Govt's slow adherence to 30-day supplier payment policy remains a concern - Public Service Commission

7th December 2021 By: News24Wire

Public Service Commission (PSC) compliance reports continue to raise the alarm about national and provincial government departments' slow adherence to a 30-day supplier payment policy.

On Tuesday, the PSC said that although there were improvements in some government departments, the issue remained a concern. Late payment has a dire impact on the survival of suppliers, PSC commissioner Michael Seloane said.

"Unpaid invoices have the potential of destabilising any business, especially the SMMEs whose lifeblood is the sufficient availability of cash flow, which ultimately impact negatively on government's initiative of achieving its job creation and economic growth outcomes," Seloane added.

Nationally, the Department of Public Works and Infrastructure showed significant improvement in dealing with outstanding invoices monthly from July to September. 

The department recorded 11 outstanding invoices in July at a cost of R 307 124. In September, the number declined to two unpaid invoices worth R55 767.

The Department of Mineral Resources and Energy showed improvement from 13 invoices in July, valued at R 12 737 900. In September, the department had only 7 outstanding invoices at the cost of R 7 489 310.

Government departments are required to submit payment reports to National Treasury. Still, the Departments of Traditional Affairs, Correctional Services, and Justice and Constitutional Development failed to submit reports for the September period.

Provincial non-compliance

Gauteng, the Eastern Cape and the North West have reported a high number of unpaid invoices. 

"As at the end of September 2021, the Eastern Cape recorded 4 648 invoices with a related cost of R 2 280 024 142, compared to 8 057 invoices with a related cost of R 2 228 122 449. For Gauteng, 4 855 invoices with a related cost of R 1 044 398 803 were recorded at the end of September 2021, compared to 1 677 invoices with a related cost of R 790 771 938 at the end of June 2021.

"The North West recorded 4 340 invoices with a related cost of R 266 912 565 at the end of September 2021, compared to 5 527 invoices with a related cost of R 456 021 865 at the end of June 2021," Seloane said.

Mpumalanga failed to report for August and September, and the Western Cape did not report for September. 

Seloane said the commission might have to apply stricter measures to improve compliance with Public Finance Management Act.

He pointed to the delay in the tabling of the Public Procurement Bill, which has yet to be presented to Cabinet and aims to professionalise supply chain management in the government.

It was earmarked for presentation by December 2021.

The new deadline is 2022/23, Seloane said.