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R4 Billion in Late Payments Will Hinder Job Creation

In a presentation to the Appropriations Committee in Parliament last week, the Department of Performance Monitoring and Evaluation revealed that the government continues to fail to pay its suppliers on time. According to the presentation, during 2012, 38 national government departments were responsible for late payment totalling R3.7 billion. South Africa JobsA total of R208.7 million in late payments were reported in December 2012 alone. The two worst performing departments were the Department of Justice and Constitutional Development and the Department of Public works with total late payments in 2012 to the value of R1.9 billion and R536 million respectively. Replies to DA parliamentary questions to 24 national departments and their entities during 2012 revealed that in December of that year government owed a total of R370 million to more than 12,000 suppliers. The latest revelations in the Appropriations Committee suggest that the situation could be even worse than previously anticipated. Delayed payment from government departments puts enormous financial strain on small businesses in particular and in doing so undermines job creation. I will today write to the Minister of Finance, Pravin Gordhan, requesting that National Treasury report late payment figures to the Appropriation Committee on a monthly basis. Where accounting officers are not fulfilling their duties and processing payments on time, action must be taken. The DA will also ask the Minister parliamentary questions to establish exactly how much national government owes suppliers, and how much of this constitutes late payment. In terms of the Public Finance Management Act (PFMA) and Treasury Regulations accounting officers are required to ensure that all payments due to creditors are settled within 30 days from receipt of an invoice. Non-compliance with this requirement constitutes financial misconduct in terms of Section 81 of the PFMA. In the Western Cape where the DA governs, provincial departments manage to pay 92% of supplier invoices within the prescribed 30 day period. The high rate of compliance in the Western Cape is attributable to sound systems being implemented, discipline being enforced and the provincial government urging suppliers to submit invoices timeously. Government must pay its suppliers and do so in time so that small businesses can become the engine room of our economy and create the millions of jobs that South Africa needs to fight poverty and unemployment. Source: http://allafrica.com/stories/201305140195.html

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