Novopay has paid a group of John Paul College staff $26,000 for their summer break - however the group doesn't work at the school.
John Paul College principal Patrick Walsh said the school was astounded to find the additional $26,000 removed from its operation grant during last week's payroll. He said the large sum had been given, without instruction from the school, to a group of part-time staff who left the school in August after working with international students.
"What is worse is Novopay are asking us to recover the money," Mr Walsh said.
Novopay is the schools' payroll service. Australian company Talent2 took over the Ministry of Education's payroll contract at the start of September and is responsible for paying 85,000 teaching and support staff fortnightly.
Mr Walsh said their operation grant was topped up by the Ministry of Education each quarter, and when it ran dry it was the school's responsibility to find extra money to pay wages.
Last Wednesday was the eighth pay period since the organisation picked up the contract.
"In my view it has gone from just being annoying and inconvenient to incompetence and negligence," Mr Walsh said.
After being assured by Novopay the problems would be fixed by now, it was clear the payroll issues would in fact continue well into 2013, he said.
Even communication with Novopay was difficult.
"When we went on their website to register a complaint as they asked us to, we found the website was down."
Mr Walsh, the current New Zealand Secondary Principals' Association president, said the organisation had billed Novopay for the extra work done by school executive officers.
If problems were not fixed by early 2013 that bill would increase into the hundreds of thousands of dollars.
John Paul College alone had billed Novopay for $3000, he said.
Rotorua Principals' Association president and Mokoia Intermediate principal Deborah Epp said a lot of schools in Rotorua, including Mokoia, also had trouble with last week's pay period.
She said the recent problems for schools were mainly connected to support staff payments.
"It is interesting that the ministry has sent schools ... an email address and phone number to contact Novopay if they have any problems with their pay during the Christmas period.
"It is good on the one hand but also concerning that they are expecting something to go wrong."
Attempts to contact Novopay were unsuccessful.
On December 10 Novopay released a statement on their website which said they were experiencing a high volume of calls, so unfortunately it would take longer to get through.By Gary Hamilton-Irvine of The Daily Post