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published, largely at the discretion of the Court of Accounts. Reports of the regional Chambers of Accounts concerning the statutory audit of local authorities are accessible, upon request, to citizens.

4.5.6. Enforcement of findings

The preparation and publication of the responses of ministers and other senior managers to the observations of the Court of Accounts establishes the intentions of audited bodies to follow up. Since 1996, other communications of the Court to ministers have to be submitted to parliamentary committees or commissions of enquiry after a delay for response of three months (Financial Jurisdictions Code, L135-5). In recent years, Parliament has been expressing greater interest in Court-related issues and has been receiving more information than in the past. Finally, although the Court of Accounts is a judicial body, this aspect of its work does not have a major impact on follow-up to its audit recommendations which are normally contained in its reports (as with nonjudicial external audit offices), not in its rulings.

Notes

1.Codification allows new laws, or amendments of existing laws, to be incorporated in a logical and clear legal framework for a specific subject matter. Nearly 60 different codes have been adopted in France.

2.See Bouvier and Montagnier, 2001, p. 49.

3.The hierarchy is as follows: the Constitution, organic laws, ordinary laws (separately or grouped in codes), ordinances (ordonnances), and then presidential, prime ministerial, and ministerial decrees.

4.The legal provisions of the European Union refer to an excessive deficit procedure. However, the reference values of 3% for the deficit and 60% for debt are contained in a protocol which is not legally binding on member countries, who “shall ensure that national procedures in the budgetary area enable them to meet their obligation” (European Union, 1992).

5.Prior to 1946, parliamentarians could introduce new spending without limits (Bigaut, 1995, p. 82). Both the 1946 and 1958 Constitutions prevented Parliament from raising total expenditure. The 1958 Constitution removed Parliament’s power to lower total revenues.

6.During the 1980s and 1990s, the MINEFI used a number of techniques to change budget appropriations without parliamentary authority. These included: introducing by decree “urgent” spending that could easily have been foreseen in advance; carrying over large amounts of budget authority and spending them the next year; and cancelling certain appropriations with little justification. There were also off-budget activities, financed by parafiscal taxes, which were not subject to the same accounting and reporting requirements as the State budget. Such non-transparencies helped trigger the reform of the budget process in the late 1990s (for discussion, see National Assembly, 1999, Part II).

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7.The Senate already approved changes in the 1959 Ordonnance in 1960. However, these were not carried into law. During 1960-2000, the 1959 Ordonnance was modified in only minor ways (notably in 1971 and 1995).

8.In the LOLF, special funds have been maintained as separate “programmes”. A distinction is made between the 132 programmes of the general budget and the 26 additional programmes covering earmarked funds (10), budget annexes (7) and special treasury accounts (9).

9.Even prior to adoption of the LOLF in 2001, several commentators noted the need for a more global approach. See, for example, Auberger, 2001; Bouvier and Montagnier, 2001; and Philip, 2001.

10.Caudal (2004) traces the history of how budget principles became embodied in all constitutions since 1789.

11.Exceptions include: paying appropriations for year n in year n + 1; carrying over appropriations at end-year; and committing certain expenditures in year n – 1, before Parliament approves the budget for year n. In view of these exceptions, the principle applies more to annual reporting than to annual appropriations.

12.Programme managers are listed. See www.lolf.minefi.gouv.fr/architecture/index_ responsables.html.

13.New software to assist ordonnateurs, programme managers, financial controllers, and public accountants in recording and controlling expenditures was expected to be operational by end 2004 (see www.lolf.minefi.gouv.fr/essentiel/index_chan.html). However, due to various difficulties, the ACCORD 2 project was cancelled in May 2004, and the date of 2006 was set for the modification of existing tools.

14.The accountability of ordonnateurs was already specified in the 1948 Law creating the Court of Budgetary and Financial Discipline. The responsibilities of public accountants were specified in the 1963 annual budget law (Loi de finances) (Art. 60).

15.The Minister’s responsibilities have traditionally been wide-ranging. However, there have been times when responsibilities have been narrow. For example, during 1993-95 there was a Minister/Ministry of Economy and a Minister/Ministry of the Budget, as well as a separate minister responsible for industry. See www.finances.gouv.fr/minefi/ministere/index.htm.

16.In 1991 there were 46 ministries or State secretariats compared with 28 in 1967 and an average of 15-20 during 1946-58 (see Rouban, 1995, p. 43).

17.EPIC (établissement public à caractère industriel et commercial) is a commercial or industrial public establishment; EPA (établissement public à caractère administratif) is an administrative public establishment.

18.The unit – the Agency for State Shareholding (Agence des participations de l’État) – was created in 2003. See www.finances.gouv.fr/TRESOR/agence_part_etat.htm.

19.The 1958 Ordonnance No. 58-1110 concerning the functioning of Parliament mentions three evaluation offices, covering: scientific and technological choices; legislation; and health policies.

20.For the Court of Accounts, see section 4.5 on external audit.

21.Including four départements outside metropolitan France (Guadaloupe, Guyane, Martinique, Réunion).

22.See Constitutional Law No. 2003-276 of 26 March.

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23.Although Organic Law No. 2004-758 was adopted by Parliament in July 2004, the law could not be promulgated since the Constitutional Council declared that certain provisions – those relating to the adequacy of local revenues to guarantee “free administration” – were obscure and imprecise (Constitutional Council Decision 2004-500 DC, 29 July 2004).

24.Several mechanisms exist at national level, including direct grants from the State budget, tax-sharing arrangements, and solidarity and equalisation funds. Regional and local levels have similar arrangements (Saidj, 2003, p. 452-454).

25.During the 1990s, municipalities began co-operating with a view to rationalising existing structures.

26.Charges sociales are payroll taxes from an economic viewpoint; from a legal viewpoint, they are social fees.

27.The golden rule (équilibre budgétaire réel) is rigorously enforced by the regional Chambers of Accounts.

28.The Prime Minister may establish a joint committee after one reading in each house. The text agreed by this joint committee is then submitted to both houses, whose proposed amendments have to be acceptable to the government, which has the right to refuse them. These procedures are based on decisions of the Constitutional Council.

29.Ordonnances, which have the force of law, normally need ratification by Parliament. However, for budget laws, the government can adopt them by an ordonnance that does not require parliamentary ratification (Art. 47). This constitutional provision has never been used.

30.See Constitutional Council Decision 79-110 DC at www.conseil-constitutionnel.fr/ decision/1979/79110dc.htm, 24 December 1979.

31.In 1981, following presidential and legislative elections and major changes in the direction of macrofiscal policy, there were four rectifying laws.

32.In the 19th century, ministers (acting as ordonnateurs) were committing expenditures in excess to approved limits. To control commitments, in 1890 the annual budget law required each ministry to record expenditure commitments, with “expenditure commitment controllers” designated by individual ministers. Since these controllers were not independent from the minister, the 1922 law placed all controllers under the central authority of the Ministry of Finance (Bouvier et al., 2002, p. 410).

33.Since many State expenditures are executed outside Paris, the authority to enter spending commitments is delegated to secondary ordonnateurs (e.g. prefects in départements), a process known as délégation de crédit.

34.Legifrance, which is the service that diffuses French laws, considers the Public Accounting Decree as a fundamental text (www.legifrance.gouv.fr/html/aide/ lois_reglements1.htm), the only decree having this status. The 1962 decree is to be updated to make it consistent with the new accounting provisions of the LOLF (Art. 27-30).

35.The LOLF specifies “the last quarter of the ordinary session”. According to the Constitution (Art. 28), the ordinary session begins on the first working day of October and ends on the last working day of June. Normally the budget orientation debates take place during the month of May or June.

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36.The Chamber of Accounts, which verified the accounts of the kings of France, was formally constituted in the 14th century. Three centuries later, the first French Parliament was formally established in the 1791 Constitution (Magnet, 1997).

37.One for each of the 22 administrative regions of France. The Financial Jurisdictions Code establishes special audit arrangements for French overseas départements and other dependencies.

38.See www.ccomptes.fr/FramePrinc/frame01.htm for the internal structure of the Court of Accounts.

39.The first sub-article of Article 58 of the LOLF adopted by Parliament in 2001 required the Court of Accounts to submit its draft annual work plan to Parliament for comment, with both houses being given 15 days to express opinions. Since the Court of Accounts is a judicial body, and the judiciary is constitutionally independent from both the executive and the legislature, the Constitutional Council declared that the Court’s independence would be compromised if it were obliged to present its draft work plan to Parliament for comment. See Constitutional Council Decision 2001-448 DC of 25 July 2001.

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ISSN 1608-7143

OECD Journal on Budgeting – Volume 4 – No. 3 © OECD 2004

Germany*

*This study has benefited from comments from officials of the Budget Department of the Federal Ministry of Finance and from OECD colleagues including Eckhard Wurzel of the Economics Department.