Auditor-General monitoring Novopay system

The Auditor-General has announced it is monitoring problems with the Novopay system; however, it is not investigating the Ministry of Education's payroll system at this stage.

The system, which handles the pay of school staff, has been plagued with errors since it was introduced in August last year, with staff not getting paid the correct amount or not being paid at all.

Auditor-General Lyn Provost said the office would consider investigating the issue should the ministry fail to fix the problems.

"Our current priorities around Novopay are completing annual audit work to ensure that schools are able to sign off their payroll reports and their annual financial statements," Mrs Provost said in a statement.

"We appreciate that schools may be concerned at the potential for increased audit costs as a result of the Novopay problems. We are working with the Ministry to minimise the workload for schools on their 2012 financial statements, as well as minimising any additional work that auditors have to carry out," Mrs Provost said.

"The Ministry announced last year that it would commission an independent review and last week said that its review is to be brought forward. Therefore, I have decided that it would be premature for this office to begin an inquiry at the moment. The agencies that are responsible for understanding and fixing the problems should be given a reasonable opportunity to do so.

"I fully appreciate that this is a difficult and stressful time for all involved, and I will be keeping a close eye on developments. If the steps that the Ministry takes do not adequately address the issues, I will reconsider whether there is a role for my office."

Prime Minister John Key announced on Tuesday that Economic Development Minister Steven Joyce would take over the handling of the Novopay system from associate education minister Craig Foss.