1. i
A STUDY OF THE COMPUTERIZATION OF THE PAYROLL SYSTEM ON THE
GHANA CIVIL SERVICE. A CASE STUDY OF CONTROLLER AND ACCOUNTANT
GENERAL DEPARTMENT.
BY
ETENG DESMOND (01132732D)
AGYEI NELSON (01132554D)
AMENGOR EYRAM D.YAHAN (01133127D)
A Research Project Report Submitted To The
DEPARTMENT OF ACCOUNTANCY
SCHOOL OF BUSINESS AND MANAGEMENT STUDIES
ACCRA POLYTECHNIC
In Partial Fulfilment of the Requirements for the
Higher National Diploma (HND)
In
Accountancy
JULY 2016
2. ii
DEDICATION
This work is dedicated to Madam Josephine Osei, Mr. Osei Bonsu, Mr. Adjei, Mrs. Vivian Eteng
finally we give thanks to God all mighty. We thank all those who in diverse ways helped us in
making this project paper.
3. iii
ACKNOWLEDGMENT
We thank the Almighty God for helping us to make this work possible. We are grateful to our
supervisor, Mr. Kofi Opoku Asante of the Department of Accountancy, Accra polytechnic, for his
suggestion, guidelines and encouragement which enabled this work to be well accomplished.
We also which to express our thanks to the staff of the Controller and Accountant Generals
Department and the office of the Head of Civil Service for providing us with adequate information
to write this project. We humbly thank all those who one way or the other helped us in make this
project success.
4. iv
DECLARATION
We do hereby declare that the work as presented in this project was done by the under listed
students in the school of business and management studies in partial fulfillment for the award of
higher national diploma in the accountancy. And that with the exception of reference collected
from textbooks and journals, the organization of the work is solely done by the udder listed student
NAME OF STUDENT INDEX NUMBER SIGNATURE DATE
ETENG DESMOND 01132732D ……………… .…./…./….
AGYEI NELSON 01132554D …………… …../…. /…..
AMENGOR EYRAM D.YAHAN 01133127D …………….. …./…./…..
5. v
CERTIFICATION
I certify that this project work has been supervised in accordance with the laid down procedures
and guidelines of the institution
Mr. Kofi Opoku Asante ……………… …/..../….
(Supervisor) Signature Date
6. vi
ABSTRACT
There has been a lot scandal with the CAGD office about the manner of which civil servants are
enrolled into the system and lump sum payments made to unqualified persons popularly referred
to as “GHOST NAME” which is crippling government budget financial since the grater potion of
the budget is allocated to the payments of public workers salary. Our research is intended to find
the root cause of the existence of ghost name in the CAGD system and find out the impact of the
migration from manual to a computerize system of payments of salary, whiles recommending
possible solution to the problem.
In finding answers to the problem statement we selected a sample size of twenty (20) CAGD
workers, which comprised of five (5) management, ten (10) permanent, and five (5) contract staff.
The selected were presented with questionnaires designed to gain the perception of the staff about
the problem and what suggestion or recommendation they think will sought the out the problem
of the CAGD office .
The questionnaires answered by the respondent was categories into Heads of department: were the
heads accepted that the problem with the system is most probably caused by poor internet
connection and fraudsters within the offices. Employees: they responded favorably to the
computerize system calming its fast, accurate and more transparent with ease of correction, payroll
system which was sub-categories into manual payment and computerized system of which answers
indicted by respondent was entered into this categories.
7. vii
In conclusion we notice that the computerize system of the payroll has rectified almost all the
problems associated with the manual system and the computerization of the system in early July
has brought a significant impact in the payroll system despite its shortcoming.
8. viii
LIST OF ABBREVIATIONS
CAGD - Controller and Accountant General Department
IMANI - Improving Montclair Achievement Network Initiative
IMF - International Monetary Fund
GNA - Ghana News Agency
MIS - Management Information System
NHIS - National Health Insurance Scheme
PAS - Public Accounts Section
11. xi
TABLE OF CONTENT PAGES
Dedication 2
Acknowledgement 3
Declaration 4
Certification 5
Abstract 6
Abbreviation 8
List of Table 9
List of Figure 10
CHAPTER ONE: INTRODUCTION
1.0 Introduction 14
1.1 Background Study 14
1.2 Problem Statement 16
1.3 Purpose of Study 17
1.4 Significance of Research 17
1.5 Research Objective 18
1.6 Methodology 18
1.7 Data Analysis 19
1.8 Limitations 19
1.9 Conclusion 19
12. xii
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction 20
Conceptualization of the Payroll and Computerized Accounting 21
2.3 Empirical Evidence 21
2.4The way forward challenging in managing Government payroll systems in Ghana 22
2.5 Electronic payment 25
2.6 Theories on the CAGD 28
2.7 CAGD FINANCIAL REPORT 28
2.8 Gaps in available research 29
2.9 Profile of Financial Service Department of CAGD 29
CHAPTER THREE: RESEARCH METHODOLOGY AND ORGANISATIONAL PROFILE
3.1 Introduction 31
3.2 Population of study 31
3.3 The sample size 32
3.4 Research Instrumentation 32
3.5 Data Collection Procedure 33
3.6 Data Analysis Technique 34
3.7 Summary 34
CHAPTER FOUR : ANALYSIS AND FINDING OF THE STUDY
4.1 Introduction 35
4.2 Sex of respondent 35
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4.3 Age of respondent 35
4.4 Educational background 36
4.5 Terms of service 36
ANALYSIS OF QUESTIONNAIRE ADMINISTERED;
4.6 Head of department 37
4.7 Employees 37
4.8 PAYROLL PAYMENT 38
4.8.1 Manual system 38
4.9 Computerized system 39
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
5.1 Introduction 41
5.2 Summary of Findings 41
5.3 Conclusion 43
5.4 Suggestion and Recommendation 44
14. 1
CHAPTER ONE
1.0 INTRODUCTION
In January, 2016, IMANI Ghana, an organization that deals with effective use of government
funds, stated in their articles titled “Rooting out Ghost Workers and Regain the Confidence in the
Public Payroll Administration”, Every year government budget allocates huge sum of funds used
in payment of civil servants which has led to several reforms of the civil services to account for
the value of the money spent and how such funds are allocated appropriately to the right people,
which as lead to our research topic “The study of the computerization of the payroll system on the
civil service in Ghana”.
1.1 Background Study
The CAGD has it is normally referred to has been under public debate about how its functions are
affecting government budget due its inefficiencies to manage its data base properly and the act
fraudulent staff within the office of the CAGD which as lead to the lack of credibility of the system
as lead to government over expenditure in the sector of the civil service.
The Controller and Accountant General’s Department was established under the Civil Service Act,
1960 (CA.5). The constitution and the Administration Act, 2003, Act 654 provides the legal
framework that governs the operations of the Controller and Accountant General’s Department
and the functions of the Controller and Accountant-General of Ghana.
The Controller is assisted by six Deputy Controllers and Accountant.
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The Controller and Accountant - General’s Department is mandated by Financial Administrative
Act, 2003 (Act 654) to:
Receive all Public and Trust monies payable into the Consolidated Fund (done through its staff
stationed in all government departments including the revenue collecting ones)
Provide secure custody of Public and Trust monies (with the support of the Ministry of Finance
and Bank of Ghana)
Make disbursements on behalf of the Government(includes the payment of monthly salaries to
government employees inactive service; pension gratuity and monthly pension payment to those
on retirement; and releases of funds to prosecute government projects and development throughout
the country)
Pay all Government Workers’ wages, salaries and allowances;
Process and pay all Pension gratuity for the Civil Service;
Establish, on behalf of government, such accounts with the Bank of Ghana and its agents for the
deposit of Public and Trust monies;
Be solely responsible for the opening of bank accounts for any government department;
Keep, prepare, render and publish financial statements on the Consolidated Fund of Ghana both
monthly and annually (not later than three months after the end of the financial year. The Auditor
16. 3
General is furnished with the necessary financial statements for his scrutiny and onward
transmission to parliament and eventual gazetting)
Approve accounting instructions for Government Departments;
Promote the development of efficient accounting systems in all Government Departments.
1.2 Problem Statement
The has been a lot scandal with the CAGD office about the manner of which civil servants are
enrolled into the system and huge amount of money paid to persons who are not supposed to be
payed and is causing the government investing in the sector heavily leaving other sector not taking
care of due to the limited resources available, just recently a senior EU source stated that “We have
no hard evidence of the number of ghost workers, but the [state employees’] wage bill makes up
70% of government spending and some estimates put the [ghost workers’] figure at 20%,” the
source told the Sunday Times. Another problem identified with the CAGD office is the software
been used to enroll civil servants to government payroll system which was identified by the then
finance minister Dr. Dufuor, whilst in office as Finance Minister, wrote a letter to the CAGD,
ordering them to migrate all workers on government payroll onto ‘Akatua’, a new software that
had been developed by SOFT tribe, a Ghanaian Information, Communication Technology (ICT)
company after detecting the inaccuracies of figures being churned out by the old software being
used by the CADG. Unfortunately, Dr. Dufuor’s orders were not executed when he left office in
January 2012. We leave in country were are budget is mostly financed by foreign aid and assistance
from financial institution as IMF and the World Bank citizen are expecting that such funds will be
17. 4
use amicably, but is not the case with the CADG office were funds allocated have been used not
to the interest of the people but to some fraudulent people who has taken advantage of the weakness
in system. If such issues are not taken care of soon government will keep on spending in areas
were not needed leave other sector in need deprive,
1.3 Purpose of the Study
The purpose of this study of the computerization of the payroll system is to help in finding a lasting
solution to the recurrent loop holes which has caused governments to over invest in the civil
services, such that such funds could be directed elsewhere in the economy. This study is also to
help to empower the CAGD with the necessary tools for the smooth operation of the system. The
study will also eradicate civil servant whose services are not needed in the development of the
nation. This study will also help the CAGD and other service connected with the service will be
able to identify the active labor force of the country for long-term decision to be made on the
empowerment of the country labor force.
1.4 Significance of the Research
With the modern age of computer software which are operated by humans there is a greater need
for the study in how the payroll system could be advance and updated to meet international
standards and how this computerized software could be protected from computer fraudsters. The
study will also help to pin point the need for decentralize computer payroll system were civil
servants could be registered biometrically in their various local district offices of the CAGD and
18. 5
such data would be transferred to the central data poll of the CAGD which will help in making
accountability and supervision more efficient and equal relevant to the service.
1.5 ResearchObjectives
As a group are objective of the research in which we are undertaken is to;
Is to help the service to cut down is cost of operation by improve its data collection
Is are aim to help in reinstate the credibility of the CAGD by uprooting all fraudsters within the
CAGD
Is also are aim to help CAGD to finally eradicate all so called “Ghost names” for their data through
the introduction of advance staff security software’s
Finally it is are aim to help the CAGD in educating the public through are presentation there need
for citizens to help in making the service a better one by been patriotic in reporting any fraudulent
art perpetuated by their staff rather than take advantage of the system.
1.6 Methodology
The research method in which will enable us to achieve is proposed solution will be based on
comparison of publication prepared on the topic already detecting the exemptions made and
correcting those exemptions.
We have also planned to design a sample frame of people of various age-group such as 18-25, 26-
40 etc. and various educational background with the different position within the civil service, this
is to get how practical how proposed solution will affect the civil servant and the CAGD office.
19. 6
In other to gather various opinion on the topic there is going to be a design of questionaries’ such
as,
What is the purpose of the CAGD?
Has their purpose of establishment been achieved?
To what extent have their service been hindered from achieving its full potential?
1.7 Data Analysis
With the data collected about the topic either qualitative or quantitative from the people on the
ground or our questionnaires presented to the public we would compare this variable with other
related ones from the press to draw out a pattern of which will help us to draw a conclusive opinion
about our data collected. And will be rated in percentage.
1.8 Limitation
The limitation we as a group will face in our research project is the access to information from
various government organization due to the right to information bill not passed yet by parliament.
1.9 Conclusion
From how research study about the CAGD we hope to bring credibility to the organization and
help in cutting down the cost operation, as well as educating the public about the need to be
patriotic and not taking advantages of government organization cause in fact the government is the
citizen they them self, so development and social advancement depend on they.
20. 7
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
The payment system in any organization or institution is very paramount to its general wellbeing.
In the local government system, there are two major types of payment expenditures which include
capital expenditures and recurrent expenditures. Under recurrent expenditure, we have personnel
costs and overhead costs. This study takes a closer look at personnel costs, which refers to staff
salaries or wages. In the payment of staff salaries or wages, the local government staffs have to be
pay rolled into a system that allows for fairness and accountability (Ogedebe and Babatunde,
2012). A payroll is a list of employees or staff receiving wages or salaries with the amount due to
each. The payroll consists mainly of two sections, viz: (a) Payroll payment and (b) payroll
deductions. Payroll payments consist of the annual basic salary, the basic monthly salary, grade
level, and allowances of each staff. While the payroll deductions consist of deduction that is made
out of the employee’s total emolument such as tax deductions and other deductions (Financial
System Consultants, 1993). The usual or operational payroll technique in the local government
system in Ghana has been manual since independence, referred to as the return mechanized
voucher system. With this chapter, we turn to look into how the computerization of the payroll
has affected the office of the controller and accountant general department and its clients and some
known literature that have been written and that have relevance to the subject.
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2.2 Conceptualization of Payroll and Computerized Accounting;
Pay roll is the process of listing the names of people employed by a company showing the amount
of money to be paid to each of them (Hornby, 2001: 857). It is obvious from the above statement
that pay rolling is an exercise that is done in every establishment that has some employees, which
in all intent, are paid by the employers. In this respect, pay roll becomes an exercise that is carried
out both in the private and public organizations. Therefore, it may not be out of place if pay rolling,
with respect on the local government system, is defined as the listing of all the people who are
employed by the local government council, showing the actual amount to be paid to each worker
at the end of every month. In other words, before any person is pay rolled in the local government,
he or she must be a qualified worker of the council. Payroll software programs are becoming more
popular every day. A growing number of business, both small and large, are using computer
accounting solutions to automate the process of paying salaries and wages.
2.3 Empirical Evidence
Within the past few years, there has been various reforms and research undertaken to ascertain
whether the migration of the return mechanized voucher system to the computerized system has
been of benefit in eradicating problems associated with the old system. The various reforms and
research conducted on the topic above entails
22. 9
2.3.1 The Way Forward Challenges In Managing Government Payroll Systems in Ghana
Kannyiri Thadious Banyen 1; Mumuni Abraham Nasamu (2015)
Their study was conducted to investigate the challenges of the return mechanized voucher system
of payroll management in Ghana. The study, therefore, evaluated the system of payroll
management used in Ghana before the introduction of the electronic pay voucher system, with a
view of finding solutions that would make payroll management in Ghana as effective and efficient
as possible. After various methodological research approach, they came out with their key findings
stating their study was undertaken with the main objective of investigating the challenges of the
return mechanized voucher system used in the calculation and management of payroll in Ghana,
with the view of providing practical solutions to make payroll management in the country better.
The study therefore sought to undertake an investigation into the factors that cause the challenges
encountered by the return mechanized voucher system in payroll management and find out from
literature and major stakeholders some practical solutions to these challenges. It explored available
literature on the subject matter and identified basic gaps to fill. The study found that both the
general civil service and the controller and accountant general’s department are dominated by male
employees. Most of the respondents were also found to be between the ages of 35 – 55 and had
education up to the tertiary level, mostly a diploma. The majority of these respondents have worked
in the civil service for at least 16 years, depicting and aging workforce in the civil service.
The study also found that the current payroll management system run by the controller and
accountant general’s department, the return mechanized voucher system, is confronted with
23. 10
several challenges. These include challenges like delays in payroll voucher preparation,
distribution, and return to headquarters, slow detection and correction of errors on the government
payroll, and the existence of ghost names on the payroll. This is because the return mechanized
Voucher System is a manual collection of data (throughout the country) to be inputted into the
system by CAGD staff or any such person so define to do same. It allows for major errors to be
made and these could be done deliberately by corrupt CAGD staff or unintentionally.
The study found that these challenges had major consequences for the state such as over payment
and under payment of some workers‟ salaries, poor detection of corruption and ghost names, waste
of tax payers‟ monies, and the associated negative effects on development.
The study was able to reveal the major causes of the challenges facing the return mechanized
system. Firstly, delays in payroll preparation are mainly caused by data entry errors and their
correction procedures, low education of controller staff, printing errors and their correction, some
human factors such as laziness, absenteeism of controller staff, the breakdown of machines, and a
shortage of printing and related logistics, among others. Additionally, the study found that the
delays in the distribution of payment vouchers are mainly due to Controller and Accountant
General’s Department inefficiencies. However, other causes of this delay included manual sorting
of payment vouchers and breakdown of distribution vehicles. The study also found that the
problem of ghost names is still a big issue in the payment system in the country and is mostly
caused by corruption of CAGD staff, poor detection systems, and inefficient auditing of the
government payroll. The study therefore based on these findings, the suggested solutions offered
24. 11
by the respondents, and the literature review to make some recommendations. These
recommendations, the study hopes, will go a long way to help solve the challenges that bedevil the
return mechanized voucher system in Ghana. They also came up with the proposed
recommendation, from the above findings, suggestions made by the respondents of the study, and
the reviewed literature, the study makes the following recommendations;
Firstly, the state should make efforts to increase both the effectiveness and efficiency of payroll
voucher preparation. This could be done retraining all staff at the CAGD and emphasizing on speed
in the department. Also the speed of voucher payment distribution will be enhanced by the current
electronic payment voucher system which the department has started running on a pilot basis.
However, the department could further improve speed by adopting faster electronic data
management platforms such as the use of mobile phones for e-payment voucher distribution and
management. This will allow controller staff and all civil servants to access information about
salaries and payment vouchers through their mobile phones. This will cost the state less and ensure
a more effective way of tracking changes in payroll data, leading to better payroll management.
Secondly, measures should be put in place for an eventual decentralization of the payroll
preparation and management. Having the headquarters of the CAGD handle all major payroll
issues is also a cause of inefficiencies that occur in the payroll management process in the country.
This study recommends that the controller and accountant general’s department should take steps
to decentralize its operations to the various regions and allow for errors and other issues to be
handled directly at their regional offices. This will go a long way to reducing the pressure on
25. 12
headquarters and prevent the corruptions that go with bureaucracy in payroll management in the
country.
Additionally, auditing of the government payroll should be made more regular and cross-
referenced with the data at the department of births and deaths to see which registered workers
have died within the auditing period. Additionally, directors should be given incentives to report
ghost names and strict punishment given to any culprit of corruption relating to ghost names within
and outside the staff of the Controller and Accountant General’s Department.
Lastly, the study suggests that the piloted electronic payment voucher system should be studied
for any major challenges before it is applied to the entire nation. This will ensure that major
challenges are addressed before the state invest so many resources in it and end up with similar
challenges like those facing the return mechanized voucher system.
2.5 Electronic Payment System
Information Communication Technology (ICT) has over the years been used by various
institutions to develop new ways of carrying out their operations. The challenges of the return
mechanized vouchers system have compelled several nations to move to the use of ICT-based
payroll systems in their bid to find solutions to this problem. The new payment technique entails
that money meant for the departments and agencies would now be sent to banks directly from the
consolidated fund and other sources. To collect salaries and other emoluments, staff would need
to deal directly with banks. In the old system, civil servants had an account with specific banks
and at the end of each month, their respective accounts with their respective banks will be credited
26. 13
by their cashier of the CAGD. The electronic payment system focuses on electronic fund transfer,
(EFT), electronic cash, electronic billing and automated tellers machine, credit and debit cards
respectively. The concept of accounting is developed in parallel with its functional development,
where it witnessed a transformation from a manual system to the computerized accounting system.
Sanni, et al (2008) defines accounting as the recording, classification, analysis, summarizing and
interpretation of financial transactions to show how they affect the operational performance of a
business entity. However, it must be noted that the decision to adopt manual or computerized
accounting system is dependent on the nature of the organization and the complexity or otherwise
of the transactions/items being accounted for. Accounting for employees‟ monthly emolument
using computerized accounting system has attracted so much argument due to the peculiarities and
issues associated with wage and salary administration. Some people argue that conventional
accounting is considered better and more reliable than the use of computerized accounting system
while some other people think otherwise. The assessment of every wage/salary administration
system is dependent on the efficacy of the settlement and fund transfer approach. A computerized
accounting system, a sequel to its speed and accuracy feature, may help in faster computation and
payment of employees‟ monthly emolument. Using information technology (including
computerized accounting system) has become the target of many public and private organizations,
which encouraged competition and technological progress on the computerization of information
systems with the latest technology of computers, where the system helps to plan, organize, control,
and supervise. Therefore, there is the need to keep pace with the evolution in an e-governmental
system, e-commerce, e-payments, etc. which are all affiliated to computer system, most employers
27. 14
of labor, especially in relatively large organizations, now prefer to use an in-house computerized
payroll system (Natalie 2010). All the employer has to do is to buy the payroll software and employ
a staff to perform the payroll processing. Recently, electronic payment (e-payment) of salaries to
staff has become a common feature of most government institutions and corporate body’s vis-à-
vis employee’s wages and salaries administration. E-payment of salaries was introduced with the
view to tackling such issues as ghost workers syndrome, delay in salary payment, errors caused by
manual computation of staff emoluments and other payroll misconducts. E-payment has to do with
the use of electronic means and platforms to make payments. Nevertheless, the adoption of
computerized accounting system in wages and salaries administration has its attendant pros and
cons (International Records Management Trust, 2008) In view of the peculiarities of the local
government system, and the felt need to ensure the maximum utilization of the manpower
resources, most especially the scarce high caliber ones, enhance the ability of the local government
to attract, retain and maintain credible career structures for capable hands in the service and
preserve the significant gains made in building the local government system, the need to pay
salaries adequately to local government workers as in other tiers of government, becomes
imperative. As in other government establishments, payment of salaries to local government
workers is not negotiable since it is a statutory obligation. To ensure regular, accurate and prompt
payments at the end of every month, payroll section of the Controller and Accountant General’s
Department has been empowered by law to be solely responsible for the preparation of workers‟
salaries month by month. It is on this premise that this study focuses on assessing the challenges
of the return mechanized voucher system, with a view of suggesting pragmatic solutions to this
28. 15
problem (Ghana Public Expenditure and Financial Accountability, 2009; International Records
Management Trust, 2008).
2.6 Theories on the Said Ghost Names and Fraud Associated Within the CAGD
The office of the CAGD in recent years has been identified with the issue of ghost names exiting
within its payroll system. In the year 2001 the office of CAGD was exposed with ghost names
exiting in is judicial service payroll which lead to foreign donor agencies calling on the state to
eradicate such names from its payroll if aid was to continue this lead to a nationwide initiated move
by the ministry of local government and rural development and the auditors general department in
the hunt for ghost pensioners’.
2.7 CAGD Financial Report
In its financial statement the controller and accountant general department stated is key
achievement in recent years was the introduction of the payroll management program, single spinal
pay police, establishment of payroll clinics, decentralization of the printing of payroll reports,
pension arrears all in the quest of bettering the computerization of their system and addressing the
problems associated with them.
The establishment of the payroll m management was to improve the management of the payroll,
the department undertook the following programs, and migration of subverted agencies to manage
the public payroll cost in a more effective way. In view of the payment policy there has been an
introduction of single spine salary policy which was effected January 2010.
29. 16
2.8 Gaps in Available Research
With the limited research available on the topic of computerization of the CAGD, we notice that
the available research was not update with the recent changes in the CAGD office such as The
Controller and Accountant - General's Department (CAGD), has engaged the services of a
consultancy firm- Provision Consult to delete the names of "ghost names" on the pay-roll, effective
August this year.
The exercise is in response to an appeal made by the Ghana Government Pensioners' Association.
Mr. Paul Asumadu, Brong-Ahafo Regional Director of CAGD, made this known in Sunyani at the
6th regional quadrennial delegates' conference of the Ghana Government Pensioners' Association.
He said the department had acquired the necessary logistics including vehicles to kick-start the
exercise.
2.9 Profile Of The Financial Service Division Of The Controller And Accountant General
Department Pension
this section validates retirement processes (both Compulsory and voluntary) for public sector
workers. A Pension Payment Unit is responsible for the payment of monthly pension allowance to
retired officers from the Service; police, prison service, the Armed Forces and other institutions
which subsist on government subvention.
30. 17
2.9.1 Public Accounts Section
The role of the Public Accounts Section is to produce the Report and Financial Statement on the
Consolidated Fund on a monthly, quarterly and annual basis. The Public Accounts Section (PAS)
conforms to section 41(b) of the FAA 2003 (Act 654) in the production of Public Accounts.
2.9.2 Research& Development
This Unit carries out studies into the operations of all agencies of Government with responsibility
for consolidated fund aimed at constantly ensuring their adherence and compliance to the various
accounting standards and regulations and advise the Controller and Accountant General.
2.9.3 Management Information System
The aim of the M.I.S. Unit is to provide an integrated information technology environment that
advances the core missions of the CAGD and public service and facilitates the efficient
administration of the CAGD.
Audit & Investigation
The Internal Audit Division forms an integral part of the internal control mechanism of the CAGD.
The Division has the responsibility to assist management of CAGD by offering an independent
appraisal and evaluation of the internal control measures in place, and to provide useful
recommendations as to how efficient and effective the financial management objectives of the
government and the CAGD can be achieved.
31. 18
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Introduction
This chapter presents the detailed methodology used for the study. It explains the research design
and provides detailed information about the population study, its sample size and the research
instrument that will be applied, whiles given out the instrument scoring scale and procedure to
which data was collected, and data analysis technique. This chapter ends with a profile of the
financial management service department of the controller and accountant general department
[CAGD].
3.2 Population Study
We limited our population study to the head office of the Controller and Accountant General
Department. A cross section of the staff of CAGD comprising of twenty respondent drawn from
every class and cadre of the organization was sampled. For the purpose of this study, the workers
were divided into three major groups namely:
The contract staff
The permanent staff officers
The management staff officers
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3.3 Sample Size
In order to have a more effective sampling of the various groups and cadres, a total of 20 staff
were sampled. The following numbers were sampled from each group:
TABLE 3.1 CATEGORIZATION OF STAFF
CATEGORY OF STAFF NUMBER OF STAFF
Management 5
Permanent 10
Contract 5
TOTAL 20
3.4 ResearchInstrument
Questionnaire was used for collecting responses from the subject selected for the study.
The questionnaire consisted of two parts. The first part consisted of questions that make it possible
for the bio-data to be collected. This part of the questionnaire was intended to elicit information
about the sex, age, and working category and employment duration of the respondents. The other
part of questionnaire contain designed question of which were going to be answered by are
volunteers, the question to be asked were designed to lead are volunteers to reveal the true state of
the controller and accountant general department after the implementation of the computerized
system, and the lope holes such a system has created within the years. The questionnaires were
categorized into answering this three parent questions;
What is the purpose of the CAGD?
33. 20
Have their purpose of establishment been achieved?
To what extent have their service been hindered from achieving its full potential?
The respondent were allowed to answer YES OR NO and NO CLUE, which were abbreviated
with Y, N and NC on the questionnaire sheet. We issued a statement to all respondent stating that
their confidentiality will be kept a secret and those helping us will not cause any risk to their
working hours, to motivate them to give out true and fair answers to the question asked.
In designing the questionnaire, we followed the following procedure:
Deciding what information should be sought;
Deciding what type of questionnaire should be used;
First draft of the questionnaire; and
Editing the questionnaire and specifying procedures for its use. Consequently, care was taken to
ensure that the information collected on implication of computerization of the payroll system, for
example was relevant to the subject under consideration and that the response received to each
question was the type elicited.
3.5 Data Collection Procedure
A total of 20 respondents completed and returned the questionnaires. However, 15 filled and
returned questionnaires were picked randomly form the bulk for analytical purposes. The
questionnaires collected from the respondents were used for the analysis.
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3.6 Data Analysis Technique
The data collected informed us that the various answer were influenced by the years of service
with the CAGD office, and older works seem to understand the real issues of the CAGD office,
whiles the younger ones are yet to grasp the problem within the service and understand it’s root.
3.7 Summary
With this chapter we now understand the reason behind the research, that it is know the problem
from within the service from the workers point of view, we have also come to know the method to
which the data was collected and the response which was categorized according to the age group
within CAGD office.
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CHAPTER FOUR
4.0 ANALYSIS AND FINDING OF THE STUDY
4.1 Introduction
The purpose of this research is to the access the computerization of the pay roll system and how
this system as effectively eradicated all the Ghost name, fraudsters, double payment and agents
within the system who were taking advantage of the manual system available before the
introduction of the computerize system, and to examine the loops in the new system and find ways
and measures to better the new system thereby improving the internal control of the civil service.
In finding answers to the problem, questionnaires were designed and interviews were also
conducted in order to get derive solutions to the problem. The responses from respondent were
analyzed below
4.2 Sex of Respondent
In order for the researchers to come out with their research findings, questionnaires was given to
both the male and female employees of the controller and accountant general department.in all
fifteen questionnaires were retrieved out of the twenty distributed.
4.3 Age of Respondent
In accessing the age of the respondent, it was identified that the controller accountant general
department staff operating and supervising the pay roll system were 40% between the ages of 18-
25, and 60% were between 26 and 45 years (fig4.0), this shows that the CAGD is equipped with a
younger labor force when given the necessary push will perform better.
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4.4 Educational Background
In ascertaining the experts and professionals operating within the controller and accountant general
office, it was identified from the data collected from the department that almost 90% of the staff
has completed secondary education, of which out of the 90%, 20% has a master degree whiles
40% are charted accountants, (CA) level 3 holders, and 20% (fig4.1) are currently pursing HND
accountancy programs. From the level of educational background identified it can be said that all
order things been equal the employees within the controller and accountant general office could
perform their job with the optimum professionalism.
4.5 Term of Service
To determine the term of service of the workers operating the payroll system, it was identified
that 60% of the staff has worked for the controller and accountant general department and the
office of the head of civil service for 5-10 years, whiles 70% of their staff has been on their current
schedule for about 1-5 years and 10% (fig4.2) as under gone various computer training programs
since engaged on computer.
This implies that minority of the staff only know how to operate the computerize system, which
means that a few of the workers could perform their job with a little expertise and incase the is a
change in the system work with it will not be easy due to the little understanding of the computer
system language.
4.6 Head of Department
All heads of department admitted that they have under gone training in the computerization process
of the pay roll system.
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All heads of the department also allude to the same problem in computerization of the pay roll
system that.
The system has corrupted with fraudsters who are using the weakness of the system to use peoples
pay slips for hire purchase agreement. These employees later realize this fraud when deduction are
made from their salaries. This possess a lot problem because employees come from the ministries,
department and agencies in the various regions for rectification.
This is as result of poor internet service in the department. The network of the computerized payroll
system does not broadcast wide enough to transmits to the various ministries, department in the
country. The heads of department suggested that this problem could be solved if their internet
problem are revolved for the m to be able to have autonomy in the payroll system within the various
ministries, department and government agencies.
4.7 Analysis of Questionnaire Administered To Employees
In response to how has the system changed with advent of computerization of preparation of
salaries in the civil service and to know the effects, preparation and payment in the past, a greater
number of respondents responded favorably for the computerization system as they consider it to
be fast, accurate, transparent, makes corrections easily and quickly and improvement to the payroll
processing as well as allowing easy access to information on government employees.
From the data we got to understand that the people within the service needed change and are ready
to accommodate any change that it will bring to their working environment, due to the number of
yes response we gathered, from the data analysis we now understand the reason why the office of
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CAGD has been performing below its best, the chart below gives detailed information about the
data collected stating the age range and response to each question asked.
Figure 4.1 Age of respondents
4.8 Payroll Payment
4.8.1 Manual System
95% (fig4.3) of the employees were not satisfied with how manual payment were processed and
payed with regard to flexibility, accuracy, transparency, efficiency and effectiveness. Employees
interviewed explained the following; respondents acknowledged that the system is such that it
cannot be easily changed when a new policy relating to payroll is passed. Example of such policy
are tax law, pension scheme, and other insurance scheme like NHIS.
With the problem of transparency, respondent complain that the manual system is very poor in
the checking of new entries of employees, due to the fact that it does not update itself mechanical
0
1
2
3
4
5
6
18-25 YEARS 27- 35 YEARS 36-45YEARS 46-55YEARS
YES NO NO CLUE
39. 26
and staff that are retired and those dead are still within the system and are been paid by fraudsters
in the system.
Also the question of accuracy, respondents acknowledge that the manual system cannot trace any
mistake of staff working on the payroll. Some of the mistakes that the system cannot correct are
wrong casting, over and understatement of figures.
With the question of decentralization of the controller and account general office duties to the
various district, respondent suggested that it will help a lot if the paper work of salary verification
can be done and authorized in the district level to reduce the transport of civil servant to Accra.
Finally respondent complained about the inefficiency and ineffectiveness of the system. As a result
of this, there are delays of salaries, some employees are over or under paid and sometimes newly
employed staff in the civil service work for so many months without salaries and allowance.
4.9 Computerized System
The entire respondents indicates that they were satisfied with the computerized system according
to employees the computerized system satisfy all the shortcomings and the loop holes of the
manual system.
Respondents explained that the computerized system is flexible enough to suit all changes, has the
ability to trace and rectify all mistakes made by staff of the payroll, the system is transparent
enough that unauthorized personnel cannot easily access the system. This ensure that actual
employees list is encapsulated on the system.
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With the verification of all payment by heads of public service in the district, respondent testify to
the fact that with introduction of the computerization system which captures the bio data of staff,
thereby ensuring that only one civil worker is paid at a time
Also respondents acknowledged the fact that the system is efficient and effective enough that it
serves every need required.
Finally respondents concluded that the computerized system has reduced paper work in the
department and its units in the various ministries, department and agencies and also saved time as
compared cumbersome work associated with the manual system.
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CHAPTER FIVE
5.0 SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
5.1 Introduction
The purpose of this study of the computerization of the payroll system is to help in finding a
lasting solution to the recurrent loop holes which has caused governments to over invest in the
civil services, such that such funds could be directed elsewhere in the economy. This study is also
to help to empower the CAGD with the necessary tools for the smooth operation of the system.
The goal of this study has been to find out the impact of payroll computerization in the civil service.
The data collected for the study were analyzed and discussed in the preceded chapter.
This chapter present a summary of the findings of the study. It also represent recommendation,
made by the researcher.
5.2 Summary of findings
The primary concern of this study has been to find out
Alleged existence of ghost names in the payroll of the civil service
Existence of financial waste in the civil service
Poor internal control system in the payroll preparation
Lack of qualified accounting and computer personnel in the service
Lack of training for personnel who works on the payroll preparation
The researchers review relevant literature on the study. The method of collecting information for
the study include both primary and secondary sources. The primary source included information
42. 29
gathered from staff of CAGD and the secondary data was resource from literature and relevant
documents on the subject matter, researchers analyzed the data collected as follows;
From the research we have realized that the computerization of the payroll service has brought
about increased in productivity, accuracy, transparency, efficiency and effectiveness in the system.
The introduction of the computerization system as help in reducing the perception created that the
system is full of ghost names of which payment are still made to them, which tarnished the image
of the service, the introduction of the computerization has cleaned up the system heavily.
Before an employee’s name get to the payroll system the first process involves the keying input
on behalf of new entrant by the personnel processing section of the ministry, department and
agency involved. This inputs will include all the personnel details of the entrant such as his name,
address, date of birth, social security number and the bank where he saves ETC. it will be
accompanied with the necessary document authorizing the employment of the individual
concerned such as ;
Copy of appointment letter issued by the heads of the civil service
Copy of acceptance letter from the individual as well as an assumption of duty letter
Establishment warrant prepared by head of department passed by the treasury
Financial approval of clearance from the ministry of finance for such a person to be employed.
The second aspect is for the controller and accountant general department to validate this
transaction by ensuring that all necessary documents are dully signed by authorized people. Then
such a person could be “mechanized” into the national payroll. All things being equal it should
43. 30
take 2 months to complete such new transaction. However, when even one item is not properly
submitted queries can be raised and the entry may be delayed till the anomalies are rectified.
This procedure endures all names on the payroll list are properly scrutinized and also no one can
enter any name without passing through the procedure. The controller and accountant general
department send voucher containing a list of employees to each ministry department and agency
to acknowledge their presence in the civil service. This checks and ensures that all those who are
no more working in the service and dead ones are deleted from the system. The system is
programmed in such a way that all those who will become 60 every year is automatically sent to
pension list. This ensures that all unwanted names on the payroll list are deleted.
With regards to internal control in the payroll system it was realized that the division of labor and
decentralization plays a major role in the payroll processing. There was also controls like
authorization, supervision and other directives from ministry of finance and economic planning to
reduce waste, irregularities and inefficiency in the system.
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5.3 Conclusion
The computerization of the payroll system in early part of July has brought a significant impact in
the payroll system despite its shortcoming. The computerization of the payroll system has rectified
almost all the problems associated with the manual system except that this system is not developed
enough to serve all various ministries, department and agencies in the country. And the
introduction of new software to carter for the needs of the public service.
45. 32
5.4 Suggestion and Recommendation
Training plays a vital role in equipping employees to perform any job assigned satisfactory. We
suggest that the Controller and Accountant General Department should adequately train employed
staff on the knowledge of the new software and make provision for annual or mid-year seminar to
keep staff appressed with the changes in the software.
To help in reducing the fraud personnel in the system we suggest that the recruitment of the staff
of the controller and accountant general should be done by an appropriate agency with no political
influence or internal bias, which should also insist on biometric information from prospective
applicant.
One of the problem we noticed was that people needed to move from their various district to Accra
for verification to be actually confirmed this gives way for the so called “Middle Men” to fraud
people in the name of the controller and accountant general department.
For every institution communication of your duties and performance to the public helps in creating
a friendly relationship were mutual trust could be earn, and act as a way for shout down false
propaganda about the organization.
To conclude we suggest that for the government to gain value for money on the salaries paid to
civil servant, there should be a biometric register in all public service office which takes into
account the time a worker arrives at work and departs which cannot be done by two people at the
same time. This will go in a long way boosting the efficiency of the Controller and Accountant
General Office.
46. 33
REFERENCE
Controller and Accountant General Department (2010). Mission statement, budget, objectives.
Retrieved from http://www.cagd.gov.gh/portal/index.php/about-us/mission
Financial and Administration Decree 1979 S.M.C.D 221
Financial System Consultants. (1993). Local government accounting handbook. Special edition,
Vol. I.
Hornby, A.S. (2001). Oxford advanced learners’ dictionary. New York: Oxford University Press,
6th Edition
International Records Management Trust (2008). Fostering Trust and Transparency in
Governance, Ghana Case Study. Retrieved from http://www.irmt.org/
documents/building_integrity/case_studies/IRMT_Case_Study_Ghana.pdf.
Kannyiri T. B. & Mumuni A. N. (2015).The Way Forward Challenges in Managing Government
Payroll Systems in Ghana. Retrieved from http://www. academia.edu/14815763
/challenges_in_managing_government_payroll_systems_in_ghana_the_way_forward.
Ministry of finance (2008). Budget review. Treasury News. Journal of Finance. First Edition.
Retrieved from http://www.cagd.gov.gh/portal/
Natailie, G. (2010). The advantages of traditional payroll system. Retrieved from http://www.e-
how.com.
Ogedebe, P.M & Babatunde, P.J. (2012). E-payment: prospects and challenges in Nigerian public
sector. International journal of modern engineering research. vol 2, issue 5, sept-Oct. 2012
pp-3104-3106. isbn: 2249-6645
Republic of Ghana Public Expenditure and Financial Accountability (2009). Public financial
management performance assessment report. Volume I: Central Government. Retrieved
48. 35
RESEARCH QUESTIONNAIRE
EFFECT OF PAYROLL COMPUTERIZATION IN THE CIVIL SERVICE
Dear Sir / Madam,
The objective of this study is to help in identifying the effect of payroll computerization in the
Ghana civil service and thereby help to improve upon it if necessary.
Kindly help us in answering the questions below. Please tick where appropriate.
The confidentiality of the information you provide is assured.
1. a. Age 20-30 31-40
41-50 51-60
b. Sex Male Female
2. Educational Background
Middle school graduate secondary Sch. Graduate
Training College graduate polytechnic graduate
University graduate others (please specify)
3. Length of Service
1-5 years 6 – 10 years
11- 15 years over 15 years
4. Number of years on present schedule
1 – 5 years 6 – 10 years
11 – 15 years over 15 years
49. 36
5. Have u had any training since engaged on the use of computer
YES NO
6. When was the last time u went for computer training (please details of the month and
year)…………………………………….
7. What problems do you encounter when processing the input form (please specify)………………
8. Is authorization needed for the processing of the input form?
YES NO
9. If yes who exercise that authority. (Please note)………………..
10. Can you suggest ways by which the department can improve upon its work? (Please
state)……….
50. 37
SUPERVISORS / UNIT HEADS
Dear sir/ madam,
The objective of this study is to help in identifying the effect of payroll computerization in the
Ghana civil service and thereby help to improve upon it if necessary.
Kindly help us in answering the questions below. Please tick where appropriate.
The confidentiality of the information you provide is assure.
1. Present Grade (please state)
2. Number of workers under supervision? Please state…………..
3. Reporting time …………………………………………
4. Departure time………………………………………….
5. By what means do they report
Attendance book Time clock
Others (specify)
6. Who keep the attendance book
Time keeper supervisor
51. 38
EMPLOYEES
Dear sir / madam
The objective of this study is to help in identifying the effect of payroll computerization in
the Ghana civil service and thereby help to improve upon it if necessary.
Kindly help us in answering the questions below. Please tick where appropriate.
The confidentiality of the information you provide is assured.
5. Please, do you understand the detail on the pay slip?
YES NO
6. Which one below is faster in payment of salary?
Manual Mechanized
7. Which one below is more transparent?
Manual Mechanized
8. Which one below contains more errors?
Manual mechanized
9. Which one do you think is suitable mode for paying salaries?
Manual Mechanized
10. Which one makes correction more efficient
Manual Mechanized
11. Do u have problem the use of the computerized system of payroll?
YES NO
12. If yes, what issues do you have with the system (please state)……………..
13. Suggest ways by the problem stated above can be solved. (Please state)………
