This presentation by Daniele Lajoumard was made at the 14th Annual OECD Public Sector Accruals Symposium, Paris 3-4 March 2014. Find out more at http://www.oecd.org/gov/budgeting/14thannualoecdpublicsectoraccrualssymposiumparis3-4march2014.htm

1. Budgeting in French public Sector:
The use of accrual basis and cash basis systems
Danièle LAJOUMARD,
Inspecteur général des Finances
Ministère de l’Economie et des Finances

2. Summary
• A glance at the Budgeting Systems in the
French Public Sector
• A focus on the Central General
Government budgeting and accounting
system
• A reform in progress for Governmentorganizations (Agencies)

3. A glance at the budgeting systems (1)
.
Public Entities
French Central
Government
Budgeting System
Three ceilings for :
- Financial Commitments (multi
year)
-Appropriations (cash basis)
-Staff
Government-organizations
(“Agencies”)
Accrual basis
Social Security
organizations (SSO)
Accrual basis
Local authorities
Modified accrual basis
Financial accounting system
Accrual basis (French public
GAAP so call “RNCE”)
Accrual basis (French GAAP)
Accrual basis (French SSO
Standards) (so call PCUOSS)
Modified Accrual Basis

4. A glance at the budgeting systems (2)
.
Public Entities
French Central
Government
Budgeting System
Three ceilings for
- Financial commitments (multi
year)
-Appropriations (cash basis)
- Staff
Government-organizations
(“Agencies”)
Accrual basis
Social Security
organizations (SSO)
Accrual basis
Local authorities
Modified accrual basis
Nature of Budget
Revenues : forecasting
Commitments, expenses,
Staff:
Limited allocations for each
program
Only Forecasting
Only Forecasting
Revenues : forecasting
Commitments and expenses :
limited allocations

5. A Focus on the Central Government budgeting and
accounting integrated system

The budgeting legal framework: the Constitutional Bylaw of 1.8.2001

Before the passage of this law, the Parliament has considered the use of an
accrual basis budget but decided to retain different complementary systems,
each with a specific purpose:
 Allowance for Commitments (Capped allocations with a recording system)
 Appropriations (Capped appropriations with a cash basis accounting)
 Staff Ceiling (Capped Ceiling with a recording system)
 Financial accounting (Full accrual basis)

These complementary systems are integrated :
 Publication of a statement (audited) of reconciliation between budget outturn and
financial accounting result
 Use of an ERP integrated all these accounting and monitoring systems

6. The integrated Central Government system :
Recognition of expenses
Recording of
commitments for
budgetary purpose
General purpose accounting
(Full Accrual basis accounting)
Debit : expenses or
fixed assets
Budgetary
accounting
Debit : payables
Credit : cash
Credit : payables
Budget
expenditures
ERP « CHORUS »
Purchase
order
Delivery
Invoice + control
payment order
Process of expenditure (ERP Workflow)
Payment

7. The integrated Central Government system :
Recognition of revenues
General Purpose accounting
(Full Accrual basis accounting)
Debit : receivable
Debit : cash
Credit : revenues
Credit : receivable
Budget receipts
Budgetary
accounting
ERP « Chorus »
Event giving
rise to the debt
of the debtor
Document issue :
order to pay by the debtor
Process of revenues (ERP Workflow)
Collection

8. The integrated Central Government system :
Reconciliation : budgeting result and accrual accounting result
•
The financial reporting (« compte général de l’Etat ») includes a statement
of reconciliation between budgeting result and accrual accounting result
(standard 1 of French public GAAP)
Budgetary result
+ Reste à recouvrer sur produit de l’année
- Recettes au titre des produits des années antérieures
+ Acomptes d’impôts rattachés à l’exercice
+/- Dépenses et recettes se traduisant par une inscription au bilan (= ne constituant pas
des charges et produits)
+/- Opérations à impact patrimonial (charges n’ayant pas données lieu à dépenses
budgétaires, produits n’ayant pas donné lieu à recettes budgétaires) :
exemples valeur nette comptable des actifs cédés , variation des stocks…
+/- autres opérations
= Accrual accounting result

9. A reform in progress for Government-organizations
(Agencies)
• A new regulatory framework : The Regulation on budgetary and
accounting public Governance of November 7, 2012 (so call GBCP):
– Extension of the Budgeting Central Government system to the
public Agencies :
• From an accrual basis budgeting system (for forecasting
purpose)
• To a cash basis budgeting system (with ceilings for :
– commitments,
– appropriations,
– staff
– Maintaining financial forecasting and accounting (Full accrual
basis)
• The aim of this reform is to strengthen control on the public
Agencies

10. For more details…
• The English text of :
– The Constitutional bylaw regarding budget procedure
of 1. August 2001
– And other documents about French reform
are available on the French Government’s site:
www.performance-publique.budget.gouv.fr
(Accueil : “ressources documentaires” “documentation en Anglais”)
• The English text of the Central Government Accounting
Standards are available on the CNoCP site:
www.economie.gouv.fr/cnocp

11. Thank you for your attention