The new system of financial accountability for public managers, at the heart of the public integrity ecosystem

by Louis Gautier, General Prosecutor of the French Cour des comptes

The French Cour des comptes and regional and territorial chambers (CRTCs) underwent a major overhaul with the reform of the financial liability regime for public managers on 1^st January 2023. Until this date, the contentious functions of these financial jurisdictions were based on two distinct liability regimes: the one specifically applicable to public accountants (who handle the public fund and keep the accounts) and the one generally applicable to “authorizing” public managers (who decide on revenue and expenditure).

Under the system of personal and financial liability of public accounting officer, public accountants were held responsible out of their own personal funds for any shortfalls in the public purse, and could therefore be placed “en débet“, i.e. ordered to reimburse such shortfalls. In 1948, this system was supplemented by a liability regime inspired by common criminal law, under which every public manager (except ministers and elected public manager officials) who were not accountants could be fined if they failed to comply with the legal rules governing the handling of public funds. An ad hoc court was set up for this purpose, the Court of Budgetary and Financial Discipline (CDBF), made up equally of magistrates from the financial jurisdictions and members of the Conseil d’État (the supreme administrative court), before being integrated into the Cour des comptes in 2023. 

These two parallel systems had become unsatisfactory. The accountability of accountants was ineffective because of frequent remissions, while the CDBF, by judging only a few cases a year due to a lack of resources and ambition, had come to seem like an exceptional form of justice. Putting an end to this dichotomy, the new regime of Liability of Public Managers (LPM) applies to all public managers, whether accountants or authorizing officers, for all their budgetary and financial acts. A new chamber dedicated to litigation has been created within the French Cour des comptes. Its judgments may be appealed to a Financial Court of Appeal, and then to the Conseil d’État. 

As part of the reform, ten financial offences liable to be prosecuted under the Financial Jurisdictions Code from 1^st January 2023 have been redefined and grouped into four main categories: 

1. Budgetary and accounting offences – which can include, for example irregular commitment of credits without having the authority to do so (ie. no clearance/ no visa);
2. The offence of giving an undue benefit to itself/somebody (directly or indirectly);
3. Breach of a of revenue, expenditure or management rule resulting in a significant financial loss through serious misconduct; and lastly,
4. Non-enforcement of a court decision and offences related to the enforcement of court rulings, making it possible to penalize public managers for failure to comply with court rulings ordering them to pay a sum of money.

These offences are all designed to punish mismanagement that undermines public financial order. Penalties are purely pecuniary, and can range up to six months’ annual remuneration. They may be accompanied by publication of the judgement in the Journal Officiel. Persons liable to prosecution include anyone working in a public or private structure likely to be audited by the financial courts, whether as accountant, authorizing officer, chairman of a board of directors or head of a supervisory body. Managers of organizations receiving public subsidies or appealing to the generosity of the public are also concerned (with the exception of volunteers). Government officials and elected representatives, on the other hand, are not liable to prosecution for most offences.

The procedure governing the application of this new system has also been renewed: from now on, the General Prosecutor’s Office will be central to all stages of the litigation process. It examines cases referred to it by the chambers of the financial jurisdictions or by public authorities authorized to report (ministers, public prosecutors, prefects or state inspection services), as well as reports received directly from citizens via its online platform. The General Prosecutor then decides whether or not to prosecute, and can either issue an indictment or issue a reminder of the law. This latter warning usually proves effective!

In the event of an indictment, the case is referred to the litigation chamber, which then conducts an independent investigation. At the end of the investigation, the General Prosecutor’s Office decides whether to refer the accused to the litigation chamber or to close the case. The public prosecutor’s office requests sanctions during the hearing, and may appeal against the decision of the litigation chamber, or appeal to the Court of Cassation. This procedure is unique in its rationale: based on the notion of “protecting public financial order”, it complements the administrative and disciplinary liability regimes, sanctioning the most serious cases where necessary. 

What’s more, when the cases referred involve facts that could constitute a criminal offence, such as alleged corruption, misappropriation of public funds, illegal interest-taking or favoritism, the public prosecutor may decide to refer the case to the courts. In this way, the financial and criminal courts complement each other, with the former punishing misconduct in public management, and the latter to initiate proceedings when the same facts constitute criminal offences against probity – the public prosecutor’s office therefore plays an important role in coordinating their respective actions. Through its prosecution policy, the General Prosecutor’s Office of the French Cour des comptes contributes to reinforcing the credibility of financial jurisdictions by initiating public action, whether in response to reported cases or on its own initiative. This new system completes the arsenal of sanctions available for criminal, managerial or disciplinary liability. In this sense, it guarantees the usefulness of the work of the supreme audit institutions, which can find a direct jurisdictional outcome, and reassures citizens about the notion of public accountability. More than ever, financial jurisdictions are in a position to safeguard the financial and proprietary interests of the public sector, to play their part in combating breaches to the duty of probity, and to account for the proper management of public funds, in accordance with article 15 of the 1789 Declaration of the Rights of Man and of the Citizen, ”Society has the right to demand an account from any public official of his administration”, as inscribed on the frontispiece of the Grand’chambre of the French Cour des comptes.

Through its prosecution policy, the General Prosecutor’s Office of the French Cour des comptes contributes to reinforcing the credibility of financial jurisdictions by initiating public action, whether in response to reported cases or on its own initiative. This new system completes the arsenal of sanctions available for criminal, managerial or disciplinary liability. In this sense, it guarantees the usefulness of the work of the supreme audit institutions, which can find a direct jurisdictional outcome, and reassures citizens about the notion of public accountability. More than ever, financial jurisdictions are in a position to safeguard the financial and proprietary interests of the public sector, to play their part in combating breaches to the duty of probity, and to account for the proper management of public funds, in accordance with article 15 of the 1789 Declaration of the Rights of Man and of the Citizen, ”Society has the right to demand an account from any public official of his administration”, as inscribed on the frontispiece of the Grand’chambre of the French Cour des comptes.