Novopay 'not first' failure for provider

CHARLEY MANN AND SAM SACHDEVA
Last updated 05:00 28/01/2013

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The Novopay debacle is not news to the Government. A union says the company that designed it delivered a similarly disastrous system two years ago.

Novopay, the bug-addled system that has wreaked havoc on teachers' pay cheques, frequently giving them too much money, too little, or none at all, is the second payroll programme from Australian company Talent2 to bedevil the public sector.

New Zealand Post workers are still reeling from a payroll system designed by Talent2, launched in April 2011.

If the organisation's experience is anything to go by, schools are facing years of problems.

The Sunday Star Times revealed yesterday that side-effects of the Novopay system had leaked into other government departments. Payments are not being made to ACC, Superannuation, KiwiSaver and student loans, despite being taken out of wages and listed on payslips.

Novopay bulk payments, to make up for weeks of not being paid, are pushing teachers over tax brackets, leaving them out of pocket and unable to recoup the money until filing a tax return at the end of the financial year.

Teachers are losing thousands from being struck down the pay grades and schools are facing upcoming audits with accounts so depleted they have been forced to put Novopay down as a debtor.

There are apparent similarities between the two systems.

EPMU national communications sector industry organiser Joe Gallagher said NZ Post had been sold a "dog" of a system.

"We had workers overpaid, underpaid, not paid, you name it, we had it. We had instances where people got significantly large amounts and occasions where they were paid minus amounts."

Gallagher had heard of team leaders paying for their employees' groceries and petrol to cover pay problems, while others had faced the possibility of mortgage defaults.

"It's quite distressing when you're mucking around with people's lives."

Almost two years on, the state-owned enterprise was only just beginning to see improvements, he said.

"Is it perfect? No, not by some margin, but it is a lot better than it has been."

Otago University professor Robin Gauld, who co-authored a book about public sector IT disasters, said a company's desire to secure a critical contract could often trump ensuring its system was error-free.

"Yes, they're interested in developing good, cutting-edge projects, but they're also keen to get their foot in the door to sell projects, then after they get in the door, that's when they mop up the problems."

Ministry of Education group manager Rebecca Elvy said Talent2 had been assessed as "the best of the vendors.

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"We remain committed to working with Talent2 to resolve the issues with the system so that schools receive the payroll service they were promised."

Steven Joyce, the minister newly tasked with fixing the Novopay debacle, said he was aware of NZ Post's payroll problems but could not yet comment on "the similarities or otherwise" of the two.

He said he would be investigating how the previous Labour government conducted the tender for the Novopay system in 2007 and entered into a contract with Talent2 in 2008.

TIMELINE

2005: Australian firm Talent2 wins tender from Labour Government for software for Ministry of Education payroll service, to replace existing Datacom system.

2008: Talent2 wins extended contract from Labour for hardware as well as software. Deadline is 2010, budget is $30 million. 2010: Deadline whistles past.

2011: NZ Post launches payroll system, designed by Talent2. Workers are beset with payment problems, similar to those later experienced by teachers under Novopay.

August 7, 2012: Education Ministry internal survey shows 37 per cent of Novopay users feel ready for rollout, and numerous are struggling with bugs.

August 20, 2012: Novopay goes live. Errors affect staff at 90 per cent of schools.

November 2012: Despite repeated assurances, errors continue. Ministry admits budget will be more like $100m. An estimated 70 per cent of schools are still experiencing problems.

- Fairfax Media

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