Non-payment killing small businesses: PSC

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Published Apr 28, 2015

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Johannesburg - The Public Service Commission (PSC) wants government departments to strictly monitor the enforcement of the 30-day payment policy to service providers after they were left owed tens of millions of rand.

The PSC said in a report, tabled in Parliament recently, that late and non-payment left service providers in the lurch, with almost R100 million owed to companies in 2012.

The tabling of the PSC report, on compliance with the 30-day payment period, comes hot on the heels of the announcement by Minister in the Presidency Jeff Radebe that a report has been presented to the cabinet on the jacked-up system of payment.

The PSC conducted public hearings across the country in 2012. It met with service providers who raised a number of concerns regarding the impact non-payment by departments has on their businesses.

Small and medium-sized businesses have complained in the past how late and non-payment impacted on their operations and that this crippled them.

In its report, the PSC said the National Treasury reported in 2012 that 3 470 invoices, amounting to R73 million, had not been paid to service providers.

This late or non-payment was also criticised by the auditor-general in his report on performances of departments and entities.

The auditor-general also rebuked departments and entities for not complying with some laws.

“One such prevalent area of non-compliance was that of expenditure management, where it was reported that 44 percent of national departments and 7 percent of national public entities did not pay their creditors within 30 days of receipt invoices,” said the PSC report.

The report also touched on failure by a number of departments and entities to prevent irregular expenditure.

But a statement by Radebe two weeks ago in Parliament showed there has been an improvement in meeting the 30-day payment period.

Finance Minister Nhlanhla Nene has spoken strongly against departments and entities that fail to pay suppliers on time.

Radebe told journalists at a briefing two weeks ago that the cabinet had received a report on the 30-day payment period.

The analysis, from January 2013 to October 2014, showed that departments and entities have upped their game, with a 39 percent improvement in payment to suppliers within 30 days. In addition, payments made after 30 days had improved by 32 percent.

A unit to be placed in Radebe’s department will be set up to keep an eye on departments and help them with paying suppliers on time.

This unit will work with the National Treasury and the Department of Public Service and Administration.

The PSC said in its report that it wants departments to stick to the laws of the country and pay suppliers within 30 days.

Political Bureau

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