National Treasury’s 2020-2021 annual report on non-compliance with payment of supplier’s Invoices – 2020-2021: extract from the executive summary

The National Treasury has been providing reports to relevant stakeholders on the status of noncompliance with Treasury Regulation 8.2.3 and continues to monitor the level of compliance with the requirement to pay supplier’s invoices within the prescribed period in terms of the Public Finance Management Act (PFMA), 1999 (Act No. 1 of 1999).

In monitoring progress on payment of suppliers within the prescribed period the National Treasury issued a Treasury Instruction Note Number 34 which requires departments to submit 30 days exception reports to the relevant treasuries by the 7th day of each month with information in respect of the preceding month, with details of the following information:

(a) the number and value of invoices paid after 30 days from the date of receiving invoices
(b) the number and value of invoices that are older than 30 days, which remained unpaid
(c) the reasons for the late and/or non-payment of the invoices referred to above.

Provincial treasuries are also required to collate information from their respective provincial departments and to submit exception reports to the National Treasury by the 15th day of each month with information of the preceding month.

The Treasury Instruction Note Number 34 also requires departments to implement manual or electronic systems and processes that will enable departments to track invoices from the time they are received at the relevant cost centers to the time that a payment is made. Whilst it is not currently a legal requirement that public entities must settle their invoices within 30 days in terms of Treasury Regulation 8.2.3 and the National Treasury Instruction Note Number 34, it is advised that public entities listed in Schedules 2 and 3 to the PFMA follow the 30 days payment principle as a best practice. When amendments are effected to the PFMA, Treasury Regulations and Treasury Instruction, public entities will be required to pay their invoices within 30 days from date of receipt of an invoice and further required to submit 30 days exception reports to their relevant Treasuries.

The annual report serves to update the relevant key stakeholders such as the Forum of South African Directors-General, Standing Committee on Public Accounts and the Standing Committee on Finance, Public Service Commission, Department of Planning Monitoring and Evaluation, Department of Small Business and Development and other relevant stakeholders on the status of non-compliance with the requirement to pay suppliers within the required timeframes. The annual report also provides a comparative analysis of the 2020/2021 financial year reported information against the 2019/2020 financial year.

According to the information presented to the National Treasury, the following departments paid all their invoices within 30 days during the 2020/2021 financial year as required by Treasury Regulation 8.2.3:

  •  National School of Government;
  •  Planning Monitoring and Evaluation;
  •  Public Service and Administration;
  •  Traditional Affairs;
  •  Communications and Digital Technologies;
  •  Small Business Development;
  •  Sports, Arts and Culture; and
  •  Trade, Industry and Competition.These national departments are applauded for their outstanding performance and efforts to ensure that supplier’s invoices are paid timeously and further urged to maintain this performance.