Unpaid invoices increase – Government owes service providers R11.1 billion, says PSC

The Public Service Commission (PSC) says the late and non-payment of suppliers remains a serious problem which needs to be addressed by government.

The PSC released its quarterly Pulse of the Public Service bulletin in Pretoria on Tuesday. The bulletin covered the period between 1 July and 30 September.

‘12% higher’

Speaking at a Press briefing, PSC commissioner Anele Gxoyiya said service providers were “indeed in trouble”, with the number of national and provincial government departments’ unpaid invoices standing at 117 158.

The total value of all the unpaid invoices, which had to be settled within 30 days, was R11.1 billion.

“That’s the money that is sitting in government for services that have been given, but the service providers have not been paid. That R11.1 billion is 12% higher than R8.6 billion that was owed at the first quarter of the 2023/2024 financial year,” Gxoyiya said.

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The PSC commissioner said while all government departments, both national and provincial, submitted their first quarter reports to the National Treasury, only 15 abided by the required payment date to suppliers.

“[This] means 25 government departments have not complied with the 30 day payment which is quite serious and needs to be addressed. We will engage, of course, with those departments. [The national Department of] Health is always topping the list of departments that are non-compliant.”

Other departments with a high non-compliance rate include: Home Affairs, Correctional Services, Defence and Military Veterans, South African Police Service (Saps), Agriculture and Land Reform, Transport, Water and Sanitation, Public Works and Infrastructure as well as Tourism.

“Health owes 690 invoices that amount to R40 million, Water and Sanitation has 657 invoices that amount to R2.7 million, Public Works and Infrastructure has 36 invoices amounting to R22 million, Home Affairs has 10 invoices and they account for R25 268, Agriculture and Land Reform has seven invoices and they owe R1.8 million and Tourism has six invoices of R20 094,” the commissioner said.

“The total number of invoices that were paid after 30 days by provincial government departments amounted to 90 973 and it was R9.9 billion. Gauteng contributed with the highest number of invoices that were not paid which were about 45 538 and they amounted R3.5 billion. [Alongside Gauteng], North West and Eastern Cape were the three highest contributors to the non-payment of invoices.”

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Gxoyiya said small, medium, and micro enterprises (SMMEs) have been mostly affected by the unpaid government invoices and were “struggling to stay afloat” because some relied on borrowing funds to deliver services to government.

“Small businesses are played out of the game because they are not paid their invoices and the same departments are quick to kick them out when they cannot deliver on time [out] of the resource constraints caused by the department themselves.”

Corruption

Gxoyiya further briefly touched on the importance of transparency in tackling corruption within the public sector.

“Transparency is intertwined with accountability and on the other hand transparency encourages openness,” he said.

“While corruption in the public sector is by no means a new phenomenon, the nature and extent of corruption manifesting primarily through unlawful procurement of contracts was not fully comprehended until now.

“Corruption is largely due to public officials who are serving in their personal, factional and private interests rather than the interests of the citizens and the Constitution. In the broad sense, every act of corruption must involve some kind of conflict of interest,” the commissioner added.

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