé-
ration scientifique or EPCS).
Operation Campus, which is a real-
estate project with a capital of 5 billion
Euros, supported this movement, the
PRES being most often the principal
investigators of the selected projects.
Modest results
However, the PRES development
was thwarted, for several reasons: The
priority given, since 2007, to the imple-
mentation of the law relative to the free-
doms and responsibilities of the univer-
sities (libertés et responsabilités des uni-
versités or LRU law) which overshado-
wed the cooperative logic; insufficient
ministerial support, once the creation
wave had passed; a passive attitude of
the large research organisations; finally,
the piling up of multiple mechanisms of
various nature over the course of the
years with no links among them.
In fact, the results are significantly
below the expectations created. The
PRES still have a modest impact on trai-
ning. Site policies are struggling to
emerge for research. PRES governance
is often unsuited to their ambitions.
A needed clarification
The new financial means, notably,
“the growth-enhancing investments”
launched as part of the large loan, are
such as to favour the combination or
consolidation approaches and to streng-
then the role of the PRES.
However, the generally difficult
budget context imposes the obligation
to strive for an efficient use of the new
means granted.
From this viewpoint, the need to
clearly specify what is expected from the
Annual public report
Executive summaries
Cour des comptes
Annual public report
Executive summaries
Strengthen the support provi-
ded by the Central Government
through a contractualisation with the
PRES, the objective should be in the
long term the signature of a single site
contract and the definition of a shared
vision of the policies of the site bet-
ween the Central Government, the
local authorities, the higher education
institutions and the research bodies ;
Orient the future of the PRES
in two directions through contributed
support, when integration is the most
suitable formula for the creation of a
new public institution in which mem-
bers would merge; or, if a merger does
not seem appropriate, create long-
term bonding entities with a strong
identity and with reinforced skill sets
and responsibilities.
Higher education and research
clusters (PRES) :
In need of a new impetus
PRES is urgent. If these structures are
called on to be major players for the on-
going restructuring, they should then be
made the point of impetus and carriers
of site policies as well as true unifying
factors, in terms of training pro-
grammes, research and enrichment poli-
National Research
Agency (ANR): First
findings and outlook
Created in 2005, the National
Research Agency (Agence nationale de
la recherche or ANR), mostly issues
requests for proposals by research teams
and selects the winning proposals accor-
ding to criteria of scientific excellence.
To do so, it has had at its disposal since
2006 an annual programme budget of
approximately €800m. The Cour des
comptes wanted to prepare a first status
report regarding the activities of this
agency at a time when three major deci-
sions were taken: In June 2009, the
minister of higher education and
research announced the transition from
25% to 50% of the portion of credits
dedicated to requests for non-thematic
proposals, and the assumption by the
ANR of all the missions until then pro-
vided on its behalf by “support units”
housed within various research and
higher education institutions. Finally, the
ANR will manage €18.9bn of the
“growth-enhancing investments”, deci-
ded as part of the Big Loan (Grand
Emprunt). These decisions are intended
to change the nature of the agency, ini-
tially designed by the legislator as a more
streamlined organization.
Successful ramp-up
Created in 2005, the National
Research Agency was able to find its
place in the public policy of research
very fast. Its activities, turned towards
the financing of projects, complete an
important development of the French
research landscape by converging with
the practices of our principal foreign
partners. The ANR has brought in that
context formalised peer-evaluation-
based selection processes.
Beyond the sometimes lively debates
which have surrounded its creation, the
community of researchers has mobili-
sed to respond to the ANR’s request for
proposals: Since 2005, the agency has
received 5,500 projects belonging to
some thirty requests for proposals laun-
ched, it has selected 1,462 and commit-
ted close to €540m in credits. All in all,
between 2005 and 2009, the agency was
the recipient of approximately 25,000
research projects and had financed
5,800 for a total amount exceeding
Programme methods to be
The rules that govern the allocation
of aid from the ANR were inherited
from out-dated systems, can be impro-
ved and have effects that should be cor-
First, the aids, in general delivered
for three years, can prove to be too
short in certain domains such as the
human and social sciences and mathe-
Annual public report
Executive summaries
Cour des comptes
Annual public report
Executive summaries
matics, and the quite rigorous rate of
project selection could lead to the elimi-
Then, the ANR acts differently in
public laboratories and private laborato-
ries, in particular because of the fact
that public laboratories have financing
derived from the Central Government's
budget for their recurring operations.
behind the various calculation methods
used for these two categories of benefi-
ciaries, in its inquiry the Cour des
comptes has found on a test basis that
the resulting ratio of participation is
very different: approximately 25% of
total cost for a public laboratory project
compared to close to 50% for a private
laboratory in 2009.
Finally, the principal difference bet-
ween the aid granted to public and pri-
vate laboratories has to do with the fact
that the remuneration of permanent
staff is obviously excluded from the
basis of expenses eligible to receive aid
from the ANR in the case of public
entities. As a result, the agency essen-
tially provides support by financing
non-permanent staff: in 2008 it financed
over 15,000 fixed-term contracts. This
situation presupposes that ANR regu-
larly monitor what happens with such
staff and calls for contemplating a broa-
der basis of personnel expenses eligible
for aid from the ANR, regardless of
whether it has to do with financing of
partial teaching release time or bonuses
for principal investigators.
Weaknesses in terms of
finance and management
In financial, budget and accounting
matters, the audit by the Cour des
comptes drew attention to the weak-
nesses that would have to be overcome
before the ANR can provide the mana-
gement for third-parties of the €18.9bn
in growth-enhancing investments with
which it is to be entrusted.
Thus, the agency did show in its
accounts its multi-year commitments
until 2009 and for the audit by the Cour
des comptes it had to recognize a provi-
sion of more than €1bn in relation to
that. Its needs in budget payment are
calculated without taking into account
the effective calendar of the payment of
its aids: what results is a surplus of
€400m in payments from the Central
Government’s budget.
In this context, the decision to dis-
continue in three years the operations of
the support units is a gamble. Until
2009, these units accommodated by a
dozen higher education and research
institutions were managing 80% of the
requests for proposals of the agency.
The fact that this decision is not applied
under satisfactory conditions makes this
gamble all the more risky and pushes the
ANR away from the directions traced by
the legislator who wanted it to be a
more lightweight organization.
National Research Agency (ANR):
First findings and outlook
National Research Agency (ANR) :
First findings and outlook
A strategic positioning to
be clarified
Several of the systems provided for
by law were not applied. This is true par-
ticularly of the multi-annual contract
with the Central Government. The
negotiation and signing of such a
contract seem today necessary and
urgent. This contract will have to priori-
tise the objectives of the agency, among
other things, and specify the conditions
under which the planning of the agency
connects with the strategic priorities of
the Central Government.
Six years after its creation, the posi-
tioning of the aids provided by the
agency and the results obtained deser-
ved to be the subject of an evaluation
on the basis of an update of indicators
that would make it possible to assess the
efficacy and the specific efficiency of
the agency. Placing the activities of the
ANR in a multi-annual context becomes
all the more important since the 2011
Budget Bill stipulates granting it lower
amounts, thereby raising the issue of the
place finally reserved to the financing of
public policy and research projects.
With respect to strategy
Establish and sign without delay
the multi-annual contract stipulated by
Government and the ANR that should
in particular clarify the objectives assi-
gned to the agency and its link to the
strategic priorities of the Central
Government and the choice of pro-
grammes giving rise to requests for
proposals ;
impact of the activities of the agency
making it possible to measure its added
value ;
With respect to management
increase in workforce, by providing an
adequate management framework ;
Establish the annual allocations
of the ANR as payment
tions based on a precise calendar of
the needs related to the commitments ;
With respect to the aid delivered
by the agency
Measure the ratio of actual aid
provided to public and private labora-
tories in order to substantiate the
deviations found or to absorb them;
Specify the borderline between
certain growth-enhancing investment
actions and the planning specific to
Ensure that the mechanism spe-
cific to the valuation of results from
public research that has received the
support of the ANR has been imple-
mented ;
Annual public report
Executive summaries
Annual public report
Executive summaries
Cour des comptes
Irregular migratory
movements to French
Guiana, Mayotte and
The size of irregular
migratory movements is a
major phenomenon in
French Guiana, Mayotte
and Saint-Martin
The borders of these territories are
particularly difficult to monitor because
of insularity or, for French Guiana,
because of an immense and sparsely
populated Amazon forest, as well as an
increasing attractiveness given that the
quality of life of the inhabitants of
neighbouring countries, culturally and
linguistically close, is considerably lower.
31,000 escorts back to
the border of foreigners
with irregular overseas
status in 2009
95% of these escorts were made
from Mayotte (close to two thirds),
French Guiana (approximately one
third) and from Saint-Martin. Their
number grew continuously between
2002 and 2009 and even exceeded that
reported for Metropolitan France. For
the first time in 2009, the number of
persons held in the overseas administra-
tive detention centres came close to that
of Metropolitan France, while in 2005 it
was less than one third of it.
The majo-
rity of that concerns Mayotte and
French Guiana.
The policy led has reached
its limits
These data reflect the persistent dif-
ficulties to control the irregular entries
into the territory rather than the efficacy
of the policy applied, which is for the
most part based on strengthening the
resources of the security forces.
1) The legal regime includes particu-
larities that have been reinforced by two
laws of 2006 and 2007 relative to immi-
gration and integration. The legal rights
of appeal of persons detained are more
limited than in Metropolitan France and
the deportation failures less frequent.
The exemptions from ordinary law,
based on the characteristics of the terri-
tories concerned, make it more difficult
for a judge to ascertain the regularity of
removal procedures.
2) The organisation of means to
control the irregular migratory move-
ments is not very satisfactory. In French
Guiana, the mechanisms used by police
at the borders are experiencing malfunc-
tions, because of unfortunate property
Irregular migratory movements to
French Guiana, Mayotte and
Mayotte, the judicial response, in parti-
cular with respect to smugglers, has to
deal with the shortage of magistrates
and the overpopulation of the retention
centre in Majicavo. In Saint-Martin, the
action of the police at the borders suf-
fers from the dispersion of police sta-
3) With respect to administrative
detention centres, deficiencies have
been found in the situation of women
and children as well as in relation to
healthcare and judicial assistance. The
professionalisation of the management
of the centres remains inadequate. The
Cayenne centre was brought up to stan-
dard in 2007, but its extension has to be
torn down before building a new one.
The Mayotte centre has been experien-
almost ten years; the plan to build a new
centre announced for mid-2007 has
been postponed until June 2012.
4) General problems are poorly
resolved. The number of “repeat offen-
ders”, i.e. people who return to France
after having been escorted back to the
border, is not measured and the services
concerned have no targets in that res-
pect. The distribution of police work-
force at the borders is not rational:
French Guiana and Mayotte are unders-
taffed compared to the West Indies,
while the problems there are more
acute. In terms of air transport, the
plane specifically chartered since 2008
for French Guiana serves primarily for
internal flights, while its use is only fully
justified for direct deportations abroad.
5) The conducting of relations with
the neighbouring countries, ensured by
several ministries, seems to be poorly
coordinated. The results of a few initia-
tives taken these past few years do not
correspond to the challenges. In French
Guiana, the mixed commissions are
Guiana, Central Governments whose
practices are an important hindrance to
the removal of immigrants.
Regional cooperation
remains limited
In Mayotte, the negotiations started
by France in order to normalise its rela-
tions with the Union of Comoros did
not succeed. Few initiatives have been
taken to establish a true regional coope-
ration. The departmentalisation of
Mayotte, from which the Union of the
Comoros never admitted being separa-
ted, may not facilitate such a process. In
Concordia of 1648 between France and
the Netherlands (the island, as the other
Annual public report
Executive summaries
Annual public report
Executive summaries
Periodically evaluate the advan-
tages and disadvantages of the overri-
ding legal provisions applicable to the
Overseas Territories ;
Adapt the detention centres
map; speed up the building a new
administrative detention centre in
Mayotte; supplement the social, medi-
cal and legal assistance ;
management of detention activities
and the deportation of immigrants
overseas ;
repeat offenses and set objectives in
relation to this for the departments
concerned ;
Take better account of irregular
migratory movement in the relations
with the neighbouring Governments,
notably by clarifying the distribution
of respective jurisdiction amongst the
ministries concerned.
Irregular migratory movements to
French Guiana, Mayotte and
Overseas Department, is not included in
the Schengen treaties), establishes free
movement between the two parts of the
island, joint control over the island’s air-
ports is still not in place. The draft
police cooperation agreement, finally
prepared, was still not signed in October
2010. The negotiation of a readmission
agreement was never seriously envisa-
Management of natural
hazards in the Overseas
The Overseas Departments are
highly exposed to natural hazards: earth-
quakes, tsunamis, cyclones, volcanic
risk, marine submersion and flooding.
The magnitude and diversity of
natural hazards have developed a “risk
culture” there, both among the popula-
tion and among the elected officials. But
its translation into practice suffers, nota-
bly at the level of the local authorities,
due to its limited human and financial
resources. As for the actions of the pur-
view of the Central Government, they
remain perfectible.
The prevention
mechanisms show several
Not all risk prevention plans (plans
de prévention des risques or PPR) are
approved. Some of them are imperfect,
in particular in the West Indies: the
“swell and cyclonic tide” risk is insuffi-
ciently taken into account; micro seismic
zoning remains to be integrated, zoning
in Martinique remains ambiguous. The
approved PPRs are not always strictly
applied. The construction permit checks
are irregular. The fight against illegal
constructions is inadequate.
There is a “West Indies earthquake
plan” but it presents several deficiencies.
Its inter-ministerial features are inade-
quate. The association of local elected
officials was not planned initially. The
diversity of its objectives, without prio-
ritisation, presents a risk of dispersion.
Budget financing, of various origins,
rarely identifiable, are not subject to
balance of reinforcement and adapta-
tion expenditures for existing construc-
tion is mediocre. The training effort is
not sufficient to impact, within a reaso-
nable timeframe, all the players concer-
ned. The awareness raising methods
should be modernised.
Numerous Central
Government buildings,
essential in the event of
crisis, non compliant with
For teaching institutions, while the
assessments have just been completed
for the most part, the works have only
started. One portion of the low-income
housing inventory is vulnerable while,
for private housing, individuals do not
have the means to request an assessment
of the vulnerability of their homes; the
Annual public report
Executive summaries
Cour des comptes
Annual public report
Executive summaries
earthquake assessment is not mandatory
when a transaction takes place.
The recognition of natural
hazards is still imperfect
The land-use planning policy still
poorly accounts for the volcanic risk.
While the population awareness rai-
sing efforts at the beginning of each
“cyclonic campaign” seem satisfactory,
the information about high-wind struc-
tural detailing is less systematic.
For flooding, the flood warning
Metropolitan France, has not yet been
applied in the Overseas Departments,
the preparation of preventive action
plans for flooding is behind schedule.
The recognition of the risk of marine
Numerous actions remain to be carried
out to prevent the risk of landslides
The weaknesses of crisis
For the volcano logical and seismo-
logical risks, the building of the obser-
vatory in Martinique is not compliant
with earthquake-proofing standards.
The observatories are not equipped for
large scale earthquakes; the mechanism
of financing of the observatories is
uncertain, even to ensure the equipment
maintenance. The tsunami alert systems
for the Indian Ocean and especially the
Caribbean are not completely satisfac-
tory, because of the deficiencies of the
The decrease in armed forces on
location required provision for additio-
nal human resources either on a perma-
nent or temporary basis. Several contin-
gency plans should be updated.
La réduction des moyens des forces
armées sur place nécessite de prévoir
des moyens humains supplémentaires
d’intervention, à titre permanent ou
temporaire. Plusieurs plans de secours
méritent d’être actualisés.
Feedback is generally received, but
the practical consequences to be dedu-
ced are not established precisely, and the
identification and measurement of the
costs are inadequate.
Compensation mechanism
While the application of the “natu-
ral catastrophes” treatment is limited in
scope because of the small proportion
of people insured, the implementation
of the relief fund, financed by the
Central Government’s budget, calls for a
few observations. Agricultural opera-
tions are the main beneficiaries as they
Management of natural hazards in
the Overseas Departments
Complete and improve the
natural hazard prevention plans, in
particular those related to earthquakes;
reinforce the fight against illegal
constructions ;
For the West Indies earthquake
plan, increase the involvement of local
authorities and contract with them;
establish multi-year planning; improve
the inter-ministerial nature of the
mechanism ;
Increase significantly the occu-
pational training effort; put in place a
control mechanism for building regu-
lations; make the earthquake vulnera-
bility assessment mandatory at the
time of real estate transactions ;
Stabilise the financing frame-
work for the volcano logical and seis-
mological observatories; clarify the
respective responsibilities of the pre-
fect and of Météo France
Departments, and as a priority those
of the West Indies, in the overhaul of
the national alert network ;
plans; require local authorities to esta-
blish a communal safeguard plan (plan
communal de sauvegarde or PCS);
plan “volcano” exercises in the West
Indies; improve feedback ;
mechanism to motivate prevention ;
Examine the possibilities to
make the farms of the Overseas
Department eligible for the agricultu-
ral catastrophe coverage; apply rigo-
rously uniform rules for the relief
Management of natural hazards in
the Overseas Departments
Annual public report
Executive summaries
are eligible for the agricultural catas-
trophe fund.
The application of the rules as well
as their control lack rigour. Sometimes
several years pass between a catastrophe
and the full payment of aid to the local
expenses (€85m from 2007 to 2009)
must in fact be compared with those,
overall rather small, dedicated to pre-
Annual public report
Executive summaries
Cour des comptes
Agricultural support
policy in the Overseas
The relative weight of agriculture is,
in the four overseas departments
Martinique and Reunion), greater than
in Metropolitan France. While the por-
tion of the population working in agri-
culture is however of the same order as
that in Metropolitan France (3.5%), the
strong demographic growth makes agri-
cultural production an essential local
economic issue.
The agricultural sector
public support policy
raises substantial financial
European agricultural aids are part
of a special European programme. Its
component concerning the ultra-peri-
pheral regions, named POSEI (pro-
gramme d’options spécifiques à l’éloi-
gnement et à l’insularité – options speci-
fic to remote areas and insularity pro-
gramme), applies to the four depart-
ments. As part of POSEI-France,
implemented in 2006, then in 2007, for
the banana sector, a double choice has
been presented: maintaining the export
crops that are “structuring” (banana and
sugar-cane-rum) and favour the diversi-
fication of products, with a view to
improving self-sufficiency. The amount
of aid paid was increased, with as an
objective the preservation of jobs in the
agricultural sector. Outside of this pro-
gramme and the European aid to rural
development, national aid has also pro-
gressed significantly, notably after the
social unrest in 2009 and the organisa-
tion of the "Overseas Convention". All
in all, the amount of agricultural aid
paid to Overseas France increased by
40% between 2008 and 2010, rising
from €370m to €520m (estimated
amount); it is favourable to the banana
and sugar cane sectors.
In relation to the control of the
Overseas agricultural economy develop-
ment office (Office de développement
de l’économie agricole d’outre-mer or
ODEADOM), which pays a portion of
that aid, the Cour des comptes has
found that that the organisation, tasked
by the rural code to carry out an assess-
ment of the agricultural aid paid in
Overseas France, was not fulfilling the
role ascribed to it. As a result, the Cour
des comptes strove to prepare the
assessment and evaluate the contribu-
Agricultural support policy in the
Overseas Departments
tion of aid for sustainable agricultural
Public aid represented, in
2008, 28.6% of the value
of the Overseas
Departments’ agricultural
production, in other
words, double the propor-
tion reported in
Metropolitan France
This average covers significant diffe-
rences resulting from the concentration
of aid in the banana sector: 64.7% for
Martinique, 32.8% for Guadeloupe,
14.5% for Réunion and 8.4% for French
Guiana. The budgetary effort of the
Central Government for banana produ-
cers in the West Indies also takes other
forms: thus, the Central Government
has written off claims on the repayment
of loans, to the amount of €49.2m;
European aid repayments have also
been requested from the Central
Government by the European Union
Preserving aid to the banana sector,
while its production was declining, has
resulted in aid per ton between 2007 and
2009 doubling that recorded between
2002 and 2006.
The current aid per hec-
tare of banana plantations in the West
€300,000 for a 20-hectare farm. This
support did not even materialise in the
preservation of jobs, the latter having
decreased by more than 40% in the
banana plantations in the West Indies.
The priority given to export crops,
which are nevertheless not very compe-
titive on the global market, leaves only a
small portion of the aid for the other
local produce. As a result, despite the
increase in the overall amount of aid,
the supply of the population with local
products has generally diminished and
the trade balance of agricultural and
food products has deteriorated. Thus,
the coverage rate of the trade balance
for these products is of the order of
20%. The situation is even worse for
organic agriculture.
The issues raised by the
pollution related to the
treatment of banana trees
The Cour des comptes analysed the
consequences of the pollution by chlor-
decone (an insecticide still used in 1993),
both from a budget point of view and
on other produce. The Cour des
comptes would like to see the payment
of aid linked to compliance with envi-
ronmental regulations, to which the
All the findings led to questioning
the suitability of the agricultural deve-
lopment model used for these depart-
Annual public report
Executive summaries
Annual public report
Executive summaries
Redeploy the aid by favouring
the diversification of products and
processing circuits, with an objective
of reducing imports ;
Take into account the “carbon
footprint” in the economic reasoning,
with a view to favouring a more endo-
genous development of productions ;
Link the payment of aid to strict
compliance with environmental regula-
tions, and, generally, to better targeted
sustainable development objectives ;
Conduct a follow-up of the
“chordecone plan” jointly with the
ministry of health, in particular with
respect to the impact on agriculture
and aquaculture ;
Improve the integration of sec-
tors between producers and the pro-
cessing industry with a view to res-
pond to local consumption and deve-
lop advertising in favour of these sec-
tors ;
Use the real property control
tools, notably those stipulated in the
Law of 27 July 2010 for the moderni-
sation of agriculture and fishing ;
Require the ODEADOM to
prepare a report on the Overseas
Departments’ agricultural aid, as stipu-
lated by the rural code ;
Favour extending the beneficia-
ries of the special procurement treat-
ment, in particular in the animal feed
sector ;
Entrust ODEADOM with the
payment of all the POSEI and related
national aid, while reinforcing its
control over investigation and liquida-
tion, for each of the mechanisms
Agricultural support policy in the
Overseas Departments
A first assessment on
outsourcing activities at
the ministry of defence
Outsourcing aims to contract out to
specialised companies tasks previously
performed internally in order to enable
the refocusing of activities on the so-
called “core business” missions and
obtain service of an equal or a higher
quality at a lower cost.
Outsourcing, a more fre-
quent practice
The ministry of defence, which
must be able to face external crisis situa-
tions, traditionally produced most of
the services it needed internally. The dis-
continuation of the draft led to a first
wave of outsourcing (for ancillary tasks
in particular). This movement accelera-
ted with the discussions related to the
ministerial reform strategy (2003), follo-
wed by the general review of public
policies (revue générale des politiques
publiques or RGPP) in 2006.
This policy takes on a particular
dimension at the ministry of defence as
it is carried simultaneously in all the
reforms which are otherwise engaged:
jointness of forces, overhaul of the ter-
ritorial establishment of the units, crea-
tion of defence bases, adaptation to the
new operational format approved follo-
wing the works of the White Paper on
defence and national security published
in 2008.
Several sectors of the ministry
which could be the subject of major
outsourcing, likely to concern numerous
jobs, have been identified.
First assessment on out-
The Cour des comptes has exami-
ned more than ten cases, their methods,
costs and benefits.
The outsourcing carried out did not
reduce the operational capacity of the
armies but, the reality of economic
gains that such activities provide seems
difficult to assess. Important progress
remains to be accomplished by the
ministry to use outsourcing wisely and
efficiently, in particular in terms of cost
analysis and separation of the “core
business” activities.
Five conclusions may be
drawn :
1. The outsourcing of the defence
ministry continues to have limited bud-
getary impact: Approximately €1.7bn in
2008, which is a little over 4% of the
ministry’s budgetary appropriations
Annual public report
Executive summaries
Cour des comptes
Annual public report
Executive summaries
(excluding pensions). The development
of outsourcing since the beginning of
the decade is real; however, the near
doubling of the volume of expenditures
recorded between 2005 and 2008 cor-
responds for the most part to changes in
scope. The externalisation level of the
ministry is slightly lower than that
reported by the German ministry of
defence (5% of budget) and below that
reported for the United Kingdom
2. The on-going outsourcing activi-
ties do not challenge the operational
capacity of the armies. They are even
sometimes indispensable for the accom-
plishment of missions, notably in terms
of strategic transport (92% of tonnage
transported is as part of outsourced
contracts). The armed forces must spe-
cify what “core business” is in order to
clearly determine the scope of “out-
sourceable” activities without running
the risk of facing one day operational
3. The outsourcing activities realized
had no material impact on the staff. The
projects identified under the RGPP
could, conversely, affect more than
16,000 positions. To ease their imple-
mentation, the ministry has requested
the inclusion in Article 43 of the Law of
3 August 2009 of provisions aimed at
facilitating the transfer of public per-
sonnel toward the service providing
4. The participation of the SMEs in
the process, an objective made known
by the ministry, is not currently measu-
red. Moreover, it appears problematic to
reconcile this participation with the
objectives of economic streamlining,
which is more favourable to large
5. The reality of economic gains is
difficult to assess. The absence of cost
accounting makes it impossible to eva-
luate the cost of production under state-
controlled management and prevents
comparison with the cost of outsour-
cing. Progress has been made, but too
many studies do not yet distinguish bet-
ween the gains related to rationalisation
those generated by externalisation alone.
This distinction is however indispensa-
ble, particularly when the outsourcing
causes the parties to run the risk of las-
ting loss of purview.
Outsourcing activities
could lead to gains
Subject to the reservations presen-
ted, outsourcing activities could facili-
tate the reorganisations that would
otherwise be difficult to accomplish
(civil vehicles of the ministry), or deli-
cate when they relate to activities mobi-
lising sizeable personnel (security),
because of a significant difference in
terms of remuneration compared with
the private sector.
A first assessment on outsourcing
activities at the ministry of defence
Conversely, the examples analysed
call for prudence when they primarily
concern equipment: Thus, small gains
are expected at Dax (public private part-
nership for the supply of helicopters for
the school base), while surcharges are
visible in the lease, with option to pur-
chase, of the A340 of the Air Force.
Yet, in the current budget context, using
outsourcing to realise heavy and imme-
diate investments for which budget
financing is not available, at the price of
the payment of sustainable rent flows,
may be very tempting. The multiplica-
tion of outsourcing activities and part-
nership contracts for heavy operations
would contribute to reducing the budget
leeway, by rigidifying over the long-term
the operating expenditures (title 3 of the
budget). Furthermore, certain transac-
tions only offer economic advantages
due to third-party revenues whose reali-
sation is uncertain.
Also, regardless of their nature, to
be fully justified, outsourcing activities
must be based on their own merits.
Clarify the notion of
business”, as well as that of “pillar”
when reference is made to them to jus-
tify the use of supplemental outsour-
cing activities ;
Develop solid preliminary cost
accounting which is essential to the
start of an outsourcing process in
order to be able to judge each project
on its own merits ;
management capacities of the ministry.
A first assessment on outsourcing
activities at the ministry of defence
Annual public report
Executive summaries
Annual public report
Executive summaries
Cour des comptes
Management of the
Rhône-Alpes ski area
Major resorts such as Val d’Isère,
Tignes, Avoriaz, Val-Thorens, Les
Ménuires, Courchevel, Méribel, Les
Arcs, La Plagne, Chamonix, medium-
altitude mountain resorts such as Les
Gets, Les Sept Laux and small resorts,
La Chapelle d’Abondance, Montricher-
Albanne/Les Karellis, Villard de Lans
made up the sample in this enquiry.
These resorts represent 80% of the tur-
nover of alpine resorts and 80% of
French winter business activity.
Multiple players
Several entities are involved in the
Communes, ski lift operators under
direct or delegated state-controlled
management, tourism offices, leisure,
vacationing and well-being infrastruc-
With respect to the sole manage-
ment of ski lifts, the dominant trend has
been however to delegate to private
companies, whether mixed ownership
or more frequently private companies.
In fact, the ski areas often escape the
control of local communities which
must assume wide-reaching missions
and combine several types of logic -
industrial, commercial and territorial.
Renegotiation with high
The soon to expire thirty-year
contracts, signed in application of the
Mountain Law of 9 January 1985, now
constitute a vital stake for the local com-
munities to which they were assigned.
The issue of their renewal or direct
management will be raised.
It would be in the interest of the
local communities to join forces and
face the united private operators in
order to constitute larger groups. The
local authorities, predominantly isolated,
are often weakened in their relationship
with the assignees. Thus, some of them
are unable to obtain information that
would help them to grasp the effect of
the choices made in price terms, notably
in relation to commercial innovations.
Multiple risks
A financial risk weighs on the local
communities, in a context of budget dif-
ficulties: in addition to existing agree-
ments, the local communities sometimes
are obliged to assume large scale invest-
ments, but also facilities related to event
organisation, without the assignees,
which benefit from their impact in
Management of the Rhône-Alpes
ski area
terms of guest occupancy of the sta-
tion, contributing to their financing.
At the same time, the resorts must
deal with the development of both sum-
mer and winter practices and respond to
a demand further directed toward vaca-
tioning and leisure, inducing new
expenses in addition to the special
charges for personnel and equipment
related to the traditional activity.
Environmental risks must also be
taken into consideration, notably for the
new amenities whose integration into
the landscape becomes a requirement.
There is also the issue of using
machine-made snow.
Finally, local communities must
manage a social risk, closely related to
their capacity to offer local employment
to the population, predominantly in the
area of tourism. A delegated manage-
ment of their ski areas consequently
limits their ability to influence local
Invest to remain competitive,
measure the financial risk of commit-
ments and carry out a comparative
analysis to select the best management
method (direct or delegated) of the
amenity depending on financial capa-
city ;
Unite by joining forces with the
local communities managing neigh-
bouring ski areas, to reach a balance
with respect to potential vendors,
many of whom are already grouped
together ;
investment plan ;
Provide, in the contracts with
the assignees, an incentive clause gua-
ranteeing to the assignees a benefit in
continuing the modernisation of
equipment, even in the last years of a
contract ;
Establish specific inventories
through joint surveys of the goods
allocated to operations, by separating
the goods that would be returned for
free to the local community at the end
of the contract and those that may be
taken over by the latter ;
While aiming to satisfy the
needs of users and building up the
loyalty of the customer base, interes-
ted both in authenticity and relaxation,
show prudence before starting costly
diversifications of activities, be they
winter or summer activities ;
Fully integrate the environmen-
tal concerns, and, generally, those of
sustainable development, in the prepa-
ration of projects and making of deci-
Annual public report
Executive summaries
Annual public report
Executive summaries
Cour des comptes
Territorial continuity
with Corsica
Since 1976, the territorial continuity
with Corsica principle has made it possi-
ble to reduce the constraints of insula-
The bodies involved
Since 1991, the territorial commu-
nity of Corsica (collectivité territoriale
de Corse or CTC) has replaced the
Central Government in defining the
public service obligations (obligations
de service public or OSP) on service
lines of its choice. Via its Corsican
transport office (office des transports de
la Corse or OTC), it signs agreements
with each of the companies that provide
public air or maritime transport.
An allocation known as territorial
continuity allocation (dotation de conti-
nuité territoriale or DCT) of a current
amount of €187m is allocated every year
by the Central Government to the CTC
which retrocedes it to OTC. The latter
then distributes it among each mode of
transport in order to finance obligations
made to carriers to ensure regular high-
quality service while applying lower
fares for certain categories of passen-
gers, including residents of Corsica.
Two mechanisms may then exist: the
delegation of public service or social
The global economy of the
principle of territorial
continuity experienced
significant transformations
between 2001 and 2009
The total number of passengers that
entered and exited Corsica on air or
maritime routes under the OSP increa-
sed by 30%, from 4m to 5.2 million.
This increase was for the most part
concentrated in the maritime routes bet-
ween Corsica and Toulon managed
under the “social aid” system, as a result
of which the OTC has to repay a lump
sum per passenger entitled to a reduced
The expenses in favour of
contracting companies
increased sharply
They exceed the amount of the
DCT paid by the Central Government,
the financial reserves of the OTC,
which totalled more than €40m in 2001,
are now exhausted.
Several reasons explain these finan-
cing issues aggravated by the freeze of
the DCT, which has not seen an increase
since 2009 :
- The significant increase in the
compensation per air passenger in 2003,
Territorial continuity with Corsica
which made it possible to restore the
financial balance of CCM, a mixed
ownership company of CTC ;
-the increase in “social” aid paid per
maritime passenger, directly related to
that of the number of passengers trans-
ported under this system ;
-the increase in compensation allo-
cated to the assignee maritime compa-
nies kept on routes serving Marseille,
despite a relatively sizeable drop in the
number of passengers transported on
the assigned lines ;
-the decrease in low-income fares,
the impact of which was not measured
with respect to the global economy of
the principle.
Management failures
The CTC, an organising authority,
was incapable of adapting the agree-
ments regarding, or contents of, the
public service obligations to the deve-
lopments of traffic or anticipating the
financial consequences.
The reports of the carriers, often
too succinct, were not properly used and
the number of passengers receiving fare
reductions is not precisely known.
The specifications of the successive
contracts during this period and the
negotiations which preceded their
signing did not sufficiently take into
account the developments that were
however perceptible for several years.
The management of delegation
contracts, notably their preparation and
signing, did not make it possible to opti-
mally apply the rules of competition
At the end, due to lack of motiva-
tion and the absence of evaluation ins-
truments, the CTC did not prepare the
strategic decisions necessary to develop
a system that had been showing signs of
exhaustion for several years.
Clearly define the role of the
transports office in the design and
management of territorial continuity,
both maritime and air, and implement
a true supervision of the establish-
ment ;
Reinforce the controls of the
implementation and execution of the
OSPs by the companies ;
Implement evaluation tools nee-
ded for a global and objective debate
on this topic ;
Favour conditions of competi-
tion through greater anticipation of
the launch of public utility contract
Annual public report
Executive summaries
Annual public report
Executive summaries
Cour des comptes
Government workers at
the Ministry of
equipment and civil
Out of the 8,000 govern-
ment workers at the
ministry, 2,200 were
recruited without legal
In 2009, out of 46,300 government
workers on active duty at the Central
Ministry of equipment and civil aviation
employed 8,000 including fleet and
workshop workers (7,200) and civil avia-
tion workers (800).
Close to 5,000 workers are in fact
assigned to equipment fleets and works-
hops, notably for the operation and
maintenance of roads and for the main-
Following the 2004 decentralisation
laws, these employees have been, since
2010, transferred to the local communi-
ties, under conditions that reflect a cer-
tain lack of preparedness.
The other 2,200 workers theoreti-
cally assigned to fleets and workshops
were in actuality employed by other
departments under irregular terms.
The roughly 800 workers reporting
to the general directorate of civil avia-
tion are, for their part, divided into 42
occupational families within which they
hold positions that are very diverse
(logistics operator, driver, painter, IT
specialist, warehouse keeper, AC specia-
list, photographer, etc.) which, in the
other public service areas, are for the
most part held by permanent or
contract public employees.
These government wor-
kers enjoy the great
advantage of practically
being civil servants
The advantages of holding a non-
incumbent position within the civil ser-
vice are multiple, in terms of recruit-
ment, promotion and remuneration.
Moreover, these workers are enrolled in
a special retirement plan which provides
them with pensions 30% higher on ave-
rage compared to that paid to perma-
nent public employees holding compa-
rable positions.
The management of these
government workers pre-
sents numerous irregulari-
ties of a serious nature
For several years, promotions have
been awarded in an abusive manner,
without cost control and in breach of
the rules of balance of the pyramid of a
Government workers at the Ministry
of equipment and civil aviation
Moreover, for the fleet and workshops
workers, promotions from journeyman
to master journeyman are awarded in
the year prior to retirement, while this
practice is explicitly barred by law.
Practically all the compo-
nents in the remuneration
of civil aviation workers
must be reviewed without
In fact, fictitious overtime is concea-
led in the basic salary of civil aviation
workers, irregularly increasing their total
pay (by up to 400 Euros per year). This
disguised system has cost the Central
Government €3.6m since its implemen-
tation in 2002.
In the civil aviation services, mana-
ging two workers is sufficient to be
named team leader and as a result obtain
a salary increase of 20%, without regu-
latory basis for such increase. The Cour
des comptes also found several irregular
supplemental remuneration compo-
nents granted to those employees, as
well as an overtime rate unduly paid at
35% extra, before any legal increase.
The civil aviation services were una-
ble to report the average salary cost per
pay grade for their workers.
These practices are at the
root of a major financial
Between 2006 and 2009, the payroll
of the fleet and workshop workers
remained unchanged with the workforce
decreasing by 11% and that of the pay-
roll of the civil aviation workers rose by
29% with the workforce decreasing by
The human resource management
of these employees is seriously deficient
and benefits are awarded with no
employee evaluation whatsoever and
without seeking any productivity.
Annual public report
Executive summaries
Annual public report
Executive summaries
Government workers at the Ministry
of equipment and civil aviation
Put an end to any recruitment
of government workers in the depart-
ments of the ministry of equipment
and civil aviation ;
Identify, within the HRD of
the ministry, a single department in
charge of the management of the
government workers, regardless of
their posting ;
Review the entire system of
bonuses, allowances, and overtime pay
applicable to this category employees,
on the one hand discontinuing those
that seem exorbitant, and on the other,
giving to those that may be kept a
regular legal basis ;
Discontinue the practice of the
so-called ‘tip of the hat’ (known in
French as coup de chapeau) promo-
tions before retirement given to boost
pension income and redefine the pyra-
mid structure of the various categories
of Government workers, by applica-
tion of promotion quotas negotiated
with the budget department ;
Regularise the situation of the
some 30% of the workers who are not
assigned to a fleet or workshop ;
Reform the IT, management
and pay system of the DGAC to dis-
continue any irregular practice and so
that that department may be in a posi-
tion, as soon as possible, to produce
reliable data in terms of the manage-
ment of its workers ;
Reorganise the management of
human resources of the directorate
general of civil aviation in order to
make it more accurate and put an end
to the practice of secret payments for
fictitious overtime.
Cour des comptes
The “one-quarter fare”
of military servicemen
Military railway travel is at the
Government contribution to French
National Railways (SNCF) (€192.4m in
2009) which has been experiencing the
most dynamic growth for around ten
years (+34.5%).
The “one-quarter fare”: a
relic from the first railway
Since the 19th century, a 75% fare
discount, known as “one-quarter fare”
has been given to the military service-
men for their railway business or perso-
nal travel. This fare has been offset by
the Central Government’s budget since
1949, in accordance with the methods
currently set in a framework agreement
and an agreement signed in 2006 and
2007 by and between the Central
Government and SNCF.
Military servicemen are entitled to
this fare discount and to the public
financing of their personal travel as a
benefit that is incidental to their status:
they see it as a compensation for the
special constraints related to military
life, which requires significant mobility
for work and, often, being away from
the family home.
Uncontrolled increase of
Whilst the charges approved for
this purpose were rapidly growing, the
Ministry of defence did not find the
means to control their increase or to
efficiently prevent fraud, which was pro-
bably under-valued. Travel passes are
still printed on paper; blank passes sto-
red on the units’ premises are a potential
source of distribution of counterfeit
passes; some military personnel do not
return their passes when leaving the
Moreover, the information on the
variables related to the travel passes and
to the Central Government's offsetting
of this charge - number of passes,
actual headcount, amount of expense -
is compartmentalised, and internal
control remains inadequate. The imple-
mentation of monitoring tools relative
to the issuance of travel passes is so
recent that their inventory did not
become reliable until 2009. No systema-
tic comparison between the number of
military personnel in active duty and the
number of travel passes currently valid
is possible. The ministry of defence
does not know the exact number of
military personnel authorised to have a
travel pass; it cannot therefore compare
that number to that of currently valid
passes. Furthermore, the clauses of the
Annual public report
Executive summaries
Annual public report
Executive summaries
agreement authorizing the Central
Government to carry out checks on the
production of the SNCF electronic data
included in the calculation of the charge
to be offset have gone unheeded.
Too many beneficiaries
The field of the “one-quarter fare”
beneficiaries is large as it includes all
military servicemen in active duty as
defined by their statute. This situation
concerns not only the military service-
men holding positions with the ministry
Gendarmerie, but also those assigned to
other government administrations or
public institutions, or even private com-
panies. It also concerns the generals of
the so-called “2nd section” who, having
remain available to the ministry of
defence and, as such receive active duty
pay and are entitled to a travel pass for
One could wonder whether exten-
ding the scope is pertinent: the ministry
of defence finances the business and
personal travel of military servicemen
assigned outside of its departments, in
relation to which results a transfer of
charges that cannot be quantified with
various public or private operators. In
principle, intended to compensate for
the constraints of military life, the “one-
quarter fare” in actuality also benefits
people who are not subjected thereto.
The necessary reform of
the “one-quarter fare"
The ministry of defence, now aware
of the need to reform the system, plans
to modernise the form of the travel pass
(smart card). This would make it possi-
ble to remotely disable the travel passes
of officers that have severed their links
with the army.
Being able to differentiate between
army and personal reasons for travel is
important. This objective could already
be reached if the Home and Defence
ministries issued a preliminary travel
order for any travel of the military ser-
vicemen on army business. The use of a
travel pass being thus, de facto, reserved
for personal travel, it would then be pos-
sible to know the value of the benefit-
in-kind granted. At that point, nothing
would hinder any longer the re-examina-
tion of the basis for the exemption from
social and tax withholding of this bene-
fit-in-kind, whose overriding nature had
been underscored by the Cour des
comptes in 2009.
The “one-quarter fare” is moreover
part of an uncertain environment: The
opening up of international railways to
competition may lead, in the future, to
challenging the legality of its being off-
set by the Central Government.
The “one-quarter fare” of
military servicemen
Annual public report
Executive summaries
Systematically re-examine the
field of beneficiaries of travel passes,
in order to reserve its award to military
constraints ;
Re-examine the basis of the
default of valuation of the benefit-in-
kind consisting of the “one-quarter
fare” for travel of a personal nature,
together with the ministries of budget
and civil service, with a view to
including it in the basis for social secu-
rity and tax withholdings ;
Continue the modernisation of
travel passes which has already been
started and improve internal control.
Further, the ministry of defence
must examine the pertinence of
preserving the “one-quarter fare”
The “one-quarter fare” of
military servicemen
Annual public report
Executive summaries
Cour des comptes
Particularities of the
remuneration of
military reserves
A difficult-to-justify tax
Remunerations paid to reservists are
exempt from tax on income. The tax
exemption for military reservists affec-
ted, in 2008, more than 60,000 persons
(including the gendarmerie), for a tax
expenditure of €6.4m. To justify this
exemption, it is no longer possible to
claim the need to compensate the obli-
gation to participate in long compulsory
instruction periods since this obligation
ended with the Law of 22 October
1999. Moreover, the remuneration of
reservists cannot be treated as a pay-
ment for expenses eligible for an
Maintaining the salary of
public employee-reservists
Public employees who are absent in
order to participate in activities of the
military reserve still receive their salaries
for up to thirty days per calendar year.
This benefit increases the cost of
the reserve by several million Euros and
certainly explains the overrepresenta-
tion of public employees in the military
Revisit this exemption, which
runs counter to the principle of tax
equity between active duty and
military reserve ;
granted to public employees and not
to reservists in private employ.
Annual public report
Executive summaries
Cour des comptes
SOVAFIM: An operator
with no real usefulness
SOVAFIM, a real estate manage-
ment company (société de valorisation
foncière et immobilière) is a société ano-
nyme whose capital is wholly-held by
the State. It was created in 2006 in order
to speed up the sales of the real estate of
Réseau Ferré de France and to generate
from these transactions capital gains
intended to be up-streamed to the
Central Government’s budget in the
form of dividends. SOVAFIM was des-
igned on the basis of a short-term pro-
ject and without clear prospects. Its
foremost mission was to bring to the
Central Government €350m in budget
revenues in 2006 and the same amount
in 2007.
No other transfer of goods from
the RFF having occurred since, the
legislator broadened the field of applica-
tion of SOVAFIM several times, with
the scope to extend its mission to the
valuation of real property belonging to
the Central Government and its public
establishments. However, between 2007
and 2009, the activity of SOVAFIM
resulting from these provisions was
limited to three one-off transactions,
carried out at the Central Government’s
The ambitions of the senior mana-
gers of the company, who had intended
to make it a real estate operator likely to
invest €1bn in five years, have led to
nothing. An autonomous development
project was challenged because of the
lack of recapitalisation by the Central
Government shareholder. The transfers
of real property for SOVAFIM, limited
in number, did not offer it real develop-
ment prospects.
The business of SOVAFIM became
very limited (€4.5m in turnover in 2009)
and therefore not very profitable, return
on equity (1% in 2009) no longer paying
for the risk of the business. Its depen-
dence on the decisions of Central
Government, which determine its level
of activities, limits its leeway de facto it
has become nothing more than a divi-
sion of the administration. Having after
all as its sole customer and contact the
Central Government itself, this com-
pany, whose financial area is too narrow
to enable it to acquire a material portfo-
lio of goods to manage and which sub-
contracts the majority of its sales acti-
vity to brokers, is an intermediary struc-
ture without a customer and without a
long-term project.
Discontinue the existence of this company with no actual usefulness.
Annual public report
Executive summaries
Cour des comptes
Paris Habitat’s
new headquarters
Paris Habitat, France’s largest public
housing authority (more than 117,000
housing units) was based in the fifth
arrondissement of Paris (Cardinal
Lemoine Street). But the building being
too small to accommodate all the staff,
several directorates had to be housed in
rented premises.
The board of directors, having
resolved to have all staff members work
on one site, decided to sell this building
in December 2003 to acquire one which
used to be the headquarters of Le
Monde, the French national daily. The
building, also located in the 5th arron-
dissement (Claude Bernard Street) in a
condominium, could however not
house all of IT activities.
Rampant costs and
delayed execution due to
poor project monitoring
The cost of the project rose from
€90m to €139.4m between the initial
plan submitted to the board of directors
in March 2004 and the May 2008 esti-
mate produced one month before Paris
Habitat actually moved into the new
headquarters, which also meant delayed
execution: four and a half years instead
of two years as initially planned.
Drifting costs and failure to meet
deadlines can be ascribed to poor pro-
ject monitoring which implied many
changes that could have otherwise been
anticipated. In this respect, wavering
implementation in the removal of
asbestos removal from the building pro-
vides a good example.
Unsatisfactory building
performance with respect
to sustainable develop-
After one year in use, despite Paris
Habitat’s ouspoken commitment to the
goals of sustainable development, the
performance of the new building star-
ted causing concern as electricity and
heating costs almost doubled by compa-
rison to the three previous sites.
The results of long-term
total-cost approach
Paris Habitat’s top management
insists that, in view of the expenses
avoided by leaving the former premises,
the “net” cost of the project should
According to the assessment produced
by the chambre régionale des comptes,
which is based on the total cost of the
Paris Habitat’s
new headquarters
new headquarters over 40 years, the
“net” cost amounts to €55m, the equiva-
lent of the cost of 240 council flats.
An estimated imputed rent calcula-
ted on the whole operation, so as to
make comparisons possible with the
actual rents that a real-estate promoter
could charge, has displayed figures
above the highest rents in the 5th arron-
dissement and equalling those of the
most expensive Paris areas for office
building leasing.
For a project of this size, it is regret-
table that such a large organisation,
whose trade is building and administe-
ring housing units did not, from the very
beginning, take up the option based on
long-term total-cost approach. For ins-
tance, several options could have been
assessed and the requirements related to
sustainable development could have
been appropriately met. But as Paris
Habitat concedes, the implementation
of this approach remains crucial to best
monitor and curb expenditures for the
whole period of use of the building.
projects, the approach based on
long-term total cost should be taken
from the outset. On the basis of
long-term total-cost approach, the
available options can be assessed and
appropriately met with.
The same approach should be
taken during the whole period of use
of real property to better monitor and
control costs in the interest of both
public money and environment..
Annual public report
Executive summaries
Annual public report
Executive summaries
Cour des comptes
Exemptions of
allowances paid to sports
referees and judges:
An ill-adapted tool
The Law of 23 October 2006 speci-
fied the legal treatment of 196,000
sports referees and judges and defined
the terms of tax and social security
exemption for the allowances that are
paid to them. It stipulates that their allo-
wances are exempt from payroll taxes –
employer and employee – for up to 14.5
% of the annual ceiling of social secu-
rity, i.e. €5,020 in 2010. They are exempt
from tax on income if their annual
amount is below that ceiling.
An unreliable declaration
The declaration system selected by
the law presents clear limitations. At the
tax level, referees themselves – and not
the organisations that pay them (sports
clubs, sport federations, competition
organisers) are indeed responsible for
declaring any allowances that exceed the
legal ceiling. In terms of social security
contributions, sports federations and
professional leagues must theoretically
declare the allowances paid: however,
the referees are not required to notify
them until after they have exceeded that
ceiling, and they only submit upon
request the forms on which they have to
list all of the sums received. In practice,
this declaration system depends there-
fore on the quality, the frequency and
completeness of the information sub-
mitted by the referees: the sports federa-
tions and the professional leagues are
not in a position to ensure at any time
the proper application of the exemption
provisions, contrary to their responsibi-
lity which is defined by the law.
In addition, diverging interpreta-
tions appear in the application of these
provisions. Thus, while the tax exemp-
tion should only concern remuneration
amounts below the ceiling, certain fede-
rations - such as the French Football
Federation - interpret in an unorthodox
manner the provisions of the Law of 23
October 2006 by also granting this
exemption to referees whose allowances
are over €5,020 per year.
A poorly monitored
Any attempt to quantify the fiscal
and social cost of the system is fraught
with uncertainty, not only because of
the declarative nature of the allowances
received, but also because of the lack of
awareness of the exact number of refe-
Exemptions of allowances paid to
sports referees and judges :
An ill-adapted tool
rees and their status (professional or
volunteer, full time or part time). Under
these circumstances, the assumptions
made by the administration to quantify
these tax and social expenditures are not
uniform. All in all, the overall cost quan-
tification differences for this system –
between €37.5m and €134m according
to the assumptions applied by the
concerned – shows defective monito-
ring and the resultant inability of
Central Government to ascertain the
impact of these exemption measures.
And yet, the cost of the exemptions
granted to the referees represents,
according to the assessments, between
15% and 54% of the “Sport” budget
totalled €246.7m in 2010).
No efficacy measurement
It is difficult to establish a direct link
between the change in the number of
referees and these exemption measures.
In fact, while the overall cost of this sys-
tem is high - regardless of the figures
used - the pecuniary benefit it provides
individually to each referee is limited
and could not represent alone sufficient
incitement to explain a notable increase
in the number of people wishing to
become referees. Furthermore, an
important portion of amateur referees
is not affected by these exemption mea-
sures: the volunteer portion which by
design, is not concerned by it, is estima-
ted by the AFCAM at 40% of the body
of referees, i.e. approximately 78,000
referees in 2010.
In the end, the Law of 23 October
2006 clarified the status of the sports
referees and judges. However, the
absence of a clearly defined objective
for these exemption measures is cou-
pled with absence of management and
evaluation of the system by the sports
Government places with the sports
federations the responsibility to manage
the terms of the remuneration of the
referees: the implementation of an
exemption system under the Law of 23
October 2006 was not accompanied by
any analysis of the allowance system of
the referees.
Under these circumstances, the
social security and tax exemption sys-
tems created by the Law of 23 October
2006 are not in a clear and consistent
manner part of the implementation
policy of the Central Government in
the sports area: none of the objectives
set by the “sport” budget make it possi-
ble to consider that a portion of the
allowance of the sports referees and
judges should be financed by the budget
of the Central Government and by the
general social security system.
Annual public report
Executive summaries
Annual public report
Executive summaries
The Cour des comptes unders-
cores the essential role played by the
referees in the teaching and organisa-
tion of sport activities, as well as the
considerable difficulties encountered
in the performance of their duties. It
notes however that the situations with
which they are faced are very dissimi-
lar and should call for different solu-
Under these circumstances, the
fundamental ill-adaptation of this
generalized exemption system leads
the Cour des comptes, considering the
disproportionate size of its overall
cost compared to the budgetary
appropriations of the “Sport” pro-
gramme, to recommend it be disconti-
Exemptions of allowances paid to
sports referees and judges:
An ill-adapted tool
Cour des comptes
The national museum of
sport : A poorly
monitored project
The museum of sport, a simple
department of the ministry of sports
since its creation in 1963, was only
transformed into a public administrative
institution in March 2006.
Despite having close to 600,000
objects and documents that form one of
the largest collections in the world on
the history of sports, this museum
remains not very well known and not
often visited. At the completion of its
audit, the Cour des comptes established
three findings which explain this
paradox :
Late and muddled institu-
The transformation of the museum
into a public institution was labour-
intensive. One year was needed for the
new institution to acquire a board of
directors and operational accounting.
During that time, the manager of the
museum turned to a private company,
with which he had signed an agreement
in March 2005, to organise travelling
exhibitions and recruit representatives,
while it did not have the signature
authority to do so.
The departments of the ministry of
sport did not exercise their oversight
responsibility in an adequate manner.
While a general audit report showed
irregularities as early as October 2006,
the agreement was not terminated until
August 2007, at the request, not of the
ministerial departments, but of the
financial auditor.
No permanent site
The national museum of sport
never had a permanent site. In 1979, this
“virtual museum” was housed, tempora-
rily, within Parc des Princes, but not
until 1988 were “national galleries” of
the museum inaugurated, which made it
possible to have a permanent exhibition
Nevertheless, the preparation for the
Football World Cup in 1998 had as a
consequence a squeezing of the pre-
mises of the museum and the closure of
its exhibit halls. Several museum site
projects were then envisaged.
An unclear strategy for
the collections
As a result, since July 2008, the
museum has only been able to display
350 objects on the premises, named
"showcases", located on the ground
floor of a building rented by the minis-
try. This presentation only attracts a
limited audience (on average, less than
50 visitors per day). Numerous difficul-
ties and notable surcharges affected this
Annual public report
Executive summaries
Annual public report
Executive summaries
While it should have been comple-
ted in early 2006, the “showcase” was
not ready until June 2008.
The initial
budget (€3.5m) was considerably excee-
ded (by €4.4m). At the end, the presen-
tation of each of the 350 objects on dis-
play cost more than 12,000 Euros.
The future use of the “showcase”
remains uncertain. The ministry has
mentioned a project of a museum site in
Nice, within the “Cité nationale des
sports”. A memorandum of understan-
ding was signed in May 2010 with the
city of Nice, but that memorandum
does not address the question of the
cost of the “showcase” whose financing
was supported by the ministry for what
was to be a temporary use.
One last difficulty concerns the col-
lections of the museum. They indeed
represent the history of all the sport dis-
ciplines, shown through competitions,
leisure practices and the place of the
sport phenomena in society. This direc-
tion explains the presence of objects
that are sometimes unique, such as an
advertising Tour de France truck, or
repetitive, such as numerous jerseys and
accessories signed by champions. The
extent of these collections requires the
definition of an acquisition strategy.
First steps forward
Many years were needed however
for the museum to start defining a cultu-
ral and scientific project, which was not
approved by the board of directors until
November 2010.
The current management of the
national museum of sport is now trying
to overcome the deficiencies of the past
The performance agreement
signed in February 2010 with the minis-
try of sport, the memorandum of
understanding signed in relation to the
site at Nice or the preparation of a
scientific and cultural project all testify
to this. All of these steps have neverthe-
less yet to materialise: failing that, calling
into question the future of this museum
will be inevitable.
The national museum of sport :
A poorly monitored project
Find the appropriate solution
to reduce the very high costs that the
ministry of sport has committed in the
casual installation that has lost its
purpose considering the prospect
The failure of the announced
advances to materialise immediately
calls into question the future of the
Implementation of the
recommendations of the
financial courts
Executive summaries
of volume 2
(1)Office national de l’eau et des milieux aquatiques – National office of water and aquatic
Cour des comptes
Public water and sanita-
tion services:
In its thematic report of 2003 dedi-
cated to the management of public
water and sanitation, the Cour des
comptes had recommended an inter-
communal management, in order to
strengthen the economies of scale,
financial transparency and the manage-
ment of these services. Seven years
later, despite the noted progress, impor-
tant streamlining efforts remain to be
Implementation of the
recommendations of the
Cour des comptes: the
advances initiated by
Central Government and
Among these advances, the Decree
of 14 March 2005 has standardised the
presentation and the content of the
(compte annuel de résultat de l'exploita-
tion or CARE). The law of 30
December 2006 on water and the aqua-
tic environment for its part has made
budget planning and management
easier. The obligations of the assignee
were also strengthened, notably in rela-
tion to the renewal of facilities. Finally,
the law created a system of information
about the public water and sanitation
services (système d’information sur les
services publics d’eau et d’assainisse-
ment or SISPEA).
The efforts of the territo-
rial communities
The efforts engaged to improve the
management of water and sanitation
services can be seen in the development
of expert capacities. They make possible
a greater transparency in the choice of
the management method, a decrease in
the length of delegation contracts, faster
return to competition as well as inclu-
sion of contractual clauses allowing real
control over the performance condi-
Advances yet to be made:
excessive number of ser-
Deficiency remains, notably in
terms of costs, due to the excessively
high number of water and sanitation
Annual public report
Executive summaries
Public water and sanitation services
: Encouraging developments
Annual public report
Executive summaries
services. According to ONEMA (1);
France totals 35,000 of these services, a
number unmatched in Europe. The laws
adopted since 2003 to favour their com-
bination did not modify the territorial
grid pattern. This excess creates difficul-
ties for funding SISPEA, its reliability
and completeness criteria being rather
incompatible with the current fragmen-
tation of structures.
A necessary rebalancing
of the relationships bet-
ween local authorities and
the assignees
Due to the poor knowledge of the
networks, the local authorities do not
have true control over the renegotiation
of contracts, which explain the low rate
of operator changes.
Likewise, the financial reports of
the assignee, often short and incom-
plete, do not allow for a comparison
between actual and estimated results.
The water and sanitation syndicates and
smaller authorities were traditionally
supported by the Central Government
services in terms of public engineering,
but these services are slated for com-
plete discontinuation by 2011.
In conclusion, only a drastic reduc-
tion in the number of structures and the
pooling of resources and skills will
make it possible to improve manage-
ment and rebalance the relationship bet-
ween the local authorities and the public
service assignees.
Make the opening of their own
cash accounts mandatory for all public
service contract holders(délégation de
service public or DSP) ;
Authorise the investment of
surpluses by applying the provisions of
Article L.2224-11-1 of the CGCT ;
Implement efficiently the new
accounting standards from instruction
M49 applicable to water and sanitation
services ;
Determine by regulatory means
the content and presentation of the
CARE contractor, to render it compa-
rable to the estimated operating
account appended to the contract ;
Postpone until 30 September
the presentation of the annual report
on the price and quality of the service,
in order to enable the organising
authority to prepare an expert opinion
based on the information provided by
the contract holder ;
In order to have a database on
water pertinent for the entire territory
of France, improve the operations of
the information system for the public
services of water and sanitation by
establishing a requirement to submit
all the performance indicators for the
public services with the greatest
weight nationally.
Cour des comptes
Agencies receiving
charitable funding
The mission entrusted
with the Cour des
comptes by the legislator
The legislator wanted, in 1991, for
the Cour des comptes to be able to
“audit the account of uses of funds
received from the public as part of cam-
paigns conducted on a national scale [...]
in order to check the compliance of
expenditures [...] with the objectives
pursued in the charitable funding recei-
From its initial inquiries, the Cour
des comptes did not stop at the simple
accounting audit of the account of
sources and uses of funds. It considered
that examining the actions conducted
and their management and the proce-
dures implemented and management
methods used was part of its mission.
Checking the compliance of expendi-
tures incurred with the objectives pur-
sued by the campaigns presumes, in fact,
checking, from the initial phases, the
information provided to potential
donors on the use that will be made of
the funds collected, and, in the final
stages, of the nature, performance
methods and results of the actions
The Cour des comptes was also
determined to report on its audit to the
donors by systematically publishing the
findings of its investigations.
Recommendations with
widely successful conse-
Since 2004, the Cour des comptes
has conducted various types of inquiries
to monitor the implementation of its
1. New comprehensive controls
(three cases): two out of the three
reports published between 2004 and
2007 noted considerable changes or
material improvements ;
2. Targeted follow-up inquiries (five
cases): the reports published in June and
September 2009 showed that the asso-
ciations audited had largely taken into
account the recommendations of the
Cour des comptes, with the notable
exception of the Animal protection
society (Société protectrice des animaux
or SPA). The official receiver of the
SPA, appointed as a result of the audit,
reports on the work conducted in this
report ;
3. An audit of the uses of the remai-
ning balance of the funds collected allo-
cated to the victims of the tsunami of
26 December 2004: out of the 29 agen-
cies that were reviewed again in 2009, 19
had their 2006-2008 “tsunami” expendi-
Annual public report
Executive summaries
Annual public report
Executive summaries
tures declared compliant with the pur-
pose of the collection, without qualifi-
The Cour des comptes has thus
found that the implementation of its
recommendation has been largely suc-
It also used its latest publication to
issue a reminder that, in the event of an
allocated collectio : :
- All donations received must, until
exhausted, be treated in the books as
dedicated funds ;
- they must be used in accordance
with what was announced to the poten-
tial donor, therefore – unless expressly
otherwise stated in the call for funds-
exclusively for the social mission ;
- if the funds are kept for a suffi-
ciently long time by the agency so that
their investment could generate interest
income, such income must benefit the
actions, under the same conditions as
the donations originating from the
Broadening the purview of
the Cour des comptes
Article 20 of the Supplementary
Budget Act of 30 December 2009 pro-
vided for two innovations :
1. It broadened the purview of the
Cour des comptes to include auditing
the compliance with the objectives of
the organisations receiving charitable
funding entitling them to a tax benefit
and the expenses financed by such
donations, when the annual amount of
the latter exceeds €153,000 ;
It introduced the possibility to
impose a sanction: when it receives
from the Cour des compte a declaration
of non-compliance, the minister for the
budget may now “suspend any tax bene-
fit for donations, bequests and pay-
ments made in favour of the agency
referred to in the declaration”.
In terms of charitable donations,
the Cour des comptes has always had as
an objective to audit the respect of the
wishes of the donor, and it has conside-
red the donor – or potential donor – as
the foremost intended recipient of the
works of the Court. It will continue to
have this same concern in the perfor-
mance of its broadened mission that the
law has recently entrusted therewith
with respect to agencies receiving dona-
tions entitling them to a tax benefit.
Agencies receiving charitable
The “decrystallisation”
of pensions of nationals
of territories previously
under French sovereign
Pensions whose amount
has remained unchanged
In 2010 the Cour des comptes had
found that the pensions paid to veterans
from the territories formerly under
French sovereign control had remained
unchanged, both in terms of amount
and in terms of legal form, as at the date
of these territories becoming indepen-
dent. This de facto situation, overriding
the ordinary law applicable to pensions,
was at the source of persistent inequa-
lity of treatment, between French natio-
nals and foreigners on the one hand
and, on the other hand, between the
various nationalities concerned. As a
result, the Cour des comptes had
recommended an overall alignment of
the “crystallized” treatment regardless
of whether it affected disability pen-
sions or civil or military service retire-
ment pensions with the French ordinary
law treatment.
Alignment with ordinary
Following the decision of the
Constitutional Council of 28 May 2010
on the first priority question of the
constitutionality that was raised before it
and the adoption of Article 211 of the
Budget Act for 2011, followed by
Decree 2010-1961 of 30 December
2010, this recommendation was taken
into account.
As from 1 January 2011, all military
disability pensions, civil and military ser-
vice retirement pensions and veteran
retirement pensions paid to nationals of
countries or territories that were once
part of the French Union or of the
Community or placed under the protec-
torate or oversight of France, are calcu-
lated based on the ordinary law treat-
The Cour des comptes will ensure
the proper implementation of the new
law, notably by informing the potential
beneficiaries of the steps they have to
take in order to have the index used in
the calculation of their pensions revi-
Annual public report
Executive summaries
Cour des comptes
Annual public report
Executive summaries
Financial regulatory
The Cour des comptes audited, star-
ting in July 2006, the three main finan-
cial control and regulatory authorities
namely the Commission bancaire, the
Autorité de contrôle des assurances et
des mutuelles (ACAM) and the Autorité
des marchés financiers (AMF).
In its Annual Public Report of
February 2009, the Cour de comptes
carried out a comparative assessment of
these three authorities. The global ban-
king crisis that has emerged since
autumn 2008 highlighted the crucial role
that was to be played by a responsible
and appropriate financial regulation sys-
tem and the responses of the French
authorities as part of the principles of
action generated internationally, are in
line with the recommendations that the
Cour des comptes had issued in the
course of its inquiries.
Thus, order 2010-76 of 21 January
2010 simplified the control and regula-
tory structures as the Cour des comptes
saw fit and arranged new oversight obli-
gations for the protection of savers,
which had been a topic upon which the
Cour des comptes had focused its
The banking and financial regulation
law of 22 October 2010 has, for its part,
completed the substantial progress
made in relation to the oversight of sys-
temic risks and the strengthening of the
powers of the authorities, whose
concrete terms generally satisfy the
recommendations of the Cour des
Cour des comptes
Cour des comptes
Central services in
charge of Overseas
In 2006, the Cour des comptes had
noted that the two services of the over-
seas ministry, the political, administra-
tive and financial affairs directorate
(direction des affaires politiques, admi-
nistratives et financières or DAPAF) and
the economic, social and cultural affairs
directorate (direction des affaires écono-
DAESC) were providing poor inter-
ministerial coordination, while they
were managing appropriations represen-
ting only a minor portion of those dedi-
cated to Overseas France.
Creation of the general
overseas delegation (délé-
gation générale à l’outre-
mer or DéGéOM)
DAPAF and DAESC were placed in
May 2007 under the authority of the
minister of home affairs, overseas and
local authorities, the secretary of State
for overseas having final power of deci-
sion, as needed. Then, in September
DéGéOM.The set up of DéGéOM was
labour-intensive: tight deadlines, late
designation of the prefiguration, insuffi-
cient support to the personnel, difficulty
filling the positions. At the end of 2008,
the workforce was significantly smaller
than planned; half of it comprising new
employees and the approval of applica-
tions was at times problematic.
Shrinking of the organiza-
Pursuant to the recommendations
of the Cour des comptes, a single cen-
tral administration department was set
up and structured around three func-
tions: coordination of public policies,
legal and institutional functions, assess-
ment and outlook.
The majority of the “support func-
tions” was transferred to the competent
departments at the ministry of home
affairs, with the corresponding posi-
tions, which makes it possible to achieve
economies of scale. The link between
DéGéOM and the other departments of
the ministry is now operating properly.
An inter-ministerial role to
be asserted
DéGéOM keeps the management of
the “overseas” budget mission, manages
numerous subsidies and makes deci-
sions on the civil-status department of
Overseas France and on the appropriate
military service staff. However, its inter-
ministerial drive and coordination func-
tion remains fragile: no meetings of the
inter-ministerial commission for the
Annual public report
Executive summaries
Annual public report
Executive summaries
coordination of public investments;
inter-ministerial secretariat of Overseas
France provided by the secretary general
of the government; not very clear link
with DATAR for the contractual policy.
In addition, serious productivity
constraints have been imposed on the
delegation, reduced by 83 positions, of
which only 46 correspond to the trans-
fer of the support functions, while the
relative portion of the higher grade
positions did not increase. Neither the
number nor the profile of positions
made available by other ministries is
specified and the inter-ministerial nature
of recruitments did not increase. Over
these first two years, DéGéOM was
faced with the crisis in the West Indies
and had to provide complex follow-up
of the LODEOM project. Three gene-
ral delegates succeeded each other and
the minister of home affairs and the
Secretary of State for Overseas France
were replaced. The DéGéOM depart-
ments were not included in the consul-
tative phase of the organisation of the
“Overseas Convention”. The cabinet of
the minister for Overseas France com-
prises some sixty employees, including
some ten management level employees,
compared to the DéGéOM whose
workforce has decreased. Inter-ministe-
rial meetings are rarely held in the pre-
sence of the delegate general. The rela-
tions with several ministries are difficult,
the information circulates poorly and
certain ministries do not follow the rules
and timeframes for reporting matters
set by the Prime Minister; others have
yet to appoint a correspondent.
Central services in charge of
Overseas France
Meet the conditions for the
DéGéOM to be able to carry out its
mission as best as possible :
- Facilitate the recruitment of
employees from other ministries ;
- Support its actions by informal
disciplinary actions with respect to the
rules of referring matters and systema-
tic appointment of correspondents ;
- Long-term stability in time for its
management team.
Cour des comptes
Geology and mining research
office (Bureau des recherches
géologiques et minières or
The Cour des comptes examined on
several occasions the accounts and
management of the Geology and
mining research office (Bureau des
recherches géologiques et minières or
BRGM), an industrial and commercial
public institution.
Criticised management
The previous audit, covering fiscal
years 1999 to 2002, during which
BRGM exercised mining operator acti-
vities, had led the Cour des comptes to
address to the appropriate ministers a
summary proceedings on three points:
- The need to define the new mis-
sions of the BRGM and to ensure its
future financial balance ;
- More rigorous management, nota-
bly by putting an end to accounting mal-
functions related to the difficult roll-out
of a software package;
- Financial consequences of the
commitment in the building of a nickel
processing plant in New Caledonia.
Significant improvements
The latest audit, for fiscal years 2003
to 2008, showed that the recommenda-
tions of the Cour des comptes were lar-
gely followed.
The Decree of 20 September 2004
defined the new missions of the
BRGM, around three lines: research in
the field of geosciences, expert opinions
for the public authorities in the same
field and international activities. Four-
year contracts define the objectives of
the BRGM under its new missions. This
new strategy has made it possible for the
institution to improve its accounts: its
operating income has become positive
since 2004 and reached €10.6m in 2008.
In addition, the BRGM has impro-
ved its management and its accounting
software packages now operate pro-
With respect to the risks that the
BRGM stood to incur because of its
involvement in a nickel plant project in
New Caledonia, the institution sold its
ownership interest in this project to
société de participation minière du sud,
a company on which it now holds a
claim to the amount of €67.4m, hedged
with a provision of €10m. This provi-
Annual public report
Executive summaries
Annual public report
Executive summaries
Reform the organization of
BRGM to create a fully functional
financial department and modify the
functions of the production depart-
ment ;
In terms of financial matters,
improve the internal control and audit
Geology and mining research office
(Bureau des recherches géologiques
et minières or BRGM)
sion was found inadequate by the audi-
tors. A residual risk remains therefore in
this area.
However, the creation, during the
audited period, of a school for applied
geosciences seems of extremely limited
Air navigation
The Cour des comptes examined on
several occasions the management of
the human resources of the general
directorate of civil aviation (DGAC): In
2002 (public thematic report), in 2006,
and then in 2010. In its annual public
report of 2010, the Cour des comptes
made a harsh appraisal, notably with
regard to the lack of transparency of
the organisation of the work which was
raising productivity and security issues.
One year after the publication of
that report, DGAC ended its most
controversial practices and corrected the
remuneration system applicable to its
Since June 2010, a verification sys-
tem shows the control hours actually
worked by each employee.
This put an
end to a system of unofficial absences
(known as “clearances”) implemented
by the air traffic controllers, in favour of
an opaque organization of the work.
Difficulties were experienced locally, but
they have remained limited, despite the
emotions generated by the implementa-
tion of these controls.
These measures constitute a major
step forward. Nevertheless, the Cour
des comptes had found that the same
opacity had prevented the aviation
safety department from having the
necessary procedures to ascertain the
controllers’ aptitude to exercise their
profession. One year later, the informa-
tion available to the safety department is
still incomplete.
Annual public report
Executive summaries
Cour des comptes
Annual public report
Executive summaries
Cour des comptes
The CNRS in the new
landscape of research
In its 2007 public report, the Cour
des comptes had found that the Centre
National de Recherche Scientifique
(CNRS) had not managed to redefine its
positioning in the rapidly changing land-
scape of research. In 2010, the Cour des
comptes verified the implementation of
its recommendations.
Reformed governance
The decree of 29 October 2009
entrusted the president of CNRS with
the general management of the institu-
tion. Pursuant to its provisions, a Chief
Executive Officer was appointed on 20
January 2010.
The performance contract signed
with the Central Government on 19
October 2009 was followed rapidly by
action notably with the creation of ten
discipline-specific institutes, in early
2010, in the stead and place of the old
scientific departments. It however lacks
any quantitative financial representa-
Advances to be pursued
To implement the renewed and
balanced partnerships by university site,
the functions that will remain within the
CNRS must be specified; the CNRS
must also acquire the use of up-to-date
management methods and tools.
While the accounting modernisation
is on the way to completion, considering
that the CNRS accounts which have
been certified with qualifications since
2008, the budget modernisation has yet
to concretize. Only after 2010 were
renewed procedures put in place which
should have accompanied the imple-
mentation of the Constitutional Bylaw
on Budget Acts (Loi organique relative
aux lois de finance or LOLF). Two
questions remain to be solved: the level
of the reports and the allocation of
appropriations to the research units.
Partial adaptation of
management tools
The assessment systems were har-
monised. Interfaces between informa-
tion systems of CNRS partners in its
mixed research units, i.e. 90% of the
1,000 units that make up the Centre,
must be created. Finally, the CNRS has
a consultative scientific director at the
major university sites.
bridges between research and teaching
activities were set up, but at this stage
they concern only limited personnel. At
the same time, the integration of secon-
ded teaching researchers did not evolve
and the results in terms of recruiting
teachers/researchers by the CNRS are
The CNRS in the new landscape
of research
Management of research
units: a reform to be
conducted urgently
In the mixed units, i.e. in 90% of
laboratories, the CNRS only gets a
consolidated vision of its human and
financial capital once every four years.
Despite a clearly stated priority, the
achievements to date are particularly
limited. This presumes that the question
of personnel assigned to tasks at CNRS
be solved. The new system will also have
to enable the institutions to ensure the
financial steering of their management.
Annual public report
Executive summaries
Active participation in the
emergence of university clusters of
excellence ;
Develop bridges between the
researching and teaching functions by
setting ambitious and measurable tar-
gets ;
Urgently reform the financial
management of mixed research units ;
Settle in the next budgets the
issue of the carry-over and allocation
of appropriations to the research
Annual public report
Executive summaries
Cour des comptes
Preparation and monito-
ring of the execution of
the Central
Government’s budget
In the reports it draws up every year
on the results and budget management
of the Central Government as well as in
the assessment of movements of credits
decided by decree, the Cour des
comptes expresses recommendations
relative to the preparation and monito-
ring of the execution of the Central
Government’s budget. The monitoring
of seventeen of them shows a gradual
but still too limited development of
good practices.
Several recommendations intended
to specify the framework for the execu-
tion of the budget of the Central
Government, to reinforce the monito-
ring of the expenditures of the opera-
tors and to reclassify certain revenues of
the Central Government were for the
most part implemented. They contri-
bute to clarifying the budgetary infor-
mation and to improving the manage-
ment of its execution.
Other recommendations were par-
tially implemented. They referred nota-
bly to the insufficiencies of budget
authority under the initial Budget Act
compared to the foreseeable needs, the
recognition and payment of expendi-
tures due during the fiscal year, or the
structuring of the standard used to limit
the increase of Central Government’s
expenditures. At the same degree of
implementation are the recommenda-
tions related to the monitoring and
assessment of tax expenditures and to
budget management. The complemen-
tary period that makes it possible to
extend beyond the end of the year the
execution of expenditures that become
payable has been reduced; the annual
performance reports are prepared soo-
ner after the end of the year and the
budgetisation of expenditures in autho-
rised commitments was extended. The
progress noted must be improved.
Certain recommendations have not
yet been successful, notably those that
pertain to the recognition of all the legal
obligations created during the fiscal
year, to informing Parliament on the
development of indebtedness over the
short term or also to the matching of
special accounts contributing to the
implementation of public policy to the
corresponding missions of the master
The delay in implementing several
of these main recommendations made
by the Cour des comptes does not
result, for the majority of cases, from a
technical difficulty and they should be
able to quickly come to fruition in order
to improve the quality of budget infor-
mation and to favour a better financial
management of public policies.
The effects of the
certification of the
financial statements of
the Central Government
Every year, since 2006 the Cour des
comptes is entrusted with certifying the
lawfulness, truthfulness and fairness of
the financial statements of the Central
Government with respect to the repor-
ting framework set out in the Central
Government’s accounting standards on
an accrual basis.
Expressing a certification opinion is
an essential aspect of the reform deci-
ded by the constitutional legislator
under the LOLF. It must guarantee the
reliability of information provided to
Parliament, the authorities and the citi-
zens. The economic and financial crisis
simply increased the need for a com-
plete transparency of the accounts.
By deciding to certify the financial
statements for the 200-, 2007 and 2008
fiscal years with a high number of reser-
vations, the Cour des comptes wanted
to underscore its desire to adopt a
constructive hand-holding approach for
the gradual implementation of the
accounting reform while, at the same
time, providing Parliament with detailed
information on the limitations of the
Central Government’s financial state-
Fiscal year 2009 : a year
of progress
In its certification opinion published
on 25 May 2010, the Cour des comptes
decided to remove three of the qualifi-
cations expressed on the financial state-
ments for the prior fiscal year. Overall
10 reservations were removed over
three years (1).
Despite these improvements, nine
reservations, eight of which are substan-
tial, have been renewed. All of the
aggregates of the financial statements
continue to be affected by uncertainties,
differences of opinion with the preparer
of the financial statements and limita-
tions on the scope of the audits. Two
reservations are of a structural nature.
They result from the maladjustment of
the financial and accounting informa-
Government and the insufficient effi-
cacy of its internal control mechanisms.
Two qualifications concerning long-
term investments refer to the accoun-
ting treatment of the social debt
redemption fund and uncertainties
regarding the valuation of Central
Government operators under its assets.
Cour des comptes
Annual public report
Executive summaries
(1)Furthermore, new reservations were formulated during the same period.
The effects of the certification of the
financial statements of the Central
Annual public report
Executive summaries
Three other reservations pertain to the
assets of the ministry of defence, the
valuation of the real estate holdings of
the Central Government and the fixed
assets and inventories of the civil minis-
Management of the ser-
vices of the Central
Government remaining for
the most part rooted in
the budget-based
Supplementing the monitoring of
budget operations, i.e. the sole inflows
and outflows for the fiscal year, with
asset-related information remains mar-
ginal. Thus, the information derived
from a better accounting awareness of
the real estate holdings, the improve-
ment from the inventory of contingent
liabilities, the cost of holding and main-
taining the equipment necessary for
conducting the activities of the Central
Government is not used to support the
decision-making process.
However, regardless of the remai-
ning limits, accrual-basis accounting
may provide the administrations with
information as yet not in their posses-
sion, which may prove useful for the
steering of their management. These
data must now be used.
Legislative measures
concerning Social
Security and retirement
As in previous years, the Cour des
comptes examined to what extent the
provisions of the Law for the Financing
of Social Security (loi de financement de
la sécurité sociale or LFSS), as well as
those, just prior to that, of the Law on
the reform of retirement, reflected in
the Court’s previous audit and recom-
Several recommendations repeated
by the Cour des comptes, which
concern structural questions, were the
object of provisions in the 2011 LFSS.
This was in particular the case of the
financing of deficits, since a debt takeo-
ver is planned by the Social Debt
Redemption Fund (caisse d’amortisse-
ment de la dette sociale or CADES), for
the monitoring of the national objective
for sickness insurance expenditures
(objectif national des dépenses d’assu-
rance maladie or ONDAM), made more
rigorous as recommended by the Cour
des comptes.
The Cour des comptes notes howe-
ver that these measures remain, in parti-
cular for the decrease of “social niches”
(exemptions of contribution payments),
below its recommendations and that
they did not have a sufficient effect on
the decrease of deficits, which consti-
tutes for the Cour des comptes an
genuine necessity. Several provisions of
the Law on the reform of retirement
correspond also to recommendations,
sometimes old, by the Cour des
comptes. In two cases, the Law
announces supplementary studies in
order to go in the direction of the
recommendations of the Cour des
comptes, on the one hand for a greater
harmonisation of the rules and limits
between invalidity and disability, on the
other hand for reform of demographic
compensations in the retirement branch.
The LFSS stipulates, in turn, the discon-
tinuation of the sickness demographic
compensation: this also corresponds to
a recommendation of the Cour des
Several provisions further allow
greater convergence between the rules
for the private sector and those applica-
ble to public servants: The decrease in
the minimum time needed to be eligible
for retirement in public service, the
removal of the option - offered to
parents of three or more children - to
retire after 15 years in public service or
also the downward revision of the insu-
rance time bonus, provided to certain
grades of civil servants.
Cour des comptes
Annual public report
Executive summaries
Annual public report
Executive summaries
Cour des comptes
In an inquiry carried out in 2008 at
the request of the finance commission
of the Senate, the Cour des comptes
audited Coface which manages on
behalf and with the guarantee of the
Central Government, the export risk
insurance translations of French com-
panies that cannot be reinsured com-
A strengthening of the
demand for support of
The economic crisis largely explains
this. In 2008, the Cour des comptes had
found a trend toward a decrease in the
applications by companies for Coface’s
public bidding process, principally with
respect to credit insurance. The cove-
rage taken out under credit insurance
has in fact tripled from €7.5bn in 2008
to more than €20bn in 2009.
The Cour
des comptes recommends transferring
this process, at least partially, to a ban-
king operator whose management costs
remain high.
Improved management
The recommendations that the
Cour des comptes had made for the
improvement of the management of
the public bidding process were follo-
wed overall, both with respect to
streamlining the organisation of Coface
for examining the applications of com-
panies and for a better identification of
the workforce assigned to managing the
government backing.
Better risk assessment
The recommendations relative to
the understanding of the risks incurred
by the Central Government expressed
in 2008 have taken on a new sensitivity.
In fact, the risks taken in aeronautics,
which represent 20% of commitments
underwritten, are not properly provisio-
ned. The Cour des comptes continues
above all to regret that all the conclu-
sions have not been drawn, by the cen-
tral Government, from the calculation
made to determine the capital needed to
deal with risks related to credit insu-
rance. It reiterates in consequence its
recommendation aimed at defining the
Government wishes to cover with
equity from the public bidding account
of Coface in order to deduct from it the
annual withholding that it may operate
on the cash in the account.
Reorganisation of the
collection of
apprenticeship tax in the
fields of transport and
Following the audit of the agencies
that collect the apprenticeship tax (orga-
nismes collecteurs de la taxe d’appren-
tissage or OCTA) in the transport and
logistics sector the Cour des comptes
had found major malfunctions, which it
reported, by summary proceedings of
23 July 2008, to the ministers of trans-
port, employment, national education
and budget, who oversee these associa-
tions. The Cour des comptes had
underscored the opacity of the collec-
tion system and noted the establishment
of self-controlled “de facto groups”
carrying out activities that are some-
times very remote from any public ser-
vice mission, without such deviations
having generated any reaction on the
part of the administrations concerned.
Therefore the Cour des comptes had
recommended an immediate and far-
reaching reorganisation.
The collection organisation
has changed since 2008
The AFT, a vocational training asso-
ciation in the transport sector (associa-
tion pour la formation professionnelle
dans les transports) is now the only
agency that collects the apprenticeship
tax, the other associations having lost
their authority to do so in 2009.
organisation of this group has itself
been simplified: the 27 real estate com-
panies that were part of it have been
merged into a single one and the various
associations operating in the field of
continuing education have been combi-
ned into a single organisation.
An incomplete develop-
The setting of the remuneration of
senior managers continues to escape the
control of the oversight of AFT while
there is room for improvement in the
financial transparency of the group due
to the lack to date of consolidated
accounts certified by an auditor.
The distinction between collection
activities and those pertaining to the
area of competition (training) remains
unclear. The situation of the OCTA
would profit from collaborating with of
equal representation organisations col-
lecting funds from the continuing occu-
pational education (OPCA), for which
collection is the essential mission,
except for any activity concerning the
provision of occupational training.
Annual public report
Executive summaries
Cour des comptes
Réorganisation of the collection
apprenticeship tax in the fields of
transport and logistics
Annual public report
Executive summaries
The exercise of oversight
remains marked by major
After a mobilisation consecutive to
the summary proceedings by the Cour
des comptes, the responsible ministries
did little to change their practices. In
particular, they did not set up a “com-
mitment and monitoring committee”,
tasked with approving the distribution
of tax resources allocated to AFT, while
they had made the commitment to do so
following the summary proceedings of
2008, thus depriving themselves of a
management tool for that operator.
The Cour des comptes underscores
the need of reinforced vigilance of the
public authorities so that the changes
started in 2009 may be completed.
GIP Housing and social
actions for marginally
homeless and homeless
In a previous audit included with the
annual public report of 1999, the Cour
des comptes had prepared a critical
report of the exercise of its re-housing
missions by the housing and social
actions badly housed and homeless per-
sons public interest group “groupement
d’intérêt public (GIP) habitat et inter-
ventions sociales pour les mal-logés et
les sans abri”.
It had raised the question of the
continuity of this entity.
Ultimately renewed in 2003, the GIP
experienced strong growth which resul-
ted in 2007 in a doubling of the Central
Government’s subsidy. Its activity was
refocused and its missions further res-
The Cour des comptes notes that
the existence of this entity which seems
justified for Ile-de-France to ensure
emergency re-housing, and that the
oversight authorities are satisfied with
its actions. The risk to have it entrusted
with missions that have no direct rela-
tion with its purpose remains however
quite real. The Cour des comptes calls
the attention to the consequences from
the increase in the use of sliding scale
leases until 2009.
It recommends imple-
menting a securitisation of GIP claw-
backs and maintaining the means for
controlling this entity. The internal
management of the GIP must be fur-
ther improved.
Cour des comptes
Annual public report
Executive summaries