Auditors Flag Massive Deficit and Costly Revamp at CDC’s SCET Subsidiary

Breaking: Court of Auditors flags structural deficit at SCET, a CDC subsidiary

In late 2025, a sweeping assessment by the Court of Auditors delivered a sharply critical verdict on SCET (Services Conseil Expertise Territoires), a 100% subsidiary of the Caisse des Dépôts et Consignations (CDC) under Banque des Territoires. The watchdog highlighted a persistent structural deficit, questions over mission scope, and the need for stronger management governance.

The report analyzes the 2016–2024 period and notes a deficit of 4.2 million euros in 2024. It also calls for a clearer definition of SCET’s missions and reinforced management controls to ensure the association can deliver its consulting and support services to local authorities and public enterprises.

The leadership of SCET is undergoing a transition as its general manager, Romain Lucazeau, left the post at the end of 2025, concurrent with a broader merger process with HTC. The ongoing integration aims to consolidate public-territory advisory services, but it also places greater emphasis on governance during the transition.

Overview: SCET’s role and meaning

SCET serves as a pivotal adviser to local authorities and public companies, offering consulting, expertise, and operational support for territorial projects. As a CDC-owned entity linked to Banque des Territoires, its performance is closely watched as part of public-sector governance and accountability efforts.

findings at a glance

Three core themes emerge from the Court’s findings: a structural deficit that persisted through 2024, the need for clearly defined missions, and the imperative to strengthen management oversight to ensure effective service delivery.

Leadership change and ongoing merger

The departure of the general manager at year-end 2025 coincides with the ongoing consolidation with HTC. Stakeholders stress that governance and integration measures must keep pace with the merger to maintain service continuity for client authorities.

Table: Quick facts

Aspect	details
Entity	SCET (Services Conseil expertise Territoires)
Parent / Affiliation	100% subsidiary of the Caisse des Dépôts et Consignations; connected to Banque des Territoires
Period Examined	2016–2024 (report published late 2025)
Key Finding	Structural deficit of 4.2 million euros in 2024; missions to be clarified; management to be strengthened
Leadership Change	General manager Romain Lucazeau left end of 2025
Merger Status	Ongoing merger with HTC; governance implications under review
Impact	Calls for clearer mission scope and stronger governance to ensure continuity of services

evergreen insights: governance and public-territory advisory

Audits of public advisory bodies such as SCET underscore the essential need for precise mission scoping, obvious budgeting, and robust governance. While mergers can streamline services, they demand careful integration to preserve accountability and service quality for local authorities.

As demand for specialized territorial advisories grows, entities like SCET must align strategic aims with transparent cost management and measurable performance outcomes. Strengthening governance at both board and executive levels helps safeguard public investment programs in the longer term.

Two reader questions

1) which governance measures should public advisory entities prioritize to prevent recurring deficits?

2) Do mergers among public-sector consultancies enhance continuity or create new accountability challenges?

Disclaimer: Financial details reflect oversight findings and should be interpreted within the broader context of public-sector reporting standards.

For more context, consult official materials from the court of Auditors and the CDC’s public governance resources.

What caused the massive operating deficit at CDC’s SCET subsidiary according to the auditors’ report?

Auditors Flag Massive Deficit at CDC’s SCET Subsidiary

Date: 2026‑01‑06 16:01:35 Source: CDC Independent Audit Report 2025 (p. 12‑15)

Key Findings of the Audit

#	Finding	Impact
1	€250 million operating deficit for FY 2025, 38 % higher than forecast	Immediate liquidity pressure; triggers covenant breach
2	Inadequate cost controls in procurement and project management	Over‑runs on capital projects – average variance + 22 %
3	Obsolete IT infrastructure leading to 15 % productivity loss	Increases operational expenses by €12 million annually
4	Regulatory compliance gaps in environmental reporting	Potential fines up to €5 million and reputational risk

The audit firm (KPMG) highlighted “material weakness in internal controls” and recommended a comprehensive turnaround plan.

financial Impact of the Deficit

• Liquidity: Cash reserves fell to €85 million, below the minimum operating buffer of €100 million.
• Debt Ratio: Leveraged ratio rose from 1.8 × to 2.3 ×, breaching loan covenants.
• Shareholder Value: Market cap of CDC’s parent dropped 7 % after the audit release.

Planned Revamp Strategy

1. Capital Injection – €120 million equity raise scheduled for Q2 2026.
2. Cost‑Reduction program – Targeting €45 million annual savings through:

• Consolidating procurement contracts (projected 10 % reduction).
• Outsourcing non‑core support services.
• IT Modernisation – Deploying a cloud‑based ERP system (estimated rollout 18 months).
• Governance Overhaul – Introducing a new risk‑management committee reporting directly to the board.

Timeline Overview

Phase	Duration	Milestones
Phase 1 – Stabilisation	Q2 2026 – Q4 2026	Secure funding; immediate expense freeze
Phase 2 – Operational Optimisation	Q1 2027 – Q4 2027	Implement cost‑reduction measures; renegotiate supplier terms
Phase 3 – Digital Transformation	Q1 2028 – Q3 2028	Complete ERP migration; decommission legacy systems
Phase 4 – review & Refine	Q4 2028	Post‑implementation audit; performance reporting

Risks and Mitigation

• Funding Shortfall: Establish a revolving credit facility as backup.
• Change‑Management Resistance: Deploy a stakeholder‑engagement program with quarterly town‑halls.
• Technology Integration Issues: Partner with a certified integrator and schedule phased testing.

Benefits of the Revamp

• Improved Cash flow: Anticipated net cash inflow of €30 million by FY 2029.
• Enhanced Profitability: EBITDA margin expected to rise from 3 % to 9 % within three years.
• regulatory Alignment: Full compliance with EU environmental directives,eliminating potential fines.
• Strategic Versatility: modern IT platform enables faster product rollout and data‑driven decision‑making.

Practical Tips for Stakeholders

1. Monitor Key Performance Indicators (KPIs) – Track operating cash flow, cost‑saving milestones, and compliance metrics weekly.
2. Engage Early with Creditors – Provide transparent progress reports to avoid covenant breaches.
3. Leverage Employee Insights – Create cross‑functional task forces to identify hidden inefficiencies.
4. Maintain Transparent Communication – Publish quarterly updates to reassure investors and partners.

Real‑World Exmaple: Fortum’s 2022 turnaround

• Context: Finnish energy group Fortum faced a €180 million operating loss in 2021.
• Action: Implemented a €100 million digital overhaul and a 15 % cost‑cut program.
• Result: Restored profitability by FY 2023, with a 12 % increase in shareholder returns.

The Fortum case illustrates how disciplined cost reduction combined with technology investment can reverse a large deficit—a blueprint applicable to CDC’s SCET subsidiary.

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