Talent2's Novopay settlement costs top NZ$29 million

The operating costs of New Zealand's troubled Novopay schools payroll system are still too high, according to the minister responsible.

Customisations to fix New Zealand's troubled Novopay schools payroll system have driven the total settlement paid by software provider Talent2 to between NZ$29 million and NZ$32 million, the minister responsible, Steven Joyce, has announced.

Those customisations are now valued at NZ$9.4 million.

Despite that, the government is pumping a further NZ$8.7 million into funding the government-owned company now operating Novopay to cover transition and operating costs for the 2014-15 year.

Such ongoing costs are still to high, Joyce said.

"The operating costs of the service have declined nearly NZ$8 million on last year, but are still unacceptably high, at NZ$35 million for the year," he said.

"The one-off settlement offsets a lot of that expenditure in the current year, but now the system is steadily improving, we need to work to bring the ongoing annual costs to a sustainable level."

The government wants Novopay to cost about the same as the projected 2016 cost of running the Datacom service that Novopay replaced.

However, that will require further budget appropriations in the 2015 Budget, Joyce said.

Novopay was to cost NZ$182 million over 10 years, but went live disastrously in August 2012, with thousands of errors in teachers' pay packets.

Joyce said end-of-year payroll processing is proceeding steadily, with low numbers of issues and complaints.

The last two pay periods were well under the 0.5 percent acceptable error rate defined in a technical review, he said.