NZ govt to take control of Novopay school payroll system, receive as much as $22M settlement

Wednesday 30th July 2014

The New Zealand government will take control of the troubled Novopay school payroll system from its Australian developer Talent2 which has agreed to pay the government $7 million in cash, and as much as $15 million worth of services.

A government-owned company will take over school payroll processing and service centre activities from Oct. 17 after Talent2 wouldn't agree to provide extra resources to further develop the system within existing contractual arrangements, Steven Joyce, the minister responsible for Novopay, said in a statement. The Novopay system has been plagued with errors since going live in August 2012.

As part of the agreement, the Ministry of Education gains ownership of Novopay software customisations, valued by Talent2 at as much as $18 million. Talent2 will license the core Alesco software to the new government-owned company, and offer discounted fees for the support and maintenance of the software, Joyce said.

The school payroll system has remained within the 0.5 percent acceptable steady state error rate over the past 15 months for all but the three 'start of year' payroll cycles at the beginning of this year, Joyce said. Still, the system needed further simplification and improvements, he said.

BusinessDesk.co.nz

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