Canadian govt plans to bypass payroll emergency controls branded “risky” Canadian govt plans to bypass payroll emergency controls branded “risky”

Canadian govt plans to bypass payroll emergency controls branded “risky”
30 Apr 2018

The Canadian Auditor General has warned that government plans to bypass internal financial controls in the event of payroll emergencies will make his annual $23 billion audit (US$18 billion) even more difficult.

Michael Ferguson said he was concerned that the latest plan to bypass controls related to the controversial Phoenix payroll system during emergency situations creates a “higher level of risk”, which will make it harder and more time-consuming to audit the government’s payroll expenses.

"This means that in the course of our audit of the government’s payroll expenses we have to assume a higher level of risk. That is part of the reason why it now takes us more time and efforts to audit the government’s payroll expenses," he said.

According to iPolitics, the Treasury Board is asking all departments to sign blanket approvals enabling it to bypass federal financial rules in the event of Phoenix emergencies, which could leave large numbers of Canada’s public servants unpaid. Departments have been asked to seek their ministers’ permission to surrender, or “delegate”, their financial authority to approve salary spending to Public Services and Procurement Canada (PSPC). The aim is to ensure pay can be rushed through during an emergency.

The government has already encountered three such emergencies, including one that was dubbed a near catastrophe last Christmas. PSPC rushed through an authorisation to make payroll fixes on time, but departments at the time were told it was a one-off request.

But the Treasury Board is now seeking a standing, or open-ended, approval that would remain in force until March 2021. The need to extend beyond that date would be re-assessed at that point.

The approvals concerned relate to provisions in the Financial Administration Act (FAA). Under the FAA, only managers with delegated authorities for sections 33 and 34 can approve transactions to trigger payments.

The goal is to avert an emergency, whether caused by an error, power outage or technical glitch, which could lead to a “significant risk that employees will not receive their pay” should there not be enough time to approve transactions via the normal route.

Ferguson’s office said Comptroller-General Roch Huppe informed him “some time ago” that the government could change the way sections 33 and 34 were executed, but Ferguson did not take part in the management’s decision to go ahead with the changes.

Emma Woolla

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

 

The Canadian Auditor General has warned that government plans to bypass internal financial controls in the event of payroll emergencies will make his annual $23 billion audit (US$18 billion) even more difficult.

Michael Ferguson said he was concerned that the latest plan to bypass controls related to the controversial Phoenix payroll system during emergency situations creates a “higher level of risk”, which will make it harder and more time-consuming to audit the government’s payroll expenses.

"This means that in the course of our audit of the government’s payroll expenses we have to assume a higher level of risk. That is part of the reason why it now takes us more time and efforts to audit the government’s payroll expenses," he said.

According to iPolitics, the Treasury Board is asking all departments to sign blanket approvals enabling it to bypass federal financial rules in the event of Phoenix emergencies, which could leave large numbers of Canada’s public servants unpaid. Departments have been asked to seek their ministers’ permission to surrender, or “delegate”, their financial authority to approve salary spending to Public Services and Procurement Canada (PSPC). The aim is to ensure pay can be rushed through during an emergency.

The government has already encountered three such emergencies, including one that was dubbed a near catastrophe last Christmas. PSPC rushed through an authorisation to make payroll fixes on time, but departments at the time were told it was a one-off request.

But the Treasury Board is now seeking a standing, or open-ended, approval that would remain in force until March 2021. The need to extend beyond that date would be re-assessed at that point.

The approvals concerned relate to provisions in the Financial Administration Act (FAA). Under the FAA, only managers with delegated authorities for sections 33 and 34 can approve transactions to trigger payments.

The goal is to avert an emergency, whether caused by an error, power outage or technical glitch, which could lead to a “significant risk that employees will not receive their pay” should there not be enough time to approve transactions via the normal route.

Ferguson’s office said Comptroller-General Roch Huppe informed him “some time ago” that the government could change the way sections 33 and 34 were executed, but Ferguson did not take part in the management’s decision to go ahead with the changes.

Emma Woolla

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

 

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