By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Government personnel files “cannot be located 15 per cent of the time”, another report cataloguing further waste and inefficiency that ultimately costs the Bahamian taxpayer.

The study, by the Deloitte and Touche accounting firm, which focuses on the Government’s human resources and payroll systems, details how its internal systems are open to abuse due to a combination of “overreliance” on paper and manual processes, and “ineffective controls”.

Among the problems this creates, which were identified by Deloitte, are:

• “Numerous cases” where civil service supervisors did not realise employees were off sick, leading in some cases to persons being paid their regular salary for more than one year.

Human resources “often times” was not notified when an employee was on sick leave, even when their annual 20-day allowance was exhausted.

• Government employees do not have to sign in and out for lunch, even though they are paid for these hours.

Deloitte identified cases when supervisors signed off on an employee’s full attendance, even when human resources could confirm they were not at work that day.

This means some public sector workers are being paid for non-productivity, costing the Bahamian taxpayer while hurting the quality and provision of services to the public.

• Civil servants have been ‘banking’, or accruing, significant leave/vacation time.

This forced the Government to tell those who had built up more than 50 weeks’ worth of leave to take it.

And, more alarmingly, the Government has to pay out a ‘lump sum’ for any accrued vacation once a civil servant reached the public sector retirement age of 65.

“This is a big cost to the Government,” Deloitte said with some understatement.

“There may [also] be a delay before the person’s first pension payout if they are under 65 and have accrued leave.

“If all the leave isn’t taken before 65, it is paid out in pension benefits as a lump sum payment as part of their gratuity. This is a big cost to the Government.”

• The Christie administration has committed to public sector pension reform, which is badly needed judging by the Deloitte & Touche report.

It identifies the administration of pensions, and their benefits, as a major problem area, warning that “no one ‘owns this process’ in terms of a Ministry, or department, taking charge of it.

“There is no trigger to notify that a person is 65 and must stop working,” the report said. “People can still be working and paid if they aren’t notified - a person in Education who was 70 and still working.”

The Deloitte report, which was completed in mid-2012, was only made public last week by the Inter-American Development Bank (IDB), published a batch of documents relating to a proposed $33 million project to overhaul the Government’s financial management and public procurement processes.

The fact that the IDB has chosen to publish the Deloitte & Touche report now indicates that the findings are still relevant, and that the Government has yet to fully act on its recommendations.

The accounting firm found that personnel information was “stored in multiple paper files” spread between different ministries and the Department of Public Service.

This, Deloitte and Touche noted, created data integrity and audit/compliance issues, while making human resources processes within the Government “expensive”.

Similar problems, including the potential for security breaches, also resulted from ineffective controls, which allow access to the Government’s JD Edwards (JDE) payroll system “based on an individual’s request”.

And the reliance on manual processes, Deloitte & Touche warned, also created the risk of “overpayment/unrecoverable funds” from inaccurate calculations of due sums.

“Human resources staff do not use JDE to enter human resources data,” the accounting firm said. “Payroll uses the system as a processing engine for salaried, monthly paid employees.

“Overall, resources lack a holistic understanding of what JDE can be used to do across human resources and payroll, and how to use it.”

Deloitte & Touche said there needed to be an audit of the “countless” codes used to process salary deductions for civil service employees, with deductions allowed to consume up to 75 per cent of their pay.

“Ministry payroll does not have the capability to pull reports to conduct a check of employees’ gross pay/ensure all changes are correct before Treasury runs the pre-pay run. This means pay data can go to the Treasury with multiple errors,” Deloitte & Touche said.

“Human resources may be informed long after an employee leaves the organisation. This means payroll has not been notified and the employee continues to be paid.”

The report also found there was “no cap on employee leave accruals” within the civil service, and that persons “find ways to circumvent” the process for obtaining paid study leave while still employed by the Government.