The Federal Ministry of Finance has announced the successful completion of a pilot programme which uses Bank Verification Number (BVN) details to check for ghost workers and identify duplicate and other irregular entries on the payroll. The Bank Verification Number is a number that uniquely identifies each bank’s customer for “know your customer” (KYC) purposes.

The pilot project was initiated as a solution to the slow pace of progress being encountered in the enrollment of staff on the Integrated Payroll and Personnel Information System (IPPIS). According to the ministry, the strategy of using BVN rather than requiring the physical presence of each member of staff has significantly simplified and accelerated the progress of the project and at a lower cost than previously incurred. 

The Honourable Minister explained: “We believe that the use of BVN rather than requiring physical presentation as a first line check on the integrity of our payroll is a cost effective and efficient measure. This will accelerate the pace of enrollment on IPPIS as well as identify anomalies which can be flagged for further investigation and review.”

She explained that: “To date, despite over 5 years since initiation of the project, just 20% of public employees have actually been enrolled onto IPPIS due to a variety of reasons. As part of our public financial management reforms, we are committed to scrutinizing our largest single expense item. Personnel related costs account for over 40% of government expenditure and must be prudently managed to ensure the validity of every payment. We are therefore determined that everyone who collects a salary form the Federal Purse is on the IPPIS system.” 

The Honourable Minister of Finance thanked the Central Bank of Nigeria and Nigeria Inter-Bank Settlement Plc (NIBBS) for their co-operation in the exercise. She noted that under BVN more than 30 million biometric and personal data records had been captured. “The BVN provides a pool of reliable data against which records held on the Federal Government’s payroll will be cross checked to identify inconsistencies including duplicate payments, payments to dormant accounts, multiple payments to a single account holder, non-matching of data provided, among others.” Mrs. Adeosun assured that “genuine staff have nothing to be concerned about but those who are collecting multiple salaries and those engaged in any type of payroll fraud are guaranteed to be caught out.”     

The Ministry of Finance has also built in controls to counteract those seeking to transfer their salary receiving accounts to micro-finance, mortgage bank and other non BVN accounts in order to evade detection. “Since the advent of BVN we have seen a trend of such requests for transfer from commercial bank accounts to non BVN accounts. Accordingly, we plan to undertake a detailed review of all persons who have requested such transfers in the last 12 months.” The Ministry of Finance is also working closely with NIBBS to finalise plans to roll out BVN to capture non-BVN bank institutions with a significant number of Federal Government salary accounts.

The Honourable Minister announced that in line with the commitment made by President Buhari in his budget speech, the Federal Ministry of Finance has set up a “Continuous Audit” team with the sole function of undertaking detailed, programmed audits on payroll.  The team is to be based in the Office of the Minister and is to be headed by one of the most senior accountants in the Office of the Accountant General Mr M Diqua who was hitherto Director Funds. The remit of the team will be to undertake programmed risk based audits of the payroll to strengthen the controls framework.

The Honourable Minister also announced that based on preliminary work undertaken the Federal Government anticipates saving billions of naira as a result of these new initiatives.