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Ministers' knowledge of Novopay problems revealed

Friday 1 Feb 2013 11:54 a.m.

Novopay's problems were known when the system was rolled out

Novopay's problems were known when the system was rolled out

Hundreds of Novopay documents released today show the ministers who signed off on the system knew about its problems.

The documents also show Novopay’s creator Talent2 failed to meet a number of testing milestones. This prompted them to ask the ministry for more money but a reduced scope in order to iron out the issues.

The documents were released at the request of Steven Joyce, the newly-appointed minister responsible for Novopay who launched an inquiry into the beleaguered payroll system yesterday.

Novopay launched in August last year as an all-digital replacement to the paper-oriented Datacom system.

It was meant to go live in May 2010 but numerous target and milestone failures by Talent2 delayed the introduction by more than two years.

When the system finally went live it was plagued with problems – and the total number of teachers who have been overpaid, underpaid or not paid at all stands at more than 8000.

Currently, the ministry owes teachers and education staff nearly $12 million in failed payments.

During the delays, ministry staff became increasingly frustrated at Talent2’s failure to get Novopay working.

In December 2011, the ministry refused to give Talent2 more money or de-scope the programme.

“I acknowledge that Talent2 has found it more difficult and expensive to deliver on its contractual commitments than originally estimated,” a letter from the ministry to Talent2 says.

“But this does not mean the ministry must accept a higher price or a reduced scope.

“I am very disappointed that Talent2 has failed to meet this milestone.”

The ministry put Talent2 “on notice” after they failed to meet four additional milestones and for the headache it had caused the ministry. The threat was later retracted.

When the ministry probed Talent2 about the failings, they received the answer:

“The Novopay project team had underestimated the complexity of the payroll requirements. Tasks took longer than originally anticipated.”

Other issues cited by the ministry included “significant operational, reputational and cost consequences of Talent2’s failure”.

When the Novopay system was finally tested three months before it went live, 107 software defects or “bugs” were discovered in the system.

Just before Novopay’s introduction last year, three ministers were briefed about the remaining defects but they signed off on it anyway.

They were Education Minister Hekia Parata, Associate Education Minister Craig Foss and Minister of Finance Bill English.

The documents were put on the ministry’s website this morning but after 15 minutes, they were taken down because information that was meant to be blanked out could be seen. They were back on the site an hour later. 

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