A new report from the Minnesota Office of the Legislative Auditor highlights severe payroll system failures within the Minnesota State university system following the adoption of the Workday HR platform, affecting thousands of employees.
In a sample test of 202 faculty and staff members, auditors found that 19 had received incorrect pay. Further testing uncovered an additional 38 employees who were paid inaccurately. Beyond incorrect payment amounts, the report also identified significant issues with delayed paychecks.
As the fourth-largest higher education system in the U.S., Minnesota State operates 54 campuses, serves approximately 270,000 students, and employs over 14,200 staff and faculty. Based on the 9% error rate identified in the audit, the number of affected employees could be as high as 1,278.
Integration Flaws at the Heart of the Problem
The university system launched an ERP upgrade initiative in 2019 to replace its outdated ISRS system. However, the project team discovered during implementation that a single software solution could not meet all functional requirements. Ultimately, the Workday system did not include payroll calculation capabilities for faculty and staff.
The audit report indicates that the university was forced to manage a "patchwork" system involving Workday, the legacy payroll system, and the state’s SEMA4 system. Auditors noted that while payroll management issues existed prior to the introduction of Workday, the situation worsened after the new system went live due to data transmission vulnerabilities between the ISRS and Workday interfaces.
Project costs have also ballooned significantly. The initial budget was $151.1 million; after selecting Workday in 2020, the budget was increased to $242.7 million. As of November 2024, due to expanded project scope, delays, and the allocation of emergency funds, the total budget has climbed to $290.4 million.
Currently, the system’s HR and payroll modules went live in July 2024, while the full implementation of the student management system has been pushed back to the fall of 2029. Neither the university system nor Workday has yet responded to the findings of the audit report.