The Gauteng Department of Health (GDoH) exclusively told “The Star” that it has put in place payment plans for its service providers within the next 30 days, following a pending R1 billion debt of unpaid invoices.
On Monday, the DA disclosed that the department failed to pay 19 212 invoices to its suppliers in the past month.
In a recent health portfolio committee meeting, the public service commissioner, Vusumuzi Mavuso, indicated that only 29% of invoices were paid by the department in 30 days for the first quarter of the 2024/25 financial year. Unpaid invoices increased by 71% by the end of the fourth quarter of the 2023/24 financial year.
GDoH spokesperson, Motalatale Modiba confirmed the department was aware of the backlog in payments, as these small businesses would eventually head towards bankruptcy and being shut down.
“The Department of Health has noted concerns regarding the delay in processing suppliers’ payments and wishes to assure the public that it has since put measures in place to improve the payment of service providers within 30 days, and to reduce the number of invoices that remain unpaid,” Modiba said.
He said the department has come up with solutions to remedy the unsettled payments for suppliers’ rendered services.
“A number of mitigation measures have been put in place to remedy the situation as the department is alive to the impact of delayed payments on suppliers, especially emerging businesses.
“The department is also strengthening its processes and governance systems to avoid duplication of invoices, and to improve communication with service providers and enter into payment arrangements where necessary.”
Noting there are mitigation measures in place to speed up payments, Modiba said: “The department is strengthening implementation of payments-arrangements. A 70:30 split of monthly cash allocation, where 70% of the cash allocation is to consider supplier payments within 30 days of processed invoices, and the remaining 30% is a provision made towards payment of invoices processed outside 30 days.”
Among others, he mentioned that GDoH is ensuring an inclusive payment strategy based on the available cash flow.
In spite of a log-jammed payment process, the department’s 2023/24 Q4 report showed overall performance improvements by 6% points, from 51% in 2022/23 to 57% in 2023/24 financial year.
Last week, the health committee applauded the department for spending less money on litigation cases, as this has infringed on cash flow in the past.
“The GDoH was commended by the portfolio committee on the decreased rand value of medico-legal claims from R18bn to R13.2bn owing to various interventions, such as mediation, public health care defence and other strategies instituted to reduce the contingent liability. This area has previously impacted negatively on the cash flow of the department resulting in accruals annually. Treasury has now allocated funds for the 2024/25 financial year to address this,” Modiba said.
The Star