Datacom in discussions over Novopay contingency plan

Minister in charge of troubled payroll system announces ministerial inquiry

The acting secretary of education Peter Hughes has begun talking to Datacom about a contingency plan which may involve replacing Novopay.

Cabinet minister Steven Joyce, who announced a ministerial inquiry and technical audit on the troubled teachers payroll today, says Hughes has “commenced dialogue with previous supplier Datacom”.

The Ministry of Education signed the contract with Talent2 for Novopay in August 2008 and it was to be implemented two years later. But there were delays and it went live in August last year. During that time Datacom continued to provide the payroll service which it had developed as a bespoke service since 1996.

Today, Joyce told stuff.co.nz that rolling back on Novopay was "not a decision you would take lightly" and he would prefer not to "jump horses".

In the meantime, Joyce says solving software problems will be accelerated, and further resources and staff would be poured into fixing problems which have seen hundreds of teachers go unpaid and schools go into the red.

He says the extra cost is likely to run to millions of dollars. The government will supply cash and resources in the interim, until contractual issues were worked out with provider Talent2.

The technical audit would be carried out by Murray Jack of Deloittes to examine the "stability" of the payroll system, and Joyce says it will report back on whether problems were "critical".

The audit will include results from an audit currently being undertaken by Ernst and Young.

Joyce says Novopay is one of the largest and most complicated payrolls in Australasia, and he stressed there was no quick fix.

It was "too challenging" to say when teachers would begin to be paid properly, but the remediation plan stretched "to weeks, even months".

Joyce will take a proposal for a ministerial inquiry to Cabinet and it is likely to take three to four months. But he doesn’t want an inquiry to get in the way of fixing the problems.

Joyce was handed responsibility for fixing Novopay after Education Minister Hekia Parata and former associate Craig Foss failed to get to grips with the debacle.

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