Ottawa

Phoenix pay problems haven't improved, Auditor General finds

The federal government's Phoenix system woes are as tumultuous as ever, according to a report by the Auditor General of Canada, which says there were $615 million worth of pay errors this year alone.

Number of people with errors increased in 2017-18 fiscal year

In a report released Monday, Auditor General Michael Ferguson described the Phoenix payroll system as the one 'significant blemish' on the federal government's financial record. ( The Canadian Press/Sean Kilpatrick)

The federal government's Phoenix system woes are as tumultuous as ever, according to a report by the Auditor General of Canada, which says pay errors this year alone amounted to about $615 million.

The 26-page report released Monday by Auditor General Michael Ferguson describes the Phoenix payroll system as the one "significant blemish" on the federal government's financial record.

More than half of the roughly 300,000 people employed by the federal government have faced pay problems since the Phoenix system was introduced more than two years ago. Workers have been overpaid, underpaid or not paid at all for months at a time.

During the 2017 to 2018 fiscal year, Phoenix processed approximately $25 billion in pay expenses.

The report looked at an estimated 16,000 pay transactions across 47 of the 101 departments and agencies that use the payroll system.

Ferguson found that the extent of the errors in the government's pay transactions showed no improvement from the previous year, and that in fact, the total number of people experiencing errors is growing since the Phoenix system was first implemented.

"The government continued to have numerous challenges in accurately paying employees this fiscal year," Ferguson wrote in the report.

"We found underpayments and overpayments made to employees … these findings show that the situation for government employees has not improved."

Employees with errors now at 58%

The report found that in 2017-18, the government owed employees $369 million due to underpayments and employees owed the government $246 million because of overpayments.

The mistakes add up to $615 million as of March 31, 2018.

The report stated that the issue is widespread across departments, with 62 per cent of employees paid incorrectly at least once during the 2017-18 fiscal year — the same percentage as the 2016-17 fiscal year.

In 2017-18, the percentage of employees in the report's payroll sample who still needed their pay to be corrected was 58 per cent, up from 51 per cent in 2016-17.

"Paying employees the right amount on time and resolving existing pay issues are shared responsibilities across the government," the report stated. 

Since the implementation of the Phoenix system, people waiting for their pay to be corrected increased this past year, the report found.

Fixing the problems 

The Auditor General's report stated that several factors contributed to the high number of pay errors this past year, including the complexity of processing payrolls for various employees with different pay rules.

The report also referenced a backlog of pay action requests, which the government is still struggling to address, as well the need for more manual processing support.

The 2018 federal budget included $16 million to design a better payroll and human resources system for employees. The process to fix the troubled system began in August.

The report said the government must pay attention to the pitfalls associated with managing the risks and challenges with "complex projects with IT components."

"The result could be more failures like Phoenix," the report stated.   

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