The federal government is conducting a major cost review of the disastrous Phoenix pay system — including a price tag for what it would take to make the erratic system “sustainable” over the long run.

The Office of the Comptroller-General, the government’s chief financial officer, is leading the “comprehensive” spending review to get a full picture of what the accident-prone pay system has cost — and estimate what it could cost in the future. It is expected to be completed by May.

So far, the cost is anyone’s guess. The government has spent more than $400 million on fixes, hiring more staff and opening satellite pay offices and a call centre.

Last fall, Public Services Minister Carla Qualtrough said she could not guarantee that Phoenix won’t end up costing taxpayers $1 billion to fix.

Shortly after, Auditor-General Michael Ferguson delivered his scathing report on the Phoenix roll-out and warned it will cost more than the $540 million departments he found that departments had earmarked over the next several years. He pointed to the failure of a similar pay system at Queensland Health in Australia, which hit $1.2 billion and is still not working as planned.

The ongoing costing review came out of Ferguson’s report, which recommended then the government track and report on the cost of resolving pay problems, as well as the implementation cost of a “sustainable solution.”

Assistant Comptroller Tom Scrimger told a Senate committee earlier this week that the office is putting together a “global picture of all costs in and around the Phoenix question.”

He said the “cost estimation project” is focused on three areas: cost to build and implement; how much will be spent ‘stabilizing’ Phoenix and future costs to get it working efficiently. Some say those future costs will shape whether the government keeps or replaces Phoenix.

“The third area, which is the one that we approach with a great deal of caution, because we don’t know all the answers yet, is what might the future cost of the solution be,” Scrimger said.

Scrimger also said the costing team that reports to him is working with departments and agencies now. They are gathering data, which will have to be checked for its quality, and then used to build costing models.

The plan is to report by spring to the working group of ministers appointed by Prime Minister Justin Trudeau to oversee management of the Phoenix crisis.

Ferguson told the same Senate committee that fixing Phoenix means more than stabilizing the system so public servants are paid correctly and on time.

He said the government must also continue to pay people “efficiently” and will have to figure out what that will cost. The pay system, for example, was built to save money and reduce staff and now employs more people in pay operations than before Phoenix was launched.

Ferguson said that means identifying the “root causes” of Phoenix errors, address and monitor them to come up with a “workable solution. “

“This system has been procured to delivery efficiencies. This system was supposed to pay more easily. Right now, they have a system that is more efficient than the 40-year-old system that it replaced, but it is less efficient than the 40-year-old system that it replaced,” Ferguson told senators.

“Once they get the errors down to the point, they can process them in a reasonable manner, they will then need to turn their attention to making the system efficient.”

Public Services and Procurement Canada, the paymaster, is currently implementing an action plan with more than 20 measures to ‘stabilize’ Phoenix by 2018. At last count, the backlog of files waiting to be processed reached 645,000.

The action plan revolves around a ‘HR to pay’ approach that is at the centre of a new training program and a review of all pay policies and processes.

The approach recognizes that pay and human resources are linked. Human resource transactions trigger payments, so they are central to paying employees properly.

Months into the pay crisis, the government realized the extent of the errors and problems caused by data being entered improperly — largely because no one had been trained on how to use Phoenix with the more than 30 separate HR systems used by departments.

But Ferguson flagged his concerns that the ‘HR to pay’ approach could mean the government is taking on more complexity and risks when it should be focusing on fixing the pay problems.

“I think it indicates some risk because they’re not just talking about fixing pay problems and fixing the pay system. They’re talking about this whole integrated HR information to pay information and that could in fact complicate the whole project,” he told Senators.

Scrimger recapped some of the costs for senators.

The government spent $309 million on the two-part pay modernization project. The first phase consolidated pay operations, moving pay services from 45 departments to a new central pay centre in Miramichi, N.B.

About 800 compensation advisers working in those departments were laid off. Departments had to transfer about $217 million to the Miramichi project.

The second phase was the roll-out of Phoenix, a pay system that was built by IBM using Oracle’s PeopleSoft software.

Scrimger said PSPC received an additional $50 million when problems mushroomed after the second roll-out and departments were allowed to keep the $210 million in savings that Phoenix was supposed to generate over the next several years. The ministers’ working group then approved an additional $142 million last year.

“If I very quickly do the math, there is approximately $400 million in funding that’s been approved to address the challenges that have come out since the implementation of Phoenix, almost evenly split between not harvesting savings from departments and new monies invested to address the Phoenix implementation issues,” said Scrimger.

But some senators were frustrated that the review doesn’t yet have a handle on how much departments are spending to fix the problems and deal with the backlog.

“Why is it always “will”? Why wouldn’t some of it be done? Why couldn’t it be done now? Why isn’t it done now,” said Conservative Senator Elizabeth Marshall.