The Deputy Minister said this when the Department of Planning, Monitoring and Evaluation briefed Parliament’s Committee that is tasked with providing oversight over the department on Wednesday.
He said statistics from the first quarter of the current financial year show that in terms of departments that pay invoices on time, while there has been significant progress in some of the months, the numbers are not consistent.
“…I think the question of consequences is important. We cannot emphasise this anymore and what we can do is only to repeat it and to understand that not to pay within 30 days is a financial misconduct, and a serious financial misconduct at that,” he said.
The Deputy Minister said following an imbizo held in Gauteng on the issue of unpaid invoices, he would go on a nationwide roadshow to engage small business enterprises – who are the hardest hit by the non-payment of invoices – to engage them on the challenges.
“But we are taking the work seriously because it is linked to the economy. It is linked to jobs, it is linked to sustainable SMMEs because we believe that is where the solution for dealing with unemployment broadly lies and that is why are taking this seriously.”
Following growing concerns over the non-payment of invoices, which has been seen to affect the sustainability of small businesses, the department established a unit to deal with the 30 day payment of invoices in April 2015 to monitor the performance of departments in this indicator.
Irene Mathenjwa, the Outcome Facilitator: Public Service at the department, said while the department is concerned about the number of departments that still fail to pay their invoices on time, the picture was not all “doom and gloom”.
“We have got about 23 departments that have demonstrated an improvement in the payment process of their invoices within the first quarter. So if you look at the beginning of the quarter and the end of the quarter, those invoices have gone down.
“We are also heartened by some of the departments that have maintained a clean record of zero (unpaid) invoices throughout the quarter.
“So from the beginning of the quarter to the end of the quarter, they paid all of their invoices on time.”
Out of 40 national departments, 23 have demonstrated a pattern of improvement, with 10 of these maintaining a clean record of invoices paid on time between April and June. However, the remaining 17 departments have shown a downward trend.
Mathenjwa said in April 2016, national departments that paid 11 375 invoices after 30 days, represented a monetary value of R327 million.
In May, there was a spike, with 20 948 invoices being processed and paid. However, the monetary value of those invoices went down to R305 million.
In June, there was a slight reduction in terms of the number of invoices that were paid (17 668), however the monetary value went up to R340 million.
However, the number of invoices that are older than 30 days and were still not paid amounted to 9 881 (April), 12 780 (May) and 12 870 (June).
This represented the regression of 2 899 unpaid invoices from April to May, and a slight improvement of 90 invoices from May to June.
In monetary terms, this means that invoices that are older than 30 days and not paid amounted to R499 million in April, R55 million in May and R62 million in June.
This represented an overwhelming improvement of R444 million from April to May, and a regression of R7 million from May to June.