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Phoenix-related pay errors affected more than half of all federal public servants: auditor general

Auditor general recommends fixing Phoenix pay system, not scrapping it
Canada's auditor general recommends fixing the Phoenix pay system, not scrapping it.

More than half of federal public servants experienced at least one error in their paycheque in the 2016-17 fiscal year, according to a new report by the auditor general.

The report, released Tuesday, examined the government’s adoption of the Phoenix pay system, which has been blamed for public servants being paid too little or too much, and sometimes not at all.

As of June 2017, the government owed 51,000 employees a total of $228 million, because they had been underpaid, and 59,000 employees owed the government a total of $295 million because they were overpaid, according to the report.

READ MORE: Backlog balloons to more than 500,000 outstanding transactions in Phoenix pay fiasco

Last week, it was reported that there were still half a million outstanding transactions that needed to be processed by the pay system.

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The auditor general also found that Public Services and Procurement Canada, the ministry responsible for administering the Phoenix pay system, took a year to begin developing a roadmap for resolving the pay issues and although they devoted effort to fixing individual problems, they didn’t come up with a way to fully address the underlying issues.

Initially, the ministry believed that the problems were caused by other departments not knowing how to use the system properly, according to the auditor general. But according to the report, the Phoenix system just couldn’t handle a variety of different pay situations, like for people who did shift work, or temporarily took an acting position at a higher level.

The new pay system was supposed to save money: $70 million per year, starting in the 2016-17 fiscal year. The government expects to spend $540 million over three years to resolve the pay problems, and the auditor general doesn’t think this will be enough.

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“In our view it will take years to fix the pay system and it will cost more than the $540 million the government has identified,” said Auditor General Michael Ferguson.

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A similar problem in an Australian health system took eight years and over $1 billion to resolve, according to the report.

READ MORE: With Phoenix pay system fix potentially costing $1B, union says time to pull the plug

Public Services and Procurement Minister Carla Qualtrough recently acknowledged in an interview with CTV News that the pay system might cost over $1 billion to fix. One of Canada’s biggest public sector unions, the Professional Institute of the Public Service of Canada, said last week that it was time for the government to pull the plug on Phoenix and start over – even if it meant hundreds of thousands of dollars in wasted spending.

Qualtrough told reporters Tuesday that the priority is to stabilize the current system before examining further options. “I anticipate the backlog starting to go down early next year,” she said, and acknowledged there was still a long way to go to solve the problems.

“It’s not going to be easy, it’s going to take time and it’s going to cost money,” said Qualtrough.

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When asked whether it would be a good idea to dump Phoenix and come up with a whole new pay system, Ferguson agreed that it was probably too complicated. The government’s best bet is to fix the system they already have, he said.

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“The environment is essentially the same. So if they started all over again, it’s hard to see how they would end up in a better situation.”

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Qualtrough also blamed the previous Conservative government for creating the Phoenix system in the first place, saying it was “botched” from the start.

Conservative Leader Andrew Scheer disputed Qualtrough’s version of events.

“It was this Liberal government that decided to rush the launch of it, even over the objections of a third-party analysis that this government asked for,” Scheer said.

“They commissioned a third-party analysis of whether or not they should proceed and whether it was ready; the analysis said that it wasn’t, (but) they decided to overrule that and go ahead with it. It was this government’s decision to press the start button.”

In a response to the auditor general’s findings, Public Services and Procurement Canada said that a preliminary plan for fixing the pay problems would be finalized by December. “We are desperately trying to pay people as quickly as possible,” said Qualtrough. “Absolutely we’re going to invest more resources in this.”

In the meantime, the number of pay problems continues to grow.

— With files from Monique Scotti

LISTEN: Rob Breakenridge rants about the Phoenix Pay system

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