4 July 2003

                                                                     MOF # 07-02

 CPA policy on Payment of Public Sector Salaries in July 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.

Salaries will be paid in US dollars according to the following schedule:

 

Salary Grade	Previous Civil Service Grade	July salary scale in Southern Iraq	July salary scale in Kurdish provinces	Memo: April salary scale in Southern Iraq	Memo: April salary scale in Kurdish provinces	Memo: May and June salary scale
Grade 4	6 and below	$60 plus 7500 dinars in 250 notes	$65	100,000 ID	$50	$60
Grade 3	3-5	$120 plus 7500 dinars in 250 notes	$125	200,000 ID	$100	$120
Grade 2	1-2	$180 plus 7500 dinars in 250 notes	$185	300,000 ID	$150	$160
Grade 1	General Manager or above	$300 plus 7500 dinars in 250 notes	$305	500,000 ID	$200	$260

Note:  as a guide, across all workforces and across the country as a whole, we expect the average distribution by salary grade to be approximately 60% Grade 4; 30% Grade 3; 9% Grade 2; 1% Grade 1.    

Employees who have not received their full salary entitlement for April, May and June or their full $50 emergency payment shall be entitled to payment of the balance.  Any double payment of April, May or June salaries or emergency payments, or any previous payment of July salary payments shall be deducted from July salary payments.  For the purposes of calculating deductions and backpayments due an exchange rate of 2000 ID:1 USD shall be used. 

All salary payments will be managed by Ministry of Finance officials through the Treasury account and executed through the Rafidain and Rasheed banking systems.

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 July salaries.  Ministries will be responsible for providing the information required for salaries to be paid to the employees of State Corporations and other self-financed entities for which they are responsible, before authorisation for payment can be issued.

All Ministries are required, as a condition for further disbursements, to provide information on actual payments made in the previous month.  This should include information on funds received, funds paid out and on the balance remaining.  This should include a receipt from the bank recording the redeposit - at the earliest opportunity - of unused funds at the Treasury account in the bank from which they were withdrawn.

To obtain authorisation for disbursement of funds for salary payments, each accounting unit must write a letter on official paper and signed by the senior officials to request the release of funds.  This letter should cover a spreadsheet showing summary payroll data. 

Ministries and departments which submitted summary payroll data for the payment of April salaries or for the payment of May and June which was approved by the relevant CPA Senior Adviser and the Director General of Administration and Finance will only need to report changes to the payroll to the Ministry of Finance.  Where the April payroll or the May-June payroll of a workforce in a governate outside Baghdad was approved in accordance with the established process, the Baghdad Ministry of Finance will, unless the Senior Adviser decides otherwise, delegate payroll management to the local branch of the Treasury.    

Where payroll data for ministries and departments has not been approved by the relevant CPA Senior Adviser and the Director General of Administration and Finance (as in some governates), this will be required before any further payments can be made.  This information should include details of any unauthorized salary or emergency payment including who the money was paid to.    

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.

Internal audit sections in each ministry shall review the payroll and salary levels for consistency with those approved for payment by the Ministry of Finance as well as the integrity of individual payments.  In each accounting unit a three‑person committee shall oversee distribution of salaries.  A post payment audit shall be performed by the Board of Supreme Audit wherever possible.

Contracted employees in July will be paid out of operating expenses, as provided through the budget and not out of payroll. Contracted employees will be paid for April, May and June under a different procedure:

-         Collect a payroll of the relevant contracted employees, including a breakdown of the workforce by pay.  The pay levels need not necessarily be the same as the four tier scale for permanent employees. 

-         Obtain approval of the Iraqi Director General of Administration and Finance and the CPA Senior Adviser approve the list.

-         Submit the approved list to the CPA Ministry of Finance, who will direct the Iraqi Ministry of Finance to issue an authorisation to release funds to cover payment of the costs of the contracted employees     

Points of Contact for Further Information:

John Rooney, Adviser on Logistics Security, rooneyj@orha.centcom.mil

Jacob Nell, Adviser, Ministry of Finance, nellj@orha.centcom.mil