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18 March 2004
Policy on Payment of Public Sector Salaries in March-April 2004
This policy applies to all State employees and employees of State
Corporations and other self financed entities. See below for more details.
Freeze on Hiring and Promotions. In accordance with the August 5 CPA OMB memo,
no Iraqi Ministry, agency, company or other government organization may hire
employees at a level above the applicable end strength limit for that entity, as
approved in the current FY04 National Budget (effective January 1, 2004), except
as approved by the Interim Minister of Finance and the CPA Director of
Management and Budget under the established procedures. Promotions are also
temporarily frozen.
Salary Scale. Salaries will be paid in new Iraqi dinar at the new salary scale,
as set out in CPA Order No.30 dated 08 September 2003. All Ministries were
funded to implement the new salary scale in January and were supposed have it
completed by the end of February. Any ministry that has transferred over to the
new salary scale must be able to pay salaries from their salary budget including
the additional 40% increase that was distributed by the Ministry of Finance. It
must be understood that all employees did not receive a 40% increase, but rather
40% of the total salary budget was added to cover those employees that will
receive more under the new scale.
All ministries must transfer over to the new salary scale as a whole ministry,
as opposed to one department or governorate at a time. If the salaries are above
the allotted amount then the ministries must redo the placement of employees in
the new salary scale, no ministry will be given additional funds for salaries
beyond the 40% increase. Employees will continue to be paid at the 4-tier scale
until the transfer of the entire ministry is complete.
State Owned Enterprises. Employees of State-Owned Enterprises (SOEs) receiving
support from the Ministry of Finance shall be paid at the four-tier scale for
February and all subsequent months until a formal decision is made regarding
salary levels for employees of State-owned Enterprises. Any differences in
salary, stemming from the formal decision, shall be given as back pay for those
months in which the difference was not paid for February and all subsequent
months. Any SOE not requiring funding support from the Ministry of Finance may
choose to move working employees to the 11-tier pay scale and pay these
employees accordingly.
Facilities Protection Service. Effective 01 March all Ministries are responsible
for the salaries and hazardous duty pay for their Facilities Protection Service
(FPS) guards. Ministries shall submit FPS payroll funding requests to the
Ministry of Finance on a monthly basis in accordance with procedures described
below. Coalition Provisional Authority Order No. 27 dated 04 September 2003 lays
out guidance regarding the establishment and administration of the FPS. All
ministries dealing with personnel providing security should refer to the
Security Salary Matrix at
http://www.cpa-iraq.org/budget/revisedsalarymatrix.pdf.
Back-pay and Recovery of Excess Pay. Employees who have not received their full
salary entitlement for the previous six months shall be entitled to payment of
the balance. Any double payment or overpayment of previous month’s salaries
shall be deducted from February salary payments.
Procedure. All salary payments will be authorized by Ministry of Finance
officials, acting in accordance with the established policy, through the
Treasury account. Payments will be executed through the Rafidain and Rasheed
banking systems, which act as the agent of the Ministry of Finance. The Director
General of Accounts of the Ministry of Finance will issue a circular to all
Ministries and Departments setting out the procedure for the payment of March
salaries.
To obtain authorization for disbursement of funds for salary payments for both
centrally financed workforces and for the employees of State Corporations and
other self-financed entities for which they are responsible, Ministries, and
their relevant Directorates are responsible for providing the following:
Accounting for previous month payments. Each ministry must provide payroll
execution information to the responsible Accounts Departments at the local
Treasury Office or Ministry of Finance. Information should include funds
received, funds paid out, number of employees in each pay grade that were paid
(by directorate) and the balance remaining. Unused payroll funds will be
redeposited in the bank from which they were withdrawn and a receipt filed with
the local directorate accounting manager. If, in previous months, payroll
payments were inconsistent with Ministry of Finance guidelines at that time, the
Ministries are required to provide relevant accounting of those salaries and
emergency payments before additional funds can be released. Information should
include details of any such salary or emergency payments, including a list of
names to which the money was paid. The Ministry of Finance should provide
details on the previous month’s payroll execution by Ministry to the CPA Office
of Management and Budget.
Requests for payment for current month. For administrative convenience,
Ministries are to present a single report, and single request for release of
funding for all their directorates/spending units, rather than separate requests
for different directorates/spending units. Requests for payment should include a
cover letter written on official paper, approved by the three senior officials
of the directorate/spending unit and signed by the Director General of
Administration and Finance. The request should also include a spreadsheet with
the names and grades of the employees to be paid. If required payroll exceeds
that of the previous month, the request for payment must be approved by the CPA
Senior Advisor. Any actions that will cause the increase of more than 1% in the
pay bill of a workforce over the level paid in August must be approved by the
CPA Senior Adviser to the Ministry of Finance before the payroll can be
executed. If the governorate demonstrates responsible payroll practices
consistent with Ministry guidance, the Baghdad Ministry of Finance can delegate
payroll management to the local branch of the Treasury, provided the Senior
Advisor of the Ministry agrees.
Executing payroll. Internal audit sections in each ministry shall review the
payroll and salary process for conformity with approved methods for payment by
the Ministry of Finance, as well as the integrity of individual payments. In
each accounting unit the three person committee shall oversee the distribution
of salaries. The names of these individuals will be kept on file at the Agent
Bank authorizing the release of funds. A post payment audit shall be performed
by the Board of Supreme Audit wherever possible.
The Ministry of Finance shall issue authorization to designated banks to provide
specified funds to named representatives of Ministries and Departments to pay
salaries. Presentation of this authorization, which may be transmitted
electronically, at the designated bank, will release the specified funds to the
named representatives for the purpose of paying salaries.
Contract employees will be paid from operating expenses, as provided through the
budget, and not out of payroll.
Points of Contact for Further Information:
John Hanley, Advisor, Ministry of Finance,
hanleyj@orha.centcom.mil
Anita Greco Advisor, Ministry of Finance,
grecoa@orha.centcom.mil
Brendan Wheeler, Advisor, Ministry of Finance,
wheelerb@orha.centcom.mil
Brendan Lund, Advisor, Ministry of Finance,
lundb@orha.centcom.mil
John Moore, Advisor, Ministry of Finance,
moorej@orha.centcom.mil
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