Bahamas’ public service payroll system leaks millions in overpayments

The Bahamian government said that the country is annually spending an estimated US$120 million in excess due to inaccuracies within the public service payroll system, according to Financial Secretary Simon Wilson.

Wilson shared that there are instances of employees who have been receiving a paycheck for decades, even though there is no record of their service or productivity.

“Our payroll accounts for 60 per cent of the government's budget and if we have an error rate of 10 per cent, that's roughly US$120 million. Those small errors, overpayments or underpayments and so forth, if you minimize those errors, you can have tremendous savings from the government,” he told reporters following the opening ceremony where finance officers are attending a training workshop introducing the Oracle ERP Fusion system

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The new system promises to track all employees, aiming to prevent dubious salary cases.

“Every employee is going to be captured in this system. That is for us critical because we assume, sometimes wrongly, that we know of every employee, that we know the details of every employee. But every year, we find instances where we do not know an employee existed or was being paid or has been paid by the government or the ministry.”

He painted a clear picture of the current system’s flaws, citing incidents of phantom employees. Wilson pointed out instances in Andros, where people were on the Ministry of Finance’s payroll for four decades, without any recorded service. He was left speechless when they showed up to claim their retirement benefits, after confirming the payment history dating back to 1974.

According to Wilson, situations like these are not rare, and the lack of records often leads to a tedious process of regularization. He recalled a previous unsuccessful attempt to modernize the accounting and financial management system due to a lack of staff engagement.

Wilson stressed the importance of staff buy-in, saying, “We cannot succeed unless there is buy-in from finance and accounts officers. We've done this before, with JD Edwards, which we purchased at great cost and great fanfare and because there was not enough buy-in, what we were left with was simply a payroll system.”

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He cautioned against repeating the past and pointed towards a challenging few months ahead as staff familiarize themselves with the new system before its launch early next year.

Manual work, especially regarding salary reassessments and pension payments, is another burden on government services that Wilson hopes the new system will ease.

Despite having large accounts departments, he lamented the lack of trained officers and the resultant strain on manpower.