This presentation was made by Marie-Pierre Calmel & Jean-Paul Milot, France, at the 19th OECD Senior Financial Management and Reporting Officials Symposium held at the OECD Conference Centre, Paris, on 4-5 March 2019
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Consolidating Public Accounts - Marie-Pierre Calmel & Jean-Paul Milot, France
1. Session 7 – Consolidating public accounts:
Challenges and Success Factors
Challenges and practice in France
19th Annual Meeting of OECD Senior Financial Management
and Reporting Officials
______
5 March 2019
2. Content
Key points
Literature
Central Government in France
Social security
Local authorities
2
3. Key points
Central Government in France comprises ministries, a consolidation of some sorts
National accounts provide aggregated financial information
Presenting consolidated accounts in limited areas of the public sector is not a
priority in France as of now
Presenting all public sector entities in one set of accounts cannot faithfully tell the
story of the public sector in France
3
4. Literature
Government sector per national accounts
Scope of Government sector per SNA 2008
22.17 Government units are unique kinds of legal entities established by political
processes that are legislative, judicial or executive authority over other institutional
units within a given area.
22.22 […] NPIs* that are non-market producers and are controlled by a government
are also units of the general government sector. Although they may legally be
established to be independent from government, they are considered to be carrying out
government policies and are effectively part of government.
* NPI stands for Non-Profit Institutions
4
5. Literature
Combined financial statements
Under IFRSs, defined in the Conceptual Framework (see §3.12)
Financial statements of a reporting entity that comprises two or more entities
that are not all linked by a parent-subsidiary relationship
Combined financial statements in the public sector in France
In accordance with French regulation CRC 99-02 for the private sector
Provides guidance on how to determine the scope of combined entities
• Entities that form a head group linked by an « affectio familiae » relationship
o common interest,
o common societal, commercial, technical or financial behaviour,
o entities bound by an agreement that describes the « affectio familiae » relationship
• Entities controlled by an entity within the combined group
5
6. Central Government in France
Current state of play under public sector accrual accounting
Public
establishment 1
Public
establishment 3
Government
Ministry 1 Parliament …Ministry 2 …
Public sector
individual financial statements
Accrual accounting
Public
establishment 2
6Approx. 500 public establishments
7. Public
establishment* 1
Public
establishment* 3
Government
Ministry 1 Parliament …Ministry 2 …
Public
establishment* 2
7
Central Government in France
Scope under National Accounts
* Non Market Non Profit Institutions
Scope of national accounts
Approx. 500 public establishments
8. Public
establishment* 1
Government
Ministry
1
Parliament …Ministry
2 …
Public
establishment* 3
Public
establishment* 2
8
Public
corporations
CONTROL*
* Non Market Non Profit Institutions
Public sector
individual financial statements
Accrual accounting
Private sector
financial statements
* as defined in IPSASs
Central Government in France
Relationship based on control …
but no consolidated accounts as of yet
Scope of controlled
entities
9. Social security sector
Current state of play under accrual accounting
Public sector
individual financial statements
Accrual accounting
Social
security
entity* 1
Social
security
entity* 2
Social
security
entity* 3
9
Regional
entity b
Regional
entity a
National
entity M
Regional
entity b
Regional
entity a
National
entity V
Regional
entity b
Regional
entity a
National
entity M
* Not incorporated in a scheme
Approx. 1,500 entities
10. Public sector
individual financial statements
Accrual accounting
Social
security
entity* 1
Social
security
entity* 2
Social
security
entity* 3
10
Regional
entity b
Regional
entity a
National
entity M
Regional
entity b
Regional
entity a
National
entity V
Regional
entity b
Regional
entity a
National
entity M
* Not incorporated in a scheme
Social security sector
Combination for some social security schemes
No overall combining entity / no parent-subsidiary relationship
Combined financial statements
Accrual accounting
Approx. 1,500 entities
11. 11
Social
security
entity* 1
Social
security
entity* 2
Social
security
entity* 3
Regional
entity b
Regional
entity a
National
entity M
Regional
entity b
Regional
entity a
National
entity V
Regional
entity b
Regional
entity a
National
entity M
Social security sector
Scope under National Accounts
Scope of national accounts * Not incorporated in a scheme
Approx. 1,500 entities
12. Local authorities
Current state of play under accrual accounting
12
Public sector
individual financial statements
Accrual accounting
Local
authority LA1
Local
authority LA2
LA (1,2)
Inter communality
LA1
Satellite
LA2
Satellite
Local
authority LA3
Local
authority LA4
LA (3,4)
Inter communality
LA3
Satellite
LA4
Satellite
Approx. 80,000 entities
13. 13
Local
authority LA1
Local
authority LA2
LA (1,2)
Inter communality
LA1
Satellite
LA2
Satellite
Local
authority LA3
Local
authority LA4
LA (3,4)
Inter communality
LA3
Satellite
LA4
Satellite
Local authorities
Scope under National Accounts
Scope of national accounts Approx. 80,000 entities
14. 14
Public sector
individual financial statements
Accrual accounting
Local
authority LA1
Local
authority LA2
LA (1,2)
Inter communality
LA1
Satellite
LA2
Satellite
Local
authority LA3
Local
authority LA4
LA (3,4)
Inter communality
LA3
Satellite
LA4
Satellite
Local authorities
Relationship based on control or common interest…
but neither consolidated nor combined accounts as of yet
CONTROL*
* as defined in IPSASs
COMMON INTEREST
Public
corporations
Private sector
financial statements
15. Public sector under national accounts
15
Public
establishment 2
Public
establishment …
Central Government
Ministry
1
Parliament …Ministry
2
…
Public
establishment 1
Public corporations
Local authorities
Local
entity x1
Local
entity mLocal
entity z
Local
entity x2
Social security
Social security
entities A
Social security
entities B
Social security
entity 1
Social security
entity 2
Scope of national accounts
16. Whole of public sector under accrual a/c
No parent-subsidiary relationship
No legally established combining entity
16
Public
establishment …
Central Government
Ministry 1 Parliament …Ministry 2 …
Public
establishment 2
Public
establishment 1
Public corporations
Local authorities
Local
entity x1
Local
entity mLocal
entity z
Local
entity x2
Social security
Social security
entities A
Social security
entities BSocial security
entity 1
Social security
entity 2