The effect of IPPIS in the control of payroll fraud in Nigeria public sector 

The effect of IPPIS in the control of payroll fraud in Nigeria public sector 

 

CHAPTER ONE/INTRODUCTION

1.1:      Background to the Study

The study on implementation of Integrated Payroll and Personnel Information System (IPPIS) and Administration of the Nigerian Federal Civil Service was motivated by our concern over the years for efficient and effective service delivery in our public life. The dynamy of our modern welfare and service delivery has inevitably called for instrumentality of the attendant good governance values of accountability, probity, transparency, efficiency, effectiveness and prudence. Essentially, as we all know, public service is meant to deliver goods and services to the citizenry at the right time and accessible degree. The goods and services are expected to be delivered in the most efficient and effective manner to the satisfaction of the beneficiaries, such that the basic values of good governance are demonstrated in the management of public business.

The civil service which is the integral part of public service has inadvertently tend to fail the government of modern complex, dynamic, and technologically driven administration, hence the instrumentality of reform programmes in the public service in the past few decades in Nigeria.

At present, various countries are in the struggle to better their existence through the process of good governance and responsible public service for effective and efficient service delivery. Nigeria, of course is one of such countries. In the past, the civil service which is an integral part of public service was the darling of applicants who saw it as a place to make contributions towards good governance and economic growth of the nation. It is the pillar that sharpens the direction of national goals and aspirations (Ahmad, 2005). Many joined the service because of job security, efficient career progression and self-contentment from realistic wage, but later, the system became bastardised with the fear of victimization and sudden retrenchment which make the public service vulnerable to political interference and weakness to give genuine advice and sincere recommendation on policy issues (Ahmad, 2005).

Right from the beginning, one needs to realize that the civil service has remained a key instrument in the persistence and consolidation of any governmental and indeed, actualization of national development. Thus, the effectiveness and productivity of any government is largely determined by the efficiency of the civil service (Beetseh, 2010:91). As the administrative and technical support to the governing apparatus, the civil service remains the viable mechanism for policy initiation or formulation. This probably explains why O’Connel (1981: 164) aptly posited that “political leadership without administrative and technical support is power in a vacuum; and administration without political leadership is only tidiness in stagnation.” This simply implies that the civil service is a sine-qua-non in any governmental setting, because it constitutes the engine of development. The civil service as the engine of governance is vital to the translation of government policies into tangible programmes of action for attainment of the goals of social and economic transformation. It provides the administrative machinery of governance through which the agenda of political leaders are implemented (Sali, 2012).

Unequivocally, just like in the developed nations, civil service has always been the tool available to African governments for the implementation of developmental goals and objectives. It is seen as being crucial to the growth and development of African economy (Fatile, et al, 2010:145). It is however further argued by Fatile and his associates (2010) that the hitherto conservative international financial institutions were merely interested in globalizing the neo-liberal economy for the interest of powerful global capital, and not in promoting autonomous development, which is not what Africa needs for economic progress.

The current drive to improve management in government through public service reform programmes which aims at increasing efficiency, effectiveness, and the delivery of quality service to the public is common to many African countries, including Nigeria. It is pertinent to note that public administration has moved away from being mere watchman, to being the engine of the society and the major provider of various services, including regulatory and distributive ones. Generally, all societies have some forms of public service provisions for reasons of economic, risks, and moral responsibility. Governments in many parts of the world are structurally and constitutionally tied to the civil service, irrespective of the system of government (Olagboye, 2005:105). This, according to Agagu (2008) explains why the relationship between the government and the public in Nigeria endured in spite of the various reforms Nigeria has been experimenting since independence. Indeed, it has been argued that at independence in 1960, the civil service in Nigeria was regarded as one of the most important legacies of some sixty years of British rule (Gboyega and Abubakar, 1989:129). Moreover, given the performance of the public service in the first few years of independence, there was great hope that the expectation of Nigerians for rapid socio-economic development would be fulfilled with reasonable efficiency. This was because giant strides were taken in the provision of infrastructural and capital investments (Agagu, 2008:243). It is instructive to note that by the mid 1980s, the Nigerian public service was far from being ideal. It was tradition-bound, somewhat ponderous and showing signs of deterioration. Indeed, at that point in time, the civil service was displaying a patent inability to cope effectively with the changes of modern complex, and development hungry society (Adegoroye, 2006).

The ills of the Nigerian public service have been identified at various times. About two decades ago, the Ayida panel, which was instituted to review past public service reforms in Nigeria with a view to proffering measures to further re-invigorating the service, identified the major ills of the service, which needed to be corrected to improve the dynamism and effectiveness of the civil service. Adegoroye (2006) identified among others, politicization of the top hierarchy of the civil service; lack of financial accountability and probity; perpetual breakdown of discipline; virtual institutionalization of corruption at all levels and segments of the service; disregard for rules and regulations; loss of direction; and general decline of efficiency and effectiveness in the civil service, as some of the challenges of the civil service delivery in Nigeria.

In a similar line of thought, many scholars and public commentators such as Ahmad (2005), Lawal and Oluwatoyin (2011:61) and Nwanolue and Iwuha (2012:79) tend to criticize the performances of the public service in the recent years. According to Lawal, and Oluwatoyin (2011:26), the civil service today is a battered institution which has virtually lost its attributes of anonymity, neutrality and security in tenure; an institution in which moral has reached its nadir, in which excessive caution, undue bureaucratic practice and interminable delays have become the hall marks. The institution is seemingly resistant to dynamic change and has become the object of constant public criticism (FRN, 1988).

In the contributions of Ahmad (2005: 3), the then Head of Service of the Federation opined that, “the service was often perceived as a corrupt, outdated in technology, lacking in creativity, slow in responding to issues, and structurally weak…….”.

Furthermore, the then Chairman of the Public Service Reform Team, (PSRT), El-Rufai (2007: 5) maintained that “the Nigerian Public Service is now seen as employer of the dull, the lazy and the venal. It is therefore incontestable that the public service became dysfunctional following years of neglect and failure to reform. The public service was both large and unwieldy, accountability was weak and professional standards low…..”.

With this general condemnation of the performance of the public service, the need to improve on the overall efficiency and effectiveness of the public service through administrative reforms became imperative. Thus, the idea of setting up several reform programmes by various governments in Nigeria became necessary and relevant. The eventual establishment of Bureau of Public Service Reforms in 2003 by the Federal Government to coordinate the activities of reform programmes and the establishment of IPPIS in 2006 further substantiates its significance.

Thus, over the past decades, there has been a host of reform initiatives to bring about changes in government service delivery system with a view to providing efficient, effective and responsive service to the citizenry. These reforms have been concentrated on creating an efficient civil service focused on the need for provision of high quality service to the public (Fatile, et al 2010:148).

It is pertinent to note that almost all African countries are caught in the web of public sector reform. Good governance and efficient public administration are regarded as a wishful thought without public sector reform. Also, accountability, transparency and merit driven public service are thought to be unachievable except programmes of public sector reform are drawn up, and efficiency, effectiveness and responsiveness of government to the yearnings of its citizens could only be gauged through the lenses of the public sector reform (Omoyefa, 2008).

To ensure the effective coordination of the reform implementation process, a monumental step was taken by the Nigerian government. For the first time in the history of reform management in Nigeria, an agency was created to drive the reforms. The Bureau of Public Service Reforms (BPSR) was established in 2003 but however came into effect in 2004 to rectify earlier trends wherein several reforms were implemented concurrently within the Federal service without a central platform for technical and administrative coordination, and has been on the agenda since then. As noted by Obasanjo (2005), who mooted the idea of the institution:

The reform of the civil service is one of the central themes of government’s agenda. For without a transparent and effective civil service, government business and service delivery to the public will be crippled and mired in dishonesty and graft. I am convinced that an efficient, transparent, and accountable civil service should be the hallmark of our democratic transformation and development. The Nigerian people deserve nothing less.

 

The return to democratic governance in 1999 in Nigeria witnessed reform efforts targeted at improving the macro-economic environment, pursuing structural reforms, strengthening public expenditure management and implementing institutional and governance reform (BPSR, 2009). Government has achieved remarkable results from the various initiatives which have been implemented under the Public Service Reform Programme (PSRP) aimed at improving governance in the public service. The quality of human resources management information is a key determinant of government effectiveness.

The capacity to effectively manage the public service and track account for employee costs enables government to achieve its national objectives of modernization, improved transparency, accountability and service delivery (Asia, 2009).

The Federal Government in order to entrench a viable public service in Nigeria, under President Olusegun Obasanjo in 2006, supported by World Bank, established a wide-ranged public service reform programme starting with civil service reform in Ministries, Departments, and Agencies (MDAs). Reform in these MDAs relies upon a minimum set  of standards across the civil service, and in turn provide a platform for launching broader public service reforms (FGN, 2007).

President Umaru Musa Yar’Adua on assumption of duty in 2007 was driven by passion to continue with Obasanjo development agenda through reforms. Accordingly, he identified core areas of concern by which his administration hoped to carry on with the development objectives of the country. These areas are classified under the president’s 7-points agenda.

In order to achieve this, the president required an efficient development plan that targets the year 2020. Thus, both Bureau of Public Service Reform (BPSR) and the National Planning Commission (NPC) worked and produced long-term plans which include; a new National Strategy for Public Service Reforms (NSPSR); and a national development plan for vision 2020.

According to BPSR (2009), the NSPSR has four pillars and they include:

  • Creating an enabling institutional and governance environment;
  • An enabling socio-economic environment;
  • Public finance management reform; and
  • Civil service and administration reform;

The role of implementation of the IPPIS Scheme in the entire public service belongs to one of the eight targets of pillar (iv) above, and is the focus of this study. Critical to this programme is the introduction of the Integrated Payroll and Personnel Information System (IPPIS). The Bureau of Public Service Reform (BPSR) was mandated to coordinate the reform process within the government, and also had oversight responsibility for the IPPIS project. The purpose of IPPIS project was to procure, implement and integrate solution that would:

  • Improve the effectiveness and efficiency in transactional services;
  • Enhances the confidence in payroll costs and budgeting;
  • Greatly improve management reporting and information (World Bank Report, 2012).

The IPPIS, which is an ICT-based system is a principal component of the public sector reform initiative that was designed to achieve a set of objectives. These objectives include to:

  1. Facilitate planning: Having all the civil service records in a centralized database will aid manpower planning as well as assist in providing information for decision making;
  2. Aid Budgeting: An accurate recurrent expenditure on emoluments could be planned and budgeted for on a yearly basis;
  3. Monitor the monthly payment of staff emoluments against what was provided for in the budget to ensure convenient staff remuneration payment with minimum leakages and wastages;
  4. Ensure database integrity so that personnel information are correct and intact using database integrity constraints that built into ICT-based system that once entered cannot be manipulated by unauthorized This will prevent alteration of sensitive employee data like dates of birth and appointment;
  5. Eliminate payroll fraud, such as the ghost workers syndrome where a non-existing employee is being paid monthly; multiple payments of emoluments to a single employee; and credentials falsification;
  6. Facilitate easy storage, uploading and retrieval of personnel records for administrative and pension processes;
  7. Provide a good working environment that is conducive and supportive to the operations of modern, proactive service that is innovative and technologically driven (OAGF: IPPIS Operational Manual, 2008).

The IPPIS reform which brought about this positive development was approved by the Federal Executive Council in February, 2006, but however commenced work in April, 2007. It is however pertinent to note that, at the time the Bureau of Public Service Reform (BPSR) announced that in a bid to “entrench transparency and accountability in the human resource, records and payroll administration”, and the government consequent introduction of the Integrated Payroll and Personnel Information System (IPPIS), many Nigerians were skeptical about its success (Nigeria: FG’s New Integrated Payroll, 2011).

The IPPIS introduced in the Federal Service was a major step towards reforming and transforming the service for better service delivery in the country. The IPPIS is an enterprise-wide, integrated, computerize and efficient human resource management information system that is used by the ministries, departments, agencies and local governments to undertake human resource management activities from recruitment to separation, including payroll and pension processing. The IPPIS is designed to make use of modern information and communication technologies to help the government manage the human resource of the public service more efficiently and effectively.

The IPPIS project which started as a World Bank-assisted programme under the Economic Reforms and Governance Project (ERGP) was instituted to provide a reliable and comprehensive database for the public service; facilitate manpower planning; eliminate record and payroll fraud; facilitate easy storage, update and retrieval of personnel records for administration and pension processes; and facilitate staff remuneration payment with minimal wastage and leakages (BPSR, 2009).

Generally, the central aim of IPPIS project is to strengthen the macroeconomic and fiscal environment with specific objectives to improve efficiencies and block all leakages and wastages in the payroll system. In other words, the IPPIS project is targeted at improving macroeconomic environment, strengthening public expenditure management, and promoting public accountability and probity, and ensuring efficient service delivery in the public service.

According to BPSR (2009), IPPIS is a computerized biometric platform intended to provide a reliable and comprehensive database of employees in the public service to facilitate manpower planning and eliminate headcount and payroll fraud. IPPIS was approved by the Federal Executive Council (FEC), and implemented in phases. The first phase (pilot phase) covering seven MDAs and the central management organizations of the public service took off in April 2007, saving N416 million from the payroll in its first month. The said pilot Ministries, Department and Agencies (MDAs) in the IPPIS project include: Federal Ministry of Education, Federal Ministry of Information and National Orientation, Federal Ministry of Finance, Federal Ministry of Works, Federal Ministry of Foreign Affairs, National Planning Commission and Budget Office. The pilot phase later extended to additional 11 MDAs in 2009 to optimize the 55,000 licenses (OAGF, 2012).

By the end of 2014, the IPPIS had captured a total of 344 MDAs with a total of 224,440 civil servants. The IPPIS had saved the Federal Government of Nigeria a total sum of N161.953bilion between 2007 and 2013 (Mede, 2014). About 84MDAs were yet to be captured by IPPIS (Mede, 2014). Mede, (Director of IPPIS) revealed this at the Federal Universities Sensitization Workshop on incorporation of all MDAs into the IPPIS Platform at University of Lagos, Akoko, Lagos.

The IPPIS project was initiated by the administration of former President Olusegun Obasanjo to stem the tide of inflated public service nominal roll which led to increasing demand for budgetary allocation for personnel cost yearly. The IPPIS project actually commenced work with the pilot scheme implemented by a Nigerian IT company, SystemSpecs. The pilot scheme captured 55,000 workers in its database, when the pilot phase was concluded. This figure was later made to pass through the more credible exercise of the phase II service provider. The Nigerian IT company, Soft Alliance was chosen in December 2010, to handle phase II, and it captured 47,000 in 58 MDAs (The Nation Newspaper, 2012).

The IPPIS has a clearly defined mode of operational procedure for its implementation. Under the system, the comprehensive records module of IPPIS are the major ingredients supplied by the Office of the Head of Civil Service of the Federation (OHCSF) and verified by the Federal Civil Service Commission (FCSC), and augmented by other details that are captured directly from employees during staff enrollment. This information is used in the monthly payroll process that generates salaries which are examined by control agencies like Office of Auditor-General of the Federation (OAGF) and the Budget Office of the Federation (BOF) before they are paid directly to the banks through Central Bank of Nigeria (CBN) by Nigeria Inter-Bank Settlement System Plc (NIBSS).

The main input into the personnel records are data extracted from confidential employee files that are kept by OHCSF and FCSC, simply because majority of civil servants have been recruited, promoted, and moved around the MDAs before the IPPIS project was commissioned.

These data are converted into a format acceptable by the IPPIS, verified and validated before they are upsized into the database.

The second input into the personnel records is the staff biometric data (fingerprints) and passport photographs that are captured during the enrolment process. Other data generated from personnel transactions like promotion, transfer, disciplinary actions and in-service training are added to make the database complete.

The IPPIS has a web camera that automatically captures the passport photograph of an employee that is being currently enrolled. Appointment details, like present work location (MDA), grade level and step, employment and resumption dates must be verified/validated and entered into the personnel database. Other details like salary, bank account number, and branch code must be duly captured so that the employee’s monthly emoluments can be automatically posted into the account.

Enrolment in this system implies the process of capturing biometric data (fingerprints), photograph of an eligible employee to complement the comprehensive bio-data, qualifications, work experience, appointment details supplied by FCSC for onward storage into the IPPIS database.

The following must be captured into the personnel database for completeness of IPPIS database:

  • Comprehensive record on individual civil servant verified by OHCSF.
  • Personnel transactions tracking
  • Specialty
  • Promotion
  • Deployment
  • Transfers/postings
  • In-service trainings
  • Disciplinary actions
  • Effects on employee’s qualifications.

After completeness in IPPIS database, the next paramount issue is payroll administration. The major processes in the monthly payroll cycle are:

  • Variation captured at the MDAs
  • Payroll run at the MDAs
  • Payroll closure by MDAs
  • Payroll audit
  • Pay slip generation at MDAs
  • Rollover to a new month.
  • Payroll warrant generation by BOF
  • Payroll mandate generation by OAGF.
  • Send payroll warrants to CBN.

The IPPIS system became operational in many more Ministries, Departments and Agencies (MDAs) during its second phase (Okogu, 2010). Government at different levels battled the menace of ghost workers which had become a perennial problem, creating holes in public coffers. The implementation of IPPIS scheme by the Federal Government during the pilot stage helped it save N12billion, according to the then Finance Minister, (Segun Aganga, 2011).

Buttressing the fact further, the Director-General, Budget Office of the Federation, Okogu (2010) said, so far, the Federal Government had saved over N12billion with introduction of IPPIS. He maintained that the electronic capturing system was part of the present administration’s strategy to stop wastage, particularly through leakages in the system as a result of significant losses in salaries and pension payments to ghost workers and retired employees in the federal civil service. Aganga (2011) maintained that the IPPIS would boost its capacity for saving and enhance efficiency in the public funds management.

In apparent revelation, the new Minister of Finance, Ngozi Okonjo – Iweala (2012) maintained that N14.2billion was saved on personnel cost through the Integrated Payroll and Personnel Information System (IPPIS). She listed this savings as key achievement of the administration recorded at the end of the first quarter of 2012. She further concluded that as at April 2012, about 94,299 public workers were captured on IPPIS in 75 Ministries, Departments, and Agencies (MDAs).

In the same vein, the Chairman, House of Representatives Committee on Finance, John Owan – Enoh traced the challenges facing the country’s economy to ineffective payroll management system. He maintained that the effectiveness of the IPPIS would be measured by how much the government has been able to save through the AGF initiative.

The ghost workers were detected after a staff audit was carried out, and it showed  that out of the 26,017 workers on the payroll of FCT, government was losing about $8million annually due to ghost workers on the FCT payroll, and specifically 6,000 were fictitious (Proshare, 2013). News Agency of Nigeria (NAN) gathered that since its first roll-out in October 2006, more than 100,000 public workers have been covered by IPPIS in 94 MDAs (NAN, 2012).

According to the then Minister of Finance, Olusegun Aganga, about 43,000 names on the payroll of some Federal parastatals were not of existing human beings, and this situation raised a sad point in the waste that have plagued the Nigerian system(The Nation, 2012). This is because the issue of ghost workers remained one of the potent ways designed by public officers to create holes in the coffers of the state. Successive governments in Nigeria have discovered ghost workers and expressed confidence in whatever step they had taken and believed that the matter had been nipped in the bud. Yet each new government discovers fresh cases. This is one of the reasons why critics say that the federal civil service is bloated, and it also explains why federal government’s recurrent expenditure is scandalously higher than its capital expenditure (Aganga, 2011). Aganga further maintained that through the phantom workers, the Federal government was losing N12 billion annually. The ghost workers formed part of the numerous employees on the nominal payroll of the Federal Government. Aganga (2011) who had earlier said this during the report presentation of the screening exercise to the Senate, maintained that the personnel cost of government had risen steadily every year from N850 billion to N1.3 trillion between 2009 and 2010, and this represented more than 50 percent of recurrent expenditure of government.

There are a number of central personnel agencies and technical support agencies that are linked with the operations of IPPIS for their oversight and control functions. According to Alaopa (2008), these support agencies include: Office of the Head of Civil Service of the Federation; Office of the Auditor-General of the Federation; Office of Accountant-General of the Federation; the Budget Office of the Federation; Federal Civil Service Commission; and the Nigerian Information Technology Development Agency.

In its contribution on the significance of IPPIS, Budget Office of the Federation (BOF, 2010) maintains that the electronic data capturing system is part of the administration’s strategy to stop wastage, particularly through leakages in the system as a result of significant losses in salaries and pension, and payments to ghost workers and retired employees in the federal civil service. He maintained that apart from helping government to update its data and records, for proper planning, the IPPIS project has been widely acknowledged as a positive step to stem corruption, reduce administrative hostage taking, associated with payment to individuals and contractors, as well as facilitate a more transparent payment system that allows for effective monitoring.

 

1.2:      Statement of the Problem:

The Nigerian civil service from its inception was a model to emulate. According to Ogunrui and Erhijakpor (2009:106), misappropriation of public funds was difficult and very rare during that era, and that the service was very efficient, and greatly contributed to the formulation and implementation of public policies.

Over time, inefficiency and corruption became rife in the Nigerian civil service, and this malady had eaten deep into the fabrics of the Nigerian public servants (El-Rufai, 2010). It was at this stage of rethink that many Nigerians started nursing the idea of reforms into the public service generally.

According to the World Bank (2002), there was a strong consensus in the international development community on the need for civil service reforms in developing nations. It was therefore a topical issue of the moment as developing nations all over the world engaged in the struggle to better their existence through the process of reforms for efficient and effective service delivery.  In pursuance of the global reform agenda, Nigeria’s development objective is to be in the league of the 20 leading economies in the world by the year 2020. The main philosophy underlying vision 20-20-20 therefore is the transcendence of the country from the category of a developing nation struggling to attain the millennium development goals (MDGs). This aspiration emerged at the twilight of the last millennium in 1999, when Nigeria embraced democracy after several years of military dictatorship (BPSR, 2009).

The Nigerian civil service witnessed several administrative and public service reform programmes dating as far back as pre-independence. The major reforms which this study focuses on came up as from 1999 and beyond with the heralding of the new civilian regimes of Chief Olusegun Obasanjo and Umaru Musa Yar’Adua/Goodluck Jonathan.

The Nigeria vision of the public service reforms of 1999 was to positively transform the civil service into an ideal, competent, professional, development-oriented, public-spirited, and customer-friendly, capable of responding effectively and exhibiting core values of political neutrality, impartiality, integrity, loyalty, transparency and accountability that was improved upon to the point of being competitively well remunerated and innovative, according to Bureau of Public Service Reform  (BPSR, 2009).

Consequently, the reforms came in the major aspects of government administration which include: Restructuring of the civil service; Monetization policy; Civil service salary review; Overhaul of procurement system; Sustained crusade against corruption; Capacity building; ICT development; Review of the public service rules; Regulations and procedures; Rightsizing the civil service; Integrated payroll and Personnel Information System (IPPIS); and Due process. These major reforms were introduced and implemented since the inception of Obasanjo’s  regime and Yar Adua’s administration, and were targeted at realizing the vision of the public service reform agenda aforementioned.

The IPPIS project as the core subject of this study started as a world Bank-assisted programme under the Economic Reforms and Governance Project (ERGP) and was instituted in 2006 to provide a reliable and comprehensive database for the public service to facilitate manpower planning; eliminate records and payroll fraud; facilitate easy storage, update and retrieval of personnel records for administrative and pension processes; and facilitate staff remuneration payment with minimal leakages and wastages. Going by the declaration of the immediate past Head of the Civil Service of the Federation, El-Rufai (2010), there were about 650,000 workers in the civil service as at that time.

Apparently, investigation revealed by the former Accountant-General of the Federation, Ibrahim Dankwambo through the pilot phase of IPPIS which revealed that although 7 MDAs were involved in the pilot phase, feedback was said to be mind-boggling. Furthermore, over 16MDAs that were captured in the second phase of IPPIS had more shocking revelations and reduction in wage bill (Dankwambo, 2011). It is therefore not surprising that this feedback informed the decision of President Goodluck Jonathan of strengthening the IPPIS to fish out ghost workers in the system.

According to Dankwambo (2011), it was unimaginable that the wage bill of the workforce of the Nigerian Federal civil service was about N1.5trillion. Afolabi accused the public officers on embarking on imaginary or fake recruitment of staff in order to jack up the payroll with the aim that the excess funds are diverted into private purse (Huge wage bill, 2011). Afolabi succinctly maintained that the benefit of weeding out ghost workers was that government could create new jobs and have a manageable workforce with reduced wage bill.

It is in view of the foregoing that the researcher sought to investigate the effect of IPPIS in the control of payroll fraud in Nigeria public sector.

Consequently the following research questions are posed to guide the study:

  1. How has the implementation of the IPPIS hindered payroll fraud in the Nigerian Federal Civil Service?
  2. What role did IPPIS play in storage and updating of personnel records required for payroll administration in the Nigerian Federal Civil Service?
  • To what extent has the IPPIS been able to minimize leakages and wastages in the Nigerian Federal Civil Service; and
  1. What are the impediments to the effective implementation of IPPIS in the Nigerian Federal Civil Service?
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Effectiveness Of Performance Appraisal Systems In The Nigerian Public Service Sector

Effectiveness Of Performance Appraisal Systems In The Nigerian Public Service Sector

INTRODUCTION

Background of Study

The subject of performance appraisal appears a major subject of controversy in management circles. According to Kurt (2004), while business leaders see the need for appraisal systems, they are frequently disappointed in them because of various challenges that derail its objectives. One of the responsibilities of management is to ensure that an organization functions effectively and efficiently. In order to achieve these goals, managers must be able to determine and assess performance levels of both an organization and its individual employees (Kurt, 2004).

Performance appraisal has been described as a management tool designed to encourage communications in the office, improve the quality of work produced, and promote individual accountability. This is the concept underpinning the legal requirement that all agencies evaluate employee performance (Derven, 1990). Winston and Creamer (1997) define performance appraisal as an organizational system comprising deliberate processes for determining staff accomplishments, through rating, to improve staff effectiveness.

Modern organisations depend upon measurement and analysis of performance. Measurements must derive from the organisation’s strategy and provide critical data and information about key processes, outputs and results. The said data and analysis support a variety of organisational purposes, such as planning, reviewing organisationalperformance, improving processes, and comparing organisational performance with ‘best practices’ benchmarks (Averson, 1998).

Within the context of formal perfor mance appraisal requirements, rating has been used to mean evaluating employee performance against the elements and standards in an employee’s performance appraisal plan and assigning a rating of record. It is extremely important that workers have the proper knowledge, skills, and attitudes to perform well in their jobs. Knowledge, skills, and attitudes are the internal competencies that workers bring with them to the job or that they must learn through training.

Irrespective of what the organization’s intentions are when conducting performance appraisal, it produces a feedback that can either be positive or negative to both the management and the employees. Managing employee performance is an integral part of the work that all managers and officials perform in any institution. It is as important as managing financial resources and program outcomes because employee performance or the lack thereof, has a profound effect on both the financial and program components of any organization (Kurt, 2004).

In many organizations appraisals are used to help determine reward outcome by identifying employees who should get the majority of available merit such as pay increases, bonuses and promotions. For the same reason, appraisal results are used to identify poorer performers who any require some form of counseling or in extreme cases demotions, decrease in pay or dismissal (Chadbourne 1994).

Again, uses for performance appraisal have included equal employment opportunity considerations, promotions, transfer and salary increases. Primarily, performance appraisal has been considered an overall system for controlling an organization. It has also been called an audit function of an organization regarding the performance of individuals, groups and entire divisions (Awosanya and Ademola, 2008).

International research reveals that appropriate appraisal schemes have the potential to improve effective management of educational institutions, the quality of education provided for students, as well as satisfying legitimate demands for accountability (Chadbourne, 1994). Consequently, in most learning environments, there have been attempts globally to identify human resource policies necessary to inculcate and reinforce the continuous learning climate by examining various manpower variables such as training development and performance appraisal. Performance appraisal is widely accredited to contribute to the superior performance outcomes of many organizations (Averson, 1998). Such organizations or institutions are frequently lauded as high performance work systems, learning or flexible organizations with mutual or high commitment models (Applebaum and Butt, 1994).

In Nigeria public sector, performance appraisal is a periodic ‘ritual’, the level of importance and seriousness attached to it however not known to the researcher at this point.

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THE IMPACT OF PENSION AND GRATUITY ON QUALITY LIFE OF A RETIREE IN NIGERIA

CHAPTER ONE

 INTRODUCTION

  • BACKGROUND OF THE STUDY

Pension as a scheme is designed to cater for the welfare of the pensionable retired workers both in the public and private sectors. The working lives of employees move continuously towards a certain direction that is, from employment, to grow, to retirement, some are fortunate to save enough money to take them through the retirement period; while a majority leaves the service with little or no savings at all.  Ideally, there, governments and organizations need to identify a way of accommodating and adequately rewarding employees’ past efforts through organized pension plans, so that it can achieve the goals of their existence (Rabelo, 2002). Essentially, this is often thought different retirement policies which include the Defined Benefit (pay-as-you-go) Scheme, the National Provident Fund Scheme and in particular the new Contributory Pension Scheme that is expected to be fully funded.

 

However, some of the existing Pension Schemes seem inadequate and/or ineffective. In Nigeria, for instance, Statement of Accounting Standards number 8 (SAS 8) was issued in 1991 to direct and guide businesses on the determination and reporting of pension and retirement benefits.  Its growing tribute, however, emerges from divergent schools of thought namely, the contributory, the noncontributory and the hybrid schools of thought (Kantudu, 2005).  The first school of thought, emphasizing on contribution, is advocated by most accounting standards setting bodies as well as by writers (Campbell and Feldstein, 2001).  These scholars argued that should the employees contribute a certain percentage to the plan the employee will be able to receive the entire or part of the benefits at retirement, or in case of termination of appointment or dismissal.  The hallmark of the contributory theory is operational efficiency in computation and funding.

 

The second school of thought (the non contributory) also advocated by some accounting setting bodies (McGill, 1984; and Byrne, 2003).  According to the school, employers alone should fund the pension asset.  The belief of this school was that the singular funding made by the sponsor encourages and attracts more qualified and dedicated employees into the organization.  Under this arrangement, the benefit is defined by a formula, and pension at retirement is paid either as a lump sum amount or as a life annuity (SAS 8, 1991). In between the two extremes lies another school – the hybrid, with the view that on an aggregate basis, the active working employees of the firm should always provide the funds for the firms’ pensioners (Feldstein, 1996). In other words, companies should pay pensioners out of the company’s cash flow (Hendriksen and Van Breda, 1992). This is because the cash flows generated are as a result of the employees’ efforts and contributions, and hence they deserved a share of it especially now that they are unproductive.  But an apparent limitation of this argument is that it can only hold if current employees are not out numbered by pensioners (Klumpes and McCrae, 1999).

 

Pension Accounting has also been subjected to further controversies and criticisms particularly in the area of actuarial valuation methods to be used in computing pension costs. The result has been the emergence of two schools of thought. Hagerman and Zmijewski (1979); Bowen (1981); Daley and Vigeland (1983); and Ghicas (1990) contended that the prescription of one best method which posters comparability among annual accounts of firms and one that eliminated chances of earnings management by firms at the detriment of the pensioners, should be the goal of pension standards. This school argued that the laxity which must pension standards allow in the selection and application of actuarial valuation methods must often than not gives firms an advantage to reduce pension liability, and hence pension contribution, which by extension increases their earnings per share and executive compensation. For instance, a study by Gopalakrishnan and Sugrue (1995) revealed that a 1% increase in discount rate will lower the pension liability by about 20%.

 

The other school of thought argued that firms should be allowed to switch actuarial valuation methods, because whatever they do will be in the best interest of the firms and other stakeholders. What is important, according to this school of thought, is that voluntary application of the requirements of the standards would be affected by political visibility of making the disclosure and the proprietary costs associated with application (Ghicas, 1990; Klumpes and McCrea, 1999; Klumpes and Manson, 2000). Consequently, Pension has in recent times increasingly attracted the attention of policy makers in many countries as a means of facilitating privately funded retirement income savings by an ageing workforce (World Bank, 1994).

 

Pension has been defined in various ways viz: Uzoma (1987) is of the view that Pension is a series of regular payment provided by a former employer to a retired employee.  Also, pension is basically a human affair that employees are expected to enjoy a retirement benefit that corresponds with the amount of commitment they have investe in the achievement of the profit maximization or service oriented goals of the organization or government (Bunmi and Obaro, 2007).  Furthermore, paragraph 9, Statement of Accounting Standards (SAS. 8) states that pension involves an agreement between employers and employees upon attainment of a specified retirement age.

 

In the same vain, Ako (2006) views a pension system as essentially an income security program which provides benefits to beneficiaries who may be retirees, pensioners or the destitute.  However, the establishment of different Pension Schemes in Nigeria did not achieve their aim, these were characterized by many problems that really constituted a set back for the scheme. These include non-availability of records, uncoordinated administration, inadequate funding, out right fraud, irregularities and conflicting laws, diversion of remitted or allocated fund, presence of ineligible pensioners on the pension’s payroll, and incapacity to effectively implement its budget and make adequate provisions.  This has given rise to untold hardship faced by retired workers, for example frustration, lack of sustenance, health problems and in some cases death.

 

Therefore, the gross in adequacies and mismanagement of the most of our adopted pension policies with their attendant frustrating effects on the sustenance of both the retired workers and the economy at large has often call for their constant review in Nigeria as obtains in other part of the world. Pension Schemes exist to provide post-retirement benefits to employees.  Pension Scheme was introduced into Nigeria during the colonial era to provide old age income and security to British citizens working in the country upon retirement.  All along, and until very recently, Nigeria embraced and adopted the traditional Defined-Benefits (D-B) plan that has failed to yield the desired benefits for most workers and several economies where it has been adopted.  The Defined-Benefits (D-B) plan, which usually specifies the entitlements of workers after a minimum qualifying year of service, has lost favour with most countries, including the most developed countries of Europe and North America.  In fact, Ambachtsheer (2007) noted that many corporate employers are abandoning their traditional Defined-benefit plans, while many of the Defined Benefits plans that remain are financially important to offset the huge indebtedness.

 

Thus, it is imperative that the privilege of receiving gratuity and pension appears the greatest manifestation of the victory of labour in his fight with the employer over his exploitation after several years of productive services.  Hence, pension reform became necessary as a result of the malady which ravaged Pension Schemes through the activities of the old Pension Board.  With the bad administration of Pension Schemes in Nigeria, the hope of the pensioner became bleak, as many verification exercises were embarked by old Pension Board to mock the pathetic pensioners.  This eventually escalated their agony as their labour became in vain. Many of these pensioners lost their lives as a result of these exercises which do not yield any good dividend. Indeed, today people have resorted to self-help to secure their life in retirement.  Thus fueling corruption and other vices (Fanimo et al, 2007).

 

Pension Scheme which was meant to provide for old age when one has retired from service has turned out to become a burden on the people and the government.  These Nigerian workers who have worked tirelessly for the growth and development of the country will end up passing through many hurdles to get their retirement benefits.  It should be noted that the Federal Government still owes pension obligation areas in excess of N2 trillion national pension deficits as at 12004 and 216,000 retirees from the Federal public service being owed a whopping N56 billion retirement benefit (Moddibo 2007).

 

From the foregoing, in order to reposition and refocus the Nigeria Pension Scheme to be alive to its responsibility and to address some of the problems associated with Pension Schemes in Nigeria.  The Federal Government signed into law the Pension Reform Act 2004 which introduced the New Contributory Pension Scheme and it covers employees in the public sector, the Federal Capital Territory and the private sector.

The Pension Act repeals all previous legislations regulating the administration of pension benefits in Nigeria.  The Pension Reform Act, 2004 appears to be a neoliberal piece of legislation which ideas are relevant in explaining the evolution and development of pension system in Nigeria (Aborisade, 2008).  With the virtual collapse of the African Welfare System, the new Pension Act attempts to have as its primary objective, the encouragement of savings among employees so that in retirement they are not impoverished and the establishment of a uniform set of rules regulations and standards in the public and private sectors of the Nigerian economy on matters of pensions.  Fundamentally, the Pension Reform was designed at ensuring that all employees receive their entitlements as and when due, assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.  The question remains, what is the impact of the application of the Contributory Pension scheme on employee retirement benefits and standard of living.  In the same vein, the new Contributory Pension Scheme will save the economy much of its heavy debt burdens inherited from previous schemes, facilitate adequate funding of employers pension pans, create enhanced opportunity for the citizens in all works of life, add more value to the final entitlements of workers, promote the development of capital markets, foster investment opportunities; promote national savings and, macroeconomic development (Pension Reform Act, 2004).

 

TABLE OF CONTENT
Title Page i
Certification ii
Dedication iii
Acknowledgements iv
Abstract vi
Table of Content vii
List of Tables x

CHAPTER ONE: INTRODUCTION
1.0 Background of the Study 1
1.1 Statement of Problem 5
1.2 Objectives of the Study 7
1.3 Research Questions 7
1.4 Statement Research Hypotheses 7
1.5 Scope of the Study 8
1.6 Significance of the Study 8
1.7 Definition of Terms 9
References

CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.0 Pension Scheme in Nigeria: An Overview 14
2.1 Prior Studies on Compliance With Pension Standards 16
2.1.1 Concept of Pension Plans 18
2.1.2 Objectives of Pension Plans 21
2.1.3 Determination of Retirement Cost 22
2.1.4 Pension Costs Recognition and Future Pension Liabilities 23
2.1.5 Concept of Assets 24
2.1.6 The Concepts of Profits 25
2.2 The Emergence of Pension Reform Act 2004 25
2.3 The Objectives of the New Pension Reform 27
2.4 Elements of the New Contributory Pension Scheme 27
2.5 Institutional Framework 29
2.5.1 The National Pension Commission (PenCom) 30
2.5.2 Pension Fund Administrators and Pension Fund Custodians 30
2.6 Investment of Pension Assets under the New Contributory Pension
Scheme 31
2.6.1 The Investment Guidelines 32
2.6.2 The Assets Allocation Structures by National Pension Commission
(PenCom) 33
2.6.3 Risk Management Under the New Contributory Pension Scheme 35
2.6.4 Identifiable Risks 37
2.6.5 Pension Risk Managnsion Scheme 43
2.8 The Implications of the Contributory Pension Scheme on Nigerian
Workers 45
2.9 The Challenges of the Contributory Pension Scheme in Nigeria 46
References

CHAPTER THREE: RESEARCH METHODOLOGY
3.0 Introduction 53
3.1 Research Design 53
3.2 Sample Size and Sampling Technique 54
3.3 Nature and Sources of Data Collection 54
3.4 Techniques of Data Analysis 55
References

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.0 Introduction 61
4.1 Data Presentation and Analysis of The Student T-Test Result 61
4.2 Data Presentation and Analysis of Pearson Correlation Coefficient Result 66
4.3 Data Presentation and Analysis of Regression 69
4.4 Research Findings 76
References

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.0 Summary of Findings 80
5.1 Conclusions 82
5.2 Recommendations 84
References

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LOCAL GOVERNMENT AND HEALTH CARE DELIVERY IN NIGERIA

LOCAL GOVERNMENT AND HEALTH CARE DELIVERY: A STUDY OF IKENNE LOCAL GOVERNMENT AREA (2015-2020)

ABSTRACT

This research seeks to highlights the recent activities of Local Government in health care delivery. The study reveals the connection between local government and the sustenance of primary health care in Nigeria. The study traced the historical antecedent of health service delivery from the colonial era to the present day. It identifies the major contradictions in the management of primary health care implementation. Using a local government as a case study. They include employment or shortage of qualified personal, finance, inadequate transportation, inaccessibility to communities, lack of maintenance culture, political instability, high degree of leadership turn-over. For the sustainability of health care service delivery at the grassroots, the study recommends increase financial allocation, community mobilization, improved health education, policy consistency and provision of qualified health workers. The major focus of the project is the examination of the local government primary health care delivery in Nigeria that shall be adequately examined. At the end of the project, there should be summary to finding as to how the primary health care delivery has succeeded in improving the health at the grass root, their shall be conclusion and summary. 

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Local governments are potentially effective instrument for rural transformation and delivery of social services i.e. health care delivery. This is because of local governments proximity to the people and the relative ease with which they can communicate with the local jurisdiction. The constitution guarantees the existence of system of democratically elected local councils and each State must enact legislation to establish same and provide for their structure.

            The project topic health care delivery in the local government is worth research considering the position of local government in any democratic society. This position seems to be particularly true of the democratic situation in Nigeria especially since it has been argued that the worst democratic system of government is better than the most benevolent military system of government.

            Democracy is thus a form of governments in which the highest premium is placed on the participation of the individual in government. Local government system within the three tiers of government brings governance to the citizen at the grass roots. This is mutates in agreement with the doctrine of federalism, which is enshrined in the Nigeria constitution.

            Thus, in this project I shall consider local government as an organ of third tier of government within the Nigeria federal structure outside the central government that are concern with administrative function in the grass root. This is to bring out clearly the essential features of local governments as competent institution in the discharge functions constitutionally assigned in their own right.

            Health care delivery is a very essential function which the Local Government is expected to give the people at the grass root and which delivery ought to be adequate, efficient and consistent. The Local Government is very suitable for this function considering its proximity in its closeness to the people. The project work hope to contribute to the existing literature as the topic by exploring the developments in the most recent times of the government desire to tackle the menace of variety of sickness prevalent in our society.

            The study of health care delivery in the Local Government therefore is based on the constitutional involvement of basic necessities to the populace particularly with regard to health.

1.2 Statement of the Problem

Over 20years after the introduction and implementation of the primary health care system in Nigeria, the country is yet to witness the much desired impact of promoting and protecting health, preventing diseases and reducing mortality, morbidity, and disabilities associated with illness (Christandolus, 2012).There is a high prevalence of preventable and curable diseases in rural Nigeria despite the fact that the Nigerian government has adopted the primary health model as a strategy for providing efficient, cost effective and quality health care service as close to the community as possible. In 2014, demographers reported the life expectancy at birth of 53.66years for females and 51.63years for males. The infant mortality and maternal mortality rates according to the UN-inter-agency group for child mortality estimation are; 82% in 2010, 79% in 2011, 77% in 2012, 74% in 2013, 72.97% per 1000 live births in a given year which is one of the highest in the world (Health Survey, (2014). Nigeria has the 10th highest maternal mortality rate ratio (MMR) in the world according to UN estimates with 630 women dying per 100,000 birth, a higher proportion than in Afghanistan and Haiti, and only slightly lower than in Liberia or Sudan (Obasi,2013). An estimated 40,000 women die each year and another 1million to 1.6 million suffer from serious disabilities from pregnancy and birth related causes annually (WHO, UNICEF and World Bank, 2012).

The delivery of health care services in rural areas has continued to be a major problem as evidenced by high level of morbidity and mortality rates.  Over 65% of Nigerian people who live in rural areas are most neglected and deprived of modern health care services as well as other infrastructural necessities that are essential to maintenance and promotion of good health (Omotosho, 2010).

According to the Ogun state strategic health development plan 2010-2015 (2010), although the specific health indices of the state were not readily available, it is unacceptably high as were the health indices of the rest of the country. The health of the state is characterized by inequitable distribution of resources, decaying infrastructure, poor management of human resources for health, weak referral systems, poor coverage with high impact cost-effective interventions, lack of effective integration and poor supportive supervision. Despite decentralization and integration of the health system and considerable investment in the health sector over the years, available evidence suggests that health services throughout the state are delivered through a weak health system. Consequently, it is unable to provide basic cost-effective services for the prevention and management of common health problems especially at the LGA and ward levels of which Ikenne  local government is one of them.

1.3 Aims and objectives

            This project work intends to dwell into the assessment of Local Government as a legal entity in the democratic government of Nigeria, this is with the view to determine the extent and limit to which it is duty bound to provides proper health care delivery to the citizen within its constitutional limitation.

Thus the specific aims of the project include:

  1. To examine Local Government as an aims of government in Nigeria commencing with:
  2. To highlight the constitutionally vested duties, responsibilities, and obligations of Local Government administration.
  3. To highlight the structural arrangement of Local Government including its revenue generation and means. This is important considering the enormous fund required to executive health care delivery to the populace.
  4. To examine and highlight Local Government powers and duties in the provision of primary health care delivery in Nigeria, and the legal basis.
  5. To highlight by way of conclusion, the summary of all discourse provide some suggestions to further improve the Local Government’s ability in providing health care delivery to local people.

1.4 The scope of study

            Proper Local Government administration in the Nigeria political society is very important in the achievement of good governance, sustenance of democracy and equal distribution of democratic dividend to Nigerians.

          It is instructive to emphasis the fact without scintilla of doubt Local Government is closer to the people at the grass root and their participation in democratic governance cannot be taken for granted. Thus, the project work is limited in scope to the examination at the health care delivery as one of the many responsibilities constitutionally vested on Local Government in Nigeria. The project will critically examine the several duties of Local Government from historical origin, legal basis, and most importantly the provision of health care to the people at the grass root.

1.5Research methodology

            The approach intended to be adopted in this project is to take into consideration primary and secondary sources. Reliance shall be placed on Textbooks, articles in journals and internet and law reports.

1.6 Literature review

            It is instructive to note hat a lot of literatures abounds on the Local Government in Nigeria evolution, functions, and structure, the health care delivery within Local Government inclusive several of these write up shall be consulted in the case of writings the project.

Though no mention is made about, the health care function of Local Government. She concluded that for Local Governments to act as agents of development at the grass roots, their share of total public expenditure should be substantially increased.

            Kunle Awotokun, examines Local Government in Nigeria and its reforms since 1976 as a bedrock socio economic and political development. This paper tried to expose the contradictions and how the 1999 constitution undermined peoples aspirations as well as the efficacy of grass roots governance.

            Ola  (1984) examines the historical evolution, functions and administration of Local Government in Nigeria. It gives an assessment of Local Government functions within the three tiers of governance  in the Federal Republic of Nigeria.

            Nwabueze B.O.8 Federalism in Nigeria under the Presidential Constitution look at the Nigeria Federal Structure including the Local Government within the constitution of Nigeria.

            Alex Gboyega(1991), protecting Local Governments from Arbitrary State and federal interference. What prospects from the 1990? Is also very good piece of literature that examines the various developmental stages and reforms of Local Government in Nigeria. It examines the various interference in the autonomous existence of Local Government particularly during the military area.

1.7       Conclusion

Local Government and health care delivery receives considerable attention from both the Federal and State Government in order for Local Government to discharge their functions effectively. Considering the importance of health in our society, the examination of the delivery to the grass root by the Local Government is thus very important. This shall be thorough examined in the preceding chapters.

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