AFP/Archives – Stefani Reynolds Economy Minister Bruno Le Maire in Washington, April 12, 2023.
According to management researcher Marie Caussimont, the lack of certification of local government accounts is a real Pandora's box. Accounting abuses are indeed creeping in and are damaging the already significant deficit caused by the increased spending by local authorities.
In an article published in Le Monde, the comments of the Lecturer at Toulouse School of Management are not unrelated to Bruno Le Maire's announcement. He pointed to a possible increase in local government spending of around 16 billion euros in 2024. So, would this announcement be underestimated by what is really happening ?
The Court of Auditors is addressing the issue by conducting studies to highlight the few accounting aberrations that were creeping into local authority documents. For example, some infrastructure can be redone before its true “end of life”. Until now, accounting standards did not require this expenditure to be recorded as a financial loss. These are procedures that nevertheless exist in private companies. Standards that have however been refined recently and hope to eliminate this problem. But it is not the only one. Local authorities are less forthcoming about their actual stocks. The spare parts they have, for example for certain works, are not mentioned, allowing them to appear to be in greater financial need than necessary. The reverse is also true. Some will then give the impression of experiencing greater prosperity than in reality. By not putting enough money aside, urgent requests for finances come into conflict with the balance of the budget.
A bombshell that could jeopardize the relationship between the State and local authorities, even though tensions are already running high: the Association of Mayors of France (AMF) advised Bercy to clean up its own house before pointing the finger at local authorities' substantial budgets.
“Displaying the real financial situation of local authorities could be a real bombshell,” says the researcher. Faced with heightened tensions between the two entities, this new data could jeopardize an already uncertain balance. At the very least, the largest communities should comply with the certification of their accounts to allow for the coming of expenses that continue to skyrocket.
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