For the thousands of federal public workers who have ongoing pay issues, a grim diagnosis from Canada’s auditor general Tuesday: it’s going to be years before the government has a pay system that works.
In an examination of the federal government’s rollout of the Phoenix pay system, the federal auditor concluded that Public Services and Procurement Canada — the department responsible for Phoenix — was slow to recognize the seriousness and depth of the problems plaguing the payroll system, and now it’s going to take years and cost more than the government had budgeted to find a solution.
“A sustainable solution will take years and cost more than the $540 million the government expected to spend to resolve pay problems,” said Auditor Michael Ferguson in his Fall 2017 report tabled in Parliament Tuesday.
The audit of 12 of the departments using Phoenix examined the job Public Services did working with them to fix pay problems and make sure public servants were paid correctly, and on time.
The Auditor General is recommending that Public Services analyze what it’s going to take to fix the problem; and work with the Treasury Board and the federal departments to come up with options for and costing of a “sustainable pay solution.”
The AG suggests this “sustainable” solution, when found, will need an implementation plan that includes clear accountability set timelines, and to do what the Phoenix rollout didn’t: make it jive with human resource systems. He did not comment in the audit on whether or not this sustainable solution should be the current Phoenix system.
The audit found that after starting the rollout of Phoenix in February 2016, it took the department four months to recognize there were serious problems, and it wasn’t until around a year later that they understood what the problems were. At first the department thought it was an issue of managers incorrectly entering information into the system, though it has since become apparent the troubles are much more complex and included glitches and design flaws within the system itself.
The AG found that the number of public servants with outstanding pay issues quadrupled since Phoenix was launched. At the time the audit concluded, more than 150,000 public servants had outstanding pay requests with Phoenix; that’s about half of the 290,000 public servants currently getting paid through the system. Not all departments have begun to use Phoenix.
As of June 30, 2017 the amount of money tied up in unresolved pay errors totalled more than half a billion dollars, ($502 million). The total annual payroll for the government is around $22 billion.
Employees have been waiting on average more than three months to have their pay requests processed, with just under 49,000 employees waiting for more than a year, half of which have outstanding requests of high financial impact.
The report said that as of March 31, 2017, Public Services and the departments had spent $145 million fixing pay problems and expect to send another $395 million over the next two years, totalling $540 million. This means the government will have to keep the $210 million in savings they were anticipating, and find an additional $330 million to go towards fixing the pay issues.
The auditor general said he is concerned that the cost estimate does not include the extra cost it will take to get it to work properly, meaning the final cost for the payroll system will be “much higher.”
In the report, the AG uses the Australian example — where the Queensland health department has spent eight years trying to fix a similar system. This ended up costing $1.2 billion.
Public Services and Procurement Minister Carla Qualtrough has already recognized that Canadian taxpayers could be on the hook for about that much too, as a result of Phoenix.
On CTV’s Question Period, she stated she hoped, but couldn’t guarantee that fixing Phoenix wouldn’t cost $1 billion. She also could not say when the payroll system will be working properly.
Public Services is now being asked to prioritize settling the outstanding pay requests, with regular reporting on the progress of that; and work with departments to improve input of pay information and better help employees resolve pay issues.
When surveyed, the employees at the pay centre in Miramichi reported that they had not received enough training to do their jobs properly.
So far the government has hired 1,400 employees to help with pay, more than the 1,200 let go by the previous government in advance of Phoenix’s debut. It has also set up satellite pay centres in Gatineau, Montreal, Winnipeg, and Shawinigan, to try to chip away at the pile of remaining cases, though the auditor general found that these steps have not reduced the number of cases.
The department has told the AG that it will have a preliminary HR-to-Pay integration plan completed by December 2017, and will provide a cost estimate for the Phoenix pay system by the end of May 2018.
The government is expected to respond to the findings later today