By Alfred Dogbey
The Controller and Accountant-General’s Department (CAGD), has rubbished the wild allegation of massive payroll fraud leveled against it by politically motivated Policy Think Tank, IMANI Ghana, describing the claims a complete “factual inaccuracies”.
A statement issued and signed by James Ntim Amponsah for CAGD, and copied to The Herald noted that “There were many factual inaccuracies in the statement as some of the comments made do not reflect our business processes and procedures”.
The CAGD’s respond, dated January 14, 2014, said “the purpose of this press release is to respond to recent bad press and attack on the integrity of the Controller and Accountant-General’s Department from Imani Ghana and some media houses alleging massive payroll corruption and inefficient management hence recommending the outsourcing of GOG payroll management to a third party”.
According to the Controller, “It is instructive to note that management responses issued with the report and measures taken over the past two years, since the audit was completed, have been ignored in the publications”.
It said, “There were many factual inaccuracies in the statement as some of the comments made do not reflect our business processes and procedures”.
“We have read the statement put out by Imani Ghana about the performance of various public sector institutions with particular attention to the paragraphs concerning
the Controller and Accountant General’s Department (CAGD) and the subsequent publication of extracts from an audit report that was commissioned by the Controller and Accountant General to identify and eliminate control weaknesses”.
Mr. Ntim Amponsah said “the conclusions derived from the analysis made by Imani do not portray the true picture of the management of the Central GoG Payroll managed by the CAGD.
The recommendations made in the statement can therefore not be the right prescription to successfully address the payroll challenges. CAGD in collaboration with relevant stakeholders is already implementing measures to enhance the payroll management”.
He responded to the issues raised against the Department under the categories Ghost names, Lack of transparent Technology, Disregarded Moratorium on Employment, National Service Payment, Waste of $80m on GIFMIS, Faulty Accounting System and Handing over of payroll to IT Specialist.
In the allegation that “CAGD is padding the ghost payroll with more ghosts”, Mr. Ntim Amponsah said “CAGD does not decide who MDAs put on their payrolls”.
He argued that, “MDAs make their own recruitment; prepare input forms to their personnel processing sections who then capture these inputs into the Integrated Personnel and Payroll Database (IPPD) system before CAGD processes the salaries for payment.
Mr. Ntim Amponsah maintained “The role of CAGD in the payment process however includes the validation of personnel data entered by MDAs against inputs they submit to CAGD for that purpose”.
“On the issue of separated staff it is the responsibility of heads of departments to make inputs and delete the names from the payroll as required by law.
Even though the primary responsibility to delete separated staff rests with the heads of departments, CAGD nevertheless takes precautionary measures to suspend salaries of suspected separated staff pending confirmation by the MDAs”.
“Other issues that have created doubt about the authenticity of employees on the payroll which include double mechanization; wrong SSNIT numbers, zero bank account numbers, wrong date of birth etc are not necessarily ghost related issues.
“Established control measures and continuous improvements in the payroll management such as heads count, biometric validation, and suspension of salaries and monthly validation of the payroll through the E-SPV system are regularly employed to deal with such issues”.
Again, on the issue of Controller “Refused to allow technology; Transparent Technology to fix the mess”, he said “CAGD over the years has consistently upgraded the technology/system used to run the payroll. We moved from a manual system to the VSE payroll software”.
“CAGD later replaced the VSE system with the SIGAGIP System using the Integrated Payroll database. Further review of the payroll system led to the replacement of SIGAGIP with an Oracle HRMIS (IPPD2) which was an integral part of the Public Financial Management Reform Program (PUFMARP). IPPD3 was developed as a backup system to the IPPD2 but both are currently being used in production”.
Apart from the above, some of the most recent technology adopted by CAGD to enhance the integrity, transparency and efficient payroll management include the Electronic Payslips, Electronic Payment vouchers and Third Party Referencing System. Apart from adopting these systems CAGD has consistently upgraded them to their latest versions.
CAGD has also ensured that it trains its staff to acquire the requisite skills to man all these systems.
National Service Payment:
Under the watch of the CAGD “plunderous activities of the National Service Secretariat were allowed passage”.
CAGD has no direct involvement in National Service Secretariat (NSS) processing and payment of allowances for the national service personnel. It is therefore erroneous to say that CAGD watched over the plunderous activities that took place at the National Service Secretariat.
The National Service Secretariat (NSS), like any other subvented agency, is self accounting and manages its own payroll. The NSS therefore obtains releases from Ministry of Finance (MOF) after their request has been vetted by the Ghana Audit Service. Based on the MOF release, CAGD makes lump sum transfer into NSS bank accounts for the payment of Service personnel. NSS processes its own payroll for payment.
Moratorium on Employment
“Some Ministries and CAGD have disregarded the publicly declared moratorium on employment by the Ministry of Finance”. CAGD does not make recruitment for or on behalf of any MDA.
By the Financial Administration Regulation, MDAs make their own recruitment based on the establishment ceilings issued by the PSC/Head of Civil Service, post their staff and upon assumption of duty raised inputs with all the necessary documentations to place these employees on the Central GoG payroll.
CAGD validates these input forms and ensures that the necessary Financial Clearance has been obtained by the MDA from MoF and attached before processing”.
Handing over the Public Payroll
“Ghana should handover the entire Public payroll to IT specialist such as SOFT Tribe”.
It is worth noting that SOFT Tribe is already involved in the management of the payroll and is equally confronted with the same challenges of the Payroll Management. Some of these challenges include fraudulent promotion dates, false recruitment dates, wrong and zero bank accounts, staff without SSF numbers etc.
Notwithstanding the identified challenges, the CAGD has implemented different initiatives to address and clean up the payroll database. Some of these initiatives
include, the Electronic payment voucher system (E-SPVs)the Electronics payslips(E-Payslips) the Regional decentralization of inputs, Biometric registration, E-zwich, the Electronic Input forms etc.
The issue confronting payroll management today is not at the payroll processing stage that outsourcing will easily target, but the major challenge with Payroll Management is at the personnel processing stage. Outsourcing therefore would be a limited and doubtful solution that may come with its own challenges including security and higher management costs.
Faulty Accounting System:
“CAGD is using faulty accounting system”.
Ghana Integrated Financial Management Information System (GIFMIS) which is being implemented on the Oracle e-business Suite is an internationally recognised financial management system. It embodies budget preparation, budget execution, control, accounting, reporting and auditing. Its achievements (refer Cost of GIFMIS) to date are real and not merely boastful.
Waste of $80m on GIFMIS
“Wasting nearly $80 million on GIFMIS”.
The implementation of GIFMIS has not been a waste to the Republic of Ghana. The following are some of the significant achievements to date:
•Efficient budget preparation
•Efficient budget execution, monitoring, control, accounting and reporting
•Facilitated the adoption of the IPSAS
•Facilitated the development and implementation of a GFS (2001)/COFOG compliant chart of accounts for use across government since 2011 which meets international standards.
•IPPD Payroll has been upgraded and integrated with the GIFMIS Financials to ensure budgetary controls on payroll cost, among others;
•Interface with BoG has been achieved and EFT and electronic cheques are being used for third party and internal payments respectively;
•Monthly and Annual Financial reports are being generated real time from the system;
•As part of TSA implementation significant savings in bank charges and interest on overdrawn position are being made.
SUMMARY REACTION TO KPMG PAYROLL ASSURANCE REPORT
The report was commissioned at the instance of the Controller and Accountant General on the payroll systems then in active use(IPPD2) to provide assurance of the existence of adequate controls and procedures to support effective payroll management and the integration of the payroll with GIFMIS Oracle e-business suite(HRMIS, FINANCIALS, BUDGET. ETC.). The substantive issues raised in the report have been addressed and the upgrade and the integration of the payroll with the larger GIFMIS have been achieved.