Novopay signed off despite 150 flaws

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 "showstoppers".

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 notice.

Talent2 told the ministry to refrain from what it called excessive reviews and attempts to manage it on contract matters.

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 said.

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 default.

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 life".

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.