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Auditor general says $500M in overpayments to civil servants needs to be collected

Up to a quarter of federal government employees are still experiencing problems with their pay because of the troubled Phoenix pay system, and the government might be running out of time to collect on overpayments.

A new report from Canada’s auditor general says 28 per cent of civil servants in its sampling had errors in their pay, which is down from an estimated 47 per cent last year.

Meanwhile, more than $500 million in overpayments were made to more than 100,000 employees, some dating back more than three years.

If the government doesn’t collect those overpayments soon, the auditor said, it may run out of time to use some recovery mechanisms because of legal limitations.

According to public accounts documents released Thursday, the federal government paid $125 million in Phoenix-related damages to 143,521 people during the 2021-22 fiscal year.

In the previous fiscal year, the federal government paid $400 million in damages to 324,346 individuals.

The office of Public Services and Procurement Minister Helena Jaczek said in a statement Thursday that federal employees deserve to be paid accurately and on time, and acknowledged that the pay problems are creating stress and hardship.

“We are making progress on stabilizing the pay system — as the Auditor General’s report notes, this past year we saw a significant fall in the number of employees who faced pay issues and a reduction in the time it takes to resolve issues,” her office said.

“When it comes to overpayments, we are already working to recover these sums and making significant progress on that as well and are confident virtually all of those payments will be recovered.”

The Phoenix system was launched in 2016 and was meant to consolidate dozens of antiquated pay systems and save the government millions each year.

Instead, it resulted in massive upheaval and has cost the government more than $2.1 billion.