While there has been a consistent improvement in the setting up of systems to enable government institutions to pay suppliers and service providers within 30 days, the pace of the improvement is still inadequate, states Minister in the Presidency for Planning, Monitoring and Evaluation Jeff Radebe.
“We are the first to concede that much is [still] to be done to ensure [that] all departments in all three spheres of government and State-owned enterprises adhere to the 30-day payment policy,” Radebe said at an All Africa Events Management Conference and Exhibition conference, in Ekurhuleni, earlier this month.
Radebe, also chairperson of the National Planning Commission, spoke at a dialogue that focused on how government strives to unlock business opportunities for entrepreneurs through interventions to fast-track the timeous payment of suppliers and service providers by government.
He highlighted that the number of legitimate invoices paid after 30 days was 17 668, to the value of R340-million, as at June 30, which was high, compared with June 30, 2015, when 13 803 invoices to the value of R224-million were paid after 30 days.
Also worrying was the number of invoices older than 30 days that remained unpaid, he stressed.
National departments had to pay 12 870 invoices older than 30 days to the value of R62-million as at June 30, compared with June 30, 2015, when the total number of invoices older than 30 days that remained unpaid was 4 543 to the value of R410-million.
Radebe, however, highlighted “pockets of excellence” that were identified through the Department of Planning, Monitoring and Evaluation’s (DPME’s) monitoring programmes, which included instances where some departments paid suppliers within four days.
“These good practices have been shared with other departments to encourage them to do the same,” he said.
The DPME is further monitoring through the Management Performance Assessment Tool whether national and provincial departments have the required invoice tracking and reporting systems in place and whether investigations and appropriate actions are initiated where invoices are not paid within 30 days.
Radebe stressed that “it is not government policy not to honour financial obligations”, emphasising that measures were afoot to intensify its efforts in this area.
This includes the review of legislative frameworks by the National Treasury and the creation of debt forums by provinces to facilitate the sharing of good practice and address systemic issues.
Government has also committed to eliminating any corrupt practices related to payments.
Further, a DPME special unit, established in April 2015, which works in a trilateral partnership with the National Treasury and the Department of Public Service and Administration, is rolling out a targeted support programme to the identified struggling departments.
This intervention comprises visits and inspections at the identified departments to understand and address the challenges that lead to the nonpayment or late payments of suppliers, Radebe said.
The visits aim to share best practices and obtain commitment from CFOs and accounting officers on improved compliance with invoice payment deadlines.
The DPME and the Treasury have also devoted more resources to efforts to address the challenges of payment of suppliers, such as a walk-in centre at the National Treasury offices to attend to suppliers’ queries. Queries from suppliers are being shared between the two departments.
Radebe further believes that several measures, such as the Central Suppliers Database, “will go a long way in eradicating blockages in the payment processes by departments”.
He, nevertheless, appealed for service providers to assist in ensuring that government departments pay them within the stipulated 30-day period.