Phoenix failures top Auditor General’s report

OTTAWA — The failed federal public service pay system was the result of a “government culture” that stands in the way of helping people, auditor general Michael Ferguson said Tuesday as he issued his latest report to Parliament.

The problem-plagued Phoenix pay system was mismanaged from the very beginning and is just one of the “incomprehensible failures” of the government over the last decade, Ferguson told a news conference after tabling the report.

Auditors also found flaws in Canada’s military justice system; in how government surplus assets are disposed of; and in Ottawa’s failure 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,” Ferguson said, adding later that the government has reached a critical moment where it needs to reflect on how to change the way it does business.

The pay system was never properly tested before its 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.

The former Conservative government had projected that Phoenix, conceived in 2009, 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 last two years. Some have been overpaid, some underpaid and others not paid at all — in some cases for months.

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.

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.