The Novopay inquiry

Steve Joyce has released the report of the Ministerial Inquiry into Novopay. Major findings:

  • The problems with Novopay have affected public trust and confidence in the Ministry of Education, and also the wider public sector
  • Weaknesses in project governance and project leadership allowed Novopay to go live with a number of significant risks which the Ministry of Education and its vendors, including Talent2, were over-confident of managing
  • These risks resulted in service issues and the Ministry and Talent2 were unprepared and overwhelmed by their nature and scale
  • The School payroll is overly complex due to an accumulation of historical changes
  • There was extensive customisation of the Novopay software
  • There was a failure to involve the users of the Novopay system in the schools and appreciate their requirements
  • There was no overall accountabilityfor Independent Quality Assurance
  • The project has cost $23.9 million more than estimated for a total cost to date of $56.8 million
  • Ministers were not well served by the information they were given on the project. Reporting to Ministers was inconsistent, unduly optimistic and sometimes misrepresented the situation.

Joyce comments:

“This report makes for sober reading and, while it confirms the view that there is a lot of blame to go around for the problems with Novopay, it provides a greater understanding of the level of fault between the organisations involved,” Mr Joyce says.

“There are substantial lessons to be learned by the Ministry of Education in a number of areas which the Acting Secretary of Education is taking steps to address.

“There are also lessons to be learned by the public service and the wider State Sector on the design, delivery and oversight of major ICT projects.

“As the report notes, these problems are not unique with issues identified in the Ministerial Inquiry into the police computer system INCIS 13 years ago also evident here.

“The Government will be carefully considering the findings of the Ministerial Inquiry into Novopay. It intends to act on all the recommendations. It is critical these problems are not repeated again.

In the report itself:

Work commenced on the requirements for the schools payroll project in October 2008. This  process was lengthy, and was never actually completed. Even after Go Live, new requirements  were being discovered. There was little direct customer (boards of trustees) or user (principals  and school administrators) involvement in the definition of the requirements, and Datacom’s involvement was minimal.

And that’s where it would all have started to go wrong. You must finalise the requirement and have customer input into them.


A 5 June 2012 paper, which invited Ministers English, Parata and Foss to approve the continuation of the project following Confidence Point Two, misrepresented its state.

In more detail:

We were particularly concerned about the 5 June 2012 document, which invited Ministers to approve the Ministry’s Go Live decision. This report misrepresented the situation in two significant ways. It suggested that the Go Live decision was supported by three members of the ICT Council, which was not the case; and it stated that Confidence Point Two criteria had been met, when in fact a number either had not been met or were “deemed” to have been met (a lower criterion). These factors overrepresented project readiness and its chances of success.

The report is very interesting reading. There are even questions over the original selection decision.

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