Payroll Fraud: Effects of Ghost Names on the Government Wage Bill in Ghana

Payroll Fraud: Effects of Ghost Names on the Government Wage Bill in Ghana by Gilbert Nyaledzigbor MBA, University of Ghana Business School, 2009 Chartered Accountant, Institute of Chartered Accountants (ICA) Ghana, 2002 BSc. , University of Ghana Business School, 1994 Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy Public Policy and Administration Walden University October 2015 Abstract Policy makers believe that there are ghost workers, persons who do not work yet receive salaries, on Ghana’s public sector payroll. However, little is known about the factors that create opportunities for ghost workers. The purpose of this quasi-experimental study was to extend Cressy’s conceptualization of the fraud triangle theory to test the applicability of Reinikka and Svennson’s graft estimation model by using nonprobability quotaPolicy makers believe that there are ghost workers, persons who do not work yet receive salaries, on Ghana’s public sector payroll. However, little is known about the factors that create opportunities for ghost workers. The purpose of this quasi-experimental study was to extend Cressy’s conceptualization of the fraud triangle theory to test the applicability of Reinikka and Svennson’s graft estimation model by using nonprobability quota sampling to select 85 heads of public agencies for participation in a cross-sectional survey. The research questions focused on the relationship between size of government agency, the estimated number of opportunities for ghost workers, and the dependent variable of occurrence of ghost workers in the public sector in Ghana. Correlational and multiple regression analysis was used to discern the relationship between the independent variables of agency size and opportunities for ghost workers and the dependent variable of number of ghost workers. Results revealed a statistically significant, positive relationship between the number of opportunities for ghost workers and the number of ghost workers. However, there was a negative relationship between the size of government agencies and both the number of opportunities for ghost workers and the number of ghost workers. The implications for social change include recommendations to revise the Financial Administration Act of Ghana by introducing new controls in the payroll administration at the Controller and Accountant General’s Department to eliminate ghost workers from the payroll so that public funds can be saved to provide more public services for Ghanaians. Payroll Fraud: Effects of Ghost Names on the Government Wage Bill in Ghana by Gilbert Nyaledzigbor MBA, University of Ghana Business School, 2009 Chartered Accountant, Institute of Chartered Accountants (ICA) Ghana, 2002 BSc. , University of Ghana Business School, 1994 Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy Public Policy and Administration Walden University October 2015 Dedication This study is dedicated to my parents whose passion for their children’s education inspired me to reach this level. Also, to my wife and children who sacrificed and encouraged me throughout the course. Finally, to all my friends who motivated me in diverse ways to enable me complete the course successfully. Acknowledgments My first gratitude goes to the Almighty God for the wisdom and strength He gave me to successfully complete this course. My next gratitude goes to Ms Grace Adzroe the Controller and Accountant –General and Mr. Raphael Tufuor, former Controller and Accountant -General for their vision to develop the capacities of CAGD staff to a PhD level for which I was fortunate to be selected. I owe a big gratitude to Dr. Linda Day who graciously offered to chair my Dissertation Committee and has provided tremendous support to me throughout the course. My special thanks also go to Dr. David Powell (Committee member), Dr. Olivia Yu (URR), and Sarah Matthey (Dissertation editor) whose inputs into this work has shaped my academic thoughts tremendously. I also wish to thank Mr. Webster Kofi Ahli who supported me with materials and gave me insights into statistics which has helped me in my data analysis. To all my class mates at Walden University and instructors whose contributions in class have shaped my scholarly thoughts, I say a big thanks to you all. Finally, I wish to thank Alhaji Mohammed Odaymat the Chairman of Rana Motors and Metal Works Engineering Co. Limited Group and his management team for the support they offered me throughout the period of the course.