Departments pay 1 600 suppliers late

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Cape Town - The government has failed to pay more than 1 600 suppliers a total of R160 million within the 30-day limit prescribed by law.

Fourteen national departments and their entities owed the money to 1 662 companies, the DA said.

The 30-day limit is set down in the Public Finance Management Act.

“Overdue payments place enormous pressure on the cash-flow management systems of these businesses and can result in them defaulting in the payment of their own creditors,” DA finance spokesman Tim Harris said.

“In some cases businesses, like listed company Sanyati, have been forced to close because of late payment.”

The information was provided by government departments in response to parliamentary questions by the DA.

Harris said that, on average, money owed to suppliers had been overdue for nearly 80 days.

He said the worst offender was the Department of Water and Environmental Affairs and its entities, which had kept 20 service providers waiting for payment an average 158 days.

“The Department of Rural Development and Land Reform came in second place with 87 service providers who were kept waiting for an average of 122 days beyond the 30-day rule,” Harris said.

The Department of Justice and Constitutional Development and its entities kept 766 service providers waiting an average of 70 days for close to R40m in outstanding payments.

The Department of Public Works and its entities left 503 suppliers out of pocket to the tune of R19m for an average of 45 days.

Harris said the biggest bad debtor was the Department of Social Development, whose late payments to 43 suppliers totalled over R64m.

All departments reported that they paid no interest on outstanding debts.

Harris said the DA welcomed the announcement by Performance Monitoring and Evaluation Minister Collins Chabane, that the Treasury was setting up a dedicated system to check compliance with the act by national and provincial departments.

He said he would be asking parliamentary questions to get more details on this.

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