The Gauteng Shared Services Centre (GSSC) says it has cleared R1.5 billion of its R1.7 billion payment backlog - saying the remaining R200 million will be processed this week.
The centre says that, as of 30 September, R1.5 billion of the R1.7 billion had been processed through Operation Bhadala. The GSSC says the remaining amount is being processed and should be completed in the next week.
The GSSC has been battling the R1.7 billion payment backlog after it failed to pay numerous suppliers since April 2008. The centre is fast-tracking payments through Operation Bhadala, which is the provincial government's initiative to ensure all outstanding invoices for goods and services rendered and delivered are paid.
“Part of the reason we have not processed the full amount relates to challenges around disputes between departments and their respective suppliers. In other instances, these may have arisen because the service has not been completed,” said the GSSC.
Operation Bhadala was launched by Gauteng premier Nomvula Mokonyane as part of ensuring the provincial government processed all outstanding invoices spanning the 2008/9 financial year, up to June of the current financial year (2009/10). The premier stated the backlog would be cleared by the end of September 2009.
“Operation Bhadala has brought to the fore some important lessons for the provincial government. Among others, it has become apparent that the systems are not understood by all the end-users.
“There is a tendency at times to disregard procurement rules by way of procuring goods without express approval from budget holders. This leads to the chronic delays in payments, because services would be rendered and/or goods delivered without proper authorisation,” said the GSSC.
The task team, led by the centre, would continue to operate for at least another six months to ensure the momentum is sustained.
Future initiatives
Newly appointed GSSC CEO Molaodi Khutsoane and Gauteng finance MEC Mandla 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 centre says processes have been set in motion to ensure that government consistently complies with the provisions of the Public Finance Management Act and ensures suppliers are paid within seven to 30 days of receipt of relevant documentation.
“In terms of the bigger picture - part of the problem arises from the current economic environment, which, in part, has seen our financial resources depleting rapidly. In the case of Gauteng, at least R60 billion that was allocated for the province as part of the adjustment process in the last financial year had to be redirected too,” the centre said.
Nkomfe expressed his satisfaction with the operation. He added that he would make announcements on other provincial initiatives that the province has started in the near future.
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