A call to urgent implementation of independent Deloitte 2023 Audit of the Public Service Payroll.
The Chairman of the Special Parliamentary Committee on Public Sector Reform and Service Delivery, Hon Gary Juffa calls on the Ministerial Committee responsible for implementing the recommendations of the “PNG Government Payroll Diagnostic Review” conducted by Deloitte from 2022 to 2023, to start implementing the recommendations.
Responsible governance requires a hard look at the single largest expenditure item in the public service, that of Personal Emoluments. This is especially true when times are tough and loans are harder to come by.
In 2021 my Committee commissioned a review of the Public Service payroll that the NEC approved in 2017 but was abandoned.
In 2017 NEC in its wisdom approved a review into the Public Service Payroll. It appears that for all intents and purposes, this decision was abandoned by those mandated to implement this NEC decision. After four years of not commissioning this NEC decision, my Committee was able to coordinate the push to implement the review through the engagement of Deloitte.
“I will be releasing a series of press statements on each of the 11 key findings of the Deloitte Audit and demanding action on each alarming finding, as there appears no action is forthcoming by those responsible for the integrity of the Government payroll. It should not take a costly independent payroll audit and a Parliamentary Committee intervention for those State Department’s to cease obvious fraudulent and high risk issues in their administration”.
The concern that there was a deep lack of integrity in the public payroll commenced from 2012 peaking at 8.6% annually from K4.2 Billion in 2017 to K5.7 Billion in 2021. “ We don’t know what actual wage bill growth is now in Mid 2024”.
Last count of public servants was 132,989 in 2021; that is an increase of 43% since 2017.
“The Deloitte report had 53 findings of which 11 were considered to be “key findings” ranging from:
- Large amounts paid every fortnight higher than K100,000 per fortnight not thoroughly reviewed.
- Interdepartmental conflicts of interest,
- Lack of data cleansing and validation,
- Lack of automated calculations,
- Lack of consistent IT audits,
- 12 year old lack of upgrade of ALESCO system from Version 12 to version 20,
- Lack of updating leave records,
- Inconsistent salary grades across same jobs in public agencies,
- Lack of taking and implementing disciplinary actions,
- Lack of training of IT officers and users, and
- Operational funds used on salaries and allowances.
These 11 needed urgent attention to restore integrity in the current Public Service Payroll
I will start with the first one of these 11 key findings
The Deloitte Payroll Review discovered that the ALESCO Payroll system shows large amounts are being paid in excess of K100,000 every fortnight. Although these amounts may be for valid purposes such as furlough, gratuity, and other legitimate allowances, the Auditors were not satisfied that there existed a systematic and thorough review process in place to check the validity of these claims and payments.
The Auditor recommends that a system be immediately implemented to fortnightly review and validate the top 50 largest fortnightly pay amounts over K100,000 .
It is alarming to think that the auditors would raise this obvious concern while carrying out the Audit in 2022 and there is no evidence reaching my Committee that anyone is doing anything about it!
The Committee is left with questions such as :
- How many public servants are consistently earning over K100,000 per fortnight? Or are these one- off payments?
- What review and checking processes are in place now to diffuse the lack of controls reviewing these massive payments each fortnight identified by the Deliotte Report?
- Has any post Deloitte Report review system picked up any mistaken and fraudulent claims in these K100,000 per fortnight payments?
- If so, what are the costs being saved so far from thoroughly reviewing these high value payments?
- Are any of theses K100,000+ payments made to Ghosts or Ghost bank accounts?
- Is each receiver of over K100,000 being properly identified as real persons?
“Depending on stakeholders satisfying my Parliamentary Committee that there is nothing to be alarmed about here, my Committee sees that the next step is to commission a forensic audit into these large unreviewed payments,” Chairman Juffa said.
Mr Juffa laments that there appears to be an absence of consistency and tenacity in holding the Public Sector to account for performance of their mandared responsibilities which the people of PNG pay so dearly for.
The Committee intends to hold hearings into these matters
Hon Gary Juffa
Chairman
