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Otago Polytechnic information technology senior lecturer Tom Clark said the issues with
the Novopay payroll system were part of a wider problem in which contracts to build large-scale technology projects ended up going to companies off-shore.
''Something is amiss in the way that our Government is sourcing these technology projects.
''They are going to large offshore development firms, which makes sense at first glance, because these companies have resources and experience appropriate for projects of this scope.
''But we're missing out on the opportunity to foster that kind of engineering capacity here in New Zealand,'' he said.
''We want to see Kiwi developers competing for, and landing, large development projects overseas rather than sending our dollars and work abroad.
''This sort of high-value technology work could be a tremendous asset to our economy.''
Mr Clark said New Zealand had a well-educated workforce, and its remote location did not hinder its competitiveness abroad, as it did in some other industries.
He believed the Government should be helping to start this by structuring the bidding process in a way that gave New Zealand-based companies fair access.
Earlier, Mr Clark said it would be easier to dump the Novopay system and rebuild it from scratch than repair its compounding problems.
''And, in the meantime, we have an older version of Novopay that we know works, even if it does need an upgrade.
''Given that the current version does not work and is not likely to in the foreseeable future, the correct course of action is obvious.''
Auditor-general Lyn Provost announced this month she was now monitoring the problems being experienced by the education sector with Novopay, but stopped short of saying there would be an inquiry into the payroll system.
The Ministry of Education also announced it would commission an independent review.
The post-implementation review is expected to start in April.
''Therefore, I have decided that it would be premature for this office to begin an inquiry at the moment,'' Mrs Provost said.
The agencies 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.''
Mrs Provost said the office's priorities around Novopay were completing annual audit work to ensure schools could sign off their payroll reports and annual financial statements.