In response to a series of questions by a major media outlet regarding Public Service payroll reforms, the Chairman of the Special Parliamentary Committee on Public Sector Reform and Service Delivery, the Honorable Gary Juffa restates and questions and answers issues raised as follows:
1. Can you give us an update on your committee work looking into the Alesco payroll System?
- As far back as 2021 the Committee foresaw potential crisis in what it considered as the deteriorating management of the public service payroll system.
- Through a series of Committee hearings and in consultation with the Departments responsible for managing the Public Service payroll, the Committee enforced the activation of a dormant 2018 Cabinet decision approving an independent audit of the payroll by the international firm Deloitte. The Departments tasked with the Public Service payroll management are the Departments of Personnel Management (DPM), Finance and Treasury.
- Under the Committee’s watchful eye, Deloitte started a 3 prong audit of the Public Service payroll thru DPM in May 2022. The audit was to cover:
- a review of Payroll Data,
- a review of Alesaco Payroll System and,
- a review of the Human Resource managing the Payroll.
The Audit was completed in December 2022 and its final draft fully workshopped with the 3 concerned Departments.
- The Deloitte systems audit came up with over 60 troubling issues and summarized them into 11 Key findings ranging from:
- DPM and Department of Finance conflict of interest in payroll functions compromising payroll integrity and actual calculations and final payments. One department cannot be paymaster and pay calculator at the same time.Lack of proper scrutiny and verification of alarming large amounts being paid out every fortnight to individuals,
- Lack of data validation and data cleansing,
- Lack of IT audits with lack of implementation of previous IT audits,
- Inconsistent salary grades for same positions across public agencies,
- Failure to update the Alesco system from Version 8 in 2003 to Version 12 in 2012 and again from 2012 to the most recent 2024 Version 24. Someone has let the system twice to become almost obsolete and thereby susceptible to internal and external predators.
- Leave records left not updated- risking multiple payment of same leave entitlements.
- Lack of automation in some major calculations- allowing for manual configuration.
- Lack of implementation of disciplinary actions. Lack of training for HR officers/IT and system users
- In April 2023, the Committee completed its role in overseeing the audit and handed the Deloitte report to the Executive Arm of Government to urgently execute the pressing recommendations by it. The report was later presented to Parliament.
- In April 2023, the Executive Arm of Government formed a Ministerial Committee comprising of Treasurer, Finance Minister, DPM Minister and IT Minister to immediately oversee the implementation of the Deloitte audit findings.
- Operational funds used to pay salaries and not recorded in the Alesco system
2. You have said top pays would be reviewed. Have there been any individuals arrested for pay fraud and for ghost names as well?
- The Ministerial Committee is working on this.
- My Committee recommends a follow up forensic audit into the Public Service Payroll as it believes the Deloitte systems audit shows the need for it. Otherwise, any incompetence and fraud will continue unabated.
3. Do you think updating the Alesco system would help the public sector or should there be a new pay system put in place?
Alesco was introduced in 2003 on Version 8 and for reasons unknown, it was never upgraded till 2012 to version 12. As is the norm in the advancing world of IT till to date- the rest of the world has most likely moved on to Version 24 going thru all the preceding versions. Thanks to the Deloitte report PNG will have to take a giant leap. I hear rumors that there is an attempt to upgrade in one long jump from the 2012 Version 12 to Version 22 or 24 and the Departments concerned are independently accessing Alesco upgrades, when we think they need to collaborate so as to:
- upgrade to same versions and service providers and,
- end the current conflict of interest situation, which gives rise to payroll failure.
My Committee’s opinion is that Alesco payroll system is a world class system but the integrity of it’s operating protocols may have been compromised -hence our recommendation for a forensic audit to establish whether the degeneration indicated by the Deloitte Audit has been deliberate or plain gross incompetence.
- The Committee understands that Alesco Payroll system is more than adequate for PNG and to professionally upgrade our Technical and Human Resource far outweighs the cost of migrating to a new system.
- The Committee will soon be holding hearings to have visibility to the implementation of the Deloitte payroll systems audit and billboarding each finding of the Deloitte audit report over a period of months hereon, on its website, in hope that the public will be given the opportunity to understand the pressing issues of the lack of integrity in the Public Service payroll.
Chairman
Hon Gary Juffa
