FRAUD syndicates have for too long been running riot in the Imo State Civil Service. The state governor, Hope Uzodinma, highlighted this in a recent broadcast to mark his first 100 days in office, claiming that his administration had discovered 1,000 ghost workers since assuming office. This has resulted in Imo saving a whopping N2 billion monthly. This amount, viewed against the backdrop of the N1.2 billion generated internally monthly, is a rip-off that epitomises the failure of governance.
For 10 years, 30,000 retirees have been on the pension payroll, implying that no pensioner died and no fresh retiree enrolled within the period under review. This is unlikely, suggesting fraud and manipulation of the roll. A typical civil service state, Imo has 27 local government areas with a combined workforce of 57,000 employees. Out of this figure, only 17,000 persons are captured in the income tax payment. Ironically, the tax of any civil servant is deducted from salary before payment is made under the mandatory Pay-As-You-Earn system. That this fraud lasted this long unnoticed beggars belief. It strongly suggests that the actual strength of the state’s workforce is the 17,000 captured under PAYE. Indeed, some senior civil servants should be put in the dock to explain these irreconcilable differences.
The payroll heist, according to Uzodinma, was perpetrated with the use of the Bank Verification Number scheme. He said, “Quite instructively, most of the infractions were committed through multiple entries of the same BVN for different names on the payroll. It is incredible to discover that some people earned salaries as civil servants and also earned pension as retirees.” Why have these crooks and their accomplices in the banking system not been identified and punished accordingly?
Uzodinma should not bask in the self-adulation of “discovering” ghost workers because preceding administrations charted the same course. Like his predecessors, he has failed a critical test of leadership by not invoking the instrumentality of the law to deal with the situation immediately. Payroll fraud of this magnitude is brazen criminality that will only abate if the fraudsters are identified, prosecuted and forced to disgorge their illicit gain.
The searchlight should be on permanent secretaries who are the chief accounting officers of ministries, directors in government departments and agencies, those who prepare salary vouchers and the officials that approve them each month. The Secretary of the Presidential Initiative on Continuous Audit of the MDAs, Mohammed Dikwa, was spot on when he averred that payroll fraud, “involves many people and, most times, they operate in a syndicate. An individual cannot just go and insert somebody’s name in the payroll; it requires the connivance of officers from different places.”
Indeed, it is impossible for such fraudsters to fleece the state treasury for more than a decade without the connivance of the upper echelon of the bureaucracy. The civil service has to adopt the private sector model in cleaning the Augean stable, where managers, sectional heads and financial officers are held to account for the slightest breach. Government does not exist only for paying salaries to an insignificant number of the citizenry. This is against the background of other public necessities like education, health, roads, transport, water and environmental protection that require attention.
Bayelsa State offers Uzodinma a good example of how to decisively deal with payroll fraud. The immediate past governor, Seriake Dickson, inherited a N6 billion monthly wage bill when he assumed office in 2012, which he pruned to N3.5 billion in his first term in office. Sanity was finally restored to the system when the syndicates in the civil service were identified and some members prosecuted and jailed.
Emeka Ihedioha, governor for seven months before Uzodinma’s administration, discovered 8,000 ghost retirees through a rigorous verification of pensioners from which N500 million was saved monthly. He also ramped up the state’s IGR from N600 million to N1.18 billion, made public in a January 2020 broadcast. His predecessor, Rochas Okorocha, had also unravelled a N700 million fraud from the N1.3 billion monthly pension bill following an audit enquiry.
All this suggests that despite every government’s efforts to rid the public service of this vice, the felons would always dig in. The abuse of the BVN and the Integrated Personnel Payroll Information System, point to the fact that they are not in themselves magic bullets, but must be complemented by hands-on governance with uncompromising fidelity to the application of the penal code. The IPPIS, a product of the World Bank, introduced in 2007 by the then Minister of Finance, Ngozi Okonjo-Iweala, as part of general public service reforms at the centre, has since then become an effective tool for states to weed out ghost workers.
In these troubled times, only a state with a nimble bureaucracy, drastic cuts in cost centres and innovative governance can deliver service to the people. At present, this is difficult to achieve in a state with a paltry N1.2 billion IGR monthly, a reality painfully reinforced by dwindling oil revenues occasioned by the COVID-19 pandemic. Such a dark horizon should be managed through transparent and accountable governance.
Reforms focussing on improving financial management and strengthening the role of auditing agencies should be carried out. Uzodinma, therefore, should initiate ever-evolving anti-fraud practices and employ cutting-edge technology to end the heist. Effective law enforcement, as Transparency International says, is essential to ensure the corrupt are punished and break the cycle of impunity, or freedom from punishment or loss.