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Auditor-General Michael Ferguson appears before the Commons public accounts committee on Report 1, Building and Implementing the Phoenix Pay System, of the 2018 Spring Reports of the Auditor General on Parliament Hill in Ottawa, Ont. on June 14, 2018.David Kawai/THE CANADIAN PRESS

The three public servants blamed by the Auditor-General for the Phoenix pay system problems were not fired for mismanagement of the massive technology project that botched the pay of tens of thousands of public servants for more than two years.

Marie Lemay, deputy minister for Public Services and Procurement Canada (PSPC), said two of the three Phoenix executives were shuffled out of their senior posts in pay administration and did not receive performance bonuses for their handling of the system. Those two employees still work for the department, she said. Ms. Lemay, who refused to identify the individuals, said the third Phoenix executive retired.

In a scathing report last month, Auditor-General Michael Ferguson blamed three “executives” – senior public servants at PSPC, which is responsible for Phoenix − for the pay system’s “incomprehensible failure.” He said the executives did not tell the then-deputy minister about the known problems with Phoenix, leading the department to launch the pay system despite clear warnings it was not ready.

Speaking to a parliamentary committee on Thursday, Ms. Lemay said the individuals did not act with “ill intent,” noting that the development and implementation of the Phoenix project were flawed. She encouraged critics to look at the “bigger picture” to learn from all of Phoenix’s failures.

“Pointing to two or three people and thinking that they are responsible for making this entire system fail and what we’re living today is very simplistic. If we focus on that, we’re going to miss all the other really important lessons,” Ms. Lemay told The Globe and Mail after the committee meeting.

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Mr. Ferguson, whose office spoke with the three Phoenix executives as a part of its reporting, said the officials prioritized some aspects of the pay-system rollout, such as schedule and budget, over functionality. He said they also cancelled a pilot implementation project with one department that would have helped it detect problems indicating the system was not ready.

Ms. Lemay was careful not to identify the three Phoenix executives, but did confirm that two of them reported directly to the then-deputy minister of PSPC, while the other person did not. Conservative MP Gérard Deltell said he was troubled that the executives are still employed by the government and suggested they testify before a parliamentary committee to explain their role in the Phoenix mess.

“As a taxpayer and a representative of the citizens, this concerns me,” Mr. Deltell said.

Peter Wallace, Treasury Board secretary, suggested Parliament consider legislative changes to allow the government to quickly fire public service executives who fail to do their job properly and to claw back performance bonuses in serious cases, such as “gross mismanagement.”

“There may well be opportunities to improve the accountability regime,” Mr. Wallace told the committee. The barriers to firing public servants are “very, very high,” he said.

Liberal MP Jean Yip said she is disappointed over the lack of accountability within the public service.

“It just seems like people are just shuffled,” Ms. Yip said.

Mr. Ferguson’s report warned the Phoenix problems are indicative of “pervasive cultural problems” in the civil service, which he said is fearful of making mistakes, taking risks and conveying “hard truths.”

Ms. Lemay said that while Canada has a world-class public service, there is always room for improvement. She is currently overseeing her department’s cultural transformation efforts.

Speaking to the same parliamentary committee on Tuesday, Privy Council Clerk Michael Wernick challenged Mr. Ferguson’s assertions, saying his chapter on the federal government’s cultural issues is an “opinion piece” containing “sweeping generalizations.”

The Public Service Alliance of Canada (PSAC), the country’s largest civil-service union, said the comments from Mr. Wernick are shocking.

“To say the report contains sweeping generalizations, and that it’s not supported by evidence is unbelievable and couldn’t be further from the truth. All senior government officials should be focused on addressing the cultural and systemic problems the Phoenix debacle has brought to the forefront,” Chris Aylward, PSAC national president, said on Thursday.

The latest Phoenix revelations come as the federal government marks its annual National Public Service Week recognizing the work of civil servants. PSAC intends on writing Prime Minister Justin Trudeau to request a public inquiry into Phoenix.

The launch of the Phoenix pay system and data collection by Indigenous Services Canada are being criticized in the auditor general’s latest report. Michael Ferguson urged Ottawa to reflect on what he called “incomprehensible failures.”

The Canadian Press