Gauteng Health owes R92 million penalty interest for late payments

8 March 2020

The Gauteng Health Department paid R5 642 301 last year for interest on late payments and owes a further R91.8 million for penalty interest.

This is revealed by Gauteng Health MEC Bandile Masuku in a written reply to my questions in the Gauteng Legislature.

According to Masuku, the high amounts paid and owing for interest are due to “court orders, late payment of interest-bearing accounts and infrastructure related.”

The breakdown of what is owed in penalty interest is as follows:

Telkom V Block - R88.7 million

Telkom voice account - R1.4 million

Novo - R513 000

Interest on litigation - R1.2 million

I am concerned that so much is owed to the disputed Telkom V Block contract which has been mired in allegations of corruption that need to be resolved soon. It is also shameful that R1.2 million is owed for interest on overdue court-ordered payments.

With regard to late payments to the Gauteng Department of Infrastructure Development, Masuku blames “poor project management processes and coordination between the two Departments. This has since been addressed with the appointment of a dedicated Head of Infrastructure in the Gauteng Department of Health.”

This Department will never get a clean audit if penalty amounts continue to be paid for overdue accounts as these are classified as fruitless and wasteful expenditure.

Better financial discipline is needed to ensure that all accounts are paid in time.

Issued by Jack Bloom, DA Gauteng Shadow Health MEC, 8 March 2020