THE Government is spending $25 billion this year on over 28,000 pensioners, but approximately $10 billion is for staff seeking early retirement and lump sum payments.

Financial Secretary, Dr Wesley Hughes, told the Public Accounts Committee (PAC) of the House of Representatives yesterday, that only $14.6 billion of the budgeted $25 billion is for regular monthly pension payments.

"The numbers have grown significantly," Dr Hughes admitted, as he suggested that the lump sums could be linked to increased demand for early retirement, which may have been triggered by ongoing discussions on public sector pension reform.

"So the lump sum payments in an average year could be as much as half of the total amount? That's significant!" PAC Chairman Audley Shaw commented.

"It's a huge jump. I don't know if it is related to the discussions about pension reform, but we did note a huge jump coinciding with that period," Hughes stated.

The Accountant General's Department (AGD) informed the PAC that it paid out approximately $44 billion to pensioners between 2008/2009 and 2010/2011. But an audit to ascertain whether or not there were adequate controls to ensure efficiency and effectiveness of the payment process in 2010/2011 found a number of issues. Among them are, that the management did not design appropriate strategies to ensure that the $17 billion paid out that year was protected from manipulation and abuse.

Auditor general Pamela Monroe Ellis had reported that risk management assessments were not being conducted regularly to facilitate the design of effective controls, and there were no reviews of the pension payroll activity log to identify unauthorised transactions.

She found that these failures led to improper payments of $6.8 million and irregularities totalling $20.6 million in 2010/2011, as well as a $14- million fraud in 2009/2010.

However, yesterday both Monroe Ellis and the PAC members agreed that efforts were being made by the AGD to address most of the major issues, following Dr Hughes's presentation.