The Minister responsible for Novopay, Steven Joyce, says the State Services Commission had effectively lost its independent view when it failed to raise concerns about Novopay with ministers.
A ministerial inquiry's report into the error-ridden system, released on Tuesday, concludes that ministry advice to government ministers about Novopay was inconsistent, over-optimistic and misrepresented the project just before its launch.
The report said the Education Ministry's choice of Australian company Talent2 to create Novopay was not inappropriate, but the ministry failed to meet its obligations and did not have the commercial experience required to deal with the Novopay contract.
Mr Joyce told Radio New Zealand's Morning Report programme a number of people set up to provide independent quality assurance, including the State Services Commission (SSC), either had their views misrepresented or had become part of the project.
"The SSC was montoring that particular project and providing its independent advice, or at least it was assumed to be independent advice, to ministers. Unfortunately the report makes quite clear that effectively the SSC was drawn into the project to a degree that it lost its independent view as well."
Mr Joyce says it would be unfair to criticise all the public service because of isolated problems, but ministers have to be able to trust advice from their officials.
Acting Secretary for Education Peter Hughes has acknowledged that errors of judgement and wrong decisions have been made, and apologised to school staff and government ministers.
An independent employment investigation is set to begin for two senior Minister of Education managers who had leadership and management roles in Novopay's development.
Labour's education spokesperson Chris Hipkins says the Government is making an effort to put the blame on officials, but ministers are taxpayers' final line of defence and did not drill down into the information that was available.
He said Finance Minister Bill English, Education Minister Hekia Parata and Associate Education Minister Craig Foss signed off on Novopay going live despite clear evidence in existence that it was not going to work.
Principals alarmed at extent of mistakes
School principals say it will take years to regain trust in the Education Ministry.
Ashburton College principal Grant McMillan says he was stunned by the extent of the problems outlined in the report, some of which were simple avoidable errors.
The principal of Belfast School in Christchurch, Peter Simpson, says the report makes it easy to see why there is a lack of confidence in the Government's ability to handle large IT projects.
Mr Simpson says the education sector has lost its trust in the ministry.
The principal of Beaconsfield School in Timaru says while faith has been lost in the ministry, he doesn't think it should get all the blame.
Wayne Facer says Bill English, Hekia Parata and Craig Foss were naive to sign off Novopay so quickly.
Principals' Federation president Philip Harding says if payroll administrators in schools had tested Novopay rather than ministry staff, the true extent of its failings would have become clear.