Sourced Content
Wellington, February 3, 2019
The cost of fixing a public sector Payroll System continues to increase.
The underpayments, which date back to a 2004 change to the Holidays Act, came to light in 2016.
The Ministry, which is responsible for enforcing labour laws, paid $1.9 million in November 2018 to current staff left out-of-pocket.
Altogether, the Ministry of Business, Innovation and Employment (MBIE) is facing total costs of at least $30 million.
Outside contractors hired
Figures newly released under the Official Information Act show that the Ministry has spent almost $7 million on outside contractors to help fix the problems and used the equivalent of just three fulltime staff on the project since 2015.
It will spend an additional $15-18m on designing, testing and implementing a new Payroll System. Selecting a supplier cost almost $1 million.
Complexity of issues
The government has ordered ministries to reduce the use of contractors and consultants.
However, MBIE said that ‘complexity’ of the Payroll Project demanded the ‘specialised skills’ of contractors.
It had already set aside $12 m to recompense more than 9000 former and current staff who were short-changed on their holiday pay over several years.
The spending on contractors amounted to $800,000 in the 2015-2016 financial year; $2.4 million in 2016-2017; $2.6 million in 2017-18; and $950,000 up to November 2018 this financial year.
MBIE is just one of many large organisations facing a big bill for historic payroll problems.
Affected current staff include MBIE, WorkSafe and those Ministry of Housing and Urban Development people paid through MBIE’s Payroll System.
-Under a Special Arrangement with www.rnz.co.nz
