We've bought a lemon

Waikato schools are waiting with "bated breath" for an error-free payroll system following the announcement that the Government will take control of the troubled Novopay system in October.

The company running the system refused to pay more to improve it under the existing contract, so a government-owned company will take over on October 17.

Waikato principals called the move "long overdue" and inevitable, with one saying Novopay was "riddled with errors".

Talent2, the company which designed and administers the system, will pay between $18 million and $22m compensation in cash and discounted services. But the taxpayer will fork out an additional $9m over six years to use the software.

Cambridge Middle School principal Ross Tyson expected school staff to be pleased with the change, which he said was "long overdue".

Tyson was in the sector group consulted on the Novopay decision, in his role as president of the New Zealand Association of Intermediate and Middle Schooling.

With Novopay "there were so many fires to put out that some got left behind," Tyson said. He was pleased the Government would be looking after "the whole package", and said the education sector had been pushing for change for some time.

Overpayments, underpayments or non-payments - and tonnes of paperwork - have been among the complaints since the system went live in September 2012.

Although educators tend to agree it has improved, they say there are still bugs in the system.

Hamilton teacher Bevan Thomas said he had experienced frequent pay problems and was still having hassles.

"No one at Novopay will talk to me; apparently I am not allowed to talk to Novopay about my pay - everything at every school goes through an exec officer, not the staff in question," he said.

"Upon not being paid at all, I was asked, ‘Can you wait until the next pay period?' No, I'm sure my kids don't mind going hungry and of course the bank doesn't mind if I miss mortgage payments."

Minister Steven Joyce said yesterday that the payroll management change was a mutual decision.

"It became the logical next step towards giving schools a more stable, sustainable and simple payroll service."

Waikato Principal's Association chairman John Coulam didn't expect any opposition to the plan from the education sector.

"Novopay has continued to be riddled with errors. While there have been improvements, there's still frustration for those working in schools," he said.

"The schools will wait with bated breath and we just hope we get an error-free system."

The change showed what schools had been saying was correct, he said.

"It was a flawed system that was introduced too soon."

The ministry should have taken the initiative a long time ago, Melville High School principal Clive Hamill said.

"There's a sense of inevitability about it, I think." In effect, money used to provide support for the system had been diverted from classrooms, he said.

Those responsible for the errors should have been held accountable.

"I wouldn't get away with that in my school."

Marcus Freke, foundation principal of the Endeavour Primary School, which is under construction in Hamilton, said there was a "genuine wahoo" happening, judging by some messages he had received.

"From my point of view I thought that they seemed to be getting on top of a lot of the issues," he said.

"I'm just really nervous now that if they introduce a new system we're going to go through the whole process again."

Although he'd had fairly good experiences with Novopay, he said it wasn't an easy or intuitive system to use.

The initial changeover had taken "hours and hours and hours above and beyond the call of duty" for the payroll officer at Vardon School, where he used to be principal.

Hamilton West MP Tim Macindoe expected the news to be "pretty widely welcomed".

"We want to do everything we possibly can to ensure that the payroll system is perfect, that nobody is inconvenienced by the sort of ongoing problems that have been happening."

He could understand people's frustration with the time it took, but said obligations under the contract with Talent2 meant changes couldn't happen overnight.

Significant effort had gone into fine-tuning, he said.

Labour list MP and Hamilton West candidate Sue Moroney said school staff had suffered in the implementation of Novopay, which she called a "shambles".

"They [the government] should have resolved it long before"

Joyce said more work was still to be done to make the system easier for school administrators and less expensive to run for taxpayers and the provider.

"Talent2 was not prepared to provide the extra resources that are necessary for further development of the system within the current contractual arrangements," he said.

A settlement package of between $18 and $22m will include a cash payment from Talent2 of $7m, asset and IP transfers, and a discounted software license.

However a Talent2 statement said a $9.6m software support and maintenance contract was also agreed, as was a contract to cover transition and the completion of objectives before the handover.


Since its inception in 2012, the $110 million Novopay scheme has been beset by problems. It was installed despite tests showing it was not ready, and schools immediately struck payroll problems. As a result the Government was forced to provide a $6m support package in March last year to compensate for the additional work. That same month the Government also forked out an extra $5m to help fix 542 software bugs and to address a backlog of more than 19,000 unresolved problems. In April last year, Talent2 emailed personal and payment details to the wrong schools. Last June, a ministerial inquiry was highly critical of the rollout, and schools have repeatedly complained about problems with staff pay. 


Waikato Times