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PSC: Govt departments' failures to pay suppliers damaging economy

In its recent report on the state of the public service between April and June this year, the Public Service Commission (PSC) found that billions of rand provisioned for in budgets were owed to suppliers.

Michael Seloane the commissioner for the Public Service Commission. Picture: @OPSC_SA/Twitter

JOHANNESBURG - The Public Service Commission (PSC) said that the failures by national and provincial government departments to pay suppliers had wrought “untold damage” to the economy, leading to the collapse of businesses.

The commission monitors government’s adherence with constitutional values governing public administration.

In its recent report on the state of the public service between April and June this year, the PSC found that billions of rand provisioned for in budgets were owed to suppliers.

The report by the Public Service Commission showed that the Water and Sanitation Department was the worst offender among all government departments, with R1.2 billion owed to suppliers in June.

The Gauteng province had not paid over 20,000 invoices amounting to R1.6 billion in the same period, a slight improvement from a whopping R2.6 billion it owed in April.

The Public Service Commission's Michael Seloane said corruption, incompetence and a lack of consequence management were just some of the reasons the non-payment of suppliers remained a non-priority.

“Service providers are not paid because there is poor management and in order to deal with poor management, there must be consequences. One of the development plans is about promoting medium-sized enterprises, so there’s no way government can back down from that priority,” he said.

Not only had these failures wiped out much-needed jobs in the labour market, which has a 29% unemployment rate, but it had an impact on service delivery too.

The PSC said that many suppliers had resorted to withholding their services from government, while others simply stopped doing business with the state altogether for fear of financial ruin.

FAILURE TO PAY BUSINESSES ASSOCIATED WITH CORRUPTION

The PSC said an unethical culture that has permeated every sphere of government was the reason suppliers’ invoices were not being settled.

The commission, which monitors compliance to the law in state entities, has found that small businesses - many of which are owned by previously disadvantaged individuals - were getting the raw deal when providing services to government.

Seloane said the nonchalant approach of government officials towards the timeous payment of suppliers was associated with corrupt activities.

“With respect to payment of service providers, that is a serious risk where bribes are solicited. That’s why there now must be serious focus in that regard, to make sure that the controls are tight enough.”

Thousands of small to medium businesses have been forced to shut their doors as government departments and provincial administrations continued to ignore calls to pay them on time.

The national development plan envisages that by 2030, 90% of all jobs will be created by small, medium and micro-enterprises in line with other progressive economies.

Seloane said this was why government simply could continue to drop the ball.

The PSC said it had carried out several programmes in the public service to help improve governance.

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