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

1
 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.

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 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.

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 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 .. ././..

4
 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

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 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.

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.

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 LIST OF ABBREVIATIONS

CAGD - Controller and Accountant General Department

IMANI - Improving Montclair Achievement Network Initiative

IMF - International Monetary Fund

GNA - Ghana News Agency

7
MIS - Management Information System

NHIS - National Health Insurance Scheme

PAS - Public Accounts Section

LIST OF FIGURES

Figure 4.1 Age of respondents 38

8
 LIST OF TABLES

Table 3.1 Categorization of Staff 32

9
TABLE OF CONTENT

PAGES

Dedication

Acknowledgement

Declaration

Certification

Abstract

10
Abbreviation

List of Table

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

11
1.8 Limitations 19

1.9 Conclusion

19

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

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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

4.3 Age of respondent

35

13
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

14
5.4 Suggestion and Recommendation

44

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 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 Generals 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 Generals Department

and the functions of the Controller and Accountant-General of Ghana.

The Controller is assisted by six Deputy Controllers and Accountant.

The Controller and Accountant - Generals Department is mandated by Financial Administrative

Act, 2003 (Act 654) to:

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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

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.

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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. Dufuors 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 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

3
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

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 Research Objectives

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 softwares

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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.

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.

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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.

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

6
salary, grade level, and allowances of each staff. While the payroll deductions consist of

deduction that is made out of the employees 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.

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.

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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

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

generals 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

8
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 generals department, the return mechanized voucher system, is confronted with

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

Generals Department inefficiencies. However, other causes of this delay included manual

sorting of payment vouchers and breakdown of distribution vehicles. The study also found that

9
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

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 generals department should

take steps to decentralize its operations to the various regions and allow for errors and other

10
issues to be handled directly at their regional offices. This will go a long way to reducing the

pressure on 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 Generals 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 by their cashier of the CAGD. The electronic payment system focuses on electronic

11
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 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

12
perform the payroll processing. Recently, electronic payment (e-payment) of salaries to staff has

become a common feature of most government institutions and corporate bodys vis--vis

employees 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 Generals 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 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

13
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.

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

14
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.

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

15
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.

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

16
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

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

17
3.4 Research Instrument

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?

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

18
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.

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 its 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-

20
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.

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.

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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.

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

22
the office of 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

0
18-25 YEARS 27- 35 YEARS 36-45YEARS 46-55YEARS
YES NO NO CLUE

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

and staff that are retired and those dead are still within the system and are been paid by fraudsters

in the system.

23
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.

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

24
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.

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

25
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

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.

26
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 employees 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

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

27
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.

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.

28
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.

29
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.

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.

30
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

from thttp://www.mofep.gov.gh/sites/default/files/reports/Ghana_ PEFA%202009_

Report_ volume_ 1.pdf.

Sanni, T.A., Momodu, A.A. Ngerebo, T.A., Olagunju, A., and Ogunbiyi, S.S. (2008) Dictionary

of Finance and Banking Port Harcourt: Davidstones Publishers Ltd.

31
 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)

32
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
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)

SUPERVISORS / UNIT HEADS

33
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

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

34
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)

35