‘Health still owes millions’: Gauteng health suppliers unpaid for over a year

Despite promises of reform and system upgrades, the financial crisis facing Gauteng health department has not improved, with it owing 69 suppliers for more than a year and 125 for more than six months.

The department owed suppliers a staggering R743 million for over a year. A total of R117 million had been overdue for more than six months.

This was disclosed by MEC Nomantu Nkomo-Ralehoko in response to questions from DA Gauteng shadow health MEC Jack Bloom in the provincial legislature.

Suppliers owed R734m for over year

Bloom said the department’s chronic budget issues were the result of the “poor financial management” that persisted despite promises from the MEC and premier Panyaza Lesufi to fix it.

“This has been going on for years, When suppliers are owed for over a year, something is seriously wrong.

ALSO READ: ‘I’d rather die at home’: Cancer patient refuses to spend one more night at Charlotte Maxeke Hospital

“Delayed payments mean companies raise prices to cover holding costs, reducing the supplier pool and driving up costs.

“Specialist suppliers hesitate to provide critical medical items, leaving doctors and hospitals to find alternatives,” Bloom said.

Nkomo-Ralehoko said one supplier, Curve Business Solutions, had already cut its services over an unpaid balance exceeding R5 million.

One supplier cut services over unpaid balance

The department has blamed “challenges with uploading invoices to its Prizma Portal”. But suppliers say the issue has been ongoing. One medical supplies company, on condition of anonymity, said although they have been able to cope, it’s always been a problem.

“It’s difficult. We have occasionally threatened to stop, though it’s difficult to do so. Many of our expenses, such as stock, are paid upfront, or we have short credit terms with suppliers.

ALSO READ: Gauteng health scrambles to spend R511m on cancer cases

“We deliver to the government and then might not get paid for six months to a year. It doesn’t make sense. We offer the public sector good prices because of the volumes, but the delays make it tough.”

Currently, the department owed about R5 million, with R3.2 million of their payments under review and R1.4 million “ready for payment” but still unpaid.

“We have received occasional payments, but we still have a lot outstanding that should all be paid now,” the company said.

A lot outstanding

“Sometimes they use the current year’s budget to pay old invoices from 2022 or 2023. When that runs out, we wait for the next budget cycle. They’re not managing budgets well. The delays have put the company into overdraft, adding monthly interest and charges. If we were paid up we wouldn’t be in overdraft.”

A former food supplier to the department also expressed frustration over longstanding delays. “We don’t know when we’ll be paid. The whole year that I was providing services to the department, it was plagued with delays. Even now I haven’t received full payment,” she said.

ALSO READ: Life Esidimeni families call for prosecution of Mahlangu and Manamela

She estimated the department owed her between R160 000 and R200 000, impacting her company’s cash flow significantly. “I do business in the hope that we will get the money on time, especially because I supply various hospitals and need to budget accordingly.

“This has made it increasingly difficult for the business to sustain operations.”

While the department officially acknowledges only one supplier halting services over non-payment, Bloom noted reports that other suppliers had been following suit.

‘Department lost control’

“The department has lost control. Many companies no longer bid due to delayed payments while others have quietly withdrawn from supplying the department.”