Editorial: Minister must put more heat on Novopay designers

Mr Joyce reports that problems in the last three fortnightly pay rounds have dropped from 2.2 per cent to 1.9 per cent, to 1 per cent. Photo / NZPA

It is now two months since the Government's trouble-shooting minister, "Mr Fix-it" Steven Joyce, was sent into the Education Ministry to sort out Novopay. Time perhaps for an audit of his performance.

Last week he delayed a decision on the deficient payroll system after releasing the findings of a technical review he had commissioned from Deloitte, and told schools they would have to put up with it for two more months. He gave them $6 million compensation for the extra work they are having to do to deal with the errors in the system that cost $30 million at the outset.

The technical review has found 526 defects, 49 of which were classified as very serious, 320 serious, 115 moderate and 42 "cosmetic". Whatever those categories mean, it is some comfort to have precise figures. Someone at last has a measure of the scale of the problem. It is no longer the amorphous mess it seemed last year when each fortnightly payday caused consternation over random, unfathomable mistakes.

The basic problem is said to be that the Australian software designer, Talent2, assumed that 90 per cent of administrators would be using it online. Only 70 per cent are doing so because forms for part-time teachers and support staff do not fit the online prescription and have to be filed by email and handled manually. Talent2 lacked the staff to handle them and seems to have been in no hurry to hire more. Now it has done so, with the help of the ministry at no doubt extra cost to the taxpayer.

With those extra hands, Mr Joyce reports that problems in the last three fortnightly pay rounds have dropped from 2.2 per cent to 1.9 per cent, to 1 per cent. However, Deloitte recommends that errors need to be held consistently below 1 per cent in a system with no "very serious" defects and fewer than 10 "serious" defects.

Its report said, "We do not believe long-term stability can be delivered by the current processes and resources. It would require materially elevated and sustained effort by both the ministry and Talent2." The system is still failing to deal with all the permutations of staff pay, such as annual leave, holiday pay, end-of-year payments, bulk leave, timesheet bookings, terminations, service accumulation and sick leave.

Mr Joyce cannot yet be confident that it ever will. He has not only delayed a decision on its future, he has asked the ministry's previous payroll system provider, Datacom, to prepare a back-up system more quickly. He expects a proposal from them within two months but warns that a reversion to that system would not be straightforward. Its database has not been updated since Novopay took over last August.

With so much uncertainty still remaining, it is too soon for recriminations but they are inevitable. Why was Datacom replaced by a system that testing had shown to have 147 software defects producing 6000 errors? Who decided that despite its known problems Novopay offered a better system?

The contract with Talent2, a celebrated systems business in Sydney, was signed by the Labour Government in 2008. Its Novopay "solution" was due to be delivered in May 2010, then delayed a year, then another year, by which time the ministry and ministers Hekia Parata and Craig Foss had sufficient doubts to sign a back-up contract with Datacom. Yet last June they and the Finance Minister decided to go with Novopay.

Software system changes are seldom fault-free on either side. Specifications can be deficient, too. Blame can be identified in time, right now Mr Joyce must put more heat on the supplier to provide a system schools can trust.