[Full report: MIN130501InquiryReportweb.pdf
Link Welcome | Ministerial Inquiry into Novopay]

Report of the

Ministerial Inquiry into the Novopay Project

Foreword

The schools payroll manages the pay for the staff of 2,457 New Zealand schools. The payroll distributes a great deal of taxpayers’ money – over $4 billion each year – to a large number of people – approximately 110,000. The Novopay project, the development of which began in 2008 with implementation in August 2012, was conceived to replace the existing, aging service.

The impacts of the well-publicised Novopay failures have reverberated across New Zealand. Every state and state-integrated school in the country has been affected. Dealing with the aftermath has distracted school staff, principals, boards of trustees, the Ministry of Education and Ministers from other important concerns.

This state of affairs and the wider disruptions that were caused were avoidable. It is clear to us that important lessons from the past, in particular those arising from the 1996 education payroll implementation difficulties and the INCIS experience in 2000, should have been learned, but were not.

Although there has been valid criticism of the Novopay project, we stress that not all public sector projects of this nature encounter issues as serious as Novopay has. There are numerous examples of high complexity, high value projects that have been delivered effectively, on time and on budget, by other agencies.

The problems with Novopay have affected public trust and confidence in the Ministry of Education, and also the wider public sector. This will take time to restore. All public sector entities are charged with responsibilities on behalf of Parliament, Ministers and taxpayers, and must exert every effort to ensure that they deliver the services they are expected to, within the law, on time, and within budget. In this case, the Ministry of Education failed to meet its obligations.

There were many factors that contributed to the Novopay failures. It is our overall view that weaknesses in project governance and leadership allowed the service to go live with a number of significant risks which the Ministry and its vendors were over-confident of managing. When these risks resulted in service issues Post-Go Live, the Ministry and its vendors were overwhelmed by their nature and scale. Over the course of the project, Talent2 had missed agreed milestones or deadlines, which eroded trust and confidence in its ability to deliver. The nature of the service that the Ministry was seeking also diverged from the original proposition. Efforts to stabilise the service continue.

Despite the problems, we observed a strong commitment to delivering a successful project and some significant individual efforts. The future of the schools payroll system now looks more positive. We are confident that there is scope to address the weaknesses that we have found. Our findings and recommendations are mostly addressed at matters that emerged through the design and delivery of the project. Some of them, however, have relevance for the wider public sector, and other similar projects. We commend them to the attention of all those with public sector leadership roles.

We also assess that the Ministry of Education has much to learn from this long-running process. The Acting Secretary for Education has already taken steps to deal with some of the issues that have arisen. Every effort should be made to support the Acting Secretary, and his successor as Secretary, to drive the Ministry to the improved performance level necessary so that all elements of the education sector can properly fulfil their critical roles in contributing as effectively as possible to New Zealand’s future.

We are conscious of the important and growing role of technology in the efficient delivery of services to New Zealanders in both the public and private sectors. It is critical that public and private sector entities collaborate effectively to bring the required expertise to bear.

Murray Jack Sir
Maarten Wevers, KNZM

[Full report: MIN130501InquiryReportweb.pdf
Link Welcome | Ministerial Inquiry into Novopay]

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