Government payment problems persist, thousands of invoices outstanding
The Office of the Chief Procurement Officer received 5,647 queries about invoices unpaid by government departments, amounting to R620m, between July 1 2016 and end-March 2017.
Government departments and state-owned entities are obliged to pay suppliers within 30 days and their failure to do so has had a severely harmful impact on small and medium enterprises, which experience debilitating cash crunches as a consequence.
Documents presented to Parliament’s standing committee on finance on Tuesday by Treasury showed that of the total invoice queries received, 2,514 valued at R225m were resolved and paid by departments, 50 valued at R21m were declared as dispute invoices, and 3,083 valued at R373m were still outstanding.
Treasury said the majority of entities cited cash flow challenges as the reason they deferred payment to over 60 days.
For example, Gauteng’s health department — which had R51m in outstanding invoices — told Treasury that it had a problem with cash flow, which had come "under pressure by medical inflation, medico-legal cases, neighbouring provinces patients (and) foreign patients that visit the institution".
Between July 1 2016 and end-March 2017 the office received queries about outstanding invoices amounting to R152m due by municipalities. Through the intervention of Treasury, R71m was paid and R82m was still outstanding.