Gauteng health department 'worst' for non-payment, owes R1.7bn

Gauteng's health department is the worst in the province when it comes to non-payment of suppliers, with 987 businesses owed a combined R1.9bn dating back to 2014.

This was revealed in the legislature by health MEC Bandile Masuku in reply to questions by DA MPL Jack Bloom.

Masuku said 236 businesses which provided services to the department two years ago were owed R1.3bn.

In addition, R103m was due to 128 service providers for work done three years ago, and close to R300m was owed to more than 500 companies for services provided in 2018.

Why does the department owe so much money to service providers?

Masuku replied: "Historically, the Gauteng department of health had cash flow challenges as a result of cash which was not aligned with budget. This resulted in the department's inability to pay some suppliers in full, and in being unable to comply with the PFMA requirement of payment of suppliers within 30 days."  

Masuku said the department was on a campaign to "clean" up this anomaly, which Bloom said was having devastating impact on the companies owed money.

"The department is on a drive to clean up accruals and eliminate accruals in future," said Masuku.

"The focus has been given to the oldest invoices, and the accruals strategy has helped  with reducing the accruals from prior financial years in terms of number of service providers owed. In 2018-19, the amount owed is mainly due to disputes and exceptions."

Bloom slammed the department, saying there was no excuse for "this non-payment culture".

He said: "Slow payment by government is devastating to companies. The Gauteng health department is the worst of all the provincial departments and needs to take firm measures to be up to date with all payments."