National, Provincial Governments Fail To Settle Bills Worth R35.1 Billion Within 30 Days

The National Treasury revealed in a report on Monday that during the 2023-24 financial year, national and provincial government departments failed to pay 362,068 invoices worth R35.1 billion to suppliers within 30 days as required.

"The R35.1 billion, although paid late, was settled and paid during the 2023-24 financial year. The number of invoices older than 30 days and not paid by national and provincial departments at the end of March 2024 amounted to 114 908, to the rand value of R10.7 billion," the National Treasury said, SA News reported.

National departments reduced outstanding invoices by R13 million compared to the previous financial year. However, there was a 24% increase in the number of invoices older than 30 days and unpaid by the end of March 2024.

This amounted to 1,427 invoices worth R53 million, up from 1,149 invoices worth R66 million in March 2023.

Provincial departments witnessed a decline of 53% in the number of invoices unpaid after 30 days by the end of the 2023-24 financial year. This amounted to 113,481 invoices worth R10.6 billion, compared to 73,974 invoices worth R6.8 billion reported in March last year.

National Treasury explained that late or non-payment of suppliers' invoices has negative effects on various socioeconomic issues like high unemployment, inequality and poverty.

It also harms the financial stability of suppliers who may need to borrow money to stay in business and affects their ability to pay salaries and fulfill contracts. Timely payment of suppliers is crucial for boosting economic growth and reducing poverty, inequality, and unemployment.

"During the 2023/24 financial year, National Treasury continued to monitor, address and respond to queries on non-payment of supplier's invoices through a centralized email system dedicated to receiving queries from suppliers," National Treasury said.

It added, "Through the intervention of the Office of Accountant-General, 54 queries to the value of R58 million were resolved and payments were made to suppliers in the 2023/24 financial year."

National Treasury is working on updating current systems to better identify and track delayed payments.

In the meantime, the department has suggested several improvements including accounting officers and chief financial officers should address the reasons behind late or non-payment of invoices to ensure they meet Treasury Regulation 8.2.3 requirements.

Furthermore, accounting officers must ensure that all information submitted to the relevant treasury is properly signed off and submitted on time, following National Treasury Instruction 34 of 2011.

Departments should discuss payment of suppliers within 30 days as a regular agenda item in every EXCO meeting and disciplinary action should be taken against officials who do not adhere to the 30-day payment requirement and not following internal control systems.