Building and Implementing the Phoenix Pay System Read full text in English
1 Poor budgeting of the project
Lack of functionality and data security
When faced with possible higher costs, the Department of Public Services and Procurement Canada removed or deferred important system functions. All of this created many risks-which the Department knew about-that the system would not be able to process pay accurately or keep employee information secure. The Department chose to not go back to the Treasury Board either to ask it for more money so that the project could be delivered as planned or to inform it about the Department's decision to remove or defer some functions and the impact that could have on the expected benefits and savings.
2 No all-embracing testing
Problems by implementing the system
OAG found that Public Services and Procurement Canada did not test Phoenix as a whole system before implementation and did not know whether it would operate as intended. For example, the Department did not complete the final testing of Phoenix by pay advisors.
In June 2015 Phoenix executives cancelled the pilot because of major defects that affected critical functions and outstanding problems with system stability, and they did not have enough time to reschedule the pilot without delaying Phoenix implementation. They decided that rather than delaying Phoenix, there would be no pilot. Public Services and Procurement Canada did not assess the impacts of cancelling the pilot. This pilot was the Department's chance to test a final, live version of Phoenix before implementation. The pilot could have allowed the Department to detect problems that would have shown that the system was not ready.
3 Lack of involvement of all stakeholders
Failure of project management
Public Services and Procurement Canada did not fully consult and involve other departments and agencies during the development of Phoenix to determine what they needed Phoenix to do or to adequately help them move to the new system. The Department did not completely and properly test Phoenix before its implementation, which is contrary to recognized practices for developing a system. Phoenix executives cancelled a pilot project with one department that would have assessed whether Phoenix was ready to be used government-wide.
In 2009, the Government of Canada started an initiative to replace the 40-year-old system it used to pay 290,000 employees in 101 departments and agencies. This Transformation of Pay Administration Initiative would also centralize pay services for nearly half of the departments and agencies, which had previously processed pay for their own employees. The initiative's goal was to decrease the costs of and improve the efficiency of processing the government's payroll, which is about $22 billion a year. The government expected the initiative to save it about $70 million a year, starting in the 2016-17 fiscal year.
Public Services and Procurement Canada centralized the pay advisors for 46 departments and agencies between May 2012 and early 2016. In our fall 2017 audit of Phoenix pay problems, we found that the system had problems immediately after it was put in place and that they continued to grow. Departments and agencies have struggled to pay their employees accurately and on time.
This audit focused on whether Public Services and Procurement Canada effectively and efficiently managed and oversaw the implementation of the new Phoenix pay system. The audit focused on the Department as the lead organization for building and implementing the system and for operating centralized pay operations for 46 departments and agencies in the Public Service Pay Centre in Miramichi, New Brunswick. The system is a critical part of the Transformation of Pay Administration Initiative.
OAG of Canada wanted to know whether the decision to implement the system was reasonable and considered selected aspects of standard management practices for system development. OAG examined whether the system was fully tested, would deliver the functions needed to pay federal employees, was secure, and would protect employees' private information. OAG also examined whether Public Services and Procurement Canada adequately supported selected departments and agencies in their move to Phoenix.