Improving government payroll systems
The Government Chief Digital Officer (GCDO) is working with the State Services Commission and the Ministry of Business, Innovation and Employment on a work programme to improve government’s payroll systems.
The purpose of the programme is to provide Ministers with assurance that:
- expenditure on payroll systems is warranted
- payroll project risks are managed
- payroll systems are fit-for-purpose and are provided at a reasonable cost.
The programme team will also work with government agencies to:
- collate their interpretations of the Holidays Act 2003
- adopt a common payroll process that reflects good practice.
Avoiding development of bespoke payroll processes and simplifying procurement for payroll systems will help government agencies save on costs.
The programme has 3 workstreams.
- Overseeing payroll projects — providing oversight over agency payroll projects.
- Improving payroll practices — working with payroll practitioners to improve practices.
- Coordinating payroll procurement — coordinating procurement of payroll systems and services on behalf of government agencies.
Workstreams and related activity
|Overseeing payroll projects||
Oversee agency payroll investments and provide advice to agencies on their business cases.
Review agency payroll projects and provide advice to agencies on their assurance planning and reporting.
Provide a system-wide view of the investment and delivery risk profile for payroll systems.
|Improving payroll practices||
Collaborate with agencies to collate and share good practice for Holidays Act 2003 calculations and look for opportunities to standardise employment terms and conditions.
Share any opportunities for more consistent employment terms and conditions.
|Coordinating payroll procurement||
Collaborate with agencies and suppliers of payroll systems and services to review the payroll process model and ensure it is suitable.
Invite suppliers of payroll systems and services to demonstrate how they align with this model and government's other requirements.
Support government agencies to select suitable suppliers.
Workstream 1: Overseeing payroll projects
Ministers have asked the GCDO to provide assurance that expenditure on payroll systems is warranted, payroll project risks are managed, and payroll systems are fit-for-purpose and provided at a reasonable cost.
Who and what’s involved
Public and non-public service departments and selected Crown entities are subject to the GCDO’s oversight of investment and delivery of payroll systems.
The Crown entities involved are:
- Accident Compensation Corporation
- Earthquake Commission
- Housing New Zealand Corporation
- New Zealand Transport Agency
- New Zealand Trade and Enterprise
- New Zealand Qualifications Authority
- Tertiary Education Commission
- district health boards (DHBs).
All investment and delivery of agency payroll systems, whether funded from Budget bids or baseline, is subject to the GCDO’s oversight.
Payroll systems include at least 1 of the following processes:
- compensation changes
- time schedules
- employee data
- payroll schedules
- employee benefits.
Key oversight themes
The GCDO’s oversight of payroll investments will focus on whether there is:
- alignment with, and intent to adopt, the New Zealand government’s payroll process model
- an intent to use all-of-government commercial arrangements and ensure there is value for money
- a focus on the right outcomes (e.g. addressing Holidays Act 2003 non-compliance) and acceptable mitigation of delivery risks (e.g. Holidays Act 2003 interpretations)
- a compelling driver for the investment (e.g. end-of-life versus incremental enhancement)
- sufficient capacity and capability (e.g. internal governance and external supplier)
- consideration of opportunities to work across government? (e.g. opportunities for re-use)
The GCDO’s assurance oversight expectations for payroll projects are set out in the Payroll project assurance framework.
The programme team will contact agencies by email in October-November 2019.
They will work to confirm with each agency the accuracy of the investment data it holds and then follow up with bilateral discussions about specific business cases and the status of delivery projects.
Further discussions will occur as agencies progress their investment cases and delivery.
The information collected from agencies will inform the GCDO’s advice to agencies on their investment cases and reporting to Ministers on a system-wide view of agency payroll systems.
These reports will be provided to Ministers every 6 months.
Workstream 2: Improving payroll practices
There is widespread non-compliance with the Holidays Act 2003 within government and this often requires significant upgrades to payroll systems.
Non-compliance is driven by several factors, including:
- difficulties interpreting the Holidays Act 2003
- problems aligning variable work patterns
- complex employment agreements with the Holidays Act 2003.
The programme team will support payroll practitioners to improve payroll practices.
Who and what’s involved
The GCDO will collate good practices for the main calculations in the Holidays Act 2003 from half a dozen government agencies and share opportunities for more consistent employment terms and conditions.
These good practices will inform the approach taken by agencies in their payroll projects and the approach taken by the programme for all-of-government contracts with payroll providers.
The programme team will:
- facilitate a “discovery” sprint to confirm the objective
- establish relationships within the team
- agree the scope of the work
- prioritise work for the remaining sprints.
They will reach out to agencies in October 2019 to seek expressions of interest to participate in a multi-disciplinary team comprising HR and payroll practitioners from agencies.
The deliverables from this workstream are likely to include:
- concept maps — to define the key concepts used in the Holidays Act 2003
- decision trees — to define the key decisions and business rules
- APIs — to capture the concepts, decisions, and business rules into a library of code samples.
Agencies can use these tools as part of their selection and implementation payroll systems.
Workstream 3: Coordinating payroll procurement
The GCDO is coordinating payroll procurement because this will:
- make government more effective — by setting a good practice benchmark for payroll functions
- deliver cost savings — by avoiding development of bespoke payroll processes and simplifying procurement.
Who and what’s involved
The programme team will validate the New Zealand government’s payroll process model with agencies and suppliers and make any changes necessary to ensure it is fit-for-purpose.
This model will inform government's requirements for:
- payroll systems
- payroll business process outsourcing services
- payroll consulting services.
The programme team will create a marketplace category for payroll systems, payroll business process outsourcing services, and payroll consulting services.
It will then invite suppliers to demonstrate how their systems and services align with the government's requirements and its commercial terms and conditions.
In early 2020, the programme team will ask a mix of agencies that have recently completed, are currently working on, or planning a new payroll project, to participate in a review team.
The review team will review the payroll process model and recommend changes as needed. They will also invite input from all payroll providers.
The programme team will produce a fit-for-purpose payroll process model and commercial arrangements with those payroll suppliers that are able to support it.
Agencies can use the process model and the commercial arrangements to implement their payroll systems.
Department of Internal Affairs
All-of-government (AoG) Payroll Programme team