• Tuesday, October 03, 2023
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ICPC probes billion-naira salary fraud syndicate in federal civil service

Senate passes amended ICPC Act, provides 2yr-jail for false petitioners

The Independent Corrupt Practices and Other Related Offences Commission (ICPC) is investigating what is now being unraveled as a massive fraud syndicate that specialises in compromising the Integrated Personnel and Payroll Information System (IPPIS) and inflating salaries of collaborators who work in the federal government’s Ministries, Departments and Agencies (MDAs).

The fraud has possibly gone on for years and could run into billions of naira of losses to the government, according to some concerned civil servants who are also familiar with the development.

The fraud, which the ICPC officials are still trying to crack, involves a syndicate made up of staff in the IPPIS and Accounts units of some of the MDAs headed most times by high-level officers, who connive with some officials in the Office of the Accountant General of the Federation to inflate their salaries by manipulating the IPPIS.

BusinessDay was told that the act has been perfected such that the collaborators (officers at the IPPIS and Account units of these agencies and the inflated salary beneficiaries) who mostly know themselves share the proceeds at the end of the day.

Some of the civil servants suspended and being investigated are from the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), OAGF and another agency, which BusinessDay now understands is the Petroleum Training Institute (PTI) where the incident broke.

A source also mentioned that the Raw Materials Research and Development Council (RMRDC), another agency of the government, is also being investigated, among others.

The matter came to light when some civil servants in some agencies connived with some officials in the IPPIS unit of the OAGF to inflate their salaries by manipulating the IPPIS, which the government had assured at the time was fraud-proof.

An assistant director at the IPPIS unit of the RMAFC is reportedly fingered in the racket and is one of those currently under probe.

It was reported that a level 7 officer who earns a salary of about N60,000 was paid over N400,000, which is the salary package of a director.

Another colleague on same salary scale had seen the payslip of the colleague with a net pay of over N400,000, asked questions and then raised alarm, which eventually resulted to a committee being set up to investigate the matter.

The OAGF had at the time put out a statement acknowledging there was a reported breach of the IPPIS third party payment protocol at an institute outside Abuja, but said it had no evidence of “salary padding” but was being investigated.

The treasury house, however, confirmed that a staff suspected to be connected with the breach was suspended to allow for thorough investigation, as it further assured that all necessary steps were being taken to strengthen the controls around the IPPIS payment platform. It also assured that an independent forensic audit of the entire payroll system was underway to ascertain if the reported breach is isolated or widespread.

But BusinessDay investigation now shows the situation could be worse than is being reported, with many more government workers and agencies likely involved.

“There is a fraud syndicate that is perpetrated by agencies and what they do is to connive with the accounts department in those agencies which of course do not have access to pay salaries but what they do is to feed the IPPIS unit at the OAGF with the information to inflate the salaries. So there’s a connivance between those officers at the IPPIS and account units in those agencies and some people at the IPPIS unit at the OAGF,” a source who does not want to be mentioned confirmed.

According to him, “the syndicate is bursted, and investigation is ongoing. This will unravel the magnitude of what has happened and the government agencies are cooperating with the investigating agencies”.

“The security agencies are scrutinising the payslips, interrogating the officers, checking documents and comparing notes. If the investigators are not seeing something, they will continue to print and scrutinise payslips. A lot of people have been going to ICPC for questioning,” he added.

He also confirmed that the person initially suspended and taken to the ICPC was from IPPIS unit of the OAGF but works for the PTI, and that he is the one leading the investigators to the collaborators.

He said: “I think the investigators have identified those benefitting staff they are using, like at the RMFAC. And what happens is, for instance, a staff you are supposed to pay N30 and you are now paying N60, how come?

“Already, that syndicate must have been established by the investigators and by the time they finish, they will be able to come up with the amount and people involved, and the issue will now be the exact punitive measures to take, whether to prosecute them or mete out disciplinary actions, but that will be after investigation.”

Asked how the IPPIS can possibly be compromised in such a manner, he told BusinessDay that the problem mostly is that the system is being run by employees who alter and input the data which is now being reworked to see the possibility of reducing human element in the system.

He insisted that any staff members that have been redeployed or even retired but was in the office at the time of such incident will be recalled and questioned.

The source also informed that salary scam in Nigeria’s civil service space, which is consistently being perfected, did not start today, but that it has taken a higher and more dangerous dimension.

“What they were doing before perfecting to this latest approach was that they will drop on you while just sitting on your own. You know your salary is N120,000, but you’ll now get an alert of N650,000. At this time, nobody has spoken to you and you will be alarmed. Then somebody calls to explain to you what has happened and how the balance will be shared. You may be asked to take say half of the money and send the balance into an account you’ll be given. That’s what they were doing before they perfected the act of consenting,” he explained.

He said that most of the time, some people refused, raised alarm and some even paid the money back to the treasury.

“But do you know that the next time you refuse to cooperate with them, they will create an artificial error so that you will not see your salary the next time and when you try to find out what happened and resolve the issue, they will sabotage and frustrate you for months before your salary is released.”

He also spoke of some instances where when civil servants are redeployed or posted to other agencies or even leave the system, the perpetrators will, rather than deactivate the officers’ salary, adjust the payroll platform, change the details, super-impose another account and picture to enable them to continue to collect the salary, thereby defrauding the system.

“This one is an advanced pattern of the fraud; before now, they connive with beneficiaries and now they do it with high impunity because they go from agency to agency to perpetrate the act.”

When contacted for comment, Bawa Mokwa, director, press and public relations at the OAGF, indicated that a lot more agencies are now being investigated but said he did not have much information on possible outcomes.

He also said at the time the initial statement was sent out, the OAGF did not know the magnitude of the alleged fraud.

“At the time we released the earlier statement, we didn’t know the magnitude and that there was a syndicate which is now being investigated and I do not have the details,” he told BusinessDay.

He said: “Of course, the matter is now beyond the earlier statement we issued because at the point, we were not well aware. As I am speaking with you, even this afternoon, there are security officials in certain places within the building investigating the matter.

“The investigation is seriously on and I believe they making discoveries in terms of whether other agencies are involved. Some people are being questioned and have identified collaborators and they are facing probe. The level of it will be determined at the end of the investigation.”

On what is being done to strengthen controls around the IPPIS, Mokwa said that on account of ongoing investigations, it is now evident that the human influence is a big challenge, but that so much is being done, in terms of manpower audit, installation of new technologies, strengthening the audit systems, while also focusing on how to check the influence of the human element in the course and possible prosecution of those found to have been involved.

“The human element is more dangerous than the machine because it is what the machine gets that it will process. The issue is not that the technology did not work, but the human angle has compromised the system,” he said in a chat.

The federal government in October 2006 introduced the IPPIS as one of its reform programmes to improve the effectiveness and efficiency in the storage of personnel records and administration of monthly payroll in such a way to enhance confidence in staff emolument costs and budgeting.

The goal of IPPIS as a payment system was to enroll into the platform, all the federal government’s MDAs that draw personnel cost fund from the consolidated revenue fund.

Since the inception of the IPPIS project in April 2007, officials says that the department has saved the federal government billions of naira by eliminating thousands of ghost workers.

At the launch, government officials had said the system would be highly protected in a way that rules out possible manipulation.

However, the development, many say, leaves a distaste, especially at a time of low revenues which has seen government struggle to fund development needs.

BusinessDay could not reach the ICPC to get updates of the investigation.

However, those who spoke to BusinessDay advocated that culprits in this fraud, which has cost so much leakage in the system, deserve adequate consequences, in terms of dismissal, prosecution and also recovery of all that they have benefitted to serve as a deterrent.

One of the sources said the development was a pointer to the level of wrath, leakages and negligence in government, especially at a time of huge fiscal constraints.

He said: “Nigeria’s government is borrowing to pay salaries, part of the salaries are being stolen by the same government agencies. This suggests that the problem may not be entirely with the vessel but the pilot and the crew steering the vessel.

“The simple truth is that if we retain Nigeria’s current political system/structures, the resources so critically necessary for development will continue to elude us for the foreseeable future.

“We cannot afford more than six or at most 12 states. We cannot afford the numbers in our various legislative chambers and executive councils (probably not more than a quarter of the current numbers).

“We cannot afford the multiplicity of MDAs. We cannot afford the current uniform system of local government. Having tried both the parliamentary and executive systems of governance, I will opt for the former, which is cheaper and more accountable.”

Advocating for a competitive fiscal federalism, the source further explained that the “current structure is not working for the generality of Nigerians, but then if we are looking for change to come from the few for whom it is working, it will be a long wait.”

“This is the major challenge in our country. Public officers entrusted with the management of public resources are being greedy and selfish. If we cannot trust the OAGF to manage a simple payroll operation without compromising it, where do we go from here? This is ridiculous. Who borrows from a bankrupt bank/entity?” he questioned.

He raised further concerns that “Nigeria is just printing money to pay for recurrent expenditures of an obese and over-bloated government system” and called it “a case of privileged few having a bazaar while the masses continue in abject poverty”.

“This is sad indeed. I think we may be running towards the abyss. What we think may not happen could happen,” he added.