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Western Cape and Mpumalanga governments more likely to...

Business Maverick

TREASURY REPORT

Western Cape and Mpumalanga governments more likely to pay suppliers within 30 days

(Image: iStock)

If you are planning on working as a government supplier, you are more likely to be paid within 30 days in the Western Cape and Mpumalanga, according to a National Treasury annual report on payment of supplier invoices released this week.

The report reveals that more than 400,000 (401,691) invoices – with a total value of R 33.7-billion – were paid after 30 days by national and provincial departments.  

In addition, 67,862 invoices older than 30 days, with a total value of R6.1-billion, had not been paid by the end of March this year. 

There was an encouraging 63% improvement in the number of invoices older than 30 days and not paid (134 invoices at a total of R5-million) at the end of the 2021/22 financial year, compared with 358 invoices at a total of R426-million reported at the end of the 2020/21 financial year.

There is a noticeable trend that the number of invoices paid after 30 days by provincial departments is always highest towards the end of the financial year (March) and the beginning of the new financial year (April and May). 

Government departments and provinces are required to send regular reports to National Treasury outlining how many suppliers have not been paid within 30 days, and explaining the reasons for the delay in payments.

In a newsletter earlier this year, Advocate Dinkie Dube, director-general of the Public Service Commission, said a disregard for the submission of exception reports to National Treasury remained a “persistent challenge”.  The departments of basic education, employment and labour, and international relations and cooperation failed to submit timeous monthly reports for the entire last quarter of 2021.

The department of transport and the Government Communications and Information System did not submit monthly reports for January and February 2022. 

Dube says these departments are all repeat defaulters when it comes to the submission of monthly reports. National Treasury has recommended:

  • Payment of invoices within 30 days be included in the performance agreements of accounting officers, chief financial officers and other responsible officials.
  • Disciplinary action against officials who fail to pay invoices within 30 days and who undermine internal control systems.
  • Accounting officers ensure information is signed off and submitted to the relevant treasury timeously.
  • Accounting officers and chief financial officers must address the root causes of the late and/or non-payment of invoices to improve compliance.

National Treasury has noted that the late and/or non-payment of supplier invoices have a negative impact on small and medium-sized enterprises (SMMEs). 

To ensure that supplier operations continue without strain and financial difficulties, government institutions are urged to pay their suppliers on time and not contribute to the dire effects of the pandemic that has already put a strain on the financial sustainability of SMMEs. BM/DM

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