THERE are three types of contrôles - audits - with regard to social contributions and rules that can be carried out on your business.
• An audit carried out by an inspecteur at the business premises or at the business accountant(s) called a contrôle sur place (on-site audit)
• An audit carried out by a contrôleur takes place on the URSSAF premises based on supporting documents contrôles sur pièces: it is not as exhaustive as the on-site audit, but the ultimate goal is the same: ensuring that the business applies social rules and regulations properly. The aim is to check that there is no discrepancy between what has been declared and what the law requires the business to declare.
• Audits carried out in order to fight against illegal work (LCTI: Lutte Contre le Travail Illégal). In that case, the audit aims at ensuring that any given professional activity is carried out legally and fully declared. Companies as well as staff can be audited in this case.
1) Who can be audited?
Any given person or business with a non agricultural professional activity can be audited by URSSAF, no matter how small the activity is.
2) How are the people/companies selected for an URSSAF audit?
For on-site audits and audits based on supporting documents, a global action plan is put in place on a yearly basis by URSSAF, taking into account national, regional and local criteria.
Companies are selected because their criteria match the selected control criteria for that year (eg. activity, size, date when the business was set-up, previous audit results etc).
URSSAF also benefits from an automated tool which allows each office to select companies randomly among all those matching the given criteria hence ensuring that all cotisants (contributor, anyone paying URSSAF contributions) are treated fairly with regards to being audited.
When it comes to illegal work, there is also an action plan in place which allows companies/people to be audited for prevention purposes or to fight against fraudulent practices, on a wide scale as well as on an individual basis. As such, an audit may be carried out if information has been given to URSSAF regarding suspected illegal work.
3) What is the purpose of an URSSAF audit?
There are four main goals: To secure the social security funding process; to help people/ businesses to properly apply rules and regulations and help them know their rights; to protect employees' rights (by checking collective bargaining agreements - Conventions Collectives); to support a fair competition environment.
4) Are URSSAF audits designed to fight against illegal work?
Fighting against undeclared work has been an essential part of the overall URSSAF auditing activities since 1997. It represents about 20% of its overall activity.
The auditing process takes place within a very strict and highly regulated framework set by Article R243-59 of the Social Security Code.
1) What exact role does the inspecteur play?
The inspecteur's role is to both audit and give advice: her/his job is to analyse the situation of the business with regards to social rules and
regulations, ensure they are properly applied and to put things in order where and if needed. It is worth mentioning that 50% of URSSAF audits end up with businesses being credited rather than debited.
2) Can a business be audited with no prior warning?
If the audit relates to suspected illegal work, then there may well not be any warning as this would obviously defeat the point of the audit.
For on-site audits or audits based on supporting documents, an avis de contrôle (notice) suggesting a meeting date along with a list of the required basic supporting documents will be sent by recorded delivery with proof of receipt.
3) What is the auditing process?
The inspecteur will go the business - or its representative, ie. accountancy firm, on the agreed date. They will then carry out the necessary checks. The time spent on-site really depends on the business size, its activities (some activities may be more strictly regulated than others), and whether the inspecteur finds numerous mistakes or not.
On average, this should take about half a day for businesses with between three to five people, a couple of days for businesses with around 20 people, to several weeks for businesses with 2,000 people.
Upon completing all relevant checks, the inspecteur will send a lettre d'observations (comments letter) by recorded delivery with proof of receipt, mentioning adjustments needed or that what has been checked is certifié conforme (no adjustment to be made).
The business has 30 days to get back to the inspecteur with comments and new supporting documents in case of disagreement with the adjustments mentioned in the lettre d'observations. The inspecteur will look into these and can cancel, maintain or amend the adjustments initially requested. At the end of the 30 days, the inspecteur will send the local URSSAF his official report (procès verbal), and URSSAF will then deal directly with getting paid or paying whatever adjustments that are indicated in the inspecteur's report.
At this stage, the business has another month to appeal against the inspecteur's conclusions. The appeal must be sent to the Commission de Recours Amiable de l'URSSAF.
The audit covers the three previous calendar years along with the current year. In case of illegal work, the audit can go back five years.
Supporting documents that may be checked include all documents relating to the business accounts, along with documents related to the business legal and social matters: receipts for expenses, declarations made to the various social institutions, pay slips, general meetings minutes for a SARL etc. It is impossible to draw an exact list bearing in mind the inspecteur can ask to see any document he deems relevant.
The business accountant(s) should be around to assist their clients and provide professional advice, and are often the best people to answer the inspecteur's technical questions.
4) How to behave around the inspecteur:
Bearing in mind businesses are not at liberty to oppose an audit, the best approach is to fully collaborate and allow the inspecteur to carry out their mission in optimum conditions: make sure a desk is set aside, documents are prepared and filed clearly etc.
Refusing to provide any given document is not an option: do bear in mind that the inspecteur is fully accredited and sworn to professional secrecy. The inspecteur is also at liberty to interview employees, which will be supported by official interviews reports and minutes.
In the case of illegal work, the inspecteur can also interview anybody related to the business activities such as suppliers and clients.
If there are discrepancies, these will be formally notified by the inspecteur and the business will have to ensure that it does apply the rules and regulations properly from the date of the audit, and will also have to pay any money overdue, along with late payment penalties. If money is owed to the business, URSSAF will deal with the reimbursement directly. In the case of illegal work, penalties are heavier and consequences may involve financial penalties, jail, higher late payment fines public subsidies being denied etc.
1) What if you do not agree with the inspecteur?
Once you receive the mise en demeure (document explaining why and how much you owe URSSAF), you have 30 days to appeal to the Commission de Recours Amiable de l'URSSAF. After such time, you will need to involve the Tribunal des Affaires de Sécurité Sociale (TASS), Court of Appeal (Cour d'Appel) or even, the Supreme Court of Appeal (Cour de Cassation).
3) What if the audit identifies that the business owes money to URSSAF but it is unable to pay it?
If the business is experiencing cash flow problems, do not hesitate to ask for payment options in terms of instalments for example. In fact, the inspecteur should suggest the appropriate methods of payment.
Do not forget that the aim of URSSAF audits is not to shut businesses down but to help them and give advice, including throughout difficult times.
For further information, please contact your local URSSAF offices.
You can also download the Charte du cotisant (French only) on www.urssaf.fr
Article written exclusively for The Connexion by Alexandra Thevenet of the Périgord Développement Agency who spoke with Patrick Courtois at the URSSAF in the Dordogne.
Périgord Développement Agency which was formed in April 2004. It has assisted many of the 450 British-sponsored firms which have set up or relocated to the Dordogne, together with new businesses looking to set up there.
