Durban - The KwaZulu-Natal government has launched Operation Pay on Time in an attempt to improve relations with the business community in the province.
The initiative, which requires all government departments to pay suppliers within 30 days and to address any payment-related queries timeously, was launched by KZN Premier Zweli Mkhize and MEC for Finance Ina Cronje on Tuesday.
During his address, Mkhize said Operation Pay on Time came about because several concerns were raised by the businesses working with government.
The premier said companies that are providing government with services and supplies must be treated with the business courtesy they deserve.
Mkhize added that service providers are government's partners in making service delivery possible. Government, he said, does not have companies to build schools and hospital and therefore depends on the private sector, hence the need to improve relations.
There are various factors for late payments and the KZN Department of Finance presented solutions to the problem.
In some instances, delays occur when a service provider delivers the invoice to the responsibility manager directly and not to the finance unit. In this case, the finance unit is not aware of the existence of the invoice or date of receipt.
The organisational structure of a department could also contribute to a delay in the payment of accounts. A centralised payment office of a department with responsibilities across the province will substantially contribute to a delay in payment.
Government departments have also found that proper procurement procedures are not followed. The finance office receives invoices where supply chain management (SCM) procedures have not been followed and/or official orders have not been issued and they need to be properly investigated.
Mkhize reminded businesses to ensure they go through proper channels to work with government and also insist on contracts.
Other reasons for delayed payments include invoices from service providers sometimes not registered as an entity on the financial system (BAS). There are disputes with regard to the invoice itself.
Therefore, the first action is to ensure prompt payment. Every official in the procurement and payment cycle must be diligent in their functions to ensure compliance.
Programme and responsibility managers must deal with invoices requiring approval immediately.
The initiative requires that payments be captured immediately. Service providers have been asked to make sure they receive an official purchase order before supplying goods or services. Also, their invoices must have correct bank details, and all necessary information that can speed up the payment process.
The teams working with this initiative have committed to providing an update to the complainant within seven days of receipt of the complaint, on the progress of the investigation.
If there is a dispute, a meeting between the service provider and the relevant department will be arranged within 21 days.
