Three lists, one payday
Payday in a ministry looks like the simplest accounting event of the month. The finance system receives one journal, or a handful of lines: gross pay, the deductions, the net that went out to the banks. It is the largest recurring expenditure in the budget, and it arrives in the ledger as the least informative entry of the month, a few totals with nothing behind them.
Everything that made those totals happened somewhere else. The establishment register says which posts exist and at what grade. Appointment letters put people into the posts. Increments, promotions, overtime and allowances move each person’s number, and separation letters (retirement, resignation, dismissal, death) are supposed to stop it. Every one of these is a decision with a lasting financial consequence, and every one of them is taken, recorded and filed in an office that never posts a journal.
Readers of the last two pieces will recognise the shape. Commitment control checks the money and cannot see the procedure, and the contract commits at signature while the ledger hears about it at invoice. Payroll is the same pattern, only bigger and on a monthly cycle. An appointment is a commitment that runs for years, it passes through no commitment control I have ever seen, and the ledger meets it in arrears, twelve times a year, as an accomplished fact.
The scale is worth pausing on. In smaller administrations the wage bill is often the biggest single line in the recurrent budget, sometimes approaching half of it (my rough sense from the places I have worked, and the published numbers point the same way). A procurement above a threshold gets a committee, an evaluation and a contract file. An appointment, which over its life can easily commit more money than the contract, arrives with a letter.
Ghost workers are the famous failure here, and headcount audits do find them. In my experience the everyday version is quieter and adds up to more. The acting allowance that outlived the acting arrangement by two years. The officer who retires in March and is still on the payroll run in November, because the letter is travelling by hand between three buildings (a semi-regular occurrence, and usually not a scandal, just a slow letter). Nobody designed any of this, and no single item is large.
The reason it stays this way is not carelessness, it is the division of labour. The payroll office has one job, to pay on time, and payday is the one deadline a government never misses, because missing it is the failure everybody notices the same afternoon. The establishment office keeps its register and is right by its own rules. Attendance belongs to the line ministries. Reconciling the three lists is nobody’s job in particular, so it gets done as a census every few years instead of as a routine every month, and a census fixes the list only for the month it was taken. The errors start accumulating again with the next appointment letter.
What I would actually do about it is not clever, which I mean as a recommendation. Treat appointment and separation letters as financial events, with a defined route to the payroll file and a deadline measured in days, rather than as personnel correspondence that finance eventually hears about. It is the same fix as last week’s contract, and that is really the point: the award, the variation, the appointment and the retirement are all financial events that happen to be held by offices that do not think in journals.
Give every allowance and every acting arrangement an expiry date. Continuing to pay should require a decision by someone who holds the authority, not the absence of one. In my experience allowances behave the way contract variations do: each one is small, each is approved in isolation (or simply never stopped), and the total is discovered later, by someone reconstructing how the wage bill grew.
And reconcile the three lists on a schedule a real office can keep. One ministry a month, every month, beats an all-of-government census that takes a year, produces a report, and is out of date before it is printed. (I have more faith in a boring monthly routine than in a heroic exercise, in payroll as in most other things.)
A single system for HR and payroll helps, and integration is usually pitched as the answer. The difficulty, as with procurement and finance last week, is organisational rather than technical: different offices, different reporting lines, a baton passed in the open. Every officer in the service reads their own payslip line by line, which is the one internal control that has never needed strengthening. I have not yet met the equivalent reader for the run as a whole, and the run is where the money is.