Department continues to pay suppliers

15 Feb 2011

The Gauteng Department of Health and Social Development is processing payments of over R400 million per month in an effort to clear supplier debts.

In the current financial year, the department paid R1 068 billion from its R22.5 billion budget to settle outstanding payments.

The payments are being managed through cash flow allocation that the department receives from Treasury on a weekly basis.

In processing these payments, small, medium and micro enterprises (SMMEs) are prioritised; they receive their payments within 30 days of submitting their invoices.

The department also negotiates terms of payment with bigger suppliers and they receive their payments according to agreement.

The department aims to settle all supplier payments in 30 days and avoid accruals in the next financial year as its cash flow situation improves.

To improve the financial management, the department has introduced stringent cost containment measures to ensure rational use of resources and to bring expenditure with budget in order not to compromise patients' care.

The statement that the DA issued is inaccurate. Accruals do not mean outstanding payments from the previous financial year only refers to any account that a department or company currently has even if it is less than 30 days. At any given time the department will have accruals but they have to be managed and settled within reasonable time.

Statement issued by Simon Zwane, Gauteng Health and Social Development, February 15 2011

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