The authors would like to thank all their colleagues both in AFR and FAD for very useful comments, and in particular participants to the seminar organized by AFR on these issues. We would also like to thank Ann Robertson for exceptional editing assistance.
In the rest of the text, and for simplification, the term francophone African countries is used instead of sub-Saharan francophone African countries.
However, the French system has been subject to profound change, especially during the last ten years, and further evolution is underway. By and large, these changes have eroded the specificities of the French treasury and brought it more in line with other developed systems. In francophone Africa, however, these changes have been further delayed, if made at all.
The main departments are the Direction de la Prévision (macroeconomic forecasting), the Direction du Budget (budget preparation, supervision of budget execution, and of the network of financial comptrollers within the line ministries), the Direction du Trésor (financing), the Direction générale de la Comptabilité publique (accounting and public treasury network), the Direction générale des Impôts (tax base and tax collection), and the Direction générale des Douanes (customs).
It also advises on the central government’s role as a shareholder of state-owned enterprises, and is in charge of international financial relations (e.g., through the Secretariat of the Paris Club).
Most taxes are now collected by the direction générale des impôts (the main tax administration besides the customs and the Trésor public).
To give another example, in a different area, some countries have created a direction des assurances (insurance department), a mere duplicate of what is now a subdivision inside the direction du Trésor in France, and whose role in francophone African countries is arguably limited.
French expressions like correspondants are also used when necessary.
In the French system, the interpretation of this legal framework is under the jurisdiction of administrative Courts, The delineation between administrative and judicial has been studied extensively, For an overview, see Jean Rivero, droit administratif, 1987, 12 ed., Page 171.
The incompatibility between the functions of ordonnateurs and comptables already existed in a 1862 regulation on public accounting.
However, a law has fixed the responsibilities of the comptables
To give a historical perspective, it was on September 28, 1807 that Napoleon created the Comptabilité. Nationale with a mandate to report on the accounts of the government (including the main local authorities). A yearly report was submitted to the emperor. The need for a closer look at the books had been felt for a number of years: the perpetual state of war prevented the preparation of budgets and it is estimated that arrears had gone as far back as 1759 (48 years). In fact, arrears to the Northern Belgian Provinces alone were evaluated at FF 40 million out of a (estimated) budget of FF 720 million for the whole of France.
For a line ministry, and for each line item corresponding to an investment operation, both autorisations de programme (authorization of commitment for an investment operation that may entail payments over a multi-year period) and crédits de paiements (actual payments during the year) are voted on and appropriated by parliament. When a procurement is made (it must correspond to some identifiable operation), the corresponding autorisations de programme are committed (under the control of the financial comptroller). During the same year, credits de paiements will be committed, payment orders will be issued, and payments made corresponding to autorisations de programme during the previous years.
The recording of commitments is made separately by the line ministry and the financial comptroller, each keeping a separate record to be regularly reconciled.
These controls are made by agents of separate entities within the ministry of finance: in principle, financial comptrollers are attached to the budget directorate, while public accountants are under the administrative supervision of the public accounting directorate (la comptabilité publique). In practice, while the public accounting directorate encompasses the largest network of public accountants, other public accounting networks exist, especially in the tax (receveur des impôts) and customs administration (receveurs des douanes), as well as in the education sector (intendants in any public school or university), and in the parastatal sector (agents of the post office).
While arrears are sometimes narrowly defined as accounts payable for more than 30 days, this definition tends to exclude other types of arrears (such as DENOs. which are not recorded as accounts payable). The notion of arrears is discussed in detail in Box 3. In the text, we use the term arrear broadly (i.e. including DENOs and others).
Anglophone African countries do not respect commitment-recording requirements, and therefore have little capacity to provide any immediate measure of arrears. By comparison, as long as commitments are effectively recorded, francophone African PEM systems will provide some measure of arrears, even if only partial.
Audits on central government domestic liabilities have unveiled stocks of arrears amounting to more than 10 percent of GDP in certain francophone African countries.
For a special fund, a global payment order is initially issued, and expenditure made on this basis does not have to be justified any further.
Petty-cash procedures only allow immediate payment and the expenditure is later regularized. The person responsible for the petty cash, le régisseur, is under the supervision, and control, of a public accountant on behalf of whom he/she is acting.
Advance mechanisms” typically involve larger amounts than petty-cash procedures but are the same type of mechanism.
In terms of timing, the fact that a large number of managerial., administrative, and accounting staff who were well acquainted with the functioning of the public expenditure management system retired in the seventies and early eighties may be considered a contributing factor to the progressive decay of francophone-African treasury systems.
The limited size of the financial market compared to France, as well as the limited number of financial instruments, drastically reduces the capacity of the trésor to play a role similar to the direction du trésor in France. Furthermore, compared to France, the trésor often lacks the ability to issue treasury bills (a role taken over by the central bank) or to mobilize foreign financing (a specific aid and debt department inside the ministry of finance is sometimes in charge).
Accounts juridiction are the cour des comptes, at the central level and the chambres régionales des comptes at the local level. They judge all accountants whether they effectively possess this title or have acted as such (comptable de fait). Ordonnateurs acting in their normal functions are also subject to the Cour de discipline Budgetaire et Financière incase of mismanagement. The jurisdiction of this court is limited, however, as ministers and local government authorities are outside its authority.
In France, a system of mutual insurance has been designed to foster the solvency of public accountants in case they are mis en débit.
As with other provisions copied on the French system, these may exist in many francophone-African countries, although they are sometimes totally overlooked.
Article 118 of the 1962 decree Portant réglement général de la comptabilité publique, explicitly defines the existence of entities that, compulsorily and voluntarily, deposit their fund at the trésor. It states that the correspondants are “public or private entities that are required by the law or by specific covenants to deposit part or the whole of their liquidities at the trésor,” and authorized to have their financial transactions executed by public accountants of the trésor. The list includes in particular the CCP (postal bank), the CEP (savings bank), the Caisse des Dépôts et Consignations (a specific financial institution with an overarching role in the economy and the public sector), the CNSS (social security), local governments, public agencies, universities, public high schools, and hospitals.
Historically, that is why the trésor in France was so named. It was the recipient of massive deposits that greatly facilitated liquidity management. We shall see later that while this facility could be used for a good purpose, it could also be misused and has indeed been misused in many countries where the French system has been adopted.
In fact, historically, private banks were reluctant to manage the accounts of civil servants because most did not earn enough to make it worthwhile. Hence, the state offered its employees the possibility of depositing their salaries at the treasury. The money would also be deposited one working day earlier than in the private banks, an advantage that many could not afford to neglect.
While the overall stock has always been large, the ability to meet additional financing needs depends in fact on the ability of the correspondants du trésor to increase their stock of deposits. During the sixties and seventies, the contribution of the circuit to financing was boosted by the substantial rate of inflation that prevailed at the time.
In a period of economic crisis, including macroeconomic instability and debt crisis (with a possible depreciation of the currency), the need to mobilize, if necessary, all available resources is heightened. However, economic agents are, at the same time, likely to withdraw some of their deposits from the postal and savings banks to compensate for wage loss (in ease of unemployment), or to move their capital to safer countries and currencies. Because this move is outside the control of the central government, the extensiveness of the circuit du trésor creates an additional risk, and further complicates cash management. With a single treasury account restricted to the central government, as is traditionally the case in anglophone countries, such risks do not exist, as deposits do not depend on the economic behavior of private individuals and entities.
Their name actually varied across countries: Caisse Autonome d’Amortissement, Caisse d’Amortissemenl, and Caisse d’amortissement de la dette were the most commonly used.
Some arrangements were more complex. For example, the CAA could cover two different entities: one in charge of foreign aid mobilization and debt management, and the other assuming a banking function for public entities. The former would not lend to the trésor directly, but would be a correspondant of the latter, itself a correspondant du trésor.
This is also a concern in the context of the HIPC initiative.
The publicly owned petroleum sector and also the CAA and the postal bank were among the main providers of this type of contingent liabilities through their accounts at the trésor. What remains of the publicly owned sector in some countries can represent a substantial draw on central government resources, with the petroleum entity running a negative position at the résor.
This is only partially so. As a matter of fact, it has sometimes led trésors to intensify their relationship with the commercial banking sector, and also to adopt practices at odds with sound management (like cashing only tax payments made to commercial banks or CCP).
Actually, one often finds in fiscal tables a revealing line called “nonbank financing and errors and omissions” (see Appendix I).
The CAA, for instance, have been been dissolved, or at least substantially reduced in scope, in many African countries. What remains is generally a stock of debt and a limited capacity to service it effectively.
Essentially this is because the whole administration has gradually internalized the short-cuts. From a game theoretical point of view, the situation is such that both the agent (the civil servant) and the principal (the government) have an incentive to circumvent the system: the agent, because of the possible punishment, and the government, because of the need to collect data and keep the system going.
There is often a misconception that the TOFE is an accounting tool. It is not: it is essentially a tool to monitor budget implementation. Even when the trésor is in a position to compile the lines of the TOFE on the basis of account balances, it is useful to give responsibility for putting together the final numbers (including those produced outside the trésor) to a unit whose focus is on economic development and policies.