GSSC battles R1.3bn backlog

Johannesburg, 11 Sept 2009

Despite introducing new payment systems over the years, the Gauteng Shared Services Centre (GSSC) is battling a R1.37 billion payment backlog.

The centre has run up this bill after failing to pay its suppliers since April 2008. While the backlog has been slightly reduced by R324 million, from R1.7 billion, over a period of three weeks - the GSSC will have to pick up its pace if its payments are to meet their deadline.

Gauteng premier Nomvula Mokonyane stated the backlog would be cleared by the end of September. But, with only 19 days to go until the end of the month, finance MEC Mandla Nkomfe says he is confident the GSSC will meet the deadline.

“We are steadfast in our commitment to ensuring we complete this task within the set time frame. While doing so, we will continue to implement stringent internal controls to ensure the prescribed rules are not flouted,” Nkomfe notes.

Newly-appointed GSSC CEO Molaodi Khutsoane and Nkomfe have both blamed the backlog on incorrect or incomplete information. However, both have failed to say why the backlog has escalated into the billions and why the GSSC had not managed to solve the issue earlier.

The GSSC further claims payments were being fast-tracked through Operation Bhadala, which is the provincial government's initiative to ensure all outstanding invoices for goods and services rendered and delivered are paid.

Blame game

Despite the payment backlog running into more than a billion rand and payments being delayed for over a year, the finance department and GSSC continue to blame suppliers for the delays.

“It has emerged that some of the payments we process get rejected because, in certain cases, banking or other material supplier details may have changed or documents may not be matching each other and, therefore, are not recognised by the system,” says Nkomfe.

As a result, the department has established a task team, called the War Room. The MEC says the team is tasked with clearing the backlog and assisting suppliers to update information on the system.

“We have made a call to our suppliers to ensure they submit invoices accompanied by documents such as the purchase order, instructions to perform work, or statements of account to the department where they rendered service or delivered goods.”

What went wrong?

Despite the introduction of several new measures over the years to improve payment systems and ensure suppliers were paid within 14 days, the GSSC has struggled to make payments timeously.

In 2006, the centre announced the implementation of an automated procure-to-pay process, aimed at minimising delays experienced with the manual process and eliminate the inefficiencies.

In 2007, former premier Paul Mashatile announced the GSSC would roll out several automation initiatives, including SMS interaction with debtors on outstanding balances.

He added that the roll-out of an e-filing solution to improve document tracking and management of audit processes would be carried out in 2008. He also noted the GSSC had piloted and implemented e-invoicing as an automation initiative to shorten the amount of time it takes to process payments to suppliers to the provincial government.

The GSSC also claimed the capacity to process payments within the 14 days required by policy and said it had strengthened its debt collection capacity.

“We have acted on the need to ensure that we reduce the time it takes to process payments for suppliers doing business with Gauteng,” Mashatile said at the time.