The Government has warned it could still scrap the
Novopay payroll system and has revealed that its back-up plan
could include working with the previous payroll provider.
Minister in charge of Novopay Steven Joyce today announced a
ministerial inquiry and a technical audit of the flawed
education payroll system.
The technical audit would be carried out by Deloitte but
would incorporate the results of the audit currently being
undertaken by Ernst & Young on behalf of the Ministry of
The ministerial inquiry will start in March or April and run
for up to four months.
A contingency plan was being investigated and could include
scrapping the payroll system but in the meantime the
Government would stick with it, Mr Joyce said.
He and acting Education Secretary Peter Hughes had begun
talks with Datacom, the previous payroll provider.
"We're basically investigating setting up a contingency - I
want to stress that would not be a simple solution.
"You would have to wind back a significant amount of what's
been done and then go forward again, and I don't think
anybody is under any illusion that that solution would be at
least as painful as where we are in the short term."
He said that would not be a decision taken lightly.
Mr Joyce said the Datacom payroll system had also had
problems and was part of the reason the Government pushed for
Mr Joyce also confirmed Cabinet Ministers Bill English, Hekia
Parata and Craig Foss had signed off on the Novopay system
even though the system had "bugs" in it.
"In terms of the advice to proceed, all advisers were
unanimous in their decision that it should proceed," said Mr
When asked if Novopay was a "dog", Mr Joyce replied: "it's
one with a few fleas."
Mr Joyce said those fleas, or "bugs" were going to be
investigated during the month-long technical audit running in
tandem with the ministerial inquiry.
The technical audit would incorporate the results of the
audit currently being undertaken by Ernst and Young for the
Mr Joyce is to take the terms of reference for the
ministerial inquiry to Cabinet on Monday.
The Government will fund new measures to fix Novopay. Mr
Joyce could not say the exact amount being spent but it is
believed to be in the millions of dollars.
The commercial and contractual issues between Talent2 and the
Government would be put to one side until the ministerial
inquiry and technical inquiry were completed.
Mr Joyce said the Government would then go through the
contract to determine who was responsible for the cost.
"There is still some debate around responsibilities for
different elements of the extra resource we're going to need"
"We don't want the inquiry to get in the way of fixing the
"The reality is there are no steps forward that don't involve
some more pain for the administrators and the people who are
working on the payroll," he said.
Mr Joyce stressed the technical audit and the ministerial
inquiry were separate and he didn't want the inquiry to get
in the way of fixing the system.
But whether the system could be fixed was a main part of the
investigation and Mr Joyce could not firmly rule out
scrapping Novopay entirely
He had met sector groups this week - principals, and staff in
schools, unions and more announcements would be made in the
Mr Joyce could not say when school staff would be paid
correctly, or when the problems with Novopay would be sorted
Education Minister Ms Parata said all the advice at the time
suggested they should proceed.
"I think hindsight is a wonderful thing," she said.
Labour's acting education spokesman Chris Hipkins said
Novopay wasn't ready to be implemented.
"They didn't ask fundamental questions about whether or not
it was ready," said Mr Hipkins.