Phoenix: Standing Committee on Public Accounts—May 27, 2021

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Status update: Report 1—Building and Implementing the Phoenix Pay System: Spring 2018 report of the Auditor General of Canada


In 2017 to 2018, the Office of the Auditor General (OAG) conducted an audit which focussed on determining whether Public Services and Procurement Canada (PSPC) effectively and efficiently managed and oversaw the implementation of the new Phoenix pay system.

PSPC was the lead organization responsible for building, implementing, operating and maintaining a government-wide pay system that served a community of 46 departments and agencies at that time. PSPC used the Pay Centre for data entries and 55 other departments and agencies who were responsible to input pay information in Phoenix for their employees.

The OAG’s report concluded that PSPC did not effectively and efficiently manage and oversee the implementation of the Phoenix pay system.

As a result, 4 recommendations were issued to PSPC for consideration moving forward when the department is responsible for implementing government-wide information technology projects.

These 4 recommendations focussed on the following areas:

Key messages

Since the tabling of this report, PSPC has considered and implemented these recommendations for the government-wide information technology projects which it is currently leading.

Currently, PSPC is leading the following 4 government-wide information technology projects which are at various stages of execution:

According to an independent third-party reviewer (Deloitte), PSPC’s management has implemented actions to address, in full or in part, recommendations pertaining to project management (recommendation 1.48—fully), project oversight (recommendation1.103—partially) and the role of internal audit (recommendation1.104—fully).

Furthermore, to address the issue of stakeholder engagement (recommendation 1.61):

Finally, our internal audit function is committed to integrate these recommendations when conducting its planning, assurance and consulting and advisory work. For example:

These actions will continue to enhance PSPC’s ability to address the recommendations issued in the Office of the Auditor General of Canada’s 2018 Spring Report 1—Building and Implementing the Phoenix Pay System.


Internal audit activity

With respect to the Upgrade of PeopleSoft 9.1 pay system to PeopleSoft 9.2, the internal audit function has conducted:

With respect to the 3 government wide-information technology projects currently in development, our internal audit function is:

Specifically, integrated real-time industrial security project:

With respect to the Government of Canada trusted platform project:

With respect to the electronic procurement solution:

Status update: Report 1—Phoenix pay problems

Key messages


Performance audits

On November 21, 2017, the OAG tabled its first report on Phoenix pay problems , which focused on the government’s response to pay issues following the implementation of Phoenix.

The audit found that a year and a half after the Phoenix pay system was launched, the number of public servants served by the Miramichi Pay Centre with an outstanding pay request had quadrupled. The audit also found that it took the department too long to recognize that there were serious pay problems, and to have a better understanding of the problems. At the end of the audit period, in June 2017, it was found that the department had started to develop a longer-term plan toward a sustainable solution.

As a result, the OAG made 6 recommendations for Public Services and Procurement Canada and Treasury Board Secretariat to analyze the causes of pay problems, resolve outstanding pay requests, work with departments and agencies to provide accurate and timely information, develop a sustainable pay solution, and report on the cost of those measures.

On May 29, 2018, a second report was tabled, titled Building and Implementing the Phoenix Pay System , which focuses on whether the department provided management and oversight to the Phoenix pay system implementation, and whether the decision to implement the system was reasonable.

The audit found that the department failed to properly manage the Phoenix project and that the system was implemented without:

The department also did not fully consult and involve other departments and agencies in building Phoenix, or adequately train them to use it. Phoenix senior executives did not understand the importance of warnings that the Miramichi Pay Centre, users and the new system were not ready; and there was no oversight of the decision to implement Phoenix.

As a result, the OAG made 5 recommendations to strengthen the project management and development of government-wide information technology projects under PSPC’s responsibility.

PSPC and the TBS have accepted and are implementing recommendations from both performance audits through management action plans.

Financial audits

Starting in 2016 to 2017, the Office of the Auditor General has issued Phoenix-related commentaries every year as part of their annual observations on the financial statements of the Government of Canada.

Three key Phoenix results measures are monitored year after year:

The OAG generally concludes each year that there is little to no improvement to the situation for government employees. The OAG also recognizes, and emphasized in its latest commentary, that departments and agencies play a key role in providing the department with timely and accurate data, so that employees can be accurately paid on time.

The department is implementing a series of measures related to pay transactions and processes, as well as information technology (IT) tools and infrastructure, in response to the observations made as part of the financial audits.

Progress update: Resolving pay problems key messages

Support for employees and capacity

Supporting employees facing pay issues and making sure they are paid accurately and on time is a top priority.

As part of our ongoing efforts we have increased our compensation workforce four-fold since 2016, to more than 2,300 employees, increasing our ability to process incoming work to service standards as well as address backlog cases.

We have improved services offered by the Client Contact Centre to provide better support to employees, including the ability to resolve pay issues in a faster and more effective way at the first point of contact. The Client Contact Centre supports the escalation of hardship cases so they can be addressed quickly, and agents are trained to respond to situations where employees may be in distress.

Following an 18-month roll-out concluding in spring 2019, all organizations served by the Pay Centre have transitioned to the pay pod model, representing more than 220,000 employees. Pay pods provide better services to employees in departments and agencies served by the Pay Centre by providing enhanced client relations and interactions, by handling employee files to process current intake within the effective pay period, while also contributing to efforts to work through the backlog and addressing outstanding cases.

We have introduced MyGCPay to all departments and agencies. MyGCPay is a new web application that provides employees with a centralized and simplified view of their pay and benefits, as well as their detailed pay stub, to help employees better understand their pay.

In addition, our government created the Treasury Board Secretariat Claims Office to compensate employees who have incurred expenses or financial losses because of the implementation of the Phoenix pay system. A new claims process was launched in mid-January, to compensate current and former employees who have experienced severe personal or financial impact.

We continue to build strong partnerships between departments, unions and all stakeholders so that pay transactions can be processed quickly and accurately.

Improved processes and technology

PSPC has put in place over 2,500 systems enhancements and fixes which have helped move the pay system to a much steadier environment. As a result, PSPC has increased the overall system stability and performance in payroll processing.

In addition, PSPC continues to work closely with all stakeholders, including experts, federal public sector unions and the private sector to identify and implement innovative solutions to accelerate pay stabilization.

PSPC launched a procurement process in August 2018 to engage the private sector in innovative solutions to help stabilize the pay system. Industry has been consulted in several areas identified as key to reaching stabilization. These are:

In February 2020, PSPC awarded a contract to McKinsey & Company to provide accelerator services to the Public Service Pay Centre. Earlier this year, the contract was extended to the end of August 2021. Under this contract, McKinsey & Company will provide consulting services to transform ways of working, including management practices and tools, to improve both productivity and the experience of our clients and client organizations. The work to date has resulted in substantial increases in the productivity and accuracy of work across the pilot teams at the Pay Centre.

In October 2020, PSPC implemented a new retro redesign solution in the Phoenix pay system, which further automates the processing of individual late transactions, as well as eligible mass retro payments. The new solution is expected to result in more timely payments for employees and reduced demand for manual work by compensation advisors. In addition, a new view page is now available in Phoenix and the MyGCPay application, providing employees with more detailed information about their automated retroactive payments.

In January 2021, PSPC awarded a contract to IBM to build on the robotic process automation work completed to date, and to accelerate the automation of pay processing, allowing compensation employees at the Public Service Pay Centre to focus on complex cases and address more transactions in the backlog.

Progress in overall queue decrease

PSPC is taking actions on all fronts to help stabilize the pay system, and we are seeing progress.

As of April 28, 2021, the backlog of financial transactions beyond the normal workload has decreased by 74% since the peak of January 2018, representing a reduction of 286,000 transactions, from 384,000 to 98,000.

Over the same period of time, the overall queue of transactions waiting to be processed at the Pay Centre has decreased by 58%, representing a reduction of 365,000 transactions, from 633,000 to 268,000.

The Pay Centre met service standards 82% of the time in April 2021, compared to 72% on average in 2020, and 57% on average over 2018 to 2019.

The department has also focused efforts on priority files such as parental leave, disability leave, student pay and collective agreements implementation. On average in 2020, parental and disability leaves were processed within service standards 99% of the time.

PSPC has processed close to $2.5 billion in collective agreement retroactive payments to employees, for the 2014 round. In addition, the department has processed almost $1.6 billion in collective agreement retroactive payments to employees to date, for the 2018 round.

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