Johannesburg - The Gauteng government failed to timeously pay nearly R10 billion of the R34bn due to suppliers who provided services to national and provincial departments.
And the National Treasury has warned that late payments amounting to R33.7bn in the 2021/22 financial year were having a negative impact on small businesses’ sustainability, contributing to unemployment and inequality.
”The late and/or non-payment of supplier’s invoices have a negative impact on socio and economic challenges that our country is facing such as high unemployment rate, inequality, poverty, the financial health of suppliers and the ability of suppliers to pay salaries and meet their contractual obligations,” Treasury complained.
In Gauteng, almost 93 000 invoices valued at R10bn were paid later than the required 30 days, while the KwaZulu-Natal provincial government failed to pay nearly 32 000 invoices worth R7.25bn.
The Western Cape was the best performing province, only failing to pay about 2 000 invoices valued at just above R287 million.
According to the National Treasury’s 2021/22 annual report on non-compliance with payment of suppliers’ invoices within 30 days released this week, the Eastern Cape failed to pay R4.47bn or 61 410 invoices on time and the North West had 54 453 invoices or R3.35bn unpaid for more than 30 days.
Free State failed to pay almost 6 500 invoices or R1.35bn timeously.
At national government, the departments of defence and correctional services were the worst performing in paying their suppliers on time.
Almost 105 000 invoices valued at more than R1.35bn were paid later by the defence department in the 2021/22 financial year that ended on March 31, while correctional services failed to pay 2 723 invoices worth just over R1bn.
According to the National Treasury, the total value of invoices paid after 30 days by national departments in 2021/22 amounted to R 4.7bn, which represents a regression of R300m or 7% compared to R4.4bn in 2020/21.
It also found that departments across all nine provinces were responsible for the majority of late and non-payment of invoices during 2021/22 as they contributed 263 359 or 66% of the 401 691 invoices paid after 30 days by national and provincial governments.
Provincial departments paid late 263 359 invoices valued at R29bn in 2021/2022 while the figure was 227 190 invoices worth R26bn in the 2020/21 financial year.
By the end of March, R6.1bn or 67 862 invoices older than 30 days had not paid by the national and provincial departments.
The Eastern Cape also completely failed to pay 34 585 invoices valued at R3.1bn and was followed by Gauteng, which reported R1.8bn or 15 309 unpaid invoices.
Treasury has asked that payment of invoices within 30 days be included in the performance agreements of accounting officers, chief financial officers and other responsible officials.
It has also urged disciplinary action to be taken against officials who fail to comply with the requirements to pay invoices within 30 days and those who undermine internal control systems.