The Public Service Commission (PSC) has expressed its frustration at what it described as the National Treasury’s alleged concealment of information in relation to government departments' failures to pay service providers.
Over the years there has been a trend of either late or non-payment of invoices, with provinces and national departments owing billions of rand.
Commissioner Anele Gxoyiya has now urged small, medium, and micro enterprises (SMMEs) with unpaid government invoices exceeding 30 days to approach the PSC with their grievances.
Gxoyiya was speaking at a media briefing on Wednesday where he released a Quarterly Bulletin titled “The Pulse of the Public Service”, which covered the overall number of complaints and grievances handled from April 1 to June 30.
Gxoyiya emphasised they were troubled that once again they could not reflect on the compliance of local and national government departments over the 30-day payment of suppliers due to the Treasury’s “unwillingness” and “seemingly concealing something”.
“The PSC has noted with concern the reluctance by National Treasury to avail information relating to the payment of suppliers.
“The commission will continue to engage the National Treasury to submit the information in the interest of transparency.
“Furthermore, the commission would like to encourage small businesses whose invoices have not been paid by various state institutions to approach the offices of the PSC countrywide for assistance.
“We are of the view that reflecting and reporting on the compliance of government departments is part of us holding them accountable. Even if the Treasury does not give us that information, you can come to us because we are doing this in the interest of accountability to the public. We want a transparent and accountable government; hence, we are there as a constitutional body," Gxoyiya said.
The PSC has, at the end of June, registered 184 grievances including 114 carried over from the previous financial year. Of the 184 cases, national departments accounted for 89, followed by 20 complaints in the Western Cape and Limpopo with 18 cases.
Social grant fraud was by far the most commonly reported, with 315 complaints referred for investigation, followed by service delivery issues, including water shortages and unethical behaviour.
National Treasury spokesperson Cleopatra Mosana said details on late or non-payment of suppliers has always been shared with the PSC and there was no change to information provided except for raw data which they believed would make a meaningful impact when analysed for a specific purpose by the PSC.
Mosana said the Treasury informed the PSC that information in this area will be shared with the department such as exception reports received from national departments and provincial treasuries and published reports on the National Treasury website.
According to a Treasury report, as of June, 117 158 invoices were paid after 30 days by national and provincial departments during the first quarter of the 2023/24 financial year, amounting to R 11.1 billion.
The number of invoices older than 30 days and not paid by national and provincial departments at the end of June, was 37 577, amounting to R 4.4 billion.
This was a regression of 51% when compared to the first quarter of the 2022/23 financial year which amounted to R4.8 billion.
“The most common reasons provided by both the national and provincial departments for the late and/or non-payment of invoices are interruptions caused by poor internal controls, internal capacity, and budget constraints,” the report read.
Mosana said their mandate as in terms of the Public Finance Management Act (PFMA) provides that the Treasury prescribe treasury norms and standards, enforce, and monitor the implementation of the PFMA including any prescribed norms and standards.
“Since there was a persistent non-compliance in this area, the National Treasury prescribed in terms of section 76 of the PFMA, a Treasury Instruction No. 34 of 2011 requesting institutions to submit exception reports on late/non- payment of supplier’s invoices for the department to be able to monitor and track compliance with this requirement,” she said.
Hugo Pienaar, chief economist at Stellenbosch University's Bureau for Economic Research, said the impact of non-payment and late payments to SMMEs was mainly a cash flow issue.
“Smaller firms typically do not have sufficient buffers to carry them through periods when their clients, in this case government departments, do not pay their bills timeously.
“It may mean that they are then unable to honour commitments to vendors, staff and other things,” said Pienaar.
*This story has been updated to reflect a response from National Treasury.
Cape Times