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P.M.S CT 208 Cantonments, Accra-GhanaT:+233. 21. 786093 F:
+233.21.782615
Email: [email protected] Website: www.softtribe.com
Software Solutions for a Growing Africa
12th February 2010
The Controller & Accountant GeneralController &
Accountant Generals DepartmentMinistriesAccra
Dear Sir,
Re: IPPD Major Risks
SOFTtribe has completed training and is ready to formally
handover the IPPD3 system to CAGD.
This therefore seems an appropriate time to highlight a few of
the challenges we experienced in the
execution of the project.
The single most challenging aspect ofthe project was the
migration of data from IPPD2 to IPPD3.
Given the major issues we observed during the execution of this
task, we think it only fair to bringour decades of local industry
experience in payroll computerization to the table.
We therefore think it is only prudent to make sure-these issues
are documented and well-known.
It i;; important that this information be included in the
nandover documentation. as it is essentialknowledge required for
anyone assuming responsibility for the day-to-day operations of
AKATUA!
IPPD3.
Additionally, CAGD might have to engage in data migration from
IPPD2 to IPPD3 periodically in the
future.
The detailed Issues to do with IPPD2 data handed to IPPD3 team
are as follows:
1) Absence of audit trail in data structure:
The data that was handed to us from IPPD2 did not contain
information about who put that
data in and when it was entered.
This is a serious issue whic.h could result on the
following:
a) In the event that fraudulent data is entered into the system,
nobody can be heldaccountable. (ghost names, undue allowances
...).
. Hypotheticall,!, if it was shown that, in the IPPD2 system,
certain staff were being promotedbefore the pavroll run, paid
accordingly to their new, higher grade, and then brought back
totheir true grade after the payroll run; all this could happen
without a hope of eve, catchingthe responsible user unless by sheer
luck.
Directors: Herman Chinery-Hesse, Tetteh Antonio, David Bolton,
Steve Antwi-Asimeng_
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Essentially, as things stand today, if payroll fraud is
identified and can be demonstrated to haveoriginated from the
computer system, there would be no way to pinpoint the culprit
and'therefore, no staff member can be indicted for the crime. The
guilty party will essentially bewalking away scot-free.
2) Original amounts of loans are not kept; therefore no loan
history is available. This means that:a) Loans may not be recovered
fully.b) In the event of a loan dispute with a staff member, there
is no basis for GOG to counter the
staff member's refusal to repay the loan.c) Additionally, loans
payments can be paid out against non-existent loans and the
payment
records destroyed after the fact.
3) Calculation of arrears is a major problem which results in
many employees not getting back payover time. This is evidenced by
the fact that the IPPD3 team's first task was to fix majorproblems
regarding IPPD2 arrears resulting in having to recalculate all
arrears from 2003 to date.
4) Staff deleted and re-inserted into IPPD2 payroll without any
documented justification or audittrail within the system or
database:
This is a complete violation of fundamental payroll rules and
would fail any system audit. Payrolldata is never to be
deleted.
5) Sometimes the amount on the pay slips does not match the
amounts going to the banks: this is avery strong indicator of
system malfunction or the presence of fraudulent activities and
shouldtrigger alarm bells every time it happens.
6) Some employees above 60 years are still present in the
payroll and are being paid. They areactive on the system but are
not "on Contract." They seem to have escaped the systemautomatic
flagging mechanism:
This should have been caught easily by the system's validation
facilities as those employees maywell be ghost staff.
7) We observed strange invalid characters in employee codes
handed to us. These normallysuggest severe source data corruption.
It could result in inconsistent reporting and couldgenerally serve
to make a software system inaccurate and unreliable.
\
We had to resort to writing unique and complicated ad-hoc
programs to rectify this anomaly inorder for AKATUA to accept it
for processing.
8) There were major misassignments between staff and their
relevant employment agencies. Forexample some employees of MOH were
stored in the data as MOE workers.
This is a major issue and could totally misrepresent
organizational reporting. That this situationcan exist may suggest
weak procedures and validation protocols.
9) We observed duplication of employees. Some employees existed
multiple times in the data.This is a serious issue which could
cause double pay. It may also suggest the existence of
ghostworkers.
It is exactly the kind of thing a computerized payroll system
should be designed to eliminate.It should easily raise red flags in
a ny audit.
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10) We observed staff at the same level with different salaries.
These differences were not justifiedby their grades. In some cases
staff had been assigned grades that did not exist, in
theorganizations in which they worked.
This could also be a major cause of general inaccuracy in a
payroll system.
11) We observed that the currency-related data (Ghana Cedis)
contained both re-denominated andun-denominated amounts.
This could cause an accounting / mathematical disaster assuming
the same program isprocessing all of GaG's payroll.
If however different programs or processes are being used to run
different parts of IPPD2 then itis an even more serious problem,
since there can be no consistency, predictability, fidelity
orreliability on any payroll run.
12) We observed many names of staff members that had no IPPDl
staff numbers.
This resulted in additional delays as we matched IPPD1 and IPPD2
data for arrears processing.
13) We observed that active staff that were on the payroll but
were not being paid.
It is more likely these individuals were left on the system
after termination but this issue mayprovide opportunity for fraud
as an unscrupled user can reactivate payment which results innew
ghost names.
It must be noted that all of the observations made were derived
from the data we received.
There may be legitimate reasons that explain some of
observations made.
Best industry practice, however, dictates that all relevant
payroll data reside within the system.
In conclusion, IPPD3 was brought in as a backup for IPPD2. IPPD3
is being handed over to the staff ofCAGD.
Given the obvious weaknesses in processing arrears that exist in
IPPD2, and the resultant difficultiesencountered while migrating
the data to IPPD3, we deem it important to alert CAGD about
thecomplications caused by the above discrepancies especially
considering the above list is notexhaustive.
If these issues are not tackled, in the event of a switch to the
IPPD3 in a given month, confusion maybe created among the civil
service staff by the significantly different payroll output.
numbers thatmay emerge.
We would like to urge CAGD to immediately rectify these major
issues that exist in data emanatingfrom IPPD2 to eliminate the
potential for payroll fraud.
Additionally, it is our opinion that a system used to process
wages and salaries totallingapproximately One Billion United States
Dollars per annum should not be saddled with such basicissues.
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As always, we want to assure CAGD of our continued commitment to
provide first class services to
support your goal of administering an efficient payroll
system.
SOFTtribe will be available to answer any questions regarding
the above observations and to provide
the requisite backing data where applicable.
Furthermore, we stand ready to assist with the solution if
required.
cc: The Honourable Minister- MOFEP
The Deputy Minister - MOFEP
The Chief Director - MOFEP
Deputy Controller & Accountant-General (F&A)
Deputy Controller & Accountant-General (FMS)
IPPD3 Project Coordinator
