The Eastern Cape government owes businesses more than R2bn.
This is according to the DA.
The amount is in unpaid invoices owed for more than 30 days despite the provincial Treasury launching an invoice tracking system aimed at improving the government’s payment turnaround time.
DA MPL Kobus Botha said provincial departments were not paying suppliers on time, with the department of health the main culprit.
Botha said that by September there was a total of 11,184 outstanding invoices owed to business in the province.
Despite launching the Have-I-Been-Paid (HIBP) online system for service providers to query their outstanding invoices, the number of suppliers not paid within 30 days, remains extremely high
“Despite launching the Have-I-Been-Paid (HIBP) online system for service providers to query their outstanding invoices, the number of suppliers not paid within 30 days, remains extremely high,” he said.
“The purpose of the system is to expedite the process and to ensure that suppliers have a direct link to query their invoices and track payments.
“However, the online system does not seem to have had the intended impact.
“There has not been much of a decline in unpaid invoices.”
The health department owes businesses R1.9bn, followed by the department of education with R122m in outstanding invoices older than 30 days.
While giving his state of the province address, Eastern Cape premier Oscar Mabuyane told those tuned in virtually that the average turnaround time in the province from invoice to payment was down to 14 days.
Previously, The Herald reported that the invoice tracking system would — once invoices were captured on the system — launch a countdown, and should the money not be at the final stage of invoicing by the end of the 30 days, the contact details of officials would be uploaded for suppliers to query their invoices.
Responding to questions in parliament, Mabuyane said the provincial Treasury had fully implemented the HIBP system and sessions were ongoing with departments still using the old system.
He said as of November 3, the system showed that there were 3,807 visits and 9,153 searches.
“Suppliers are able to track and submit their invoices and follow up with departments when there are delays.
“[There is a] built-in complaints procedure which guides suppliers on when to escalate their queries up to the level of engaging the customer service desk to follow up with departments on their non-payments,” Mabuyane wrote.
On Wednesday, the provincial Treasury department said there were a number of challenges.
Spokesperson Pumelele Godongwane said: “This issue of payment of SMMEs raised by the DA does not present a new challenge for the province, it’s a challenge that the province is dealing with.
“The premier was right in saying the province is paying within the period of 14 days, on average.
“As at January 31 2021, the invoices submitted are worth R2.6bn, with [the] health [department] accounting for a bigger chunk of that amount, followed by [the] education [department].”
He said some of the administrative problems included disputes around supplier information on invoices, incorrect banking details, disputes on claimed amounts when compared against orders issued and suppliers doing work without an order number.
“But our major challenge on this issue is located within [the] health [department], where they are unable to pay their suppliers on time due to budget unavailability,” Godongwane said.
“The major contributing factor to that effect is medico-legal claims; the litigations that are ordered against the department, which are unplanned and not budgeted for.
We are aware that these litigations are compromising our service-delivery imperatives, including our support to SMMEs
“We are aware that these litigations are compromising our service-delivery imperatives, including our support to SMMEs.
“Some of these litigations are questionable but the province is putting measures in place to put brakes on this.
“While working on improving our systems internally, we would like to call on suppliers to work with us on this issue to avoid unnecessary delays in payments.
“Our resolve to support small businesses, including paying them on time, is unshaken as we believe that they are the cornerstone of the economy.”
Botha said Mabuyane should take a firm stand against the culture of non-payment which had become the norm in recent years.
“To prevent job losses and turn the economy around, suppliers must be paid on time.”
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