GOVERNMENT OF ANAMBRA STATE OF NIGERIA

Concept Paper and Action Plan for Human Resources and Payroll Integration in

Anambra State Government

MARCH 2014

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Acknowledgement This is a concept note and action plan for Human Resources and payroll integration in Anambra State Government.

The concept note and action plan is a product of a collaborative and participatory effort of members of relevant officers of the Anambra State Government civil service drawn from the Office of Head of Service, the Accountant-General’s Office and the Auditor-General’s Office.

The State Partnership for Accountability, Responsiveness and Capability programme of the Department For International Development must be commended for its initiative in producing the initial draft of this Concept Note and for facilitating the review and finalization of the Action plan.

There is no doubt this Concept note would provide the appropriate impetus for a robust integrated HR and payroll system that ensures salaries are paid on-time to existing staff and that will serve as a basis for future introduction of workforce and succession planning, and strategic planning by professional HRM managers in MDAs.

This unique document is highly recommended as a reliable guide for Human Resources Managers, payroll officers and other officers within and outside the Anambra State public service.

Chidi Ezeoke mni,

Head of Service

Anambra State of Nigeria

20th March 2014

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Content List

Abbreviations and Acronyms ...................................................................................................... 4

Executive Summary ................................................................................................................... 5

1.0 Introduction ..................................................................................................................... 7

2.0 Human resources and payroll integration ........................................................................ 8

2.1 Human resources......................................................................................................... 8

2.2 Payroll .......................................................................................................................... 8

2.3 Benefits of integration of HR and Payroll systems ........................................................ 8

3.0 Approach and action plan ...............................................................................................11

3.2 Steps ..........................................................................................................................11

3.3 Communications and change management ................................................................13

3.4 Action plan and decisions made..................................................................................13

3.5 Next steps ...................................................................................................................15

Appendix 1 Attendance at the validation of the concept note ..............................................16

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Abbreviations and Acronyms

AG Accountant General

AnSG Anambra State Government

APER Annual Performance Evaluation Report

DFID Department for International Development

EXCO Executive Council

HoS Head of Service

HR Human Resources

HRM Human Resources Management

HRMIS Human Resources Management Information System

IEC Information, Education and Communication

IPPIS Integrated Personnel and Payroll Information System

LGAs Local Government Areas

MDAs Ministries, Departments and Agencies

MEPB Ministry of Economic Planning and Budget

OHoS Office of the Head of Service

PSs Permanent Secretary

SPARC State Partnership for Accountability, Responsiveness and Capability

ToR Terms of Reference

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Executive Summary

This is a concept note and an action plan for the consolidation of, and the activation of other modules of the Integrated Human Resources and Payroll Information System which is located in and managed by the Office of the Head of Service.

Anambra State Government had conducted a personnel audit in 2009 which led to updating its human resources records. This was the beginning of the development of a secure human resource management information system1 which is located in the Office of the Head of Service. This resulted in cleaner personnel and payroll records for active and retired staff and some financial savings. The State has continued to update its personnel records using biometrics and physical verification exercises which have yielded some positive results. For example, based on physical verification exercise of pensioners undertaken in September 2012, cheques to the value of about N600 million were not collected from all the local governments. This did not necessarily mean that these were savings from “ghost workers” as some of the cheques belonged to employees who had not been able to physically collect their cheques for good reasons. Also based on the verification exercise of civil servants carried out in 18 sub-treasuries, about 90 pensioners per sub-treasury had been identified as “ghost workers”.

The State in its determination to modernise human resources management and ensure a clean payroll has continued to update its personnel records in the Human Resource Management Information System (Veritexsuites) and has now linked human resources to payroll for ease of records management and retrieval of information, and for prompt payment of staff salaries. In spite of the integration, some processes in paying salaries are still manually driven. For example, the Office of the Head of Service sends hard copies of personnel data to ministries for the issuance of physical warrants after reconciliation and before sending to the Accountant General for payment of salaries. This process could be shorter and seamless with the consolidation of the IPPIS and training of professional human resources managers on the use of the non-secure sections of the IPPIS to continuously update personnel information.

The activation of other modules of the Integrated Personnel and Payroll Information System will make it possible for the professional human resources managers to use the data for strategic planning such as tracking career progression, developing workforce and succession plans, and developing individual capacities based on needs analysis and performance of employees.

Objectives

The objective is to have a robust integrated human resource and payroll system that ensures salaries are paid on-time to existing staff and will serve as a basis for future introduction of workforce and succession planning, and strategic planning by professional human resource managers in ministries, departments and agencies. The underlying objective is to re-focus ministries, departments and agencies on organisational performance and service delivery.

1 www.Veritexsuites.com/anambra

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Next step

The next step will be for the Office of Head of Service to begin to implement this action plan.

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1.0 Introduction

The Anambra State Government (AnSG) in its efforts to improve service delivery, embarked on some governance reforms which include:

Personnel/payroll audit in 2009;

Mandate mapping;

Delineation of functions of all ministries, departments and agencies (MDAs); and

Review of the Annual Performance Evaluation Report (APER) form which serves as the re-introduction of performance management at the organisational and individual levels.

These unassisted reforms point to the fact that human resources management (HRM) remains a priority of the state government and has served as the foundation for State Partnership for Accountability, Responsiveness and Capability (SPARC) Programme support to public service management reforms in Anambra State.

The personnel audit conducted in 2009 resulted in the upgrading of the computerised payroll system, adoption of end to end e-payment and the prompt payment of salaries although the actual head count and financial savings were not clear at the time. Based on the physical verification exercises of pensioners carried out in third quarter of 2012, cheques valued at about N600 million were not collected from all the local government areas (LGAs). This however did not necessarily mean that these were savings from “ghost workers” as some of the cheques belonged to employees who were not physically present to collect their cheques. Also based on the verification exercise of pensioners carried out in 18 sub-treasuries, about 90 pensioners per sub-treasury were identified as “ghost pensioners”.

AnSG has continued to improve its HRM records keeping and management which is now integrated with payroll using an Integrated Personnel and Payroll Information System (IPPIS) using Veritexsuites - an end-to-end software solution. Veritexsuites is a web-based software which is managed by the Office of Head of Service (OHoS) and can be accessed by other authorised stakeholders such as the Accountant General (AG). There has been continuous updating of personnel records and cleansing of payroll. For example, the personnel records of local governments were being updated through the capture of staff biometrics as at February 2014.

The AnSG now seeks to consolidate IPPIS and activate other modules of its IPPIS to make it more robust and reliable.

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2.0 Human resources and payroll integration

2.1 Human resources

AnSG recognises that its human resources (HR) – its people - are its very important assets. Without good HR, poor public goods and services will be delivered and organisations will not function optimally. In recognition of this, the AnSG developed its human resources management information system (HRMIS) using Veritexsuites which is an end-to-end software solution. This database has eased up-to-date record keeping, organising, tracking, usage and retrieval of all information stored. The HRM database will support AnSG’s transition to a decentralised and professionalised HRM which will require HR professionals to spend less time on routine administrative activities and more time on transformational and strategic work of managing staff. These would lead to achieving organisational strategic objectives and deliver better goods and services to the public.

2.2 Payroll

Payroll refers to the financial records of payments to employees, as well as any deductions from the pay for taxes or other purposes. Payroll management is one function of HRM. HR/payroll database integration automates many of the functions of payroll, saving time and ensuring correct accounting and prompt payment of salaries. This is a major improvement on past administrations when salaries and pensions were paid late.

The current integrated HR/payroll located in and managed by the OHoS will ensure that the new professional HR managers (when implementation of professionalising HRM starts) will communicate seamlessly with staff of the AG’s office to ensure accurate and timely payment of salaries. One of the main challenges for professional HR managers is that payroll does not function effectively without up-to-date and reliable data pulled from the HRMIS (HRMIS). Also, without an up-to-date and comprehensive HR data, it is very difficult to track career progression, develop state-wide workforce plan, succession plan and build individual capacities based on needs. These functions place great responsibilities on HR managers to ensure proactive and sound maintenance of the data contained in the HRMIS. Certainly there is good access control to the HRMIS.

2.3 Benefits of integration of HR and Payroll systems Below are some of the general benefits of integration although AnSG is not enjoying all these benefits yet:

HR records are easily updated, more secure, accurate and therefore reliable for decision making and strategic planning;

Prompt payment of salaries, benefits and other entitlements because of the automatic update of employee records and entitlements. For example when

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an individual is terminated, their payroll and benefits are automatically terminated at the same time. This means that you are no longer susceptible to cash flow leakage as a result of this commonly made error. This is a major improvement of past administrators who consistently paid salaries and pensions months in arrears;

No duplicate data entry, as changes made to the centralised HR and payroll database are entered only once. This eliminates errors and the need for duplicate entry of employee, pay rate, benefits and deduction information;

Integrated reporting, where consolidated reporting which is valuable to management, but is virtually impossible without an integrated database and reporting tools. For example, management needs a report outlining each employee’s “total compensation package” or to develop workforce plan. This report must contain employee information, benefits data from HR and compensation data from payroll;

Ensuring data changes appear in conjunction with different events. For example, salary determined upon hire is instantly changed upon promotion;

Allowing HR practitioners to maintain HR information for establishment, workforce and succession planning, and for capacity-building;

Ease of electronic data storage, retrieval and archiving;

Eliminating “ghost workers” thereby recording financial saving which can be deployed to other areas of needs.

2.4 Challenges Although the integration of personnel records and payroll has reduced paperwork, end of month activity is still partly paper based. Hard copies of nominal roll are sent by the OHoS to the respective MDAs for staff verification and processing of warrants before sending the hard copies of nominal roll and warrants to the AG for payment. However, the AG who is one of the few that has access code to the HRMIS, does reconciliation of the hard against the electronic versions of nominal roll before authorising payment of salaries. This is undoubtedly a long process dependent on paper, which is subject to human errors and possible financial leakages, and some delays in payments. This process can be shortened with the consolidation of IPPIS.

Integrated and consolidated reporting has been difficult without a comprehensive database. The current HRMIS still does not have comprehensive personnel information. For example, it does not have information to track career progress, develop workforce and succession plans or develop employee capacity based on needs and performance. It however has some information for tracking nominal seniority in the service such as date of appointment and dates of last two promotions of officers etc. It can also generate a report outlining on each employee’s total compensation package for management when required.

Some of the possible challenges when HR information is not fully captured and/or is not fully integrated with payroll are:

Collating, inputting and controlling the HR and payroll data is challenging making it difficult to combine information for reporting which may delay the

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production of reports as you deal with different types of databases such as paper based and electronic;

Loss of revenue due to leakages in payroll system and inefficient HR record keeping that is manually driven. This is currently being addressed;

Existence of non-employees (“ghost workers”) and non-existent/dead pensioners in the database and payroll

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3.0 Approach and action plan

With AnSG having deployed Veritexsuites, it is crucial to begin to consolidate IPPIS, and activate all other modules of HR which will be useful for tracking career progression, planning workforce and succession, and for capacity development based on needs and/or performance etc. The activation will be done in sequence. Currently, only the basic HR information has been captured and linked to payroll. HR records and biometrics of local government employees were being captured in February 2014. This will soon be concluded.

Month end activities for the payment of salaries and benefits are still partly paper based. This process will definitely be shortened if HR managers in pilot MDAs for professionalising HRM are trained and possibly given access to unsecured sections of the HRMIS for regular updates of personnel information and to add new employee data. Personnel managers will also have access to part of the database for strategic planning for their respective MDAs. This will require the activation of some other modules of the HRMIS to make it more robust and reliable for use.

3.2 Steps

In order to consolidate the HRMIS, the following are some of the steps to be taken:

Continue with the updating of personnel records to consolidate IPPIS to ensure payment of salaries is paperless and seamless;

Obtain necessary Executive Council (EXCO) approvals to activate new modules. For example, activating modules for tracking career progression, for developing capacity of employees based on performance and needs, and for developing workforce and succession plans;

Agree pilot MDAs which will be aligned with the pilots chosen for professionalising HRM;

Determine the additional data required for input to make the database more robust for example (some of these are already in the database):

o Personal details: for example name, surname, address, telephone number, date of birth, local government and state, gender, disability, marital status.

o Current position: for example, job title, MDA, department, unit, cadre, grade level, manager’s name.

o Educational experience: for example, highest level of education, highest qualification obtained, highest professional qualification.

o Employment history: for example, contract type, commencement date, confirmation date, MDAs worked in.

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o Career development: for example date of last promotion, eligibility for next promotion, last appraisal score awarded, date of last appraisal score awarded.

o Training history: for example, training courses/seminars/workshops etc attended to date.

Review the existing/remaining data sources to establish whether and where the data can be found; also assess the quality and credibility of the data. This may entail personnel audit to ensure information is up to date, not duplicated and not misleading;

Train data processors that will input the personnel information for the pilot MDAs and train your HR managers who will use the database for strategic planning;

If existing personnel data is inadequate, additional data will be collected through surveys. This will be a last resort, because of the cost and time involved in designing and administering the survey materials, collating, analysing and validating survey responses. If a survey is necessary, AnSG will :

o Ensure that senior managers understand the need for the survey, have agreed the contents, and take the lead in communicating with staff about the survey.

o Communicate well in advance about the survey and its purpose to minimise concerns, or even resistance, among staff.

o Request very relevant and necessary data and determine how we will safeguard the data, and reassure staff that their information will be kept confidential.

o Design and test the survey questionnaire, and decide whether or not staff can complete it for themselves, or through interviews.

o Define and ensure staff are aware of the arrangements for collecting and safeguarding the forms, and for ensuring that the data remains secure during analysis.

o Set out a timetable for the data collection, data entry and data analysis. This should be done as quickly as possible to minimise concerns and uncertainty which staff will feel.

o Define how the data will be recorded and analysed and decide who will control the data and who will have access to the data.

o Determine whether, and what verification will be needed. This is an important step. If the quality of the data is called into doubt, then the credibility of the analysis and conclusions will be undermined.

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o We will build-in some checks to ensure the integrity of the data for example checking total numbers with existing nominal roll and/or payroll.

3.3 Communications and change management

Communication and change management are of great importance in implementing any reform especially reforms that challenge sensitivity of powerful interest groups who will resist changes as they stand to benefits from the status quo. Communication will continue throughout this reform by sensitizing stakeholders at all stages about the nature of the process, the timelines, the purpose, the parameters of the work and the benefits to them.

Good practice in managing change to implement this reform will include the following:

Review membership of existing steering and implementation committees when necessary;

Continue to develop, consult and communicate the agreed process and procedures so that all officers are aware of them, including a timetable showing key milestones, sequencing of decision points etc. This will be contained in an Information, Education and Communication (IEC) programme;

Establish a regular communication process to keep managers and staff informed about progress. This will also include establishment of a communication channel by which staff comments can be fed back to the steering group or implementation team.

3.4 Action plan and decisions made

The following decisions, timelines and responsibilities were agreed during a meeting facilitated by SPARC:

S/N Activity Timeline Responsibility

1 Continue with the updating of personnel records to consolidate IPPIS and ensure payment of salaries is paperless and seamless

May 2014 Head of Service (HoS)

2 Obtain necessary EXCO approvals to activate new modules for example for tracking career progression, developing capacity of employees based on performance/needs, and for developing workforce and succession plans

Done HoS

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3 Review membership of the steering committee and implementation committee to include staff of the MDAs piloting professionalising HRM Draft Terms of Reference (ToRs) for the Committees (if they do not exist)

Done: membership includes: HoS, Accountant General, State Auditor General, Director Computer Services, Reforms and Performance Improvement Department

HoS OHoS with technical support

4 Develop a simple Information, Education and Communication (IEC) programme Begin sensitization of state and non-state actors on the next stage of the process, the plan, and benefits based on the IEC programme for different stakeholders. Sensitization will be on-going throughout

June 2014 OHoS/Ministry of Information OHoS

5 Develop backup and disaster recovery procedures

Done OHoS with technical support

6 Select 3 ministries as pilot Five pilots were selected: OHoS, Finance, Auditor General’s Office, Education and Information

HoS and College of Permanent Secretaries

7 Decide on staffing requirements for the next stage of the process including the proposed HELP DESK

Done (with recent recruitment of officers into the Service)

HoS and Permanent Secretaries

8 Train new HR managers and data processors on their respective new roles and use of the system

July 2014 Supplier/representative of Veritexsuites/HoS

9 Implementing pilots by deploying trained staff Establish help desk in pilots and train staff to man the desks

September 2014 OHoS and MDAs

10 Capture lessons learned to guide sequenced and future roll-out

December 2014 OHoS

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Communication and sensitization will be an on-going process to ensure buy-in and the success of the reform.

3.5 Next steps

State partners to continue with the implementation of all other activities in the Action Plan as sequenced and as agreed.

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Appendix 1 Attendance at the validation of the concept note

On 26 March 2014, Permanent Secretaries and some senior Directors drawn from the OHoS and Accountant General’s Office validated the draft concept paper and action plan for human resources and payroll integration in Anambra State Government. Officers that attended the validation meeting include the following:

S/N

Name Designation MDA

1 Onu I.T. (Mrs)

Permanent Secretary

Office of Head of Service

2 Udu J.H Permanent Secretary

Office of Head of Service

3 Nworah Uche

Permanent Secretary

Ministry of Local Government and Chieftaincy Affairs

4 Ezeaku Ifeoma (Mrs)

Deputy Director,

Ministry of Information

5 Okoli A.C Director, Computer Services

Office of Head of Service

6 Obodogha T.C

Special Assistant

Office of Head of Service

7 Ezeanya L.N (Mrs)

Acting Director of Administration

8 Onyenwe B.I (Mrs)

Head of Department (Reforms and Performance

Office of Head of Service

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Improvement Department)

9 Obigwe H.O Pay officer Accountant General’s Office

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Nwude J.N Senior Accountant

Pay Office

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Ogbuedi J.A Pensions Office of Head of Service