The solution to the teacher payroll problem

November 15th, 2012 at 8:10 am by David Farrar

Jody O’Callaghan writes at Stuff:

They’ve been overpaid, underpaid and not paid at all – now one teacher has been paid for being in two places at one time.

In the latest round of Novopay botches, the relief teacher was paid for working at schools in Upper Hutt and Auckland on the same day.

The Upper Hutt school, which did not want to be named, joked that a classroom of children must have been left reading silently, while their teacher caught a plane to Auckland.

This week’s pay cycle gave one teacher thousands of dollars more than they were owed, when they were paid for 39 days, instead of 39 hours.

And Fergusson Intermediate School deputy principal Shirley Porteous, of Upper Hutt, was randomly demoted by the new payroll system, so she supposedly now owes Novopay $1500.

Teacher unions and Labour education spokeswoman Nanaia Mahuta are demanding a parliamentary inquiry into the Education Ministry’s system, which was introduced nearly three months ago.

The performance of the new payroll system does appear to have been not satisfactory. Having said that, have to be careful to make every single error a major story. I imagine the old payroll system would always have a dozen or so errors in it, out of 60,000 or so teachers paid. What I’d be keen to see reported is how many errors have occurred each pay period since it was implemented.

I do feel very sorry for those teachers and schools that have to cope with not being paid. Worse of all for them, there is nothing they can do about it.

That is why I have a solution. . If we delegated salaries to every school, then each school would choose its own payroll provider (or do it themselves) and they could simply not use a company like Novopay, if there performance is not satisfactory.

UPDATE: A reader points out the contract with Novopay was approved in September 2008 by then Education Minister Chris Carter!

UPDATE2 I understand that in fact each pay period has around 100,000 pays from 2,300 schools and there are several hundred different pay rates and codes. This means that even a 99.9% accuracy rate will have 100 or so mistakes per pay period. Also what may not be known is that any staff member under paid or not paid by the central system, can and generally does get paid by the school out of their ops grant, so the staff member is not out of pocket. The Ministry then reimburses the school once the error is notified and corrected, So yes there are issues to be sorted out, but there shouldn’t be anyone out of pocket for more than a day.

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45 Responses to “The solution to the teacher payroll problem”

  1. Tristan (63 comments) says:

    “The performance of the new payroll system does appear to have been not satisfactory”

    christ DPF I wonder if you could make that statement any milder?? MY guess is that as long as National are in government the sinking of the south island would be described as “slightly unsatisfactory”

    [DPF: Fair point]

    beef it up a bit mate

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  2. alex Masterley (1,438 comments) says:

    Bulk Funding is definitely the solution to the problem.

    regards,

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  3. Lance (2,309 comments) says:

    So Tristan
    You don’t think a comparison is in order between old and new systems?

    These are the teachers so they could be shrieking hysterically over a minor issue (because they hate any govt not far left) OR is could be a big problem worthy of major attention…. but some sense of proportion would be handy for the rest of us to actually tell shit from clay.

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  4. ChristineY (7 comments) says:

    One reason the payroll system will be having problems is because of the complexity of the teacher pay structures. it would be good to hear how many employment contracts it is handling, and how variable are the allowances and different pay scales. One way to make the system easier to implement, operate and maintain would be to simplify the contracts.

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  5. Elaycee (4,067 comments) says:

    DPF:

    That is why I have a solution. Bulk Funding.

    Absolutely!

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  6. Rick Rowling (776 comments) says:

    I have to admit to wondering how many of the errors are due to the software, and how many are admin errors on the part of whoever enters the hours into the system

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  7. Puzzled in Ekatahuna (329 comments) says:

    Bulk funding doesn’t have a fucking thing to do with it.
    Whether the salaries are fixed by a Ministry system of decided by Boards of Trustees, the hours and other factors vary and it is still just a question of entering all that data and making the appropriate payment into thousands of accounts.

    If Labour was doing their fucking job instead of changing leader again, they would ask Questions in Parliament to compare the old system with the new, as suggested here by some.
    Plus, why was the old system replaced at all.
    I haven’t seen a reason given in any media report.
    Does anyone know that?

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  8. mikemikemikemike (239 comments) says:

    Agree with Puzzled! – you replace people with software to remove these errors not the other way around. Aren’t teachers on salary and not wages? simple errors are normally caused by simpletons. Get rid of them and you’ll probably remove the problem……..of course then you’ll also probably have an empty beehive :)

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  9. voice of reason (491 comments) says:

    http://computerworld.co.nz/news.nsf/news/novopay-government-threatens-penalties

    http://computerworld.co.nz/news.nsf/news/teachers-union-critical-of-new-payroll-system?OpenDocument&c=11

    A couple of articles in compuetrworld about it. Datacom was the previous provider. They are an experienced payroll provider and seemingly were reliable and competent, otherwise we would have heard the “hysterical shrieking” from unpaid teachers before”.

    “Novopay has been plagued with problems since it was introduced in August with errors in more than 8000 teachers’ pay”
    As of Saturday there were 1500 outstanding errors and the Education Ministry has ordered Talent 2 to fix the problems by Wednesday”

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  10. OneTrack (1,963 comments) says:

    Has it been identified whether the problem is a simple technical build issue (by the contractor) or was it also inadequate requirements specification.

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  11. flipper (3,269 comments) says:

    DPF….Your informant regarding Carter may be correct in relation to the original contract. But yesterday, in the HoR , C.Foss said that he had accepted and signed off on performance warranties provided to the Min of Ed in relation to Novapay.
    Foss went on to say, paraphrased: ” I am pissed off.”

    Novapay? Oops!

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  12. wreck1080 (3,522 comments) says:

    Bulkfunding would end up with overall higher costs and greater intra-school confusion.

    If novopay worked OK, it should be cheaper and more efficient overall.

    I don’t think it will be easy to simply penalise the novopay developer. The government is also at fault for not fully testing novopay before go-live ( absolutely critical for what I assume is a bespoke development). And, maybe some of the project requirements and scope (set by govt) were unrealistic. This will be a complex melting pot of blame — anyway get the problems fixed first, then look at blame.

    From the description of the errors and mistakes I wonder if they have fundamental database design errors. If the database design is good, it should be easy to fix these kinds of problems. eg, that could explain cases where a teacher is paid in 2 locations at once. They are possibly mixing up teachers pay entitlements because they cannot identify teachers correctly.

    There could be more problems too, because a bad database design will result in corrupt data and that can be notoriously difficult to fix.

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  13. Lance (2,309 comments) says:

    @Onetrack
    I was involved with a major technology installation at the Reserve bank many moons ago. The bloody spec and requirements changed daily.
    Other than being a headache for us engineers the company didn’t mind as it was all variations to contract charged at a hefty premium. The problem was an original beautifully designed, streamlined installation ended up with all kind of patches on it.
    But seriously nobody on the govt side had a bloody clue what they were doing. Some upgrades were to make one person look more important than someone else.

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  14. flipper (3,269 comments) says:

    Lance.
    Thanks for that.
    I’m no IT spec or guru, but I do understand crap when I see / hear it.

    But one should not be critical of Governmernt, Lance. The dinosaur (State Services Commission) says they are wonderful, highly skilled, motivated and always use best practice. The French, the British, the Spanish, the Russians and a few others, learned centuries ago that bureaucrats, of whatever persuasion, represent the nadir of working humanity.

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  15. Reid (15,531 comments) says:

    I have to admit to wondering how many of the errors are due to the software, and how many are admin errors on the part of whoever enters the hours into the system

    So do I Rick. Normally payroll systems use double-entry for checking purposes so this error they talked about where someone was paid for 36 days not 36 hours should have been picked up then but clearly wasn’t.

    I suspect its a mix of process issues in the operations area and the lack of contactibility in the call centre is another process issue, and there may possibly be some bugs.

    It is a complex payroll because it’s large and you would get a lot of relieving teachers at multiple schools in the same pay period and complex allowances. What would be helpful is if those allowances were built into the hourly rate when the award is next negotiated which reduces the workload and error rate when you set people up but all payroll systems are perfectly capable of handling complex allowance and rate structures, it’s what they do. It just increases the error rate caused by incorrect configuration due to the extra data entry.

    I think probably about 90% of this, is hot air from the teachers who as someone said above, can’t stand new things anyway and take every opportunity they can to make life difficult for the hated tory govt. Combined with ignorance from the media as to whether it’s a real issue or not. I bet Craig Foss doesn’t like Hekia at the mo. He seemed a bit annoyed about the whole thing yesterday in his statement.

    I’ve wondered why Talent 2 hasn’t been more forthcoming, because message management is critical on this and they should have been vigorously on it from day one when the first payroll was processed. I mean it wasn’t hard to anticipate that the silly old teachers would go completely mental on this, was it? It would have been more surprising if they hadn’t done this.

    I wonder if the Ministry of Ed has told them to say nothing? I wouldn’t be surprised given the bureaucratic mindset from the “officials.” Which if that happened, was an incredibly stupid move because what pray tell does anyone in the Ministry of Ed’s Corporate Comms dept, know about message management? Nothing, is the apparent answer because they have sat back and watched this crisis grow over months and they’ve done or said nothing. Until now they’ve gone and upset the politicians. Crikey. That’ll have the “officials” sprinting down the corridors, just like Whitehall did when Winston took over in 1940.

    I wouldn’t be surprised to see the govt in its vast wisdom spend another $500k or whatever on yet another report from one of the big six which will tell us nothing more than what we’d already worked out for ourselves, without needing a report

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  16. BeaB (1,948 comments) says:

    We are always told we need to pay public servants huge salaries so we get the brightest and best.

    Yet we have stuff up after stuff up. Perhaps we should go lower down the lists, find good, solid, reliable workers and offer them the top jobs – at much lower than the current rates but with rigorous performance bonuses.

    Then we could rid ourselves of the over-paid show ponies and have a public service that just gets on with the job we are paying taxes for.

    I suggest too that no-one in the public service earn more than the PM. At present far too many do – and much more than their so-called masters – cabinet ministers. A crazy state of affairs when their performance is so mediocre and there is no accountability.

    So someone like Kate Wilkinson resigns when those truly responsible keep their cushy jobs.

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  17. RightNow (6,338 comments) says:

    I’ve been in an organisation transitioning off Datacom for payroll to an in-house system. We ran both in parallel for several pay runs and produced exception reports to identify issues before going live on the system. I would assume this has also been done with Novopay. Then there should be ‘day 1′ support where the project team remain involved to deal with issues, before transitioning to business as usual, where Novopay service desk should have all the processes in place to resolve incidents.
    On the face of it this is a badly managed project.

    Not hard to find a name:
    Guest Speakers were : Gary Billingham, the Novopay Business Change Project Manager

    http://www.nasdap.org.nz/PDFs/minutes/mins_term1_2012.pdf

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  18. Alan Wilkinson (1,798 comments) says:

    Sorry, David, but I have to disagree. This is a massive botchup and heads should be rolling. I strongly suspect both design and implementation incompetence. In a new implementation you expect mistakes. However, you expect them to be fixed in days or at most several weeks, not months.

    I watched Campbell with the Ministry CEO last night and frankly she should have been grilled by someone who has a clue about IT. There is no excuse for this level of incompetence.

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  19. wreck1080 (3,522 comments) says:

    Also, why did this go to an aussie company? If it had have been given to a kiwi company, there could have been future spinoff’s and the payroll system could even have been expanded and sold overseas. Although, it is NZ specific it could be developed in a modular sort of way for the parts which are generic and modular plug-ins for local customisation where necessary.

    I understand it was on the basis of lowest cost — but, when I was building my house I’d never go with the lowest cost provider by default as I didn’t want a stuff up.

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  20. bhudson (4,720 comments) says:

    RightNow,

    Good call. That approach is common sense.

    This is not about NZ vs offshore purchasing – it is about effective management; requirements gathering, design, implementation and testing

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  21. ross69 (3,637 comments) says:

    “Also what may not be known is that any staff member under paid or not paid by the central system, can and generally does get paid by the school out of their ops grant, so the staff member is not out of pocket.”

    That doesn’t seem to be happening.

    Six weeks ago, Campbell Live asked the Ministry of Education when Novopay will be working. The answer was “soon”. Last week, Campbell Live provided details of one desperate person to the ministry so they could make sure she was paid. They wrote back, saying she would be paid in full on the next payday – November 14.

    That was today, and she still wasn’t paid.

    The ministry has her name and all her details, they know she is desperate, they told Campbell Live they would pay her. But they haven’t.

    http://www.3news.co.nz/Novopay-The-payroll-system-that-doesnt-pay/tabid/817/articleID/276678/Default.aspx

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  22. pidge (49 comments) says:

    @wreck – you’d have to review the tender process. I’ve heard a rumour that there is/was someone in the Ministry who has/had it in for Datacom… And when was the tender done, actually? I recall it being in 2007.

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  23. ross69 (3,637 comments) says:

    “We are always told we need to pay public servants huge salaries so we get the brightest and best. Yet we have stuff up after stuff up.”

    Actually Talent2 is a private company…so much for the private sector being more efficient than the public sector.

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  24. RightNow (6,338 comments) says:

    ross69 – that sounds like Jacque Ruston who featured on Campbell live last night. If you didn’t see it you should.

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  25. Lance (2,309 comments) says:

    @ross69
    Classic lefty twist. I think you will find the discussion was heading down the line that specifications by public servants are usually crap, inconsistent and dynamic at best and MAYBE this is part of the problem with the payroll. Certainly there is a long history of piss poor public sector management of this sort of thing.

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  26. id (2 comments) says:

    “Also what may not be known is that any staff member under paid or not paid by the central system, can and generally does get paid by the school out of their ops grant, so the staff member is not out of pocket.”

    If/when this is happening it is a manual process that the school staff have to do for each staff member. And this is a loan from the school, so once they get the correct pay they will have to pay it back.

    “I think probably about 90% of this, is hot air from the teachers who as someone said above, can’t stand new things anyway and take every opportunity they can to make life difficult for the hated tory govt.”

    With the two teachers that I know directly, as part time and relief teachers they have both had mistakes in over 60% of their pays since the start of the new system. This has included being paid at the wrong rate, work not paid at all and the wrong hours being paid. It would then take 2 or 3 pay runs before the corrections would happen. They are both still waiting on money owed.

    To start with it was compounded by the new pay slips not containing enough information, as they didn’t mention what days the hours where worked. Making it very hard for part time teachers to confirm what they had been paid for.

    Those that think it’s just some loud spoken teachers talking hot air, go and talk to your local school and see what they have to say. And think about how happy you would be if you got paid incorrectly AND it didn’t get resolved by the next pay run?

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  27. MD (60 comments) says:

    There were exactly the same shrieks from the teachers union when the previous system from Datacom was first introduced. I couldn’t find links to the original implementation, but http://www.odt.co.nz/news/national/1111/payroll-problem-plagues-schools this relates to the start of a school year not the original implementation.
    It’s exactly the same as we are hearing now, and while the original issues seemed to point to system problems, the errors they are trotting out now are rubbish. Someone is paid for 39 days rather than 39 hours, does anyone really think that’s a system issue rather than someone just entering data into the wrong column and not checking it?
    It’s a major system change, everyone is re-training, you will get an increased level of these errors until things settle down, it would be nice if journalists put some effort to sort the real issues from the bleating, but I guess that’s unlikely so we get this FUD instead.

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  28. Alan Wilkinson (1,798 comments) says:

    There is no excuse:

    a) For schools being unable to enter the source data directly to the system and verify it online immediately.
    b) For schools being unable to verify the forthcoming pay-run details are correct prior to the fortnightly pay-run.
    c) For errors in the pay-run not being capable of being immediately rectified via a patch-up run prior to the next fortnightly pay-run.
    d) For teachers not to be clearly informed (in hard copy) of what they should be paid, how and when.
    e) For not knowing who is to blame for this almighty cock-up.

    Excuses for this are b.s.

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  29. lastmanstanding (1,154 comments) says:

    Mind you the private scetor aint so hot either. Im in the process of advising a person who has just left a very well known prominent company. His final holiday pay was caluclated at 40% of the actual amount due. The senior managers and the payroll provider werent complying with the relevant section of the Holiday act 2003 and didnt know or understand it.

    However as one of my first jobs many decades ago was to pay 150 staff weekly using a hand written manual payroll my boss told me there would be no excuse if I cocked up. He rightly said that the very basic responsibility of any employer was to pay their employees the correct amount and pay on time.

    No excuse of Novo. They and the Minister and MOE CEO should be fired immediately and replace with people who are up to the job.

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  30. Alan Wilkinson (1,798 comments) says:

    @lastman, yep, for instance at a large multinational I contracted for the payroll run was absolutely sacrosanct. If staff were not paid properly the assembly line would have walked out the next day. It just never happened.

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  31. rolla_fxgt (311 comments) says:

    As someone with some experience of payroll, its not hard to do, even when people are paid different rates for different roles within the same pay cycle.

    Personally I think its a system design problem, as well as a data input problem, the latter can be fixed easily, the design problem not so much.

    I also put part of the problem down to the clunky and antiquated collectives decide teachers salaries, which means there is so much variation in what people are paid for doing the same role. Some longstanding teachers are on very generous grandfathered clauses from way back when which really don’t help the simplicity of the system.
    Perhaps the looming expiry of collectives would be a good time to do a complete rewrite of the education pay scales to simplify them, and remove any oddities from the system then and there, once and for all.
    Make management units and allowances in line with each other, and as much as possible bring allowances outside the collective, so they aren’t salary issues, just simple allowances that are paid tax free, and FBT paid by the ministry.

    I do find it interesting that there are apparently so many problems (claimed by the teachers), yet the official figures seem to show not that many problems. Someones not telling the truth. And in the media we always here of clusters of problems, like one school where 1/2 the staff haven’t been paid in a pay cycle, yet the school down the road has no problems. That to me would suggest a data entry error, or lack of understanding from the person at the school entering the data.

    I worked out the error rate for Novopay the other day, based on the last pay cycles reported errors, and the reported number of payees, and the accuracy rate was 99.999975% accurate.
    Which in my opinion is pretty good, yet the unions are saying its not good enough. Guess the Minister should put it to the unions that since 99.999975% accuraccy is not goode enough for them, that the government will demand a higher level of success from schools in ensuring data sent to the ministry is accuracte, and that more than 99.999975% of students achieve at or above the required level.
    Pretty sure that’ll go down well with the unions!

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  32. Alan Wilkinson (1,798 comments) says:

    @rolla, how on earth do you get that accuracy? I understand there are about 80,000 payees and the errors are in the thousands per pay cycle. Your number just doesn’t compute.

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  33. Paulus (2,296 comments) says:

    I understand that the WHOLE Education payroll involved is 90,000 persons.

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  34. rolla_fxgt (311 comments) says:

    @ Allan Wilkinson

    Your figure of thousands of errors per pay cycle is incorrect. The last pay cycle (not the one yesterday) had 167(from my memory as was stated in the house, I think it was last week) errors over a pay run of just under 90,000 staff. (I think it was in the region of 89,000 payees)

    8500 errors is the total errors reported to date, some of which are double ups. i.e where someone was underpaid in one pay period, and it wasn’t fixed in the next pay period either, so the error is reported again. Something John Campbell couldn’t understand last night on Campbell live.

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  35. Alan Wilkinson (1,798 comments) says:

    Even if 167 is correct which I strongly doubt, the error rate is 0.18% and the accuracy is 99.82%. Your number was nonsense.

    Errors not fixed (often after fixes have been promised in writing) are rightly counted for each pay-run. You misrepresent Campbell since he certainly understood this.

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  36. wreck1080 (3,522 comments) says:

    @rolla_fxgt—-

    If the error rate for novopay is pretty good, then, why is this in the news?

    I just don’t buy it.

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  37. rolla_fxgt (311 comments) says:

    Allan you can’t count the same error twice, that’s just moronic. Campbell didn’t understand that, it was clear from his questioning in his interview last night. He thought there were over 8000 seperate errors (makes for a better story doesn’t it!) when some of those will be the same error logged more than once.

    The 167 figure was what was given in the house, and widely reported by the media. Unless you’re suggesting that the ministry is lying.
    The latest figure was only 57 faults reported in yesterdays pay run.

    Even if I was wrong on the accuracy figure (I was remembering off the top of my head, after a busy week, never a good idea!), a 0.18% error figure is very very low.
    I mean if its bad as the NZEI said last week, then surely we the taxpayers, and parents have a right to demand a higher level of acheivement from schools.
    So I now expect 99.82% of students to achieve NCEA level 2, or their teachers to resign or face retraining.

    My better half hasn’t had any pay problems with Novapay, apart from finding out that for all of this year she had been being over paid by a few cents under the previous payroll, as the MOE couldn’t figure out how to work out payroll for a leap year.

    Not to mention that the govt had overspent by $60million under the previous school payroll provider due to errors in that. I notice the govt is being nice and not enforcing its legal rights to claim that money back from teachers.

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  38. rolla_fxgt (311 comments) says:

    @wreck

    Simple because the unions and most of the NZ education system dislike the National Party, and will use anything they can to blow up an issue to try and embarrass a national government.

    Though to be fair the first pay run was a stuff up and had thousands of errors.
    Its the dragging it out like its still a big story and constantly using the 8000 errors figure to try and make out that there’s that many errors a pay cycle I object to. Its now a non-story.

    I’ve had under pays and no pays before, its been fixed up within days mostly, or sorted out in the next pay run.

    In fact if teachers were intelligent they’d just ring the department of Labour and ask them to deal with it, for failing to pay wages. Or get their lawyer to write the school as the employer a letter demanding payment within 48 hours, or legal action will be taken against them. The schools, can and do pay, and have been authorised by the MOE to do so in cases of underpayment, or no payment.

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  39. Alan Wilkinson (1,798 comments) says:

    rolla, an error not fixed by the next pay cycle is a new error as far as the payee is concerned. It is just an error of omission rather than commission. Nothing obscure or moronic about that.

    Whether the Ministry actually knows how many errors occur I would doubt since it seems reporting of them occurs to both the Ministry and the contractor, and the persistence of existing errors probably leads to inconsistent recording and reporting of them.

    What seems clear anecdotally is that they have been widespread, long drawn out and very costly in administrative time trying in vain to get them rectified. I don’t believe this is just a campaign by teacher trouble-makers.

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  40. rolla_fxgt (311 comments) says:

    Allan, there is 1 portal to access the errors, both the contractor and MOE have access to it. So both have the same figures. I imagine (going off what happens with other payrolls), there is an end of day report run that lists all the queries against payroll figures. They just take the total of that and report it.

    Its the same error, just it hasn’t been fixed. Its like if your power goes out (tree across line or whatever), you don’t count it as the power going out each time you call the power company to ask when its going to be fixed. Its the 1 problem, just with multiple queries about it.

    I think we’ll have to disagree about the media coverage the issue has gotten after the first couple of pay runs. For the media coverage to be drawn out this long, there has to be some sort of pushing of the issue by someone, in this case I suspect the unions, as it suits their purpose to show the government they have some power. Plus it strengthens the unions hand in the ongoing collective negotiations. Part of which are being conducted through the employment court at the moment. Its a typical negotiating strategy, and quite good one too. Means the unions can go on strike, and not make themseleves seem geedy about money, by claiming its not about money, its about integrity, or trust, or something similar.

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  41. Alan Wilkinson (1,798 comments) says:

    rolla, your interpretation is inconsistent with the Ministry CEO on Campbell Live telling teachers who hadn’t been paid to contact the Ministry directly. If they knew who they were and what the problems were that wouldn’t have been necessary.

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  42. rolla_fxgt (311 comments) says:

    The ministry/novopay only know when someone has contacted them, hence when their details go on the report. They have a seprate email address for it, its all on the novopay website.

    Which is what Longstone was saying on Campbell live. Person emails/rings/writes in that they have a pay problem, details get noted, its logged in the system, end of the day they can generate a report on pay issues.

    Schools no the day before who will have pay issues, as they get to see the SUE report before the pays are proccessed.

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  43. kiwigunner (184 comments) says:

    You would have to be a bloody idiot or worse to link the inability to meet the legal requirement to pay workers with the need to change how they are funded or the amount they are paid. All the figures from the Minister seem bullshit to me. At my school we have 6 outstanding problems – 3 date back for 6 weeks. We are a small rural school with 19 employees. Multiply that across the country!

    As for the problems being manufactured by shrill teachers – well until this govt agreed to pay $100.5mk over 8 years to an aussie company to mess up a system that worked perfectly well no one mentioned the education payroll.

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  44. kiwigunner (184 comments) says:

    And just how ridiculous this infantile posting is is best highlighted by the solution which the blogger would I am sure agree with – there would be no novapay problems at all if we stopped paying teachers.

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  45. mikenmild (8,798 comments) says:

    Yes, tut tut, some sympathy for the teacher but (gasp!) a LABOUR Minister of Education approved the contract four years ago. I guess the teachers deserve to wait for the next Labour government to fix it all up do they?
    Seriously, DPF, have you posted a few too many times this week? This one was pathetic.

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