The National Treasury has proposed wide-ranging measures that could lead to severe sanctions, including disciplinary action, against accounting officers who fail to pay invoices within the stipulated 30-day period.
THE NATIONAL Treasury has proposed wide-ranging measures that could lead to severe sanctions, including disciplinary action, against accounting officers who fail to pay invoices within the stipulated 30-day period.
The Treasury on Tuesday published the “2021/22 annual report on non-compliance with payments of suppliers’ invoices within 30 days” for the period ending March 2022.
National and provincial government departments are required to pay supplier’s invoices within the prescribed period in terms of section 38(1)(f) of the Public Finance Management Act (PFMA).
The report found that the number of invoices paid after 30 days by national and provincial departments in the 2021/22 financial year amounted to R33.7 billion.
The situation deteriorated for the number of invoices older than 30 days and not paid by national and provincial departments as this stood at R6.1bn.
National departments had a noticeable regression of 75 percent in the number of invoices paid after 30 days amounting to R4.7bn from R4.4bn a year earlier.
At national level, the Department of Defence recorded the highest number of invoices paid after 30 days, followed by Public Works and Infrastructure.
In a statement, the Treasury recommended that the payment of invoices within 30 days should be included in the performance agreements of accounting officers, chief financial officers and other officials working in this area.
“Disciplinary actions against officials who fail to comply with the requirements to pay invoices within 30 days and who undermine the systems of internal control be taken,” it said.
“Accounting officers (must) take steps to ensure that the information to be submitted to the relevant treasury is duly signed off and submitted to the relevant treasury as per the time frames stipulated in the National Treasury Instruction Note number 34.
“Payment of suppliers within 30 days be a standing agenda item for discussion at every exco meeting of departments.”
The analysis further indicated that provincial departments were responsible for the majority, or 66 percent, of late and non-payment of invoices during the year.
The total rand value of invoices older than 30 days and not paid by provincial departments amounted to R6.1bn, a regression of R800 million or 15 percent compared to R5.3bn a year before.
Gauteng provincial departments reported the highest number and rand value of invoices paid after 30 days, followed by the Eastern Cape.
Earlier this year, Gauteng legislature’s finance committee revealed that the provincial Health Department owed R3.1bn to 42,519 suppliers who had not been paid within the legally required 30 days.
Western Cape provincial departments reported the lowest number and rand value of invoices paid after 30 days followed by Mpumalanga province.
The Treasury said the late and/or non-payment of suppliers invoices impacted negatively on the socio-economic challenges that the country faced.
These include the financial health of suppliers, and the ability of suppliers to pay salaries and meet their contractual obligations, the impact of the Covid-19 pandemic and many other challenges.
“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.”
– BUSINESS REPORT