NZ payroll inquiry points to govt failings

New Zealand's education department has been handed most of the blame in the findings of an inquiry into the country's failed education payroll system.

New Zealand Government minister Steven Joyce today released the outcome of an inquiry into the Novopay system, built by Australian payroll vendor Talent2.

The project took nine years to come to fruition, racking up an eventual bill of $56.8 million.

After it went live in September 2012 it was plagued with problems, with many staff underpaid, overpaid or not paid at all.

The inquiry found the Education Ministry did not establish the quality of governance required for a complex project of this nature, was not always willing to act on advice, and was overly optimistic about the state of the project once it was underway.

Acting secretary for education Peter Hughes today said two Ministry of Education staff would be investigated as a result of the inquiry.

Other findings from the inquiry were:

• The Ministry did not have the commercial experience to manage the vendors in a project of this nature
• Talent2 missed agreed milestones and deadlines  
• There was a large degree of turnover in key project leadership positions throughout
• The Ministry had cause to invoke breaches of the contract for non-delivery from as early as 2010, but did not exercise this option
• The relationship between the Ministry and Talent2 were not always healthy, and this affected the effective forward momentum of the project.

The report recommended the Government Chief Information Officer help to set standards for ICT projects and develop improved requirements for assurance, in order to prevent a repeat occurrence of the Novopay debacle.

It also recommended agencies consider the full range of options, including process simplification and redesign, before embarking on major projects, and said contracts should be designed with “stage gates” and “off-ramps”.

The report said when reporting to the eight ministers holding responsibility for Novopay, the Ministry had been inconsistent and at times unduly optimistic, sometimes misrepresenting the situation.