School principals have been celebrating news the Government is taking over the school payroll from Australian firm Talent2.
The school payroll is the biggest in New Zealand, paying about 90,000 people every fortnight. However, it has been beset by problems since its introduction in August 2012.
The error rate vastly improved after months of work, from 628 schools being affected at the start of 2013's first pay period to 32 in the most recent pay period.
However, Steven Joyce, the minister responsible for the beleaguered system, on Wednesday announced that a Government-owned company would take its running Novopay and that the Government had reached a cash settlement with the Australian-based company Talent2.
Talent2 will licence the payroll software to that company. It will also pay a settlement package worth between $18 million and $22 million to the Government.
This includes $7 million cash, the transfer of assets including the software, and discounted fees for the ongoing support and maintenance of the software.
Dancing in the halls
Principals admit Novopay has improved a lot, but say it is still causing headaches in many schools.
Jill Corkin, principal of Snell's Beach School in Auckland, said she danced down the hall when she learned the Government was taking over the system.
"As soon as I heard it I did a little jig along the staffroom corridor and into the staffroom and a few little woo-hoos and twirls around, because I'm just so delighted that some major action is being taken and that Steven Joyce and the Government have realised that we can't just keep going on the way we're going."
Andy Wood from Invercargill's James Hargest College, said the change was sensible and that it made sense to capitalise on the enormous investment which had been made making the software developed by Talent2 fit-for-purpose.
Mr Wood was confident the Government would do a better job running the school payroll because he could remember the last time it was in charge of the school payroll.
"It was run effectively. There was a dedicated person that you sorted things out with very quicky."
"I think it's ironic that we've got back to where we started from 30 years ago to a government agency - effectively a government agency - running payroll and I think it will be better all round."
Peter Simpson, principal of Belfast School in Christchurch, said he was not surprised by the Government's decision. However, there were still too many historic and ongoing issues with the system.
"It's probably time this step was taken and possibly should have been taken a lot earlier."
The Education Ministry has told schools Talent2 staff working for Novopay will move to the new company to ensure the handover goes smoothly on 17 October.
Post Primary Teachers' Association president Angela Roberts said problems with staff pay were now down to human error, rather than the software.
The Principals' Federation says the buck will now sit with the ministry. President Philip Harding said any debate or discussion between Talent2 and the ministry about resolving issues will stop and that will mean resolutions will be quicker.