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2016

ANNUAL PUBLIC

REPORT

Observations

Summaries

DISCLAIMER

These summaries are intended to facilitate the understanding

and use of the report produced by the Cour des comptes.

Only the original report is legally binding on the Cour des

comptes.

The responses of the administrations and government authorities

concerned appear after the report.

The order of the summaries corresponds to the order of the

chapters of the report.

Made public for the first time in 1832, the annual report of the Cour des

comptes is the principal means for telling the general public about the work

of the Cour des comptes and of the regional and territorial chambers of

accounts, and about the lessons to be learned from this work. The 2016 version

of the annual public report provides examples of reforms that are or should

be carried out in various sectors of public management, while highlighting

shortcomings in the way they are controlled and their results.

The

2016 annual public report

is made up of two volumes:

volume I

presents the observations and recommendations from a selection

of audits and surveys conducted in 2015 by the Cour des comptes and the

regional and territorial chambers of accounts;

volume II

presents the organisation and missions of the Cour des comptes

and the regional and territorial chambers of accounts, as well as the results of

their action and particularly the follow-up actions taken by the administrations,

government authorities, and other supervised bodies in response to the obser-

vations and recommendations made in previous years.

The annual report of the Court of Financial Discipline (CDBF) is appended to

these two volumes.

This booklet presents the summaries of the observations contained in volume I.

These 18 texts are grouped by theme:

- part 1:

public finances

(1);

- part 2:

public policies

(8);

- part 3:

public management

(9).

Introduction

Summaries of the Cour des comptes 2016 Annual Public Report

Sommaire

Summaries of the Cour des comptes 2016 Annual Public Report

Observations

Part 1 - Public finances

The overall situation of public finances (at the end of January 2016) . . .9

Part 2 - Public policies

Chapter I - Employment and Solidarity

The generation contract: why it has been a failure

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

The Solidarity Fund: an operator to be closed down

. . . . . . . . . . . . . .19

Chapter II - Energy and Sustainable Development

Maintenance of nuclear power plants: an updated policy,

uncertainties to be clarified

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

Eco-organisations: an original system to be consolidated

. . . . . .26

Chapter III - Territories

The fishing sector in Saint Pierre and Miquelon: an uncertain future .

Connections to the main Ponant Islands: a challenge for the

Bretagne region

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35

“Carcassonne Agglo”: the example of an unfinished

inter-communal structure

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37

The school system in French Polynesia and New Caledonia:

a major public effort, efficiency to be improved

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

Sommaire

Summaries of the Cour des comptes 2016 Annual Public Report

Part 3 - Public management

Chapter I - Implementation of sovereign policies

Legality review and budget control: a place to be found

in the new organisation of the State

. . . . . . . . . . . . . . . . . . . . . . . . . . .47

Labour inspectorate: a necessary modernisation

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

Chapter II - Management of public companies and agencies

Postal workers faced with the challenge of declining mail: changes

to be accelerated

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57

The Transdev-Veolia Transport merger: an ill-conceived transaction with

major losses to date for the Caisse des Depots et Consignations

. . . . . .61

National theatres: scenes of excellence, weakened institutions

. . .65

The fight against fraud in urban transport in the Greater Paris

region: a collective failure

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69

Chapter III - Project management

The French horse and riding institute: an improperly conducted

reform, a phase-out to be scheduled

. . . . . . . . . . . . . . . . . . . . . . . . . .75

Reorganisation of public higher education in agriculture: a

deceiving reform

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78

The Terra Botanica botanical park: a costly initiative in search of

financial sustainability

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81

Part 1

Public finances

The overall situation of public finances

(at the end of January 2016)

The overall situation

of public finances

(at the end of January 2016)

Summaries of the Cour des comptes 2016 Annual Public Report

In 2015, a moderate reduction

in the headline and structural

deficits

According to the forecasts of the 2016

budget act, the General governement

deficit

is expected to decrease by

0.1% of GDP in relation to 2014 to

reach 3.8% of GDP. This moderate

reduction is expected to come from a

significant decline in expenditure

relative to GDP ( 0.5 points) and a

parallel decline in public revenues

( 0.4 points), related in particular to

the measures taken to reduce the

taxes weighing on companies (tax

credit

for

competitiveness

and

employment, and accountability pact).

In 2016, a more ambitious deficit

reduction goal, but significant

risks on expenditure

In 2016, the Government expects the

headline and structural deficits to

decrease by 0.5% of GDP, to 3.3% and

1.2% of GDP respectively.

Achieving this goal appears to be

possible. However, revenue forecasts

are a bit high, and there is a real risk

of overshoot on the expenditure side.

The revenue forecasts are based on

assumptions of inflation and payroll

increases that seem high, as deemed

by the High Council of public finances

in its opinion of 25 September 2015.

The

European

Commission,

the

OECD, and the INSEE now expect

lower inflation and payroll growth

levels, therefore posing a risk on the

expected revenues from VAT and

social contributions.

Real risks of overspending weigh on

the State’s expenditure and on certain

social expenditure items.

Overspending under the State budget

appears likely on some expenditure

items for which the credits provided

for in the initial budget act are inade-

quate each year (external operations,

emergency accommodations, etc.). In

addition, the employment and training

plan announced in January 2016 has

no identified credit to date, whereas

its cost for the State is estimated at

€1bn by the Government.

______________________

The General governement accounts for 2015 will be not published by the INSEE until the end

of March 2016.

The overall situation of public finances

(at the end of January 2016)

Summaries of the Cour des comptes 2016 Annual Public Report

Change in the balance of General governement (in GDP percentage points)

Source:

Cour des comptes according to Insee data until 2014, Government forecasts

in 2015 and 2016

Public debt (in GDP percentage points)

Source: Cour des comptes according to Insee data until 2014, Government forecasts in

2015 and 2016

The overall situation of public finances

(at the end of January 2016)

Summaries of the Cour des comptes 2016 Annual Public Report

Meeting the State’s expenditure target

in value will therefore again require

particularly rigorous management of

credits throughout 2016 and mobili-

sation of the precautionary reserve.

The target for social expenditure

growth will also be difficult to reach:

even if the ONDAM is achieved, part of

the expected savings in supplementary

pension schemes and unemployment

insurance (€1.8bn in total) may not be

realised in 2016.

Like every year, the General governe-

ment’s interest expenditures could be

less than the Government’s forecast

and partly make up for the risk of

overrun on other expenditure.

Continue to reduce

the structural deficit

by acting on expenditure

In 2016, public deficit will exceed 3%

of GDP and the public debt will be

close to 100% of GDP. Reducing the

deficits and the level of public debt

will be vital to helping France keep

control of its fiscal policy and weather

macroeconomic shocks and interest

rate hikes.

To be sustainable, the reduction in

public deficits must focus as much

on the structural deficit as on the

headline deficit. In a period of economic

recovery, the headline deficit can be

improved through a short-term, and

therefore temporary, boost in public

revenues. In the past, episodes of growth

recovery have led to complacency in the

control of expenditure. The objectives

for reducing the structural deficit, which

are at the heart of France’s European

commitments,

must

therefore

maintained.

Given the high level of public spending

and the margins that exist to improve

its efficiency, deficit reduction must be

based on controlling expenditure. New

expenditure items, such as those

considered necessary with regard to

security and defence against terrorism,

will therefore need to be funded by

reducing expenditure items that have

not been deemed effective.

Part 2

Public policies

Chapter I

Employment and solidarity

The generation contract: why it has been a failure

The Solidarity Fund: an operator of the State to be eliminated

Summaries of the Cour des comptes 2016 Annual Public Report

The generation contract:

why it has been a failure

Although it constitutes one of the key

features of the employment policy

created in the past few years, the

generation contract, instituted by the

act of 1 March 2013 on the basis of a

national interprofessional agreement

unanimously signed by labour and

management, is currently a failure.

A quantitative failure given

the number of contracts signed

the

end

of July

2015,

only

40,300 contracts had been signed,

whereas more than 220,000 were

expected by this date to achieve the

goal of 500,000 contracts by 2017. In

addition, two-thirds of the young

signers were already present in the

companies involved, meaning that the

plan has had only a negligible effect

on unemployment.

A consequence of this quantitative

failure is that the generation contract

is less costly than expected: while the

Government had planned to spend

€975m in 2014 and each year thereafter,

only a quarter of this sum (€255m)

has actually been committed, where

the 2015 budget act revised the cost

of the plan down to €480m per year

once it is up and running.

A hybrid mechanism

misunderstood by companies

The design and the conditions for

implementation of the generation

contract explain this failure.

In principle, the generation contract

aimed to simultaneously promote

recruiting young people for permanent

contracts, keeping seniors employed,

and transferring skills. On this basis, the

Government made the choice to

entrust the labour and management

with devising the plan, which ultima-

tely took the form not of an assisted

contract, but a hybrid instrument

combining an obligation to negotiate

to avoid penalties (for companies

with more than 50 employees) and

financial aid reserved for the smaller

companies

(with

fewer

than

300 employees and not affiliated

with a group).

Although the eligibility criteria of

companies were fixed in a restrictive

manner, they remained flexible to the

young recruits by not focusing on

their level of qualification or their

degree of employability.

Recommendation

If it is decided to maintain it, tho-

roughly redefine the generation

contract

plan,

particularly

regards the penalty related to the

obligation to negotiate a collective

agreement and the criterion of not

belonging to a group.

The generation contract: why it has been a failure

Disappointing collective

bargaining

A year after the act of 1 March 2013,

although the seven-month period

allotted for collective bargaining was

far in the past, 50% of the workforces

of companies or groups with more

than 300 employees and 60% of the

workforces of companies with 50 to

300 employees were not covered by a

text relating to the generation contract.

From this point of view, the threat of a

penalty of up to 1% of the payroll in the

absence of negotiation has proved to

be ineffective and virtually unapplied

by the administration despite obvious

shortcomings.

Moreover, the content of these

agreements has been disappointing.

Their quantified objectives are never

binding and are most often based on

hiring forecasts at constant staffing

levels, and some branches have even

integrated job cuts into their goals.

In addition, the agreements have

often abandoned the principle of an

effective partnership between a

young person and a senior person to

favour a statistical matching without

real professional ties.

A plan already adjusted without

becoming more attractive

With its lack of attractiveness becoming

more and more obvious, the generation

contract already underwent three

successive amendments in 2014 and

2015 in order to exempt companies

with between 50 and 300 employees

from prior negotiation, raise the

maximum age of young beneficiaries

in case of company takeover or

continuity between apprenticeship

and generation contract, and double

the financial aid when a company

recruits a young people and a senior

person at the same time. However,

these adjustments have not sped up

the signing of new contracts.

Given these findings, the Cour des

comptes considers it essential to

wonder about the possible evolution

of the generation contract.

If the public authorities intend to keep

it beyond the duration of the collective

agreements already signed and the

aid granted, it should be thoroughly

revised by considerably simplifying or

even abandoning the obligations of

prior negotiation and by relaxing the

eligibility criteria for financial aid.

Without such a revision, it would be

vain to expect stronger mobilisation

of companies, and it would then be

necessary to consider the termination

of the generation contract in favour of

more effective plans.

Summaries of the Cour des comptes 2016 Annual Public Report

The Solidarity Fund:

an operator to be closed down

The Solidarity Fund is a public

agency, an operator of the State. It

was created in 1982 to collect the

1% solidarity contribution levied on

the wages of civil servants and public

officials in the purpose of funding

the national solidarity scheme for

unemployed workers ineligible for

unemployment insurance. This primarily

involves the specific solidarity allocation

(ASS) and the retirement equivalent

allowance (AER).

In 2014, the Solidarity Fund managed

a budget of €2.7bn.

A financing scheme far from

the balance initially expected

The financing, initially ensured only

by the solidarity contribution,

is today very largely supported

by the State’s budget.

Because the revenues from the collec-

tion of the 1% solidarity contribution

proved insufficient during the 1990s

to cover the financing requirements of

the solidarity scheme, since then, the

State contributed each year an average

of 46% of the Fund’s revenues over the

2006-2014 period.

Various measures or practices

have reduced the visibility

of the initial scheme

Various legislative provisions have

successively allocated then taken

away new revenues for the agency

and have led to an increase in the

State’s

subsidy.

addition,

the

agency was used for the management of

certain operations outside its purpose.

Almost non-existent autonomy

A board of directors without real power

In reality, the board takes decisions solely

about the agency’s own operation,

i.e., 0.5% of its budget, in particular

because of the tax nature of its own

revenues and the absence of margin

for manoeuvre on its expenditure

items, which are directly related to

the allocations used by Pôle Emploi

(French employment and unemploy-

ment agency).

An authorising officer without control

over the execution of expenditure

The authorising officer lacks the

powers of control fundamentally

associated with this function, having

never been made responsible for the

department’s control on allocations

financed by the agency, which represent

99.5% of the Fund’s expenditure.

Recommendations

immediately initiate the closure of

the agency and the transfer of its

recovery mission to a collection

network, such as that of the DGFiP

or the ACOSS;

Clarify quickly the calculation

basis of the solidarity contribution

through

interministerial

approach (employment and labour,

public service, budget), identify all

organisations employing staff who

may be subject to the solidarity

contribution, and make the use of

telepayment mandatory for all liable

administrations and bodies.

The Solidarity Fund: an operator to be closed down

Major deficiencies

in the collection task

No identification of employers

in charge of the contribution

The collection of the solidarity

contribution is based on a purely

declaratory

system,

and

the

Solidarity Fund has no identification of

employers in charge of the deduction.

Uneven application

of the regulations

The texts defining the base of the

solidarity contribution are interpreted

differently according to the adminis-

trations, which results in unequal

treatment of public officials who owe

the tax and leads to a substantial

shortfall for the State.

Inadequate means of control

The Solidarity Fund, unlike large

collection networks, is unable to

monitor recovery on all taxpayers.

Partial modernisation

of recovery

The

telepayment

procedure,

implemented in 2006 to improve

collection conditions, has not yet

been applied on a large scale

because of insufficient support from

the supervisory authorities.

Insufficient effectiveness

justifying the transfer

of the Fund’s missions

The Solidarity Fund does not have

the means to effectively monitor the

recovery of the solidarity contribution.

Its

small

degree

institutional

influence has not allowed it to obtain

uniform application of the texts

defining its calculation basis by the

administrations.

The transfer of its missions to a

recovery network, such as that of

the DGFiP or the ACOSS, would

help to streamline the landscape of

operators of the social ministries

and would improve recovery.

Summaries of the Cour des comptes 2016 Annual Public Report

Chapter II

Energy and sustainable development

Maintenance of nuclear power plants: an updated policy,

uncertainties to be clarified

Eco-organisations: an original system to be consolidated

Source : Cour des comptes

* 2014 forecast.

Change in maintenance capital expenditure of nuclear power plants

(in current €M)

Summaries of the Cour des comptes 2016 Annual Public Report

The 58 nuclear reactors operated by

EDF in France undergo maintenance

operations to replace or renovate

equipment and maintain facilities in

order to supply electricity under

safety

conditions

according

peremptory norms.

EDF upgraded its maintenance

policy

Between

2006

and

2011,

EDF’s

nuclear power stations posted poor

performance indicators (technical

capacity to produce electricity, nuclear

safety, “metal time”2), but they have

recovered since 2011, particularly

because of a significant investment

effort.

Nevertheless, they must be constantly

monitored by EDF.

Maintenance of nuclear power

plants: an updated policy,

uncertainties to be clarified

______________________

“Metal time” is an indicator internal to EDF representing the degree of organisation of

maintenance operations during a reactor shutdown.

Maintenance of nuclear power plants:

an updated policy, uncertainties

to be clarified

EDF has taken measures

to improve the maintenance

of the power plants

In 2011, EDF launched the “Grand

Carénage” programme covering all

maintenance operations for its current

nuclear power plants. Its objective is to

permit their operation with the best

efficiency, if possible beyond 40 years,

the length of time for which the plants

were originally designed.

EDF also revised its internal organisation,

the procedure for reactor shutdowns,

and the management of its equipment

and spare parts.

Controlling the conditions

of outsourcing must remain

a priority for EDF

EDF outsources 80% of maintenance

operations to external service providers

under controlled competition and

transparency rules. Considering the

available indicators and the checks

performed by independent bodies

such as the Nuclear Safety Authority

and the Inspector General for Nuclear

Safety And Radiation Protection, the

service

providers

operate

under

conditions that do not jeopardise

their safety but require ongoing

attention by EDF.

Securing the production

of electricity requires an ambitious

maintenance programme

The implementation of the EDF’s

maintenance programme could reach

€100bn (in 2013 figures) between

2014 and 2030, i.e., €1.7bn (in 2013

figures) on average per reactor. This

figure includes investments and

operational

disbursements

for

maintenance.

The project should have only a limited

impact on the cost of production of

nuclear electricity, unlike changes

in production whose effects are

potentially greater. In fact, the 50%

increase

investments

would

result in an increase of less than 5%

in the cost of production, whereas a

50% decrease in average production

would double this cost.

EDF’s maintenance programme

is subject to high uncertainty

The nuclear sector’s hiring requirement

is estimated at 110,000 direct and

indirect jobs by 20203. It faces tensions

on certain industrial segments (welding,

piping, etc.) and strategic uncertainties

that do not encourage companies to

invest and hire. Despite initiatives by EDF,

public authorities, and stakeholders in

the nuclear sector (information, creating

loyalty of industrial partnerships),

their mobilisation remains insufficient,

particularly with regard to vocational

training.

The

industrial

project

also

dependent on the development of

safety requirements. The resulting

uncertainties could alter the project’s

timetable and its technical options,

with a potential effect of €5.11bn (in

2013 figures) at minimum on its cost.

Summaries of the Cour des comptes 2016 Annual Public Report

______________________

Including in order to meet the group’s needs in its new national and export projects.

Maintenance of nuclear power plants:

an updated policy, uncertainties

to be clarified

Summaries of the Cour des comptes 2016 Annual Public Report

addition,

investment

budgets

incorporate a significant level of

uncertainty, estimated at €13.30bn

(2013 figures) between 2014 and

2030. However, the inadequacy of

EDF’s cost assessment model does

not make it possible to validate this

assessment.

Lastly, the application of the recent law

on the energy transition for green

growth dated August 2015 should

lead EDF to throughly revise its

maintenance programme. Notably, the

statutory cap on installed power of

63.2 GW could involve the shutdown

of the two Fessenheim reactors, while

the objective of reducing nuclear

power’s share of national electricity

production to 50% by 2025, could

lead to the closure of 17 to 20 other

reactors. No assessment has been

conducted yet by the State or by

EDF on the potential economic

consequences of the application of

the new law. Yet, several billion euros

per year are at stake. Thus, starting

in 2025, EDF’s annual revenue losses

could amount to €5.7bn, whereas its

running costs would be reduced only

by €3.9bn. The amount of investments

could decrease up to €1.5bn per year,

and EDF’s assets could be reduced by

the value of the closed production

assets (between €1.7bn and €2bn

(in 2013 figures) per year).

These assessments does not take

into account the effects of closures

on the cost of energy, with impacts

on employment and growth, or any

compensation or indemnities that

EDF could obtain from the State not

yet valued.

The implications of the act on the

energy transition for green growth

will need to be specifically identified

and assessed in the multiyear energy

forecast (MEF) currently being defined

under the responsibility of the State so

that EDF can incorporate its guidelines

into the “maintenance” component of

its strategic plan, provided for in the

law.

Recommendations

identify in the study of the

impact of the MEF, provided for in

the law on the energy transition for

green growth, its industrial and

financial

consequences

on the

nuclear

reactor

maintenance

programme;

in view of the development of

EDF’s strategic plan, decided as part

of the MEF, update the assessments

of maintenance operations taking

into account the uncertainties and

contingencies associated with them;

because of the difficulties expected

with regard to recruitment and

training, intensify the mobilisation

of industry players, public and private,

aimed at addressing shortages of

skills identified in the context of the

“Grand Carénage”.

Eco-organisations have emerged

relatively recently in waste manage-

ment. They are private structures to

which producers delegate all or part

of their responsibility for managing

waste resulting from the end of life

of products that they have placed on

the market, in application of the

“extended producer responsibility”

(or EPR) principle. The Cour des

comptes audited fourteen of them

representing an overall financial

budget of €1.2bn in 2013.

The role of eco-organisations:

significant resources,

a mixed picture

Although collection and treatment

rates have increased overall since the

establishment of extended producer

responsibility sectors, the results tend

to peak and are uneven depending on

the sectors, for various reasons

(overly ambitious goals, sometimes only

partially covered by eco-organisations,

lack of sanctions imposed by the public

authorities when they are not met,

under-utilisation of resources, and

mainly difficulty in changing consumer

habits with respect to sorting).

Beyond waste management, the

prevention of its production as well

as the eco-design of products must

be a growing concern for both pro-

ducers and consumers. Two main

levers are used: the modulation of

the contribution paid by producers

to eco-organisations (eco-contribution),

on the basis of ecological criteria

according to the bonus/penalty principle,

and

research

and

development.

However, the results remain very

limited in most sectors.

The regularity of the management as

well as the good financial health of

the eco-organisations must not hide

the efforts that they must still

accomplish, especially since they are

funded by eco-contributions ultimately

paid by consumers. In particular, some

of them should control their personnel

costs as well as the amount of their

provisions or cash.

Necessary changes

In order to develop sorting habits,

progress in communication must be

made by both eco-organisations and

local authorities. In particular, this

means updating the sorting instructions

Eco-organisations:

an original system

to be consolidated

Summaries of the Cour des comptes 2016 Annual Public Report

Les éco-organismes : un dispositif original

à consolider

that they distribute, making the payment

of the financial support they collect

subject to this prerequisite. However,

the main challenge is to clarify the

messages conveyed by the various

pictograms on products that are part

of an extended producer responsibi-

lity sector by affixing clear sorting ins-

tructions for the end-consumer uni-

form across all products and packa-

ging. This should be accompanied by

communication actions common to

the various sectors, especially in urban

areas, and assume that the promotion

of sorting is preferred to the promo-

tion of the eco-organisations them-

selves.

In addition, the transparency of costs

must be increased, whether it be

those incurred by local authorities in

terms of selective collection of house-

hold waste or treatment costs of

structures that recycle or recover it.

Similarly, cost control requires choices

on the organisation of collection and

sorting. Several factors contribute to

The abundance of messages on products

Eco-organisations: an original system

to be consolidated

higher costs of collection and treatment

of household waste: door-to-door

collection at the expense of voluntary

contributions, the number, the size,

and the operating model of sorting

centres. In addition to the streamlining

and modernisation of sorting centres,

other avenues could be explored

(concerning, for example, management

by certain eco-organisations of certain

sorting operations currently the

responsibility of the local authorities).

Lastly, the State must strengthen its

role as regulator. The consultation

structures put in place must be

simplified and oriented towards the

overall effectiveness of the sectors.

Greater formalisation of the process

of development of specifications as

well as increased professionalisation

of the approval procedure should

permit better access for all potential

eco-organisations to approval.

Summaries of the Cour des comptes 2016 Annual Public Report

Recommendations

To the State and eco-organisations:

continue and develop, for all

interested sectors, the approach

involving affixing a sorting instruction

manufactured

objects

and

packaging;

make the payment of financial

support

local

government

authorities subject to the updating

of sorting instructions;

make the eco-contribution visible

for

all

sectors,

according

methods to be defined jointly by

the

eco-organisations,

public

authorities, and those who place

products on the market.

To the State:

put in place a legal and contractual

framework promoting the transfer

and the publication of data on the

collection and treatment of waste from

an EPR sector whilst guaranteeing

the confidentiality of commercial

data;

encourage

local

government

authorities to modernise the sorting

centres and reduce their number.

Chapter III

Territories

The fishing sector in Saint Pierre and Miquelon:

an uncertain future

Connections to the main Ponant Islands: a challenge for

the Bretagne region

“Carcassonne Agglo”: the example of an unfinished

inter-communal structure

The school system in French Polynesia and New Caledonia:

a major public effort, efficiency to be improved

Saint Pierre and Miquelon, a French

territory located in the North Atlantic,

is located 25 kilometres south of the

Canadian island of Newfoundland and

has 5,478 inhabitants.

Recurring failures of public

support for the fishing sector

in Saint Pierre and Miquelon

Although fishing sector constituted

the cornerstone of the local economy

until the 1980s, since it generated

400 jobs related to port activity at the

time, it has suffered a profound crisis

since then that has changed the entire

economic and social balance of the

archipelago.

In 1992, following a 20-year dispute

between Canada and France, the

arbitration court in New York gave a

first blow to the fishing industry,

reducing the French exclusive economic

zone (EEZ) to a maritime corridor a few

nautical miles wide and 200 nautical

miles long.

The effects of this decision have

been compounded by the five-year

moratorium on cod fishing introduced

by Canada. The offshore fishing sector

has been almost totally destroyed,

and small-scale fishing is slowly

dying out.

This situation has led the State and

local

government

authorities

become heavily involved in the economic

revitalisation

Saint

Pierre

and

Miquelon and particularly the fishing

sector. Nevertheless, the conversion of

the sector has proved to be very difficult,

if not impossible. Several companies

have successively filed for bankruptcy.

The latest, the Canadian company SPM

Seafoods

International,

although

widely supported by public financing,

ceased its activity in spring 2011.

Two reports of the territorial chamber

accounts

Saint

Pierre

and

Miquelon, pertaining two local mixed

economy companies, SIFPA (investment

company of the fishing sector of the

archipelago) in Saint-Pierre and SODEM

(economic development corporation

of Miquelon) in Miquelon-Langlade,

pointed out the rapid deterioration of

the situation of the fishing sector and

the absence, in the short term, of a

lasting revitalisation solution.

This work highlighted anomalies and

deficiencies in the direction of these

two companies that have led SPM

Seafoods International, a shareholder

of SIFPA, to operate a processing

plant without legal title and deviating

from compliance with the rules

relating to facilities classified for

the protection of the environment.

The fishing sector

in Saint Pierre and Miquelon:

an uncertain future

Summaries of the Cour des comptes 2016 Annual Public Report

The fishing sector in Saint Pierre and Miquelon:

an uncertain future

Source: website of the commune of Miquelon-Langlade

Map of fishing areas around Saint Pierre and Miquelon

The territorial chamber of accounts

also identified serious deficiencies of

the local stakeholders in the controls

of the material reality of investments

that needed to be made and that were

funded for more than €3m by subsidies

from the local authority and the State.

Lastly, it denounced the conditions

under which the territorial community

bought out the vast majority of the

the

SPM

Seafoods

International group for a highly

overestimated amount.

In the end, this public financing was

incurred in vain, the Saint-Pierre

factory is now abandoned, SPM

Seafoods International having been

placed in liquidation in May 2011,

and the factory’s industrial facilities

were dismantled in 2012.

At the same time, in Miquelon-Langlade,

SODEM

(economic

development

corporation of Miquelon), created in

1993 with the mission of contributing

to the tourist, industrial, commercial,

and economic development of the

commune of Miquelon-Langlade, was

never able to develop sufficient

activity to ensure the coverage of

its expenditures. The company was

therefore in a de facto state of

insolvency at the end of financial year

2012. It is now forced to sell its assets.

Summaries of the Cour des comptes 2016 Annual Public Report

The uncertain outlook

for the restructuring

of the fishing sector

in Saint Pierre and Miquelon

Even so, prospects for economic

development still exist for the fishing

sector in Saint Pierre and Miquelon.

The

archipelago

has

interesting

resources, in volume and quality,

including some with high commercial

value.

However, today they

are

under-exploited in the light of the

available quotas. Thus, from 2010 to

2015, the tonnages caught never

exceeded 3,300 tonnes per year,

while the authorised quotas were

The fishing sector in Saint Pierre and Miquelon:

an uncertain future

Summaries of the Cour des comptes 2016 Annual Public Report

7,600 tonnes. At the same time, there is

a growing market for aquatic products.

This restructuring must essentially rely

on the adaptation and diversification of

small-scale fishing activities, subject

however to a better organisation of

fishermen and small producers and a

number of essential basic investments.

As a corollary, the development of

aquaculture, and particularly scallop

farming, would provide complementary

contributions with high added value.

The restructuring of industrial fishing

undertaken with the support of the

public authorities seems more difficult

to carry out.

Total products fished relative to the authorised quotas in tonnes

Source: Cour des comptes according to data from the prefecture of Saint-Pierre-et-Miquelon

As part of the 2015-2018 territorial

development contract, the State

provided for the continuation of the

modernisation of the single plant

still in operation, located at Miquelon,

the purchase of a new 28-metre

fishing vessel, and, in general, new

investments. However, the inadequacy

of industrial equipment of this proces-

sing site, as well as its geographical

location, considerably limit the possi-

bilities of development of its production.

To date, the State has failed to find a

shipping company likely to engage in the

development of offshore fishing in the

archipelago.

The fishing sector in Saint Pierre and Miquelon:

an uncertain future

Summaries of the Cour des comptes 2016 Annual Public Report

Recommendation

In any case, the success of these

projects requires the involvement

of local stakeholders, many of

whom appear to be demobilised, as

the private initiatives are rare, or even

non-existent. It will also most likely

require the commitment of external

partners with the technical expertise

and the financial capacity necessary

for processing and marketing of fishery

products in economically satisfactory

conditions.

Support the restructuring of the

fishing industry in Saint Pierre and

Miquelon, subject to real involvement

of reliable private partners.

Connections to the main Ponant

Islands: a challenge

for the Bretagne region

Summaries of the Cour des comptes 2016 Annual Public Report

The départements have authority until

31 December 2016 with regard to

public regular maritime transport of

people and goods to the islands, and

this authority will be transferred to the

regions from 1 January 2017 pursuant

to the law of 7 August 2015 on the new

territorial organisation of the Republic.

Exercising this authority has led the

government authority to determine

the public service obligations of the

connections between the islands and

the continent in order to compensate

for the difficulties related to insularity.

These transport flows of passengers

(two million per year, including one-

quarter residents) and goods are

of obvious importance for the

départements of Finistère and

Morbihan. The Cour des comptes

has audited these départements,

which own the equipment that they

make available to private operators,

public service delegates. The Cour des

comptes highlighted failed strategic

management, whereas the financial

balance of operators is not ensured.

The Breton islands of Ponant

Source: Cour des comptes according to the Ponant islands association

The two départements are insufficiently

aware of the costs and data of activities

relating to this public service. The

annual costs incurred by the départe-

ments include the contribution paid

to the operators and disbursements

that they directly cover (employee

pay, maintenance, etc.). According to

the

estimate

the

Cour

des

comptes, the government authority’s

disbursements

average

€10.6m

annually for Finistère and €4.5m for

Morbihan. These disbursements are

difficult to read in the budget documents

because they are not individualised in

a single specific budget. The overall

cost of the service, which also includes

the disbursements incurred by the

operators, amounts to €25m annually

for Morbihan and €15m for Finistère.

In addition, the départements do not

have all of the strategic data to fully

assess the effectiveness of the service

rendered, whether its quality, the

filling rate of ships with private

vehicles and heavy goods vehicles,

or the freight costs.

The accounts of the operators present

recurring deficits due to a lower number

of visits than their forecasts. Despite

the aid paid by the départements, the

operator’s annual average deficit

amounts to €1m for Morbihan, i.e.,

approximately 5% of its turnover, and

€0.6m for Finistère, i.e., 17% of the

annual turnover of the delegation. The

pricing policy, set by the départements

on a proposal of the delegates, is not

only unclear, because it is made up of

an excessive number of prices (200 for

Morbihan at the time of the audit),

but also because, in certain cases, it is

irregular in the light of the principle

of equality of users of a public service.

The transfer of authority to the region

constitutes an opportunity for strategic

thinking,

particularly

order

straighten out the financial position

and put an end to the disparities noted

between the two services, which do not

make it possible to reach the common

goals of the two départements, ensure

the right to transport of the islanders,

and boost the local economy. These

disparities especially concern the aid

policy, which is based primarily on

the taxpayer for Finistère and on

“continental”

passengers

for

Morbihan, the pricing policy, which

creates many exceptions and lost

revenue, and the adaptation of the

equipment to the requirements of

the activity.

Connections to the main Ponant Islands:

a challenge for the Bretagne region

Summaries of the Cour des comptes 2016 Annual Public Report

Recommendations

To the départements of Finistère and

Morbihan and the region of Brittany

as from 1 January 2017:

improve the information given by

the delegates on the operation of

the service and define additional

indicators;

perfect knowledge of the overall

costs and track them in a special

account;

adapt the pricing to the principles of

equal treatment of users identified by

the case-law;

objectivise the provided public aid

particularly by individualising the

transported freight cost;

initiate global thinking about

the service, relating in particular

to the principles of financing by

the organising authority and the

composition of the fleets.

“Carcassonne Agglo”: the example

of an unfinished inter-communal

structure

Summaries of the Cour des comptes 2016 Annual Public Report

The “Carcassonne Agglo” conurbation

(73 communes, 105,000 inhabitants),

created on 14 December 2001 and

whose scope expanded continuously

until 2013, provides an example of an

unfinished inter-communal structure

that struggles to build a project that

could be understood across its territory.

In that respect, this public inter-communal

cooperation

establishment

(EPCI)

illustrates the persistent failures of the

inter-communal

structure

system

already highlighted in previous reports

of the Cour des comptes (2005, 2009).

A conurbation in search

of its stability

The conurbation has failed to clearly

define its powers, which is an essential

prerequisite to the implementation of

structuring actions within a growing

territory. There has been little specifi-

cation of the powers made mandatory

by law, particularly with regard to

economic action, whereas the EPCI

has been much more enterprising to

develop powers chosen optionally

(social action and cultural policy). The

concept of Community interest has

remained

unfinished.

The

rapid

expansion of the geographical scope

of the conurbation makes all the

more necessary the development of a

territory project giving consistency to

the inter-communal structure and

ensuring a real integration of member

communes.

The extension of the conurbation since 2001

Source: Cour des comptes according to Insee - IGN 2014

Recommendations

To “Carcassonne Agglo”:

redefine the priority actions of

the conurbation, in connection with

its core competencies;

strengthen the control on the

subsidies granted to third-party

bodies;

reinforce the pooling actions

between

the

conurbation,

the

social action inter-communal centre

(CIAS), and the communes;

contain staff expenditures and

revisit the benefits granted without

any legal or regulatory basis.

Powers incompletely assumed

In its current state, “Carcassonne Agglo”

is struggling to actually exercise its

powers. The EPCI’s is akin to a transfer

budget, with a significant share of its

resources being repaid to bodies that

assume certain powers in its place (in

the fields of social action and household

waste

treatment

particular),

without sufficiently asserted control.

The interventions of “Carcassonne

Agglo” in the economic field remain

limited, while the socio-economic

characteristics of those living there

are unfavourable. The investment

policy especially favoured a power

chosen optionally (culture, with the

construction of a music conservatory),

and the financial fragility of the

government authority no longer allows

it to support a large-scale investment

policy.

Costly administrative

management

“Carcassonne Agglo” thus suffers from

costly administrative management.

The staff doubled between 2007 and

2014. However, the management of

staff appears deficient in several

respects. The legal duration of working

time is not respected, recourse to

overtime is excessive, and absenteeism

remains high. All these problems have

a significant cost for the government

authority. The growth of the conurbation

has also caused an increase in the

cost of governance and general

expenditures. Pooling efforts between

the conurbation and the member

communes have remained very limited

and should be intensified as part of a

pooling scheme adopted in December

2015.

The recommendations made by the

Cour des comptes in 2005 and 2009

therefore remain relevant for this

conurbation, in terms of clarity of the

powers exercised, rigour in the use of

resources,

and

effectiveness

action to the service of the territory.

“Carcassonne Agglo”:

the example of an unfinished inter-communal

structure

Summaries of the Cour des comptes 2016 Annual Public Report

School systems facing

significant challenges

French Polynesia (270,500 inhabitants)

and New Caledonia (268,767 inhabitants)

are

overseas

collectivities with

common characteristics: more than

15,000 kilometres from mainland

France4, location in the South Pacific,

a highly diverse population and, in

part, isolated. On the institutional

level, they have a broad set of powers

transferred under the general principles

set by the Constitution.

They are thus the only two collectivities

of the Republic that have a transferred

power with respect to schooling,

with the notable exception of the

management of seconded State officials

and higher education. This transfer was

gradual: in French Polynesia in 1957

for primary education and 1987-88 for

colleges and high schools; in New

Caledonia in 1957 for public primary

education and 2012 for private primary

education and secondary education.

The effort is significant: the amount of

public spending devoted today to the

school system in these two territories is

greater than €1.3bn, including €954m

in State appropriations. In 2014, school

spending per pupil was €8,223 in

French Polynesia and €10,539 in New

Caledonia versus €7,700 in 2013 (last

known figure) for mainland France and

the overseas departments

Although the results obtained by

these school systems have made

much progress, they remain lower

than those of mainland France. Given

the demographic outlook oriented

downwards, the challenge is to improve

the efficiency of these systems.

The school system in French

Polynesia and New Caledonia:

a major public effort, efficiency

to be improved

Summaries of the Cour des comptes 2016 Annual Public Report

______________________

Paris is 15,714 km from Papeete and 16,742 km from Nouméa.

For French Polynesia and New Caledonia, these data do not include disbursements of private

players (households, companies), which are not available, unlike mainland France and the overseas

departments.

Distribution of institutions in French Polynesia

Source : Cour des comptes

Distribution of students in New Caledonia

Source : Cour des comptes

The school system in French Polynesia

and New Caledonia: a major public effort,

efficiency to be improved

Summaries of the Cour des comptes 2016 Annual Public Report

Governance to be simplified

The process of transferring a large

part of the academic powers to the

territories has resulted in a jumble of

highly complex texts, undoubtedly

difficult to avoid, which affects the

clarity of the action taken. The

necessary statistical tools are very

imperfect, because the collection of

data is hampered by the heterogeneity

of information systems.

The

administrative

organisation,

although different in each territory, gives

rise to difficulties. The management of

seconded staff is the responsibility of

the

two

authorities.

French

Polynesia,

relations

between

the

State’s services (vice-chancellorship)

and the services of the territory should

be reviewed, exploring all possible

rational mergers. In New Caledonia, the

vice-chancellorship, which has become

the sole joint service for transferred

and non-transferred skills, does not

incorporate public primary education.

A greater pooling of services would be

necessary.

Financing methods

with little consistency

In French Polynesia, the overall allocation

for compensation provided by the law

is not yet applied. In New Caledonia,

the State pays several compensation

allocations, each with different indicators

to set their annual growth. The criteria

for setting the job cap are not precise and

transparent. Changes in remuneration

are sometimes poorly controlled, as the

State might be led to fund decisions that

it did not originate.

In French Polynesia, the delay in the

scheduling of constructing, renovating,

equipping

establishments

considerable. In both territories,

there is not always a multiyear

school investment plan.

An assessment to be conducted:

adaptation to the specific

characteristics of the territories

Certain specific characteristics of

these territories, particularly the low

population density in certain regions

and the use of a local language, in

addition to French, are structuring

factors for the school system (for

example: dense network of small

schools and colleges, transport, boarding

schools). In this context, the scope and

the effectiveness of the adaptations

implemented in the two territories

deserve to be measured on the basis a

complete assessment, carried out on a

partnership

and

multidisciplinary

basis.

The school system in French Polynesia

and New Caledonia: a major public effort,

efficiency to be improved

Summaries of the Cour des comptes 2016 Annual Public Report

The school system in French Polynesia

and New Caledonia: a major public effort,

efficiency to be improved

Recommendations

Summaries of the Cour des comptes 2016 Annual Public Report

To the State and the two collectivities:

consider

pooling

agreements

between the State’s decentralised

services and the services of each

territory;

systematically put in place a

multiyear school investment plan;

perform an evaluative assessment,

on a partnership and multidisciplinary

basis, of the pedagogical and

organisational adaptations already

implemented.

To the State and French Polynesia:

put in place, starting in 2017, a global

compensation allocation, excluding

appropriations for remuneration of

seconded

personnel,

taking

into

account

the

decline

school

enrolment.

To the State:

explicitly establish rules for setting

job caps.

Part III

Public management

Chapter I

Implementation

of sovereign policies

Legality review and budget control: a place to be found in

the new organisation of the State

Labour inspectorate: a necessary modernisation

Legality review and budget

control: a place to be found

in the new organisation

of the State

The

legality

review

and

budget

control performed by the State’s

representative on acts of the territorial

collectivities

and

their

groupings

constitute a constitutional mission.

Despite a reform at the end of the

2000s, the controls performed by the

prefectures appear limited. This mission,

which pertains to institutional balances

resulting from decentralisation, must

be modernised.

Limited controls

A reduction of the scope

of controlled acts

The legality review potentially pertains

to several million acts. Similarly, the

budget control is characterised by a

large mass of documents to be

checked (450,000 per year). In order to

refocus the legality review on the most

significant acts, the law reduced the

scope of acts subject to the obligation

of transmission to the State’s repre-

sentative. In addition, each prefecture

must establish an annual control

strategy on the basis of national priorities

supplemented by local priorities.

However, many priority acts are not

controlled particularly because of the

option left to prefectures to adjust the

number of priority acts to be controlled

to the resources that they have. The

concept of controlled act is not

identical depending on the prefectures.

Some have put in place less rigorous

controls mainly concerning respect for

the external legality of acts. Others have

maintained a thorough control on a

smaller number of acts.

Insufficient efficiency gains

The legality review has been centralised

in the prefecture, with the sub-prefec-

tures maintaining a function of recei-

ving and selecting the acts of their

arrondissement as well as an advisory

activities with local elected officials.

Yet, this centralisation is incomplete

and sometimes ineffective locally.

In order to strengthen the expertise

capacity of the prefectural services,

cooperation and pooling between the

State’s decentralised services have

been

encouraged.

However,

these

remain limited to certain areas or certain

departments.

Similarly, the dematerialisation of the

transmission of certain acts has not

yielded the expected benefits because

of the partial deployment of computer

applications and the inadequacy of

their features.

Summaries of the Cour des comptes 2016 Annual Public Report

Change in staff assigned

to legality review in full-time equivalent

worked (FTEW)

Source: Cour des comptes according to data

from the French ministry of the interior

Legality review and budget control:

a place to be found in the new organisation

of the State

Legality review rates (2011-2014)

Weakened human resources

The reform of legality review and budget

control has resulted in part from the

general review of public policies (RGPP),

which

translated

into

significant

reductions of staff. Between 2009 and

2014, across the départements of

mainland France, the staff of the

prefectures

and

sub-prefectures

assigned to legality reviews have

decreased by 30%, and those assigned

to budget control have decreased by

34.5%. The previously accumulated

expertise has been partly lost. Most of

the training offered to control officers

is not suited to their needs.

Summaries of the Cour des comptes 2016 Annual Public Report

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

Advice that sometimes substitutes

for controls

The prefects have broad discretionary

power over how to proceed following

the legality review. Pushed too far,

these

discretionary

margins

can

contribute to the weakening of the

effectiveness of controls. They are

also prevalent in matters of budget

control, although the prefect does not

such latitude in this area.

A modernisation to be carried out

Adapting the controls to territorial

reform issues

The reorganisation of the State’s

services following the territorial

reform and, in particular, the establish-

ment of “large regions” makes the

completion of the centralisation of

controls in the prefecture essential in

order to promote the streamlining of

how acts are treated, the optimisation

of the activity, and the strengthening of

the expertise capacity of the services.

The development of pooling in all

its forms appears essential, as the

establishment within each prefecture

of services with the ability to handle

the most complex acts in isolation is

illusory. The legality review should be

able to receive the support of specialised

centres of competence in a regional

framework.

Pooling

approaches

contribute

the

same

goal.

Strengthening them appears to be

essential, particularly in high-stakes,

high-risk fields.

Refocusing control on high-stakes acts

and high-risk situations

The definition of national priorities

can only be encouraged. Yet, the goal

of concentration of control actions on

a limited number of high-stakes acts

has not been achieved so far. It is

important that the State put in place

monitoring of the implementation of

national priorities and that they be

defined on the basis of a risk analysis.

The targeting of acts controlled in

respect of the legality review should

also take into account the assessment

of budgetary risks associated with

certain operations.

Legality review and budget control:

a place to be found in the new organisation

of the State

Summaries of the Cour des comptes 2016 Annual Public Report

Legality review and budget control:

a place to be found in the new organisation

of the State

Summaries of the Cour des comptes 2016 Annual Public Report

Recommendations

with regard to legality review,

ensure monitoring of the imple-

mentation of national and local

priorities and target the acts

with the most significant legal or

economic stakes on the basis of

a risk analysis and exploitation of

the results of the controls;

complete the centralisation of

controls in the prefecture and

develop pooling in order to esta-

blish centres of expertise operating

in a network;

generalise and formalise the

partnerships, particularly in the

light of the distribution of control

tasks, for urban planning acts with

the departmental directorates of

the territories and the sea and, for

fiscal

discussions,

with

the

departmental directorates of public

finances;

rebalance the legality review and

budget control staff of the prefectures

on the basis of activity indicators;

adapt the training of officers

responsible for legality review and

budget control and increase, at

constant payroll budget, the share

of the category A officers;

develop existing IT applications in a

way that they allow the performance,

monitoring,

and

supervision

control actions, both for legality

review and budget control.

In 2014, the Cour des comptes carried

out an investigation on the labour

inspectorate and the reorganisations

that it has undergone since 2006, with

the central services of the ministry of

labour and in five regions: Alsace,

Brittany, Île-de-France, Lorraine, and

Rhône-Alpes. At the end of its

investigation, the Cour des comptes

considers that thorough changes in

the labour inspectorate are necessary

and that its reform, deferred for too

long, must now be carried out.

Fixed organisation

and operation

Whereas in most European countries,

there are several labour inspectorate

services, specialised by professional

branches or according to rules that

they are responsible for enforcing, the

French model is that of a generalist

inspectorate for all the entire scope of

labour relations and employees of the

private

sector,

i.e.,

18.3

million

employees in 1.8 million establishments.

In addition to its control tasks, it gives

prior authorisation in several areas:

dismissals of protected employees

(25,000 decisions per year), exemptions

for work prohibited to minors (6,500),

and

terminations

permanent

employment contracts, which are

subject to approval (320,000). It has a

public advisory role (more than 800,000

telephone or direct contacts per year).

Lastly, it intervenes in collective

labour relations, playing a role of

prevention, conciliation, or even

mediation in collective disputes.

The labour inspectorate is traditionally

organised into sections (790 in 2014),

each with jurisdiction over a given

territory. In principle, each section

had four officers: a labour inspector

(category

civil

servant),

two

controllers (category B civil servant), and

an assistant (category C). A customary

rule was that the inspectors would

check companies with more than

50 employees, whereas the controllers

would check smaller companies. This

organisation and this division of

labour, which lasted until 2015, were

clearly too rigid. This organisation

favoured a dispersion of efforts and

excessive autonomy in the activity of

the sections and control officers,

which was further strenghthened by

the statutory independance that the

International labour Organisation

(ILO) recognises for labour inspectors.

Labour inspectorate:

a necessary modernisation

Summaries of the Cour des comptes 2016 Annual Public Report

Labour inspectorate:

a necessary modernisation

The organisation and the professional

practices of the labour inspectorate

were to be adapted to changes in the

labour market, the complexity and

multiplicity of labour law standards,

and the sophistication and the

internationalisation of fraud tech-

niques. A tighter organisation and

more collective working methods,

which permit specialisation of tasks, an

analysis of risks, a definition of national

and regional control priorities, a

concentration of controls, and a better

measure of their effect, had become

essential.

A reform to be continued

To that end, several reforms of the

labour inspectorate have succeeded

each other over 10 years: from 2006

to 2010, the labour inspectorate

modernisation plan (PMDIT), comple-

ted in 2008 through the takeover of

agriculture and transport inspections,

led to a significant increase in staff; in

2013, a process to merge the bodies

of controllers and labour inspectors

was implemented over five years; lastly,

in 2014, the territorial organisation was

modified with the creation of control

units substituting for the sections.

The labour inspectorate’s staff, currently

consisting of 2,500 control officers,

increased by 1,110 officers from 2006

to 2010, 57% of which were jobs

transferred from the ministries of

agriculture and transport, and 43%

were created jobs. This effort was not

preceded by an objective measurement

of needs, if not by reference to general

standards such as those of the ILO,

which recommends 10,000 employees

per control officer, which was largely

satisfied, with 6,563 employees per

control officer in 2010.

Summaries of the Cour des comptes 2016 Annual Public Report

Impact of the PMDIT and the merger

on the control staff

of the labour inspectorate

The merger resulted in the establish-

ment of sections predominantly geared

towards

agriculture,

whereas

the

“general”

sections

handled

road

transport, with rail, air, and maritime

transport controls being allotted to

specialised sections. This organisation

resulted in a significant decline in the

number of controls in the areas of

agriculture and road transport. The

productivity gains expected from the

merger are not reflected in activity

figures.

In 2013, a job transformation plan was

launched. It should be completed in

2017. The controllers, after a competitive

examination, undergo six months of

training, at the end of which they

become labour inspectors. This reform,

which must decompartmentalise the

tasks between inspectors and controllers

in order to end up with a versatile single

body, is not without impact on the

operation of the network: allowing

250 controllers per year to undergo

training for six months requires

replacing them temporarily, which is

not without difficulties.

Lastly, in 2014, a new territorial

organisation

was

decided.

includes 240 “control units”, which

Source: Cour des comptes according to data

from the French ministry of labour, employ-

ment, and social dialogue and the reform

assessment presented to the joint technical

committee meeting of 28 June 2011

will become the main framework for

performance of the missions of the

labour inspectorate, one control unit

per region specialised in the fight

against illegal work, and a national

unit in connection with the other

European inspectorates.

This reform puts an end to an organi-

sation in sections that was no longer

relevant. It allows innovative practices

to be extended: specialisation of

“expert”

officers

for

particular

controls or risks, determination of

control

priorities

based

assessment of risks, local deployment

of national control objectives, or the

conduct of coordinated control

campaigns,

for

example

the

“500 chantiers” operation, which

targets the main building and public

works

projects

throughout

the

national territory.

However, the reform of measurement

and management instruments still needs

to be supported. Today, the activity and

performance measurement tools need

to be reworked. After its ramp-up from

2005 to 2010, the operation of the

activity input software Cap-Sitère was

hampered by union calls to refuse to

give it any information, a movement

that subsequently expanded to a

boycott of professional appraisal

interviews.

This situation, which is not acceptable,

continues to compromise the moni-

toring of the activities of the labour

inspectorate and prevents France

from fully meeting its obligation to

report to the ILO on its activity.

Beyond this problem, all of the

labour inspectorate’s activity and

performance indicators must be

rethought in order to give them

meaning that they lack today.

The human resources management

modes of the labour inspectorate

must also change in order to better

translate into reality the priority to

control functions, as well as the

specialisation of skills, which is

likely to grow as part of the new

Recommendations

Labour inspectorate:

a necessary modernisation

Summaries of the Cour des comptes 2016 Annual Public Report

complete the territorial reorgani-

sation of the labour inspectorate by

making the audit units an effective

framework for scheduling audits,

monitoring activity, and evaluation;

define the control priorities on

the basis of an analysis of risks, at all

levels of the labour inspectorate;

give priority to the control function

in the human resources management

of the labour inspectorate;

put in place indicators accurately

measuring the activity and the

results of the labour inspectorate in

programme 111 – “Improvement of

quality of employment and labour

relations”.

Chapter II

Management of companies

and public agencies

Postal workers faced with the challenge of declining post:

changes to be accelerated

The Transdev-Veolia Transport merger: an ill-conceived

transaction with major losses to date for the Caisse des

Depots et Consignations

National theatres: scenes of excellence, weakened institutions

The fight against fraud in urban transport in the Greater

Paris region: a collective failure

A profession full of particular

characteristics and traditions

Each day, 73,000 La Poste postal

workers distribute mail and objects

to 37.8 million mailboxes. Their

56,000 rounds are perceived as an

important form of presence of the

public service, especially in rural

areas. They alone represent 28% of the

company’s workforce and constitute a

vital part of an activity, the post, which

represents 40% of the group’s turnover.

While mail volumes have dropped

sharply for several years, the costs of

distribution by postal workers (who

represent 60% of the total postal

costs and €4.1bn), are fixed for the

most

part:

even

with

smaller

volumes, the rounds must be carried

out in full. Although the number of

postal workers has decreased over the

past few years – from 84,000 in 2009 to

73,000 in 2013 – the decline has slowed

down since 2011 and is now less than

the

volumes

correspondence

exchanged.

Change in mail volumes and staff

Postal workers faced with

the challenge of declining post:

changes to be accelerated

Summaries of the Cour des comptes 2016 Annual Public Report

Source: Cour des comptes according to data from the French Telecommunications and Posts

Regulator (ARCEP) and La Poste

Postal workers faced with the challenge

of declining post: changes to be accelerated

Consequently, in order to avoid an

overly large increase in unit costs and

despite some peculiarities of the

postman profession that can slow

down their achievement, La Poste must

give itself ambitious objectives for

reducing the overall cost of distribution.

Postal workers enjoy a degree of

autonomy during their round. It is

therefore difficult, despite detailed

knowledge of the characteristics of

each round, to ensure that the time

actually worked corresponds to the

theoretical schedules. Especially in a

period of declining volumes, situations

of under-occupation can occur, which

are not always measured by La Poste.

The strenuousness and dangerousness

of the profession are causes contributing

to a worrisome rate of absenteeism. La

Poste has failed to reduce it.

Lastly, the “sale” of rounds, a system of

assignment that deprives management

of its power to assign and ensures that

the postal workers will be able to work

in an identical zone, may prove to be

inadequate in a context that will

increasingly require adapting the

organisations and work schedules to

the needs of clients.

Productivity and quality efforts

that must be intensified

The workplaces that the postal workers

go to each morning are not post

offices, but “distribution platforms”,

grouped

into

“establishments”.

These establishments coexist with the

networks for distribution of printed

advertising materials and express

parcels, without the search for

synergies with them being clearly

organised.

The major investments made to

automate sorting, thanks to which

some of the mail arrives to the postal

workers arranged “in bag order”, have

permitted

staff

reductions.

Nevertheless, there are still margins

for further leverage.

The organisation of work in teams

and replacements between postal

workers, introduced by the “Facteurs

d’avenir” plan, have increased the

capacity for adaptation of the distri-

bution establishments to daily and

seasonal changes in volumes of mail

to be distributed.

The establishments have a greater

degree of autonomy to organise the

work, particularly by rearranging the

rounds to adapt them to changes in

volumes. La Poste has set the rule of

a minimum interval of two years

between

these

reorganisations.

While mail volumes are declining, this

duration should be a maximum in order

to avoid deteriorating productivity.

Moreover, “Factéo”, the smartphone that

postal workers now have, is a source for

saved time and service quality. By

making a postman a carrier and a

collector of data, new commercial

services for businesses and individuals

will be able to be created.

Summaries of the Cour des comptes 2016 Annual Public Report

Lastly, especially in rural areas, better

accessibility of mailboxes for mailmen

would limit the distribution time and

the risks of an accident, but certain

necessary measures involve amending

the regulations in force.

The ample “quality approach” conducted

by La Poste has boosted distribution

times. Nevertheless, service quality

remains dependent on the involvement

of postal workers in the field. It must

make further progress, particularly by

reducing the excessively high proportion

of objects not distributed to be picked

up at the post office. In this regard, La

Poste’s inability to use the Internet and

mobile phones to notify its customers

of recommended letters appears to be

a glaring shortcoming.

A weakened economic model,

a change to be organised

In order to make up of the decline in

the postal activity, La Poste’s strategic

plan expects an increase in the parcel

activity, which is not ensured in a

highly competitive context, as well as

the development of “new postman

services”, the turnover from which

currently remains marginal despite

the abundance of experiences.

This plan also provides for an increase

in rates, but this lever, already heavily

mobilised, could reach its limits by

accelerating the

decline

mail

volumes. La Poste also intends to

continue the productivity efforts,

which will involve much more mobility

and retraining of postal workers. This

prospect requires transforming their

career model.

These efforts alone will not be sufficient

to make up for the effects of the decline

in mail. It is the definition of the public

postal service itself that must change.

For that purpose, La Poste will need

public authorities and citizens by its

side.

Referred to as the “universal service”

by the European directives, the postal

distribution public service, for the

service provider, relies on compliance

with regard to offers, time limits, and

geographic and temporal accessibility.

It was designed in France ambitiously,

at a time of growth or stability of

volumes, while digital exchanges were

rare.

Like other countries, the time limits

and methods of distribution as well

as the services that are included

must change in order to ensure the

sustainability of the distribution

activity. The universal postal service,

of which the postal workers constitute

a pillar, concerns all French people: a

public debate on its necessary changes

must be prepared and initiated.

Postal workers faced with the challenge

of declining post: changes to be accelerated

Summaries of the Cour des comptes 2016 Annual Public Report

Postal workers faced with the challenge

of declining post: changes to be accelerated

Summaries of the Cour des comptes 2016 Annual Public Report

Recommendations

set a goal of reducing the overall

cost of distribution as part of the

strategy plan;

take advantage of the producti-

vity gains associated with the

mechanisation of sorting to reduce

the time spent by postal workers on

“internal work”;

take measures to facilitate postal

worker access to the mailboxes of

individuals;

collect information to notify

recipients of upcoming distribution

of registered letters or tracked

objects and give them the choice

of delivery methods;

develop quantified scenarios of

the content and cost of the universal

postal service and present them

for discussion, both between the

administrations

concerned

and

with the users.

The Cour des comptes audited the

participation of the Caisse des dépôts

et consignations (CDC) in Transdev, a

passenger transport company of which

it was the majority shareholder until

2011 and that was equally merged

with Veolia Transport, a division of

Veolia Environnement, to form the

Veolia-Transdev group. Four years after

this operation, the Cour des comptes

has established an initial assessment

as well as the following lessons.

The Transdev-Veolia Transport

merger: an ill-conceived

transaction with major losses

to date for the Caisse des Depots

et Consignations

Summaries of the Cour des comptes 2016 Annual Public Report

Situation in July 2009 (before merger) and situation after the merger

Source : Cour des comptes

The merger resulted

from a hasty decision

and was improperly conducted

The CDC, which wanted to put an

end to the RATP’s minority stake in

Transdev and link its subsidiary

with a new partner, initiated bilateral

discussions in 2009 with Veolia

Environnement, of which it was also

the

primary

shareholder.

These

negotiations

took

place

the

absence of a competitive procedure

and

without

having

previously

addressed the issue of the RATP’s

exit from Transdev’s capital. The

The Transdev-Veolia Transport merger:

an ill-conceived transaction with major losses

to date for the Caisse des Depots et Consignations

choice to merge with Veolia Transport

rather than with Keolis, a subsidiary of

the SNCF, which had also expressed its

interest, was confirmed very quickly,

although the supervisory commission

of the CDC and the minister of the

economy, industry, and employment

had come down in favour of a longer

period of consideration.

Because of this haste, the conditions

for the project’s success were not

sufficiently studied.

The difficulties posed by models and

corporate cultures distant that were

quite different and by the low level of

support from customers and the teams

as well as the stability of the partner’s

directions

were

not

satisfactorily

assessed.

In addition, the initial commercial and

financial ambitions were very optimistic.

Lastly, the presence of the SNCM, a

66% subsidiary of Veolia Transport,

within the scope of the new group was

underestimated during the initial

review of the project in 2009.

The merger was not prepared satisfac-

torily despite a period of nearly two

years between the decision in principle

and the completion of the transaction.

The shareholders were unable to

agree in due time on the operational

aspects and called the key points into

question at the last minute: the

balance of powers, the choice of top

leaders.

The actual completion of the merger

was not consistent with the initial

agreement between the two partners

or the original ambitions.

The CDC had to agree to support a

prior capital increase of Transdev of

€200m and grant to the RATP, in

exchange for its exit from the capital,

quality assets from the Transdev

scope.

The IPO, briefly considered, was not

carried out.

Only nine months after the merger, in

December 2011, Veolia Environment

announced its decision to withdraw

from the field of transport and sell its

interest in Veolia-Transdev.

In this context, the CDC was forced to

consider

increasing

its

stake

Veolia-Transdev’s capital, contrary to

its initial plans. However, to date,

this change has not been able to be

completed, as the prerequisite of

Veolia Environnement’s takeover of

the SNCM has not been met.

The results are very negative

in the short term for the CDC,

even though a recovery

has begun.

For Transdev, the first years following

the merger resulted in heavy losses.

The turnover, which was supposed

to grow by 5% per year, was only

€6.6bn in 2013, a figure far below

the combined turnover of Transdev

Summaries of the Cour des comptes 2016 Annual Public Report

and Veolia Transport before the

merger (€8.1bn). This decrease is

explained by significant losses of

contracts and, starting in 2013, by

sales of assets that the company

was forced to carry out because of

its financial difficulties.

Transdev’s result was negative between

2011 and 2013, with accumulated

losses on the order of €1bn.

For the CDC, this transaction represented

in recent times the group’s second-

largest source of losses after Dexia.

For the CDC group, the losses from its

interest in Transdev amounted to

€554m during the same period.

In terms of assets, the net value of the

interest fell to €374m, as a result of

€597m in impairments.

Nevertheless, the CDC’s strategic

choice must be assessed over the long

term.

The adjustment by Transdev is starting

to yield results, with a return to balance

in 2014. The CDC took over operational

control of the company at the end of

2012, which took on the historical

name of Transdev again.

However, results far greater than the

sector’s average for several years

would be necessary to compensate

for the losses.

This transaction highlighted

persistent weaknesses

in the CDC’s governance

The conduct of this transaction showed

that the CDC’s supervisory commission

and the investment committee created

by the economic modernisation act

(LME) of 4 August 2008 were not

included in on the merger decision in

satisfactory conditions.

Still, it is essential that investment or

disinvestment decisions pertaining to

major issues stop being based on the

sole responsibility of the managing

director and be able, like in all entities

of this size, to effectively involve the

body performing the supervisory

function of the institution and the

action of the managing director in the

various stages of the decision and the

negotiation.

The Transdev-Veolia Transport merger:

an ill-conceived transaction with major losses

to date for the Caisse des Depots et Consignations

Summaries of the Cour des comptes 2016 Annual Public Report

The Transdev-Veolia Transport merger:

an ill-conceived transaction with major losses

to date for the Caisse des Depots et Consignations

Recommendations

fully use the mechanism resulting

from

the

LME

(Economic

Modernisation Law) of 2008:

- by strictly respecting the powers

of the investment committee and

the supervisory commission and

ensuring the complete transmission

of information;

- by providing the investment

committee with the means necessary

to enable it to use outside expertise.

change the rules of procedure of

the supervisory commission to

reinforce its role and the role of the

investment committee:

- by

allowing

the

investment

committee to stay proceedings

when it believes that the conditions

of investigation are not met to allow

it to present an informed opinion;

- by providing that the supervisory

commission formalise at least once a

year opinions on the CDC’s with

regard to its subsidiaries;

- by extending this power to inte-

rests that are the subject of “strate-

gic support” although they are not

consolidated within the group’s scope.

initiate thinking about a modification

of the law in order to give the

supervisory commission a veto

right (simple majority or two-thirds)

on operations within the scope of the

referral to the investment committee.

Summaries of the Cour des comptes 2016 Annual Public Report

National theatres:

scenes of excellence,

weakened institutions

The Cour des comptes examined the

operation of four of the five national

theatres6: Comédie-Française, Théâtre

national de l’Odéon (TNO), Théâtre

national de la Colline (TNCo), and

Théâtre national de Strasbourg (TNS),

between 2006 and 2014.

Considered by the ministry of culture

and communication to be “the pillars

of its public policy in favour of drama”,

these four industrial and commercial

public

agencies

(EPIC)

received

€458.23m in operating grants between

2006 and 2014, i.e., 71% of their total

resources.

An essential place in

the French dramatic landscape

Situated atop a vast decentralised

drama network, the national theatres,

unlike the 39 national and regional

drama centres (CDN/R) and 71 national

venues, receive exclusively State public

funding.

They

alone

therefore

receive nearly half of the State’s

grants allocated to all 110 decentralised

structures.

This high concentration is based on

the formal political choice to equip

these institutions with substantial

permanent

human

resources

(717 full-time

equivalents

worked

(FTEW), in addition to the employment

of casual artistic and technical workers,

averaging 88 FTEW per year) and

various production tools (11 halls).

A distinctive yet fading identity

The status of each of the four national

theatres is not within a common legal

framework, each of them being

governed by regulatory and contractual

provisions

(business

agreements)

that are their own.

Thus, beyond the distinctive criterion

of substantial resources allocated by

the State, the boundary between

national theatres and CDN is increasingly

permeable, at least as regards the

TNCo and the TNS, which in principle

cannot be distinguished, at least in

terms of artistic programming and

ambition, from large CDNs.

The artistic identity specific to each of

the four national theatres, historically

forged by their successive directors,

also tends to be fading.

______________________

The Théâtre national de Chaillot, whose activity is geared towards dance, is not included in the

scope of the investigation, which focused exclusively on drama institutions.

Cost, subsidy, and revenues per paid seat in 2006 and 2014 (in euros)

Source: Cour des comptes. For the TNS, the subsidy per paid seat was calculated on the basis

of only the subsidy for the theatre (excluding School). However, given the pooling of

resources between the theatre and the School, a part of the subsidy for the theatre can cover

the School’s expenses.

National theatres: scenes of excellence,

weakened institutions

Very largely absent supervision

The development of the activities of the

national theatres, like their operation, is

subject to little supervision by the

ministry of culture.

The mission letters sent to the directors

are either non-existent or received

several months after the post is taken

up. With the exception of the TNS, no

performance

contract was

signed

during the nine years of the period

under review, despite the repeated

commitments made during the previous

audits of the Cour des comptes.

The failure of the supervision is

undoubtedly

strongest

the

Comédie-Française. While it provides

nearly 70% of its financing, the State

does not have the right to vote in its

administrative committee.

Regardless of the theatre in question,

the monitoring of the management is

very incomplete: the conditions for

appointment and departure of directors

are expensive and lack transparency,

and their service obligations (staging

activities,

external

activities)

are

poorly defined.

Lastly, the conditions of use of certain

contributed buildings are not satisfac-

tory. Such is the case of the Ateliers

Berthier, permanently assigned to the

Odéon in 2006, without any prior

study. The same year, the TNS was

allocated the former music conservatory

of the City of Strasbourg, which remains

untapped, for lack of an identified use

and rehabilitation project.

A fragile, unbalanced financial

position

Despite high attendance rates (83% in

2006, 98% in 2014), the economy of

the national theatres remains fragile.

A largely loss-making activity

Of the 356 shows presented (excluding

Comédie-Française) between 2006

and 2014, only seven were able to

be self-financed (six at the Odéon

and one the Colline). With regard to

the Comédie-Française, due to the

integration of the cost of the permanent

troupe into its structural expenditures,

it is more difficult for it to determine

the actual rate of self-financing of its

shows.

In 2014, show revenues represented

from 9% (Colline and TNS) to 21%

(Odéon) of the price of a paid seat.

Summaries of the Cour des comptes 2016 Annual Public Report

National theatres: scenes of excellence,

weakened institutions

Summaries of the Cour des comptes 2016 Annual Public Report

An insufficient distribution of shows

Between 2006 and 2014, the number

of shows presented on tour averaged

between two (Colline and TNS) and

six (Comédie-Française) per year for

an average number of performances

that reaches, at best, 20% of the total

performances offered within these

establishments.

The increase in structural expenditures

With the exception of the TNS, the

structural expenditures of all the

national theatres increased at a

significantly faster rate than inflation

(+16% between 2006 and 2014, up to

+27% for the Odéon).

At the Comédie-Française, the theatre’s

expenditures are burdened by the

“sharing system”, which consists in

distributed nearly all of the operating

profits to the members and, more

marginally, the staff. Any surplus thus

leads only to a very marginal profit

for the public agency, since the result is

immediately converted into remuneration

expenditures (immediate or deferred),

which unavoidably increase the payroll.

Areas for improvement:

the search for a better

economic balance

The directors of the theatres have three

major levers to improve the financial

balance of their establishment.

Streamlining of expenditure

Old and costly, the collective agree-

ments, in some cases signed more

than 40 years ago, should be revised

on several points (work time less than

the statutory work time, particularly

complex bonus systems).

The organisation of the production,

whether it involves the number of

staff on set or the use of sets and

costumes, deserves to be rethought.

A better allocation of resources bet-

ween the main halls, more profitable,

and the many additional halls with very

small capacity – which account for up

to 40% of the artistic budget – should

also be sought.

Because of their size and the proximity

of their needs, the national theatres

would benefit from pooling several of

their administrative and accounting func-

tions (accounting agency, purchasing, and

contracting) as well as certain production

functions (workshops, storage spaces,

organisation of tours and audio-visual

recordings).

Increase in revenues

The capacities are not optimally

exploited. The partial use of the

halls, for technical reasons or artistic

requirements of staging, has led to

the loss of several thousand seats

per year (64,161 seats in 2006 and

56,645 in 2014).

The policy of invitations or distribution

of free seats, which explains the loss of

nearly 75,000 seats per year, should be

revised downwards.

National theatres: scenes of excellence,

weakened institutions

Summaries of the Cour des comptes 2016 Annual Public Report

Recommendations

To the State:

reinforce the State’s place within

the administrative committee of

the Comédie-Française;

establish mission letters and

entered into performance contracts

at the beginning of the term of

office of the directors, in order to

set clear, measurable objectives for

each of the institutions and, at the

end of the mission, be sure to define

the conditions of departure;

make any new project at the

Berthier workshops conditional on

the performance of a study on the

necessary investments, operating

costs, and pooling of equipment

between the Comédie-Française

and the Odéon.

To the Comédie-Française and the

State:

clarify the asset and accounting

links between the Société des

Comédiens-Français and the public

agency of the Comédie-Française.

To the four national theatres and the

State:

initiate

the

renegotiation

contractual provisions (collective

agreement, additional agreements);

increase

the

distribution

created performances by increasing

the number of performances at the

headquarters, as well as the number

of tours, particularly in collaboration

with

the

decentralised

drama

network;

significantly reduce the number of

free seats (75,000 in 2014) and

annually report to the board of

directors on the policy of free

access;

revise the pricing policy based on

better knowledge of the spectators

(performance of statistical studies

on the composition of the audience);

pool the production functions

(workshops, storage, circulation of

costumes and sets, or even distribution

activities) and administrative functions

(accounting

agency,

purchases,

contracting support).

Summaries of the Cour des comptes 2016 Annual Public Report

The fight against fraud in urban

transport in the Greater Paris

region: a collective failure

The Cour des comptes conducted a

survey on the fight against fraud

implemented by the RATP and the

SNCF on the transport networks of

the Greater Paris region (metro, RER

and Transilien, bus, tramway), which

are particularly vulnerable to fraud

because of the massive flows of

passengers transported and the

absence of automatic screening

stations on the land network like in

numerous train stations.

Growing fraud rates

in the Greater Paris region,

significantly higher than

comparable foreign networks

The measurement of fraud is based on

regular surveys, which, although they

are approximate and under-estimate

the phenomenon, paint a disturbing

picture.

Ticket fraud (proportion of travellers

travelling without valid or validated

tickets) is actually nearly 14% on the

surface network and between 2.5%

and 4% on the rail networks (2014

figures). These rates have increased

since 2008, mainly on the surface

network and, to a lesser degree, on

the rail networks. At the same time,

distance fraud (use of a ticket not

covering all travel fare zones) on the

Transilien network has improved

substantially, which is the consequence

of successive dezonings decided by the

transport authority of the Greater

Paris region (STIF) since 2011.

Fraud rates in the Greater Paris region

thus appear to be substantially higher

than those of similar foreign networks

(around 3% on surface networks and

1% on the metro networks), which is

even less understandable given that

fares in the Greater Paris region are

low and the range of social fares is

particularly developed.

The fight against fraud in urban transport

in the Greater Paris region: a collective failure

Rate of ticket fraud on the Greater Paris region networks since 2004 (in %)

Real anti-fraud efforts

by the two transporters,

but disappointing results

The two transporters, RATP and

SNCF, have mobilised to combat

fraud, and decreasing fraud has been

a goal of their respective contracts

with the STIF since 2008.

The RATP has defined an ambitious

strategy, implemented by a control

department able to intervene jointly

on all its networks. The SNCF, whose

Transilien network is much more

extensive, is making an effort to

improve the tightness of its stations,

whereas its controls are increasingly

based on static operations in the

station, protected by agents of its

security department. Ticket inspectors

of the two companies are in fact faced

with growing constraints of incivility

and insecurity.

Up to now, this mobilisation of the

transporters

has

obtained

only

mixed results. Although there is

room for improvement within the

two companies, particularly with

regard to the organisation of work or

the statutory constraints, legal and

functional limits are undermining the

effectiveness of the fight against fraud.

A major obstacle: the difficulty

in collecting reliable data

about the identity

and address of offenders

Under the applicable legislation, the

sworn ticket inspectors of the two

transporters may request the identity

and address of an offender but do not

have the means to verify them. The

violations are thus often written out

on the basis of erroneous data, which

do not allow a track down of the

fraudster at the recovery stage.

Summaries of the Cour des comptes 2016 Annual Public Report

Sources: Cour des comptes according to data from RATP and SNCF

In the face of a stubborn fraudster, the

ticket inspector can certainly notify a

law enforcement officer, who may

issue an order to detain the fraudster

or bring him in to verify his identity. In

practice, this order is virtually never

given, given the administrative nature

of the offence, the small amount of

the harm in question, and the priority

given to safety and anti-crime duties

by law enforcement officers. The

police officers responsible for patrol

tasks on the network who are not law

enforcement officers have limited

powers of control and, unlike the

transporters’

ticket

inspectors,

paradoxically have no power to

book in transport police matters.

Marginal recovery from violations

and criminal penalties

that remain rare

Recoveries related to offences start

with an amicable phase between the

company and the offender. Starting

from this phase, the recovery system

appears to be deficient, since 60% of

offenses do not result in any recovery.

Only immediate payment to the ticket

inspector, which occurs in 30% of

cases, appears to be effective. The

recovery rate for violations without

immediate payment is marginal (14%)

due to difficulties in tracking down the

fraudsters.

If the amicable procedure fails, the

Public Treasury takes over to collect the

fines, which it manages to do in only 5%

to 9% of cases. Yet, the transporters

contact it only for fewer than half of

their non-recovered violations, those

deemed the most reliable.

Lastly, the criminal punishment of

fraudsters appears to be very low. In

particular, the usual fraud, which

represents an increasing proportion

of transport fraud and constitutes an

offence, is not yet the subject of a

systematic crackdown, even though

the sentences handed down, which

may include prison sentences, are

often substantial.

A significant cost

In 2013, fraud in mass transport in

the Greater Paris region represented

a loss of revenue of €191m for the

RATP, i.e., the price of 14 “MI09”

two-level trains, and €57m for the

SNCF, i.e., the price of six ”nouvelles

automotrices

Transilien”

trains.

Recovering

just

these

revenues

would fund nearly half the cost of

the

complete

dezoning

the

Navigo pass implemented by the

STIF beginning in September 2015,

estimated at €485m.

More generally, considering the cost of

the anti-fraud measures implemented

by the two transporters and the

revenues resulting from the recovery

of fines, the overall financial impact

of fraud for the RATP and the SNCF

in the Greater Paris region was

€366m in 2013.

Nevertheless, the significance of this

cost should not reduce the fight

against fraud to a commercial issue:

the failure in this area is not only a

failure of companies, but also a failure

of public action.

Summaries of the Cour des comptes 2016 Annual Public Report

The fight against fraud in urban transport

in the Greater Paris region: a collective failure

The fight against fraud in urban transport

in the Greater Paris region: a collective failure

Evaluation of fraud for the RATP and the SNCF Transilien

Recommendations

To the RATP, the SNCF, and the STIF:

define a harmonised, stable tool

for measuring fraud and develop a

dissuasive communication strategy

against fraud.

To the SNCF and the RATP:

better articulate the anti-fraud

strategies of the two companies in

order to concentrate the control

resources on the most vulnerable

areas; ensure systematic monitoring

of repeat fraudsters and increase

the number of complaints filed

against the usual fraudsters.

To the SNCF and the STIF:

define a programme for equipping

the stations with automatic control

lines if they lack them, prioritised on

the basis of technical and economic

studies of flows and levels of fraud.

To the State:

within an expanded interministerial

framework, involving all the relevant

ministries, provide the legal answers to

lift the barriers to obtaining identities

and reliable addresses when citation

are issued.

Summaries of the Cour des comptes 2016 Annual Public Report

Source: Cour des comptes according to data from RATP and SNCF

Chapter III

Project management

The French horse and riding institute: an improperly

conducted reform, a phase-out to be scheduled

Reorganisation of public higher education in agriculture:

a deceiving reform

The Terra Botanica botanical part: a costly initiative in

search of financial viability

The French horse

and riding institute:

an improperly conducted reform,

a phase-out to be scheduled

Source: Cour des comptes according to the 2010 activity report of the IFCE

Sites of the French horse and riding institute in 2010

______________________

This activity, historically viewed as a public service mission, still called “public mating”, was

intended to ensure the quality and genetic diversity of horse breeds in France.

Created under Louis XIV, the Haras

nationaux (French national stud

farms) gradually lost its reason for

existence from the end of the 20

century: with a vast network of stud

farms and riding centres, their core

business was equine reproduction

until the activity of private stud farmers

developed.

In 2010, the State, after setting goals for

the Haras nationaux in the 2000s to

reduce their activity, created a new

public agency intended to be the sole

horse operator, formed through the

merger of the Haras nationaux and the

École nationale d’équitation de Saumur

(ENE - French national riding school of

Saumur): the Institut français du cheval

et de l’équitation (IFCE - French horse

and riding institute).

Summaries of the Cour des comptes 2016 Annual Public Report

The French horse and riding institute:

an improperly conducted reform,

a phase-out to be scheduled

An inconsistent

merger decision

The merger of the Haras and the

“Cadre noir” to create the IFCE was

conducted without any search for true

consistency: in particular, there was a

major contradiction between one of

the objectives of the merger – make

high-level horses available to the ENE

for competition – and the decision to

sell the fleet of stallions of the former

Haras nationaux to the private sector

Moreover, the choice to put an end to

public mating was not accompanied

by the takeover by the private sector

of the functions previously performed

by the Haras nationaux for the entire

equine industry: equine production in

France has lost between 20% and

30% of its volumes since 2008, putting

the genetic resource at risk – in both

diversity and quality – in an economic

environment unfavourable to the

recreational sector in France. At the

same time, the private mating supply

has struggled to develop.

Deficiencies in management

The Cour des comptes noted several

types of deficiencies in the operation

and management of the IFCE: certain

support functions, such as thorough

knowledge of the costs of its activities

and

purchasing

procedures,

are

improperly performed.

In addition, since its creation, the

IFCE has experienced governance

problems: since 2010, there have

been two managing directors and

two chairmen of the board of the

directors.

The IFCE also suffers from the geogra-

phical dispersion of its management

team: whereas the managing director

and his deputy are located in Saumur

(Maine-et-Loire) – former headquarters

of the ENE, the Secretary General is

located in Pompadour (Corrèze) – the

former headquarters of the Haras

nationaux.

Lastly, since its creation, the esta-

blishment’s financial position has

deteriorated continuously because of

a structurally negative operating result,

which translates into a cumulative

operating deficit over its five years of

existence of €29m. {PS}Its revenues do

not cover its expenditure; it lives in a

permanent financial imbalance that

forced the State in 2015 to increase the

subsidies for public service expenditures

that it pays to the IFCE by 17%.

Excessive resources

for reduced missions

Within the IFCE, the former ENE has

retained its previous missions: promote

the influence of equestrian arts by the

riders of the Cadre Noir de Saumur (the

French horseback riding tradition has

been recognised as an intangible cultural

heritage of humanity by UNESCO),

organise training in equestrian arts and

sports, participate in the reception and

development of high-level equestrian

sports in coordination with the French

horseback riding federation (FFE).

______________________

The former ENE, and particularly the Cadre Noir de Saumur, regularly purchase horses in

Germany and the Netherlands.

Summaries of the Cour des comptes 2016 Annual Public Report

The French horse and riding institute:

an improperly conducted reform,

a phase-out to be scheduled

However, excluding ENE, the IFCE has

lost most of its activity and reason for

existence

without

the

necessary

adjustments having been made as

regards both the human resources

and the territorial locations: the main

remaining mission of the former Haras

nationaux is the equine registration

and tracking system, within a database

called SIRE, as well as the organisation

of training in horse-related professions.

The initial goal of reducing the

workforce by 450 FTEs in nine years

(which was supposed to result in a

workforce of 650 FTEs in 2018) has

been abandoned. The forecast for

2017 is now 745 FTEs.

Five years after its creation, the IFCE

is therefore in difficulty: its public

service missions are now limited,

where the vast real estate portfolio

inherited from the Haras nationaux is

no longer necessary for its missions;

the personnel of the former Haras

responsible of public mating are still

present

number

and

spread

across a large number of locations

although their previous activities

have disappeared; and the financial

position of the Institute is in constant

deterioration because of the loss of

revenue from mating not offset by

savings measures.

In addition, the missions to develop

equestrian sports remain incidental

and unsteady.

Even though the ambition of the project

can explain that, barely a few years after

the creation of the establishment, its

reform is not yet completed and that its

“economic model” is still uncertain, the

fact remains that the IFCE has not found

its balance: the merger in 2010 did not

produce the expected savings or permit

a real integration of the two pre-existing

establishments. The merger revealed

many weaknesses:

- the objectives initially established for

the merger of the Haras nationaux

and the ENE assumed that reforms

would be made, particularly with

regard to public mating, but have not

been made;

- the

consequences,

particularly

human but also in terms real estate,

of the decision to put an end to

public mating were not properly

anticipated;

- the

call

for

public

funds

address

the

consequences

these decisions was thus made

essential.

Recommendations

close down the IFCE and organise

the transmission of the public service

activities that still exist there, between

the ministries respectively responsible

for

agriculture

(SIRE

database,

research, market observation) and

sports (training and French riding

tradition), or even the Haras national

du Pin;

organiser la réaffectation des

personnels de l’IFCE ;

organiser la cession du patrimoine

immobilier de l’IFCE.

Summaries of the Cour des comptes 2016 Annual Public Report

Reorganisation of public higher

education in agriculture:

a deceiving reform

The public agencies for higher education

in agriculture under the supervision of

the ministry of agriculture, agri-food, and

forestry prepare nearly 10,000 students

for engineering, veterinary, or landscape

careers, 39% of whom are fellows and

whose net rate of employment at the

end of their schooling is high. The total

of their budgets executed in 2014

amounted to €367m, including €194m

in payroll paid directly by the ministry.

In 2003, the minister of agriculture

launched a comprehensive reform of

agricultural education to adapt to the

new demands of society. For higher

education, this meant reinforcing the ties

with agricultural technical education,

bringing the training up to European and

international standards, and developing a

contractual policy between the State and

the institutions.

From great ambition

to withdrawal

Seven “centres of excellence” have been

created to coordinate the activities of

higher education institutions, research

organisations, and development and

technology transfer organisations over

a geographical area.

The presence of several public higher

education institutions in agriculture

in the same centre led to groupings,

leading to six new scientific, cultural,

and

professional

(EPSCP)

public

agencies between 2007 and 2010

resulting from the merger of fifteen

schools. These mergers were laborious

and generally purely administrative.

The restructuring process only partly

remedied the scattering of locations.

The ministry of higher education is

associated with supervision, mainly

for the definition of the strategy and

the accreditation of institutions, and

higher education in agriculture is slowly

approaching university education. The

ministry of agriculture is reluctant to

adopt measures that would have the

effect of loosening its relationship with

these institutions, and openness to the

university world is increasing more under

the effect of legislative changes and

the will of the ministry of agriculture.

Summaries of the Cour des comptes 2016 Annual Public Report

Reorganisation of public higher education

acin agriculture: a deceiving reform

The sites in 2015

Results far from the goals

The initial training system for agricul-

tural technical educators, entrusted to

the École nationale de formation

agronomique (ENFA - French national

agricultural training school), has not

changed, the number of trainees is

low, and the disciplines taught are

numerous. As a result, the cost of this

training is exorbitant. For continued

education, the mission of the national

support service (SNA), although

hundreds of kilometres away, three

centres were integrated into EPSCP

during their creation, without that the

transplant actually having taken. A

complete overhaul of the initial and

continued education system for public

agricultural technical educators and a

streamlining of these activities with

those of other agricultural higher

education institutions and those of

national education are necessary.

Summaries of the Cour des comptes 2016 Annual Public Report

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

agri-food, and forestry (MAAF)

Recommendations

Reorganisation of public higher education

in agriculture: a deceiving reform

The training and research offering has

been little changed by the mergers of

institutions. Only a minority of students

have been able to benefit from the

enrichment of the training offering.

The ministry has not fully played its role

as the stimulus of change. Until 2013, it

did not change its practices with regard

to the institutions although the reform

aimed to modernise them, and it was

slow to provide common management

tools. In addition, the movement of

contractualisation, an explicit objective

of the reform, has been delayed.

Institutions that have experienced

financial difficulties have not found

with their supervisor the support that

would have allowed them to avoid

major disturbances. Thus, the École

vétérinaire d’Alfort (National veterinary

school of Alfort) avoided payment

default only with a total of €6m in

exceptional State funding, three times

the annual amount of the operating

subsidy.

The search for a unifying body

A new attempt to ensure consistency

is promised by the recent creation, in

2015, of a cooperation structure: the

Institut agronomique, vétérinaire et

forestier de France (IAVFF - French

agronomy, veterinary, and forestry

institute), whose positioning is not yet

clearly defined.

reduce the dispersion of institutions

by decreasing the number of locations;

reduce the cost of the initial training

of agricultural technical educators

by streamlining the system (ENFA

and centres of the SNA);

complete

the

negotiation

contracts of objectives and perfor-

mance and accelerate the efforts

to provide common management

tools to the institutions.

Summaries of the Cour des comptes 2016 Annual Public Report

The Terra Botanica botanical park:

a costly initiative in search

of financial sustainability

Summaries of the Cour des comptes 2016 Annual Public Report

Source : IGN

The park in Maine-et-Loire

The Terra Botanica park, located in

Angers in Maine-et-Loire, is a park of

275,000 plants from five continents.

This facility, opened in April 2010, was

designed to promote the image of the

département of Maine-et-Loire by

showcasing its plant industry.

Originally

configured

receive

400,000 visitors per year, the park

received only 162,000 visitors in 2014,

whereas 290,000 were expected to

ensure financial stability.

In reality, its attractiveness has never

been sufficient because this investment

was initially poorly defined. Its operation

has lacked transparency. Today, the

future of this facility remains uncertain.

The Cour des comptes makes recom-

mendations to permit long-term

viability of this activity, which

should be truly complementary to

the local plant industry.

A risky investment

During the park’s design, no strategy

was truly developed, the prior studies

were insufficient, and the long-term

economic balance was not properly

estimated. The complexity of its

construction was not sufficiently

evaluated in advance.

Although the purpose of the park – to

promote plants in Anjou and contribute

to economic development and tourism

– has always been based on consensus,

the means of achieving it have lacked

clarity.

The département of Maine-et-Loire

entrusted its construction by agency

agreement to the local semi-public

department development company,

SODEMEL.

The

amount

the

transaction amounted to €115m, and

the département received €22.3m in

subsidies and €17.5m from the VAT

compensation fund. After deduction

of these forms of funding, the facility

cost €75.2m.

The Terra Botanica botanical park:

a costly initiative in search

of financial sustainability

Upon its opening to the public, the

park

was

not

fully

completed.

SODEMEL had issued more than

one thousand observations. The

public service delegation therefore

occurred without any inventory or

formal handover of the facilities.

The attendance goals making it

possible to achieve the projected

operating balance of 290,000 visitors

were reached only in 2011, and the

decline was significant since 2012.

A lack of transparency

in operating the park

The

département

entrusted

the

park’s management to a semi-public

company

(SEM)

Terra

Botanica

through a public service delegation

(DSP). Operational difficulties appeared

very quickly because the financial risk

and economic balance were initially

poorly estimated.

Most of the obligations related to the

park’s operation have not been met.

For its part, the département showed

no specific requirement with respect

to the operator.

Faced with difficulties, the operator

requested financial compensation

from the département, which first

paid €3.1m in a roundabout way by

expressly asking SODEMEL to fund

them.

In fact, the first alerts were not formally

discussed

before

the

competent

bodies until the end of 2013.

For the last season managed by the

SEM in 2014, the département paid a

balancing subsidy of €1.7m for total

turnover that was then €2.99m.

These direct and indirect sources of fun-

ding provided by the département

delayed the appearance of the structural

deficit of the public service delegation,

which is estimated at €5.7m for the

2010-2014 period, representing 31%

of cumulative operating income.

The governance of Terra Botanica

was particularly inadequate. Its board

of directors acted as a simple rubber

stamp for decisions made by the

département. This management proved

to be notoriously insufficient to cope

with the difficulties encountered by

the park.

A park with an uncertain future

Faced with the impossibility of

balancing

the

park’s

operation

without

significant

financial

contribution from the public authori-

ties, a public interest group was

created, composed of the département

of Maine-et-Loire (51% of the share

capital), the commune of Angers (48%),

and the tourism committee (1%) to

operate the park from 2015.

Sharing responsibility and funding

between two local authorities instead

of only one will not solve the park’s

structural deficit in the long run,

because the public funding require-

ments remain particularly significant

and are even amplified; by 2015, this

financial support totalled €3.56m.

The park’s management must take

advantage of this new round table

to strengthen its relations with

partners in the plant sector and

also more actively seek other funding

sources from external private partners

or patrons.

Summaries of the Cour des comptes 2016 Annual Public Report

To the département of Maine-et-

Loire and the town of Angers:

establish a performance contract

with

the manager on specific

objectives and monitoring indicators.

To the Terra Botanica public interest

group:

develop partnerships with the

plant ecosystem of Anjou and

players

the

local

economy

involved in the “plant” sector;

increase

the

own

resources through the park’s compe-

titive activities.

The Terra Botanica botanical park:

a costly initiative in search

of financial sustainability

Summaries of the Cour des comptes 2016 Annual Public Report

Recommendations

First and foremost a better link between

the park and the plant ecosystem has to

be created, particularly by presenting

research, testing local innovations at

full scale, and raising awareness

among young visitors to the many

plant-related professions.

The implementation of the new

mode of management has been an

opportunity to clarify the park’s

image and redefine the priority targets.