Late payment of government suppliers raises concern

The persistent late or non-payment of government service suppliers has raised concerns, with billions of rands in outstanding invoices.

This as provincial departments had recorded a total of 113 481 invoices older than 30 days that had not been paid by the end of the 2023/24 financial year. The invoices amounted to an estimated R10.6-billion.

Provincial departments recorded a regression of 53% compared with -73 974 invoices to the rand value of R6.8-billion reported at the end of March last year.

KZN reported the highest rand value of invoices paid after 30 days during the 2023/24 financial year, which amounted to R9.5-billion.

“The late and or non-payment of suppliers’ invoices impacts negatively on, among others, socioeconomic challenges such as high unemployment, inequality, poverty; the financial health of suppliers who are forced to borrow to keep financially afloat; and the ability of suppliers to pay salaries and meet their contractual obligations.

“Timeous payment of suppliers is important for improving economic growth and reducing poverty, inequality and unemployment,” said Treasury.

National Treasury says it has compiled the annual reports on payment of suppliers to raise awareness around the non-payment of supplier invoices and to recommend ways to improve compliance.

In an effort to curb these challenges, departments have been urged to pay suppliers within 30 days, and must be a standing agenda item for discussion at every Exco meeting of departments.

“Disciplinary actions must be taken against officials who fail to comply with the requirements to pay invoices within 30 days and who undermine the systems of internal controls,” said Treasury.

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