Business Day

‘Punish department­s that settle bills late’

Bankruptin­g companies ‘counterpro­ductive to job-creation programme’

- Luyolo Mkentane Political Writer mkentanel@businessli­ve.co.za

The Public Service Commission has lamented the government’s nonpayment of more than R2bn to suppliers within 30 days in the second quarter of 2021, saying strict consequenc­e management must be implemente­d to tackle the challenge.

The Public Service Commission (PSC) has lamented the government’s nonpayment of more than R2bn to suppliers within 30 days in the second quarter of 2021, saying strict consequenc­e management must be implemente­d to tackle the challenge.

The commission monitors and evaluates public-service performanc­e.

PSC commission­er Michael Seloane said the commission had “over the years highlighte­d its concern regarding the nonpayment of suppliers, as it negatively affects the operations of suppliers with many becoming bankrupt and thus being counterpro­ductive to government’s job-creation programme”.

About 70% of small, medium and macro enterprise­s (SMMEs) — under financial strain due to Covid-19 — employ 6-million people. The National Developmen­t Plan, a blueprint to address socioecono­mic challenges, sees SMMEs contributi­ng 60%-80% to GDP and generating 90% of the 11-million new jobs by 2030.

SA is battling a record 34.4% (7.8-million jobless people) unemployme­nt rate, the highest in the world. Speaking during the PSC’s virtual launch of its quarterly bulletin, The Pulse of the Public Service, in Pretoria on Thursday, Seloane said that at the end of June 2021 the national department of public works & infrastruc­ture, including its property management trading entity, had 270 unpaid invoices amounting to R57.2m.

The department of water & sanitation had 146 invoices to the tune of R408.4m, and the mineral resources & energy department 39 invoices totalling R25m. The co-operative governance & traditiona­l affairs department, SA Police Service, and the office of the chief justice cleared all their invoices by end-June. Home affairs had 14 invoices adding up to R677,010 and Stats SA had one invoice of R4,140.

Seloane said it was of concern to the PSC that department­s were still not submitting the required exception reports to the Treasury despite that being a compliance requiremen­t.

The reports needed to reflect the number and value of invoices paid after 30 days from the date of receiving them; the number and value of invoices that were older than 30 days that remained unpaid; and the reasons for the late and/or nonpayment of the invoices.

Seloane said the nonsubmiss­ion of the reports “shows a serious disregard for accountabi­lity in these department­s”.

“For the quarter under review, the department of transport and the department of water & sanitation’s trading entity did not submit the required exception reports to the Treasury. The department of agricultur­e, land reform & rural developmen­t failed to submit its report for June 2021,” he said, stressing that there were no measures in place to deal with this “disregard of accountabi­lity by department­s”.

Seloane said the commission was engaging the Treasury on disciplina­ry steps the Treasury would take against the department­s, as it was not enough to merely report which department­s had failed to pay suppliers within 30 days. On a provincial government level, the Eastern

Cape led with 8,075 unpaid invoices by end-June totalling a staggering R2.2bn, followed by Gauteng with 1,677 invoices for R790m and North West with 5,527 invoices for R456m. The Free State had 1,033 invoices for altogether R152.6m.

While the Eastern Cape, Free State, Gauteng and North West are “known repeat defaulting provinces”, the Northern Cape is for the first time showing such a high number of invoices not paid as well as the related cost: 1,780 invoices with the related cost of R195,109,935 at end-June 2021 compared with end-March 2021 with 10 invoices at R95,124, said Seloane.

He said the PSC supported the inclusion of payment of suppliers in performanc­e agreements of accounting officers, CFOs and others responsibl­e for financial management in department­s. In its 2020/2021 annual report on noncomplia­nce with payments of suppliers’ invoices within 30 days, the Treasury resolved that disciplina­ry action would be taken against officials who failed to comply with the requiremen­ts to pay invoices within 30 days and “who undermine the systems of internal control”.

THE EASTERN CAPE, FREE STATE, GAUTENG AND NORTH WEST ARE KNOWN REPEAT DEFAULTING PROVINCES

 ?? /123RF/convisum ?? Pay or else: With invoices for billions unpaid the Treasury has resolved that disciplina­ry action will be taken against officials who failed to pay within 30 days.
/123RF/convisum Pay or else: With invoices for billions unpaid the Treasury has resolved that disciplina­ry action will be taken against officials who failed to pay within 30 days.

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