Queensland Health Payroll System Finally Stabilizing After 16 Months and AU$209+ Million

Last year, I blogged about the on-going problems that plagued the roll-out of the Queensland Health service's new SAP-based payroll system. In summary, the health service installed a massively late, over-budget and under-tested payroll system on the 24th of March of 2010.  Immediately, technical deficiencies surfaced, which resulted in many of the 80,000 Queensland Health staff not getting paid; some getting paid incorrectly; some employees who had quit a year ago (or died) still getting paid; some getting paid but with blank payroll slips to tell them what was taken out of their pay; and some staff even quitting over the problem.

To correct the problems, the project required an additional AU$209 million on top of the AU$102 million already spent on it. IBM, the prime contractor at the time, strongly defended the project as being an "outstanding success."

Queensland Health service staff had problems getting the proper pay for months, even into this year.

Well, last week there were a couple of news stories that seem to indicate that the pay debacle is finally moving towards closure. According to story at ABC News, Queensland's Technology Minister Simon Finn stated at budgetary hearings that the payroll system was finally stabilized, and that no further money above the AU$209 million committed to fix the system will be needed. However, Queensland Health's  acting director general Tony O'Connell indicated at the same hearings that another AU$10 million is required. Whatever is the eventual correct amount, it looks like there isn't a lot more work to be completed to get Queensland Health staff paid properly.

There is, however, still the burning issue of what to do about staff over-payments and under-payments. In May, the government said that some 38,000 Queensland Health service staff had been overpaid by some AU$62 million, and that the government wanted the money back. However, the government's recovery approach was so bungled that Queensland Health service staff were said to be on the verge of a revolt last month. One reason was that staff were told to repay amounts that could not be verified because of last year's chaos, while the other was that the government seemed to be aggressively pursuing staff overpayments while ignoring underpayments.

Last week, Queensland Premier Anna Bligh decided to impose a moratorium on pursuing overpayments until the underpayment issue was resolved. She was quoted in this Sky News Australia report as saying:

"In my view, the approach adopted by Queensland Health in seeking to recover overpayments from staff while it was clear that many employees were still owed entitlements was unacceptable."

The moratorium will allow affected Queensland Health service staff time to dispute the alleged overpayments. It will likely be another six months or more to get the over/underpayment issues straightened out, but at least the end is somewhat in sight.

In a bit of a déjà vu story, a few weeks ago there were news stories like the one at CBC News that an SAP-based national payroll system developed by IBM for the Victorian Order of Nurses (VON), which its web site says is "Canada's largest, national, not-for-profit, charitable home and community care organization," was causing missed "staff payments and putting some nurses in financial jeopardy."

The CBC News story reports that the  payroll system was installed January 1st of this year, and apparently payroll problems involving both over and underpayments began to show up soon afterwards.

A story in PC World quotes VON Chief Operating Officer John Gallinger as saying that while there were problems, everything is now fine. However, the president of the Nova Scotia Nurses Union, Janet Hazelton, seems to dispute that claim.

IBM declined to comment about the payroll problems at VON, PC World said.

Probably a smart move.

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