BUSINESS MAVERICK / 11 DECEMBER 2019 - 14.04 / RICHARD SINAZI
The accounting officers of government departments who fail to settle invoices timeously must pay the price for adding stress to small businesses and letting our country down.
The scourge of late payment has become rampant. Almost 3,000 invoices older than 30 days were not yet paid at the beginning of the 2019/20 financial year, amounting to R1.1-billion.
These invoices were not paid for the six months of April to September 2019. This is a shame and a shocking horror. In fact, it is criminal and must be treated as such. The more things change, the more they stay the same.
The chief culprits were the departments of Water and Sanitation as well as Public Works, with 488 unpaid invoices worth R851.4-million and 266 unpaid invoices worth R235.8-million, respectively.
When naming and shaming is no longer the most effective way of hoping to self-correct and remedy the situation, what stick do you use to deal with these delinquent departments and what remedial options are available to affected and distressed small businesses?
The National Development Plan aims to eliminate poverty, reduce inequality and boost employment. One of the key strategies is to use government procurement to unlock the potential of Small, Medium and Micro Enterprises (SMMEs).
This perpetual state of paradox is unacceptable. The Road to Damascus gets more dramatic and startling.
Some of the delinquent departments that are repeat offenders seem to reject all manner of rehabilitation and most importantly, their constitutional obligation, as per the constitutional values and principles outlined in Chapter 10 of the Constitution.
This deliberate disregard of constitutional obligations cannot go unpunished, otherwise we are going nowhere slowly.
The Public Service Commission supports the call by President Cyril Ramaphosa that any non-compliance with the 30-days payment of SMMEs will be viewed as financial misconduct and followed with consequences.
Financial misconduct is grounds for dismissal or suspension, or other appropriate sanction against an official of the public service.
If the accounting officer finds any transgression, they must take swift action against the officials, including laying criminal charges or civil proceedings.
Contravention of prescribed rules and applicable procedures is not only a non-compliance issue, but also an attack on our constitutional values and principles, which underpins public administration. There is a need to enhance the public sector values and culture as a preventive measure.
Non-payment of suppliers is a crime against the poor. Government is duty-bound to correct itself and avoid wasteful and litigious ways of resolving matters — the verdict often finds government wanting and scoring own goals.
There may well be other reasons why suppliers are not paid within 30 days, such as perhaps non-availability of funds, lack of internal controls and incorrect banking details. Nonetheless, everyone must be vigilant in his or her respective functional areas.
The Public Service Commission (PSC) is an independent body established in terms of Chapter 10 of the Constitution to promote constitutional values and principles, especially those governing public administration as set out in section 195 throughout the public service.
The commission has the power to issue directions regarding compliance with personnel relating to dismissals, propose measures and give directions, among other things, and it accounts to Parliament.
We will not spare anyone in fulfilling this mandate.
With unemployment at its highest rate, Statistics South Africa’s April 2019 figures of liquidations and insolvencies paint a grim picture of businesses shutting down at an alarming rate.
While there is a generally positive mood in our country following President Ramaphosa’s investment conference to garner about R300-billion in investment pledges and create about 165,000 direct and indirect jobs, we must maintain this momentum and also play our part.
We cannot afford to make a mockery out of the gains of our democracy.
Perhaps it is about time that the same regulation, applied when processing interest payable on debts to the state, should equally be applied by SMMEs to the state to level the playing field.
The accounting officers of the delinquent departments must pay the price for letting our country down. Public administration must be responsive to the needs and aspirations of the people of South Africa.
If we still have R61.3-billion of irregular expenditure, it is a reflection that perhaps our consequence management regime is not stringent.
It is business as usual. To what extent has the Auditor-General implemented the Public Audit Amendment Act on financial misconduct?
At the heart of all of this pandemonium, is the extent to which all of us help to embed the constitutional values and principles as these are the foundation for effective, efficient and economical use of resources in the state.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER