Ottawa·Phoenix Falling

Phoenix overpayments just tip of $250M iceberg, records show

On the heels of a CBC report revealing federal workers were overpaid more than $70 million under the troubled Phoenix system, the government now says it actually doled out $250 million more than it should have between 2012 and 2015.

Government has recouped most of the money, but $15M remains unaccounted for

Deputy Minister of Public Services and Procurement Canada Marie Lemay listens to a question during a technical briefing on the Phoenix pay system on Thursday, Aug. 11, 2016 in Ottawa. (Justin Tang/The Canadian Press)

On the heels of a CBC report revealing federal workers were overpaid more than $70 million under the troubled Phoenix system, the government now says it actually doled out $250 million more than it should have between 2012 and 2015.

The deputy minister in charge of Phoenix, Marie Lemay, released the numbers after explaining on Wednesday that it was overpaying workers before the troubled pay system was brought in.

"It's important to note overpayments were also experienced in the old system," said Lemay.

The government is trying to cover up this Phoenix fiasco. The excuse is unacceptable.- Dany Richard, ACFO

The president of the Association of Canadian Financial Officers said it's an "unacceptable" excuse that exposes a major problem in the federal government. 

"The government is trying to cover up this Phoenix fiasco," said Dany Richard. "The excuse is unacceptable, you cannot simply tell people you've done it in the past, so it's not that bad."

Richard, who represents accountants within the public service, said he's worried about just how much time and resources are going into recouping the money paid out in error. 

"You shouldn't have any overpayments. Maybe some mistakes, but these are millions of dollars and the fact that we're just saying, 'Oh it's OK, it's normal, it's standard procedure' … It shouldn't be this way. These are taxpayers' funds," he said.

ACFO president Dany Richard says the government's characterization of the overpayment problem as "normal" is unacceptable. (CBC News)

Overpayments increased during transition

Public Services and Procurement Canada said overpayments most commonly happen when public servants retire or go on leave.

The department emailed reporters these numbers a day after the news conference. They show overpayments increased in 2014, from $45 million to $78 million: 

  • 2015 - $78.3 million  
  • 2014 - $78.6 million 
  • 2013 - $45.2 million  
  • 2012 - $53.8 million  

That increase coincides with a transition period when the government started letting go of compensation advisers, amalgamating pay records and training new advisers at the pay centre in Miramichi, N.B., according to the Government Services Union.

GSU national president Donna Lackie said she's as surprised as anyone about the overpayments, and doesn't know why they doubled. 

Government Services Union president Donna Lackie represents compensation advisers dealing with the Phoenix payroll problems. (CBC)

"I had no idea overpayments were ever that high and I have been in government for 30 years," said Lackie. "If that's traditional I can tell you I never knew that."

She plans to go to Public Services and Procurement Canada to find out what's going on and calls it concerning. 

$15M still missing

PSPC said it recouped almost all of the $250 million in overpayments that were made between 2012-2015. 

"At the end of 2015, 94 per cent of these have been recovered and processes continued to recover remaining amounts," said PSPC in a statement. 

That means that six per cent was not recovered by the end of that year, totaling more than $15 million.

Lemay says Phoenix should eventually minimize overpayments compared to the old payroll system.

"Over time [overpayments] should appear less and less frequently because we now have a system that flags any payments over $10,000 so that departments and agencies can validate these amounts before payments are made," said Lemay on Wednesday. 

She's assuring the public that "all overpayments will be recovered" once it processes a backlog of over 290,000 cases in the next several months. 

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