Red Alert

Novopay Issues #1

Posted by on February 25th, 2013

Plenty has already been said about the Novopay shambles. The system was never ready for implementation, it never should’ve been signed-off, and the safeguards and contingencies that should have been in place weren’t. I’ll keep holding the government to account for their failure, but I’ll also be picking up specific issues and, where I can, working to ensure that people aren’t disadvantaged in the long-term because of Novopay.

Last week in the House I asked the Minister Responsible for Novopay, Steven Joyce, some questions about Novopay not handing over Kiwisaver contributions to savings providers. The money is being taken from employees pay packets, but it’s not showing up in their Kiwisaver accounts. In some cases I’m aware of, this has been going on for months and months. Not only are the employees concerned worried about where their money has gone, they’re also missing out on the returns that would otherwise have accrued had their money been paid over on time.

The most important comment Steven Joyce made was this one:

Chris Hipkins: Will employees who have had KiwiSaver or other superannuation contributions deducted from their salaries but not paid over to their scheme provider be compensated for lost returns that would otherwise have accrued, and if not, why not?

Hon STEVEN JOYCE: My understanding is that yes, they will be made good in those regards.

I welcome this commitment by Joyce. It means that not only will people affected get their money back, they will be compensated for any returns that would’ve accrued in the meantime. I’ll be interested to see the details of exactly how they’re going to calculate that, and will ask some more questions in that regard.

There are other specific concerns about Novopay that I hope to address in coming weeks, including people defaulting on child support payments, justice ministry payments, student loan repayments, and so on. I’ll blog more about those as the answers come through.

6 Responses to “Novopay Issues #1”

  1. Chris,

    The real question begged by these bizarre happenings is this.

    Is Novopay a massive fraud taking place in slow motion?

    & specifically,

    How much money has been to people who do not work for Schools, and how much money has been deducted from Schools to pay tax but has not reached the IRD?

    I am fairly sure that if a bank had a rogue payment system which was consistently deducting money from bank accounts and the money was disappearing into the ether then this would be precisely what bank security would suspect was happening.

    In the big year end pay processed on 19 December I know of an individual School (not particularly large – integrated) which lost over $50,000 out of its operations bank account – most of which was paid to people who were no longer employed by the school. Some of the people could be identified – but the EO of the school in question could not identify all the recipients.

    In this case the EO saw the payroll was disastrously wrong and rang first Novopay and then MOE to ask them, beg them, to stop the pay from going ahead. They said there was nothing they could do. The EO now seriously regrets not withdrawing the direct debit authority held by Novopay at their bank.

    Simple math would suggest that if this pattern were relatively widespread in the pay of 19 December across other schools then the amount of money wrongly paid in that single payroll may be close to the amount of money paid to Novopay to build the system to date.

    This system should have been unplugged in the first few weeks of operation. The fact it is continuing to run now, and we continue to get flannel explanations for what is going on is seriously disturbing.

  2. Jack Ramaka says:

    The problem is in NZ we do not have politicans with the necessary skill set to make decisions in the best interests of the country and the people of NZ.

    Holyoake was involved with dodgy Maori Land Deals in the Taupo District, Roger Douglas sold off key assets for a pittance and now we have an ex Merrill Lynch Currency Trader as PM making out he is leading the country to a brighter future while ensuring the wealth transfer continues. The sale of our Energy Assets will be the final nail in the coffin for this country.

    The Novopay Debacle is a repeat of the Police Insyis System which was scrapped after $65m had been invested. One really has to ask the question the competence of the decision makers.

    Solid Energy was always going to struggle with coal prices going backwards. With the GFC, demand for steel etc was stalling, and China’s growth was stalling. So unless Solid Energy had forward contracts there was only one way for the price of coal to go.
    Obviously the management of Solid Energy were very inexperienced in the Coal Industry.

  3. bbfloyd says:

    @Alistair Thompson… you raise some rather worrying isues… I have some queries.

    1).. If there is actually fraud being perpetrated through this debacle, then who is the likely beneficiary?

    2).. If the beneficiary of any fraudulant skimming off from the teachers payroll budget is the company that devised the program, or it’s backers, then what motivation is there for the government to approve what was an obviously flawed, and incomplete system for implementation?

    Just to be clear on this, I am not questioning your veracity. I simply seek clarification on the reasoning, and underlying rationale for what has become a confusing, and disquieting muddle….

    I must say that my suspicians were tweaked once I tried to rationalise the reasoning behind what, on the surface at least, is an example of breathtaking incompetence..

    The fact that the people invlved in the decisionmaking process aren’t the sort of fools who can’t add two and two together successfully… they are clever, and have the depth to see past the obvious… so what are they REALLY doing?

    Your theory is as valid as any other at this point..

  4. Jack Ramaka says:

    You need to realise this Government only measures things in $’s they do not consider the social issues or the intangible costs to society. Merchant Banking mentality.

  5. Wendy says:

    Funny that INCIS, ‘the biggest cock-up in New Zealand IT history’ [before NovoPay!] should have also happened under a National government isn’t it?

  6. Gail says:

    Chris……come visit my school now and see what NOVOPAY has done to my staff…..I have paid out over 20,000 to ensure that I have staff in front of children each day……I want action this week……Bulk Fund wages to me now and I will do what I am already doing….paying teachers…..then go back to Datacom….problem solved for 72,000 teachers!