The cost of running the school payroll would have blown out to more than $200 million if the Government had dumped the Novopay system last year and continued with the Datacom service.
The $30 million Novopay system developed by Australian company Talent2 has been plagued with thousands of errors since it was introduced in August 2012 with underpayments, overpayments or no payments at all to some teaching staff.
Documents released under the Official Information Act show the Government allocated $189 million over 10 years to the payroll project.
The Government has previously said the cost of developing and running Novopay over a decade is about $100 million.
But papers provided to Radio New Zealand show that the actual cost of developing Novopay and running the Datacom system in the meantime is $189 million.
The papers say the Government would have had to find a further $27 million if it had decided to abandon Novopay and stick with Datacom.
However, they also say that might be off-set with refunds from Talent2.
Schools brace for more problems
Schools grappling with the Novopay system say predictions that this week's pay cycle will be a disaster are coming true.
In a Cabinet reshuffle on 22 January, Steven Joyce was put in charge of Novopay and last Thursday announced a ministerial inquiry and a range of new initiatives aimed at fixing the problems, including a technical review.
Mr Joyce warned that further problems were expected when wages go through on Tuesday night in the first pay cycle of the new school year.
Payroll reports to schools show even more problems than usual.
Timaru's Beaconsfield School principal Wayne Facer says he has just written cheques for four of his school's 12 staff, who will be partially paid or not paid at all this week.
The ministerial inquiry is expected be completed by the end of May at a cost of $500,000. Mr Facer says it is pleasing to see the Government is taking the matter seriously, but fears the new payroll system will be an ongoing money pit.
"All this money going down the drain on a flawed system could well be better put towards the coal face of education, which would be supporting children in their learning within schools through extra teaching time or extra teacher aid support that that money could go towards."
Waitara High School principal Jenny Gellen says the system is continuing to create major stress.
"Especially for the support staff, who are the ones who are dealing with Novopay - the extra hours they are having to do, being called in during the holidays to try and sort issues to ensure others are getting paid - is just ongoing.
"In some areas of New Zealand some staff have actually resigned because of it - but luckily, I haven't had that happen at my school."
Ms Gellen says she doesn't expect the ministerial inquiry will reveal anything that is not already known about the system.
Ministry of Education puts in special measures for Waitangi Day
The Ministry of Education has put special measures in place to deal with any urgent errors that may arise out of Wednesday's pay day for teachers, because it's a public holiday.
A ministry support team will be available on Waitangi Day to provide urgent assistance to any staff who are not paid as scheduled.
Arrangements have also been made with the major banks, so the ministry can get in touch to authorise catch-up payments.
Any staff member who is not paid, or significantly underpaid, should contact the pay administrator at their school; failing that they can contact the ministry directly.
This can be done by calling 0800 663 772, or emailing resourcing@minedu.govt.nz with the words 'manual payment' in the subject line.
If people contact the ministry before midday, they should get paid in the afternoon.