Auditor general says bureaucrats bungled Phoenix, costing millions
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.
“We found that (Phoenix executives) did not consider the report’s findings and recommendations before Phoenix was implemented,” auditors concluded.