DA pressure on province supplier payment delays paying off

Mike Moriarty MPL

Spokesperson on Finance

The DA is seeing results for our continued pressure on Gauteng Premier Nomvula Mokonyane’s government for its inability to pay suppliers within 30 days of receipt of goods as required by law.

The gradual improvement, with the exception of the Gauteng Health Department, is conveyed in the Premier’s reply to my written question.

I also proposed a motion in the Gauteng Provincial Legislature calling for disciplinary action against staff holding up payments, which was duly adopted. This is in line with section 81 of the Public Finance Management Act (No 1 of 1999) which states that an official commits an act of financial misconduct if he or she wilfully or negligently fails to exercise his or her duties.

It is of great concern that suppliers to the department of Health, which is the greatest bulk of the invoices, will still wait for over three months before getting paid.

A supplier to the Social Development Department had to wait 1 794 days before being paid. There was a supplier to the Department of Education that waited 1 555 days, and one to the Health Department who waited 1 553 days.

But the picture is actually an improving one. The provincial government is now reporting that the average time between date of invoice and date of payment is now 41 days. While this is not within the 30 day legal requirement it is much better than the 76 days achieved earlier in the year.

It is, however, worrisome that the provincial government is trying to spin a more positive picture than they are entitled to. Recent reports from the government focus on the time taken to process an invoice once it is received by the department accountable for making the money transfer to the supplier.

The provincial government is bound by the rules of Generally Recognised Accounting Principles (GRAP). The rules of GRAP require the province to account for the payment of goods and services from the moment these have been received. Up until now the provincial government has avoided this obligation by claiming its computer system cannot accommodate this provision.

So, by obscuring these facts, the province is ignoring the plight of suppliers, some of whom have had to wait over four years for payment. The provincial government wants us to believe that this is the fault of suppliers saying that they don’t submit invoices on time.  No business wants to be paid late. The more likely explanation for invoices being “received late” is if staff members hide these in drawers before forwarding them to the accounts department, at which point the invoice is now “received”.

The DA calls on the government to implement an internet-based invoice receipting system that will make it easier for suppliers to submit invoices to a point where they are virtually guaranteed payment within 30 days. This would also end all arguments about when the document was received if the system provides an “invoice received” notification.

The DA also calls on the provincial government to continue monitoring staff performance and to endeavour towards a situation where suppliers can finally expect to be paid within 30 days, with specific focus on the Health Department.

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