The Australian company behind the Education Ministry's troubled Novopay payroll system says its technology is "rock solid", saying school administrators haven't fully embraced it.

Talent2 chief executive John Rawlinson has today fronted up to the media for the first time, after the ministry lifted a muzzle on the company.

Rawlinson admitted the company would probably be penalised for Novopay's performance in its first three months of operation.

But he stood behind the technology, saying Novopay should save taxpayers a fortune in the long run.



A clause in the $100 million contract between the Education Ministry and Talent2 prevented the company from speaking out about the problems that have beset the system until yesterday.



Rawlinson said the root cause of the issues that have seen thousands of teachers paid incorrectly or not at all, did not lie in any software bugs.

Instead, school administrators had not embraced a system that let them enter data into Novopay directly online.



Many schools had chosen to fax or phone-through the information needed to pay teachers, as they had when the payroll service was operated by former Kiwi payroll provider Datacom, he said.



That had created a backlog for the 120 Talent2 staff who work at Novopay's service centres in Wellington and Christchurch and resulted in an unacceptable level of what were "human errors".



Rawlinson said Datacom offered schools a lot of hand-holding, providing what were in effect "account managers" who prompted schools about what they needed to do to manage their payroll.



The ministry had decided to move away from that model, which Rawlinson said was "not sustainable" to save "significant amounts of money".



Rawlinson said he was not blaming school administrators for being slow to adopt Novopay's automated systems, attributing their reticence to a lack of skills and training and imperfections in Novopay's ease-of-use.



The system was not hard to use but "not as easy as an Apple iPad", he said.



"Unfortunately the training we did was largely online and some people were not able to get on to the training.



"I am certainly not saying it has been the sector's fault. We have offered more rounds of training and support."



The problems had been compounded by errors such as a failure by Talent2 to get the first round of payslips out on time, he said.



The Education Ministry said last week that it expected to pay Talent2 $100.5 million over eight years for building and running the payroll system.



Rawlinson indicated Talent2 would take any performance penalties on the chin. "We are a very commercial organisation. We pride ourselves on getting things right and if we don't do the things we need to do under our contracts we would expect penalties would be imposed."



He said that even without any quarterly penalties, Talent2 was losing a "significant amount of money" on the contract because of the extra costs it had taken on. These included hiring nine additional experienced staff for its service centres.



"It is not just the sector that has suffered some stress. It has been brutal on our own people," he said.



Rawlinson expected the outstanding errors would get "less and less" with each payroll cycle. But Talent2 and the ministry were phoning schools to check they were confident about what they needed to do over the next two weeks to reconcile teachers' end-of-year pay and leave, he said.



"There is a lot of nervousness about 'year-end' and I can understand that." Schools needed to go online or email Talent2's service centres a spreadsheet with the required data, he said.



Half of schools had completed the process online and Talent2 and the ministry were calling every school that had not yet done so, starting with those they thought might find the process challenging.