15 September 2003

15 September 2003 MOF # 09-01 CPA policy on Payment of Public Sector Salaries in September 2003 This policy applies to all State employees and employees of State Corporations and other self‐financed entities. See below for more details. All allowances, bonuses, supplements and any other additions to salaries remain suspended, with the exception of overtime. Per August 5 CPA OMB memo, new hiring is unauthorized without the permission of Mr David Oliver, CPA OMB/Finance. Promotions are temporarily frozen, but eligible employees may be promoted upon their transfer to the new civil service system authorized under CPA Order #30. Per CPA OMB guidance (email dtd Sep 9, 2003, subject Salary Reform Order is Signed), Ministries must submit copies of proposed Ministry reclassifications to Dr Sami Metti (Ministry of Planning), Mr Al-Hilfi (Ministry of Finance, Legal Dept), and COL Richard Reynolds (CPA OMB/Finance) for final approval before any payments can be made under the new order. Salaries will be paid in US dollars according to the following schedule: Salary Grade Previous Civil Service Grade September pay scale Memo: August pay scale Memo: July salary scale in Southern Iraq/Kurdish provinces Grade 4 6 and below $60 $60 $60 plus 7500 dinars in 250 notes/$5 Grade 3 3-5 $120 $120 $120 plus 7500 dinars in 250 notes/$5 Grade 2 1-2 $180 $180 $180 plus 7500 dinars in 250 notes/$5 Grade 1 Director General or above $400 $400 $300 plus 7500 dinars in 250 notes/$5 Employees who have not received their full salary entitlement for previous months shall be entitled to payment of the balance. Any double payment of previous month’s salaries or any previous payment of September salary payments shall be deducted from September salary payments. For the purposes of calculating deductions and back payments due an exchange rate of 2000 ID:1 USD shall be used. All salary payments will be authorised by Ministry of Finance officials, acting in accordance with CPA 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, Ministry of Finance will issue a circular to all Ministries and Departments setting out the procedure for the payment of September salaries. To obtain authorisation 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 . Payroll execution information should be provided to the servicing 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 made 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 whom the money was paid. A copy of the Ministry’s previous month’s payroll execution will be provided to the CPA Office of Management and Budget. Requests for payment for current month. For administrative convenience, Ministries are advised 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 governance demonstrates responsible payroll practices consistent with Baghdad 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 authorisation to designated banks to provide specified funds to named representatives of Ministries and Departments to pay salaries. Presentation of this authorisation, which may be transmitted electronically, at the designated bank will release the specified funds to the named representatives for the purpose of paying salaries. Contracted employees in September will be paid out of operating expenses, as provided through the budget, and not out of payroll. Ministries should begin working on the transition of military paid Facilities Protection Personnel to their payrolls if there is a continued need for their services. Effective 1 November, these people will no longer be paid out of Commanders’ Emergency Response Funds. Points of Contact for Further Information: Justin Tyson, Adviser, Ministry of Finance, tysonj@orha.centcom.mil Jacob Nell, Senior Policy Adviser, Ministry of Finance, nellj@orha.centcom.mil Sandra Layton, Budget Adviser, CPA OMB, laytons@orha.centcom.mil Danilo Roseano, Budget Adviser, CPA OMB, danilor@orha.centcom.mil