Government officials face investigations for failing to pay suppliers on time
Image: File
Heads of national and provincial government departments could face investigations and disciplinary action for failing to pay suppliers billions of rand within the required 30 days.
The National Treasury has revealed that by the end of the 2024/25 financial year on March 31, provincial departments reported 140,364 invoices older than 30 days and not paid were valued at R17.8 billion, while nationally the figure stood at R381 million for 2,437 invoices.
In addition, about 321,000 invoices valued at nearly R37.2bn were paid later than 30 days by provincial departments, and national departments also missed the 30-day payment deadlines for 143,245 invoices with a value of R6.4bn.
The value of invoices older than 30 days that provincial departments failed to pay increased to R17.8bn from R10.6bn in 2023/24, while national departments also regressed to R381m in 2024/25 from R328m the previous financial year.
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Provinces also paid R37.2bn after 30 days in 2024/25, which is up from R30.5bn in 2023/24.
National government departments paid R6.4bn in invoices after 30 days in 2024/25 compared to R4.6bn in 2023/24.
Treasury has noted that among the repeated common reasons provided by national and provincial departments for late and non-payment of invoices and which mostly align with its assessments are excessive administrative procedures, multiple approval layers and slow compliance processes that can delay payments and poor forecasting or cash management leading to shortages of funds available for timely payments.
Other common reasons are missing or incorrect documentation from suppliers, including invoices or delivery receipts, which delays processing, and unethical practices resulting in deliberate delays or misappropriation of funds and manual systems commonly used to track invoices received from suppliers.
The National Treasury wants accounting officers (heads of departments and directors-general) and chief financial officers to address the root causes of the late and/or non-payment of invoices to improve compliance with the requirements of Treasury regulations.
'Wilful or negligent failure by accounting officers who consistently breach the Public Finance Management Act (PFMA) and Treasury regulations by paying suppliers late constitutes financial misconduct in terms of Section 83 of the PFMA.
'This must be investigated and disciplinary action 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 control,' Treasury stated.
In terms of the PFMA, financial misconduct is a ground for dismissal or suspension of, or other sanction against, any government official.
According to the National Treasury, executive authorities (ministers, premiers, and MECs) play an important role in holding accounting officers accountable for the continued improvement in the culture and payment internal control environment of their respective departments.
It has also urged that interventions be prioritised at the provincial level, as provinces continue to be the highest contributors to the statistics of late payments and unpaid invoices.
The continued impact of the late or non-payment of invoices also contributes to the sustainability of small and medium enterprises, adding to unemployment, job creation, and inequality issues.
Treasury said its efforts and those of the Public Service Commission, national departments of Small Business Development, Planning, Monitoring and Evaluation, and the Presidency can only be impactful if there is a willingness of leadership at the departmental level to make a difference.
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