Departments fail to pay bills on time

THREE years after putting a 30-day payment policy in place, government departments are still failing to pay service providers on time and, in some cases, refusing to pay interest on debt to suppliers.

The Public Service Commission (PSC) told Parliament’s standing committee on appropriations on Tuesday that provincial departments had failed to pay 21,847 invoices, worth more than R1bn in total, while national departments have failed to pay 3,470 invoices worth more than R70m.

The failure to honour these invoices has seen some cash-strapped companies struggle to stay afloat and others falling under. Those that could afford it have had to approach the courts for relief.

Acting chair of the PSC advocate Richard Sizani said departments were found wanting not only in paying suppliers but in imposing penalties for failure to pay.

“Judgments, awards and 30-day payments are serious matters that government has not been able to address sufficiently. We have raised 30-day payment as a concern, but a lot of departments still pay beyond that. Some departments refuse to pay interest on their debts to service providers; there are still no consequences,” Mr Sizani said.

PSC commissioner Phumelele Nzimande said that the commission would soon begin work with the Treasury to entrench the 30-day payment stipulation by enforcing section 195 of the Constitution, which “promotes values-based service”.

“Management of ill health in the public service is completely outsourced. We have local district and national professionals in the system, as well as government resources institutions.

“To outsource to companies created for the sole purpose of getting work from government without the skills can’t be allowed to continue,” Ms Nzimande said.

African National Congress committee member Nkhensani Shope-Sithole said: “We need to get the departments to come here and write strong reports, per department, for the house to consider. The money that we require is within the departments.”

Democratic Alliance committee member Alan McLoughlin said while the analysis from the PSC was critical to addressing the challenge, he was convinced that the problem was worse than the PSC claimed.

“What worries me is what you’re not telling us. The possibility that you are telling us what you would like, but not telling us much of what you should is my fear,” Mr McLoughlin said.

The PSC told the standing committee that taxpayers were also not getting their money’s worth from a number of departments, despite these departments spending all of the money they were allocated.

The commission analysed 11 departments’ expenditure against their performance indicators.

According to the commission’s analysis, the departments’ expenditure ranged between 83% and 100% of their allocation. However only one of the 11 departments, the Economic Development Department, managed to achieve a performance rate of more than 90% between 2012 and 2015.

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