The Gauteng Health Department is facing severe financial scrutiny, as it owes 69 suppliers a staggering R743 million for over a year.
This alarming revelation was made by Gauteng Health MEC Nomantu Nkomo-Ralehoko in response to questions posed by DA Gauteng Shadow Health MEC, Jack Bloom, in the Gauteng Legislature.
Bloom highlighted the department’s “abysmal financial management”, which has persisted despite numerous promises of improvement from both the MEC and Premier Panyaza Lesufi.
He sought clarity on the number of suppliers owed for over six months and over a year.
Nkomo-Ralehoko confirmed that 125 suppliers are owed for more than six months, with 69 suppliers waiting for payment for over a year.
The total amount owed to suppliers for more than six months is R117,420,398.41, while the amount overdue for more than a year stands at R743,010,551.64.
Bloom also inquired about the companies that have ceased supplying goods and services due to non-payment. Nkomo-Ralehoko acknowledged that only one company, Curved Business Solutions, has officially cut ties, with an outstanding amount of R5,363,110.19 owed to them.
She added that the department has allocated an alternative source of supply while assisting the supplier in uploading invoices to the Prizma portal.
In response to Bloom’s concerns regarding the ongoing debts, Nkomo-Ralehoko explained that the supplier faced challenges with uploading invoices to the Prizma portal.
Bloom pressed for a timeline on when these debts would be settled, to which Nkomo-Ralehoko stated that the supplier is being assisted with training manuals for the portal registration.
Bloom warned that the consequences of these financial mismanagement issues are dire for hospital patients, as budgets are misallocated and some suppliers refuse to engage with the department due to the failure to pay within the legally mandated 30 days.
While the department officially recognises only one company has ceased services over non-payment, Bloom suggested that there are reports of other suppliers quietly doing the same.
To address these issues, Bloom called for a comprehensive overhaul of the department’s top management, suggesting that the Gauteng Health Department could learn from the DA-led Western Cape Health Department, which consistently achieves clean audits and pays suppliers promptly.
Treasury Regulation 8.2. 3 states that “unless determined otherwise in a contract or other agreement, all payments due to creditors must be settled within 30 days from receipt of an invoice or, in the case of civil claims, the date of settlement or court judgment”.
The Star