Official documents reveal the flawed Novopay payroll system
was signed off by Cabinet ministers, despite them knowing
there were nearly 150 software defects.
A report last June by Ministry of Education chief information
officer Leanne Gibson revealed 147 defects, with most at a
medium to serious level, but said they were not
Four independent advisors, PWC, Ministry of Social
Development, Ministry for Primary Industries and NZ Transport
Agency, assessed Novopay and gave it the go-ahead.
"On balance, while they noted some matters still need to be
addressed, they recommended that the programme should
continue," Ms Gibson said.
Two months before that, the developer Talent2, was told it
was in contractual default for failing to meet targets in
rolling out the system.
A breach notice was threatened, however Talent2 argued
defects were acceptable for the state of the project and it
did not think the ministry could issue a breach of contract
Talent2 told the ministry to refrain from what it called
excessive reviews and attempts to manage it on contract
Education Minister Hekia Parata, Finance Minister Bill
English and Associate Education Minister Craig Foss were
advised that despite 5913 payslip errors during testing,
those figures were expected to be reduced by just over 773
before the system was rolled out.
"Of the 773 differences outstanding, the large majority fall
within the range of $25 over or under payment," Ms Gibson
Novopay went live in August. As of January 9, education staff
were owed almost $12 million.
The information also revealed the ministry received 255
invoices from schools and school support staff for extra
costs they incurred from administering payment errors in
relation to Novopay to the value of $1.197 million.
Last year Associate Education Minister Craig Foss assured
staff any banks fees or charges due to missed payments would
be covered by the ministry.
Schools began invoicing the ministry for extra administrative
time spent working on Novopay.
Yesterday the Government announced it will carry out a
technical audit of the flawed system to see if it can be
fixed. This would happen alongside a ministerial inquiry into
how the problems with Novopay were allowed to occur.
The Government paid $30 million to Australian company Talent2
to develop Novopay over a two-year period.
The company was awarded the contract in 2005, but five years
later, education deputy secretary Anne Jackson requested an
urgent meeting with Talent2's chief executive Joah Rawlinson
over significant delays in implementing the system.
By last April Ms Jackson said the company had missed four
major deadlines, and she believed the company were in
She also said there were 65 faults in system, and there was a
need to run a total of 270 test scripts.
The ministry issued a breach of notice in April 18 to
Talent2, prior to roll out of contract, but Mr Rawlinson
argued that ongoing defects were "part of the normal project
Yesterday, Steven Joyce, the minister tasked with finding a
solution to the ongoing problems, said an audit would be
carried out by Deloitte, which would incorporate the results
of the audit being undertaken by Ernst & Young on behalf
of the Ministry of Education.
A ministerial inquiry will start in March or April and run
for up to four months.
* The Ministry of Education botched the release of official
documents about Novopay by allowing people to view some
information it was trying to keep secret.
The ministry this morning made documents about the troubled
school payroll system available through its website but some
blacking out of information was reversible.
Access was blocked for two hours before the documents could
be viewed online again.