Payroll glitch shows Govt must buy local

TOM PULLAR-STRECKER
Last updated 10:29 14/11/2012

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An Auckland payroll company which warned more than a year ago that Talent2 might not be the right firm to build the Education Ministry's Novopay payroll system says it hopes problems with the system will encourage the Government to buy local in future.

The Education Ministry awarded Australian firm Talent2 the contract to build and operate Novopay in September 2008, saying the deal was worth $62.7 million over seven years.

In June last year Noel Reid, chief executive of rival Auckland payroll company AMS, questioned whether Talent2 was the right company to provide the system.

He warned then that the ministry might end up with "10 years of second best".

Fiona McTavish, the ministry's work force group manager, responded at the time by saying the ministry had conducted a rigorous tender backed by independent reviews.

Talent2 delisted from the Australian stock exchange in August after a share-price plunge and is now privately owned. A company spokeswoman said it was prohibited by its contract with the Education Ministry from commenting on the Novopay situation.

Reid said AMS, which expressed interest in bidding to build the teacher payroll system but was not shortlisted by the ministry to put in a formal bid, paid more than half of New Zealand health workers.

Many were nurses doing shift work who operated under different awards and collectives, he said. "I weep into my glass of wine when [officials] say paying teachers is really complex."

It was also a bit late to make that observation, he said.

A payroll industry source - not Reid - said Novopay would face a fresh test in about two weeks when the time came to reconcile the pay and leave of thousands of teachers employed on annual contracts.

Novopay has been plagued with problems since it was implemented in August with more than 8000 errors in teachers' pay.

Candace Kinser, chief executive of information technology industry body NZICT, said she was concerned the Novopay debacle would reflect badly on the IT industry as a whole.

Geoff Lawrie, chief executive of the New Zealand subsidiary of networking company Cisco, said government departments had just started to invest in new technology again after undertaking relatively little activity last year.

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Lawrie said that, unlike in the private sector, there could be few consequences for departments that responded to challenges by choosing to do little.

- BusinessDay.co.nz

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