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Corruption in the Civil Service. A Study of Salary Fraud in Bayelsa State, Nigeria

Forschungsarbeit 2014 26 Seiten

Politik - Internationale Politik - Region: Afrika

Leseprobe

Contents

ABSTRACT

Introduction

Statement of the Problem

Objectives of the Study

Significance of the Study

Review of Related Literature and Theoretical Framework

Factors that Contribute to Salary Fraud in Bayelsa State Civil Service

The Role of Economic and Financial Crime Commission (EFCC) in Prosecution of Culprits

Theoretical Framework

Methodology

DATA PRESENTATION

Discussion of Findings

Conclusion

Recommendations

REFERENCES

ABSTRACT

This study investigates factors responsible for salary fraud in Bayelsa State Civil Service, Nigeria. The study adopted ex-post-facto research design. Data were gathered from secondary sources. Robert K. Merton’s anomie theory was adopted as the study’s theoretical framework. The study found that the crime of salary fraud persists in Bayelsa State civil service despite measures taken by government to stem it. It also discovered that the challenges such as lack of adequate funds and corruption confronting the Economic and Financial Crime Commission (EFCC) are responsible for the futile prosecution of culprits. Based on these discoveries, the study recommends amongst others, that Bayelsa State Government should train Forensic accountants to man all her Ministries, Departments, and Agencies as a proactive measure to check fraud.

Introduction

Section 206 of the Constitution of Federal Republic of Nigeria 1999 (as amended) provides for the establishment of State Civil Service. The Civil Service provides the machinery and acts as a springboard for the development, consolidation of programmes and policies of the government of the day. However, these realities are far from being achieved in Bayelsa State Civil Service due to widespread corruption. In Bayelsa State Civil Service, it has been observed that some unscrupulous civil servants put in names of non-existing workers (ghost-names) in the pay roll of government for pecuniary gains. This has over the years accounted for loss of billions of naira due to over bloated recurrent expenditure at the expense of capital expenditure and significantly weakened the State’s capacity to function optimally. Available data reveal that the practice is common in the state particularly at the Local Government level, State Ministries, Departments, and Agencies (MDAs). In each of these levels, as observed, names of non-existing workers are stuffed up the payroll as ghosts that are paid salaries for doing nothing, yet the qualified youths roam the streets of Bayelsa State in desperate search for white-collar jobs.

The syndicates have raised the monthly wage bill to a staggeringN5.46 billion for civil servants alone, a trend that has gravely undermined the capacity of the state government to carry out its developmental functions (Dickson, 2013). This is because the salary fraud appears to have blocked channels to socio-economic development of the state.

In Bayelsa state, between 2009 and 2013, successive governments and administrations have conducted biometrics screening and verifications, yet the practice has still not reduced or stopped (Utebor, 2014). Financial experts argued that there is no financial fraud committed in government without the knowledge of civil servants. They create the loopholes for monies to leave the treasury and sometimes devise dubious means to earn above their monthly income (Odiegwu 2012). According to Odiegwu, people are however worried that the rot in the public service has continued despite the basket of promises by successive governments to reform the system. Observers believe that political office holders benefitting from the decay have shown lack of the required will to transform the service and to get rid of corrupt practices. Modugu (2013) asserts that the war against fraud and financial crimes in Nigeria will not be won because of the following factors: syndicates and collaborators are organized and are within the system, as well as failure by the anti-graft agencies to smash the gang, arrest perpetrators and prosecute culprits to serve as a deterrent to others. This poses serious concern to many observers of this problem, knowing full well that if the problem is allowed to continue, the socio-economic conditions of the state would not improve and the citizens will continue to wallow in poverty while a few feed fat on the financial resources of the state. It is on this basis that this study was undertaken.

Statement of the Problem

In the past six (6) years, Bayelsa state has recorded an increase in its wage bill without a corresponding increase of the workforce. This has resulted in the State’s over bloated wage bill of civil servants alone. This situation aroused government curiosity to ascertain the actual workforce through various exercises such as biometric capturing, personnel verification and the use of table payment. Evidence from these exercises show that about 21% of the workers whose names appear on the pay roll are fictitious. This is a fraudulent act and constitutes a criminal offence going by the law.

Regrettably, no single culprit has been prosecuted after these exercises. It appears therefore, that the state government is closing eyes on this issue. Alternatively, perhaps the perpetrators of this act are those within the corridor of power. It is also not clear whether the anti-graft agencies are not aware of this fraud and if they are, why are they not prosecuting the offenders? What is actually clear is that, various verification panels on salary fraud have affirmed in concrete terms the existence of fraud in the state. Therefore, efforts need to be made to stop this ugly incidence and this study is one such effort.

Although, several studies have been conducted on corruption and other financial crimes in Nigeria, far less study have been carried out on salary fraud (Olaleye, 2008; Babalobi, 2008). Similarly, available literature reveals no study on corruption in Bayelsa State. It was in view of the foregoing, that this study was undertaken. The study seeks to investigate salary fraud in Bayelsa State Civil Service.

Objectives of the Study

The following are the objectives of this study:

i. To examine the factors that contribute to salary fraud in Bayelsa state;
ii. To find out the role of Economic and Financial Crime Commission (EFCC) in prosecuting salary fraud culprits;
iii. To assess the effects of salary fraud on the economy of the state; and
iv. To make recommendations on ways by which salary fraud can be addressed.

Significance of the Study

This study on salary fraud in Bayelsa State Civil Service has several contributions to make in the Nigerian society. It does not only seek to curb corruption in our society, it is also an attempt to give Nigeria and Nigerians image abroad. In recognition of these, the study will be of great significance to security agencies, government and non-governmental organizations (NGO) and members of the public. On the side of government and security agencies, especially the police, it will help provide necessary information on corruption in the Nigeria Civil Service, its types and ways of tackling the problem. It will as well help to bring to the attention of appropriate authorities, information on how state funds are stolen by organized criminals within the civil service organization, and agitate for proper policies to be made and implemented in order to curb the problem.

This work will add to the literature in this area of study for future researchers who may find it useful as reference material. It will also add new knowledge to the existing body of knowledge. Findings from the work will be significant to sociologists, criminologists, economists, legal practitioners, political scientists, as well as crime monitoring and management experts.

Review of Related Literature and Theoretical Framework

In this section of the study, the researcher presents a review of related literature that covers factors that contribute to salary fraud in Bayelsa State, the role of the anti-graft agency in prosecuting salary fraud culprits and the effect of salary fraud on the economy of Bayelsa State.

Factors that Contribute to Salary Fraud in Bayelsa State Civil Service

Like many other forms of crime in Nigeria, salary fraud is one form of corruption that has dominated every level of government. It has been observed, that as a form of corruption, it exists because the culture of the environment encourages material success (Babalobi, 2008). It represents effort to secure wealth or power at public expenses by public servants. It allows for a misuse of public power for private benefits (Lipset and Lenz, 2000). Salary fraud flourishes because of the inordinate desire of the syndicates to siphon public funds (that could have been used to provide infrastructure) to private accounts. It is the shortest means by which perpetrators can measure up with social demands of materialism. As observed by Jaja (2012), obsession with materialism, compulsion for a shortcut to affluence, glorification and approbation of ill-gotten wealth among others account for the high rate of corruption in Nigeria. The unfortunate parameter of good life in Nigeria is ostentatious living and affluence (Olaleye, 2008). At this, the insatiable quest for wealth by whatever possible means contributes to fraud in government establishments.

According to Babalobi (2008), corruption in the public service is encouraged by weak government institutions, poor pay incentive, lack of openness and transparency. In this view, the salary fraud seemingly represents a means to making up with the poor pay incentives. The fraudster’s syndicates compensate themselves by this unwholesome act. In Nigeria today, there is a problem of inequality in the distribution of wealth where only a few privileged members of society amass the wealth, leaving a greater percentage to scramble for the crumbs. As such, some civil servants turn to salary fraud in attempts to achieve the objective of a better life. Over the years, previous and current governments at all levels have unconsciously encouraged fraud because of the unwillingness of government to arrest and prosecute the syndicates involved in corrupt practices (Ukoko, 2014).

This fraudulent act allows corrupt civil servants to fill the wage bill with non-salary items and fictitious names only to go behind and collect the proceeds. Thus, it has become impossible to prosecute the perpetrators who are players themselves in the episodes. This worrisome situation has made Ukoko (2014) to inquire why government is only able to discover salary fraud in its civil service but unable to identify the persons behind the fraud; and why does the problem still persist despite all the past discoveries made on the crime? Even though it is as old as Nigeria, none of the brains behind the problem has ever been prosecuted. No records exist about any person in the civil service that has been sacked on the grounds of involvement in this corrupt practice.

It has been observed that collaboration remains another reason why false wage earners will continue to inflate the recurrent expenditure budget of government. Ukoko (2014) observed that internal auditors and the auditing firms assigned to audit the government offices are beneficiaries of the fraud. The auditing firm cannot claim to have audited without discovering those who have cooked-up the books. According to Ukoko, the auditing processes represent another means of stealing from the government. Obinna (2013) noted that, there is collaboration within the system that enhances the operation of salary fraud. For example, it is somebody, a top official of government that must approve wage payment. Another official must have audited the pay vouchers for another official to pay the salary. The collaboration appears to have paralyzed the possibility of apprehending the culprits and encouraged the fraud. According to Obinna (2013), the disturbing problem of salary fraud in the Nigerian Civil Service is a difficult one because from all indications, it has features of organized crime, with insiders in government agencies as arrowheads. The insiders’ influence as further observed by Obinna tends to block possible apprehension and prosecution of offenders. It has become difficult for the government to get to the root of the matter, which is fuelled by official corruption.

In Bayelsa State, until recently, attempts to smash the syndicates behind the fraud have yielded very little result (Odiegwu, 2012). As at July 2009, the biometrics exercise conducted by the state government reveals that the payroll is stuffed with many channels through which the syndicate used in defrauding the government. Precisely, the government announced that top members of the state executive council and civil servants in the state were under security surveillance over their involvement in the fake employment racket and over bloated civil service (Okhomina, 2009). According to Okhomina, the surveillance of the top government official over the fraud resulted in continued threat to officers of the bureau in charge of the staff verification exercise in the state with pressure to stop the process. This explains that salary fraud is identified as a crime of the privileged few and it flourishes because of collaboration, fear, and insider syndicates. The first exercise in personnel verification chaired by Dr. Bolare Nwakeafor (then Secretary to Bayelsa State Government) was politicized by the inside syndicates, and eventually, the programme was aborted. Consequently, on the 18th of May 2009 arising from an attempt by Government to streamline salaries and payment of wages in the state, Government established the Due Process & e-Governance Bureau and inaugurated the biometrics committee chaired by Mr.Von Kemedy (See 2009 Biometrics report in appendix 4 for more details). According to Mr. Kemedy, who served as the director-general of the bureau, the claim that Bayelsa State has a total workforce of 54,330 with a wage bill of 2.6 billion is hard to believe, hence the verification will be thorough (Oyadongha, 2010). The report had it that no fewer than 11,696 fictitious names were discovered during the capturing exercise with the state government said to be losing 293.7 million naira monthly and about 3.524 billion annually as salaries to fraudsters.

Faustinus (2013) observed that in most parts of the state capital, beautiful and luxury buildings, hotels, and wine bars are owned by civil servants including cashiers and accountants. Some ride costlier cars, living beyond their means. Yet the Economic and Financial Crime Commission (EFCC) failed to exercise its power as spelt out in Part 2(b) of the EFCC Act, which stipulates that the commission has special power to cause investigation to be conducted into the properties of any person if it appears to the commission that the lifestyle and extent of the properties are not justified by his source of income. Danfulani (2013) argued that before the advent of e-government in Nigeria, understanding the real workforce in the three tiers of government was a mystery and hard like rocket science. Personnel in administration in league with their colleagues in finance inflate the payment voucher with fictitious names running into hundreds of thousands on the payroll for pecuniary benefits. Perpetrators of the crime created a system where the majority of staff were not paid in the banks using workers functioning accounts, rather, they paid cash using their ministries cashiers. According to Danfulani, the amount oozing through this channel into the pockets of these fraudsters surpassed the real wage bill of government, and led to inability of the government to perform other statutory functions. He further stated that successive governments battled with this menace through setting up special staff committees and what they called table payment and physical appearance of staff without getting to the root of the matter. This was because the manual operational standard of the civil service machinery aided the fraud. As further observed by Danfulani, more than ever before, the use of Integrated Payroll and Personal Information System (IPPIS) by the federal government has significantly reduced the fraud. The e-governance and transaction in e-mail, e-verification of payment and e-transfers, among others, have eliminated corrupt practices bothering on the following of files and cheques from one desk to another.

The digitalized machinery of government has been identified as efforts in the right direction. However, Faustinus (2013) has observed that salary fraud has also gone digital. Most of the fictitious names today operate functional bank accounts that monies in the form of salaries, allowances and other entitlements are paid into. The perpetrators as noted operate as a group organized around the administration and finance departments and the banks. Precisely, the e-payment system tends to make it easy but hard for outsiders to understand. According to Faustinus, the problem of fraud has a foundation in the culture of corruption that Nigeria is noted for. The corrupt tendencies and capabilities among Nigerians civil servants allow for the creation, and sustainability of organized crime syndicates in the civil service. The organized groups who operate as mafia enhance the persistence of salary fraud. Olaleye (2008) noted that good intentions of government in trying to reduce the recurrent expenditure often produce no result because of human dishonesty and social recognition of the wealthy no matter the source of the wealth. The social recognition, ethnicity, and religious affiliation even appear to cripple the hands of the law in dealing with the culprits. The ethno-religious consciousness and social recognition often down play the political will of government to execute the war against salary fraud not minding whose ox is gored. As observed by Danfulani (2013), the way out is that those caught in the act must be made to face the full wrath of the law which will serve as a deterrent to others aspiring to steal from the public treasury or abet looters through subverting the system for personal economic aggrandizement. According to Danfulani, the judiciary in this war must live up to its billing by shedding of technicalities that often set criminals free due to some simple procedure not observed by the prosecuting teams. If social recognition, ethno-religious and political affiliation and legal technicality that often cripple the law are not downplayed, the war against corruption will continue to make no sense.

Faustinus (2013) observed that salary fraud is as old as the civil service establishment in Nigeria. The trend has occupied the minds of policy planners at several tons of millions of taxpayers fund are spent by government hunting fictitious names that are growing in number and notoriety. Despite claim efforts to flush out these names, the scenario consistently repeats itself. Ige (2013) posits that the International Monetary Fund as a matter of concern gave Nigerian Government until the end of December 2000 to root out fictitious names on the payroll of the Federal Civil Service for the government to enjoy $1billion loan sought by President Obasanjo led government. Surprisingly, government could not subdue the fraud. Ige noted that even in this current administration as much 100 billion naira had been drawn as salaries and other emoluments by fraudsters in the federal civil service, the culprits who have been signing and issuing cheques to the fictitious workers are yet to be apprehended and punished according to the provisions of the law, 54 years after independence.

According to Olaleye, there is growing fear that it has become a kind of industrial complex or, the racket must have gained the approval of the government. Otherwise, the culprits and beneficiaries would have been fished out. After all, who has been signing the cheques? Who are the people withdrawing from these accounts? Are there salary accounts in the banks that do not have pictures of their owners? Has there been connivance with bank workers to perpetrate this fraud? Are there officials who prefer to look the other way rather than apprehend those behind the salary fraud? If the hands of top government officials are bloody as speculated, then no thief can apprehend and punish another thief. The practice of esprit de corps among high-ranking white-collar criminals, no doubt appears stronger.

The Role of Economic and Financial Crime Commission (EFCC) in Prosecution of Culprits

The Economic and Financial Crime Commission (EFCC) was established in the year 2004 by EFCC establishment Act 2004, with a mandate to combat financial and economic crimes and also to prevent, investigate and prosecute economic and financial crime perpetrators (EFCC Act 2004).

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Details

Seiten
26
Jahr
2014
ISBN (eBook)
9783668805927
ISBN (Buch)
9783668805934
Sprache
Englisch
Katalognummer
v441900
Note
Schlagworte
corruption civil service study salary fraud bayelsa state nigeria

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Titel: Corruption in the Civil Service. A Study of Salary Fraud in Bayelsa State, Nigeria