The Gauteng Health Department owes R1.209 billion to 823 companies for more than 90 days even though they are legally required to be paid within 30 days.
This is revealed by Gauteng Health MEC Bandile Masuku in a written reply to my questions in the Gauteng Legislature.
According to Masuku, only 68% of companies were paid within the 30 day period as at 31 March this year. The late payments are because: “The department had previously experienced cash flow challenges which resulted in unavailability of cash to settle obligations timeously. The majority of transactions that were not paid as at 31 March are those transactions where the department had entered into payment plans with the Service Providers. The 2020/2021 financial year is the last year for the settlement of the payment plans.”
It is disappointing that so many companies are still owed huge amounts of money by this department which has a notorious record of poor financial management. Some of these companies may have to close and lay off workers due to the Covid-19 crisis.
It is still unclear why the department’s Chief Financial Officer resigned recently, but I hope her successor does what is necessary to ensure that all companies are paid in good time.