Cabinet cracks down on late payments
2012-11-08 18:07
Cape Town - A new system to crack the whip on government officials failing to pay service providers on time will be up and running next year, Minister in the Presidency Collins Chabane said on Thursday.
Chabane said 90% of provincial and national departments and other state institutions had registered on the system, which was set up at National Treasury.
"There was a general complaint that government is killing entrepreneurs because they're not paid within the prescribed period, and they asked me to search for a solution," Chabane said.
Departments would now have to capture invoices on the system, so the government could track whether payments were made within the prescribed 30 days.
Chabane conceded there were teething problems associated with implementing the new system.
"We have people who capture invoices which are not complete... officers not understand[ing the] system... we hope that in next few months we can clear this."
The minister indicated that officials would be held accountable for late or non-payments. A provision for payment for goods and services within 30 days would be included in the performance agreements of directors general, CFOs and other accounting officers.
"In that performance agreement, you will recall the [Public Finance Management Act] PFMA says payment beyond 30 days, unless you have good reasons -- you are breaking the law."
Chabane said while the PFMA made it illegal to withhold payment after 30 days, the inclusion of the option of "unless there are reasons not to do so", was leading to people "always finding a reason why they can't pay".
Chabane said when the new system was up and running at optimal level, the government would be able to identify and question officials on non-payment.
"As we improve the system, we'll be able to tell which are genuine cases where invoices could not be paid, where it was legally not possible to do so."
Chabane was unable to say whether officials would be sanctioned, disciplined or fired for continued non-compliance.
Several businesses, specifically smaller companies, have gone bankrupt or been forced to retrench workers as a result of the government not paying them on time.
- SAPA
