Auditor general says unleashed bureaucrats bungled Phoenix, costing millions

More than half of the federal government’s 290,000 employees have reported being affected by Phoenix

The federal government’s problem-plagued Phoenix pay system was mismanaged from the very beginning, says a new report that lays blame for the bungled project squarely at the feet of bureaucrats.

The findings were contained in the auditor general’s latest report to Parliament, which also found flaws in Canada’s military justice system; how government surplus assets are disposed of; and how Ottawa has failed to close socio-economic gaps between on-reserve First Nations people and other Canadians.

“The building and implementation of Phoenix was an incomprehensible failure of project management and oversight,” auditor general Michael Ferguson said in his second report on the pay system in six months.

The pay system was never properly tested before its initial launch in February 2016, and Phoenix executives either didn’t understand or ignored warnings of problems, choosing to place potential savings targets ahead of system readiness, said Ferguson’s spring report.

“Phoenix executives were more focused on meeting the project budget and timeline than on what the system needed to do,” the report concluded.

Initially conceived in 2009, the former Conservative government had projected Phoenix would save taxpayers about $70 million annually by requiring fewer people to work on pay files.

So far, however, it’s estimated that the system could cost $1.2 billion by the time it is stabilized, which could take years.

More than half of the federal government’s 290,000 employees have reported being affected by Phoenix over the past two years. Some have been overpaid, some underpaid and others not paid at all — in some cases for months at a time.

How a system with such glaring shortcomings could be fully launched without raising alarms at the highest levels came down to who was minding the store, said the report.

“Overall, we found that there was no oversight of the Phoenix project, which allowed Phoenix executives to implement the system even though they knew it had significant problems.”

It meant the deputy minister in charge of the project didn’t receive independent information showing that Phoenix was not ready, auditors concluded.

The report recommended that an oversight mechanism be put in place before any new IT projects are launched.

In its response, the Treasury Board Secretariat said it will ensure independent reviews are conducted on all such government-wide projects in future, and that the deputy ministers and senior executives responsible for them are made aware of the findings.

Auditors found that Public Services and Procurement Canada, which is responsible for the pay system, was aware of significant failings even before the initial system launch in February 2016, but appeared to ignore the warning signs.

Concerns about Phoenix raised by other departments and agencies caused Treasury Board to hire Gartner, an IT consulting firm, in December 2015 to assess the government’s readiness for Phoenix.

Gartner identified several risks and recommended Phoenix be launched in a limited number of departments with less complicated pay needs, and that Phoenix and the old pay system be run in parallel in case anything went wrong.

READ MORE: Progress on fixing Phoenix pay system backlog could be short-lived: Ottawa

READ MORE: Minister opens federal pay centre, says troubled Phoenix system improving

“We found that (Phoenix executives) did not consider the report’s findings and recommendations before Phoenix was implemented,” auditors concluded.

The backlog of problem pay transactions awaiting processing at the government’s pay centre in Miramichi, N.B., exceeded 600,000 earlier this month, down from a peak of 633,000 reached in January.

Some of the errors, such as minor overpayments, have been relatively easy to correct. In other cases, however, government workers have reported months-long pay nightmares and endless headaches – diminished credit ratings and missed tuition payments among them.

While the Trudeau government has apologized repeatedly for the “suffering” felt by public servants under Phoenix, and have pledged to compensate “those who have incurred out-of-pocket expenses as a result,” they have also attempted to distance themselves from the debacle, referring to Phoenix as “the Conservative pay system.”

Civil service unions, however, have pointed fingers at the Liberals, insisting the current government is responsible for paying its employees.

The Conservatives have also deflected blame; Opposition Leader Andrew Scheer has argued that, ultimately, it was a Liberal government decision “to press the start button.”

In its latest report, the auditor general’s office was also critical of Canada’s military justice system, saying delays have resulted in at least one court martial case being thrown out, with others facing charges never going to trial.

The report also found that the government routinely sells off surplus assets at fire sale prices when goods or equipment could be reused by other federal organizations instead. Based on the government’s own accounting, auditors said assets were sold for less than two thirds of their value with almost no consideration given to repurposing.

One department, however, was held out as an example of the benefits of reusing assets. Auditors said the Canada Revenue Agency saved more than $4.5 million over three years by adopting reuse practices.

Ferguson also called for a “fundamental rethink” of how the government provides social services to Indigenous Canadians.

The auditor was particularly critical of Indigenous Services Canada for overstating on-reserve high school graduation rates among First Nations students by up to 29 per cent.

Terry Pedwell, The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Red Deer’s Jamie Woodfin lands in Project WILD’s top 12

Following showcase events and public voting, the top three artists will be chosen

Court full as schools, parents dispute Alberta gay-straight alliance law

Justice Centre argues keeping parents out of the loop violates freedom of religion and expression

Lacombe’s hydrant flushing program maintains water quality

During flushing, customers may notice a drop in water pressure

Marijuana to be legal in Canada Oct. 17: Trudeau

Prime Minister made the announcement during question period in the House of Commons

Lacombe County 2018 property assessment and tax notices mailed-out

Municipal property tax notices were recently mailed out to Lacombe County ratepayers

In reversal, Trump signs executive order to stop family separation

President had been wrongly insisting he had no choice but to separate families apprehended at border

True-Line Homes donates over $14,000 to Boys and Girls Club of Red Deer and District

Money raised at True-Line’s 10th and final charity slo-pitch tournament in Blackfalds

WATCH: Mellisa Hollingsworth highlights Special Olympics Celebrity Breakfast

Olympic Bronze Medalist from Central Alberta shared her journey with a packed house

Humboldt survivors to attend NHL Awards

Players say it’s a blessing to be back together again

Justice minister: marijuana still illegal for now

Driving under the influence of drugs has always been — and will remain — against the law

Crown recommends 150 years for Quebec mosque shooter

Crown lawyers say Alexandre Bissonnette deserves to receive the longest sentence in Canadian history

192 missing after ferry sinks in Indonesia

Divers are searching an Indonesian lake after a ferry sank earlier this week

No clear plan yet on how to reunite parents with children

A lawyer has documented more than 300 cases of adults who have been separated from a child

Senate officially passes Canada’s marijuana legalization bill

Bill C-45 now moves to royal assent, which is the final step in the legislative process

Most Read