Various departments' failure to pay invoices on time severely affects small, medium and micro enterprises (SMME) to the extent that it threatens their very survival. 

As of 1 June this year, unpaid invoices spiralled from 959 to 3 454 at the end of September. 

This is according to the Public Service Commission's quarterly bulletin covering the period from 1 June until 30 September.  

PSC commissioner Anele Gxoyiya presented the bulletin in Pretoria on Tuesday. 

He said some small businesses struggle to honour their financial obligations, as they mostly lack financial reserves. 

"This results in some of them closing down and some being blacklisted, which in turn creates difficulties in securing future assistance from financial institutions," he said.  

He stressed that the "late payments and non-payment of suppliers by departments has been an ongoing problem in the public service, which is indicative of the lack of compliance [with] the regulations".                                                 

Gxoyiya said the health and tourism departments contributed the most to the number of unpaid invoices, with 2 929 and 468, respectively. 

He accused the Department of Agriculture, Land Reform and Rural Development of being repeat offenders for late submission during the first quarter.

"It is further disconcerting that the Department of Agriculture, Land Reform and Rural Development and the Department of Health submitted reports late for the whole of the second quarter of the 2022/23 financial year."

He added that the late submission of the exception reports by departments showed disregard for their legal obligations. He said it also demonstrated "little care" for the plight of small businesses and their struggles.   

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Turning to provinces, the bulletin showed no significant improvements in the non-payments of invoices as of the end of September 2022.

"The overall number of unpaid invoices decreased from 29 236 in July 2022 to 27 068 at the end of September 2022, which is a decline of 7.4%. The Eastern Cape, Gauteng, and North West provinces were the main contributors to [the] non-payment of suppliers as at [the] end of the second quarter of [the] 2022/23 financial year. 

He added:

Of great concern is the Limpopo province, which submitted the reports to Treasury late for the first quarter (two months) and also during the second quarter (all three months).

"In October 2022, the PSC held a meeting with the Portfolio Committee on Public Service and Administration, during which it was briefed on the non-payment of suppliers. The PSC presented varied reasons for late and non-payment of invoices which include systematic challenges, a lack of an IT system to track invoices; a lack of financial delegations; and unrecorded invoices, among others."

Another concern was the poor financial planning by government departments, particularly the lack of alignment between the budget and procurement plans. 

"Prevalent was also poorly drafted contracts where some of the clauses had different interpretations, which indicate [the] inadequate capacity in contract management. 

"The PSC recommended that Parliament assists in holding departments accountable, especially accounting officers, for failure to meet their statutory obligations in terms of Section 38(1) of the PFMA [Public Finance Management Act.]"