Schools will have to put up with problematic pay administered through Novopay for another eight weeks after the Government announced it would persist with the unstable system.
Minister responsible for Novopay, Steven Joyce, delayed a decision on the troubled system today when he released Deloitte's technical review, led by Murray Jack. It found Novopay software platforms are currently not stable, due to a backlog of 19,000 pay-related problems.
This is in addition to 526 defects with Novopay; 49 of which have been classified very serious, 320 serious, 115 moderate and 42 cosmetic.
Mr Joyce said the Government would escalate plans for a back-up payroll system with previous provider Datacom.
He said a proposal from Datacom was likely within eight weeks.
"It's important to note any change would involve considerable additional rework for schools. If we reverted to the old system, there would be significant rework to update the pre-August Datacom database."
Mr Joyce said he was reserving the right to proceed with Datacom earlier if required.
"It would not be responsible to make that call now."
Despite a lack of stability in the system, Deloitte said Novopay could be fixed if greater effort was made by Australian provider Talent2 and the ministry.
"We do not believe that long term stability can be delivered by the current processes and resources.
"It would require materially elevated and sustained effort and capability by both the ministry and Talent2.
"The work required to achieve long term stability is therefore feasible but difficult, and it is important to note that even with a technically stabilised solution certain characteristics would likely remain," Deloitte found.
The review found Novopay was not properly processing annual leave and holiday pay for employees, end of school-year payments, bulk leave and timesheet bookings, terminations, service accumulation and sick leave.
Mr Joyce said progress was being made on stabilising Novopay in each pay round under the Remediation Plan by boosting the number of staff working on processing pay at both the Education Ministry and Talent2.
"In the last three fortnightly pay periods, the percentage of complaints and notifications received dropped from 2.2 per cent to 1.9 per cent to one per cent, while at the same time the total number of people being paid increased from 74,373 to 84,822," he said.
Deloitte recommended mistakes would have to be reduced to consistently below one per cent. It said there would have to be no very serious defects, and serious defects would need to be fewer than 10.
Mr Joyce also announced a $6 million package, based on the number of teachers.
He said it would help schools meet the costs of extra work administrative staff had done dealing with Novopay, none of which Talent2 will have to pay for.
The payout would cover the period until the end of June.
"The reality is that if we have more issues at the end of June we will have to discuss these things again," Mr Joyce said.
The $6m comes on top of $5m the Government set aside in February, part of which has funded the Backlog Clearing Unit and its 100 staff.
The Government has spent $700,000 on the technical review and a ministerial inquiry.
Mr Joyce would not say if Datacom had been paid in preparing its back-up payroll system. He said unions had asked for $5.8m compensation.
The Post Primary Teachers Association were pleased with the announced payout, but president Angela Roberts said legal action seeking compensation for "hurt and humiliation" will continue.
Labour's education spokesman Chris Hipkins said taxpayers were bearing the brunt of problems with Novopay.
"Each payday more errors are added to the backlog, and parents, teachers and schools have no confidence that the system can be fixed."
Greens' co-leader and education spokeswoman Metiria Turei said Mr Joyce had not given any certainty to schools.
"At the end of the day these problems will continue until there is a new system in place, or this system is fixed."