3M Cogent Led Project Removes 34,000 Illegal Names from Pension Payroll in Ghana

Ghana’s Ministry of Finance and Economic Planning initiative to clear the government’s payroll of ghost names has detected and expunged about 34,000 illegal names in seven regions that were on pensioners’ payroll. These ghost names account for 38% of the pensioners registered so far during the $2.385 million project, led by the US company 3M Cogent. Biometric data has been collected from 54,544 out of the 88,467 pensioners in the Greater Accra, Eastern, Volta, Central, Ashanti, Western and Brong Ahafo regions.

Project Co-ordinator and ICT Adviser of MoFEP, Mr George Gyamfi, points out that even though some pensioners could not be captured, the number of those pensioners was not substantial. “A handful of people have called to say that they have not been registered and so we have established a desk at the ministry to register them, but their number will not underestimate the figures we have”. Mr Gyamfi also stated that in some cases, pensioners that were dead still had their names on the payroll, with their allowances being claimed by unknown persons. The registration phase, he stated, will be complete by January 20, 2012.

The first phase of the project was launched by the ministry to capture pensioners who retired on the CAP 30 Pension Scheme, and covers about 96,154 pensioners on the government’s payroll in the 10 regions.

  • The Greater Accra Region topped the list of ghost names at 18,527, according to a breakdown from the MoFEP. The region originally had 34,013 names on the pensioners’ database but the exercise captured 15,486.
  • In the Eastern Region, 9,976 were registered, instead of 14,074
  • The Volta Region had 6,840 instead of 8,620
  • The Central Region had 5,888 instead of 8,487
  • The Western Region had 4,447, instead of 7,006
  • The Ashanti Region had 8,478, instead of 12,195
  • The Brong Ahafo Region recorded the least with 643 ghost names. It originally had 4,072 names in the database but 3,429 were captured during this project.

A significant percentage of the government’s discretionary budget goes to public sector payroll expenditure, which is perceived to be bloated with fraudulent employee records and gross over-payments. The Rawlings administration introduced the Integrated Payroll and Personnel Database II (IPPD II) in the late 1990s to mitigate such payroll management problems, and even though some gains were recorded with this system, government purse and payroll processes and procedures still contain inefficiencies and loopholes which allow for fraud. Because of this, there have been many attempts, moreso recently, to improve the payroll’s integrity and save cost.

The problem persists, however, despite attempts by the MoFEP and the Controller and Accountant-General’s Department (CAGD) to organise head counts for both active employees and pensioners on the government’s payroll to get rid of ghost names. The lack of adequate mechanisms to effectively identify ghost names on the payroll and delete them has been one major contributing factor for the failure of head counts in the past. While ghost names have been identified and expunged from the payroll, more ghost names have continued to find their way onto the payroll.

MoFEP and CAGD initiated the biometric registration and verification of all pensioners and active employees who live on the nation’s coffers as part of their continued effort to ensure discipline in public finance management. The same scheme is also being employed to register 730,000 public sector workers by June 2012.

The government committed GH¢45 million a month as wages for pensioners in 2011 according to a source at the CAGD. GH¢540 million was spent on pensioners’ remuneration last year. CAGD figures also reveal that the average CAP 30 pensioner currently receives GH¢468 monthly, meaning that with the detection of the close to 34,000 ghost names, the government will save close to GH¢16 million monthly and GH¢192 million annually.

Dr Kwabena Duffuor, the Minister of MoFEP, stated that the initiative will minimize payroll fraud significantly and cut down substantially on public expenditure on emoluments. The government projects spending close to GH¢6 billion on the wage bill of public sector employees and pensioners in 2012, but the minister is optimistic that the nation will save close to GH¢1.5 billion once the entire project is completed in June.