The Government has announced a $6 million support package for schools.

Minister in charge of Novopay Steven Joyce made the announcement today, saying it was designed to go some way to meeting the costs of additional work caused by the Novopay system.

"Schools are experiencing increased administration workloads to manage the Novopay issues and they have requested financial relief. This $6 million support package recognises the impact that Novopay has created for schools and will assist in addressing some of these issues," he said.

The $6 million package will be allocated as a one-off payment across the sector, calculated on a formula of $105 per Full-time Teaching Equivalents (FTTEs) plus $500 per school.


The support package would be provided as recognition for additional work through until the end of June, by which time it was expected that much of the backlog of issues would be cleared by the newly created Backlog Clearance Unit.

It was equivalent to five hours of administration time per pay period for the average-sized school over a six month period.

"This support package was prepared in consultation with the sector stakeholder groups and forms part of an overall package of financial and non-financial support," Mr Joyce said.

New Zealand Education Institute national secretary Paul Goulter said the support package signalled the Government acknowledged the extent of the problems schools faced.

"Schools are best placed to make a decision on whether the interim package is enough and we hope the Government will be ready to provide additional support when an individual school can show the amount is inadequate.''

Green Party co-leader and education spokeswoman Metiria Turei said Mr Joyce had failed to say anything that would give schools and families certainty about Talent2`s ability to manage the payroll now or in the future.

"Schools and families need to know if Novopay is capable of delivering, and if the Government has confidence in Talent2 to ensure Novopay can deliver.''

Labour education spokesman Chris Hipkins said the Novopay bill continued to mount for taxpayers.

"The costs of the Novopay debacle just continue to escalate - today's $6 million bill comes on top of $5 million announced just nine days ago to clear the backlog of pay problems. That is $11 million that taxpayers have had to find to clean up after Hekia Parata.''

Post Primary Teachers Association president Angela Roberts said the package would not halt legal action it launched this month.

"While the support package is designed to assist schools through this mess, the question of compensation for the hurt and humiliation payroll problems have inflicted on many hard-working people still needs to be resolved.''

She hoped the package was enough to cover schools for the period of time Mr Joyce anticipated payroll problems to continue.

Non-financial support available immediately includes:

* Extending the Banking Staffing balancing period to enable schools to manage staffing allocations across more than a single year

* Ministry of Education identifying duplicate queries from schools faster and emailing and calling schools directly on the Thursday when draft staff usage and expenditure reports come out

* Regional support for schools including basing Novopay specialists in regions to improve direct support for schools

* Providing employee assistance programmes to staff at schools experiencing stress

* Putting system fixes in place to allow school administrators to see if their time sheets have been processed and also allow them to complete time sheets online for relieving teachers

* Improved operational communications regarding using Novopay, accessing support, and managing the known issues

* Ex gratia financial recognition where employees have experienced out of pocket expenses when a pay was late or wrong (e.g. bank charges)

* An operations grant advance where a school is experiencing cash flow issues because of direct payments made to staff

* Direct access to advice for schools and to employees who cannot access the support provided by the Novopay Service Centre

* Case by case discretion on meeting charter deadlines for schools to relieve their administration burdens.

"The support package will be funded from Between Budget Contingency and it will go some way to relieve the impact of what has been a difficult time for school staff - particularly school payroll administrators," Mr Joyce said.

"The on-going problems with Novopay are frustrating for everyone involved but they are complex to resolve and there is no quick fix. The range of measures announced today will hopefully assist in alleviating some of this frustration.

"I appreciate the extra effort that principals, school administrators and other staff are putting in to resolve the issues and I thank them for their continued hard work and patience."

Mr Joyce also gave an update on progress with the Government's remediation plan to address issues with the school payroll system.

A new dedicated Education Sector Payroll Services business unit to be established in the Education Ministry to co-ordinate the Remediation Plan.

The new unit will be headed by former chief executive of Gareth Morgan Investments Group and former IRD Deputy Commissioner and KiwiSaver Programme Director, Cathy Magiannis.

"Ms Magiannis is a highly experienced leader and operational manager with proven expertise in programme delivery," Mr Joyce said.

"The new business unit will pull together all the work being done in the ministry on Novopay, including working with Talent2 on delivering each pay period, operating the Backlog Clearance Unit, and supervising the resolution of system bugs and defects."

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 1 per cent while at the same time the total number of people being paid increased from 74,373 to 84,822," he said.

But he warned that pay period 1, in which significant changes occur for the start of the new financial year, including adjustments to KiwiSaver and student loan repayment rates, would introduce new issues.

"The ministry is working closely with Talent2 to minimise any increases in error rate."

The Backlog Clearance unit was gearing up from 40 staff to the planned 100, and it was intended it will be at fully operational by next week.

The unit had begun working on the backlog of outstanding issues from all previous pay periods, numbering about 19,000, and included issues relating to overpayments, underpayments and non-payments.

There were about 25,000-35,000 transactions in a normal pay period.

The backlog needed to be cleared regardless of any final decisions being made on the shape of the future delivery of the school pay service.

It was intended that the backlog be reduced to "business as usual" levels by the end of June.


Schools and staff across the country had been looking forward to details of the compensation package.

The Government has already shelled out $5 million for a remediation fund but not a cent of that has gone to schools.

The funds were in addition to the $200,000 price tag for the technical audit and $500,000 for a ministerial inquiry.

Schools have sent more than 260 invoices totalling totalling $1.2 million to the ministry for additional administrative time they have spent sorting out payroll problems.



Ministry request tenders for a new school payroll provider after a review of Datacom found it posed a high risk.

2005: Contract given to Talent2, but an independent review found Datacom was no longer a high risk, so plans ditched.

2007: Tenders requested again when Datacom said it would not continue payroll services after 2011.

- Eleven tenders received including Datacom with a new Peoplesoft payroll system, Talent2 put forward Novopay.

2008: $30m contact with Novopay provider Talent2 signed off by former Labour MP Chris Carter.

June 2012: Ministry chief information officer Leanne Gibson revealed 147 software defects and 6000 errors prior to Novopay going live.

- During the testing phase, prior to its launch, there were 5923 payslip errors which were reduced to 773 before it was rolled out in September.

- Four independent advisers - PwC, the Social Development Ministry, the Primary Industries Ministry and the New Zealand Transport Agency gave the system the go ahead.

- Finance Minister Bill English, Education Minister Hekia Parata and Associate Minister of Education Craig Foss signed off on the project despite knowing there were 147 defects.

August 2012: Novopay goes live.

- Early problems with the system arise.

December 2012: Education Secretary Lesley Longstone quits.

January 2013: School staff owed $12 million after holiday pay period and 255 invoices from schools and school support staff for extra costs due to Novopay administration sent to ministry, to the value of $1.197.

- Mr Joyce tells schools to brace themselves for the worst: February 6 pay cycle set to be the worst, due to new collective agreements.

- Ministerial Inquiry launched into Novopay and technical audit begins.

February 2013: PPTA launch legal action over Novopay, taking the Acting Secretary for Education Peter Hughes

- Primary and intermediate schools across the country protest against Novopay problems.

- The New Zealand Principals' Federation revealed Novopay caused 23 school staff to resign.

March 2013: Backlog Clearance Unit opens, 100 staff dedicated to clear the backlog of work relating to previous Novopay pay periods.

- A new bug with Novopay revealed, many permanent and fixed-term school employees have suddenly had a termination date of April 21 slapped on their contract.

- Debt collectors chasing 200 education-related debts, with seven of those relating to Novopay since they took over the contract last August.

- Debt collection called off by Mr Joyce.