Government says it remains committed to timeous payment of small businesses that render services to the state.

Cabinet received a report on compliance with Treasury Regulation that requires suppliers to be paid within 30 days from receipt of a legitimate invoice.

“Government has prioritised timeous payment of services by government departments, as part of supporting small businesses which are important for job creation and broad-based black economic empowerment,” a Cabinet statement issued by the Government Communication and Information System (GCIS) said on Friday.

President Jacob Zuma warned last year that government officials who stall on paying small businesses could face disciplinary action. At the time Zuma told members of the Black Management Forum that government was considering taking drastic action to ensure that small businesses are paid on time.

Cabinet noted that SMMEs carry the heaviest burden as a result of late payments by government and big business, which creates numerous cash flow difficulties.

The Small Enterprise Development Agency (Seda) hotline launched in 2009 continues to facilitate payments worth millions to small businesses. The Hotline takes up late payment queries with public sector institutions on behalf of SMMEs.

“National Treasury and the Department of Performance Monitoring and Evaluation continue to monitor this issue and will guide Chief Financial Officers on good practice and procedures for payment of suppliers.”

Cabinet has also approved that Executing Authorities take disciplinary steps against errant Accounting Officers and officials who fail to honour the departments’ contractual obligations timeously.  Payment of suppliers within 30 days is a requirement in terms of Section 38 (f) of the PFMA and Treasury Regulations 8.2.3.

Non-compliance with this requirement constitutes financial misconduct (PFMA clause 81).