Date: Thursday, December 13th, 2018
Time: 7:30 pm
Place: Simon Fraser University, Vancouver, BC Campus, 515 West Hastings Street (between Seymour and Richards Streets) in the Diamond Alumni Lounge on the second floor
Speaker: Mark Dwor
Topic: The Phoenix Payroll Disaster
I am the Chairman of the Canadian Academy of Independent Scholars. Up until September 2018, I was also the British Columbia representative on the Board of Management of the Canada Revenue Agency which placed me in Ottawa approximately every 90 days for over 3 years. Just to make it clear, there is nothing that I will say in my presentation or in my answers to questions that would have come exclusively from my being on the Board of the CRA. I will discuss only public documents and refer to conversations that I had with other individuals who were not part of the CRA or its Board. Further, what I will say will be absolutely idiosyncratic and does not represent any opinion of any other Board Member of the CRA or the Senior Management of the CRA.
Phoenix Payroll is the public name for the Government of Canada’s new payroll system that was designed to replace an existing payroll system that was not centralized, that was based on a variety of operating systems and specific hands on expertise and probably needed to be modernized. The problem is that the present system does not work anywhere near as well as the prior system. From day one of its implementation in April 2016, the Phoenix Payroll system has overpaid certain people, underpaid certain people and not paid certain people on a regular and continuous basis. The devastation that this has caused to individuals across the country has been documented in the media but it seems to have lost its popular currency under the assumption that it is being taken care of.
It may be fair to say that many civil servants across the country have felt despondent not only because of the disastrous payroll system for them individually but for the state and integrity of public administration in Canada.
The new plans that were announced in August 2018 were basically to put continuing band aids on the Phoenix Payroll System until it can be replaced in the unknowable future, by a system yet to be designed.
I should clarify that the official name of the Phoenix Payroll System is “Transformation of Pay Administration Initiative (TPAI)”.
As you will see, the information I rely on will be using uncommon language designed for particular audiences. My task will be to take all these different types of languages designed for different audiences and make my presentation comprehensible to the audience sitting in front of me.
The latest information on this disaster is the latest Government of Canada Pay Bulletin: November 2018. If you look at it, you will notice that the Government’s target for the Percentage of Transactions Processed within service standards is 95%. As of October 31, 2018, the percentage was 59%. While it is dangerous to quote statistical percentages out of context, this spread of 59% to the acceptable standard of 95% shows the continuing problems with the payroll system.
I hasten to add that the issues raised in this disaster are not unique to the Federal Government nor are they unique to governments but can also be found in many bureaucracies and organizations of any size.
The ministry that was in charge of the Phoenix Payroll project is Public Services and Procurement Canada (PSPC). I’ll call it Public Services.
I will be referring briefly to an Public Services Project known as Shared Services Canada, because in its planning and implementation it bears some similarities to the Phoenix Payroll System.
Here is an article in the Ottawa Citizen (which was modified at the end of December 2016) on Shared Services: https://ottawacitizen.com/
This article may seem complicated and full of “insider” knowledge but after all, Ottawa is a company town and that’s who the market for this expose is. For those of you who read it, the concerns about the email system have been dealt with but it will take years to get Shared Services to be fully functional.
The second document I’ll be referring to, in some detail, is “Lessons Learned from the Transformation of Pay Administration Initiative”:
This report was done at the request of Treasury Board by an outside management consulting firm (Goss Gilroy) and the report was made public in October 2017. For those of you who read it, it is written in bureaucratic management language and its mandate was to report to the Treasury Board on “Lessons Learned”. This was not an audit – that will come separately. But even the phrase “Lessons Learned” contains a kind of political ambiguity. This issue is dealt with by the authors in the last paragraph as follows:
“Finally, in our view, these are lessons that are yet to be learned, not lessons that have been learned through the course of the management and implementation of the TPA (Transformation of Pay Administration Initiative). It will be critical for the government to actually apply these lessons in future transformations and more immediately in the transformation challenge currently before the government in addressing the multitude of issues with pay administration today.”
The third document we will be looking at is the report from the Auditor General in May of 2018.
This report was made under the statutory authority of the Auditor General to report to Parliament. That does not mean that the language does not also occasionally reflect the cultural language of the Government of Canada.
The Auditor General was very clear in his analysis as outlined in the last paragraph 1.105:
“We concluded that the Phoenix project was an incomprehensible failure of project management and oversight. Phoenix executives prioritized certain aspects such as schedule and budget, over other critical ones, such as functionality and security. Phoenix executives did not understand the importance of warnings that the Miramichi Pay Centre, departments and agencies, and the new system were not ready. They did not provide complete and accurate information to deputy ministers and associate deputy ministers of departments and agencies, including the Deputy Minister of Public Services and Procurement, when briefing them on Phoenix readiness for implementation. In our opinion, the decision by Phoenix executives to implement Phoenix was unreasonable according to the information available at the time. As a result, Phoenix has not met user needs, has cost the federal government hundreds of millions of dollars and has financially affected tens of thousands of its employees.”
I may be discussing the Auditor General’s view which he has given for the last number of years regarding the culture of the Federal Civil Service.
I will probably not be discussing all of the hard work done by government officials to make the problem be more manageable, except to say that from my knowledge, they did the best they possibly could.
By the end of August 2018, the government unveiled its plan which will be a work in progress for quite a while.
Basically, Public Service will keep Phoenix running as well as possible until a proper replacement can be formulated and implemented. That new replacement project is under the direct control of the Treasury Board Secretariat particularly the new Chief Information Officer. It is unclear how long this will take.
The last estimate that I have seen is that this whole disaster will cost over $2.5 billion of unexpected and avoidable expenditure.