Government departments in South Africa not complying with the 30-day payment provision laid down by cabinet are posing a dire threat to suppliers, the Public Service Commission (PSC) has said.
Voicing concern over the non- or late payment of contractors, PSC commissioner Anele Gxoyiya has warned that it imposes dire consequences on the financial health of businesses.
“Late and non-payment of suppliers can expose departments to costly litigation for non-payment, including being ordered to pay interest on late payments, resulting in the already scarce financial resources being diverted from priority areas.”
Addressing the media in Pretoria yesterday, Gxoyiya said in discharging its constitutional responsibility, the PSC continued to monitor compliance with the 30-day payment provision of suppliers’ invoices.
“The PSC has made several recommendations, taking into consideration the reasons provided by national and provincial departments, such as misfiled, misplaced or unrecorded invoices that are rooted in the lack of internal control measures, which refer to not only the systemic issues but also human resources shortcomings.”
He added that the PSC supported the decision taken by President Cyril Ramaphosa as stated in the 2022 State of the Nation Address of the appointment of the current chairperson of the Small Business Institute to head a unit in the Presidency to “identify priority reforms for the year ahead, including mechanisms to ensure government departments pay suppliers within the required 30 days”.
This is especially in respect of responding to the plight of small businesses in South Africa.
“Government departments are required to settle all contractual obligations and pay all monies owed, including intergovernmental claims, within the prescribed 30 days from receipt of an invoice or, in the case of civil claims, the date of settlement or court judgement,” Gxoyiya said.
He added though that there had been an improvement in the payment of suppliers by the national departments during the third quarter, despite the late submission of information to the National Treasury.
With regard to cases of alleged corruption received by the PSC through the National Anti-Corruption Hotline (NACH) in the 2020/2021 financial year, Gxoyiya said 24 650 cases of alleged corruption had been reported by callers and whistleblowers as at December 31, 2021 since the inception of the NACH in September 2004.
During the third quarter of the 2021/2022 financial year, the PSC recorded a total of 347 cases. These cases, according to the PSC, are slightly higher than the 337 cases received in the second quarter and 282 received in the first quarter of the 2020/2021 financial year.
The PSC noted from the feedback provided by departments on concluded investigations that the number of complaints investigated by departments were unsubstantiated.
