Minister in charge of Novopay Steven Joyce has admitted he can't rely on the information he received from the Ministry of Education over the last school pay round.
Pricewaterhouse Cooper was commissioned to look at documents and all information from the Ministry of Education on the previous pay cycle - pay round 23.
PwC will review the records of both Talent2 and the ministry and provide an audit of the pay round and release details of the total number of issues with it.
"The reason I put PwC in to do that mechanical exercise reviewing pay period 23 is actually I'm not confident the information at this point gives a sufficiently clear picture of pay period 23," Mr Joyce said today.
" I am fully capable of sending things back if I'm not comfortable," he said.
Cabinet has agreed for $5 million to be put aside to cover a remediation plan in addition to the $200,000 price tag for a technical audit and $500,000 for a ministerial inquiry.
The $5 million would cover work on fixing bugs in Novopay and boosting the numbers of call centre and data processing staff.
In his update on the investigations into Novopay, Mr Joyce said Talent2 had been issued with formal notices of a breach of contract and key performance indicators.
He would not say how many had been issued but confirmed more would be issued in the coming weeks.
Schools were also urged to again brace themselves for problems with the next pay round - pay 24- which is due into school employees' bank accounts next week.
Mr Joyce could not say if the 255 invoices schools had sent the ministry for additional administrative time spent on Novopay, totalling $1.197 million, would be paid.
"The schools have said this is where we're out of pocket and we want to send an invoice, but the invoices themselves don't have actual status but the issue of providing some form of extra support to schools, or compensating them for the issues that have been raised is something that is on the table - we've said it is something that will be on the table and something we will look at," he said.
Labour's acting education spokesman Chris Hipkins said the $5 million bill was the fault of Education Minister Hekia Parata.
"Steve Joyce has ridden into town with the Government chequebook in a belated attempt to clean-up the Government's Novopay nightmare. He's chucking $5 million at Novopay bug fixes, the call centre and data processing.
"It's a shame he couldn't find any money for extra support for all the schools that are millions of dollars out of pocket as a result of dealing with the fallout from Novopay."
The terms of reference for the Novopay technical review and the ministerial inquiry into Novopay were released today.
The technical review is expected to report back to the minister by February 28 and the ministerial inquiry by the end of May.