Gauteng Health MEC Bandile Masuku. Picture: Jacques Naude/African News Agency(ANA)
Gauteng Health MEC Bandile Masuku. Picture: Jacques Naude/African News Agency(ANA)

Gauteng Health says it has no cash flow problems despite owing service providers R1.2bn

By Botho Molosankwe Time of article published Jun 30, 2020

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Johannesburg - The Gauteng Health Department has stated that it does not have cash flow problems after admitting to owing service providers R1.209-billion.

The monies are owed to 823 companies that provided services to the department and were supposed to have been paid within 90 days.

However, they are still waiting for the payments.

The DA's Gauteng Shadow MEC for Health Jack Bloom said MEC Dr Bandile Masuku revealed this in a reply to his questions in the Gauteng Legislature.

"According to Masuku, only 68% of companies were paid within the 30 day period as at March 31 this year. 

"The late payments are because the department had previously experienced cash flow challenges which resulted in unavailability of cash to settle obligations timeously. 

"The majority of transactions that were not paid as at 31 March are those transactions where the department had entered into payment plans with the service providers. The 2020/2021 financial year is the last year for the settlement of the payment plans," he said.

Bloom said it was disappointing that so many companies were still owed huge amounts of money by the department which he said had a notorious record of poor financial management. 

"Some of these companies may have to close and lay off workers due to the Covid-19 crisis.

"It is still unclear why the department’s Chief Financial Officer resigned recently, but I hope her successor does what is necessary to ensure that all companies are paid in good time," he said.

IOL spoke to the department to find out why the service providers had not been paid and whether cash flow problems could be the reason.

"There is no cash flow challenge. All payments which are due and payable and have been duly authorised at appropriate level are being processed. These include prior year accruals as Treasury made funding available for that," the department said on Tuesday.


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